SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
SCHEDULE 13D
(Amendment No. 4)
Under the Securities Exchange Act of 1934
JONES INTERCABLE, INC.
(Name of Issuer)
CLASS A COMMON STOCK
$.01 PAR VALUE
480206-200
(CUSIP Number)
COMMON STOCK
$.01 PAR VALUE
480206-101
(CUSIP Number)
BCI TELECOM HOLDING INC.
(Name of Persons Filing Statement)
Martine Turcotte
Assistant Corporate Secretary
BCI Telecom Holding Inc.
1000, rue de la Gauchetiere West, Bureau 1100
Montreal, Quebec
Canada H3B 4Y8
Tel. No.: (514) 392-2340
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications)
August 12, 1998
(Date of Event which Requires Filing of this Statement)
................................................................................
Exhibit Index is at Page 14
<PAGE>
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with this Statement |_|.
CLASS A COMMON STOCK
CUSIP No. 480206-200
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
BCI Telecom Holding Inc.
----------------------------------------------------------------------
Not Applicable
----------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
-------------------------------------------------------------
(b) [X]
-------------------------------------------------------------
-------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------
----------------------------------------------------------------------
(4) Source of Funds (See Instructions) AF
----------------------------------
----------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
Not Applicable
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(6) Citizenship or Place of Organization Canada
--------------------------------
----------------------------------------------------------------------
- ------------------
Number of (7) Sole Voting Power 12,782,500
Shares -----------------------
Beneficially -----------------------------------------
Owned by (8) Shared Voting Power ---------------------
Each -----------------------------------------
Reporting (9) Sole Dispositive Power ------------------
Person -----------------------------------------
With (10) Shared Dispositive Power 12,782,500
----------------
- ------------------ -----------------------------------------
2
<PAGE>
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 12,782,500
----------
-----------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
Not Applicable
-----------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11) 35.9%
--------------------
-----------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) CO
---------------------------
3
<PAGE>
COMMON STOCK
CUSIP No. 480206-101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
BCI Telecom Holding Inc.
----------------------------------------------------------------------
Not Applicable
----------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
-------------------------------------------------------------
(b) [X]
-------------------------------------------------------------
-------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------
----------------------------------------------------------------------
(4) Source of Funds (See Instructions) AF
----------------------------------
----------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
Not Applicable
----------------------------------------------------------------------
(6) Citizenship or Place of Organization Canada
--------------------------------
----------------------------------------------------------------------
- ------------------
Number of (7) Sole Voting Power
Shares -----------------------
Beneficially -----------------------------------------
Owned by (8) Shared Voting Power ---------------------
Each -----------------------------------------
Reporting (9) Sole Dispositive Power ------------------
Person -----------------------------------------
With (10) Shared Dispositive Power 2,878,151
----------------
- ------------------ -----------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,878,151
----------
-----------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
Not Applicable
-----------------------------------------------------------------------
4
<PAGE>
(13) Percent of Class Represented by Amount in Row (11) 56.3%
--------------------
-----------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) CO
---------------------------
5
<PAGE>
CLASS A COMMON STOCK
CUSIP No. 480206-200
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
BTH (U.S. Cable) Limited
----------------------------------------------------------------------
Not Applicable
----------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
-------------------------------------------------------------
(b) [X]
-------------------------------------------------------------
-------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------
----------------------------------------------------------------------
(4) Source of Funds (See Instructions) AF
----------------------------------
----------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
Not Applicable
----------------------------------------------------------------------
(6) Citizenship or Place of Organization British Virgin Islands
--------------------------------
----------------------------------------------------------------------
- ------------------
Number of (7) Sole Voting Power 12,782,500
Shares -----------------------
Beneficially -----------------------------------------
Owned by (8) Shared Voting Power ---------------------
Each -----------------------------------------
Reporting (9) Sole Dispositive Power ------------------
Person -----------------------------------------
With (10) Shared Dispositive Power 12,782,500
----------------
- ------------------ -----------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 12,782,500
----------
-----------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
Not Applicable
-----------------------------------------------------------------------
6
<PAGE>
(13) Percent of Class Represented by Amount in Row (11) 35.9%
--------------------
-----------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) CO
---------------------------
7
<PAGE>
COMMON STOCK
CUSIP No. 480206-101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
BTH (Intercable) Limited
----------------------------------------------------------------------
Not Applicable
----------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
-------------------------------------------------------------
(b) [X]
-------------------------------------------------------------
-------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------
----------------------------------------------------------------------
(4) Source of Funds (See Instructions) AF
----------------------------------
----------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e).
Not Applicable
----------------------------------------------------------------------
(6) Citizenship or Place of Organization British Virgin Islands
--------------------------------
----------------------------------------------------------------------
- ------------------
Number of (7) Sole Voting Power
Shares -----------------------
Beneficially -----------------------------------------
Owned by (8) Shared Voting Power ---------------------
Each -----------------------------------------
Reporting (9) Sole Dispositive Power ------------------
Person -----------------------------------------
With (10) Shared Dispositive Power 2,878,151
----------------
- ------------------ -----------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,878,151
----------
-----------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
Not Applicable
-----------------------------------------------------------------------
8
<PAGE>
(13) Percent of Class Represented by Amount in Row (11) 56.3%
--------------------
-----------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) CO
---------------------------
9
<PAGE>
BCI Telecom Holding Inc., a Canadian corporation, f/k/a Bell Canada
International Inc. hereby amends and supplements its Report on Schedule 13D,
originally filed with the Securities and Exchange Commission on April 1, 1994,
as amended by Amendment No. 1 filed on June 3, 1994, as further amended by
Amendment No. 2 filed on December 20, 1994 and as further amended by Amendment
No. 3 filed on May 27, 1998 (as so amended, the "Schedule 13D") relating to the
shares of Class A Common Stock $.01 par value (the "Class A Shares") and the
Common Stock $.01 par value (the "Common Shares") of Jones Intercable, Inc., a
Colorado corporation (the "Company") with its principal executive offices
located at 9697 E. Mineral Avenue, Englewood, Colorado 80112.
Unless otherwise indicated, capitalized terms used but not defined
herein shall have the meaning assigned to such terms in the Schedule 13D.
Item 1. Security and Issuer.
No changes.
Item 2. Identity and Background.
No changes.
Item 3. Source and Amount of Funds or Other Consideration.
The response set forth in Item 3 of the Schedule 13D is hereby
supplemented as follows:
Reference is made to (a) the Option Agreements, each as amended by
Amendment No. 1 to Option Agreements dated as of August 12, 1998 (as so amended,
the "Amended Option Agreements"), (b) the Purchase and Sale Agreement, as
amended and restated on August 12, 1998 (the "Amended Purchase and Sale
Agreement"), (c) the Shareholders Agreement, as amended by Agreement and
Amendment No. 1 to Shareholders Agreement dated August 12, 1998 (the "Amended
Shareholders Agreement") and (d) that certain agreement dated August 12, 1998
among Glenn R. Jones ("Jones"), Glenn Jones Grantor Business Trust, Jones
International Grantor Business Trust, Jones International, Ltd., Jones Space
Segment, Inc., Jones Global Group, Inc., Jones Interdigital, Inc. and Jones
Entertainment Group, Ltd (each of the foregoing entities being collectively
referred to herein as the "Jones Entities") and Comcast Corporation ("Comcast")
(the "Jones/Comcast Agreement" and, when taken together with the Amended Option
Agreements, the Amended Purchase and Sale Agreement and the Amended Shareholders
Agreement, being collectively referred to herein as the "Transaction
Documents").
As more fully described in Item 6 below, the Transaction Documents
contemplate, subject to the satisfaction or waiver of certain conditions
precedent, the immediate acceleration of the exercise of the Control Option and
the simultaneous acquisition of the Class A Shares and the Common Shares by
Comcast for aggregate consideration to BTH of $500,000,000.
10
<PAGE>
Item 4. Purpose of Transaction.
The response set forth in Item 4 of the Schedule 13 D is hereby
supplemented as follows:
During the period beginning August 12, 1998 and ending on the later to
occur of the Closing (as defined below) or the Final Purchase, as the case may
be, BTH will, together with its affiliates, continue to hold sufficient shares
in the Company to continue to exercise its consent rights, pre-emptive rights,
rights of first refusal and other rights under the Shareholders Agreement and
will do so after consultation with Comcast. BTH, after consultation with
Comcast, will also continue to fulfill its obligations pursuant to the
Shareholders Agreement during such period. To date, BTH has invested
$286,424,250 of its total $400,000,000 commitment thereunder.
Subject to compliance with the terms of the Transaction Documents, BTH
from time to time intends to review its investment in the Company on the basis
of various factors, including the Company's business, financial condition,
results of operations and prospects, general economic and industry conditions,
the securities markets in general and those for the Company's securities in
particular, as well as other developments and other investment opportunities.
Based upon such review, BTH will take such actions in the future as BTH may deem
appropriate in light of the circumstances existing from time to time in
compliance with the terms of the Transaction Documents to which it is a party.
Such actions may include the acquisition of additional Class A Shares or Common
Shares through open market purchases, privately negotiated transactions, tender
offer, exchange offer or otherwise. Alternatively, such actions may involve the
sale of all or a portion of the Class A Shares or Common Shares held by BTH from
time to time in the open market, in privately negotiated transactions, through a
registered public offering or otherwise.
Item 5. Interest in Securities of the Issuer.
The response set forth in Item 5 of the Schedule 13 D is hereby
supplemented as follows:
(a) No changes.
(b) No changes.
(c) No transactions in Class A Shares or Common Shares have been
effected during the last 60 days by BCE, BTH, US Cable or BTH Intercable
(collectively, the "BTH Entities"), any other person controlling any BTH Entity
or to the best of BTH's knowledge, any of the persons named in Schedule A, B, C
or D hereto.
(d) Not applicable.
(e) Not applicable.
11
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The response set forth in Item 6 of the Schedule 13D is hereby
supplemented as follows:
On August 12, 1998, BTH, Comcast, the Company and the Jones Entities
entered into the Transaction Documents which contemplate, subject to the
satisfaction or waiver of certain conditions precedent, (i) the immediate
exercise of the Control Option and the acquisition by Comcast of the Class A
Shares and the Common Shares currently beneficially owned by BTH, (ii) the
resignation of certain directors of the Company other than those certain
directors mutually selected by Jones and BTH and (iii) the assignment to Comcast
of BTH's rights under the Shareholders Agreement (the consummation of such
transactions being referred to herein as the "Closing"). In the event that the
Closing is not consummated on or prior to June 30, 1999, the Jones/Comcast
Agreement will be terminated and Comcast and BTH will alternatively proceed with
the Initial Purchase and the Final Purchase as more fully described in Amendment
No. 3 to this Schedule 13-d filed on May 27, 1998 ("Amendment No. 3").
During the period beginning August 12, 1998 and ending on the earlier
to occur of the termination or expiration of the Jones/Comcast Agreement and the
Closing, BTH's ability to exercise the Control Option will be suspended.
The Closing is conditioned on the satisfaction or waiver of certain
conditions precedent, including expiration of all applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
receipt of certain other governmental and franchise approvals, absence of any
governmental order, injunction or applicable law prohibiting the transactions
contemplated by the Transaction Documents or requiring any party to divest a
material portion of its assets as a result of the consummation of the
transactions, receipt of all material third party consents and approvals, truth
and accuracy of certain standard representations and warranties, absence of
material adverse change during the period commencing March 31, 1998 to and
including the earlier to occur or the Closing, the Initial Purchase and December
31, 1998, and compliance by each party in all material respects of the covenants
required of it pursuant to the Transaction Documents.
Pursuant to the Transaction Documents and conditioned upon the
consummation of the Closing, the Jones Entities, the Company and BTH have each
agreed to waive and release any claims they may have against each other, except
for those obligations, rights, actions, causes of action, claims, demands,
damages, costs, expenses or liabilities of each such party under the Amended
Option Agreements or with respect to any judgement previously obtained in any
court of competent jurisdiction. Moreover, the Jones Entities, the Company, BTH,
US Cable and BTH Intercable have agreed to take or to refrain from taking any
and all actions necessary or advisable to seek a stay of any proceedings
relating to that certain lawsuit brought by BTH against Jones Intercable, Inc.,
Jones International, Ltd., Jones Internet Channel, Inc. and Glenn R. Jones,
which was filed before the U.S. District Court for the
12
<PAGE>
District of Colorado, including the appeal of the order entered on May 5, 1998,
until the earlier to occur of the Closing (at which time the parties shall
dismiss the litigation with prejudice) and the expiration or termination of the
Jones/Comcast Agreement.
In the event the Closing occurs on or prior to June 30, 1999, Comcast
will pay BTH $500,000,000 in cash consideration at the time of the Closing;
otherwise consideration for the Initial Purchase and the Final Purchase will be
made as described in Amendment No. 3.
During the period beginning on August 12, 1998 and ending on the
earlier to occur of the Closing or the Final Purchase, as the case may be, BTH
and its affiliates will continue to own the Class A Shares and will continue to
exercise their rights and fulfill their obligations under the Shareholders
Agreement. BTH will consult with Comcast from time to time prior to exercising
certain consent rights, rights of first refusal, tag-along rights, etc., held by
BTH under the Shareholders Agreement as more fully described in Amendment No. 3.
Item 7. Material to Be Filed as Exhibits.
Exhibit 12: Agreement dated August 12, 1998 among
Comcast and the Jones Entities together with
Schedules A, B, C, C-1, F and Exhibits A, C, D, E.
Exhibit 13: Amended and Restated Purchase and Sale
Agreement dated August 12, 1998 among
Comcast, BTH, US Cable and BTH Intercable together
with Schedules 3.8, 3.10, 7.3 and F.
Exhibit 14: Amendment No. 1 to Option Agreements
dated August 12, 1998 among Jones
International Grantor Business Trust, Glenn
Jones Grantor Business Trust, Jones
International, Ltd., Jones Space Segment,
Inc., Jones Global Group, Inc., Jones
Interdigital, Inc., Jones Entertainment
Group, Ltd. and Bank of New York, as
successor to Morgan Guaranty Trust Company
of New York and as agent for BTH and
Comcast together with Schedule F.
Exhibit 15: Agreement and Amendment No. 1 to Shareholders Agreement
dated August 12, 1998 between the Jones Entities, the
Company, BTH, US Cable and BTH Intercable.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
August 12, 1998 BCI TELECOM HOLDING INC.
By: /s/ Martine Turcotte
------------------------------
Name: Martine Turcotte
Title: Assistant Corporate Secretary
13
<PAGE>
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS
BCI TELECOM HOLDING INC.
The name, business address, title, present principal
occupation or employment and citizenship of each of the directors and executive
officers of BCI Telecom Holding Inc. ("BTH") are set forth below. If no business
address is given the director's or officer's business address is 1000, rue de La
Gauchetiere Ouest, Bureau 1100, Montreal, Quebec, Canada H3B 4Y8. Unless
otherwise indicated, each individual's principal occupation and address refers
to such individual's title and address at BTH.
<TABLE>
<CAPTION>
Directors and Officers Principal Occupation and Address Citizenship
of BTH
- ---------------------- -------------------------------- -----------
<S> <C> <C>
William D. Anderson Senior Vice President, Finance Canadian
Director/ BCE Inc.
Chief Financial Officer 1000, rue de la Gauchetiere West, Bureau 3700
Montreal, Quebec, Canada H3B 4Y7
Derek H. Burney Chairman and Chief Executive Officer Canadian
Director/ President and Bell Canada International Inc.
Chief Executive Officer
Josef J. Fridman Chief Legal Officer Canadian
Director/ BCE Inc.
Corporate Secretary 1000, rue de la Gauchetiere West, Bureau 3700
Montreal, Quebec, Canada H3B 4Y7
David G. Masse Assistant Corporate Secretary Canadian
Assistant Corporate Secy. BCE Inc.
1000, rue de la Gauchetiere West, Bureau 3700
Montreal, Quebec, Canada H3B 4Y7
Jean C. Monty President and Chief Executive Officer Canadian
Director BCE Inc.
1000, rue de la Gauchetiere West, Bureau 3800
Montreal, Quebec, Canada H3B 4Y7
Martine Turcotte Vice President, Law and Corporate Secretary Canadian
Assistant Corporate Secy. Bell Canada International Inc.
Siim A. Vanaselja Executive Vice President and Chief Financial Canadian
Director /Vice President Officer
Bell Canada International Inc.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Directors and Officers Principal Occupation and Address Citizenship
of BTH
- ---------------------- -------------------------------- -----------
<S> <C> <C>
Lynton R. Wilson Chairman of the Board Canadian
Director / Chairman of the BCE Inc.
Board 1000, rue de la Gauchetiere West, Bureau 3700
Montreal, Quebec, Canada H3B 4Y7
</TABLE>
16
<PAGE>
SCHEDULE B
DIRECTORS AND EXECUTIVE OFFICERS
BTH (U.S. CABLE) LIMITED
The name, business address, title, present principal
occupation or employment and citizenship of each of the directors and executive
officers of BTH (U.S. CABLE) LIMITED ("US Cable") are set forth below. If no
business address is given the director's or officer's business address is Arawak
Trust Company Limited, Main Street, Road Town, Tortola, British Virgin Islands.
<TABLE>
<CAPTION>
Directors and Officers Principal Occupation and Address Citizenship
of US Cable
- ---------------------- -------------------------------- -----------
<S> <C> <C>
Christopher S. McKenzie Attorney British
Director and President Smith-Hughes Raworth & McKenzie
Arawak Chambers
P.O. Box 173
Road Town, Tortola
British Virgin Islands
Roger J. Harris Retired Canadian
Director
Derek H. Burney Chairman and Chief Executive Officer Canadian
Director Bell Canada International Inc.
1000, rue de la Gauchetiere West, Bureau 1100
Montreal, Quebec, Canada H3B 4Y8
Anthony G. Lynton Attorney Barbadian
Secretary Smith-Hughes Raworth & McKenzie
Arawak Chambers
P.O. Box 173
Road Town, Tortola
British Virgin Islands
</TABLE>
17
<PAGE>
SCHEDULE C
DIRECTORS AND EXECUTIVE OFFICERS
BTH (INTERCABLE) LIMITED
The name, business address, title, present principal
occupation or employment and citizenship of each of the directors and executive
officers of BTH (INTERCABLE) LIMITED ("BTH Intercable") are set forth below. If
no business address is given the director's or officer's business address is
Arawak Trust Company Limited, Main Street, Road Town, Tortola, British Virgin
Islands.
<TABLE>
<CAPTION>
Directors and Officers Principal Occupation and Address Citizenship
of BTH Intercable
- ---------------------- -------------------------------- -----------
<S> <C> <C>
Christopher S. McKenzie Attorney British
Director and President Smith-Hughes Raworth & McKenzie
Arawak Chambers
P.O. Box 173
Road Town, Tortola
British Virgin Islands
Roger J. Harris Retired Canadian
Director
Derek H. Burney Chairman and Chief Executive Officer Canadian
Director Bell Canada International Inc.
1000, rue de la Gauchetiere West, Bureau 1100
Montreal, Quebec, Canada H3B 4Y8
Anthony G. Lynton Attorney Barbadian
Secretary Smith-Hughes Raworth & McKenzie
Arawak Chambers
P.O. Box 173
Road Town, Tortola
British Virgin Islands
</TABLE>
18
<PAGE>
SCHEDULE D
DIRECTORS AND EXECUTIVE OFFICERS
BCE INC.
The name, business address, title, present principal
occupation or employment and citizenship of each of the directors and executive
officers of BCE Inc. ("BCE") are set forth below. If no business address is
given the director's or officer's business address is 1000, rue de La
Gauchetiere Ouest, Bureau 3700, Montreal, Quebec, Canada H3B 4Y7. Unless
otherwise indicated, each individual's principal occupation and address refers
to such individual's title and address at BCE.
<TABLE>
<CAPTION>
Directors and Officers Principal Occupation and Address Citizenship
of BCE
- ---------------------- -------------------------------- -----------
<S> <C> <C>
William D. Anderson Canadian
Chief Financial Officer
Ralph M. Barford President Canadian
Director Valleydene Corporation Limited
20 Eglinton Avenue W., Suite 1903
Toronto, Ontario, Canada M4R 1K8
Michael Conway Canadian
Vice-President Special
Reports
Richard J. Currie President Canadian
Director George Weston Limited
22 St. Clair Avenue East, Suite 2001
Toronto, Ontario Canada M4T 2S7
Josef J. Fridman Canadian
Chief Legal Officer
Donna Soble Kaufman Lawyer and Corporate Director Canadian
Director 2 St. Clair Avenue East
Suite 800
Toronto, Ontario M4T 2T5
Pierre N. Lessard Canadian
Vice-President and Treasurer
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Directors and Officers Principal Occupation and Address Citizenship
of BCE
- ---------------------- -------------------------------- -----------
<S> <C> <C>
Brian M. Levitt President and Chief Executive Officer Canadian
Director Imasco Limited
600, Boul. de Maisonneuve ouest, 19e etage
Montreal, Quebec, Canada H3A 3K7
Gerald J. Maier Chairman Emeritus Canadian
Director TransCanada PipeLines Limited
3400, 237 Fourth Avenue S.W.
Calgary, Alberta, Canada T2P 5A4
John H. McArthur Dean Emeritus Canadian
Director Harvard Univ. Graduate School of Business
Administration
Soldiers Field
Boston, MA 02163 USA
Jean C. Monty, President and Canadian
Chief Executive Officer
James E. Newall Chairman Canadian
Director Newall & Associates
2015 Bankers Hall
855- 2nd Street S.W.
Calgary, Alberta, Canada T2P 4J7
Peter J. M. Nicholson Canadian
Exec. Vice-President,
Corporate Strategy
Barry W. Pickford Canadian
Vice-President, Taxation
Marc J. Ryan Canadian
Vice-President, Associate
General Counsel and
Corporate Secretary
Guy Saint-Pierre Chairman of the Board Canadian
Director Groupe SNC-Lavalin Inc.
455, Boul. Rene-Levesque ouest, 21e etage
Montreal, Quebec, Canada H2Z 1Z3
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Directors and Officers Principal Occupation and Address Citizenship
of BCE
- ---------------------- -------------------------------- -----------
<S> <C> <C>
Peter M. Sharpe Canadian
Vice-President,
Corporate Services
Lynton R. Wilson Canadian
Director /
Chairman of the Board
Jeannine Guillevin Wood Chairman of the Board Canadian
Director Banque Laurentienne du Canada
1980 Avenue McGill College, 20e etage
Montreal, Quebec, Canada H3A 3K3
Victor L. Young Chairman and Chief Executive Officer Canadian
Director Fishery Products International Limited
70 O'Leary Avenue
P.O. Box 550
St. John's, Newfoundland, Canada A1C 5L1
</TABLE>
21
<PAGE>
EXHIBIT 12
AGREEMENT DATED AUGUST 12, 1998 AMONG COMCAST AND THE JONES
ENTITIES
<PAGE>
Execution Copy
AGREEMENT
This AGREEMENT is entered into as of August 12, 1998, by and among
Comcast Corporation, a Pennsylvania corporation ("Comcast") and Mr. Glenn R.
Jones ("Jones"), Jones International, Ltd. ("International"), Glenn Jones
Grantor Business Trust (the "Jones Trust"), Jones International Grantor Business
Trust (the "JI Trust", and together with the Jones Trust, the "Trusts"), Jones
Space Segment, Inc. ("Space"), Jones Global Group, Inc. ("Global"), Jones
Interdigital, Inc. ("Interdigital"), Jones Entertainment Group, Ltd.
("Entertainment" and together with Jones, International, the Trusts, Space,
Global and Interdigital, the "Jones Entities").
WHEREAS, certain of the Jones Entities and The Bank of New York, as
successor agent to Morgan Guaranty Trust Company of New York, as agent for BCI
Telecom Holding Inc., a Canadian corporation f/k/a/ Bell Canada International
Inc. ("BTH") and BTH (Intercable) Limited, a British Virgin Islands corporation
f/k/a Bell Canada International BVI VI Limited ("BTH Intercable"), as assignee
of BTH, have entered into certain option agreements each dated as of December
20, 1994 and amended as of the date hereof (the "Option Agreements"), granting
an option (the "Control Option") to purchase the shares of Common Stock, par
value $.01 per share (the "Common Stock"), of Jones Intercable, Inc. (the
"Company") owned beneficially or of record by the Jones Entities (the "Control
Shares");
WHEREAS, the Company, Jones, International and BTH are parties to a
certain Shareholders Agreement originally dated as of December 20, 1994
providing for certain rights and obligations regarding their relationships (the
"Original Shareholders Agreement");
WHEREAS, Comcast, BTH, BTH Intercable and BTH (US Cable) Limited, a
British Virgin Islands corporation f/k/a Bell Canada International BVI III
Limited ("US Cable" and together with BTH and BTH Intercable the "BTH Entities")
have entered into a Purchase and Sale Agreement, dated as of May 22, 1998,
providing, among other things, for the acquisition by Comcast of the Control
Shares at such time that certain of the BTH Entities (or their agents) are
entitled to acquire the Control Shares pursuant to the Control Option (the
"Original Comcast/BTH Agreement");
WHEREAS, conditioned on the terms hereof, the Jones Entities and
Comcast desire to expedite the consummation of the transactions contemplated by
the Option Agreements;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Jones Entities and certain of the BTH Entities are amending the
Option Agreements which amendments provide for the immediate acceleration of the
exercise of the Control Option and the ultimate acquisition of the Control
Shares by Comcast;
<PAGE>
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Company, Jones, International and BTH have entered into an
agreement of even date herewith providing for the amendment of certain rights
and obligations of the parties under the Original Shareholders Agreement (the
Original Shareholders Agreement as so amended, the "Shareholders Agreement"),
and the other Jones Entities and BTH Entities have also entered into such
agreement of even date herewith to provide for the mutual release, effective as
of the Closing Date, of certain claims each of the Jones Entities, the Company
and the BTH Entities may have against each other.
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Comcast and the BTH Entities have entered into an amendment to the
Original Comcast/BTH Agreement amending, among other things, the timing of the
"Initial Closing" and "Final Closing" and providing for the "Simultaneous
Closing" (as such terms are defined in the Comcast/BTH Agreement) of the
transactions contemplated by the Comcast/BTH Agreement, which Simultaneous
Closing shall occur on the same date as the Closing (as defined below) (the
Original Comcast/BTH Agreement as so amended, the "Comcast/BTH Agreement"); and
WHEREAS, Comcast and the Jones Entities desire to set forth their
agreement regarding certain matters relating to the transactions contemplated by
the amendments to the Option Agreements, the Comcast/BTH Agreement and the
Shareholders Agreement;
THEREFORE, in consideration of the mutual covenants contained herein
and intending to be legally bound hereby, the parties agree as follows.
1. Closing.
(a) The closing of the transactions contemplated
hereby (the "Closing") shall take place on the same date as the Simultaneous
Closing at the offices of Dechert Price & Rhoads, 4000 Bell Atlantic Tower, 1717
Arch Street, Philadelphia, PA 19103 as soon as is reasonably practicable after
the date on which the conditions specified in Sections 3 and 4 shall be
fulfilled or waived. The date on which the Closing occurs is sometimes referred
to herein as the "Closing Date". Comcast shall notify to the extent possible the
Jones Entities of the expected Closing Date no less than three days prior to the
Closing Date.
(b) At the Closing, the parties agree that the
following events shall occur in the following sequence:
(i) The directors of the Company other than
the Joint Nominees (as defined in the Shareholders Agreement) shall resign
seriatim and the remaining directors shall appoint individuals designated by
Comcast to fill the vacancies created thereby.
(ii) The purchase and sale of the Control
Shares shall occur (the "Option Closing").
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(iii) The Simultaneous Closing shall occur.
(c) If the Option Closing and the Simultaneous
Closing under the Comcast/BTH Agreement shall not have occurred on the Closing
Date, then all of the transactions and agreements to be effected at the Closing
shall be rescinded and deemed not to have occurred.
2. Initial Consideration.
(a) In consideration for the Jones Entities entering
into this Agreement, Comcast agrees that, on the date that the Jones Entities
pledge the Pledged Shares (as defined herein) pursuant to Section 9(e) hereof,
it will deposit with International $50,000,000 in cash (the "Initial
Consideration") by wire transfer of immediately available funds to a bank
account designated by International. The parties acknowledge and agree that the
Initial Consideration, together with interest thereon, shall be a credit against
the aggregate Purchase Price (as such term is defined in the Option Agreements)
required to be paid upon the closing of the purchase and sale of all of the
Optioned Shares, as more fully described in the Option Agreements.
(b) In the event that this Agreement is terminated
for any reason other than pursuant to Section 16(c) hereof or the Closing fails
to occur on the Closing Date for any reason other than as set forth in Section
16(c), the Jones Entities agree to pay to Comcast, upon delivery by any Jones
Entity of any notice of termination or upon demand by Comcast, an amount equal
to the Initial Consideration plus interest calculated at the Applicable Rate
from the date the Initial Consideration is deposited with the Jones Entities to
and including the date the Jones Entities repay such Initial Consideration.
"Applicable Rate" means an interest rate per annum at which deposits in United
States dollars appears on page 3750 (or any successor page thereto) of the Dow
Jones Telerate Screen for a ninety day period, plus 1/2%. The Applicable Rate
for any period shall be determined as of the date the Initial Consideration is
deposited with the Jones Entities, and shall be adjusted quarterly on the first
business day of each January, April, July and October through the date the Jones
Entities repay the Initial Consideration (or the Initial Consideration is
credited against the Purchase Price payable in respect of the Optioned Shares
pursuant to the Option Agreements).
(c) In the event that this Agreement is validly
terminated by the Jones Entities pursuant to Section 16(c) hereof or the Closing
fails to occur on the Closing Date for the reason set forth in Section 16(c),
the parties agree that the damages suffered by the Jones Entities would be
speculative and difficult to measure and, therefore, the Jones Entities shall be
entitled to retain the Initial Consideration (together with any interest earned
thereon by the Jones Entities) as liquidated damages and a sole remedy for
Comcast's breach of its obligations under this Agreement; provided however, that
nothing contained in this clause (c) shall preclude the Jones Entities from
seeking specific performance of Comcast's obligations hereunder prior to the
termination of this Agreement.
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(d) The Jones Entities shall be entitled to retain
the Initial Consideration (together with any interest earned thereon by the
Jones Entities) upon consummation of the purchase and sale of the Optioned
Shares.
3. Conditions to the Obligations of Comcast. The obligation of
Comcast to take any action required to be taken by Comcast at or following the
Closing shall be subject to the fulfillment or waiver of each of the following
conditions:
(a) The waiting period (including any extension
thereof resulting from additional inquiries, if any) under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") applicable to the
consummation of the transactions contemplated hereby (including the consummation
of the exercise of the Control Option and the Simultaneous Closing under the
Comcast/BTH Agreement) shall have expired or been earlier terminated.
(b) All authorizations, consents, approvals or other
actions by, in respect of or filings with any Governmental Authority in the
United States, England or Spain, or any other country where any Intercable Group
Entity conducts material business required (including the obtaining of any
approvals from Franchise Authorities) to permit the consummation of the
transactions contemplated hereby shall have been taken or obtained, as the case
may be, and shall be in full force and effect; provided that if all
authorizations, consents and approvals from applicable Franchise Authorities
necessary to effect the change of control of the Franchises (i) relating to the
Franchises (whether in Owned Systems or Managed Systems) set forth on Schedule
F, (ii) relating to Franchises in Managed Systems which, as of the Closing Date,
are subject to a letter of intent or agreement of sale providing for the sale or
other disposition of such Managed System to a Person other than the Company (or
its wholly owned Subsidiaries), and (iii) relating to Franchises with not less
than 10,000 basic subscribers in Systems (whether Owned Systems or Managed
Systems) acquired by any Intercable Group Entity (except for Managed Systems
which, as of the Closing Date, are subject to a letter of intent or agreement of
sale providing for the sale or other disposition of such Managed System to the
Company or one of its wholly owned Subsidiaries) after the date hereof (the
"Required Franchise Approvals") shall have been so obtained, be in effect and
not be subject to withdrawal or appeal then the condition contained in this
paragraph (b) shall be deemed to be fulfilled as it relates to authorizations,
consents or approvals from applicable Franchise Authorities on the date on which
all of the Required Franchise Approvals are so obtained and are in effect and
not subject to withdrawal or appeal and provided further that this condition
shall not be satisfied if any Required Franchise Approval shall not have been
obtained.
(c) There shall not then be in effect any applicable
law, rule or regulation or any judgment, injunction, order or decree that has
one or more of the effects described in clauses (i), (ii) or (iii) of the
following paragraph (d); provided that if after the date hereof Comcast or any
of its Affiliates enters into a new line of business and at such time there is a
law, rule or regulation that has, or is reasonably expected to have, one or more
of such effects, then this paragraph (c) will not apply to any such
law, rule or regulation.
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(d) There shall not then be instituted or pending any
action or proceeding before any federal or state court or other Governmental
Authority brought by a Governmental Authority challenging the consummation of
the transactions contemplated hereby or seeking to (i) prevent Comcast from
consummating the transactions contemplated hereby, including exercising (or
directing BTH Intercable (or its Affiliates and agents) to exercise) the Control
Option or prevent BTH Intercable (or its Affiliates and agents) from exercising
the Control Option, (ii) require Comcast to divest, or otherwise limit Comcast's
ability to exercise full rights of ownership over the Control Option or the
Optioned Shares or any shares of capital stock of the Company owned by Comcast,
BTH, BTH Intercable or their respective Affiliates, or (iii) require, after the
exercise of the Control Option, Comcast or the Intercable Group to divest any
material business or assets or which would impose a material limitation on the
conduct of Comcast's or the Intercable Group's business; provided that if after
the date hereof Comcast or any of its Affiliates enters into a new line of
business and at such time there is a law, rule or regulation that has, or is
reasonably expected to have, one or more of the foregoing effects, then this
paragraph (d) will not apply to actions or proceedings that seek to enforce such
law, rule or regulation.
