<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 18, 1994
COMCAST CORPORATION
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 0-6983 23-1709202
----------------- ----------------- ----------------
(State or other (Commission file (IRS employer
jurisdiction of number) identification
incorporation) no.)
1500 Market Street, Philadelphia, PA 19102-2148
--------------------------------------------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (215) 665-1700
----------------
<PAGE>
Item 2. Acquisition.
- - - ------ -----------
Maclean Hunter Limited.
----------------------
On June 18, 1994, Comcast Corporation (the "Company") entered into a Share
Purchase Agreement (the "Maclean Hunter Agreement") with Rogers Communications
Inc. ("Rogers") to purchase the U.S. cable television and alternative access
operations of Maclean Hunter Limited ("Maclean Hunter"). A copy of the Maclean
Hunter Agreement was filed as Exhibit (a) (ii) (3) to the Company's Report on
Form 10-Q for the period ended June 30, 1994. Maclean Hunter's U.S. cable
television operations include systems in New Jersey, Michigan and Florida and
provide service to approximately 550,000 cable subscribers.
As contemplated by the Maclean Hunter Agreement, on October 21, 1994, the
Company entered into an Agreement and Plan of Share Exchange (as amended, the
"Barden Agreement") with Barden Communications, Inc. ("BCI"), Don H. Barden and
The Don H. Barden Revocable Trust, pursuant to which the Company agreed to
acquire all of the outstanding shares of BCI. BCI holds interests in the
partnerships that own, operate and manage the cable television system for the
City of Detroit, Michigan. The remaining interests in those partnerships, other
than a minority interest of less than 1%, are part of the U.S. cable television
operations of Maclean Hunter.
On December 18, 1994, Comcast Cable Communications, Inc. ("Comcast Cable"), a
wholly-owned subsidiary of the Company, the California Public Employees'
Retirement System ("CalPERS") and the Company entered into an agreement (the
"LLC Agreement") pursuant to which Comcast Cable and CalPERS agreed to invest
approximately $305 million and $250 million, respectively, in a newly formed
limited liability company (the "LLC") established to acquire and operate cable
television systems (see below). The LLC is owned 55% by Comcast Cable and 45% by
CalPERS and is managed by the Company. At any time after the LLC Agreement's
seventh anniversary, or earlier under certain limited circumstances, CalPERS may
elect to liquidate its interest in the LLC at a price based upon the fair value
of CalPERS' interest in the LLC, adjusted, under certain circumstances, for
certain performance criteria relating to the fair value of the LLC or to the
Company's stock. Except in certain limited circumstances, Comcast Cable, at its
option, may satisfy this liquidity arrangement by purchasing CalPERS' interest
for cash or through the issuance of the Company's stock (subject to certain
limitations) or by selling the LLC. At certain times after the LLC Agreement's
eighth anniversary, Comcast Cable has the right to acquire for cash or through
the issuance of the Company's stock (subject to certain limitations) CalPERS'
interest in the LLC at a price based on the fair value of CalPERS' interest in
the LLC, subject to certain adjustments. The Company has agreed to guarantee the
obligations of Comcast Cable under the LLC Agreement.
On December 22, 1994, the Company assigned its rights and obligations under the
Maclean Hunter Agreement and the Barden Agreement to Comcast MH Holdings, Inc.
("MH Holdings"), an indirect wholly-owned subsidiary of the LLC, and pursuant to
the Maclean Hunter Agreement and the Barden Agreement, MH Holdings acquired the
U.S. cable television and alternative access operations of Maclean Hunter and
the outstanding shares of BCI (the "Acquisitions") for a total of approximately
$1.24 billion (subject to certain adjustments) in cash which, together with
funds for related expenses, was provided by the LLC ($555 million) and bank
financing ($715 million), as described below. The purchase price was determined
pursuant to arms-length negotiations.
In connection with the Acquisitions, MH Holdings entered into a credit agreement
(the "Credit Agreement"), dated as of December 22, 1994, with The Chase
Manhattan Bank (National Association), NationsBank of Texas, N.A. and the
Toronto-Dominion Bank, as Arranging Agents, The Bank of New York, The Bank of
Nova Scotia, Canadian Imperial Bank of Commerce and Morgan Guaranty Trust
Company of New York, as Managing Agents, NationsBank of Texas, N.A., as
Administrative Agent and several other banks. The Credit Agreement provides for
a nine-year secured reducing revolving credit facility permitting borrowings of
up to $850 million. The initial borrowing under the Credit Agreement to finance,
in part, the Acquisitions was $715 million. The Credit Agreement contains
representations and warranties, covenants, conditions and events of default
which are customary for similar transactions. Under the terms of the Credit
Agreement, borrowings thereunder are secured by the stock of MH Holdings and
certain of its wholly-owned subsidiaries and bear interest at rates that are
subject to certain adjustments based upon MH Holdings' ability to meet certain
ratios.
Comcast Cable's investment in the LLC was primarily funded with the proceeds of
a $300 million dividend from Comcast Cable Tri-Holdings, Inc. ("Tri-Holdings"),
a wholly-owned subsidiary of Comcast Cable, which borrowed under its existing
credit agreement (the "Tri-Holdings Credit Agreement") to make the dividend. The
Tri-Holdings Credit Agreement, dated as of September 14, 1994, is among Tri-
Holdings, The Bank of New York, The Chase Manhattan Bank (National Association),
PNC Bank, National Association, as Managing Agents, and The Bank of New York, as
Administrative Agent, and several other banks. The Tri-Holdings Credit Agreement
contains representations and warranties, covenants, conditions and events of
default which are customary for similar transactions. Under the terms of the
Tri-Holdings Credit Agreement, borrowings thereunder are secured by the stock
of Tri-Holdings and bear interest at rates that are subject to certain
adjustments based upon Tri-Holdings' ability to meet certain ratios.
Item 5. Other Events.
- - - ------ ------------
QVC, Inc.
--------
On November 18, 1994, the Company and Tele-Communications, Inc. ("TCI")
extended the expiration date of their tender offer (the "Offer") to purchase all
of the outstanding shares of common and preferred stock of QVC, Inc. ("QVC") to
December 16, 1994.
On December 5, 1994, the Company and TCI announced that (i) the Federal Trade
Commission ("FTC") had agreed that the information previously provided to the
FTC constituted substantial compliance with the FTC's requests issued on August
24, 1994 and September 8, 1994 and (ii) accordingly, the waiting period under
the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the "HSR
Act"), applicable to the purchase of shares of QVC pursuant to the Offer expired
on November 25, 1994 and the waiting period under the HSR Act applicable to the
acquisition by the Company and TCI of the shares of the tender offer acquisition
vehicle, QVC Programming Holdings, Inc. (the "Acquisition Vehicle Waiting
Period"), would expire on December 6, 1994. However, in order to allow the FTC
sufficient time to complete its review and continue discussions with the Company
and TCI relating to the transaction, the Company and TCI have agreed to provide
ten days' notice to the FTC prior to consummating the Offer. The Company and TCI
have not yet determined when they intend to give such notice. In addition, there
can be no assurance as to what action, if any, the FTC intends to take if such
notice is given. On December 6, 1994, the Acquisition Vehicle Waiting Period
expired.
On December 15, 1994, the Company and TCI extended the expiration date of the
Offer to January 13, 1995 because all of the conditions to the Offer had not
been satisfied. The Offer continues to be conditioned upon obtaining sufficient
financing on terms satisfactory to purchase all of the outstanding shares
pursuant to the Offer, to consummate the second step merger and to pay related
fees and expenses. The Company and TCI are continuing to pursue arrangements
providing for such financing. The Company anticipates that it will be necessary
to again extend the expiration date of the Offer.
Although the Company believes the consummation of the QVC acquisition is
probable, no assurances can be given that the acquisition will occur at all or
occur in the manner described above.
2
<PAGE>
Item 7. Financial Statements and Exhibits.
- - - ------ ---------------------------------
(a) Financial Statements
--------------------
The Company's Pro Forma Condensed Consolidated Financial Statements and
the Combined Financial Statements for the U.S. Cable Television
Operations of Maclean Hunter, Inc. are included in this Report and are
listed in the Index to Pro Forma Financial Information and Financial
Statements included immediately after the Exhibit Index of this Report.
The Consolidated Financial Statements for QVC, Inc. (formerly, QVC
Network, Inc.) for the quarter ended July 31, 1994 are incorporated by
reference to QVC, Inc.'s Quarterly Report on Form 10-Q for that period.
(b) Exhibits
--------
Exhibit No.
- - - -----------
(10.1) Comcast MHCP Holdings, L.L.C. Amended and Restated Limited Liability
Company Agreement, dated as of December 18, 1994, among Comcast Cable
Communications, Inc., The California Public Employees' Retirement
System and, for certain limited purposes, Comcast Corporation.
(10.2) Credit Agreement, dated as of December 22, 1994 among Comcast MH
Holdings, Inc., the banks listed therein, The Chase Manhattan Bank
(National Association), NationsBank of Texas, N.A. and The Toronto-
Dominion Bank, as Arranging Agents, The Bank of New York, The Bank of
Nova Scotia, Canadian Imperial Bank of Commerce and Morgan Guaranty
Trust Company of New York, as Managing Agents and NationsBank of
Texas, N.A., as Administrative Agent.
(10.3) Pledge Agreement, dated as of December 22, 1994, between Comcast MH
Holdings, Inc. and NationsBank of Texas, N.A., as the secured party.
(10.4) Pledge Agreement, dated as of December 22, 1994, between Comcast
Communications Properties, Inc. and NationsBank of Texas, N.A., as
the Secured Party.
(10.5) Affiliate Subordination Agreement (as the same may be amended,
modified, supplemented, waived, extended or restated from time to
time, this "Agreement") dated as of December 22, 1994 among Comcast
Corporation, Comcast MH Holdings, Inc., (the "Borrower"), any
affiliate of the Borrower that shall have become a party thereto and
NationsBank of Texas, N.A., as Administrative Agent under the Credit
Agreement dated as of December 22, 1994, among the Borrower, the Banks
listed therein, The Chase Manhattan Bank (National Association),
NationsBank of Texas, N.A. and The Toronto-Dominion Bank, as Arranging
Agents, The Bank of New York, The Bank of Nova Scotia, Canadian
Imperial Bank of Commerce and Morgan Guaranty Trust Company of New
York, as Managing Agents, and the Administrative Agent.
(10.6) Amendment to Agreement and Plan of Share Exchange, dated as of
November 4, 1994, among Barden Communications, Inc., Comcast
Corporation, and Don H. Barden and The Don H. Barden Revocable Trust.
(10.7) Second Amendment to Agreement and Plan of Share Exchange, dated as of
November 16, 1994, among Barden Communications, Inc., Comcast
Corporation, Don H. Barden and The Don H. Barden Revocable Trust.
(10.8) Registration Rights and Price Protection Agreement, as of December 22,
1994, by and between Comcast Corporation and The California Public
Employees' Retirement System.
(10.9) First Amendment to Share Purchase Agreement, dated as of December 22,
1994, by and between Comcast Corporation and Rogers Communications
Inc., to the Share Purchase Agreement dated June 18, 1994.
3
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: January 6, 1995 COMCAST CORPORATION
By: /s/ Lawrence S. Smith
-----------------------
Lawrence S. Smith
Senior Vice President
4
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Exhibit
- - - ----------- -------
(10.1) Comcast MHCP Holdings, L.L.C. Amended and Restated Limited Liability
Company Agreement, dated as of December 18, 1994, among Comcast Cable
Communications, Inc., The California Public Employees' Retirement
System and, for certain limited purposes, Comcast Corporation.
(10.2) Credit Agreement, dated as of December 22, 1994 among Comcast MH
Holdings, Inc., the banks listed therein, The Chase Manhattan Bank
(National Association), NationsBank of Texas, N.A. and the Toronto-
Dominion Bank, as Arranging Agents, The Bank of New York, The Bank of
Nova Scotia, Canadian Imperial Bank of Commerce and Morgan Guaranty
Trust Company of New York, as Managing Agents and NationsBank of
Texas, N.A., as Administrative Agent.
(10.3) Pledge Agreement, dated as of December 22, 1994, Comcast MH Holdings,
Inc. and NationsBank of Texas, N.A., as the secured party.
(10.4) Pledge Agreement, dated as of December 22, 1994, between Comcast
Communications Properties, Inc. and NationsBank of Texas, N.A., as
the Secured Party.
(10.5) Affiliate Subordination Agreement (as the same may be amended,
modified, supplemented, waived, extended or restated from time to
time, this "Agreement") dated as of December 22, 1994 among Comcast
Corporation, Comcast MH Holdings, Inc., (the "Borrower"), any
affiliate of the Borrower that shall have become a party thereto and
NationsBank of Texas, N.A., as Administrative Agent under the Credit
Agreement dated as of December 22, 1994, among the Borrower, the Banks
listed therein, The Chase Manhattan Bank (National Association),
NationsBank of Texas, N.A. and The Toronto-Dominion Bank, as Arranging
Agents, The Bank of New York, The Bank of Nova Scotia, Canadian
Imperial Bank of Commerce and Morgan Guaranty Trust Company of New
York, as Managing Agents, and the Administrative Agent.
(10.6) Amendment to Agreement and Plan of Share Exchange, dated as of
November 4, 1994, among Barden Communications, Inc., Comcast
Corporation, Don H. Barden and The Don H. Barden Revocable Trust.
(10.7) Second Amendment to Agreement and Plan of Share Exchange, dated as of
November 16, 1994, among Barden Communications, Inc., Comcast
Corporation, Don H. Barden and The Don H. Barden Revocable Trust.
(10.8) Registration Rights and Price Protection Agreement, as of December 22,
1994, by and between Comcast Corporation and The California Public
Employees' Retirement System.
(10.9) First Amendment to Share Purchase Agreement, dated as of December 22,
1994, by and between Comcast Corporation and Rogers Communications
Inc., to the Share Purchase Agreement dated June 18, 1994.
<PAGE>
COMCAST CORPORATION
INDEX TO PRO FORMA FINANCIAL INFORMATION
AND FINANCIAL STATEMENTS
Comcast Corporation - Unaudited Pro Forma Financial Information
- - - ---------------------------------------------------------------
Unaudited Pro Forma Financial Information F- 1
Unaudited Pro Forma Condensed Consolidated
Balance Sheet - September 30, 1994 F- 2
Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the Nine Months ended September 30, 1994
and Year ended December 31, 1993 F- 3
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements F- 5
U.S. Cable Television Operations of Maclean Hunter, Inc.
- - - --------------------------------------------------------
Quarter Ended September 30, 1994
- - - --------------------------------
Combined Balance Sheets as of September 30, 1994
and December 31, 1993 (Unaudited) F-11
Combined Statements of Operations for the Three
and Nine Months ended September 30, 1994 and
1993 (Unaudited) F-12
Combined Statements of Cash Flows for the
Nine Months ended September 30, 1994 and
1993 (Unaudited) F-13
Notes to Combined Financial Statements (Unaudited) F-14
<PAGE>
UNAUDITED PRO FORMA
FINANCIAL INFORMATION
On December 22, 1994, Comcast Corporation (the "Company") completed the
previously announced purchase (the "Purchase") of the U.S. cable television and
alternative access operations of Maclean Hunter Limited ("Maclean Hunter"). In
addition, on August 4, 1994, the Company, together with a wholly owned
subsidiary ("TCI Sub") of Tele-Communications, Inc., QVC Programming Holdings,
Inc. ("Holdings"), a corporation to be wholly owned by the Company and TCI Sub,
and QVC, Inc. ("QVC"), entered into a definitive merger agreement (the "Merger")
pursuant to which Holdings launched a tender offer on August 11, 1994 to
purchase all of the outstanding common and preferred stock of QVC. For a further
description of the Purchase and the Merger and certain related transactions, see
the notes to unaudited pro forma condensed consolidated financial statements.
The following unaudited pro forma condensed consolidated financial statements
reflect the consolidated financial position of the Company, Maclean Hunter and
QVC as of September 30, 1994, and their consolidated operations for the nine
months ended September 30, 1994 and for the year ended December 31, 1993. See
the notes to unaudited pro forma condensed consolidated financial statements for
a description of the assumptions used in preparing these unaudited pro forma
condensed consolidated financial statements.
Although the Company believes the consummation of the Merger is probable, there
are no assurances that it will occur at all or occur in the manner assumed in
the accompanying unaudited pro forma condensed consolidated financial
statements.
The unaudited pro forma condensed consolidated balance sheet assumes the
Purchase and the Merger occurred on September 30, 1994. The unaudited pro forma
condensed consolidated statements of operations for the nine months ended
September 30, 1994 and for the year ended December 31, 1993 assume the Purchase
and the Merger occurred on January 1, 1993.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with: 1) the historical consolidated financial statements of
the Company included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1993 and the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994; 2) the historical combined financial
statements of the U.S. Cable Television Operations of Maclean Hunter, Inc. as of
and for the three years in the period ended December 31, 1993, included in the
Company's Current Report on Form 8-K dated June 18, 1994 and filed November 2,
1994, and for the quarter ended September 30, 1994, included in this Current
Report on Form 8-K; and 3) QVC's historical consolidated financial statements
included in QVC's Annual Report on Form 10-K for the fiscal year ended January
31, 1994 and QVC's Quarterly Report on Form 10-Q for the fiscal quarter ended
July 31, 1994 and, in each case, incorporated by reference in this Current
Report on Form 8-K. The unaudited pro forma condensed consolidated statements of
operations are not necessarily indicative of the results which actually would
have occurred had the Purchase and the Merger occurred on the dates indicated or
which may result in the future.
F-1
<PAGE>
Comcast Corporation
Unaudited Pro Forma Condensed Consolidated Balance Sheet
September 30, 1994
(Dollars in thousands)
<TABLE>
<CAPTION>
(B) Maclean The Company
Maclean Hunter Pro Forma
The Company Hunter Pro Forma with Maclean
Historical Historical Adjustments Hunter
---------- ---------- ----------- ------
ASSETS
- - - ------
<S> <C> <C> <C> <C>
Current Assets
Cash, cash equivalents and
short-term investments $537,908 $93,778 ($95,212) (C.1.) $536,474
Accounts receivable, net 92,815 10,162 102,977
Inventories 11,041 536 11,577
Deferred income taxes
Other current assets 18,198 4,088 22,286
Due from affiliates 18,692 (18,692) (C.2.)
------------ ---------- ------------ -----------
Total Current Assets 659,962 127,256 (113,904) 673,314
Investments, principally in affiliates 828,951 828,951
Property and Equipment, net 1,040,779 185,956 229,920 (C.3.) 1,456,655
Deferred Income Taxes
Deferred Charges, net 2,434,392 141,426 1,266,818 (C.4.,9.) 3,842,636
Due from Affiliates 38,949 (38,949) (C.2.)
------------ ---------- ------------ -----------
$4,964,084 $493,587 $1,343,885 $6,801,556
============ ========== ============ ===========
LIABILITIES AND STOCKHOLDERS'
- - - -----------------------------
(DEFICIENCY) EQUITY
-------------------
Current Liabilities
Accounts payable and accrued expenses $348,634 $38,504 $14,600 (C.10.) $401,738
Current portion of long-term debt 136,731 9,390 (9,390) (C.5.) 136,731
Due to affiliates 25,373 (25,373) (C.2.)
------------ ---------- ------------ -----------
Total Current Liabilities 485,365 73,267 (20,163) 538,469
Long-term Debt, less current portion 3,820,993 37,090 977,910 (C.5.,6.) 4,835,993
Deferred Income Taxes 936,537 41,523 471,336 (C.9.) 1,449,396
Minority Interest and Other 357,816 6,978 249,531 (C.7.) 614,325
Due to Affiliates 93,607 (93,607) (C.2.)
Stockholders' (Deficiency) Equity
Common stock 238,870 238,870
Convertible preferred stock
Additional capital 875,345 241,122 (241,122) (C.8.) 875,345
(Accumulated deficit) retained earnings (1,792,534) (1,792,534)
Unrealized gains on marketable securities 58,580 58,580
Cumulative translation adjustments (16,888) (16,888)
------------ ---------- ------------ -----------
Total Stockholders' (Deficiency) Equity (636,627) 241,122 (241,122) (636,627)
------------ ---------- ------------ -----------
$4,964,084 $493,587 $1,343,885 $6,801,556
============ ========== ============ ===========
<CAPTION>
(E) The Company
QVC Pro Forma
QVC Pro Forma with Maclean
Historical Adjustments Hunter & QVC
---------- ----------- ------------
ASSETS
- - - ------
<S> <C> <C> <C>
Current Assets
Cash, cash equivalents and
short-term investments $49,537 ($285,707) (F.1.) $300,304
Accounts receivable, net 182,810 285,787
Inventories 150,041 161,618
Deferred income taxes 57,981 57,981
Other current assets 7,870 30,156
Due from affiliates
----------- ---------- -----------
Total Current Assets 448,239 (285,707) 835,846
Investments, principally in affiliates 6,840 (78,287) (F.2.) 757,504
Property and Equipment, net 81,072 1,537,727
Deferred Income Taxes 19,494 (19,494) (F.3.)
Deferred Charges, net 359,906 1,062,017 (F.4.,6.) 5,264,559
Due from Affiliates
----------- ---------- -----------
$915,551 $678,529 $8,395,636
=========== ========== ===========
LIABILITIES AND STOCKHOLDERS'
- - - -----------------------------
(DEFICIENCY) EQUITY
-------------------
Current Liabilities
Accounts payable and accrued expenses $317,211 ($180) (F.7.) $718,769
Current portion of long-term debt 3,143 139,874
Due to affiliates
----------- ---------- -----------
Total Current Liabilities 320,354 (180) 858,643
Long-term Debt, less current portion 6,751 1,163,803 (F.5.) 6,006,547
Deferred Income Taxes 36,610 (F.3.,6.) 1,486,006
Minority Interest and Other 66,742 (F.7.) 681,067
Due to Affiliates
Stockholders' (Deficiency) Equity
Common stock 403 (403) (F.8.) 238,870
Convertible preferred stock 56 (56) (F.8.)
Additional capital 450,259 (450,259) (F.8.) 875,345
(Accumulated deficit) retained earnings 137,728 (137,728) (F.8.) (1,792,534)
Unrealized gains on marketable securities 58,580
Cumulative translation adjustments (16,888)
----------- ---------- -----------
Total Stockholders' (Deficiency) Equity 588,446 (588,446) (636,627)
----------- ---------- -----------
$915,551 $678,529 $8,395,636
=========== ========== ===========
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements
F-2
<PAGE>
Comcast Corporation
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Nine Months Ended September 30, 1994
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
(B) Maclean The Company
Maclean Hunter Pro Forma
The Company Hunter Pro Forma with Maclean
Historical Historical Adjustments Hunter
---------- ---------- ----------- ------
<S> <C> <C> <C> <C>
Revenues, net $1,015,087 $195,216 $ $1,210,303
------------ ---------- ----------- ------------
Operating, Selling, General and
Administrative Expenses 578,889 110,716 (992) (C.11.) 688,613
Depreciation and Amortization 243,309 22,872 85,585 (C.12.) 351,766
------------ ---------- ----------- ------------
822,198 133,588 84,593 1,040,379
------------ ---------- ----------- ------------
Operating Income 192,889 61,628 (84,593) 169,924
Investment (Income) Expense
Interest expense 228,464 5,292 55,608 (C.13.) 289,364
Investment income (15,094) (3,295) (18,389)
Equity in net losses of affiliates 29,417 29,417
Minority interest and other (3,498) 4,203 (26,443) (C.14.) (25,738)
------------ ---------- ----------- ------------
239,289 6,200 29,165 274,654
------------ ---------- ----------- ------------
(Loss) Income Before Income Taxes (46,400) 55,428 (113,758) (104,730)
Income Taxes (Benefit) (621) 23,787 (55,181) (C.15.) (32,015)
------------ ---------- ----------- ------------
(Loss) Income from Continuing Operations ($45,779) $31,641 ($58,577) ($72,715)
============ ========== =========== ============
Loss from Continuing Operations Per Share ($0.19) ($0.31)
============ ============
Weighted Average Number of the Company's
Common Shares Outstanding During the Period 235,383 235,383
============ ============
<CAPTION>
(E) The Company
QVC Pro Forma
QVC Pro Forma with Maclean
Historical Adjustments Hunter & QVC
---------- ----------- ------------
<S> <C> <C> <C>
Revenues, net $972,207 ($6,748) (F.9.) $2,175,762
---------- ----------- ------------
Operating, Selling, General and
Administrative Expenses 822,896 (4,039) (F.9.) 1,507,470
Depreciation and Amortization 31,877 34,914 (F.10.) 418,557
---------- ------------ -------------
854,773 30,875 1,926,027
---------- ------------ -------------
Operating Income 117,434 (37,623) 249,735
Investment (Income) Expense
Interest expense 1,049 92,445 (F.11.) 382,858
Investment income (11,066) (29,455)
Equity in net losses of affiliates 28,884 7,784 (F.12.) 66,085
Minority interest and other 34,800 (24,616) (F.13.) (15,554)
---------- ----------- ------------
53,667 75,613 403,934
---------- ----------- ------------
(Loss) Income Before Income Taxes 63,767 (113,236) (154,199)
Income Taxes (Benefit) 37,130 (47,239) (F.14.) (42,124)
---------- ----------- ------------
(Loss) Income from Continuing Operations $26,637 ($65,997) ($112,075)
========== =========== ============
Loss from Continuing Operations Per Share ($0.48)
============
Weighted Average Number of the Company's
Common Shares Outstanding During the Period 235,383
============
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements
F-3
<PAGE>
Comcast Corporation
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Year Ended December 31, 1993
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
(B) Maclean The Company
Maclean Hunter Pro Forma
The Company Hunter Pro Forma with Maclean
Historical Historical Adjustments Hunter
---------- ---------- ----------- ------
<S> <C> <C> <C> <C>
Revenues, net $1,338,228 $258,666 $ $1,596,894
------------ ----------- ------------ --------------
Operating, Selling, General and
Administrative Expenses 731,832 144,887 (1,172) (C.11.) 875,547
Depreciation and Amortization 341,500 29,670 114,112 (C.12.) 485,282
------------- ----------- ------------ -------------
1,073,332 174,557 112,940 1,360,829
------------- ----------- ------------ -------------
Operating Income 264,896 84,109 (112,940) 236,065
Investment (Income) Expense
Interest expense 347,448 7,703 73,497 (C.13.) 428,648
Investment income (29,249) (2,962) (32,211)
Equity in net losses of affiliates 28,872 28,872
Minority interest and other 1,467 5,023 (34,698) (C.14.) (28,208)
------------- ----------- ------------ -------------
348,538 9,764 38,799 397,101
------------- ----------- ------------ -------------
(Loss) Income Before Income Taxes (83,642) 74,345 (151,739) (161,036)
Income Taxes (Benefit) 15,229 32,192 (73,372) (C.15.) (25,951)
------------- ----------- ------------ -------------
(Loss) Income from Continuing Operations ($98,871) $42,153 ($78,367) ($135,085)
============= =========== ============ =============
Loss from Continuing Operations Per Share ($0.46) ($0.63)
============= =============
Weighted Average Number of the Company's
Common Shares Outstanding During the Period 213,939 213,939
============= ============
<CAPTION>
(E) The Company
QVC Pro Forma
QVC Pro Forma with Maclean
Historical Adjustments Hunter & QVC
---------- ----------- ------------
<S> <C> <C> <C>
Revenues, net $1,191,449 ($4,699) (F.9.) $2,783,644
------------ ------------ ------------
Operating, Selling, General and
Administrative Expenses 1,009,503 (4,699) (F.9.) 1,880,351
Depreciation and Amortization 43,325 46,551 (F.10.) 575,158
------------ ------------ ------------
1,052,828 41,852 2,455,509
------------ ------------ ------------
Operating Income 138,621 (46,551) 328,135
Investment (Income) Expense
Interest expense 4,252 120,380 (F.11.) 553,280
Investment income (9,542) (41,753)
Equity in net losses of affiliates 2,118 30,990
Minority interest and other (16,349) (F.13.) (44,557)
------------ ------------ ------------
(3,172) 104,031 497,960
------------ ------------ ------------
(Loss) Income Before Income Taxes 141,793 (150,582) (169,825)
Income Taxes (Benefit) 69,310 (56,069) (F.14.) (12,710)
------------ ------------ ------------
(Loss) Income from Continuing Operations $72,483 ($94,513) ($157,115)
============ ============ ============
Loss from Continuing Operations Per Share ($0.73)
============
Weighted Average Number of the Company's
Common Shares Outstanding During the Period 213,939
============
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements
F-4
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Maclean Hunter
- - - --------------
A. Summary of Transactions
-----------------------
On June 18, 1994, Comcast Corporation (the "Company") entered into a Share
Purchase Agreement (the "Maclean Hunter Agreement") with Rogers
Communications Inc. ("Rogers") to purchase (the "Maclean Hunter Purchase")
the U.S. cable television and alternative access operations of Maclean
Hunter Limited ("Maclean Hunter") through the purchase of the shares of
Maclean Hunter, Inc. Maclean Hunter's U.S. cable television operations
include systems in New Jersey, Michigan and Florida and provide service to
approximately 550,000 cable subscribers.
As contemplated by the Maclean Hunter Agreement, on October 21, 1994, the
Company entered into an Agreement and Plan of Share Exchange (as amended,
the "Barden Agreement") with Barden Communications, Inc. ("BCI"), Don H.
Barden and The Don H. Barden Revocable Trust, pursuant to which the Company
agreed to acquire all of the outstanding shares of BCI (the "Barden
Purchase"). BCI holds interests in the partnerships that own, operate and
manage the cable television system for the City of Detroit, Michigan. The
remaining interests in those partnerships, other than a minority interest
of less than 1%, are part of the U.S. cable television operations of
Maclean Hunter.
On December 18, 1994, Comcast Cable Communications, Inc. ("Comcast Cable"),
a wholly-owned subsidiary of the Company, the California Public Employees'
Retirement System ("CalPERS") and the Company entered into an agreement
(the "LLC Agreement") pursuant to which Comcast Cable and CalPERS agreed to
invest approximately $305 million and $250 million, respectively, in a
newly formed limited liability company (the "LLC") established to acquire
and operate cable television systems (see below). The LLC is owned 55% by
Comcast Cable and 45% by CalPERS and is managed by the Company. At any time
after the LLC Agreement's seventh anniversary, or earlier under certain
limited circumstances, CalPERS may elect to liquidate its interest in the
LLC at a price based upon the fair value of CalPERS' interest in the LLC,
adjusted, under certain circumstances, for certain performance criteria
relating to the fair value of the LLC or to the Company's stock. Except in
certain limited circumstances, Comcast Cable, at its option, may satisfy
this liquidity arrangement by purchasing CalPERS' interest for cash or
through the issuance of the Company's stock (subject to certain
limitations) or by selling the LLC. At certain times after the LLC
Agreement's eighth anniversary, Comcast Cable has the right to acquire for
cash or through the issuance of the Company's stock (subject to certain
limitations) CalPERS' interest in the LLC at a price based on the fair
value of CalPERS' interest in the LLC, subject to certain adjustments. The
Company has agreed to guarantee the obligations of Comcast Cable under the
LLC Agreement.
On December 22, 1994, the Company assigned its rights and obligations under
the Maclean Hunter Agreement and the Barden Agreement to Comcast MH
Holdings, Inc. ("MH Holdings"), an indirect wholly-owned subsidiary of the
LLC, and pursuant to the Maclean Hunter Agreement and the Barden Agreement,
MH Holdings acquired the U.S. cable television and alternative access
operations of Maclean Hunter and the outstanding shares of BCI (the
"Acquisitions") for a total of approximately $1.24 billion (subject to
certain adjustments) in cash which, together with funds for related
expenses, was provided by the LLC ($555 million) and bank financing ($715
million), as described below. The purchase price was determined pursuant to
arms-length negotiations.
In connection with the Acquisitions, MH Holdings entered into a credit
agreement (the "Credit Agreement"), dated as of December 22, 1994, with The
Chase Manhattan Bank (National Association), NationsBank of Texas, N.A. and
the Toronto-Dominion Bank, as Arranging Agents, The Bank of New York, The
Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Morgan Guaranty
Trust Company of New York, as Managing Agents, NationsBank of Texas, N.A.,
as Administrative Agent and several other banks. The Credit Agreement
provides for a nine-year secured reducing revolving credit facility
permitting borrowings of up to $850 million. The initial borrowing under
the Credit Agreement to finance, in part, the Acquisitions was $715
million. The Credit Agreement contains representations and warranties,
covenants, conditions and events of default which are customary for similar
transactions. Under the terms of the Credit Agreement, borrowings
thereunder are secured by the stock of MH Holdings and certain of its
wholly-owned subsidiaries and bear interest at rates that are subject to
certain adjustments based upon MH Holdings' ability to meet certain ratios.
Comcast Cable's investment in the LLC was primarily funded with the
proceeds of a $300 million dividend from Comcast Cable Tri-Holdings, Inc.
("Tri-Holdings"), a wholly-owned subsidiary of Comcast Cable, which
borrowed under its existing credit agreement (the "Tri-Holdings Credit
Agreement") to make the dividend. The Tri-Holdings Credit Agreement, dated
as of September 14, 1994, is among Tri-Holdings, The Bank of New York, The
Chase Manhattan Bank (National Association), PNC Bank, National
Association, as Managing Agents, and The Bank of New York, as
Administrative Agent, and several other banks. The Tri-Holdings Credit
Agreement contains representations and warranties, covenants, conditions
and events of default which are customary for similar transactions. Under
the terms of the Tri-Holdings Credit Agreement, borrowings thereunder are
secured by the stock of Tri-Holdings and bear interest at rates that are
subject to certain adjustments based upon Tri-Holdings' ability to meet
certain ratios.
F-5
<PAGE>
Prior to the Maclean Hunter Purchase, the minority shareholders of Cable TV
of Jersey City, Inc. ("Jersey City"), an indirect majority owned subsidiary
of Maclean Hunter, who owned 20% of the outstanding common shares, sold
their shares to a subsidiary of Maclean Hunter (the "Jersey City
Purchase"). The purchase consideration for the Jersey City Purchase of
approximately $14.6 million was paid on January 3, 1995.
B. Basis of Presentation
---------------------
Maclean Hunter, Inc. had historically operated a periodical publishing
business and had been the holding company for all of Maclean Hunter
Limited's other U.S. operations, which included cable television, business
forms and periodical publishing. As contemplated by the Maclean Hunter
Agreement, prior to the Maclean Hunter Purchase, Rogers removed the
non-cable television and non-alternative access businesses of Maclean
Hunter, Inc. Accordingly, when MH Holdings acquired the shares of Maclean
Hunter, Inc., it only purchased the U.S. cable television and alternative
access businesses.
The historical combined financial statements of Maclean Hunter included in
the unaudited pro forma condensed consolidated financial statements
represent the historical net assets that the Company acquired and exclude
the assets, liabilities and results of operations of the non-cable
television and non-alternative access operations of Maclean Hunter, Inc.
C. Pro Forma Adjustments
---------------------
The following adjustments and elimination entries have been made to the
unaudited pro forma condensed consolidated balance sheet to reflect the
Maclean Hunter Purchase, Barden Purchase and Jersey City Purchase:
1. Represents the net change in cash, cash equivalents and short-term
investments resulting from the repayment of balances due to and due
from affiliates (resulting in a net payment of $61.3 million based on
such balances as of September 30, 1994), repayment of Maclean Hunter's
historical long-term debt ($46.5 million) prior to the Maclean Hunter
Purchase, and
F-6
<PAGE>
the cash requirements for the Maclean Hunter Purchase and Barden
Purchase, including transaction costs ($1.252 billion), net of the
proceeds from long-term borrowings ($1.015 billion)(See C.6. below)
and the investment by CalPERS ($250 million).
2. Represents the repayment of balances due to and due from affiliates.
3. Estimated fair value of the property and equipment acquired in the
Maclean Hunter Purchase, Barden Purchase and Jersey City Purchase in
excess of the book value of such property and equipment. The estimated
fair value of the acquired property and equipment is subject to
adjustment upon receipt by the Company of an independent appraisal of
Maclean Hunter, BCI and Jersey City.
4. Allocation of the Maclean Hunter, BCI and Jersey City purchase price
to deferred charges ($932.2 million), principally to franchise costs
and subscriber lists, partially offset by the elimination of Maclean
Hunter's historical goodwill ($136.7 million). The purchase price
allocation is subject to adjustment upon receipt by the Company of an
independent appraisal of Maclean Hunter, BCI and Jersey City.
5. Repayment of Maclean Hunter's historical long-term debt prior to the
Maclean Hunter Purchase.
6. Incurrence of additional long-term indebtedness under the Credit
Agreement ($715 million) and the Tri-Holdings Credit Agreement ($300
million). Proceeds from these borrowings were used to fund, in part,
the Maclean Hunter Purchase and Barden Purchase.
7. Represents the minority interest related to the CalPERS investment
($250 million), offset, in part, by the elimination of the minority
interests acquired in the Barden Purchase and Jersey City Purchase.
8. Elimination of Maclean Hunter's historical equity.
9. Represents goodwill and deferred income taxes resulting from the
differences in the book and tax bases of the assets of Maclean Hunter,
BCI and Jersey City under the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109") ($471.3 million).
10. Represents the liability for the Jersey City Purchase consideration
which was paid on January 3, 1995.
The following adjustments to the unaudited pro forma condensed consolidated
statements of operations have been made to reflect the Maclean Hunter
Purchase, Barden Purchase and Jersey City Purchase:
11. Elimination of historical management fees paid by Maclean Hunter.
12. Represents additional depreciation and amortization expense resulting
from the increased fair market value of the assets acquired in excess
of their historical book value
F-7
<PAGE>
and amortization of goodwill recorded under SFAS 109, offset, in part,
by the elimination of Maclean Hunter's historical goodwill
amortization. Depreciation expense assumes an estimated remaining
average property and equipment life of 8 years. Amortization expense
assumes an estimated average life for deferred charges, principally
franchise costs and subscriber lists, and goodwill of 12 years and 40
years, respectively. Debt issuance costs are amortized over the term
of the related debt.
13. Represents the increase in interest expense due to the incurrence of
additional long-term indebtedness as a result of the Maclean Hunter
Purchase and Barden Purchase, at an interest rate of 8.0%, offset, in
part, by the elimination of Maclean Hunter's historical interest
expense on balances due to affiliates and long-term debt.
14. Represents the minority interest resulting from CalPERS' 45% interest
in the LLC, net of tax, and the elimination of the acquired minority
interests in the Barden Purchase and Jersey City Purchase.
15. Represents the adjustments to the tax provision resulting from the
above pro forma adjustments.
QVC
- - - ---
D. Summary of Transactions
-----------------------
On August 4, 1994, the Company, together with a wholly owned subsidiary
("TCI Sub") of Tele-Communications, Inc. ("TCI"), QVC Programming Holdings,
Inc. ("Holdings"), a Delaware corporation to be wholly owned by the Company
and TCI Sub, and QVC, Inc. ("QVC"), entered into a definitive merger
agreement (the "Merger Agreement") pursuant to which Holdings launched a
tender offer (the "Offer") on August 11, 1994, to purchase all of the
outstanding shares of common and preferred stock (the "Shares") of QVC at
$46 per share of common stock and $460 per share of preferred stock.
The Offer is conditioned upon, among other things: (i) there being validly
tendered and not withdrawn prior to the expiration date of the Offer, which
is currently January 13, 1995, Shares which, together with the Shares
agreed to be contributed to Holdings by the Company and TCI Sub pursuant
to the Joint Bidding Agreement described below, represent at least a
majority of the outstanding shares of common stock on a fully diluted
basis, (ii) Holdings having obtained sufficient financing on terms
satisfactory to it to purchase all of the outstanding Shares pursuant to
the Offer, consummate the merger of its wholly-owned subsidiary and QVC
contemplated by the Merger Agreement (the "Merger") and pay related fees
and expenses, and (iii) expiration of all applicable waiting periods under
the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the
"HSR Act"). Although all applicable waiting periods under the HSR Act have
expired, the Company and TCI have agreed to provide ten days' notice to the
Federal Trade Commission ("FTC") prior to consummating the Offer in order
to allow the FTC sufficient time to complete its review and continue
discussions with the Company and TCI relating to the transaction. The
Company and TCI Sub have not yet determined when they intend to give such
notice. In addition, there can be no assurance as to what action, if any,
the FTC intends to take if such notice is given.
F-8
<PAGE>
On August 4, 1994, the Company, TCI Sub and TCI entered into a letter
agreement (the "Joint Bidding Agreement"), as amended, pursuant to which
the Company and TCI Sub agreed, among other things, to contribute certain
cash and Shares to Holdings for the purpose of acquiring QVC in the Offer.
Pursuant to the Joint Bidding Agreement, following the Merger, Comcast and
TCI Sub will own approximately 57.4% and 42.6%, respectively, of Holdings.
Although the Company believes the consummation of the QVC acquisition is
probable, no assurances can be given that the acquisition will occur at all
or occur in the manner assumed in the accompanying unaudited pro forma
condensed consolidated financial statements.
E. Basis of Presentation
---------------------
QVC's fiscal year ends on January 31. Accordingly, the historical
financial position and results of operations of QVC presented in the
unaudited pro forma condensed consolidated financial statements are
presented two months in arrears. The historical balance sheet of QVC
included in the unaudited pro forma condensed consolidated balance sheet is
as of July 31, 1994. The unaudited pro forma condensed consolidated
statements of operations for the nine months ended September 30, 1994 and
for the year ended December 31, 1993 include QVC's historical results of
operations for the nine months ended July 31, 1994 and for the year ended
October 31, 1993, respectively.
F. Pro Forma Adjustments
---------------------
The following adjustments and elimination entries have been made to the
unaudited pro forma condensed consolidated balance sheet to reflect
consummation of the QVC acquisition and the transactions contemplated under
the Joint Bidding Agreement:
1. Represents the Company's estimated cash contribution to fund, in part,
the Offer.
2. Elimination of the Company's historical net investment in QVC's common
stock.
3. Reclassification of QVC's historical long-term deferred income tax
assets to long-term deferred income tax liabilities.
F-9
<PAGE>
4. Primarily, the allocation of the QVC purchase price to deferred
charges ($1.010 billion), principally to goodwill and cable television
distribution rights. The purchase price allocation is subject to
adjustment upon receipt by the Company of an independent appraisal of
QVC.
5. Incurrence of additional long-term indebtedness under a revolving
credit and term loan agreement with banks and the offering of
Holdings' senior subordinated debentures. Proceeds from these
borrowings are to be used to finance the Offer.
6. Represents goodwill and deferred income taxes resulting from the
difference in the book and tax bases of the QVC assets acquired,
under the provisions SFAS 109 ($56.1 million).
7. Represents the minority interest related to TCI Sub's
cash and stock contributions (recorded at TCI Sub's
historical basis) ($70.9 million) offset, in part, by the elimination
of certain revenues from QVC deferred by the Company and Maclean
Hunter.
8. Elimination of QVC's historical equity.
The following adjustments to the unaudited pro forma condensed consolidated
statements of operations have been made to reflect the consummation of the QVC
acquisition and the transactions contemplated under the Joint Bidding Agreement:
9. Elimination of commissions and other payments by QVC to the Company
and Maclean Hunter.
10. Represents additional amortization expense resulting from the
increased fair market value of the assets acquired in excess of
their historical book value and amortization of goodwill.
Amortization expense assumes an estimated average life of 30 years
for goodwill and 10 years for cable television distribution rights.
Debt issuance costs are amortized over the estimated term of the
related debt.
11. Represents the increase in interest expense due to the incurrence of
additional long-term indebtedness, assuming a weighted average
interest rate of 10.3%.
12. Elimination of the Company's historical equity in the net income of
QVC. The Company commenced equity method accounting for its investment
in QVC effective January 1, 1994.
13. Represents the minority interest resulting from TCI Sub's 42.6%
interest in Holdings, net of tax.
14. Represents the adjustments to the tax provision resulting from the
above pro forma adjustments.
F-10
<PAGE>
U.S. Cable Television Operations of Maclean Hunter, Inc.
<TABLE>
<CAPTION>
COMBINED BALANCE SHEETS
[thousands of U.S. dollars]
[Unaudited]
September 30 December 31
1994 1993
$ $
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents 93,778 83,806
Accounts receivable, net 10,162 9,921
Prepaid charges and other 4,624 3,072
Due from affiliates 18,692 10,792
------- ---------
Total current assets 127,256 107,591
Property and equipment, net 185,956 185,428
Goodwill, net 136,699 140,047
Deferred charges and other assets, net 4,727 4,544
Due from affiliates 38,949 38,949
------- ---------
493,587 476,559
======= =========
LIABILITIES AND NET EQUITY
Current liabilities
Accounts payable and accrued liabilities 33,576 29,849
Income and other taxes payable 4,928 6,176
Due to affiliates 25,373 15,865
Current portion of long-term debt 9,390 7,043
------- ---------
Total current liabilities 73,267 58,933
Equipment deposits and other
long-term liabilities 3,765 3,741
Due to affiliates 93,607 99,306
Long-term debt 37,090 46,480
Deferred income taxes 41,523 42,311
Minority interest 3,213 15,039
------- ---------
Total liabilities 252,465 265,810
Contingencies
Net equity 241,122 210,749
------- ---------
493,587 476,559
======= =========
</TABLE>
See accompanying notes
F-11
<PAGE>
U.S. Cable Television Operations of Maclean Hunter, Inc.
COMBINED STATEMENTS OF OPERATIONS
Quarter Ended September 30, 1994
[thousands of U.S. dollars]
[Unaudited]
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
-------------------- ---------------------
1994 1993 1994 1993
$ $ $ $
<S> <C> <C> <C> <C>
Revenue 65,242 63,933 195,216 194,214
Operating expenses (36,059) (36,332) (110,716) (108,699)
Depreciation and amortization (7,628) (5,246) (22,872) (22,138)
-------------------- ---------------------
Operating income 21,555 22,355 61,628 63,377
Intercompany interest expense, net (1,188) (1,264) (3,325) (3,793)
Other income, net 1,190 1,558 3,295 2,202
External interest expense (714) (675) (1,967) (2,047)
Minority interest (1,358) (1,429) (4,203) (3,774)
-------------------- ---------------------
Income before income taxes and cumulative
effect of accounting change 19,485 20,545 55,428 55,965
Income taxes (8,268) (8,653) (23,787) (21,528)
-------------------- ---------------------
Income before cumulative effect
of accounting change 11,217 11,892 31,641 34,437
Cumulative effect of accounting change - - - 5,023
-------------------- ---------------------
Net income 11,217 11,892 31,641 39,460
==================== =====================
</TABLE>
See accompanying notes
F-12
<PAGE>
U.S. Cable Television Operations of Maclean Hunter, Inc.
COMBINED STATEMENTS OF CASH FLOWS
Quarter Ended September 30, 1994
[thousands of U.S. dollars]
[Unaudited]
<TABLE>
<CAPTION>
Nine Months Ended
September 30
-----------------------
1994 1993
$ $
<S> <C> <C>
OPERATING ACTIVITIES
Net income 31,641 39,460
Non-cash items included in net income
Depreciation and amortization 22,872 22,138
Deferred income tax benefit (4) (7,138)
Minority interest 4,203 3,774
--------- ---------
58,712 58,234
Net change in non-cash working capital
balances related to operations (366) 873
--------- ---------
Cash provided by operating activities 58,346 59,107
--------- ---------
FINANCING ACTIVITIES
Debt repayments (7,043) (5,907)
Change in amounts due to/from affiliates (14,092) (12,122)
Distribution to Barden Communications Inc. (5,000) -
Advances to non-cable subsidiaries (1,268) (255)
--------- ---------
Cash used in financing activities (27,403) (18,284)
--------- ---------
INVESTING ACTIVITIES
Additions to property and equipment (20,851) (17,342)
Other (120) 592
--------- ---------
Cash used in investing activities (20,971) (16,750)
--------- ---------
Net increase in cash and cash equivalents 9,972 24,073
Cash and cash equivalents, beginning of period 83,806 56,947
--------- ---------
Cash and cash equivalents, end of period 93,778 81,020
========= =========
</TABLE>
See accompanying notes
F-13
<PAGE>
U.S. Cable Television Operations of Maclean Hunter, Inc.
NOTES TO COMBINED FINANCIAL STATEMENTS
[tabular figures in thousands of U.S. dollars]
[Unaudited]
Quarter Ended September 30, 1994
1. BASIS OF PRESENTATION
Between April 7 and June 20, 1994, Rogers Communications Inc. ["Rogers"]
acquired all of the issued and outstanding common shares of Maclean Hunter
Limited. All shares of Maclean Hunter Limited acquired had been deposited in
trust pursuant to a voting trust agreement between Rogers and the Honourable
Pierre Juneau, P.C., O.C. The shares remained in trust until various
regulatory authorities in both the United States and Canada provided their
respective approvals to the acquisition by Rogers of control of Maclean Hunter
Limited and its subsidiaries in December 1994. Upon receipt of regulatory
approval, the shares were transferred to Rogers, at which time Rogers caused
Maclean Hunter Limited to be dissolved, and its assets and liabilities to be
transferred to Rogers.
On June 18, 1994, Rogers entered into an agreement [the "Maclean Hunter
Agreement"] with Comcast Corporation ["Comcast"] under which Rogers agreed to
sell to Comcast all of the shares of Maclean Hunter, Inc., a wholly-owned
subsidiary of Maclean Hunter Limited. The closing of this sale to an indirect
majority-owned subsidiary of Comcast ["MH Holdings"] occurred on December 22,
1994 following the dissolution of Maclean Hunter Limited, at which time all of
the shares of Maclean Hunter, Inc. were owned directly by Rogers [see note 9].
Maclean Hunter, Inc. had historically operated a periodical publishing business
as well as being the holding company for all of Maclean Hunter Limited's other
U.S. operations, which include cable television, business forms and periodical
publishing. Under the Maclean Hunter Agreement, Rogers removed the
non-cable television and non-alternative access businesses of Maclean Hunter,
Inc. prior to the closing of the sale to MH Holdings. Accordingly, when
MH Holdings acquired the shares of Maclean Hunter, Inc., it purchased only the
U.S. cable television and alternative access businesses.
These combined financial statements of the U.S. Cable Television Operations of
Maclean Hunter, Inc. [the "Company"] have been prepared to provide historical
financial information related to the net assets which Comcast acquired.
Accordingly, the assets, liabilities and results of operations of the non-cable
television and non-alternative access operations of Maclean Hunter, Inc. have
been excluded from these combined financial statements.
In addition, these combined financial statements include the accounts of Barden
Cablevision [the "Partnership"], which holds the franchise to operate a cable
television system in the City of Detroit, Michigan. Maclean Hunter, Inc.,
through wholly-owned subsidiaries, had an approximate 59% equity interest in the
Partnership as of September 30, 1994. Maclean Hunter, Inc. also had a contract
to direct the day-to-day management of the Partnership. As described in note 9,
MH Holdings ultimately acquired the remaining equity and voting interest in the
Partnership other than a minority interest of less than 1%.
F-14
<PAGE>
The combined balance sheet at December 31, 1993 has been prepared from the
audited combined balance sheet at that date. The combined balance sheet at
September 30, 1994, the combined statements of operations for the three and nine
months ended September 30, 1994 and 1993 and the combined statements of cash
flows for the nine months ended September 30, 1994 and 1993 have been prepared
by the Company and have not been audited by the Company's Independent Auditors.
In the opinion of management, all adjustments [which include only normal
recurring adjustments and the adjustment described in note 2] necessary to
present fairly the financial position, results of operations and cash flows at
September 30, 1994 and for all periods presented have been made.
Certain information and note disclosures normally included in the Company's
annual financial statements prepared in accordance with generally accepted
accounting principles have been omitted. These combined financial statements
should be read in conjunction with the Company's December 31, 1993 audited
financial statements and notes thereto included in Comcast's Current Report on
Form 8-K, dated June 18, 1994, filed with the Securities and Exchange Commission
on November 2, 1994. The results of operations for the periods ended September
30, 1994 are not necessarily indicative of operating results for the full year.
2. NEW ACCOUNTING PRONOUNCEMENT
Income taxes are provided using the liability method prescribed by Statement of
Financial Accounting Standards ["SFAS"] No. 109, "Accounting for Income
Taxes," which the Company adopted January 1, 1993. The cumulative effect of
adopting SFAS No. 109 as of January 1, 1993 was to increase net income by
$5,023,000.
3. CHANGE IN ESTIMATE
During fiscal 1993, the Company completed a comprehensive review of depreciation
rates taking account of historical experience and of accepted industry practice.
As a result of this review, the Company revised, on a prospective basis, the
remaining period over which certain of its assets would be depreciated in order
to better reflect management's estimate of the remaining useful lives of the
assets and to make the depreciation rates consistent with those used by other
companies in the industry.
The Company now depreciates all of its head-ends, system plant and subscriber
installations over fifteen years, compared to the seven-and ten-year periods
that were previously used for such assets by certain subsidiaries. This change
was effective July 1, 1993. In addition, converters and decoders are now
depreciated over periods of six to eight years compared to five years
previously. This change was effective January 1, 1993.
4. CONTINGENCIES
The Company is subject to claims which arise in the ordinary course of its
business and other legal proceedings. In the opinion of management, the amount
of ultimate liability with respect to these actions will not materially affect
the financial position or results of operations of the Company.
F-15
<PAGE>
5. NET EQUITY
Net equity consists of the following:
<TABLE>
<CAPTION>
1994
$
<S> <C>
Net equity, beginning of period 210,749
Net income 31,641
Advances to non-cable subsidiaries, net (1,268)
-------
Net equity, end of period 241,122
-------
</TABLE>
6. 1992 CABLE ACT
On October 5, 1992, Congress enacted the Cable Television Consumer Protection
and Competition Act of 1992 [the "1992 Cable Act"], which, among other
provisions, requires rates for certain levels of cable service to be regulated,
either by the local franchising authority or the Federal Communications
Commission ["FCC"]. The FCC issued detailed rules for implementation of rate
regulation in May 1993 and the regulations became effective on September 1,
1993. Following a thorough and exhaustive review of the new regulations, all of
the Company's cable operations implemented the new rules on the due date,
resulting in a reduction in revenue and cash provided by operating activities of
approximately $2.2 million in the last four months of 1993, and approximately
$5.2 million in the first nine months of 1994.
In February 1994, the FCC announced an additional set of regulations which
generally became effective May 15, 1994. The Company has completed its review of
these latest regulations and has implemented them where applicable on the due
date.
The Company believes it has taken all actions necessary to comply with the 1992
Cable Act and with all FCC regulations issued to date. However, it is unable to
determine whether the FCC and other regulatory authorities will concur that the
actions taken to date were appropriate.
The regulations also contain restrictions on future rate increases for the
regulated levels of cable service. Accordingly, future revenue growth will have
to come from unregulated services and new subscribers to a greater degree than
has been the case in the past.
On November 10, 1994, the FCC announced its "Going Forward" rules which, among
other things, permit cable operators to charge an additional $0.20 per month per
channel for channels added to the cable programming services tier, up to a
maximum of six channels, and may recover an additional $0.30 in fees paid to
programmers for such channels. The ruling applies to channels added between May
15, 1994 and December 31, 1996 and is effective January 1, 1995. The Company is
currently reviewing the ruling and is unable to predict the effect on its future
results of operations.
F-16
<PAGE>
7. DISTRIBUTION TO PARTNER
On July 28, 1994, the Partnership made a distribution of $5,000,000 to Barden
Communications Inc. ["BCI"], which has a 40% equity interest and voting control
in the Partnership. This distribution was funded by an advance from Maclean
Hunter, Inc.
8. AGREEMENT TO ACQUIRE BCI
On May 13, 1994, the partnership agreement governing the affairs of the
Partnership was amended. Included in this amendment was a provision which
granted an option to the owners of BCI to elect to sell their shares of BCI to
Maclean Hunter, Inc. or an affiliate once a buyer was identified for Maclean
Hunter, Inc.'s cable operations, at a price proportionate to the price that the
buyer agreed to pay for such operations. Following the agreement between Rogers
and Comcast referred to in note 1, this option was exercised on June 29, 1994.
Pursuant to the exercise of this option, Rogers was to negotiate a formal
purchase agreement whereby Maclean Hunter, Inc. or an affiliate would purchase
all of the outstanding shares of BCI. However, it was subsequently agreed that
Comcast would purchase directly all of the outstanding shares of BCI in
connection with its purchase of the shares of Maclean Hunter, Inc. [see note 9].
9. OTHER EVENTS
On October 21, 1994, Comcast entered into an Agreement and Plan of Share
Exchange [as amended, the "Barden Agreement"] with BCI, Don H. Barden and The
Don H. Barden Revocable Trust, pursuant to which Comcast agreed to acquire all
of the outstanding shares of BCI [see below].
In November, 1994, the minority shareholders of Cable TV of Jersey City, Inc.,
who owned 20% of the outstanding common shares, sold their shares to a
subsidiary of Maclean Hunter, Inc., for purchase consideration of approximately
$14.6 million, which was paid on January 3, 1995.
On December 22, 1994, Comcast assigned its rights and obligations under the
Maclean Hunter Agreement and the Barden Agreement to its indirect majority-owned
subsidiary [the "Comcast Sub"], and pursuant to the Maclean Hunter Agreement and
the Barden Agreement, the Comcast Sub acquired the Company and the outstanding
shares of BCI for a total of approximately $1.24 billion [subject to certain
adjustments] in cash.
F-17
<PAGE>
Exhibit 10.1
COMCAST MHCP HOLDINGS, L.L.C.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
dated as of
December 18, 1994
among
COMCAST CABLE COMMUNICATIONS, INC.,
THE CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
and
for certain limited purposes
COMCAST CORPORATION
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
<S> <C> <C>
1.01 Definitions........................................................ 2
<CAPTION>
ARTICLE II
FORMATION AND PURPOSES OF
THE COMPANY
<S> <C> <C>
2.01 Formation of the Company...........................................34
2.02 Name of the Company................................................35
2.03 Purpose of the Company.............................................35
2.04 Place of Business of the Company...................................35
2.05 Registered Office and Registered Agent.............................36
2.06 Duration of the Company............................................36
2.07 Title to Company Property..........................................36
2.08 Filing of Certificates.............................................36
2.09 Limitation on Liability............................................37
<CAPTION>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
<S> <C> <C>
3.01 Representations and Warranties of Comcast
and CCCI.........................................................37
3.02 Representations and Warranties of CalPERS..........................47
3.03 Survival...........................................................50
<CAPTION>
ARTICLE IV
PERCENTAGE INTEREST;
CAPITAL COMMITMENTS
<S> <C> <C>
4.01 Percentage Interests ..............................................51
4.02 Capital Commitments ...............................................51
4.03 Other Matters......................................................55
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
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ARTICLE V
CAPITAL ACCOUNTS AND ALLOCATIONS
<S> <C> <C>
5.01 Capital Accounts; Book Allocations.................................56
5.02 Tax Allocations....................................................56
<CAPTION>
ARTICLE VI
DISTRIBUTIONS
<S> <C> <C>
6.01 Distributions......................................................56
6.02 Amounts Withheld...................................................57
6.03 Dissolution........................................................58
<CAPTION>
ARTICLE VII
MANAGEMENT OF COMPANY
<S> <C> <C>
7.01 Management.........................................................58
7.02 Quorum and Manner of Acting........................................60
7.03 Meetings...........................................................68
7.04 Action by Consent..................................................68
7.05 Telephonic Meetings................................................68
7.06 Absence of Authority to Bind.......................................69
7.07 Monitoring Committee...............................................69
7.08 Inspection Rights of Members.......................................69
7.09 Records and Reports................................................70
7.10 Preparation of Budget..............................................73
7.11 Notice of Litigation and Disputes..................................74
<CAPTION>
ARTICLE VIII
TAX MATTERS
<S> <C> <C>
8.01 Fiscal Year........................................................74
8.02 Partnership for Tax Purposes.......................................74
8.03 Tax Matters........................................................75
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
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ARTICLE IX
COMPANY OPPORTUNITIES
<S> <C> <C>
9.01 Noncompetition......................................................76
9.02 Cable System Acquisitions...........................................81
9.03 Right of First Offer................................................83
9.04 Limitation on Rights ...............................................89
9.05 Conditions to Subsequent Contributions..............................90
9.06 Other Business Activities...........................................91
9.07 Duties..............................................................92
9.08 Discretion..........................................................92
<CAPTION>
ARTICLE X
MANAGEMENT AND PROGRAMMING AGREEMENTS
<S> <C> <C>
10.01 Integration Into Comcast; Management................................93
10.02 Programming Agreement...............................................93
10.03 Directors' & Officers' Insurance....................................94
10.04 Other Expenditures..................................................94
10.05 Comcast, CCCI and CalPERS Not Managers..............................95
<CAPTION>
ARTICLE XI
COVENANTS OF THE MEMBERS,
COMCAST AND CALPERS
<S> <C> <C>
11.01 Best Efforts........................................................96
11.02 Confidentiality ....................................................96
11.03 CalPERS Right of First Offer........................................98
11.04 Notices............................................................101
11.05 Comcast Information................................................101
<CAPTION>
ARTICLE XII
CLOSING CONDITIONS
<S> <C> <C>
12.01 Conditions to the Obligation of Each Member........................102
12.02 Conditions to the Obligation of CalPERS............................103
12.03 Concurrent Condition to CalPERS Obligation.........................107
12.04 Conditions to the Obligation of CCCI...............................108
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
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ARTICLE XIII
DISPOSITIONS OF INTERESTS
<S> <C> <C>
13.01 General............................................................109
13.02 CalPERS Put........................................................110
13.03 CCCI Call..........................................................125
13.04 Alternative Call...................................................127
13.05 Sale Option........................................................130
13.06 Determination of Appraised Value...................................131
13.07 Sale of Company....................................................139
13.08 Nominee Purchase...................................................143
13.09 Limitation on Stock................................................144
<CAPTION>
ARTICLE XIV
NONCOMPLIANCE; EVENT RISKS
<S> <C> <C>
14.01 Noncompliance; Misconduct..........................................144
14.02 Event Risk.........................................................146
<CAPTION>
ARTICLE XV
EXCULPATION AND INDEMNIFICATION
<S> <C> <C>
15.01 Exculpation and Indemnification....................................153
<CAPTION>
ARTICLE XVI
TERMINATION, DISSOLUTION AND LIQUIDATION
<S> <C> <C>
16.01 Term...............................................................157
16.02 Liquidating Events.................................................157
16.03 Winding Up.........................................................159
16.04 Distribution Upon Dissolution .....................................160
16.05 Rights of Members; Resignation.....................................161
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Page
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ARTICLE XVII
MISCELLANEOUS
<S> <C> <C>
17.01 Notices............................................................162
17.02 Amendments; No Waivers.............................................164
17.03 Expenses...........................................................165
17.04 Successors and Assigns.............................................167
17.05 Headings...........................................................167
17.06 Governing Law .....................................................167
17.07 Exclusive Jurisdiction ............................................168
17.08 Counterparts; Effectiveness........................................168
17.09 Third Party Beneficiaries .........................................169
17.10 Severability.......................................................169
17.11 Further Assurances.................................................169
17.12 Entire Agreement...................................................169
17.13 Enforcement........................................................170
17.14 CalPERS Account Information........................................171
</TABLE>
v
<PAGE>
SCHEDULES
---------
10.01 Comcast Senior Management
EXHIBITS
--------
1.01A Material Subsidiaries
1.01B Registration Rights and Price Protection
Agreement
4.02 Form of Comcast Communications Properties, Inc.
Zero Coupon Note
7.07 Monitoring Plan
10.01 Management Agreement
10.02 Programming Agreement
12.02E(1) Opinion of Davis Polk & Wardwell, Special
Counsel to Comcast
12.02E(2) Opinion of Stanley Wang, General Counsel for
Comcast
12.02E(3) Opinion of Arthur R. Block, Deputy General
Counsel for Comcast
12.02E(4) Opinion of Richards, Layton & Finger, Special
Counsel to Comcast
12.04C(1) Opinion of S. Kayla Gillan, Assistant General
Counsel of CalPERS
12.04C(2) Opinion of Prickett, Jones, Elliott, Kristol &
Schnee, Special Counsel to CalPERS
13.02 Examples of Put Price Calculation
vi
<PAGE>
LIMITED LIABILITY COMPANY AGREEMENT
-----------------------------------
AGREEMENT dated as of December 18, 1994 among Comcast Cable
Communications, Inc., a Delaware corporation ("CCCI"), and the California Public
Employees' Retirement System, a governmental unit of the State of California
("CalPERS"), each in its respective capacity as a Member (as hereinafter
defined), and for certain limited purposes, Comcast Corporation, a Pennsylvania
corporation ("Comcast").
WITNESSETH:
WHEREAS, Comcast and CCCI have formed a Delaware limited liability
company (together with any successor entity, the "Company") and have entered
into the Limited Liability Company Agreement (the "Existing Agreement"), dated
as of December 12, 1994, between Comcast and CCCI;
WHEREAS, Comcast, CalPERS and CCCI wish to replace the Existing
Agreement with this Agreement;
WHEREAS, on the date hereof, CalPERS will be admitted as a Member (as
hereinafter defined) of the Company and Comcast will immediately thereafter
resign from the Company;
NOW, THEREFORE, the parties hereto agree as follows:
<PAGE>
ARTICLE 1.
DEFINITIONS
1.01. Definitions. (a) As used herein, the following terms have the
-----------
following meanings:
"Acquisition Facility" means one or more credit or other loan
agreements (or, subject to Section 7.02(b)(xiv), any refinancing thereof)
between the Company or any of its Subsidiaries and one or more lenders pursuant
to which the Company or such Subsidiary may borrow money (i) to finance a given
Cable Acquisition and (ii) if deemed necessary or appropriate, to provide a
reasonable amount of working capital to operate the Cable Systems acquired. The
terms of and maximum amount that may be borrowed under a given Acquisition
Facility will be determined by CCCI in its reasonable discretion at the time of
the relevant Cable Acquisition and will be communicated promptly in writing to
CalPERS together with a copy of all documentation for the Acquisition Facility.
An Acquisition Facility may be established for each Cable Acquisition made by
the Company or any of its Subsidiaries. Except for the Initial Facility, an
Acquisition Facility established in connection with a given Cable Acquisition
may not be used to finance other Cable Acquisitions or for other purposes.
"Act of Misconduct" means any CalPERS Act of Misconduct or any Comcast
Act of Misconduct.
-2-
<PAGE>
"Adjacent Basic Subscriber" means a Basic Subscriber of a Cable System
with a franchise area adjoining the franchise area of a Cable System (i) that is
owned directly or indirectly by the Company or (ii) that both is owned or
managed by a member of the Comcast Group and forms a part of a Cluster that
includes a Cable System owned directly or indirectly by the Company. For
purposes of this definition, two franchise areas will be treated as adjacent if
in the ordinary course of its business, Comcast would manage the Cable Systems
serving the two franchise areas as an integrated unit.
"Adverse Member" means (i) CCCI upon and with respect to the
occurrence of any Event of Comcast Noncompliance or Comcast Act of Misconduct
and (ii) CalPERS upon and with respect to the occurrence of any Event of CalPERS
Noncompliance or CalPERS Act of Misconduct.
"Affiliate" means, with respect to any Person, any Person controlling,
controlled by or under common control with such Person; provided that neither
the Company nor any of its Subsidiaries shall be treated as an Affiliate of a
Member or any of its Affiliates. For purposes of this definition, "control" (and
the derivative terms "controlling" and "controlled") shall have the meaning
assigned to this term in Rule 405 of the SEC under the Securities Act.
-3-
<PAGE>
"Applicable Law" means any federal, state, local or foreign law
(including common law and civil and criminal law), statute, rule, regulation or
ordinance.
"Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement between Comcast and Holdings dated as of the Initial
Closing Date .
"Average Price" of any common stock of Comcast as of any date means
the average Closing Price of such common stock during the twenty (20) trading
day period immediately preceding such date.
"Bankruptcy Event" involving any Person means (i) such Person
commencing a voluntary case or other proceeding, or an involuntary case or other
proceeding being commenced against such Person and remaining undismissed and
unstayed for a period of sixty (60) days, in either case seeking liquidation,
reorganization or other relief with respect to such Person or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver or liquidator, custodian or other
similar official of such Person or any substantial part of its property, (ii)
such Person consenting to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, (iii) such Person admitting in writing its inability to
pay its debts generally as they become due or
-4-
<PAGE>
generally failing to pay such debts as they become due, or (iv) such Person
making or consenting to any assignment of any material portion of its assets for
the benefit of creditors.
"Basic Subscribers" of any Cable System means, as of any date, the sum
of (i) the total number of households (exclusive of "additional outlets" as such
term is commonly understood in the cable television industry and also exclusive
of customers billed on a bulk billing or commercial account basis) subscribing
on the last day of the fiscal quarter of the Person owning such Cable System
ending on, or most recently ended prior to, such date to receive basic or
expanded basic service (as such terms are commonly understood in the cable
television industry) in such Cable System and paying the standard monthly
service fees and charges imposed by such Cable System, provided that such term
--------
shall not include any household whose account is more than ninety (90) days past
due on the last day of the fiscal quarter of the Person owning such Cable System
ending on (or most recently ended prior to) such date and (ii) the total number
of equivalent households served on a bulk billing or commercial account basis,
which shall be deemed to be equal to the quotient obtained by dividing (A) the
total fees and charges billed by such Cable System during the fiscal quarter of
such Cable System ending on, or most recently ended prior to, such date on a
bulk billing or commercial account basis by (B) the
-5-
<PAGE>
weighted average standard monthly service fees and charges for basic and
expanded basic service (as such terms are commonly understood in the cable
television industry) that Basic Subscribers of the type described in clause (i)
above were billed during the fiscal quarter.
"BCI Purchase Agreement" means the Agreement and Plan of Share
Exchange dated as of October 21, 1994 among Barden Communications, Inc.,
Comcast, Don N. Barden and The Don H. Barden Revocable Trust, as amended to the
date hereof and as further amended in accordance with the condition set forth in
Section 12.02(g).
"Business" means the cable television, wireless video, alternative
access, wireline or cable telephony, video dialtone, private cable or other
services provided by wire, cable or other conduit or closed transmission path,
related operations and other businesses conducted, purchased, acquired or built
by the Company or its Subsidiaries.
"Business Day" shall mean a day which is not a Saturday, Sunday or
legal holiday on which banking institutions in the State of California or the
Commonwealth of Pennsylvania are closed.
"Cable Act" means the Cable Television Consumer Protection and
Competition Act of 1992.
-6-
<PAGE>
"Cable Acquisition" means the acquisition of one or more Cable Systems
in a single or group of related transactions.
"Cable Franchise" means a franchise for the operation of a Cable
System.
"Cable Group" means the group consisting of all Subsidiaries of
Comcast engaged primarily in the management, ownership or operation of Cable
Systems.
"Cable System" means a cable television system offering multichannel
video services in the United States, and includes the tangible and intangible
assets associated with such system.
"Call Exercise Period" means the first sixty (60) days following the
eighth (8th) anniversary hereof and the first sixty (60) days following the
ninth (9th) anniversary hereof .
"CalPERS Act of Misconduct" means any act or omission of CalPERS that
has a Material Adverse Effect on the Company and that:
(a) constitutes fraud, gross negligence or reckless or willful
misconduct relative to the Company or any Subsidiary of the Company; or
(b) results in CalPERS, the Company or any of its Subsidiaries having
been determined (by any governmental or arbitral action) to have violated any
Applicable Law.
-7-
<PAGE>
"Capital Commitment" means, with respect to any Member at any given
time, the Initial Capital Commitment of such Member plus such additional amounts
as such Member shall have expressly agreed in writing to contribute to the
capital of the Company in accordance with the terms of Section 9.03. A Member's
Capital Commitment shall be calculated without regard to any distributions made
to such Member.
"Change in Control of Comcast" means (i) Ralph J. Roberts, his spouse,
descendants (and their spouses), heirs, executors and administrators and trusts
for himself or his family (collectively, the "Roberts Family") ceasing to own,
directly or indirectly, or ceasing to have the power to vote, shares of Comcast
capital stock having a majority of the total votes of all outstanding Comcast
capital stock entitled to vote in an ordinary election of directors, (ii) shares
of Comcast stock having a majority of the total votes of all outstanding Comcast
capital stock entitled to vote in an ordinary election of the board of directors
of Comcast not having been voted by the Roberts Family as a block on all matters
submitted to the stockholders of Comcast as to which such shares are entitled to
vote, or (iii) Comcast ceasing to be the record and beneficial owner, directly
or indirectly (through an unbroken chain of wholly-owned Subsidiaries of
Comcast), of securities or other ownership interests (A) having ordinary voting
power to elect a majority of the
-8-
<PAGE>
board of directors or other persons performing similar functions of the Comcast
Cable Parent or (B) representing a majority of the common equity interest in the
Comcast Cable Parent.
"Closing Price" of any common stock of Comcast on any date means the
closing price per share of such common stock in the primary market for such
common stock at the close of such market on such date (or the immediately
preceding trading day if such date is not a trading day), as reported by the
primary market (inter-dealer quotation system or securities exchange) on which
such common stock is quoted or traded, as the case may be. If on any trading day
there is no transaction for such common stock, the mean between the closing bid
and asked prices, as so reported, for such stock shall be substituted for the
closing price on such day. The Closing Price of Comcast Class B Common Stock on
any date shall be deemed to be equal to the Closing Price of Comcast Class A
Common Stock on such date.
"Cluster" means two or more Cable Systems that, in the ordinary course
of its business, Comcast would manage as an integrated unit.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to specific provisions of the Code include references to
corresponding provisions of successor law.
-9-
<PAGE>
"Comcast" shall have the meaning specified in the first paragraph of
this Agreement and shall also include any successor to Comcast as a result of
any merger, consolidation, reorganization or similar transaction involving
Comcast.
"Comcast Act of Misconduct" means any act or omission of Comcast or
any Subsidiary of Comcast (including, without limitation, CCCI) or the Company
or any Subsidiary of the Company or any Key Executive that has a Material
Adverse Effect on the Company or Comcast and that:
(a) constitutes fraud, gross negligence or reckless or willful
misconduct relative to Comcast or any Material Subsidiary or to the Company or
any Subsidiary of the Company; or
(b) results in such Person having been determined (by any governmental
or arbitration action) to have violated any Applicable Law.
"Comcast Agreements" means the MHI Agreements and the Company Related
Agreements.
"Comcast Basic Subscribers" means the total number of Basic
Subscribers of all Cable Systems owned by the Extended Comcast Group .
"Comcast Board" means the Board of Directors of Comcast.
-10-
<PAGE>
"Comcast Cable Parent" means CCCI or any successor entity that
similarly is a member of and that serves as the common Parent of the entities
comprising the Cable Group.
"Comcast Group" means Comcast and its Subsidiaries.
"Comcast Stock" means Comcast Class A Special Common Stock (NASDAQ
symbol CMCSK) or any other capital stock of Comcast into which the Comcast Class
A Special Common Stock is reclassified or recapitalized, or into which it is
converted pursuant to any merger, consolidation or reorganization.
"Company" has the meaning set forth in the preamble hereto.
"Company Business" means (i) the Business, and (ii) the commercial
exploitation of all or any part of all Cable Systems owned at any time by the
Company or any Subsidiary of the Company or any tangible or intangible asset or
right of such Cable System or the Company or any Subsidiary of the Company
including, without limitation, the franchise, existing and former subscriber
lists and other information, and existing and former subscriber base, potential
subscriber base (homes passed) and information with respect thereto, goodwill
and contract rights, and shall include, without limitation, (a) the sale or
provision at any given time of any goods or services to any Company Subscriber
or Potential Company Subscriber; provided that such goods or services are of a
type that at such time either (x) owners and operators of Cable
-11-
<PAGE>
Systems generally provide, are planning to provide or are actively considering
providing to their subscribers or (y) Comcast provides, is planning to provide
or is actively considering providing to subscribers of Cable Systems owned or
managed by a member of the Comcast Group and (b) the transmission or
communication of information or data to or from any such Company Subscriber or
Potential Company Subscriber by wireline, cable or other conduit or closed
transmission path (using any presently known or hereafter developed technology).
"Company Group" means the Company and its Subsidiaries.
"Company Related Agreements" means the Registration Rights Agreement,
the Guaranty Agreement, the Management Agreement and the Programming Agreement.
"Company Subscriber" means any Person who is, at the relevant time, a
subscriber to any service of any Cable System owned at such time by any member
of the Company Group.
"Control Affiliate" means, with respect to any Person, any Person
controlling, controlled by or under common control with such Person; provided
that for purposes of this definition and its application in this Agreement
neither the Company nor any of its Subsidiaries shall be treated as a Control
Affiliate of a Member or any of its Control Affiliates. For purposes of this
definition, a Person
-12-
<PAGE>
"controls" another Person if at the relevant time it directly or indirectly owns
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such Person.
"Covered Person" means a Member, any Control Affiliate of a Member,
any officers, directors, shareholders, partners, members, employees,
representatives or agents of a Member (including a Proxy or any member of the
Monitoring Committee) or its Control Affiliates or any officer, employee or
agent of the Company or its Affiliates .
"Debt" of any Person means, without duplication, (i) all obligations
of such Person for borrowed money, (ii) all obligations of such Person to pay
the deferred purchase price of property or services, except trade accounts
payable, (iii) all obligations of such Person under a lease that would be
treated as a "capital lease" under GAAP, (iv) all obligations of such Person as
lessor under a sale/leaseback agreement, (v) all obligations of such Person
evidenced by a promissory note, bond, debenture or similar written obligation to
pay money, (vi) all obligations that are secured by a Lien (other than a
Permitted Lien) on any property or asset owned by such Person whether or not
such Person has assumed responsibility for such obligations, and (vii) except
for Permitted Guarantees, all obligations guaranteed by such Person or for
-13-
<PAGE>
which such Person is otherwise contingently liable pursuant to any contract or
agreement; provided that obligations between the Company and any of its wholly-
owned Subsidiaries or between any such wholly-owned Subsidiaries shall not
constitute "Debt".
"Default" means (a) the failure to pay, after any applicable grace
period, any principal of, interest or premium on, or other fee or other sum in
respect of, any Debt as and when the same becomes due, or (b) any event or
condition (i) with respect to which any applicable cure or grace period has
expired and (ii) which (x) results in the acceleration of the maturity of any
Debt or (y) with the giving of notice, would enable the holder of such Debt or
any Person acting on such holder's behalf to accelerate the maturity thereof;
provided that in the case of either (a) or (b), an act, omission or event that
would otherwise constitute a Default shall not constitute a Trigger Event if it
is curable and it is cured within five (5) Business Days of the date the party
committing such Default has notice or actual knowledge thereof. The failure of
the primary obligor to satisfy any obligation with respect to which a Person has
provided a guarantee or is otherwise contingently liable shall not be treated as
a Default by such Person unless such Person does not within five (5) days of
notice thereof satisfy (or pending such satisfaction contests in good faith by
appropriate proceedings
-14-
<PAGE>
and establishes appropriate reserves therefor) its liability with respect
thereto.
"Disabling Conduct" means fraud, bad faith, gross negligence or
reckless or willful misconduct relative to any member of the Company Group or
the material breach of this Agreement or any of the Company Related Agreements.
"EBITDA" means, with respect to any Person for any period, (i) the net
income of such Person and its consolidated subsidiaries for such period,
adjusted to exclude (A) gains and losses from unusual or extraordinary items,
(B) interest income and (C) the amount of any restoration of any charge to or
other reserve against revenues taken during any prior period, in each case for
such period plus (ii) the income and gross receipts taxes (whether or not
deferred), Interest Expense, bank fees and expenses, depreciation, amortization
and other non-cash charges to income of such Person and its consolidated
subsidiaries, in each case for such period. The elements of EBITDA shall be
calculated in accordance with GAAP on a consolidated basis, applied on a
consistent basis.
"Equity Security" has the meaning ascribed to such term in Rule 405
promulgated under the Securities Act, and in any event includes any security
having the attendant right to vote for directors or similar representatives.
-15-
<PAGE>
"Event of CalPERS Noncompliance" means the occurrence of any of the
following events, if such event has a Material Adverse Effect on the Company:
(a) breach by CalPERS of any agreement, covenant, representation or
warranty in this Agreement after written notice and failure to cure, if curable,
within thirty (30) days of such notice;
(b) the failure of CalPERS to make any Capital Contribution that it
is obligated to make hereunder after notice and failure to cure such failure to
contribute within ten (10) Business Days after such notice of failure to
contribute; provided, however, that there shall be no requirement of notice of
failure, or opportunity to cure the failure, to make the Capital Contribution
required for the MHI Acquisition;
(c) any Bankruptcy Event involving CalPERS; or
(d) enactment, repeal or application of any law, rule, statute,
ordinance or regulation applicable to CalPERS by any legislative, judicial or
administrative body with jurisdiction over such Person that would make it
unlawful for CalPERS to continue to hold its Interest in the Company or that
would provide CalPERS any form of sovereign immunity with respect to its
contractual obligations hereunder or its obligations as a Member under the
Delaware Act, after written
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<PAGE>
notice and failure to cure, if curable, within thirty (30) days of such notice.
"Event of Comcast Noncompliance" means the occurrence of any of the
following events, if such event has a Material Adverse Effect on the Company or
Comcast:
(a) breach by Comcast or CCCI or the Company or any Subsidiary of
Comcast, CCCI or the Company of any covenant, agreement, representation or
warranty in this Agreement or any of the Company Related Agreements, after
written notice and failure to cure, if curable, within thirty (30) days of such
notice;
(b) the failure of CCCI to make any Capital Contribution that it is
required to make hereunder after notice and failure to cure such failure to
contribute within ten (10) Business Days after such notice of failure to
contribute; provided, however, that there shall be no requirement of notice of
failure, or opportunity to cure the failure, to make the Capital Contribution
required for the MHI Acquisition; or
(c) enactment, repeal or application of any law, rule, statute,
ordinance or regulation applicable to Comcast, CCCI or any Material Subsidiary
by any legislative, judicial or administrative body with jurisdiction over such
Person that would make it unlawful for CCCI to continue to hold its Interest in
the Company.