(e) The Intercable Group Entities shall have received
all material third party consents required to be obtained in connection with the
Closing (including all consents required under any loan or security agreement,
indenture or other agreement in respect of borrowed funds to which any
Intercable Group Entity is a party and waivers of all purchase rights or rights
of first offer or rights of first refusal triggered by the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby held by any Franchise Authority, or other third party in respect of any
Franchise of the Intercable Group Entities but excluding consents from Franchise
Authorities necessary to effect the change of control of the Franchises held by
Intercable Group Entities), in each case in form and substance reasonably
satisfactory to Comcast.
(f) Each of the covenants and agreements to be
performed by the Jones Entities under this Agreement at or prior to the Closing
shall have been duly performed in all material respects.
(g) Each of the representations and warranties of the
Jones Entities contained in this Agreement shall, in the case of those
representations and warranties that are not qualified by materiality, be true,
complete and correct in all material respects, and in the case of those
representations and warranties that are qualified by materiality shall be true,
complete and correct in all respects, as of each of (i) the date of this
Agreement and (ii) unless otherwise specified as having been made as of a
specific date, the Closing Date, in each case as though newly made at such time.
(h) Within forty-five (45) days of the date hereof,
the Company shall have amended the Severance Plan adopted by the Board of
Directors on August 11, 1998, so that such Severance Plan conforms to the
requirements of Schedule B.
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(i) The Simultaneous Closing shall have occurred on
the Closing Date.
4. Conditions to the Obligations of the Jones Entities. The
obligations of the Jones Entities to take any action required by them at or
following the Closing shall be subject to the fulfillment or waiver of each of
the following conditions:
(a) The waiting period (including any extension
thereof resulting from additional inquiries, if any) under the HSR Act
applicable to the consummation of the transactions contemplated hereby
(including the consummation of the exercise of the Control Option and the
Simultaneous Closing under the Comcast/BTH Agreement) shall have expired or been
earlier terminated.
(b) There shall not then be in effect any applicable
law, rule or regulation or any judgment, injunction, order or decree that would
prevent the Jones Entities from consummating the transactions contemplated
hereby.
(c) Each of the covenants and agreements to be
performed by Comcast hereunder at or prior to the Closing shall have been duly
performed in all material respects.
(d) Each of the representations and warranties of
Comcast contained in this Agreement shall, in the case of those representations
and warranties that are not qualified by materiality, be true, complete and
correct in all material respects, and in the case of those representations and
warranties that are qualified by materiality shall be true, complete and correct
in all respects, as of each of (i) the date of this Agreement and (ii) unless
otherwise specified as having been made as of a specific date, the Closing Date,
in each case as though newly made at such time.
(e) The Simultaneous Closing shall have occurred on
the Closing Date.
5. Representations and Warranties of the Jones Entities. Each
Jones Entity jointly and severally represents and warrants to Comcast that, as
of the date hereof and the Closing Date (except for the representations
contained in Section 5(d) and clause (ii) of Section 5(e) which representation
is made only as of the date hereof):
(a) Such Jones Entity is the sole record and
beneficial owner of the Optioned Shares and the shares of Class A Stock, par
value $.01 per share of the Company (the "Class A Shares") set forth opposite
its name on Schedule A free and clear of any mortgage, lien, pledge, charge,
security interest, encumbrance or other adverse claim of any kind ("Liens")
(other than the Option Agreements and the Shareholders Agreement) and any other
limitation or restriction (including any limitation or restriction on the right
to vote, sell or otherwise dispose of or transfer any Optioned Share or Class A
Share), other than offer and sale restrictions imposed by securities laws and
the Shareholders Agreement. At the Closing, each Jones Entity will convey good
and valid title to the Optioned Shares set forth opposite its name on Schedule A
free and
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clear of any Lien and any such limitation or restriction (other than
offer and sale restrictions imposed by securities laws).
(b) Such Jones Entity has been duly organized, and is
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.
(c) The execution, delivery and performance by each
Jones Entity of this Agreement are within such Jones Entity's power and have
been duly authorized by all necessary action on the part of such Jones Entity.
This Agreement has been duly executed and delivered by each Jones Entity, and
assuming the accuracy of Comcast's representations and warranties contained
herein, is a valid and binding agreement of such Jones Entity.
(d) Assuming the accuracy of Comcast's
representations and warranties contained herein, the execution, delivery and
performance by each Jones Entity of this Agreement requires no action by any
Jones Entity or any Intercable Group Entity in respect of, or filing by any
Jones Entity or any Intercable Group Entity with, any Governmental Authority
other than (i) compliance with any applicable requirements of the HSR Act and
(ii) actions or filings with Franchise Authorities and the Federal
Communications Commission and (iii) any such action or filing as to which the
failure to make or obtain would not reasonably be expected to have, individually
or in the aggregate, a material adverse effect on the business, assets, results
of operations, properties or condition (financial or otherwise) of any
Intercable Group Entities taken as a whole or the ability of such Jones Entity
to consummate the transactions contemplated hereby or perform its obligations
hereunder.
(e) The execution, delivery and performance by each
Jones Entity of this Agreement do not: (i) violate its articles of incorporation
or trust, bylaws or similar organizational documents, (ii) assuming the accuracy
of Comcast's representations and warranties herein violate any applicable law,
rule, regulation, judgment, injunction, order or decree binding on such Jones
Entity or any Intercable Group Entity, (iii) assuming the accuracy of Comcast's
representations and warranties herein, require any consent or other action by
any Person under, or constitute a default under, any material agreement or other
instrument binding upon such Jones Entity or any Intercable Group Entity, (iv)
result in the creation or imposition of any Lien on any material asset of such
Jones Entity or any Intercable Group Entity, or (v) require any consent or other
action by any Person under, or constitute a default under, (x) any agreement or
other instrument binding upon any Intercable Group Entity providing for the sale
of a Managed System to a Person other than the Company or its wholly owned
Subsidiaries or (y) any Partnership Agreement or similar organizational document
of any Cable Partnership, except in the case of clauses (ii), (iii) and (iv), to
the extent that any such violation, failure to obtain any such consent or other
action, default, right, loss or Lien would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the business,
assets, results of operations, properties or financial condition of such
Intercable Group Entities taken as a whole or the ability
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of such Jones Entity to consummate the transactions contemplated hereby or
perform its obligations hereunder and except in the case of clauses (ii) and
(iii), actions and consents required under the HSR Act and the Communications
Act of 1934, as amended, and in respect of Franchises, loan and lease agreements
and other agreements and instruments customarily entered into by cable operators
in the ordinary course of business, including agreements with utilities,
programming agreements and retransmission consent agreements.
(f) There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of any Jones Entity or its Affiliates who might be entitled to any fee or
commission from Comcast or any Intercable Group Entity in connection with the
transactions contemplated by this Agreement.
(g) Options to purchase no more than 1,353,083 shares
of Class A Common Stock of the Company are outstanding and there are no options
outstanding to purchase any shares of Common Stock of the Company. The Company
has not granted any options to purchase either Class A Common Stock or Common
Stock since July 28, 1997.
6. Representations and Warranties of Comcast. Comcast
represents and warrants to the Jones Entities that, as of the date hereof and
the Closing Date (except for the representation contained in Section 6(c) and
clause (ii) of Section 6(d) which representation is made only as of the date
hereof):
(a) Comcast has been duly organized, and is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.
(b) The execution, delivery and performance by
Comcast of this Agreement are within Comcast's power and have been duly
authorized by all necessary action on the part of Comcast. This Agreement has
been duly executed and delivered by Comcast, and assuming the accuracy of the
representations and warranties of the Jones Entities contained herein, is a
valid and binding agreement of Comcast.
(c) Assuming the accuracy of the Jones Entities'
representations and warranties contained herein, the execution, delivery and
performance by Comcast of this Agreement requires no action by Comcast in
respect of, or filing by Comcast with, any Governmental Authority other than (i)
compliance with any applicable requirements of the HSR Act, (ii) filings with
respect to Franchises of the Intercable Group Entities and (iii) any such action
or filing as to which the failure to make or obtain would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the ability of Comcast to consummate the transactions contemplated hereby or
perform its obligations hereunder.
(d) The execution, delivery and performance by
Comcast of this Agreement does not: (i) violate its articles of incorporation or
bylaws, (ii) assuming the accuracy of the representations and warranties of the
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Jones Entities contained herein, violate any applicable law, rule, regulation,
judgment, injunction, order or decree binding on Comcast, (iii) assuming the
accuracy of the representations and warranties of the Jones Entities contained
herein, and assuming that the Intercable Group Entities have all powers,
licenses, authorizations, permits, consents and approvals required to carry on
their businesses as now conducted, require any consent or other action by any
Person under, or constitute a default under, any material agreement or other
instrument binding upon Comcast, or (iv) result in the creation or imposition of
any Lien on any material asset of Comcast, except in the case of clauses (ii),
(iii) and (iv), to the extent that any such violation, failure to obtain any
such consent or other action, default, right, loss or Lien would not reasonably
be expected to have, individually or in the aggregate, a material adverse effect
on the ability of Comcast to consummate the transactions contemplated hereby or
perform its obligations hereunder.
(e) There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Comcast or its Affiliates who might be entitled to any fee or commission from
any Jones Entity or any Intercable Group Entity in connection with the
transactions contemplated by this Agreement.
7. Reasonable Best Efforts; Further Assurances. Comcast and
the Jones Entities will each execute and deliver or cause to be executed and
delivered all further documents and instruments and use their reasonable best
efforts to secure such consents and take, or cause to be taken, all such further
action and to do, or cause to be done, all things as may be reasonably necessary
in order to consummate the transactions contemplated hereby or to enable Comcast
to enjoy all of the benefits and rights incident to the ownership of the Control
Shares. Comcast and the Jones Entities shall each use their reasonable best
efforts to, and the Jones Entities shall use their reasonable best efforts to
cause the Intercable Group Entities to, cooperate with one another (a) in
determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from any third party, in connection with the
consummation of the transactions contemplated by this Agreement and (b) in
taking such actions or making any such filings, furnishing information required
in connection therewith and seeking timely to obtain any such actions, consents,
approvals or waivers, including making such filings on FCC Form 394 ("394
Filings") as may be necessary to obtain the required authorizations, consents
and approvals from the applicable Franchise Authorities relating to the
Franchises held by the Intercable Group Entities; provided that no such 394
Filings shall be required to be filed prior to November 1, 1998 with respect to
Franchises relating to Managed Systems, which, on the date hereof, are and
thereafter remain subject to a letter of intent or agreement of sale providing
for the sale or other disposition of such Managed System to a Person other than
the Company (or its wholly-owned Subsidiaries). In connection with the
foregoing, Comcast may also seek that any such actions, consents, approvals or
waivers include the immediate transfer on the Closing Date of the Control Shares
by Comcast to Comcast Cable Communications, Inc., a wholly-owned subsidiary of
Comcast and the parent company of Comcast's cable division. Comcast and the
Jones Entities shall use their reasonable best efforts to, and the Jones
Entities shall use their reasonable best efforts to cause the Intercable
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Group Entities to, each make an appropriate filing of a Notification and Report
Form pursuant to the HSR Act no later than ten business days from the date
hereof; and each such filing shall request early termination of the waiting
period imposed by the HSR Act. Comcast and the Jones Entities shall not be
required to agree to any consent decree or order in connection with any
objections of the Department of Justice or the Federal Trade Commission to the
transactions contemplated by this Agreement.
8. Covenants and Agreements of Comcast.
(a) (i) On the Closing Date, Comcast agrees to enter
into, or cause one or more of its appropriate Affiliates to enter into an
agreement with Knowledge TV, Inc. ("KTV") in the form of Exhibit D attached
hereto.
(ii) On the Closing Date, Comcast agrees to
enter into, or cause one or more of its appropriate Affiliates to enter into (x)
an amendment to that certain Affiliate Agreement dated December 10, 1997,
between Comcast and Great American Country, Inc. ("GAC"), which amendment shall
be in the form of Exhibit A attached hereto, and shall provide for the
elimination of the current incremental service subscriber launch commitment and
(y) an agreement with GAC in the form of Exhibit E attached hereto.
(b) Comcast acknowledges effective as of and
conditioned upon the consummation of the Closing, the Option Closing and the
Simultaneous Closing the existence of (i) that certain lease (the "Lease"),
dated November 30, 1989, by and between the Company and Jones Properties, Inc.
(the "Landlord"), together with that certain Sublease, dated December 1, 1994
between the Company and Jones International, Ltd., (ii) that certain Services
Agreement, dated June 9, 1994, by and between the Company and Jones Interactive,
Inc., (iii) that certain Amended and Restated Jones Infomercial Networks, Inc.
Affiliate Agreement, dated as of August 1, 1994, by and between Jones
Infomercial Networks, Inc. and the Company, (iv) that certain Galactic Radio
Affiliate Agreement, dated as of May 1, 1990, by and between Galactic Radio,
Inc. and Jones Programming Services, Inc., (v) the KTV and GAC Agreements (as
defined herein), and (vi) the transactions, agreements and/or arrangements as
described in the Company's Form 10-K for the year ended December 31, 1997 (the
"1997 Form 10-K") (the matters listed in clauses (i) through (vi), the "Existing
Related Party Agreements") and that such Existing Related Party Agreements are
binding obligations of the Company except as enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent
transfer or similar laws affecting the enforcement of creditor's rights
generally and by the effect of general principles of equity (regardless of
whether asserted in a proceeding at law or in equity). Comcast agrees effective
as of and conditioned upon the consummation of the Closing, the Option Closing
and the Simultaneous Closing that it shall not assert directly or indirectly in
any claim, suit or action or otherwise, the invalidity or unenforceability, in
whole or in part, of any Existing Related Party Agreement.
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(c) Comcast, on behalf of itself and its Affiliates,
effective as of and conditioned upon the consummation of the Closing, the Option
Closing and the Simultaneous Closing, (i) waives and releases the Jones
Entities, their Affiliates and their Affiliates' employees, officers, directors,
shareholders and their predecessors, successors and assigns from any
obligations, actions, causes of action, demands, damages, costs, expenses and
liabilities whatsoever at law or in equity known or unknown, fixed or contingent
("Claims") which Comcast and its Affiliates ever had, now has or which their
successors or assigns can, shall or may have against them and (ii) agrees not to
cause any Intercable Group Entity to assert any Claims against them, in the case
of both (i) and (ii) arising from (x) the adoption of the proposed resolutions
set forth on Schedules B or C, (y) any transaction or agreement between any
Jones Entity or an Affiliate thereof and any Intercable Group Entity consummated
or terminated prior to and no longer in effect as of the date hereof and (z)
arising from the Existing Related Party Agreements. In the event this Agreement
is terminated the execution and delivery of this Agreement including this
Section 8(c) shall not be deemed a waiver by Comcast of each Claim which it may
have against any of the Jones Entities.
(d) Comcast agrees that, for six years after the
Closing, it shall use its reasonable best efforts to cause the Company not to
amend, repeal or otherwise modify any rights to indemnification by the Company
which exist as of the Closing Date in favor of each present and former director,
officer, employee or agent of the Company under the Company's articles of
incorporation or bylaws, in each case as in effect on the date of this
Agreement, in any manner that would adversely affect the rights of individuals
who, at any time prior to the Closing, were directors, officers or employees of
the Company to receive indemnification under the Company's articles of
incorporation and bylaws for actions occurring prior to the Closing. Comcast
shall use its reasonable best efforts to cause the Company to maintain in effect
for six years from the Closing Date, if available, the current directors' and
officers' liability insurance policies maintained by the Company covering those
persons and positions who are currently covered by such policies (provided that
the Company may substitute therefor policies of at least the same coverage
containing terms and conditions which are not less favorable) with respect to
matters occurring prior to the Closing Date; provided, however, that in no event
shall Comcast be required to use its reasonable best efforts to cause the
Company to expend pursuant to this paragraph (e) more than an amount per year
equal to one hundred fifty percent (150%) of current annual premiums paid by the
Company for such insurance. In the event that, but for the proviso to the
immediately preceding sentence, the Company would be required to expend more
than one hundred fifty percent (150%) of current annual premiums, Comcast shall
use its reasonable best efforts to cause the Company to obtain the maximum
amount of such insurance obtainable by payment of annual premiums equal to one
hundred fifty percent (150%) of current annual premiums.
(e) Comcast agrees that (i) it shall perform its
obligations under the Comcast/BTH Agreement; (ii) it shall not, without the
written consent of the Jones Entities, amend the Comcast/BTH Agreement to add
any additional conditions to the obligations of the parties to the Comcast/BTH
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Agreement to consummate the Simultaneous Closing or otherwise adversely affect
in a material way the right or ability of any party thereto to consummate the
Closing or the Simultaneous Closing; and (iii) it shall enforce vigorously any
rights it may have against the BTH Entities in respect of any breach by them of
their obligations under the Comcast/BTH Agreement, including seeking specific
performance by the BTH Entities of their obligations thereunder.
(f) Comcast agrees that it shall pay to
International, at the Closing, a fee of $1,500,000 on account of financial
advisory, brokerage and consulting services performed by International for the
Company.
9. Covenants and Agreements of the Jones Entities.
(a) At the Closing (but in any event prior to the
closing of the purchase and sale of the Optioned Shares, Jones agrees to resign
as a director, and Jones and International agree to cause each of the other
Jones Nominees (as such term is defined in the Shareholders Agreement) to
resign, seriatim from the Company's board of directors and to designate as Jones
Nominees such persons as may be selected by Comcast and the Jones Entities agree
to vote in favor of and Jones and International agree to cause the other Jones
Nominees, subject to their fiduciary duties as provided in Section 2.4(b) of the
Shareholders Agreement, to vote in favor of electing such individuals designated
by Comcast to fill the vacancies created by such resignations and by the
resignations of the Investor Nominees (as such term is defined in the
Shareholders Agreement) pursuant to the Comcast/BTH Agreement. The Jones
Entities agree to follow Comcast's direction with respect to the sequence of
such resignations and the filling of such vacancies.
(b) The Jones Entities agree that to the extent the
Company does not adopt any of the proposed resolutions set forth on Schedule C
hereto prior to the Closing, then following the Closing, the Jones Entities may
offer the Company the opportunity to enter into (and Comcast agrees to use its
reasonable best efforts after the Closing to cause the Company to consider
promptly and in any event within 30 days after receipt of such offer) the same
transactions with the Jones Entities as are authorized by such proposed
resolution; provided that the Jones Entities shall, following the Closing, offer
such opportunity to the Company with respect to those resolutions so indicated
on Schedule C. The Jones Entities agree that any such offer shall remain open
for at least 30 days following the Closing.
(c) Each of the Jones Entities on behalf of itself
and each of its Affiliates (the "Releasing Parties"), effective as of and
conditioned upon the consummation of the Closing, the Option Closing and the
Simultaneous Closing, releases and forever holds harmless, and waives and
relinquishes from and against all obligations, actions, causes of action,
claims, demands, damages, costs, expenses and liabilities whatsoever, at law or
in equity, known and unknown, fixed or contingent which the Releasing Parties
ever had, now have or which their predecessors, successors, assigns, heirs,
executors and administrators hereafter can, shall or may have against (i) each
of the BTH Entities and (ii) Comcast and, in the case of both (i) and (ii),
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their Affiliates, and their (and their Affiliates') officers, directors,
employees, shareholders and their predecessors, successors or assigns on account
of or arising out of (A) any matter, cause or thing whatsoever relating to the
execution and delivery of the Comcast/BTH Agreement and the consummation of the
transactions contemplated thereby; and (B) the BTH Entities having provided to
Comcast any information received by them or the Investor Nominees. In the event
that this Agreement is terminated the execution and delivery of this Agreement
including this Section 9(c) shall not be deemed to be a waiver by the Jones
Entities of any claim they may have against Comcast arising out of or related to
the execution, delivery or performance of the Comcast/BTH Agreement.
(d) In consideration of Comcast's execution and
delivery of this Agreement and the Comcast/BTH Agreement, the Jones Entities
agree to take any and all actions and refrain from taking any and all actions
and to use their reasonable best efforts to cause the Company to take any and
all actions and refrain from taking any and all actions necessary or advisable
to seek a stay any proceedings relating to that certain lawsuit brought by BTH
against Jones Intercable, Inc., Jones International, Ltd., Jones Internet
Channel, Inc. and Glenn R. Jones, which was brought before the U.S. District
Court for the District of Colorado (the "Litigation"), including, without
limitation, any hearings or proceedings relating to any damage claims relating
to the subject matter of the Litigation and the appeal of the order entered on
May 5, 1998 until the first to occur of (i) the date on which both the Closing
and the Simultaneous Closing shall have occurred or (ii) the termination of this
Agreement as provided in Section 16 hereof and, effective as of the Closing
Date, to release any and all claims which they may have against the BTH Entities
and their Affiliates in respect of the Litigation on the terms and conditions
set forth in the Agreement and Amendment No. 1 to Shareholders Agreement of even
date herewith.
(e) The Jones Entities agree, as a condition to
Comcast's obligation to deliver the Initial Consideration, to pledge 2,000,000
Class A Shares owned by the Jones Entities as of the date hereof (the "Pledged
Shares") to Comcast to secure the repayment of the Initial Consideration
pursuant to Section 2(b). The Jones Entities shall pledge the Pledged Shares by
delivering them to Comcast and executing and delivering to Comcast a pledge
agreement containing the same terms as are contained in the pledge agreement in
the form attached as Exhibit C (the "Pledge Agreement"). Comcast agrees to
terminate its security interest in and release the Pledged Shares to the Jones
Entities upon the earliest to occur of (i) the Closing, (ii) the valid
termination of this Agreement pursuant to Section 16(c) hereof or (iii)
repayment to Comcast of the Initial Consideration plus interest as provided in
Section 2(b). In the event that the Jones Entities breach their obligations to
repay the Initial Consideration plus interest as provided in Section 2(b),
Comcast shall be entitled to exercise its rights under the Pledge Agreement;
provided that Comcast shall remain entitled to all other remedies available to
it at law or in equity in respect of such breach and the exercise by Comcast of
its rights under the Pledge Agreement shall not relieve the Jones Entities of
any liability they may have in respect of any breach of this Agreement.
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<PAGE>
(f) The Jones Entities agree that they shall cause
GAC to enter into an amendment, effective as of and conditioned upon the
consummation of the Closing, the Option Closing and the Simultaneous Closing, to
the GAC Programming Agreement substantially in the form of Exhibit A hereto.
(g) The Jones Entities agree that they shall cause
KTV, formerly known as Mind Extension University, Inc. and GAC to amend,
effective as of and conditioned upon the consummation of the Closing, the Option
Closing and the Simultaneous Closing, those certain Affiliate Agreements with
the Company, dated December 28, 1993, and January 1, 1996, with KTV and GAC,
respectively (the "KTV/GAC Agreements") to provide that the term of such KTV/GAC
Agreements shall expire no later than June 9, 2009.
(h) Effective as of and conditioned upon the
consummation of the Closing, the Option Closing and the Simultaneous Closing,
the Jones Entities and Landlord each agree that any extension of the Lease
beyond its stated term is required to be approved by the Company.
(i) The Jones Entities agree that they waive,
effective as of and conditioned upon the Closing, the Option Closing and the
Simultaneous Closing and conditioned further upon an amount equal to $50,000,000
of the Purchase Price (as defined in the Comcast/BTH Agreement) being allocated
to the Affiliate Stock in the amounts previously disclosed to the Jones
Entities, any rights they may have under the Education and Entertainment
Shareholders Agreements (including Section 4.5 thereof) with respect to the sale
of the Affiliate Stock (as such term is defined in the Comcast/BTH Agreement) to
Comcast at the Simultaneous Closing pursuant to the Comcast/BTH Agreement. In
addition, the Jones Entities consent to the assignment, effective as of and
conditioned upon the consummation of the Closing, the Option Closing and the
Simultaneous Closing, of all of the rights and obligations of BTH under the
Education and Entertainment Shareholders Agreements and the related Registration
Rights Agreements. "Education and Entertainment Shareholders Agreements" means
that certain Shareholders Agreement dated as of December 20, 1994 among Jones,
International, Bell Canada International Inc. and Jones Entertainment Group,
Ltd. and that certain Shareholders Agreement dated as of December 20, 1994 among
Jones, International, Bell Canada International Inc. and Jones Education
Networks, Inc.
(j) The Jones Entities agree that prior to the
Closing without the prior written consent of Comcast they and their Affiliates
shall not enter into any contract, agreement, understanding or transaction
(including the amendment, modification or renewal of any existing contract,
agreement, arrangement or understanding) with any Intercable Group Entity other
than those transactions specifically authorized by the resolutions listed on
Schedule B.
(k) The Jones Entities agree that (i) they shall
perform their obligations under the Option Agreements and the Shareholders
Agreement (including the Agreement and Amendment No.1 to Shareholders Agreement
of even date herewith); (ii) they shall not, without the written consent of
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Comcast, amend any of their rights under the Shareholders Agreement (including
the Agreement and Amendment No. 1 to Shareholders Agreement of even date
herewith); and (iii) they shall enforce vigorously any rights they may have
against the BTH Entities in respect of any breach by them of their obligations
under the Shareholder's Agreement (including the Agreement and Amendment No. 1
to Shareholders Agreement), including seeking specific performance by the BTH
Entities of their obligations thereunder.
10. Additional Covenants of the Jones Entities with Respect to
the Company.
(a) The Jones Entities agree that they shall use
their reasonable best efforts to cause the Company not to take or agree to take,
and not to permit any Subsidiary of the Company to take or agree to take,
directly or indirectly, any of the following actions prior to the Closing
without the prior written consent of Comcast or except pursuant to the
procedures described in paragraph (b) below:
(i) authorize, sell, distribute or otherwise
issue, or grant rights with respect to, any shares of capital stock or
securities convertible into or exchangeable for shares of capital stock of the
Company or its Subsidiaries (or any stock appreciation or similar interests or
rights with respect to such securities) except for (A) any issuances of capital
stock pursuant to the terms of stock options issued and outstanding as of the
date hereof, (B) authorizations, sales, distributions or other issuances of
capital stock of a Subsidiary of the Company to Persons that are wholly-owned
Intercable Group Entities (except in connection with sales of capital stock of a
Subsidiary of the Company permitted by subparagraphs (v) and (vi) of Section
2.6(a) of the Shareholders Agreement and Section 10(a)(ii) of this Agreement),
and (C) Permitted Equity Issuances as such term is defined in the Shareholders
Agreement.
(ii) any action described in Section
2.6(a)(ii) through (vii), inclusive, and Section 2.6(a)(ix) and (xi) of the
Shareholders Agreement.
(iii) enter into any contract, agreement,
arrangement, understanding or transaction (including the amendment, modification
or renewal of any existing contract, agreement, arrangement or understanding)
with any Jones Entity or BTH Entity or any Affiliate of any Jones Entity or BTH
Entity other than those transactions specifically identified by the resolutions
listed on Schedule B. For purposes of this clause (iii) only no Intercable Group
Entity shall be deemed an Affiliate of any Jones Entity or any BTH Entity.
(iv) any action that would reasonably be
expected to, as a result of a law, rule or regulation of a Governmental
Authority organized within the United States of America, England or any other
jurisdiction where the Intercable Group conducts a material portion of its
business, (A) prevent Comcast, BTH or their Affiliates from consummating the
transactions contemplated hereby or from otherwise obtaining control of the
Company, (B) require Comcast, BTH or their Affiliates to divest or otherwise
limit Comcast's ability to exercise full rights of ownership over the Control
Option or any shares of capital stock of the Company (whether acquired upon
exercise of the Control Option or otherwise)
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<PAGE>
or (C) require, after the exercise of the Control Option, Comcast, BTH or their
Affiliates or the Intercable Group to divest any material business or assets or
impose a material limitation on the conduct of Comcast's or the Intercable
Group's business; provided that (1) if on the date hereof the activities
conducted by Comcast or BTH are subject to any such law, rule or regulation
(based on interpretations in effect on the date hereof) that has, or would
reasonably be expected to have, one or more of the effects described in clauses
(A), (B) or (C), or if after the date hereof Comcast or BTH enters into a new
line of business and at such time there is a law, rule or regulation that has,
or would reasonably be expected to have, one or more of the effects described in
clauses (A), (B) or (C), then in each case this subparagraph (iv) will not apply
to actions of the Intercable Group that would reasonably be expected to have
such effects under such law, rule or regulation, (2) the Jones Entities shall
not be in breach of this clause (iv) in matters relating to Franchise agreements
and material contracts if the Company is in compliance with its obligations
under Section 5.2 of the Shareholders Agreement concerning such matters and if
the Company is in compliance with the obligations it would have under Section
5.2 of the Shareholders Agreement if Comcast were "Investor" as such term is
used in the Shareholders Agreement, and (3) in the case of clauses (A) and (B)
the effect of any such action must be due to the business or assets of Comcast
or BTH (and not an agent thereof).
(v) declare or make any provision for
payment of, or the setting aside of assets with respect to, any dividend or
other distribution of any property by the Company with respect to any shares of
capital stock of the Company.
(b) If the Company wishes to take an action described
in paragraph (a) of this Section 10, the Jones Entities shall cause the Company
to deliver to Comcast a written notice describing in reasonable detail the
action proposed to be taken and expressly requesting Comcast's consent to such
action pursuant to this Section 10. Such notice shall be accompanied by such
additional information as is reasonably required to enable Comcast to evaluate
such proposed action. Upon receipt of such notice and of any additional
information as may be reasonably requested by Comcast, Comcast will have ten
Business Days to exercise its right not to consent to such proposed action. If
no response is received by the Jones Entities from Comcast prior to the
expiration of such time period, the proposed action will be deemed to have been
approved by Comcast. The Jones Entities shall not be in breach of this Section
10 if such action is taken in compliance with the procedure set forth in this
paragraph.
11. Preservation of Business. Between the date hereof and the
earlier of the Closing Date and the date this Agreement is terminated, the Jones
Entities will use their reasonable best efforts to preserve, and to cause the
Company to preserve, the business organization of the Company intact and to
preserve the goodwill of the Company's (and its Subsidiaries') suppliers,
clients and others having business relationships with the Company (or its
Subsidiaries) and to operate their respective businesses in the ordinary course,
consistent with past practices.
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<PAGE>
12. Access.
(a) Immediately upon execution of this Agreement, the
Jones Entities shall use their best efforts to cause the Company to provide
Comcast and its representatives complete access to the books, records,
agreements, employees, accountants and the offices of the Company and its
Subsidiaries for the purposes of making such investigation of the business of
the Company and its Subsidiaries as Comcast shall deem necessary; provided,
however, that such investigation shall not unreasonably interfere with the
operations of the Company. Between the date hereof and the termination of this
Agreement, Jones agrees to provide to Comcast copies of all information
delivered to BTH or any Investor Nominee in accordance with the Shareholders
Agreement. In addition, the parties agree that the BTH Entities shall be
permitted to provide to Comcast all information regarding the Company received
by them or any Investor Nominee after the date hereof; provided that any such
information provided to Comcast shall be subject to paragraph (b) below.
(b) From the date hereof to the earlier of the
Closing Date or the date which is one year after the termination of this
Agreement, Comcast and its officers, directors, employees, representatives and
Affiliates will use reasonable care to avoid disclosure to third parties of
proprietary information (whether received by Comcast from the Company, the Jones
Entities or the BTH Entities) relating to the Company, except as specifically
(and only to the extent) required to be disclosed by applicable law or
administrative or legal process. For purposes of Comcast's obligations under
this Section 12, reasonable care means the same degree of care that Comcast
exercises with respect to similar types of its own proprietary information. It
is understood and agreed that: (i) Comcast will (to the extent reasonably
possible) notify the Jones Entities in writing prior to any proposed disclosure
of such nonpublic information in response to the requirements of applicable law
or administrative or legal process in order to enable the Jones Entities to seek
an appropriate protective order; (ii) Comcast may disclose any information which
(x) is or becomes publicly available other than as a result of a disclosure of
Comcast in breach of this Agreement, (y) was known to the party receiving such
information prior to the receipt thereof other than as a result of a disclosure
by Comcast in breach of this Agreement, or (z) was previously independently
developed by the party receiving such information without the assistance of
Comcast. In the event that the transactions contemplated hereby do not take
place, all original documents shall be returned by Comcast if requested by the
providing party within thirty (30) days of the termination of this Agreement;
otherwise, Comcast shall dispose of any such original documents in the normal
course of Comcast's business.
13. Costs and Expenses. Whether or not the transactions
contemplated hereby are consummated, each party shall bear its own costs and
expenses. The Jones Entities agree to indemnify, defend and hold harmless
Comcast and its Affiliates and each of their respective directors, officers,
employees, agents, contractors, successors and assigns from any claims by or
liabilities to any third party with whom the Jones Entities or their agents had
discussions regarding the disposition of their interests in the Company arising
from the consummation of the transactions contemplated hereby.
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14. Publicity. The parties agree to keep the transactions
contemplated hereby confidential until mutual agreement is reached in writing
regarding publicity or until otherwise required by law (and as to the latter the
parties will make reasonable efforts to consult with each other).
15. Standstill. From the date of the execution of this
Agreement until the Closing or termination of this Agreement, the Jones
Entities, on behalf of themselves and each of their Affiliates, agents,
officers, consultants, and representatives, agree not to solicit, encourage or
negotiate with any other party relating to or enter into any contract,
agreement, understanding or arrangement with respect to the sale of the Common
Stock of the Company owned beneficially or of record by the Jones Entities or a
transaction involving the merger, consolidation or sale of the Company or
substantially all of the Company's assets.