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<PAGE>
"Event of Noncompliance" means any Event of CalPERS Noncompliance or
any Event of Comcast Noncompliance.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extended Comcast Group" means the Comcast Group and the Company
Group.
"FCC" means the United States Federal Communications Commission .
"GAAP" means United States generally accepted accounting principles.
"Guaranty Agreement" means the Guaranty Agreement between Comcast and
CalPERS dated as of the date hereof.
"Holdings Agreements" means the Assignment and Assumption Agreement,
the Note Purchase and Assignment Agreement, the Management Agreement, the
Programming Agreement and the Initial Facility.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvement Act of
1976, as amended.
"Initial Facility" means the Acquisition Facility for the MHI
Acquisition.
"Interest" means, with respect to any Member, such Member's interest
in the Company as provided in this Agreement or the Delaware Act, or both.
"Interest Expense" means, for any Person for any period, without
duplication, (i) all interest on Debt of such
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<PAGE>
Person and commitment fees paid in respect thereof, accrued, whether or not
actually paid, during such period plus (ii) the net amount accrued, whether or
not actually paid, by such Person pursuant to any Interest Rate Protection
Agreement during such period (or minus the net amount receivable, whether or not
actually received, by such Person thereunder during such period).
"IRR" means, as of any date, that rate of return which is that
discount rate compounded annually which, when applied to all cash flows from and
to a Member in respect of its Interest (including all Capital Contributions of
such Member, distributions by the Company to the relevant Member and the
proceeds received by such Member in respect of any sale of its Interest and
excluding all amounts paid pursuant to Article 10 and all monitoring
establishment fees, monitoring fees or expenses paid pursuant to Section 17.03)
up to and including the date such calculation is made, produces a net present
value of those cash flows equal to zero. IRR shall be calculated using the
internal rate of return function of Microsoft Excel 5.0, absent manifest error.
"Key Executive" means (i) Ralph J. Roberts, (ii) Brian L. Roberts,
(iii) Julian A. Brodsky, (iv) John R. Alchin, (v) Stanley Wang, (vi) Lawrence S.
Smith, (vii) Thomas G. Baxter or (viii) any successor to any of these
individuals or any officer or key executive of Comcast or any Subsidiary
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of Comcast who performs substantially the same functions as those currently
performed by any of these individuals, or any of the respective successors to
any of the individuals described in this clause (viii). Any Key Executive who
leaves office or is replaced by a successor as set forth in the foregoing clause
(viii) shall cease to be a Key Executive upon such replacement.
"knowledge" means, when used with respect to any Person, the actual
knowledge of such Person, or if such Person is not an individual, the actual
knowledge of any officer of such Person.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest in respect of such asset. For the purposes of this Agreement, any
Person shall be deemed to own subject to a Lien any asset which it has acquired
or holds subject to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement relating to
such asset.
"Market Capitalization of Comcast" on any date means the aggregate for
all classes of common stock of (x) the number of issued and outstanding shares
of such class of
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common stock of Comcast on such date multiplied by (y) the Closing Price of such
class of common stock on such date.
"Market Capitalization Deficiency Date" means any date after the
Initial Closing Date on which (x) the Market Capitalization of Comcast is below
$1.5 billion and (y) the percentage decline in the per share price of Comcast
Stock since the Initial Closing Date is at least 50% greater than the percentage
decline, if any, in the NASDAQ Index since the Initial Closing Date. The
calculation of the Market Capitalization of Comcast referred to in clause (x) of
the preceding sentence and the decline in the per share price of Comcast Stock
referred to in clause (y) of the preceding sentence shall appropriately account
for any (a) dividends declared or distributions made on any class of capital
stock of cash (other than routine cash dividends) or other property, (b)
subdivisions or splits of the outstanding Comcast Stock, (c) combinations or
reclassifications of the outstanding Comcast Stock into a smaller number of
shares, (d) issuance of any shares of Comcast capital stock in a
reclassification of Comcast Stock or (e) merger in which Comcast is one of the
constituent corporations.
"Market Float" of Comcast means, on any given date, the Market
Capitalization of Comcast on such date calculated as if (i) only shares of
Comcast Stock, and shares convertible into shares of Comcast Stock, were then
outstanding and (ii)
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all shares of common stock owned by any and all members of the Roberts Family
were not outstanding.
"Market Float Deficiency Condition" means, at any time of
determination, Comcast's Market Float being below $1.5 billion or Comcast Stock
not being listed or quoted on either the New York Stock Exchange or NASDAQ/NMS.
"Material Adverse Effect" on any Person means a material adverse
effect, or any condition, situation or set of circumstances that could
reasonably be expected to have a material adverse effect, on such Person and its
Subsidiaries, taken as a whole, or the business, assets, condition (financial or
other) or operations of such Person and its Subsidiaries, taken as a whole.
"Material Disabling Conduct" means Disabling Conduct that has a
Material Adverse Effect on the Company or the Put Price.
"Material Debt" means Debt of one or more members of the Extended
Comcast Group, arising in one or more related or unrelated transactions, in an
aggregate principal or face amount at such time exceeding 10% of the aggregate
Debt of the Extended Comcast Group.
"Material Subsidiary" on any date means a Subsidiary of Comcast or the
Company that on such date either (i) has, together with its consolidated
subsidiaries, total recorded assets or liabilities, determined in accordance
with GAAP on a
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<PAGE>
consolidated basis, equal to at least 20% of the total recorded assets or
liabilities, respectively, of Comcast and its consolidated subsidiaries,
determined in accordance with GAAP on a consolidated basis, or (ii) has had
EBITDA for the preceding four (4) fiscal quarters equal to at least 20% of the
total consolidated EBITDA of Comcast for such period. For this purpose, recorded
assets or liabilities and EBITDA shall be determined from the financial
statements, audited or unaudited (whichever is the more recent), as of the last
day of the Comcast fiscal quarter ending on (or most recently ended prior to)
such date (and, in the case of EBITDA from such financial statements for the
three fiscal quarters preceding such fiscal quarter) provided that in any event,
(x) the Comcast Affiliate that is a Member of the Company, (y) any Subsidiary of
the Company that controls MHI and (z) MHI will be treated as Material
Subsidiaries for purposes hereof. Comcast and CCCI represent and warrant that as
of the date hereof, the information set forth in Exhibit 1.01A regarding
Subsidiaries of Comcast is accurate and complete in all material respects.
"Member" means CCCI or CalPERS, as the case may be, in its capacity as
a member of the Company, or any other Person who becomes a substituted Member as
herein provided in such Person's capacity as a member of the Company.
"MHI" means Maclean Hunter Inc.
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<PAGE>
"MHI Agreements" means the MHI Purchase Agreement, the BCI Purchase
Agreement and the MHI Indemnity Agreement.
"MHI Business" means the business to be owned by MHI at the MHI
Closing.
"MHI Closing" means the Closing as defined in the MHI Purchase
Agreement and as defined in the BCI Purchase Agreement.
"MHI Closing Date" means the Closing Date as defined in the MHI
Purchase Agreement and as defined in the BCI Purchase Agreement.
"MHI Indemnity Agreement" means the Indemnity Agreement dated as of
November 16, 1994 between Rogers Communications Inc. and Comcast, as amended to
the date hereof, and as further amended in accordance with the condition set
forth in Section 12.02(g).
"MHI Purchase Agreement" means the Share Purchase Agreement dated as
of June 18, 1994 between Comcast and Rogers Communications Inc, as amended to
the date hereof, and as further amended in accordance with the condition set
forth in Section 12.02(g).
"NASDAQ Index" means the NASDAQ Composite Index, as reported in The
Wall Street Journal; provided that if any class of Comcast common stock becomes
listed on the New York Stock Exchange, the Standard and Poor's 500 Stock Index
shall
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<PAGE>
be substituted for the NASDAQ Index in the definition of "Market Capitalization
Deficiency Date."
"NASDAQ/NMS" means The NASDAQ Stock Market's National Market System.
"Non-Adverse Member" means, upon and with respect to the occurrence of
any Event of Noncompliance or Act of Misconduct, the Member that is not the
Adverse Member.
"Note Purchase and Assignment Agreement" means the Note Purchase and
Assignment Agreement to be dated as of the Initial Closing Date among Rogers
Communications, Inc., Data Business Forms Limited and Holdings.
"PCS" means a radio communications system authorized under the rules
for broadband personal communications services designated as Subpart E of Part
24 of the FCC's rules, including the network, marketing, distribution, sales,
customer interface and operations functions relating thereto.
"Parent" means, with respect to any Person, any other Person of which
such Person is a Subsidiary.
"Percentage Interest" means, with respect to any Member, such Member's
Percentage Interest as set forth in Section 4.01.
"Permitted Guarantees" means any performance bonds, letters of credit
and guarantees in connection with franchise agreements, or pole attachment,
conduit or trench agreements to which any member of the Company Group is a
party.
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<PAGE>
"Permitted Interest Rate Protection Agreement" means, for any Person,
a simple agreement (as hereinafter defined) between such Person and a bank or
other financial institution having combined capital and surplus of at least
$200,000,000 or that has (or that is a subsidiary of a bank holding company that
has) publicly traded unsecured long-term debt securities given a rating of A (or
the equivalent rating then in effect) or better by Standard & Poor's Ratings
Group or a rating of A2 (or the equivalent rating then in effect) or better by
Moody's Investors Service, Inc., providing for the transfer by such Person to
such bank or other financial institution or the mitigation of such Person's
interest risks either generally as to all of such Person's interest exposure or
as to specific interest exposure, provided that (i) the notional amount of such
simple agreement or agreements does not exceed 100% of the relevant indebtedness
and (ii) the maturity of such agreement or agreements does not exceed the stated
maturity of the relevant indebtedness. For purposes of this definition, "simple
agreement" means an interest rate swap, cap or collar agreement or similar
arrangement (x) not involving leverage, (y) without any currency or commodity
feature, and (z) not involving coupon payments based upon any formula, other
than a formula calling for the payment of a floating sum plus a spread.
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<PAGE>
"Permitted Lien" means (i) any Lien securing a tax, assessment or
other governmental charge or levy or the claim of a materialman, mechanic,
carrier, warehouseman or landlord for labor, materials, supplies or rentals or
any similar Lien arising under law and not under contract or (ii) any Lien
consisting of a deposit or pledge made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation; provided that, in
the case of (i) and (ii), either (a) the obligation secured by such Lien is not
yet due, or (b) the obligation is being contested in good faith by appropriate
proceedings and an appropriate reserve has been established therefor.
"Person" means an individual, corporation, partner-ship, association,
trust, limited liability company or any other entity or organization, including
a government or political subdivision or an agency, unit or instrumentality
thereof.
"Potential Company Subscriber" means any Person who, at the relevant
time, could subscribe to any service of any Cable System owned at the relevant
time by the Company or any Subsidiary of the Company by reason of being an
occupant of a home passed (as this expression is commonly understood in the
cable television industry) by any such Cable System.
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<PAGE>
"Prime Rate" means the prime commercial lending rate of NationsBank of
Texas, N.A., as publicly announced to be in effect from time to time. The Prime
Rate shall be adjusted automatically, without notice, on the effective date of
any change in such prime commercial lending rate. The Prime Rate is not
necessarily the lowest rate of interest of NationsBank of Texas, N.A.
"Qualified Cable Acquisition" means any Cable Acquisition (i) during
the term of the Company, (ii) in which the number of Adjacent Basic Subscribers
of the Cable Systems to be acquired constitute at least 75% of the total number
of Basic Subscribers of the Cable Systems to be acquired and (iii) that is not a
Special Approval Transaction.
"Registration Rights Agreement" means the Registration Rights and
Price Protection Agreement between Comcast and CalPERS in the form attached as
Exhibit 1.01B, to be entered into at the Initial Closing.
"Regulations" means the Treasury Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations are in effect from
time to time. References to specific provisions of the Regulations include
references to corresponding provisions of successor regulations.
"SEC" means the United States Securities and Exchange Commission.
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<PAGE>
"SEC Documents" means (i) the annual report of Comcast on Form 10-K
for Comcast's fiscal year ended December 31, 1993, (ii) Comcast's quarterly
reports on Form 10-Q for its fiscal quarters ended March 31, June 30 and
September 30, 1994, (iii) Comcast's proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of Comcast
held since January 1, 1994, and (iv) all of Comcast's other reports, statements,
schedules and registration statements filed with the SEC pursuant to the
Exchange Act or the Securities Act since December 31, 1993.
"Securities Act" means the Securities Act of 1933, as amended.
"Security" has the meaning set forth in Section 2(1) of the Securities
Act. For the avoidance of doubt, no debt instrument (other than an Equity
Security) held by a commercial lending institution or any Member or any of its
Affiliates shall be considered a Security for purposes of this Agreement.
"Special Approval Transaction" means (a) the acquisition by any member
of the Company Group of any minority interest in any Person, other than such
acquisition incidental to a Cable Acquisition or any transaction otherwise
unanimously approved by the Members, (b) the acquisition by any member of the
Company Group of marketable Securities of
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<PAGE>
any Person that is not (and after such acquisition will not be) a member of the
Company Group, other than such acquisition incidental to a Cable Acquisition or
to any transaction otherwise unanimously approved by the Members or pursuant to
cash management in the ordinary course of business, (c) the acquisition by any
member of the Company Group of any assets, any Person or any interest in any
Person located or engaged in providing services outside the United States, other
than such acquisition incidental to a Cable Acquisition or to any transaction
otherwise unanimously approved by the Members or (d) any hostile acquisition or
attempted hostile acquisition of any Person by any member of the Company Group.
"Subscriber Base Event" means (a) the number of Comcast Basic
Subscribers being less than 50% of the number of Comcast Basic Subscribers
immediately following the MHI Closing at a time when (b) sales or exchanges of
Cable Systems owned, or loss or revocation of Cable Franchises held, by members
of the Extended Comcast Group immediately following the MHI Closing have
directly resulted in a net loss of Comcast Basic Subscribers (after offsetting
for any increase in the number of Comcast Basic Subscribers as a direct result
of such exchanges) equal to or greater than 50% of the number of Comcast Basic
Subscribers immediately following the MHI Closing. At September 30, 1994, the
total number of Basic Subscribers of Cable Systems owned by members of the
Comcast
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<PAGE>
Group was approximately 2.8 million (excluding pro-rated subscribers
attributable to Comcast's interest in Heritage Communications, Inc., which
Comcast has contracted to sell, but including pro-rated subscribers attributable
to Comcast's 40% interest in Garden State Cablevision L.P.).
"Subsidiary" means, with respect to any Person, any other Person of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person or a
Subsidiary of such Person; provided that for purposes of this definition and its
application in this Agreement, the Company and its Subsidiaries shall not be
treated as Subsidiaries of a Member or its Affiliates.
"Telecommunications Business" means the business of owning, operating
or providing programming for telecommunications systems or facilities (including
without limitation, Cable Systems, alternative access systems and wireless video
systems), the Wireless Telephone Business and related businesses.
"Wireless Telephone Business" means the use of radio spectrum for
cellular, PCS, specialized mobile radio, enhanced specialized mobile radio,
paging, mobile telecommunications and any other voice or data wireless services,
whether fixed or mobile, but not including the delivery of video or the
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provision of satellite or broadband microwave transmission services.
(b) Each of the following terms is defined in the
Section set forth opposite such term:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Acquisition Notice 9.03(a)
Action 7.02(b)
Additional Alternative Call Period 13.05
Adjusted CalPERS Interest Value 13.02(d)
Agents 11.02
Alternative Call 13.04(a)
Alternative Call Date 13.04(a)
Alternative Call Exercise Notice 13.04(a)
Alternative Call Price 13.04(b)
Appraiser 13.06(a)
Auction Election Period 13.02(b)
Auction Notice 13.02(b)
Balance Sheet Date 3.01(g)
Call Closing 13.03(c)
Call Date 13.03(a)
Call Price 13.03(b)
Calling Member 13.04(a)
CalPERS Appraiser 13.06(a)
CalPERS Board 3.02(c)
CalPERS Interest Value 13.02(d)
CalPERS Put 13.02(a)
Capital Account 5.01
Capital Call Notice 4.02(a)
Capital Contributions 4.02(a)
CCCI Appraiser 13.06(a)
CCCI Call 13.03(a)
CCCI Call Notice 13.03(a)
CCPI 4.02(c)
Class A Common Stock 3.01(f)
Class B Common Stock 3.01(f)
Comcast Common Stock 3.01(f)
Confidential Information 11.02
Conversion Stock 13.02(h)
Convertible Dilution Date 13.02(h)
Covered Claim 15.01(b)
Delaware Act 2.01
Designated Price 13.02(g)
Dilution Date 13.02(g)
Discretionary Acquisition 9.02(b)
Election Period 11.03
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Equity 11.03
Equity Notice 11.03
Equity Transaction 11.03
Fiscal Year 8.01
Higher Appraised Amount 13.06(c)
Holdings 4.02(c)
Hypothetical Portfolio 13.02(e)
Initial Capital Commitments 4.02(a)
Initial Closing 4.02(d)
Initial Closing Date 4.02(d)
Initiation Date 13.06(c)
Investment Bank 3.01(h)
Liquidating Event 16.02
Lower Appraised Amount 13.06(c)
Management Agreement 10.01
MHI Acquisition 4.02(c)
Monitoring Committee 7.07
Mutually Appraised Amount 13.06(c)
Mutually Designated Appraiser 13.06(c)
Newsub 13.01(b)
Non-Dilutive Issuance 13.02(i)
Notice of Act or Event 14.01(b)
Notice of Trigger Event or
Change in Control 14.01(b)
Permitted Activities 9.01(b)
Potential Acquisition 9.03
Programming Agreement 10.02
Proposed Acquisition 9.03
Proxy 7.01(c)
Put Closing 13.02(d)
Put Date 13.02(a)
Put Notice 13.02(a)
Put Price 13.02(c)
Right of First Offer 9.05
Sale Notice 14.01(b)
Sale Option 13.05
Sale Option Date 13.05
Sale Option Notice 13.05
Sale Proceeds 13.02(b)
Selling Member 13.04(a)
Signing Date Documents 3.01(i)
Special Deferred Charges 13.02(d)
Tax Matters Partner 8.03(a)
Transfer 13.01(a)
Trigger Event 14.02(b)
Valuation Date 13.06(a)
Value of Company Equity 13.06(b)
</TABLE>
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<PAGE>
(c) Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, and all accounting determinations hereunder shall
be made, in accordance with generally accepted accounting principles in the
United States as in effect from time to time.
ARTICLE 2.
FORMATION AND PURPOSES OF THE COMPANY
2.01. Formation of the Company. Comcast and CCCI have previously
------------------------
formed and established the Company under the Existing Agreement and the
provisions of the Delaware Limited Liability Company Act, 6 Del. C. (S)(S) 18-
-------
101 et seq. (as amended, and any successor to such statute, the "Delaware Act").
-------
Effective upon the execution hereof, and without the need for further action,
(a) CalPERS will be admitted as a Member of the Company and Comcast will
immediately thereafter resign as a member of the Company (and thereafter have no
rights or obligations as a Member) and (b) the Existing Agreement shall be
amended and restated by this Agreement. Notwithstanding anything in this
Agreement to the contrary, CCCI and CalPERS are hereby authorized to, and shall
continue, the business of the Company without dissolution. Effective upon the
execution hereof, the rights and liabilities of the Members shall be as provided
in this Agreement and, except as herein otherwise expressly provided, in the
Delaware Act.
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2.02. Name of the Company. The name of the Company shall be "Comcast
-------------------
MHCP Holdings, L.L.C.". The business of the Company shall be conducted under
such name or such other names (upon notice to all the Members) as the Members
may from time to time determine.
2.03. Purpose of the Company. The purpose of the Company is to engage
----------------------
in the Company Business and the Telecommunications Business, and in furtherance
thereof, the Company may engage in any lawful act or activity for which limited
liability companies may be formed under the Delaware Act and in any and all
activities necessary or incidental to the foregoing. In furtherance of its
purpose, the Company shall have and may exercise all of the powers now or
hereafter conferred by Delaware law on limited liability companies formed under
the Delaware Act. In furtherance of its purpose, the Company shall have the
power to do any and all acts necessary, appropriate, proper, advisable,
incidental or convenient to or for the protection and benefit of the Company.
2.04. Place of Business of the Company. The principal place of
--------------------------------
business of the Company will be located at 1105 N. Market Street, Wilmington,
New Castle County, Delaware 19801 or (upon notice to all the Members) such other
address as may be designated by action of the Members.
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<PAGE>
2.05. Registered Office and Registered Agent. The address of the
--------------------------------------
registered office of the Company in the State of Delaware is c/o The Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New
Castle County, Delaware 19801. The name and address of the registered agent for
service of process on the Company in the State of Delaware are The Corporation
Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New
Castle County, Delaware 19801.
2.06. Duration of the Company. The Company shall continue until its
-----------------------
termination in accordance with the provisions of Article 17.
2.07. Title to Company Property. All property of the Company, whether
-------------------------
real or personal, tangible or intangible, shall be deemed to be owned by the
Company as an entity, and no Member, individually, shall have any direct
ownership interest in such property.
2.08. Filing of Certificates. CCCI is hereby designated as an
----------------------
authorized person, within the meaning of the Delaware Act, to execute, deliver
and file, or to cause the execution, delivery and filing of any amendments or
restatements of the certificate of formation of the Company and any other
certificates, notices, statements or other instruments (and any amendments or
restatements thereof) necessary or advisable for the formation of the Company or
the
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operation of the Company in all jurisdictions where the Company may elect to do
business.
2.09. Limitation on Liability. Except as required by the Delaware
-----------------------
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member shall be obligated personally for any
such debt, obligation or liability of the Company solely by reason of being a
Member.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
3.01. Representations and Warranties of Comcast and CCCI. Comcast and
--------------------------------------------------
CCCI represent and warrant that as of the date hereof and as of the Initial
Closing Date:
(a) Comcast, CCCI and Company Existence and Power. Each of Comcast
---------------------------------------------
and CCCI is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all requisite
corporate power and authority to carry on its business as presently conducted,
to execute and deliver this Agreement and to perform its obligations hereunder.
Comcast has all requisite corporate power and authority to execute and deliver
the Company Related Agreements and the MHI Agreements and to perform its
obligations thereunder. The Company has been duly formed and is validly existing
and in good standing as a
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limited liability company under the Act and this Agreement and has all requisite
limited liability company power and authority to carry on the business in which
it proposes to engage hereunder. The copies of (i) the Amended and Restated
Articles of Incorporation and Bylaws of Comcast (ii) the Certificate of
Incorporation and Bylaws of CCCI and (iii) the Certificate of Formation of the
Company and the Existing Agreement, all of which have been delivered to CalPERS
prior to the execution of this Agreement, are true and complete and have not
been amended (except as stated therein or herein) or repealed. The Company is
not required to be licensed or qualified to do business in any jurisdiction
other than Delaware.
(b) CCPI and Holdings Corporate Existence and Power. As of the
-----------------------------------------------
Initial Closing Date, each of CCPI and Holdings will be a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and have all requisite corporate power and
authority to carry on its business as proposed to be conducted hereunder, and in
the case of Holdings, to execute and deliver the Holdings Agreements and to
perform its obligations thereunder. True and complete copies of the Certificates
of Incorporation and Bylaws of CCPI and Holdings as in effect on the Initial
Closing Date will be delivered to CalPERS prior to the Initial Closing Date.
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(c) Corporate Authorization. The execution, delivery and performance
-----------------------
by Comcast and CCCI of this Agreement, and by Comcast of the Company Related
Agreements and the MHI Agreements, have been duly authorized by all necessary
corporate action. The execution, delivery and performance by Holdings of the
Holdings Agreements will, prior to the time of the Initial Closing, be duly
authorized by all necessary corporate action.
(d) Non-Contravention. Except for such matters as would not in the
-----------------
aggregate have a Material Adverse Effect on Comcast or the Company or a material
adverse effect on the transactions contemplated hereby taken as a whole, the
execution and delivery of this Agreement by Comcast and CCCI, the execution and
delivery of the MHI Agreements and the Company Related Agreements by Comcast,
the execution and delivery of the Holdings Agreements by Holdings and the
performance by Comcast and CCCI in connection with the consummation of the
Initial Closing (a) will not require from the board of directors or stockholders
of Comcast, CCCI or Holdings any consent or approval that has not been validly
and lawfully obtained on or prior to the Initial Closing Date, (b) will not
require any authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality of government, except such as shall have
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been lawfully and validly made or obtained on or prior to the Initial Closing
Date, (c) subject to the exception set forth in (b) above, will not cause
Comcast, CCCI, the Company, CCPI or Holdings to violate or contravene (i) any
provision of any law, rule, regulation, judgment, order or decree binding on or
applicable to any of them, (ii) any permit, authorization, license, franchise or
approval granted to or held by any of them or (iii) any provision of the Amended
and Restated Articles of Incorporation or Bylaws of Comcast, the Certificate of
Incorporation or Bylaws of CCCI, CCPI or Holdings or the Certificate of
Formation of the Company, and (d) will not violate or be in conflict with,
result in a breach of or (with or without notice or lapse of time or both)
constitute or give rise to a default or right of termination, modification,
cancellation, prepayment or acceleration under, any agreement, contract or other
instrument binding upon any of them. Except for such matters as would not in the
aggregate have a Material Adverse Effect on Comcast or the Company or a material
adverse effect on the transactions contemplated hereby taken as a whole, to the
knowledge of Comcast after due inquiry, all registrations, filings,
applications, notices, consents, approvals, orders or waivers required to be
made, filed, given or obtained in connection with the closing of the
transactions contemplated by the MHI
-40-
<PAGE>
Agreements and the Assignment and Assumption Agreement have been validly made or
obtained.
(e) Binding Effect. This Agreement constitutes a valid and binding
--------------
agreement of each of Comcast and CCCI enforceable against it in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium and other similar laws affecting the rights of creditors generally
and except for limitations imposed by general principles of equity. The Guaranty
Agreement constitutes, and each of the other Company Related Agreements and each
of the MHI Agreements constitutes, or on the Initial Closing Date will
constitute, a valid and binding agreement of Comcast enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium and other similar laws affecting the rights of creditors
generally and except for limitations imposed by general principles of equity. On
the Initial Closing Date, each of the Holdings Agreements will constitute a
valid and binding agreement of Holdings enforceable against it in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium and other similar laws affecting the rights of creditors generally
and except for limitations imposed by general principles of equity.
-41-
<PAGE>
(f) Ownership of CCCI and Company Interests. Comcast is the record
---------------------------------------
and beneficial owner of, and has the full power to vote all of, the issued and
outstanding capital stock of CCCI. CCCI is a member of and serves as the common
Parent of the entities comprising the Cable Group and owns all of its Interest
free and clear of any Lien other than Permitted Liens. On the Initial Closing
Date, (i) the Company will be the record and beneficial owner of, and will have
the full power to vote all of, the issued and outstanding capital stock of CCPI
free and clear of any Lien other than a Permitted Lien, (ii) CCPI will be the
record and beneficial owner of, and will have the full power to vote all of, the
issued and outstanding capital stock of Holdings free and clear of any Lien
other than a Permitted Lien and other than Liens securing obligations under the
Initial Facility (iii) neither the Company, CCPI nor Holdings will have
outstanding any option, warrant, convertible security or other agreement or
commitment under which any Person (other than the Company or a wholly-owned
Subsidiary of the Company) will have the right to acquire any Equity Security of
the Company, CCPI or Holdings.
(g) Commission Reports; Financial Statements.
----------------------------------------
(i) Comcast has duly filed with the SEC all registration
statements, forms, reports and other documents since December 31, 1993 (the
"Balance Sheet
-42-
<PAGE>
Date") required to be filed by it under the Securities Act and the Exchange
Act, each of which has complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act, each as
in effect on the date so filed.
(ii) Comcast has heretofore delivered or promptly will deliver to
CalPERS, in the form filed with the Commission (including any amendments
thereto but not including any exhibits thereto), all SEC Documents.
(iii) None of the SEC Documents, including without limitation any
financial statements or schedules included or incorporated by reference
therein, contained, when filed, any untrue statement of a material fact or
omitted to state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(iv) The audited financial statements and unaudited interim
financial statements of Comcast included in the Annual Report on Form 10-K
and the Quarterly Reports on Form 10-Q referred to in clauses (i) and (ii)
of the definition of "SEC Documents" fairly present, in accordance with
generally accepted accounting principles applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated
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<PAGE>
financial position and results of operations and cash flows of Comcast and
its consolidated subsidiaries as of the dates and for the periods stated
therein (subject, in the case of interim financial statements, to normal
recurring year-end audit adjustments and to the absence of certain
footnotes that would be required by generally accepted accounting
principles).
(v) Comcast has heretofore delivered or promptly will deliver to
CalPERS copies of all press releases published by the Company from December
31, 1993. None of these press releases contained, when published, any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(h) No Brokers or Finders. Except pursuant to an engagement letter
---------------------
dated October 14, 1994 between Comcast and a certain investment bank (the
"Investment Bank"), no Person retained by or authorized to act for Comcast or
CCCI has, or as a result of the transactions contemplated by this Agreement or
the MHI Agreements will have, any right or valid claim against CalPERS or any of
its Affiliates, the Company or any Subsidiary of the Company for any commission,
fee or other
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<PAGE>
compensation as an investment banker, financial advisor, finder or broker, or in
any similar capacity.
(i) Changes. Except as disclosed in the SEC Documents filed with the
-------
Commission since the Balance Sheet Date that have been delivered to CalPERS
prior to the execution of this Agreement (excluding the exhibits thereto, the
"Signing Date Documents"), since the Balance Sheet Date (i) there has been no
change in or development applicable to Comcast and its Subsidiaries that has had
a Material Adverse Effect on Comcast except:
(a) any changes resulting from general economic, financial or market
conditions;
(b) any changes required in order to comply with applicable
legislation or regulations affecting U.S. cable television or cellular
telephone operators generally, including but not limited to any adjustment
in cable television subscriber rates implemented in a manner consistent
with the rate regulations promulgated by the FCC under the Cable Act; and
(c) any technological changes applicable generally to the industry in
which Comcast operates;
(ii) neither Comcast nor any of its Subsidiaries has incurred any obligation
that would constitute "long-term debt - less current portion" or the "current
portion of long-term debt" that would be disclosed pursuant to GAAP in the
balance sheet
-45-
<PAGE>
line items with those names such that the total of such obligations of Comcast
and its Subsidiaries exceeds $4.5 billion (exclusive of such obligations
incurred to acquire QVC, Inc. or to consummate the MHI Acquisition); (iii)
Comcast has not declared or paid any dividend on or made any distribution with
respect to, or directly or indirectly purchased or redeemed (other than regular
cash dividends or other dividends, distributions, purchases or redemptions that
have been publicly disclosed or that are not material) any of its Equity
Securities, or obligated itself to do any of the foregoing; and (iv) Comcast has
not made any material change in its accounting principles, methods or practices
or depreciation or amortization policies or rates.
(j) Litigation. Except as disclosed in the Signing Date Documents,
----------
there is no legal action, suit, arbitration or other legal, administrative or
other governmental proceeding (whether federal, state, local or foreign) pending
or, to Comcast's knowledge, threatened against Comcast or any of its
Subsidiaries or any of their respective properties, assets, rights or businesses
before any court or governmental department, commission, board, bureau, agency
or instrumentality or any arbitrator, that has a Material Adverse Effect on
Comcast or the Company or that draws into question the validity of this
Agreement or the ability of Comcast or CCCI to perform its obligations
hereunder.
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<PAGE>
(k) Share Purchase Agreement and Share Exchange Agreement. To
-----------------------------------------------------
Comcast's knowledge, the representations and warranties of Rogers
Communications, Inc. in the MHI Purchase Agreement and the representations and
warranties of BCI and Don Barden in the BCI Purchase Agreement were true and
correct in all material respects when made and are true and correct in all
material respects except for such matters as would not in the aggregate have a
Material Adverse Effect on the Company.
(l) Change in Control. There has been no Change in Control of Comcast
-----------------
and no decision has been made by Ralph J. Roberts to engage in any transaction
that would result in a Change of Control of Comcast.
(m) Issuance of Comcast Stock. If and when any shares of Comcast
-------------------------
Stock are issued to CalPERS pursuant to this Agreement, such shares will be duly
authorized, validly issued, fully paid and non-assessable and will be delivered
to CalPERS free and clear of any Lien or any preemptive or similar rights, and
will be sold or delivered to CalPERS in compliance with applicable federal and
state securities laws.
3.02. Representations and Warranties of CalPERS. CalPERS represents
-----------------------------------------
and warrants that as of the date hereof and as of the Initial Closing Date:
(a) CalPERS Existence and Power. CalPERS is a governmental unit duly
---------------------------
created and validly existing under the laws of the State of California and has
all requisite legal
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<PAGE>
powers to carry on its activities as presently conducted, to execute and deliver
this Agreement, the Registration Rights Agreement and the Guaranty Agreement and
to perform its obligations hereunder and thereunder.
(b) CalPERS Authorization. The execution, delivery and performance by
---------------------
CalPERS of this Agreement, the Registration Rights Agreement and the Guaranty
Agreement are within its legal powers and have been duly authorized by all
necessary action.
(c) Non-Contravention. Except for such matters as would not in the
-----------------
aggregate have a Material Adverse Effect on CalPERS or the Company or a material
adverse effect on the transactions contemplated hereby taken as a whole, the
execution and delivery of this Agreement, the Registration Rights Agreement and
the Guaranty Agreement by CalPERS, and the performance by CalPERS of its
obligations at the Initial Closing, (i) do not require any action by CalPERS or
its Board of Administration (the "CalPERS Board") that has not been validly
obtained, (ii) do not violate CalPERS' enabling statute or any action by the
CalPERS Board, (iii) do not require any action by CalPERS in respect of, or
filing by CalPERS with, any governmental body, agency or official, (iv) assuming
compliance with the matters referred to in the preceding clause (iii), will not
cause CalPERS to violate any applicable law or regulation, and (v) do not
require CalPERS
-48-
<PAGE>
to obtain any consent or give rise to any right of termination, cancellation or
acceleration under, or contravene, conflict with or constitute a default under
any agreement or other instrument binding upon CalPERS, or any license,
franchise, permit or other similar authorization held by CalPERS.
(d) Binding Effect. This Agreement and the Guaranty Agreement
--------------
constitute and when executed and delivered by CalPERS and Comcast the
Registration Rights Agreement will constitute the valid and binding agreements
of CalPERS enforceable against it in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency, moratorium and
other similar laws affecting the rights of creditors generally and except for
limitations imposed by general principles of equity. CalPERS is not, with
respect to its obligations hereunder or under the Registration Rights Agreement
or the Guaranty Agreement, entitled to sovereign immunity or any other similar
immunity or defense.
(e) Litigation. There is no legal action, suit, arbitration or other
----------
legal, administrative or other governmental proceeding (whether federal, state,
local or foreign) pending or, to CalPERS' knowledge, threatened against CalPERS
before any court or governmental department, commission, board, bureau, agency
or instrumentality or any arbitrator, that has a Material Adverse Effect on the
Company
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<PAGE>
or which in any manner draws into question the validity of this Agreement or the
ability of CalPERS to perform its obligations hereunder.
(f) No Brokers or Finders. No Person retained by or authorized to act
---------------------
for CalPERS has, or as a result of the transactions contemplated by this
Agreement or the MHI Agreements will have, any right or valid claim against
Comcast or any of its Subsidiaries or the Company or any Subsidiary of the
Company for any commission, fee or other compensation as an investment banker,
financial advisor, finder or broker, or in any similar capacity.
3.03. Survival. The representations and warranties contained in
--------
Sections 3.01(g), (i) and (j) shall survive (i) as to a willful breach thereof,
indefinitely and (ii) as to any other breach thereof, until thirty (30) days
after Comcast delivers to CalPERS its Annual Report on Form 10-K for its fiscal
year ended December 31, 1995, as filed with the SEC. Notwithstanding the
preceding sentence, any representation or warranty shall survive the time at
which it would otherwise terminate pursuant to the preceding sentence if CalPERS
shall have given notice of the inaccuracy or breach thereof to Comcast prior to
such time and within six (6) months after giving such notice CalPERS commences
an action to enforce any remedies it may have with respect to such inaccuracy or
breach. Except as expressly provided above in this Section
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<PAGE>
3.03, the respective representations and warranties contained herein or in the
certificate delivered pursuant to Section 12.02(d) (except that to the extent
such certificate addresses representations and warranties whose survival is
limited pursuant to the first sentence of this Section 3.03, the representations
and warranties in such certificate shall be so limited) shall not be deemed
waived or otherwise affected by any investigation made by any party. Each and
every such representation and warranty shall survive without limitation the
execution and delivery of this Agreement, the Company Related Agreements, the
Initial Closing, the MHI Closing and the completion of the transactions
contemplated hereby and the MHI Agreements. This Section 3.03 shall have no
effect upon any other obligation of the parties, whether to be performed before
or after the Initial Closing.
ARTICLE 4.
PERCENTAGE INTEREST; CAPITAL COMMITMENTS
4.01. Percentage Interests. The Percentage Interest in the Company of
--------------------
each Member is as follows:
<TABLE>
<S> <C>
CCCI 55%
CalPERS 45%
</TABLE>
4.02. Capital Commitments. (a) The initial capital commitments (the
-------------------
"Initial Capital Commitments") of the Members are as follows:
<TABLE>
<S> <C>
CCCI $305,555,556
CalPERS $250,000,000
</TABLE>
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<PAGE>
Each Member agrees to make capital contributions to the Company ("Capital
Contributions") from time to time as hereafter set forth. Except as expressly
provided in Section 9.03, no Member shall be required to make any Capital
Contribution if, at the time such Capital Contribution is to be made, such
Capital Contribution when aggregated with all prior Capital Contributions of
such Member, would exceed such Member's Initial Capital Commitment. Except as
provided in Section 6.02, Capital Contributions shall be made by each Member in
proportion to its Percentage Interest in the Company. All Capital Contributions
after the date hereof shall be made by each Member in an amount set forth in a
capital call notice ("Capital Call Notice") received by such Member at least 10
Business Days prior to the date upon which such Capital Contribution is to be
made; each such Capital Contribution shall be made in cash by wire transfer of
immediately available funds to an account designated by the Company by written
notice at least two Business Days prior to the date such Capital Contribution is
to be made; provided, however, that the Capital Call Notice given for the
Capital Contributions to be made for the MHI Acquisition need only be received
by the Members two Business Days prior to the date on which such Capital
Contributions are to be made.
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<PAGE>
(b) The Members have contributed the following amounts, in cash, and
no other property, to the Company as of the date hereof:
<TABLE>
<S> <C>
CCCI $55.00
CalPERS $45.00
</TABLE>
(c) The first Cable Acquisition that the Company will make is the
acquisition of MHI and Barden Communications, Inc. pursuant to the MHI
Agreements (the "MHI Acquisition"). At or prior to the Initial Closing, (i) the
Company will incorporate (or acquire as a newly formed corporation with no prior
operations and no material assets or liabilities) Comcast Communications
Properties, Inc., a Delaware corporation ("CCPI") which will be a wholly-owned
Subsidiary of the Company; (ii) CCPI will incorporate (or acquire as a newly
formed corporation with no prior operations and no material assets or
liabilities) Comcast MH Holdings, Inc., a Delaware corporation ("Holdings")
which will be a wholly-owned Subsidiary of CCPI; and (iii) Holdings will enter
into the Initial Facility.
(d) Subject to the satisfaction or waiver of the conditions set forth
in Sections 12.01 through 12.04, on the Initial Closing Date and immediately
prior to the MHI Closing, (i) the Members will make the following contributions
to the capital of the Company in cash by wire transfer of immediately available
funds to an account designated by CCCI at least two Business Days prior to the
MHI Closing:
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<PAGE>
<TABLE>
<S> <C>
CCCI $305,555,501
CalPERS $249,999,955;
</TABLE>
(ii) the Company will contribute $275,555,556 to the capital of CCPI in exchange
for common stock of CCPI and the Company will lend $275,000,000 to CCPI
substantially in accordance with the terms of the note set forth as Exhibit 4.02
hereto; (iii) CCPI will contribute $550,555,556 to the capital of Holdings in
exchange for common stock of Holdings; (iv) Holdings will borrow pursuant to the
Initial Facility such additional funds as are necessary to consummate the MHI
Acquisition; and (v) Comcast will assign to Holdings its rights and obligations
under the MHI Agreements and Holdings will accept such assignments and assume
such obligations. At the MHI Closing, Holdings will consummate the MHI
Acquisition and will enter into and consummate the transactions under the Note
Purchase and Assignment Agreement dated as of the Initial Closing Date among
Rogers Communications, Inc., Data Business Forms Limited and Holdings. The date
of the MHI Closing is referred to herein as the "Initial Closing Date" and the
making of the Capital Contributions on such date is referred to herein as the
"Initial Closing."
(e) Upon making the Capital Contributions as provided in clause (i)
of the foregoing paragraph (d), the Members will have made Capital Contributions
equal to their respective Initial Capital Commitments, and no further Capital
Contributions will be required except as provided in Section
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<PAGE>
9.03. Unless otherwise provided in this Agreement, the Members may, but are not
obligated to, make such additional Capital Contributions in such manner and at
such times as the Members may (each in its sole discretion) unanimously agree.
(f) If the conditions set forth in Section 12.04 (other than
paragraph (e) thereof) have not been satisfied or waived at the time of the MHI
Closing, then, Section 9.02 notwithstanding, any member of the Comcast Group may
make the MHI Acquisition, but without prejudice to any rights or remedies of any
Member for the breach hereof, or any other wrongful act or omission, by any
Member.
4.03. Other Matters. (a) Except as otherwise provided in this
-------------
Agreement, no Member shall demand or receive a return of its Capital
Contributions or resign from the Company without the consent of the other
Member. Under circumstances requiring a return of any Capital Contributions, no
Member shall have the right to receive property other than cash except as may be
specifically provided herein.
(b) No Member shall receive any interest, salary or drawing with
respect to its Capital Contributions or its Capital Account or for services
rendered on behalf of the Company or otherwise in its capacity as a Member,
except as otherwise contemplated by this Agreement.
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<PAGE>
ARTICLE 5.
CAPITAL ACCOUNTS AND ALLOCATIONS
5.01. Capital Accounts; Book Allocations. A capital account (each a
----------------------------------
"Capital Account") shall be maintained for each Member. CCCI's initial Capital
Account balance shall be $55, and CalPERS's initial Capital Account balance
shall be $45. Each Member's Capital Account shall be increased by any
allocations of income or gain and by any additional Capital Contributions by
that Member and shall be reduced by any allocations of loss, expense or
deduction and by any distributions to that Member. Except as otherwise provided
herein, all items of Company income, gain, loss, expense or deduction shall be
allocated to the Capital Accounts of the Members in proportion to their
Percentage Interests.
5.02. Tax Allocations. Except as otherwise required by the Code or
---------------
the Regulations, all items of Company income, gain, loss, expense, deduction and
any other items shall be allocated among the Members for federal income tax
purposes in the same proportions as they share the corresponding items pursuant
to Section 5.01.
ARTICLE 6.
DISTRIBUTIONS
6.01. Distributions. Except as otherwise provided herein, all
-------------
distributions to the Members shall be in proportion to their Percentage
Interests. Notwithstanding any
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<PAGE>
provision of this Agreement to the contrary, the Company shall not make a
distribution to any Member on account of its Interest if such distribution would
violate Section 18-607 of the Delaware Act or other applicable law.
6.02. Amounts Withheld. Promptly upon learning of any requirement
----------------
under any provision of the Code or any other applicable federal, state or local
law requiring the Company to withhold any sum from a distribution, or with
respect to an allocation, to a Member or to make any payment to any federal,
state or local taxing authority in respect of such Member, the Tax Matters
Partner shall give written notice to such Member of such requirement and shall
cooperate with such Member in all lawful respects, if practicable, to minimize
or to eliminate any such withholding or payment. The Tax Matters Partner is
authorized to withhold from distributions, or with respect to allocations, to
the Members and to pay over to any federal, state, local or foreign governmental
authority any amounts which it reasonably determines may be required to be so
withheld pursuant to the Code or any provisions of any other federal, state,
local or foreign law. All amounts withheld pursuant to the Code or any provision
of any state, local or foreign tax law with respect to any allocation or
distribution to any Member shall be treated as amounts distributed to such
Member pursuant to this Article for all purposes under this Agreement; provided
that if this sentence
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<PAGE>
would otherwise cause a distribution that is not proportionate as required by
Section 6.01, then at the election of the Member receiving the
disproportionately large distribution either (i) such Member shall make a
Capital Contribution (provided that such Capital Contribution shall not be taken
into account for purposes of determining whether such Member's Initial Capital
Commitment has been exhausted) in cash equal to the excess of the distribution
made to such Member over the amount that would have been distributed to such
Member if the distribution had been proportionate or (ii) a distribution shall
be made to the other Member in cash equal to the amount necessary to make the
distribution proportionate.
6.03. Dissolution. Upon dissolution and winding up of the Company,
-----------
the Company shall make distributions in accordance with Section 16.04.
ARTICLE 7.
MANAGEMENT OF COMPANY
7.01. Management. (a) Except as otherwise provided in this
----------
Agreement, the business and affairs of the Company shall be managed by or under
the direction of the Members.
(b) CCCI shall be entitled to 55 votes and CalPERS shall be entitled
to 45 votes in respect of any matter requiring the vote, consent or
determination of the Members under this Agreement.
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<PAGE>
(c) Each Member may authorize another Person (a "Proxy") to act for
such Member by proxy for purposes of attending meetings of Members, voting,
acting by consent, taking any other actions pursuant to this Article 7 and
making any election or decision to be made by such Member pursuant to this
Agreement; provided that the designation of such Proxy must be signed by such
--------
Member and delivered to the other Member and shall be revocable at any time
prior to any such action; provided further that no such revocation shall revoke,
-------- -------
amend or otherwise affect any action taken by the Proxy prior to the time the
other Member was notified of such revocation. CalPERS hereby designates Pacific
Corporate Advisors, Inc. as its initial Proxy, subject to revocation as provided
above. As of the date hereof, CCCI is not appointing a Proxy. To the fullest
extent permitted by law, a Proxy shall be deemed the agent of the Member that
appointed such Person as Proxy, and such Proxy shall not be deemed an agent or
sub-agent of the Company or the other Member and shall have no duty (fiduciary
or otherwise) to the Company or the other Member. Each Member, by execution of
this Agreement, agrees to, consents to and acknowledges the delegation of powers
and authority to such Proxies, and to the actions and decisions of such Proxies
within the scope of such Proxies' authority as provided herein as if such
actions or decisions had been made by the Member appointing such Proxy.
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<PAGE>
7.02. Quorum and Manner of Acting. (a) Except as otherwise provided
---------------------------
in subsection (b) below, (i) the presence, in person or by proxy, of one or more
Members with a majority of the total number of votes shall constitute a quorum
for the transaction of business and (ii) the affirmative vote of one or more
Members with a majority of the total number of votes held by the Members present
in person or by proxy at a meeting at which a quorum exists, shall control the
actions of the Members. At each meeting of Members, an individual chosen by one
or more Members with a majority of the total votes held by the Members present
in person or by proxy thereat shall act as chairman of the meeting and preside
thereat. The chairman of the meeting shall appoint an individual to act as
secretary of such meeting and keep the minutes thereof.
(b) Notwithstanding any other provision of this Agreement to the
contrary, in addition to the other provisions of this Agreement that
specifically require unanimous approval of the Members, the following actions by
the Company or any of its Subsidiaries shall require the unanimous approval of
the Members:
(i) other than (x) capital expenditures (which are addressed
separately in the following clause (ii)) and (y) acquisitions or
dispositions of assets in the ordinary course of business (which for the
avoidance of doubt shall not include any acquisition or disposition of
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<PAGE>
a Cable System), the acquisition, sale, exchange or other disposition of
any property or assets by the Company or any of its Subsidiaries (other
than transactions among the Company and one or more of its wholly-owned
Subsidiaries or among wholly-owned Subsidiaries of the Company) (A) in any
transaction or series of related transactions in which the price paid for
such property or assets exceeds $25 million, or (B) in any series of
transactions in any 12-month period whether related or not, if on the date
of such acquisition, sale, exchange or disposition the aggregate price paid
in all such transactions during such period, exceeds $50 million, provided
that for purposes of applying the tests set forth in the foregoing sub-
clauses (A) and (B), the price paid in any transaction shall include the
amount of Debt assumed in (or, without duplication, Debt owed by any Person
transferred pursuant to) such transaction;
(ii) any capital expenditure (A) that would result in a Default
under the Initial Facility as amended or waived or (B) if (1) such capital
expenditure is made after the fourth full Fiscal Year after the Initial
Closing Date (or the third full Fiscal Year after the Initial Closing Date
if the first partial Fiscal Year after such date is at least ten months
long), (2) as a result of such expenditure, the aggregate of all capital
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<PAGE>
expenditures by the Company and its Subsidiaries in any such Fiscal Year in
which such expenditure is made would exceed $50 million and (3) such
expenditure would require the creation or incurrence of Debt not otherwise
expected to be created, incurred or issued;
(iii) the issuance, sale or acquisition of any Security or profits
interest in the Company or any of its Subsidiaries, other than any such
transaction between the Company, on the one hand, and any wholly-owned
Subsidiary, on the other hand, or between wholly-owned Subsidiaries of the
Company and other than Permitted Interest Rate Protection Agreements;
(iv) the creation or incurrence by any member of the Company
Group of any Debt (including through acquisition by such member of any
Person, property or asset subject to such Debt, whether or not such member
expressly assumes such Debt) other than (1) any such transaction between
the Company or any of its wholly-owned Subsidiaries, on the one hand, and
the Company or any of its wholly-owned Subsidiaries, on the other hand
(including for this purpose Liens created or guarantees by any member of
the Company Group to secure or guarantee Debt of the Company or any
wholly-owned Subsidiary of the Company), (2) subject to clause (xiv) below,
pursuant to an Acquisition Facility, (3) Debt assumed in (or, without
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<PAGE>
duplication, Debt owed by any Person acquired in) a transaction (in which
any such Debt of which Comcast has knowledge prior to the relevant approval
is disclosed in writing to all Members prior to the relevant approval) that
has been unanimously approved by the Members pursuant to subparagraph (i)
above or is a Discretionary Acquisition under Section 9.02(b), (4) in the
ordinary course of business under one or more working capital facilities
(other than the Acquisition Facilities) or loans not exceeding $50 million
in the aggregate at any time, (5) Debt, other than Debt for borrowed money,
created or incurred in the ordinary course of business (and not for the
purpose of making a Cable Acquisition), if at the time such Debt is created
or incurred, the aggregate of such Debt and other outstanding Debt created
or incurred pursuant to this sub-clause (5) does not exceed $50 million;
(6) Permitted Interest Rate Protection Agreements; or (7) any refinancing
of Debt, subject to subparagraph (xiv) below.
(v) any transaction between any Member or any of its Affiliates,
on the one hand, and the Company or any of its Subsidiaries, on the other
hand; provided that unanimous approval of the Members shall not be required
for (1) subject to the limitations in subparagraph (iv)(4) above, unsecured
loans from a Member or any of
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<PAGE>
its Affiliates to the Company or any of its Subsidiaries on terms no less
favorable to the Company or such Subsidiary than could have been obtained
from a third party in an arm's-length transaction, (2) the Management
Agreement, the Programming Agreement or the transactions provided for
thereunder, or (3) any charges to the Company or any of its Subsidiaries in
accordance with Section 10.03 or 10.04;
(vi) except as provided in the third sentence of Section 6.02,
the declaration or payment of any distribution by the Company to any
Member;
(vii) except for assets having a value not in excess of $10
million incidental to a business acquired by the Company in accordance with
the terms hereof, and which the Company promptly divests, the conduct by
the Company or any of its Subsidiaries of any business other than, or
engaging in any transaction not substantially related to, (1) the Company
Business, or (2) participation (including through management, advisory,
operating, consulting or other agreements or arrangements) in the business
of other Persons engaged in substantially the same business as the Company
Business, whether or not such Persons are engaged solely in such business;
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(viii) any merger or consolidation of the Company or any of its
Subsidiaries, other than a merger between two wholly-owned Subsidiaries of
the Company.
(ix) the Company or any Subsidiary of the Company (i) commencing
a voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to any such Person or its debts under any
bankruptcy, insolvency or other similar law affecting the enforcement of
creditors' rights generally, now or hereafter in effect, (2) seeking the
appointment of a trustee, receiver or liquidator, custodian or other
similar official of any such Person or any substantial part of its
property, (3) otherwise consenting to any such case, proceeding or
appointment (whether voluntary or involuntary) or (4) making or consenting
to any assignment of any material portion of its assets for the benefit of
creditors;
(x) the commencement by the Company or any Subsidiary of the
Company of any legal action, suit, arbitration or other proceeding (each,
an "Action"), other than any such proceeding that (1) is in the ordinary
course of business or (2) where the aggregate amount of (a) damages or
other relief (including the reasonably anticipated economic impact of any
non-monetary relief, as determined by CCCI in its good faith
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judgment) sought by the Company or such Subsidiary in such Action, (b) the
amount of damages or other relief that would reasonably be expected to be
sought by the defendant or defendants in any counterclaim against the
Company or such Subsidiary in such Action and (c) the amount of expenses
the Company or such Subsidiary would reasonably expect to pay to prosecute
or defend such Action does not in the good faith judgment of CCCI exceed
$10 million;
(xi) the settlement of any Action against the Company or any of
its Subsidiaries other than (1) any Action that arises in the ordinary
course of business or (2) any such settlement that would result in a cost
to the Company Group (net of any amounts payable to the Company or any of
its Subsidiaries under insurance policies or recoveries by the Company or
any of its Subsidiaries on any counterclaims) of $20 million or less
(including the reasonably anticipated economic impact of any non-monetary
relief, as determined by CCCI in its good faith judgment);
(xii) any amendment or modification of this Agreement, the
Management Agreement or the Programming Agreement;
(xiii) except as set forth in Sections 13.01 and 13.08, the
admission to the Company of any member or the
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designation of any manager within the meaning of the Delaware Act; or
(xiv) the refinancing of any Acquisition Facility or other Debt
permitted hereunder of any member of the Company Group, but only if such
refinancing would (A) adversely affect (other than as a result of general
financial or economic impact on the Company and its Subsidiaries) the
ability of CalPERS to exercise its rights under this Agreement, the
Registration Rights Agreement or the Guaranty Agreement or (B) provide any
lender with any profits interest in the Business;
(xv) any Special Approval Transaction by any member of the
Company Group; or
(xvi) the entering into of any interest rate or currency swap or
any derivative or structured investment product transaction (as such terms
are commonly understood in the financial derivatives and investment
products industry), except for Permitted Interest Rate Protection
Agreements.
Except as set forth in this Section 7.02(b) or as specifically
provided for herein, no actions requiring the vote, consent or determination of
the Members shall require unanimous approval of the Members. As used herein, the
phrases "action by the Members", and "at the direction of the Members" and other
similar phrases are not intended to require
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unanimous approval of the Members, except as specifically provided.
7.03. Meetings. Either Member may, on at least five (5) days'
--------
written notice to the other Member, call a meeting of the Members at a place in
Wilmington, Delaware. The representatives of any Member, including its
accountants, financial advisors and counsel, may attend any such meeting.
7.04. Action by Consent. Any action required or permitted to be
-----------------
taken by the Members, either at a meeting or otherwise, may be taken without a
meeting if one or more Members with a majority of the total number of votes (or,
in the case of actions referred to in Section 7.02(b) or elsewhere in this
Agreement requiring unanimous vote or consent, both Members) consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
Members; provided however, that any Member whose consent is not obtained shall
be given notice of the action taken within twenty-four (24) hours of such
action.
7.05. Telephonic Meetings. Members may participate in a meeting of
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Members by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
such participation in a meeting shall constitute presence in person at the
meeting.
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7.06. Absence of Authority to Bind. Except as expressly provided in
----------------------------
this Agreement or as authorized pursuant to action by the Members, no Member
shall have any authority to act for, bind or assume any obligation or
responsibility on behalf of any other Member or the Company.
7.07. Monitoring Committee. A monitoring committee (the "Monitoring
--------------------
Committee") shall be established and shall comprise three members, two selected
by CCCI and one selected by CalPERS. The initial designee of CalPERS to the
Monitoring Committee shall be Pacific Corporate Advisors, Inc. A Member may at
any time replace any member of the Monitoring Committee selected by it. The
Monitoring Committee shall meet at least quarterly in order to review the
operations of the Company and its Subsidiaries for the preceding periods, review
guidelines for investments by the Company and its Subsidiaries and review
dealings between the Company or its Subsidiaries, on the one hand, and the
Members or their Affiliates, on the other. The form of Monitoring Plan to be
utilized by the Monitoring Committee is attached hereto as Exhibit 7.07. The
Monitoring Committee shall have no authority in respect of the management of the
affairs or business of the Company and its Subsidiaries or any decision relating
thereto.
7.08. Inspection Rights of Members. Any Member and such designees
----------------------------
as it may appoint (including without limitation, its Proxy, designee to the
Monitoring Committee,
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accountants, attorneys or any other agent) may, from time to time, for any
reasonable purpose visit and inspect the properties of the Company and its
Subsidiaries, examine (and make copies and extracts of) their books, records and
documents of every kind, and discuss their affairs with their respective
officers, directors, employees and independent accountants, all at such
reasonable times as such Member may request on reasonable notice.
7.09. Records and Reports. The Company shall accurately and
-------------------
fairly maintain its books of account (separate from those of the Members and
their respective Affiliates) in accordance with GAAP, as approved from time to
time by the Company and its independent certified public accountants; employ a
firm of independent certified public accountants, which firm is either one of
the six largest national accounting firms or which is approved by the unanimous
vote of the Members and which firm may serve as independent certified public
accountants to Comcast or CCCI, to make annual audits of the Company's accounts
in accordance with generally accepted auditing standards (with CCCI and CalPERS
acknowledging that such accountants initially shall be Deloitte & Touche LLP);
and furnish each Member:
(a) As soon as available, and in any event within forty-five (45)
days after the close of each monthly accounting period, a consolidated statement
of operations
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(i.e., revenue, expenses and operating cash flow) on a year-to-date basis which
compares the current year-to-date results with those of the same period in the
prior year and to budget for the same current period, and management's
discussion thereof, if any;
(b) As soon as available, and in any event within seventy-five (75)
days after the close of each fiscal quarter, financial statements prepared on a
consolidated basis consisting of a balance sheet of the Company as of the end of
such quarter and statements of income, Members' equity and cash flow for such
quarter, and for the portion of the Company's Fiscal Year ending with the last
day of quarter, setting forth in comparative form the figures for such quarter,
the figures for the corresponding quarter of the preceding Fiscal Year and the
budgeted figures for such current quarter prepared and submitted pursuant to
Section 7.10 hereof, all in reasonable detail and certified by the chief
financial officer of Holdings as fairly presenting the financial condition as of
the balance sheet date and results of operations and cash flow for the period
then ended in accordance with GAAP consistently applied, subject to normal year
end adjustments, and management's discussion thereof, if any;
(c) As soon as available, and in any event within one hundred twenty
(120) days after the close of each Fiscal
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Year of the Company, financial statements prepared on a consolidated basis
consisting of a balance sheet of the Company, as of the end of such Fiscal Year,
together with statements of income, members' equity and cash flow for such
Fiscal Year and the footnotes thereto, setting forth in comparative form the
figures for such Fiscal Year and for the previous Fiscal Year, all in reasonable
detail, and duly certified by an opinion unqualified as to scope of a firm of
independent certified public accountants appointed as provided in this Section
7.09, and management's discussion thereof, if any;
(d) Promptly upon learning of the occurrence of any Event of
Noncompliance, Act of Misconduct, Trigger Event or Default on any Debt of the
Company, or a condition or event which with the giving of notice or the lapse of
time, or both, would constitute any such matter, a certificate describing such
Event of Noncompliance, Act of Misconduct, Trigger Event or Default on any Debt
of the Company, or condition or event, and stating what steps are, to the
Company's knowledge being taken to remedy or cure the same, if such matter is
capable of remedy or cure;
(e) Promptly upon the receipt thereof by the Company or CCCI, copies
of all reports, all management letters and other detailed information submitted
to the Company or CCCI by independent accountants in connection with each annual
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or interim audit or review of the accounts or affairs of the Company made by
such accountants;
(f) Promptly after the same are available, copies of all such
financial statements and reports as the Company shall send to any of its Members
or lenders, and promptly upon the transmission thereof copies of all documents
and writings, if any, which the Company may file with or furnish to any
governmental authority, other than such documents and writings that are filed or
furnished in the ordinary course of business or that are not material to the
Company; and
(g) With reasonable promptness, such other information of the Company
relating to the finances, properties, business prospects and affairs of the
Company and each of its Subsidiaries, as any Member may reasonably request from
time to time, including without limitation any work papers prepared by the
Company in connection with preparation and audit of the Company's financial
statements.
7.10. Preparation of Budget. On a timely basis under the relevant
---------------------
circumstances, and in any event within sixty (60) days after the commencement of
the relevant fiscal year, the Company shall prepare, and furnish to each Member
a copy of, an annual plan for such year which shall include monthly capital and
operating expense budgets, and operating cash flow statements, itemized in such
detail as any Member
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may reasonably request. Each annual plan shall be modified as often as
necessary.
7.11. Notice of Litigation and Disputes. The Company shall promptly
---------------------------------
notify each Member of each legal action, suit, arbitration or other
administrative or governmental investigation or proceeding (whether federal,
state, local or foreign) instituted or, to the Company's knowledge threatened by
or against the Company that has a Material Adverse Effect on the Company, or of
any occurrence or dispute which involves a reasonable likelihood of any such
action, suit, arbitration, investigation or proceeding being instituted that
would have a Material Adverse Effect on the Company.
ARTICLE 8.
TAX MATTERS
8.01. Fiscal Year. The fiscal year of the Company (the "Fiscal
-----------
Year") shall begin on January 1 (except for the first Fiscal Year, which shall
begin on the date hereof) and end on December 31 of each year.
8.02. Partnership For Tax Purposes. The Members hereby agree that
----------------------------
the Company shall be treated as a partnership for tax purposes under United
States federal, state and local income tax laws or other laws, and further agree
not to take any position or any action or to make any election, in a tax return
or otherwise, inconsistent herewith.
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If a change in applicable law (including a revenue ruling, revenue procedure or
other administrative pronouncement) would cause the Company not to be treated as
a partnership for United States federal income tax purposes, the Members shall
endeavor in good faith to reach an agreement on restructuring the Company so
that it will be so treated (which may entail a merger of the Company into an
entity treated as a partnership for federal income tax purposes).
8.03. Tax Matters. (a) The tax matters partner (the "Tax Matters
-----------
Partner") for purposes of Section 6231 of the Code shall be CCCI.
(b) All necessary tax information shall be delivered to each Member
after the end of each Fiscal Year of the Company. Such information shall be
furnished not later than 90 days prior to the due date (including extensions) of
the Company's federal income tax information return.
(c) All elections by the Company for income and franchise tax
purposes and all determinations for tax purposes regarding the fair market value
of any Company assets, book basis, depreciation or amortization and all other
matters relating to all tax returns (including amended returns) filed by the
Company, including tax audits and related matters and controversies, shall be
made and conducted by the Tax Matters Partner at the direction of the Members.
The Tax Matters Partner shall, at the expense of the Company, cause to be
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prepared and filed all tax returns (including amended returns) required to be
filed by the Company.
ARTICLE 9.
COMPANY OPPORTUNITIES
9.01. Noncompetition. (a) The parties hereby acknowledge that the
--------------
cable television system business has substantial potential for expanding beyond
the services traditionally provided by cable television system operators and
that the Members are investing in the Company with a view to acquiring Cable
Systems, enhancing the traditional sources of revenue and profitability from
such Cable Systems and exploiting this potential for expanding beyond
traditional cable television services. For this reason and to protect and
enhance the Company Business, actual and potential, and CalPERS' Interest in the
Company, Comcast agrees that from the date hereof through the earlier of (x) the
sale or other disposition of substantially all of the Company's assets in
connection with the liquidation of the Company in accordance with Article 16
hereto, and (y) the second anniversary of the first date on which Comcast no
longer owns a direct or indirect interest in the Company, neither Comcast nor
any of its Subsidiaries will, directly or indirectly, compete with, or (for the
purpose of furthering or facilitating such competition) finance or assist any
Person that competes with, the Company Business in any geographic area in which
the
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Company or any of its Subsidiaries holds a Cable Franchise, provided that
nothing herein shall preclude Comcast or its Subsidiaries from directly or
indirectly:
(i) engaging in the Permitted Activities as defined below;
provided, that if the Permitted Activities set forth in Section 9.01(b)(3)
or (4) at any time compete with the Company Business (other than through
the supply of wireline telephony to non-residential customers) and such
competition has a Material Adverse Effect on the Company, Comcast shall
promptly provide CalPERS with written notice thereof, which notice shall
describe in reasonable detail the Permitted Activity and the competitive
effect thereof on the Company, and CalPERS will be entitled to exercise the
CalPERS Put at any time within sixty (60) days after receipt of such
notice; and further provided that if Comcast is required to give written
notice pursuant to this clause (i) but fails to do so, CalPERS will be
entitled to exercise the CalPERS Put at any time until sixty (60) days
after Comcast provides such required notice;
(ii) acquiring a Person or business having not more than 20% of
its sales (based on its latest annual financial statements) attributable to
activities that compete with the Company Business; provided that Comcast or
such Subsidiary divests the competing activity within
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one year of the date of acquisition; and further provided that Comcast will
indemnify and hold the Company free and harmless in respect of all damages,
losses, liabilities, costs and expenses incurred by the Company or any
Subsidiary of the Company as a result of the failure of Comcast or any
Subsidiary of Comcast to dispose of the competing activity within the time
period specified in the preceding clause;
(iii) engaging in competition with the Company Business if Comcast
or such Subsidiary is engaged in substantially equivalent competition with
cable television systems owned by Comcast or its Subsidiaries; provided
that if such competition has a Material Adverse Effect on the Company,
Comcast will promptly provide CalPERS with written notice, which notice
will set forth in reasonable detail a description of the competitive
activity in which Comcast or its Subsidiary intends to engage, and CalPERS
will be entitled to exercise the CalPERS Put at any time within sixty (60)
days after receipt of such notice; and further provided that if Comcast is
required to give written notice pursuant to this clause (ii) but fails to
do so, CalPERS will be entitled to exercise the CalPERS Put at any time
until sixty (60) days after Comcast provides such required notice; or
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(iv) continuing to engage in any activity that was not prohibited
hereby on the date Comcast or its Subsidiary began such activity, even if
thereafter such activity would have been prohibited hereby; provided that
nothing in this sub-paragraph (iv) shall permit Comcast to continue to
engage in any activity that, at the time Comcast began engaging in such
activity, constituted Company Business.
As used in the preceding sentence, the term "indirectly" means through an entity
controlled by Comcast or in which Comcast has an equity interest in excess of
15%. The provision by any Person other than a member of the Company Group of
wireline telephone services, or wireline or wireless multichannel video
services, or the transmission or communication of information or data by
wireline, cable or other conduit or closed transmission path in the geographical
area in which the Company or any of its Subsidiaries holds a Cable Franchise or
the conduct by any such Person of any of the activities set forth in clause
(ii)(a) of the definition of "Company Business" (other than as part of any
programming or other service broadcast or transmitted over a Cable System owned
by the Company or any of its Subsidiaries) will be presumed to constitute
competition with the Company Business, and any other business or activity will
be presumed not to constitute
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competition with the Company Business. The foregoing presumptions may be
rebutted.
(b) For purposes of subsection (a) above, the term "Permitted
Activities" shall mean (i) the Wireless Telephone Business and (ii) ownership
and participation in and activity (including sales of products or services) in
connection with (1) Primestar Partners, L.P., a partnership which currently
provides direct broadcast satellite multichannel video services, (2) Nextel
Communications, Inc., a corporation which currently provides specialized mobile
radio/dispatch radio, enhanced specialized mobile radio and wireless
communications services, (3) Teleport Communications Group, a partnership which
is currently a competitive access provider of telecommunications services, (4)
the "Triple Play Joint Venture", the recently announced telecommunications joint
venture among Comcast, Sprint Corporation, Tele-Communications, Inc. and Cox
Cable Communications, Inc., which is currently expected to involve the provision
of wireless telephone services and wireline telephone services that will be
complementary to and not competitive with alternative access or wireline or
cable telephone services of cable television systems owned by the Company Group,
and the sale of long distance services and (5) Eastern Telelogic Corporation, a
corporation which is currently a competitive access provider of
telecommunications services in the Greater
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Philadelphia/Southern New Jersey region. Comcast represents and warrants to
CalPERS that the preceding sentence fairly and accurately summarizes to the best
of Comcast's knowledge the current competitive and planned competitive
activities of the Permitted Activities described in clauses (1), (2), (3), (4)
and (5) of the preceding sentence, insofar as they have a Material Adverse
Effect on the Company. Comcast agrees to give prompt written notice to CalPERS
of any material change in the competitive activities of such Permitted
Activities that has a Material Adverse Effect on the Company.
9.02. Cable System Acquisitions. (a) Cable Acquisitions by the
-------------------------
Company will be financed with excess cash of the Company Group, borrowings by
the Company Group and, to the extent needed or deemed prudent, Capital
Contributions by the Members (with such Capital Contributions being made by each
Member in proportion to its Percentage Interest in the Company). The amount of
any Capital Contributions needed or prudent for a Cable Acquisition will be
determined in the reasonable judgment of CCCI; provided, however, that no Member
shall be obligated to make any Capital Contribution to the Company in excess of
its Initial Capital Commitment except as provided in Section 9.03.
(b) If any member of the Comcast Group proposes to make a Qualified Cable
Acquisition between the date hereof and the sixth (6th) anniversary hereof, such
acquisition will be
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subject to the Company's Right of First Offer as described in Section 9.03
below; provided that if a Qualified Cable Acquisition (i) does not require
unanimous approval of the Members under Section 7.02(b)(i), (ii) is to be
consummated without additional Member Capital Contributions to the Company,
(iii) does not require any Member to guarantee any obligation and (iv) does not
allow any Person other than the Company or any Subsidiary of the Company to have
any profits interest or Equity Security in the Person or business that is to be
acquired (such a Qualified Cable Acquisition herein a "Discretionary
Acquisition"), then such Discretionary Acquisition may be made by the Company or
one of its Subsidiaries upon approval by one or more Members holding a majority
of the total votes of the Members without compliance with the Right of First
Offer procedures described below. No member of the Comcast Group may make a
Discretionary Acquisition without first offering such Discretionary Acquisition
to the Company as though such Discretionary Acquisition were a Qualified Cable
Acquisition subject to the Company's Right of First Offer. Subject to Section
11.03, any member of the Comcast Group may make any Cable Acquisition that does
not constitute a Qualified Cable Acquisition or, after the sixth anniversary of
the date hereof, any Qualified Cable Acquisition without providing the Company
with a Right of First Offer with respect thereto.
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9.03. Right of First Offer. In order to provide CalPERS with ample
--------------------
time to evaluate each Proposed Acquisition, whether or not CalPERS' vote as a
Member would be necessary to enable the Company to make the Proposed
Acquisition, Comcast will keep CalPERS informed, on as current a basis as is
reasonably practicable, of all potential Qualified Cable Acquisitions that it is
considering as to which the Company would have a Right of First Offer (a
"Potential Acquisition"), including, to the extent it is available to Comcast,
summary information that in Comcast's good faith judgment would be relevant to a
business and financial assessment of the Potential Acquisition for the Company;
and on as current a basis as is reasonably practicable, will provide CalPERS
with information reasonably necessary for CalPERS' purposes, to update and
amplify any previously provided information and as to the status of each
Potential Acquisition, including whether in Comcast's good faith judgment the
Potential Acquisition is likely to become a Proposed Acquisition. Comcast and
CalPERS will in good faith negotiate and agree upon procedures (including
standard forms of and requirements for deal logs and information packages) to
enable Comcast to satisfy the preceding requirements as to informing CalPERS of
all Potential Acquisitions.
The following procedures shall apply in the case of any Cable
Acquisition that Comcast proposes to the Company (a
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"Proposed Acquisition") and with respect to which the Company has a right of
first offer (a "Right of First Offer"):
(a) Comcast will provide written notice of the Proposed Acquisition
(the "Acquisition Notice") to the Members. The Acquisition Notice will set forth
in reasonable detail (i) to the extent Comcast has not previously provided
CalPERS with such information, a reasonable description of the target company's
business, finances and affairs that would be reasonably sufficient to enable
CalPERS to make a business and financial assessment of the Proposed Acquisition,
(ii) the material terms and conditions upon which the Company would make the
Proposed Acquisition, including, without limitation, the maximum price, the
maximum amount of any Capital Contributions the Members would be required to
make to consummate the Proposed Acquisition, the amount of any guarantees that
would be required from the Members, a description of any Equity Security or
profits interest any Person other than a member of the Company Group is to have
and, to the extent Comcast has knowledge thereof, any terms and conditions of
the Proposed Acquisition that Comcast, in its good faith judgment, believes to
be a departure from customary and reasonable commercial terms for such an
acquisition (including, without limitation, whether the Company or its
Subsidiary would be required to close such transaction without the Seller's
representations and
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warranties being true in all material respects on the date of such closing),
(iii) the estimated amount of any financing beyond Member Capital Contributions
and, to the extent available, the source and terms of such financing, and (iv)
such additional information as Comcast and CalPERS agree Comcast will provide
CalPERS in connection with Proposed Acquisitions. Comcast and CalPERS will in
good faith negotiate and agree upon a standard form and requirements for
Acquisition Notices. In addition, in any Acquisition Notice Comcast shall
provide representations and warranties (1) as of the Initial Closing Date as to
the matters set forth in Section 3.02 with a schedule of any exceptions thereto,
(2) as of the date of the Acquisition Notice as to the matter set forth in
Section 3.02(i)(i) with a schedule of any exceptions thereto and (3) that since
the closing of the most recent Cable Acquisition by the Company there has been
no Comcast Act of Misconduct or Event of Comcast Noncompliance with respect to
which the period for CalPERS to elect a remedy under Section 14.01 or 14.02 has
not expired, with a schedule of any exceptions thereto. Promptly upon learning
of any material development, positive or negative, with respect to the target
company or the Proposed Acquisition, including, without limitation, a higher or
lower purchase price, more or less favorable terms and conditions of the
Proposed Acquisition, any material information about financing for the Proposed
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Acquisition or any information that indicates that information previously
provided to CalPERS has become false or misleading in any material respect,
Comcast will provide CalPERS with a supplement to the Acquisition Notice
containing all information reasonably available to it with respect to such
development. The Members will have a reasonable period of time (taking into
account the relevant facts, circumstances and exigencies) in which to assess
whether to approve or disapprove of the Proposed Acquisition, which period of
time will be set forth in the Acquisition Notice but will be subject to change
if the relevant circumstances change (any such change will be conveyed to the
Members promptly). At the conclusion of such period of time, a meeting of the
Members will be held to approve or disapprove of the transaction.
Notwithstanding the provisions of Section 7.03, no advance notice of such
meeting other than the Acquisition Notice shall be necessary. The approval of
the Proposed Acquisition will require the written unanimous consent of the
Members. If both Members approve the Proposed Acquisition, the Company will
make, or attempt to make, such acquisition on terms not materially less
favorable to the Company than those set forth in the Acquisition Notice. The
approval of a Proposed Acquisition by a Member will constitute the binding
agreement of such Member, subject in the case of CalPERS to the satisfaction of
the conditions set forth in Section 9.05, to
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make a Capital Contribution of the amount set forth in, and in accordance with
the terms of, the Acquisition Notice if the Company succeeds in making the
Proposed Acquisition (regardless of whether such Capital Contribution would
result in the aggregate of such Member's Capital Contributions exceeding such
Member's Initial Capital Commitment) and the binding consent of such Member to
an Acquisition Facility for such Proposed Acquisition on the general terms, and
in an amount not greater than, described in the Acquisition Notice. Subject in
the case of CalPERS to the satisfaction of the conditions set forth in Section
9.05, the failure to make such Capital Contribution in accordance with the terms
of the Acquisition Notice will constitute an Event of Noncompliance. If (x)
CalPERS does not make a Capital Contribution in accordance with the terms of an
Acquisition Notice and (y) CCCI so elects, then in addition to any other rights
any member of the Comcast Group may have, any member of the Comcast Group may
make the proposed Cable Acquisition in lieu of the Company; provided, however,
that CalPERS shall have no liability with respect thereto if the conditions to
CalPERS' obligation to make a Capital Contribution described in Section 9.05
were not satisfied. If CCCI does not approve the Proposed Acquisition, neither
the Company nor any member of the Comcast Group will make such Proposed
Acquisition. If CalPERS does not approve the Proposed Acquisition, the Company
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will not make such acquisition, but any member of the Comcast Group may make
such acquisition on terms and conditions which in the aggregate are not
materially more favorable to such member of the Comcast Group than those set
forth in the Acquisition Notice as modified by any supplement to such
Acquisition Notice delivered to CalPERS at least two Business Days prior to its
vote on the Proposed Acquisition (or as soon as reasonably practicable before
the Members' vote on the Proposed Acquisition if two (2) Business Days prior
delivery is not reasonably practicable under the circumstances). Comcast shall
promptly notify CalPERS of the completion of any Proposed Acquisition by the
Company and shall provide CalPERS with copies of all documentation for each such
Proposed Acquisition and any related Acquisition Facility. If CalPERS does not
approve a Proposed Acquisition and any member of the Comcast Group makes such
acquisition, Comcast shall promptly provide CalPERS with a summary, certified by
an officer of Comcast, of the final principal terms related to such acquisition.
(b) If the Company does not succeed in making a previously approved
Proposed Acquisition or if a Proposed Acquisition is not unanimously approved,
Comcast may thereafter provide the Members with another Acquisition Notice
setting forth revised terms and conditions for such Proposed
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Acquisition and the provisions of subsection (a) shall apply to such subsequent
Acquisition Notice.
9.04. Limitation on Rights. Notwithstanding the foregoing, the Right
--------------------
of First Offer set forth in Section 9.03 (i) applies only for so long as any
member of the Comcast Group owns an interest in the Company, (ii) terminates
upon exercise of the CalPERS Put, the CCCI Call, the Alternative Call or the
Sale Option or, if earlier, upon the sixth anniversary hereof, (iii) subject to
Section 11.03, does not apply to any Special Approval Transaction, and (iv)
applies only to Cable Acquisitions in which the consideration for such
acquisition is solely cash or the obligation to pay cash or a combination of the
two and excludes, by way of example and without limitation, any acquisitions
where the seller wants to receive stock of a member of the Comcast Group for tax
or other reasons. In the case of a seller seeking consideration other than cash
or the obligation to pay cash as described in clause (iv) of the preceding
sentence, Comcast will, to the extent it has the ability to influence the
seller's decision as to the form of consideration to be received, endeavor to
have the seller offer its Cable Systems for sale to the Company solely for cash
or the obligation to pay cash or a combination of the two; provided that (x)
such change in the form of consideration would not otherwise adversely affect
the terms of the transaction (including the aggregate fair market
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value of the consideration to be paid) and (y) Comcast will not be required to
so endeavor if, in its reasonable discretion, it concludes that such steps would
jeopardize its likelihood of success in making such Cable Acquisition.
9.05. Conditions to Subsequent Contributions. In addition to the
--------------------------------------
requirement for CalPERS to approve the relevant Proposed Acquisition, the
obligation of CalPERS under Section 9.03 to make any additional Capital
Contribution after its Initial Capital Contribution shall be subject to the
satisfaction of the following conditions at or prior to the time of such
additional Capital Contribution:
(a) the representations and warranties contained in the Acquisition
Notice calling for such Capital Contribution being true and correct in all
material respects as of the date made pursuant to the Acquisition Notice (the
Initial Closing Date or the date of the Acquisition Notice, as the case may be);
(b) Comcast not having made any representation or warranty in the
Acquisition Notice calling for such Capital Contribution, and not having
provided CalPERS with any information relating to the Proposed Acquisition that
Comcast knew to be false or misleading in any material respect when made or
provided;
(c) Comcast having provided CalPERS with all of the information, to
the extent Comcast has knowledge thereof and
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to the extent available to Comcast, it is required to provide CalPERS regarding
the Proposed Acquisition under this Agreement;
(d) no member of the Extended Comcast Group and no Key Executive
having engaged in Material Disabling Conduct since the date of such Acquisition
Notice with respect to which the period for CalPERS to elect a remedy under
Section 14.01 or 14.02 has not expired; and
(e) CalPERS having received an officer's certificate from Comcast
certifying to the satisfaction of these conditions.
9.06. Other Business Activities. Except as otherwise provided in
-------------------------
this Agreement, the doctrine of corporate opportunity shall not apply with
respect to the Company and no Member or Affiliate of a Member shall have any
obligation not to (i) engage in the same or similar activities or lines of
business as the Company or its Subsidiaries or develop or market any products or
services that compete, directly or indirectly, with those of the Company or its
Subsidiaries, (ii) invest or own any interest publicly or privately in, or
develop a business relationship with, any Person engaged in the same or similar
activities or lines of business as, or otherwise in competition with, the
Company or its Subsidiaries, (iii) do business with any client or customer of
the Company or its Subsidiaries, or (iv) employ or
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otherwise engage a former officer or employee of the Company or its
Subsidiaries; and except as provided herein, neither the Company nor any Member
shall have any right by virtue of this Agreement in or to, or to be offered any
opportunity to participate or invest in, any venture engaged in by the other
Member or any right by virtue of this Agreement in or to any income or profits
derived therefrom.