16. Termination. This Agreement may be terminated as follows:
(a) by mutual written consent of Comcast and the Jones Entities; (b) by Comcast
upon written notice to the other parties hereto of such termination if (x) the
Jones Entities have materially breached any of their obligations contained
herein and the Jones Entities have failed to cure such breach within fifteen
(15) calendar days of receipt of written notice of such breach from Comcast, (y)
all of the conditions to closing set forth in Sections 3 and 4 hereof shall have
been fulfilled or waived at the time of such termination except for the
condition which has not been fulfilled or waived because of the Jones Entities'
breach of this Agreement and (z) Comcast shall not be in material breach of its
obligations contained herein or in the BTH/Comcast Agreement; (c) by the Jones
Entities upon written notice to Comcast of such termination if (x) Comcast has
materially breached any of its obligations contained herein and Comcast has
failed to cure such breach within fifteen (15) calendar days of receipt of
written notice of such breach from the Jones Entities, (y) all of the conditions
to closing set forth in Sections 3 and 4 hereof shall have been fulfilled or
waived at the time of such termination except for the condition which has not
been fulfilled or waived because of Comcast's breach of this Agreement and (z)
the Jones Entities shall not be in material breach of their obligations
contained herein or in the Agreement and Amendment No. 1 to Shareholders
Agreement of even date herewith; (d) if the Closing shall not have occurred on
or prior to June 30, 1999, by Comcast upon written notice of such termination to
the other parties hereto, provided that no such notice of termination shall be
effective if at the time of such purported termination, Comcast is in material
breach of any of its obligations contained herein or in the Comcast/BTH
Agreement; or (e) if the Closing shall not have occurred on or prior to June 30,
1999, by the Jones Entities upon written notice of such termination to Comcast
and repayment to Comcast of the Initial Consideration as provided in Section
2(b) hereof, provided that no such notice of termination shall be effective if
at the time of such purported termination, any Jones Entity shall be in material
breach of any of its obligations contained herein or in the Agreement and
Amendment No. 1 to Shareholders Agreement of even date herewith. This Agreement
and the rights and obligations of the parties hereunder shall cease upon any
termination pursuant to this Section; provided that (x) the provisions of this
Section and Section 2(b), 12(b) and 13 shall survive any termination of this
Agreement and (y) nothing herein shall relieve any party from any liability for
any prior breach of this Agreement.
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<PAGE>
17. Miscellaneous.
(a) Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors. No party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
written consent of the other parties hereto, provided that Comcast may assign
its rights, but not its obligations, hereunder to any Subsidiary of Comcast.
(b) Specific Performance. The parties agree that (i)
Comcast would be irreparably damaged if for any reason any Jones Entity failed
to sell the Optioned Shares upon exercise of the Control Option or to perform
any of such Jones Entity's other obligations under this Agreement, and that
Comcast would not have on adequate remedy at law for money damages in such event
and (ii) the Jones Entities would be irreparably damaged if for any reason
Comcast failed to perform any of Comcast's obligations under this Agreement, and
that the Jones Entities would not have an adequate remedy at law for money
damages in such event. Accordingly, each party shall be entitled to specific
performance and injunctive and other equitable relief to enforce the performance
of this Agreement by the other party. This provision is without prejudice to any
other rights that each party may have against the other party for any failure to
perform their obligations under this Agreement.
(c) Notices. All notices, requests, claims, demands
and other communications hereunder shall be deemed to have been duly given when
delivered in person, by facsimile transmission, nationally-recognized overnight
courier service or by registered or certified mail (postage prepaid, return
receipt requested):
if to the Jones Entities,
c/o Glenn R. Jones
Jones International, Ltd.
9697 East Mineral Avenue
Englewood, Colorado 80112
if to Comcast:
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
Attn: General Counsel
Any notice delivered after business hours or on any day which is not a Business
Day shall be deemed for purposes of computing any time period hereunder to have
been delivered on the succeeding Business Day.
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<PAGE>
(d) Amendments and Waivers. (i) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(ii) 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 provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
(e) Governing Law. This Agreement shall be construed
in accordance with and governed by the law of the State of Delaware, without
regard to the conflicts of law rules of such state.
(f) Counterparts; Effectiveness. 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 and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
(g) Entire Agreement. This Agreement, the
Shareholders Agreement (including Agreement and Amendment No.1 to Shareholders
Agreement), the Option Agreements, the Comcast/BTH Agreement and the agreements
attached as exhibits hereto, together with their respective schedules and
exhibits, constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.
(h) Separability. In case any provision of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(i) No Third Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their permitted assigns and
nothing herein expressed or implied shall give or be construed to give to any
person or entity, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
(j) Tax Matters. The parties hereto covenant and
agree to consult with one another and cooperate in good faith to determine
mutually advantageous allocations and tax structures to effect the transactions
contemplated by this Agreement.
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18. Definitions.
"Affiliate" shall have the same meaning as in Rule 12b-2 under
the Securities Exchange Act of 1934, as amended.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks are authorized to close in New York, New
York.
"Cable Partnership" means, at any time, any partnership that
is an Intercable Group Entity at such time.
"Franchise" means written "franchise" within the meaning of
Section 602(8) of the Cable Communications Policy Act of 1984 (47 U.S.C.
(S)522(9)).
"Franchise Authority" has the meaning that term is given by
Section 602(9) of the Cable Communications Act of 1984 (47 U.S.C. (S)522(10)).
"Governmental Authority" means any local, county, state,
commonwealth, federal or foreign court, judicial, executive or legislative
instrumentality, or any agency, authority, commission, board or official
thereof, including, without limitation, any Franchise Authority.
"Intercable Group" means, at any time, the Company and each
person that is a Subsidiary of Jones Intercable, Inc., a Colorado corporation at
such time.
"Intercable Group Entity" means, at any time, each Person
included in the Intercable Group at such time.
"Jones" means Glenn R. Jones, a resident of Colorado, or in
the event he is not then alive or legally competent, his executor, the
administrator of his estate or his legal representative (including, without
limitation, his guardian, conservator or other similar fiduciary).
"Managed System" means any System that is owned and operated
by a Cable Partnership.
"Option Closing" shall mean the consummation of the purchase
and sale of the Control Shares.
"Owned System" means any System that is owned and operated by
an Intercable Group Entity other than a Cable Partnership.
"Person" means an individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
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"Securities Act" means the Securities Act of 1933, as amended,
and rules and regulations promulgated thereunder.
"Subsidiary" means, as to any Person, (i) any entity 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, directly or indirectly, owned or controlled by such person, (ii) any
partnership of which such Person is, directly or indirectly, a general or
managing partner or (iii) any other entity that is, directly or indirectly,
controlled by such Person.
"System" means a cable television or SMATV system owned or
operated by an Intercable Group Entity serving subscribers within a geographical
area covered by one or more Franchise agreements from the same head end facility
(or two or more related head end facilities).
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.
COMCAST CORPORATION
By:
---------------------------------------
/s/ Glenn R. Jones
------------------------------------------
Glenn R. Jones
GLENN JONES GRANTOR BUSINESS TRUST
By:
---------------------------------------
JONES INTERNATIONAL GRANTOR BUSINESS TRUST
By:
---------------------------------------
JONES INTERNATIONAL, LTD.
By:
---------------------------------------
JONES SPACE SEGMENT, INC.
By:
---------------------------------------
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<PAGE>
JONES GLOBAL GROUP, INC.
By:
---------------------------------------
JONES INTERDIGITAL, INC.
By:
---------------------------------------
JONES ENTERTAINMENT GROUP, LTD.
By:
---------------------------------------
The undersigned hereby joins in this Agreement as a party hereto
solely for purposes of Sections 9(h) and 17 hereof.
JONES PROPERTIES, INC.
By:
---------------------------------------
The undersigned hereby consent to the execution of this
Agreement pursuant to Section 5.4 of the Shareholders Agreement and Section 4.1
of each of the Option Agreements.
BCI TELECOM HOLDING INC.
By:
---------------------------------------
BTH (INTERCABLE) LTD.
By:
---------------------------------------
BTH (US CABLE) LTD.
By:
---------------------------------------
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Schedule A
Beneficial Ownership of Optioned Shares held by the Jones Entities
Optioned Shares
(Common Stock)
Jones International Grantor Business Trust 2,239,416
Glenn Jones Grantor Business Trust 474,400
Jones Space Segment, Inc. 35,707
Jones Global Group, Inc. 27,585
Jones Interdigital, Inc. 643
Jones Entertainment Group, Ltd. 100,400
---------
2,878,151
=========
Class A Shares
Jones International Ltd. 1,497,373
Glenn R. Jones 526,893
---------
2,024,266
=========
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Schedule B
Permitted Affiliate Transactions
1. The purchase of the following assets by Jones or a Jones Entity at a price
equal to the fair market value (determined by appraisal) of such assets:
(a) that certain real estate located on Lot 1, Jones
Intercable's headquarters according to the recorded plot thereof, County of
Arapahoe, State of Colorado and the Panorama Falls Office Building.
(b) the Company's equity interest in each of Jones
Futurex, Inc., Jones Global Group and Jones Customer Service Management LLC
(c) all of the Company's interest in the "Jones
Spacelink" tradename.
2. The assumption by the Jones Entities of the Company's rights and obligations
under that certain lease dated, December 23, 1997, by and between the Company
and PNC Leasing Corp. ("Lessor") relating to the aircraft presently leased by
the Company and the release by the Lessor of the Company from such lease.
3. The amendment of (i) that certain lease, dated November 30, 1989, by and
between the Company and Jones Properties, Inc. (the "Lease") (a) providing the
Company with a right to terminate the Lease upon (x) vacating the entire
premises which are subject to the Lease and occupied by the Company with the
intention not to re-occupy such leased premises and (y) the payment by the
Company to Jones Properties, Inc. of an amount determined pursuant to section
27(a)(v) of such Lease (without the offset for fair market rental value of such
premises provided in such section calculated until the end of the stated term of
such lease, June 30, 2000, and (b) prohibiting the Company from subleasing the
premises to any person other than Jones, through the stated term of such lease,
and (ii) any subleases relating to the premises providing that such subleases
automatically terminate upon the termination of the Lease and relieving the
Company of any further obligations under such sublease following such
termination.
4. The adoption of a Severance Plan for certain associates of the Intercable
Group Entities located in Denver, Colorado, and Lanham, Maryland. Amounts
payable under the plan shall be in cash and shall not exceed $33,000,000 in the
aggregate, of which not more than $15,000,000 shall be non-deductible by the
Company from its income under Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code").
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Such Severance Plan may also include the provision of COBRA benefits for the
number of weeks used to calculate a covered employee's severance payment but in
any case not to exceed one year. All such severance payments shall, as a
condition to payment, require that the recipient be an employee of the Company
at all times from the date hereof to the date which is 90 days after the Closing
Date unless such employee is terminated without cause prior to the expiration of
such 90-day period. Jones shall not be a recipient of any such severance
payments.
5. The termination of the Services Agreement on the terms set forth on Schedule
C-1.
-28-
<PAGE>
Schedule C
Transactions Offered to the Company Post-Closing
1. The purchase of the following assets by Jones or a Jones Entity at a price
equal to the fair market value (determined by appraisal) of such assets:
(a) that certain real estate located on Lot 1, Jones
Intercable headquarters according to the recorded plot thereof, County of
Arapahoe, State of Colorado and the Panorama Falls Office Building.
(b) the Company's equity interest in each of Jones
Futurex, Inc., Jones Global Group and Jones Customer Service Management LLC
(c) all of the Company's interest in the "Jones
Spacelink" tradename.
*2. The assumption by the Jones Entities of the Company's rights and obligations
under that certain lease dated, December 23, 1997, by and between the Company
and PNC Leasing Corp. ("Lessor") relating to the aircraft presently leased by
the Company and the release by the Lessor of the Company from such lease.
*3. The termination of the Services Agreement on the terms set forth on Schedule
C-1.
*4. The amendment of (i) that certain lease, dated November 30, 1989, by and
between the Company and Jones Properties, Inc. (the "Lease") (a) providing the
Company with a right to terminate the Lease upon (x) vacating the entire
premises which are subject to the Lease and occupied by the Company with the
intention not to re-occupy such leased premises and (y) the payment by the
Company to Jones Properties, Inc. of an amount determined pursuant to section
27(a)(v) of such Lease (without the offset for fair market rental value of such
premises provided in such section calculated until the end of the stated term of
such lease, June 30, 2000 and (b) prohibiting the Company from subleasing the
premises to any person other than Jones, through the stated term of such lease,
and (ii) any subleases relating to the premises providing that such subleases
automatically terminate upon the termination of the Lease and relieving the
Company of any further obligations under such sublease following such
termination.
* Indicates transactions which Jones Entities shall offer the Company following
the Closing as provided in Section 9(b).
-29-
<PAGE>
Schedule C-1
The Services Agreement dated as of December 9, 1994 (the
"Services Agreement") between Jones Intercable, Inc. ("Intercable") and Jones
Interactive, Inc. ("Interactive") may be terminated by Intercable, prior to the
end of the term stated in the Services Agreement (an "Early Termination"), on
sixty (60) days prior written notice to Interactive (an "Early Termination
Notice"), subject to the following termination payment:
In connection with an Early Termination, Intercable shall pay
to Interactive on the termination date (x) the net present value discounted at a
rate of 6.25% of the greater of (i) $50,000 or (ii) the average Management Fee
(as such term is defined in the Services Agreement) which was payable during the
three (3) months immediately preceding the date of the Early Termination Notice,
in either case times the number of months remaining in the term of the Services
Agreement; plus (y) an amount equal to the severance costs associated with the
termination of employment of employees of Interactive in connection with the
termination of the Services Agreement, which severance payments shall be
calculated based on the formulas contained in the severance plan adopted by
Intercable in connection with the change in control of Intercable from Glenn R.
Jones and Jones International, Ltd. to Comcast Corporation; plus (z) any lease
termination costs associated with early termination of leases of equipment that
will no longer be required or used as a result of the Early Termination and
which the Company has decided not to assume.
-30-
<PAGE>
EXHIBIT 12
(Continued)
SCHEDULE F - Owned Systems
<PAGE>
SCHEDULE F
Owned Systems
FRANCHISES HELD BY
JONES INTERCABLE, INC.
Panama City Beach, Florida System
City of Panama City Beach
Oxnard, California System
City of Oxnard
FRANCHISES HELD BY
JONES COMMUNICATIONS OF MARYLAND, INC.
Prince George's County System:
North Prince George's County
South Prince George's County
City of Bowie
Chesapeake Bay Group (including Annapolis,
Anne Arundel County and
Charles County Systems):
Anne Arundel County
City of Annapolis
<PAGE>
FRANCHISES HELD BY
JONES COMMUNICATIONS OF
GEORGIA/SOUTH CAROLINA, INC.
Savannah System:
Chatham County
City of Savannah
FRANCHISES HELD BY
JONES COMMUNICATIONS OF VIRGINIA, INC.
Alexandria System:
City of Alexandria
Prince William Group (including
Dale City, Reston and
Manassas Systems):
Fairfax County (Reston)
City of Manassas
FRANCHISES HELD BY
JONES COMMUNICATIONS OF ARIZONA, INC.
Pima County System:
Town of Oro Valley
FRANCHISES HELD BY
JONES COMMUNICATIONS OF MISSOURI, INC.
Independence System:
City of Olathe, KS
City of Raytown
<PAGE>
FRANCHISES HELD BY
JONES COMMUNICATIONS OF NEW MEXICO, INC.
Albuquerque System:
City of Albuquerque
FRANCHISES HELD BY
JONES OF WISCONSIN, INC.
Manitowoc System:
City of Manitowoc
Managed Systems
FRANCHISES HELD BY
CABLE TV FUND 14-A, Ltd.
Calvert County System:
Calvert County
Naperville System
City of Naperville
FRANCHISES HELD BY
JONES GROWTH PARTNERS, L.P.
Wheaton System
City of Wheaton
Village of Addison
<PAGE>
FRANCHISES HELD BY
IDS/JONES JOINT VENTURE PARTNERS
Aurora System
City of Aurora
FRANCHISES HELD BY
CABLE TV FUND 12-BCD VENTURE
Palmdale and Littlerock Systems:
Los Angeles County
City of Lancaster
City of Palmdale
FRANCHISES HELD BY
JONES CABLE INCOME FUND 1-A, LTD.
Owatonna/Glencoe System
City of Owatonna
FRANCHISES HELD BY
CABLE TV FUND 12-A, LTD.
Cook County/Orland Park System
Village of Mundelein
FRANCHISES HELD BY
CABLE TV FUND 15-A, LTD.
South Suburban System
Village of Lansing
<PAGE>
EXHIBIT A
FORM OF FIRST AMENDMENT TO GREAT AMERICAN COUNTRY
AFFILIATE AGREEMENT
THIS FIRST AMENDMENT TO GREAT AMERICAN COUNTRY AFFILIATE
AGREEMENT is made and entered into as of the ___ day of _________, 19__, by and
between GREAT AMERICAN COUNTRY, INC., a Colorado corporation ("G A C") and
COMCAST PROGRAMMING, a division of Comcast Corporation, a Pennsylvania
corporation ("Affiliate").
WHEREAS, G A C and Affiliate entered into that certain Great
American Country Affiliate Agreement dated as of December 10, 1997 (the
"Affiliate Agreement"); and
WHEREAS, G A C and Affiliate now desire to amend the Affiliate
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto hereby
agree as follows:
1. Section 5 Amendments.
(a) Section 5(b) of the Affiliate Agreement is hereby deleted in
its entirety and in place thereof the following is inserted:
"(b) On or before February 28, 1998 (the "New System Launch
Date"), Affiliate shall launch the Service in systems that are not currently
distributing the Service (such systems on which the Service is launched between
the date of this Agreement and the New System Launch Date shall be referred to
herein as the "New Systems", and following any such launch shall be included in
the term "Systems" as used herein), which New Systems shall represent at least
250,000 Service Subscribers. The New Systems shall distribute the Service on a
full time basis at all times during the term of this Agreement. If Affiliate
does not launch the Service on the New Systems as of the New System Launch Date,
Affiliate shall have until May 31, 1998 to cure such default without any
liability or obligation of any kind to G A C."
(b) Section 5(d) of the Affiliate Agreement is hereby deleted in
its entirety and in place thereof the following is inserted:
"(d) Affiliate shall not delete the Service from any System or
delete any System from Exhibit A during the term of this Agreement; provided,
however, that in the event Affiliate sells a System to an unaffiliated third
party, Affiliate shall be relieved of all of its obligations with respect to
such System for all periods after the date of sale of such System.
Notwithstanding the foregoing, at no time during the term of this Agreement,
A-1
<PAGE>
commencing from and after the New System Launch Date, shall the number of
Service Subscribers be less than 250,000."
2. No Other Amendments. Except as expressly set forth herein, the
Affiliate Agreement shall remain in full force and effect without modification
or change.
IN WITNESS WHEREOF, the parties hereto have executed this
First Amendment to Great American Country Affiliate Agreement as of the day and
year first written above.
GREAT AMERICAN COUNTRY, INC.
By _________________________________________
Jeffrey C. Wayne
Vice President and General Manager
COMCAST PROGRAMMING,
a division of Comcast Corporation
By _________________________________________
Thomas A. Hurley
Senior Vice President, Programming
A-2
<PAGE>
Exhibit C
FORM OF PLEDGE AGREEMENT
This PLEDGE AGREEMENT is entered into as of the 12 day of August 1998,
by and among Glenn R. Jones ("Jones"), Jones International, Ltd.
("International") and Comcast Corporation ("Comcast").
WHEREAS, Comcast, Jones, International, Glenn Jones Grantor Business
Trust, Jones International Grantor Business Trust, Jones Space Segment, Inc.,
Jones Global Group, Inc., Jones Interdigital, Inc., and Jones Entertainment
Group, Ltd. have entered into that certain Agreement, dated as of August __,
1998 (the "Jones/Comcast Agreement");
WHEREAS, Section 2 of the Jones/Comcast agreement provides for Comcast
to deposit $50,000,000 with International (the "Initial Consideration");
WHEREAS, Section 2 of the Jones/Comcast Agreement further provides
that under certain circumstances described therein, the Jones Entities, as
defined therein, are obligated to repay the Initial Consideration to Comcast
plus interest as described in such Section 2 (the "Secured Obligations");
WHEREAS, Comcast's obligation to deposit the Initial Consideration
with International is conditioned upon Jones and International pledging
2,000,000 shares (the "Class A Stock") of Class A Common Stock, par value $.01
per share, of Jones Intercable, Inc. (the "Company") with Comcast to secure the
Secured Obligations; and
WHEREAS, contemporaneously with the execution and delivery hereof
Comcast is depositing the Initial Consideration with International;
THEREFORE, in consideration of the mutual covenants contained herein
and intending to be legally bound hereby, the parties agree as follows.
1. The Security Interest. In order to secure the performance of the
Secured Obligations in accordance with the terms thereof,
(a) Jones and International each hereby assign and pledge to Comcast
and grant to Comcast a security interest in the Class A Shares, and all of their
rights and privileges with respect to the Class A Shares, and all income and
profits thereon (other than dividends paid by the Company in respect of the
Class A Shares prior to any exercise by Comcast of its remedies hereunder, which
will be paid over to Jones and International as provided in Section 4) and all
proceeds of the foregoing, and any and all property referred to in Section 1(b)
(the "Collateral").
<PAGE>
(b) In the event any change in the Company's capital stock shall
occur, Jones and International will immediately pledge with Comcast any
securities (and any share certificates or other instruments evidencing such
securities) issued by the Company in respect of the Class A Shares, and all
income and profits thereon (other than dividends paid by the Company in respect
of the Class A Shares prior to any exercise by Comcast of its remedies
hereunder), as additional security for the Secured Obligations. All such
securities, share certificates, instruments and other property constitute
Collateral and are subject to all provisions of this Agreement.
(c) The Security Interest is granted as security only and shall not
subject Comcast to, or transfer or in any way affect or modify, any obligation
or liability of Jones and International with respect to any of the Collateral or
any transaction in connection therewith.
(d) In the event Jones and International fail to perform any Secured
Obligation, Comcast shall be entitled to exercise all rights of a secured party
under the Uniform Commercial Code (whether or not in effect in the jurisdiction
where the rights are exercised) and such other rights as may otherwise be
provided to a secured party under applicable law.
2. Delivery of Collateral. All certificates representing the Class A
Shares (or securities described in Section 1(b)) delivered to Comcast by Jones
and International pursuant hereto shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, with signatures appropriately guaranteed, and accompanied
by any required transfer tax stamps, all in form and substance satisfactory to
Comcast.
3. Further Assurances. (a) Jones and International agrees that they
will, at Comcast's expense and in such manner and form as Comcast may reasonably
require, execute, deliver, file and record any financing statement, specific
assignment or other paper and take any other action that may be necessary or
desirable that Comcast may request, in order to create, preserve, perfect or
validate the Security Interest or to enable Comcast to exercise and enforce its
rights hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, Jones and International hereby authorize Comcast to execute
and file, in the name of Jones and International or otherwise, Uniform
Commercial Code financing statements (which may be carbon, photographic,
photostatic or other reproductions of this Pledge Agreement or of a financing
statement relating to this Pledge Agreement) which Comcast in its reasonable
discretion may deem necessary or appropriate to further perfect the Security
Interest.
(b) Jones and International agree that they will not change (i) their
name, identity or structure in any manner or (ii) the location of their chief
executive office or domicile unless they shall have given Comcast not less than
30 days' prior notice thereof.
(c) In connection with an exercise of rights pursuant to Section 1(d),
Comcast may cause any or all of the Class A Shares to be transferred of record
into the name of Comcast or its designee. After notice thereof, Jones and
International will promptly give to Comcast
<PAGE>
(or its designee) copies of any notices or other communications received by them
with respect to the Class A Shares registered in the name of Jones and
International, and Comcast will promptly give Jones and International copies of
any notices and communications received by Comcast with respect to any Class A
Shares registered in the name of Comcast.
4. Right to Vote and Receive Dividends on Collateral. (a) Until such
time (if ever) that Comcast shall have exercised, pursuant to Section 1(d), any
of its remedies in respect of the Collateral, Jones and International shall
retain all voting rights with respect to the Class A Shares and shall have the
right to receive all dividends paid by the Company in respect of the Collateral
and Comcast shall take all such action as Jones and International may deem
necessary or appropriate to give effect to such right. All such dividends which
are received by Comcast shall be received in trust for the benefit of Jones and
International and shall promptly be paid over to Jones and International.
(b) In the event Comcast exercises, pursuant to Section 1(d), any of
its remedies in respect of the Collateral, Comcast shall thereafter be entitled
to receive all dividends paid by the Company in respect of the Collateral.
5. Limitation on Duty of Comcast in Respect of Collateral. Beyond the
exercise of reasonable care in the custody thereof, Comcast shall have no duty
as to any Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto. Comcast
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property, and
shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any agent or bailee selected by Comcast in good faith.
6. Termination of Security Interest; Release of Collateral. The
Security Interest granted hereunder shall terminate, and all rights to the
Collateral shall revert to Jones and International at such time as the Jones
Entities shall have no further obligation to repay the Initial Consideration.
Upon any such termination of the Security Interests or release of Collateral,
Comcast will deliver the Collateral to Jones and International and will execute
and deliver to Jones and International such documents as Jones and International
shall reasonably request to evidence the termination of the Security Interest or
the release of such Collateral, as the case may be.
7. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by facsimile transmission, nationally-recognized overnight courier
service or by registered or certified mail (postage prepaid, return receipt
requested):
<PAGE>
if to Jones or International,
c/o Glenn R. Jones
Jones International, Ltd.
9697 East Mineral Avenue
Englewood, Colorado 80112
if to Comcast:
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
Attn: General Counsel
Any notice delivered after business hours or on any day which is not a business
day shall be deemed for purposes of computing any time period hereunder to have
been delivered on the succeeding business day.
8. Amendments and Waivers. (i) Any provision of this Pledge Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Pledge
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective. 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
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
9. Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of Delaware, without regard to the
conflicts of law rules of such state.
10. Counterparts; Effectiveness: 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 and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
11. Entire Agreement. This Pledge Agreement and the Jones/Comcast
Agreement together with its respective schedules and exhibits, constitute the
entire agreement between the parties with respect to the subject matter of this
Pledge Agreement and supersedes all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter of this
Pledge Agreement.
<PAGE>
12. Separability. In case any provision of this Pledge Agreement shall
be held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
13. Successors and Assigns. The provisions of this Pledge Agreement
are for the benefit of Comcast and Jones and International and their respective
successors and assigns.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be executed as of the date set forth above by their duly authorized
representatives.
COMCAST CORPORATION
By:______________________________________
Glenn R. Jones
JONES INTERNATIONAL, LTD.
By:______________________________________
<PAGE>
EXHIBIT D
FORM OF KNOWLEDGE TV
AFFILIATE AGREEMENT
THIS AGREEMENT is made as of the ___ day of ___________, 199_,
by and between KNOWLEDGE TV, INC., a Colorado corporation ("KTV"), and COMCAST
PROGRAMMING, a division of COMCAST CORPORATION, a Pennsylvania corporation
("Affiliate"), whose address is 1500 Market Street, Philadelphia, PA. 19102.
IN CONSIDERATION OF THE MUTUAL COVENANTS, STIPULATIONS AND
REPRESENTATIONS CONTAINED HEREIN, THE PARTIES HERETO AGREE
AS FOLLOWS:
1. GRANT OF LICENSE
Subject to the terms and conditions of this Agreement, KTV hereby
grants to Affiliate the non-exclusive license to distribute the
"Knowledge TV" service (the "Service") within any operating area within
the United States of any (i) cable, satellite master antenna television
system(s) ("SMATV") or multichannel multipoint distribution system(s)
of which Affiliate owns now or hereafter no less than 50% or of which
Affiliate owns now or hereafter no less than 20% and over which
Affiliate has management control including the authority to make
programming decisions with respect to the applicable system, and (ii)
any SMATV system that is operated by a party other than Affiliate in
the operating area of any cable system of Affiliate or an area
contiguous thereto, all as listed on the attached Exhibit A, as such
list may be amended from time to time (the "System(s)"). Affiliate
shall give prior written notice to KTV of the addition of a System to
Exhibit A.
2. TERM AND TERMINATION
(a) The term of this Agreement shall commence on the date hereof and
shall extend for a period of five (5) years plus ninety (90) days from
the date hereof.
1
<PAGE>
(b) Except as otherwise provided herein, neither Affiliate nor KTV may
terminate this Agreement except upon sixty (60) days prior written
notice and then only if the other has made a material misrepresentation
herein or breaches any of its material obligations hereunder and such
misrepresentation or breach (which shall be specified in such notice)
is not cured within sixty (60) days of such notice, or the defaulting
party has not undertaken within such sixty (60) day period and is not
diligently pursuing actions to cure such misrepresentation or breach.
(c) Affiliate acknowledges and agrees that its obligations hereunder
with respect to the distribution of the Service are of a special,
unique and extraordinary character and that such distribution has a
unique and peculiar value, the loss of which cannot be adequately or
reasonably compensated by damages in an action at law, and that
Affiliate's failure to perform its obligations hereunder with respect
to the distribution of the Service shall cause KTV irreparable injury
and damage. In acknowledgment thereof, Affiliate hereby agrees that, in
addition to any and all other rights it may have at law or in equity,
including its termination right set forth above, KTV shall be entitled
to bring an action for specific performance of the terms of this
Agreement in the event of any breach thereof by Affiliate.
3. CONTENT OF SERVICE
(a) KTV shall have the exclusive authority to determine the content and
format of the Service, and the selection, scheduling, substitution and
withdrawal of any program or advertisement shall remain within the sole
discretion of KTV. Notwithstanding the foregoing, the Service shall
consist of educational informational materials and programming which
endeavors to expose the viewer to the activities one might find in a
school, on a campus, or in other learning environments including but
not limited to, educational, instructional and informational
programming and, in addition, such programming as might relate to or
evolve from schools, campuses or other learning environments including
bookstores, field trips, laboratories, observatories, libraries and
trips or outings related to the foregoing, as well as marketing and
sales activities relating to the foregoing; provided, however, that
such marketing activities shall not include the direct on-air marketing
and/or sale of goods or products (excluding materials, books, tapes and
other items directly relating to any of the educational programming on
the Service), except as set forth below in this Section 3(a). The
Service currently contains no more than thirty-five (35) hours in the
aggregate of infomercial and/or home shopping programming each week.
KTV shall have the right to increase such infomercial and/or home
shopping programming at any time during the term of this Agreement;
provided, however, that if the number of hours of infomercial and/or
home shopping programming in the Service exceeds thirty-five (35) hours
each week, Affiliate shall be entitled, at its option, to preempt any
of the hours of infomercial and/or home shopping programming in excess
of thirty-five (35) each week; and provided further, however, that any
infomercial and/or home shopping programming will only be aired by KTV
during the hours of
2
<PAGE>
Midnight to 6:00 a.m., Eastern time, Monday through Sunday and during
the hours of 3:00 p.m. to 6:00 p.m., Eastern time, Saturday and Sunday,
such times to be adjusted to reflect comparable periods in other time
zones in the event that the Service, in the future, supplies other than
a single satellite feed. Except as set forth herein, Affiliate shall
distribute the Service without addition, deletion, alteration, editing
or amendment, including any copyright notices, credits and similar
notices, trademarks or trade names contained therein.
(b) KTV does not currently make available to any affiliates any local
advertising time in the Service. However, if during the term of this
Agreement, KTV makes any such local advertising avails available to any
distributor of the Service, it will offer at least the same number and
type of local advertising avails to Affiliate. KTV will not have more
than twelve (12) minutes during any hour of national advertising time
in the Service at any time during the term of this Agreement.
3
<PAGE>
4. RATES AND PAYMENTS
(a) For those Systems listed on Exhibit A attached hereto, as the same
may be amended, on or before the forty-fifth (45th) day following each
month throughout the term of this Agreement, Affiliate shall pay to KTV
for each Subscriber of such System during the preceding month, at the
address specified by KTV, license fees in an amount calculated in
accordance with the attached Exhibit B.
(b) KTV's failure, for any reason, to send an invoice for a particular
monthly payment shall not relieve Affiliate of its obligation to make
any payment in a timely manner consistent with the terms of this
Agreement. Past due payments may, at KTV's option, bear interest at a
rate equal to the lesser of (i) one percent (1%) per month or (ii) the
maximum legal rate permitted under law, and Affiliate shall be liable
for all reasonable costs and expenses (including, without limitation,
reasonable court costs and attorneys' fees) incurred by KTV in
collecting any past due payments.
(c) For purposes of this Agreement, the term "Subscriber" shall mean
(i) each residential customer and commercial or business establishment
(including any restaurant, barbershop, lounge, tavern, social, athletic
or country club, bar, business office, sales office, store or shop)
receiving and separately paying for any level of cable television
service which includes the Service from each System, and (ii) the
number of basic equivalent subscribers computed by dividing the monthly
revenue for cable television service paid by bulk accounts (such as
apartment buildings, cooperatives, condominiums, mobile home parks,
hotels, and motels) of each System for cable television service up to
and including the level of service that includes the Service by the
standard residential rate of that System for cable television service
up to and including the level of service that includes the Service;
provided, however, that the term "Subscriber" shall not include persons
who do not pay any monies to Affiliate to receive the level of service
on which the Service is carried (which shall be limited to full-time
employees of Affiliate or of cable system operators located within a
System's DMA, schools, libraries, government buildings and offices and
any other complimentary service which is required by a System's
franchise ordinance, grant, license or other authorizing operating
agreement).