9.07. Duties. To the extent that a Member or any Covered Person has
------
duties (including fiduciary duties) and liabilities relating thereto to the
Company or to the Members, any Covered Person acting under this Agreement or
otherwise shall not be liable to the Company or to any Member for its good faith
reliance on the provisions of this Agreement. The provisions of this Agreement,
to the extent that they restrict the duties and liabilities of a Covered Person
otherwise existing at law or in equity, are agreed by the Members to replace
such other duties and liabilities of such Covered Person.
9.08. Discretion. Whenever in this Agreement any Member is permitted
----------
or required to make a decision or act (i) in its "sole discretion" or
"discretion" or under a grant of similar authority or latitude, such Member
shall be entitled to consider only such interests and factors as it desires,
including its own interest or (ii) in its "good faith," such Member shall act
under such standard and shall not be subject
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to any other or different standard imposed by this Agreement or any other
agreement contemplated herein or by relevant provisions of law or in equity or
otherwise.
ARTICLE 10.
MANAGEMENT AND PROGRAMMING AGREEMENTS
10.01. Integration Into Comcast; Management Agreement. The Business
----------------------------------------------
will be integrated into the existing management structure of Comcast and its
Subsidiaries and Comcast will assign senior management personnel to operate the
Business. The names and positions of such senior management personnel who will
initially operate the Business are set forth on Schedule 10.01 hereto. Comcast
will promptly notify CalPERS in writing of, and consult with CalPERS regarding,
any changes in such personnel. Comcast will manage the Business in accordance
with the terms of one or more Management Agreements between Comcast and the
Company or one or more of its Subsidiaries (such Management Agreement or
Agreements are referred to collectively as the "Management Agreement"). The
Management Agreement will be in the form set forth as Exhibit 10.01 hereto.
10.02. Programming Agreement. Comcast will provide programming to
---------------------
the Cable Systems owned or operated by the Company or its Subsidiaries in
accordance with the terms of one or more programming agreements between Comcast
and the Company or one or more of its Subsidiaries (such programming agreement
or agreements are referred to collectively as the
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"Programming Agreement") in the form attached as Exhibit 10.02.
10.03. Directors' & Officers' Insurance. Comcast shall use its
--------------------------------
reasonable efforts to obtain and maintain substantially the same insurance for
persons performing for the Company those functions that would customarily be
performed by an officer of a corporation and for those persons performing the
functions of directors or officers of Subsidiaries of the Company as Comcast
obtains and maintains for its own directors and officers; provided that
Comcast's obligations under this sentence shall continue only for so long as
CalPERS has not exercised its rights pursuant to Section 14.02(a)(iii) and shall
not continue after Comcast does not directly or indirectly hold an interest in
the Company. Comcast will charge the Company and its Subsidiaries (a) for such
insurance in accordance with the terms of the Management Agreement if coverage
is obtained under a Comcast policy or (b) for the direct charge for such
insurance if a separate policy is obtained.
10.04. Other Expenditures. Except as otherwise provided in the
------------------
Management Agreement or the Programming Agreement, any capital expenditures or
other outlays made by Comcast or any of its Subsidiaries on behalf of the
Company or any of its Subsidiaries and any goods, services or facilities
provided by Comcast or any of its Subsidiaries to the Company
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or any of its Subsidiaries will be charged to the Company or its Subsidiaries at
no more than the actual cost incurred by Comcast or its Subsidiaries (excluding
costs incurred by Comcast or its Subsidiaries for its or their own management
salaries, corporate overhead, rent, leasehold or utilities expenses). Except as
expressly provided for in the Management Agreement or the Programming Agreement
or as provided in Section 10.03 or above in this Section 10.04 neither Comcast
nor any of its Affiliates will be entitled to charge the Company for any
services, facilities or support.
10.05. Comcast, CCCI and CalPERS Not Managers. Notwithstanding the
--------------------------------------
fact that Comcast is a party to this Agreement, the Management Agreement and the
Programming Agreement and notwithstanding the fact that Comcast, CCCI and
CalPERS have certain duties and obligations under this Agreement, (i) none of
Comcast, CCCI and CalPERS is, and none shall be deemed to be, a "manager" of the
Company within the meaning of the Delaware Act, (ii) Comcast is not and shall
not be deemed to be a member of the Company, (iii) this Agreement does not
constitute a partnership between Comcast and the Company or between Comcast and
either Member and (iv) the provisions herein related to Comcast are included
herein rather than in a separate agreement for convenience only; provided
however, that nothing herein shall alter or relieve any of Comcast, CCCI or
CalPERS of, its obligations hereunder,
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in such agreements and under the Guaranty Agreement and the Registration Rights
Agreement.
ARTICLE 11.
COVENANTS OF THE MEMBERS, COMCAST AND CALPERS
11.01. Best Efforts. Subject to the terms and conditions of this
------------
Agreement, CCCI, Comcast and CalPERS will each use its reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary under applicable laws and regulations to consummate the MHI
Acquisition, any other Cable Acquisition the Company determines to pursue and
any transaction pursuant to Article 13 or 16). CCCI, Comcast and CalPERS each
agree to execute and deliver such other documents, certificates and other
writings and to take such other actions as may be reasonably necessary in order
to consummate expeditiously the MHI Acquisition, any other Cable Acquisition
that the Company determines to pursue and any transaction pursuant to Article 13
or 16. The obligations of any of Comcast, CCCI or CalPERS under this Section
11.01 shall terminate when such Person no longer owns a direct or indirect
interest in the Company.
11.02. Confidentiality. From the date hereof through the second
---------------
anniversary of the first date on which it is no longer a Member, each Member and
its Affiliates will hold, and will use their reasonable efforts to cause its and
their respective officers, directors, employees, accountants,
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counsel, consultants, advisors and agents (collectively, the "Agents") to hold
in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning (i) in the case of CalPERS as the Member with obligations
hereunder, any member of the Extended Comcast Group, and (ii) in the case of
CCCI as the Member with obligations hereunder, any member of the Company Group,
(as the case may be, the "Confidential Information") that is furnished to such
Member, its Affiliates or Agents in connection with the Company, the Company
Business or the transactions contemplated hereby and will use such information
solely in connection with its membership in the Company; provided that
"Confidential Information" shall not include, and no Member shall have any
obligation with respect to, information (i) that has become public from a source
other than such Member, its Affiliates or Agents, (ii) that has become available
to such Member on a non-confidential basis from a source (A) that such Member
has no reason to believe to be under an obligation of confidentiality and (B)
other than the Company or its Subsidiaries or the other Member or its Affiliates
or any of their respective representatives, (iii) that has been made available
on a non-restricted basis to a third party by a member of the Extended Comcast
Group, or any Affiliate of such member, and (iv) that has been developed by or
on behalf of
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such Member independently of any disclosure from the Company or its Subsidiaries
or the other Member or its Affiliates. A Member may in any event disclose
Confidential Information to its Agents so long as such Agents are informed by
such Member of the confidential nature of such information and such Agents agree
to be bound by the confidentiality obligation of such Member; provided that in
any event such Member will be responsible for any breach of this Section 11.02
by such Agents. Notwithstanding the foregoing, (i) no Member or its Affiliates
or Agents shall be liable for any inadvertent disclosure of Confidential
Information so long as such Person used the same degree of care in preventing
unauthorized disclosure of Confidential Information that it employs in
protecting its own confidential information in the ordinary course of its
business, (ii) this Section 11.02 shall not affect the use or disclosure of
Confidential Information by any Member or any of its Affiliates or Agents in
connection with enforcing any rights or remedies under this Agreement, any
agreement provided for herein, or in the Guaranty Agreement or the Registration
Rights Agreement, and (iii) any Member or its Affiliates or Agents may use and
disclose Confidential Information in connection with establishing the Value of
Company Equity.
11.03. CalPERS Right of First Offer. Subject to the last sentence
----------------------------
of this Section 11.03, if any member of the
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Comcast Group proposes to engage in any transaction other than a Special
Approval Transaction during the period beginning on the date hereof and ending
three years later (or at any earlier time that Comcast sells, transfers or
otherwise disposes of its Interest), (i) for which such member intends to raise
at least $50 million in cash through third party equity financing, (ii) which is
not primarily related to activities or assets outside the United States and
(iii) with respect to which the Company does not have a Right of First Offer (an
"Equity Transaction"), CalPERS will have a right of first offer to provide such
equity financing in accordance with the terms of this Section 11.03. Comcast
will provide written notice (the "Equity Notice") of the proposed transaction to
CalPERS. The Equity Notice will set forth in reasonable detail the material
terms and conditions of the proposed transaction, including a description of the
terms and amount of equity to be provided by the third party (the "Equity").
CalPERS will have a reasonable period of time (taking into account the relevant
facts, circumstances and exigencies) in which to decide whether to provide the
Equity, which period of time will be set forth in the Equity Notice but will be
subject to change if the relevant circumstances change (any such change will be
conveyed to CalPERS promptly). Prior to the conclusion of such period of time
(the "Election Period"), CalPERS may elect, by written notice to Comcast, to
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provide, and the relevant member of the Comcast Group will be obligated to
accept, the Equity on the terms and conditions set forth in the Equity Notice.
To the extent it is reasonably practicable to do so, Comcast shall arrange for
the Election Period to be at least 15 Business Days. As promptly as practicable
after receiving an Equity Notice (and in any Event within the Election Period),
CalPERS will notify Comcast whether it elects to provide the Equity. If CalPERS
elects not to provide the Equity or if, prior to the conclusion of the Election
Period, CalPERS does not notify Comcast that it elects to provide the Equity,
the member of the Comcast Group may obtain the Equity from one or more third
parties on terms and conditions that in the aggregate are not materially more
favorable to such third parties than those specified in the Equity Notice. If
the member of the Comcast Group obtains the Equity from a third party, Comcast
will promptly give written notice to CalPERS of the terms and conditions of the
transaction in which such Equity was obtained and compare the same with the
terms and conditions set forth in the Equity Notice given to CalPERS. At any
time prior to the time it receives notice by CalPERS of its election to provide
the Equity, Comcast may cancel an Equity Notice and CalPERS shall have no
further rights with respect thereto; provided that the relevant member of the
Comcast Group may not obtain the Equity referred to therein from third parties
without again complying
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with the provisions of this Section 11.03. The rights of first offer described
in this Section 11.03 will not apply to (i) any transaction in which the
provider of the equity financing is an industrial operating company which is a
participant or potential participant in the telecommunications industry, (ii)
any public offering of equity securities or (iii) any offering or sale of
securities to officers, directors or employees of any member of the Comcast
Group.
11.04. Notices. If at any time either member becomes aware of
-------
any condition or event that could reasonably be expected to give rise to any
rights of the other Member under this Agreement (including, without limitation,
the remedies set forth in Sections 14.01 and 14.02), the Member becoming aware
of such condition or event shall promptly notify the other Member in writing (i)
of such condition or event and (ii) the steps being taken to remedy or cure such
condition or event, if such matter is capable of remedy or cure.
11.05. Comcast Information. Comcast shall provide CalPERS with:
-------------------
(a) Within ten (10) days after it has been filed with the SEC, a copy
of (i) each annual report, quarterly report and current report, and each
amendment thereto, (ii) each proxy statement and information statement, and
(iii) all other reports, registration statements, schedules
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and other documents filed by Comcast with the SEC under the Exchange Act and the
Securities Act (except in the case of (i), (ii) or (iii), those filed on a
confidential basis), in each case together with all exhibits;
(b) Promptly upon publication, copies of all news releases and press
releases issued by Comcast;
(c) Promptly after the same are available, copies of all such proxy
statements, financial statements and reports as Comcast shall send to its
stockholders; and
(d) With reasonable promptness, such other public information as
CalPERS may reasonably request relating to the finances, properties, business
and affairs of Comcast and its Subsidiaries that Comcast would, either as
required under applicable law or in accordance with its ordinary practice,
provide a Comcast stockholder.
ARTICLE 12.
CLOSING CONDITIONS
12.01. Conditions to the Obligation of Each Member. The obligation
-------------------------------------------
of each Member to consummate the Initial Closing is subject to the satisfaction
of the following conditions:
(a) Any applicable waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or been terminated.
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(b) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit consummation of the Initial Closing.
12.02. Conditions to the Obligation of CalPERS as to the Initial
---------------------------------------------------------
Closing. The obligation of CalPERS to make its Capital Contribution at the
- - - -------
Initial Closing is subject to the satisfaction of the following conditions at or
prior to the Initial Closing:
(a) The representations and warranties of Comcast and CCCI contained
in Section 3.01 and the representations and warranties of Comcast in the
Guaranty Agreement shall be true and correct in all material respects on the
Initial Closing Date.
(b) The Company, Comcast and CCCI shall have complied with and
performed in all material respects all covenants and agreements contained in
this Agreement to be complied with or performed by the Company, Comcast or CCCI,
as the case may be, on or prior to the Initial Closing Date.
(c) All conditions under the MHI Agreement to the obligations of
Comcast to consummate the transactions contemplated by the MHI Agreements shall
have been satisfied in all material respects.
(d) Comcast shall have delivered to CalPERS a certificate dated the
date of the Initial Closing signed by its Chairman, Vice Chairman, President or
Senior Vice President and Treasurer, certifying to the satisfaction of the
conditions specified in paragraphs (a), (b), (f), (g), (h) and (l) of this
Section 12.02.
(e) CalPERS shall have received opinions of Davis Polk & Wardwell and
other counsel to the Company, Comcast and CCCI, reasonably satisfactory to
CalPERS, dated the Initial Closing Date, substantially in the forms set forth as
Exhibits 12.02(e)(1), (2), (3) and (4) hereto.
(f) There shall have been no Change in Control of Comcast and no
decision shall have been made by Ralph J. Roberts to
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engage in a transaction that would result in a Change of Control.
(g) None of the MHI Agreements or any schedule or exhibit thereto
shall have been modified or amended in any material respect adverse to the
Company, and Comcast shall not have knowingly waived any material condition or
provision therein, in either case without having received CalPERS' written
approval.
(h) Since March 31, 1994 there shall have been no change that has had
a Material Adverse Effect on the MHI Business, and since the Balance Sheet Date,
except as disclosed in the Signing Date Documents, there shall have been no
change that has had a Material Adverse Effect on Comcast, except in each case
for:
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(i) any changes resulting from general economic, financial or
market conditions;
(ii) any changes required in order to comply with applicable
legislation or regulations affecting U.S. cable television or cellular
telephone operators generally, including but not limited to any adjustment
in cable television subscriber rates implemented in a manner consistent
with the rate regulations promulgated by the FCC under the Cable Act; and
(iii) any technological changes applicable generally to the
industry in which MHI or Comcast operates, as the case may be.
(i) All federal, state and local governmental regulatory consents,
approvals and authorizations required for the legal acquisition of MHI and BCI
by the Company in accordance with the BCI Purchase Agreement and the MHI
Purchase Agreement shall have been obtained without any conditions or
reservations applicable thereto that has a Material Adverse Effect on the
Company.
(j) Comcast and CalPERS shall have entered into the Registration
Rights Agreement.
(k) CalPERS shall have approved the material terms of and
documentation for the Initial Facility, which approval shall not be unreasonably
withheld or delayed.
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(l) No Comcast Act of Misconduct or Event of Comcast Noncompliance
shall have occurred and be continuing, it being agreed that for the purpose of
this Section 12.02(l) whether or not a Comcast Act of Misconduct has occurred
shall be determined without regard to any requirement herein that the same shall
have had any Material Adverse Effect of any kind.
(m) CalPERS shall have reasonably concluded that its ownership of the
CalPERS' Interest and its payment of the Capital Contributions in connection
with the Initial Closing do not conflict with any law, rule, regulation or
administrative or judicial order or decree applicable to CalPERS.
(n) CalPERS shall have received the following:
(i) Copies of resolutions of the respective boards of directors
of Comcast and CCCI, certified by the secretary of the applicable
corporation, authorizing and approving the execution, delivery and
performance of this Agreement, and in the case of Comcast, the Registration
Rights Agreement, the Guaranty Agreement, the Management Agreement and the
Programming Agreement, as appropriate, and all other documents and
instruments to be delivered pursuant hereto and thereto;
(ii) Certificates of incumbency executed by the secretary of
Comcast and CCCI certifying the names,
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titles and signatures of the officers authorized to execute the documents
referred to in subparagraph (i) above.
(iii) Such additional documentation as CalPERS or its special
counsel, Paul, Hastings, Janofsky & Walker, may reasonably request relating
to the existence of Comcast, CCCI and the Company, to the authority of
Comcast or CCCI, as the case may be, for this Agreement the MHI Agreements,
the Registration Rights Agreement, the Guaranty Agreement, the Management
Agreement and the Programming Agreement and (to the extent reasonably
available) to the satisfaction of the conditions set forth in this Section
12.02, all in form and substance reasonably satisfactory to CalPERS.
12.03. Concurrent Condition to CalPERS Obligation at Initial Closing.
-------------------------------------------------------------
Concurrently with CalPERS' Capital Contribution at the Initial Closing, the
following conditions shall be satisfied.
(a) The Closing shall have occurred under the BCI Purchase Agreement
and the MHI Purchase Agreement.
(b) The conditions set forth in Section 2.02 (other than Section
2.01(c)) and 2.02 of the Initial Facility shall have been satisfied with respect
to the initial Loans (as defined in the Initial Facility), except for such
conditions
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shall have been waived by the Required Banks (as defined in the Initial
Facility).
12.04. Conditions to the Obligation of CCCI. The obligation of CCCI
------------------------------------
to make its Initial Capital Contribution at the Initial Closing is subject to
the satisfaction of the following conditions:
(a) The representations and warranties of CalPERS contained in
Section 3.02 shall be true in all material respects on the Initial Closing Date.
(b) CalPERS shall have complied with and performed in all material
respects all covenants and agreements contained in this Agreement to be complied
with or performed by CalPERS on or prior to the Initial Closing Date.
(c) CCCI shall have received an opinion of counsel to CalPERS
reasonably satisfactory to CCCI, dated the Initial Closing Date substantially in
the form set forth as Exhibits 12.04(c)(1) and (2).
(d) CCCI shall have received all documents it may reasonably request
relating to the existence of CalPERS and the authority of CalPERS for this
Agreement, all in form and substance reasonably satisfactory to CCCI.
(e) All conditions under the MHI Agreements to the obligations of
Comcast to consummate the transactions contemplated by the MHI Agreements shall
have been satisfied in all material respects.
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ARTICLE 13.
DISPOSITIONS OF INTERESTS
13.01. General. (a) No Member may sell, transfer, grant a security
-------
interest in or pledge (collectively, "Transfer") all or any part of its
Interest without the consent of the other Member, except pursuant to the
exercise of CalPERS Put, the CCCI Call, the Sale Option or the Alternative Call.
At all times the Comcast Cable Parent shall either (i) directly own CCCI's
Interest or (ii) have, directly or indirectly (through an unbroken chain of
wholly-owned Subsidiaries), record and beneficial ownership of and full power to
vote all of the issued and outstanding capital stock and other Equity Securities
of any Subsidiary of the Comcast Cable Parent that holds CCCI's Interest.
(b) CalPERS consents to the transfer by CCCI of its Interest as set
forth in this paragraph (b). Within 180 days of the date hereof, CCCI may, in
its sole discretion, effect a single transfer or assignment of CCCI's Interest
to a newly-formed direct or indirect wholly-owned Subsidiary of CCCI ("Newsub")
that upon such transfer or assignment shall have no asset or liability other
than its Interest in the Company. Immediately prior to such transfer or
assignment, Newsub will execute a counterpart to this Agreement, mutatis
mutandis, with Newsub replacing CCCI wherever CCCI appears herein, other than in
the definition of "Comcast Cable Parent" and in this
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Section 13.01(b). Upon such execution, Newsub shall be admitted as a member of
the Company without the need for the consent of any Member and CCCI will
immediately thereafter resign as a member of the Company (and thereafter have no
rights, duties or obligations as a Member). Notwithstanding anything in this
Agreement to the contrary, upon such transfer or assignment, Newsub and CalPERS
are hereby authorized to, and shall continue the business of the Company without
dissolution.
(c) Any Transfer of an Interest which is not made in compliance with
the provisions of this Agreement shall be void, and the Company shall not
recognize any such Transfer. Notwithstanding anything else contained herein, no
Transfer shall be made except in compliance with applicable law, including the
Securities Act.
13.02. CalPERS Put. (a) At any time after the seventh (7th)
-----------
anniversary hereof or as provided in Sections 9.01(a)(i), 9.01(a)(iii) or 14.02,
CalPERS may exercise an option (the "CalPERS Put") to require CCCI to purchase
CalPERS' Interest, subject to subsection (b) below. To exercise the CalPERS Put,
CalPERS shall deliver a written notice (the "Put Notice") to CCCI which shall
contain an unconditional exercise of the CalPERS Put (the date of such delivery
being the "Put Date"). Upon delivery of the Put Notice, the CCCI Call, the
Alternative Call and the Sale
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Option shall terminate and may not thereafter be exercised by either Member
pursuant to any provision of this Agreement; provided, however, that if after
the Put Date any member of the Comcast Group engages in Material Disabling
Conduct, CalPERS will retain the right to exercise any of the remedies with
respect thereto provided for in Section 14.01 and 14.02 without regard to having
previously exercised the Put. As soon as practicable after delivery of the Put
Notice, CCCI and CalPERS shall arrange for the determination of the Value of
Company Equity as of the Put Date in the manner provided in Section 13.06.
(b) At any time prior to the 30th day after the determination of the
Value of Company Equity in the manner provided in Section 13.06 (the "Auction
Election Period"), CCCI may elect by written notice (an "Auction Notice")
delivered to CalPERS to conduct an auction sale for cash of the entire Company
in accordance with the procedures set forth in Section 13.07. If at any time
during the Auction Election Period any member of the Extended Comcast Group
engages in Material Disabling Conduct, the Auction Election Period shall be
suspended until the expiration of the period provided for CalPERS' election of a
remedy pursuant to Section 14.01 or 14.02. In the event of a sale of the Company
pursuant to an Auction Notice, the Value of Company Equity as of the Put Date
shall be conclusively presumed to be equal to the net cash
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proceeds of such sale (the "Sale Proceeds") for purposes of calculating the Put
Price, and any value determined pursuant to the appraisal process set forth in
Section 13.06 shall be disregarded. If CCCI does not deliver an Auction Notice
to CalPERS during the Auction Election Period (or waives in writing its right to
deliver such notice), for purposes of determining the Put Price, the Value of
Company Equity as of the Put Date shall be conclusively presumed to be the value
finally determined pursuant to the appraisal process set forth in Section 13.06.
(c) The price to be paid for CalPERS' Interest pursuant to the
CalPERS Put (the "Put Price") shall be the greater of (i) the Adjusted CalPERS
Interest Value and (ii) the Stock Investment Value as of the Put Date (adjusted
as provided in paragraph (j) below).
(d) For purposes of calculating the Put Price, the term "CalPERS
Interest Value" means an amount equal to the product of (x) 0.45 multiplied by
(y) the Value of Company Equity as of the Put Date, and the term "Adjusted
CalPERS Interest Value" means the CalPERS Interest Value adjusted as follows:
(i) if payment of the CalPERS Interest Value as the Put Price
would, at the time of such payment, result in an IRR on CalPERS' Capital
Contributions of less than 0%, then any "Special Deferred Charges" (as
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defined in the Management Agreement and the Programming Agreement) accrued
to such date of payment shall be canceled to the extent necessary (but in
no event to an amount less than zero) to cause such IRR to reach 0%, and
the Adjusted CalPERS Interest Value shall be the CalPERS Interest Value
calculated after giving effect to such cancellations;
(ii) if payment of the CalPERS Interest Value as the Put Price
would, at the time of such payment, result in an IRR on CalPERS' Capital
Contributions of greater than or equal to 0% but less than or equal to 15%,
then the Adjusted CalPERS Interest Value shall be the CalPERS Interest
Value increased by an amount equal to 50% of the amount by which (x) the
product of .55 multiplied by the Value of Company Equity as of the Put Date
exceeds (y) CCCI's aggregate Capital Contributions (reduced by the amount
of any distributions received by CCCI from the Company other than pursuant
to Section 17.03), to the extent necessary (but in no event by an amount
greater than 50% of such excess) to cause such IRR to reach 15%; or
(iii) if payment of the CalPERS Interest Value as the Put Price
would, at the time of such payment, result in an IRR on CalPERS' Capital
Contributions of greater than 15%, then the Adjusted CalPERS Interest
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Value shall be the CalPERS Interest Value reduced by 50% of the amount by
which (x) the CalPERS Interest Value exceeds (y) the amount that would be
required, if paid as the Put Price, to achieve an annual IRR of 15% on
CalPERS' Capital Contributions at the time of such payment.
The operation of the foregoing provisions and of the provisions of paragraphs
(f), (g) and (h) is illustrated in the examples attached as Exhibit 13.02
hereto.
(e) The "Stock Investment Value" means, as of any date, the value on
such date (calculated based on the Average Price of Comcast Stock on such date)
of the portfolio of Comcast Stock (the "Hypothetical Portfolio") that CalPERS
would have possessed if (i) each Capital Contribution by CalPERS had, rather
than being contributed to the Company, been used to purchase Comcast Stock at
the Average Price of Comcast Stock on the date of such contribution (without
payment of any commission, fee or other charge) and (ii) at the time of each
distribution by the Company to CalPERS (other than payments under Section 17.03)
the Hypothetical Portfolio were reduced by the number of shares of Comcast Stock
that could have been purchased with such distribution at the Average Price on
the date of such distribution (without payment of any commission, fee or other
charge).
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(f) The Hypothetical Portfolio shall be appropriately adjusted, and
the Stock Investment Value shall appropriately account, for any (i) dividends
paid or distributions made on Comcast Stock payable in Comcast Stock, (ii)
subdivisions or splits of the outstanding Comcast Stock, (iii) combinations or
reclassifications of the outstanding Comcast Stock into a smaller number of
shares, (iv) issuance of any shares of Comcast capital stock in a
reclassification of Comcast Stock or (v) merger in which Comcast is one of the
constituent corporations. If at any time from the Initial Closing Date through
the Put Date Comcast pays a dividend or makes a distribution of cash or property
other than Comcast Stock (other than in a reclassification or merger as set
forth in clauses (iii), (iv) and (v) of the preceding sentence), the
Hypothetical Portfolio shall be increased as though such cash or the fair market
value of such property, as determined by the Comcast Board in good faith, had
been reinvested, on the date such dividend or distribution is paid or made, to
purchase Comcast Stock at the Average Price of Comcast Stock on the date such
dividend or distribution is paid or made (without payment of any commission, fee
or other charge).
(g) If on any date (the "Dilution Date") between the Initial Closing
Date and the Put Date Comcast issues or sells shares of any class of Comcast
common stock (other than in a Non-Dilutive Issuance) without consideration or
for a
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consideration per share less than the Average Price of such class of common
stock on the Dilution Date, the Hypothetical Portfolio shall be increased as of
the Dilution Date by the number of shares of Comcast Stock that could have been
purchased on the Dilution Date at the Designated Price (without the payment of
any commission, fee or other charge) for the amount obtained by multiplying:
(i) the difference between (x) the Average Price on the Dilution
Date of the class of common stock so issued or sold and (y) the per-share
consideration, if any, received by Comcast upon such issuance or sale; by
(ii) the number of shares of common stock so issued or sold; and
by
(iii) the fraction, the numerator of which is (x) the Stock
Investment Value on the Dilution Date, and the denominator of which is (y)
the aggregate for all classes of Comcast common stock of (1) the number of
shares of such class of Comcast common stock issued and outstanding
immediately after such dilutive issuance or sale multiplied by (2) the
Average Price of such class of common stock on the Dilution Date.
As used herein, "Designated Price" means the Average Price of Comcast Stock as
of the Dilution Date, minus a fraction:
(i) The numerator of which is the product of:
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(x) the difference between (1) the Average Price on the Dilution
Date of the class of common stock so issued or sold and (2) the per-
share consideration, if any, received by Comcast upon such issuance or
sale; multiplied by
(y) the number of shares of common stock so issued or sold; and
by
(z) a fraction,
(A) the numerator of which is the number of shares of
Comcast Stock issued and outstanding immediately after such
dilutive issuance or sale multiplied by the Average Price of the
Comcast Stock on the Dilution Date, and
(B) the denominator of which is the aggregate for all
classes of Comcast common stock of (1) the number of shares of
such class of Comcast common stock issued and outstanding
immediately after such dilutive issuance or sale multiplied by
(2) the Average Price of such class of common stock on the
Dilution Date; and
(ii) The denominator of which is the number of shares of Comcast Stock
outstanding after the dilutive financing.
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If any portion of the consideration to be received by Comcast is in a form other
than cash, the fair market value of such noncash consideration, as determined in
good faith by the Comcast Board, shall be utilized in the foregoing computation.
For purposes of the foregoing computation, the consideration received by Comcast
upon any issuance or sale requiring adjustment of the Hypothetical Portfolio
pursuant to this paragraph (g) shall be deemed to be the actual consideration so
received plus the amount of any underwriting discounts, agent's fees, brokerage
commissions, financial advisory fees or similar cost paid by Comcast in respect
of such issuance or sale, but only to the extent such discounts, fees,
commissions and costs are at the time customary for such a transaction. In
addition, for purposes of the foregoing computation, the number of issued and
outstanding shares of Comcast Stock at any time shall be deemed to be the number
of such shares actually issued and outstanding (or otherwise deemed to be issued
and outstanding pursuant to paragraph (h)) at such time plus the number of
shares of Comcast Stock comprising the Hypothetical Portfolio at such time.
Within thirty (30) days after any adjustment of the Hypothetical Portfolio as
set forth in this paragraph (g) (including such adjustment pursuant to paragraph
(h)), the Chief Financial Officer of CCCI shall provide CalPERS with a
certificate setting forth in
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reasonable detail the circumstances giving rise to, and the effect of, such
adjustment.
(h) If on any date (the "Convertible Dilution Date") between the date
hereof and the Put Date Comcast issues rights, options or warrants entitling the
holders thereof to subscribe for or purchase shares of any class of Comcast
common stock (or securities convertible into any class of Comcast common stock)
or shall issue convertible securities (in any event, other than in a Non-
Dilutive Issuance), and the price per share of such class of Comcast common
stock (such stock, herein the "Conversion Stock") of such rights, options,
warrants or convertible securities (including, (x) in the case of rights,
options or warrants, the price at which they may be exercised and (y) in the
case of convertible securities, the fair market value of any non-cash
consideration provided by the purchaser of such convertible security, including
the acceptance of a below-market interest rate) is less than the Average Price
of the Conversion Stock on the date of such issuance, (i) the Hypothetical
Portfolio shall be adjusted pursuant to paragraph (g) as though the maximum
number of shares of Conversion Stock issuable upon exercise of such rights,
options or warrants or upon conversion of such convertible securities had been
issued as of the Convertible Dilution Date for an aggregate consideration equal
to the aggregate consideration paid for such rights, options,
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warrants or convertible securities and the aggregate consideration payable by
the holders of such rights, options, warrants or convertible securities prior to
their receipt of such shares of Conversion Stock (including for this purpose the
value of any non-cash consideration, as described above) and (ii) for purposes
of any subsequent adjustment of the Hypothetical Portfolio pursuant to paragraph
(g) (including an adjustment pursuant to this paragraph (h)), such maximum
number of shares of Conversion Stock shall be deemed to have been issued and
outstanding as of the Convertible Dilution Date. In the event that any such
rights, options or warrants expire unexercised, or in the event of a change in
the number of shares of Conversion Stock to which the holders of such rights,
options, warrants or convertible securities are entitled (other than pursuant to
adjustment provisions therein comparable to those contained in paragraph (g) and
this paragraph (h) or otherwise customary for the relevant instrument), the
Hypothetical Portfolio and the number of shares of Conversion Stock deemed to be
issued and outstanding shall again be adjusted as of the Convertible Dilution
Date to be the number of shares of Comcast Stock that would have comprised the
Hypothetical Portfolio and the number of shares of Conversion Stock that would
have been deemed to have been issued and outstanding, respectively, if such
rights, options, warrants or convertible securities had not been issued, in the
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former event, or if such holders had initially been entitled to such changed
number of shares of Comcast common stock, in the latter event.
(i) Notwithstanding the provisions of paragraphs (g) and (h), none of
the following (each a "Non-Dilutive Issuance") shall give rise to any adjustment
pursuant to paragraph (g) or (h):
(i) the issuance of Comcast common stock pursuant to any
employee stock option plan, employee restricted stock plan, dividend
reinvestment plan or other similar plan adopted by the Comcast Board in
good faith;
(ii) the issuance or sale of Comcast common stock in an
underwritten public offering if (x) the price at which such common stock is
offered to the public is not less than (1) the Closing Price of such common
stock on the trading day such offering price was determined minus (2) a
customary public offering discount and (y) such offering does not require
Comcast to pay underwriting discounts greater than customary for such a
transaction at such time;
(iii) the issuance of Comcast common stock upon the exercise of
rights, options or warrants or upon the conversion of convertible
securities;
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(iv) the issuance of Comcast Stock to CalPERS pursuant to any
provision of the Agreement;
(v) the issuance of any security in connection with the
acquisition by Comcast or any Subsidiary of Comcast of any Person, property
or asset, if the Comcast Board determines in good faith that such Comcast
common stock has been issued at market value; or
(vi) to the extent the existing holders of Comcast Stock receive
pro rata treatment in respect of the distribution, the distribution to
existing holders of one or more classes of Comcast common stock of (x)
Comcast common stock, (y) rights, options, or warrants entitling the
holders thereof to subscribe for or purchase shares of Comcast common stock
or (z) any security convertible into Comcast common stock (including,
without limitation, in connection with a shareholder rights plan).
(j) Notwithstanding any of the foregoing, the Stock Investment Value
on the Put Date shall be reduced, if and to the extent necessary, so that if the
Stock Investment Value were paid as the Put Price such payment would not, at the
time made, result in an IRR on CalPERS' Capital Contributions in excess of 15%.
(k) If CCCI does not deliver an Auction Notice to CalPERS prior to
the termination of the Auction Election
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Period (or if CCCI waives in writing its right to deliver such a notice) then as
promptly as possible after the termination of such period (or the date of such
waiver), CCCI shall purchase from CalPERS and CalPERS shall sell to CCCI
CalPERS' Interest. The Members agree to use their best efforts both to satisfy
all applicable regulatory requirements, including obtaining all regulatory
approvals, and to obtain all third party approvals necessary to consummate such
purchase and sale as promptly as practicable. Such purchase and sale shall be
consummated as promptly as possible, but in any event no later than the later of
(i) 90 days after the termination of the Auction Election Period or the date of
such waiver (or 30 days after such termination or such date of waiver if CCCI
pays the Put Price primarily in Comcast Stock) and (ii) five Business Days after
the receipt of all necessary regulatory and third party approvals. Such purchase
and sale pursuant to the CalPERS Put shall be consummated at a closing at the
offices of the Company (the "Put Closing"). At the Put Closing (i) CCCI shall
pay CalPERS the Put Price either (x) in cash, by wire transfer of immediately
available funds, (y) by delivery of Comcast Stock (valued on the basis of the
Average Price on the date of such closing) or (z) by any combination thereof
(the form of consideration being determined by CCCI in its sole discretion;
provided, however, that no portion of the Put Price may be paid in Comcast Stock
if there is a Market Float
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Deficiency Condition at the time the value of Company Equity is finally
determined as set forth in paragraph (b) hereof) and (ii) CalPERS shall deliver
to CCCI good and valid title to the CalPERS Interest free and clear of any lien
or encumbrance and without any further representation, warranty, indemnity or
other assurance. Funds shall be wire transferred to CalPERS as provided in
Section 17.14.
(l) If CCCI delivers an Auction Notice during the Auction Election
Period then at the closing of the sale pursuant to Section 13.07, (i) each of
CCCI and CalPERS shall deliver to the purchaser good and valid title to its
Interest free and clear of any lien or encumbrance and without any further
representation, warranty, indemnity or other assurance (other than those with
respect to which the purchaser's only recourse is to an escrow of a portion of
the purchase consideration), (ii) CalPERS shall receive an amount of the Sale
Proceeds equal to the Put Price, provided that if the Sale Proceeds are
insufficient to pay the Put Price, CCCI shall deliver to CalPERS at such closing
both the entire Sale Proceeds and an amount equal to such deficiency, such
amount to be paid either (x) in cash by wire transfer of immediately available
funds, (y) by delivery of Comcast Stock (valued on the basis of the Average
Price on the date of such closing), or (z) by any combination thereof (the form
of consideration being determined by CCCI in its sole discretion; provided,
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however, that no portion of the Put Price may be paid in Comcast Stock if there
is a Market Float Deficiency Condition at the time the Value of Company Equity
is finally determined as set forth in paragraph (b) hereof), and (iii) CCCI will
receive the remaining Sale Proceeds, if any. The parties acknowledge that the
Put Price could exceed the amount of the Sale Proceeds only if (a) the Stock
Investment Value is the Put Price and (b) the Sale Proceeds are insufficient to
pay the Stock Investment Value. Funds shall be wire transferred to CalPERS as
provided in Section 17.14.
13.03. CCCI Call. (a) During the Call Exercise Period, and at no
---------
other time notwithstanding the circumstances, CCCI may exercise an option (the
"CCCI Call") to require CalPERS to sell CalPERS' Interest to CCCI. To exercise
the CCCI Call, CCCI shall deliver a written notice (the "CCCI Call Notice") to
CalPERS which shall contain an unconditional exercise of the CCCI Call (the date
of such delivery being the "Call Date"). Upon delivery of the CCCI Call Notice,
the CalPERS Put, the Alternative Call and the Sale Option shall terminate and
may not thereafter be exercised by either Member pursuant to any provision of
this Agreement. As soon as practicable thereafter CCCI and CalPERS shall arrange
for the determination of the Value of Company Equity as of the Call Date in the
manner provided in Section
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13.06, and such determination shall be final for purposes of calculating the
Call Price.
(b) The price to be paid for CalPERS' Interest pursuant to the CCCI
Call (the "Call Price") shall be the lesser of (i) the amount that would have
constituted the Put Price had CalPERS exercised the Put on the Call Date (but
without CCCI having the right to effect a sale of the Company pursuant to
Section 13.02(b)) and (ii) 80% of the product of (x) 0.45 multiplied by (y) the
Value of Company Equity as of the Call Date.
(c) As promptly as possible after the date of the final determination
of the Call Price, CCCI shall purchase from CalPERS and CalPERS shall sell to
CCCI CalPERS' Interest. The Members agree to use their best efforts both to
satisfy all applicable regulatory requirements, including obtaining all
regulatory approvals, and to obtain all necessary third party approvals
necessary to consummate such purchase and sale as promptly as practicable. Such
purchase and sale shall be consummated as promptly as possible, but in any event
no later than the later of (i) 90 days after final determination of the Call
Price (or 30 days after such final determination if CCCI pays the Call Price
primarily in Comcast Stock) and (ii) five Business Days after the receipt of all
necessary regulatory and third party approvals. Such purchase and sale of
CalPERS' Interest shall be consummated at a closing at the offices of
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the Company (the "Call Closing"). At the Call Closing (i) CCCI shall pay to
CalPERS the Call Price either (x) in cash by wire transfer of immediately
available funds, (y) by delivery of Comcast Stock (valued on the basis of the
Average Price on the date of such closing), or (z) by any combination thereof
(the form of consideration being determined by CCCI in its sole discretion;
provided, however, that no portion of the Call Price may be paid in Comcast
Stock there is a Market Float Deficiency Condition at the time the Value of
Company Equity is finally determined as set forth in paragraph (a) hereof) and
(ii) CalPERS shall deliver to CCCI good and valid title to the CalPERS Interest
free and clear of any lien or encumbrance and without any further
representation, warranty, indemnity or other assurance. Funds shall be wire
transferred to CalPERS as provided in Section 17.14.
13.04. Alternative Call. (a) Any time after the tenth (10th)
----------------
anniversary hereof, either Member (the "Calling Member") may exercise an option
(the "Alternative Call") to require the other Member (the "Selling Member") to
sell its Interest to the Calling Member. To exercise the Alternative Call the
Calling Member shall deliver a written notice to the Selling Member (the
"Alternative Call Exercise Notice") which shall contain an unconditional
exercise of the Alternative Call (the date of such delivery being the
"Alternative Call Date"). Upon such delivery, the CalPERS Put and the Sale
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Option shall terminate and may not thereafter be exercised by either Member
pursuant to any provision of this Agreement, and the Alternative Call shall
terminate as to the Selling Member and may not thereafter be exercised by such
Member; provided, however, that if after the Alternative Call Date a member of
the Extended Comcast Group engages in Material Disabling Conduct, (i) CalPERS
will retain the right to exercise any of the remedies with respect thereto
provided for in Sections 14.01 and 14.02 without regard to the prior exercise of
the Alternative Call, (ii) the prior exercise of the Alternative Call shall be
suspended until the expiration of the applicable period provided for the
election by CalPERS of a remedy pursuant to Section 14.01 or Section 14.02 and
(iii) if CalPERS validly elects such a remedy, the prior exercise of the
Alternative Call shall be of no further effect. As soon as practicable after
delivery of an Alternative Call Exercise Notice, CCCI and CalPERS shall arrange
for the determination of the Value of Company Equity as of the Alternative Call
Date in the manner provided in Section 13.06, and such final determination shall
be final for purposes of calculating the Alternative Call Price.
(b) The price to be paid for the Selling Member's Interest pursuant
to the Alternative Call (the "Alternative Call Price") shall be the product of
(x) the Selling Member's
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Percentage Interest multiplied by (y) the Value of Company Equity as of the
Alternative Call Date.
(c) The purchase and sale of the Selling Member's Interest pursuant
to the Alternative Call shall be consummated at a closing at the offices of the
Company as promptly as possible following final determination of the Value of
Company Equity; provided that such closing may be held at such other time and
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place as the parties to the transaction may agree. The Members agree to use
their best efforts both to satisfy all applicable regulatory requirements,
including obtaining all regulatory approvals, and to obtain all necessary third
party approvals necessary to consummate such purchase and sale as promptly as
practicable. Such purchase and sale shall be consummated as promptly as
possible, but in any event no later than the later of (i) 90 days after final
determination of the Value of Company Equity as of the Alternative Call Date and
(ii) five Business Days after the receipt of all necessary regulatory and third
party approvals. At such closing, (i) the Calling Member shall pay to the
Selling Member the Alternative Call Price in cash by wire transfer of
immediately available funds, and (ii) the Selling Member shall deliver to the
Calling Member good and valid title to the Selling Member's Interest free and
clear of any lien or encumbrance and without any further representation,
warranty, indemnity or other assurance. If CalPERS is the Selling Member, funds
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shall be wire transferred to CalPERS to its account as provided in Section
17.14.
13.05. Sale Option. At any time after the tenth (10th) anniversary
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hereof, if neither Member has exercised the Alternative Call, or as provided in
Section 14.01 or 14.02, either Member may exercise an option (the "Sale Option")
to require the entire Company to be sold in accordance with the procedures set
forth in Section 13.07. To exercise the Sale Option, the Member exercising the
Sale Option shall deliver a written notice (the "Sale Option Notice") to the
other Member which shall contain an unconditional exercise of the Sale Option
(the date of such delivery being the "Sale Option Date"). Upon such delivery the
CalPERS Put shall terminate and may not thereafter be exercised. If the Sale
Option is being exercised pursuant to Section 14.01 or 14.02, the Alternative
Call shall terminate upon delivery of the Sale Option Notice and may not
thereafter be exercised by either Member. If the Sale Option is not being
exercised pursuant to Section 14.01 or 14.02, then for a period of sixty (60)
days (the "Additional Alternative Call Period") following the Sale Option Date
either Member may exercise the Alternative Call, and upon such exercise the Sale
Option shall terminate (and may not thereafter be exercised by either member)
and the Sale Option Notice shall be of no further effect. If by the end of the
Additional Alternative Call Period neither Member has
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exercised the Alternative Call, the Alternative Call shall terminate and may not
thereafter be exercised by either Member. Upon termination of the Alternative
Call, CCCI shall promptly commence the sale of the Company in accordance with
the procedures set forth in Section 13.07. Upon and after the closing of the
sale of the Company, each Member shall receive (x) such Member's Percentage
Interest multiplied by (y) the net proceeds of such sale (when and as received)
after deduction of all expenses relating thereto, and no Member shall be
required to give any representation, warranty, indemnity or other assurance to
the purchaser of the Company (other than those with respect to which the
purchaser's only recourse is to an escrow of a portion of the purchase
consideration). Funds shall be wire transferred to CalPERS as provided in
Section 17.14.
13.06. Determination of Appraised Value. (a) If the Value of Company
--------------------------------
Equity is to be determined as of any date (the "Valuation Date") pursuant to any
provision of this Agreement, CCCI will designate a cable television system
appraiser of recognized national standing (the "CCCI Appraiser") and CalPERS
will designate a second cable television system appraiser of recognized national
standing (the "CalPERS Appraiser"), in each case to determine the Value of
Company Equity. If the Value of Company Equity is to be determined upon exercise
of the CalPERS Put or upon the
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exercise of the Alternative Call by CalPERS, CalPERS shall have the first in
time right to designate an appraiser, which appraiser shall serve as the CalPERS
Appraiser, and CCCI shall have the second in time right to designate an
appraiser, which appraiser shall serve as the CCCI Appraiser. If the Value of
Company Equity is to be determined upon exercise of the CCCI Call or upon the
exercise of the Alternative Call by CCCI, the order of designation shall be
reversed. The Appraisers shall enter into appropriate and reasonable
confidentiality agreements with the Company in a form approved by both Members.
(b) In establishing the Value of Company Equity, the Appraisers shall
consider the Company and its Subsidiaries on a consolidated basis. The "Value of
Company Equity" shall be the greater of:
(i) the aggregate hypothetical market value as of the Valuation
Date of all outstanding Interests assuming that (1) all such Interests were
of a single class of common stock, with no CalPERS Put, CCCI Call,
Alternative Call, Sale Option or similar rights applicable thereto, (2)
such common stock were publicly tradeable, (3) a regular and active market
existed for such common stock on an established securities exchange or the
NASDAQ/NMS, whichever market would provide the greater liquidity and value
for such common stock, (4)
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the Management Agreement and Programming Agreement were terminated as of
the Valuation Date, (5) the Company and its Subsidiaries have no less than
the same quality management as has been provided to the Company and its
Subsidiaries by Comcast and its Affiliates and such management was
compensated at market rates then prevailing for the management to be
provided, (6) the Company has the same programming as was being furnished
by Comcast and its Affiliates at market prices then prevailing for the
programming to be furnished, (7) at the Valuation Date, the Company and its
Subsidiaries did not have any cash or cash equivalents in excess of
reasonable working capital requirements, (8) at the Valuation Date, the
Company and its Subsidiaries did not have any Debt in excess of reasonable
working capital facilities and did not have any liability for Special
Deferred Charges, and (9) the adjustments hereafter described were made; in
arriving at the aggregate hypothetical market value of all outstanding
Interests, the appraisers shall first arrive at a value taking into account
all of the assumptions described in clauses (1) through (8) (herein, the
"tentative value"), and the aggregate hypothetical market value of all
outstanding Interests shall be equal to the tentative value (i) increased
by all cash and cash equivalents of the Company
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and its Subsidiaries on the Valuation Date in excess of reasonable working
capital requirements, and (ii) reduced by all Debt of the Company and its
Subsidiaries on the Valuation Date in excess of reasonable working capital
facilities and all Special Deferred Charges; and
(ii) the private market price as of the Valuation Date that an
unrelated willing third party would pay in cash in an arm's-length
transaction for all outstanding Interests, assuming that (1) the purchaser
was in possession of all material information specifically concerning the
Company and its Subsidiaries (and not the telecommunication industry or the
market for telecommunications services in general) known by Comcast and its
Affiliates and was a knowledgeable participant in the telecommunications
industry, (2) there were no CalPERS Put, CCCI Call, Alternative Call, Sale
Option or similar rights applicable thereto, (3) the Members are willing
sellers and the Company is being sold in the manner set forth in Section
13.07 (but the hypothetical costs of such sale will not be deducted for
purposes of calculating private market value hereunder), (4) the Management
Agreement and Programming Agreement were terminated as of the Valuation
Date, (5) the purchaser will be able to provide no less than the same
quality management as has been provided to the Company and its
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Subsidiaries by Comcast and its Affiliates and such management was
compensated at market rates then prevailing for the management to be
provided, (6) the purchaser will be able to obtain at least the same
programming as was being furnished by Comcast and its Affiliates at market
prices then prevailing for the programming to be furnished, (7) at the
Valuation Date, the Company and its Subsidiaries did not have any cash or
cash equivalents in excess of reasonable working capital requirements, (8)
at the Valuation Date, the Company and its Subsidiaries did not have any
Debt in excess of reasonable working capital facilities and did not have
any liability for Special Deferred Charges, and (9) the adjustments
hereafter described were made; in arriving at the private market price, the
appraisers shall first arrive at a value taking into account all of the
assumptions described in clauses (1) through (8) (herein, the "tentative
private market price") and the private market price shall be equal to the
tentative private market price (i) increased by all cash equivalents of the
Company and its Subsidiaries on the Valuation Date in excess of reasonable
working capital requirements, and (ii) reduced by all Debt of the Company
and its Subsidiaries on the Valuation Date in excess of
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reasonable working capital facilities and all Special Deferred Charges.
(c)(i) Without in any way limiting any other obligation either Member
or the Company has to provide information to any Member or any Member's access
thereto under this Agreement or otherwise, each Member shall have reasonable
access to all books, records, financial statements, business plans, management,
appraisals (whether by a Member, an Affiliate of a Member or by a third party),
and other information relating to the Company and its Subsidiaries, their
respective businesses and prospects and all other information relating to the
Company and its Subsidiaries that are reasonably requested by either Member to
assist in the appraisal procedures provided for in this Section 13.06; and each
Member and its Control Affiliates shall promptly provide the other Member with
such information as such other Member may reasonably request relating to the
Company and its Subsidiaries including reasonable access to the Company's
auditors and executives and personnel who have responsibility with respect to
the management of the Company and its Subsidiaries; provided that nothing in
this sub-paragraph (i) shall provide either Member with access to (A) the work
papers or other information prepared by the Appraiser appointed by the other
Member hereunder other than such Appraiser's final report, (B) material of the
other Member or its Affiliates
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protected by the attorney-client privilege or work product doctrine and (C)
material other than material held or prepared by the other Member's Proxy, at
any time such other Member has appointed a Proxy as provided in Section 7.01(c)
and not revoked such appointment, or (D) confidential reports prepared for use
by the CalPERS Board or the Comcast Board, as the case may be.
(ii) Each Member shall also provide the other and each Appraiser
with all letters of intent (whether or not executed), formal and informal bona
fide offers, expressions of interest, or similar communications or inquiries
that such Member or any of its Controlled Affiliates or any Person acting on
behalf of such Member or its Controlled Affiliates has prepared, delivered,
received or solicited about a sale or purchase of all or any part of the Company
or any of its Subsidiaries, information about all negotiations held by such
Member, any of its Controlled Affiliates or any such Person with any broker,
finder or potential purchaser for all or any part of the Company or any of its
Subsidiaries, and any pending agreement for the sale of all or any part of the
Company or any of its Subsidiaries. Each Appraiser shall be instructed to
consider all of this information in arriving at such appraiser's determination
of the Value of Company Equity.
(iii) Comcast and CalPERS shall exchange with one another the
information it or its Affiliates or
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representatives will provide to the Appraisers for the purpose of establishing
the Value of Company Equity. Comcast and CalPERS shall have equal access to the
Appraisers to provide the Appraisers with all information each deems pertinent
to the Appraisers' determination.
(d) Within 30 days after the first date (the "Initiation Date") by
which both the CCCI Appraiser and the CalPERS Appraiser have been selected, the
CCCI Appraiser and the CalPERS Appraiser will each determine its initial view as
to the Value of Company Equity and consult with one another with respect
thereto. By the 45th day after the Initiation Date, the CCCI Appraiser and the
CalPERS Appraiser will each have determined its final view as to the Value of
Company Equity. At that point, if the Higher Appraised Amount (as defined below)
is not more than 110% of the Lower Appraised Amount (as defined below), the
Value of Company Equity will be the average of those two amounts. Otherwise, the
CCCI Appraiser and the CalPERS Appraiser will agree upon and jointly designate a
third cable television system appraiser of recognized national standing (the
"Mutually Designated Appraiser") to participate in the determination of the
Value of Company Equity. The Mutually Designated Appraiser will, no later than
the 75th day after the Initiation Date, determine its view as to the Value of
Company Equity (the "Mutually Appraised Amount"), and the Value of Company
Equity will be
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(x) the Mutually Appraised Amount, if such amount falls within the range of
values that is greater than one-third and less than two-thirds of the way
between the Lower Appraised Amount and the Higher Appraised Amount, (y) the
average of the Mutually Appraised Amount and the other Appraised Amount (Lower
or Higher) that is closest to the Mutually Appraised Amount, if the Mutually
Appraised Amount does not fall within that range but does fall between the Lower
Appraised Amount and the Higher Appraised Amount and (z) the Appraised Amount
(Lower or Higher) that is nearest to the Mutually Appraised Amount, if the
Mutually Appraised Amount falls outside the range between the Higher and Lower
Appraised Amounts.
As used herein, "Lower Appraised Amount" means the lower of the
respective final views of the CCCI Appraiser and the CalPERS Appraiser as to the
Value of Company Equity, "Higher Appraised Amount" means the higher of such
respective final views and "Appraiser" means any of the CalPERS Appraiser, the
CCCI Appraiser and the Mutually Designated Appraiser. The reasonable fees and
expenses of the Appraisers shall be paid for by the Company.
13.07. Sale of Company. (a) If either Member exercises a right
---------------
under this Agreement to cause a sale of the Company, then CCCI will, as promptly
as practicable following the exercise of such right, put the entire Company up
for sale for cash to a Person that is not a Control Affiliate (or a
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Person in which a Member or any of its Control Affiliates has an equity interest
unless such interest is limited to direct or indirect ownership of no more than
ten percent of a class of common stock of such Person that is traded or quoted
on a national securities exchange or NASDAQ/NMS) of either Member, in a manner
designed to achieve the highest reasonable value for both Members; provided that
if CalPERS has exercised the Sale Option as a result of a Change in Control of
Comcast or a Comcast Act of Misconduct or any Trigger Event specified in clause
(i) or (iv) of Section 14.02(b), then CalPERS rather than CCCI shall put up the
Company for sale. The Members acknowledge that an auction sale is the most
likely mechanism to achieve the highest reasonable value for both Members and
agree that an auction sale will be effected unless the financial advisors of
both Members in writing recommend an alternative method, in which event such
alternative method shall be employed to sell the Company. The sale will be
conducted by CCCI, with the advice of financial advisors and counsel selected by
CCCI with the approval of CalPERS, which approval will not be unreasonably
withheld; provided, however, that if CalPERS has exercised the Sale Option as a
result of a Change in Control of Comcast or a Comcast Act of Misconduct or any
Trigger Event specified in clause (i) or (iv) of Section 14.02(b), then CalPERS
rather than CCCI shall put the Company up for sale and conduct the sale with
financial advisors and
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counsel selected by CalPERS with the approval of CCCI, which approval will not
be unreasonably withheld. The Member that is not conducting the sale shall also
be entitled to select a financial advisor and counsel to assist it in the sale
of the Company. The fees and expenses of the financial advisors and counsel of
both Members shall be borne by the Company. The Member conducting the sale will
effect the sale as promptly as practicable consistent with the objective of
achieving highest reasonable value for the Members. CCCI and CalPERS will each
fully cooperate in this process. Any sale of the Company pursuant to this
Section would be subject to receipt of FCC and other necessary regulatory
approvals and would be likely to require the consent of certain lenders under
Debt of the Company or its Subsidiaries. Neither Member nor any of its Control
Affiliates will take any action, including action involving any judicial,
regulatory or legislative body, that is intended to delay or prevent, or could
reasonably expected to have the effect of delaying or preventing, consummation
of any transaction effected in accordance with this Section 13.07. At the
closing of such sale, each Member will deliver to the purchaser good and valid
title to its Interest free and clear of any lien or encumbrance and without any
further representation, warranty, indemnity or other assurance (other than those
with respect to which the purchaser's only recourse is to an escrow of a portion
of the purchase consideration).
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CalPERS' share of the cash proceeds shall be wire transferred to CalPERS as
provided in Section 17.14.
(b) If, in connection with any sale of the Company, indemnities are
provided that survive the closing of such sale, unless the Members otherwise
unanimously agree, the obligations with respect thereto shall be limited to a
portion of the consideration to be received upon such sale that will be placed
in an escrow account. Except as hereinafter provided, claims against the escrow
account assets shall be allocated between the Members in proportion to the
respective percentages of the escrowed amount each Member would receive if there
were no claims against the escrow account. CCCI shall indemnify and hold CalPERS
free and harmless against and in respect of any claim, action, demand,
liability, expense (including, without limitation, reasonable fees and expenses
of counsel), loss or damage suffered as a result of any claims made against
CalPERS or CalPERS' interest in the assets in the escrow account if and to the
extent that such claims arise out of Material Disabling Conduct by any member of
the Extended Comcast Group. If, upon a sale of the Company, any of its
Subsidiaries or any assets of the Company Group, any proceeds of such sale are
placed into an escrow account, each Member shall be deemed to have received, as
of the date such proceeds are placed into escrow, the amount of such proceeds
such
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Member would have received on such date had such proceeds not been placed into
escrow.
13.08. Nominee Purchase. In the event of a purchase and sale of
----------------
either Member's Interest pursuant to the CalPERS Put, the CCCI Call or the
Alternative Call, the Member purchasing such Interest may, in its sole
discretion, (i) designate a wholly-owned Subsidiary of such Member to purchase
the Interest, in which case the other Member shall, at the closing of such
transaction, deliver its Interest to such Subsidiary or (ii) cause the Company
to redeem such Interest, in which case the other Member shall, at the closing of
such transaction deliver its Interest to the Company; provided, however, that
the other Member shall not be obligated to transfer its Interest to the Company,
directly or indirectly, if such Member in its sole discretion concludes that
such transfer could result in a violation of Section 18-607 of the Delaware Act
or other applicable law including, without limitation, any law prohibiting
fraudulent transfers or conveyances. Any such nominee shall be admitted as a
Member of the Company upon such nominee's execution of a counterpart to this
Agreement. Immediately following such admission, the Member selling its Interest
shall cease to be a Member of the Company. The Member purchasing such Interest
and such Member's nominee are hereby authorized to continue the business of the
Company without dissolution.
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13.09. Limitation on Stock. The number of shares of Comcast Stock
-------------------
that may be delivered to CalPERS pursuant to Section 13.02(k) or (l) or Section
13.03(c) shall not exceed 19.9% of the total number of shares of Comcast Stock
outstanding (including for this purpose the total number of shares of Comcast
Stock then issuable upon conversion of Comcast's then outstanding Class A Common
Stock, par value $1.00 per share, and Class B Common Stock, par value $1.00 per
share) immediately prior to the issuance of the shares pursuant to such Section.
To the extent the number of shares delivered would exceed this limit, CCCI shall
substitute cash for such excess. As a condition to CCCI's right to deliver
Comcast Stock pursuant to Section 13.02(k) or (l) or Section 13.03(c), CCCI
shall deliver to CalPERS a favorable opinion of Davis Polk & Wardwell or other
firm reasonably acceptable to CalPERS in form and substance reasonably
acceptable to CalPERS regarding the matters set forth in Section 3.01(m).
ARTICLE 14.
NONCOMPLIANCE; EVENT RISKS
14.01. Noncompliance; Misconduct. (a) Upon the occurrence of any
-------------------------
Act of Misconduct or Event of Noncompliance, the Non-Adverse Member may in its
sole discretion exercise (i) in the case of CalPERS as the Non-Adverse Member,
the Sale Option or (ii) in the case of CCCI as the Non-Adverse Member, either
the Sale Option or the Alternative Call.
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(b) The election of the remedy specified in Section 14.01(a) may be
exercised as to any Act of Misconduct or Event of Noncompliance by delivery to
the Adverse Member of a sale notice (herein, a "Sale Notice"), at any time from
the occurrence of such Act of Misconduct or Event of Noncompliance until sixty
(60) days after the Non-Adverse Member receives from the Adverse Member a
written notice (herein, a "Notice of Act or Event") that (x) unconditionally
acknowledges that an Act of Misconduct or Event of Noncompliance has occurred
and specifically identifies and describes in reasonable detail such Act of
Misconduct or Event of Noncompliance including, without limitation, the specific
facts giving rise thereto and the specific Section, paragraph and clause of this
Agreement that describes such Act of Misconduct or Event of Noncompliance and
(y) sets forth the action that the Adverse Member is taking and proposes to take
to remedy, cure, mitigate the effect of or otherwise deal with the same. The
Sale Notice shall specifically identify the Act of Misconduct or Event of
Noncompliance as to which the remedy specified in Section 14.01(a) is being
exercised. Resort to any remedy specified in Section 14.01(a) shall not for any
purpose be deemed a waiver of any other remedy available hereunder or under
Applicable Law; provided that CalPERS may not elect to exercise the Sale Option
--------
pursuant to Section 14.01(a) and also elect the remedy specified in Section
14.02(a)(i). The failure to elect a remedy available
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pursuant to Section 14.01(a) within the time period provided in the first
sentence of this paragraph (b) shall constitute a waiver of the remedies
provided in Section 14.01(a), but only with respect to the specific Act of
Misconduct or Event of Noncompliance that is described in the apposite Notice of
Act or Event as req uired by this Section 14.01(a).
14.02. Event Risk. (a) Upon and after either a Change in Control of
----------
Comcast or the occurrence of any Trigger Event set forth in Section 14.02(b),
CalPERS in its sole discretion may elect:
(i) with respect to a Change of Control or any Trigger Event, to
exercise the CalPERS Put;
(ii) with respect only to the Trigger Events set forth in clauses
(i), (iii) and (iv) of Section 14.02(b), to exercise the Sale Option; or
(iii) with respect only to the Trigger Events set forth in clauses
(i) and (iv) of Section 14.02(b) and the Trigger Event set forth in clause
(v) thereof (but not if such Trigger Event set forth in clause (v) results
from an event that constitutes a Change in Control of Comcast), cause the
Company or one of its Subsidiaries, as the case may be, to terminate the
Management Agreement and to enter into a substitute agreement with a Person
of recognized standing as a manager of Cable Systems chosen by CalPERS in
its reasonable discretion and containing
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such reasonable terms and conditions as are approved only by CalPERS in its
reasonable discretion (which substitute agreement shall not require the
approval of any other Member); provided that such termination of the
--------
Management Agreement may not occur prior to the effectiveness of such
substitute agreement, and further provided that any such substitute
------- --------
agreement shall be reasonably designed to preserve the value of the
Company. The Members agree that the substitute agreement shall be
reasonably designed to preserve the value of the Company if the financial
terms are arrived at in arms-length negotiations between CalPERS and the
substitute manager. Comcast and the Company shall each cause their
respective Subsidiaries, without charge by Comcast or any of its
Subsidiaries to the Company or any of its Subsidiaries, (i) to enter into
an instrument terminating the Management Agreement and in the case of the
Company's Subsidiary to enter into the substitute management agreement, as
and when required by this Agreement, (ii) to transfer to the substitute
manager the books and records maintained by Comcast or any of its
Subsidiaries for the Company and its Subsidiaries in connection with
management of the Company under the Management Agreement, (iii) to provide
the substitute manager with access to all other books and records, whether
of Comcast or any of
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its Subsidiaries or the Company or any of its Subsidiaries to the extent
necessary to enable the substitute manager to perform its duties including,
without limitation, the evaluation of all charges of Comcast or any of its
Affiliates to the Company or any of its Subsidiaries (provided that any
information with respect to which Comcast or any of its Subsidiaries is
under a duty of confidentiality to a third party, need not be disclosed to
the substitute manager), (iv) to cooperate in all respects with and
otherwise assist the substitute manager in the transfer of the management
function to the substitute manager, and (v) to use their best efforts both
to satisfy all applicable regulatory requirements, including obtaining all
regulatory approvals, and to obtain all necessary third party approvals
necessary to terminate the Management Agreement and enter into a substitute
agreement with the Person selected by CalPERS. Comcast agrees that it and
its Subsidiaries will use best efforts not to enter into agreements that
could restrict CalPERS' access to information relating to the Company
unless such confidentiality provisions are customary for agreements of the
type, and if Comcast or one of its Subsidiaries does enter into any such
non-customary confidentiality agreement relating to Company information
Comcast will
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disclose the confidentiality provisions thereof to the Members. Subject to
compliance with such regulatory requirements and the obtaining of all
necessary third party approvals, such termination and substitution shall be
consummated within five (5) Business Days after CalPERS notifies CCCI in
writing that it is prepared to have the substitute agreement with the new
manager entered into. Upon CalPERS' termination of the Management Agreement
and substitution of a new manager pursuant to this clause (iii) and
notwithstanding any other provision of this Agreement no member of the
Comcast Group shall have any responsibility or liability for the acts or
omissions of such new manager (other than solely as a result of CCCI's
status as a Member of the Company) and no act or omission of the Company or
its Subsidiaries (other than due solely to CCCI's exercise of its votes as
a Member on Company matters) shall thereafter constitute a Comcast Act of
Misconduct, Event of Comcast Noncompliance, Trigger Event or Disabling
Conduct unless such act or omission (A) was occasioned by the management of
the Company prior to such termination and (B) was not reasonably
foreseeable at the time that CalPERS elected such termination or was not
related to the act or omission that gave rise to CalPERS' right to elect
such termination.
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(b) The occurrence of any one or more of the following shall
constitute a "Trigger Event" for purposes of Section 14.02(a ):
(i) any Bankruptcy Event involving Comcast or any Material
Subsidiary;
(ii) fifteen (15) out of any thirty (30) consecutive trading days
at any time after the Initial Closing Date being Market Capitalization
Deficiency Dates;
(iii) any Default under any Material Debt or under any Debt of the
Company Group with an unpaid principal or face amount in excess of $100
million;
(iv) any Comcast Act of Misconduct or Event of Comcast
Noncompliance; or
(v) any Subscriber Base Event.
(c) To the fullest extent permitted by law, the remedy specified in
clause (i) of Section 14.02(a) is exclusive so that selection of such remedy, if
available, shall preclude selection of either of the remedies specified in
clauses (ii) and (iii) thereof. The remedies specified in clauses (ii) and (iii)
of Section 14.02(a) are not mutually exclusive, and selection of one, if
available, does not preclude selection to the other, if available. The election
of a remedy specified in Section 14.02(a) may be exercised by CalPERS by
delivering to CCCI a CalPERS Put Notice, a Sale
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Notice or a notice that CalPERS is electing to exercise its remedy under
14.02(a)(iii), as the case may be, at any time from the occurrence of any Change
in Control or Trigger Event until sixty (60) days after CalPERS receives from
CCCI a written notice (herein, a "Notice of Trigger Event or Change in Control")
that (x) unconditionally acknowledges that such Trigger Event or Change of
Control has occurred and specifically identifies and describes in reasonable
detail such Trigger Event or Change in Control including, without limitation,
the specific facts giving rise thereto and the specific Section, paragraph and
clause of this Agreement that describes such Trigger Event or Change in Control
and (y) sets forth the action that CCCI or Comcast is taking and proposes to
take to remedy, cure, mitigate the effect of or otherwise deal with the same.
Except as provided in the first sentence of this paragraph (c), the resort to
any remedy pursuant to Section 14.02(a) shall not for any purpose be deemed a
waiver of any other remedy available hereunder or under applicable law; provided
--------
that CalPERS may not elect the remedy specified in clause (i) of Section
14.02(a) and also select or resort to the remedy specified in Section 14.01(a).
The failure to elect a remedy within the time period provided in the third
sentence of this paragraph (b) shall constitute a waiver of the remedies
provided in Section 14.02(a), but only with respect to the specific Trigger
Event or Change of Control
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that is described in the apposite Notice of Trigger Event or Change in Control
required by this Section 14.02(b).
(d) Upon and after any Change in Control of Comcast that occurs as a
result of the merger of Comcast with another Person or the sale of all or
substantially all of the assets of Comcast, (i) the Trigger Event set forth in
Section 14.02(b)(ii) shall cease to be a Trigger Event and its occurrence shall
not give rise to any rights or remedies hereunder, (ii) the definitions of
"Comcast Basic Subscribers" and "Subscriber Base Event" shall apply, mutatis
-------
mutandis, with "Company Group and the group that comprised the Cable Group
- - - --------
immediately prior to the Change in Control of Comcast" replacing "Extended
Comcast Group" therein, (iii) the determination of whether the Trigger Events
set forth in either Section 14.02(b)(i) or (iii) has occurred shall be made by
replacing Comcast with the Person that is the ultimate parent of CCCI
immediately following the Change in Control of Comcast for purposes thereof and
(iv) any payment of the Put Price or the Call Price will be paid only in cash
without regard to any earlier election of CCCI to deliver Comcast Stock. In the
event that Comcast is sold in a merger, or sale of all or substantially all of
its assets, for consideration, at least 50% of which is cash (x) any payment of
the Put Price or the Call Price will be paid only in cash and (y) the Stock
Investment Value shall be the amount that a holder of the
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Hypothetical Portfolio would have obtained as a result of such sale for cash,
with interest thereon from the date of such sale to the Put Date or the Call
Date, as the case may be, at (A) if the sale is consummated prior to the seventh
(7th) anniversary of the date hereof, the sum of (1) the yield to maturity of
United States Treasury obligations with the maturity date that is closest to the
seventh (7th) anniversary of the date hereof plus (2) 200 basis points and (B)
if the sale is consummated thereafter, the Prime Rate plus 200 basis points.
ARTICLE 15.
EXCULPATION AND INDEMNIFICATION
15.01. Exculpation and Indemnification. (a) Except as specifically
--------------------------------
set forth in this Agreement or in the case of its Disabling Conduct, no Covered
Person shall be liable to the Company or any Member provided that such Covered
Person acted in good faith and in a manner such Person reasonably believed to be
in or not opposed to the best interests of the Company, and, with respect to any
criminal conduct, had no reasonable cause to believe such conduct was unlawful.
In no event shall a Covered Person be liable to the Company or any Member for
simple negligence.
(b) Except in the case of a Covered Person's Disabling Conduct, and
provided that such Covered Person acted in good faith and in a manner such
Person reasonably believed
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to be in or not opposed to the best interests of the Company, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe such
Person's conduct was unlawful, each Covered Person who was or is a party or is
threatened to be made a party to, or is involved in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, (x) by reason of the fact that such Person is or was a Covered
Person, and (y) related to the business or activities of the Company, (a
"Covered Claim") shall be indemnified and held harmless by the Company to the
fullest extent permitted by the laws of the State of Delaware; provided that a
Covered Person shall be entitled to indemnification in respect of (i) a
derivative action brought against a Covered Person by or in the right of the
Company, or (ii) an action brought against a Covered Person by a party hereto or
an Affiliate of a party hereto, only if such Covered Person prevails in such
action. To the fullest extent permitted by law, expenses (including any
reasonable attorney's fees), incurred by a Covered Person in defending any
Covered Claim (other than a derivative claim brought against a Covered Person by
or in the right of the Company) shall, from time to time, be advanced by the
Company prior to the final disposition of such Covered Claim upon receipt by the
Company of an undertaking by or on behalf of such Covered Person to repay such
amount if it shall
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ultimately be determined that such Covered Person is not entitled to be
indemnified as authorized in this Section 15.01. The Company shall advance
expenses pursuant to the preceding sentence for the settlement or compromise of
a Covered Claim only if one of the Members provides or guarantees the
undertaking called for in the preceding sentence upon terms reasonably
satisfactory to the other Member. Before seeking indemnification from the
Company, any Covered Person shall use its reasonable efforts to obtain payment
of any claim or expense indemnifiable pursuant to this paragraph (b) from the
insurance, if any, maintained by Comcast on behalf of such Covered Person
pursuant to Section 10.03 or by the Company pursuant to paragraph (e) hereof.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Covered Person did not act
in good faith and in a manner which such Person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that such
Person's conduct was unlawful.
(c) The determination of whether a Covered Person shall be entitled
to indemnification by the Company as provided in the foregoing paragraph (b)
shall be made by (i) a
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final decision of a court of competent jurisdiction, (ii) unanimous agreement of
the Members or (iii) opinion of impartial legal counsel reasonably satisfactory
to both Members.
(d) The Company may, by unanimous action of the Members, provide
indemnification to such other employees and agents of the Company or other
persons who are or were serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise to such extent and to such effect as the Members shall
determine to be appropriate.
(e) The Company shall have the power to purchase and maintain
insurance on behalf of any Person who is or was a Covered Person against any
expense, liability or loss incurred by such person in any such capacity or
arising out of his status as such, whether or not the Company would have the
power to indemnify him against such liability under the laws of the State of
Delaware. Except as provided in Section 10.03, the Company shall not purchase
officers and directors insurance without the unanimous approval of both Members.
(f) Except as otherwise provided by applicable law, the rights and
authority conferred in this Section shall be exclusive of any other right which
any Person may otherwise have or hereafter acquire from the Company or its
Subsidiaries with respect to the matters covered hereby.
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(g) Neither the amendment of this Section, nor, to the fullest extent
permitted by the laws of the State of Delaware, any modification of law, shall
eliminate or reduce the effect of this Section in respect of any acts or
omissions occurring prior to such amendment or modification.
(h) The Company shall indemnify Comcast for any loss, claim,
liability, damage or expense Comcast may suffer in respect of (i) any guaranty
or indemnity Comcast may provide, or any assumption it may undertake, in respect
of any obligation of the Company or any of its Subsidiaries, including, without
limitation, any guaranty, indemnity or assumption pursuant to Section 6.5 of the
MHI Purchase Agreement or (ii) any failure by the Company or any of its
Subsidiaries to perform its obligations under the Assignment and Assumption
Agreement after the Initial Closing.
ARTICLE 16.
TERMINATION, DISSOLUTION AND LIQUIDATION
16.01. Term. The term of the Company shall continue until dissolved
----
pursuant to this Article.
16.02. Liquidating Events. The Company shall dissolve and commence
------------------
winding up upon the first to occur of any of the following events (each a
"Liquidating Event"):
(a) the resignation, bankruptcy or dissolution of a Member or the
occurrence of any other event which terminates the continued membership of a
Member in the Company, provided,
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the Company shall not be dissolved or required to be wound up in connection with
any of the events specified in this clause (a) if (i) at the time of the
occurrence of such event there are at least two remaining Members who are hereby
authorized to and do carry on the business of the Company without dissolution,
or (ii) within ninety (90) days after the occurrence of such event, the
remaining Member agrees in writing to continue the business of the Company and
to the appointment, effective as of the date of such event, of one or more
additional Members of the Company;
(b) the sale of all or substantially all of the Company's assets;
(c) the unanimous vote of the Members to dissolve, wind up and
liquidate the Company;
(d) the entry of a decree of judicial dissolution pursuant to Section
18-802 of the Delaware Act;
(e) the Initial Closing not having occurred on or before March 31,
1995 (in which event any and all obligations of the Members to make Capital
Contributions shall immediately terminate) or the MHI Acquisition having been
consummated by a Person other than a member of the Company Group (in which event
(i) any Member of the Company Group that has entered into any contract or
agreement with respect to a Cable Acquisition shall immediately assign such
contract or agreement to Comcast, (ii) Comcast shall assume the
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obligations thereunder, (iii) Comcast shall indemnify the Company for any losses
or expenses arising out of or related to such contract and (iv) any and all
obligations of either Member to make Capital Contributions shall immediately
terminate); or
(f) the fifteenth (15th) anniversary of the date of this Agreement.
16.03. Winding Up. Upon the occurrence of a Liquidating Event, the
----------
Company shall continue solely for the purposes of winding up its affairs in an
orderly manner, liquidating its assets, and satisfying or making reasonable
provision for the satisfaction of the claims of its creditors and Members, and
no Member shall take any action that is inconsistent with, or not necessary to
or appropriate for, the winding up of the Company's business and affairs,
provided that all covenants contained in this Agreement and obligations provided
for in this Agreement (other than those contained in Sections 9.02 through 9.04
and Sections 11.03 and 11.04 and other than the CalPERS Put, the MHCP Call and
the Alternative Call), shall continue to be fully binding upon the Members until
such time as the assets or property or the proceeds from the sale thereof have
been distributed pursuant to this Article 16 and the Company has terminated by
the filing of a Certificate of Cancellation of the Certificate of Formation of
the Company with the Secretary of State of the State of
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<PAGE>
Delaware. Subject to the provisions of Section 13.07, the Members shall be
responsible for overseeing the winding up and dissolution of the Company.
Subject to the provisions of Section 13.07, the Members shall take full account
of the Company's assets and liabilities, and the Company's affairs shall be
wound up in an orderly manner in accordance with the following procedures:
(a) To the extent that the Members determine that any or all of the
assets of the Company shall be sold, such assets shall be sold as promptly as
possible, but in a business-like manner so as not to involve undue sacrifice;
and
(b) The Capital Account of each Member shall be adjusted to take into
account the profit and loss resulting from the sale of the Company's assets and
all other transactions in connection with the winding up of the Company.
16.04. Distribution Upon Dissolution of the Company. The Company's
--------------------------------------------
assets or the proceeds from the sale thereof pursuant to this Article 16 to the
extent sufficient therefor shall be applied and distributed to the maximum
extent permitted by law, in the following order:
(a) first, to the satisfaction (whether by payment or by the making
of reasonable provision for payment) of all of the Company's debts and
liabilities to creditors (including, to the fullest extent permitted by law, any
Member
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<PAGE>
or any of its Affiliates that is a creditor of the Company); and
(b) the balance, if any, to the Members in accordance with the
remaining balances of their Capital Accounts, after giving effect to all
contributions, distributions, and allocations for all periods.
16.05. Rights of Members; Resignation. (a) Except as otherwise
------------------------------
provided in this Agreement or in any agreement referred to in this Agreement,
each Member shall look solely to the assets of the Company for the return of its
Capital Contributions and shall have no right or power to demand or receive
property other than cash from the Company.
(b) No Member shall resign from the Company prior to the dissolution
and winding up of the Company in accordance with this Agreement, except as
provided in subparagraph (c) of this Section 16.05.
(c) CalPERS may resign from the Company if, in the opinion of counsel
to CalPERS (which counsel shall be reasonably acceptable to CCCI), it is
reasonably likely that the continuation of CalPERS as a Member would result in a
violation by CalPERS of any federal or state law. If, in the opinion of counsel
to CCCI reasonably concurred in by counsel to CalPERS, a cure, remedy or
reversal is possible, CCCI and CalPERS shall use their reasonable best efforts
to effect such cure, remedy or reversal within 90 days (or such shorter
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<PAGE>
period specified by counsel to CalPERS in its opinion) from the date of the
opinion of counsel to CalPERS if CCCI, in its reasonable discretion, deems it to
be in the best interest of the Company. All costs of such cure, to either
Member, Comcast or any member of the Company Group shall be borne by CalPERS. If
no such cure, remedy or reversal is possible, or if no such cure, remedy or
reversal has been effected by the end of such period, CCCI, if requested by
CalPERS, shall use reasonable best efforts to find a buyer or buyers at the best
possible price for CalPERS Interest, which price shall be acceptable to CalPERS
at its sole discretion.
ARTICLE 17.
MISCELLANEOUS
17.01. Notices. All notices, requests and other communications to
-------
any party or to the Company shall be in writing (including telecopy or similar
writing) and shall be given,
if to CCCI to:
Comcast Cable Communications, Inc.
c/o Comcast Corporation
1500 Market Street
Philadelphia, PA 19102
Attention: General Counsel
Telecopier: (215) 981-7622
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<PAGE>
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Phillip R. Mills, Esq.
Telecopier: (212) 450-4800
if to CalPERS, to:
California Public Employees' Retirement System
Lincoln Plaza - 400 P Street
Sacramento, California 95814
Attention: Sheryl Pressler,
Chief Investment Officer
Telecopier: (916) 326-3248
with copies to:
Paul, Hastings, Janofsky & Walker
555 South Flower Street, 23rd Floor
Los Angeles, California 90071
Attention: Alan J. Barton, Esq.
Telecopier: (213) 627-0705
and
Pacific Corporate Group, Inc.
1200 Prospect Street, Suite 200
La Jolla, California 92037
Attention: Brian Kinsman, Managing Director
Telecopier: (619) 456-6019
if to Comcast to:
Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102
Attention: General Counsel
Telecopier: (215) 981-7622
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<PAGE>
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Phillip R. Mills, Esq.
Telecopier: (212) 450-4800
or to such other address or telecopier number as such party or the Company may
hereafter specify for the purpose by notice to the other parties and the
Company. Any such notice, request or other communication shall be deemed to have
been given and received on the day on which it is delivered or telecopied (or,
if such day is not a Business Day or if the notice or other communication is not
telecopied during business hours, at the place of receipt, on the next following
Business Day).
17.02. Amendments; No Waivers. (a) Any provision of this Agreement
----------------------
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by all parties hereto, or in the case
of a waiver, by the party or parties against whom the waiver is to be effective.
(b) Except as expressly set forth herein, no failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein
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<PAGE>
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
17.03. Expenses. (a) The Company or a Subsidiary of the Company
--------
shall pay or reimburse Comcast for (x) the reasonable fees and expenses of
Comcast's counsel and accountants incurred in connection with (i) the creation
of the Company, (ii) the MHI Acquisition, if consummated by any member of the
Company Group and (iii) any Cable Acquisition (other than the MHI Acquisition)
which the Company attempts to make, regardless of whether the Company actually
makes such acquisition and (y) for the fees of the Investment Bank in connection
with the transactions contemplated hereby. If the MHI Acquisition is not
consummated, each party hereto shall bear its own expenses with respect to the
MHI Acquisition, except as otherwise expressly agreed in writing by the parties.
(b) The Company shall pay or reimburse CalPERS on the Initial Closing
Date for all of CalPERS' out-of-pocket expenses incurred in connection with the
Company and the MHI Acquisition to such date. CalPERS' reimbursable expenses for
the MHI Acquisition are to include (i) a monitoring establishment fee of 15
basis points of CalPERS Initial Capital Commitment and (ii) the reasonable fees
and expenses of CalPERS' counsel, accountants and consultants (which shall not
include any Person receiving all or any part of the amount
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<PAGE>
referred to in clause (i) immediately above). The Company shall pay or reimburse
CalPERS on the date of each Capital Contribution subsequent to the Initial
Closing Date for all of CalPERS' out-of-pocket expenses incurred in connection
with such Capital Contribution and any related transaction to such date.
CalPERS' reimbursable expenses for such Capital Contribution or transaction are
to include (A) a monitoring establishment fee of 15 basis points of such
subsequent Capital Contribution and (B) reasonable fees and expenses of CalPERS'
counsel, accountants and consultants (which except for the out-of-pocket
expenses of such Person shall not include any Person receiving all or any part
of the amount referred to in clause (i) above in the immediately preceding
clause (A) or in clause (i) of Section 17.03(c)).
(c) After the Initial Closing Date, and for so long as CalPERS holds
an economic interest in the Company, the Company shall reimburse CalPERS (i)
annually on each anniversary of the Initial Closing Date for its out-of-pocket
monitoring expense of 15 basis points of CalPERS' average Capital Commitment for
the previous year and (ii) on a current basis for the reasonable fees and
expenses of its counsel and, as necessary in CalPERS' reasonable judgment, its
accountants and consultants (which, except for the out-of-pocket expenses of
such Person, shall not include any Person receiving all or
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<PAGE>
any part of the expense referred to in clause (i) immediately above), in each
case relating to the Company.
(d) If the Company is unable to pay any amount required pursuant to
this Section 17.03 when due, the Company shall, in addition to such amount, pay
interest on such unpaid amount from the date such amount was due and payable to
but not including the date such amount is paid, at the Prime Rate.
(e) Any payments made by the Company to Comcast or CalPERS under this
Section 17.03 shall be treated as an expense of the Company and shall not be
treated as a distribution to CalPERS or CCCI, as the case may be, for the
purpose of determining their Capital Accounts.
17.04. Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. This Agreement is for the sole
benefit of the parties hereto and, except as otherwise contemplated herein,
nothing herein expressed or implied shall give or be construed to give any
Person, other than the parties hereto, any legal or equitable rights hereunder.
17.05. Headings. Headings are for ease of reference only and shall
--------
not form a part of this Agreement.
17.06. Governing Law. This Agreement shall be construed and
-------------
interpreted in accordance with and governed by
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<PAGE>
the law of the State of Delaware without giving effect to the principles of
conflicts of laws thereof.
17.07. Exclusive Jurisdiction. Any suit, action or proceeding
----------------------
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought only in the courts of the State of Delaware, and each of the parties
hereby consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient form.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 17.01 shall be deemed effective service of
process on such party.
17.08. Counterparts; Effectiveness. This Agreement may be signed in
---------------------------
in any number of counterparts, each of which shall be deemed an original. This
Agreement shall become
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<PAGE>
effective when each party shall have received a counterpart hereof signed by
each of the other parties.
17.09. Third Party Beneficiaries. No provision of this Agreement is
-------------------------
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder. No person may make any claim for indemnification or
reimbursement of expenses under Article 16 except through the parties hereto.
17.10 Severability. If any provision of this Agreement or the
------------
application thereof to any Person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
17.11. Further Assurances. The parties hereto will execute and
------------------
deliver such further instruments and do such further acts and things as may be
required to carry out the intent and purpose of this Agreement.
17.12. Entire Agreement. This Agreement, the Management Agreement,
----------------
the Guaranty Agreement, the Registration Rights Agreement and the Programming
Agreement, including any exhibits or schedules hereto or thereto, or any other
instruments, agreements or documents referenced herein or therein, constitute
the entire agreement among the parties
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<PAGE>
hereto with respect to the subject matter hereof and thereof, and supersede all
other prior agreements or undertakings with respect thereto, both written and
oral.
17.13 Enforcement. The Members agree that (i) if any default in the
-----------
due observance or performance of any covenant, condition or agreement to be
observed or performed under this Agreement shall occur, or (ii) if any
representation or warranty in this Agreement or in any certificate, report or
other instrument delivered under or pursuant to any term hereof shall be untrue
or misleading in any material respect as of the date of this Agreement or as of
the Initial Closing Date or as of the date it was made, furnished or delivered
(the Member or Person in default or whose representation, warranty, certificate,
report or instrument shall be untrue or misleading, being herein called the
"breaching Member" and the other Member being herein referred to as the "non-
breaching Member"), then the non-breaching Member may proceed to protect and
enforce its rights by suit in equity or action at law, whether for the specific
performance of any term contained in this Agreement or for an injunction against
the breach of any such term or in aid of the exercise of any power granted in
this Agreement, or to enforce any other legal or equitable right, or to take any
one or more of such actions. In such event, the non-breaching Member shall be
entitled to recover from the breaching Member
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<PAGE>
all fees, costs and expenses of protecting or enforcing any such right,
including without limitation such reasonable fees and expenses of attorneys,
accountants and other experts, which shall include, without limitation, all
fees, costs and expenses of appeals. Except as expressly provided herein, none
of the rights, powers or remedies conferred upon any Member shall be mutually
exclusive, and each such right, power or remedy shall be cumulative and in
addition to every other right, power or remedy, whether conferred hereby or
otherwise, or now or hereafter available at law, in equity, by statute or
otherwise. No course of dealing between Members or between CalPERS and Comcast
shall operate as a waiver of, or otherwise prejudice, any right, power or remedy
of any such Person.
17.14 CalPERS Account Information. All payments toCalPERS under
---------------------------
this Agreement shall be made in United States dollars and by wire transfer to
CalPERS in immediately available funds. Unless and until changed by notice to
the Company, all funds shall be wired to CalPERS as follows:
California Public Employees'
Retirement System
Account No. SJ88
State Street Bank
Boston, Massachusetts
IN WITNESS WHEREOF, the parties hereto have entered into this Limited
Liability Company Agreement or have caused this Agreement to be duly executed by
their respective authorized officers, in each case as of the day and year first
above written.
COMCAST CABLE COMMUNICATIONS, INC.
By: /s/ Stanley Wang
----------------------------
Name: Stanley Wang
Title: Senior Vice President
THE CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
By: /s/ David E.J. Maxwell
----------------------------
Name: David E.J. Maxwell
Title: Principal Investment Officer
COMCAST CORPORATION
By: /s/ Stanley Wang
----------------------------
Name: Stanley Wang
Title: Senior Vice President
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<PAGE>
Exhibit 10.2
CREDIT AGREEMENT
Dated as of December 22, 1994
COMCAST MH HOLDINGS, INC., a Delaware corporation, the BANKS listed on
the signature pages hereof, THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
NATIONSBANK OF TEXAS, N.A., and THE TORONTO-DOMINION BANK, as Arranging Agents,
THE BANK OF NEW YORK, THE BANK OF NOVA SCOTIA, CANADIAN IMPERIAL BANK OF
COMMERCE and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Managing Agents, and
NATIONSBANK OF TEXAS, N.A., as Administrative Agent, agree as follows (with
certain terms used herein being defined in Article 10):
ARTICLE 1
CREDIT FACILITY
---------------
Section 1.01. Commitment to Lend. (a) Loans. Upon the terms and
------------------ -----
subject to the conditions of this Agreement, each Bank agrees to make, from time
to time during the period from the Agreement Date through the Commitment
Termination Date, one or more Loans to the Borrower in an aggregate unpaid
principal amount not exceeding at any time such Bank's Commitment at such time;
provided, however, that (i) no Tranche A Loan shall be requested or made if,
- - - -------- -------
after giving effect to the making thereof and the making of each other Tranche A
Loan requested to be made at such time, the aggregate principal amount of all
Tranche A Loans outstanding at such time would exceed the Total Tranche A
Commitment at such time, (ii) no Tranche B Loan shall be requested or made (A)
unless the aggregate amount of all Tranche A Loans outstanding at such time is
equal to the Total Tranche A Commitment at such time or (B) if, after giving
effect to the making thereof and the making of each other Tranche B Loan
requested to be made at such time, the aggregate principal amount of all Tranche
B Loans outstanding at such time would exceed the Total Tranche B Commitment at
such time and (iii) no Loan shall be requested or made if, after giving effect
to the making thereof and the making of each other Loan requested to be made at
such time, the aggregate principal amount of all Loans outstanding at such time,
together with the aggregate principal amount of all Senior Subordinated
Indebtedness outstanding at such time, would exceed the Total Commitment at such
time. The Total Tranche A Commitment on the Agreement Date is $775,000,000.
The Total Tranche B Commitment on the Agreement Date is $75,000,000.
<PAGE>
(b) Type of Loans. Subject to Section 1.06 and the other terms and
-------------
conditions of this Agreement, the Loans may, at the option of the Borrower, be
made as, and from time to time continued as or converted into, Base Rate Loans
or Eurodollar Rate Loans of any permitted Type, or any combination thereof.
Section 1.02. Manner of Borrowing. (a) The Borrower shall give the
-------------------
Administrative Agent notice (which shall be irrevocable) no later than 10:00
a.m. (Dallas time) on, in the case of Base Rate Loans, the Business Day and, in
the case of Eurodollar Rate Loans, the third Eurodollar Business Day, before the
requested date for the making of such Loans. Each such notice shall be in the
form of Schedule 1.02 and shall specify (i) whether such Loans are Tranche A
-------------
Loans or Tranche B Loans (or a combination thereof), (ii) the requested date for
the making of the requested Loans, which shall be, in the case of Base Rate
Loans, a Business Day and, in the case of Eurodollar Rate Loans, a Eurodollar
Business Day, (iii) the Type or Types of Loans requested and (iv) the amount of
each such Type of Loan, the aggregate amount of which shall be $3,000,000 or any
integral multiple of $500,000 in excess thereof or the amount of the unused
Total Commitment. Upon receipt of any such notice, the Administrative Agent
shall promptly notify each Bank of the contents thereof, of the amount and Type
of each Loan to be made by such Bank on the requested date specified therein and
whether such Loan is a Tranche A Loan or a Tranche B Loan (or a combination
thereof).
(b) Not later than 12:00 noon (Dallas time) on each requested date
for the making of Loans, each Bank shall make available to the Administrative
Agent, in Dollars in funds immediately available to the Administrative Agent at
the Administrative Agent's Office, the Loans to be made by such Bank on such
date. The obligations of the Banks hereunder are several and, accordingly, any
Bank's failure to make any Loan to be made by it on the requested date therefor
shall not relieve any other Bank of its obligation to make any Loan to be made
by such other Bank on such date, but such other Bank shall not be liable for
such failure.
(c) Unless the Administrative Agent shall have received notice from a
Bank prior to 12:00 noon (Dallas time) on the requested date for the making of
any Loans that such Bank will not make available to the Administrative Agent the
Loans requested to be made by such Bank on such date, the Administrative Agent
may assume that such Bank has made such Loans available to the Administrative
Agent on such date in accordance with Section 1.02(b) and the Administrative
Agent in its sole discretion may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount on behalf of such
Bank. If and to the extent such Bank shall not have so made available to the
Administrative Agent the Loans requested to be made by such Bank on such date
and the Administrative Agent shall have so made available to the Borrower
-2-
<PAGE>
a corresponding amount on behalf of such Bank, such Bank shall, on demand, pay
to the Administrative Agent such corresponding amount together with interest
thereon, for each day from the date such amount shall have been so made
available by the Administrative Agent to the Borrower until the date such amount
shall have been paid to the Administrative Agent, at the Federal Funds Rate
until (and including) the third Business Day after demand is made and thereafter
at the Base Rate. If such Bank does not pay such corresponding amount promptly
upon the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower and the Borrower shall immediately repay such
corresponding amount to the Administrative Agent together with accrued interest
thereon at the applicable rate or rates provided in Section 1.03(a); provided,
--------
however, that, with respect to such repayment, the Borrower shall have no
- - - -------
liability with respect to losses, costs or expenses otherwise compensable under
Section 7.04 in connection therewith.
(d) All Loans made available to the Administrative Agent in
accordance with Section 1.02(b) shall be disbursed by the Administrative Agent
not later than 3:00 p.m. (Dallas time) on the requested date therefor in Dollars
in funds immediately available to the Borrower by credit to an account of the
Borrower at the Administrative Agent's Office or in such other manner as may
have been specified in the applicable notice and as shall be acceptable to the
Administrative Agent.
Section 1.03. Interest. (a) Rates. Each Loan shall bear interest
-------- -----
on the outstanding principal amount thereof until due at a rate per annum equal
to, (i) so long as it is a Base Rate Loan, the Base Rate as in effect from time
to time plus the Applicable Margin and (ii) so long as it is a Eurodollar Rate
----
Loan, the applicable Adjusted Eurodollar Rate plus the Applicable Margin. If
----
all or any part of a Loan or any other amount due and payable under the Borrower
Loan Documents is not paid when due (whether at maturity, by reason of notice of
prepayment or acceleration or otherwise), such unpaid amount shall, to the
maximum extent permitted by Applicable Law, bear interest for each day during
the period from the date such amount became so due until it shall be paid in
full (whether before or after judgment) at a rate per annum equal to the
applicable Post-Default Rate.
(b) Payment. Interest shall be payable, (i) in the case of Base Rate
-------
Loans, on each Interest Payment Date, (ii) in the case of Eurodollar Rate Loans,
on the last day of each applicable Interest Period (and, in the case of a
Eurodollar Rate Loan having an Interest Period longer than three months, on each
three month anniversary of the first day of such Interest Period) and (iii) in
the case of any Loan, when such Loan shall be due (whether at maturity, upon
mandatory prepayment, by reason of notice of prepayment or acceleration or
otherwise) or converted, but only to the extent then accrued on the amount then
so due or
-3-
<PAGE>
converted. Interest at the Post-Default Rate shall be payable on demand.
(c) Conversion and Continuation. (i) All or any part of the
---------------------------
principal amount of Loans of any Type may, on any Business Day, be
converted into any other Type or Types of Loans, except that (A) Eurodollar
Rate Loans may be converted only on the last day of the applicable Interest
Periods therefor and (B) Base Rate Loans may be converted into Eurodollar
Rate Loans only on a Eurodollar Business Day.
(ii) Base Rate Loans shall continue as Base Rate Loans unless and
until such Loans are converted into Loans of another Type. Eurodollar Rate
Loans of any Type shall continue as Loans of such Type until the end of the
then current Interest Period therefor, at which time they shall be
automatically converted into Base Rate Loans unless the Borrower shall have
given the Administrative Agent notice in accordance with Section
1.03(c)(iv) requesting either that such Loans continue as Loans of such
Type for another Interest Period or that such Loans be converted into Loans
of another Type at the end of such Interest Period.
(iii) Notwithstanding anything to the contrary contained in
Section 1.03(c)(i) or (ii), so long as an Event of Default shall have
occurred and be continuing, the Administrative Agent may (and, at the
request of Banks having more than 66 2/3% of the Loans outstanding (or, if
there are no Loans outstanding, more than 66 2/3% of the Total Commitment),
shall) notify the Borrower that Loans may only be converted into or
continued upon the expiration of the applicable current Interest Period
therefor as Loans of certain specified Types and, thereafter, until no
Event of Default shall continue to exist, Loans may not be converted into
or continued as Loans of any Type other than one or more of such specified
Types.
(iv) The Borrower shall give the Administrative Agent notice
(which shall be irrevocable) of each conversion of Loans or continuation of
Eurodollar Rate Loans no later than 11:00 a.m. (Dallas time) on, in the
case of a conversion into Base Rate Loans, the Business Day and, in the
case of a conversion into or continuation of Eurodollar Rate Loans, the
third Eurodollar Business Day before the requested date of such conversion
or continuation. Each notice of conversion or continuation shall be in the
form of Schedule 1.03(c)(iv) and shall specify (A) the requested date of
--------------------
such conversion or continuation, (B) whether such Loans are Tranche A Loans
or Tranche B Loans (or a combination thereof), (C) the amount and Type and,
in the case of Eurodollar Rate Loans, the last day of the applicable
Interest Period for the Loans to be converted or continued and (D) the
amount and Type or Types of Loans into
-4-
<PAGE>
which such Loans are to be converted or as which such Loans are to be
continued. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each Bank of (w) the contents thereof, (x) the amount and
Type and, in the case of Eurodollar Rate Loans, the last day of the
applicable Interest Period for each Loan to be converted or continued by
such Bank, (y) whether such Loans are Tranche A Loans or Tranche B Loans
(or a combination thereof) and (z) the amount and Type or Types of Loans
into which such Loans are to be converted or as which such Loans are to be
continued.
(d) Maximum Interest Rate. Nothing contained in the Loan Documents
---------------------
shall require the Borrower at any time to pay interest at a rate exceeding the
Maximum Permissible Rate. If interest payable by the Borrower on any date would
exceed the maximum amount permitted by the Maximum Permissible Rate, such
interest payment shall automatically be reduced to such maximum amount
permitted, and interest for any subsequent period, to the extent less than the
maximum amount permitted for such period by the Maximum Permissible Rate, shall
be increased by the unpaid amount of such reduction. Any interest actually
received for any period in excess of such maximum amount permitted for such
period shall be deemed to have been applied as a prepayment of the corresponding
Loans.
Section 1.04. Repayment. The aggregate outstanding principal amount
---------
of the Loans shall mature and become due and payable, and shall be repaid by the
Borrower, on the Commitment Termination Date.
Section 1.05. Prepayments. (a) Optional Prepayments. The Borrower
----------- --------------------
may, at any time and from time to time, prepay the Loans in whole or in part,
without premium or penalty, except that any optional partial prepayment shall be
in an aggregate principal amount of $3,000,000 or any integral multiple of
$500,000 in excess thereof. Any prepayment of Eurodollar Rate Loans made on a
day other than the last day of the applicable Interest Periods therefor shall be
accompanied by the amount, if any, required to be paid in respect thereof
pursuant to Section 7.04. The Borrower shall give the Administrative Agent
notice of each prepayment no later than 11:00 a.m. (Dallas time) on, in the case
of a prepayment of Base Rate Loans, the Business Day and, in the case of a
prepayment of Eurodollar Rate Loans, the third Eurodollar Business Day before
the date of such prepayment. Each such notice of prepayment shall be in the
form of Schedule 1.05 and shall specify (i) whether such Loans are Tranche A
-------------
Loans or Tranche B Loans (or a combination thereof), (ii) the date such
prepayment is to be made and (iii) the amount and Type and, in the case of
Eurodollar Rate Loans, the last day of the applicable Interest Periods for the
Loans to be prepaid. Upon receipt of any such notice, the Administrative Agent
shall promptly notify each Bank of the contents thereof and the amount and Type
and, in the case of Eurodollar Rate Loans, the last day of the applicable
-5-
<PAGE>
Interest Periods for the Loans of such Bank to be prepaid. Amounts to be so
prepaid shall irrevocably be due and payable on the date specified in the
applicable notice of prepayment, together with interest thereon as provided in
Section 1.03(b).
(b) Mandatory Prepayments. If, after giving effect to any reduction
---------------------
of the Tranche A Commitment or the Tranche B Commitment pursuant to Section
1.07, the aggregate outstanding principal amount of the Tranche A Loans or the
Tranche B Loans, as the case may be, exceeds the Tranche A Commitment or the
Tranche B Commitment,as the case may be, the Borrower shall prepay the Tranche A
Loans or the Tranche B Loans, as applicable, in an amount equal to the amount of
such excess, together with interest thereon as provided in Section 1.03(b), and
the amount, if any, required to be paid in respect thereof pursuant to Section
7.04, on the date of such reduction.
(c) Application and Timing. Prepayments of Loans made pursuant to
----------------------
Section 1.05(b) shall be applied first to prepay Base Rate Loans and then to
prepay Eurodollar Rate Loans in the order that the Interest Periods for such
Loans end. Amounts to be so prepaid shall be paid on the date specified
therefor, whether or not such payment would require a prepayment of any
Eurodollar Rate Loans prior to the last day of the applicable Interest Periods
therefor or would result in losses, costs or expenses compensable under Section
7.04.
Section 1.06. Limitation on Types of Loans. Notwithstanding anything
----------------------------
to the contrary contained in this Agreement, the Borrower shall borrow, prepay,
convert and continue Loans in a manner such that (a) the aggregate principal
amount of Eurodollar Rate Loans having the same Interest Period shall at all
times be not less than $3,000,000, (b) there shall not be, at any one time, more
than six Interest Periods in effect with respect to Eurodollar Rate Loans of all
Types and (c) no payment of Eurodollar Rate Loans will have to be made prior to
the last day of an applicable Interest Period in order to repay the Loans in the
amounts and (subject to Section 1.10(d)) on the dates specified in Sections 1.04
and 1.05(b).
Section 1.07. Reductions of Commitments. (a) Scheduled Reductions.
------------------------- --------------------
(i) Scheduled Reductions of Total Tranche A Commitment. Subject to the
--------------------------------------------------
adjustments described in Section 1.07(d), the Total Tranche A Commitment shall
be automatically reduced on each date set forth below by the amount set forth
below opposite each such date:
<TABLE>
<CAPTION>
Amount of
Date Reduction
---- ---------
<S> <C>
March 31, 1998 $23,250,000
June 30, 1998 $23,250,000
September 30, 1998 $23,250,000
December 31, 1998 $23,250,000
</TABLE>
-6-
<PAGE>
<TABLE>
<S> <C>
March 31, 1999 $27,125,000
June 30, 1999 $27,125,000
September 30, 1999 $27,125,000
December 31, 1999 $27,125,000
March 31, 2000 $31,000,000
June 30, 2000 $31,000,000
September 30, 2000 $31,000,000
December 31, 2000 $31,000,000
March 31, 2001 $34,875,000
June 30, 2001 $34,875,000
September 30, 2001 $34,875,000
December 31, 2001 $34,875,000
March 31, 2002 $38,750,000
June 30, 2002 $38,750,000
September 30, 2002 $38,750,000
December 31, 2002 $38,750,000
March 31, 2003 $38,750,000
June 30, 2003 $38,750,000
September 30, 2003 $38,750,000
December 31, 2003 $38,750,000
</TABLE>
(ii) Scheduled Reductions of Total Tranche B Commitment. Subject to
--------------------------------------------------
the adjustments described in Section 1.07(d), the Total Tranche B Commitment
shall be automatically reduced on each date set forth below by the amount set
forth below opposite each such date:
<TABLE>
<CAPTION>
Amount of
Date Reduction
----- ---------
<S> <C>
March 31, 1998 $2,250,000
June 30, 1998 $2,250,000
September 30, 1998 $2,250,000
December 31, 1998 $2,250,000
March 31, 1999 $2,625,000
June 30, 1999 $2,625,000
September 30, 1999 $2,625,000
December 31, 1999 $2,625,000
March 31, 2000 $3,000,000
June 30, 2000 $3,000,000
September 30, 2000 $3,000,000
December 31, 2000 $3,000,000
March 31, 2001 $3,375,000
June 30, 2001 $3,375,000
September 30, 2001 $3,375,000
December 31, 2001 $3,375,000
March 31, 2002 $3,750,000
</TABLE>
-7-
<PAGE>
<TABLE>
<S> <C>
June 30, 2002 $3,750,000
September 30, 2002 $3,750,000
December 31, 2002 $3,750,000
March 31, 2003 $3,750,000
June 30, 2003 $3,750,000
September 30, 2003 $3,750,000
December 31, 2003 $3,750,000
</TABLE>
(b) Optional Reductions. The Borrower may reduce the Total
-------------------
Commitment by giving the Administrative Agent notice (which shall be
irrevocable) thereof no later than 10:00 a.m. (Dallas time) on the third
Business Day before the requested date of such reduction, except that each
partial reduction thereof shall be in an amount equal to $1,000,000 or any
integral multiple of $1,000,000 in excess thereof and that no reduction shall
reduce (i) the Total Tranche A Commitment or Total Tranche B Commitment, as the
case may be, to an amount less than the aggregate principal amount of all
Tranche A Loans or Tranche B Loans, as the case may be, outstanding at such
time, (ii) the Total Commitment to an amount less than the aggregate principal
amount of all Loans and all Senior Subordinated Indebtedness outstanding at such
time or (iii) the Total Tranche A Commitment unless the Total Tranche B
Commitment shall have been reduced to zero. Upon receipt of any such notice,
the Administrative Agent shall promptly notify each Bank of the contents thereof
and the amounts to which such Bank's Tranche A Commitment and/or Tranche B
Commitment are to be reduced.
(c) Other Mandatory Reductions. (i) Upon the making of a Restricted
--------------------------
Payment not prohibited by operation of clause (c) of Section 4.06, the Total
Commitment shall be automatically reduced by an amount equal to the amount of
such Restricted Payment. Each such reduction shall be applied to the Total
Tranche A Commitment and the Total Tranche B Commitment pro rata in accordance
with the respective amounts thereof.
(ii) In the event that any of the Net Proceeds of any sale or
disposition of assets contemplated by and in accordance with Section 4.08(f)
have not been reinvested, pursuant to acquisitions described in Section 4.07(d),
in cable television systems and related communications businesses in a manner
not prohibited by this Agreement, or a contract providing for a transaction that
will entail such reinvestment shall not have been entered into by all of the
parties thereto, in either case, within the six-month period following such sale
or disposition, and such non-invested Net Proceeds, together with the non-
invested Net Proceeds of all previous such sales or dispositions (net of the
amount of any previous reduction made on the basis thereof pursuant to this
Section 1.07(c)(ii)), exceeds $2,000,000, the Total Commitment shall be reduced
by the amount equal to such excess. Each such reduction shall be applied to the
Total Tranche A Commitment and the Total Tranche B Commitment pro rata in
accordance with the respective amounts thereof.
-8-
<PAGE>
(d) Adjustments. Upon each reduction of the Total Commitment
-----------
pursuant to Section 1.07(b) or Section 1.07(c), the remaining scheduled
reductions set forth in Sections 1.07(a)(i) and 1.07(a)(ii), respectively, shall
be adjusted, after giving effect to any prior adjustments thereto pursuant to
this Section 1.07(d), by reducing each such scheduled reduction by the amount
obtained by multiplying such reduction of the Total Commitment by a fraction,
the numerator of which is the amount of such scheduled reduction and the
denominator of which is the aggregate of all such remaining scheduled
reductions.
(e) No Reinstatement. No reduction of the Total Commitment may be
----------------
reinstated.
Section 1.08. Commitment Fees. The Borrower shall pay to the
---------------
Administrative Agent, for the account of each Bank, a commitment fee on the
daily unused amount of such Bank's Tranche A Commitment and Tranche B Commitment
for each day from the Agreement Date through the Commitment Termination Date at
a rate per annum of (a) for so long as the Leverage Ratio is greater than or
equal to 5.50 to 1, 0.375%, and (b) for so long as the Leverage Ratio is less
than 5.50 to 1, 0.25%, payable in arrears on successive Interest Payment Dates,
on the date of any reduction of such Tranche A Commitment or Tranche B
Commitment (to the extent accrued and unpaid on the amount of such reduction)
and on the Commitment Termination Date.
Section 1.09. Computation of Interest and Fees. Interest calculated
--------------------------------
on the basis of the Adjusted Eurodollar Rate or the Federal Funds Rate shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed. Commitment fees and interest calculated on the basis of the Prime
Rate shall be computed on the basis of a year of 365 or 366 days, as applicable,
and paid for the actual number of days elapsed. Interest for any period shall
be calculated from and including the first day thereof to but excluding the last
day thereof.
Section 1.10. Payments by the Borrower. (a) Time, Place and Manner.
------------------------ ----------------------
All payments due to the Administrative Agent under the Borrower Loan Documents
shall be made to the Administrative Agent at the Administrative Agent's Office
or to such other Person or at such other address as the Administrative Agent may
designate by notice to the Borrower. All payments due to any Bank under the
Borrower Loan Documents shall, in the case of payments on account of principal
of or interest on the Loans or fees, be made to the Administrative Agent at the
Administrative Agent's Office and, in the case of all other payments, be made
directly to such Bank at its Domestic Lending Office or at such other address as
such Bank may designate by notice to the Borrower. All payments due to any Bank
under the Borrower Loan Documents, whether made to the Administrative Agent or
directly to such Bank, shall be made for the account of, in the case of payments
in respect of Eurodollar Rate Loans, such Bank's Eurodollar Lending Office and,
in the case of all other
-9-
<PAGE>
payments, such Bank's Domestic Lending Office. A payment shall not be deemed to
have been made on any day unless such payment has been received by the required
Person, at the required place of payment, in Dollars in funds immediately
available to such Person, no later than 1:00 p.m. (Dallas time) on such day;
provided, however, that the failure of the Borrower to make any such payment by
- - - -------- -------
such time shall not constitute a Default hereunder so long as such payment is
received no later than 3:00 p.m. (Dallas time) on such day, but any such payment
received later than 1:00 p.m. (Dallas time) on such day shall be deemed to have
been made on the next Business Day for the purpose of calculating interest on
the amount paid.
(b) No Reductions. All payments due to the Administrative Agent or
-------------
any Bank under the Borrower Loan Documents, and all other terms, conditions,
covenants and agreements to be observed and performed by the Borrower
thereunder, shall be made, observed or performed by the Borrower without any
reduction or deduction whatsoever, including any reduction or deduction for any
set-off, recoupment, counterclaim (whether sounding in tort, contract or
otherwise) or Tax, except for, so long as the Borrower is in compliance with
Section 1.12, any withholding or deduction for Taxes required to be withheld or
deducted under Applicable Law.
(c) Authorization to Charge Accounts. The Borrower hereby authorizes
--------------------------------
the Administrative Agent and each Bank, if and to the extent any amount payable
by the Borrower under the Borrower Loan Documents (whether payable to such
Person or to any other Person that is the Administrative Agent or a Bank) is not
otherwise paid when due, to charge such amount against any or all of the demand
deposit or other transaction accounts of the Borrower with such Person or any of
such Person's Affiliates (whether maintained at a branch or office located
within or without the United States), with the Borrower remaining liable for any
deficiency. The Person so charging any such account shall give the Borrower
prompt notice thereof, but any failure to give or delay in giving such notice
shall not affect such Person's right to effect such charge.
(d) Extension of Payment Dates. Whenever any payment to the
--------------------------
Administrative Agent or any Bank under the Borrower Loan Documents would
otherwise be due (except by reason of acceleration) on a day that is not a
Business Day or, in the case of payments of the principal of Eurodollar Rate
Loans, a Eurodollar Business Day, such payment shall instead be due on the next
succeeding Business or Eurodollar Business Day, as the case may be, unless, in
the case of a payment of the principal of Eurodollar Rate Loans, such extension
would cause payment to be due in the next succeeding calendar month, in which
case such due date shall be advanced to the next preceding Eurodollar Business
Day. If the due date for any payment under the Borrower Loan Documents is
extended (whether by operation of any Borrower Loan Document, Applicable Law or
otherwise), such payment shall bear
-10-
<PAGE>
interest for such extended time at the rate of interest applicable hereunder.
Section 1.11. Distribution of Payments by the Administrative Agent.
----------------------------------------------------
(a) The Administrative Agent shall promptly distribute to each Bank its ratable
share of each payment received by the Administrative Agent under the Loan
Documents for the account of the Banks by credit to an account of such Bank at
the Administrative Agent's Office or by wire transfer to an account of such Bank
at an office of any other commercial bank located in the United States or at any
Federal Reserve Bank, in each case as may be specified by such Bank.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks under
the Loan Documents that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent in its
sole discretion may, in reliance upon such assumption, cause to be distributed
to each Bank on such due date a corresponding amount with respect to the amount
then due such Bank. If and to the extent the Borrower shall not have so made
such payment in full to the Administrative Agent and the Administrative Agent
shall have so distributed to any Bank a corresponding amount, such Bank shall,
on demand, repay to the Administrative Agent the amount so distributed together
with interest thereon, for each day from the date such amount is distributed to
such Bank until the date such Bank repays such amount to the Administrative
Agent, at the Federal Funds Rate until (and including) the third Business Day
after demand is made and thereafter at the Base Rate.
Section 1.12. Taxes on Payments. (a) Taxes Payable by the Borrower.
----------------- -----------------------------
If any Tax is required to be withheld or deducted from, or is otherwise payable
by the Borrower in connection with, any payment due to any Bank or any Agent
that is not a "United States person" (as such term is defined in Section
--------------------
7701(a)(30) of the Code) hereunder, the Borrower (i) shall, if required,
withhold or deduct the amount of such Tax from such payment and, in any case,
pay such Tax to the appropriate taxing authority in accordance with Applicable
Law and (ii) shall pay to such Bank or Agent such additional amounts as may be
necessary so that the net amount received by such Bank or Agent with respect to
such payment, after withholding or deducting all Taxes required to be withheld
or deducted, is equal to the full amount payable hereunder. If any Tax is
withheld or deducted from, or is otherwise payable by the Borrower in connection
with, any payment due to any such Bank or Agent hereunder, the Borrower shall
furnish to such Bank or Agent the original or a certified copy of a receipt for
such Tax from the applicable taxing authority within 30 days after the date of
such payment (or, if such receipt shall not have been made available by such
taxing authority within such time, the Borrower shall use reasonable
-11-
<PAGE>
efforts to promptly obtain and furnish such receipt). If the Borrower fails to
pay any Taxes when due to the appropriate taxing authority or fails to remit to
any such Bank or Agent the required receipts, the Borrower shall indemnify such
Bank or Agent for any Taxes, interest, penalties or additions to Tax that may
become payable by such Bank or Agent as a result of any such failure.
(b) Taxes Payable by any Bank or Agent. The Borrower shall, promptly
----------------------------------
upon request by any Bank or Agent that is not a United States person for the
payment thereof, pay to any such Bank or Agent an amount equal to (i) all Taxes
(other than Bank Taxes and without duplication of amounts paid pursuant to
Section 1.12(a)) payable by such Bank or Agent with respect to any payment due
to such Bank or Agent hereunder and (ii) all Taxes (including Bank Taxes)
payable by such Bank or Agent as a result of payments made by the Borrower
(whether made to a taxing authority or to such Bank or Agent) pursuant to
Section 1.12(a) or this Section 1.12(b).
(c) Exemption from U.S. Withholding Taxes. (i) Each Bank that is
-------------------------------------
not a United States person shall submit to the Borrower and the Administrative
Agent, on or before the fifth day prior to the first Interest Payment Date
occurring after the Closing Date (or, in the case of a Person that became a Bank
by assignment, promptly upon such assignment), two duly completed and signed
copies of either (A) Form 1001 of the United States Internal Revenue Service
entitling such Bank to a complete exemption from withholding on all amounts to
be received by such Bank pursuant to this Agreement and the Loans or (B) Form
4224 of the United States Internal Revenue Service relating to all amounts to be
received by such Bank pursuant to this Agreement and the Loans. Each such Bank
shall, from time to time after submitting either such Form, submit to the
Borrower and the Administrative Agent such additional duly completed and signed
copies of one or the other such Forms (or any successor forms as shall be
adopted from time to time by the relevant United States taxing authorities) as
may be (A) requested in writing by the Borrower or the Administrative Agent and
(B) appropriate under the circumstances and under then current United States law
or regulations to avoid or reduce United States withholding taxes on payments in
respect of all amounts to be received by such Bank pursuant to this Agreement or
the Loans. Upon the request of the Borrower or the Administrative Agent, each
Bank that is a United States person shall submit to the Borrower and the
Administrative Agent a certificate to the effect that it is a United States
person.
(ii) If any Bank determines that it is unable to submit to the
Borrower or the Administrative Agent any form or certificate that such Bank is
obligated to submit pursuant to the preceding paragraph, or that it is required
to withdraw or cancel any such form or certificate, or that any such form or
certificate previously submitted has otherwise become ineffective
-12-
<PAGE>
or inaccurate, such Bank shall promptly notify the Borrower and the
Administrative Agent of such fact.
(iii) Notwithstanding anything to the contrary contained herein,
the Borrower shall not be required to pay any additional amount in respect of
United States withholding taxes pursuant to Section 1.12(a) or Section 7.02 to
any Bank that (A) is not, on the date this Agreement is executed by such Bank
(or, in the case of a Person that became a Bank by assignment, on the date of
such assignment), either (x) entitled to submit Form 1001 of the United States
Internal Revenue Service entitling such Bank to a complete exemption from
withholding on all amounts to be received by such Bank pursuant to this
Agreement and the Loans or Form 4224 of the United States Internal Revenue
Service relating to all amounts to be received by such Bank pursuant to this
Agreement and the Loans or (y) a United States person or (B) is no longer
entitled to submit either such Form (or any successor form as shall be adopted
from time to time by the relevant United States taxing authorities) as a result
of any change in circumstances or other event other than a Regulatory Change.
Section 1.13. Evidence of Indebtedness. Each Bank's Loans and the
------------------------
Borrower's obligation to repay such Loans with interest in accordance with the
terms of this Agreement shall be evidenced by this Agreement, the records of
such Bank and a single Note payable to the order of such Bank. The records of
each Bank shall be prima facie evidence of such Bank's Loans and accrued
interest thereon and of all payments made in respect thereof.
Section 1.14. Pro Rata Treatment. Except to the extent otherwise
------------------
provided herein, (a) Tranche A Loans shall be made by the Banks pro rata in
accordance with their respective Tranche A Commitments, (b) Tranche B Loans
shall be made by the Banks pro rata in accordance with their respective Tranche
B Commitments, (c) Loans of the Banks shall be converted and continued pro rata
in accordance with their respective amounts of Loans of the Type and, in the
case of Eurodollar Rate Loans, having the Interest Period being so converted or
continued, (d) each reduction of the Total Commitment shall be applied to the
Commitments of the Banks pro rata in accordance with the respective amounts
thereof and (e) each payment of the principal of or interest on the Loans or of
commitment fees shall be made for the account of the Banks pro rata in
accordance with their respective amounts thereof then due and payable.
ARTICLE 2
CONDITIONS TO LOANS
-------------------
Section 2.01. Conditions to Initial Loans. The obligation of each
---------------------------
Bank to make its initial Loan is subject to the fulfillment of each of the
following conditions:
-13-
<PAGE>
(a) the Arranging Agents' and the Managing Agents' receipt of each of
the following, in form and substance and, in the case of the materials referred
to in clauses (i), (ii), (iii), (vii), (viii), (x), (xiii) and (xiv) below,
certified in a manner satisfactory to the Required Agents:
(i) a certificate of the Secretary or an Assistant Secretary or a
Responsible Officer of each of the Loan Parties, dated the requested date
for the making of such Loan, substantially in the form of Schedule
--------
2.01(a)(i), to which shall be attached copies of the resolutions and by-
----------
laws referred to in such certificate;
(ii) copies of the certificate of incorporation of each of the Loan
Parties, in each case certified, as of a recent date, by the Secretary of
State or other appropriate official of the jurisdiction of incorporation of
such Loan Party;
(iii) a good standing or subsistence certificate with respect to
the Borrower, each Consolidated Subsidiary and each other Loan Party (in
each case, other than partnerships, to the extent such certificate is not
customarily available with respect thereto), issued as of a recent date by
the Secretary of State or other appropriate official of such Person's
jurisdiction of incorporation, together with a telegram from such Secretary
of State or other official, updating the information in such certificate;
(iv) an opinion of counsel for the Borrower and an opinion of
counsel for each other Loan Party, each dated the requested date for the
making of such Loan, in the form of Schedules 2.01(a)(iv)-1 and
-----------------------
2.01(a)(iv)-2, respectively, with such changes as the Required Agents shall
-------------
approve;
(v) an opinion of special FCC counsel for the Borrower and the
Subsidiaries and opinions of local counsel for the Borrower and the
Subsidiaries addressing the law of the State of New Jersey, each dated the
requested date for the making of such Loan, in the form of Schedules
---------
2.01(a)(v)-1 and 2.01(a)(v)-2, respectively, with such changes as the
-----------------------------
Required Agents shall approve;
(vi) an opinion of Winthrop, Stimson, Putnam & Roberts, special
counsel for the Arranging Agents and the Managing Agents, dated the
requested date for the making of such Loan, in the form of Schedule
--------
2.01(a)(vi);
-----------
(vii) a copy of each Governmental Approval and other consent or
approval listed on Schedule 3.03;
-------------
(viii) a certificate of a Responsible Officer of the Borrower,
dated the requested date for the making of such
-14-
<PAGE>
Loan, with respect to the conditions set forth in Sections 2.02(b) and (c)
and setting forth the calculation of the Leverage Ratio in effect
immediately after giving effect to the making of the initial Loans and the
application of the proceeds thereof;
(ix) a duly executed Note for each Bank and a duly executed copy of
each of the other Loan Documents;
(x) a copy of the Management Agreement and the Tax Sharing
Agreement, each of which shall be in form and substance satisfactory to the
Required Agents;
(xi) such instruments and other documents as the Required Agents
may request, the possession of which is necessary or appropriate in the
Required Agents' determination to create or perfect a security interest in
the Collateral under Applicable Law, including but not limited to the
certificates representing the Pledged Securities, together with undated
stock powers for such certificates duly executed in blank, and duly
executed UCC-1 financing statements;
(xii) evidence that, prior to or substantially simultaneously with
the making of such Loan, (A) the Predecessor Indebtedness will be repaid,
(B) all commitments to lend in respect of the Predecessor Indebtedness
shall have been effectively terminated and (C) all UCC-3 termination
statements and all other documents necessary in the determination of the
Required Agents to effectively terminate of record all security interests
related to the Predecessor Indebtedness shall have been duly executed by
the proper parties and shall have been delivered to the Administrative
Agent, or other arrangements with respect thereto satisfactory to the
Required Agents shall have been made;
(xiii) a certificate of a Responsible Officer of the Borrower, dated the
requested date for the making of such Loan, to which shall be attached a
pro forma balance sheet of the Borrower and the Consolidated Subsidiaries
(excluding Comcast Cablevision of Inkster, L.P.) as at September 30, 1994,
reflecting the making of the initial Loans and the repayment or
satisfaction of the Predecessor Indebtedness, which shall be in reasonable
detail and in form satisfactory to the Required Agents;
(xiv) copies of the Acquisition Documents; and
(xv) evidence that the Borrower shall have paid all of the fees
required to be paid to the Agents and the Banks on the date of the initial
Loans and all of the reasonable fees and disbursements of Winthrop,
Stimson, Putnam & Roberts, special counsel for the Arranging Agents and the
Managing
-15-
<PAGE>
Agents, in connection with the negotiation, preparation, execution and
delivery of the Loan Documents and the making of the initial Loans;
(b) the acquisitions contemplated by the Acquisition Documents shall
have been consummated in accordance with the Acquisition Documents (as the same
may have been modified by any waivers of the terms and conditions thereof which,
individually or in the aggregate, do not and, insofar as can reasonably be
foreseen, will not have a Materially Adverse Effect on (i) the Borrower and the
Consolidated Subsidiaries taken as a whole, (ii) any Loan Document or (iii) the
Collateral), and the Arranging Agents and the Managing Agents shall have
received a certificate of a Responsible Officer of the Borrower to such effect;
and
(c) a cash equity contribution in an amount not less than
$555,000,000, less an amount not in excess of the known and reasonably estimated
transaction costs incurred in connection with the formation and capitalization
of Persons established to hold, directly or indirectly, the Capital Securities
issued by the Borrower, shall have been made to the Borrower for common stock or
for other Capital Securities satisfactory to the Required Agents.
Section 2.02. Conditions to Each Loan. The obligation of each Bank
-----------------------
to make each Loan requested to be made by it, including its initial Loan, is
subject to the fulfillment of each of the following conditions:
(a) the Administrative Agent shall have received a notice of
borrowing with respect to such Loan complying with the requirements of Section
1.02;
(b) each Loan Document Representation and Warranty shall be true and
correct in all material respects at and as of the time such Loan is to be made,
both with and without giving effect to such Loan and all other Loans to be made
at such time and to the application of the proceeds thereof, except, in the case
of Loans other than the initial Loans, to the extent waived by the Required
Banks;
(c) no Default (other than a Default (i) that shall have been waived
by the Required Banks or (ii) that shall not constitute an Event of Default and
will be cured, contemporaneously with the making of such Loan pursuant to
arrangements satisfactory to the Required Agents, by the application of the
proceeds of such Loans and the other Loans to be made at such time) shall have
occurred and be continuing at the time such Loan is to be made or would result
from the making of such Loan and all other Loans to be made at such time or from
the application of the proceeds thereof; and
(d) without in any way limiting Section 2.02(c), such Bank shall have
received such materials as it may have reasonably
-16-
<PAGE>
requested pursuant to Section 5.01(d) and that were reasonably capable of being
delivered to such Bank prior to the making of such Loan.
Except to the extent that the Borrower shall have disclosed in the
notice of borrowing, or in a subsequent notice given to the Banks prior to 3:00
p.m. (Dallas time) on the Business Day before the requested date for the making
of the requested Loans, that a condition specified in Section 2.02(b) or (c)
will not be fulfilled as of the requested time for the making of such Loans, the
Borrower shall be deemed to have made a Representation and Warranty as of the
time of the making of such Loans that the conditions specified in such clauses
have been fulfilled as of such time. No such disclosure by the Borrower that a
condition specified in Section 2.02(b) or (c) will not be fulfilled as of the
requested time for the making of the requested Loans shall affect the right of
each Bank to not make the Loans requested to be made by it if such condition has
not been fulfilled at such time.
ARTICLE 3
CERTAIN REPRESENTATIONS AND WARRANTIES
--------------------------------------
In order to induce each Bank to enter into this Agreement and to make
each Loan requested to be made by it, the Borrower represents and warrants as
follows:
Section 3.01. Organization; Power; Qualification. Each of the
----------------------------------
Borrower and the Subsidiaries is a corporation or a partnership, as the case may
be, duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, has full corporate or partnership power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and in good standing as
a foreign corporation or limited partnership, as the case may be, and is
authorized to do business, in all jurisdictions in which the character of its
properties or the nature of its business requires such qualification or
authorization, except for qualifications and authorizations the lack of which,
singly or in the aggregate, has not had and, insofar as can reasonably be
foreseen, will not have a Materially Adverse Effect on (a) the Borrower and the
Consolidated Subsidiaries taken as a whole or (b) the Collateral.
Section 3.02. Capitalization; Subsidiaries. Schedule 3.02 sets
---------------------------- -------------
forth, as of the Agreement Date, (a) all of the Capital Securities issued by the
Borrower and the Persons owning such Capital Securities, the jurisdictions of
incorporation of such Persons and the percentages of such Capital Securities so
owned and (b) all of the Subsidiaries, their jurisdictions of organization and
the percentages of the various classes of their Capital Securities owned by the
Borrower or another Subsidiary
-17-
<PAGE>
and indicates which Subsidiaries are Consolidated Subsidiaries. The Borrower or
another Subsidiary, as the case may be, has the unrestricted right to vote, and
(subject to limitations imposed by Applicable Law) to receive dividends and
distributions on, all Capital Securities issued by the Subsidiaries indicated on
Schedule 3.02 as owned by the Borrower or such Subsidiary. All such Capital
- - - -------------
Securities have been duly authorized and issued and are fully paid and
nonassessable.
Section 3.03. Authorization; Enforceability; Required Consents;
-------------------------------------------------
Absence of Conflicts; Acquisition Documents. The Borrower has the power, and
- - - -------------------------------------------
has taken all necessary action (including, if a corporation, any necessary
stockholder action) to authorize it, to execute, deliver and perform in
accordance with their respective terms the Loan Documents to which it is a party
and to borrow hereunder in the amount of the unused Total Commitment. This
Agreement has been, and each of the other Loan Documents to which the Borrower
is a party when delivered to the Arranging Agents and the Managing Agents will
have been, duly executed and delivered by the Borrower and is, or when so
delivered will be, a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity. The execution,
delivery and performance in accordance with their respective terms by the
Borrower of the Loan Documents to which it is a party, and each borrowing
hereunder, whether or not in the amount of the unused Total Commitment, do not
and (absent any change in any Applicable Law or applicable Contract) will not
(a) require any Governmental Approval or any other consent or approval,
including any consent or approval of any Subsidiary or any consent or approval
of the stockholders or the partners, as the case may be, of the Borrower or any
Subsidiary, other than Governmental Approvals and other consents and approvals
that have been obtained, are in full force and effect and are final and not
subject to review on appeal or to collateral attack and, in the case of any such
required under any Applicable Law or Contract as in effect on the Agreement
Date, are listed on Schedule 3.03 or (b) violate, conflict with, result in a
-------------
breach of, constitute a default under, or result in or require the creation of
any Lien upon any assets of the Borrower or any Subsidiary under, (i) any
Contract to which the Borrower or any Subsidiary is a party or by which the
Borrower or any Subsidiary or any of their respective properties may be bound or
(ii) any Applicable Law, except for such violations, conflicts, breaches or
defaults of or under, or Liens resulting from or created under, Contracts or
Applicable Law (A) so long as, in the case of any Contract, such Contract is not
expressly identified or contemplated herein or in any other Loan Document, and
no Loan Party is party thereto, or, in the case of Applicable Law, such
Applicable Law is not applicable to any Loan Party, or, in the case of any such
Lien, such Lien does not attach to any property of the Borrower, (B) that could
not reasonably be
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<PAGE>
expected to expose any Agent or Bank to any liability, loss, cost or expense and
(C) that, either alone or in conjunction with all other such violations,
breaches or defaults, could not have a Materially Adverse Effect on (x) the
Borrower and the Consolidated Subsidiaries taken as a whole, (y) any Loan
Document or (z) the Collateral. There are no material agreements to which
Comcast, the Borrower or any of their respective Subsidiaries is a party
relating to the acquisitions contemplated by the Acquisition Documents, other
than the Acquisition Documents.
Section 3.04. Litigation. (a) Except as set forth on Schedule 3.04
---------- -------------
or as set forth in a notice to the Administrative Agent with sufficient copies
for each of the Banks delivered not less than ten Business Days prior to each
succeeding date on which this representation and warranty is being made or
deemed made, there are not, in any court or before any arbitrator of any kind or
before or by any governmental or non-governmental body, any actions, suits or
proceedings (or any material development therein) pending or, to the knowledge
of the Borrower and the Subsidiaries, threatened against or in any other way
relating to or affecting (i) the Borrower or any Subsidiary or any of their
respective businesses or properties, (ii) any Loan Document to which the
Borrower or any Subsidiary is a party or (iii) the Collateral, except actions,
suits or proceedings that may affect the cable television industry generally but
with respect to which neither the Borrower or any Subsidiary nor any other Loan
Party is a party or that, if adversely determined, would not, singly or in the
aggregate, have a Materially Adverse Effect on (A) the Borrower and the
Consolidated Subsidiaries taken as a whole, (B) any Loan Document or (C) the
Collateral; provided, that when the representation and warranty contained in
--------
this Section 3.04(a) is made on the Agreement Date and the Closing Date, it is
deemed made to the knowledge of the Borrower on such dates.
(b) There are not, in any court or before any arbitrator of any kind
or before or by any governmental or non-governmental body, any actions, suits or
proceedings pending or, to the knowledge of the Borrower and the Subsidiaries,
threatened against or in any other way relating to or affecting (i) the Borrower
or any Subsidiary or any of their respective businesses or properties, (ii) any
Loan Document to which the Borrower or any Subsidiary is a party or (iii) the
Collateral (except actions, suits or proceedings that may affect the cable
television industry generally but with respect to which neither the Borrower or
any Subsidiary nor any other Loan Party is a party) with respect to which there
is a reasonable probability of a determination adverse to the interests of the
Borrower or any Subsidiary that, if adversely determined, would, singly or in
the aggregate, have a Materially Adverse Effect on (A) the Borrower and the
Consolidated Subsidiaries taken as a whole, (B) any Loan Document or (C) the
Collateral.
Section 3.05. Burdensome Provisions. As of the Agreement Date and as
---------------------
of the Closing Date, neither the Borrower
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<PAGE>
nor any Subsidiary is a party to or bound by any Contract or Applicable Law
(other than Applicable Law affecting the cable television industry generally),
compliance with which might, insofar as can reasonably be foreseen by the
Borrower, have a Materially Adverse Effect on (a) the Borrower and the
Consolidated Subsidiaries taken as a whole, (b) any Loan Document to which the
Borrower or any Subsidiary is a party or (c) the Collateral.
Section 3.06. No Adverse Change or Event. Except for events
--------------------------
affecting the cable television industry generally, since December 31, 1993, no
change in the business, assets, Liabilities, financial condition or results of
operations of the Borrower or any Subsidiary has occurred, and no event has
occurred or, in the case of events anticipated by the Borrower to have occurred
prior to the making or deemed making of this representation and warranty, failed
to occur, that has had or might have, insofar as can reasonably be foreseen by
the Borrower, either alone or in conjunction with all other such changes, events
and failures, a Materially Adverse Effect on (a) the Borrower and the
Consolidated Subsidiaries taken as a whole, (b) any Loan Document to which the
Borrower or any Subsidiary is a party or (c) the Collateral. Such an adverse
change may have occurred, and such an event may have occurred or failed to
occur, within the meaning of this Section 3.06 at any particular time without
regard to whether such change, event or failure constitutes a Default or whether
any other Default shall have occurred and be continuing.
Section 3.07. Taxes. Each of the Borrower and the Subsidiaries has
-----
filed (either directly or indirectly through the Affiliate of the Borrower or
such Subsidiary responsible (whether as common parent or agent of a filing group
or otherwise) under Applicable Law for such filing) all United States Federal
income tax returns and all other material Tax returns that are required to be
filed by such Person and have paid (either directly or indirectly through the
Affiliate of the Borrower or such Subsidiary responsible (whether as common
parent or agent of a filing group or otherwise) under Applicable Law for such
payment) all Taxes reflected as being due pursuant to such returns and all Taxes
due pursuant to any assessment received by the Borrower or any of its Affiliates
and relating to the Borrower or any Subsidiary, except such Taxes, if any, as
are being contested in good faith by appropriate proceedings, if any, and as to
which adequate reserves have been provided and except, with respect to such
Subsidiaries, as at the Agreement Date and the Closing Date, for such tax
returns the failure to file and Taxes the failure to pay of which would not have
a Materially Adverse Effect on (a) the Borrower and the Consolidated
Subsidiaries taken as a whole, (b) any Loan Document to which the Borrower or
any Subsidiary is a party or (c) the Collateral. The charges, accruals and
reserves on the books of the Borrower and each of the Subsidiaries in respect of
Taxes and other governmental charges are, as of the Agreement Date and the
Closing Date, to the
-20-
<PAGE>
knowledge of the Borrower, and at all other times, in the opinion of the
Borrower, adequate. Other than the Tax Sharing Agreement, there is in effect on
the Agreement Date, after giving effect to the acquisitions contemplated in the
Acquisition Documents, no tax sharing, tax allocation or similar agreement to
which the Borrower or any Subsidiary is a party.
Section 3.08. No Default. Neither the Borrower nor any of the
----------
Subsidiaries is in default in the payment or performance or observance of any
Contract to which it is a party or by which it or its properties or assets may
be bound that, individually or together with all other such defaults, could have
a Materially Adverse Effect on (a) the Borrower and the Consolidated
Subsidiaries taken as a whole, (b) any Loan Document to which the Borrower or
any Subsidiary is a party or (c) the Collateral.
Section 3.09. Franchises. To the knowledge of the Borrower, set
----------
forth in Schedule 3.09 is a complete and correct list of all of the Franchises
-------------
granted or issued by any state, county, city, town, village or other local
governmental authority and owned by the Borrower and each of the Subsidiaries on
the Agreement Date, setting forth the respective system names, territories and
expiration dates and each such Franchise is in full force and effect on the
Agreement Date. No default has occurred that is continuing under or in respect
of any of the provisions of any such Franchise other than defaults the
consequences of which would not have a Materially Adverse Effect on (a) the
Borrower and the Subsidiaries taken as a whole, (b) any Loan Document to which
the Borrower or any Subsidiary is a party or (c) the Collateral. Except as set
forth in Schedule 3.09, no Governmental Approval is required to enable the
-------------
Borrower or any of the Subsidiaries to own and operate any such Franchise other
than Governmental Approvals that have been obtained and are in full force and
effect or the absence of which would not have a Materially Adverse Effect on (i)
the Borrower and the Subsidiaries taken as a whole, (ii) any Loan Document to
which the Borrower or any Subsidiary is a party or (iii) the Collateral. Except
as set forth in Schedule 3.09, neither the Borrower nor any of the Subsidiaries
-------------
has received notice from the granting body or any other governmental authority
with respect to any breach of any covenant under, or any default with respect
to, any Franchise other than breaches or defaults the consequences of which
would not have a Materially Adverse Effect on (x) the Borrower and the
Subsidiaries taken as a whole, (y) any Loan Document to which the Borrower or
any Subsidiary is a party or (z) the Collateral.
Section 3.10. Not an Investment Company. Neither the Borrower nor
-------------------------
any of the Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940.
Section 3.11. Hazardous Materials. The Borrower and each of the
-------------------
Subsidiaries have obtained all permits, licenses and
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<PAGE>
other authorizations which are required under all Environmental Laws, except to
the extent failure to have any such permit, license or authorization would not
have a Materially Adverse Effect on (a) the Borrower and the Subsidiaries taken
as a whole, (b) any Loan Document to which the Borrower or any Subsidiary is a
party or (c) the Collateral. The Borrower and each of the Subsidiaries are in
compliance with the terms and conditions of all such permits, licenses and
authorizations, and are also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
failure to comply would not have a Materially Adverse Effect on (i) the Borrower
and the Subsidiaries taken as a whole, (ii) any Loan Document to which the
Borrower or any Subsidiary is a party or (iii) the Collateral. In addition, to
the knowledge of the Borrower, no notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Borrower or any of the Subsidiaries to have any permit, license
or authorization required in connection with the conduct of the business of the
Borrower or any of the Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, discharge, disposal or "release"
(as such term is defined in 42 U.S.C. (S) 9601(22)) of Hazardous Materials
generated by the Borrower or any of the Subsidiaries, the consequences of any of
which would have a Materially Adverse Effect on (x) the Borrower and the
Subsidiaries taken as a whole, (y) any Loan Document to which the Borrower or
any Subsidiary is a party or (z) the Collateral. To the knowledge of the
Borrower, there have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or that are in the possession of
the Borrower or any of the Subsidiaries in relation to any property or facility
now or previously owned or leased by the Borrower or any of the Subsidiaries
that have not been made available to the Banks and that relate to or contain any
information that could, if known, lead to any of the items referred to in the
preceding sentence having the consequences set forth in the preceding sentence.
Section 3.12. FCC and Copyright Matters. Each of the Borrower and
-------------------------
the Subsidiaries has duly and timely filed all cable television registration
statements and other filings that are required to be filed by them under the
Communications Act of 1934 and all other Applicable Law pertaining to the cable
television industry and is in all material respects in substantial compliance
with such Act and other Applicable Law, including the rules and regulations of
the FCC relating to the carriage of television signals, except to the extent
that the failure to duly and timely file any such registration statement or
filing, or
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<PAGE>
failure to comply with such Act or other Applicable Law, would not have a
Materially Adverse Effect on (a) the Borrower and the Subsidiaries taken as a
whole, (b) any Loan Document to which the Borrower or any Subsidiary is a party
or (c) the Collateral. The Borrower and each of the Subsidiaries has recorded
or deposited with and paid to the United States Copyright Office, the Register
of Copyrights and the Copyright Royalty Tribunal all notices, statements of
account, royalty fees and other documents and instruments required under the
Copyright Act, except to the extent that the failure to record, deposit or pay
such notices, statements of accounts, royalty fees and other documents and
instruments would not have a Materially Adverse Effect on (i) the Borrower and
the Subsidiaries taken as a whole, (ii) any Loan Document to which the Borrower
or any Subsidiary is a party or (iii) the Collateral. Neither the Borrower nor
any of the Subsidiaries is liable to any Person for copyright infringement under
the Copyright Act as a result of its business operations, except to the extent
that any such liability would not have a Materially Adverse Effect on (x) the
Borrower and the Subsidiaries taken as whole, (y) any Loan Document to which the
Borrower or any Subsidiary is a party or (z) the Collateral.
Section 3.13. Senior Obligations. The obligations of the Borrower
------------------
under the Borrower Loan Documents and under any Interest Rate Protection
Agreement entered into with any Bank or any Affiliate of a Bank constitute
"Senior Obligations" within the meaning and pursuant to the terms of the
Affiliate Subordination Agreement with respect to Affiliate Subordinated
Obligations.
Section 3.14. Benefit Plans. As of the Agreement Date, neither the
-------------
Borrower nor any Subsidiary has any Existing Benefit Plans other than those
listed on Schedule 3.14.
-------------
Section 3.15. Security Interest. When the Administrative Agent as
-----------------
the Secured Party has taken possession on behalf of the Principals (as defined
in the Pledge Agreements) of the certificates representing the Pledged
Securities, the Security Interest will constitute a valid and perfected security
interest in the Pledged Securities and the Pledged Securities will not be
subject to any other Lien.
ARTICLE 4
CERTAIN COVENANTS
-----------------
From the Agreement Date and until the Repayment Date,
A. The Borrower shall and shall cause each Subsidiary to:
-----------------------------------------------------
Section 4.01. Preservation of Existence and Properties, Scope of
--------------------------------------------------
Business, Compliance with Law, Payment of Taxes and Claims, Preservation of
- - - ---------------------------------------------------------------------------
Enforceability. (a) Preserve
- - - --------------
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<PAGE>
and maintain its corporate or partnership existence, as the case may be (except
as permitted by Section 4.07 and except for liquidation or dissolution of any
Subsidiary in connection with or following the sale or other disposition of all
or substantially all of the assets of such Subsidiary in a disposition permitted
under Section 4.08), and all of its other franchises, licenses, rights and
privileges, including the Franchises, (b) preserve, protect and obtain all
Intellectual Property, and preserve and maintain in good repair, working order
and condition all other properties, required for the conduct of its business,
(c) comply with Applicable Law, (d) pay or discharge when due all Taxes and all
Liabilities that are or might become a Lien on any of its properties and (e)
take all action and obtain all consents and Governmental Approvals required so
that its obligations under the Loan Documents will at all times be legal, valid
and binding and enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally; provided, however, that this Section 4.01 (other
-------- -------
than clause (a) above (insofar as it requires the Borrower to preserve its
corporate or partnership existence, as the case may be) and clause (e) above)
shall not apply in any circumstance where noncompliance, together with all other
noncompliances with this Section 4.01, will not have a Materially Adverse Effect
on (i) the Borrower and the Consolidated Subsidiaries taken as a whole, (ii) any
Loan Document to which the Borrower or any Subsidiary is a party or (iii) the
Collateral.
Section 4.02. Insurance. Maintain insurance with responsible
---------
insurance companies against at least such risks and in at least such amounts (a)
as is customarily maintained by similar businesses or (b) as may be required by
Applicable Law, except, in the case of clause (b) above, to the extent that the
failure to maintain such insurance could not have a Materially Adverse Effect on
(i) the Borrower and the Subsidiaries taken as a whole, (ii) any Loan Document
to which the Borrower or any Subsidiary is a party or (iii) the Collateral.
Whether or not customarily maintained by similar businesses, the Borrower shall,
and shall cause the Subsidiaries to, maintain business interruption insurance.
Section 4.03. Use of Proceeds. Use the proceeds of the Loans only to
---------------
(a) repay in full the Predecessor Indebtedness and pay transaction costs in
connection herewith, (b) consummate the acquisition transaction contemplated by
the Acquisition Documents, (c) make acquisitions to which Section 4.07 is by its
express terms inapplicable, (d) fund working capital and capital expenditure
requirements and other general corporate purposes, (e) subject to Section 4.06,
make Restricted Payments and (f) subject to Section 4.21, make payments of
principal and interest in respect of Senior Subordinated Indebtedness. None of
the proceeds of any of the Loans shall be used by the Borrower or any
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<PAGE>
Subsidiary to purchase or carry, or to reduce or retire or refinance any credit
incurred by the Borrower or any Subsidiary to purchase or carry, any margin
stock (within the meaning of Regulations U and X of the Board of Governors of
the Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any margin stock. If requested by any Bank, the Borrower
shall complete and sign Part I of a copy of Federal Reserve Form U-1 referred to
in Regulation U of the Board of Governors of the Federal Reserve System and
deliver such copy to such Bank.
B. The Borrower shall not, and shall not permit or suffer any Subsidiary
---------------------------------------------------------------------
to, directly or indirectly:
- - - --------------------------
Section 4.04. Guaranties. Be obligated, at any time, in respect of
----------
any Guaranty, except that this Section 4.04 shall not apply to (a) Existing
Guaranties and (b) Permitted Guaranties.
Section 4.05. Liens. Permit to exist, at any time, any Lien upon any
-----
of its properties or assets of any character, whether now owned or hereafter
acquired, or upon any income or profits therefrom, except that this Section 4.05
shall not apply to Permitted Liens; provided, however, that if, notwithstanding
-------- -------
this Section 4.05, any Lien to which this Section 4.05 is applicable shall be
created or arise, the Liabilities of the Loan Parties under the Loan Documents
shall, to the extent such Lien attaches to any asset that does not constitute
Collateral or to any asset with respect to which such Lien would be prior to the
Security Interest, automatically be secured by such Lien to the full extent
permitted by Applicable Law equally and ratably with the other Liabilities
secured thereby, and the holder of such other Liabilities, by accepting such
Lien, shall be deemed to have agreed thereto and to share with the Banks, on
that basis, the proceeds of such Lien, whether or not the Banks' security
interest shall be perfected; provided further, however, that notwithstanding
-------- ------- -------
such equal and ratable securing and sharing, the existence of such Lien shall
constitute a default by the Borrower in the performance or observance of this
Section 4.05.
Section 4.06. Restricted Payments. Make or declare or otherwise
-------------------
become obligated to make any Restricted Payment, except that, so long as, at
both the time of the declaration or other incurrence, if any, of any such
Restricted Payment, and the time of the making thereof, and immediately after
giving effect thereto, no Default shall have occurred and be continuing, this
Section 4.06 shall not apply to (a) the distribution of the Capital Securities
issued by MH Lightnet or MH Lightnet of Florida, (b) any Restricted Payment the
proceeds of which are used to pay Permitted Parent Reimbursements and (c) any
other Restricted Payment so long as the Leverage Ratio is less than 5.00 to 1
both before and after giving effect to such other Restricted Payment and the
Borrower shall have made the prepayment of the Loans pursuant to Section 1.05(b)
required to
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<PAGE>
be made upon the reduction of the Total Commitment pursuant to Section 1.07(c)
resulting from such other Restricted Payment.
Section 4.07. Merger or Consolidation; Acquisitions. Merge or
-------------------------------------
consolidate with any Person, or acquire any assets or business from or Capital
Securities issued by any Person, except that, if after giving effect thereto no
Default would exist, this Section 4.07 shall not apply to (a) (i) any merger or
consolidation of the Borrower with any one or more Subsidiaries or with any
Person acquired as provided in clause (d) below, provided that the Borrower
--------
shall be the continuing Person or (ii) any merger or consolidation of the
Borrower with any Person so long as the sole purpose of such merger or
consolidation was to change the domicile of the Borrower, the Person into which
the Borrower merged or with which it consolidated was specially formed for such
purpose and had at no time conducted any business or operations and such Person
shall have assumed in writing the obligations of the Borrower under the Loan
Documents in a manner reasonably satisfactory to the Required Agents, (b) any
merger or consolidation of any Subsidiary with any one or more other
Subsidiaries or with any Person acquired as provided in clause (d) below, (c)
any acquisition of assets in the ordinary course of business or contemplated by
Section 4.08(c) and (d) any acquisition (whether effected by merger,
consolidation, acquisition of Capital Securities or otherwise) of one or more
cable television systems or related communications businesses which is in
exchange for cable television systems or related communications businesses as
provided in Section 4.08(f)(ii) or the purchase price of which is funded with
any one or any combination of the following sources, subject to any condition or
restriction set forth below with respect thereto:
(i) the amount of outstanding Junior Subordinated Indebtedness (other
than Junior Subordinated Indebtedness applied or deemed applied
as set forth in Section 6.03 or constituting deferred programming
expenses);
(ii) the amount of cash equity contributions received by the Borrower
after the Agreement Date (other than from a Subsidiary);
(iii) so long as such acquisition is from any Person other than
an Affiliate, the proceeds of sales (or the cash component of
exchanges) of assets referred to in Section 4.08(f);
(iv) so long as the Leverage Ratio is less than 5.50 to 1 both before
and after giving effect to such acquisition, the proceeds of
Loans and/or Indebtedness incurred pursuant to Section 4.09(e),
so long as no more than $50,000,000 of proceeds of Loans is used
for any one acquisition and no more than $100,000,000 of proceeds
of Loans is used for
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<PAGE>
all acquisitions (including in each case any such proceeds used
pursuant to clause (vi) below);
(v) so long as the Leverage Ratio is less than 5.00 to 1 both before
and after giving effect to such acquisition, the amount of Excess
Cash Flow for the most recently ended fiscal year of the Borrower
less any portion of such Excess Cash Flow previously used to make
acquisitions; and
(vi) so long as the Leverage Ratio is less than 6.50 to 1 both before
and after giving effect to such acquisition and such acquisition
is an acquisition of a cable television system or systems that
are substantially contiguous to one or more cable television
systems owned or controlled by Comcast or any Subsidiary of
Comcast, the proceeds of Loans, the proceeds of Indebtedness
incurred pursuant to Section 4.09(e) and/or Excess Cash Flow, not
in excess of $35,000,000 in the aggregate;
provided, however, that, in the case of clause (d), the Borrower shall have
- - - -------- -------
furnished to the Banks, promptly upon consummation of each such acquisition
involving total consideration in excess of $10,000,000, financial statements,
pro forma projections and other information relating thereto satisfactory in
form and detail to the Required Agents demonstrating pro forma compliance with
the terms of this Agreement through the Commitment Termination Date and that, in
the event that any such acquisition is from an Affiliate, the Board of Directors
of the Borrower shall have determined in its good faith judgment that the amount
paid was not in excess of the fair market value of the assets acquired.
Section 4.08. Disposition of Assets. Sell, lease, license, transfer
---------------------
or otherwise dispose of any asset or any interest therein, except that this
Section 4.08 shall not apply to (a) any disposition of inventory in the ordinary
course of business, (b) any disposition of any obsolete or retired property not
used or required in its business, (c) any disposition of any asset or any
interest therein by a Subsidiary to the Borrower or a Wholly Owned Subsidiary or
any disposition of any asset or any interest therein by the Borrower to a Wholly
Owned Subsidiary, (d) any sale or assignment of delinquent accounts receivable
or other trade receivables (or notes evidencing such receivables) to a
collection agency or similar service in the ordinary course of business, (e) any
transaction to which any of the other provisions of this Agreement (other than
Section 4.10) is by its express terms inapplicable and (f) any other
disposition, so long as no Default shall have occurred and be continuing
immediately prior to or after giving effect to such disposition and
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<PAGE>
(i) such disposition is a sale to any Person for cash in an
amount not less than the fair market value of the assets sold net of the
liabilities assumed, as determined in the good faith judgment of the Board
of Directors of the Borrower or the applicable Subsidiary, and (A) unless
the Required Agents shall have otherwise consented in writing, the Cash
Flow Percentage attributable to such assets together with the Cash Flow
Percentage of all other assets sold or exchanged by the Borrower and its
Subsidiaries pursuant to this clause (i) or clause (ii) below within the
prior twelve calendar month period (or, if shorter, the period from the
Closing Date) does not exceed 10% and (B) the Cash Flow Percentage
attributable to such assets together with the Cash Flow Percentage
(determined, with respect to prior sales or exchanges, at the time of each
such sale or exchange) of all assets sold or exchanged by the Borrower and
its Subsidiaries pursuant to this clause (i) or clause (ii) below since the
Closing Date does not exceed 25% plus the lesser of (1) the portion of the
Cash Flow Percentage attributable to the assets sold or exchanged pursuant
to transactions consented to by the Required Agents pursuant to clause (A)
above that is in excess of 10% and (2) 7.5%, and (C) the Borrower shall
have furnished to the Banks, not later than the tenth Business Day
preceding the date of any such disposition wherein the Cash Flow Percentage
attributable to the assets sold (including the portion of assets exchanged,
as provided in clause (ii) below, to which the cash component, if any, of
any such exchange is attributable) is greater than 5%, a certificate of a
Responsible Officer of the Borrower substantially in the form of Schedule
--------
4.08(f) and, promptly upon consummation of each such disposition (without
-------
regard to such Cash Flow Percentage), other information relating thereto in
form and content reasonably satisfactory to the Required Agents, or
(ii) such disposition is an exchange, with any Person, of assets
exchanged by the Borrower or applicable Subsidiary comprising one or more
cable television systems or related communications businesses or the stock
of a Person owning such a system or systems for assets comprising one or
more other cable television systems or related communications businesses of
a similar nature and of equal or greater value, as determined in the good
faith judgment of the Board of Directors of the Borrower or the applicable
Subsidiary, and (A) unless the Required Agents shall have otherwise
consented in writing, the Cash Flow Percentage attributable to such assets
exchanged by the Borrower or applicable Subsidiary together with the Cash
Flow Percentage attributable to all other assets exchanged or sold by the
Borrower and its Subsidiaries pursuant to this clause (ii) or clause (i)
above within the prior twelve calendar month period (or, if shorter, the
period from the Closing Date) does not exceed 10%, (B) the Cash Flow
Percentage attributable to such assets together with the Cash Flow
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<PAGE>
Percentage (determined, with respect to prior exchanges, at the time of
each such exchange) attributable to all other assets exchanged or sold by
the Borrower and its Subsidiaries pursuant to this clause (ii) or clause
(i) above since the Closing Date does not exceed 25% plus the lesser of (1)
the portion of the Cash Flow Percentage attributable to the assets sold or
exchanged pursuant to transactions consented to by the Required Agents
pursuant to clause (A) above that is in excess of 10% and (2) 7.5%, and (C)
the Borrower shall have furnished to the Banks, not later than the tenth
Business Day preceding the date of any such exchange wherein the Cash Flow
Percentage attributable to the assets exchanged (which shall include, in
this case, the portion of assets exchanged to which the cash component, if
any, of such exchange is attributable) is greater than 5%, a certificate of
a Responsible Officer of the Borrower substantially in the form of Schedule
--------
4.08(f) and, promptly upon consummation of each such exchange (without
-------
regard to such Cash Flow Percentage), financial statements and other
information relating thereto in form and content reasonably satisfactory to
the Required Agents;
provided that, in the case of any such sale to or exchange with an Affiliate, in
- - - --------
addition to the requirements set forth above in clause (i) and (ii), (y) unless
the Required Agents shall have otherwise consented in writing, the Cash Flow
Percentage attributable to the assets sold or exchanged, together with the Cash
Flow Percentage of all other assets sold to or exchanged with Affiliates since
the Closing Date, shall not exceed 5%, and (z) such Board of Directors shall
have determined, in its good faith judgment, that such sale or exchange is for
consideration or in exchange for assets reflecting the fair market value of the
assets sold or exchanged, and the Borrower shall have furnished to the Banks,
not later than the fifteenth Business Day preceding the date of such sale or
exchange, a fairness opinion with respect to such sale or exchange from a
recognized investment bank or cable television broker, as the case may be,
reasonably satisfactory in form and content to the Required Agents.
Section 4.09. Indebtedness. Incur, create, assume or suffer to exist
------------
any Indebtedness, except that this Section 4.09 shall not apply to (a)
Indebtedness under the Loan Documents, (b) Junior Subordinated Indebtedness, (c)
Senior Subordinated Indebtedness, (d) Indebtedness to which Section 4.14 is by
its express terms inapplicable by virtue of clause (f) thereof, (e) other
Indebtedness, in an aggregate outstanding principal amount not in excess of
$50,000,000 at any time and (f) assumptions by certain Subsidiaries of portions
of the Indebtedness of the Borrower described in clause (a) of this Section
4.09, so long as such assumptions (i) are effected pursuant to assumption
agreements in the forms furnished to the Arranging Agents and the Managing
Agents on the Closing Date and (ii) shall not constitute a release in whole or
in part of the Borrower from its obligations in respect thereof.
-29-
<PAGE>
Section 4.10. Transactions with Affiliates. (a) Effect any
----------------------------
transaction with any Affiliate (other than the Borrower or any Subsidiary) on a
basis less favorable than would at the time be obtainable for a comparable
transaction in arms-length dealing with an unrelated third party, except that
this Section 4.10 shall not apply to (i) transactions to which this Agreement is
by its express terms inapplicable, (ii) the Management Agreement and (iii) the
Tax Sharing Agreement.
(b) Incur, create, assume or suffer to exist any obligation or other
Liability (other than any such obligation or Liability arising under Applicable
Law upon the declaration of any Restricted Payment permitted under Section 4.06)
owed by the Borrower or any Subsidiary to Comcast, CalPERS or any of their
respective Affiliates in respect of any repurchase, redemption or similar
arrangement with respect to the direct or indirect ownership interest of any
such Person in the Borrower or any such Subsidiary.
Section 4.11. Management. (a) Management Agreement. Fail at any
---------- --------------------
time to keep the Management Agreement in full force and effect (payment under
which shall be the sole and exclusive payment by the Borrower and the
Subsidiaries to Comcast or any Subsidiary of Comcast or any other Person for the
supervision and management of the Borrower and the Subsidiaries (other than
amounts paid in reimbursement of out-of-pocket costs and expenses incurred on
behalf of the Borrower or the Subsidiaries)) or permit any Persons other than
Comcast or any Subsidiary of Comcast to supervise or manage the day-to-day
business of the Borrower and the Subsidiaries.
(b) Management Fees. Make payments in respect of, or accrue,
---------------
Management Fees at any time other than Permitted Management Fees. For purposes
of this Agreement, "Permitted Management Fees" means, at any time during any
-------------------------
fiscal year of the Borrower, the lesser of (i) the maximum amount permitted
under any other agreement applicable thereto and (ii) (A) Management Fees in an
amount equal to 6% of Total Revenue at such time, which may be paid in cash or
accrued to the extent not currently paid in cash as provided below ("Current
-------
Management Fees"), and (B) the accrued and unpaid portion of Management Fees
- - - ---------------
from prior fiscal years ("Accrued Management Fees"). When the Leverage Ratio is
-----------------------
greater than or equal to 5.50 to 1, (x) the portion of Current Management Fees
paid in cash at such time, together with the aggregate amount of all other
Current Management Fees paid during such fiscal year, shall not exceed 3% of
Total Revenues at such time and (y) no Accrued Management Fees shall be paid.
When the Leverage Ratio is less than 5.50 to 1, (1) Current Management Fees paid
in cash at such time, together with the aggregate amount of all other Current
Management Fees paid during such fiscal year, shall not exceed 6% of Total
Revenue at such time and (2) Accrued Management Fees may be paid at such time to
the extent the amount of such proposed payment, together with all other payments
of Accrued Management Fees during the same fiscal
-30-
<PAGE>
quarter of the Borrower, would not, if deducted from Annualized Cash Flow at
such time (to the extent that such payments had not been deducted from net
income in determining such Annualized Cash Flow), result in the Leverage Ratio
at such time being greater than 5.50 to 1. Notwithstanding the foregoing,
Permitted Management Fees shall not be paid in cash at any time a Default exists
or, immediately after giving effect thereto, would exist. For purposes of this
Section 4.11, "Total Revenue" means, at any time during any fiscal year of the
-------------
Borrower, consolidated gross operating revenue of the Borrower and the
Subsidiaries (including revenues arising from second outlets and remotes, pay-
per-view revenues and advertising revenues and installation fees, but excluding
interest income and unusual or extraordinary items) during the period commencing
with the first day of such fiscal year and ending at such time.
Section 4.12. Limitation on Restrictive Covenants. Permit to exist,
-----------------------------------
at any time, any consensual restriction limiting the ability (whether by
covenant, event of default, subordination or otherwise) of any Subsidiary to (a)
pay dividends or make any other distributions on shares of its Capital
Securities held by the Borrower or any other Subsidiary, (b) pay any obligation
owed to the Borrower or any other Subsidiary, (c) make any loans or advances to
or investments in the Borrower or in any other Subsidiary, (d) transfer any of
its property or assets (other than property or assets subject to Permitted
Liens) to the Borrower or any other Subsidiary or (e) create any Lien upon its
property or assets (other than property or assets subject to Permitted Liens)
whether now owned or hereafter acquired or upon any income or profits therefrom,
except that this Section 4.12 shall not apply to Permitted Restrictive Covenants
or, in the case of clause (d) and (e) only, to limitations or restrictions
contained in Franchises.
Section 4.13. Issuance or Disposition of Capital Securities. Issue
---------------------------------------------
any of its Capital Securities or sell, transfer or otherwise dispose of any
Capital Securities issued by any Subsidiary, except that this Section 4.13 shall
not apply to (a) any issuance by a Subsidiary of any of its Capital Securities
to the Borrower or a Wholly Owned Subsidiary, (b) any issuance by a Subsidiary
of any of its Capital Securities to the holders of the common stock or other
ownership interests of such Subsidiary made pro rata to the relative amounts of
such common stock or other ownership interests, respectively, held by such
holders, (c) any disposition by the Borrower or any Subsidiary of any Capital
Securities issued by a Subsidiary (i) to the Borrower or a Wholly Owned
Subsidiary or (ii) pursuant to any disposition permitted under Section 4.08 and
(d) any issuance by the Borrower of its Capital Securities to Comcast
Communications.