(d) Accompanying each payment during the term of this Agreement,
Affiliate shall provide to KTV a true and complete monthly report,
prepared by the chief financial officer of Affiliate or his/her
authorized designee specifying for each System the average number of
Subscribers of each System during the subject payment period (computed
by dividing the sum of the number of Subscribers on the first and last
day of the payment period by two (2)) and certifying the accuracy of
such information and containing such other information as may be
reasonably required by KTV for accurate billing purposes, subject to
applicable law.
4
<PAGE>
(e) Affiliate agrees to keep and maintain complete and accurate books
and records of matters relating to this Agreement. Affiliate grants
KTV, itself or through an independent audit service selected by KTV,
the right, during regular business hours, at KTV's expense, to inspect,
make copies and otherwise audit such books and records at Affiliate's
offices upon fifteen (15) days' prior written notice from KTV. KTV's
right to perform such audit shall be limited to once in any twelve (12)
month period during the term of this Agreement and shall be limited to
an audit with respect to amounts paid in the current calendar year and
prior calendar year. Throughout such audit, KTV's auditors or its
representatives shall discuss with Affiliate's controller, or his
designee, audit methodology as well as a reasonable estimate of any
additional payments which KTV believes may be due. If, as a result of
such audit, it is determined that Affiliate's payments to KTV under
this Agreement were less than what they should have been, Affiliate
shall pay to KTV, upon demand by KTV, the difference between
Affiliate's actual payments to KTV and the undisputed amounts Affiliate
should have paid to KTV hereunder; provided, however, that KTV shall,
upon request by Affiliate, make available copies of work papers,
analyses and other supporting documentation used to calculate any such
difference. If, as a result of such audit, it is determined that
Affiliate's payments to KTV under this Agreement were greater than what
they should have been, Affiliate may elect to receive a cash refund
from KTV of such overpayment or may elect to have the amount of such
overpayment credited against future license fees that may be owed to
KTV under this Agreement. If KTV audits Affiliate's books hereunder,
KTV must make any claim against Affiliate within three (3) months after
KTV completes such audit. If the claim is not made within such three
(3) month period, KTV will be deemed to have waived its right to
collect any shortfalls from Affiliate for the period(s) audited. Both
parties shall endeavor to resolve any claim hereunder in a timely
manner.
5. DELIVERY AND DISTRIBUTION
(a) During the term of this Agreement, each of the Systems shall offer
the Service on such level, and as part of such package, of cable
television service as Affiliate may elect; provided, however, that
Affiliate may not distribute the Service (i) on a level or as part of a
package of cable television service that has a Penetration (as
hereinafter defined) of less than ten percent (10%); or (ii) as a stand
alone a la carte service, unless the Service is also carried on a tier
with at least three (3) other national cable television services; or
(iii) as part of a package of cable television services that includes
pay or premium services, such as HBO, Showtime or other similar
services. For purposes of this Agreement, the term "Penetration" means
the ratio of the number of Subscribers in any System receiving and
paying for the level or package of cable television service that
includes the Service to the total number of basic subscribers of the
System. Affiliate shall designate one (1) channel on each System for
the carriage of the Service prior to the commencement of the delivery
of the Service on such System. Affiliate may change, from time to time,
the channel designation on which the Service is carried; provided,
however, that Affiliate shall use commercially reasonable efforts to
give
5
<PAGE>
KTV written notice of the change and the new channel designation at
least thirty (30) days prior to the effective date of such change.
(b) On or before forty-five (45) days after the date of this Agreement
(the "New System Launch Date"), Affiliate shall launch the Service in
systems that are not currently distributing the Service and which are
located in one or more of the markets identified on Exhibit C attached
hereto, which systems shall represent at least 500,000 Subscribers. If
Affiliate does not launch the Service on Systems representing at least
500,000 Subscribers as of the New System Launch Date, Affiliate shall
have until ninety (90) days after the date of this Agreement to cure
such default without any liability or obligation of any kind to KTV.
(c) Each System shall distribute the Service on a full time basis at
all times during the term of this Agreement at the hours it is
initially transmitted by KTV.
(d) Affiliate shall not delete the Service from any System or delete
any System from Exhibit A during the term of this Agreement; provided,
however, that in the event Affiliate sells a System to an unaffiliated
third party, Affiliate shall be relieved of all of its obligations with
respect to such System for all periods after the date of sale of such
System. Notwithstanding the foregoing, at no time during the term of
this Agreement, commencing from and after the New System Launch Date,
shall the number of Subscribers receiving the Service be less than
500,000 (the "Minimum Distribution Commitment").
(e) KTV will transmit the Service by means of domestic communications
satellite Galaxy V, Transponder 21. Affiliate shall, at its own
expense, obtain and install such earth station receivers and other
equipment as shall be necessary to receive, descramble (if necessary)
and transmit and deliver to Subscribers receiving the Service the
signals comprising the Service. In the event KTV decides to change the
transmission of the Service to another domestic communications
satellite or change its scrambling or transmission technology, KTV
shall notify Affiliate at least sixty (60) days prior to the effective
date of such change. If it reasonably appears that as a result of such
proposed change Affiliate will incur the expense of additional
equipment in order to continue to receive or decode the Service,
Affiliate will be entitled to terminate this Agreement with respect to
all affected Systems as of the effective date of such change; provided,
however, that this termination right shall not apply if (i) KTV agrees
to reimburse such Systems for its pro rata share (based on the number
of signals to be received by any System from such new satellite) of the
cost of purchasing and installing equipment reasonably necessary for
such Systems to receive the Service as the result of any such change;
(ii) physical space exists at the then-existing earth station sites to
accommodate the necessary equipment; and (iii) current zoning and other
restrictions permit such additional equipment. KTV shall provide a high
quality signal for provision of the Service and shall use commercially
reasonable efforts to maintain such high quality signal. Affiliate
shall use commercially reasonable efforts to maintain the high quality
signal provided by KTV.
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(f) Subject to then existing law, Affiliate shall not itself, and shall
not expressly authorize others to, copy, tape or otherwise reproduce
any part of the Service without KTV's prior written authorization, and
shall take reasonable and practical security measures to prevent the
unauthorized copying or taping by others; provided, however, that
nothing herein shall prohibit Affiliate from assisting its residential
subscribers in connecting video cassette recorders to record the
Service. Affiliate shall not distribute or exhibit, and shall not
expressly authorize or license or knowingly permit the distribution or
exhibition of, the Service by any means or device, whether now known or
hereafter devised, other than through the Systems now or hereafter
listed in Exhibit A hereto and in accordance with the terms of this
Agreement.
6. PROMOTION AND RESEARCH
(a) Affiliate shall use commercially reasonable efforts, as determined
in its best business judgment, to promote, market and sell the Service
to Subscribers and to the general public within the Operating Area of
each System. Advertising, promotional, marketing and/or sales materials
concerning the Service which are provided to Affiliate by KTV, if used
by Affiliate, shall be used without any alteration, deletion, addition
or any other change, unless such changes are approved by KTV prior to
use by Affiliate.
(b) At KTV's request, each System shall use commercially reasonable
efforts in its business judgment to provide KTV with data regarding the
marketing and promotion of the Service by Affiliate. Subject to
applicable federal, state and local law (including the franchises, if
any, pursuant to which the Systems are operated), Affiliate also agrees
to render such other assistance to KTV as KTV may request and which
Affiliate may reasonably provide in its business judgment in connection
with any marketing test, survey, poll or other research which KTV may
undertake in connection with the Service. KTV shall treat as
confidential any data or information which KTV receives from Affiliate,
and shall not utilize any such data or information except in connection
with such research.
7. NOTICES
All notices, statements and other communications given hereunder shall
be in writing and shall be delivered by facsimile transmission,
telegraph, personal delivery, certified mail, return receipt requested,
or by next day express delivery, addressed, if to KTV at 9697 East
Mineral Avenue, Englewood, Colorado 80112, Attn: President, KTV, (Fax:
303-799-1644), with a copy to the Legal Department and, if to
Affiliate, at its address set forth herein or by facsimile at
215-981-7793, with a copy to the Legal Department. The date of such
facsimile transmission, telegraphing or personal delivery or the next
day if by express delivery, or the date three (3) days after mailing,
shall be deemed the date on which such notice is given and effective.
7
<PAGE>
8. TRADEMARKS
(a) All right, title and interest in and to the Service, and all
materials, formats, computer software or other rights of whatever
nature related thereto shall remain the property of KTV. Further,
Affiliate acknowledges and agrees that all names, logos, marks,
copyright notices or designations utilized by KTV in connection with
the Service (the "Marks") are the sole and exclusive property of KTV
and/or its affiliates, and no rights or ownership are intended to be or
shall be transferred to Affiliate. Affiliate's use of the Marks shall
be limited to the advertising and promotion of its carriage of the
Service over the Systems pursuant to this Agreement; provided, however,
that Affiliate may request that KTV allow it to use the Marks in other
manners, and KTV agrees not to unreasonably withhold its consent to
reasonable business uses of the Marks requested by Affiliate. KTV shall
provide Affiliate with samples of the Marks which Affiliate shall use
in their entirety (including all service mark and trademark notices)
whenever the Marks are used by Affiliate.
(b) KTV acknowledges that the names "Comcast", "Comcast Cable
Communications, Inc.", "Comcast Cablevision" and the concentric "C"
mark are the exclusive property of Affiliate and/or its affiliated
entities, and that KTV has not and will not acquire any proprietary
rights therein by reason of this Agreement. Any use of such names or
marks by KTV shall be subject to Affiliate's prior written consent.
9. REPRESENTATIONS AND INDEMNIFICATION
(a) KTV represents and warrants to Affiliate that (i) it is a
corporation duly organized and validly existing and in good standing
under the laws of the State of Colorado; (ii) KTV has the corporate
power and authority to enter into this Agreement and to fully perform
its obligations hereunder; (iii) KTV is under no contractual or other
legal obligation which in any way interferes with its ability to fully,
promptly and completely perform hereunder; (iv) the individual
executing this Agreement on behalf of KTV has the authority to do so;
(v) KTV is operating in substantial compliance with all applicable
laws, rules and regulations; (vi) nothing contained in the Service
shall violate the civil or property rights, copyrights, trademark
rights, right of privacy or any other right of any person, firm or
corporation except that no representation and warranty is given with
respect to music performance rights, subject to the indemnification
obligation of KTV pursuant to Section 9(d) hereof; and (vii) the
license fee rates set forth on Exhibit B attached hereto for the years
2002, 2003 and 2004 are the standard license fee rates for KTV, and
have been agreed to in at least one written affiliate agreement with a
cable television operator in the United States with an equivalent or
greater number of basic cable television subscribers as Affiliate.
(b) Affiliate represents and warrants to KTV that (i) Affiliate is a
corporation duly organized and validly existing and in good standing
under the laws of the
8
<PAGE>
Commonwealth of Pennsylvania; (ii) Affiliate has the corporate power
and authority to enter into this Agreement and to fully perform its
obligations hereunder; (iii) the individual executing this Agreement on
behalf of Affiliate has the authority to do so; and (iv) Affiliate is
under no contractual or other legal obligation which in any way
interferes with its ability to fully, promptly and completely perform
hereunder.
(c) Affiliate and KTV shall each indemnify, defend and forever hold
harmless the other, the other's affiliated companies and their
respective officers, directors, employees, partners and agents from all
liabilities, claims, costs, damages and expenses (including, without
limitation, reasonable counsel fees) arising out of any breach or
claimed breach by it of any representation or warranty or any of its
obligations pursuant to this Agreement. KTV will credit Affiliate for
any continuous interruption of Service caused by KTV of twenty-four
(24) hours or longer. The amount so credited shall be an amount equal
to that portion of the monthly license fees applicable to the period
during which the Service was interrupted. KTV's liability for damages
arising out of its inability or failure to deliver the Service shall be
limited to the license fee credits set forth in the preceding sentence.
(d) With respect to music performance rights, KTV agrees that it will
use its commercially reasonable efforts, at its expense, to secure
additional appropriate licenses, authorities or other grants of right
regarding music performance rights related to the exhibition and
distribution of the Service by KTV, Affiliate and/or the Systems
distributing the Service which KTV does not currently possess, and will
indemnify and hold harmless Affiliate from and against any claims,
damages, liabilities, costs and expenses arising from music performance
rights related to the exhibition and distribution of the Service by
KTV, Affiliate and/or the Systems distributing the Service.
(e) In connection with any indemnification provided for in this Section
9, each party shall so indemnify the other only if such other party
claiming indemnification shall give the indemnifying party prompt
notice of any claim or litigation to which its indemnification applies;
it being agreed that the indemnifying party shall have the right to
assume the full defense of any or all claims or litigation to which its
indemnity applies and that the indemnified party will cooperate fully
(at the cost of the indemnifying party) with the indemnifying party in
such defense and in the settlement of such claims or litigation, and
the indemnified party shall make no compromise or settlement of any
such claim without the prior written consent of the indemnifying party.
The settlement of any claim without the prior written consent of the
indemnifying party shall release the indemnifying party from its
obligations hereunder with respect to such claim or action so settled.
(f) Except as herein provided, neither Affiliate nor KTV shall have any
rights against the other party hereto for the non-operation of
facilities or the non-furnishing of the Service if such non-operation
or non-furnishing is due to an act
9
<PAGE>
of God; inevitable accident; fire; lockout; flood; tornado; hurricane;
strike; or other labor dispute; riot or civil commotion; earthquake;
war; act of government or governmental instrumentality (whether
federal, state or local); failure of performance by a common carrier;
failure in whole or in part of technical facilities; or other cause
(financial inability excepted) beyond such party's reasonable control.
In the event of non-operation or non-furnishing of the Service for a
period of ten (10) consecutive days, Affiliate shall have the right to
insert programming of its choice on the channel otherwise identified
with the Service until such time as the Service is fully operational
again. Credit will be given to Affiliate, however, on the portion of
the Service which is affected by an interruption during any month equal
to the product of (i) the license fees which would be due for such
month, calculated in accordance with Section 4 hereof, assuming no
interruption of Service during such month, multiplied by (ii) a
fraction, the numerator of which is the total number of hours of
interruption of the Service during such month and the denominator of
which is the total number of hours of the Service which would have been
provided during such month absent such interruption(s). In the event of
non-operation or non-furnishing of the Service for a period of fifteen
(15) or more consecutive days, or thirty (30) days out of any ninety
(90) day period, Affiliate may terminate this Agreement by delivery of
written notice thereof to KTV without any further obligation or
liability on the part of KTV or Affiliate.
(g) The representations, warranties and indemnities contained in this
Section 9 shall continue throughout the term of this Agreement and the
indemnities shall survive the expiration or termination of this
Agreement.
10. CONFIDENTIALITY
(a) Neither Affiliate nor KTV shall disclose to any third party (other
than its respective officers, directors, employees, auditors and
attorneys each of whom shall agree to be bound by the provisions of
this Section 10 and whose compliance herewith shall be the legal
obligation of the disclosing party) any information with respect to the
terms and provisions of this Agreement, including by way of press
release(s), and KTV shall not disclose any information obtained in any
inspection and/or audit of Affiliate's books and records, except: (i)
to the extent necessary to comply with law or legal reporting or
disclosure requirements, including those relating to the public or
private offering of securities, or the valid order of an administrative
agency or a court of competent jurisdiction, in which event the party
making such disclosure shall so notify the other as promptly as
practicable (and, if possible, prior to making such disclosure) and
shall seek confidential treatment of such information; (ii) as part of
its normal reporting or review procedure to its parent company, its
auditors and its attorneys; provided, however, that such parent
company, auditors and attorneys agree to be bound by the provisions of
this Section 10; (iii) in order to enforce its rights pursuant to this
Agreement; and (iv) if mutually agreed by Affiliate and KTV in advance
and in writing.
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<PAGE>
(b) This Section 10 shall survive the termination or expiration of this
Agreement.
11. GENERAL
(a) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, this Agreement may not be assigned by
either party without the prior written consent of the other party,
which consent shall not be unreasonably withheld, except that upon 30
days' prior notice to the other party, either party may assign this
Agreement to any entity controlled by, controlling, or under common
control with such party, or to an entity acquiring all or substantially
all of the assets of such party, whether by acquisition, stock
issuance, trade, merger or other means.
(b) Neither Affiliate nor KTV shall be, or hold itself out as, the
agent of the other under this Agreement. No subscriber of Affiliate
shall be deemed to have any privity of contract or direct contractual
or other relationship with KTV by virtue of this Agreement or KTV's
delivery of the Service to Affiliate hereunder. Likewise, no supplier
of advertising or programming or anything else included in the Service
by KTV shall be deemed to have any privity of contract or direct
contractual or other relationship with Affiliate by virtue of this
Agreement or Affiliate's carriage of the Service hereunder. Nothing
contained herein shall be deemed to create, and the parties do not
intend to create, any relationship of partners, joint venturers or
agents, as between Affiliate and KTV, and neither party is authorized
to or shall act toward third parties or the public in any manner which
would indicate any such relationship with the other. KTV disclaims any
present or future right, interest or estate in or to the transmission
facilities of Affiliate or the parent, subsidiaries, partnerships or
joint venturers controlling the Systems on which the programming
signals delivered by Affiliate are transmitted, such disclaimer being
to acknowledge that neither Affiliate nor the transmission facilities
of the Systems (and the owners thereof) are common carriers.
(c) Except for the Original KTV Agreement (as hereinafter defined),
this Agreement contains the entire understanding of the parties and
supersedes all prior understandings of the parties relating to the
subject matter herein. This Agreement may not be modified except in
writing executed by all parties hereto. Any waiver must be in writing
and signed by the party whose rights are being waived and no waiver by
either Affiliate or KTV of any breach of any provision hereof shall be
or be deemed to be a waiver of any preceding or subsequent breach of
the same or any other provision of this Agreement.
(d) This Agreement and all collateral matters shall be construed in
accordance with the internal laws of the State of Colorado applicable
to agreements fully made and to be performed therein, irrespective of
the place of actual execution or performance.
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(e) The invalidity or unenforceability of any provision of this
Agreement shall in no way affect the validity or enforceability of any
other provision of this Agreement.
(f) KTV and Affiliate each acknowledge that this Agreement was fully
negotiated by the parties and, therefore, no provision of this
Agreement shall be interpreted against any party because such party or
its legal representative drafted such provision.
(g) The provisions of this Agreement are for the exclusive benefit of
the parties hereto and their permitted assigns, and no third party
shall be a beneficiary of, or have any rights by virtue of, this
Agreement.
(h) The titles and headings of the sections in this Agreement are for
convenience only and shall not in any way affect the interpretation of
this Agreement.
(i) If at any time during the term of this Agreement, KTV offers any
other distributor of the Service terms and conditions with respect to
the following matters: exclusivity, distribution to alternate
technologies, tiering, packaging, and/or a la carte carriage (the
"Non-Economic Terms"), which are more favorable than the terms set
forth herein, KTV shall offer to Affiliate such more favorable terms
and conditions with respect to the Non-Economic Terms for such period
of time as the same are available to the other third party distributor;
provided, however, that Affiliate must also accept those terms and
conditions of such other distributor's agreement as were material
inducements to KTV's willingness to offer such more favorable terms to
the other third party distributor to the extent such terms and
conditions are not unique to such other distributor and Affiliate can
reasonably comply with such terms and conditions.
(ii) Within ten (10) business days after receiving Affiliate's
request, KTV shall provide Affiliate with a certificate signed by an
authorized officer of KTV stating that KTV has complies with the
conditions of this Section.
(j) As between KTV and Affiliate, Affiliate shall be responsible for
all taxes levied upon Affiliate or related to the existence or
operation of the Systems or to its handling and delivery of the Service
from its Systems' headends to Subscribers. KTV shall be responsible for
all taxes levied with respect to producing, distributing, licensing and
transmitting the Service to such headends.
(k) Except with respect to closed captioning and second audio programs
(which uses Affiliate agrees shall be reserved to KTV throughout the
Term of this Agreement), KTV agrees that signal distribution beyond
traditional television video and audio, including but not limited to
the use of Vertical Blanking Interval ("VBI"), is not essential to, nor
a part of, the transmission of the Service and, thus, except for the
rights reserved to KTV herein, all rights in and to signal distribution
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beyond traditional television video and audio, including but not
limited to the use of the VBI, are retained by and reserved to
Affiliate, and nothing herein shall preclude Affiliate from exercising
and exploiting such rights exclusively by means and in any locations
concurrently herewith freely and without restrictions.
(l) The obligations of Affiliate under this Agreement with respect to
the launch and distribution of the Service are in addition to the
obligations of Affiliate under that certain Affiliate Agreement dated
as of January 1, 1997 between KTV (f/k/a Mind Extension University,
Inc.) and Affiliate (the "Original KTV Agreement"). The terms and
conditions of the Original KTV Agreement shall govern the distribution
of the Service on Systems where the Service is launched pursuant to the
terms of such agreement, and the terms and conditions of this Agreement
shall govern the distribution of the Service on Systems where the
Service is launched pursuant to the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the date first set forth above.
KNOWLEDGE TV, INC.
a Colorado corporation
By ___________________________
Glenn R. Jones
President
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COMCAST PROGRAMMING,
a division of COMCAST
CORPORATION
By _____________________________________
Thomas A. Hurley,
Senior Vice President, Programming
(37494)
14
<PAGE>
EXHIBIT A
SYSTEMS DISTRIBUTING SERVICE
List Each
Franchise Area No. of
Served by Each Launch Date Subscribers
System
-------------- ----------- -----------
A-1
<PAGE>
EXHIBIT B
LICENSE FEES
Affiliate shall pay License Fees as follows:
<TABLE>
<CAPTION>
Affiliate's
Service 1998 1999 2000 2001 2002 2003 2004
Subscribers* ---- ---- ---- ---- ---- ---- ----
- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
0 - 799,999 $.05 $.07 $.07 $.07 $.10 $.11 $.135
800,000 - $.05 $.065 $.065 $.07 $.09 $.10 $.125
1,599,999
1,600,000 - $.05 $.06 $.06 $.065 $.08 $.09 $.115
2,399,999
2,400,000 $.05 $.05 $.06 $.06 $.07 $.08 $.105
or more
</TABLE>
* For purposes of calculating applicable volume discounts with respect to
license fees payable under this Agreement, all Service Subscribers receiving the
Service pursuant to this Agreement and the Original KTV Agreement (as such term
is defined herein) shall be aggregated. Similarly, for purposes of calculating
applicable volume discounts with respect to license fees payable under the
Orginial KTV Agreement, all Service Subscribers receiving the Service pursuant
to the Original KTV Agreement and this Agreement shall be aggregated.
B-1
<PAGE>
EXHIBIT C
MARKETS WHERE SYSTEMS ARE TO BE LOCATED
Y Philadelphia DMA (Philadelphia, Willow Grove, Lower Merion,
Gloucester, Burlington, East Windsor)
Y Systems in New Jersey or Connecticut within the NY DMA
Y Sacramento, CA
Y Knoxville, TN
Y South Florida (Broward County/Palm Beach County)
Y Indianapolis, IN
Y West Florida (Sarasota/Arcadia/Venice/Lehigh Acres/Port Charlotte)
Y Chesterfield, VA
Y Tallahassee, FL
Y Mobile, AL
Y Howard County, MD
Y New Haven, Conn.
Y Detroit DMA
To qualify toward the subscriber benchmark in Section 5(b) hereof, the market
must have at least 50,000 Comcast/KTV subscribers.
C-1
<PAGE>
Exhibit E
FORM OF GREAT AMERICAN COUNTRY
AFFILIATE AGREEMENT
THIS AGREEMENT is made as of the ___ day of ______________,
199_, by and between GREAT AMERICAN COUNTRY, INC., a Colorado corporation
("G A C"), and COMCAST PROGRAMMING, a division of COMCAST CORPORATION, a
Pennsylvania corporation ("Affiliate"), whose address is 1500 Market Street,
Philadelphia, PA. 19102.
IN CONSIDERATION OF THE MUTUAL COVENANTS, STIPULATIONS AND
REPRESENTATIONS CONTAINED HEREIN, THE PARTIES HERETO AGREE
AS FOLLOWS:
1. GRANT OF LICENSE
Subject to the terms and conditions of this Agreement, G A C hereby
grants to Affiliate the non-exclusive license to distribute the "Great
American Country" service (the "Service") within any operating area
within the United States of any (i) cable, satellite master antenna
television system(s) ("SMATV") or multichannel multipoint distribution
system(s) of which Affiliate owns now or hereafter no less than 50%, or
of which Affiliate owns now or hereafter no less than 20% and over
which Affiliate has management control including the authority to make
programming decisions with respect to the applicable system, and (ii)
any SMATV system that is operated by a party other than Affiliate in
the operating area of any cable system of Affiliate or an area
contiguous thereto, all as listed on the attached Exhibit A, as such
list may be amended from time to time (the "System(s)"). Affiliate
shall give prior written notice to G A C of the addition of a System
to Exhibit A.
2. TERM AND TERMINATION
(a) The term of this Agreement shall commence on the date hereof and
shall extend for a period of five (5) years plus ninety (90) days from
the date hereof.
(b) Except as otherwise provided herein, neither Affiliate nor G A C
may terminate this Agreement except upon ninety (90) days prior written
notice and then only if the other has made a material misrepresentation
herein or breaches any of its material obligations hereunder and such
misrepresentation or breach (which
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shall be specified in such notice) is not cured within ninety (90) days
of such notice, or the defaulting party has not undertaken within such
ninety (90) day period and is not diligently pursuing actions to cure
such misrepresentation or breach. The parties' right to terminate this
Agreement pursuant to this Section 2(b) shall be in addition to any
right or remedy which either party may have in law or equity.
3. CONTENT OF SERVICE
(a) G A C shall have the exclusive authority to determine the
content and format of the Service, and the selection, scheduling,
substitution and withdrawal of any program or advertisement shall
remain within the sole discretion of G A C. Notwithstanding the
foregoing, the Service shall consist of a twenty-four (24) hour a day,
satellite-delivered country music television network that features
current and past country music videos, concerts, information on country
music artists and occasional short-form programming that focuses on
both country music and country music's performing artists. Affiliate
shall distribute the Service without addition, deletion, alteration,
editing or amendment, including any copyright notices, credits and
similar notices, trademarks or trade names contained therein.
(b) G A C shall make available to Affiliate not less than four (4)
minutes of commercial advertising time in each programming hour for use
by Affiliate in inserting local advertising or promotions. All such
availabilities shall be at such points in the transmission of the
Service as G A C determines in its sole discretion. G A C shall
signal Affiliate's commercial advertising time by a hidden cue tone.
Affiliate shall use its reasonable efforts to assure that all
commercial matter or advertisements it inserts with the Service (i) are
not offensive in nature; (ii) do not suggest an affiliation between
G A C or any programming contained in the Service, and third party
advertisers, and (iii) are compatible with applicable law. Affiliate's
commercial advertising time shall be fixed, nonrecapturable and
nonpreemptible, except that under limited circumstances and uniformly
applied to all affiliates of G A C, G A C may give thirty (30)
days' notice to Affiliate preempting Affiliate's specific commercial
time, provided that G A C makes available to Affiliate, within sixty
(60) days of such preemption, an equal amount of commercial time in a
like time period.
(c) The Service shall not contain more than four (4) hours of
infomercial and/or long form (i.e. longer than two minutes) home
shopping programming (collectively, "Infomercial Programming"), in any
day, and any Infomercial Programming so included in the Service shall
be aired only between the hours of
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Midnight and 6:00 a.m. Eastern Time. Beginning at the earlier of (i)
January 1, 2002, (ii) such time as the Service is being distributed to
at least 20,000,000 Service Subscribers, in the aggregate, in the
United States, or (iii) the date on which any other affiliate of G A C
has the right to preempt Infomercial Programming included in the
Service, Affiliate shall be entitled, at its option, to preempt up to
one hundred percent (100%) of the Infomercial Programming included in
the Service. In the event of any such permitted preemption, Affiliate
shall be entitled to insert programming of its own choosing into the
Service during the periods of such preemption; provided, however, that
such inserted programming is not adult-oriented programming and
otherwise meets the standards for inserted material set forth in
Section 3(b) of this Agreement.
4. RATES AND PAYMENTS
(a) For those Systems listed on Exhibit A attached hereto, as the same
may be amended, on or before the forty-fifth (45th) day following each
month throughout the term of this Agreement, Affiliate shall pay to
G A C for each Service Subscriber of such System during the preceding
month, at the address specified by G A C, license fees in an amount
calculated in accordance with the attached Exhibit B.
(b) G A C's failure, for any reason, to send an invoice for a
particular monthly payment shall not relieve Affiliate of its
obligation to make any payment in a timely manner consistent with the
terms of this Agreement. Past due payments may, at G A C's option,
bear interest at a rate equal to the lesser of (i) one percent (1%) per
month or (ii) the maximum legal rate permitted under law, and Affiliate
shall be liable for all reasonable costs and expenses (including,
without limitation, reasonable court costs and attorneys' fees)
incurred by G A C in collecting any past due payments.
(c) For purposes of this Agreement, the term "Service Subscriber" shall
mean (i) each residential customer and commercial or business
establishment (including any restaurant, barbershop, lounge, tavern,
social, athletic or country club, bar, business office, sales office,
store or shop) receiving and separately paying for any level of cable
television service which includes the Service from each System, and
(ii) the number of basic equivalent subscribers computed by dividing
the monthly revenue for cable television service paid by bulk accounts
(such as apartment buildings, cooperatives, condominiums, mobile home
parks, hotels, and motels) of each System for cable television service
up to and including the level of service that includes the Service by
the standard residential rate of that System for cable television
service up to and including the level of service that includes the
Service;
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<PAGE>
provided, however, that the term "Service Subscriber" shall not include
persons who do not pay any monies to Affiliate to receive the level of
service on which the Service is carried (which shall be limited to
full-time employees of Affiliate or of cable system operators located
within a System's DMA, schools, libraries, government buildings and
offices and any other complimentary service which is required by a
System's franchise ordinance, grant, license or other authorizing
operating agreement).
(d) Accompanying each payment during the term of this Agreement,
Affiliate shall provide to G A C a true and complete monthly report,
prepared by the chief financial officer of Affiliate or his/her
authorized designee specifying for each System the average number of
Service Subscribers of each System during the subject payment period
(computed by dividing the sum of the number of Service Subscribers on
the first and last day of the payment period by two (2)) and certifying
the accuracy of such information and containing such other information
as may be reasonably required by G A C for accurate billing purposes,
subject to applicable law.
(e) Affiliate agrees to keep and maintain complete and accurate books
and records of matters relating to this Agreement. Affiliate grants
G A C, itself or through an independent audit service selected by
G A C, the right, during regular business hours, at G A C's expense, to
inspect, make copies and otherwise audit such books and records at
Affiliate's offices upon fifteen (15) days' prior written notice from
G A C. G A C's right to perform such audit shall be limited to once
in any twelve (12) month period during the term of this Agreement and
shall be limited to an audit with respect to amounts paid in the
current calendar year and prior calendar year. Throughout such audit,
G A C's auditors or its representatives shall discuss with
Affiliate's controller, or his designee, audit methodology as well as a
reasonable estimate of any additional payments which G A C believes
may be due. If, as a result of such audit, it is determined that
Affiliate's payments to G A C under this Agreement were less than
what they should have been, Affiliate shall pay to G A C, upon demand
by G A C, the difference between Affiliate's actual payments to G A C
and the undisputed amounts Affiliate should have paid to G A C
hereunder; provided, however, that G A C shall, upon request by
Affiliate, make available copies of work papers, analyses and other
supporting documentation used to calculate any such difference. If, as
a result of such audit, it is determined that Affiliate's payments to
G A C under this Agreement were greater than what they should have
been, Affiliate may elect to receive a cash refund from G A C of such
overpayment or may elect to have the amount of such overpayment
credited against future license fees that may be owed to G A C under
this Agreement. If G A C audits
4
<PAGE>
Affiliate's books hereunder, G A C must make any claim against
Affiliate within three (3) months after G A C completes such audit.
If the claim is not made within such three (3) month period, G A C
will be deemed to have waived its right to collect any shortfalls from
Affiliate for the period(s) audited. Both parties shall endeavor to
resolve any claim hereunder in a timely manner.
5. DELIVERY AND DISTRIBUTION
(a) During the term of this Agreement, each of the Systems shall offer
the Service on such level, and as part of such package, of cable
television service as Affiliate may elect; provided, however, that
Affiliate may not distribute the Service (i) as a stand alone a la
carte service, unless the Service is also carried on a tier with at
least three (3) other national cable television services; or (ii) as
part of a package of cable television services that includes pay or
premium services, such as HBO, Showtime or other similar services; and
provided further, however, that Affiliate must maintain an aggregate
Penetration (as hereinafter defined) for the Service on all Systems
distributing the Service of not less than fifty percent (50%). For
purposes of this Section 5(a), the term "Penetration" means the ratio
of the aggregate number of Service Subscribers in all Systems
distributing the Service, to the total number of basic subscribers of
those Systems, excluding those subscribers receiving only a "lifeline"
level of service. Affiliate shall designate one (1) channel on each
System for the carriage of the Service prior to the commencement of the
delivery of the Service on such System. Affiliate may change, from time
to time, the channel designation on which the Service is carried;
provided, however, that Affiliate shall use commercially reasonable
efforts to give G A C written notice of the change and the new
channel designation at least thirty (30) days prior to the effective
date of such change.
(b) On or before forty-five (45) days after the date of this Agreement,
(the "New System Launch Date"), Affiliate shall launch the Service in
systems that are not currently distributing the Service, which systems
shall represent at least 500,000 Service Subscribers. If Affiliate does
not launch the Service on Systems representing at least 500,000 Service
Subscribers as of the New System Launch Date, Affiliate shall have
until ninety (90) days after the date of this Agreement to cure such
default without any liability or obligation of any kind to G A C.
(c) Each System shall distribute the Service on a full time basis at
all times during the term of this Agreement at the hours it is
initially transmitted by G A C.
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<PAGE>
(d) Affiliate shall not delete the Service from any System or delete
any System from Exhibit A during the term of this Agreement; provided,
however, that in the event Affiliate sells a System to an unaffiliated
third party, Affiliate shall be relieved of all of its obligations with
respect to such System for all periods after the date of sale of such
System. Notwithstanding the foregoing, at no time during the term of
this Agreement, commencing from and after the New System Launch Date,
shall the number of Service Subscribers be less than 500,000 (the
"Minimum Distribution Requirement").
(e) G A C will transmit the Service to each System by means of
domestic communications satellite GE American C-3, Transponder 20, and
at all times at no additional cost to Affiliate. Affiliate shall, at
its own expense, obtain and install such earth station receivers and
other equipment as shall be necessary to receive, descramble (if
necessary) and transmit and deliver to Subscribers receiving the
Service the signals comprising the Service. In the event G A C
decides to change the transmission of the Service to another domestic
communications satellite or change its scrambling or transmission
technology, G A C shall notify Affiliate at least sixty (60) days
prior to the effective date of such change. If it reasonably appears
that as a result of such proposed change Affiliate will incur the
expense of additional equipment in order to continue to receive or
decode the Service, Affiliate will be entitled to terminate this
Agreement with respect to all affected Systems as of the effective date
of such change; provided, however, that this termination right shall
not apply if (i) G A C agrees to reimburse such Systems for its pro
rata share (based on the number of signals to be received by any System
from such new satellite) of the cost of purchasing and installing
equipment reasonably necessary for such Systems to receive the Service
as the result of any such change; (ii) physical space exists at the
then-existing earth station sites to accommodate the necessary
equipment; and (iii) current zoning and other restrictions permit such
additional equipment. G A C shall provide a high quality signal for
provision of the Service and shall use commercially reasonable efforts
to maintain such high quality signal. Affiliate shall use commercially
reasonable efforts to maintain the high quality signal provided by
G A C.
(f) Subject to then existing law, Affiliate shall not itself, and shall
not expressly authorize others to, copy, tape or otherwise reproduce
any part of the Service without G A C's prior written authorization,
and shall take reasonable and practical security measures to prevent
the unauthorized copying or taping by others; provided, however, that
nothing herein shall prohibit Affiliate from assisting its residential
subscribers in connecting video cassette recorders to record the
Service. Affiliate shall not distribute or exhibit, and shall not
expressly
6
<PAGE>
authorize or license or knowingly permit the distribution or exhibition
of, the Service by any means or device, whether now known or hereafter
devised, other than through the Systems now or hereafter listed in
Exhibit A hereto and in accordance with the terms of this Agreement.
6. PROMOTION AND RESEARCH
(a) Affiliate shall use commercially reasonable efforts, as determined
in its best business judgment, to promote, market and sell the Service
to subscribers and to the general public within the Operating Area of
each System. Advertising, promotional, marketing and/or sales materials
concerning the Service which are provided to Affiliate by G A C, if
used by Affiliate, shall be used without any alteration, deletion,
addition or any other change, unless such changes are approved by G A C
prior to use by Affiliate.
(b) At G A C's request, each System shall use commercially reasonable
efforts in its business judgment to provide G A C with data regarding
the marketing and promotion of the Service by Affiliate. Subject to
applicable federal, state and local law (including the franchises, if
any, pursuant to which the Systems are operated), Affiliate also agrees
to render such other assistance to G A C as G A C may request and
which Affiliate may reasonably provide in its business judgment in
connection with any marketing test, survey, poll or other research
which G A C may undertake in connection with the Service. G A C
shall treat as confidential any data or information which G A C
receives from Affiliate, and shall not utilize any such data or
information except in connection with such research.
7. NOTICES
All notices, statements and other communications given hereunder shall
be in writing and shall be delivered by facsimile transmission,
telegraph, personal delivery, certified mail, return receipt requested,
or by next day express delivery, addressed, if to G A C at 9697 East
Mineral Avenue, Englewood, Colorado 80112, Attn: President, G A C,
(Fax: 303-799-1644), with a copy to the Legal Department and, if to
Affiliate, at its address set forth herein or by facsimile at
215-981-7793, with a copy to the Legal Department. The date of such
facsimile transmission, telegraphing or personal delivery or the next
day if by express delivery, or the date three (3) days after mailing,
shall be deemed the date on which such notice is given and effective.
8. TRADEMARKS
7
<PAGE>
(a) All right, title and interest in and to the Service, and all
materials, formats, computer software or other rights of whatever
nature related thereto shall remain the property of G A C. Further,
Affiliate acknowledges and agrees that all names, logos, marks,
copyright notices or designations utilized by G A C in connection
with the Service (the "Marks") are the sole and exclusive property of
G A C and/or its affiliates, and no rights or ownership are intended
to be or shall be transferred to Affiliate. Affiliate's use of the
Marks shall be limited to the advertising and promotion of its carriage
of the Service over the Systems pursuant to this Agreement; provided,
however, that Affiliate may request that G A C allow it to use the
Marks in other manners, and G A C agrees not to unreasonably withhold
its consent to reasonable business uses of the Marks requested by
Affiliate. G A C shall provide Affiliate with samples of the Marks
which Affiliate shall use in their entirety (including all service mark
and trademark notices) whenever the Marks are used by Affiliate.
(b) G A C acknowledges that the names "Comcast", "Comcast Cable
Communications, Inc.", "Comcast Cablevision" and the concentric "C"
mark are the exclusive property of Affiliate and/or its affiliated
entities, and that G A C has not and will not acquire any proprietary
rights therein by reason of this Agreement. Any use of such names or
marks by G A C shall be subject to Affiliate's prior written consent.
9. REPRESENTATIONS AND INDEMNIFICATION
(a) G A C represents and warrants to Affiliate that (i) it is a
corporation duly organized and validly existing and in good standing
under the laws of the State of Colorado; (ii) G A C has the corporate
power and authority to enter into this Agreement and to fully perform
its obligations hereunder; (iii) G A C is under no contractual or
other legal obligation which in any way interferes with its ability to
fully, promptly and completely perform hereunder; (iv) the individual
executing this Agreement on behalf of G A C has the authority to do
so; (v) G A C is operating in substantial compliance with all
applicable laws, rules and regulations; (vi) nothing contained in the
Service shall violate the civil or property rights, copyrights,
trademark rights, right of privacy or any other right of any person,
firm or corporation except that no representation and warranty is given
with respect to music performance rights, subject to the
indemnification obligation of G A C pursuant to Section 9(d) hereof;
and (vii) the license fee rates set forth on Exhibit B attached hereto
for the years 2003 and 2004 are the standard license fee rates for
G A C, and have been agreed to in at least one written affiliate
agreement with a
8
<PAGE>
cable television operator in the United States with an equivalent or
greater number of basic cable television subscribers as Affiliate.
(b) Affiliate represents and warrants to G A C that (i) Affiliate is
a corporation duly organized and validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania; (ii) Affiliate has
the corporate power and authority to enter into this Agreement and to
fully perform its obligations hereunder; (iii) the individual executing
this Agreement on behalf of Affiliate has the authority to do so; and
(iv) Affiliate is under no contractual or other legal obligation which
in any way interferes with its ability to fully, promptly and
completely perform hereunder.
(c) Affiliate and G A C shall each indemnify, defend and forever hold
harmless the other, the other's affiliated companies and their
respective officers, directors, employees, partners and agents from all
liabilities, claims, costs, damages and expenses (including, without
limitation, reasonable counsel fees) arising out of any breach or
claimed breach by it of any representation or warranty or any of its
obligations pursuant to this Agreement. G A C will credit Affiliate
for any continuous interruption of Service caused by G A C of
twenty-four (24) hours or longer. The amount so credited shall be an
amount equal to that portion of the monthly license fees applicable to
the period during which the Service was interrupted. G A C's
liability for damages arising out of its inability or failure to
deliver the Service shall be limited to the license fee credits set
forth in the preceding sentence.
(d) With respect to music performance rights, G A C agrees that it
will use its commercially reasonable efforts, at its expense, to secure
additional appropriate licenses, authorities or other grants of right
regarding music performance rights related to the exhibition and
distribution of the Service by G A C, Affiliate and/or the Systems
distributing the Service which G A C does not currently possess, and
will indemnify and hold harmless Affiliate from and against any claims,
damages, liabilities, costs and expenses arising from music performance
rights related to the exhibition and distribution of the Service by
G A C, Affiliate and/or the Systems distributing the Service.
(e) In connection with any indemnification provided for in this Section
9, each party shall so indemnify the other only if such other party
claiming indemnification shall give the indemnifying party prompt
notice of any claim or litigation to which its indemnification applies;
it being agreed that the indemnifying party shall have the right to
assume the full defense of any or all claims or litigation to which its
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<PAGE>
indemnity applies and that the indemnified party will cooperate fully
(at the cost of the indemnifying party) with the indemnifying party in
such defense and in the settlement of such claims or litigation, and
the indemnified party shall make no compromise or settlement of any
such claim without the prior written consent of the indemnifying party.
The settlement of any claim without the prior written consent of the
indemnifying party shall release the indemnifying party from its
obligations hereunder with respect to such claim or action so settled.
(f) Except as herein provided, neither Affiliate nor G A C shall have
any rights against the other party hereto for the non-operation of
facilities or the non-furnishing of the Service if such non-operation
or non-furnishing is due to an act of God; inevitable accident; fire;
lockout; flood; tornado; hurricane; strike; or other labor dispute;
riot or civil commotion; earthquake; war; act of government or
governmental instrumentality (whether federal, state or local); failure
of performance by a common carrier; failure in whole or in part of
technical facilities; or other cause (financial inability excepted)
beyond such party's reasonable control. In the event of non-operation
or non-furnishing of the Service for a period of ten (10) consecutive
days, Affiliate shall have the right to insert programming of its
choice on the channel otherwise identified with the Service until such
time as the Service is fully operational again. Credit will be given to
Affiliate, however, on the portion of the Service which is affected by
an interruption during any month equal to the product of (i) the
license fees which would be due for such month, calculated in
accordance with Section 4 hereof, assuming no interruption of Service
during such month, multiplied by (ii) a fraction, the numerator of
which is the total number of hours of interruption of the Service
during such month and the denominator of which is the total number of
hours of the Service which would have been provided during such month
absent such interruption(s). In the event of non-operation or
non-furnishing of the Service for a period of fifteen (15) or more
consecutive days, or thirty (30) days out of any ninety (90) day
period, Affiliate may terminate this Agreement by delivery of written
notice thereof to G A C without any further obligation or liability on
the part of G A C or Affiliate.
(g) The representations, warranties and indemnities contained in this
Section 9 shall continue throughout the term of this Agreement and the
indemnities shall survive the expiration or termination of this
Agreement.
10. CONFIDENTIALITY
(a) Neither Affiliate nor G A C shall disclose to any third party
(other than its respective officers, directors, employees, auditors and
attorneys each of whom
10
<PAGE>
shall agree to be bound by the provisions of this Section 10 and whose
compliance herewith shall be the legal obligation of the disclosing
party) any information with respect to the terms and provisions of this
Agreement, including by way of press release(s), and G A C shall not
disclose any information obtained in any inspection and/or audit of
Affiliate's books and records, except: (i) to the extent necessary to
comply with law or legal reporting or disclosure requirements,
including those relating to the public or private offering of
securities, or the valid order of an administrative agency or a court
of competent jurisdiction, in which event the party making such
disclosure shall so notify the other as promptly as practicable (and,
if possible, prior to making such disclosure) and shall seek
confidential treatment of such information; (ii) as part of its normal
reporting or review procedure to its parent company, its auditors and
its attorneys; provided, however, that such parent company, auditors
and attorneys agree to be bound by the provisions of this Section 10;
(iii) in order to enforce its rights pursuant to this Agreement; and
(iv) if mutually agreed by Affiliate and G A C in advance and in
writing.
(b) This Section 10 shall survive the termination or expiration of this
Agreement.
11. GENERAL
(a) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, this Agreement may not be assigned by
either party without the prior written consent of the other party,
which consent shall not be unreasonably withheld, except that upon 30
days' prior notice to the other party, either party may assign this
Agreement to any entity controlled by, controlling, or under common
control with such party, or to an entity acquiring all or substantially
all of the assets of such party, whether by acquisition, stock
issuance, trade, merger or other means.
(b) Neither Affiliate nor G A C shall be, or hold itself out as, the
agent of the other under this Agreement. No subscriber of Affiliate
shall be deemed to have any privity of contract or direct contractual
or other relationship with G A C by virtue of this Agreement or G A C's
delivery of the Service to Affiliate hereunder. Likewise, no
supplier of advertising or programming or anything else included in the
Service by G A C shall be deemed to have any privity of contract or
direct contractual or other relationship with Affiliate by virtue of
this Agreement or Affiliate's carriage of the Service hereunder.
Nothing contained herein shall be deemed to create, and the parties do
not intend to create, any relationship of partners, joint venturers or
agents, as between Affiliate and G A C, and neither
11
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party is authorized to or shall act toward third parties or the public
in any manner which would indicate any such relationship with the
other. G A C disclaims any present or future right, interest or
estate in or to the transmission facilities of Affiliate or the parent,
subsidiaries, partnerships or joint venturers controlling the Systems
on which the programming signals delivered by Affiliate are
transmitted, such disclaimer being to acknowledge that neither
Affiliate nor the transmission facilities of the Systems (and the
owners thereof) are common carriers.
(c) Except for the Original G A C Agreement (as hereinafter defined),
this Agreement contains the entire understanding of the parties and
supersedes all prior understandings of the parties relating to the
subject matter herein. This Agreement may not be modified except in
writing executed by all parties hereto. Any waiver must be in writing
and signed by the party whose rights are being waived and no waiver by
either Affiliate or G A C of any breach of any provision hereof shall
be or be deemed to be a waiver of any preceding or subsequent breach of
the same or any other provision of this Agreement.
(d) This Agreement and all collateral matters shall be construed in
accordance with the internal laws of the State of Colorado applicable
to agreements fully made and to be performed therein, irrespective of
the place of actual execution or performance.
(e) The invalidity or unenforceability of any provision of this
Agreement shall in no way affect the validity or enforceability of any
other provision of this Agreement.
(f) G A C and Affiliate each acknowledge that this Agreement was
fully negotiated by the parties and, therefore, no provision of this
Agreement shall be interpreted against any party because such party or
its legal representative drafted such provision.
(g) The provisions of this Agreement are for the exclusive benefit of
the parties hereto and their permitted assigns, and no third party
shall be a beneficiary of, or have any rights by virtue of, this
Agreement.
(h) The titles and headings of the sections in this Agreement are for
convenience only and shall not in any way affect the interpretation of
this Agreement.
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(i) (i) G A C agrees that if, at any time during the term of this
Agreement, it gives or offers to any third party with an equivalent or
lesser number of Service Subscribers than Affiliate any non-economic
term, provision, covenant or consideration (excluding deletion rights)
which are or is more favorable to such third party than Affiliate is
receiving hereunder, G A C will afford such more favorable
non-economic term, provision, covenant or consideration to Affiliate,
on and subject to the same material terms and conditions offered or
given to such other affiliate.
(ii) Within ten (10) business days after receiving Affiliate's
request, G A C shall provide Affiliate with a certificate signed by
an authorized officer of G A C stating that G A C has complied with
the conditions of this Section.
(j) As between G A C and Affiliate, Affiliate shall be responsible
for all taxes levied upon Affiliate or related to the existence or
operation of the Systems or to its handling and delivery of the Service
from its Systems' headends to subscribers. G A C shall be responsible
for all taxes levied with respect to producing, distributing, licensing
and transmitting the Service to such headends.
(k) Except with respect to closed captioning and second audio programs
(which uses Affiliate agrees shall be reserved to G A C throughout
the Term of this Agreement), G A C agrees that signal distribution
beyond traditional television video and audio, including but not
limited to the use of Vertical Blanking Interval ("VBI"), is not
essential to, nor a part of, the transmission of the Service and, thus,
except for the rights reserved to G A C herein, all rights in and to
signal distribution beyond traditional television video and audio,
including but not limited to the use of the VBI, are retained by and
reserved to Affiliate, and nothing herein shall preclude Affiliate from
exercising and exploiting such rights exclusively by means and in any
locations concurrently herewith freely and without restrictions.
(l) The obligations of Affiliate under this Agreement with respect to
the launch and distribution of the Service are in addition to the
obligations of Affiliate under that certain Affiliate Agreement dated
as of December 10, 1997 between G A C and Affiliate (the "Original
G A C Agreement"). The terms and conditions of the Original G A C
Agreement shall govern the distribution of the Service on Systems where
the Service is launched pursuant to the terms of such agreement, and
the terms and conditions of this Agreement shall govern the
distribution of the Service on Systems where the Service is launched
pursuant to the terms of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the date first set forth above.
GREAT AMERICAN COUNTRY, INC.
a Colorado corporation
By ______________________________________
Jeffrey C. Wayne
Vice President and General Manager
COMCAST PROGRAMMING,
a division of COMCAST
CORPORATION
By ______________________________________
Thomas A. Hurley,
Senior Vice President, Programming
(37490)
14
<PAGE>
EXHIBIT A
SYSTEMS DISTRIBUTING SERVICE
List Each
Franchise Area No. of
Served by Each System Launch Date Subscribers
--------------------- ----------- -----------
A-1
<PAGE>
EXHIBIT B
LICENSE FEES
I. Affiliate shall pay the following license fees per Service Subscriber per
month (the "Base Rate"):
<TABLE>
<CAPTION>
Penetration of
Service in
any System 1998 1999 2000 2001 2002 2003 2004
- ---------- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
70% or
greater $.05 $.055 $.06 $.065 $.07 $.075 $.08
</TABLE>
II. In Systems where the Service is distributed on a level of cable television
service with a penetration rate of less than 70% (excluding lifeline), Affiliate
shall pay, in addition to the Base Rate, the following tier surcharge per
Service Subscriber per month:
Penetration of
Service in any System 1998 through 2004
- --------------------- -----------------
50% to 69.9% $.02
30% to 49.9% $.04
20% to 29.9% $.06
0%-19% $.08
III. The following volume discounts to the Base Rate are available to Affiliate
based on the aggregate number of Service Subscribers of Affiliate receiving the
Service pursuant to the terms of this Agreement:
Aggregate Number of % Discount Applicable
Service Subscribers* to the Base Rate
- -------------------- ---------------------
100,000 - 249,999 5%
250,000 - 499,999 10%
500,000 - 749,999 15%
750,000 - 999,999 20%
1,000,000 - 1, 999,999 25%
2,000,000 - 3,999,999 40%
Over 4,000,000 50%
B-1
<PAGE>
*For purposes of calculating applicable volume discounts with respect to license
fees payable under this Agreement, all Service Subscribers receiving the Service
pursuant to this Agreement and the Orginal GAC Agreement (as such term is
defined herein) shall be aggregated.
B-2
<PAGE>
EXHIBIT 13
Execution Copy
AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT
by and among
BCI TELECOM HOLDING INC.,
BTH (U.S. CABLE) LIMITED,
BTH (INTERCABLE) LIMITED
and
COMCAST CORPORATION
<PAGE>
AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I SALE AND PURCHASE.......................................................................................2
Section 1.1. Purchase and Sale...........................................................................2
Section 1.2. Purchase Price..............................................................................3
ARTICLE II EFFECTIVE TIME.........................................................................................4
Section 2.1. Effective Time..............................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BTH.................................................................4
Section 3.1. Organization and Standing...................................................................4
Section 3.2. Ownership of the Class A Shares.............................................................5
Section 3.3. Capitalization..............................................................................5
Section 3.4. No Other Investments; No Liabilities........................................................6
Section 3.5. Corporate Power and Authority...............................................................7
Section 3.6. Conflicts; Consents and Approvals...........................................................7
Section 3.7. Brokerage and Finder's Fees; Expenses.......................................................8
Section 3.8. Shareholders Agreement and Option Agreements................................................8
Section 3.9. Transactions with Affiliates and Jones......................................................9
Section 3.10. Status of the Company......................................................................9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMCAST..............................................................9
Section 4.1. Organization and Standing...................................................................9
Section 4.2. Corporate Power and Authority..............................................................10
Section 4.3. Conflicts; Consents and Approvals..........................................................10
Section 4.4. Brokerage and Finder's Fees; Expenses......................................................11
Section 4.5. Investment Purpose........................................................................11
Section 4.6. Transactions with Jones...................................................................11
ARTICLE V CONDITIONS TO THE OBLIGATIONS OF COMCAST AT THE INITIAL CLOSING AND THE FINAL CLOSING..................11
Section 5.1. Litigation; No Opposition..................................................................11
Section 5.2. Representations, Warranties and Covenants..................................................11
Section 5.3. Approvals..................................................................................12
Section 5.4. Other Deliveries...........................................................................12
Section 5.5. HSR Act....................................................................................13
Section 5.6. Material Adverse Change....................................................................13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 5.7. Litigation.................................................................................13
Section 5.8. Status of the Company......................................................................13
ARTICLE VI CONDITIONS TO THE OBLIGATIONS OF BTH AND THE BTH SUBSIDIARIES AT THE
INITIAL CLOSING AND THE FINAL CLOSING............................................................................14
Section 6.1. Litigation; No Opposition..................................................................14
Section 6.2. Representations, Warranties and Covenants..................................................14
Section 6.3. Approvals.................................................................................14
Section 6.4. Other Deliveries...........................................................................15
Section 6.5. HSR Act...................................................................................15
ARTICLE VII COVENANTS............................................................................................15
Section 7.1. [Intentionally left blank].................................................................15
Section 7.1. [Intentionally left blank].................................................................15
Section 7.3. Consultation with Comcast..................................................................16
Section 7.4. Prohibited Transaction.....................................................................18
Section 7.5. Exercise of the Control Option.............................................................18
Section 7.6. Litigation.................................................................................19
Section 7.7. Covenant Not to Take Certain Actions.......................................................20
Section 7.8 Resignation of Directors...................................................................21
Section 7.9. Covenant to Act in Good Faith..............................................................21
Section 7.10. Tax Matters...............................................................................22
Section 7.11. Other Agreements..........................................................................22
Section 7.12. Updates...................................................................................23
Section 7.13 Programming Rights........................................................................23
ARTICLE VIII CLOSINGS............................................................................................23
Section 8.1. Initial Closing............................................................................23
Section 8.2. Deliveries at the Initial Closing..........................................................23
Section 8.3. Final Closing..............................................................................24
Section 8.4. Deliveries at the Final Closing............................................................24
Section 8.5. Conditions to Final Closing of Comcast.....................................................25
Section 8.6. Conditions of BCE and BTH to the Final Closing.............................................28
Section 8.7. Simultaneous Closing.......................................................................29
Section 8.8. Alternative Final Closing Procedures.......................................................30
ARTICLE IX TERMINATION...........................................................................................32
Section 9.1. Termination................................................................................32
Section 9.2. Effect Of Termination......................................................................32
Section 9.3. Right to Proceed...........................................................................32
ARTICLE X RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING...........................................................33
</TABLE>
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<TABLE>
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Page
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<S> <C>
Section 10.1. Survival of Representations, Warranties and Covenants.....................................33
Section 10.2. Regulatory Filings........................................................................33
ARTICLE XI INDEMNIFICATION.......................................................................................33
Section 11.1. Indemnification by BCE....................................................................33
Section 11.2. Limitations on Indemnification by BCE.....................................................34
Section 11.3. Indemnification by Comcast................................................................35
Section 11.4. Limitation on Indemnification by Comcast..................................................35
Section 11.5. Notice: Defense of Claims.................................................................36
Section 11.6. No Right of Contribution..................................................................37
ARTICLE XII DEFINITIONS..........................................................................................37
ARTICLE XIII MISCELLANEOUS.......................................................................................39
Section 13.1. Further Assurances........................................................................39
Section 13.2. Counting of Days..........................................................................39
Section 13.3. Fees and Expenses.........................................................................39
Section 13.4. Dispute Resolution........................................................................39
Section 13.5. Waivers...................................................................................40
Section 13.6. Governing Law and Consent to Jurisdiction.................................................40
Section 13.7. Notices...................................................................................40
Section 13.8. Entire Agreement..........................................................................41
Section 13.9. Assignability; Binding Effect.............................................................42
Section 13.10. Captions and Gender......................................................................42
Section 13.11. Execution in Counterparts................................................................42
Section 13.12. Amendments...............................................................................42
Section 13.13. Publicity and Disclosures................................................................42
Section 13.14. Equitable Relief.........................................................................42
Section 13.15. Severability.............................................................................43
Section 13.16. Surety of Payment........................................................................43
Section 13.17. Miscellaneous............................................................................43
</TABLE>
<PAGE>
49% Subsidiary Stock................................2
Affiliate..........................................38
Affiliate Stock.....................................3
Associate..........................................38
BCE................................................19
BCE Indemnification Cut-Off Date...................36
BCE Indemnified Parties............................36
BTH.................................................2
BTH Indemnified Party..............................36
BTH Subsidiaries....................................2
Claim..............................................38
Class A Shares......................................2
Class A Stock.......................................2
Comcast Indemnification Cut-Off Date...............35
Comcast Indemnified Parties........................34
Comcast Indemnified Party..........................34
Common Stock........................................2
Company.............................................2
Control Option......................................2
Control Option Agreements...........................2
Control Shares......................................2
Fee Letter..........................................3
Final Closing......................................25
Final Closing Date..................................4
Final Closing Payment...............................4
Final Purchase......................................4
Franchise..........................................39
Franchising Authority..............................39
Governmental Authority..............................9
HSR Act.............................................9
Initial Closing....................................24
Initial Closing Date................................4
Initial Closing Payment.............................4
Initial Purchase....................................3
Initial Shares......................................2
Intercable..........................................2
International.......................................2
JEC.................................................2
Jones...............................................2
Jones Companies.....................................2
Jones Companies Shareholders Agreements............39
Jones Sellers.......................................2
Jones/BTH Agreements...............................39
Jones/Comcast Agreement.............................3
Jones/Comcast Closing...............................4
Knowledge..........................................39
Litigation.........................................14
Losses.............................................34
Material Adverse Effect............................39
Notice of Preference...............................17
Payments...........................................39
Person.............................................39
Purchase Price......................................4
Purchased Assets....................................3
Remaining Subsidiary Stock..........................3
SEC.................................................9
Section 3.1(a)(vi) Exercise........................20
Shareholders Agreement..............................2
Simultaneous Closing................................4
Simultaneous Closing Date...........................4
Subsidiary Stock...................................40
Supply Services Agreement...........................3
Transfer...........................................40
US Cable............................................2
<PAGE>
AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT
This AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT by and among BCI
Telecom Holding Inc., a Canadian corporation f/k/a Bell Canada International
Inc. (together with any successor thereto permitted pursuant to the last
sentence of Section 7.4, "BTH"), BTH (U.S. Cable) Limited, a British Virgin
Islands corporation f/k/a Bell Canada International BVI III Limited ("US
Cable"), BTH (Intercable) Limited, a British Virgin Islands corporation f/k/a
Bell Canada International BVI VI Limited ("Intercable , and together with US
Cable, the "BTH Subsidiaries") and Comcast Corporation, a Pennsylvania
corporation ("Comcast"), dated as of May 22, 1998, is amended and restated as of
this 12 day of August, 1998.
WHEREAS, the parties entered into a Purchase and Sale Agreement dated
as of May 22, 1998 and desire to amend and restate such Purchase and Sale
Agreement as set forth herein;
WHEREAS, US Cable is the record and beneficial owner of 12,782,500
shares (the "Class A Shares") of Class A Common Stock, par value $.01 per share
(the "Class A Stock") of Jones Intercable, Inc., a Colorado corporation (the
"Company"), and 2,410 shares of Class A Common Stock of Jones Education Company,
a Colorado corporation ("JEC") and 747,500 shares of Class A Common Stock of
Jones Entertainment Group Ltd., a Colorado corporation ("JEG" and, together with
JEC, the "Jones Companies");
WHEREAS, Intercable, as assignee of BTH pursuant to that certain
assignment between Intercable and BTH, is party, through Bank of New York as its
agent, to certain Option Agreements with Jones International, Ltd.
("International"), Glenn Jones Grantor Business Trust, Jones International
Grantor Business Trust, Jones Space Segment, Inc., Jones Global Group, Inc.,
Jones Interdigital, Inc. and Jones Entertainment Group, Ltd. (collectively, the
"Jones Sellers"), all dated as of December 20, 1994 and amended as of August 12,
1998 (the "Control Option Agreements"), pursuant to which Intercable, as
assignee of BTH and through its agent, has the option (the "Control Option"),
under certain circumstances and subject to certain conditions, to purchase
2,878,151 shares (as such number may be adjusted pursuant to the Control Option
Agreements) (the "Control Shares") of Common Stock, par value $.01 per share, of
the Company (the "Common Stock") from the Jones Sellers;
WHEREAS, US Cable, as assignee of BTH pursuant to that certain
Assignment Agreement, dated December 20, 1994 (the "Shareholders Agreement
Assignment"), between US Cable and BTH, is party to that certain Shareholders
Agreement, dated as of December 20, 1994 and amended as of August 12, 1998,
among Glenn R. Jones ("Jones"), International, BTH and the Company (the
"Shareholders Agreement"), whereby, among other things, US Cable has been
granted certain contractual rights relating to its investment in the Company;
WHEREAS, subject to the terms and conditions of this Agreement, BTH
desires to sell, and Comcast desires to purchase (a) at the Initial Closing (i)
from BTH, 49% of the Subsidiary Stock issued and outstanding as of the date of
the Initial Closing (the "49% Subsidiary Stock")
<PAGE>
and (ii) from US Cable, (x) 6,400,000 of the Class A Shares (the "Initial
Shares") and (y) subject to the right of first refusal contained in Section 4.5
of the Jones Companies Shareholders Agreements, all of the capital stock of the
Jones Companies owned beneficially or of record by US Cable or its Affiliates
(the "Affiliate Stock") and (b) at the Final Closing from BTH, at Comcast's
option, all of the shares of Subsidiary Stock issued and outstanding as of the
Final Closing Date other than those shares of Subsidiary Stock owned
beneficially or of record by Comcast or its Affiliates as of the Final Closing
Date or such other transaction as may be contemplated by Section 8.4(c) hereof
(the "Remaining Subsidiary Stock" and collectively with the 49% Subsidiary
Stock, the Affiliate Stock and the Initial Shares the "Purchased Assets") each
on the terms and conditions set forth herein;
WHEREAS, Comcast and the Jones Sellers have entered into the Agreement
dated August 12, 1998 (the "Jones/Comcast Agreement") relating to the investment
by the Jones Sellers in the Company and certain agreements between Comcast and
the Jones Sellers relating to the exercise of the Control Option.
WHEREAS, the parties hereto desire to enter into this Amended and
Restated Purchase and Sale Agreement in connection with the transactions
contemplated by the Jones/Comcast Agreement, including the exercise of the
Control Option pursuant to the Control Option Agreements; and
WHEREAS, BTH also desires to agree to pay over to Comcast certain fees
and other amounts to be received by BTH or its Affiliates pursuant to that
certain Financial Services Agreement dated December 20, 1994, by and between BTH
and Jones Financial Group, Inc. (the "Fee Letter") and that certain Supply
Services Agreement, dated December 20, 1994, by and between BTH and the Company
(the "Supply Services Agreement"), on the terms and conditions set forth herein.
THEREFORE, in consideration of the mutual covenants contained herein
and intending to be legally bound hereby, the parties hereto agree as follows.
ARTICLE I
SALE AND PURCHASE
Section 1.1. Purchase and Sale. (a) On the terms and subject to the conditions
of this Agreement, BTH agrees to sell, and Comcast agrees to purchase, for the
Purchase Price (i) the 49% Subsidiary Stock, the Initial Shares and, subject to
any rights pursuant to Section 4.5 of the Jones Companies Shareholders
Agreements, the Affiliate Stock all free and clear of any Claims, together with
all Payments received since the Initial Closing Date by BTH pursuant to the Fee
Letter and the Supply Services Agreement (the "Initial Purchase"), such sale and
purchase to be consummated as soon as reasonably practicable following the later
to occur of (x) the earlier of five Business Days following the expiration or
termination of the Jones/Comcast Agreement, and July 10, 1999 (or such later
date as the parties shall mutually agree to in writing) and (y)
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<PAGE>
the expiration of the 90-day period (or, at Comcast's option, such earlier time
as it may determine in its sole discretion) commencing on the date of this
Agreement, and in each case, assuming the satisfaction or waiver of the
conditions precedent set forth in Sections 5.1, 5.3, 5.4, 5.5, 6.1, 6.3, 6.4 and
6.5, or such later date as the parties may agree (the first such day being the
"Initial Closing Date") and (ii) on the first date following the day on which
all of the conditions precedent contained in Sections 8.5 and 8.6 are satisfied
or waived (the "Final Closing Date"), the Remaining Subsidiary Stock (or such
alternative shares as contemplated by Section 8.4(c)) (the "Final Purchase").
Comcast currently intends to explore the possibility of a consensual transaction
with Jones and/or the Company and BTH during the aforementioned 90-day period
pursuant to which BTH would receive $500,000,000 in exchange for its interests
in the Company and the Affiliate Stock and Comcast has entered into the
Jones/Comcast Agreement to effect such a consensual transaction with Jones.