Section 4.14. Investments. Purchase or acquire obligations or
-----------
Capital Securities issued by, or any other interest in, or make loans to, any
Person, except that this Section 4.14 shall not apply to any such obligation,
Capital
-31-
<PAGE>
Security, interest or loan consisting of (a) obligations issued or guaranteed by
the United States of America with a remaining maturity not exceeding one year,
(b) commercial paper with maturities of not more than 270 days and a published
rating of not less than A-1 by Standard & Poor's Ratings Group ("S&P") or P-1 by
Moody's Investors Service, Inc. ("Moody's") (or the equivalent rating), (c)
certificates of time deposit and bankers' acceptances having maturities of not
more than one year of any Bank or other commercial bank if (i) such bank has a
combined capital and surplus of at least $100,000,000 and (ii) its unsecured
long-term debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A-or A3 (or the equivalent rating) by a
nationally recognized investment rating agency, (d) repurchase agreements with
any Bank for periods not in excess of 180 days fully collateralized by
securities constituting obligations issued or guaranteed by the United States of
America, (e) notes and other instruments that are exempt from Federal income
taxation with a remaining maturity not exceeding one year, provided that such
--------
notes and other instruments are rated in the highest safety category (MIG1 or
equivalent) by Moody's or S&P, (f) stock or interests in, or loans or advances
to, the Borrower or any of the Consolidated Subsidiaries, provided that no such
--------
loans or advances to a Consolidated Subsidiary shall remain outstanding after
any sale, exchange or disposition of such Subsidiary, (g) acquisitions referred
to in Section 4.07, (h) Interest Rate Protection Agreements having a designated
notional amount not exceeding, at the time entered into, 100% of the Total
Commitment then in effect, having a maturity not later than the Commitment
Termination Date, (i) Existing Investments, (j) loans to the Persons established
to own, directly or indirectly, the capital stock issued by the Borrower, the
proceeds of which loans are used to pay Permitted Parent Reimbursements, (k)
Indebtedness in a principal amount not in excess of $20,000,000 of the Don H.
Barden Revocable Trust owed to Barden Communications, Inc. and (l) other
investments at any time owned by the Borrower and the Subsidiaries and acquired
for an aggregate purchase price not in excess of $10,000,000.
C. The Borrower shall not:
----------------------
Section 4.15. Leverage Ratio. Permit the Leverage Ratio to be
--------------
greater than the following respective amounts at any time during the following
respective periods:
<TABLE>
<CAPTION>
Period Leverage Ratio
------ --------------
<S> <C>
Closing Date through December 31, 1995 6.90 to 1
January 1, 1996 through December 31, 1996 6.50 to 1
January 1, 1997 through December 31, 1997 6.00 to 1
January 1, 1998 through December 31, 1998 5.50 to 1
January 1, 1999 through December 31, 1999 5.00 to 1
January 1, 2000 and thereafter 4.75 to 1
</TABLE>
-32-
<PAGE>
Section 4.16. Interest Coverage Ratio. Permit the Interest Coverage
-----------------------
Ratio to be less than (a) 1.75 to 1 at any time during the period from the
Closing Date through December 31, 1996 and (b) 2.00 to 1 at any time thereafter.
Section 4.17. Pro Forma Debt Service Ratio. Permit the Pro Forma
----------------------------
Debt Service Ratio to be less than 1.05 to 1 as of the end of any fiscal quarter
of the Borrower.
Section 4.18. Interest Rate Protection Agreements. From and after
-----------------------------------
the date that is 180 days after the Closing Date, fail to maintain in full force
and effect Interest Rate Protection Agreements satisfactory in form and
substance to the Required Agents with respect to a notional principal amount
equal to or greater than 40% of the aggregate principal amount of the Loans
outstanding at such time and with weighted average lives of not less than two
years; provided, however, that the Borrower shall not be required to maintain
-------- -------
such Interest Rate Protection Agreements during any period in which the Leverage
Ratio is less than 5.00 to 1 at all times and was less than 5.00 to 1 at all
times during the two full fiscal quarters of the Borrower immediately preceding
such period.
Section 4.19. Cable Television Revenues. Permit at any time the
-------------------------
portion of consolidated gross revenues of the Borrower and its Consolidated
Subsidiaries derived from their cable television systems and related
communications businesses for any fiscal quarter of the Borrower to be less than
85% of the total consolidated gross revenues of the Borrower and its
Consolidated Subsidiaries for such fiscal quarter.
Section 4.20. Tax Sharing Agreement. Amend, modify, or waive any
---------------------
provision of, or terminate, the Tax Sharing Agreement or enter into, or allow
any Subsidiary to enter into, any other tax sharing, tax allocation or similar
agreement, if the result of such amendment, modification, waiver or agreement is
adverse to the Borrower or to the Subsidiaries taken as a whole.
Section 4.21. Senior Subordinated Indebtedness. Make payments of
--------------------------------
principal or interest in respect of Senior Subordinated Indebtedness, except
that this Section 4.21 shall not apply to any payments so long as (i) such
payments of principal are made with the proceeds of Loans made substantially
simultaneously therewith and (ii) such payments of interest are made on the
regularly-scheduled quarterly payment dates therefor or on the date of any
repayment of Senior Subordinated Indebtedness in an amount not in excess of the
amount accrued on the principal being repaid.
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<PAGE>
ARTICLE 5
FINANCIAL STATEMENTS AND INFORMATION
------------------------------------
Section 5.01. Financial Statements and Information to Be Furnished.
----------------------------------------------------
From the Agreement Date and until the Repayment Date, the Borrower shall furnish
to the Administrative Agent, with sufficient copies for each of the Banks (which
copies shall be promptly forwarded by the Administrative Agent to each of the
Banks):
(a) Quarterly Financial Statements; Officer's Certificate. As soon
-----------------------------------------------------
as available and in any event within 60 days after the close of each of the
first three quarterly accounting periods in each fiscal year of the Borrower,
commencing with the quarterly period ending March 31, 1995:
(i) a consolidated balance sheet of the Borrower and the
Consolidated Subsidiaries as at the end of such quarterly period and the
related consolidated statements of operations, retained earnings and cash
flows of the Borrower and the Consolidated Subsidiaries for such quarterly
period and for the elapsed portion of the fiscal year of the Borrower ended
with the last day of such quarterly period, setting forth in each case
(commencing with the financial statements with respect to the quarterly
period ending March 31, 1996) in comparative form the figures for the
corresponding periods of the previous fiscal year of the Borrower; and
(ii) a certificate with respect thereto of a Responsible Officer
of the Borrower in the form of Schedule 5.01(a).
----------------
(b) Year-End Financial Statements; Accountants' and Officer's
---------------------------------------------------------
Certificates. As soon as available and in any event within 120 days after the
- - - ------------
end of each fiscal year of the Borrower, commencing with the fiscal year ending
December 31, 1994:
(i) a consolidated balance sheet of the Borrower and the
Consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of operations, changes in retained earnings or net
equity and cash flows of the Borrower and the Consolidated Subsidiaries
and/or of the Borrower's Predecessor Company for such fiscal year, setting
forth in each case (commencing with the financial statements with respect
to the fiscal year ending December 31, 1995) in comparative form the
figures as at the end of and for the previous fiscal year of the Borrower
or the Borrower's Predecessor Company, as the case may be;
(ii) an audit report of Deloitte & Touche, or other independent
certified public accountants of recognized
-34-
<PAGE>
standing satisfactory to the Required Agents, on the consolidated financial
statements referred to in clause (i) above, which report shall state that
such consolidated financial statements fairly present the consolidated
financial condition and results of operations of the Borrower and the
Consolidated Subsidiaries or of the Borrower's Predecessor Company, as the
case may be, in conformity with Generally Accepted Accounting Principles as
at the end of and for such fiscal year and which report shall otherwise be
satisfactory in scope to the Required Agents;
(iii) a certificate of the accountants referred to in clause
(ii) above addressed to the Banks and in form satisfactory to the Required
Agents stating that such accountants have read this Agreement in making the
examination necessary for their report on such consolidated financial
statements and that nothing came to their attention that caused them to
believe that, as of the date of such financial statements, any Default
exists or, if such is not the case, specifying such Default and its nature,
when it occurred and whether it is continuing; provided, however, that the
-------- -------
furnishing of such certificate shall not require any expansion of the scope
of the audit conducted by such accountants; and
(iv) a certificate of a Responsible Officer of the Borrower in
the form of Schedule 5.01(b).
----------------
For purposes of this Section 5.01(b), "Borrower's Predecessor Company" shall
------------------------------
mean the Consolidated Subsidiaries of Maclean Hunter Inc. purchased by the
Borrower pursuant to the Acquisition Documents, including Barden Cablevision but
excluding MH Lightnet and MH Lightnet of Florida.
(c) Reports and Filings. (i) During any period while the most
-------------------
recent financial statements of the Borrower and the Consolidated Subsidiaries
delivered pursuant to Section 5.01(a) or (b) shall have been accompanied by a
qualified opinion of the Borrower's independent public accountants or by a
similar written statement of material inadequacy with respect to such financial
statements, then, promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or any Subsidiary, or the Board of Directors of the
Borrower or any Subsidiary, by such independent certified public accountants,
including any management letter; and (ii) together with the financial statements
next required to be furnished pursuant to Section 5.01(a) or (b), copies of all
financial statements and reports as Comcast, the Borrower or any Subsidiary
shall send to its stockholders (other than, in the case of the Borrower or any
Subsidiary, its Affiliates) and of all registration statements and all regular
or periodic reports that the Borrower or any Subsidiary shall file with the
Securities and Exchange Commission.
-35-
<PAGE>
(d) Requested Information. From time to time and with reasonable
---------------------
promptness upon request of any Bank, such Information regarding the Loan
Documents, the Loans or the business, assets, Liabilities, financial condition,
results of operations or business prospects of the Borrower and the Subsidiaries
as such Bank may reasonably request.
(e) Notice of Defaults and Other Matters. Prompt notice of: (i) any
------------------------------------
Event of Default, after a Responsible Officer of the Borrower shall have become
aware thereof, describing such Default and the action, if any, that the Borrower
is proposing to take with respect thereto, (ii) the occurrence or non-occurrence
of any change or event that would cause the Representation and Warranty
contained in Section 3.10 to be incorrect if made at such time, (iii) any event
or condition referred to in clauses (i) through (vii) of Section 6.01(h),
whether or not such event or condition shall constitute an Event of Default and
(iv) any material amendment to the certificate of incorporation or by-laws of
the Borrower.
(f) Subscriber Information. Together with the financial statements
----------------------
delivered pursuant to Section 5.01(a) and (b), a report with respect to Basic
Subscribers and other subscriber information in the form of Schedule 5.01(f).
----------------
For purposes of this Section 5.01(f), "Basic Subscribers" means, as of any date
-----------------
of determination thereof, the sum of (i) the total number of households
(exclusive of "additional outlets," as such term is commonly understood in the
cable television industry and also exclusive of customers billed on a bulk
billing or commercial account basis) subscribing on the last day of the fiscal
quarter of the Borrower ending on, or most recently ended prior to, such date to
receive basic or expanded basic service (as such terms are commonly understood
in the cable television industry) in the cable television systems of the
Borrower and the Subsidiaries and paying the standard monthly service fees and
charges imposed by the Borrower and the Subsidiaries, provided that such term
--------
shall not include any household whose account is more than ninety days past due
on the last day of the fiscal quarter of the Borrower ending on (or most
recently ended prior to) such date and (ii) the total number of equivalent
households served on a bulk billing or commercial account basis, which shall be
deemed to be equal to the quotient obtained by dividing (A) the total fees and
charges billed by the Borrower and the Subsidiaries during the fiscal quarter of
the Borrower and the Subsidiaries ending on, or most recently ended prior to,
such date on a bulk billing or commercial account basis by (B) the weighted
average standard monthly service fees and charges for basic and expanded basic
service (as such terms are commonly understood in the cable television industry)
that Basic Subscribers of the type described in clause (i) above were billed
during such fiscal quarter.
-36-
<PAGE>
Section 5.02. Accuracy of Financial Statements and Information.
------------------------------------------------
(a) Historical Financial Statements. The Borrower hereby represents
-------------------------------
and warrants that (i) Schedule 5.02(a) sets forth a complete and correct list of
----------------
the financial statements (other than projections) submitted by the Borrower to
the Banks in order to induce them to execute and deliver this Agreement, (ii)
(A) each of such financial statements which is audited is and (B) each of such
financial statements which is unaudited is, in all material respects, complete
and correct and presents fairly, in accordance with Generally Accepted
Accounting Principles (except as noted in the auditor's report thereon and
except for the absence of footnotes in unaudited financial statements and normal
year-end audit adjustments and any pro forma balance sheets), the financial
position of the Persons to which such financial statements relate as at their
respective dates and the results of operations, retained earnings or partners'
capital, as the case may be, and, as applicable, changes in financial position
or cash flows of such Persons for the respective periods to which such
statements relate and (iii) except as disclosed or reflected in such financial
statements, or otherwise set forth herein (including the Schedules hereto), as
at December 31, 1993, none of such Persons had any Liability, contingent or
otherwise, or any unrealized or anticipated loss, that, singly or in the
aggregate, has had or might have, insofar as can reasonably be foreseen by the
Borrower, a Materially Adverse Effect on the Borrower and the Consolidated
Subsidiaries taken as a whole.
(b) Future Financial Statements. The financial statements delivered
---------------------------
pursuant to Section 5.01(a) or (b) shall be complete and correct and present
fairly, in accordance with Generally Accepted Accounting Principles (except for
changes therein or departures therefrom, subject to satisfaction of the
exception set forth in Section 10.02), the consolidated financial position of
the Borrower and the Consolidated Subsidiaries as at their respective dates and
the consolidated results of operations, retained earnings and cash flows of the
Borrower and such Subsidiaries for the respective periods to which such
statements relate. The furnishing of the financial statements pursuant to
Section 5.01(a) and (b) shall constitute a representation and warranty by the
Borrower made on the date the same are furnished to the Administrative Agent to
that effect and to the further effect that, except as disclosed or reflected in
such financial statements, as at the respective dates thereof, neither the
Borrower nor any Subsidiary had any Liability, contingent or otherwise, or any
unrealized or anticipated loss, that, singly or in the aggregate, has had or
might have, insofar as can reasonably be foreseen by the Borrower, a Materially
Adverse Effect on the Borrower and the Consolidated Subsidiaries taken as a
whole.
-37-
<PAGE>
(c) Historical Information. The Borrower hereby represents and
----------------------
warrants that all Information (other than the financial statements listed on
Schedule 5.02(a) and financial projections) furnished to the Administrative
- - - ----------------
Agent or the Banks in writing by or on behalf of the Borrower or any Subsidiary
and concerning such Person, and not the cable television industry generally,
prior to the Agreement Date in connection with or pursuant to the Loan Documents
and the relationships established thereunder, at the time the same was so
furnished, but in the case of Information dated as of a prior date, as of such
date, when taken together (giving effect to Information so furnished that
corrects, supplements or supersedes Information previously furnished), (i) in
the case of any Information prepared in the ordinary course of business, was
correct in all material respects in the light of the purpose for which it was
prepared and (ii) in the case of any Information the preparation of which was
requested by any Bank, (A) did not contain any untrue statement of a material
fact and (B) did not omit to state a material fact necessary in order to make
the statements contained therein not misleading in the light of the
circumstances under which they were made. The Borrower hereby represents and
warrants that all financial projections furnished to the Administrative Agent or
the Banks in writing by or on behalf of the Borrower or any Subsidiary prior to
the Agreement Date, which are not to be construed as guaranties of the financial
performance of the Borrower and the Consolidated Subsidiaries for the period or
periods to which such projections relate, were based on reasonable estimates and
assumptions made by the Borrower in good faith and are the projections used in
the capitalization and financial planning of the Borrower and the Consolidated
Subsidiaries for such period or periods, and no fact is known to the Borrower on
the Agreement Date that has not been disclosed in writing to the Banks that
would result in any material change in any such projections or in any estimate
or assumption reflected therein.
(d) Future Information. All Information (other than financial
------------------
statements delivered pursuant to Section 5.01(a) or (b)) furnished to the
Administrative Agent or the Banks in writing by or on behalf of the Borrower or
any Subsidiary and concerning such Person, and not the cable television industry
generally, on or after the Agreement Date in connection with or pursuant to the
Loan Documents or in connection with or pursuant to any amendment or
modification of, or waiver of rights under, the Loan Documents, shall, at the
time the same is so furnished, but in the case of Information dated as of a
prior date, as of such date, when taken together (giving effect to Information
so furnished that corrects, supplements or supersedes Information previously so
furnished) (i) in the case of any Information prepared in the ordinary course of
business, be correct in the light of the purpose prepared and (ii) in the case
of any Information required by the terms of the Loan Documents or the
preparation of which was requested by any Bank, not contain any untrue statement
of a material fact, and not omit to state a
-38-
<PAGE>
material fact necessary in order to make the statements contained therein not
misleading in the light of the circumstances under which they were made, and the
furnishing of the same to the Administrative Agent or any Bank shall constitute
a representation and warranty by the Borrower made on the date the same are so
furnished to the effect specified in clauses (i) and (ii) above.
Section 5.03. Additional Covenants Relating to Disclosure. From the
-------------------------------------------
Agreement Date and until the Repayment Date, the Borrower shall and shall cause
each Subsidiary to:
(a) Accounting Methods and Financial Records. Maintain a system of
----------------------------------------
accounting, and keep such books, records and accounts (which shall be true and
complete) as may be required or necessary to permit (i) the preparation of
financial statements required to be delivered pursuant to Sections 5.01(a) and
(b) and (ii) the determination of the compliance of the Borrower and the
Subsidiaries with the terms of the Loan Documents.
(b) Fiscal Year. Unless the Required Agents shall otherwise consent,
-----------
maintain the same opening and closing dates for each fiscal year as for the
fiscal year reflected in the Base Financial Statements or, if the opening and
closing dates for the fiscal year reflected in the Base Financial Statements
were determined pursuant to a formula, determine the opening and closing dates
for each fiscal year pursuant to the same formula.
(c) Visits, Inspections and Discussions. Permit representatives
-----------------------------------
(whether or not officers or employees) of any Bank, from time to time, as often
as may be reasonably requested and upon reasonable notice, to (i) visit any of
its premises or property or any premises or property of others on which any of
its property or books and records (or books and records of others relating to
it) may be located, (ii) inspect, and verify the amount, character and condition
of, any of its property, (iii) review and make extracts from its books and
records and books and records of others relating to it and (iv) discuss its
affairs, finances and accounts with its officers, employees and, upon prior
notice to the Borrower, its independent public accountants (and by this
provision the Borrower authorizes such accountants to discuss the finances and
affairs of the Borrower and the Subsidiaries).
Section 5.04. Authorization of Third Parties to Deliver Information
-----------------------------------------------------
and Discuss Affairs. The Borrower hereby agrees that any opinion, report or
- - - -------------------
other Information delivered to the Administrative Agent, the Arranging Agents,
the Managing Agents or the Banks pursuant to the Loan Documents (including under
Article 2 or this Article 5) is hereby deemed to have been authorized and
directed by the Borrower to be delivered for the benefit of the Administrative
Agent, the Arranging Agents, the Managing Agents and the Banks.
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ARTICLE 6
DEFAULT
-------
Section 6.01. Events of Default. Each of the following shall
-----------------
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary, or within or without the control of the
Borrower, any Subsidiary or any other Loan Party, or be effected by operation of
law or pursuant to any judgment or order of any court or any order, rule or
regulation of any governmental or nongovernmental body:
(a) Any payment of principal of or interest on any of the Loans or
the Notes or of any fee shall not be made when and as due (whether at maturity,
upon mandatory prepayment, by reason of notice of prepayment or acceleration or
otherwise) and in accordance with the terms of this Agreement and the Notes and,
except in the case of payments of principal, such failure shall continue for
three Business Days;
(b) Any Loan Document Representation and Warranty shall at any time
prove to have been incorrect or misleading in any material respect when made;
(c) (i) The Borrower shall default in the performance or observance
of:
(A) any term, covenant, condition or agreement contained in
Section 4.01(a) (insofar as such Section requires the preservation of
the corporate existence of each of the Loan Parties), 4.01(e), 4.03
through 4.17, 4.19 through 4.21, 5.01(e)(i), 5.03(b) or 5.03(c) of
this Agreement; or
(B) any term, covenant, condition or agreement contained in
(x) this Agreement (other than a term, covenant, condition or
agreement a default in the performance or observance of which is
elsewhere in this Section 6.01 specifically dealt with) or (y) any
other Borrower Loan Document and, in the case of any such default
under clause (x) or (y), if capable of being remedied, such default
shall continue unremedied for a period of 30 days; or
(ii) Any Loan Party (other than the Borrower) shall default in
the performance or observance of:
(A) any term, covenant, condition or agreement contained in
(x) Sections 2 and 3 of the Pledge Agreement to which such Loan Party
is a party or (y) any other Loan Document to which such Loan Party is
a party, and, in the case of any such default under clause (y), if
capable of being remedied, such default
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<PAGE>
shall continue unremedied for the duration of any applicable cure
period provided for in such other Loan Document; or
(B) any term, covenant, condition or agreement contained in
the Pledge Agreement to which such Loan Party is a party (other than
Sections 2 and 3 thereof) and, if capable of being remedied, such
default shall continue unremedied for a period of 30 days;
(d) (i) The Borrower or any Subsidiary shall fail to pay, in
accordance with its terms and when due and payable, any of the principal of or
interest on any Indebtedness (other than the Loans and Affiliate Subordinated
Obligations) having a then outstanding principal amount in excess of $7,500,000,
(ii) the maturity of any such Indebtedness shall, in whole or in part, have been
accelerated, or any such Indebtedness shall, in whole or in part, have been
required to be prepaid or purchased prior to the stated maturity thereof, in
accordance with the provisions of any Contract evidencing, providing for the
creation of or concerning such Indebtedness or (iii) (A) any event shall have
occurred and be continuing that, after giving effect to any applicable waivers
or amendments, permits (or, with the passage of time or the giving of notice or
both, would permit) any holder or holders of such Indebtedness, any trustee or
agent acting on behalf of such holder or holders or any other Person so to
accelerate such maturity or require any such prepayment or purchase and (B) if
the Contract evidencing, providing for the creation of or concerning such
Indebtedness provides for a cure period for such event, such event shall not be
cured prior to the end of such cure period;
(e) A default by the Borrower or any Subsidiary shall be continuing
under any Contract (other than a Contract relating to Indebtedness to which
clause (a) or (d) of this Section 6.01 is applicable) binding upon the Borrower,
any Subsidiary or any other Loan Party, except a default that, together with all
other such defaults, has not had and will not have a Materially Adverse Effect
on (i) the Borrower and the Consolidated Subsidiaries taken as a whole or any
other Loan Party, (ii) any Loan Document or (iii) the Collateral;
(f) (i) The Borrower, any Subsidiary or any other Loan Party shall
(A) commence a voluntary case under the Federal bankruptcy laws (as now or
hereafter in effect), (B) file a petition seeking to take advantage of any other
laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, (C) consent to or fail to
contest in a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws, (D) apply for, or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver,
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<PAGE>
custodian, trustee, liquidator or the like of itself or of a substantial part of
its assets, domestic or foreign, (E) admit in writing its inability to pay, or
generally not be paying, its debts (other than those that are the subject of
bona fide disputes) as they become due, (F) make a general assignment for the
benefit of creditors or (G) take any corporate action for the purpose of
effecting any of the foregoing; or
(ii) (A) A case or other proceeding shall be commenced against the
Borrower, any Subsidiary or any other Loan Party seeking (x) relief under the
Federal bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts or (y) the appointment of a trustee,
receiver, custodian, liquidator or the like of the Borrower, any Subsidiary or
any other Loan Party, or of all or any substantial part of the assets, domestic
or foreign, of the Borrower, any Subsidiary or any other Loan Party, and such
case or proceeding shall continue undismissed or unstayed for a period of 60
days or (B) an order granting the relief requested in such case or proceeding
against the Borrower, any Subsidiary or any other Loan Party (including an order
for relief under such Federal bankruptcy laws) shall be entered;
(g) A judgment or order shall be entered against the Borrower or any
Subsidiary by any court and (i) in the case of a judgment or order for the
payment of money, such judgment or order shall continue undismissed, unbonded,
undischarged or unstayed for a period of 30 days in which the aggregate amount
of all such judgments and orders exceeds $7,500,000 and (ii) in the case of any
judgment or order for other than the payment of money, such judgment or order
could, in the reasonable judgment of the Required Banks, together with all other
such judgments or orders, have a Materially Adverse Effect on the Borrower and
the Consolidated Subsidiaries taken as a whole;
(h) (i) any Termination Event shall occur with respect to any Benefit
Plan of the Borrower or any Subsidiary or any of their respective ERISA
Affiliates, (ii) any Accumulated Funding Deficiency, whether or not waived,
shall exist with respect to any such Benefit Plan, (iii) any Person shall engage
in any Prohibited Transaction involving any such Benefit Plan, (iv) the
Borrower, any Subsidiary or any of their respective ERISA Affiliates shall be in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
owing to any such Benefit Plan that is a Multiemployer Benefit Plan as a result
of such Person's complete or partial withdrawal (as described in Section 4203 or
4205 of ERISA) therefrom, (v) the Borrower, any Subsidiary or any of their
respective ERISA Affiliates shall fail to pay when due an amount that is payable
by it to the PBGC or to any such Benefit Plan under Title IV of ERISA, (vi) a
proceeding shall be instituted by a fiduciary of any such Benefit Plan against
the Borrower, any Subsidiary or any of their respective ERISA Affiliates to
enforce Section 515 of ERISA and such
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<PAGE>
proceeding shall not have been dismissed within 30 days thereafter or (vii) any
other event or condition shall occur or exist with respect to any such Benefit
Plan, except that no event or condition referred to in clauses (i) through (vii)
above shall constitute an Event of Default if it, together with all other such
events or conditions at the time existing, has not subjected and is not
reasonably likely to subject the Borrower or any Subsidiary to any Liability
that, alone or in the aggregate, has had or could have a Materially Adverse
Effect on (x) the Borrower and the Consolidated Subsidiaries taken as a whole,
(y) any Loan Document or (z) the Collateral;
(i) Any Loan Party asserts, or any Loan Party institutes any
proceedings seeking to establish, that (i) any provision of the Loan Documents
is invalid, not binding or unenforceable or (ii) the Security Interest is not a
valid and perfected first priority security interest in the Collateral subject
only to Permitted Liens;
(j) One or more Franchises relating to the cable television systems
of the Borrower and the Subsidiaries shall be terminated or revoked such that
the Borrower and the Subsidiaries are no longer able to operate such Franchises
and retain the revenue received therefrom or the Borrower and the Subsidiaries
or the grantors of such Franchises shall fail to renew such Franchises at the
stated expiration thereof such that the Borrower and the Subsidiaries are no
longer able to operate such Franchises and retain the revenue received
therefrom, and the overall effect of all such terminations, revocations and
failures to renew would be to reduce Annualized Cash Flow by 10% or more;
(k) Any of the parties to the Affiliate Subordination Agreement
(other than the Administrative Agent) shall have breached any of the provisions
thereof or shall otherwise be in default thereunder;
(l) Comcast shall at any time cease to own, directly or indirectly,
and control Capital Securities issued by the Borrower (a) having a majority of
the total votes of all outstanding Capital Securities entitled to vote in an
ordinary election of the Board of Directors of the Borrower and (b) representing
not less than 51% of the equity ownership interest in the Borrower;
(m) The Management Agreement shall have been terminated or shall
cease to be in full force and effect or Comcast shall at any time fail to manage
and supervise pursuant to the Management Agreement each cable television system
of the Borrower and the Subsidiaries in a manner consistent with good industry
practices; and
(n) Any challenge shall be commenced with respect to the order of the
State of New Jersey Board of Public Utilities authorizing the entering into by
the Borrower of, and the
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<PAGE>
transactions contemplated by, this Agreement within the period of 45 days
following the effective date of such order, and such challenge shall result in
an order, judgment or other decree that is final and not subject to review on
appeal or to collateral attack, that either (i) has the effect of depriving the
Borrower and the Subsidiaries of the right to own or operate cable television
systems in New Jersey or (ii) otherwise has or could reasonably be expected to
have a Materially Adverse Effect on (A) the Borrower and the Consolidated
Subsidiaries taken as a whole, (B) any Loan Document or (C) the Collateral.
Section 6.02. Remedies upon Event of Default. During the continuance
------------------------------
of any Event of Default (other than one specified in Section 6.01(f)) and in
every such event, the Administrative Agent, upon notice to the Borrower, may
(but shall not be obligated to), and if so directed by the Required Banks shall,
do either or both of the following: (a) declare, in whole or, from time to
time, in part, the principal of and interest on the Loans and the Notes and all
other amounts owing under the Borrower Loan Documents to be, and the Loans and
the Notes and all such other amounts shall thereupon and to that extent become,
due and payable and (b) terminate, in whole or, from time to time, in part, the
Commitments. Upon the occurrence of an Event of Default specified in Section
6.01(f), automatically and without any notice to the Borrower, (i) the principal
of and interest on the Loans and the Notes and all other amounts owing under the
Borrower Loan Documents shall be due and payable and (ii) the Commitments shall
terminate. Presentment, demand, protest or notice of any kind (other than the
notice provided for in the first sentence of this Section 6.02) are hereby
expressly waived.
Section 6.03. Certain Cure Rights. Notwithstanding the provisions of
-------------------
Sections 6.01 and 6.02, but without limiting the obligations of the Borrower
under Sections 4.15, 4.16 and 4.17, if the Borrower shall default in the
performance or observance of any term, covenant, condition or agreement
contained in Sections 4.15, 4.16 or 4.17, such default shall not constitute an
Event of Default (but shall constitute a Default) until the Cure Date, and if on
or before the Cure Date the respective actions set forth below shall have been
taken and evidence thereof shall have been delivered to the Banks, then such
default shall be deemed to have been cured:
(a) With respect to Section 4.15, the Borrower shall have prepaid
Loans, either from cash on hand or the proceeds of new capital contributions or
Junior Subordinated Indebtedness in an aggregate amount sufficient so that,
after giving effect to the application of such prepayments and the reduction of
Consolidated Indebtedness by the amount thereof for the purpose of determining
compliance with Section 4.15, the Borrower would be in compliance therewith as
recalculated at the date of receipt of such proceeds; and
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<PAGE>
(b) With respect to Section 4.16 or 4.17, the Borrower shall have
prepaid Loans, either from the proceeds of new capital contributions or the
proceeds of Junior Subordinated Indebtedness, in an amount sufficient so that if
the respective ratios set forth in Section 4.16 or 4.17 as at the date of
receipt of such proceeds were recalculated in a manner which, in the case of
Section 4.16, would include as additional Cash Flow or which, in the case of
Section 4.17, would add to Annualized Cash Flow the amount of such proceeds, the
Borrower would be in compliance with the provisions of Section 4.16 or 4.17 as
at such date;
provided, however, that (i) any such default may not be deemed to be cured
- - - -------- -------
pursuant to this Section 6.03 more than an aggregate of five times during the
term of this Agreement or with respect to consecutive fiscal quarters of the
Borrower and, for purposes of this proviso, in the event that the receipt and
application by the Borrower of the proceeds of any new capital contributions or
Junior Subordinated Indebtedness shall at any time have the effect of enabling
the Borrower to avoid any such default, the Borrower shall be deemed to have
cured any such default pursuant to this Section 6.03 and (ii) the recalculations
described in this Section 6.03 shall not be deemed to constitute a recalculation
for any other purpose of this Agreement, including the determination of the
Applicable Margin. For purposes of this Section 6.03, "Cure Date" means, with
---------
respect to any breach of the covenants contained in Sections 4.15, 4.16 and
4.17, the date that is 30 days after the earlier of (A) the day on which
financial statements for the fiscal quarter (or fiscal year, in the case of any
such breach occurring in the fourth quarter of any fiscal year) in which such
breach occurred are delivered to the Banks pursuant to Section 5.01 and (B) the
day by which such financial statements are required to be delivered pursuant to
Section 5.01.
ARTICLE 7
ADDITIONAL CREDIT FACILITY PROVISIONS
-------------------------------------
Section 7.01. Mandatory Suspension and Conversion of Eurodollar Rate
------------------------------------------------------
Loans. A Bank's obligations to make, continue or convert into Eurodollar Rate
- - - -----
Loans of any Type shall be suspended, all such Bank's outstanding Loans of such
Type shall be converted on the last day of their applicable Interest Periods
(or, if earlier, in the case of clause (c) below, on the last day such Bank may
lawfully continue to maintain Loans of such Type or, in the case of clause (d)
below, on the day determined by such Bank to be the last Business Day before the
effective date of the applicable restriction) into, and all pending requests for
the making or continuation of or conversion into Loans of such Type by such Bank
shall be deemed requests for, Base Rate Loans, if:
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(a) on or prior to the determination of an interest rate for a
Eurodollar Rate Loan of such Type for any Interest Period, the Administrative
Agent determines that for any reason appropriate information is not available to
it for purposes of determining the Adjusted Eurodollar Rate for such Interest
Period;
(b) on or prior to the first day of any Interest Period for a
Eurodollar Rate Loan of such Type, such Bank determines that the Adjusted
Eurodollar Rate as determined by the Administrative Agent for such Interest
Period would not accurately reflect the cost to such Bank of making, continuing
or converting into a Eurodollar Rate Loan of such Type for such Interest Period;
(c) at any time such Bank determines that any Regulatory Change makes
it unlawful or impracticable for such Bank or its applicable Lending Office to
make, continue or convert into a Eurodollar Rate Loan of such Type, or to comply
with its obligations hereunder in respect thereof; or
(d) such Bank determines that, by reason of any Regulatory Change,
such Bank or its applicable Lending Office is restricted, directly or
indirectly, in the amount that it may hold of (i) a category of liabilities that
includes deposits by reference to which, or on the basis of which, the interest
rate applicable to Eurodollar Rate Loans of such Type is directly or indirectly
determined or (ii) the category of assets that includes Eurodollar Rate Loans of
such Type.
If, as a result of this Section 7.01, any Loan of any Bank that would otherwise
be made or maintained as or converted into a Eurodollar Rate Loan of any Type
for any Interest Period is instead made or maintained as or converted into a
Base Rate Loan, then, unless the corresponding Loan of each of the other Banks
is also to be made or maintained as or converted into a Base Rate Loan, such
Loan shall be treated as being a Eurodollar Rate Loan of such Type for such
Interest Period for all purposes of this Agreement (including the timing,
application and proration among the Banks of interest payments, conversions and
prepayments) except for the calculation of the interest rate borne by such Loan.
The Administrative Agent shall promptly notify the Borrower and each Bank of the
existence or occurrence of any condition or circumstance specified in clause (a)
above, and each Bank shall promptly notify the Borrower and the Administrative
Agent of the existence, occurrence or termination of any condition or
circumstance specified in clause (b), (c) or (d) above applicable to such Bank's
Loans, but the failure by the Administrative Agent or such Bank to give any such
notice shall not affect such Bank's rights hereunder.
Section 7.02. Regulatory Changes. If in the determination of any
------------------
Bank (a) any Regulatory Change shall directly or indirectly (i) reduce the
amount of any sum received
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<PAGE>
or receivable by such Bank with respect to any Loan or the return to be earned
by such Bank on any Loan, (ii) impose a cost on such Bank or any Affiliate of
such Bank that is attributable to the making or maintaining of, or such Bank's
commitment to make, any Loan, (iii) require such Bank or any Affiliate of such
Bank to make any payment on or calculated by reference to the gross amount of
any amount received by such Bank under any Loan Document or (iv) reduce, or have
the effect of reducing, the rate of return on any capital of such Bank or any
Affiliate of such Bank that such Bank or such Affiliate is required to maintain
on account of any Loan or such Bank's commitment to make any Loan and (b) such
reduction, increased cost or payment shall not be fully compensated for by an
adjustment in the applicable rates of interest payable under the Loan Documents,
then the Borrower shall pay to such Bank such additional amounts as such Bank
determines will, together with any adjustment in the applicable rates of
interest payable hereunder, fully compensate for such reduction, increased cost
or payment. Such additional amounts shall be payable, in the case of those
applicable to prior periods, within 15 Business Days after request by such Bank
for such payment accompanied by the certificate described in Section 7.05 and,
in the case of those applicable to future periods, on the dates specified, or
determined in accordance with a method specified, by such Bank. Each Bank will
promptly notify the Borrower of any determination made by it referred to in
clauses (a) and (b) above, but the failure to give such notice shall not affect
such Bank's right to such compensation; provided, however, that the Borrower
-------- -------
shall not be required to pay such additional amounts in respect of any
Regulatory Change for any period ending prior to the date that is 90 days prior
to the giving of the notice of the determination of such additional amounts
(unless such period shall have commenced after the date that such Bank notified
the Borrower of the possibility that additional amounts may be payable as a
result of such Regulatory Change), except, if such Regulatory Change shall have
been imposed retroactively, for the period from the effective date of such
Regulatory Change to the date that is 90 days after the first date on which such
Bank reasonably should have had knowledge of such Regulatory Change.
Section 7.03. Capital Requirements. If, in the determination of any
--------------------
Bank, such Bank or any Affiliate of such Bank is required, as a result of a
Regulatory Change, to maintain capital on account of any Loan or such Bank's
commitment to make any Loan, then, upon request by such Bank, the Borrower shall
from time to time thereafter pay to such Bank such additional amounts as such
Bank determines will fully compensate for any reduction in the rate of return on
the capital that such Bank or such Affiliate is so required to maintain on
account of such Loan or commitment suffered as a result of such capital
requirement. Such additional amounts shall be payable, in the case of those
applicable to prior periods, within 15 Business Days after request by such Bank
for such payment accompanied by the certificate described in Section 7.05 and,
in the case of those relating to future periods, on the dates specified, or
determined
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in accordance with a method specified, by such Bank; provided, however, that the
-------- -------
Borrower shall not be required to pay such additional amounts in respect of any
Regulatory Change for any period ending prior to the date that is 90 days prior
to the making of such Bank's initial request for such additional amounts (unless
such period shall have commenced after the date that such Bank notified the
Borrower of the possibility that additional amounts may be payable as a result
of such Regulatory Change), except, if such Regulatory Change shall have been
imposed retroactively, for the period from the effective date of such Regulatory
Change to the date that is 90 days after the first date on which such Bank
reasonably should have had knowledge of such Regulatory Change.
Section 7.04. Funding Losses. The Borrower shall pay to each Bank,
--------------
upon request, such amount or amounts as such Bank determines are necessary to
compensate it for any loss, cost or expense (excluding loss of the Applicable
Margin) incurred by it as a result of (a) any payment, prepayment or conversion
of a Eurodollar Rate Loan on a date other than the last day of an Interest
Period for Eurodollar Rate Loan or (b) a Eurodollar Rate Loan for any reason not
being made or converted (other than as a result of the failure of such Bank to
make such Loan available to the Borrower upon the fulfillment of the conditions
specified in Article 2 without any determination by the Administrative Agent or
such Bank under Section 7.01), or any payment of principal thereof or interest
thereon not being made, on the date therefor determined in accordance with the
applicable provisions of this Agreement. At the election of such Bank, and
without limiting the generality of the foregoing, but without duplication, such
compensation on account of losses may include an amount equal to the excess of
(i) the interest that would have been received from the Borrower under this
Agreement (excluding the Applicable Margin) on any amounts to be reemployed
during an Interest Period or its remaining portion over (ii) the interest
component of the return that such Bank determines it could have obtained had it
placed such amount on deposit in the London interbank Dollar market for a period
equal to such Interest Period or remaining portion.
Section 7.05. Determinations. In making the determinations
--------------
contemplated by Sections 7.01, 7.02, 7.03 and 7.04, each Bank may make such
estimates, assumptions, allocations and the like that such Bank in good faith
determines to be appropriate, and such Bank's selection thereof in accordance
with this Section 7.05, and the determinations made by such Bank on the basis
thereof, shall be final, binding and conclusive upon the Borrower, except, in
the case of such determinations, for manifest errors in computation or
transmission. Each Bank shall furnish to the Borrower, at the time of any
request for compensation under Section 7.02 or 7.03 and otherwise upon request,
a certificate outlining in reasonable detail the computation of any amounts
claimed by it under this Article 7 and the assumptions underlying such
computations, which shall include
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<PAGE>
a statement of an officer of such Bank certifying that such request for
compensation is being made pursuant to a policy adopted by such Bank to seek
such compensation generally from customers similar to the Borrower and having
similar provisions in agreements with such Bank.
Section 7.06. Change of Lending Office. If an event occurs with
------------------------
respect to a Lending Office of any Bank that obligates the Borrower to pay any
amount under Section 1.12, makes operable the provisions of Section 7.01(c) or
(d) or entitles such Bank to make a claim under Section 7.02 or 7.03, such Bank
shall, if requested by the Borrower, use reasonable efforts to designate another
Lending Office or Offices the designation of which will reduce the amount the
Borrower is so obligated to pay, eliminate such operability or reduce the amount
such Bank is so entitled to claim, provided that such designation would not, in
--------
the sole and absolute discretion of such Bank, be disadvantageous to such Bank
in any manner or contrary to such Bank's policies. Each Bank may at any time
and from time to time change any Lending Office and shall give notice of any
such change to the Administrative Agent and the Borrower. Except in the case of
a change in Lending Offices made at the written request of the Borrower, the
designation of a new Lending Office by any Bank shall not obligate the Borrower
to pay any amount to such Bank under Section 1.12, make operable the provisions
of Section 7.01(c) or (d) or entitle such Bank to make a claim under Section
7.02 or 7.03 if such obligation, the operability of such clause or such claim
results solely from such designation and not from a Regulatory Change subsequent
to such designation.
Section 7.07. Replacement of Banks. If any Bank requests
--------------------
compensation pursuant to Section 1.12, 7.02 or 7.03, or such Bank's obligation
to make or continue, or to convert Loans of any other Type into, any Type of
Eurodollar Rate Loan shall be suspended pursuant to Section 7.01, the Borrower,
upon three Business Days' notice, may require that such Bank transfer all of its
right, title and interest under this Agreement and such Bank's Notes to any bank
or financial institution identified by the Borrower with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld) (a) if
such proposed transferee agrees to assume all of the obligations of such Bank
for consideration equal to the outstanding principal amount of such Bank's
Loans, together with interest thereon to the date of such transfer, and
satisfactory arrangements are made for payment to such Bank of all other amounts
payable hereunder to such Bank on or prior to the date of such transfer
(including any fees accrued hereunder and any amounts that would be payable
under Section 7.04 as if all of such Bank's Loans were being prepaid in full on
such date) and (b) if such Bank being replaced has requested compensation
pursuant to Section 1.12, 7.02 or 7.03, such proposed transferee's aggregate
requested compensation, if any, pursuant to Section 1.12, 7.02 or 7.03 with
respect to such replaced Bank's Loans is lower than that of the Bank replaced.
Without prejudice to the survival of any other agreement of the
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Borrower hereunder, the agreements of the Borrower contained in Sections 1.12,
7.02, 7.03, 7.04 and 9.02 (without duplication of any payments made to such Bank
by the Borrower or the proposed transferee) shall survive for the benefit of any
Bank replaced under this Section 7.07 with respect to the time prior to such
replacement.
ARTICLE 8
THE AGENTS
----------
Section 8.01. Appointment and Powers. Each Bank hereby irrevocably
----------------------
appoints and authorizes the Agents, individually in their respective capacities
as Agents, to act as the agents for such Bank under the Loan Documents with such
powers as are delegated to the respective Agents by the terms thereof, together
with such other powers as are reasonably incidental thereto. The Agents' duties
shall be purely ministerial and they shall have no duties or responsibilities
except those expressly set forth in the Loan Documents. None of the Agents
shall be required under any circumstances to take any action that, in its
judgment, (a) is contrary to any provision of the Loan Documents or Applicable
Law or (b) would expose it to any Liability or expense against which it has not
been indemnified to its satisfaction. None of the Agents shall, by reason of
its serving as an Agent, be a trustee or other fiduciary for any Bank. By its
execution and delivery hereof, each Bank, in its capacity as a Bank and in its
capacity, if any, as a party to an Interest Rate Protection Agreement,
authorizes the Administrative Agent to act as its agent under, and to execute
and deliver, in its name and on its behalf, the Pledge Agreements and the
Affiliate Subordination Agreement. The Administrative Agent shall consent to
any amendment of any term, covenant, agreement or condition of, or to any waiver
of any right under, the Pledge Agreements or the Affiliate Subordination
Agreement if, but only if, but subject to Section 9.07, the Administrative Agent
is directed to do so in writing by the Required Banks; provided, however, that
-------- -------
the Administrative Agent shall not be required to consent to any such amendment
or waiver that affects its rights or duties.
Section 8.02. Limitation on Agents' Liability. None of the Agents
-------------------------------
nor any of their respective directors, officers, employees or agents shall be
liable or responsible for any action taken or omitted to be taken by them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. None of the Agents shall be responsible to
any Bank for (a) any recitals, statements, representations or warranties
contained in the Loan Documents or in any certificate or other document referred
to or provided for in, or received by any of the Banks under, the Loan
Documents, (b) the validity, effectiveness or enforceability of the Loan
Documents or any such certificate or other document, (c) the value or
sufficiency of
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the Collateral or (d) any failure by the Loan Parties to perform any of their
obligations under the Loan Documents. Each of the Agents may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact so long as such Agent was not grossly
negligent in selecting or directing such agents or attorneys-in-fact. Each of
the Agents shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telecopier, telegram
or cable) believed by it to be genuine and correct and to have been signed or
given by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by such Agent. As to any matters not expressly provided for by the Loan
Documents, each of the Agents shall in all cases be fully protected in acting,
or in refraining from acting, under the Loan Documents in accordance with
instructions signed by the Required Banks, and such instructions of the Required
Banks and any action taken or failure to act pursuant thereto shall be binding
on all of the Banks.
Section 8.03. Defaults. The Administrative Agent shall not be deemed
--------
to have knowledge of the occurrence of a Default (other than the non-payment to
it of fees or principal of or interest on Loans) unless the Administrative Agent
has received notice from a Bank or the Borrower specifying such Default and
stating that such notice is a "Notice of Default." In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the Banks. In the
event of any Default, the Administrative Agent shall (a) in the case of a
Default that constitutes an Event of Default, take either or both of the actions
referred to in Section 6.02(a) and Section 6.02(b) if so directed by the
Required Banks and (b) in the case of any Default, take such other action with
respect to such Default as shall be reasonably directed by the Required Banks.
Unless and until the Administrative Agent shall have received such directions,
in the event of any Default, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interests of the Banks.
Section 8.04. Rights as a Bank. Each Person acting as an Agent that
----------------
is also a Bank shall, in its capacity as a Bank, have the same rights and powers
under the Loan Documents as any other Bank and may exercise the same as though
it were not acting as an Agent, and the term "Bank" or "Banks" shall include
such Person in its individual capacity. Each Person acting as an Agent and its
Affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to and generally engage in any kind of banking, trust or other
business with the Loan Parties and their Affiliates as if it were not acting as
an Agent, and such Person and its Affiliates may accept fees and other
consideration from the Borrower and its Affiliates for
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services in connection with the Loan Documents or otherwise without having to
account for the same to the Banks.
Section 8.05. Indemnification. The Banks agree to indemnify each of
---------------
the Agents (to the extent not reimbursed by the Loan Parties under the Loan
Documents), ratably on the basis of the respective principal amounts of the
Loans outstanding made by the Banks (or, if no Loans are at the time
outstanding, ratably on the basis of their respective Commitments), for any and
all Liabilities, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against such Agent in its capacity as an Agent
(including the costs and expenses that the Loan Parties are obligated to pay
under the Loan Documents) in any way relating to or arising out of the Loan
Documents or any other documents contemplated thereby or referred to therein or
the transactions contemplated thereby or the enforcement of any of the terms
thereof or of any such other documents, provided that no Bank shall be liable
--------
for any of the foregoing to the extent they arise from gross negligence or
willful misconduct by such Agent.
Section 8.06. Non-Reliance on Agents and Other Banks. Each Bank
--------------------------------------
agrees that it has made and will continue to make, independently and without
reliance on any of the Agents or any other Bank, and based on such documents and
information as it deems appropriate, its own credit analysis of the Loan
Parties, its own evaluation of the Collateral and its own decision to enter into
the Loan Documents and to take or refrain from taking any action in connection
therewith. None of the Agents shall be required to keep itself informed as to
the performance or observance by the Loan Parties of the Loan Documents or any
other document referred to or provided for therein or to inspect the properties
or books of any Loan Party or any Subsidiary thereof or the Collateral. Except
for notices, reports and other documents and information expressly required to
be furnished to the Banks by the Administrative Agent under the Loan Documents,
none of the Agents shall have any obligation to provide any Bank with any
information concerning the business, status or condition of any Loan Party or
any Subsidiary thereof, the Loan Documents or the Collateral that may come into
the possession of such Agent or any of its Affiliates.
Section 8.07. Resignation of the Administrative Agent. Subject to
---------------------------------------
the appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Banks and the Borrower. Upon receipt of any such notice of resignation,
the Required Banks may, with the consent of the Borrower (which consent shall
not be unreasonably withheld), appoint any bank or financial institution as the
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Administrative Agent's giving
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of notice of resignation, then the retiring Administrative Agent may, on behalf
of the Banks and with the consent of the Borrower (which consent shall not be
unreasonably withheld), appoint any bank or financial institution as the
successor Administrative Agent. Upon the acceptance by any Person of its
appointment as a successor Administrative Agent, such Person shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties and
obligations of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations as Administrative
Agent under the Loan Documents. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Article 8 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.
ARTICLE 9
MISCELLANEOUS
-------------
Section 9.01. Notices and Deliveries.
----------------------
(a) Manner of Delivery. All notices, communications and materials
------------------
(including all Information) to be given or delivered pursuant to the Borrower
Loan Documents shall, except in those cases where giving notice by telephone is
expressly permitted, be given or delivered in writing (which shall include
telecopy transmissions). Notices under Sections 1.02, 1.03(c), 1.05, 1.07 and
6.02 may be by telephone, promptly confirmed in writing. In the event of a
discrepancy between any telephonic notice and any written confirmation thereof,
such written confirmation shall be deemed the effective notice except to the
extent that the Administrative Agent has acted in reliance on such telephonic
notice.
(b) Addresses. All notices, communications and materials to be given
---------
or delivered pursuant to the Borrower Loan Documents shall be given or delivered
at the following respective addresses and telecopier and telephone numbers and
to the attention of the following individuals or departments:
(i) if to the Borrower, to it at:
1105 Market Street
Suite 1219
Wilmington, DE 19801
Telecopier No.: (302) 427-7664
Telephone No.: (302) 427-8991
Attention: Howard Grabelle
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<PAGE>
with a copy to:
1500 Market Street
Philadelphia, PA 19102
Telecopier No.: (215) 981-7744
Telephone No.: (215) 981-7503
Attention: John R. Alchin, Senior
Vice President and
Treasurer
(ii) if to the Administrative Agent, to it at:
901 Main Street, 64th Floor
Dallas, Texas 75202
Telecopier No.: (214) 508-0980
Telephone No.: (214) 508-0924
Attention: Thomas Carter
(iii) if to any Bank, to it at the address or telecopier or
telephone number and to the attention of the individual
or department set forth below such Bank's name under the
heading "Notice Address" on Annex A or, in the case of a
-------
Bank that becomes a Bank pursuant to an assignment, set
forth under the heading "Notice Address" in the Notice of
Assignment given to the Borrower and the Administrative
Agent with respect to such assignment;
or at such other address or telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice specifically
captioned "Notice of Change of Address" given to (x) if the party to which such
information pertains is the Borrower, the Administrative Agent and each Bank,
(y) if the party to which such information pertains is the Administrative Agent,
the Borrower and each Bank and (z) if the party to which such information
pertains is a Bank, the Borrower and the Administrative Agent.
(c) Effectiveness. Each notice and communication and any material to
-------------
be given or delivered pursuant to the Borrower Loan Documents shall be deemed so
given or delivered (i) if sent by registered or certified mail, postage prepaid,
return receipt requested, on the third Business Day after such notice,
communication or material, addressed as above provided, is
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<PAGE>
delivered to a United States post office and a receipt therefor is issued
thereby, (ii) if sent by any other means of physical delivery, when such notice,
communication or material is delivered to the appropriate address as above
provided, (iii) if sent by telecopier, when such notice, communication or
material is transmitted to the appropriate telecopier number as above provided
and is received at such number and (iv) if given by telephone, when communicated
to the individual or any member of the department specified as the individual or
department to whose attention notices, communications and materials are to be
given or delivered, or, in the case of notice by the Administrative Agent to the
Borrower under Section 6.02 given by telephone as above provided, if any
individual or any member of the department to whose attention notices,
communications and materials are to be given or delivered is unavailable at the
time, to any other officer of the Borrower, except that notices of a change of
address, telecopier or telephone number or individual or department to whose
attention notices, communications and materials are to be given or delivered
shall not be deemed given until received.
Section 9.02. Expenses; Indemnification. Whether or not any Loans
----------------------------------------
are made hereunder, the Borrower shall:
(a) pay or reimburse the Administrative Agent and each Bank for all
transfer, documentary, stamp and similar taxes, and all recording and filing
fees and taxes, payable in connection with, arising out of, or in any way
related to, the execution, delivery and performance of the Loan Documents or the
making of the Loans;
(b) pay or reimburse the Administrative Agent for all reasonable out-
of-pocket costs and expenses (including reasonable fees and disbursements of
legal counsel collectively retained by the Arranging Agents and the Managing
Agents or, other than with respect to clause (i) below, appraisers, accountants
and other experts employed or retained collectively by the Arranging Agents and
the Managing Agents or the Administrative Agent) incurred by the Administrative
Agent (or, in the case of fees and disbursements of legal counsel, the Arranging
Agents and the Managing Agents) in connection with, arising out of, or in any
way related to (i) the negotiation, preparation, execution and delivery of (A)
the Loan Documents and (B) whether or not executed, any waiver, amendment or
consent thereunder or thereto, (ii) the administration of and any operations
under the Loan Documents, (iii) consulting with respect to any matter in any way
arising out of, related to, or connected with, the Loan Documents, including (A)
the protection or preservation of the Collateral, (B) the protection,
preservation, exercise or enforcement of any of the rights of the Administrative
Agent or the Banks in, under or related to the Collateral or the Loan Documents
during a Default or (C) the performance of any of the obligations of the
Administrative Agent or the Banks under or related to the Loan Documents, (iv)
protecting or preserving the
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<PAGE>
Collateral or (v) protecting, preserving, exercising or enforcing any of the
rights of the Administrative Agent or the Banks in, under or related to the
Collateral or the Loan Documents during a Default, including defending the
Security Interest as a valid, perfected, first priority security interest in the
Collateral subject only to Permitted Liens;
(c) pay or reimburse each Bank for all reasonable costs and expenses
(including reasonable fees and disbursements of legal counsel and other experts
employed or retained by such Bank) incurred by such Bank in connection with,
arising out of, or in any way related to protecting, preserving, exercising or
enforcing during a Default any of its rights in, under or related to the
Collateral or the Loan Documents; and
(d) indemnify and hold each Indemnified Person harmless from and
against all losses (including judgments, penalties and fines) suffered, and pay
or reimburse each Indemnified Person for all costs and reasonable expenses
(including reasonable fees and disbursements of legal counsel and other experts
employed or retained by such Indemnified Person) incurred, by such Indemnified
Person in connection with, arising out of or in any way related to (i) any Loan
Document Related Claim (whether asserted by such Indemnified Person or the
Borrower or any other Person), including the prosecution or defense thereof and
any litigation or proceeding with respect thereto (whether or not, in the case
of any such litigation or proceeding, such Indemnified Person is a party
thereto), or (ii) any investigation, governmental or otherwise, arising out of,
related to, or in any way connected with, the Loan Documents or the
relationships established thereunder, except that the foregoing indemnity shall
not be applicable to (A) any loss suffered by any Indemnified Person to the
extent such loss is determined by a judgment of a court that is binding on the
Borrower and such Indemnified Person, final and not subject to review on appeal
to be the result of acts or omissions on the part of such Indemnified Person
constituting gross negligence or willful misconduct or (B) any such losses,
costs and expenses incurred in connection with any examination of such
Indemnified Person by governmental authorities and arising other than with
respect to this Agreement and the Loans specifically.
Section 9.03. Amounts Payable Due upon Request for Payment. All
--------------------------------------------
amounts payable by the Borrower under Section 9.02 and under the other
provisions of the Borrower Loan Documents shall, except as otherwise expressly
provided, be immediately due upon request for the payment thereof accompanied by
a certificate of the requesting Bank setting forth the basis for the request and
the computation for the amount thereof in reasonable detail.
Section 9.04. Remedies of the Essence. The various rights and
-----------------------
remedies of the Administrative Agent and the Banks under the Borrower Loan
Documents are of the essence of those agreements, and the Administrative Agent
and the Banks shall be
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<PAGE>
entitled to obtain a decree requiring specific performance of each such right
and remedy.
Section 9.05. Rights Cumulative. Each of the rights and remedies of
-----------------
the Administrative Agent and the Banks under the Loan Documents shall be in
addition to all of their other rights and remedies under the Loan Documents and
Applicable Law, and nothing in the Loan Documents shall be construed as limiting
any such rights or remedies.
Section 9.06. Confidentiality. Each Bank agrees to exercise all
---------------
reasonable efforts to keep any information delivered or made available by the
Borrower confidential from anyone other than persons employed or retained by
such Bank who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided, however, that nothing herein
-------- -------
shall prevent any Bank from disclosing such information (a) to any Affiliate of
such Bank or to any other Bank, (b) upon the order of any court or
administrative agency, (c) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Bank, (d) that has been publicly
disclosed, (e) in connection with any litigation relating to the Loans, this
Agreement or any transaction contemplated hereby to which any Bank, any Loan
Party or any Agent may be a party, (f) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (g) to such Bank's legal
counsel and independent auditors and (h) to any actual or proposed participant
or assignee of all or any part of its Loans hereunder, if such other Person,
prior to such disclosure, agrees for the benefit of the Borrower to comply with
the provisions of this Section 9.06.
Section 9.07. Amendments; Waivers. Any term, covenant, agreement or
-------------------
condition of any Loan Document to which the Banks are party may be amended, and
any right under the Loan Documents may be waived, if, but only if, such
amendment or waiver is in writing and is signed by the Required Banks and, if
the rights and duties of the Administrative Agent are affected thereby, by the
Administrative Agent and by each Loan Party that is a party thereto; provided,
--------
however, that no such amendment or waiver shall be effective, unless in writing
- - - -------
and signed by each Bank affected thereby, to the extent it (a) changes the
amount or extends the term of such Bank's Commitment, (b) reduces the principal
of or the rate of interest on such Bank's Loans or Notes or any fees payable to
such Bank hereunder, (c) postpones any date fixed for, or reduces the amount of,
any scheduled or mandatory reduction of Commitments (other than a reduction of
the Total Commitment pursuant to Section 1.07(c)(i)) or any mandatory prepayment
of principal of or interest on such Bank's Loans or Notes or any fees payable to
such Bank hereunder (other than as a result of any reduction of the Total
Commitment pursuant to Section 1.07(c)(i)), (d) except as expressly provided in
any Pledge Agreement, releases any portion of the Collateral from the Security
Interest, (e) waives any material condition precedent
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<PAGE>
under Section 2.01 or 2.02 (as Section 2.02 applies to the initial Loans
hereunder) or (f) amends this Section 9.07 or any provision of this Agreement or
the other Loan Documents requiring the consent or other action of all of the
Banks. Unless otherwise specified in such waiver, a waiver of any right under
the Borrower Loan Documents shall be effective only in the specific instance and
for the specific purpose for which given. No election not to exercise, failure
to exercise or delay in exercising any right, nor any course of dealing or
performance, shall operate as a waiver of any right of the Administrative Agent
or any Bank under the Borrower Loan Documents or Applicable Law, nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right of the Administrative Agent
or any Bank under the Borrower Loan Documents or Applicable Law.
Section 9.08. Set-Off; Suspension of Payment and Performance. The
----------------------------------------------
Administrative Agent and each Bank is hereby authorized by the Borrower, at any
time and from time to time, without prior notice, (a) during any Event of
Default, to set off against, and to appropriate and apply to the payment of, the
Liabilities of the Borrower under the Borrower Loan Documents (whether owing to
such Person or to any other Person that is the Administrative Agent or a Bank
and whether matured or unmatured, fixed or contingent or liquidated or
unliquidated) any and all Liabilities owing by such Person to the Borrower
(whether payable in Dollars or any other currency, whether matured or unmatured
and, in the case of Liabilities that are deposits, whether general or special,
time or demand and however evidenced and whether maintained at a branch or
office located within or without the United States) and (b) during any Default,
to suspend the payment and performance of such Liabilities owing by such Person
and, in the case of Liabilities that are deposits, to return as unpaid for
insufficient funds any and all checks and other items drawn against such
deposits. The Person so setting off against any such Liabilities of the
Borrower or suspending payment or performance of any such Liabilities of such
Person, as the case may be, shall give the Borrower notice thereof promptly
following such set-off or suspension, but any failure to give or delay in giving
such notice shall not affect such Person's right to so set off or suspend
payment or performance.
Section 9.09. Sharing of Recoveries. (a) Each Bank agrees that, if,
---------------------
for any reason, including as a result of (i) the exercise of any right of
counterclaim, set-off, banker's lien or similar right, (ii) its claim in any
applicable bankruptcy, insolvency or other similar proceeding being deemed
secured by a Debt owed by it to the Borrower, including a claim deemed secured
under Section 506 of the Bankruptcy Code, or (iii) the allocation of payments by
the Administrative Agent or the Borrower in a manner contrary to the provisions
of Section 1.14, such Bank shall receive payment of a proportion of the
aggregate amount due and payable to it hereunder as principal, interest or fees
that is greater than the proportion received by any other Bank in
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<PAGE>
respect of the aggregate of such amounts due and payable to such other Bank
hereunder, then the Bank receiving such proportionately greater payment shall
purchase participations (which it shall be deemed to have done simultaneously
upon the receipt of such payment) in the rights of the other Banks hereunder so
that all such recoveries with respect to such amounts due and payable hereunder
(net of costs of collection) shall be pro rata; provided, however, that if all
-------- -------
or part of such proportionately greater payment received by the purchasing Bank
is thereafter recovered by or on behalf of the Borrower from such Bank, such
purchases shall be rescinded and the purchase prices paid for such participation
shall be returned to such Bank to the extent of such recovery, but without
interest (unless the purchasing Bank is required to pay interest on the amount
recovered to the Person recovering such amount, in which case the selling Bank
shall be required to pay interest at a like rate). The Borrower expressly
consents to the foregoing arrangements and agrees that any holder of a
participation in any rights hereunder so purchased or acquired pursuant to this
Section 9.09(a) shall, with respect to such participation, be entitled to all of
the rights of a Bank under Sections 7.02, 9.02 and 9.08 and may exercise any and
all rights of set-off with respect to such participation as fully as though the
Borrower were directly indebted to the holder of such participation for Loans in
the amount of such participation.
(b) Notwithstanding anything to the contrary contained herein,
Section 9.09(a) shall not be deemed to limit each Bank's entitlement to exercise
any right of counterclaim, set-off, banker's lien or similar right that it may
have in respect of the Borrower in any manner as it may choose and to apply the
amount subject to such exercise to the payment of Liabilities of the Borrower
other than obligations subject to the sharing provisions of Section 9.09(a).
Section 9.10. Assignments and Participations. (a) Assignments. (i)
------------------------------ -----------
The Borrower may not assign any of its rights or obligations under the Borrower
Loan Documents without the prior written consent of the Administrative Agent and
each Bank, and no assignment of any such obligation shall release the Borrower
therefrom unless the Administrative Agent or each Bank, as applicable, shall
have consented to such release in a writing specifically referring to the
obligation from which the Borrower is to be released.
(ii) Each Bank may from time to time assign any or all of its rights
and obligations under the Loan Documents and with respect to the Collateral to
one or more banks or other financial institutions with (except in the case of
any assignment by a Bank to an Affiliate of such Bank) the consent of the
Borrower and the Administrative Agent (which consents shall not be unreasonably
withheld); provided, however, that, (A) any assignment by a Bank of a portion of
-------- -------
its Commitment and Loans shall consist of ratable portions of its Tranche A
Commitment and
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Tranche A Loans and its Tranche B Commitment and Tranche B Loans and (B) no such
assignment shall be effective unless and until (x) a Notice of Assignment with
respect thereto, duly executed by the assignor and the assignee, shall have been
given to the Borrower and the Administrative Agent and (y) except in the case of
an assignment by the Bank that is the Administrative Agent or an assignment by
any Bank to an Affiliate of such Bank, the Administrative Agent shall have been
paid an assignment fee of $2,500; provided further, however, that, unless the
-------- ------- -------
Borrower shall have otherwise consented, no such partial assignment, other than
a partial assignment by any Bank to an Affiliate of such Bank, shall be made or
shall be effective unless (1) if such assignment is made other than to another
Bank, the amount thereof is not less than $5,000,000 and (2) after giving effect
to such assignment and all other assignments made and participations granted by
such Bank, the Commitment (or, if the Total Commitment shall have terminated,
the Loans), net of the amount of such participations, retained by such Bank is
not less than (aa) in the case of each Arranging Agent and Managing Agent,
$30,000,000 and (bb) in the case of each other Bank, the lesser of $25,000,000
and 50% of the Commitment of such Bank hereunder in effect on the Agreement Date
or, if such Bank became a Bank pursuant to an assignment, on the day it became a
Bank. Any such assignment by a Bank of any or all of its obligations under the
Borrower Loan Documents shall release such Bank therefrom. No such assignment
by a Bank of any or all of its obligations under the Borrower Loan Documents to
any Affiliate of such Bank shall obligate the Borrower to pay any amount to the
assignee Bank under Section 1.12, make operable the provisions of Section
7.01(c) or (d) or entitle such assignee Bank to make a claim under Section 7.02
or 7.03 if such obligation, the operability of such clause or such claim results
solely from such assignment and not from a Regulatory Change subsequent to such
assignment. In the event of any such assignment by a Bank, the Borrower shall,
against receipt of the existing Notes of the assignor Bank, issue new Notes to
the assignee Bank and, in the case of a partial assignment, to the assignor
Bank, appropriately reflecting such assignment. Nothing in this Section 9.10
shall limit the right of any Bank to assign its interest in the Loans and Notes
to a Federal Reserve Bank as collateral security under Regulation A of the Board
of Governors of the Federal Reserve System, but no such assignment shall release
such Bank from its obligations hereunder.
(b) Participations. Each Bank may from time to time sell or
--------------
otherwise grant participations in any or all of its rights and obligations under
the Borrower Loan Documents and with respect to the Collateral without the
consent of the Borrower, the Administrative Agent or any other Bank; provided,
--------
however, that, unless the Borrower shall have otherwise consented, no such
- - - -------
participation, other than a participation sold or granted by any Bank to an
Affiliate of such Bank, shall be made or shall be effective unless (i) the
amount thereof is not less than $5,000,000 and (ii) after giving effect to such
participation and
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all other participations granted and assignments made by such Bank, the
Commitment (or, if the Total Commitment shall have terminated, the Loans), net
of the amount of such participations, retained by such Bank is not less than (1)
in the case of each Managing Agent, $30,000,000 and (2) in the case of each
other Bank, the lesser of $25,000,000 and 50% of the Commitment of such Bank
hereunder in effect on the Agreement Date or, if such Bank became a Bank
pursuant to an assignment, on the day it became a Bank. No sale by a Bank of
any participation shall relieve such Bank of any of its obligations to the
Borrower hereunder.
(c) Rights of Assignees and Participants. Each assignee of, and each
------------------------------------
holder of a participation in, the rights of any Bank under the Borrower Loan
Documents and with respect to the Collateral, if and to the extent the
applicable assignment or participation agreement so provides, (i) shall, in the
case of assignees and with respect to its assignment, be entitled to all of the
rights of a Bank and (ii) may exercise any and all rights of set-off or banker's
lien with respect thereto (as fully, in the case of a holder of a participation,
as though the Borrower were directly indebted to such holder for amounts payable
under the Borrower Loan Documents to which such holder is entitled under the
applicable participation agreement); provided, however, that each such
-------- -------
participation agreement shall provide that the Bank that shall have sold or
granted the participation shall retain the sole right to take or refrain from
taking any action under the Loan Documents except that such participation
agreement may provide that such Bank shall not, without the consent of the
participant, agree to any amendment or waiver that would have any of the effects
described in the first proviso to the first sentence of Section 9.07, to the
extent that the participant would be affected thereby. All amounts payable to
any Bank under Section 1.12 or Article 7 shall be determined as if such Bank had
not sold any participations. Each Bank that sells or grants a participation
shall (A) withhold or deduct from each payment to the holder of such
participation the amount of any Tax required under Applicable Law to be withheld
or deducted from such payment and not withheld or deducted therefrom by the
Borrower or the Administrative Agent, (B) pay any Tax so withheld or deducted by
it to the appropriate taxing authority in accordance with Applicable Law and (C)
indemnify the Borrower and the Administrative Agent for any losses, costs and
expenses that they may incur as a result of any failure to so withhold or deduct
and pay such Tax.
Section 9.11. Governing Law. This Agreement and the Notes (including
-------------
matters relating to the Maximum Permissible Rate) shall be construed in
accordance with and governed by the law of the State of New York (without giving
effect to its choice of law principles).
Section 9.12. Judicial Proceedings; Waiver of Jury Trial. Any
------------------------------------------
judicial proceeding brought against the Borrower with respect to any Loan
Document Related Claim may be brought in any
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<PAGE>
court of competent jurisdiction in the City of New York, and, by execution and
delivery of this Agreement, the Borrower (a) accepts, generally and
unconditionally, the nonexclusive jurisdiction of such courts and any related
appellate court and irrevocably agrees to be bound by any judgment rendered
thereby in connection with any Loan Document Related Claim and (b) irrevocably
waives any objection it may now or hereafter have as to the venue of any such
proceeding brought in such a court or that such a court is an inconvenient
forum. The Borrower hereby waives personal service of process and consents that
service of process upon it may be made by certified or registered mail, return
receipt requested, at its address specified or determined in accordance with the
provisions of Section 9.01(b)(i), and service so made shall be deemed completed
on the third Business Day after such service is deposited in the mail. Nothing
herein shall affect the right of any Agent or Bank or any other Indemnified
Person to serve process in any other manner permitted by law or shall limit the
right of any Agent or Bank or any other Indemnified Person to bring proceedings
against the Borrower in the courts of any other jurisdiction. To the extent
permitted in accordance with Applicable Law (including Applicable Law relating
to jurisdiction and venue), any judicial proceeding by the Borrower against the
Administrative Agent or any Bank involving any Loan Document Related Claim shall
be brought only in a court located in the City and State of New York. THE
BORROWER, THE AGENTS AND EACH BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING ANY LOAN DOCUMENT RELATED CLAIM.
Section 9.13. Severability of Provisions. Any provision of the
--------------------------
Borrower Loan Documents that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 9.14. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto were upon the same instrument.
Section 9.15. Survival of Obligations. Except as otherwise expressly
-----------------------
provided therein, the obligations of the Borrower under Sections 1.12, 7.02,
7.03, 7.04 and 9.02, and the obligations of the Banks under Section 8.05, shall
survive the Repayment Date and the termination of the Security Interest.
Section 9.16. Entire Agreement. This Agreement, the Notes and the
----------------
other Loan Documents embody the entire agreement among the Borrower, the
Administrative Agent and the Banks relating to the subject matter hereof and
supersede all prior agreements, representations and understandings, if any,
relating to the subject matter hereof.
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<PAGE>
Section 9.17. Successors and Assigns. All of the provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
Section 9.18. Reference Banks. Each Reference Bank shall furnish to
---------------
the Administrative Agent timely information for the purpose of determining the
Eurodollar Rate. If any Reference Bank shall notify the Administrative Agent
that thenceforth it shall not be able to furnish such information in a timely
manner or shall assign all of its Loans or Commitment to a Person that is not an
Affiliate of such Reference Bank, the Administrative Agent shall, with the
consent of the Required Banks and after consultation with the Borrower, appoint
another Bank (which Bank, or, in the event that the long-term debt securities of
such Bank shall not be rated by a nationally-recognized credit rating agency,
the parent holding company in the corporate group of which such Bank is a
member, shall have a credit rating with respect to long-term debt securities
from a nationally-recognized credit rating agency substantially equivalent to
the Bank, or the parent holding company in the corporate group of which such
Bank is a member, being replaced) as a Reference Bank in place of such Reference
Bank.
ARTICLE 10
INTERPRETATION
--------------
Section 10.01. Definitional Provisions. (a) Defined Terms. For
----------------------- -------------
the purposes of this Agreement:
"Accrued Management Fees" has the meaning ascribed to such term in
-----------------------
Section 4.11(b).
"Accumulated Funding Deficiency" has the meaning ascribed to such
------------------------------
term in Section 302 of ERISA.
"Acquisition Documents" means (i) the Share Purchase Agreement, dated
---------------------
June 18, 1994, between Comcast and Rogers, as modified pursuant to three letters
of modification, each dated June 18, 1994, from Rogers to Comcast and as further
amended pursuant to the First Amendment to Share Purchase Agreement, dated as of
December 22, 1994, (ii) the Agreement and Plan of Share Exchange, dated as of
October 21, 1994, among Comcast, Barden Communications, Inc., Don H. Barden and
the Don H. Barden Revocable Trust, as amended pursuant to the Amendment to
Agreement and Plan of Share Exchange, dated as of November 4, 1994, and as
further amended pursuant to the Second Amendment to Agreement and Plan of Share
Exchange, dated as of November 16, 1994, (iii) the Rogers Indemnity Agreement,
dated as of November 16, 1994, between Rogers and Comcast, (iv) the Escrow
Agreement, dated as of December 22, 1994, among Comcast, Rogers, Barden
Communications, Inc. (now known as Comcast Michigan Holdings,
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<PAGE>
Inc.), Don H. Barden and the Don H. Barden Revocable Trust, (v) the Assignment
and Assumption Agreement, dated as of December 22, 1994, between Comcast and the
Borrower and (vi) the Note Purchase and Assignment Agreement, dated as of
December 22, 1994.
"Adjusted Eurodollar Rate" means, for any Interest Period, a rate per
------------------------
annum (rounded upward, if necessary, to the next higher 1/100 of 1%) equal to
the rate obtained by dividing (i) the Eurodollar Rate for such Interest Period
by (ii) a percentage equal to 1 minus the Reserve Requirement in effect from
time to time during such Interest Period.
"Administrative Agent" means NationsBank of Texas, N.A., as
--------------------
Administrative Agent for the Banks under the Loan Documents, and any successor
Administrative Agent appointed pursuant to Section 8.07.
"Administrative Agent's Office" means the address of the
-----------------------------
Administrative Agent specified in or determined in accordance with the
provisions of Section 9.01(b)(ii).
"Affiliate" means, with respect to a Person, any other Person that,
---------
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person; unless
otherwise specified, "Affiliate" means an Affiliate of the Borrower. As used in
this definition, "control" (including, with correlative meanings, "controlled
by" and "under common control with") means possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
Contract or otherwise); provided, however, that, in any event, any Person that
-------- -------
owns directly or indirectly Capital Securities having 15% or more of the
ordinary voting power for the election of directors or other governing body of a
corporation or 15% or more of the partnership or other ownership interests in
any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person. Notwithstanding the
foregoing, no individual shall be deemed to be an Affiliate of a Person solely
by reason of such individual being an officer or director of such Person.
"Affiliate Subordinated Obligations" has the meaning ascribed to such
----------------------------------
term in the Affiliate Subordination Agreement, and, as provided therein,
includes accrued Management Fees, Junior Subordinated Indebtedness and Senior
Subordinated Indebtedness.
"Affiliate Subordination Agreement" means the Affiliate Subordination
---------------------------------
Agreement dated as of the date hereof among the Borrower, Comcast, Affiliates of
the Borrower from time to time party thereto and the Administrative Agent.
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<PAGE>
"Agent" means the Administrative Agent or any of the Arranging Agents
-----
or Managing Agents.
"Agreement" means this Agreement, including all Schedules, Annexes
---------
and Exhibits hereto.
"Agreement Date" means the date set forth as such on the last
--------------
signature page hereof, which date is the date that executed copies of this
Agreement were delivered by all parties hereto and, accordingly, this Agreement
became effective.
"Annualized Cash Flow" means, as of any date of determination, Cash
--------------------
Flow of the Borrower and the Consolidated Subsidiaries for the period of two
consecutive fiscal quarters of the Borrower ending on, or most recently ended
prior to, such date multiplied by two. For purposes of determining Annualized
Cash Flow, Cash Flow with respect to any Person, cable television system or
other assets for any period shall be adjusted by (i) deducting therefrom an
amount to reflect, as if such Person, cable television system or other assets
were not owned for any portion of such period, the reduction in Cash Flow
associated with the Person, cable television system or assets sold, exchanged or
otherwise disposed of pursuant to Section 4.08(f) hereof during such period and
(ii) adding thereto an amount to reflect, as if such Person, cable television
systems or other assets were owned for the entire period, the addition to Cash
Flow associated with the acquisition of Persons, cable television systems or
other assets during such period acquired pursuant to Section 4.07(d) or (e).
"Applicable Law" means, anything in Section 9.11 to the contrary
--------------
notwithstanding, (i) all applicable common law and principles of equity and (ii)
all applicable provisions of all (A) constitutions, statutes, rules, regulations
and orders of governmental bodies, (B) Governmental Approvals and (C) orders,
decisions, judgments and decrees of all courts (whether at law or in equity or
admiralty) and arbitrators.
"Applicable Margin" means, at any time, the respective percentage set
-----------------
forth below under the caption for such Type of Loan opposite the applicable
Leverage Ratio at such time set forth below:
<TABLE>
<CAPTION>
Eurodollar
Leverage Ratio Base Rate Rate
- - - -------------- ---------- -----------
<S> <C> <C>
Greater than or equal to 6.75 to 1 0.750% 1.750%
Less than 6.75 to 1 and greater
than or equal to 6.50 to 1 0.625% 1.625%
Less than 6.50 to 1 and greater
than or equal to 6.00 to 1 0.500% 1.500%
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
Less than 6.00 to 1 and greater
than or equal to 5.50 to 1 0.250% 1.250%
Less than 5.50 to 1 and greater
than or equal to 5.00 to 1 0.000% 1.000%
Less than 5.00 to 1 and greater
than or equal to 4.50 to 1 0.000% 0.875%
Less than 4.50 to 1 0.000% 0.625%
</TABLE>
The Leverage Ratio shall be determined initially on the basis of the certificate
provided for in Section 2.01(a)(viii) and subsequently on the basis of the most
recent financial statements delivered pursuant to Section 5.01. Any change in
the Applicable Margin as a result of a change in the Leverage Ratio shall be
effective as of the third Business Day after the day on which financial
statements are delivered to the Administrative Agent pursuant to Section 5.01
that indicate such change in the Leverage Ratio.
"Arranging Agents" means The Chase Manhattan Bank (National
----------------
Association), NationsBank of Texas, N.A., and The Toronto-Dominion Bank, as
Arranging Agents for the Banks under the Loan Documents.
"Bank" means (i) any Person listed as such on the signature pages
----
hereof and (ii) any Person that has been assigned any or all of the rights or
obligations of a Bank pursuant to Section 9.10(a).
"Bank Tax" means any Tax based on or measured by net income, any
--------
franchise Tax and any doing business Tax (including any gross receipts Tax in
the nature of a doing business Tax) imposed upon any Bank or any Agent by any
jurisdiction (or any political subdivision thereof) in which such Bank, such
Agent or any Lending Office is located.
"Base Financial Statements" means the consolidated balance sheet of
-------------------------
Comcast and its Consolidated Subsidiaries as of December 31, 1993 and the
related statements of income, retained earnings and cash flows for the fiscal
year ended with the date of such balance sheet.
"Base Rate" means, for any day, a rate per annum equal to the higher
---------
of (i) the Prime Rate in effect on such day and (ii) the Federal Funds Rate in
effect on such day plus 0.5%.
----
"Base Rate Loan" means any Loan the interest on which is, or is to be,
--------------
as the context may require, computed on the basis of the Base Rate.
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<PAGE>
"Basic Subscribers" has the meaning ascribed to such term in Section
-----------------
5.01(f).
"Benefit Plan" means, with respect to any Person at any time, any
------------
employee benefit plan (including a Multiemployer Benefit Plan), the funding
requirements of which (under Section 302 of ERISA or Section 412 of the Code)
are, or at any time within six years preceding the time in question were, in
whole or in part, the responsibility of such Person.
"Borrower" means Comcast MH Holdings, Inc., a Delaware corporation.
--------
"Borrower Loan Documents" means the Loan Documents to which the
-----------------------
Borrower is a party.
"Borrower's Predecessor Company" has the meaning ascribed to such term
------------------------------
in Section 5.01(b).
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which banks in New York City are authorized to close.
"CalPERS" means the California Employees' Retirement System.
-------
"Capital Security" means, with respect to any Person, (i) any share of
----------------
capital stock of such Person or (ii) any security convertible into, or any
option, warrant or other right to acquire, any share of capital stock of such
Person.