(b) Notwithstanding the foregoing, on the terms and subject
to the satisfaction or waiver of the conditions precedent set forth in this
Agreement, the Initial Closing and the Final Closing shall occur simultaneously
(the "Simultaneous Closing") and on the same date as the closing (the
"Jones/Comcast Closing") of the transactions contemplated by the Jones/Comcast
Agreement, or at such later date as the parties may agree (the date the
Simultaneous Closing occurs being the "Simultaneous Closing Date"). If the
Simultaneous Closing shall not have occurred prior to the earlier of five
business days following the termination or expiration of the Jones/Comcast
Agreement, and July 10, 1999, then, assuming the conditions precedent set forth
in Sections 5.1, 5.3, 5.4, 5.5, 6.1, 6.3, 6.4 and 6.5 shall have been satisfied
or waived, the Initial Closing shall take place as soon as reasonably
practicable and in any event within 5 Business Days of the earlier of such
occurrence. If the Jones/Comcast Closing shall not have occurred on the date the
Simultaneous Closing occurs, then the transactions to be effected at the
Simultaneous Closing and the Jones/Comcast Closing shall be rescinded and deemed
not to have occurred. In connection with the Simultaneous Closing, unless
Comcast shall have notified BTH in writing to the contrary at least two days
prior to the Simultaneous Closing Date, Comcast shall be deemed to have made the
election described in Section 8.4(c) not to receive the 49% Subsidiary Stock or
the Remaining Subsidiary Stock but to receive instead all of the shares of
capital stock of the Company (including the Control Shares) owned beneficially
or of record by US Cable, Intercable or any of their Affiliates as of the
Simultaneous Closing Date. The Simultaneous Closing Date shall be deemed to be
the Initial Closing Date and the Final Closing Date for purposes of Articles III
through XII hereof and the Simultaneous Closing shall be deemed to be the
Initial Closing and the Final Closing for purposes of Articles III through XII
hereof.
Section 1.2. Purchase Price. (a) Comcast agrees to pay BTH an amount equal to
$500,000,000 (the "Purchase Price"), 80% of which shall be payable on the
Initial Closing Date (the "Initial Closing Payment") and 20% of which shall be
payable on the Final Closing Date (the "Final Closing Payment"). In connection
with a Simultaneous Closing, 100% of the Purchase Price, constituting both the
Initial Closing Payment and the Final Closing Payment, shall be payable on the
Simultaneous Closing Date. If a Simultaneous Closing occurs after December 31,
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<PAGE>
1998, Comcast agrees to also pay BTH interest on the Purchase Price at the
Applicable Rate from December 31, 1998 to the Simultaneous Closing Date.
(b) Amounts payable pursuant to this Section 1.2 and
Sections 7.3(e), 8.2(b) and 8.8 shall be made by Comcast in immediately
available funds to one or more accounts designated by BTH at least two days
prior to the date any such payment is due.
(c) The foregoing purchase and sale and the Purchase Price
payable with respect thereto, shall be subject to adjustment as provided in
Sections 7.3(e), 8.2(b) and 8.8 of this Agreement.
ARTICLE II
EFFECTIVE TIME
Section 2.1. Effective Time. This Agreement will become effective immediately.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BTH
BTH hereby represents and warrants to Comcast that:
Section 3.1. Organization and Standing.
(a) BTH is a corporation duly organized, validly existing
and in good standing under the laws of Canada with full corporate power and
authority to own, lease, use and operate its properties (including, without
limitation, the shares of capital stock of its subsidiaries) and to conduct its
business as and where now owned, leased, used, operated and conducted. BTH is
duly qualified to do business and in good standing in each jurisdiction in which
the nature of the business conducted by it or the property it owns, leases or
operates requires it to so qualify, except where the failure to be so qualified
or in good standing in such jurisdiction individually or in the aggregate could
not reasonably be expected to prevent, materially interfere with or materially
delay the consummation of the transactions contemplated hereby. BTH is not in
default in the performance, observance or fulfillment of any provision of its
articles of incorporation or bylaws (or similar organizational documents) which
could reasonably be expected to prevent, materially interfere with or materially
delay the consummation of the transactions contemplated hereby.
(b) Each of the BTH Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the British
Virgin Islands with full corporate power and authority to own, lease, use and
operate its properties (including, without limitation, in the case of US Cable,
to own the Class A Shares and the Affiliate Stock and, in the case of
Intercable, to exercise the Control Option and to purchase and hold the Control
Shares) and to conduct its business as and where now owned, leased, used,
operated and conducted. Each of the BTH Subsidiaries is duly qualified to do
business and in good standing in each jurisdiction in
-4-
<PAGE>
which the nature of the business conducted by it or the property it owns, leases
or operates requires it to so qualify, except where the failure to be so
qualified or in good standing in such jurisdiction individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect on
either of the BTH Subsidiaries or prevent, materially interfere with or
materially delay the consummation of the transactions contemplated hereby. The
BTH Subsidiaries are not in default in the performance, observance or
fulfillment of any provision of their memorandum of association and articles of
association which could reasonably be expected to have a Material Adverse Effect
on the BTH Subsidiaries or prevent, materially interfere with or materially
delay the consummation of the transactions contemplated hereby.
(c) True, complete and correct copies of the memorandum of
association and articles of association for each of the BTH Subsidiaries have
been delivered to Comcast and such memorandum of association and articles of
association have not been amended, modified or rescinded since the date of such
delivery to Comcast and are in full force and effect.
Section 3.2. Ownership of the Class A Shares. US Cable owns beneficially and of
record the Class A Shares, free and clear of any Claims.
Section 3.3. Capitalization.
(a) US Cable has authorized share capital of $500,000,000
which is divided into 500,000,000 shares each having a par value of US $1.00 of
which 316,424,250 are issued and outstanding and no shares are issued and held
in treasury.
(b) Intercable has authorized share capital of $50,000 which
is divided into 50,000 shares each having a par value of US $1.00 of which 110
are issued and outstanding and no shares are issued and held in treasury.
(c) BTH owns beneficially and of record 316,424,250 shares
of the capital stock of US Cable and 110 shares of the capital stock of
Intercable, in each case free of any Claims. Such capital stock represents all
of the issued and outstanding capital stock of US Cable and Intercable,
respectively.
(d) Each of the (i) issued and outstanding shares of
Subsidiary Stock and (ii) to the Knowledge of BTH, shares of the Affiliate Stock
has been duly authorized, validly issued, fully paid and is nonassessable and,
in the case of (i) has not been and in the case of (ii) to the Knowledge of BTH
has not been issued in violation of any preemptive or similar rights. There are
(i) no outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating to
the issuance, sale, repurchase or transfer of any capital stock or other
securities of the BTH Subsidiaries or, to the Knowledge of BTH and except as set
forth in the Jones Companies Shareholders Agreements, the Jones Companies, nor
are there outstanding any securities which are convertible into or exchangeable
for any shares of capital stock or other securities of the BTH Subsidiaries or,
to the Knowledge of BTH, the Jones Companies, and (ii) the BTH Subsidiaries and,
to the Knowledge of BTH, the
-5-
<PAGE>
Jones Companies, do not have any obligation of any
kind to issue any additional shares of capital stock or other securities or to
pay for or repurchase any shares of capital stock or other securities. Except as
set forth in the Jones Companies Shareholders Agreements, there are no
preemptive or similar rights available to (i) the existing holders of the
capital stock of the BTH Subsidiaries, (ii) to the Knowledge of BTH, the
existing holders of the capital stock of the Jones Companies, or (iii) to any
other Person in respect of the capital stock or other securities of the BTH
Subsidiaries or, to the Knowledge of BTH, the Jones Companies.
Section 3.4. No Other Investments; No Liabilities.
(a) Other than the Class A Shares (together with any
distributions or dividends received on such shares and any rights to receive
declared but unpaid distributions or dividends on such shares), and any capital
stock of the Jones Companies (together with any distributions or dividends
received on such shares and any rights to receive declared but unpaid
distributions or dividends on such shares), US Cable does not own, beneficially
or of record, any capital stock of or other equity interest in any corporation
or other business entity nor does US Cable own, beneficially or of record, any
partnership interests in any general, limited or limited liability partnership.
Except for (i) the Class A Shares (together with any distributions or dividends
received on such shares and any rights to receive declared but unpaid
distributions or dividends on such shares) and any capital stock of the Jones
Companies (together with any distributions or dividends received on such shares
and any rights to receive declared but unpaid distributions or dividends on such
shares) and (ii) the Shareholders Agreement, the Jones Companies Shareholders
Agreements and the Shareholders Agreement Assignment, US Cable does not own any
assets and US Cable does not have any liabilities or obligations of any nature
whatsoever (other than franchise taxes and customary directors fees which are
not material in amount), whether known or unknown, absolute, accrued, contingent
or otherwise and whether due or to become due.
(b) Intercable does not own, beneficially or of record, any
capital stock of any corporation or other business entity nor does Intercable
own, beneficially or of record, any partnership interests in any general,
limited or limited liability partnerships. Except for its interests in the
Control Option Agreements and the Option Agreement Assignment, Intercable does
not own any assets and, except as set forth on Schedule 3.4, Intercable does not
have any liabilities or obligations of any nature whatsoever (other than
franchise taxes), whether known or unknown, absolute, accrued, contingent or
otherwise and whether due or to become due.
(c) US Cable owns beneficially and of record 2,410 shares of
the Class A Common Stock of JEC free and clear of any Claims other than pursuant
to Section 4.5 of the applicable Jones Company Shareholder Agreement, which as
-6-
<PAGE>
of the date of this Agreement constitutes 11.9% of the issued and outstanding
capital stock of JEC.
(d) US Cable owns beneficially and of record 747,500 shares
of the Class A Common Stock of JEG free and clear of any Claims other than
pursuant to Section 4.5 of the applicable Jones Company Shareholder Agreement,
which as of the date of this Agreement constitutes 20% of the issued and
outstanding capital stock of JEG.
Section 3.5. Corporate Power and Authority. BTH and each of the BTH Subsidiaries
each have all requisite corporate power and authority to enter into and deliver
this Agreement, to perform their obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution, delivery and
performance of this Agreement by BTH and each of the BTH Subsidiaries have been
duly authorized by all necessary corporate action required to have been taken by
or on behalf of BTH and each of the BTH Subsidiaries under applicable law and
their respective organizational documents. This Agreement has been duly executed
and delivered by BTH and each of the BTH Subsidiaries and constitutes the legal,
valid and binding obligation of BTH and each of the BTH Subsidiaries enforceable
against them in accordance with its terms.
Section 3.6. Conflicts; Consents and Approvals. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby will:
(a) conflict with, or result in a breach of, any provision
of the certificate of incorporation, by-laws, memorandum of association or
articles of association or similar organizational documents of BTH or either of
the BTH Subsidiaries;
(b) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or otherwise)
to terminate, accelerate, cancel, modify or call a default under, or result in
the creation of any Claim upon any of the properties or assets of BTH, the BTH
Subsidiaries, or any of their respective subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, contract, undertaking, agreement, lease or other instrument or
obligation to which any of the foregoing is a party (excluding, for purposes of
this Section 3.6(b), the Jones/BTH Agreements and the Jones Companies
Shareholders Agreements, as to which such agreements no representation or
warranty is made under this paragraph (b)), which could reasonably be expected
to prevent, materially interfere with or materially delay the consummation of
the transactions contemplated by this Agreement;
(c) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to BTH, either of the BTH Subsidiaries or any of
their subsidiaries or any of their respective properties or assets the effect of
which could reasonably be expected to, in the case of BTH prevent, materially
interfere with or delay the consummation of the transactions contemplated by
this Agreement, or in the case of each of the BTH Subsidiaries, have a Material
Adverse Effect on such BTH Subsidiary or prevent, materially interfere with or
materially delay the consummation of the transactions contemplated hereby;
(d) require any action or consent or approval of, or review
by, or registration or filing by BTH, either of the BTH Subsidiaries, or any of
their subsidiaries or to the Knowledge of BTH, the Company or the Jones
-7-
<PAGE>
Companies with (i) any local, domestic, foreign or multi-national court,
arbitral tribunal, administrative agency or commission or other governmental or
regulatory body, agency, instrumentality or authority (a "Governmental
Authority"), other than (w) actions required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act"); (x) the filing of any Schedule 13D with the
Securities and Exchange Commission ("SEC") or the amendment of any Schedule 13D
already on file with the SEC; (y) Franchise Approvals; or (z) actions required
as a result of or relating to the regulatory status of Comcast or (ii) to the
Knowledge of BTH, any third party.
Section 3.7. Brokerage and Finder's Fees; Expenses. Except in connection with
the retention of Bear Stearns & Co., Inc., (the fees of which firm shall be the
sole responsibility of BTH) none of BTH, either of the BTH Subsidiaries or their
respective Affiliates or any stockholder, director, officer or employee of any
of them has incurred or will incur on behalf of BTH, either of the BTH
Subsidiaries, the Company or any of their respective Affiliates any brokerage,
finder's or similar fee in connection with the transactions contemplated by this
Agreement.
Section 3.8. Shareholders Agreement and Option Agreements.
(a) True, correct and complete copies of the Jones/BTH
Agreements, the Jones Companies Shareholders Agreements, the Fee Letter and the
Supply Services Agreement (together with any and all schedules or exhibits to
each of the foregoing) have been delivered to Comcast. Each of the Jones/BTH
Agreements and the Jones Companies Shareholders Agreements (i) has been duly
authorized, executed and delivered by BTH and any of its Affiliates or agents
that are parties thereto, and to the Knowledge of BTH by the other parties
thereto, and (ii) is in full force and effect in the forms previously delivered
to Comcast and has not been amended, terminated or modified in any respect. BTH
is the "Investor" as such term is defined in the Shareholders Agreement and has
validly assigned all of its rights under the Shareholders Agreement to US Cable
pursuant to the Shareholders Agreement Assignment entered into pursuant to
Section 7.2(b)(ii) of the Shareholders Agreement. BTH has validly assigned all
of its rights under the Control Option Agreements to Intercable pursuant to that
certain Assignment and Assumption Agreement, dated December 22, 1995 (the
"Option Agreement Assignment"), by and among BTH, Morgan Guaranty Trust Company
of New York, Bank of New York, and Intercable. Except for the subject matter of
the Litigation (as defined in Section 5.7 hereof), neither BTH nor any of its
Affiliates or agents that are parties to or assignees of rights under the
Jones/BTH Agreements, and to the Knowledge of BTH none of the other parties
thereto, have breached or are in default under such agreements. Except for the
Jones/BTH Agreements, there are no other agreements, contracts, arrangements or
understandings which relate in any manner to, the subject matter of the
Jones/BTH Agreements.
(b) The execution of this Agreement and the consummation of
the transactions contemplated hereby and the exercise of the Control Option
(assuming the Control Option were exercised on the date hereof and on each of
the Initial Closing Date and the Final Closing Date) will not violate or
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contravene or constitute, with the passage of time, giving of notice or
otherwise, a default under or give rise to the early termination in whole or in
part of, the Jones/BTH Agreements; provided, however, that Comcast acknowledges
and agrees that the exclusive remedy of any Comcast Indemnified Party for any
breach of this Section 3.8(b) shall be limited to reimbursement of a portion of
the Initial Purchase Price as set forth in Section 8.8 of this Agreement.
(c) Except as set forth on Schedule 3.8 or as specifically
disclosed in the Company Public Reports, none of BTH, either of the BTH
Subsidiaries or any of their respective Affiliates or agents has (i) consented
to the taking of any action for which the consent of such persons is required to
be obtained by any party to the Jones/BTH Agreements, including the actions set
forth in Sections 2.6 and 3.6(b) of the Shareholders Agreement or (ii) engaged
in any transactions requiring approval pursuant to Section 3.6 of the
Shareholders Agreement, other than actions or transactions which, individually
or in the aggregate, are not material.
(d) As of the date of this Agreement, BTH has fulfilled not
less than $286,424,250 of its $400,000,000 investment commitment pursuant to
Section 3.1 of the Shareholders Agreement.
Section 3.9. Transactions with Affiliates and Jones. Except for the Jones/BTH
Agreements, the Jones Companies Shareholders Agreements, the Fee Letter, the
Supply Services Agreement and the Secondment Agreement, none of BTH or its
Affiliates or their respective agents is a party to any agreements, contracts,
understandings or arrangements with Jones or the Company or with any Affiliate
or Associate of Jones or the Company (i) relating to the subject matter of this
Agreement or any other equity investments, joint ventures or partnership
agreements or (ii) any other material matter, other than in the case of the
foregoing clause (ii) arms-length transactions entered into in the ordinary
course of business.
Section 3.10. Status of the Company. To the Knowledge of BTH, as of the date of
this Agreement and as of the earlier of (i) December 31, 1998, (ii) the
Simultaneous Closing Date and (iii) the Initial Closing Date the statements
contained on Schedule 3.10 are true, complete and correct in all material
respects.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMCAST
Comcast hereby represents and warrants to BTH that:
Section 4.1. Organization and Standing. Comcast is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania with full corporate power and authority to own, lease, use and
operate its properties and to conduct its business as and where now owned,
leased, used, operated and conducted. Comcast is duly qualified to do business
and in good standing in each jurisdiction in which the nature of the business
conducted by it or the property it owns, leases or operates requires it to so
qualify,
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except where the failure to be so qualified or in good standing in such
jurisdiction individually or in the aggregate could not reasonably be expected
to prevent, materially interfere with or materially delay the consummation of
the transactions contemplated hereby. Comcast is not in default in the
performance, observance or fulfillment of any provision of its articles of
incorporation or bylaws which could reasonably be expected to prevent,
materially interfere with or materially delay the consummation of the
transactions contemplated hereby.
Section 4.2. Corporate Power and Authority. Comcast has all requisite corporate
power and authority to enter into and deliver this Agreement, to perform its
obligations hereunder and, to consummate the transactions contemplated by this
Agreement. The execution, delivery and performance of this Agreement by Comcast
has been duly authorized by all necessary corporate action required to have been
taken by or on behalf of Comcast under applicable law or its articles of
incorporation and bylaws. This Agreement has been duly executed and delivered by
Comcast and constitutes the legal, valid and binding obligation of Comcast
enforceable against Comcast in accordance with its terms.
Section 4.3. Conflicts; Consents and Approvals. Except as set forth in Schedule
4.3, neither the execution and delivery of this Agreement, nor the consummation
of the transactions contemplated hereby will:
(a) conflict with, or result in a breach of, any provision
of the articles of incorporation or the by-laws of Comcast,
(b) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or otherwise)
to terminate, accelerate, cancel, modify or call a default under, or result in
the creation of any Claim upon any of the properties or assets of Comcast under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, contract, undertaking, agreement, lease or
other instrument or obligation to which Comcast is a party which could
reasonably be expected to prevent, materially interfere with or materially delay
the consummation of the transactions contemplated hereby;
(c) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Comcast or any of its properties or assets the
effect of which could reasonably be expected to prevent, materially interfere
with or materially delay the consummation of the transactions contemplated
hereby, or
(d) require any action or consent or approval of, or review
by, or registration or filing by Comcast with, any Governmental Authority or to
the Knowledge of Comcast any third party, other than (i) actions required by the
HSR Act; (ii) the filing of any Schedule 13D with the SEC or the Amendment of
any Schedule 13D already on file with the SEC; or (iii) actions or filings
required as a result of or relating to the status of BTH, the BTH Subsidiaries
or the Company.
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Section 4.4. Brokerage and Finder's Fees; Expenses. Except in connection with
the retention of Lazard Freres & Co. LLC (the fees of which firm shall be the
sole responsibility of Comcast) none of Comcast, its Affiliates or any
stockholder, director, officer or employee of any of them has incurred or will
incur on behalf of Comcast or any of its Affiliates any brokerage, finder's or
similar fee in connection with the transaction contemplated by this Agreement.
Section 4.5. Investment Purpose. Comcast is acquiring the shares of the Company,
JEC and JEG owned by BTH and the BTH Subsidiaries or alternatively, the Initial
Shares, the Affiliate Shares, the Subsidiary Shares and the Remaining Subsidiary
Shares, solely for the purposes of investment and not with a view to, or for
offer or sale in connection with, any distribution thereof.
Section 4.6. Transactions with Jones. Except for the acquisition of cable
systems, programming carriage agreements, minority investments in programming or
other content businesses, and advertising interconnect agreements, none of
Comcast or its Affiliates or their respective agents is a party to any
agreements, contracts, understandings or arrangements with Jones or the Company
or with any Affiliate or Associate of Jones or the Company (i) relating to the
subject matter of this Agreement or (ii) any other material matter, other than
arms-length transactions entered into in the ordinary course of business;
provided, however, that any agreement, contract, understanding or arrangement
with Jones or the Company entered into after May 22, 1998 in contemplation of
the acquisition of the Company or shares of its capital stock shall be deemed
not to be a breach of this representation and warranty.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF COMCAST
AT THE INITIAL CLOSING AND THE FINAL CLOSING
(A) The obligations of Comcast to consummate the Initial Closing in
accordance with Article VIII are subject to the fulfillment or waiver of each of
the following conditions at or prior to the Initial Closing:
Section 5.1. Litigation; No Governmental Opposition. No judgment, injunction,
order or decree (i) enjoining or prohibiting BTH, the BTH Subsidiaries or
Comcast from consummating the transactions contemplated hereby or the exercise
of the Control Option (including its exercise pursuant to Section 7.5(a)), (ii)
invalidating or terminating the Control Option or the Jones/BTH Agreements or
(iii) declaring that if the Initial Closing were to occur, the Control Option
would be invalidated or terminated, shall have been entered prior to or on the
Initial Closing Date and no suit, action or proceeding shall be pending or
threatened prior to or on the Initial Closing Date by any Governmental Authority
seeking the relief described in the foregoing clauses (i), (ii) or (iii).
Section 5.2. Representations, Warranties and Covenants.
(a) Each of the representations and warranties of BTH
contained in this Agreement shall, in the case of those representations and
warranties that are not qualified by materiality, be true, complete and correct
in all material respects, and in the case of those representations and
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warranties that are qualified by materiality shall be true, complete and correct
in all respects, as of each of (i) the date of this Agreement and (ii) unless
otherwise specified as having been made as of a specific date, the Initial
Closing Date, in each case as though newly made at such time, except to the
extent the facts underlying such representations and warranties have changed (i)
with Comcast's consent in accordance with Section 7.3 or otherwise, or (ii) as a
result of the sale of the Affiliate Stock in accordance with the provisions of
Section 7.11(b).
(b) Each of the covenants and agreements to be performed by
BTH and the BTH Subsidiaries hereunder at or prior to the Initial Closing shall
have been duly performed in all material respects.
Section 5.3. Approvals.
(a) Except as could not reasonably be expected to have a
Material Adverse Effect on Comcast or the Company and except for any
authorizations, consents, orders or approvals from applicable Franchise
Authorities, all actions by or in respect of, or filings with, any Governmental
Authority required to permit the consummation of the transactions contemplated
hereby shall have been taken, made or obtained, and any and all other permits,
approvals, consents, licenses or other actions necessary to consummate the
transactions hereunder (including those listed on Schedule 3.6) shall have been
received or taken, and none of such permits, approvals, consents or licenses
shall contain any provisions which would have a Material Adverse Effect on
Comcast or the Company.
(b) There shall not be in effect any statute, rule or
regulation which would have the effect of prohibiting Comcast from consummating
the transactions contemplated hereby.
Section 5.4. Other Deliveries. In addition to those documents and instruments
which are required to be delivered to Comcast at the Initial Closing pursuant to
Article VIII, BTH and each of the BTH Subsidiaries shall have executed (where
applicable) and delivered to Comcast (or shall have caused to be executed and
delivered to Comcast by the appropriate Person) the following:
(a) a copy of the memorandum of association and articles of
association of each of the BTH Subsidiaries which is certified as of a recent
date by the applicable British Virgin Islands authority;
(b) a customary certificate of the applicable British Virgin
Islands authority certifying as of a recent date as to matters such as the due
incorporation and good standing of each of the BTH Subsidiaries;
(c) a certificate of the secretary of each of the BTH
Subsidiaries, certifying that the attached copies of their respective memorandum
of association and articles of association and the resolutions of their
respective boards of directors and stockholders authorizing the execution of
this Agreement and the transactions contemplated hereby are true, correct and
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complete copies and are each in full force and effect and have not been amended
or modified, and that the officers of each of the BTH Subsidiaries are those
persons named in the certificate;
(d) a certificate dated as of the Initial Closing Date
signed by the president or chief executive officer of BTH certifying that all of
the conditions in Section 5.2 have been fulfilled prior to or on the Initial
Closing Date;
(e) a customary opinion of counsel to BTH and each of the
BTH Subsidiaries covering such matters as described in Sections 3.1, 3.3 and
3.5;
(f) such other certificates, documents and agreements in
connection with the consummation of the transactions contemplated hereby which
are reasonably requested by Comcast, all in form and substance reasonably
satisfactory to Comcast.
Section 5.5. HSR Act. Any applicable waiting period under the HSR Act (including
any extensions thereof) shall have expired or been terminated.
Section 5.6. Material Adverse Change. During the period beginning March 31, 1998
and ending on the earlier of (i) December 31, 1998 (ii) the Initial Closing Date
and (iii) the Simultaneous Closing Date, there shall have been no change, event
or development which, either individually or in the aggregate with other
changes, events and developments, has had or could reasonably be expected to
have a Material Adverse Effect on the Company; provided, however, that (i) a
decrease in the market price of the shares of the Company's capital stock (but
not any change, event or development underlying such decrease to the extent such
change, event or development would otherwise constitute a Material Adverse
Effect on such party) and (ii) changes, events or developments (including
changes in legal or regulatory conditions) generally affecting the economy as a
whole or the cable industry as a whole, shall be deemed not to be changes,
events or developments having a Material Adverse Effect on the Company for
purposes of this Section 5.6.
Section 5.7. Litigation. The decision and order rendered on
May 5, 1998 in that certain lawsuit brought by BTH against Jones Intercable,
Inc., Jones International, Ltd., Jones Internet Channel, Inc. and Glenn R.
Jones, which has been rendered by the U.S. District Court for the District of
Colorado (the "Litigation") shall not have been reversed and the injunction
granted in connection with such decision shall not have been stayed or
dissolved.
Section 5.8. Status of the Company. On the earliest to occur
of (i) December 31, 1998, (ii) the Initial Closing Date or (iii) the
Simultaneous Closing Date the statements on Schedule 3.10 shall be true and
correct.
(B) The obligations of Comcast to consummate the Final Closing in
accordance with Article VIII are subject to the fulfillment or waiver of each of
the conditions set forth in Section 8.5 at or prior to the Final Closing.
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ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF BTH AND
THE BTH SUBSIDIARIES AT THE INITIAL CLOSING AND THE FINAL CLOSING
(A) The obligations of BTH and the BTH Subsidiaries to consummate the
Initial Closing in accordance with Article VIII are subject to the fulfillment
or waiver of the following conditions at or prior to the Initial Closing:
Section 6.1. Litigation; No Governmental Opposition. No judgment, injunction,
order or decree (i) enjoining or prohibiting any of BTH, the BTH Subsidiaries or
Comcast from consummating the transactions contemplated hereby or the exercise
of the Control Option (including its exercise pursuant to Section 7.5(a)), (ii)
invalidating or terminating the Control Option or the Jones/BTH Agreements or
(iii) declaring that if the Initial Closing were to occur the Control Option
would be invalidated or terminated, shall have been entered prior to or on the
Initial Closing Date and no suit, action or proceeding shall be pending or
threatened prior to or on the Initial Closing Date by any Governmental Authority
seeking the relief described in the foregoing clauses (i), (ii) or (iii).
Section 6.2. Representations, Warranties and Covenants.
(a) Each of the representations and warranties of Comcast
contained in this Agreement shall, in the case of those representations and
warranties that are not qualified by materiality, be true, complete and correct
in all material respects, and in the case of those representations and
warranties that are qualified by materiality shall be true, complete and correct
in all respects, as of each of (i) the date of this Agreement and (ii) unless
otherwise specified as having been made as of a specific date, the Initial
Closing Date, in each case as though newly made at such time.
(b) Each of the covenants and agreements to be performed by
Comcast hereunder at or prior to the Initial Closing shall have been duly
performed in all material respects.
Section 6.3. Approvals.
(a) Except as could not reasonably be expected to have a
Material Adverse Effect on BTH or the BTH Subsidiaries, and except for any
authorizations, consents, orders or approvals from applicable Franchise
Authorities, all actions by or in respect of, or filings with, any Governmental
Authority required to permit BTH and the BTH Subsidiaries to consummate the
transactions contemplated hereby shall have been taken, made or obtained, and
any and all other permits, approvals, consents, licenses or other actions
necessary to permit BTH to consummate the transactions hereunder shall have been
received or taken.
(b) There shall not be in effect any statute, rule or
regulation which would have the effect of prohibiting BTH or the BTH
Subsidiaries from consummating the transactions contemplated hereby.
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Section 6.4. Other Deliveries. In addition to those documents and instruments
which are required to be delivered to BTH at the Initial Closing pursuant to
Article VIII, Comcast shall have executed (where applicable) and delivered to
BTH (or shall have caused to be executed and delivered by the appropriate
Person), the following:
(a) a certificate dated as of the Initial Closing Date
signed by the president or chief executive officer of Comcast certifying that
all of the conditions contained in Section 6.2 have been fulfilled prior to or
on the Initial Closing Date;
(b) a customary opinion of counsel to Comcast, covering such
matters as described in Sections 4.1 and 4.2;
(c) such other certificates, documents and agreements in
connection with the consummation of transactions contemplated hereby which are
reasonably requested by BTH, all in form and substance reasonably satisfactory
to BTH.
Section 6.5. HSR Act. Any applicable waiting period under the HSR Act (including
any extensions thereof) shall have expired or been terminated.
(B) The obligations of BTH and the BTH Subsidiaries to consummate the Final
Closing in accordance with Article VIII are subject to the fulfillment or waiver
of each of the conditions set forth in Section 8.6 at or prior to the Final
Closing.
ARTICLE VII
COVENANTS
Section 7.1. [Intentionally omitted]
Section 7.2. Jones/Comcast Agreement. (a) Comcast agrees that (i) it shall
perform its obligations under the Jones/Comcast Agreement (ii) it shall not,
without the prior written consent of BTH, amend or waive any provision of the
Jones/Comcast Agreement to (x) add any additional conditions to the obligations
of the parties to the Jones/Comcast Agreement to the Jones/Comcast Closing (y)
amend or waive the provisions contained in Sections 9(c), (d), (i), (j), (k) or
10 of the Jones/Comcast Agreement or (z) otherwise adversely affect in a
material way the right or ability of any party thereto to consummate the Closing
or the Simultaneous Closing or cause the Closing or the Simultaneous Closing to
be delayed, (iii) it shall enforce vigorously any rights it may have against the
Jones Entities in respect of any breach of their obligations under the
Jones/Comcast Agreement including seeking specific performance by the Jones
Entities of their obligations thereunder and (iv) it shall provide BTH with
copies of all notices Comcast receives or delivers pursuant to the Jones/Comcast
Agreement.
(b) Comcast agrees that in the event the Closing and the
Simultaneous Closing have not occurred on or prior to June 30, 1999, it shall
terminate the Jones/Comcast Agreement in accordance with the provisions of
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Section 16 thereof with a view to alternatively consummating the Initial Closing
as contemplated by Section 1.1(a) hereof.
Section 7.3. Consultation with Comcast.
(a) BTH covenants and agrees that upon BTH, the BTH
Subsidiaries or their designees on the Company's board of directors receiving
any notice from Jones, the Company or their Affiliates pursuant to, under or
with respect to Sections 2.6, 2.8, 3.1, 3.6, 3.8, 4.1, 4.2, 5.1, 5.2 or 5.4 of
the Shareholders Agreement, BTH will promptly notify Comcast of the receipt of
such notice and if so requested by Comcast promptly forward a copy of such
notice to Comcast by facsimile transmission together with telephonic notice to
the numbers specified for Comcast in Section 13.7; provided that if BTH
determines in its reasonable good faith discretion that forwarding any such
notice to Comcast would constitute a breach of its confidentiality obligations
under the Shareholders Agreement, BTH shall only be obligated to notify Comcast
of the existence and general subject matter of such notice and to the extent
permitted under its confidentiality obligations, the contents of such notice.
(b) Comcast shall have the right to deliver a notice of
preference expressing their desire that BTH, the BTH Subsidiaries or their
Affiliates exercise or not exercise their rights or otherwise take or not take
certain actions pursuant to Sections 2.6, 2.8, 3.1(b) or (c), 3.6, 3.8, 4.1,
4.2, 5.1, 5.2 or 5.4, as the case may be, (a "Notice of Preference") of the
Shareholders Agreement within the applicable Preference Period. For purposes
hereof, the "Preference Period" shall be a number of days (or hours) equal to
the greater of (i) two days less than the number of days between the date of
receipt of notice by BTH, the BTH Subsidiaries or their designees on the
Company's board of directors from Jones, the Company or their respective
Affiliates and the time BTH is required to respond to such request under the
terms of the Shareholders Agreement and (ii) one half of the number of days (or
hours) between the time of receipt of notice by BTH, the BTH Subsidiaries or
their designees on the Company's board of directors and the time BTH is required
to respond to such request.
(c) If Comcast has not delivered a Notice of Preference
within the applicable Preference Period, then Comcast shall be deemed to have
delivered a Notice of Preference containing the following advice, as applicable:
(i) in the case of Sections 2.6, 4.1, 5.1(a) or
5.2(d) of the Shareholders Agreement, BTH and the BTH Subsidiaries should
exercise their right not to consent to the proposed action and in the case of
Section 3.1(b), not to waive the conditions referred to therein;
(ii) in the case of Section 3.6 of the Shareholders
Agreement, the Unrelated Directors (as defined in the Shareholders Agreement)
designated by BTH or the BTH Subsidiaries should exercise their right (subject
to their fiduciary duties as provided in Section 7.3(e)) not to approve the
proposed transaction.