"Cash Flow" means, with respect to any Person, cable television system
---------
or other assets for any period, (i) the net income (which shall be consolidated,
as appropriate) attributable to such Person, cable television system or other
assets for such period, adjusted to exclude (A) gains and losses from unusual or
extraordinary items, (B) interest income and (C) the amount of any restoration
of any charge to or other reserve against revenues taken during any prior
period, in each case for such period plus (ii) income or gross receipts taxes
----
(whether or not deferred), Interest Expense (which for this purpose shall
include, to the extent deducted in determining net income, interest on Junior
Subordinated Indebtedness), Management Fees accrued and not paid in cash, bank
fees and expenses, depreciation, amortization and other non-cash charges to
income, in each case for such period minus (iii) except to the extent deducted
-----
in determining such net income, Management Fees paid in cash during such period
and any cash refunds of revenues received in respect of such period paid as a
result of or arising out of any of the Borrower's or any Subsidiary's FCC cost-
of-service proceedings; provided, however, that for each fiscal quarter ending
-------- -------
on, or prior to, June 30, 1995, Cash Flow shall be adjusted by adding $1,700,000
to the amount of Cash Flow for such quarter determined in accordance with the
foregoing provisions of
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<PAGE>
this definition; and provided, further, that for the purpose of determining Cash
-------- -------
Flow of the Borrower and the Consolidated Subsidiaries for any period ending
after December 31, 1996 (or such later date as shall be consented to by the
Required Agents), there shall not be added back to Cash Flow the amount of any
charges to or reserves against revenues for such period required as a direct
result of any of the Borrower's or any Consolidated Subsidiary's FCC cost-of-
service proceedings.
"Cash Flow Percentage" means, as of the date of any sale or exchange
--------------------
of capital stock, assets, or a cable television system, the ratio, expressed as
a percentage, derived by dividing (a) Cash Flow attributable thereto for the
four consecutive fiscal quarters of the Borrower ending on, or most recently
ended prior to, such date for which financial information is available and has
been delivered to the Banks hereunder prior to such date of sale or exchange by
(b) Cash Flow of the Borrower and its Consolidated Subsidiaries for such period.
"Closing Date" means the date of the making of the initial Loans
------------
hereunder.
"Code" means the Internal Revenue Code of 1986.
----
"Collateral" means all property in which a Lien is created pursuant to
----------
the Loan Documents.
"Comcast" means Comcast Corporation, a Pennsylvania corporation.
-------
"Comcast Communications" means Comcast Communications Properties,
----------------------
Inc., a Delaware corporation.
"Commitment" means, with respect to any Bank, its Tranche A Commitment
----------
and its Tranche B Commitment.
"Commitment Termination Date" means December 31, 2003.
---------------------------
"Consolidated Indebtedness" means, at any time, the consolidated
-------------------------
Indebtedness of the Borrower and the Consolidated Subsidiaries as of such time.
"Consolidated Subsidiary" means, with respect to any Person at any
-----------------------
time, any Subsidiary or other Person the accounts of which would be consolidated
with those of such first Person in its consolidated financial statements as of
such time; unless otherwise specified, "Consolidated Subsidiary" means a
Consolidated Subsidiary of the Borrower. For purposes of this Agreement, MH
Lightnet and MH Lightnet of Florida shall be deemed not to be Consolidated
Subsidiaries of the Borrower.
"Contract" means (i) any agreement (whether executory or non-executory
--------
and whether a Person entitled to rights thereunder is so entitled directly or as
a third-party
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<PAGE>
beneficiary), including an indenture, lease or license, (ii) any deed or other
instrument of conveyance, (iii) any certificate of incorporation or charter and
(iv) any by-law.
"Cure Date" has the meaning ascribed to such term in Section 6.03.
---------
"Current Management Fees" has the meaning ascribed to such term in
-----------------------
Section 4.11(b).
"Debt" means any Liability that constitutes "debt" or "Debt" under
----
Section 101(11) of the Bankruptcy Code or under the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any analogous Applicable
Law.
"Default" means any condition or event that constitutes an Event of
-------
Default or that with the giving of notice or lapse of time or both would, unless
cured or waived, become an Event of Default.
"Dollars" and the sign "$" mean lawful money of the United States of
------- -
America.
"Domestic Lending Office" means, with respect to any Bank, (i) the
-----------------------
branch or office of such Bank set forth below such Bank's name under the heading
"Domestic Lending Office" on Annex A or, in the case of a Bank that becomes a
-------
Bank pursuant to an assignment, the branch or office of such Bank set forth
under the heading "Domestic Lending Office" in the Notice of Assignment given to
the Borrower and the Administrative Agent with respect to such assignment or
(ii) such other branch or office of such Bank designated by such Bank from time
to time as the branch or office at which its Base Rate Loans are to be made or
maintained.
"Environmental Laws" means any and all Federal, state, local and
------------------
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment, including ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or waste.
"ERISA" means the Employee Retirement Income Security Act of 1974.
-----
"ERISA Affiliate" means, with respect to any Person, any other Person,
---------------
including a Subsidiary or other Affiliate of such first Person, that is a member
of any group of organizations
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<PAGE>
within the meaning of Section 414(b), (c), (m) or (o) of the Code of which such
first Person is a member.
"Eurodollar Business Day" means any Business Day on which dealings in
-----------------------
Dollar deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and international business (including
dealings in Dollar deposits) in London, England.
"Eurodollar Lending Office" means, with respect to any Bank, (i) the
-------------------------
branch or office of such Bank set forth below such Bank's name under the heading
"Eurodollar Lending Office" on Annex A or, in the case of a Bank that becomes a
-------
Bank pursuant to an assignment, the branch or office of such Bank set forth
under the heading "Eurodollar Lending Office" in the Notice of Assignment given
to the Borrower and the Administrative Agent with respect to such assignment or
(ii) such other branch or office of such Bank designated by such Bank from time
to time as the branch or office at which its Eurodollar Rate Loans are to be
made or maintained.
"Eurodollar Rate" means, for any Interest Period, the rate per annum
---------------
determined by the Administrative Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the rates per annum determined,
respectively, by each Reference Bank to be the rate at which such Reference Bank
offered or would have offered to place with first-class banks in the London
interbank market deposits in Dollars in amounts comparable to the Eurodollar
Rate Loan of such Reference Bank to which such Interest Period applies, for a
period equal to such Interest Period, at 11:00 a.m. (London time) on the second
Eurodollar Business Day before the first day of such Interest Period. If any
Reference Bank is unable or otherwise fails to furnish the Administrative Agent
with appropriate rate information in a timely manner, the Administrative Agent
shall determine the Eurodollar Rate based on the rate information furnished by
the remaining Reference Banks.
"Eurodollar Rate Loan" means any Loan the interest on which is, or is
--------------------
to be, as the context may require, computed on the basis of the Adjusted
Eurodollar Rate.
"Event of Default" means any of the events specified in Section 6.01.
----------------
"Excess Cash Flow" means, for any fiscal year, the amount, if any, by
----------------
which (a) Cash Flow of the Borrower and the Consolidated Subsidiaries for such
fiscal year exceeds (b) the sum of (i) the aggregate amount of Interest Expense
of the Borrower and the Consolidated Subsidiaries for such fiscal year, (ii) an
amount equal to 50% of the amount of capital expenditures made or incurred by
the Borrower or any Consolidated Subsidiary during such fiscal year (net of any
proceeds realized in respect of damaged or destroyed capital assets or from the
disposition of
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<PAGE>
obsolete or retired capital assets), (iii) the amount of Required Repayments in
respect of such fiscal year and (iv) the amount of income taxes, without
duplication, paid or payable in cash during such fiscal year, including (without
duplication) the amount paid to Comcast Communications in respect of income
taxes pursuant to the Tax Sharing Agreement, by the Borrower and the
Consolidated Subsidiaries.
"Existing Benefit Plan" means, with respect to any Person at any time,
---------------------
any employee benefit plan (including a multiemployer benefit plan as defined in
Section 4001(a)(3) of ERISA), the funding requirements of which (under Section
302 of ERISA or Section 412 of the Code) are, in whole or in part, the
responsibility of such Person.
"Existing Guaranty" means (i) any Guaranty outstanding on the
-----------------
Agreement Date, to the extent set forth on Schedule 4.04, and (ii) any Guaranty
-------------
that constitutes a renewal, extension or replacement of an Existing Guaranty,
but only if (A) at the time such Guaranty is entered into and after giving
effect thereto, no Default would exist, (B) such Guaranty is binding only on the
obligor or obligors under the Guaranty so renewed, extended or replaced, (C) the
principal amount of the obligations Guaranteed by such Guaranty does not exceed
the principal amount of the obligations Guaranteed by the Guaranty so renewed,
extended or replaced and (D) the obligations Guaranteed by such Guaranty bear
interest at a rate per annum not exceeding the rate borne by the obligations
Guaranteed by the Guaranty so renewed, extended or replaced except for any
increase that is commercially reasonable at the time of such increase.
"Existing Investment" means any investment outstanding on the
-------------------
Agreement Date, to the extent set forth on Schedule 4.14, and any renewal or
-------------
extension thereof not involving an increase therein as the result of an
additional investment by the Borrower or any Subsidiary.
"FCC" means the Federal Communications Commission.
---
"Federal Funds Rate" means, for any day, the weighted average of the
------------------
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day that is a Business Day, the average of quotations for such day on such
transactions received by NationsBank of Texas, N.A., from three Federal funds
brokers of recognized standing selected by such bank.
"Franchise" means a franchise, license, authorization or right to
---------
construct, own, operate, promote and/or extend any cable television system
operated or to be operated by the Borrower or any of the Subsidiaries granted by
any state or
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<PAGE>
county, city, town, village or other local government authority or by the FCC.
"Funded Current Liability Percentage" has the meaning ascribed to such
-----------------------------------
term in Section 401(a)(29) of the Code.
"Generally Accepted Accounting Principles" means (i) in the case of
----------------------------------------
the Base Financial Statements, generally accepted accounting principles at the
time of the issuance of the Base Financial Statements and (ii) in all other
cases, the accounting principles followed in the preparation of the Base
Financial Statements, except as provided in Section 10.02.
"Governmental Approval" means any authorization, consent, approval,
---------------------
license or exemption of, registration or filing with, or report or notice to,
any governmental unit.
"Guaranty" means, with respect to any Person, any contractual
--------
obligation, contingent or otherwise, of such Person (i) to pay any Indebtedness
or other obligation of any other Person or to otherwise protect the holder of
any such Indebtedness or other obligation against loss (whether such obligation
arises by agreement to pay, to keep well, to purchase assets, goods, securities
or services or otherwise) or (ii) incurred in connection with the issuance by a
third Person of a Guaranty of any Indebtedness or other obligation of any other
Person (whether such obligation arises by agreement to reimburse or indemnify
such third Person or otherwise by Contract); provided, however, that the term
-------- -------
"Guaranty" shall not include an endorsement for collection or deposit in the
ordinary course of business. The word "Guarantee" when used as a verb has the
---------
correlative meaning.
"Hazardous Material" means any oil, hazardous waste, hazardous
------------------
material or hazardous substance listed, defined or otherwise identified as
hazardous in the Resource Conservation and Recovery Act, 42 U.S.C. (S) 6921 et
--
seq., the Comprehensive Environmental Response Compensation and Liability Act,
- - - ---
42 U.S.C. (S) 9601 et seq., or any other Federal or state Environmental Law.
-- ---
"Indebtedness" means, with respect to any Person (in each case,
------------
whether such obligation is with full or limited recourse), without duplication,
(i) any obligation of such Person for borrowed money, (ii) any obligation of
such Person evidenced by a bond, debenture, note or other similar instrument,
(iii) any deferred programming expense owed to Affiliates or other obligation of
such Person, whether or not owed to Affiliates, to pay the deferred purchase
price of property or services, except a trade account payable that arises in the
ordinary course of business but only if, in the case of any such payable owed to
Affiliates, it is payable on customary trade terms, (iv) any obligation of such
Person as lessee under a capital lease, (v) any Mandatorily Redeemable
Securities issued by such Person owned by any Person other than such Person or a
Wholly Owned Subsidiary
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<PAGE>
of such Person (the amount of such Mandatorily Redeemable Securities to be
determined for this purpose as the higher of the liquidation preference of and
the amount payable upon redemption of such Mandatorily Redeemable Securities),
(vi) any obligation of such Person to purchase securities or other property that
arises out of or in connection with the sale of the same or substantially
similar securities or property, (vii) any contractual obligation, contingent or
otherwise, of such Person to reimburse any other Person in respect of amounts
paid under a letter of credit or performance or other bond issued by such other
Person, (viii) any Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) a Lien on any asset of such Person and (ix) any Indebtedness of others
Guaranteed by such Person; provided, however, that the term "Indebtedness" with
-------- -------
respect to the Borrower and the Consolidated Subsidiaries shall not include (x)
letters of credit or performance or other bonds up to an aggregate outstanding
face amount of $10,000,000 or (y) Permitted Management Fees.
"Indemnified Person" means, at any time, any Person that is, or at
------------------
such time was, the Administrative Agent, any other Agent, a Bank, an Affiliate
of the Administrative Agent, any other Agent or a Bank or a director, officer,
employee or agent of any such Person.
"Information" means written data, certificates, reports, statements
-----------
(excluding financial statements), documents and other written information.
"Intellectual Property" means (i) (A) patents and patent rights, (B)
---------------------
trademarks, trademark rights, trade names, trade name rights, corporate names,
business names, trade styles, service marks, logos and general intangibles of
like nature and (C) copyrights, in each case whether registered, unregistered or
under pending registration and, in the case of any such that are registered or
under pending registration, whether registered or under pending registration
under the laws of the United States or any other country, (ii) reissues,
continuations, continuations-in-part and extensions of any Intellectual Property
referred to in clause (i) above and (iii) rights relating to any Intellectual
Property referred to in clause (i) or (ii) above, including rights under
applications (whether pending under the laws of the United States or any other
country) or licenses relating thereto.
"Interest Coverage Ratio" means, as of any date of determination, the
-----------------------
ratio of (i) Cash Flow of the Borrower and the Consolidated Subsidiaries for the
period of two consecutive fiscal quarters of the Borrower ending on, or most
recently ended prior to, such date (or, if shorter, the period from the Closing
Date to such date) to (ii) Interest Expense for such period.
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<PAGE>
"Interest Expense" means, for any Person, cable television system or
----------------
other assets for any period, without duplication, (i) all interest on
Indebtedness of such Person, or attributable to such system or assets, and
commitment fees paid in respect thereof, accrued (other than, in the case of the
Borrower and the Consolidated Subsidiaries, interest on Junior Subordinated
Indebtedness), whether or not actually paid, during such period plus (ii) the
----
net amount accrued, whether or not actually paid, by such Person, or
attributable to such system or assets, pursuant to any Interest Rate Protection
Agreement during such period (or minus the net amount receivable, whether or not
-----
actually received, by such Person, or attributable to such system or assets,
thereunder during such period).
"Interest Payment Date" means the last day of March, June, September
---------------------
and December of each year.
"Interest Period" means a period commencing, in the case of the first
---------------
Interest Period applicable to a Eurodollar Rate Loan, on the day of the making
of, or conversion into, such Loan, and, in the case of each subsequent,
successive Interest Period applicable thereto, on the last day of the next
preceding Interest Period, and ending, depending on the Type of Loan, on the
same day in the first, second, third, sixth or, if made available by each of the
Banks, ninth or twelfth calendar month thereafter, except that (i) any Interest
Period that would otherwise end on a day that is not a Eurodollar Business Day
shall be extended to the next succeeding Eurodollar Business Day, unless such
Eurodollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Eurodollar Business Day and (ii)
any Interest Period that begins on the last Eurodollar Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month in which such Interest Period ends) shall end on the last
Eurodollar Business Day of a calendar month.
"Interest Rate Protection Agreements" means, for any Person, an
-----------------------------------
interest rate swap, cap or collar agreement or similar arrangement between such
Person and a Bank or other financial institution having combined capital and
surplus of at least $200,000,000 or that has (or that is a subsidiary of a bank
holding company that has) publicly traded unsecured long-term debt securities
given a rating of A- (or the equivalent rating then in effect) or better by
Standard & Poor's Ratings Group or a rating of A3 (or the equivalent rating then
in effect) or better by Moody's Investors Service, Inc., providing for the
transfer or mitigation of interest risks either generally or under specific
contingencies.
"Junior Subordinated Indebtedness" means Affiliate Subordinated
--------------------------------
Obligations (other than Senior Subordinated Indebtedness and accrued Management
Fees) advanced to the Borrower by Comcast (or any Affiliate of the Borrower that
is or
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shall have become a party to the Affiliate Subordination Agreement), including
deferred programming charges due to Comcast or any of such Affiliates party to
the Affiliate Subordination Agreement.
"Lending Office" means, with respect to any Bank, the Domestic Lending
--------------
Office or the Eurodollar Lending Office of such Bank.
"Leverage Ratio" means, as of any date of determination, the ratio of
--------------
(i) Consolidated Indebtedness (other than Junior Subordinated Indebtedness) on
such date to (ii) Annualized Cash Flow as of such date.
"Liability" means, with respect to any Person, any indebtedness,
---------
liability or obligation of or binding upon such Person or any of its assets.
"Lien" means, with respect to any property or asset (or any income or
----
profits therefrom) of any Person (in each case whether the same is consensual or
nonconsensual or arises by Contract, operation of law, legal process or
otherwise), (i) any mortgage, lien, pledge, attachment, levy or other security
interest of any kind thereupon or in respect thereof or (ii) any other
arrangement under which the same is transferred, sequestered or otherwise
identified with the intention of subjecting the same to, or making the same
available for, the payment or performance of any Liability in priority to the
payment of the ordinary, unsecured creditors of such Person. For the purposes
of this Agreement, a Person shall be deemed to own subject to a Lien any asset
that it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Tranche A Loan or a Tranche B Loan.
----
"Loan Document Related Claim" means any claim (whether civil, criminal
---------------------------
or administrative and whether sounding in tort, contract or otherwise) arising
out of, related to, or connected with, the Loan Documents, whether such claim
arises or is asserted before or after the Agreement Date or before or after the
Repayment Date.
"Loan Document Representation and Warranty" means any "Representation
-----------------------------------------
and Warranty" as defined in any Loan Document and any other representation or
warranty made or deemed made pursuant to the terms of any Loan Document.
"Loan Documents" means (i) this Agreement, the Notes, the Pledge
--------------
Agreements and the Affiliate Subordination Agreement and (ii) all other
agreements, documents and instruments (other than the assumption agreements
referred to in Section 4.09(f)(i) and any promissory notes payable to the
Borrower and executed in
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connection therewith) arising out of (A) any agreement, document or instrument
referred to in clause (i) above, (B) any other agreement, document or instrument
referred to in this clause (ii) or (C) any of the transactions pursuant to any
agreement, document or instrument referred to in clause (i) above or in this
clause (ii).
"Loan Parties" means the Borrower, Comcast, Comcast Communications and
------------
any Affiliate of the Borrower from time to time party to the Affiliate
Subordination Agreement (until such time as such Affiliate shall be released
therefrom in the manner provided therein).
"Management Agreement" means the Management Agreement dated as of the
--------------------
date hereof between the Borrower and Comcast.
"Management Fees" means all fees and other amounts payable under the
---------------
Management Agreement, including but not limited to overhead and administrative
costs allocated by Comcast to the Subsidiaries of the Borrower party thereto but
excluding amounts paid in reimbursement of out-of-pocket costs and expenses
incurred on behalf of such Subsidiaries.
"Managing Agents" means The Bank of New York, The Bank of Nova Scotia,
---------------
Canadian Imperial Bank of Commerce and Morgan Guaranty Trust Company of New
York, as Managing Agents for the Banks under the Loan Documents.
"Mandatorily Redeemable Securities" means, with respect to any Person,
---------------------------------
any Capital Securities issued by such Person to the extent that they are (i)
redeemable, payable or required to be purchased or otherwise retired or
extinguished, or convertible into any Indebtedness or other Liability of such
Person, (A) at a fixed or determinable date, whether by operation of a sinking
fund or otherwise, (B) at the option of any Person other than such Person or (C)
upon the occurrence of a condition not solely within the control of such Person,
such as a redemption required to be made out of future earnings or (ii)
convertible into Mandatorily Redeemable Securities.
"Materially Adverse Effect" means, (i) with respect to any Person, any
-------------------------
materially adverse effect on such Person's business, assets, Liabilities,
financial condition or results of operations, (ii) with respect to a group of
Persons "taken as a whole," any materially adverse effect on such Persons'
business, assets, Liabilities, financial condition or results of operations
taken as a whole on, where appropriate, a consolidated basis in accordance with
Generally Accepted Accounting Principles, (iii) with respect to any Loan
Document, any material adverse effect on the binding nature, validity or
enforceability thereof as an obligation of any Loan Party that is a party
thereto and (iv) with respect to any Collateral, or any category of Collateral,
pledged by any Loan Party, a materially adverse effect on the
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<PAGE>
validity, perfection, priority or enforceability of the Security Interest
therein.
"Maximum Permissible Rate" means, with respect to interest payable on
------------------------
any amount, the rate of interest on such amount that, if exceeded, could, under
Applicable Law, result in (i) civil or criminal penalties being imposed on the
payee or (ii) the payee's being unable to enforce payment of (or, if collected,
to retain) all or any part of such amount or the interest payable thereon.
"MH Lightnet" means MH Lightnet, Inc., a Delaware corporation.
-----------
"MH Lightnet of Florida" means MH Lightnet of Florida, Inc., a
----------------------
Delaware corporation.
"Multiemployer Benefit Plan" means any Benefit Plan that is a
--------------------------
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any sale or disposition
------------
(including an exchange) of assets, the gross amount of consideration (other than
consideration in the form of Indebtedness and other Liabilities assumed directly
or indirectly by the purchaser of such assets) or other amounts including
condemnation awards and insurance settlements paid to or received by the
Borrower or any Subsidiary in respect of such sale or disposition (including
only the cash component, if any, of exchanges of assets), less the sum of (a)
reasonable and customary fees, costs and expenses incurred in connection with
such sale or disposition and payable by or on behalf of the seller or the
transferor of the assets to which such sale or disposition relates, (b) the
amount, reasonably estimated by the Borrower, of taxes payable to federal, state
and local taxing authorities by such seller or transferor in connection with
such sale or disposition and (c) the amount of the Indebtedness and other
liabilities attributable to or associated with such assets (other than any such
Indebtedness or liability owed to the Borrower or any Subsidiary) required to be
paid or repaid or, in the case of any such liability, retained on a primary
obligor basis by the Borrower or any Subsidiary in connection with such sale or
disposition. For purposes hereof, the value of any noncash consideration
received from purchasers of assets shall be the fair market value thereof, as
determined in good faith by the Borrower.
"Note" means any promissory note in the form of Exhibit A.
---- ---------
"Notice of Assignment" means any notice to the Borrower and the
--------------------
Administrative Agent with respect to an assignment pursuant to Section 9.10(a)
in the form of Schedule 9.10(a).
----------------
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<PAGE>
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"Permitted Guaranty" means (i) any Guaranty to which Section 4.09 is
------------------
by its express terms inapplicable by virtue of clauses (d) or (e) thereof and
(ii) any Guaranty of obligations of the Borrower or any Subsidiary so long as
such obligations do not constitute Indebtedness and have been incurred in the
ordinary course of business.
"Permitted Lien" means (i) the Security Interest; (ii) any Lien
--------------
securing the obligations of the obligor in respect of Indebtedness to which
Section 4.09 is by its express terms inapplicable by virtue of clauses (d) or
(e) thereof; (iii) any right of set-off arising under law and not under
Contract, any Lien securing a tax, assessment or other governmental charge or
levy or the claim of a materialman, mechanic, carrier, warehouseman or landlord
for labor, materials, supplies or rentals incurred in the ordinary course of
business, but only if payment thereof shall not at the time be required to be
made in accordance with Section 4.01(d) and foreclosure, distraint, sale or
other similar proceedings shall not have been commenced and remained unstayed or
undismissed for more than 30 days; (iv) any Lien on the properties and assets of
a Subsidiary securing an obligation owing to the Borrower or a Wholly Owned
Subsidiary; (v) any Lien consisting of a deposit or pledge made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation; (vi)
any Lien (other than a Lien on the Collateral) arising pursuant to an order of
attachment, distraint or similar legal process arising in connection with legal
proceedings, but only if and so long as, in the case of any such Lien arising in
connection with a judgment, no Event of Default set forth in Section 6.01(g)
shall exist and, in each other case, the execution or other enforcement thereof
is not unstayed for more than 20 days; (vii) any Lien existing on (A) any
property or asset of any Person at the time such Person becomes a Subsidiary or
(B) any property or asset at the time such property or asset is acquired by the
Borrower or a Subsidiary, but only, in the case of either (A) or (B), if and so
long as (w) such Lien was not created in contemplation of such Person becoming a
Subsidiary or such property or asset being acquired, (x) such Lien is and will
remain confined to the property or asset subject to it at the time such Person
becomes a Subsidiary or such property or asset is acquired and to fixed
improvements thereafter erected on such property or asset, (y) such Lien secures
only the obligation secured thereby at the time such Person becomes a Subsidiary
or such property or asset is acquired and (z) the obligation secured by such
Lien is not in default; (viii) any Lien in existence on the Agreement Date to
the extent set forth on Schedule 4.05, but only, in the case of each such Lien,
-------------
to the extent it secures an obligation outstanding on the Agreement Date to the
extent set forth on such Schedule; or (ix) any Lien constituting a renewal,
extension or replacement of a Lien constituting a Permitted Lien by virtue of
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<PAGE>
clause (vii), (viii) or (ix) above, but only if (A) at the time such Lien is
granted and after giving effect thereto, no Default would exist, (B) such Lien
is limited to all or a part of the property or asset that was subject to the
Lien so renewed, extended or replaced and to fixed improvements thereafter
erected on such property or asset, (C) the principal amount of the obligations
secured by such Lien does not exceed the principal amount of the obligations
secured by the Lien so renewed, extended or replaced and (D) the obligations
secured by such Lien bear interest at a rate per annum not exceeding the rate
borne by the obligations secured by the Lien so renewed, extended or replaced
except for any increase that is commercially reasonable at the time of such
increase.
"Permitted Management Fees" has the meaning ascribed to such term in
-------------------------
Section 4.11(b).
"Permitted Parent Reimbursements" means amounts payable to or for the
-------------------------------
benefit of CalPERS pursuant to the agreements relating to CalPERS' interest in
the Borrower and any amounts payable for professional and related services
rendered to the Persons established to own, directly or indirectly, the capital
stock issued by the Borrower, in an aggregate amount not to exceed $600,000 per
annum.
"Permitted Restrictive Covenant" means (i) any covenant or restriction
------------------------------
contained in any Loan Document, (ii) any covenant or restriction binding upon
any Person at the time such Person becomes a Subsidiary of the Borrower if the
same is not created in contemplation thereof, (iii) any covenant or restriction
described in Schedule 4.12, but only to the extent such covenant or restriction
-------------
is there identified by specific reference to the provision of the Contract in
which such covenant or restriction is contained or (iv) any covenant or
restriction that (A) is not more burdensome than an existing Permitted
Restrictive Covenant that is such by virtue of clause (ii), (iii) or (iv) above,
(B) is contained in a Contract constituting a renewal, extension or replacement
of the Contract in which such existing Permitted Restrictive Covenant is
contained and (C) is binding only on the Person or Persons bound by such
existing Permitted Restrictive Covenant.
"Person" means any individual, sole proprietorship, corporation,
------
partnership, trust, unincorporated organization, mutual company, joint stock
company, estate, union, employee organization, government or any agency or
political subdivision thereof or, for the purpose of the definition of "ERISA
Affiliate," any trade or business.
"Pledge Agreement" means each of the Pledge Agreements, each dated as
----------------
of the date hereof between the Borrower and the Secured Party and between
Comcast Communications and the Secured Party, respectively.
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<PAGE>
"Pledged Securities" has the meaning ascribed to such term in the
------------------
Pledge Agreements.
"Pledgor" has the meaning ascribed to such term in the respective
-------
Pledge Agreements.
"Post-Default Rate" means the rate otherwise applicable under Section
-----------------
1.03(a) plus 2% or, if there is no such rate, the Base Rate plus the Applicable
---- ----
Margin plus 2%.
----
"Predecessor Indebtedness" means Indebtedness set forth on Schedule
------------------------ --------
10.01.
- - - -----
"Prime Rate" means the prime commercial lending rate of NationsBank of
----------
Texas, N.A., as publicly announced to be in effect from time to time. The Prime
Rate shall be adjusted automatically, without notice, on the effective date of
any change in such prime commercial lending rate. The Prime Rate is not
necessarily the lowest rate of interest of NationsBank of Texas, N.A.
"Pro Forma Debt Service" means, as of any date of determination, the
----------------------
sum of (i) all Required Repayments, and all other payments of principal of
Indebtedness (other than Junior Subordinated Indebtedness) of the Borrower and
the Consolidated Subsidiaries (including all payments in respect of capitalized
leases) scheduled to be made, during the period commencing with the day next
succeeding such date and ending on the date corresponding to such date of
determination in the following calendar year and (ii) Interest Expense for such
period; provided, however, that Interest Expense shall be calculated, for
-------- -------
purposes of this definition, on the basis of (A) in the case of Eurodollar Rate
Loans, the interest rate or rates then in effect with respect to such Eurodollar
Rate Loans, (B) in the case of Base Rate Loans, the average interest rate
applicable to such Loans during the period of 90 days preceding the date of
determination and (C) in the case of all Indebtedness of the Borrower (other
than the Loans) bearing interest at a floating rate, the interest rate or rates
then in effect with respect to such Indebtedness.
"Pro Forma Debt Service Ratio" means, as of any date of determination,
----------------------------
the ratio of (i) Annualized Cash Flow as of such date to (ii) Pro Forma Debt
Service as of such date.
"Prohibited Transaction" means any transaction that is prohibited
----------------------
under Section 4975 of the Code or Section 406 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA.
"Reference Banks" means The Chase Manhattan Bank (National
---------------
Association), NationsBank of Texas, N.A. and The Toronto-Dominion Bank, and any
replacement Reference Bank appointed pursuant to Section 9.18.
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<PAGE>
"Regulation D" means Regulation D of the Board of Governors of the
------------
Federal Reserve System.
"Regulatory Change" means any Applicable Law, interpretation,
-----------------
directive, request or guideline (whether or not having the force of law), or any
change therein or in the administration or enforcement thereof, that becomes
effective or is implemented or first required or expected to be complied with
after the Agreement Date (including any Applicable Law that shall have become
such as the result of any act or omission of the Borrower or any of its
Affiliates, without regard to when such Applicable Law shall have been enacted
or implemented), whether the same is (i) the result of an enactment by a
government or any agency or political subdivision thereof, a determination of a
court or regulatory authority or otherwise or (ii) enacted, adopted, issued or
proposed before or after the Agreement Date, including any such that imposes,
increases or modifies any Tax, reserve requirement, insurance charge, special
deposit requirement, assessment or capital adequacy requirement, but excluding
any such that imposes, increases or modifies any Bank Tax.
"Repayment Date" means the later of (i) the termination of the Total
--------------
Commitment (whether as a result of the occurrence of the Commitment Termination
Date, the reduction to zero pursuant to Section 1.07 or termination pursuant to
Section 6.02) and (ii) the payment in full of the Loans and all other amounts
payable or accrued hereunder.
"Reportable Event" means, with respect to any Benefit Plan of any
----------------
Person, (i) the occurrence of any of the events set forth in Section 4043(b)
(other than a Reportable Event as to which the provision of 30 days' notice to
the PBGC is waived under applicable regulations), 4068(f) or 4063(a) of ERISA or
the regulations thereunder with respect to such Benefit Plan, (ii) any event
requiring such Person or any of its ERISA Affiliates to provide security to such
Benefit Plan under Section 401(a)(29) of the Code or (iii) any failure to make a
payment required by Section 412(m) of the Code with respect to such Benefit
Plan.
"Representation and Warranty" means any written representation or
---------------------------
warranty made pursuant to or under (i) Section 2.02, Article 3, Section 5.02 or
any other provision of this Agreement or (ii) any amendment to, or waiver of
rights under, this Agreement, WHETHER OR NOT, IN THE CASE OF ANY REPRESENTATION
OR WARRANTY REFERRED TO IN CLAUSE (i) OR (ii) ABOVE (EXCEPT, IN EACH CASE, TO
THE EXTENT OTHERWISE EXPRESSLY PROVIDED), THE INFORMATION THAT IS THE SUBJECT
MATTER THEREOF IS WITHIN THE KNOWLEDGE OF THE BORROWER.
"Required Agents" means Arranging Agents and Managing Agents
---------------
comprising no fewer than six out of the seven Arranging Agents and Managing
Agents.
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<PAGE>
"Required Banks" means, at any time, Banks having at least 51% of the
--------------
Loans outstanding or, if there are no Loans outstanding, at least 51% of the
Total Commitment.
"Required Repayments" means, for any period, the excess, if any, of
-------------------
(i) the outstanding amount of Loans and Senior Subordinated Indebtedness at the
beginning of such period over (ii) the Total Commitment at the end of such
period.
"Reserve Requirement" means, at any time, the then current maximum
-------------------
rate for which reserves (including any marginal, supplemental or emergency
reserve) are required to be maintained under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding five billion
Dollars against "Eurocurrency liabilities," as such term is used in Regulation
D. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of
the effective date of any change in the applicable Reserve Requirement.
"Responsible Officer" means, with respect to any Loan Party, the
-------------------
chairman, vice chairman, president, any senior vice president or the chief
financial officer of such Loan Party.
"Restricted Payment" means (i) (A) any dividend or other distribution
------------------
on account of any Capital Securities issued by the Borrower or any Subsidiary
(other than dividends payable solely in such Capital Securities other than
Mandatorily Redeemable Securities and other than dividends and other
distributions payable to the Borrower or a Wholly Owned Subsidiary), (B) any
payment on account of the principal of or premium, if any, on any Indebtedness
convertible into Capital Securities issued by the Borrower or any Subsidiary
(other than any such payment to the Borrower or a Wholly Owned Subsidiary) or
(C) any payment on account of any purchase, redemption, retirement, exchange or
conversion of any Capital Securities issued by the Borrower or any Subsidiary
(other than any such payment to the Borrower or a Wholly Owned Subsidiary) and
(ii) payments of interest on, or payments or prepayments of principal of, or the
setting apart of money for a sinking or other analogous fund for, the purchase,
redemption, retirement or other acquisition of, any principal of or interest on
Junior Subordinated Indebtedness. For the purposes of this definition, a
"payment" or "prepayment" shall include the transfer of any asset or the
issuance of any Indebtedness or other obligation (the amount of any such payment
to be the fair market value of such asset or the amount of such obligation,
respectively) but shall not include the issuance of any Capital Securities other
than Mandatorily Redeemable Securities.
"Rogers" means Rogers Communications, Inc., a corporation existing
------
under the laws of the Province of British Columbia.
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<PAGE>
"Secured Party" has the meaning ascribed to such term in the Pledge
-------------
Agreements.
"Security Interest" means the Liens created, or purported to be
-----------------
created, by the Loan Documents.
"Senior Subordinated Indebtedness" means Affiliate Subordinated
--------------------------------
Obligations advanced to the Borrower by Comcast (or any Affiliate of the
Borrower that is or shall have become a party to the Affiliate Subordination
Agreement), bearing interest at a rate per annum, for any fiscal quarter of the
Borrower, not in excess of the rate that is 1/2% below the weighted average
interest rate applicable to the Loans hereunder during such fiscal quarter and
in an aggregate principal amount not in excess of the lesser of the Maximum
Senior Subordinated Indebtedness Amount and the unused portion, if any, of the
Total Commitment at such time. As used herein, "Maximum Senior Subordinated
Indebtedness Amount" means, at any time prior to December 31, 1998, $200,000,000
and, at any time thereafter, an amount equal to the product of $200,000,000 and
a fraction, the numerator of which is equal to the Total Commitment that was in
effect on the most recent December 31 (after giving effect to any reductions to
the Total Commitment to be made on such December 31) and the denominator of
which is $850,000,000. Obligations treated as Junior Subordinated Indebtedness
by the lender and borrower thereof shall not be deemed Senior Subordinated
Indebtedness irrespective of the interest rate or other terms applicable
thereto.
"Subsidiary" means, with respect to any Person, any other Person (i)
----------
Capital Securities of which having ordinary voting power to elect a majority of
the board of directors (or other persons having similar functions) of such
Person or (ii) other ownership interests, including partnership interests, of
which ordinarily constituting a majority voting interest are at the time,
directly or indirectly, owned or controlled by such first Person, or by one or
more of its Subsidiaries, or by such first Person and one or more of its
Subsidiaries; unless otherwise specified, "Subsidiary" means a Subsidiary of the
Borrower. For purposes of this Agreement, MH Lightnet, Inc. and MH Lightnet of
Florida, Inc. shall be deemed not to be Subsidiaries of the Borrower.
"Tax" means any Federal, State or foreign tax, assessment or other
---
governmental charge or levy (including any withholding tax) upon a Person or
upon its assets, revenues, income or profits.
"Tax Sharing Agreement" means the Tax Sharing Agreement, dated as of
---------------------
December 22, between the Borrower and Comcast Communications.
"Termination Event" means, with respect to any Benefit Plan, (i) any
-----------------
Reportable Event with respect to such Benefit Plan,
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(ii) the termination of such Benefit Plan, or the filing of a notice of intent
to terminate such Benefit Plan, or the treatment of any amendment to such
Benefit Plan as a termination under Section 4041(c) of ERISA, (iii) the
institution of proceedings to terminate such Benefit Plan under Section 4042 of
ERISA or (iv) the appointment of a trustee to administer such Benefit Plan under
Section 4042 of ERISA.
"Total Commitment" means the aggregate amount of the Total Tranche A
----------------
Commitment and Total Tranche B Commitment, as the same may be reduced from time
to time pursuant to Section 1.07.
"Total Revenue" has the meaning ascribed to such term in Section
-------------
4.11(b).
"Total Tranche A Commitment" means the aggregate amount of the Tranche
--------------------------
A Commitments, as the same may be reduced from time to time pursuant to Section
1.07.
"Total Tranche B Commitment" means the aggregate amount of the Tranche
--------------------------
B Commitments, as the same may be reduced from time to time pursuant to Section
1.07.
"Tranche A Commitment" means, with respect to any Bank, (i) the amount
--------------------
set forth opposite such Bank's name under the heading "Tranche A Commitment" on
Annex A or, in the case of a Bank that becomes a Bank pursuant to an assignment,
the amount of the assignor's Tranche A Commitment assigned to such Bank, in
either case as the same may be reduced from time to time pursuant to Section
1.07 or increased or reduced from time to time pursuant to assignments in
accordance with Section 9.10(a) or (ii) as the context may require, the
obligation of such Bank to make Tranche A Loans in an aggregate unpaid principal
amount not exceeding such amount.
"Tranche A Loan" means any amount advanced by a Bank with respect to
--------------
its Tranche A Commitment pursuant to Section 1.01(a).
"Tranche B Commitment" means, with respect to any Bank, (i) the amount
--------------------
set forth opposite such Bank's name under the heading "Tranche B Commitment" on
Annex A or, in the case of a Bank that becomes a Bank pursuant to an assignment,
the amount of the assignor's Tranche B Commitment assigned to such Bank, in
either case as the same may be reduced from time to time pursuant to Section
1.07 or increased or reduced from time to time pursuant to assignments in
accordance with Section 9.10(a) or (ii) as the context may require, the
obligation of such Bank to make Tranche B Loans in an aggregate unpaid principal
amount not exceeding such amount.
"Tranche B Loan" means any amount advanced by a Bank with respect to
--------------
its Tranche B Commitment pursuant to Section 1.01(a).
-84-
<PAGE>
"Type" means, with respect to Loans, any of the following, each of
----
which shall be deemed to be a different "Type" of Loan: Base Rate Loans,
Eurodollar Rate Loans having a one-month Interest Period, Eurodollar Rate Loans
having a two-month Interest Period, Eurodollar Rate Loans having a three-month
Interest Period, Eurodollar Rate Loans having a six-month Interest Period and,
if made available by each of the Banks, Eurodollar Rate Loans having a nine-
month Interest Period and Eurodollar Rate Loans having a twelve-month Interest
Period. Any Eurodollar Rate Loan having an Interest Period with a duration that
differs from the duration specified for a Type of Eurodollar Rate Loan listed
above solely as a result of the operation of clauses (i) and (ii) of the
definition of "Interest Period" shall be deemed to be a Loan of such Type
notwithstanding such difference in duration of Interest Periods. Tranche A
Loans and Tranche B Loans shall not, by virtue solely of their identity as such,
be deemed Loans of different Types.
"Unfunded Benefit Liabilities" means, with respect to any Benefit Plan
----------------------------
at any time, the amount of unfunded benefit liabilities of such Benefit Plan at
such time as determined under Section 4001(a)(18) of ERISA.
"Uniform Commercial Code" means the Uniform Commercial Code as in
-----------------------
effect from time to time in the State of New York.
"United States person" has the meaning ascribed to such term in
--------------------
Section 1.12(a).
"Wholly Owned Subsidiary" means, with respect to any Person, any
-----------------------
Subsidiary of such Person all of the Capital Securities and all other ownership
interests and rights to acquire ownership interests of which (except directors'
qualifying shares) are, directly or indirectly, owned or controlled by such
Person or one or more Wholly Owned Subsidiaries of such Person or by such Person
and one or more of such Subsidiaries; unless otherwise specified, "Wholly Owned
Subsidiary" means a Wholly Owned Subsidiary of the Borrower.
(b) Other Definitional Provisions. (i) Except as otherwise
-----------------------------
specified herein, all references herein (A) to any Person shall be deemed
to include such Person's successors and assigns, (B) to any Applicable Law
defined or referred to herein shall be deemed references to such Applicable
Law or any successor Applicable Law as the same may have been or may be
amended or supplemented from time to time and (C) to any Loan Document or
Contract defined or referred to herein shall be deemed references to such
Loan Document or Contract (and, in the case of any Note or any other
instrument, any instrument issued in substitution therefor) as the terms
thereof may have been or may be amended, supplemented, waived or otherwise
modified from time to time.
-85-
<PAGE>
(ii) When used in this Agreement, the words "herein," "hereof"
and "hereunder" and words of similar import shall refer to this Agreement
as a whole and not to any provision of this Agreement, and the words
"Article," "Section," "Annex," "Schedule" and "Exhibit" shall refer to
Articles and Sections of, and Annexes, Schedules and Exhibits to, this
Agreement unless otherwise specified.
(iii) Whenever the context so requires, the singular number
includes the plural and vice versa.
(iv) Any item or list of items set forth following the word
"including," "include" or "includes" is set forth only for the purpose of
indicating that, regardless of whatever other items are in the category in
which such item or items are "included," such item or items are in such
category, and shall not be construed as indicating that the items in the
category in which such item or items are "included" are limited to such
items or to items similar to such items.
(v) Each authorization in favor of the Administrative Agent,
the Banks, the Borrower or any other Person granted by or pursuant to this
Agreement shall be deemed to be irrevocable and coupled with an interest.
(vi) Except as otherwise specified herein, all references herein
to the Administrative Agent, any Bank or any Loan Party shall be deemed to
refer to such Person however designated in the Loan Documents, so that (A)
a reference to rights or duties of the Administrative Agent under the Loan
Documents shall be deemed to include the rights or duties of such Person as
the Secured Party under the Pledge Agreements and as a party under the
Affiliate Subordination Agreement, (B) a reference to costs incurred by a
Bank in connection with the Loan Documents shall be deemed to include costs
incurred by such Person as a beneficiary of the Security Interest under the
Pledge Agreements and as a beneficiary of the terms of the Affiliate
Subordination Agreement and (C) a reference to the obligations of the Loan
Parties (other than the Borrower) under the Loan Documents shall be deemed
to include the obligations of such Persons as parties under the Affiliate
Subordination Agreement and, in the case of Comcast Communications and the
Borrower, as Pledgors under the Pledge Agreements.
(vii) Except as otherwise specified therein, all terms defined in
this Agreement shall have the meanings herein ascribed to them when used in
the Notes or any certificate, opinion or other document delivered pursuant
hereto or thereto.
-86-
<PAGE>
Section 10.02. Accounting Matters. Unless otherwise specified
------------------
herein, all accounting determinations hereunder and all computations utilized by
the Borrower in complying with the covenants contained herein shall be made, all
accounting terms used herein shall be interpreted, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
Generally Accepted Accounting Principles, except for such departures from
Generally Accepted Accounting Principles so long as (a) the Borrower shall have
delivered to the Administrative Agent, with sufficient copies for each of the
Banks, not later than the first time that such financial statements or
computations are prepared or made on the basis of such departures, a notice
setting forth in reasonable detail the nature and substance of such departures
and the application thereof to such financial statements or computations and (b)
the Required Banks shall not have notified the Borrower within 60 days of the
receipt of the Borrower's notice that such financial statements or computations
may not be prepared or made in accordance with or on the basis of such
departures.
Section 10.03. Representations and Warranties. All Representations
------------------------------
and Warranties shall be deemed made (a) in the case of any Representation and
Warranty contained in this Agreement at the time of its initial execution and
delivery, at and as of the Agreement Date, (b) in the case of any Representation
and Warranty contained in this Agreement or any other document at the time any
Loan is made, at and as of such time and (c) in the case of any particular
Representation and Warranty, wherever contained, at such other time or times as
such Representation and Warranty is made or deemed made in accordance with the
provisions of this Agreement or the document pursuant to, under or in connection
with which such Representation and Warranty is made or deemed made.
Section 10.04. Captions. Captions to Articles, Sections and
--------
subsections of, and Annexes, Schedules and Exhibits to, this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or in any way affect the meaning or
construction of any provision of this Agreement.
-87-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers all as of the Agreement Date.
COMCAST MH HOLDINGS, INC.
By: /s/ John R. Alchin
--------------------------------
Name: John R. Alchin
Title: Senior Vice President & Treasurer
NATIONSBANK OF TEXAS, N.A., as
Administrative Agent, Arranging
Agent and a Bank
By: /s/ Thomas E. Carter
--------------------------------
Name: Thomas E. Carter
Title: Senior Vice President
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Arranging Agent
and a Bank
By: /s/ John P. White
--------------------------------
Name: John P. White
Title: V.P.
THE TORONTO-DOMINION BANK, as
Arranging Agent and a Bank
By: /s/ Debbie A. Greene
--------------------------------
Name: Debbie A. Greene
Title: Mgr. Cr. Admin.
THE BANK OF NEW YORK, as
Managing Agent and a Bank
By: /s/ Bart J. Partington
--------------------------------
Name: Bart J. Partington
Title: Vice President
<PAGE>
THE BANK OF NOVA SCOTIA, as
Managing Agent and a Bank
By: /s/ James N. Tryforos
--------------------------------
Name: James N. Tryforos
Title: Authorized Signatory
CANADIAN IMPERIAL BANK OF COMMERCE,
as Managing Agent and a Bank
By: /s/ Deborah D. Strek
--------------------------------
Name: Deborah D. Strek
Title: Authorized Signatory
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Managing Agent and a
Bank
By: /s/ Eugenia Wilds
--------------------------------
Name: Eugenia Wilds
Title: V.P.
BARCLAYS BANK PLC
By: /s/ Andrew M. Wynn
--------------------------------
Name: Andrew M. Wynn
Title: Director
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Mark L. Evans
--------------------------------
Name: Mark L. Evans
Title: Director
BANK OF HAWAII
By: /s/ Buddy Montgomery
--------------------------------
Name: Buddy Montgomery
Title: Vice President
<PAGE>
THE SUMITOMO BANK, LIMITED, CHICAGO
BRANCH
By: /s/ Takaya Iida
--------------------------------
Name: Takaya Iida
Title: Joint General Manager
BANK OF MONTREAL
By: /s/ Gretchen Shugart
--------------------------------
Name: Gretchen Shugart
Title: Director
CHEMICAL BANK
By: /s/ Jeffrey C. Howe
--------------------------------
Name: Jeffrey C. Howe
Title: Vice President
CITIBANK, N.A.
By: /s/ Eric Huttner
--------------------------------
Name: Eric Huttner
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By: /s/ M. Bernadette Collins
--------------------------------
Name: M. Bernadette Collins
Title: V.P.
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED
By: /s/ Hiroshi Sasaki
--------------------------------
Name: Hiroshi Sasaki
Title: Deputy General Manager
MELLON BANK, N.A.
By: /s/ G. Louis Ashley
--------------------------------
Name: G. Louis Ashley
Title: First Vice President
<PAGE>
ROYAL BANK OF CANADA
By: /s/ Thomas M. Byrne
-------------------------------------------
Name: Thomas M. Byrne
Title: Manager
SOCIETE GENERALE
By: /s/ John Sadik-Khan
-------------------------------------------
Name: John Sadik-Khan
Title: Vice President
BANQUE FRANCAISE DU COMMERCE
EXTERIEUER
By: /s/ Peter K. Harris / /s/ D. Copp
-------------------------------------------
Name: Peter K. Harris / D. Copp
Title: Vice President / Vice President
BANK OF CALIFORNIA, N.A.
By: /s/ David L. Chicca
-------------------------------------------
Name: David L. Chicca
Title: V.P.
BANK OF TOKYO TRUST COMPANY
By: /s/ Charles Poer
-------------------------------------------
Name: Charles Poer
Title: Vice President & Manager
BANQUE PARIBAS
By: /s/ Nicole Cawley
-------------------------------------------
Name: Nicole Cawley
Title: Vice President
By: /s/ Errol R. Antzis
-------------------------------------------
Name: Errol R. Antzis
Title: Group Vice President
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENE
By: /s/ Marcus Edward / /s/ Dora DeBlasi Hyduk
-------------------------------------------
Name: Marcus Edward / Dora DeBlasi Hyduk
Title: Vice Presidents
-91-
<PAGE>
CRESTAR BANK
By: /s/ J. Eric Millham
--------------------------------
Name: J. Eric Millham
Title: Vice President
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/ Seiji Imai
--------------------------------
Name: Seiji Imai
Title: Assistant Vice President
DRESDNER BANK AG, NEW YORK and
GRAND CAYMAN BRANCHES
By: /s/ Charles H. Hill
--------------------------------
Name: Charles H. Hill
Title: Vice President
By: /s/ R. Matthew Scherer
--------------------------------
Name: R. Matthew Scherer
Title: Vice President
DEUTSCHE BANK AG, NEW YORK and/or
CAYMAN ISLANDS BRANCHES
By: /s/ Binna R. Dabbah
--------------------------------
Name: Binna R. Dabbah
Title: Vice President
By: /s/ Alain M. Bolea
--------------------------------
Name: Alain M. Bolea
Title: Director
FIRST FIDELITY BANK, N.A.
By: /s/ Annette Procacci
--------------------------------
Name: Annette Procacci
Title: V.P.
THE FUJI BANK, LIMITED, NEW YORK
BRANCH
By: /s/ Katsunori Nozawa
--------------------------------
Name: Katsunori Nozawa
Title: Vice President & Manager
<PAGE>
THE INDUSTRIAL BANK OF JAPAN
LIMITED
By: /s/ Junri Oda
--------------------------------
Name: Junri Oda
Title: Senior Vice President and
Senior Manager
NIPPON CREDIT BANK, LTD.
By: /s/ David C. Carrington
--------------------------------
Name: David C. Carrington
Title: V.P. & Mgr.
THE SANWA BANK, LTD.
NEW YORK BRANCH
By: /s/ Joseph E. Lee
--------------------------------
Name: Joseph E. Lee
Title: Vice President and
Area Manager
UNITED JERSEY BANK
By: /s/ Henry G. Kush, Jr.
--------------------------------
Name: Henry G. Kush, Jr.
Title: Vice President
BANQUE NATIONALE DE PARIS
By: /s/ Christopher J. Kietz / /s/ Serge Desrayaud
-----------------------------------------------
Name: Christopher J. Kietz / Serge Desrayaud
Title: V.P. / V.P.
THE SUMITOMO TRUST & BANKING COMPANY,
LIMITED
By: /s/ Hedehiko Asni
--------------------------------
Name: Hedehiko Asni
Title: Deputy General Manager
<PAGE>
ANNEX A
-------
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
NATIONSBANK OF TEXAS, N.A. $31,000,000
Domestic Lending Office:
901 Main Street, 64th Floor
Dallas, Texas 75202
Eurodollar Lending Office:
901 Main Street, 64th Floor
Dallas, Texas 75202
Notice Address:
901 Main Street, 64th Floor
Dallas, Texas 75202
Telecopier No.: (214) 508-0980
Telephone No.: (214) 508-0924
Attention: Thomas Carter
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION) $31,000,000
Domestic Lending Office:
One Chase Manhattan Plaza,
4th Floor
New York, New York 10081
Eurodollar Lending Office:
One Chase Manhattan Plaza,
4th Floor
New York, New York 10081
Notice Address:
One Chase Manhattan Plaza
4th Floor
New York, New York 10081
Telecopier No.: (212) 552-4905
Telephone No.: (212) 552-5116
Attention: John P. White
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
THE TORONTO-DOMINION BANK $31,000,000
Domestic Lending Office:
909 Fannin Street, Suite 1700
Houston, Texas 77010
Eurodollar Lending Office:
909 Fannin Street, Suite 1700
Houston, Texas 77010
Notice Address:
31 West 52nd Street
New York, New York 10019-6101
Telecopier No.: (212) 262-1928
Telephone No.: (212) 468-0740/0733
Attention: Brian Rich/Chris Shipman
THE BANK OF NEW YORK $31,000,000
Domestic Lending Office:
One Wall Street
New York, New York 10286
Eurodollar Lending Office:
One Wall Street
New York, New York 10286
Notice Address:
The Bank of New York
One Wall Street
New York, New York 10286
Telecopier No.: (212) 635-8593
Telephone No.: (212) 635-8607
Attention: Bart J. Partington
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
THE BANK OF NOVA SCOTIA $31,000,000
Domestic Lending Office:
New York Agency
One Liberty Plaza, 26th Floor
New York, New York 10006
Eurodollar Lending Office:
New York Agency
One Liberty Plaza, 26th Floor
New York, New York 10006
Notice Address:
New York Agency
One Liberty Plaza, 26th Floor
New York, New York 10006
Telecopier No.: (212) 225-5091
Telephone No.: (212) 225-5099
Attention: Claudia Chifos
CANADIAN IMPERIAL BANK OF COMMERCE $31,000,000
Domestic Lending Office:
2 Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Eurodollar Lending Office:
2 Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Notice Address:
2 Paces West
2727 Paces Ferry Road
Suite 1200
Atlanta, GA 30339
Telecopier No.:
Telephone No.: (404) 319-4819
Attention: Ann Milan
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK $31,000,000
Domestic Lending Office:
60 Wall Street
New York, NY 10260
Eurodollar Lending Office:
60 Wall Street
New York, NY 10260
Notice Address:
60 Wall Street
New York, NY 10260
Telecopier No.: (212) 648-5016
Telephone No.: (212) 648-6991
Attention: Barbara Asch
BARCLAYS BANK PLC $27,000,000
Domestic Lending Office:
388 Market Street
Suite 1700
San Francisco, CA 94111
Eurodollar Lending Office:
388 Market Street
Suite 1700
San Francisco, CA 94111
Notice Address:
388 Market Street
Suite 1700
San Francisco, CA 94111
Telecopier No.: (415) 765-4760
Telephone No.: (415) 765-4703
Attention: Micheal Ballard
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
THE FIRST NATIONAL BANK OF BOSTON $27,000,000
Domestic Lending Office:
Media & Communications Group
435 Tasso Street
Suite 250
Palo Alto, CA 94301
Eurodollar Lending Office:
Commercial Loan Services
74-02-04I
100 Rushcraft Road
Dedham, MA 02026
Notice Address:
Commercial Loan Services
74-02-04I
100 Rustcraft Road
Dedham, MA 02026
Telecopier No.: (415) 853-1425/(617) 467-2276
Telephone No.: (415) 853-0143/(617) 467-2294
Attention: Mark Evans/Edward Offet
BANK OF HAWAII $27,000,000
Domestic Lending Office:
130 Merchant Street
Honolulu, Hawaii 96813
Eurodollar Lending Office:
130 Merchant Street
Honolulu, Hawaii 96813
Notice Address:
130 Merchant Street
Honolulu, Hawaii 96813
Telecopier No.: (808) 537-8301
Telephone No.: (808) 537-8237
Attention: Buddy Montgomery
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
THE SUMITOMO BANK LTD.
CHICAGO BRANCH $27,000,000
Domestic Lending Office:
233 South Wacker Drive
Suite 4800
Chicago, IL 60606-6448
Eurodollar Lending Office:
233 South Wacker Drive
Suite 4800
Chicago, IL 60606-6448
Notice Address:
233 South Wacker Drive
Suite 4800
Chicago, IL 60606-6448
Telecopier No.: (312) 876-6436
Telephone No.: (312) 876-6453
Attention: Patrick Kennedy
BANK OF MONTREAL $27,000,000
Domestic Lending Office:
430 Park Avenue
New York, NY 10022
Eurodollar Lending Office:
430 Park Avenue
New York, NY 10022
Notice Address:
430 Park Avenue
New York, NY 10022
Telecopier No.: (212) 605-1648
Telephone No.: (212) 605-1615
Attention: Gretchen Shugart
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
ROYAL BANK OF CANADA $27,000,000
Domestic Lending Office:
Media Industries Group
Financial Square, 23rd Floor
New York, NY 10005-3531
Eurodollar Lending Office:
Media Industries Group
Financial Square, 23rd Floor
New York, NY 10005-3531
Notice Address:
Media Industries Group
Financial Square, 23rd Floor
New York, NY 10005-3531
Telecopier No.: (212) 428-6460
Telephone No.: (212) 428-6551
Attention: John Page
CHEMICAL BANK $27,000,000
Domestic Lending Office:
270 Park Avenue
New York, NY 10017
Eurodollar Lending Office:
270 Park Avenue
New York, NY 10017
Notice Address:
270 Park Avenue
New York, NY 10017
Telecopier No.: (212) 270-2056
Telephone No.: (212) 270-4036
Attention: Joseph Coneeny
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
CREDIT LYONNAIS CAYMAN ISLAND BRANCH $27,000,000
Domestic Lending Office:
1301 Avenue of the Americas
New York, NY 10019
Eurodollar Lending Office:
1301 Avenue of the Americas
New York, NY 10019
Notice Address:
1301 Avenue of the Americas
New York, NY 10019
Telecopier No.: (212) 261-3421
Telephone No.: (212) 261-7836
Attention: Bernadette Collins
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED $27,000,000
Domestic Lending Office:
165 Broadway, 50th Floor
New York, NY 10006
Eurodollar Lending Office:
165 Broadway, 50th Floor
New York, NY 10006
Notice Address:
165 Broadway, 50th Floor
New York, NY 10006
Telecopier No.: (212) 608-2371
Telephone No.: (212) 335-4549
Attention: Tetsuya Fukunaga
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
CITIBANK, N.A. $25,000,000
Domestic Lending Office:
399 Park Avenue
New York, NY 10043
Eurodollar Lending Office:
399 Park Avenue
New York, NY 10043
Notice Address:
399 Park Avenue
New York, NY 10043
Telecopier No.: (212) 793-6873
Telephone No.: (212) 559-8564
Attention: Eric Huttner
MELLON BANK, N.A. $25,000,000
Domestic Lending Office:
Media Group
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Eurodollar Lending Office:
Media Group
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Notice Address:
Media Group
One Mellon Bank Center
Pittsburgh, PA 15258-0001
Telecopier No.: (412) 234-6375
Telephone No.: (412) 236-2472
Attention: Maribeth Donnelly
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
BANK OF TOKYO TRUST $25,000,000
Domestic Lending Office:
1251 Avenue of the Americas, 12th Floor
New York, NY 10116-3138
Eurodollar Lending Office:
1251 Avenue of the Americas, 12th Floor
New York, NY 10116-3138
Notice Address:
1251 Avenue of the Americas, 12th Floor
New York, NY 10116-3138
Telecopier No.: (212) 349-7964
Telephone No.: (212) 782-4324
Attention: Charles Poer
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION $25,000,000
Domestic Lending Office:
520 Madison Avenue, 37th Floor
New York, NY 10022
Eurodollar Lending Office:
520 Madison Avenue, 37th Floor
New York, NY 10022
Notice Address:
520 Madison Avenue, 37th Floor
New York, NY 10022
Telecopier No.: (212) 715-4535
Telephone No.: (212) 715-4427
Attention: Marcus Edward
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES $25,000,000
Domestic Lending Office:
New York Branch
75 Wall Street
New York, NY 10005-2889
Eurodollar Lending Office:
Cayman Island Branch
75 Wall Street
New York, NY 10005-2889
Notice Address:
New York Branch
75 Wall Street
New York, NY 10005-2889
Telecopier No.: (212) 574-0129
Telephone No.: (212) 574-0204
Attention: Charles Hill
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES $25,000,000
Domestic Lending Office:
New York Branch
31 W. 52nd Street
New York, NY 10019
Eurodollar Lending Office:
New York Branch
31 W. 52nd Street
New York, NY 10019
Notice Address:
New York Branch
31 W. 52nd Street
New York, NY 10019
Telecopier No.: (212) 474-8256/8212
Telephone No.: (212) 474-8258/8230
Attention: Bina Dabbah/Noble Samuel
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
THE FUJI BANK, LIMITED $25,000,000
NEW YORK BRANCH
Domestic Lending Office:
New York Branch
Two World Trade Center
New York, NY 10048
Eurodollar Lending Office:
New York Branch
Two World Trade Center
New York, NY 10048
Notice Address:
New York Branch
Two World Trade Center
New York, NY 10048
Telecopier No.: (212) 321-9407
Telephone No.: (212) 898-2021
Attention: Brian O'Leary
INDUSTRIAL BANK OF JAPAN LIMITED $25,000,000
Domestic Lending Office:
245 Park Avenue, 23rd Floor
New York, NY 10167-0037
Eurodollar Lending Office:
245 Park Avenue, 23rd Floor
New York, NY 10167-0037
Notice Address:
245 Park Avenue, 23rd Floor
New York, NY 10167-0037
Telecopier No.: (212) 682-2870
Telephone No.: (212) 309-6498
Attention: Jeffrey Cole
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
NIPPON CREDIT BANK, LTD. $25,000,000
Domestic Lending Office:
New York Branch
245 Park Avenue
New York, NY 10167
Eurodollar Lending Office:
New York Branch
245 Park Avenue
New York, NY 10167
Notice Address:
New York Branch
245 Park Avenue
New York, NY 10167
Telecopier No.: (212) 490-3895
Telephone No.: (212) 984-1338
Attention: David Carrington
BANQUE NATIONALE DE PARIS $20,000,000
Domestic Lending Office:
499 Park Avenue
New York, NY 10022
Eurodollar Lending Office:
499 Park Avenue
New York, NY 10022
Notice Address:
499 Park Avenue
New York, NY 10022
Telecopier No.: (212) 418-8269
Telephone No.: (212) 415-9638
Attention: Serge Desrayaud
</TABLE>
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<PAGE>
<TABLE>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
SOCIETE GENERALE $15,000,000
Domestic Lending Office:
1221 Avenue of the Americas, 11th Floor
New York, NY 10020
Eurodollar Lending Office:
1221 Avenue of the Americas, 11th Floor
New York, NY 10020
Notice Address:
1221 Avenue of the Americas, 11th Floor
New York, NY 10020
Telecopier No.: (212) 278-6240
Telephone No.: (212) 278-6884
Attention: Carolyn Alves
BANQUE FRANCAISE DU COMMERCE EXTERIEUR $15,000,000
Domestic Lending Office:
645 Fifth Avenue, 20th Floor
New York, NY 10022
Eurodollar Lending Office:
645 Fifth Avenue, 20th Floor
New York, NY 10022
Notice Address:
645 Fifth Avenue, 20th Floor
New York, NY 10022
Telecopier No.: (212) 872-5045
Telephone No.: (212) 872-5194
Attention: David Kopp
</TABLE>
-14-
<PAGE>
<TABLE>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
BANK OF CALIFORNIA, N.A. $15,000,000
Domestic Lending Office:
400 California Street
San Francisco, CA 94104
Eurodollar Lending Office:
400 California Street
San Francisco, CA 94104
Notice Address:
400 California Street
San Francisco, CA 94104
Telecopier No.: (415) 765-2634
Telephone No.: (415) 765-2671
Attention: David Chicca
BANQUE PARIBAS $15,000,000
Domestic Lending Office:
Media-Entertainment Finance Group
787 Seventh Avenue, 32nd Floor
New York, NY 10019
Eurodollar Lending Office:
Media-Entertainment Finance Group
787 Seventh Avenue, 32nd Floor
New York, NY 10019
Notice Address:
Media-Entertainment Finance Group
787 Seventh Avenue, 32nd Floor
New York, NY 10019
Telecopier No.: (212) 841-2363
Telephone No.: (212) 841-2126
Attention: Errol Antzis
</TABLE>
-15-
<PAGE>
<TABLE>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
THE DAI-ICHI KANGYO BANK, LTD. $15,000,000
Domestic Lending Office:
New York Branch
One World Trade Center, Suite 4911
New York, NY 10048
Eurodollar Lending Office:
New York Branch
One World Trade Center, Suite 4911
New York, NY 10048
Notice Address:
New York Branch
One World Trade Center, Suite 4911
New York, NY 10048
Telecopier No.: (212) 524-0579
Telephone No.: (212) 432-8411
Attention: Seiji Imai
FIRST FIDELITY BANK $15,000,000
Domestic Lending Office:
Communications Leading Division
123 S. Broad Street
Philadelphia, PA 19109
Eurodollar Lending Office:
Communications Leading Division
123 S. Broad Street
Philadelphia, PA 19109
Notice Address:
Communications Leading Division
123 S. Broad Street
Philadelphia, PA 19109
Telecopier No.: (215) 985-8793
Telephone No.: (215) 985-8487
Attention: Annette Procacci
</TABLE>
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<PAGE>
<TABLE>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
THE SANWA BANK, LTD.
NEW YORK BRANCH $15,000,000
Domestic Lending Office:
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Eurodollar Lending Office:
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Notice Address:
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Telecopier No.: (212) 754-1304
Telephone No.: (212) 339-6205
Attention: Joseph Leo
UNITED JERSEY BANK $15,000,000
Domestic Lending Office:
301 Carnegie Center CN 5316
Princeton, NJ 08543
Eurodollar Lending Office:
301 Carnegie Center CN 5316
Princeton, NJ 08543
Notice Address:
301 Carnegie Center CN 5316
Princeton, NJ 08543
Telecopier No.: (609) 734-9125
Telephone No.: (609) 987-3497
Attention: Henry G. Kush, Jr.
</TABLE>
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<PAGE>
<TABLE>
Banks, Lending Offices
and Notice Addresses Commitment
- - - ---------------------- ----------
<S> <C>
SUMITOMO TRUST AND BANKING COMPANY, LIMITED $15,000,000
Domestic Lending Office:
New York Branch
527 Madison Avenue
New York, NY
Eurodollar Lending Office:
New York Branch
527 Madison Avenue
New York, NY
Notice Address:
New York Branch
527 Madison Avenue
New York, NY
Telecopier No.: (212) 326-0619
Telephone No.: (212) 326-0619
Attention: Elle Kim
CRESTAR BANK $10,000,000
Domestic Lending Office:
919 E. Main Street
Richmond, VA 23261-6665
Eurodollar Lending Office:
919 E. Main Street
Richmond, VA 23261-6665
Notice Address:
919 E. Main Street
Richmond, VA 23261-6665
Telecopier No.: (804) 782-5413
Telephone No.: (804) 782-5675
Attention: J. Eric Millham
</TABLE>
-18-
<PAGE>
Exhibit 10.3
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as may be amended, modified, supplemented, waived,
extended or restated from time to time, this "Agreement") dated as of December
22, 1994, between COMCAST MH HOLDINGS, INC., a Delaware corporation (the
"Pledgor") and NATIONSBANK OF TEXAS, N.A., as the Secured Party (as hereinafter
defined).
WHEREAS, Pledgor, the Banks listed on the signature pages thereof, The
Chase Manhattan Bank (National Association), NationsBank of Texas, N.A. and
The Toronto-Dominion Bank, as Arranging Agents, The Bank of New York, The
Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Morgan Guaranty
Trust Company of New York, as Managing Agents, and NationsBank of Texas,
N.A., as Administrative Agent, are parties to the Credit Agreement dated as
of the date hereof (as the terms thereof may be amended, supplemented,
waived or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, it is a condition precedent to the making of the loans by the
Banks under the Credit Agreement that the Pledgor shall have granted the
security interest contemplated by this Agreement; and
WHEREAS, to induce the Banks to enter into the Credit Agreement and to
extend credit thereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Pledgor has
agreed to grant to the Secured Party a security interest in the Collateral
(as hereinafter defined) as security for the Secured Obligations (as
hereinafter defined) on the terms set forth below.
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the Pledgor and the Secured Party hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used but not otherwise
-----------
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The following terms, as used herein, shall have the following
respective meanings:
"Collateral" shall have the meaning assigned to such term in Section
----------
2.
<PAGE>
"Issuer" means each Person listed as an "Issuer" on Schedule 1 and any
------
other direct Subsidiary of the Borrower.
"Pledged Securities" shall have the meaning assigned to such term in
------------------
Section 2.
"Principals" shall mean all Persons that are, or at any time were, the
----------
Secured Party, an Arranging Agent, a Managing Agent, the Administrative Agent, a
Bank or any other Indemnified Person.
"Proceeds" shall have the meaning assigned to such term under the New
--------
York Uniform Commercial Code and, in any event, shall include (i) any and all
proceeds of any guarantee, insurance or indemnity payable to the Pledgor from
time to time with respect to any of the Collateral; (ii) any and all payments
(in any form whatsoever) made or due and payable to the Pledgor from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting under color of governmental authority); and (iii) any and
all other amounts from time to time paid or payable with respect to or in
connection with any of the Collateral.
"Secured Obligations" shall mean, collectively, (a) the principal of
-------------------
and interest (including, without limitation, interest accruing after the date of
any filing by the Borrower of any petition in bankruptcy or the commencement of
any bankruptcy, insolvency or similar proceedings with respect to the Borrower,
whether or not allowed as a claim in such proceeding under Applicable Law) on
the Loans and the Notes, all Liabilities of the Borrower from time to time owing
under any Interest Rate Protection Agreement between the Borrower and any Bank
or any Affiliate of a Bank and all other Liabilities of the Borrower from time
to time owing to the Principals (including all commitment and other fees) under
or in respect of the Loan Documents to which the Borrower is a party; and (b)
all obligations of the Pledgor to the Principals under this Agreement and any of
the other Loan Documents to which the Pledgor is a party.
"Secured Party" shall mean the Administrative Agent, acting both on
-------------
its own behalf as Administrative Agent and as the agent for and representative
(within the meaning of Section 9-105(m) of the Uniform Commercial Code) of the
other Principals.
Unless otherwise defined herein or in the Credit Agreement, or unless
the context otherwise requires, all terms used herein that are defined in the
New York Uniform Commercial Code shall have the meanings therein stated. The
definitions in this Section 1 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
-2-
<PAGE>
"including" as used in this Agreement shall be deemed in each case to be
followed by the phrase "without limitation." References to Sections, Schedules
and Exhibits shall be deemed references to Sections of and Schedules and
Exhibits to this Agreement, unless otherwise specified.
SECTION 2. Pledge. As security for the payment and performance in
------
full of the Secured Obligations, the Pledgor hereby hypothecates, pledges,
assigns, grants, sets over and delivers to the Secured Party, for the equal (in
priority) and ratable benefit of the Principals, a continuing first priority
security interest in all its right, title and interest in, to and under the
following, whether now owned or hereafter acquired:
(i) the shares of capital stock owned by the Pledgor listed on
Schedule I, and any additional shares of capital stock of each of the
Issuers (or successors thereto) obtained in the future by the Pledgor, and,
in each case, all certificates representing such shares and, in each case,
all rights, options, warrants, stock or other securities which may
hereafter be received, receivable or distributed in respect of, or
exchanged for, any of the foregoing (all of the foregoing being referred to
herein as the "Pledged Securities");
(ii) all other property which may be delivered to and held by the
Secured Party pursuant to the terms hereof of any character whatsoever into
which any of the foregoing may be converted or which may be substituted for
any of the foregoing; and
(iii) subject to the provisions of Section 5, all Proceeds of the
Pledged Securities (other than any such Proceeds arising out of any sale,
assignment, transfer, exchange, disposition or grant of option referred to
in the parenthetical provision contained in Section 7(b) hereof) and of
such other property, including all cash, securities or other property at
any time and from time to time acquired, receivable or otherwise
distributed in respect of, or in exchange for, any of or all such stock or
other property (the items referred to in clauses (i) through (iii) being
collectively referred to as the "Collateral").
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Secured Party, its successors and assigns, forever; subject, however,
------- -------
to the terms, covenants and conditions hereinafter set forth.
SECTION 3. Delivery of Collateral. (a) Contemporaneously with the
----------------------
execution of this Agreement, the Pledgor shall deliver or cause to be delivered
to the Secured Party (i) any and all certificates and other instruments
-3-
<PAGE>
evidencing the Pledged Securities, along with undated stock powers duly executed
in blank or other instruments of transfer satisfactory to the Secured Party and
endorsed in blank and such other instruments and documents as the Secured Party
may reasonably request to effect the purposes contemplated hereby, (ii) any and
all certificates or other instruments or documents representing any of the
Collateral and (iii) all other property comprising part of the Collateral with
proper instruments of assignment duly executed and such other instruments or
documents as the Secured Party may reasonably request to effect the purposes
contemplated hereby.
(b) If the Pledgor shall become entitled to receive or shall receive
any shares of stock (including, without limitation, shares of Pledged Securities
acquired after the Agreement Date), options, warrants, rights or other similar
property (including, without limitation, any certificate representing a stock
dividend, or any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection
with any reorganization of any Issuer) in respect of the Pledged Securities
(whether as an addition to, in substitution of, or in exchange for, such Pledged
Securities or otherwise), the Pledgor agrees:
(i) to accept the same as the agent of the Secured Party;
(ii) to hold the same in trust on behalf of and for the benefit
of the Secured Party; and
(iii) to deliver any and all certificates or instruments
evidencing the same to the Secured Party on or before the close of business
on the seventh (7th) Business Day following the receipt thereof by the
Pledgor, in the exact form received, with the endorsement in blank of the
Pledgor when necessary and with appropriate undated stock powers duly
executed in blank (with signatures properly guaranteed), to be held by the
Secured Party, subject to the terms of this Agreement, as additional
Collateral;
provided, however, that this Section 3(b) shall not apply to any Proceeds
- - - -------- -------
described in the first parenthetical contained in clause (iii) of Section 2.
SECTION 4. Registration in Nominee Name. Upon the occurrence and
----------------------------
during the continuance of an Event of Default, the Secured Party shall have the
right (in its sole and absolute discretion and without prior notice to the
Pledgor) to transfer to or to register the Pledged Securities in its own name or
the name of its nominee.
SECTION 5. Voting Rights, etc. (a) Unless and until an Event of
-------------------
Default shall have occurred and be continuing:
-4-
<PAGE>
(i) The Pledgor shall be entitled to exercise any and all voting
and/or consensual rights and powers accruing to an owner of Pledged
Securities or any part thereof for any purpose not prohibited by the terms
of this Agreement or the Credit Agreement.
(ii) The Secured Party shall execute and deliver to the Pledgor,
or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, and other instruments as the Pledgor may reasonably
request for the purpose of enabling the Pledgor to exercise the voting
and/or consensual rights and powers which it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) The Pledgor shall be entitled to receive, subject to the
provisions of Section 2 hereof, and retain any and all dividends paid on
the Pledged Securities to the extent and only to the extent that such
dividends are not prohibited by the terms and conditions of the Credit
Agreement. Except for dividends that the Pledgor shall be entitled to
receive and retain pursuant to the preceding sentence and for distributions
of Proceeds described in the first parenthetical of clause (iii) of Section
2, all noncash dividends, stock or dividends paid or payable in cash or
otherwise in connection with a partial or total liquidation or dissolution,
instruments, securities, other distributions in property, return of
capital, capital surplus or paid-in surplus or other distributions made on
or in respect of Pledged Securities, whether paid or payable in cash or
otherwise, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of any Issuer or from any
bankruptcy or reorganization of any Issuer or received in exchange for
Pledged Securities or any part thereof, or in redemption thereof, as a
result of any merger, consolidation, acquisition or other exchange of
assets to which any Issuer may be a party or otherwise, shall be and become
part of the Collateral, and, if received by the Pledgor, shall not be
commingled by the Pledgor with any of its other funds or property but shall
be held separate and apart therefrom, shall be held in trust for the
benefit of the Secured Party and shall be forthwith delivered to the
Secured Party in the same form as so received (with any necessary
endorsements).
(b) Upon the occurrence and during the continuance of an Event of
Default, if so specified by the Secured Party in a notice to the Pledgor and
subject to Section 21(b) hereof, all rights of the Pledgor to exercise the
voting and consensual rights and powers which the Pledgor is entitled to
exercise pursuant to Section 5(a)(i) shall cease, and all such rights shall
thereupon become vested in the Secured Party, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers, and the Pledgor shall execute and deliver to the Secured Party all such
documents and
-5-
<PAGE>
instruments (including proxies) as the Secured Party shall reasonably request in
order to effect the purposes of this Section 5(b).
SECTION 6. Representations; Warranties and Covenants. The Pledgor
-----------------------------------------
hereby represents, warrants and covenants to and with the Secured Party that:
(a) Except for the security interest granted to the Secured Party and
except as expressly permitted by Section 7 of this Agreement, the Pledgor
(i) is and will at all times continue to be the direct owner, beneficially
and of record, of the Pledged Securities, (ii) holds the Collateral free
and clear of all Liens of every kind and nature (other than, with respect
to distributions in kind on or in respect of the Pledged Securities,
Permitted Liens), (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or suffer to exist any Lien on, the Collateral
(other than, with respect to distributions in kind on or in respect of the
Pledged Securities, Permitted Liens) and (iv) subject to Section 5, will
cause any and all Collateral, whether for value paid by the Pledgor or
otherwise, to be forthwith deposited with the Secured Party and pledged or
assigned hereunder.
(b) The Pledgor (i) has, and at all times will have, the right and
legal authority to pledge the Collateral in the manner hereby done or
contemplated and (ii) will defend its and the Secured Party's respective
title and interest thereto or therein against any and all attachments,
Liens, claims or other impediments of any nature, however arising, of all
Persons whomsoever.
(c) No authorization, consent or approval, or other action by, and no
notice to or filing with, any Governmental Authority (including any
securities exchange) not previously obtained is required (i) for the pledge
by the Pledgor of the Collateral pursuant to this Agreement or the
perfection therein of the Secured Party's security interest created hereby,
other than the filing of appropriate Uniform Commercial Code financing
statements in the offices of the Secretary of State in the States of
Delaware and Pennsylvania and the Prothonotary in Philadelphia County,
Pennsylvania, (ii) for the execution, delivery or performance of this
Agreement by the Pledgor or (iii) for the exercise by the Secured Party of
the rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, other than compliance with
applicable Federal and state securities laws in connection with the
acquisition and sale or other disposition of Pledged Securities in
accordance with the terms of this Agreement and other than as referenced in
Section 21(b).
-6-
<PAGE>
(d) By virtue of the execution and delivery by the Pledgor of this
Agreement, when the certificates representing the Pledged Securities owned
by the Pledgor are delivered to the Secured Party in accordance with this
Agreement, the Secured Party will obtain and, so long as the Secured Party
maintains possession of the certificates representing the Pledged
Securities, will have and will continue to have a valid and perfected first
priority lien upon and security interest in such Pledged Securities as
security for the repayment of the Secured Obligations, prior to all other
liens and encumbrances thereon and security interests therein.
(e) The Pledged Securities constitute, and at all times will
constitute, all of the issued and outstanding shares of capital stock of
the Issuers owned by the Pledgor.
(f) All of the representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement.
(g) This Agreement constitutes the legal, valid and binding
obligation of the Pledgor, enforceable in accordance with its terms
(subject as to enforceability to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity).
(h) The execution, delivery and performance in accordance with its
respective terms by the Pledgor of this Agreement do not and will not (a)
require any Governmental Approval or any other consent or approval, other
than Governmental Approvals and other consents and approvals that have been
obtained, are in full force and effect and are final and not subject to
review on appeal or to collateral attack and, in the case of any such
required under Applicable Law or Contract as in effect on the Agreement
Date, are listed on Schedule 3.03 to the Credit Agreement, or (b) violate,
-------------
conflict with, result in a breach of or constitute a default under, or
result in or require the creation of any Lien upon any assets of the
Pledgor under, (i) any Contract to which the Pledgor is a party or by which
it or its property may be bound or (ii) any Applicable Law, except in the
case of clause (a), the failure of which to obtain, and in the case of
clause (b), the violation of which, could not have a Materially Adverse
Effect on this Agreement or the Collateral.
(i) The Pledged Securities have been duly authorized and validly
issued, are fully paid and non-assessable and have been duly and validly
pledged hereunder in accordance with Applicable Law.
-7-
<PAGE>
(j) There are no contractual restrictions upon the voting rights or
upon the transfer of any of the shares of the Pledged Securities other than
as referred to herein or in the Credit Agreement.
(k) The Pledgor represents and warrants that it has made its own
arrangements for keeping informed of changes or potential changes affecting
the Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and the Pledgor agrees that neither the Secured
Party nor any other Principal shall have any responsibility or liability
for informing the Pledgor of any such changes or potential changes.
(l) The Pledgor shall not:
(i) permit or suffer any Issuer to voluntarily dissolve or
liquidate, retire any of its capital stock, reduce its capital or merge or
consolidate with any other entity if such action would violate the
provisions of the Credit Agreement, or
(ii) vote any of the Pledged Securities in favor of any of the
foregoing.