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(d) If Comcast delivers a Notice of Preference within the
Preference Period expressing a desire to have BTH or the BTH Subsidiaries
exercise their rights under Sections 2.8, 3.1(b) or (c), 3.8, 4.2 or 5.1(b) of
the Shareholders Agreement, or if BTH or the BTH Subsidiaries are required to
invest in additional shares of the Company pursuant to Section 3.1(a) of the
Shareholders Agreement, at the time of delivery by Comcast of any such
Preference Notice or, in the case of a notice by BTH of its investment
obligations pursuant to Section 3.1(a) of the Shareholder's Agreement within 5
Business Days of receipt by Comcast thereof. Comcast and BTH agree to enter into
a mutually satisfactory escrow or security arrangement whereby Comcast shall
make available to BTH or the BTH Subsidiaries, as applicable, immediately
available funds sufficient to enable BTH or the BTH Subsidiaries to fulfill
their payment obligations pursuant to the applicable Section of the Shareholders
Agreement and such funds shall be held in escrow until immediately prior to such
time as BTH or the BTH Subsidiaries acquire the securities which are the subject
of such transaction and which further provides that BTH or the BTH Subsidiaries,
as applicable, shall deliver the securities (together with any dividends or
distributions thereon) to Comcast at the first to occur of the Final Closing,
including any alternative final closing pursuant to Section 8.8, or the
termination of this Agreement.
(e) In the event that BTH, the BTH Subsidiaries or their
designees on the Company's board of directors elect not to act in accordance
with, or take any action contrary to, any Notice of Preference of Comcast
(whether actually delivered pursuant to subsection (b) or whether deemed to have
been delivered pursuant to subsection (c) within the Preference Period), then
BTH will make a one-time payment to Comcast, within 5 days of demand by Comcast,
of an amount equal to $150,000,000, plus, if the Initial Closing has occurred
interest at the Applicable Rate accruing from the Initial Closing Date to and
including the date of such payment. No such payment shall be required of BTH
with respect to a transaction described in Section 3.6(b) of the Shareholders
Agreement that has occurred if (i) the directors of the Company designated by US
Cable or any of its Affiliates pursuant to the Shareholders Agreement shall have
reasonably concluded in good faith at the time they approved such transaction,
to the extent such consultation is reasonably practicable under the
circumstances after (x) consultation with and the receipt of advice from a
nationally recognized law firm, and (y) to the extent reasonably practicable
under the circumstances consultation with Comcast, that their fiduciary duties
as directors of the Company require them to approve such transaction and (ii)
none of BTH or its Affiliates has any financial interest in such transaction
(other than holding any capital stock of the Company) or has received
remuneration or any other inducement to approve such transaction. In addition,
no such payment shall be required of BTH with respect to the adoption of the
resolutions set forth on Schedule 7.3.
(f) Except as otherwise expressly provided in Section 8.8,
the receipt of any such payment by Comcast shall be the sole and exclusive
remedy of the Comcast Indemnified Parties with respect to claims based on the
matters set forth in this Section 7.3.
(g) Notwithstanding any provision to the contrary in this
Section 7.3, with respect to the resolutions set forth on Schedule 7.3 (i)
Comcast agrees that it shall waive any rights it may have under Section 7.3(b)
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to deliver a Notice of Preference to BTH regarding BTH's rights under the
Shareholders Agreement in respect of the adoption of the resolutions set forth
on Schedule 7.3 and the consummation of the transactions authorized by such
resolutions in accordance with the terms of such resolutions, (ii) Comcast and
BTH agree that Section 7.3(c) shall not be applicable to the resolutions set
forth on Schedule 7.3 and Comcast shall not deliver a Notice of Preference or be
deemed to have delivered a Notice of Preference with respect to such
resolutions, and (iii) Comcast and BTH agree that BTH (and any director of the
Company designated by BTH pursuant to the Shareholders Agreement) shall be
entitled, in its sole discretion, to take any such actions or refrain from
taking any actions, and exercise or refrain from exercising any such rights, as
it may have under the Shareholders Agreement with respect to the approval of, or
the giving or withholding of consent to, such resolutions.
Section 7.4. Prohibited Transactions. During the term of this Agreement, BTH
shall not and shall not permit any of its Affiliates or agents to: (i) except as
contemplated by this Agreement, Transfer any interests of BTH, the BTH
Subsidiaries or their Affiliates in, or rights relating to, the Company, (ii)
except in connection with a transaction of the type referred to in the last
sentence of Section 1.1(a), engage in any merger, consolidation or other
business combination involving the Company or any sale of substantially all of
the assets of the Company, (iii) except as contemplated by this Agreement,
Transfer any of the capital stock of either of the BTH Subsidiaries or
participate in any merger, consolidation or other business combination involving
either of the BTH Subsidiaries; (iv) except as contemplated by this Agreement,
Transfer any of the Class A Shares or the Control Shares or any interest in
Jones/BTH Agreements or the Fee Letter or Supply Services Agreement or any
rights, powers or privileges thereunder or waive, modify or fail to reasonably
enforce and to defend any and all such rights, powers or privileges; (v) except
as contemplated by this Agreement, Transfer any of the capital stock of the
Jones Companies or any interest in the Jones Company Shareholders Agreements or
any rights, powers or privileges thereunder or waive, modify or fail to
reasonably enforce and to defend any and all such rights, powers or privileges;
or (vi) grant any option or right to do any of the foregoing. BTH also agrees
that it shall not and shall not permit any of its Affiliates, agents, employees
and representatives (including, without limitation, attorneys and financial
advisors) to solicit offers relating to, or to negotiate, discuss or enter into
or consummate any agreements, arrangements, contracts or understandings relating
to, any of the matters covered by clauses (i) through (vi) of the preceding
sentence. At all times during the term of this Agreement, BTH agrees that it
shall remain a majority-owned subsidiary of BCE, Inc. ("BCE"); provided that BTH
may be liquidated into BCE in a transaction which will not result in the loss of
any rights under the Jones/BTH Agreements.
Section 7.5. Exercise of the Control Option
(a) BTH shall notify Comcast within twenty-four (24) hours
after it becomes aware that the Control Option becomes exercisable pursuant to
the terms of the Control Option Agreements. If Comcast, in its sole discretion,
determines that the Control Option should be exercised and so notifies BTH, then
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BTH shall or shall cause Intercable or their agent to either (as directed by
Comcast) (i) exercise the Control Option and, upon satisfaction or waiver of the
conditions contained in Section 3.2(b) of the Option Agreement, purchase the
Control Shares or (ii) assign their rights under the Control Option Agreements
in accordance with Section 10.2(a)(iii) or 10.2(a)(iv) thereof to Comcast or a
person selected by Comcast. In the event that Comcast decides that the Control
Option should be exercised, it shall deliver to BTH a written notice directing
BTH to, or to cause its Affiliates or agents to, exercise the Control Option on
a date specified in such notice and Comcast shall deposit into an escrow
account, with Bank of New York acting as escrow agent, sufficient funds to
consummate the exercise of the Control Option and the purchase of the Control
Shares; provided however that if BTH or the BTH Subsidiaries fail to consummate
the purchase of the Control Shares such funds provided by Comcast shall be
repaid to Comcast plus any interest earned on such funds while held in escrow.
BTH shall not, and shall cause the BTH Subsidiaries and their agents not to,
exercise the Control Option unless so directed by Comcast. Notwithstanding any
provision to the contrary in this Agreement, Comcast and BTH acknowledge and
agree that (i) the Control Option has become immediately exercisable in certain
circumstances referred to in the Control Option Agreements as a "Section
3.1(a)(vi) Exercise" and that the Control Option has been deemed to be so
exercised as set forth in the Control Option Agreements, (ii) at the time of the
closing of the purchase of the Control Shares pursuant to a Section 3.1(a)(vi)
Exercise, Bank of New York will be acting as agent for Comcast pursuant to each
of the Control Option Agreements (including the right to purchase the Control
Shares), and (iii) Comcast shall, at the time of the closing of the purchase of
the Control Shares pursuant to a Section 3.1(a)(vi) Exercise, pay the purchase
price for the Control Shares to the Jones Sellers pursuant to the Control Option
Agreements and Comcast shall not be required to deposit such funds in escrow as
provided in this Section 7.5(a).
(b) In the event that Intercable's inability to satisfy one
or more of the conditions contained in Section 3.2(b)(i)-(vi) of the Control
Option Agreements is due to a Change in Law (as defined in the Control Option
Agreements) after the date of this Agreement and prior to the delivery of an
exercise notice pursuant to the Control Option Agreements, and such inability to
satisfy such conditions would prevent Intercable from delivering the Control
Shares to Comcast as provided herein, then Intercable shall have the right to
offer the Control Option to Jones in accordance with the terms, conditions and
procedures specified in Section 7.2 of the Control Option Agreements; provided
that Intercable agrees that it shall not exercise such right to offer the
Control Option to Jones prior to the termination of the Jones/Comcast Agreement.
In the event that Jones fails to elect to purchase the Control Option pursuant
to the offer referred to in the previous sentence, then Intercable shall assign
the Control Option to Comcast (or a Person designated by Comcast) pursuant to
Section 10.2(a)(ii) of the Control Option Agreements and the condition contained
in Section 8.5(f) shall be satisfied. In the event that Jones elects to purchase
the Control Option pursuant to the offer referred to in the first sentence of
this Section 7.5(b), the condition contained in Section 8.5(f) shall not be
satisfied and BTH shall have the right to retain any proceeds of such purchase
by Jones.
Section 7.6. Litigation. BTH shall not take any action or refrain from taking
any action relating to the Litigation without first consulting with Comcast;
provided that, in consideration of Comcast's entering into the Jones/Comcast
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Agreement and this Agreement, BTH hereby releases, effective as of the date on
which the Closing Date (as defined in the Jones/Comcast Agreement) and the
Simultaneous Closing Date shall both have occurred, all claims for monetary
damages that it has asserted, or may assert, against the Company, the Jones
Sellers and their respective officers, directors and Affiliates in connection
with the subject matter of the Litigation as provided in the Agreement and
Amendment No. 1 to Shareholders Agreement of even date herewith. BTH agrees to
take any and all actions necessary or advisable to stay any and all proceedings
relating to the Litigation until the first to occur of (i) the date on which the
Closing Date (as defined in the Jones/Comcast Agreement) and the Simultaneous
Closing Date shall both have occurred or (ii) the termination of the
Jones/Comcast Agreement.
Section 7.7. Covenant Not to Take Certain Actions.
(a) None of BTH or the BTH Subsidiaries shall take, or agree
in writing or otherwise to take, or permit any of their Affiliates to take, or
agree in writing or otherwise to take, any action which will cause any of the
conditions specified in Article V or Section 8.5 not to be fulfilled at and as
of the Initial Closing Date and the Final Closing Date, respectively or which
would be inconsistent with the terms of this Agreement or the transactions
contemplated hereby.
(b) Comcast shall not take, or agree in writing or otherwise
to take, nor permit any of its Affiliates to take, or agree in writing or
otherwise to take, any action which will cause any of the conditions specified
in Article VI and Section 8.6 not to be fulfilled at and as of the Initial
Closing Date and the Final Closing Date, respectively, or which would be
inconsistent with the terms of this Agreement or the transactions contemplated
hereby.
(c) BTH shall cause the BTH Subsidiaries to: (i) conduct
their respective business only in the ordinary course consistent with past
practice; (ii) except as contemplated by this Agreement, not make (or incur any
obligation to make) any purchase, sale or disposition of any asset or property
or subject to any Claim any of their properties or assets; (iii) other than
obligations for reasonable director's fees, not incur any contingent or fixed
obligations or liabilities including, without limitation, any liability
(contingent or fixed) as a guarantor or otherwise with respect to the
obligations of others; (iv) except with Comcast's consent in connection with the
actions contemplated by Section 7.10 not make or incur any obligation to make a
change in their certificates of incorporation, by-laws or authorized or issued
capital stock; (v) except for the payment to BTH of any portion of the Purchase
Price paid to the BTH Subsidiaries by Comcast, not declare, set aside or pay any
dividend or distribution, make (or incur an obligation to make) any other
distribution in respect of its capital stock or interests or make (or incur an
obligation to make) any direct or indirect redemption, purchase or other
acquisition of their stock or interests; (vi) not make any change in the
compensation payable or to become payable to any of their respective officers,
employees, agents or independent contractors, or enter into any collective
bargaining agreement, bonus, equity, option, profit sharing, compensation,
welfare, retirement, or other similar arrangement, or any employment contract;
(vii) not prepay any loans (if any) from their stockholders, officers or
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directors; (viii) not make any change in their borrowing or banking
arrangements; and (ix) except with Comcast's consent in connection with the
actions contemplated by Section 7.10 not issue any capital stock nor any rights,
options or warrants to purchase capital stock.
Section 7.8. Resignation of Directors. BTH, US Cable and Intercable each agree
to cause each of the Investor Nominees (as such term is defined in the
Shareholders Agreement) to resign, seriatim from the Company's board of
directors at the Final Closing or the Simultaneous Closing, as applicable (but
in any event prior to the closing of the purchase and sale of the Optioned
Shares (as defined in the Option Agreements)) and to designate as Investor
Nominees such persons as may be selected by Comcast and to vote in favor of and
to cause the other Investor Nominees, subject to their fiduciary duties as
provided in Section 2.4(b) of the Shareholders Agreement, to vote in favor of
electing such individuals designated by Comcast to fill the vacancies created by
such resignations and by the resignations of the Jones Nominees (as such term is
defined in the Shareholders Agreement) pursuant to the Jones/Comcast Agreement .
BTH, Intercable and US Cable each agree to follow Comcast's direction with
respect to the sequence of such resignations and the filling of such vacancies.
Section 7.9. Covenant to Act in Good Faith.
(a) BTH and the BTH Subsidiaries shall in good faith use
reasonable best efforts to ensure that (i) the conditions in Article V(A) are
fulfilled as soon as is reasonably possible following the date hereof and (ii)
the conditions in Article V(B) are fulfilled as soon as is reasonably possible
(x) in the case of a Simultaneous Closing, following the date hereof and (y) in
all other cases after the earlier to occur of (i) the date Comcast notifies BTH
to exercise or cause the exercise of the Control Option after the Control Option
becomes exercisable or (ii) the date the Control Option terminates according to
its terms without Comcast having notified BTH to exercise the Control Option.
BTH and any of its respective Affiliates, shall promptly file any required
notice or application for approval with respect to the consummation of the
transactions contemplated hereby, including making any required filing under the
HSR Act on or prior to August 27, 1998 and shall expeditiously process the same
(and each of BTH and its respective Affiliates shall cooperate in a commercially
reasonable manner with Comcast in the filing of any such notice or application
and the obtaining of any such approval). In connection with the foregoing,
Comcast may also seek that any such actions, consents, approvals or waivers
include the immediate transfer on the Closing Date of the Control Shares by
Comcast to Comcast Cable Communications, Inc., a wholly-owned subsidiary of
Comcast and the parent company of Comcast's cable division.
(b) Comcast shall in good faith use reasonable best efforts
to ensure that (i) the conditions in Article VI(A) are fulfilled as soon as is
reasonably possible following the date hereof including making any required
filing under the HSR Act on or prior to August 27, 1998 and (ii) the conditions
in Article VI(B) are fulfilled as soon as is reasonably possible (x) in the case
of a Simultaneous Closing following the date hereof and (y) in all other cases
after the earlier to occur of (i) the date Comcast notifies BTH to exercise or
cause the exercise of the Control Option after the Control Option becomes
exercisable or (ii) the date the Control Option terminates according to its
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terms without Comcast having notified BTH to exercise the Control Option.
Comcast and any of its Affiliates shall promptly file any required notice or
application for approval with respect to the consummation of the transactions
contemplated hereby, including making any required filing under the HSR Act
prior to [July ___, 1998 (10 business days after signing)], and shall
expeditiously process the same (and Comcast and its Affiliates shall cooperate
in a commercially reasonable manner with BTH and the BTH Subsidiaries in the
filing of any such notice or application or the obtaining of any such approval).
Section 7.10. Tax Matters. BTH and Comcast covenant and agree to consult with
one another and cooperate in good faith to determine mutually advantageous
allocations and tax structures to effect the transactions contemplated by this
Agreement.
Section 7.11. Other Agreements. (a) Following the Initial Closing, BTH shall pay
Comcast any Payments pursuant to the Fee Letter and the Supply Services
Agreement received on or after the Initial Closing Date.
(b) The parties agree that $50,000,000 of the Purchase Price
(or such other amount as may be mutually agreed upon by the parties in their
individual and sole discretion) will be allocated to the Affiliate Stock. BTH
covenants and agrees to offer Jones the Affiliate Stock if and to the extent
required by the terms of the Jones Companies Shareholders Agreements pursuant to
the terms of Section 4.5 thereof promptly following the Initial Closing Date. At
the Simultaneous Closing, BTH shall, subject to Jones' consent, assign, or cause
to be assigned, to Comcast all of the rights of BTH and the BTH Subsidiaries
under the Jones Companies Shareholders Agreement and the related Registration
Rights Agreements.
(c) BTH covenants and agrees to promptly notify Comcast upon
becoming aware of a Change in Law (as defined in the Control Option Agreements)
and except as otherwise provided in Section 7.5(b) BTH and Intercable will
refrain from exercising their rights pursuant to Section 7.2 of the Option
Agreement and shall follow Comcast's instructions with respect to the Control
Option.
(d) BTH, the BTH Subsidiaries and Comcast agree that, in the
event the Company or Jones (or Jones' Affiliates or Associates) file any action,
suit or claim challenging the transactions contemplated by this Agreement or
seeking to prohibit consummation of the transactions contemplated by this
Agreement, (i) none of them shall settle any such action, suit or claim without
the written consent of the other parties to this Agreement and (ii) they shall
cooperate and use their respective reasonable best efforts to preserve the
rights of BTH pursuant to the Shareholders Agreement and the Control Option
Agreement; provided that Comcast shall not have any obligation to waive, amend,
modify or fail to enforce any of its rights under this Agreement. In addition,
each of Comcast on the one hand, and BTH and its Affiliates on the other hand,
shall pay one-half of the reasonable costs and expenses incurred in the
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aggregate by counsel to Comcast and counsel to BTH and its Affiliates in
connection with any such action, suit or claim.
(e) (i) BTH and the BTH Subsidiaries covenant and agree that
promptly upon becoming aware that Jones or any of his Affiliates have engaged in
a transaction of the type described in Section 2.6(a) or Section 3.6 of the
Shareholders Agreement without having obtained any consent of BTH required
thereunder, BTH or any such BTH Subsidiary will notify Comcast of such
transaction.
(ii) Subject to Section 7.3(g), BTH will, if requested
by Comcast, at Comcast's expense, diligently enforce its rights under the
Shareholders Agreement, including seeking judicial relief in respect thereof and
will not settle any such judicial proceeding without the consent of Comcast.
Section 7.12. Updates. BTH agrees that it shall promptly notify Comcast in
writing of (i) all events, circumstances, facts and occurrences arising
subsequent to the date of this Agreement that could result in any breach of a
representation or warranty of BTH in this Agreement or which could have the
effect of making any representation or warranty contained herein untrue or
incorrect in any material respect and (ii) all other material developments
affecting the ability of BTH to perform its obligations under this Agreement.
Comcast may elect not to accept such disclosures for purposes of any
determination pursuant to Article V(A) or V(B) of this Agreement, provided, that
if Comcast elects to proceed with the transactions contemplated hereby, such
disclosures shall (to the extent such disclosures do not relate to (i) breaches
of covenants of BTH or the BTH Subsidiaries or (ii) breaches of representations
and warranties of which BTH had Knowledge prior to the date of this Agreement)
be deemed to be updates to the applicable representations and warranties for
purposes of the indemnification provisions set forth in Article XI of this
Agreement and for purposes of any determination pursuant to Article V or Section
8.5 of this Agreement.
Section 7.13. Programming Rights. Effective as of and conditioned upon the
consummation of the Simultaneous Closing, BTH on behalf of itself and its
Affiliates assigns to Comcast all of its rights pursuant to Section 3.5 of the
Shareholders Agreement.
ARTICLE VIII
CLOSINGS
Section 8.1. Initial Closing. The initial closing of the transactions
contemplated by Section 1.1(a)(i) of this Agreement (the "Initial Closing")
shall take place at 10:00 a.m. Eastern Standard Time on the Initial Closing
Date. The Initial Closing shall take place in the offices of Dechert Price &
Rhoads, 4000 Bell Atlantic Tower, 1717 Arch Street, Philadelphia, PA 19103-2793,
or such other location as mutually agreed upon by the parties.
Section 8.2. Deliveries at the Initial Closing.
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(a) At the Initial Closing, Comcast shall deliver to BTH the
Initial Closing Payment as set forth in Section 1.2.
(b) At the Initial Closing, simultaneously with the delivery
of the Initial Closing Payment as provided in Section 8.2(a), (i) BTH shall
transfer to Comcast good, valid and marketable title to, and shall deliver to
Comcast a certificate or certificates representing, 49% of the issued and
outstanding shares of capital stock of the BTH Subsidiaries and (ii) US Cable
shall deliver to Comcast good, valid and marketable title to, and shall deliver
to Comcast certificates representing (x) the Class A Shares and (y) subject to
any rights which may exist pursuant to Section 4.5 of the Jones Companies
Shareholders Agreements shall deliver certificates representing the Affiliate
Stock, accompanied by appropriate stock power(s) in form reasonably satisfactory
to Comcast, which shares shall be free and clear of any Claims. Notwithstanding
the foregoing, in the event that US Cable is required to sell the Affiliate
Stock to Jones as a result of the exercise by Jones or any Affiliate of Jones of
any rights of first refusal under the Jones Companies Shareholders Agreements,
US Cable shall have no obligation to deliver the Affiliate Stock and the amount
of the Purchase Price shall be reduced by the amount received by BTH from Jones
or his Affiliates with respect to such Affiliate Stock. If BTH receives such
payment from Jones prior to the Initial Closing Date, then the Initial Purchase
Price shall be reduced by the amount of such payment; otherwise, BTH shall
promptly refund such amount to Comcast plus interest accrued since the Initial
Closing Date at the Applicable Rate. In the event that on the Initial Closing
Date, U.S. Cable is unable to deliver the Affiliate Stock until it has complied
with any rights of first refusal under the Jones Companies Shareholders
Agreements, U.S. Cable shall deliver the certificates representing the Affiliate
Stock as provided above as soon as U.S. Cable shall have complied with its
obligations under the Jones Companies Shareholders Agreement.
Section 8.3. Final Closing. The final closing of the transactions contemplated
by Section 1.1(a)(ii) of this Agreement (the "Final Closing") shall take place
at 10:00 a.m. Eastern Time on the Final Closing Date. The Final Closing shall
take place in the offices of Dechert Price & Rhoads, 4000 Bell Atlantic Tower,
1717 Arch Street, Philadelphia, PA 19103-2793, or such other location as
mutually agreed upon by the parties.
Section 8.4. Deliveries at the Final Closing.
(a) At the Final Closing, Comcast shall deliver to BTH the
Final Closing Payment as specified in Section 1.2, together with interest on
such amount accrued from the Initial Closing Date to and including the Final
Closing Date at the Applicable Rate.
(b) At the Final Closing, simultaneously with the delivery
of the Final Closing Payment as provided in Section 8.4(a), BTH shall transfer
to Comcast good, valid and marketable title to, and shall deliver to Comcast a
certificate or certificates representing, all of the Remaining Subsidiary Stock
accompanied by appropriate stock power(s) in form reasonably satisfactory to
Comcast, which shares of Remaining Subsidiary Stock shall be free and clear of
any Claims.
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(c) Notwithstanding the terms of Section 8.4(b), Comcast
shall have the right to elect in its sole discretion at least two days prior to
the Final Closing by written notice to BTH, not to receive the Remaining
Subsidiary Stock at the Final Closing but instead to require US Cable,
Intercable and any of their Affiliates to deliver to Comcast at the Final
Closing good, valid and marketable title to, and to deliver to Comcast a
certificate or certificates representing, all of the shares of capital stock of
the Company owned beneficially or of record by US Cable, Intercable or any of
their Affiliates as of the date of the Final Closing (including, without
limitation, the Control Shares and any shares acquired pursuant to Sections 2.8,
3.1, 3.8, 4.2 or 5.1(b) of the Shareholders Agreement with funds provided by
Comcast) accompanied by appropriate stock power(s) in form reasonably
satisfactory to Comcast, together with any cash or non-cash dividends or other
distributions upon or in respect of any shares of capital stock of the Company
paid since the date of this Agreement, which shares of capital stock and other
property shall be free and clear of any Claims; provided that if Comcast makes
such election pursuant to this Section 8.4(c), Comcast shall be required to
deliver to BTH at the Final Closing good, valid and marketable title to, and
Comcast shall deliver to BTH a certificate or certificates representing, all of
the shares of Subsidiary Stock acquired by Comcast in the Initial Closing
accompanied by appropriate stock power(s) in form reasonably satisfactory to
BTH, which shares of Subsidiary Stock shall be free and clear of any Claims.
Section 8.5. Conditions to Final Closing of Comcast. The obligations of Comcast
to consummate the Final Closing and to deliver the Final Closing Payment at the
Final Closing in accordance with this Section 8.5 are subject to the fulfillment
or waiver of each of the following conditions at or prior to the Final Closing:
(a) Litigation; No Governmental Opposition. No judgment,
injunction, order or decree (i) enjoining or prohibiting BCE, BTH, the BTH
Subsidiaries or Comcast from consummating the transactions contemplated hereby
or the exercise of the Control Option (including its exercise pursuant to
Section 7.5(a)); or (ii) invalidating or terminating the Control Option or the
Jones/BTH Agreements shall have been entered prior to or on the Final Closing
Date.
(b) Approvals.
(i) Except as could not reasonably be expected to
have a Material Adverse Effect on Comcast or the Company, all actions by, or
filings with, any Governmental Authority required to permit the consummation of
the transactions contemplated hereby or to permit the Company to continue to
conduct its business as conducted immediately prior to the Final Closing, shall
have been taken, made or obtained, and any and all other permits, approvals,
consents, licenses or other actions necessary to consummate the transactions
hereunder or to permit the Company to continue to conduct its business as
conducted immediately prior to the Final Closing shall have been received or
taken, and none of such permits, approvals, consents or licenses shall contain
any provisions which could reasonably be expected to have a Material Adverse
Effect on the Company or Comcast; provided that if all authorizations, consents
and
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approvals from applicable Franchise Authorities necessary to effect the change
of control of the Franchises (i) relating to the Franchises (whether in Owned
Systems or Managed Systems) set forth on Schedule F, (ii) relating to Franchises
in Managed Systems which, as of the Closing Date, are subject to a letter of
intent or agreement of sale providing for the sale or other disposition of such
Managed System to a Person other than the Company (or its wholly owned
Subsidiaries), and (iii) relating to Franchises with not less than 10,000 basic
subscribers in Systems (whether Owned Systems or Managed Systems) acquired by
any Intercable Group Entity (except for Managed Systems which, as of the Closing
Date, are subject to a letter of intent or agreement of sale providing for the
sale or other disposition of such Managed System to the Company or one of its
wholly owned Subsidiaries) after the date hereof (the "Required Franchise
Approvals") shall have been so obtained, be in effect and not be subject to
withdrawal or appeal then the condition contained in this Section 8.5(b) shall
be deemed to be fulfilled as it relates to authorizations, consents or approvals
from applicable Franchise Authorities on the date on which all of the Required
Franchise Approvals are so obtained and are in effect and not subject to
withdrawal or appeal and provided further that this condition shall not be
satisfied if any Required Franchise Approval shall not have been obtained.
(ii) There shall not be in effect any statute, rule
or regulation which would have the effect of prohibiting Comcast from
consummating the transactions contemplated hereby.
(c) Representations and Warranties.
(i) Each of the representations and warranties of
BTH contained in this Agreement other than the representations and warranties
contained in Section 3.7 or 3.10 shall, in the case of those representations and
warranties that are not qualified by materiality, be true, complete and correct
in all material respects, and in the case of those representations and
warranties that are qualified by materiality shall be true, complete and correct
in all respects, as of each of (i) the date of this Agreement and (ii) unless
otherwise being specified as being made as of a specific date, the Final Closing
Date, in each case as though newly made at such time, except to the extent the
facts underlying such representations and warranties have changed (i) with
Comcast's consent in accordance with Section 7.3 or otherwise, (ii) as a result
of the consummation of the Initial Closing or (iii) as a result of the sale of
the Affiliate Stock in accordance with the provisions of Section 7.11(b).
(ii) Each of the covenants and agreements to be
performed by BTH and the BTH Subsidiaries hereunder to be performed at or prior
to the Final Closing shall have been duly performed in all material respects.
(d) Other Deliveries. In addition to those documents and
instruments which are required to be delivered to Comcast at the Final Closing
pursuant to Section 8.4, BTH and each of the BTH Subsidiaries shall have
executed (where applicable) and delivered to Comcast (or shall have caused to be
executed and delivered to Comcast by the appropriate Person) the following:
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(i) if Comcast has not made the election described
in Section 8.4(c), a copy of the memorandum of association of each of the BTH
Subsidiaries which is certified as of a recent date by the applicable British
Virgin Islands authority;
(ii) if Comcast has not made the election described
in Section 8.4(c), a customary certificate of the applicable British Virgin
Islands authority, certifying as to matters such as the due incorporation and
good standing of each of the BTH Subsidiaries;
(iii) if Comcast has not made the election
described in Section 8.4(c), a certificate of the Secretary of each of the BTH
Subsidiaries, certifying that their respective articles of incorporation and the
copies of the resolutions of their respective boards of directors and
stockholders authorizing the execution of this Agreement and the transactions
contemplated hereby and which are each attached thereto are true, correct and
complete copies and are each in full force and effect and have not been amended
or modified, and that the officers of each of the BTH Subsidiaries are those
persons named in the certificate;
(iv) a certificate dated as of the Final Closing
Date signed by the president or chief executive officer of BTH certifying that
all of the conditions in Section 8.5(c) have been fulfilled prior to or on the
Final Closing Date; and
(v) in the event Comcast has not made the election
pursuant to Section 8.4(c) hereof, all corporate record books of the BTH
Subsidiaries, including minutes of all meetings of stockholders, directors and
committees of the board of directors, if any, and the stock records of the BTH
Subsidiaries and the resignations of all of the directors and officers of the
BTH Subsidiaries effective as of the date prior to the Final Closing Date.
(e) HSR Act. Any applicable waiting period under the HSR Act
(including any extensions thereof) shall have expired or been terminated.
(f) Exercise of the Control Option. Either (i) BTH and the
BTH Subsidiaries shall have caused Intercable to exercise the Control Option
pursuant to Comcast's instructions (including a Section 3.1(a)(vi) Exercise) and
Intercable shall have either consummated the purchase of the Control Shares
pursuant to the Control Option Agreements or arranged for the transfer at the
closing of such purchase of the Control Shares to Comcast or a person designated
by Comcast pursuant to the terms of the Control Option Agreements (whether
following Jones failure to elect to purchase the Control Option in accordance
with section 7.5(b) or otherwise) and Comcast or such person shall have
consummated the purchase of the Control Shares; or (ii) BTH and its Affiliates
and their respective agents shall have complied with the covenants set forth in
Section 7.5 hereof and the Control Option shall have terminated in accordance
with its terms without Comcast instructing BTH to exercise the Control Option.
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(g) Additional Condition. The Company shall not have taken
or agreed to take, and shall not have permitted any of the Company's
subsidiaries to take or agree to take, directly or indirectly, any of the
actions (other than adoption of the resolutions set forth on Schedule 7.3 and
the consummation of the transactions authorized by such resolutions in
accordance with the terms of such resolutions) described in paragraphs (i),
(ii), (iii), (v), (viii), (ix) or (x) of Section 2.6(a) of the Shareholders
Agreement; provided that this condition shall be deemed satisfied even if the
Company shall have taken or agreed to take any such action so long as (i) BTH
and its Affiliates shall not have acted contrary to or failed to take action in
accordance with, the wishes of Comcast expressed in any applicable Notice of
Preference delivered or deemed to have been delivered by Comcast pursuant to
Section 7.3 within the applicable Preference Period and have complied with the
covenants set forth in Sections 7.11(e) and, if requested by Comcast and at
Comcast's expense, sought judicial enforcement of their rights under Section 2.6
of the Shareholders Agreement as provided therein and (ii) a court of competent
jurisdiction shall have finally adjudicated all claims or suits brought pursuant
to clause (i), and (iii) no court of competent jurisdiction shall have
determined, in connection with any such final adjudication that BTH's rights
pursuant to Section 2.6 of the Shareholders Agreement are void or unenforceable
with respect to such Company action by virtue of the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated by this Agreement.
Section 8.6. Conditions of BTH to the Final Closing. The obligations of BTH or
and the BTH Subsidiaries to consummate the Final Closing are subject to the
fulfillment of the following conditions:
(a) Litigation; No Governmental Opposition. No judgment,
injunction, order or decree (i) enjoining or prohibiting BTH or the BTH
Subsidiaries from consummating the transactions contemplated hereby or the
exercise of the Control Option (including its exercise pursuant to Section
7.5(a)) or (ii) invalidating or terminating the Control Option shall have been
entered prior to or on the Final Closing Date.