SECTION 7. Issuance of Additional Stock. The Pledgor agrees that it
----------------------------
will not (a) permit any Issuer to issue any stock or other securities (including
warrants, options and other similar agreements), whether in addition to, by
stock dividend or other distribution upon, or in substitution for, the Pledged
Securities or otherwise (unless such issuance is not prohibited by the Credit
Agreement and such stock or other securities are effectively pledged hereunder
in a manner reasonably satisfactory to the Secured Party) or (b) sell, assign,
transfer, exchange or otherwise dispose of, or grant any option with respect to,
the Collateral (other than any such sale, assignment, transfer, exchange,
disposition or grant that would be permitted under Section 4.08(f) of the Credit
Agreement), or create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with respect to, any of the Collateral, or any
interest therein, except for the Lien provided for by this Agreement or an
option or claim referred to in the parenthetical in clause (b) above and, with
respect to distributions in kind on or in respect of the Pledged Securities,
Permitted Liens.
SECTION 8. Remedies Upon Default. (a) If an Event of Default shall
---------------------
have occurred and be continuing, the Secured Party shall have, in addition to
any other rights and except as otherwise provided herein, all of the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code in the State of New York. In addition, the Secured Party may
(without any obligation to seek performance of any guarantee or to resort to any
other security, right or remedy
-8-
<PAGE>
granted to it under any other instrument or agreement, including the Credit
Agreement) sell the Collateral, or any part thereof, at public or private sale
or at any broker's board or on any securities exchange, for cash, upon credit or
for future delivery as the Secured Party shall deem appropriate. The Secured
Party shall be authorized at any such sale (if it deems it advisable to do so)
to restrict the prospective bidders or purchasers to persons who will represent
and agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Secured Party shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the Collateral so
sold. Each such purchaser at any such sale shall hold the property so sold
absolutely, free from any claim or right on the part of the Pledgor (other than
rights that the Pledgor may have against such purchaser generally and without
regard to this Agreement or such sale), and the Pledgor hereby waives (to the
extent permitted by law) all rights of redemption, stay and appraisal which the
Pledgor may now have or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.
(b) The Secured Party shall give the Pledgor at least 10 days'
written notice (which the Pledgor agrees is reasonable notice within the meaning
of Section 9-504(3) of the Uniform Commercial Code as in effect in New York) of
the Secured Party's intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time of and place where such sale is
to be made and, in the case of a sale at a broker's board or on a securities
exchange, shall state the board or exchange at which such sale is to be made and
the day on which the Collateral, or portion thereof, will first be offered for
sale at such board or exchange. Any such public sale shall be held at such time
or times within ordinary business hours and at such place or places as the
Secured Party may fix and state in the notice of such sale. At any such sale,
the Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Secured Party may (in its sole and
absolute discretion) determine. The Secured Party shall not be obligated to make
any sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The Secured
Party may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. In case any sale of all or
any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Secured Party until the sale price is
paid by the purchaser or purchasers thereof, but the Secured Party shall not
incur any liability in case any such purchaser or purchasers shall fail to take
up and pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again upon like notice, and in no event
-9-
<PAGE>
shall any portion of the proceeds of any such sale be credited against payment
of the costs, expenses and obligations set forth in Section 9 hereof until cash
payment for the Collateral so sold has been received by the Secured Party. At
any private sale of Collateral of a type customarily sold in a recognized
market, and at any public sale made pursuant to this Section 8, any Principal
may bid for or purchase, free (to the extent permitted by law) from any equity
or right of redemption, stay or appraisal on the part of the Pledgor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Principal by the
Pledgor under or pursuant to the Credit Agreement as a credit, up to an amount
equal to the amount such Principal would otherwise be entitled to receive
pursuant to Section 9 in connection with such sale, against the purchase price.
For purposes hereof, in the case of any such sale pursuant to a written
agreement to purchase the Collateral or any portion thereof, the Secured Party
shall be free to carry out such sale pursuant to such agreement, and the Pledgor
shall not be entitled to the return of the Collateral or any portion thereof
subject thereto, notwithstanding the fact that after the Secured Party shall
have entered into such an agreement all Events of Default shall have been
remedied and the Secured Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Secured Party may
proceed by a suit or suits at law or in equity to foreclose upon the Collateral
pursuant this Agreement and to sell the Collateral, or any portion thereof,
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
(c) If the Secured Party or any other Principal shall have instituted
any proceeding to enforce any right or remedy hereunder, and such proceeding
shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Secured Party or such other Principal, the Secured
Party and such other Principal shall, subject to any determination in any such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter, subject as aforesaid, all rights and remedies of the
Secured Party and such other Principal shall continue as though no such
proceeding had been instituted.
SECTION 9. Application of Proceeds of Sale. The proceeds of any sale
-------------------------------
of, or other realization upon, all or any part of the Collateral pursuant to
Section 8, as well as any Collateral consisting of cash, shall be applied by the
Secured Party as follows:
FIRST, to the payment of all costs and expenses reasonably incurred by
the Secured Party in connection with such sale or otherwise in connection
with this Agreement or any of the Secured Obligations, including all court
costs
-10-
<PAGE>
and the reasonable fees and expenses of its agents and legal counsel, the
repayment of all advances plus any interest thereon made hereunder by the
Secured Party on behalf of the Pledgor and any other costs or expenses
reasonably incurred in connection with the exercise of any right or remedy
hereunder;
SECOND, to the payment in full of the Secured Obligations pro rata as
among the holders of the Secured Obligations in accordance with the amounts
of monetary Secured Obligations owed to them and outstanding (whether or
not then due and payable, at maturity, by acceleration or otherwise) as of
the date of such payment, until all the Secured Obligations have been paid
in full; and
THIRD, to the Pledgor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
SECTION 10. Secured Party Appointed Attorney-in-Fact. The Pledgor
----------------------------------------
hereby appoints the Secured Party as its true and lawful agent and attorney-in-
fact for the purpose of carrying out the provisions of this Agreement and taking
any action and executing any instrument which the Secured Party may deem
necessary or advisable to accomplish the purposes hereof, in each case upon the
occurrence and during the continuance of an Event of Default, which appointment
is irrevocable and coupled with an interest and any proxy or proxies heretofore
given by the Pledgor to any other person that is inconsistent herewith are
hereby revoked. Without limiting the generality of the foregoing, the Secured
Party shall have the right, upon the occurrence and during the continuance of an
Event of Default, with full power of substitution either in the Secured Party's
name or in the name of the Pledgor, to ask for, demand, sue for, collect,
receive, receipt and give acquittance for any and all moneys due or to become
due under and by virtue of any Collateral, to endorse checks, drafts, orders and
other instruments for the payment of money payable to the Pledgor representing
any interest or dividend or other distribution payable in respect of the
Collateral or any part thereof or on account thereof and to give full discharge
for the same, to settle, compromise, prosecute or defend any action, claim or
proceeding with respect thereto, and to sell, assign, endorse, pledge, transfer
and make any agreement respecting, or otherwise deal with, the same; provided,
--------
however, that nothing herein contained shall be construed as requiring or
- - - -------
obligating the Secured Party or any other Principal to take any action,
including requiring or obligating the Secured Party or any Principal to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Secured Party or any other Principal or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken by the Secured Party or any other
Principal or omitted to be taken by any of them with respect to the Collateral
or any part thereof
-11-
<PAGE>
shall give rise to any defense, counterclaim or offset in favor of the Pledgor
or to any claim or action against the Secured Party or any other Principal in
the absence of the gross negligence or willful misconduct of the Secured Party
or such other Principal, as the case may be, as shall have been determined in a
final, nonappealable judgment of a court of competent jurisdiction.
SECTION 11. No Waiver; Remedies Cumulative. No failure on the part
------------------------------
of the Secured Party or any other Principal to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Secured Party or any other Principal preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law or otherwise. The Secured Party and the other Principals shall
not be deemed to have waived any rights hereunder or under any other agreement
or instrument unless such waiver shall be in writing and signed by the Secured
Party.
SECTION 12. Securities Act, etc. (a) In view of the position of the
--------------------
Pledgor in relation to the Pledged Securities, or because of other present or
future circumstances, a question may arise under the Securities Act of 1933, as
amended (the "Securities Act"), or any similar or successor Federal securities
law (together with the Securities Act, the "Federal Securities Laws") with
respect to any disposition of the Pledged Securities permitted hereunder. The
Pledgor understands that compliance with the Federal Securities Laws might
strictly limit the course of conduct of the Secured Party if the Secured Party
were to attempt to dispose of all or any part of the Pledged Securities, and
might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Securities could dispose of the same. Similarly,
there may be other legal restrictions or limitations affecting the Secured Party
in any attempt to dispose of all or part of the Pledged Securities under
applicable blue sky or other state securities laws or similar laws analogous in
purpose or effect.
(b) Anything herein to the contrary notwithstanding, and in view of
restrictions specified in paragraph (a) of this Section 12, the Pledgor agrees
that, if an Event of Default shall exist hereunder, the Secured Party may, from
time to time, attempt to sell all or any part of the Pledged Securities by means
of a private placement, restricting the bidders and prospective purchasers to
those who will represent or agree as to their investment intent or method of
resale or both in a manner reasonably required by the Secured Party to assure
compliance with applicable securities laws. In so doing, the Secured Party may
solicit offers to buy such Pledged Securities or any part thereof, for cash,
from a limited number of investors deemed by the Secured Party, in its exclusive
judgment, to be responsible
-12-
<PAGE>
parties who might be interested in purchasing such Pledged Securities.
SECTION 13. Security Interest Absolute; Waivers by Pledgor. (a) All
----------------------------------------------
rights of the Secured Party hereunder, the grant of a security interest in the
Collateral and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of (i) any lack of validity or enforceability of the
Credit Agreement, any other agreement with respect to any of the Secured
Obligations or any other agreement or instrument relating to any of the
foregoing, (ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement or any other
agreement or instrument, (iii) any exchange, release or nonperfection of any
other collateral, or any release or amendment or waiver of or consent to or
departure from any guaranty, for all or any of the Secured Obligations, (iv) any
failure by the Secured Party or any Principal to demand payment or performance
by the Borrower of any of the Secured Obligations or to exercise or enforce any
right or remedy in respect thereof or (v) any other circumstance (other than
payment in full of the Secured Obligations or, in the case of rights predicated
on the existence of an Event of Default, a cure or waiver of such Event of
Default) which might otherwise constitute a defense available to, or a discharge
of, the Pledgor or any other person in respect of the Secured Obligations or in
respect of this Agreement. The Pledgor hereby acknowledges that neither the
Secured Party nor any other Principal shall be under any obligation to marshal
any assets in favor of the Pledgor or against or in payment of any or all of the
Secured Obligations.
(b) The Pledgor hereby waives notice of acceptance of this Agreement.
The Pledgor further waives presentment and demand for payment of any of the
Secured Obligations, protest and notice of dishonor or default with respect to
any of the Secured Obligations, and all other notices to which the Pledgor might
otherwise be entitled, except as otherwise expressly provided in this Agreement
or in the Credit Agreement. The Pledgor (to the extent that it may lawfully do
so) covenants that it shall not at any time insist upon or plead, or in any
manner claim or take the benefit or advance of, any stay (except in connection
with a pending appeal), valuation, appraisal, redemption or extension law now or
at any time hereafter in force that, but for this waiver, might be applicable to
any sale made under any judgment, order or decree based on this Agreement or on
the Credit Agreement; and the Pledgor (to the extent that it may lawfully do so)
hereby expressly waives and relinquishes all benefit and advance of any and all
such laws and hereby covenants that it will not hinder, delay or impede the
execution of any power in this Agreement or therein granted and delegated to the
Secured Party, but that it will suffer and permit the execution of every such
power as though no such law or laws had been made or enacted.
-13-
<PAGE>
SECTION 14. Termination. This Agreement, and the assignments,
-----------
pledges and security interests created or granted hereby, shall terminate (a)
with respect to any assets or any interests therein disposed of pursuant to
Section 4.08(f) of the Credit Agreement, upon the disposition of such assets or
interests as permitted under such Section, and (b) with respect to all
Collateral, when (i) all the Secured Obligations shall have been paid in full in
cash and (ii) the commitments and obligations of the Banks under the Credit
Agreement have terminated, in each case, at which time the Secured Party shall
reassign and deliver to the Pledgor, or to such person or persons as the Pledgor
shall designate, against receipt, (A) in the case of any disposition pursuant to
Section 4.08(f) of the Credit Agreement, such of the Collateral as shall have
been so disposed and (B) in all other cases, such of the Collateral (if any) as
shall not have been sold or otherwise applied by the Secured Party pursuant to
the terms hereof and shall still be held by it hereunder, in any case, together
with appropriate instruments of reassignment and release, all without any
recourse to, or warranty whatsoever by, the Secured Party or the other
Principals, and at the sole cost and expense of the Pledgor.
Upon any termination of any of the security interests or release of any
Collateral pursuant to this Section 14, the Secured Party will, at the Pledgor's
expense, execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence the termination of the security interests in such
Collateral.
SECTION 15. Notices. Notices and other communications provided for
-------
herein shall be in writing and shall be delivered or mailed (or delivered by
facsimile equipment, the receipt of which is promptly confirmed by telephone)
addressed,
(a) if to the Pledgor, to it at 1105 Market Street, Suite 1219,
Wilmington, Delaware 19801 (telecopy no. (302) 427-7664), Attention: Howard
Grabelle, with a copy to Comcast Corporation, 1500 Market Street,
Philadelphia, Pennsylvania 19102 (telecopy no. (215) 981-7744), Attention:
John R. Alchin, Senior Vice President and Treasurer;
(b) if to the Secured Party, to it at its address set forth in or
determined pursuant to the Credit Agreement; and
(c) if to any additional pledgor hereunder, to it at the address set
forth in a notice to the Secured Party or, if no such notice is provided to
the Secured Party, to it at the address of the Pledgor as set forth in
clause (a) above.
Except as specifically provided in Section 20 of this Agreement, all notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given at the time determined
pursuant to Section 9.01 of the Credit Agreement.
-14-
<PAGE>
SECTION 16. Further Assurances. The Pledgor agrees to do such
------------------
further acts and things, and to execute and deliver such additional conveyances,
stock powers, proxies, assignments, agreements, financing statements and other
recordings, and instruments, as the Secured Party may at any time reasonably
request in connection with the administration and enforcement of this Agreement
or with respect to the Collateral or any part thereof or in order better to
assure and confer unto the Secured Party its rights and remedies hereunder.
SECTION 17. Successors and Assigns. In the event of assignment of
----------------------
all or a portion of any of the indebtedness under the Credit Agreement by a
Principal, the rights of or on behalf of such Principal hereunder, to the extent
applicable to the indebtedness so assigned, shall be transferred with such
indebtedness. This Agreement is binding on the Pledgor and its successors but
none of them shall be permitted to assign this Agreement, any of its obligations
hereunder or any interest herein or in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect to the Collateral,
or any part thereof, or any cash or property held by the Secured Party as
Collateral under this Agreement except as expressly permitted by this Agreement
or the Credit Agreement.
SECTION 18. Changes in Writing. Neither this Agreement nor any
------------------
provision hereof may be changed, waived, discharged or terminated orally, but
only by a statement or instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. Any
waiver shall be effective only in the specific instance and for the specific
purpose for which made or given.
SECTION 19. Applicable Law. This Agreement shall be construed in
--------------
accordance with and governed by the law of the State of New York (without giving
effect to its choice of law principles).
SECTION 20. Judicial Proceedings; Waiver of Jury Trial. Any judicial
------------------------------------------
proceeding brought against the Pledgor with respect to any claim in any way
arising out of, related to or connected with this Agreement may be brought in
any court of competent jurisdiction in the City of New York, and, by execution
and delivery of this Agreement, the Pledgor (a) accepts, generally and
unconditionally, the nonexclusive jurisdiction of such courts and any related
appellate court and irrevocably agrees to be bound by any judgment rendered
thereby in connection with any such claim and (b) irrevocably waives any
objection it may now or hereafter have as to the venue of any such proceeding
brought in such a court or that such a court is an inconvenient forum. The
Pledgor hereby waives personal service of process and consents that service of
process upon it may be made by certified or registered mail, return receipt
requested, at its address specified or determined in accordance with the
provisions of Section 15, and service so made shall be deemed completed on the
-15-
<PAGE>
third business day in Wilmington, Delaware after such service is deposited in
the mail. Nothing herein shall affect the right of the Secured Party or any
other Principal to serve process in any other manner permitted by law or shall
limit the right of the Secured Party or any other Principal to bring proceedings
against the Pledgor in the courts of any other jurisdiction. To the extent
permitted in accordance with applicable law (including applicable law relating
to jurisdiction and venue), any judicial proceeding by the Pledgor against the
Secured Party or any other Principal involving any such claim shall be brought
only in a court located in the City and State of New York. THE PLEDGOR, THE
SECURED PARTY AND EACH OTHER PRINCIPAL HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING ANY SUCH CLAIM.
SECTION 21. Governmental Regulation. (a) The Secured Party will
-----------------------
not, solely by reason of the execution, delivery and performance (other than the
enforcement of remedies) of this Agreement or any other instrument or agreement
referred to herein, be subject to the regulation or control of either the
Federal Communications Commission (together with any successor thereto, the
"FCC"), any other Federal regulatory authority or agency regulating the cable
television industry or the public utilities commission of any state.
(b) The parties to this Agreement acknowledge and agree that before
certain of the remedies provided for in this Agreement are utilized it may be
necessary to obtain (i) any requisite approval of the FCC to the transfer of, or
the transfer of control of, licenses granted by the FCC, (ii) any required
consents, approvals, and authorizations of states and local governmental
entities which have granted franchises, licenses, permits or other
authorizations to operate cable television franchises to the transfer of control
of such authorizations and (iii) any consents required by contracts to any
transfer of control of such contracts, and the Secured Party agrees that it
shall not take any action hereunder that would require any such approval,
consent or authorization unless the same shall have been obtained.
Notwithstanding the above, the Pledgor agrees to use its best efforts to take,
or cause to be taken by the applicable Issuer, any action which the Secured
Party may reasonably request in connection with the exercise of remedies
hereunder after an Event of Default and during the continuation thereof in order
to obtain from the FCC, any such state or local governmental entities or any
such contracting parties such approvals, consents and authorizations as may be
necessary to enable the Secured Party and the other Principals to exercise and
enjoy the full rights and benefits granted to the Secured Party and such
Principals by this Agreement, the Credit Agreement and any other agreements,
instruments or documents delivered to the Secured Party or the other Principals
in connection herewith or therewith, including, specifically, at the expense and
cost of the applicable Issuer, the use of its best efforts to assist in
obtaining approval of the FCC, any state or local governmental entity or any
contracting party for any action or transaction
-16-
<PAGE>
contemplated by this Agreement for which such approval is required by law or
contract or otherwise should be obtained.
The Pledgor further agrees, without limiting the generality of the
foregoing, to, upon request in connection with the exercise of remedies
hereunder after an Event of Default, prepare, sign and file with the FCC and any
such state or local governmental entities the assignor's, transferor's or
exerciser's portion of any application or applications for consent to the
assignment, transfer or exercise of control necessary or appropriate under
applicable law and regulations for approval of (a) any sale or sales of the
Pledged Securities by or on behalf of the Secured Party and (b) any assumption
by the Secured Party of voting rights with respect to the Pledged Securities
effected in accordance with the terms of this Agreement. Pending the receipt of
any such approvals, consents or authorizations, the Pledgor will use its best
efforts to cause the business of each Issuer to be operated and conducted only
in the normal course, and will use its best efforts to preserve each Issuer's
business and the business of its Subsidiaries, the services of their present
employees, agents and resellers, and their business relations with suppliers,
customers and others; provided, however, that the foregoing shall not be deemed
-------- -------
to require any expenditure by the Pledgor of its own funds.
SECTION 22. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in such jurisdiction, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 23. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument. This Agreement shall
be effective when a counterpart bearing the signature of the Pledgor shall have
been delivered to the Secured Party.
SECTION 24. Headings. Section headings used herein are for
--------
convenience only and are not to affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 25. Immunities of Secured Party. The Secured Party's
---------------------------
performance of its duties hereunder shall in all respects be subject to and
governed by the Credit Agreement. Nothing contained herein shall be construed
to enlarge the degree of responsibility or discretion or the duty of care to be
exercised by the Secured Party beyond those expressly set forth in the Credit
Agreement. Without limiting the generality of the foregoing, the Pledgor hereby
acknowledges and agrees that the
-17-
<PAGE>
Secured Party shall, with respect to all of its rights, obligations and duties
under this Agreement, be entitled to all of its rights, protections and
immunities provided for under Article 8 of the Credit Agreement as fully and to
the same extent as if such provisions were set forth in full herein.
-18-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
COMCAST MH HOLDINGS,
INC., as Pledgor
By /s/ John R. Alchin
---------------------------------
Name: John R. Alchin
Title: Senior Vice President
& Treasurer
NATIONSBANK OF TEXAS,
N.A., as Secured Party
By /s/ Thomas E. Carter
---------------------------------
Name: Thomas E. Carter
Title: Senior Vice President
<PAGE>
SCHEDULE 1 TO THE
PLEDGE AGREEMENT
PLEDGED SECURITIES
<TABLE>
<CAPTION>
=============================================================================================================
Issuer Shares Pledged Shares Authorized Certificate Number(s) Pledgor
------ -------------- ----------------- --------------------- -------
- - - -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Comcast Michigan Holdings, 6,192,815 6,500,000 1A Comcast MH Holdings,
Inc. (formerly Barden Inc.
Communications, Inc.)
- - - -------------------------------------------------------------------------------------------------------------
Maclean-Hunter, Inc. Common- 4,229 Common- 10,000 Common- C14 Comcast MH Holdings,
Class B Common- Class B Common- Class B Common- B11 Inc.
2,068 10,000
=============================================================================================================
</TABLE>
<PAGE>
Exhibit 10.4
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as may be amended, modified, supplemented, waived,
extended or restated from time to time, this "Agreement") dated as of December
22, 1994, between COMCAST COMMUNICATIONS PROPERTIES, INC., a Delaware
corporation (the "Pledgor") and NATIONSBANK OF TEXAS, N.A., as the Secured Party
(as hereinafter defined).
WHEREAS, Comcast MH Holdings, Inc., a Delaware corporation, the Banks
listed on the signature pages thereof, The Chase Manhattan Bank (National
Association), NationsBank of Texas, N.A. and The Toronto-Dominion Bank, as
Arranging Agents, The Bank of New York, The Bank of Nova Scotia, Canadian
Imperial Bank of Commerce and Morgan Guaranty Trust Company of New York, as
Managing Agents, and NationsBank of Texas, N.A., as Administrative Agent,
are parties to the Credit Agreement dated as of the date hereof (as the
terms thereof may be amended, supplemented, waived or otherwise modified
from time to time, the "Credit Agreement");
WHEREAS, it is a condition precedent to the making of the loans by the
Banks under the Credit Agreement that the Pledgor shall have granted the
security interest contemplated by this Agreement; and
WHEREAS, to induce the Banks to enter into the Credit Agreement and to
extend credit thereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Pledgor has
agreed to grant to the Secured Party a security interest in the Collateral
(as hereinafter defined) as security for the Secured Obligations (as
hereinafter defined) on the terms set forth below.
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the Pledgor and the Secured Party hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used but not otherwise
-----------
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The following terms, as used herein, shall have the following
respective meanings:
<PAGE>
"Collateral" shall have the meaning assigned to such term in Section
----------
2.
"Pledged Securities" shall have the meaning assigned to such term in
------------------
Section 2.
"Principals" shall mean all Persons that are, or at any time were, the
----------
Secured Party, an Arranging Agent, a Managing Agent, the Administrative Agent, a
Bank or any other Indemnified Person.
"Proceeds" shall have the meaning assigned to such term under the New
--------
York Uniform Commercial Code and, in any event, shall include (i) any and all
proceeds of any guarantee, insurance or indemnity payable to the Pledgor from
time to time with respect to any of the Collateral; (ii) any and all payments
(in any form whatsoever) made or due and payable to the Pledgor from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting under color of governmental authority); and (iii) any and
all other amounts from time to time paid or payable with respect to or in
connection with any of the Collateral.
"Secured Obligations" shall mean, collectively, (a) the principal of
-------------------
and interest (including, without limitation, interest accruing after the date of
any filing by the Borrower of any petition in bankruptcy or the commencement of
any bankruptcy, insolvency or similar proceedings with respect to the Borrower,
whether or not allowed as a claim in such proceeding under Applicable Law) on
the Loans and the Notes, all Liabilities of the Borrower from time to time owing
under any Interest Rate Protection Agreement between the Borrower and any Bank
or any Affiliate of a Bank and all other Liabilities of the Borrower from time
to time owing to the Principals (including all commitment and other fees) under
or in respect of the Loan Documents to which the Borrower is a party; and (b)
all obligations of the Pledgor to the Principals under this Agreement and any of
the other Loan Documents to which the Pledgor is a party.
"Secured Party" shall mean the Administrative Agent, acting both on
-------------
its own behalf as Administrative Agent and as the agent for and representative
(within the meaning of Section 9-105(m) of the Uniform Commercial Code) of the
other Principals.
Unless otherwise defined herein or in the Credit Agreement, or unless
the context otherwise requires, all terms used herein that are defined in the
New York Uniform Commercial Code shall have the meanings therein stated. The
definitions in this Section 1 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
-2-
<PAGE>
"including" as used in this Agreement shall be deemed in each case to be
followed by the phrase "without limitation." References to Sections, Schedules
and Exhibits shall be deemed references to Sections of and Schedules and
Exhibits to this Agreement, unless otherwise specified.
SECTION 2. Pledge. As security for the payment and performance in
------
full of the Secured Obligations, the Pledgor hereby hypothecates, pledges,
assigns, grants, sets over and delivers to the Secured Party, for the equal (in
priority) and ratable benefit of the Principals, a continuing first priority
security interest in all its right, title and interest in, to and under the
following, whether now owned or hereafter acquired:
(i) the shares of capital stock owned by the Pledgor listed on
Schedule I, and any additional shares of capital stock of the Borrower (or
successors thereto) obtained in the future by the Pledgor, and, in each
case, all certificates representing such shares and, in each case, all
rights, options, warrants, stock or other securities which may hereafter be
received, receivable or distributed in respect of, or exchanged for, any of
the foregoing (all of the foregoing being referred to herein as the
"Pledged Securities");
(ii) all other property which may be delivered to and held by the
Secured Party pursuant to the terms hereof of any character whatsoever into
which any of the foregoing may be converted or which may be substituted for
any of the foregoing; and
(iii) subject to the provisions of Section 5, all Proceeds of the
Pledged Securities and of such other property, including all cash,
securities or other property at any time and from time to time acquired,
receivable or otherwise distributed in respect of, or in exchange for, any
of or all such stock or other property (the items referred to in clauses
(i) through (iii) being collectively referred to as the "Collateral").
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Secured Party, its successors and assigns, forever; subject, however,
------- -------
to the terms, covenants and conditions hereinafter set forth.
SECTION 3. Delivery of Collateral. (a) Contemporaneously with the
----------------------
execution of this Agreement, the Pledgor shall deliver or cause to be delivered
to the Secured Party (i) any and all certificates and other instruments
evidencing the Pledged Securities, along with undated stock powers duly executed
in blank or other instruments of transfer satisfactory to the Secured Party and
endorsed in blank and such
-3-
<PAGE>
other instruments and documents as the Secured Party may reasonably request to
effect the purposes contemplated hereby, (ii) any and all certificates or other
instruments or documents representing any of the Collateral and (iii) all other
property comprising part of the Collateral with proper instruments of assignment
duly executed and such other instruments or documents as the Secured Party may
reasonably request to effect the purposes contemplated hereby.
(b) If the Pledgor shall become entitled to receive or shall receive
any shares of stock (including, without limitation, shares of Pledged Securities
acquired after the Agreement Date), options, warrants, rights or other similar
property (including, without limitation, any certificate representing a stock
dividend, or any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection
with any reorganization of the Borrower) in respect of the Pledged Securities
(whether as an addition to, in substitution of, or in exchange for, such Pledged
Securities or otherwise), the Pledgor agrees:
(i) to accept the same as the agent of the Secured Party;
(ii) to hold the same in trust on behalf of and for the benefit
of the Secured Party; and
(iii) to deliver any and all certificates or instruments
evidencing the same to the Secured Party on or before the close of business
on the seventh (7th) Business Day following the receipt thereof by the
Pledgor, in the exact form received, with the endorsement in blank of the
Pledgor when necessary and with appropriate undated stock powers duly
executed in blank (with signatures properly guaranteed), to be held by the
Secured Party, subject to the terms of this Agreement, as additional
Collateral.
SECTION 4. Registration in Nominee Name. Upon the occurrence and
----------------------------
during the continuance of an Event of Default, the Secured Party shall have the
right (in its sole and absolute discretion and without prior notice to the
Pledgor) to transfer to or to register the Pledged Securities in its own name or
the name of its nominee.
SECTION 5. Voting Rights, etc. (a) Unless and until an Event of
-------------------
Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all voting
and/or consensual rights and powers accruing to an owner of Pledged
Securities or any part thereof for any purpose not prohibited by the terms
of this Agreement or the Credit Agreement.
-4-
<PAGE>
(ii) The Secured Party shall execute and deliver to the Pledgor,
or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, and other instruments as the Pledgor may reasonably
request for the purpose of enabling the Pledgor to exercise the voting
and/or consensual rights and powers which it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) The Pledgor shall be entitled to receive, subject to the
provisions of Section 2 hereof, and retain any and all dividends paid on
the Pledged Securities to the extent and only to the extent that such
dividends are not prohibited by the terms and conditions of the Credit
Agreement. Except for dividends that the Pledgor shall be entitled to
receive and retain pursuant to the preceding sentence, all noncash
dividends, stock or dividends paid or payable in cash or otherwise in
connection with a partial or total liquidation or dissolution, instruments,
securities, other distributions in property, return of capital, capital
surplus or paid-in surplus or other distributions made on or in respect of
Pledged Securities, whether paid or payable in cash or otherwise, whether
resulting from a subdivision, combination or reclassification of the
outstanding capital stock of the Borrower or from any bankruptcy or
reorganization of the Borrower or received in exchange for Pledged
Securities or any part thereof, or in redemption thereof, as a result of
any merger, consolidation, acquisition or other exchange of assets to which
the Borrower may be a party or otherwise, shall be and become part of the
Collateral, and, if received by the Pledgor, shall not be commingled by the
Pledgor with any of its other funds or property but shall be held separate
and apart therefrom, shall be held in trust for the benefit of the Secured
Party and shall be forthwith delivered to the Secured Party in the same
form as so received (with any necessary endorsements).
(b) Upon the occurrence and during the continuance of an Event of
Default, if so specified by the Secured Party in a notice to the Pledgor and
subject to Section 21(b) hereof, all rights of the Pledgor to exercise the
voting and consensual rights and powers which the Pledgor is entitled to
exercise pursuant to Section 5(a)(i) shall cease, and all such rights shall
thereupon become vested in the Secured Party, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers, and the Pledgor shall execute and deliver to the Secured Party all such
documents and instruments (including proxies) as the Secured Party shall
reasonably request in order to effect the purposes of this Section 5(b).
SECTION 6. Representations; Warranties and Covenants. The Pledgor
-----------------------------------------
hereby represents, warrants and covenants to and with the Secured Party that:
-5-
<PAGE>
(a) Except for the security interest granted to the Secured Party and
except as expressly permitted by Section 7 of this Agreement, the Pledgor
(i) is and will at all times continue to be the direct owner, beneficially
and of record, of the Pledged Securities, (ii) holds the Collateral free
and clear of all Liens of every kind and nature (other than, with respect
to distributions in kind on or in respect of the Pledged Securities,
Permitted Liens), (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or suffer to exist any Lien on, the Collateral
(other than, with respect to distributions in kind on or in respect of the
Pledged Securities, Permitted Liens) and (iv) subject to Section 5, will
cause any and all Collateral, whether for value paid by the Pledgor or
otherwise, to be forthwith deposited with the Secured Party and pledged or
assigned hereunder.
(b) The Pledgor (i) has, and at all times will have, the right and
legal authority to pledge the Collateral in the manner hereby done or
contemplated and (ii) will defend its and the Secured Party's respective
title and interest thereto or therein against any and all attachments,
Liens, claims or other impediments of any nature, however arising, of all
Persons whomsoever.
(c) No authorization, consent or approval, or other action by, and no
notice to or filing with, any Governmental Authority (including any
securities exchange) not previously obtained is required (i) for the pledge
by the Pledgor of the Collateral pursuant to this Agreement or the
perfection therein of the Secured Party's security interest created hereby,
other than the filing of appropriate Uniform Commercial Code financing
statements in the offices of the Secretary of State in the States of
Delaware and Pennsylvania and the Prothonotary in Philadelphia County,
Pennsylvania, (ii) for the execution, delivery or performance of this
Agreement by the Pledgor or (iii) for the exercise by the Secured Party of
the rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, other than compliance with
applicable Federal and state securities laws in connection with the
acquisition and sale or other disposition of Pledged Securities in
accordance with the terms of this Agreement and other than as referenced in
Section 21(b).
(d) By virtue of the execution and delivery by the Pledgor of this
Agreement, when the certificates representing the Pledged Securities owned
by the Pledgor are delivered to the Secured Party in accordance with this
Agreement, the Secured Party will obtain and, so long as the Secured Party
maintains possession of the certificates representing the Pledged
Securities, will have and will continue to have a valid and perfected first
priority lien
-6-
<PAGE>
upon and security interest in such Pledged Securities as security for the
repayment of the Secured Obligations, prior to all other liens and
encumbrances thereon and security interests therein.
(e) The Pledged Securities constitute, and at all times will
constitute, all of the issued and outstanding shares of capital stock of
the Borrower owned by the Pledgor.
(f) All of the representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement.
(g) This Agreement constitutes the legal, valid and binding
obligation of the Pledgor, enforceable in accordance with its terms
(subject as to enforceability to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity).
(h) The execution, delivery and performance in accordance with its
respective terms by the Pledgor of this Agreement do not and will not (a)
require any Governmental Approval or any other consent or approval other
than Governmental Approvals and other consents and approvals that have been
obtained, are in full force and effect and are final and not subject to
review on appeal or to collateral attack and, in the case of any such
required under Applicable Law or Contract as in effect on the Agreement
Date, are listed on Schedule 3.03 to the Credit Agreement, or (b) violate,
-------------
conflict with, result in a breach of or constitute a default under, or
result in or require the creation of any Lien upon any assets of the
Pledgor under, (i) any Contract to which the Pledgor is a party or by which
it or its property may be bound or (ii) any Applicable Law, except in the
case of clause (a), the failure of which to obtain, and in the case of
clause (b), the violation of which, could not have a Materially Adverse
Effect on this Agreement or the Collateral.
(i) The Pledged Securities have been duly authorized and validly
issued, are fully paid and non-assessable and have been duly and validly
pledged hereunder in accordance with Applicable Law.
(j) There are no contractual restrictions upon the voting rights or
upon the transfer of any of the shares of the Pledged Securities other than
as referred to herein or in the Credit Agreement.
(k) The Pledgor represents and warrants that it has made its own
arrangements for keeping informed of changes or potential changes affecting
the Collateral (including, but
-7-
<PAGE>
not limited to, rights to convert, rights to subscribe, payment of
dividends, reorganization or other exchanges, tender offers and voting
rights), and the Pledgor agrees that neither the Secured Party nor any
other Principal shall have any responsibility or liability for informing
the Pledgor of any such changes or potential changes.
(l) The Pledgor shall not:
(i) permit or suffer the Borrower to voluntarily dissolve or
liquidate, retire any of its capital stock, reduce its capital or merge or
consolidate with any other entity if such action would violate the
provisions of the Credit Agreement, or
(ii) vote any of the Pledged Securities in favor of any of the
foregoing.
SECTION 7. Issuance of Additional Stock. The Pledgor agrees that it
----------------------------
will not (a) permit the Borrower to issue any stock or other securities
(including warrants, options and other similar agreements), whether in addition
to, by stock dividend or other distribution upon, or in substitution for, the
Pledged Securities or otherwise (unless such issuance is not prohibited by the
Credit Agreement and such stock or other securities are effectively pledged
hereunder in a manner reasonably satisfactory to the Secured Party) or (b) sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Collateral, or create, incur or permit to exist any Lien or
option in favor of, or any claim of any Person with respect to, any of the
Collateral, or any interest therein, except for the Lien provided for by this
Agreement or an option or claim referred to in the parenthetical in clause (b)
above and, with respect to distributions in kind on or in respect of the Pledged
Securities, Permitted Liens.
SECTION 8. Remedies Upon Default. (a) If an Event of Default shall
---------------------
have occurred and be continuing, the Secured Party shall have, in addition to
any other rights and except as otherwise provided herein, all of the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code in the State of New York. In addition, the Secured Party may
(without any obligation to seek performance of any guarantee or to resort to any
other security, right or remedy granted to it under any other instrument or
agreement, including the Credit Agreement) sell the Collateral, or any part
thereof, at public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery as the Secured Party
shall deem appropriate. The Secured Party shall be authorized at any such sale
(if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation
-8-
<PAGE>
of any such sale the Secured Party shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property so sold absolutely, free from
any claim or right on the part of the Pledgor (other than rights that the
Pledgor may have against such purchaser generally and without regard to this
Agreement or such sale), and the Pledgor hereby waives (to the extent permitted
by law) all rights of redemption, stay and appraisal which the Pledgor may now
have or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.
(b) The Secured Party shall give the Pledgor at least 10 days'
written notice (which the Pledgor agrees is reasonable notice within the meaning
of Section 9-504(3) of the Uniform Commercial Code as in effect in New York) of
the Secured Party's intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time of and place where such sale is
to be made and, in the case of a sale at a broker's board or on a securities
exchange, shall state the board or exchange at which such sale is to be made and
the day on which the Collateral, or portion thereof, will first be offered for
sale at such board or exchange. Any such public sale shall be held at such time
or times within ordinary business hours and at such place or places as the
Secured Party may fix and state in the notice of such sale. At any such sale,
the Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Secured Party may (in its sole and
absolute discretion) determine. The Secured Party shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given. The
Secured Party may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned. In case any sale
of all or any part of the Collateral is made on credit or for future delivery,
the Collateral so sold may be retained by the Secured Party until the sale price
is paid by the purchaser or purchasers thereof, but the Secured Party shall not
incur any liability in case any such purchaser or purchasers shall fail to take
up and pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again upon like notice, and in no event shall any portion
of the proceeds of any such sale be credited against payment of the costs,
expenses and obligations set forth in Section 9 hereof until cash payment for
the Collateral so sold has been received by the Secured Party. At any private
sale of Collateral of a type customarily sold in a recognized market, and at any
public sale made pursuant to this Section 8, any Principal may bid for or
purchase, free (to the extent permitted by law) from any equity or right of
redemption, stay or appraisal on the part of the Pledgor (all said rights being
also hereby waived and released to the extent permitted by law), the Collateral
or any
-9-
<PAGE>
part thereof offered for sale and may make payment on account thereof by using
any claim then due and payable to such Principal by the Pledgor under or
pursuant to the Credit Agreement as a credit, up to an amount equal to the
amount such Principal would otherwise be entitled to receive pursuant to Section
9 in connection with such sale, against the purchase price. For purposes
hereof, in the case of any such sale pursuant to a written agreement to purchase
the Collateral or any portion thereof, the Secured Party shall be free to carry
out such sale pursuant to such agreement, and the Pledgor shall not be entitled
to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Secured Party shall have entered into
such an agreement all Events of Default shall have been remedied and the Secured
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Secured Party may proceed by a suit or suits at
law or in equity to foreclose upon the Collateral pursuant this Agreement and to
sell the Collateral, or any portion thereof, pursuant to a judgment or decree of
a court or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver.
(c) If the Secured Party or any other Principal shall have instituted
any proceeding to enforce any right or remedy hereunder, and such proceeding
shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Secured Party or such other Principal, the Secured
Party and such other Principal shall, subject to any determination in any such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter, subject as aforesaid, all rights and remedies of the
Secured Party and such other Principal shall continue as though no such
proceeding had been instituted.
SECTION 9. Application of Proceeds of Sale. The proceeds of any sale
-------------------------------
of, or other realization upon, all or any part of the Collateral pursuant to
Section 8, as well as any Collateral consisting of cash, shall be applied by the
Secured Party as follows:
FIRST, to the payment of all costs and expenses reasonably incurred by
the Secured Party in connection with such sale or otherwise in connection
with this Agreement or any of the Secured Obligations, including all court
costs and the reasonable fees and expenses of its agents and legal counsel,
the repayment of all advances plus any interest thereon made hereunder by
the Secured Party on behalf of the Pledgor and any other costs or expenses
reasonably incurred in connection with the exercise of any right or remedy
hereunder;
SECOND, to the payment in full of the Secured Obligations pro rata as
among the holders of the Secured Obligations in accordance with the amounts
of monetary
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<PAGE>
Secured Obligations owed to them and outstanding (whether or not then due
and payable, at maturity, by acceleration or otherwise) as of the date of
such payment, until all the Secured Obligations have been paid in full; and
THIRD, to the Pledgor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
SECTION 10. Secured Party Appointed Attorney-in-Fact. The Pledgor
----------------------------------------
hereby appoints the Secured Party as its true and lawful agent and attorney-in-
fact for the purpose of carrying out the provisions of this Agreement and taking
any action and executing any instrument which the Secured Party may deem
necessary or advisable to accomplish the purposes hereof, in each case upon the
occurrence and during the continuance of an Event of Default, which appointment
is irrevocable and coupled with an interest and any proxy or proxies heretofore
given by the Pledgor to any other person that is inconsistent herewith are
hereby revoked. Without limiting the generality of the foregoing, the Secured
Party shall have the right, upon the occurrence and during the continuance of an
Event of Default, with full power of substitution either in the Secured Party's
name or in the name of the Pledgor, to ask for, demand, sue for, collect,
receive, receipt and give acquittance for any and all moneys due or to become
due under and by virtue of any Collateral, to endorse checks, drafts, orders and
other instruments for the payment of money payable to the Pledgor representing
any interest or dividend or other distribution payable in respect of the
Collateral or any part thereof or on account thereof and to give full discharge
for the same, to settle, compromise, prosecute or defend any action, claim or
proceeding with respect thereto, and to sell, assign, endorse, pledge, transfer
and make any agreement respecting, or otherwise deal with, the same; provided,
--------
however, that nothing herein contained shall be construed as requiring or
- - - -------
obligating the Secured Party or any other Principal to take any action,
including requiring or obligating the Secured Party or any Principal to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Secured Party or any other Principal or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken by the Secured Party or any other
Principal or omitted to be taken by any of them with respect to the Collateral
or any part thereof shall give rise to any defense, counterclaim or offset in
favor of the Pledgor or to any claim or action against the Secured Party or any
other Principal in the absence of the gross negligence or willful misconduct of
the Secured Party or such other Principal, as the case may be, as shall have
been determined in a final, nonappealable judgment of a court of competent
jurisdiction.
SECTION 11. No Waiver; Remedies Cumulative. No failure on the part
------------------------------
of the Secured Party or any other Principal
-11-
<PAGE>
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy by the Secured Party or any other Principal
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law or otherwise. The Secured Party
and the other Principals shall not be deemed to have waived any rights hereunder
or under any other agreement or instrument unless such waiver shall be in
writing and signed by the Secured Party.
SECTION 12. Securities Act, etc. (a) In view of the position of the
--------------------
Pledgor in relation to the Pledged Securities, or because of other present or
future circumstances, a question may arise under the Securities Act of 1933, as
amended (the "Securities Act"), or any similar or successor Federal securities
law (together with the Securities Act, the "Federal Securities Laws") with
respect to any disposition of the Pledged Securities permitted hereunder. The
Pledgor understands that compliance with the Federal Securities Laws might
strictly limit the course of conduct of the Secured Party if the Secured Party
were to attempt to dispose of all or any part of the Pledged Securities, and
might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Securities could dispose of the same. Similarly,
there may be other legal restrictions or limitations affecting the Secured Party
in any attempt to dispose of all or part of the Pledged Securities under
applicable blue sky or other state securities laws or similar laws analogous in
purpose or effect.
(b) Anything herein to the contrary notwithstanding, and in view of
restrictions specified in paragraph (a) of this Section 12, the Pledgor agrees
that, if an Event of Default shall exist hereunder, the Secured Party may, from
time to time, attempt to sell all or any part of the Pledged Securities by means
of a private placement, restricting the bidders and prospective purchasers to
those who will represent or agree as to their investment intent or method of
resale or both in a manner reasonably required by the Secured Party to assure
compliance with applicable securities laws. In so doing, the Secured Party may
solicit offers to buy such Pledged Securities or any part thereof, for cash,
from a limited number of investors deemed by the Secured Party, in its exclusive
judgment, to be responsible parties who might be interested in purchasing such
Pledged Securities.
SECTION 13. Security Interest Absolute; Waivers by Pledgor. (a) All
----------------------------------------------
rights of the Secured Party hereunder, the grant of a security interest in the
Collateral and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of (i) any lack of validity or enforceability of the
Credit Agreement, any other agreement with respect to any of the Secured
Obligations or any other agreement
-12-
<PAGE>
or instrument relating to any of the foregoing, (ii) any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Secured Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement or any other agreement or instrument, (iii)
any exchange, release or nonperfection of any other collateral, or any release
or amendment or waiver of or consent to or departure from any guaranty, for all
or any of the Secured Obligations, (iv) any failure by the Secured Party or any
Principal to demand payment or performance by the Borrower of any of the Secured
Obligations or to exercise or enforce any right or remedy in respect thereof or
(v) any other circumstance (other than payment in full of the Secured
Obligations or, in the case of rights predicated on the existence of an Event of
Default, a cure or waiver of such Event of Default) which might otherwise
constitute a defense available to, or a discharge of, the Pledgor or any other
person in respect of the Secured Obligations or in respect of this Agreement.
The Pledgor hereby acknowledges that neither the Secured Party nor any other
Principal shall be under any obligation to marshal any assets in favor of the
Pledgor or against or in payment of any or all of the Secured Obligations.
(b) The Pledgor hereby waives notice of acceptance of this Agreement.
The Pledgor further waives presentment and demand for payment of any of the
Secured Obligations, protest and notice of dishonor or default with respect to
any of the Secured Obligations, and all other notices to which the Pledgor might
otherwise be entitled, except as otherwise expressly provided in this Agreement
or in the Credit Agreement. The Pledgor (to the extent that it may lawfully do
so) covenants that it shall not at any time insist upon or plead, or in any
manner claim or take the benefit or advance of, any stay (except in connection
with a pending appeal), valuation, appraisal, redemption or extension law now or
at any time hereafter in force that, but for this waiver, might be applicable to
any sale made under any judgment, order or decree based on this Agreement or on
the Credit Agreement; and the Pledgor (to the extent that it may lawfully do so)
hereby expressly waives and relinquishes all benefit and advance of any and all
such laws and hereby covenants that it will not hinder, delay or impede the
execution of any power in this Agreement or therein granted and delegated to the
Secured Party, but that it will suffer and permit the execution of every such
power as though no such law or laws had been made or enacted.
(c) All rights that the Pledgor may at any time have against the
Borrower or any collateral for the Secured Obligations (including rights of
subrogation, exoneration, reimbursement and contribution and whether arising
under applicable law or otherwise), and all obligations that the Borrower may at
any time have to the Pledgor, arising by virtue of the Pledgor's obligations
under the Loan Documents, any payment made pursuant thereto or the exercise by
the Secured Party of its rights with respect to the Collateral are hereby
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<PAGE>
expressly subordinated to the prior payment, observance and performance in full
of the Secured Obligations. The Pledgor shall not enforce any of the rights, or
attempt to obtain payment or performance of any of the obligations, subordinated
pursuant to this Section 13(c) until the Secured Obligations have been paid,
observed and performed in full, except that such prohibition shall not apply to
routine acts, such as the giving of notices and the filing of continuation
statements, necessary to preserve such rights. If any amount shall be paid to
or recovered by the Pledgor (whether directly or by way of setoff, recoupment or
counterclaim) on account of any right or obligation subordinated pursuant to
this Section 13(c), such amount shall be held in trust by the Pledgor for the
benefit of the Secured Party, not commingled with any of the Pledgor's other
funds and forthwith paid over to the Administrative Agent, in the exact form
received, together with any necessary endorsements, to be applied and credited
against, or held as security for, the Secured Obligations and the obligations of
the Pledgor under the Loan Documents.
SECTION 14. Termination. This Agreement, and the assignments,
-----------
pledges and security interests created or granted hereby, shall terminate when
(a) all the Secured Obligations shall have been paid in full in cash and (b) the
commitments and obligations of the Banks under the Credit Agreement have
terminated, at which time the Secured Party shall reassign and deliver to the
Pledgor, or to such person or persons as the Pledgor shall designate, against
receipt, such of the Collateral (if any) as shall not have been sold or
otherwise applied by the Secured Party pursuant to the terms hereof and shall
still be held by it hereunder, together with appropriate instruments of
reassignment and release, all without any recourse to, or warranty whatsoever
by, the Secured Party or the other Principals, and at the sole cost and expense
of the Pledgor. Upon any such termination of the security interests or release
of Collateral, the Secured Party will, at the Pledgor's expense, execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request to
evidence the termination of the security interests in the Collateral.
SECTION 15. Notices. Notices and other communications provided for
-------
herein shall be in writing and shall be delivered or mailed (or delivered by
facsimile equipment, the receipt of which is promptly confirmed by telephone)
addressed,
(a) if to the Pledgor, to it at 1105 Market Street, Suite 1219,
Wilmington, Delaware 19801, Attention: Howard Grabelle, with a copy to
Comcast Corporation, 1500 Market Street, Philadelphia, Pennsylvania 19102
(telecopy no. (215) 981-7744), Attention: John R. Alchin, Senior Vice
President and Treasurer;
(b) if to the Secured Party, to it at its address set forth in or
determined pursuant to the Credit Agreement; and
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<PAGE>
(c) if to any additional pledgor hereunder, to it at the address set
forth in a notice to the Secured Party or, if no such notice is provided to
the Secured Party, to it at the address of the Pledgor as set forth in
clause (a) above.
Except as specifically provided in Section 20 of this Agreement, all notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given at the time determined
pursuant to Section 9.01 of the Credit Agreement.
SECTION 16. Further Assurances. The Pledgor agrees to do such
------------------
further acts and things, and to execute and deliver such additional conveyances,
stock powers, proxies, assignments, agreements, financing statements and other
recordings, and instruments, as the Secured Party may at any time reasonably
request in connection with the administration and enforcement of this Agreement
or with respect to the Collateral or any part thereof or in order better to
assure and confer unto the Secured Party its rights and remedies hereunder.
SECTION 17. Successors and Assigns. In the event of assignment of
----------------------
all or a portion of any of the indebtedness under the Credit Agreement by a
Principal, the rights of or on behalf of such Principal hereunder, to the extent
applicable to the indebtedness so assigned, shall be transferred with such
indebtedness. This Agreement is binding on the Pledgor and its successors but
none of them shall be permitted to assign this Agreement, any of its obligations
hereunder or any interest herein or in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect to the Collateral,
or any part thereof, or any cash or property held by the Secured Party as
Collateral under this Agreement except as expressly permitted by this Agreement
or the Credit Agreement.
SECTION 18. Changes in Writing. Neither this Agreement nor any
------------------
provision hereof may be changed, waived, discharged or terminated orally, but
only by a statement or instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. Any
waiver shall be effective only in the specific instance and for the specific
purpose for which made or given.
SECTION 19. Applicable Law. This Agreement shall be construed in
--------------
accordance with and governed by the law of the State of New York (without giving
effect to its choice of law principles).
SECTION 20. Judicial Proceedings; Waiver of Jury Trial. Any judicial
------------------------------------------
proceeding brought against the Pledgor with respect to any claim in any way
arising out of, related to or connected with this Agreement may be brought in
any court of competent jurisdiction in the City of New York, and, by execution
and delivery of this Agreement, the Pledgor (a) accepts,
-15-
<PAGE>
generally and unconditionally, the nonexclusive jurisdiction of such courts and
any related appellate court and irrevocably agrees to be bound by any judgment
rendered thereby in connection with any such claim and (b) irrevocably waives
any objection it may now or hereafter have as to the venue of any such
proceeding brought in such a court or that such a court is an inconvenient
forum. The Pledgor hereby waives personal service of process and consents that
service of process upon it may be made by certified or registered mail, return
receipt requested, at its address specified or determined in accordance with the
provisions of Section 15, and service so made shall be deemed completed on the
third business day in Wilmington, Delaware after such service is deposited in
the mail. Nothing herein shall affect the right of the Secured Party or any
other Principal to serve process in any other manner permitted by law or shall
limit the right of the Secured Party or any other Principal to bring proceedings
against the Pledgor in the courts of any other jurisdiction. To the extent
permitted in accordance with applicable law (including applicable law relating
to jurisdiction and venue), any judicial proceeding by the Pledgor against the
Secured Party or any other Principal involving any such claim shall be brought
only in a court located in the City and State of New York. THE PLEDGOR, THE
SECURED PARTY AND EACH OTHER PRINCIPAL HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING ANY SUCH CLAIM.
SECTION 21. Governmental Regulation. (a) The Secured Party will
-----------------------
not, solely by reason of the execution, delivery and performance (other than the
enforcement of remedies) of this Agreement or any other instrument or agreement
referred to herein, be subject to the regulation or control of either the
Federal Communications Commission (together with any successor thereto, the
"FCC"), any other Federal regulatory authority or agency regulating the cable
television industry or the public utilities commission of any state.
(b) The parties to this Agreement acknowledge and agree that before
certain of the remedies provided for in this Agreement are utilized it may be
necessary to obtain (i) any requisite approval of the FCC to the transfer of, or
the transfer of control of, licenses granted by the FCC, (ii) any required
consents, approvals, and authorizations of states and local governmental
entities which have granted franchises, licenses, permits or other
authorizations to operate cable television franchises to the transfer of control
of such authorizations and (iii) any consents required by contracts to any
transfer of control of such contracts, and the Secured Party agrees that it
shall not take any action hereunder that would require any such approval,
consent or authorization unless the same shall have been obtained.
Notwithstanding the above, the Pledgor agrees to use its best efforts to take,
or cause to be taken by the Borrower, any action which the Secured Party may
reasonably request in connection with the exercise of remedies hereunder after
an Event of Default and during the continuation thereof in order to obtain from
the FCC, any such state or local
-16-
<PAGE>
governmental entities or any such contracting parties such approvals, consents
and authorizations as may be necessary to enable the Secured Party and the other
Principals to exercise and enjoy the full rights and benefits granted to the
Secured Party and such Principals by this Agreement, the Credit Agreement and
any other agreements, instruments or documents delivered to the Secured Party or
the other Principals in connection herewith or therewith, including,
specifically, at the expense and cost of the Borrower, the use of its best
efforts to assist in obtaining approval of the FCC, any state or local
governmental entity or any contracting party for any action or transaction
contemplated by this Agreement for which such approval is required by law or
contract or otherwise should be obtained.
The Pledgor further agrees, without limiting the generality of the
foregoing, to, upon request in connection with the exercise of remedies
hereunder after an Event of Default, prepare, sign and file with the FCC and any
such state or local governmental entities the assignor's, transferor's or
exerciser's portion of any application or applications for consent to the
assignment, transfer or exercise of control necessary or appropriate under
applicable law and regulations for approval of (a) any sale or sales of the
Pledged Securities by or on behalf of the Secured Party and (b) any assumption
by the Secured Party of voting rights with respect to the Pledged Securities
effected in accordance with the terms of this Agreement. Pending the receipt of
any such approvals, consents or authorizations, the Pledgor will use its best
efforts to cause the business of the Borrower to be operated and conducted only
in the normal course, and will use its best efforts to preserve the Borrower's
business and the business of its Subsidiaries, the services of their present
employees, agents and resellers, and their business relations with suppliers,
customers and others; provided, however, that the foregoing shall not be deemed
-------- -------
to require any expenditure by the Pledgor of its own funds.
SECTION 22. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in such jurisdiction, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 23. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument. This Agreement shall
be effective when a counterpart bearing the signature of the Pledgor shall have
been delivered to the Secured Party.
SECTION 24. Headings. Section headings used herein are for
--------
convenience only and are not to affect the construction
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<PAGE>
of, or be taken into consideration in interpreting, this Agreement.
SECTION 25. Immunities of Secured Party. The Secured Party's
---------------------------
performance of its duties hereunder shall in all respects be subject to and
governed by the Credit Agreement. Nothing contained herein shall be construed
to enlarge the degree of responsibility or discretion or the duty of care to be
exercised by the Secured Party beyond those expressly set forth in the Credit
Agreement. Without limiting the generality of the foregoing, the Pledgor hereby
acknowledges and agrees that the Secured Party shall, with respect to all of its
rights, obligations and duties under this Agreement, be entitled to all of its
rights, protections and immunities provided for under Article 8 of the Credit
Agreement as fully and to the same extent as if such provisions were set forth
in full herein.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
COMCAST COMMUNICATIONS PROPERTIES,
INC., as Pledgor
By /s/ John R. Alchin
---------------------------------
Name: John R. Alchin
Title: Senior Vice President
& Treasurer
NATIONSBANK OF TEXAS,
N.A., as Secured Party
By /s/ Thomas E. Carter
---------------------------------
Name: Thomas E. Carter
Title: Senior Vice President
<PAGE>
SCHEDULE 1 TO THE
PLEDGE AGREEMENT
PLEDGED SECURITIES
<TABLE>
<CAPTION>
=============================================================================================================
Issuer Shares Pledged Shares Authorized Certificate Number(s) Pledgor
- - - --------------------------- -------------- ----------------- --------------------- ----------------------
<S> <C> <C> <C> <C>
Comcast MH Holdings, Inc. 100 1,000 1 Comcast Communications
Properties, Inc.
=============================================================================================================
</TABLE>
<PAGE>
EXHIBIT 10.5
AFFILIATE SUBORDINATION AGREEMENT
AFFILIATE SUBORDINATION AGREEMENT (as the same may be amended,
modified, supplemented, waived, extended or restated from time to time, this
"Agreement") dated as of December 22, 1994 among COMCAST CORPORATION, a
corporation duly organized and validly existing under the laws of the
Commonwealth of Pennsylvania, COMCAST MH HOLDINGS, INC., a corporation duly
organized and validly existing under the laws of the State of Delaware (the
"Borrower"), any affiliate of the Borrower that shall have become a party hereto
pursuant to Section 5.09 hereof (together with Comcast, each a "Subordinated
Lender") and NATIONSBANK OF TEXAS, N.A., as Administrative Agent under the
Credit Agreement dated as of December 22, 1994 (as the same may be amended,
modified, supplemented, waived, extended or restated from time to time, the
"Credit Agreement"), among the Borrower, the Banks listed on the signature pages
thereof, The Chase Manhattan Bank (National Association), NationsBank of Texas,
N.A. and The Toronto-Dominion Bank, as Arranging Agents, The Bank of New York,
The Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Morgan Guaranty
Trust Company of New York, as Managing Agents, and the Administrative Agent
(together with the Managing Agents, the Arranging Agents and the Banks, the
"Senior Lenders").
To induce the Senior Lenders to enter into the Credit Agreement and
the Interest Rate Protection Agreements, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Subordinated Lenders, the Borrower and the Administrative Agent wish to enter
into this Agreement pursuant to which the Subordinated Lenders and the Borrower
will agree that certain obligations of the Borrower to the Subordinated Lenders
shall be subordinate in right of payment to the Senior Obligations (as herein
defined). Accordingly, the Subordinated Lenders, the Borrower and the
Administrative Agent hereby agree as follows:
Section 1. Definitions. Capitalized terms used but not defined
-----------
herein shall have the meanings assigned to such terms in the Credit Agreement.
The following terms, as used herein, shall have the following meanings:
"Affiliate Subordinated Obligations" shall mean (a) all Indebtedness,
----------------------------------
whether principal or interest, from time to time owing by the Borrower or any of
its Subsidiaries to any Subordinated Lender and (b) all Management Fees and
deferred
<PAGE>
programming expenses from time to time owing by the Borrower or any of its
Subsidiaries to any Subordinated Lender.
"Affiliate Supplement" shall mean a supplement to this Agreement
--------------------
substantially in the form of Exhibit A hereto.
"Senior Credit Agreements" shall mean the Credit Agreement, the
------------------------
promissory notes of the Borrower issued pursuant thereto and any Interest Rate
Protection Agreements between the Borrower and any Bank.
"Senior Lenders" shall have the meaning assigned to such term in the
--------------
preamble to this Agreement.
"Senior Obligations" shall mean, collectively, all rights to payment
------------------
of principal, premium, interest (including interest accruing after the
commencement of any proceeding under any Federal or state bankruptcy,
insolvency, receivership or similar law, regardless of whether a claim therefor
is allowable as a claim in such proceeding under applicable law), fees, expenses
and other sums payable, however denominated, of the Administrative Agent, the
Managing Agents, the Arranging Agents and the Banks under the Credit Agreement,
the Notes (as defined in the Credit Agreement) and the Pledge Agreements, of
each Bank and each Affiliate of a Bank under any Interest Rate Protection
Agreement between the Borrower and such Bank or such Affiliate, as the case may
be, and any extensions, renewals, refinancings or refundings of any of the
Credit Agreement, the Notes and such Interest Rate Protection Agreements, and
any and all other past, present or future Liabilities of the Borrower to the
Administrative Agent, the Managing Agents, the Arranging Agents or the Senior
Lenders under the Loan Documents.
Section 2. Representations and Warranties. Each Subordinated Lender
------------------------------
represents and warrants to the Administrative Agent for the benefit of the
Senior Lenders that:
2.01 Existence. Comcast and each other Subordinated Lender is an
---------
entity duly organized and validly existing in good standing under the laws of
the jurisdiction of its formation.
2.02 Authority. The execution, delivery and performance in
---------
accordance with its terms by each Subordinated Lender of this Agreement have
been duly authorized by all necessary corporate or other entity action and do
not and will not violate any provision of law, rules, regulations, or orders or
any provision of the charter or by-laws or other organizational documents of
such Subordinated Lender or violate, result in the breach of, constitute a
default or require any consent under, any Contract to which such Subordinated
Lender is a party or by which such Subordinated Lender or its property may be
bound. This Agreement has been duly and validly executed and delivered by each
Subordinated Lender and constitutes the legal, valid and binding obligation of
such Subordinated Lender,
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<PAGE>
enforceable in accordance with its terms, subject as to enforceability (a) to
bankruptcy, insolvency, reorganization or moratorium and other similar laws
affecting creditors' rights generally and (b) to the application of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
2.03 Approvals. No Governmental Approval is required in connection
---------
with the execution, delivery and performance in accordance with its terms by
each Subordinated Lender of this Agreement.
Section 3. Subordination Provisions. It is intended by the Senior
------------------------
Lenders that the subordination provisions contained in this Agreement shall
benefit the Senior Lenders equally (in priority) and ratably in order that the
Senior Obligations rank equally in right of payment over the Affiliate
Subordinated Obligations. To implement the foregoing (but without limiting the
generality thereof as it may apply to other provisions of this Agreement) each
Subordinated Lender agrees as follows:
3.01 Subordination. Each Subordinated Lender hereby agrees that,
-------------
except as and to the extent hereinafter provided, the Affiliate Subordinated
Obligations are and shall be subordinate and subject in right of payment to the
prior payment in full of all of the Senior Obligations, whether or not such
Senior Obligations have been voided, disallowed or subordinated pursuant to
Section 548 of the United States Bankruptcy Code or any applicable state
fraudulent conveyance laws, whether asserted directly or under Section 544 of
the United States Bankruptcy Code. Without limiting the foregoing, each
Subordinated Lender also hereby agrees that, (a) except as otherwise provided in
Section 3.02 of this Agreement, it will not ask, demand, sue for, take or
receive from the Borrower (other than directing the Borrower to make payment
directly to the holders of the Senior Obligations for the purpose of causing the
Senior Obligations to be paid), by set-off or in any other manner, payment of
the whole or any part of the Affiliate Subordinated Obligations, or any security
therefor and (b) without limiting the exception in clause (a) of this Section
3.01, it will not take any action to collect, demand payment of or accelerate
all or any portion of the Affiliate Subordinated Obligations (provided that the
--------
Subordinated Lenders may accelerate the Affiliate Subordinated Obligations if
the principal amount of all outstanding Senior Obligations shall have been
previously accelerated and may file appropriate proofs of claim in respect of
the Affiliate Subordinated Obligations in any bankruptcy or insolvency
proceeding of the Borrower), foreclose or otherwise realize upon any security
therefor or exercise any of its other rights or remedies against the Borrower
that it may have in respect of the Affiliate Subordinated Obligations, in each
case unless and until all of the Senior Obligations shall have been fully,
finally and indefeasibly paid in cash, whether or not such Senior Obligations
have been voided, disallowed or subordinated pursuant to Section
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<PAGE>
548 of the United States Bankruptcy Code or any applicable state fraudulent
conveyance laws, whether asserted directly or under Section 544 of the United
States Bankruptcy Code. Each Subordinated Lender hereby irrevocably directs the
Borrower to make such prior payment. Each Subordinated Lender further agrees
that it will not institute against the Borrower any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law, until such time as
the Senior Obligations have been fully, finally and indefeasibly paid in cash.
3.02 Certain Payments Permitted So long as no Default has occurred
--------------------------
and is continuing (and only to the extent not prohibited by the provisions of
any of the Senior Credit Agreements), the Subordinated Lenders may from time to
time receive from the Borrower payments on or in respect of the Affiliate
Subordinated Obligations. Nothing in this Agreement shall limit the right of
the Subordinated Lenders to receive payments on or in respect of the Affiliate
Subordinated Obligations so long as the Senior Obligations shall have been
indefeasibly paid in full.
3.03 Distributions, etc. In furtherance of, and to make effective,
------------------
the subordination provided for herein, the Subordinated Lenders further agree as
follows:
(a) In the event of any distribution, division or application,
partial or complete, voluntary or involuntary, by operation of law or
otherwise, of all or any part of the assets of the Borrower or the proceeds
thereof, to creditors of the Borrower, or upon any indebtedness of the
Borrower, by reason of (1) the liquidation, dissolution or other winding
up, partial or complete, of the Borrower or the Borrower's business, (2)
any receivership, insolvency or bankruptcy proceeding, or assignment for
the benefit of creditors or (3) any proceeding by or against the Borrower
for any relief under any bankruptcy or insolvency law or laws relating to
the relief of debtors, readjustment of indebtedness, arrangements,
reorganizations, compositions or extensions, then and in any such event:
(i) any payment or distribution of any kind or character,
whether in cash, securities or other property which but for this
Agreement would be payable or deliverable upon or with respect to any
or all of the Affiliate Subordinated Obligations, shall instead be
paid or delivered directly to the Administrative Agent for application
to the Senior Obligations, whether then due or not due, until the
Senior Obligations shall have first been fully, finally and
indefeasibly paid in cash and satisfied; and
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<PAGE>
(ii) each Subordinated Lender hereby irrevocably authorizes and
empowers the Administrative Agent to demand, sue for, collect and
receive every such payment or distribution and give acquittance
therefor, and to file and/or vote claims and take such other
proceedings, in the Administrative Agent's own name or in the name of
such Subordinated Lender, or otherwise, as the Administrative Agent
may deem necessary or advisable for the enforcement of this Agreement
(including, without limitation, the filing of any proof of claim in
respect of the Affiliate Subordinated Obligations in any bankruptcy or
insolvency proceeding of the Borrower). In furtherance of the
foregoing, each Subordinated Lender agrees duly and promptly to take
such action as may be reasonably requested by the Administrative Agent
to assist in the collection of the Affiliate Subordinated Obligations
for the account of the Administrative Agent and/or to file appropriate
proofs of claim in respect of the Affiliate Subordinated Obligations,
and to execute and deliver to the Administrative Agent on demand such
powers of attorney, proofs of claim, assignments of claim or other
instruments as may be reasonably requested by the Administrative Agent
to enable the Administrative Agent to enforce any and all claims upon
or with respect to the Affiliate Subordinated Obligations, and to
collect and receive any and all payments or distributions which may be
payable or deliverable at any time upon or with respect to the
Affiliate Subordinated Obligations.
(b) If any payment, distribution of security or proceeds of any
security are received by any Subordinated Lender upon or in respect of the
Affiliate Subordinated Obligations in contravention of the provisions
hereof, such Subordinated Lender will forthwith deliver the same to the
Administrative Agent in precisely the form received (except for the
endorsement or assignment of such Subordinated Lender where necessary), for
application to the Senior Obligations, whether then due or not due, and,
until so delivered, the same shall be held in trust by such Subordinated
Lender as property of the Administrative Agent. In the event of the
failure of any Subordinated Lender to make any such endorsement or
assignment, the Administrative Agent, or any of its officers or employees,
are hereby irrevocably authorized to make the same.
(c) Each Subordinated Lender agrees that it will not transfer,
assign, pledge or encumber the Affiliate Subordinated Obligations or any
part thereof or any instrument evidencing the same unless the respective
instrument of assignment specifically provides that the assignee takes such
Affiliate Subordinated Obligations subject to the provisions of this
Agreement and such assignee executes and delivers to the Administrative
Agent
-5-
<PAGE>
an instrument in form and substance reasonably satisfactory to the
Administrative Agent pursuant to which such assignee agrees to be bound by
the provisions of this Agreement. From and after the occurrence of any
Default of which any Subordinated Lender has or should reasonably be
expected to have knowledge, and for so long as the same shall be
continuing, such Subordinated Lender agrees that it will not exchange,
forgive, waive or cancel the Affiliate Subordinated Obligations or any part
thereof or reduce the principal amount of the Affiliate Subordinated
Obligations in whole or in part.
(d) Without limiting the effect of any of the other provisions
hereof, during the continuance of any Default or Event of Default with
respect to any Senior Obligation or any default in the payment of any
Senior Obligations, no payment of principal, sinking fund, interest or
premium (or any other amount) shall be made on or with respect to the
Affiliate Subordinated Obligations or any renewals or extensions thereof.
3.04 Continuing Subordination, etc. The subordination effected by
-----------------------------
this Agreement is a continuing subordination, and each Subordinated Lender
hereby agrees that at any time and from time to time, without notice to it:
(a) the time for the Borrower's performance of or compliance with any
of its agreements contained in any of the Senior Credit Agreements may be
extended or such performance or compliance may be waived by the applicable
Senior Lenders;
(b) any of the acts mentioned in any of the Senior Credit Agreements
may be done;
(c) any of the Senior Credit Agreements may be amended for the
purpose of adding any provisions thereto or increasing the amount of, or
changing the terms of, the Senior Obligations or changing in any manner the
rights of the Administrative Agent, any of the Senior Lenders or the
Borrower thereunder;
(d) payment of any of the Senior Obligations or any portion thereof
may be extended; and
(e) the maturity of any of the Senior Obligations may be accelerated,
and any collateral security therefor may be exchanged, sold, surrendered,
released or otherwise dealt with, in accordance with the terms of any of
the Senior Credit Agreements or any other present or future agreement
between the Borrower and the applicable Senior Lenders;
all without impairing or affecting the obligations of such Subordinated Lender
hereunder.
-6-
<PAGE>
3.05 Waiver of Notice. Each Subordinated Lender hereby
----------------
unconditionally waives notice of the incurring of the Senior Obligations or any
part thereof and reliance by any Senior Lender upon the subordination of the
Affiliate Subordinated Obligations to the Senior Obligations.
3.06 Application of Payments. Whenever any payment or distribution
-----------------------
shall be paid or delivered to the Administrative Agent pursuant to the
provisions of this Section 3 for application to the Senior Obligations, such
payment or distribution shall be applied by the Administrative Agent in
accordance with Section 9 of the Pledge Agreement.
3.07 Subrogation. Subject to the prior indefeasible payment in full
-----------
in cash of the Senior Obligations, the Subordinated Lenders shall be subrogated
to the rights of the Administrative Agent and the Senior Lenders to receive
payments or distributions in cash, property or securities of the Borrower
applicable to the Senior Obligations until all amounts owing on the Senior
Obligations shall be paid in full in cash, and as between and among the
Borrower, its creditors other than the Administrative Agent and the Senior
Lenders, and the Subordinated Lenders, no such payment or distribution made to
the Administrative Agent or the Senior Lenders by virtue of this Agreement which
otherwise would have been made to the Subordinated Lenders shall be deemed to be
a payment by the Borrower on account of the Senior Obligations, it being
understood that the provisions of this Section 3 are intended solely for the
purpose of defining the relative rights of the Subordinated Lenders, the
Administrative Agent and the Senior Lenders.
3.08 Certain Agreements. Each Subordinated Lender agrees that:
------------------
(a) all holders of Senior Obligations, in determining to acquire and
retain Senior Obligations, have relied upon the subordination of the
Affiliate Subordinated Obligations to the Senior Obligations as provided
herein;
(b) promptly upon the written request of the Administrative Agent,
such Subordinated Lender shall take such other action as may be reasonably
requested by the Administrative Agent to protect the rights of the
Administrative Agent or the Senior Lenders under this Agreement or
effectuate the subordination provided herein; and
(c) the Affiliate Subordinated Obligations shall not at any time be
secured by any lien or security interest on property of the Borrower or any
Subsidiary of the Borrower.
Section 4. Junior Subordinated Indebtedness. Each Subordinated
--------------------------------
Lender hereby agrees that all Affiliate Subordinated
-7-
<PAGE>
Obligations constituting Junior Subordinated Indebtedness are and shall, subject
to the waiver hereof by the holders from time to time of Senior Subordinated
Indebtedness, be subordinate and subject in right of payment to the prior
payment in full of all Affiliate Subordinated Obligations constituting Senior
Subordinated Indebtedness on the same terms and conditions as Affiliate
Subordinated Obligations are subordinate and subject in right of payment to the
prior payment in full of the Senior Obligations.
Section 5. Miscellaneous.
-------------
5.01 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the law of the State of New York (without giving
effect to its choice of law principles).
5.02 Notices. Notices and other communications provided for herein
-------
shall be in writing and shall be delivered or mailed (or delivered by facsimile
equipment, the receipt of which is promptly confirmed by telephone) addressed,
(a) if to Comcast, to it at 1500 Market Street, Philadelphia,
Pennsylvania 19102 (telecopy no. (215) 981-7744), Attention: John R.
Alchin, Senior Vice President and Treasurer; and
(b) if to any other party hereto, to it at its address set forth in
or determined pursuant to the Credit Agreement or an Affiliate Supplement,
as the case may be.
Except as specifically provided in Section 5.06 of this Agreement, all notices
and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given at the time
determined pursuant to Section 9.01 of the Credit Agreement.
5.03 Waivers, etc. The terms of this Agreement may be waived,
------------
altered or amended only by an instrument in writing duly executed by the
Subordinated Lenders and the Administrative Agent. Any such amendment or waiver
shall be binding upon all Senior Lenders and each other party to this Agreement.
5.04 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the respective successors and assigns of the
Subordinated Lenders, the Borrower, the Administrative Agent and each of the
Senior Lenders (provided, however, that neither the Subordinated Lenders nor the
Borrower shall assign or transfer their rights hereunder without the prior
written consent of the Administrative Agent (except as provided under Section
3.03(c) of this Agreement)).
5.05 Counterparts. This Agreement may be executed in one or more
------------
counterparts and all of such counterparts taken together shall constitute one
and the same instrument.
-8-
<PAGE>
5.06 Judicial Proceedings; Waiver of Jury Trial. Any judicial
------------------------------------------
proceeding brought against any Subordinated Lender with respect to any claim in
any way arising out of, related to or connected with this Agreement may be
brought in any court of competent jurisdiction in the City of New York, and, by
execution and delivery of this Agreement, each Subordinated Lender (a) accepts,
generally and unconditionally, the nonexclusive jurisdiction of such courts and
any related appellate court and irrevocably agrees to be bound by any judgment
rendered thereby in connection with any such claim and (b) irrevocably waives
any objection it may now or hereafter have as to the venue of any such
proceeding brought in such a court or that such a court is an inconvenient
forum. Each Subordinated Lender hereby waives personal service of process and
consents that service of process upon it may be made by certified or registered
mail, return receipt requested, at its address specified or determined in
accordance with the provisions of Section 5.02, and service so made shall be
deemed completed on the third business day after such service is deposited in
the mail. Nothing herein shall affect the right of the Administrative Agent or
any Senior Lender to serve process in any other manner permitted by law or shall
limit the right of the Administrative Agent or any Senior Lender to bring
proceedings against any Subordinated Lender in the courts of any other
jurisdiction. To the extent permitted in accordance with applicable law
(including applicable law relating to jurisdiction and venue), any judicial
proceeding by any Subordinated Lender against the Administrative Agent or any
Senior Lender involving any such claim shall be brought only in a court located
in the City and State of New York. EACH SUBORDINATED LENDER, THE ADMINISTRATIVE
AGENT AND EACH SENIOR LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING ANY SUCH CLAIM.
5.07 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in such jurisdiction, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
5.08 Immunities of Administrative Agent. The Administrative Agent's
----------------------------------
performance of its duties hereunder shall in all respects be subject to and
governed by the Credit Agreement. Nothing contained herein shall be construed
to enlarge the degree of responsibility or discretion or the duty of care to be
exercised by the Administrative Agent beyond those expressly set forth in the
Credit Agreement. Without limiting the generality of the foregoing, the parties
hereto agree that the Administrative Agent shall, with respect to all of its
rights, obligations and duties under this Agreement, be entitled to all of its
rights, protections and immunities provided for
-9-
<PAGE>
under Article 8 of the Credit Agreement as fully and to the same extent as if
such provisions were set forth in full herein.
5.09 Additional Subordinated Lenders. Any Affiliate of the Borrower
-------------------------------
may, if not already a party to this Agreement, become a party hereto by the
execution and delivery of an Affiliate Supplement in the form of Exhibit A
hereto. Upon delivery thereof to the Administrative Agent, such Affiliate shall
be and become a Subordinated Lender for all purposes hereof as fully and to the
same extent as if it were an original signatory hereto and shall be deemed to
have made the representations and warranties set forth in Section 2 hereof as of
the date of execution and delivery of such Affiliate Supplement. Any such
Affiliate shall be released from this Agreement and shall cease to be a
Subordinated Lender for all purposes hereof upon delivery to the Administrative
Agent of an Affiliate Supplement so specifying; provided, however, that no such
-------- -------
release shall be effective if at the time of such delivery any Affiliate
Subordinated Obligations owing to such Affiliate are outstanding.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Affiliate
Subordination Agreement to be duly executed as of the day and year first above
written.
COMCAST CORPORATION
By: /s/ John R. Alchin
----------------------------------------
Name: John R. Alchin
Title: Senior Vice President & Treasurer
COMCAST MH HOLDINGS, INC.
By: /s/ John R. Alchin
----------------------------------------
Name: John R. Alchin
Title: Senior Vice President & Treasurer
NATIONSBANK OF TEXAS, N.A.,
as Administrative Agent
By: /s/ Thomas E. Carter
----------------------------------------
Name: Thomas E. Carter
Title: Senior Vice President
-11-
<PAGE>
Exhibit A
---------
FORM OF AFFILIATE SUPPLEMENT
Affiliate Subordination Agreement dated as of [Agreement Date]
--------------------------------------------------------------
among Comcast Corporation, Comcast MH Holdings, Inc.,
-----------------------------------------------------
the other Subordinated Lenders party thereto and
------------------------------------------------
NationsBank of Texas, N.A., as Administrative Agent
---------------------------------------------------
(the "Affiliate Subordination Agreement")
-----------------------------------------
Reference is made to the Affiliate Subordination Agreement as defined
above; capitalized terms used herein and not otherwise defined herein shall have
the meanings given to such terms in, or by reference in, the Affiliate
Subordination Agreement. The undersigned hereby agrees that upon delivery
hereof to the Administrative Agent referred to above,
[the undersigned shall be and become a Subordinated Lender for all purposes of
the Affiliate Subordination Agreement as fully and to the same extent as if it
were an original signatory thereto and shall be deemed to have made the
representations and warranties set forth in Section 2 of the Affiliate
Subordination Agreement as of the date of execution and delivery of this
Affiliate Supplement.]
[no Affiliate Subordinated Obligations owing to the undersigned are outstanding
as of the date hereof and , from and after the date hereof, the undersigned
shall cease to be a Subordinated Lender for all purposes of the Affiliate
Subordination Agreement and shall be deemed to be released therefrom.]/1/
[Name of Affiliate]
By:______________________
Name:
Title:
Dated:______________________
Notice Address:
Attention:
Telephone:
Telecopy:
____________________
/1/ Select either paragraph as appropriate.
-12-
<PAGE>
Exhibit 10.6
AMENDMENT TO AGREEMENT AND PLAN OF SHARE EXCHANGE
AMENDMENT dated as of November 4, 1994 among Barden Communications,
Inc., Comcast Corporation, Don H. Barden and the Don H. Barden Revocable Trust
dated June 21, 1994, as amended.
W I T N E S E T H :
WHEREAS, the parties hereto have heretofore entered into an Agreement
and Plan of Share Exchange dated as of October 21, 1994 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to provide
for certain changes to the termination provisions thereof.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
-----------------------
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendment of Section 8.01(b) of the Agreement. Section
---------------------------------------------
8.01(b) of the Agreement is amended to read as follows:
(b) This Agreement shall terminate without any action of any party
hereto on November 16, 1994, if the following have no occurred on or
prior to such date (i) the Barden Indemnity Agreement and the Rogers
Indemnity Agreement has not bee executed and delivered by all parties
thereto or (ii) the form of the Escrow Agreement has been agreed to by
all parites thereto.
<PAGE>
SECTION 3. Governing Law. This Amendment shall be governed by and
-------------
construed in accordance with the laws of the State of Michigan.
SECTION 4. Counterparts; Effectiveness. This Amendment may be signed
---------------------------
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Amendment shall become effective as of the date hereof.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
BARDEN COMMUNICATIONS, INC.
By: /s/ Don H. Barden
_________________________
Don H. Barden, President
/s/ Don H. Barden
_____________________________
Don H. Barden individually and as
trustee of the Don H. Barden
Revocable Trust, dated as of June 21,
1994, as amended from time to time.
COMCAST CORPORATION
By: /s/ Robert S. Pick
___________________________
Name
Title: Vice President
________________________
Consented and Agreed:
the Company COMMUNICATIONS, INC.
By /s/ David Miller
_______________________
Name: David Miller
Title: Vice President
Date: November 4, 1994
3
<PAGE>
Exhibit 10.7
SECOND AMENDMENT TO AGREEMENT AND PLAN OF SHARE EXCHANGE
AMENDMENT dated as of November 16, 1994 among Barden Communications,
Inc., Comcast Corporation, Don H. Barden and the Don H. Barden Revocable Trust
dated June 21, 1994, as amended.
W I T N E S E T H :
WHEREAS, the parties hereto have heretofore entered into an Agreement and
Plan of Share Exchange dated as of October 21, 1994 and amended as of November
4, 1994 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend certain provisions of the
Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
-----------------------
defined herein, each term used herein which is defined in the Agreement shall
have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendments to the Agreement
---------------------------
SECTION 2.01. Amendment of Section 1.01 of the Agreement. (a) Section
------------------------------------------
1.01(c) of the Agreement is amended to read as follows:
"Adjustment Amount" means (i) the total of the Detroit Adjustment Amount, the
BCI Adjustment Amount, and, if and only if the Inkster Partnership is owned by
the Company at the Closing, the Inkster Adjustment Amount (the foregoing
adjustment amounts may be positive or negative amounts) reduced by (ii) the
Warranty Breach Reduction.
(b) Section 1.01(u) of the Agreement is amended by adding the following
immediately before clause (2) of such Section:
<PAGE>
provided however that for purposes of calculating such adjustment, all
indebtedness and other amounts owing by the Detroit partnership to any member
of the MHI consolidated group shall be deemed to be a Current Liability which
reduces the Purchase Price solely for the purpose of calculating this
adjustment amount so as to ensure that the amount payable to BCI, hereunder,
for its interest in the Detroit partnership is reduced by its 40% share of
such inter-company debt.
(c) Section 1.01(ag) of the Agreement is amended to read as follows:
"Escrow Agreement" means the Paying/Escrow Agreement in the form set forth as
Exhibit A hereto;
(d) Section 1.01(ah) of the Agreement is amended to read as follows:
"Exchange Consideration" means an amount equal to the total of (i) the Base
Exchange Consideration, plus (ii) the Adjustment Amount. The Exchange
Consideration shall be paid in part in cash and in part in the form of the
Purchaser Note as set forth in Section 2.05;
(e) Section 1.01(bs) of the Agreement is amended by adding the
following:
"Cash Portion", Section 2.05(a);
"Closing Certificate", Section 2.05(c);
"Holdback Claim", Section 7.05(e)(i);
"Purchaser Note", Section 2.05(a);
"Warranty Arbitrators", Section 3A.01(d);
"Warranty Breach Notice", Section 3A.01(a);
"Warranty Breach Objection Notice", Section 3A. 01(c);
"Warranty Breach Reduction", Section 3A.01(e);
"Warranty Holdback", Section 3A.01(e);
SECTION 2.02. Amendment of Section 2.04 of the Agreement. Section 2.04
------------------------------------------
of the Agreement is amended by adding the following at the end of the first
sentence of such Section:
2
<PAGE>
provided that a portion of the consideration due to Barden shall not be in
cash but shall be in the form of a non-interest bearing promissory note (in
form and substance reasonably satisfactory to the Company) of the Purchaser
(the "Purchaser Note") in an amount equal to the principal and interest owing
on the Barden Note at the time of the closing.
SECTION 2.03. Amendment of Section 2.05 of the Agreement. (a) The first
------------------------------------------
and second sentences of Section 2.05(a) of the Agreement are amended to read as
follows:
On the Closing Date, upon the terms and conditions set forth in this
Agreement, the Purchaser shall purchase 100% of the issued and outstanding
Shares of the Company in exchange for (i) the payment of an amount of cash
(the "Cash Portion") equal to the Exchange Consideration less the amount of
the Purchaser Note and (ii) the Purchaser Note. Such cash payment to be made
by Purchaser and the Purchaser Note shall be deposited with the Paying/Escrow
Agent who shall disburse said cash and the Purchaser Note only in accordance
with the terms and conditions of the Escrow Agreement.
(b) Section 2.05(c) of the Agreement is amended to read as follows:
Not less than two (2) business days prior to the Closing Date, the Company
shall deliver to the Purchaser and Rogers a certificate executed by the Vice
President of the Company (as amended by agreement of the parties hereto, the
"Closing Certificate") setting forth a good faith reasonable estimate of the
Exchange Consideration which specifically identifies a detailed breakdown of
the estimates of the BCI Adjustment Amount, the Detroit Adjustment Amount (for
purposes of calculating the Detroit Adjustment, the Company shall rely
exclusively on the Estimated Price under the SPA as it relates to any
calculation of Price Adjustments related to the Detroit Partnership, Cable
Management or the Detroit CATV System except to the extent it is necessary to
calculate BCI's share of inter-company debt of the Detroit Partnership), the
Warranty Breach Reduction, the Purchaser Note and, if and only if the Inkster
Partnership is owned by the Company at the time of the Closing, the Inkster
Adjustment Amount. Purchaser's representatives shall be entitled to review
such supporting data as may be reasonably necessary to verify such information
and the parties shall cooperate in good faith to resolve any disputes as to
the amount of the estimated Exchange Consideration as set forth in the Closing
Certificate, and any modification to the Closing Certificate shall only be by
mutual agreement of the parties.
3
<PAGE>
(c) Section 2.05(d) of the Agreement is amended to read as follows:
Based on the estimate of the Exchange Consideration as set forth in the
Closing Certificate the Purchaser shall deposit with the Paying/Escrow Agent
at the time of closing (i) an amount of cash equal to the Cash Portion
calculated on the basis of the Exchange Consideration estimated in the Closing
Certificate and (ii) the Purchaser Note. To the extent that it is
subsequently determined that the estimate of Exchange Consideration as set
forth in the Closing Certificate is less than the actual amount of the
Exchange Consideration as determined on the Settlement Date, the Purchaser
shall make a payment in accordance with Section 2.05(k) on the Settlement
Date. All assets deposited with the Paying/Escrow Agent shall be disbursed
only in accordance with the terms and conditions of the Escrow Agreement.
(d) Section 2.05(e) of the Agreement is amended as follows:
(i) by deleting the first sentence of such Section;
(ii) by adding the word "estimated" immediately before the words
"Exchange Consideration based on their determinations" in the fourth sentence
of such Section (as such Section reads before the amendment in clause (i)
hereof);
(iii) by replacing the first word of the eighth sentence of such
Section (as such Section reads before the amendment in clause (i) hereof) with
the words "Any such";
(iv) by deleting clause (iii) of such Section and amending clauses
(i) through (iv) thereof to read as follows:
<TABLE>
<S> <C> <C>
(i) BCI/Detroit System Holdback $5,000,000
increased
by the
amount, if
any, of
the
Warranty
Holdback
(ii) Inkster System Holdback $ 300,000
(iii) Exchange Consideration $1,000,000
Holdback
</TABLE>
4
<PAGE>
(v) by amending the last sentence of the first paragraph of such
Section to read as follows:
The Holdback Amounts shall be disbursed from such accounts in accordance with
this Agreement and the Escrow Agreement.
(vi) by adding the following at the end of the last sentence of
such Section:
provided that in lieu of disbursing the Purchaser Note to Barden, the
Paying/Escrow Agent will deliver the Purchaser Note to BCI on behalf of Barden
in exchange for the Barden Note marked paid in full and will deliver the
Barden Note so marked to Barden.
(e) Following Section 2.05(i) of the Agreement, the Agreement is amended
by adding the following:
(j) Warranty Breach Reduction. Notwithstanding any of the foregoing
-------------------------
provisions of this Section 2.05, the amount of the Warranty Breach Reduction,
if any, shall be the sum of all reductions determined in accordance with the
provisions of Section 3A.01 and not this Section and no Adjustment Arbitrator
shall vary the amount of any such reduction included in the Warranty Breach
Reduction
(f) Section 2.05(j) of the Agreement (as the Agreement reads before the
amendment in Section 2.03(e) hereof) is amended by renumbering such Section as
Section 2.05(k) and is further amended by replacing the words "Payment Date" in
the final clause of such Section with the words "Closing Date".
SECTION 2.04. Amendment of Section 2.06 of the Agreement. The first
------------------------------------------
sentence of Section 2.06 of the Agreement is amended to read as follows:
If, prior to the Closing, the Purchaser shall determine in good faith either
(i) that it is not reasonably likely that all notices, consents, approvals,
orders and authorizations referred to in Section 6.02(c) and relating to the
Inkster Partnership will be obtained by Closing, or (ii) that any condition to
the obligations of the Purchaser under Section 6.02 (other than Section
6.02(c)) will not be satisfied insofar as such condition relates to the
Inkster Partnership, then the Purchaser may elect to require the Company to
sell its 99% interest in the Inkster Partnership.
SECTION 2.05. Amendment of Section 3.26 of the Agreement. The first
------------------------------------------
sentence of Section 3.26 of the Agreement is amended by replacing the words "the
Partnership Interests and the Barden Note" in the first sentence of such Section
with the
5
<PAGE>
words "the Partnership Interests, the Barden Note and the books and records of
the Company".
SECTION 2.06. Amendment of the Agreement. Following Section 3.34 of the
--------------------------
Agreement, the Agreement is amended by adding the following:
3A. BREACH OF WARRANTIES; PRICE REDUCTION FOR BREACH; HOLDBACK
----------------------------------------------------------
Section 3A.01 Warranty Breaches.
-----------------
(a) Notice of Breach and Request for Reduction of the Exchange
----------------------------------------------------------
Consideration. At any time and from time prior to Closing the Purchaser may
-------------
deliver to Barden a notice in writing (a "Warranty Breach Notice") specifying
any circumstances, matters or things alleged by it to constitute one or more
breaches of the representations and warranties (except to the extent they
relate exclusively to the Inkster Partnership or to the extent Barden would
not have liability therefore as a result of Section 7.05(ii)) contained in
Section 3 with respect to which the Purchaser is requesting a reduction of the
Exchange Consideration or, alternatively, the holdback in the manner set out
in Section 3A.01(g) of a portion of the Exchange Consideration payable at
Closing until the full amount of the loss, if any, sustained by the Purchaser
in respect of such alleged breach or breaches can be determined. Such notice
shall also contain the Purchaser's estimate of the amount of the reduction in
the Exchange Consideration or the amount of such holdback, as the case may be,
that the Purchaser believes to be appropriate in the circumstances with
respect to each such breach. Notwithstanding the foregoing, the Purchaser may
not give a Warranty Breach Notice unless the aggregate of the amounts
requested thereby (and in any Warranty Breach Notices previously given) as
reductions of the Exchange Consideration and/or as holdbacks equal at least
$100,000.
(b) Warranty Breach Review. Barden shall have a period of thirty
-----------------------
(30) days following the date of the delivery of the Warranty Breach Notice to
review each BCI Warranty Breach Notice received by it. If no objection to a
particular BCI Warranty Breach Notice (including as to the existence of any
breach alleged therein or to the amount or appropriateness of any reduction
to the Exchange Consideration or holdback proposed therein) is delivered by
Barden in writing to the Purchaser within such thirty (30) day period, the
Exchange Consideration shall be reduced by the amount or amounts, if any, of
the proposed reduction or reductions thereto in such Warranty Breach Notice
and the amount or amounts of the holdback, if any, proposed in such
6
<PAGE>
Warranty Breach Notice shall be added to the Warranty Holdback in accordance
with Section 3A.01(g).
(c) Warranty Breach Disputes. If Barden objects on any of the bases
-------------------------
set out in Section 3A.01(b) to all or part of the contents of a particular
Warranty Breach Notice, Barden shall give notice in writing (a "Warranty
Breach Objection Notice") to the Purchaser setting out in reasonable detail
the nature of such objection including, where applicable, the amount, if any,
by which Barden believes the Exchange Consideration should be so reduced or
the amount, if any, of any proposed holdback. Barden and the Purchaser shall
attempt to resolve any such disputed matters within fifteen (15) days from the
date the Purchaser receives the BCI Warranty Breach Objection Notice.
(d) Warranty Arbitration Procedures. If Barden and the Purchaser
--------------------------------
cannot resolve all such disputed matters arising out of a Warranty Breach
Notice within fifteen (15) days after the date that the Purchaser receives the
Warranty Breach Objection Notice, such matters that remain in dispute shall be
referred to three arbitrators, one to be appointed by Barden, one to be
appointed by the Purchaser and the third to be appointed by the two
arbitrators thus appointed; provided that the determination by such
arbitrators shall be made within sixty (60) days after reference of the
dispute to such arbitrators. Once one party has appointed an arbitrator in
accordance with the foregoing, if the other party shall refuse or neglect to
appoint an arbitrator and give written notice of such appointment to the
first-mentioned party within ten (10) days after the first-mentioned party has
served written notice of its appointment of an arbitrator upon the other
party, then the arbitrator so appointed by the first-mentioned party shall
have the power to proceed to determine the matters in dispute as if he was an
arbitrator appointed by both parties for that purpose; provided that any
determination by him shall be made within sixty (60) days after reference of
such dispute to such arbitrator. If two (2) arbitrators thus duly appointed
are unable to agree as to the third arbitrator, the third arbitrator shall be
a person designated for such purpose by a firm selected by lot by counsel for
Barden from among Price Waterhouse or Deloitte & Touche (excluding any firm of
which either of the already chosen arbitrators is a member or principal). (The
three arbitrators (or, where applicable, the single arbitrator) thus
authorized to determine the disputed matters are hereinafter referred to as
the "Warranty Arbitrators".) The arbitration shall take place in New York
City. The rules and procedures to be followed in the arbitration proceedings
shall be determined by the Warranty Arbitrators in their own discretion and
7
<PAGE>
shall comply with the proceedings necessary to have any award confirmed by the
New York Supreme Court pursuant to the New York Civil Practice Law and Rules
-------------------------------------
7500 et. seq. unless such compliance is waived by both parties. The fees and
--------
expenses of the Warranty Arbitrators shall be borne in the manner determined
by such arbitrators in their discretion as being fair.
(e) Matters to be Determined by BCI Warranty Arbitrators and Status
----------------------------------------------------------------
of Such Determinations. Where the Warranty Arbitrators have determined (or
-- --------------------
Barden has admitted) that a breach of the representations and warranties
(except to the extent they relate solely to the Inkster Partnership or to the
extent Barden would not have liability therefore as a result of Section
7.05(ii)) set out in Section 3 has occurred, the Warranty Arbitrators shall
determine whether it is appropriate that the Exchange Consideration should be
reduced or whether there should be an increase in the Warranty Holdback
depending on whether, in the BCI Warranty Arbitrators' judgment, the damages
sustained by the Purchaser in respect of such breach can be determined with
reasonable certainty at the time of such arbitration or must await the outcome
of future events. If the Warranty Arbitrators determine that a reduction in
the Exchange Consideration is appropriate, they shall determine the amount
thereof having regard, among other things that they in their discretion deem
appropriate, to the amount of any indemnity that would be payable in respect
thereto pursuant to the provisions of Section 7.05 as it would be read without
the inclusion of paragraph 7.05(i). (The aggregate of all such reductions of
the Exchange Consideration thus determined in accordance with this Section
3A.01(e) or settled or deemed to be settled in accordance with Section
3A.01(b) or otherwise agreed to, is herein referred to as the "Warranty Breach
Reduction"). If the arbitrators determine that a holdback is appropriate,
they shall determine the amount of such holdback, being the amount that in
their judgment is reasonably sufficient to secure any claim by the Purchaser
for indemnification under Section 7.05 in respect of each breach they have
found to have occurred. (The aggregate of all such holdbacks thus determined
in accordance with this Section 3A.01(e) or settled or deemed to be settled in
accordance with Section 3A.01(b) or otherwise agreed to, is herein referred to
as the "Warranty Holdback"). The determination by the arbitrators of any
matter referred to them pursuant hereto (including, without limitation, as to
whether any breach of any such warranty or representation has occurred and the
amount and appropriateness of any reduction of the Exchange Consideration or
the amount of any holdback) shall be final and binding on the parties hereto.
8
<PAGE>
(f) Warranty Breach Reduction. The determination by the Warranty
--------------------------
Arbitrators that there has or has not been a breach of any representation or
warranty set out in the said Section 3 shall not prejudice or effect, in any
way, the right of the Purchaser to claim an indemnity arising out of a breach
of any representation or warranty by the Company or Barden based on different
facts. The determination by the Warranty Arbitrators as to the amount of the
reduction of the Exchange Consideration in respect of a breach of any warranty
or representation by the Company or Barden found by the Warranty Arbitrators
(or admitted by Barden) to have occurred, shall be final and conclusive as to
the damages sustained by the Purchaser with respect thereto and the Purchaser
shall not have any further claim, including any claim for indemnification
under Section 7 hereof in respect of that breach.
(g) Warranty Holdback. The aggregate amount of the holdbacks
------------------
determined or agreed pursuant to this Section 3A.01 shall be referred to
herein as the "Warranty Holdback" and the BCI/Detroit System Holdback shall be
increased by the amount of the Warranty Holdback. Such amount shall be held by
the Paying/Escrow Agent in accordance with Section 2.05(e) to be held by the
Paying/Escrow Agent in trust for Barden, subject to the rights of the
Purchaser as hereinafter provided and pending application in the manner
hereinafter provided, shall be invested by the Paying/Escrow Agent in interest
bearing bank accounts and money market securities having a maturity of not
more than two (2) months. Upon the final determination by agreement of the
parties or by any court that an amount is payable by Barden to the Purchaser
as an indemnification under Section 7 in respect of a breach of any
representation or warranty with respect to which all or part of the Warranty
Holdback was made, the amount so held by the Paying/Escrow Agent as part of
the Warranty Holdback that is referable to such claim, including a
proportionate share, as determined by the Paying/Escrow Agent, of any interest
earned by the Paying/Escrow Agent on the Warranty Holdback shall be paid to
the Purchaser to satisfy such claim for indemnification and the balance of
such portion including such interest shall be paid to Barden. If the portion
of the Warranty Holdback that was made with respect to such claim is less than
the amount finally determined to be payable by Barden to the Purchaser with
respect to such claim, then in addition to the amount otherwise to be paid to
the Purchaser under this paragraph, Barden shall pay to the Purchaser the
difference between the portion of the Warranty Holdback that was made with
respect to such claim and the amount finally determined to be payable by
Barden to the Purchaser with respect to such claim, plus an amount equal to
the interest
9
<PAGE>
such additional amount would have earned had it been deposited with the
Paying/Escrow Agent as part of the Warranty Holdback. If any claim for
indemnification with respect to which all or part of the Warranty Holdback was
made shall expire in accordance with the provisions of Section 7.04 or if as a
result of a final determination by a court or agreement of the parties, no
amount shall be payable with respect to a particular claim for indemnification
under Section 7 with respect to which all or part of the Warranty Holdback was
made, the portion of the Warranty Holdback that was made with respect to such
claim, together with a proportionate share, as determined by the Paying/Escrow
Agent, of interest earned by the Paying/Escrow Agent on the Warranty Holdback,
shall be paid to Barden.
(h) Termination of Agreement. Notwithstanding anything herein
-------------------------
otherwise contained, if the aggregate of the Warranty Breach Reduction and the
Warranty Holdback exceeds $25,000,000, then by notice in writing to Barden
given within ten (10) days following the date upon which such aggregate shall
first exceeds $25,000,000 and at any time within ten (10) days following each
date upon which such aggregate shall thereafter increase, the Purchaser may
terminate this Agreement; provided that if the Purchaser shall terminate this
Agreement pursuant to this Section 3A.01(h), the Company shall within ten (10)
days following receipt by the Company of the Purchaser's notice of
termination, pay to the Purchaser the sum of $750,000, any such payment being
in full satisfaction of all of the Purchaser's rights hereunder. In no event
will the aggregate of the Warranty Breach Reduction and the Warranty Holdback
exceed the Exchange Consideration.
(i) Pending Warranty Breach Notices. The Closing shall not take
-------------------------------
place while any Warranty Breach Notice is pending; provided that if the
-------- ----
Closing would take place on a given date but for the effect of the foregoing
part of this sentence, then at the election of the Purchaser, all amounts with
respect to which the Purchaser has in good faith requested a reduction or
holdback in any pending Warranty Breach Notices shall be added to the Warranty
Holdback and the Closing shall occur.
SECTION 2.07. Amendment of Section 5.14 of the Agreement. Clause (i) of
------------------------------------------
the first sentence of Section 5.14 of the Agreement is amended to read as
follows:
all assets of the Company other than the Partnership Interests and the books
and records of the Company will be sold or assigned to Barden or an affiliate
of Barden or otherwise distributed,
10
<PAGE>
SECTION 2.08. Amendment of Section 6.02(h) of the Agreement. Section
---------------------------------------------
6.02(h) of the Agreement is amended by replacing the words "within 30 days of
the date hereof" in the first sentence of such Section with the words "no later
than November 30, 1994" and to replace the words "within said 30 day period" in
the second sentence of such Section with the words "by November 30, 1994".
SECTION 2.09. Amendment of Section 7.05(e) of the Agreement. Section
---------------------------------------------
7.05(e) of the Agreement is amended as follows:
(a) Section 7.05(e)(i) of the Agreement is amended to read as follows:
Barden shall have no liability under this Agreement or otherwise for or on
Account of Indemnifiable Damages for Inkster Claims under Section 7.05(a) or
(b) unless and until all such damages, in the aggregate exceed $75,000, in
which case Barden shall have liability to the extent of the excess of the
aggregate of such claims over the initial $50,000. Barden's aggregate
liability under the indemnities provided in this Section 7.05(a) or (b)
(except insofar as it applies to Sections 2.06, 3.26, and 5.14, or insofar as
it relates to Holdback Claims, as to all of which no limitation will apply)
shall not exceed 95% of the Exchange Consideration reduced by any amounts paid
to Purchaser by Rogers under the Indemnity Agreement between the Purchaser and
Rogers wherein Rogers agrees to indemnify Purchaser for obligations of the
Company or Barden pursuant to this Agreement. Notwithstanding the foregoing,
the provisions of this paragraph (i) shall not apply to any claim in respect
of which a holdback has been made under Section 3A.1. (a "Holdback Claim").
(b) Following Section 7.05(e)(iii) of the Agreement, Section 7.05(e) of
the Agreement is amended to read as follows:
(iv) Barden's indemnity obligations hereunder shall not apply when an
adjustment of the Exchange Consideration has been made with respect thereto
under Section 3A.01 or to the extent that an adjustment of the Exchange
Consideration has been made with respect thereto under Section 2.05.
(c) Section 7.05(e)(iv) of the Agreement is amended by renumbering such
Section as Section 7.05(e)(v).
SECTION 2.10. Amendment of Section 7.09 of the Agreement. Section 7.09
------------------------------------------
of the Agreement is amended to add the words "in the relevant Escrow Account"
immediately after the
11
<PAGE>
words "Paying/Escrow Agent holds cash" in the first sentence of such Section.
SECTION 2.11. Amendment of Section 7.10 of the Agreement. Section 7.10
------------------------------------------
of the Agreement is amended to read as follows:
The provisions of Section 7.05 - Indemnification by Barden and 7.06 -
-------------------------
Indemnification by Purchaser and the other provisions of this Section 7 shall
----------------------------
apply to any claim against either party for breach of any covenants,
representation, warranty or other provision contained in this Agreement, or in
any certificate delivered pursuant thereto, except for (i) a claim for
specific performance or injunctive relief or (ii) as provided in Section 3A,
with the intent that, subject to such exceptions, all such claims shall be
subject to any applicable limitations and other provisions contained in this
Section 7.
SECTION 2.12. Amendment of Section 8.02 of the Agreement. Section 8.02
------------------------------------------
of the Agreement is amended by adding the Section number "3A.1(h)," immediately
before the Section number "5.05(d)" in the first sentence of such Section.
SECTION 3. Governing Law. This Amendment shall be governed by and
-------------
construed in accordance with the laws of the State of Michigan.
SECTION 4. Counterparts; Effectiveness. This Amendment may be signed in
---------------------------
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Amendment shall become effective as of the date hereof.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
BARDEN COMMUNICATIONS, INC.
By: /s/ Don H. Barden
-------------------------
Don H. Barden, President
/s/ Don H. Barden
-----------------------------
Don H. Barden individually and as trustee of the Don
H. Barden Revocable Trust, dated as of June 21,
1994, as amended from time to
time.
COMCAST CORPORATION
By: /s/ Stanley Wang
----------------------------
Name Stanley Wang
Title:
-------------------------
Consented and Agreed:
ROGERS COMMUNICATIONS, INC.
By /s/ G. W. Savage By /s/ D. Miller
------------------------ ------------------------
Name: G. W. Savage Name: D. Miller
Title: Senior V.P. and CFO Title: Vice President
Date: Date:
13
<PAGE>
Exhibit 10.8
REGISTRATION RIGHTS AND PRICE PROTECTION AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of December 22, 1994,
---------
by and between COMCAST CORPORATION, a Pennsylvania corporation (the "Company"),
-------
and THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM ("CalPERS").
-------
R E C I T A L S
A. The Company, CalPERS and Comcast Cable Corporation, Inc., a Delaware
corporation that is wholly owned by the Company ("Company Sub"), are parties to
an Amended and Restated Limited Liability Company Agreement dated as of December
18, 1994 (the "Operating Agreement") with respect to Comcast MHCP Holdings,
-------------------
L.L.C., a Delaware limited liability company ("LLC").
---
B. Under the Operating Agreement, subject to certain conditions, CalPERS
will become obligated to make capital contributions totalling $250,000,000 to
LLC, and Company Sub will become obligated to make capital contributions
totalling $305,555,556 to LLC.
C. Under the Operating Agreement, Company Sub may have the obligation to
make certain payments to CalPERS, which payments it may have the right to make
in cash or by delivering Company Special Class A Common Stock, par value $1.00
per share, or a combination of cash and such Common Stock.
D. Under the Operating Agreement, the Company, Company Sub and CalPERS
have agreed that the execution and delivery of this Agreement by the parties are
conditions to CalPERS' obligations to make capital contributions to LLC (other
than its initial capital contribution of $55) in accordance with the Operating
Agreement, the first of which is expected to be made in connection with the MHI
Acquisition.
E. If in accordance with the Operating Agreement Company Sub has the right
to deliver Common Stock in whole or partial satisfaction of certain of its
obligations to CalPERS under the Operating Agreement, the Company desires to
assure CalPERS that in connection with a Section 2(c) Liquidation, CalPERS will
not suffer any economic detriment as a result of having received such payment in
Common Stock rather than cash, upon the terms and conditions herein contained.
<PAGE>
THEREFORE, in consideration of the matters recited above, the mutual
promises of the parties herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereby agree as follows:
1. Definitions. Unless the context otherwise requires, the terms defined
-----------
in this Section 1 shall have the meanings herein specified for all purposes of
this Agreement, applicable to both the singular and plural forms of any of the
terms herein defined.
"Actual Income" shall have the meaning assigned to it in Section 2(d).
-------------
"Agreement" means this Registration Rights and Price Protection Agreement.
---------
"Board" means the Board of Directors of the Company.
-----
"Business Day" shall mean a day which is not a Saturday, Sunday or legal
------------
holiday on which banking institutions in the State of California or the
Commonwealth of Pennsylvania are closed.
"CalPERS" shall have the meaning assigned to it in the first paragraph of
-------
this Agreement and shall encompass CalPERS' successors and assigns.
"CalPERS' Interest" shall have the meaning assigned to it in the Operating
-----------------
Agreement.
"CalPERS Put" shall have the meaning assigned to it in the Operating
-----------
Agreement.
"CCCI Call" shall have the meaning assigned to it in the Operating
---------
Agreement.
"Common Stock" means the Special Class A Common Stock, par value $1.00 per
------------
share, of the Company, or any other capital stock of the Company into which the
Company's Class A Special Common Stock is reclassified or recapitalized, or into
which it is converted pursuant to any merger, consolidation or reorganization.
"Company" shall have the meaning assigned to it in the first paragraph of
-------
this Agreement.
-2-
<PAGE>
"Company Directed Transactions" shall have the meaning assigned to it in
-----------------------------
Section 2(c)(i).
"Company Stock" means (i) the Common Stock or (ii) the Class A Common
-------------
Stock, par value $1.00 per share, of the Company or any other capital stock of
the Company into which the Company's Class A Common Stock is reclassified or
recapitalized, or into which it is converted pursuant to any merger,
consolidation or reorganization.
"Company Sub" shall have the meaning assigned to it in the recitals to this
-----------
Agreement. "Company Sub" shall also refer to the wholly-owned Subsidiary of the
Company to which the Company transfers or assigns the Company Sub limited
liability company interest in LLC (the "Company Sub Interest") as provided in
--------------------
Section 13.01(b) of the Operating Agreement.
"Contract Price" shall mean (i) in the case of the CalPERS Put (as defined
--------------
in the Operating Agreement), the Put Price, unless the Auction Notice (as
defined in the Operating Agreement) is delivered by Company Sub during the
Auction Election Period (as defined in the Operating Agreement), in which case
clause (iii) of this definition shall apply, or (ii) in the case of the CCCI
Call (as defined in the Operating Agreement), the Call Price (as defined in the
Operating Agreement), or (iii) the amount by which the Put Price exceeds the
Sale Proceeds (as defined in the Operating Agreement).
"Definitive Agreement" shall have the meaning assigned to it in Section
--------------------
2(a)(i)(B).
"Demand Registration" shall have the meaning assigned to it in Section
-------------------
3(a).
"Designated Price" shall have the meaning assigned to it in Section
----------------
2(a)(i)(C).
"Designated Shares" shall have the meaning assigned to it in Section
-----------------
2(a)(iii).
"Election Notice" shall have the meaning assigned to it in Section
---------------
2(a)(i)(C).
"Estimated Option Closing Date" shall have the meaning assigned to it in
-----------------------------
Section 2(a)(i)(A).
-3-
<PAGE>
"Estimated Sale Closing Date" shall have the meaning assigned to it in
---------------------------
Section 2(a)(i)(B).
"Excess Proceeds" shall have the meaning assigned to it in Section
---------------
2(c)(ii).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Hypothetical Income" shall have the meaning assigned to it in Section
-------------------
2(d).
"Income Excess" shall have the meaning assigned to it in Section 2(d).
-------------
"Income Shortfall" shall have the meaning assigned to it in Section 2(d).
----------------
"Indemnified Party" and "Indemnifying Party" shall have the respective
----------------- ------------------
meanings assigned to these terms in Section 10.
"LLC" shall have the meaning assigned to it in the Recitals hereto.
---
"Liquidation Notice" shall have the meaning assigned to it Section 2(b).
------------------
"Liquidation Period" shall have the meaning assigned to it in Section
------------------
2(c)(i).
"Liquidation Proceeds" shall have the meaning assigned to it in Section
--------------------
2(c)(ii).
"Operating Agreement" shall have the meaning assigned to it in the Recitals
-------------------
hereto and shall include such Operating Agreement as the same may be amended
from time to time.
"Payment Date" shall have the meaning assigned to it in Section 2(e).
------------
"Person" includes any natural person, corporation, trust, association,
------
company, partnership, limited liability company, joint venture and other entity
and any government, governmental agency, instrumentality or political
subdivision.
-4-
<PAGE>
"Piggyback Registration" shall have the meaning assigned to it in Section
----------------------
4.
"Price Shortfall" shall have the meaning assigned to it in Section 2(c)(i).
---------------
The terms "register," "registered" and "registration" refer to a
-------- ---------- ------------
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registrable Securities" means (i) the Designated Shares issued to and
----------------------
owned by CalPERS, or that CalPERS is entitled (and obligated) to receive,
pursuant to the Operating Agreement and this Agreement, and (ii) any securities
issued or issuable with respect to the Designated Shares referred to in the
preceding clause (i) by way of a stock dividend or stock split or in connection
with a combination of shares, reclassification, recapitalization, merger or
consolidation or reorganization; provided, however, that such shares of Common
Stock or other Equity Securities shall only be treated as Registrable Securities
if and so long as they have not been (x) sold to or through a broker or dealer
or underwriter in a public distribution or a public securities transaction, or
(y) sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect to such Common Stock
are removed upon the consummation of such sale and the seller and purchaser of
such Common Stock receive an opinion of counsel for the Company, which shall be
in form and content reasonably satisfactory to the seller and buyer and their
respective counsel, to the effect that such Common Stock in the hands of the
purchaser is freely transferable without restriction or registration under the
Securities Act in any public or private transaction. If CalPERS does not
deliver the Liquidation Notice (thereby not electing to have the Designated
Shares sold in a Section 2(c) Liquidation), "Registrable Securities" shall not
include any Designated Shares CalPERS desires to sell if at the time of the
proposed sale (a) the Company has provided CalPERS with an opinion of Davis Polk
& Wardwell (or such other firm expert in securities law that is reasonably
acceptable to CalPERS), which opinion shall be in form and content reasonably
satisfactory to CalPERS, stating that CalPERS may sell any or all of such
Designated Shares in the proposed transaction without compliance with the
registration and prospectus
-5-
<PAGE>
delivery requirements under the Securities Act and without compliance with the
registration or qualification requirements of any applicable state securities
laws, and (b) all legends and Company imposed transfer restrictions have been
removed from the Designated Shares and the related stock certificates. Such
opinion shall be addressed to CalPERS and the Company and shall state that it
may be relied upon by any broker or dealer.
"SEC" shall mean the Securities and Exchange Commission.
---
"Section 2(c) Liquidation" shall have the meaning assigned to it in Section
------------------------
2(b).
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Subsidiary" shall have the meaning assigned to it in the Operating
----------
Agreement.
"Transaction Closing" shall have the meaning assigned to it in Section
-------------------
2(a)(ii).
"Underwriter" shall have the meaning assigned to it in Section 3(b).
-----------
2. Price Protection Arrangement.
----------------------------
(a) (i) The parties shall engage in the procedures set forth in
paragraphs (A) or (B) of this Section 2(a)(i) in order to assist the Company in
determining when to provide the Election Notice to CalPERS under Section
2(a)(i)(C).
(A) If CalPERS exercises the CalPERS Put, or if Company Sub
exercises the CCCI Call, then after the Value of Company Equity is determined in
accordance with the Operating Agreement, the parties (using all information
reasonably available to them), shall promptly in good faith negotiate and agree
upon an estimate of the likely date of the Put Closing or the Call Closing, as
the case may be, (the "Estimated Option Closing Date"); provided, however, that
-----------------------------
paragraph (B) of this Section 2(a)(i) shall apply if after the CalPERS Put is
exercised Company Sub delivers an Auction Notice to CalPERS during the Auction
Election Period.
-6-
<PAGE>
(B) If CalPERS exercises the CalPERS Put and Company Sub delivers
an Auction Notice to CalPERS during the Auction Election Period, if and when a
definitive agreement is entered into with a purchaser for a sale of the Company
in accordance with Section 13.07 of the Operating Agreement (the "Definitive
---------------
Agreement"), the parties shall as promptly as practicable and in good faith
- - - ---------
agree upon an estimate of the closing date of such sale (the "Estimated Sale
--------------
Closing Date"). If from time to time it shall become apparent that the Estimated
- - - ------------
Sale Closing Date or the Estimated Option Closing Date, on the one hand, and the
actual date for the Transaction Closing, on the other hand, are materially
different, which shall mean for this purpose are greater than 60 days apart, the
parties will in good faith agree upon procedures to effectuate the purpose of
the notice provisions of this Section 2(a).
(C) At least thirty (30) days prior to the Estimated Option
Closing Date or the Estimated Sale Closing Date, as the case may be, the Company
shall deliver a written notice (the "Election Notice") to CalPERS stating (x)
---------------
whether it elects to pay the Contract Price in Common Stock, in whole or in
part, and (y) if in part, stating the percentage or portion of the Contract
Price that it elects to pay in cash and the percentage or portion it elects to
pay in Common Stock. Subject to the Company's right under Section 2(b) to revoke
its election to pay all or a portion of the Contract Price in Common Stock, the
elections set forth in the Election Notice shall be irrevocable. The parties
acknowledge that under the Operating Agreement, in the event of a delivery of an
Auction Notice during the Auction Election Period, and a subsequent sale of the
Company pursuant to Section 13.07 of the Operating Agreement, the Put Price must
be paid in cash at least to the extent of the Sale Proceeds of such sale. The
Contract Price or portion thereof that the Company so elects and is entitled to
pay in Common Stock is herein sometimes called the "Designated Price".
----------------
(D) Unless otherwise defined herein or the context otherwise
requires the capitalized terms appearing in this Section 2(a) shall have the
respective meanings assigned to them in the Operating Agreement.
(ii) If the Election Notice is timely delivered to CalPERS in accordance
with, and in electing to pay all or a portion of the Contract Price in Common
Stock the Election Notice conforms to the requirements of, Section 2(a)(i)(C),
in accordance with the Operating Agreement, the
-7-
<PAGE>
Company shall pay the remainder of the Contract Price in cash at the Put
Closing, or the closing of the sale pursuant to Section 13.07 of the Operating
Agreement or the Call Closing (the applicable such closing being herein called a
"Transaction Closing"), as the case may be. If the Election Notice is not
-------------------
timely delivered to CalPERS in accordance with, or the Election Notice does not
so conform to the requirements of Section 2(a)(i)(C), the Company shall pay the
entire Contract Price in cash at the Transaction Closing.
(iii) If the Election Notice is timely delivered to CalPERS in accordance
with, and in electing to pay all or a portion of the Contract Price in Common
Stock conforms to the requirements of, Section 2(a)(i)(C), the number of shares
the Company shall be obligated to deliver to CalPERS shall be determined in
accordance with the Operating Agreement (such shares being herein called the
"Designated Shares"). The Company shall deliver certificates evidencing the
-----------------
Designated Shares to CalPERS in accordance with the Operating Agreement at the
Transaction Closing. Immediately prior to the Company's delivery of such
certificates and CalPERS' transfer of CalPERS' Interest in accordance with the
Operating Agreement, the Company, CalPERS and such transferee (other than a
purchaser of the Company in a sale of the Company pursuant to Section 13.07 of
the Operating Agreement) shall enter into a security agreement, which shall be
prepared by CalPERS and shall be reasonably satisfactory to the transferee and
the Company, pursuant to which the transferee grants a perfected first priority
security interest in CalPERS' Interest to CalPERS as security for the Company's
punctual and faithful payment, performance and discharge of the Company
obligations under this Agreement in connection with any Section 2(c)
Liquidation. Upon completion of the Section 2(c) Liquidation and the Company's
punctual payment, performance and discharge of its obligations under this
Section 2 and Section 7, CalPERS' security interest under such security
agreement shall terminate.
(iv) Subject to the last sentence of Section 2(a)(i)(B), if the parties
are unable to agree upon the Estimated Option Closing Date or the Estimated Sale
Closing Date, then for all purposes of this Section 2(a), the Estimated Option
Closing Date will be deemed to be sixty (60) days after the Value of Company
Equity is determined in accordance with Section 13.06 of the Operating
Agreement; provided that, if, in the case of the exercise of the CalPERS Put,
Company Sub delivers the Auction Notice prior
-8-
<PAGE>
to the termination of the Auction Election Period, then for all purposes of this
Agreement the Estimated Sale Closing Date will be deemed to be sixty (60) days
after the date the Definitive Agreement is entered into with a purchaser for the
sale of the Company. The Transaction Closing shall not take place prior to the
Estimated Sale Date, as such Estimated Sale Date may be revised by the parties
pursuant to the last sentence of Section 2(a)(i)(B).
(b) CalPERS will have twenty (20) days after it receives the Election
Notice to notify the Company if it intends to sell the Designated Shares in
accordance with Section 2(c) (herein, a "Section 2(c) Liquidation" and such
------------------------
notice a "Liquidation Notice"). The Company shall have the right, by giving
------------------
notice to CalPERS, to revoke the Election Notice within five (5) days after the
Liquidation Notice is given. Upon giving such notice of revocation, the Company
shall become unconditionally obligated to pay the entire Contract Price in cash
promptly in accordance with the Operating Agreement at the Transaction Closing.
Anything in this Agreement or the Operating Agreement to the contrary
notwithstanding, the number of Designated Shares shall not exceed 19.9% of the
total number of shares of Company Stock outstanding (including for this purpose
the total number of shares of Company Stock then issuable upon conversion of the
Company's then outstanding Class A Common Stock, par value $1.00 per share, and
Class B Common Stock, par value $1.00 per share) immediately prior to the
issuance of the Designated Shares. To the extent the number of Designated
Shares would exceed this limit, the Company shall substitute cash for such
excess, and such cash shall be paid to CalPERS at the Transaction Closing. If
the Liquidation Notice is timely given and the Company does not timely revoke
its Election Notice, the liquidation procedure specified in Section 2(c) shall
be followed.
(c) (i) CalPERS' Liquidation Notice shall constitute a request for
registration of the Designated Shares in accordance with Section 3. The Company
shall have a period of 180 days from the date of the Transaction Closing (the
"Liquidation Period") in which to sell the Designated Shares in such transaction
------------------
or series of transactions, and at such price or prices and upon such terms, as
shall be determined by the Company in its sole discretion (collectively, the
"Company Directed Transactions"), provided that the Company shall not be
-----------------------------
obligated to effect any sales during the Liquidation Period if it determines in
its sole discretion that the price or terms on which such sales could be made
are unacceptable.
-9-
<PAGE>
CalPERS shall in good faith, acting in accordance with applicable law, use
reasonable efforts to cooperate with the Company and to take all action
reasonably necessary to facilitate the sale of the Designated Shares in the
Company Directed Transactions; provided, however, that apart from entering into
an underwriting agreement in customary form that is reasonably satisfactory to
it, CalPERS shall have no obligation to give or make any representations,
warranties, indemnities, covenants, agreements or assurances. In any and all
events, the Company shall complete all Company Directed Transactions, if any,
during the Liquidation Period.
(ii) The aggregate proceeds received by CalPERS resulting from the sale of
the Designated Shares in Company Directed Transactions less all commissions and
other selling and other expense that CalPERS becomes legally obligated to pay or
incur, in connection with the Section 2(c) Liquidation (but only to the extent
CalPERS is not otherwise reimbursed by the Company for such expenses hereunder)
are herein called the "Liquidation Proceeds". The amount, if any, by which the
--------------------
Designated Price exceeds the Liquidation Proceeds is herein called the "Price
-----
Shortfall"), and the amount, if any, by which the Liquidation Proceeds exceed
- - - ---------
the Designated Price is herein called the "Excess Proceeds". Promptly upon
---------------
receipt of Liquidation Proceeds, CalPERS shall deposit the Liquidation Proceeds
in the State Street Short Term Investment Fund or any substitute fund selected
by CalPERS with the Company's approval (which will not be unreasonably withheld)
having similar objectives that is used by institutional investors and is managed
either by State Street Bank or a similar financial institution.
(iii) So long as Designated Shares are being offered or sold in Company
Directed Transactions, CalPERS will not purchase or sell for its own account in
the open market any Common Stock other than the Designated Shares, except to the
extent that it is legally obligated to do so when it receives the Election
Notice; provided, however, that this restriction will only apply to CalPERS'
self-directed activities and will not affect or prohibit transactions effected
for CalPERS' account by money managers, investment advisers, limited
partnerships or other pooled investment vehicles in which CalPERS has an
interest or by any agent or other Person acting for CalPERS who is not an
employee of CalPERS.
-10-
<PAGE>
(d) CalPERS will calculate the difference between the money-market income
it would have earned on the Designated Price had it been paid in cash in full,
from the date of the Transaction Closing until the Payment Date, assuming for
this purpose that the Designated Price had been invested during the period in
question in the State Street Short Term Investment Fund (such hypothetical
income being herein called the "Hypothetical Income"), and the money-market
-------------------
income CalPERS actually earned on the Liquidation Proceeds through the same date
(the "Actual Income"). CalPERS will deliver this calculation to the Company,
-------------
and the parties will use their best efforts to resolve any differences over the
computation of these two sums. The excess, if any, of the Hypothetical Income
over the Actual Income is herein called the "Income Shortfall", and the excess,
----------------
if any, of the Actual Income over the Hypothetical Income is herein called the
"Income Excess". If State Street Bank should cease to manage the State Street
- - - --------------
Short Term Investment Fund, the parties shall in good faith agree upon a
substitute fund with similar objectives that is used by institutional investors
and is managed either by State Street Bank or a similar financial institution.
(e) If there is a Price Shortfall, on the Payment Date the Company shall
pay to CalPERS a sum equal to (i) the Price Shortfall and (ii) either (x) plus
the Income Shortfall, if any, or (y) less the Income Excess, if any. If there
are Excess Proceeds on the Payment Date CalPERS shall pay to the Company a sum
equal to (iii) the Excess Proceeds and (iv) either (x) plus the Income Excess,
if any, or (y) less the Income Shortfall, if any; provided, however, that if the
Income Shortfall exceeds the Excess Proceeds, on the Payment Date the Company
shall pay an amount equal to such excess to CalPERS. The parties agree that
time is and shall be of the essence. All amounts payable hereunder shall bear
interest from the Payment Date at the Prime Rate (as defined in the Operating
Agreement). All payments shall be made on the Payment Date. If not paid within
thirty (30) days after the Payment Date, any amount payable hereunder shall bear
interest at such Prime Rate plus 5% per annum from the Payment Date. If any
Designated Shares have not been sold in Company Directed Transactions on or
prior to the Payment Date, CalPERS shall deliver the certificate or certificates
representing all remaining unsold shares, duly endorsed in blank, to the Company
on the Payment Date. For purposes of this Section 2, the "Payment Date" means
------------
the date that is the earlier to occur of (x) the last day of the Liquidation
Period and (y) the first day upon which all Designated Shares have been sold by
the Company. If the
-11-
<PAGE>
Payment Date is not a Business Day, the required payment under this Section 2(e)
shall be made no later than the next following day that is a Business Day.
(f) All payments made by the Company to CalPERS under this Section 2 are
being made on behalf of Company Sub.
(g) The Company acknowledges that it is accepting the regulatory, market,
economic and all other risks, rewards and uncertainties in the performance of
its obligations under this Section 2 including, without limitation, the
following: the unavailability of funds from any source to discharge the
Company's obligations; changes in law; the Company's ability to register the
Designated Shares and comply with then applicable laws in connection with the
Company Directed Transactions; other regulatory matters; general business and
economic conditions; those additional business and economic conditions affecting
the Company's industry generally as well as those additional business and
economic conditions affecting the Company; market prices of securities generally
and those of the Company Stock; and the price at which the Designated Shares can
be sold and when and whether purchasers make payment for the Designated Shares.
The parties agree that CalPERS is not and will not bear any of these risks. The
result of the foregoing is that (i) the Company and CalPERS agree that under any
and all circumstances whatsoever, and without regard to any matters within or
without the control of the Company or the severity of the impact on or other
consequences to the Company or any other Person of these matters or any other
considerations, CalPERS or the Company, as the case may be, shall be entitled to
receive and the Company or CalPERS, as the case may be, shall be obligated to
make, absolutely and without qualification, the full payment to the Company, or
CalPERS, as the case may be, described in Section 2(e), and such payment shall
be made on the Payment Date, and (ii) the Company shall have no obligation
whatsoever to effect any sales of Designated Shares during the Liquidation
Period.
3. Demand Registration.
-------------------
(a) If and whenever the Company shall receive a written request therefor
from CalPERS, the Company agrees to register all or part of the Registrable
Securities then owned by CalPERS under the Securities Act (a "Demand
------
Registration") in accordance with this Agreement; provided that the Company
- - - ------------ --------
shall not be obligated (i) to effect more
-12-
<PAGE>
than one Demand Registration in any 12-month period, (ii) to effect a Demand
Registration on more than three (3) occasions or (iii) to effect a Demand
Registration in respect of Registrable Securities with a fair market value of
less than $100 million, unless such Demand Registration is in respect of all
Registrable Securities. Such request will specify the number of shares of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof. A registration will not count as a Demand
Registration until it has become effective. For purposes of determining the
number of Demand Registrations the Company is obligated to effect hereunder, all
holders of Registrable Securities shall be treated as a single holder.
(b) If CalPERS so elects, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of an underwritten
offering. CalPERS shall select the managing Underwriters and any additional
investment bankers and managers to be used in connection with the offering;
provided that such managing Underwriters and additional investment bankers must
- - - --------
be reasonably acceptable to the Company. The Company will not unreasonably
withhold or delay its approval of such Underwriters and investment bankers. As
used herein, the term "Underwriter" means a (i) securities dealer who purchases
-----------
any Registrable Securities as principal and not as part of such dealer's market-
making activities, and (ii) any Designated Broker, other investment banker or
securities broker or dealer (whether or not purchasing Registrable Securities as
part of such dealer's market-making activities) that assists CalPERS in a
Section 2(c) Liquidation.
(c) Neither the Company nor any other Person shall be entitled to include
Equity Securities in any Demand Registration for a Section 2(c) Liquidation or
in any Demand Registration in which the inclusion of such Equity Securities
would, in the judgment of the managing Underwriter selected for the offering,
unreasonably delay the offering.
4. Piggyback Registration. If the Company proposes to file a registration
----------------------
statement under the Securities Act with respect to an offering of Company Stock
(i) for the Company's own account (other than a registration statement on Form
S-4 or S-8 (or any substitute form that may be adopted by the SEC)) or (ii) for
the account of any of its holders of Comcast Stock, then the Company shall give
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<PAGE>
written notice of such proposed filing to CalPERS as soon as practicable (but in
no event less than 10 Business Days before the anticipated filing date), and
such notice shall offer CalPERS the opportunity to register such number of
shares of Registrable Securities as CalPERS may request on the same terms and
conditions as the Company's or such holder's Company Stock (a "Piggyback
---------
Registration"). CalPERS shall give written notice to the Company, within 5
- - - ------------
Business Days after it receives the notice referred to in the immediately
preceding sentence, stating whether it intends to include Registrable Securities
in such registration and specifying the number of Registrable Securities it
intends to include.
5. Reduction of Offering. This Section 5 shall not apply to a Section
---------------------
2(c) Liquidation. Notwithstanding anything contained in Section 3 or 4, if the
managing Underwriter of an offering described in Section 3 or 4 delivers a
written opinion to the Company and CalPERS that (i) the size of the offering
that CalPERS, the Company and any other Persons intend to make or (ii) the
combination of securities that CalPERS, the Company and such other Persons
intend to include in such offering are such that it is reasonably likely that
the success of the offering would be materially and adversely affected, then
(A) if the size of the offering is the basis of such
Underwriter's opinion, the amount of Registrable Securities to be
offered for the account of CalPERS shall be reduced to the extent
necessary to reduce the total amount of securities to be included in
such offering to the amount recommended by such managing Underwriter;
provided that (x) in the case of a Demand Registration, the amount of
--------
Registrable Securities to be offered for the account of CalPERS shall
be reduced only after the amount of securities to be offered for the
account of the Company and such other Persons has been reduced to
zero, and (y) in the case of a Piggyback Registration, if Equity
Securities are being offered for the account of Persons other than the
Company pursuant to piggyback rights, then CalPERS and such other
Persons shall reduce the amount of Registrable Securities and Equity
Securities such that their participation in the offering shall be in
proportion to the amount of such Registrable Securities and Equity
Securities
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<PAGE>
intended to be offered for the account of CalPERS and such other
Persons, respectively; and
(B) if the combination of securities to be offered is the basis
of such Underwriter's opinion, (x) the Registrable Securities to be
included in such offering shall be reduced as described in clause (A)
above (subject to the proviso in clause (A)), and (y) in the case of a
Piggyback Registration, if the actions described in sub-clause (x) of
this clause (B) would, in the judgment of the managing Underwriter, be
insufficient substantially to eliminate the adverse effect that
inclusion of the Registrable Securities requested to be included would
have on such offering, such Registrable Securities will be excluded
from such offering.
6. Filings; Information. Whenever CalPERS requests that any Registrable
--------------------
Securities be registered pursuant to Section 3 or 4 hereof, the Company will use
its reasonable efforts to effect the registration of such Registrable Securities
as promptly as is practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file with
the SEC a registration statement on any form for which the Company then
qualifies and which counsel for the Company shall deem appropriate and available
for the sale of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof, and use its
reasonable best efforts to cause such filed registration statement to become and
remain effective for (i) in the case of a Section 2(c) Liquidation, until such
distribution is completed in accordance with Section 2(c), and (ii) other than
in the case of a Section 2(c) Liquidation, a period of not less than 60 days (or
such shorter period in which the distribution is completed); provided that,
--------
except in the case of a Section 2(c) Liquidation, if the Company shall furnish
to CalPERS a certificate signed by the Company's Chairman, President or any
Vice-President stating that in his good faith judgment it would be detrimental
or otherwise disadvantageous to the Company or its shareholders for such a
registration statement to be filed as expeditiously as possible, the Company
shall have a period of not more than 270 days within which to file such
registration statement measured from the date of the Company's receipt of
CalPERS' request for registration in accordance with Section 3. In the case of
a
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<PAGE>
Section 2(c) Liquidation, if the Company intends to use registration statement
Form S-3, the Company will include in the registration statement and each
prospectus (including the preliminary and final prospectus) such additional
information with respect to the Company and its business, finances and affairs
as is customary and as the Designated Broker reasonably requests.
(b) The Company will prior to filing such registration statement or any
amendment or supplement thereto, furnish to CalPERS and each applicable managing
Underwriter, if any, copies thereof, and thereafter furnish to CalPERS and each
such Underwriter, if any, such number of copies of such registration statement,
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein) and the prospectus included in
such registration statement (including each preliminary prospectus) as CalPERS
or each such Underwriter may reasonably request in order to facilitate the sale
of the Registrable Securities.
(c) After the filing of the registration statement, the Company will
promptly notify CalPERS and each Underwriter of any stop order issued or, to the
Company's knowledge, threatened to be issued by the SEC and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.
(d) The Company will endeavor to qualify the Registrable Securities for
offer and sale under such other securities or blue sky laws of such
jurisdictions in the United States as CalPERS reasonably requests; provided that
--------
the Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction.
(e) The Company will as promptly as is practicable notify CalPERS, at any
time when a prospectus relating to the sale of the Registrable Securities is
required by law to be delivered in connection with sales by or through an
Underwriter or dealer, of the occurrence of any event requiring the preparation
of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to
-16-
<PAGE>
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading and promptly make
available to CalPERS and to the Underwriters any such supplement or amendment.
CalPERS agrees that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in the preceding sentence, CalPERS
will forthwith discontinue the offer and sale of Registrable Securities pursuant
to the registration statement covering such Registrable Securities until receipt
by CalPERS and the Underwriters of the copies of such supplemented or amended
prospectus and, if so directed by the Company, CalPERS will deliver to the
Company all copies, other than permanent file copies then in CalPERS's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give such
notice, (i) the Company shall extend the period during which such registration
statement shall be maintained effective as provided in Section 6(a) hereof by
the number of days during the period from and including the date of the giving
of such notice to the date when the Company shall make available to CalPERS and
the Underwriters such supplemented or amended prospectus, and (ii) in the case
of a Section 2(c) Liquidation, the Designated Liquidation Period shall
automatically be extended for the same period.
(f) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the sale of such
Registrable Securities.
(g) The Company will furnish to CalPERS and to each Underwriter a signed
counterpart, addressed to CalPERS or such Underwriter, of (i) an opinion or
opinions of counsel to the Company and (ii) a comfort letter or comfort letters
from the Company's independent public accountants, each in customary form and
covering such matters of the type customarily covered by opinions or comfort
letters, as the case may be, as CalPERS or the managing Underwriter reasonably
requests.
(h) The Company will make generally available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the SEC
thereunder.
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<PAGE>
(i) The Company will use its reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on which such
securities are then listed.
The Company may require CalPERS promptly to furnish in writing to the
Company such information regarding CalPERS, the plan of distribution of the
Registrable Securities and other information as the Company may from time to
time reasonably request or as may be legally required in connection with such
registration.
CalPERS shall use its reasonable efforts to comply with SEC Rule 10b-6 in
connection with any distribution of Registrable Securities by it. The parties
acknowledge that this obligation to the Company shall only apply to CalPERS'
self-directed activities and shall not affect or restrict transactions effected
for CalPERS' account by money managers, investment advisers, limited
partnerships or other pooled investment vehicles in which CalPERS has an
interest or by an agent or other Person acting for CalPERS who is not an
employee of CalPERS.
7. Registration Expenses. In connection with any Demand Registration and
---------------------
any Piggyback Registration, the Company shall pay, the following expenses
incurred in connection with such registration: (i) filing fees with the SEC and
NASD, (ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (iii) printing expenses, (iv)
fees and expenses incurred in connection with the listing of the Registrable
Securities, (v) fees and expenses of counsel and independent certified public
accountants for the Company, (vi) the reasonable fees and expenses of any
additional experts retained by the Company in connection with such registration,
and (vii) the reasonable fees and expenses of counsel for CalPERS. Except as
provided in Section 2 or this Section 7, CalPERS shall pay any underwriting
fees, discounts or commissions attributable to the sale of Registrable
Securities and any out-of-pocket expenses of CalPERS.
8. Indemnification by the Company. The Company agrees to indemnify and
------------------------------
hold harmless CalPERS, its officers and directors, and each Person, if any, who
controls CalPERS within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any
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<PAGE>
and all losses, claims, actions, damages, liabilities and expenses (including
reasonable attorneys' fees and expenses) caused by or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, actions, damages, or expenses (including reasonable
attorneys' fees and expenses) are caused by or arise out of any such untrue
statement or omission or alleged untrue statement or omission based upon and in
conformity with information, relating to CalPERS or the plan of distribution
furnished in writing to the Company by or on behalf of CalPERS expressly for use
therein; provided that the foregoing indemnity agreement with respect to a claim
--------
of a purchaser of Registrable Securities based upon any preliminary prospectus
shall not inure to the benefit of CalPERS with respect to such claim if at the
time of the delivery of the Registrable Securities to such purchaser a copy of
the most current prospectus had been available to CalPERS and the Underwriters
and was not provided to the purchaser and such current prospectus would have
cured the defect giving rise to such loss, claim, action, damage, liability or
expense. The Company also agrees to indemnify the Underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such Underwriters on substantially the same basis as that of the
indemnification of CalPERS provided in this Section 8.
9. Indemnification by CalPERS. CalPERS agrees to indemnify and hold
--------------------------
harmless the Company, its officers and directors, and each Person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to CalPERS, but only with reference to information
relating to CalPERS or the plan of distribution furnished in writing by or on
behalf of CalPERS expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus and then only to the extent such untrue statement
or omission or alleged untrue statement or omission was made in reliance upon
and in strict conformity with such written information. CalPERS also agrees to
indemnify and hold harmless any Underwriters of the
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<PAGE>
Registrable Securities, their officers and directors and each Person who
controls such Underwriters on the same basis as that of the indemnification of
the Company provided in this Section 9. Notwithstanding the foregoing, under no
circumstances will CalPERS be obligated under any indemnity provided for under
this Section 9 with respect to an offering to pay more than the net proceeds
received by CalPERS in such offering.
10. Conduct of Indemnification Proceedings. In case any proceeding
--------------------------------------
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 8 or
Section 9, such Person (the "Indemnified Party") shall promptly notify the
-----------------
Person against whom such indemnity may be sought (the "Indemnifying Party") in
-----------------
writing, but the delay or omission to so notify the Indemnifying Party will not
relieve the Indemnifying Party from any liability which it may have to an
Indemnified Party otherwise than under this Agreement and shall only relieve the
Indemnifying Party under this Agreement to the extent such Indemnifying Party is
prejudiced by such delay or omission. Upon the request of the Indemnified
Party, the Indemnifying Party shall retain counsel reasonably satisfactory to
such Indemnified Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
conflicting interests between them. It is understood that the Indemnifying
Party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties; provided, however, that if CalPERS shall have reasonably
concluded that representation by the same counsel as the other Indemnified
Parties would be inappropriate due to actual or potential conflicting interests
between them,
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<PAGE>
CalPERS shall have the right to select, and Comcast shall be obligated to pay
the fees and expenses of, separate counsel for CalPERS. All indemnified fees
and expenses of the Indemnified Parties shall be reimbursed as they are
incurred. In the case of any such separate firm for the Indemnified Parties,
such firm shall be designated in writing by the Indemnified Parties, except that
CalPERS shall designate its own counsel in the circumstances provided above.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, or if
there be a final judgment against the Indemnified Parties, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnifying Party will consent to the entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability with respect to such claim or litigation in
respect of which the Indemnified Party is or could have been made a party and
for which indemnification could have been sought hereunder.
11. Contribution. If the indemnification provided for in this Agreement
------------
is unavailable to an Indemnified Party in respect of any losses, claims,
actions, damages, liabilities or expenses referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, actions, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the Company,
CalPERS and the Underwriters in connection with the statements or omissions that
resulted in such losses, claims, actions, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of the
Company, CalPERS and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and CalPERS agree that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by prorata allocation
(even if
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<PAGE>
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Party as a result of the losses, claims, actions, damages,
liabilities or expenses referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and CalPERS shall not be required to contribute
any amount in excess of the amount by which the net proceeds of the offering
(before deducting expenses) received by CalPERS exceeds the amount of any
damages which CalPERS has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
12. Participation in Underwritten Registrations. No Person may participate
-------------------------------------------
in any underwritten registered offering contemplated hereunder unless such
Person (a) agrees to sell its securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
Registration Rights.
13. Rule 144. The Company covenants that it will file any reports
--------
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as CalPERS may reasonably request to the
extent required from time to time to enable CalPERS to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or
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<PAGE>
regulation hereafter adopted by the SEC. Upon the request of CalPERS, the
Company will deliver to CalPERS a written statement as to whether it has
complied with such reporting requirements. If CalPERS sells Registrable
Securities without registration, it shall only do so if such sale is effected in
compliance with Rule 144 (or any successor exemptive rule of the SEC) or is
otherwise exempt from registration under Section 4(1) of the Securities Act.
14. Holdback Agreements. CalPERS agrees not to offer, sell, contract to
-------------------
sell or otherwise dispose of any Equity Securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities,
during the 14 days prior to, and during the 180-day period beginning on, the
effective date of any registration statement filed pursuant to this Agreement
other than (i) the Registrable Securities to be sold pursuant to such
registration statement, and (ii) any shares of Company Stock sold upon the
exercise of an option or warrant, or the conversion of a security, outstanding
prior to such 14-day period. The Company shall not enter into an agreement with
any Person who has acquired or will acquire Equity Securities of the Company to
register such Equity Securities under the Securities Act unless such Person
agrees to a holdback or lockup arrangement with respect to such Equity
Securities covering the same 14-day period and 180-day period prior to and
beginning on the effective date of any registration statement filed pursuant to
this Agreement; provided, that (i) this restriction shall not restrict the
content of any underwriting agreement with underwriters, and (ii) if the Company
enters into a holdback or lockup agreement with a holder of Equity Securities of
the Company providing for a lesser restriction period after the effective date
of a registration statement (which period shall in no event be less than 90 days
so long as CalPERS holds or has the right to receive Registrable Securities),
the post-effective date restriction period on CalPERS appearing in the first
sentence of this Section 14 shall automatically be amended to be the lowest
period specified in any holdback or lockup agreement with any such holder.
CalPERS' obligations under this Section 14 only apply to CalPERS' self-directed
activities and will not prohibit or affect transactions effected for CalPERS'
account by money managers, investment advisers, limited partnerships or other
pooled investment vehicles in which CalPERS has an interest or by any agent or
other Person acting for CalPERS who is not an employee of CalPERS.
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<PAGE>
15. Miscellaneous.
-------------
15.1 Waivers and Amendments. Any provision of this Agreement
----------------------
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by all parties hereto, or in the case
of a waiver, by the party against whom the waiver is to be effective.
Specifically, but without limiting the generality of the foregoing, no failure
or delay of any party in exercising any right, power or privilege hereunder or
any other course of dealing shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. No waiver by
any party of the breach of any term or provision contained in this Agreement, in
any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement. The rights and remedies provided
in this Agreement shall be cumulative and not exclusive of any rights or
remedies provided by law.
15.2 Notices. All notices, requests and other communications to
-------
any party shall be in writing (including telecopy or similar writing) and shall
be given,
(a) If to CalPERS, to:
The California Public Employees'
Retirement System
Lincoln Plaza - 400 P Street
Sacramento, California 95814
Attention: Sheryl Pressler, Chief
Investment Officer
Facsimile No.: (916) 326-3248
With copies to:
Pacific Corporate Advisors, Inc.
1200 Prospect Street
La Jolla, California 092037
Attention: Brian Kinsman
Managing Director
Facsimile No.: (619) 456-6018
and
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<PAGE>
Alan J. Barton, Esq.
Paul, Hastings, Janofsky & Walker
555 South Flower Street, 23rd Floor
Los Angeles, California 90071
Facsimile No.: (213) 627-0705
(b) If to the Company, to:
Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102
Attention: General Counsel
Facsimile No.: (215) 981-7622
With a copy to:
Phillip R. Mills, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Facsimile No.: (212) 450-4800
or to such other address or telecopier number as such party may hereafter
specify for the purpose by notice to the other party. Any such notice, request
or other communication shall be deemed to have been given and received on the
day on which it is delivered or telecopied (or, if such day is not a Business
Day or if the notice or other communication is not telecopied during business
hours, at the place of receipt, on the next following Business Day).
15.3 Severability. Should any one or more of the provisions of
------------
this Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
shall be given effect separately from the provision or provisions determined to
be illegal or unenforceable and shall not be affected thereby.
15.4 Parties in Interest. All the terms and provisions of this
-------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto, whether so
expressed or not and, in particular, shall inure to the benefit of and be
enforceable by the holder or holders at the time of any of the Registrable
Securities. Subject to the immediately preceding sentence, this Agreement shall
not run to the benefit of or be enforceable by any Person other
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<PAGE>
than a party to this Agreement and its successors and assigns.
15.5 Headings. The headings of the sections, subsections and
--------
paragraphs of this Agreement have been inserted for convenience of reference
only and do not constitute a part of this Agreement.
15.6 Choice of Law. It is the intention of the parties that the
-------------
internal substantive laws, and not the laws of conflicts, of the State of New
York should govern the enforceability and validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties.
15.7 Expenses; Payment of Funds. The Company agrees to pay and hold
CalPERS harmless from liability for the payment of, (i) the reasonable fees and
expenses (including attorneys' fees and expenses) incurred in connection with
any requested waiver of the right of CalPERS or the consent of CalPERS to
contemplated acts of the Company not otherwise permissible by the terms of this
Agreement, (ii) the reasonable fees and expenses (including attorneys' fees and
expenses) incurred with respect to any amendment to this Agreement proposed by
the Company (whether or not the same becomes effective), (iii) the reasonable
fees and expenses (including the fees and expenses of attorneys', accountants
and other experts, which shall include the fees, costs and expenses of appeals)
incurred in respect of the enforcement of the rights granted under this
Agreement, and (iv) all costs of the Company's performance of and compliance
with this Agreement. All payments to CalPERS under this Agreement and the
Operating Agreement shall be made in United States dollars and by wire transfer
to CalPERS in immediately available funds. Unless and until changed by notice to
the Company, all funds shall be wired to CalPERS as follows:
California Public Employees'
Retirement System
Account No. SJ88
State Street Bank]
Boston, Massachusetts
15.8 No Conflicting Agreements. So long as CalPERS could receive
Common Stock under the Operating Agreement or this Agreement and so long as
CalPERS owns any Registrable Securities, the Company will not enter into or
become a party to any agreement or instrument which by its terms would violate
or be in conflict with, or materially
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<PAGE>
restrict the Company's performance of, or its obligations under, this Agreement.
15.9 Counterparts. This Agreement may be executed in any number
------------
of counterparts and by different parties hereto in separate counterparts, with
the same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
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<PAGE>
[REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE]
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed personally or by a duly authorized representative
thereof as of the day and year first above written.
COMCAST CORPORATION
By: Stanley Wang
--------------------------
Title: Senior Vice President
-----------------------
THE CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
By: David E. J. Maxwell
-------------------------------
Title: Principal Investment Officer
----------------------------
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<PAGE>
Exhibit 10.9
FIRST AMENDMENT TO SHARE PURCHASE AGREEMENT
FIRST AMENDMENT (this "Amendment"), dated as of December 22, 1994, by and
--
between COMCAST CORPORATION, a corporation existing under the laws of the state
of Pennsylvania ("Buyer") and ROGERS COMMUNICATION INC., a corporation existing
under the laws of the Province of British Columbia ("Rogers"), to the Share
Purchase Agreement ("Agreement") dated June 18, 1994.
WHEREAS, the Buyer and Rogers are parties to the Agreement which provides
for the sale by Rogers to the Buyer of all the outstanding shares of capital
stock of Maclean Hunter Inc. ("MH Inc."), subject to the terms and conditions
set forth therein; and
WHEREAS, the Buyer and Rogers desire to amend certain provisions of the
Agreement as set forth in this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Definition and References. Unless otherwise specifically defined
-------------------------
herein, each term used herein which is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" or "hereby" and each other similar reference contained in
the Agreement shall from and after the date hereof, refer to the Agreement as
amended by this Amendment.
2. Amendments of Section 1.1 - Defined Terms.
-----------------------------------------
2.1 Subsection 1.1 (aw) - Excluded Assets of the Agreement is
---------------
amended to read in its entirety as follows:
(aw) "Excluded Assets" means the assets listed in Schedule 1.1(ag) except
for Excess Cash, the Rogers-MHI Publishing Note and Tax Sharing Receivables
2.2 Subsection 1.1(cy) - Tax Sharing Agreement of the Agreement is
amended by replacing, in its entirety the statement contained within the
parentheses in the first sentence of such subsection with the following:
(including, but not limited to the MHI Tax Sharing Arrangements or any
other arrangement required or permitted by law)
2.3 Section 1.1 of the Agreement is further amended to add the
following additional definitions:
(dl) "Rogers-MHI Publishing Note" means the note issued by Rogers-MHI
Publishing Inc. to MH Inc. in the amount of $37,963,000 as consideration
for the purchase of various Excluded Assets pursuant to the Asset Purchase
Agreement which
<PAGE>
note shall be deemed to be a Current Asset under the Agreement and shall be
paid by tender to MH Inc of the Comcast Note immediately following Closing.
(dm) "Asset Purchase Agreement" means the Asset Purchase Agreement by and
between MH Inc, and Rogers-MHI Publishing Inc dated as of December 22,
1994.
(dn) "Share Repurchase Agreement" means the Share Repurchase Agreement by
and between MH Inc. and Rogers dated as of December 22, 1994.
(do) "Comcast Note" means the note executed by Buyer in an amount equal to
the face amount of the Rogers-MHI Publishing Note which shall be delivered
at Closing to Rogers in partial payment of the Purchase Price and in turn
tendered to MH Inc. in full payment and satisfaction of the Rogers-MHI
Publishing Note immediately following Closing.
(dp) "MHI Tax Sharing Arrangements" means the various agreements and
understandings that reflect the obligation of certain subsidiaries included
in the MH Inc. consolidated group to contribute to and reimburse MH Inc.
for, their respective share of the Liability for Tax of the consolidated
group as determined in accordance with such arrangements, in order to
facilitate the preparation and filing of consolidated U.S. income tax
returns by MH Inc. for any Pre-Closing Tax Period and the payment of the
corresponding tax liability, which tax returns have historically included
such subsidiaries as members of the MH Inc. consolidated group.
(dq) "Excess Cash" has the meaning assigned to such term in the Share
Repurchase Agreement.
(dr) "Tax Sharing Receivables" has the meaning assigned to such term in
the Share Repurchase Agreement.
(ds) "Expense Liabilities" has the meaning assigned to such term in the
Share Repurchase Agreement.
3. Amendment of Subsection 2.1(d) - Cause Reorganization. Subsection
-----------------------------------------------------
2.1(d) of the Agreement is amended to read in its entirety as follows:
(d) Cause Reorganization. Subject to the completion of the distribution
--------------------
to Rogers of assets of MHL and the acquisition pursuant to such
distribution of all of the then issued and outstanding shares of MH Inc.,
and in any event prior to the Closing, Rogers covenants and agrees with the
Buyer to cause the Purchased Entities to effect the transactions described
in the Asset Purchase Agreement and the Share Repurchase Agreement, which
agreements and the transactions contemplated thereby are collectively
referred to as the "Reorganization", thereby removing from the Purchased
Entities, in the manner described in such agreements, the Excluded Assets.
2
<PAGE>
4. Amendment of Subsection 2.4(a)-Adjustment. Subsection 2.4(a) of the
-----------------------------------------
Agreement is amended by adding the following provision to the end of that
Subsection:
(xi) increased by the amount, if any, of the Tax Sharing Receivables
provided that (1) such Tax Sharing Receivables are paid in cash to MH Inc.
on or before the earlier of (A) the date on which the Tax liability
relating to the Tax Sharing Receivables is due to the taxing authority and
(B) the date on which the PM Report is delivered to the Buyer, (2) the
amount of such Tax Sharing Receivables is deemed to be zero for purposes of
determining the Estimated Price, (3) any Tax Sharing Receivables shall be
excluded from the definition of Current Assets for purposes of subsections
(ii) and (iii) of Section 2.4(a), (4) any adjustment to Purchase Price
resulting from the Tax Sharing Receivables shall be excluded in determining
any interest paid under Section 2.5(c) and (5) Rogers shall indemnify Buyer
or its affiliates for any detriment suffered by Buyer or its affiliates
resulting from the exclusion of the Tax Sharing Receivables from the
definition of "Excluded Assets."
5. Amendment of Subsection 2.5(d)-Payment Method. Subsection 2.5(d) of
---------------------------------------------
the Agreement is amended by adding the following to the end of that Section:
(d)...provided however, that as a portion of the Purchase Price to be paid
at Closing, Buyer shall deliver and Rogers shall accept the Comcast Note
and the amount of the Purchase Price to be paid by Buyer by wire transfer
shall be reduced by the face amount of the Comcast Note. Immediately
following the Closing, the Comcast Note shall be tendered to MH Inc. in
full and complete payment and satisfaction of the Rogers-MHI Publishing
Note.
6. Amendment of Section 3.9-Assets and Liabilities of the Purchased
----------------------------------------------------------------
Entities. Section 3.9 of the Agreement is amended by modifying the first
- - - --------
sentence of Section 3.9 to read as follows:
At the Closing, MH Inc. shall have no Liabilities (excluding Liabilities
which have been assumed by another person that is not a Purchased Entity in
the manner contemplated by the Reorganization and Liabilities to the extent
taken into account in computing the Purchase Price) and, subject to the
Reorganization, no material assets other than Excess Cash, Tax Sharing
Receivables, the Rogers-MHI Publishing Note and the shares and other
securities or indebtedness of other Purchased Entities.
7. Amendment of Section 3.13-Material Contracts. Subsection (a)(viii)
--------------------------------------------
of Section 3.13 of the Agreement is amended to read in its entirety as follows:
(viii) any Contract with Rogers or any affiliate of Rogers or any Purchased
Entity other than another Purchased Entity, except for (A) any notes of any
Purchased Entity that are treated as Long Term Debt and thereby result in a
reduction of the Purchase
3
<PAGE>
Price and (B) the Rogers-MHI Publishing Note and the MHI Tax Sharing
Arrangements.
8. Amendment of Section 6.6-State of MH Inc. and Compliance with
-------------------------------------------------------------
Sections 3.1, 3.2, 3.3, 3.6, 3.7, 3.8, 3.31, 3.32, and 3.33 at Closing.
- - - ----------------------------------------------------------------------
Section 6.6 of the Agreement is amended by replacing the first sentence of the
Section 6.6 with the following sentence:
Rogers shall cause MH Inc. at Closing to have no Liabilities (excluding (x)
Liabilities which have been assumed by another person that is not a
Purchased Entity in the manner contemplated by the Reorganization and (y)
Liabilities for Income Taxes or Expense Liabilities which are included in
Current Liabilities in adjusting the Purchase Price) and no material assets
other than Excess Cash, Tax Sharing Receivables, the Rogers-MHI Publishing
Note and the shares and other securities or indebtedness of other Purchased
Entities.
9. Amendment of Section of 6.9-Tax Election. Section 6.9 of the
----------------------------------------
Agreement is amended by adding the following after the final sentence of that
Section:
Rogers shall also cause all subsidiaries that are participants in the MHI
Tax Sharing Arrangements and not Purchased Entities to make all estimated
payments due under such arrangements, including but not limited to the
fourth quarter estimated payment, prior to the Closing.
10. Amendment of Section 6.14-Purchase of Outstanding Interest in Cable
-------------------------------------------------------------------
TV of Jersey City, Inc. Section 6.14 of the Agreement is amended by adding the
- - - ----------------------
following after the final sentence of that Section:
The parties acknowledge that the checks, payable to the holders of the 20%
interest in Cable TV of Jersey City, Inc. as consideration for the sale of
their shares in Cable TV of Jersey City, Inc., are being held in escrow by
counsel for Rogers pending confirmation that such shares are free of
certain specified liens and that Rogers shall fully indemnify Buyer,
without regard to the limitations set forth in Section 9.5(ii) of the
Agreement, against any and all costs or liability that Buyer may incur or
be subject to, including any cost or expenses incurred in enforcing this
indemnity, as a direct or indirect result of such specified liens or as a
result of the use of the escrow by Rogers in connection with acquisition of
such shares. The parties further acknowledge that the Purchase Price paid
to acquire the 20% interest as evidenced by the aggregate amount of such
checks, will have the effect of reducing the amount of the Purchase Price
payable by Buyer to Rogers either by way of a reduction in Current Assets
or by way of an increase in Current Liabilities of the Purchased Entities
at the time of Closing.
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<PAGE>
11. Amendment of Section 9.5-Indemnification by Rogers. To clarify the
--------------------------------------------------
intent of the parties, Subsection 9.5(c) of the Agreement is amended to read in
its entirety as follows:
(c) any Excluded Liabilities or any Liabilities of MH Inc. at the
Closing or any Liabilities of any of the Purchased Entities arising
from or relating to the Excluded Assets or to the Reorganization
(including, to the extent such Liability does not result in a
reduction of the Purchase Price, (1) any Liability for Taxes
relating to any Subsidiary of MH Inc. other than the Purchased
Entities (2) any Liability for Taxes relating to the income of MH
Inc., (3) any Liability under the MHI Tax Sharing Arrangements other
than a Liability for Taxes imposed on the income of any Purchased
Entities, other than MH Inc., and (4) any Liability for Taxes
relating to the Reorganization) or any Liability of the Purchased
Entities, or, following the Closing, the Buyer arising out of or
related to the employee plan or arrangement (including without
limitation any contract) entered into, maintained, administered,
contributed to or sponsored by, now or in the past, any affiliate of
the Purchased Entities, including without limitation Rogers and MHL,
that is not a Cable Employee Plan or Cable Benefit Arrangement;
12. Amendment of Section 9.5-Indemnification by Rogers. Subsection
--------------------------------------------------
9.5(d) of the Agreement is amended by adding the following after the final
sentence of that subsection:
Rogers shall undertake to have the Retirement Agreements referred to in
this subsection, settled and the Retirement Agreements released or assigned to
and assumed by a controlled subsidiary of Rogers other than one of the Purchased
Entities prior to the Closing Date. The parties agree and acknowledge that the
following language appearing at the bottom of page 37 of Schedule 3.13-Material
--------
Contracts, shall have no affect and be treated as null and void:
- - - ---------
For purposes of the Closing Purchase Price Adjustment, the liability
under these agreements under GAAP shall be determined without offset
against the assets held in any funded benefit plan.
13. Amendment of Section 11.2-Assignability and Enforceability.
----------------------------------------------------------
Subsection 11.2(b) of the Agreement is amended to read in its entirety as
follows:
(b) the Buyer may assign its rights and obligations under this Agreement
to any Subsidiary of the Buyer in which the Buyer owns a controlling
interest, provided that no such assignment shall relieve the Buyer of its
obligations hereunder, impose new or additional burdens on Rogers or
materially delay or prejudice obtaining any Purchase Regulatory Approvals.
To the extent such assignment occurs after the filing of any requests or
applications for Purchase Regulatory Approvals, Buyer agrees to indemnify
Rogers against any Liability Rogers may incur if any Purchase Regulatory
Approval is
5
<PAGE>
delayed or is ultimately determined to be invalid or any request or
application is determined to be incomplete or defective because of such
assignment by Buyer.
14. Amendment of Section 11.3-Expenses. Section 11.3 of the Agreement
is amended to reduce the amount of $10,000,000 referenced therein to the amount
of $9,000,000.
15. Governing Law. This Amendment shall be governed by and construed in
-------------
accordance with the laws of the State of New York.
16. Counterparts and Effectiveness. This Amendment may be signed in any
------------------------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Amendment shall become effective as of the date hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
COMCAST CORPORATION
By /s/ Stanley Wang
-------------------------
Its
-------------------------
ROGERS COMMUNICATIONS, INC.
By /s/ Graham Savage
--------------------------
Its Senior Vice President
--------------------------
By /s/ David Miller
--------------------------
Its Vice President
--------------------------
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