(b) HSR Act. Any period under the HSR Act (including any
extensions thereof) shall have expired or been terminated.
(c) No Violation of Law. There shall not be in effect any
statute, rule or regulation which would have the effect or prohibiting
Intercable or BTH from consummating transactions contemplated hereby.
(d) Approvals. Except as could not reasonably be expected to
have a Material Adverse Effect, and except for any authorizations, consents,
orders or approvals from applicable Franchise Authorities, all actions by or in
respect of, or filings with, any Governmental Authority required to permit the
consummation of the transactions contemplated hereby shall have been taken, made
or obtained, and any and all other permits, approvals, consents, licenses or
other actions necessary to consummate the transactions hereunder shall have been
received or taken.
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(e) Representations and Warranties. (i) The representations
and warranties of Comcast contained in the first and last sentences of Section
4.1 and Sections 4.2 and 4.3(a) in this Agreement shall, in the case of those
representations and warranties that are not qualified by materiality, be true,
complete and correct in all material respects, and in the case of those
representations and warranties that are qualified by materiality, be true,
complete and correct in all respects, as of each of (i) the date of this
Agreement and (ii) unless otherwise specified as being made as of a specific
date, as of the Final Closing Date as though newly made at such time.
(ii) Each of the covenants and agreements to be
performed by Comcast under Section 7.3(d), 7.5(b), 7.7(b), 7.9(b), 7.10 and
7.11(d) to be performed at or prior to the Final Closing shall have been duly
performed in all material respects.
(f) Other Deliveries. In addition to those documents and
instruments which are required to be delivered to BTH at the Initial Closing
pursuant to Section 8.2, Comcast shall have executed (where applicable) and
delivered to BTH (or shall have caused to be executed and delivered to BTH by
the appropriate Person) a certificate dated as of the Final Closing Date signed
by the president or chief executive officer of Comcast certifying that all of
the conditions in Section 8.6(e) have been fulfilled prior to or on the Final
Closing Date.
Section 8.7. Simultaneous Closing
(a) Notwithstanding any other provision to the contrary
herein, the Simultaneous Closing shall take place at 10:00 a.m. Eastern Standard
Time on the Simultaneous Closing Date. The Simultaneous Closing shall take place
in the offices of Dechert Price & Rhoads, 4000 Bell Atlantic Tower, 1717 Arch
Street, Philadelphia, PA 19103-2793 or such other location as mutually agreed
upon by the parties.
(b) The parties shall make the deliveries required of them
pursuant to Sections 8.2 and 8.4 as if the Simultaneous Closing were the Initial
Closing and the Final Closing.
(c) The conditions to the respective obligations of the
parties at the Initial Closing and the Final Closing as set forth in Articles V
and VI and Sections 8.5 and 8.6 shall be conditions to the respective
obligations of the parties at the Simultaneous Closing as if the Simultaneous
Closing were the Initial Closing and the Final Closing.
(d) The obligations of the parties to consummate the
Simultaneous Closing are subject to the fulfillment or waiver of the condition
that, on the Simultaneous Closing Date, the other transactions contemplated by
Section 1(b) of the Jones/Comcast Agreement shall have been consummated.
(e) The directors of the Company other than the Joint
Nominees (as defined in the Shareholders Agreement) shall resign seriatim and
the remaining directors shall appoint individuals designated by Comcast to fill
the vacancies created thereby, all as more fully set forth in Section 7.8 hereof
and in the Jones/Comcast Agreement.
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Section 8.8. Alternative Final Closing Procedures.
If an event or circumstance has occurred such that
satisfaction of a condition in Section 8.5 or 8.6 is not reasonably possible
despite the parties reasonable best efforts to ensure the same, the parties will
take the following actions as an alternative to the Final Closing:
(a) If the Final Closing has not occurred due to (i) a
failure to satisfy the conditions specified in Section 8.6(d) or (ii) a failure
to satisfy the conditions specified in Section 8.5(f) because Intercable shall
have exercised the Control Option pursuant to Comcast's instructions but shall
have failed to consummate the purchase of the Control Shares due to the failure
of Intercable to satisfy one or more of the conditions contained in Sections
3.2(b)(i)- (vi) of the Control Option Agreements and Intercable is unable to
assign its rights under the Control Option Agreements pursuant to Section
10.2(a)(iii), then BTH shall pay to Comcast an amount equal to $150,000,000 plus
interest at the Applicable Rate from the Initial Closing Date and deliver to
Comcast any shares of capital stock of the Company acquired by BTH or the BTH
Subsidiaries pursuant to Section 2.8, 3.1, 3.8, 4.2 or 5.1(b) of the
Shareholders Agreement with funds provided by Comcast together with any
dividends or distributions upon or with respect to such shares, and BTH shall
deliver to Comcast all of the Remaining Subsidiary Stock (and Comcast shall have
the right to make the same election with respect to the Remaining Subsidiary
Stock as described in Section 8.4(c)) and Comcast shall have no obligation to
pay to BTH the Final Closing Payment.
(b) If the Final Closing has not occurred due to (i) a
failure to satisfy the conditions contained in Sections 8.5(a)(ii); or (ii) a
failure of the conditions contained in Section 8.5(c), 8.5(d) or 8.5(f) to be
satisfied or waived or (iii) due to a failure of the conditions contained in
Section 8.6(e) or 8.6(f) to be satisfied or waived, then BTH shall pay to
Comcast an amount equal to $250,000,000 plus interest at the Applicable Rate
from the Initial Closing Date and deliver to Comcast any shares of capital stock
of the Company acquired by BTH or the BTH Subsidiaries pursuant to Sections 2.8,
3.1, 3.8, 4.2 or 5.1(b) of the Shareholders Agreement with funds provided by
Comcast together with any dividends or distributions upon or with respect to
such shares, and Comcast shall deliver to BTH all of the 49% Subsidiary Stock
acquired by Comcast at the Initial Closing together with any dividends or
distributions upon or with respect to such shares and Comcast shall have no
obligation to pay to BTH the Final Closing Payment; provided, however, that (A)
in the case of a judgment, injunction, order or decree referred to in clause (i)
above that is based upon the effect of any (x) agreement, arrangement or
understanding other than the Jones/BTH Agreements, or (y) any parole evidence or
other matters extrinsic to the Jones/BTH Agreements, in the case of either
clause (x) or (y) above, existing prior to the date of this Agreement or (B) the
failure of the conditions specified in Section 8.5(c) or 8.5(d) to be satisfied
or waived; then in lieu of the $250,000,000 payment referred to above BTH shall
pay to Comcast an amount equal to $272,000,000.
(c) In the event that (i) a judgment, injunction, order or
decree of any court of competent jurisdiction invalidating, terminating,
nullifying or voiding this Agreement has become final and non-appealable or (ii)
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the Final Closing fails to occur due to a failure to satisfy the condition
specified in Section 8.5(g), then in the case of either (i) or (ii), BTH shall
pay to Comcast an amount equal to $250,000,000 plus interest at the Applicable
Rate from the Initial Closing Date and deliver to Comcast any shares of capital
stock of the Company acquired by BTH or the BTH Subsidiaries pursuant to
Sections 2.8, 3.1, 3.8, 4.2 or 5.1(b) of the Shareholders Agreement with funds
provided by Comcast together with any dividends or distributions upon or with
respect to such shares, and Comcast shall deliver to BTH all of the 49%
Subsidiary Stock acquired by Comcast at the Initial Closing together with any
dividends or distributions upon or with respect to such stock and Comcast shall
have no obligation to pay to BTH the Final Closing Payment.
(d) If the Final Closing has not occurred due to the
inability of Comcast to take delivery of or take title to the Control Shares,
the Class A Shares or any other shares of capital stock of the Company or the
Remaining Subsidiary Stock but Intercable shall have exercised the Control
Option and purchased the Control Shares, then Comcast shall pay to BTH an amount
equal to the Final Closing Payment together with interest accrued at the
Applicable Rate from the Initial Closing Date through the Final Closing Date and
BTH agrees that Intercable shall take delivery of the Control Shares and US
Cable and Intercable shall hold the Control Shares and other shares of capital
stock of the Company owned by US Cable and Intercable including, without
limitation, the Class A Shares and any shares of capital stock of the Company
acquired by BTH or the BTH Subsidiaries pursuant to Section 2.8, 3.1, 3.8, 4.2
or 5.1(b) of the Shareholders Agreement with funds provided by Comcast, in each
case together with any dividends or distributions upon or with respect to such
shares (the "Trust Stock") in trust for Comcast's benefit and, to the maximum
extent permitted by law, subject to Comcast's direction.
At such time as either the Trust Stock is sold or disposed
of or Comcast is permitted under applicable law to take possession of the Trust
Stock, Comcast may at its option elect to either take possession of the
Remaining Subsidiary Stock or exchange the shares of Subsidiary Stock which
Comcast received in the Initial Closing for all of the shares of capital stock
of the Company beneficially owned by BTH and the BTH Subsidiaries (including, if
any portion of the Trust Stock shall have been sold or disposed of prior to such
exchange, the Net Proceeds of such sale or disposition). Comcast agrees that, if
the Trust Stock (including any Net Proceeds) has not been transferred to Comcast
or sold or otherwise disposed of by the BTH Subsidiaries at Comcast's direction
within one year of the date Intercable consummates the purchase of the Control
Shares, Comcast shall direct BTH and the BTH Subsidiaries to transfer either the
Remaining Subsidiary Stock or the Trust Stock (including any Net Proceeds) to an
independent trustee or other third party designated by Comcast.
(e) In the event BTH shall have paid $150,000,000 to Comcast
pursuant to Section 7.3 hereof, the payments referred to in paragraphs (a), (b),
(c) and (d) above shall be reduced by such amount and all interest on such
payments shall be calculated on such reduced amount.
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(f) In the event BTH or Comcast shall be prevented from
transferring or receiving title to or possession of any of the Remaining
Subsidiary Stock or shares of capital stock of the Company to Comcast, as
contemplated in paragraph (a), (b), (c) or (d) above, the parties shall use
their reasonable best efforts to give the parties the benefits they would have
received if such shares of the Remaining Subsidiary Stock or shares of capital
stock of the Company had been so transferred, including to the extent legally
permissible the transfer of shares of the Company and rights held by the BTH
Subsidiaries and placing such shares of the capital stock of the BTH
Subsidiaries or shares of capital stock of the Company in trust.
ARTICLE IX
TERMINATION
Section 9.1. Termination.
(a) This Agreement may be terminated as follows: (i) by
mutual written consent of Comcast and BTH; (ii) by either Comcast or BTH on July
10, 1999, if the Initial Closing or the Simultaneous Closing has not occurred;
provided that the right to terminate this Agreement under this Section
9.1(a)(ii) shall not be available to any party whose failure to fulfill any
obligation under this Agreement shall have been the cause of or shall have
resulted in the failure of the Initial Closing or the Simultaneous
Closing to occur on or prior to such date; and (iii) if a statute, rule or
regulation is enacted or adopted subsequent to the date of this Agreement but
prior to the Initial Closing Date which would have the effect of prohibiting
Comcast from purchasing or owning the Control Shares then Comcast may terminate
this Agreement and the parties hereto shall have no further obligation to any
other party hereto.
(b) Notwithstanding the foregoing, in the event any
injunction, order or similar restraint has been issued by a court of competent
jurisdiction (other than by virtue of any suit brought by a party to this
Agreement), the termination date referred to in the foregoing clause (a) shall,
upon the mutual agreement of the parties, be extended until the earlier of (i)
the 10th day after such injunction, order or restraint shall have been dissolved
or (ii) the date such injunction, order or restraint shall have become permanent
and no longer subject to appeal, as the case may be.
Section 9.2. Effect Of Termination.
All obligations of the parties hereunder shall cease upon
any termination pursuant to this Article IX; provided, however, that (a) the
provisions of this Section 9.2 and Sections 13.3, 13.4 and 13.13 shall survive
any termination of this Agreement and (b) nothing herein shall relieve any party
from any liability for any prior breach of this Agreement.
Section 9.3. Right to Proceed. Subject to Section 7.12, anything in this
Agreement to the contrary notwithstanding, if any of the conditions specified in
Article V or Section 8.5 hereof have not been satisfied, Comcast shall have the
right to proceed with the transactions contemplated hereby without waiving any
of its rights hereunder.
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ARTICLE X
RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
Section 10.1. Survival of Representations, Warranties and Covenants. Each of the
representations, warranties, agreements, covenants and obligations of Comcast
and BTH set forth herein are material and shall be deemed to have been relied
upon by the other party in entering into this Agreement. Each of the
representations and warranties set forth herein shall survive until the first
anniversary of the Final Closing Date (other than those contained in Sections
3.1, 3.2, 3.3, 3.4, 3.5, 4.1 and 4.2, which shall survive indefinitely). The
expiration of any representation or warranty shall not affect any claim made
prior to the date of such expiration. All covenants, agreements and other
obligations contained herein not fully performed shall survive the Final Closing
and continue thereafter until fully performed. Any investigation, audit or other
examination that may have been made or may be made at any time by or on behalf
of the party to whom any such representation or warranty is made shall not limit
or diminish such representations and warranties, and the parties may rely on the
representations and warranties set forth in this Agreement irrespective of any
information obtained by them by any investigation, audit or examination or
otherwise.
Section 10.2. Regulatory Filings. Each of BTH and the BTH Subsidiaries and
Comcast will cooperate to enable the other party to make any and all regulatory
filings required with respect to the transactions contemplated hereby
(including, by way of example and not of limitation, the filing of tax returns).
ARTICLE XI
INDEMNIFICATION
Section 11.1. Indemnification by BTH. BTH agrees to indemnify and hold Comcast
and its respective subsidiaries and Affiliates (including, from and after the
Initial Closing and the Final Closing, the BTH Subsidiaries) and individuals
serving as officers, directors, partners, stockholders or employees thereof
(individually a "Comcast Indemnified Party" and collectively the "Comcast
Indemnified Parties") harmless from and against any damages, liabilities,
losses, taxes, fines, penalties, costs, and expenses (including, without
limitation, reasonable fees and expenses of counsel) of any kind or nature
whatsoever (whether or not arising out of third-party claims and including all
amounts paid in investigation, defense or settlement of the foregoing)
("Losses") which may be sustained or suffered by any of them arising out of or
based upon any of the following matters:
(a) any breach of any representation, warranty or covenant
of BTH or the BTH Subsidiaries under this Agreement or in any certificate,
schedule or exhibit delivered pursuant hereto or thereto, or by reason of any
claim, action or proceeding asserted or instituted growing out of any matter or
thing constituting such a breach;
(b) the reasonable cost of enforcing any of the rights of
any Comcast Indemnified Party hereunder; and
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(c) any liabilities or obligations of any nature whatsoever
of the BTH Subsidiaries other than, in the event Comcast has not made an
election pursuant to Section 8.4(c) to return to BTH the shares of Subsidiary
Stock, those liabilities or obligations incurred by the BTH Subsidiaries after
the Final Closing.
Section 11.2. Limitations on Indemnification by BTH. Notwithstanding any other
provision of this Agreement to the contrary, the right of the Comcast
Indemnified Parties to indemnification under Section 11.1 shall be subject to
the following provisions:
(a) BTH shall have no obligation to indemnify a Comcast
Indemnified Party under Section 11.1 with respect to any claim for breach of a
representation or warranty made after the first anniversary of the Final Closing
Date other than a representation or warranty contained in Sections 3.1, 3.2,
3.3, 3.4 and 3.5 (the "Comcast Indemnification Cut-Off Date"); provided,
however, that such expiration shall not affect any claim with respect to which
notice was given in the manner contemplated by Section 11.5 hereof prior to the
Comcast Indemnification Cut-Off Date.
(b) No indemnification shall be payable pursuant to Section
11.l(a) above to any Comcast Indemnified Party if such claim is based solely
upon a breach of a representation and warranty contained in Article III (other
than a representation or warranty contained in Sections or 3.2 and 3.3 or
breaches of representations of which BTH had Knowledge as of the date of this
Agreement), unless and until the total of all such claims for indemnification
pursuant to Section 11.1(a) which are based upon a breach of the representation
and warranty, other than a representation and warranty contained in Section 3.2
and 3.3 or breaches of representations of which BTH had Knowledge as of the date
of this Agreement, shall exceed $5,000,000 in the aggregate, whereupon the
amount of such claims exceeding such $5,000,000 threshold shall be recoverable
in accordance with the terms hereof.
(c) In no event will the aggregate obligations of BTH to the
Comcast Indemnified Parties pursuant to Section 11.1(a) for breaches of
representations or warranties other than representations and warranties
contained in Sections 3.2 and 3.3 and other than those breaches of
representations and warranties of which BTH had Knowledge prior to the date of
this Agreement exceed $250,000,000. In no event will the aggregate obligations
of BTH to the Comcast Indemnified Parties pursuant to Section 11.1(a) for
breaches of representations and warranties contained herein exceed $500,000,000.
(d) Notwithstanding anything to the contrary contained in
this Agreement, BTH shall not be liable for any special or consequential damages
for breaches of representations or warranties other than those contained in
Sections 3.2 and 3.3. Comcast shall be required to take all reasonable steps to
mitigate its Losses.
(e) Notwithstanding anything to the contrary contained in
this agreement, to the extent that any Comcast Indemnified Party has been
compensated for its Losses from an insurance company or any other third party,
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BTH's indemnification obligation in respect of any such Losses shall be reduced
by an equal amount.
(f) The obligation of BTH to indemnify the Comcast
Indemnified Parties for matters contemplated by Section 7.3 and 8.8 shall be
limited to the exclusive remedies set forth herein.
Section 11.3. Indemnification by Comcast. Comcast agrees to indemnify and hold
BTH and its respective subsidiaries and Affiliates and individuals serving as
officers, directors, partners, stockholders or employees thereof (individually a
"BTH Indemnified Party" and collectively the "BTH Indemnified Parties") harmless
from and against any Losses which may be sustained or suffered by any of them
arising out of or based upon any of the following matters:
(a) any breach of any representation, warranty or covenant
of Comcast under this Agreement, or by reason of any claim, action or proceeding
asserted or instituted growing out of any matter or thing constituting such a
breach;
(b) the reasonable cost of enforcing any of the rights of
the BTH Indemnified Parties hereunder; and
(c) any Losses incurred by BTH in respect of liabilities of
any BTH Subsidiary arising following the consummation of the Final Purchase, if
Comcast has not made an election pursuant to Section 8.4(c) to return to BTH the
shares of Subsidiary Stock.
Section 11.4. Limitation on Indemnification by Comcast. Notwithstanding the
foregoing, the right of the BTH Indemnified Parties to indemnification under
Section 11.3 shall be subject to the following provisions: (a) Comcast shall
have no obligation to indemnify a BTH Indemnified Party under Section 11.3 with
respect to claim for a breach of a representation or warranty (other than
representations and warranties contained in Sections 4.1 and 4.2) which claim is
made after the first anniversary of the Final Closing Date (the "BTH
Indemnification Cut-Off Date"); provided, however, that such expiration shall
not affect any claim with respect to which notice was given in the manner
contemplated by Section 11.5 hereof prior to the BTH Indemnification Cut-Off
Date.
(a) In no event will the aggregate obligations of Comcast to
the BTH Indemnified Parties pursuant to Section 11.3 exceed $250,000,000.
(b) No indemnification shall be payable pursuant to Section
11.3 such claim is based upon a breach of representation and warranty, unless
and until the total of all such claims for indemnification pursuant to Section
11.3 which are based upon a breach of representation or warranty shall exceed
$5,000,000 in the aggregate, whereupon the amount of such claims exceeding such
$5,000,000 threshold shall be recoverable in accordance with the terms hereof.
(c) Notwithstanding anything to the contrary contained in
this agreement, Comcast shall not be liable for any special or consequential
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damages for breaches of representation or warranty. BTH shall be required to
take all reasonable steps to mitigate its Losses.
(d) Notwithstanding anything to the contrary contained in
this agreement, to the extent that any BTH Indemnified Party has been
compensated for its Losses from an insurance company or any other third party,
Comcast's indemnification obligation in respect of any such Losses shall be
reduced by an equal amount.
(e) The obligation of Comcast to indemnify the BTH
Indemnified Parties for matters contemplated by Section 8.8 shall be limited to
the exclusive remedies set forth therein.
Section 11.5. Notice: Defense of Claims. An indemnified party may make claims
for indemnification hereunder by giving written notice thereof to the
indemnifying party within the period in which indemnification claims can be made
hereunder. If indemnification is sought for a claim or liability asserted by a
third party, the indemnified party shall also give written notice thereof to the
indemnifying party promptly after it receives notice of the claim or liability
being asserted, but the failure to do so shall not relieve the indemnifying
party from any liability except to the extent that it is prejudiced by the
failure or delay in giving such notice. Such notice shall summarize the bases
for the claim for indemnification and any claim or liability being asserted by a
third party. Within twenty (20) days after receiving such notice the
indemnifying party shall give written notice to the indemnified party stating
whether it disputes the claim for indemnification and whether it will defend
against any third party claim or liability at its own cost and expense. If the
indemnifying party fails to give notice that it disputes an indemnification
claim within twenty (20) days after receipt of notice thereof, it shall be
deemed to have accepted and agreed to the claim, which shall become immediately
due and payable. The indemnifying party shall be entitled to direct the defense
against a third party claim or liability with counsel selected by it (subject to
the consent of each indemnified party, which consent shall not be unreasonably
withheld) as long as the indemnifying party has acknowledged in writing that it
is obligated to indemnify the indemnified party for such claim pursuant to this
Article XI and is conducting a good faith and diligent defense and only money
damages are at issue. Each indemnified party shall at all times have the right
to fully participate in the defense of a third party claim or liability at its
own expense directly or through counsel; provided, however, that if the named
parties to the action or proceeding include either both the indemnifying party
and/or one or more indemnified parties and an indemnified party is advised in
writing by counsel to the indemnified party that representation of both parties
by the same counsel would be inappropriate under applicable standards of
professional conduct, an indemnified party may engage separate counsel at the
expense of the indemnifying party. If no such notice of intent to dispute and
defend a third party claim or liability is given by the indemnifying party, or
if a good faith and diligent defense is not being or ceases to be conducted by
the indemnifying party or if the claim or liability includes other than money
damages, the indemnified party shall have the right, at the expense of the
indemnifying party, to undertake the defense of such claim or liability (with
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counsel selected by the indemnified party), and to compromise or settle it,
exercising reasonable business judgment. If the third party claim or liability
is one that by its nature cannot be defended solely by the indemnifying party,
then the indemnified party shall make available such information and assistance
as the indemnifying party may reasonably request and shall cooperate with the
indemnifying party in such defense, at the expense of the indemnifying party.
Section 11.6. No Right of Contribution. After the Initial Closing, neither of
BTH nor Comcast shall have any claim for contribution against the BTH
Subsidiaries in respect of any liability any such party may have to any BTH
Indemnified Party or Comcast Indemnified Party under this Agreement.
ARTICLE XII
DEFINITIONS
For the purposes of this Agreement, including the Schedules
attached hereto, the following terms shall have the following meanings:
"Affiliate" shall mean with respect to any Person (herein
the "first party") (i) any other Person that directly or indirectly controls, or
is controlled by, or is under common control with, such first party or (ii) any
officer or director of the first party or of any Person described in clause (i)
of this sentence. The term "control" as used herein (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to (a) vote fifty percent (50%) or more of the
outstanding voting securities of such Person, (b) elect fifty percent (50%) or
more of the board of directors or other equivalent committee or group of such
Person or (c) otherwise direct the management or policies of such Person by
contract or otherwise; provided however, that for purposes of this Agreement;
the parties hereto agree that the Company shall be deemed not to be an Affiliate
of BTH.
"Associate" as used herein shall mean with reference to any
Person: (i) any corporation or organization of which such Person, or relative or
spouse of such Person or relative of a spouse of such Person, is an officer or
partner or is, directly or indirectly, the beneficial owner of twenty-five
percent (25%) or more of any class of equity securities; (ii) any trust or other
estate in which such Person, or relative or spouse of such Person or relative of
a spouse of such Person, has a substantial beneficial interest or as to which
such Person, or relative or spouse of such Person or relative of a spouse of
such Person, serves as trustee or in a similar fiduciary capacity; and (iii) any
relative or spouse of such Person or any relative of such spouse of such Person.
"Applicable Rate" means an interest rate per annum at which
deposits in United States dollars appears on page 3750 (or any successor page
thereto) of the Dow Jones Telerate Screen for a ninety day period, plus 1%. The
Applicable Rate for any period shall be determined as of the Initial Closing
Date (or, in the case of a Simultaneous Closing occurring after December 31,
1998 as provided in Section 1.2(a), as of December 31, 1998), and adjusted
quarterly on the first business day of each January, April, July and October
through the date of any final payment of the Purchase Price, whether on the
Final Closing Date, the Simultaneous Closing Date or pursuant to Section 8.8.
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"Claim" shall mean any lien, charge, claim, security
interest, assignment, conditional sale agreement, deposit agreement, mortgage,
security agreement, option, restriction, charge, deposit, pledge or encumbrance
of any kind or nature whatsoever other than under the Securities Act of 1933, as
amended.
"Franchise" means written "franchise" within the meaning of
Section 602(8) of the Cable Communications Policy Act of 1984 (47 U.S.C.
(ss.)522(9)).
"Franchising Authority" has the meaning that term is given
by Section 602(9) of the Cable Communications Policy Act of 1984 (47 U.S.C.
(ss.)522(10)).
"Intercable Group" means, at any time, the Company and each
person that is a Subsidiary of Jones Intercable, Inc., a Colorado corporation at
such time.
"Intercable Group Entity" means, at any time, each Person
included in the Intercable Group at such time.
"Jones/BTH Agreements" means the Shareholders Agreement, the
Control Option Agreements, the Shareholders Agreement Assignment and the Option
Agreement Assignment.
"Jones Companies Shareholders Agreements" shall mean that
certain Shareholders Agreement among Glenn R. Jones, Jones International, Ltd.,
Bell Canada International Inc. and Jones Education Networks, Inc. and that
certain Shareholders Agreement among Glenn R. Jones, Jones International, Ltd.,
Bell Canada International Inc. and Jones Entertainment Group, Ltd., each dated
as of December 20, 1994.
"Knowledge" means, with respect to BTH, the actual knowledge
of (i) any present director of the Company who was designated by BTH or any of
its Affiliates and (ii) of any officer or, employee of BTH or its Affiliates who
actively participated in the preparation and negotiation of this Agreement.
"Material Adverse Effect" with respect to any Person shall
be deemed to occur if any event, change or effect, individually or in the
aggregate with such other events, changes or effects, has occurred which would
reasonably be expected to have a material adverse effect on the business, assets
(including intangible assets), liabilities (contingent or otherwise), results of
operations, financial condition of such Person and its subsidiaries taken as a
whole.
"Payments" means, (i) with respect to the Fee Letter, any
and all payments received by BTH or its Affiliates pursuant to the Fee Letter,
and (ii) with respect to the Supply Services Agreement, any and all payments
received by BTH or its Affiliates pursuant to the Supply Services Agreement
after reducing such amounts for 115% of the actual out-of-pocket expenses
incurred by BTH and its Affiliates in connection with the provision of the
services required to be rendered by BTH or its Affiliates to the Company under
the Supply Services Agreement.
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"Person" shall mean any individual, partnership (general or
limited), corporation, limited liability company, limited liability partnership,
association, trust, joint venture, unincorporated organization, and any
government, governmental department or agency or political subdivision thereof.
"Subsidiary Stock" means the shares of capital stock of the
BTH Subsidiaries.
"Transfer" shall mean to exchange, sell, assign, transfer,
pledge, hypothecate, make gifts of or in any manner whatsoever dispose of or
encumber or grant any rights or interests, create any voting trust or other
agreement or arrangement with respect to the transfer of voting rights or any
other beneficial interest, create any other claim or make any other transfer or
disposition whatsoever, whether voluntary or involuntary, affecting right,
title, interest or possession.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Further Assurances. BTH shall, and shall cause its Affiliates to,
from time to time after the Closing Date, at the request of Comcast and without
further consideration, execute and deliver further instruments of transfer and
assignment and take such other action as Comcast may reasonably require to fully
implement the provisions of this Agreement.
Section 13.2. Counting of Days. Whenever a specified period of days is required
to be counted hereunder, in the event that the final day in such specified
number of days falls on a date when the banking institutions in the state of New
York or Canada are required to be closed, then the final day in such specified
number of days shall be deemed to occur on the first day following such day when
the banking institutions in the state of New York or Canada are required to be
closed.
Section 13.3. Fees and Expenses. The rights and obligations of the parties
hereto with respect to fees and expenses are as follows: Comcast shall pay its
own expenses incident to the negotiation and consummation of the transactions
contemplated by this Agreement and the agreements, instruments and documents
contemplated hereby. BTH shall pay its and the BTH Subsidiaries expenses
incident to the negotiation and consummation of the transactions contemplated by
this Agreement and the agreements, instruments and documents contemplated
hereby. BTH and Comcast shall share equally any filing fees required under the
HSR Act and any transfer taxes, fees and duties arising by reason of transfer of
the Subsidiary Stock.
Section 13.4. Dispute Resolution. All disputes arising in connection with this
Agreement, other than disputes involving a request for the granting of an
injunction or specific performance, shall be resolved by binding arbitration in
accordance with the applicable rules of the American Arbitration Association.
The arbitration shall be held in the State of New York before a panel of at
least three arbitrators and shall be conducted in accordance with the American
Arbitration Association Commercial Arbitration Rules. Comcast and BTH will each
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<PAGE>
be entitled to appoint one of the three panel members and such members shall
cooperate to jointly select a third mutually acceptable to both parties.
Section 13.5. Waivers. Any waiver of any terms or conditions or of the breach of
any covenant, representation or warranty of this Agreement in any one instance,
shall not operate as or be deemed to be or construed as a further or continuing
waiver of any other breach of such term, condition, covenant, representation or
warranty or any other term, condition, covenant, representation or warranty, nor
shall any failure or delay at any time or times to enforce or require
performance of any provision hereof operate as a waiver of or affect in any
manner such party's right at a later time to enforce or require performance of
such provision or of any provision hereof; provided, however, that no such
waiver, unless it, by its own terms, explicitly provides to the contrary, shall
be construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance.
Section 13.6. Governing Law and Consent to Jurisdiction. (a) This Agreement
shall be construed under and governed by the internal laws of the State of New
York without regard to its conflict of laws provisions. Each of the parties
hereby consents to personal jurisdiction, service of process and venue in the
federal or state courts of the State of New York for any claim, suit or
proceeding arising under this Agreement, and hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such court. Each of the parties hereby irrevocably consents to the service of
process in any such action or proceeding by the mailing by certified mail of
copies of any service or copies of the summons and complaint and any other
process to such party at the address specified in Section 13.8 hereof. The
parties agree that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit or in any other
manner permitted by law and shall affect the right of a party to service legal
process or to bring any action or proceeding in the courts of other
jurisdictions.
(b) Each of the parties hereto irrevocably waives all right
to trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement, any
Jones/BTH Agreement, the Jones Companies Shareholders Agreement or the actions
of any party in the negotiation, performance or enforcement hereof or thereof.
Section 13.7. Notices. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered or sent by facsimile transmission, upon transmission
with electronic confirmation of delivery, or if sent by registered or certified
mail postage prepaid, upon the sooner of the date on which receipt is
acknowledged or the expiration of five days after deposit in United States post
office facilities properly addressed with postage prepaid or if sent by
overnight courier, the day after delivery of such notice to such courier. All
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<PAGE>
notices to a party will be sent to the addresses set forth below or to such
other address or person as such party may designate by notice to each other
party hereunder:
To BTH:
BCI Telecom Holding Inc.
1000, rue de la Gauchetiere Ouest
Bureau 1100
Montreal (Quebec) Canada H3B 4Y8
Attention: Chief Financial Officer
Facsimile No. (514) 392-2262
Telephone No. (514) 392-2260
With a copy to:
BCI Telecom Holding Inc.
1000, rue de la Gauchetiere Ouest
Bureau 1100
Montreal (Quebec) Canada H3B 4Y8
Attention: Corporate Secretary
Facsimile No. (514) 392-2342
Telephone No. (514) 392-2340
To Comcast:
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102
Attention: President
Facsimile No: (215) 981-7790
Telephone No. (215) 981-7501
with a copy to:
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
Attention: General Counsel
Facsimile No: (215) 981-7794
Telephone No. (215) 981-7510
Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
Section 13.8. Entire Agreement. This Agreement, including the Schedules and
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby including without limitation the Jones/Comcast
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<PAGE>
Agreement, the Option Agreements and the Shareholders Agreement (as amended by
Agreement and Amendment No. 1 to Shareholders Agreement), is complete, reflects
the entire agreement of the parties with respect to its subject matter, and
supersedes all previous written or oral negotiations, commitments and writings.
No promises, representations, understandings, warranties and agreements have
been made by any of the parties hereto except as referred to herein or in such
Schedules and Exhibits or in such other writings; and all inducements to the
making of this Agreement and the transactions contemplated hereby which were
relied upon by either party hereto have been expressed herein or in such
Schedules or Exhibits or in such other writings.
Section 13.9. Assignability; Binding Effect. This Agreement or any of the
obligations or rights hereunder (a) may not be assigned or delegated by Comcast
without the prior written consent of BTH, other than an assignment and/or
delegation to an Affiliate of Comcast provided that Comcast shall remain
obligated to pay the Purchase Price and to indemnify BTH pursuant to Section
11.3, and (b) may not be assigned by BTH or the BTH Subsidiaries without the
prior written consent of Comcast. This Agreement shall be binding upon and
enforceable by, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
Section 13.10. Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
Section 13.11. Execution in Counterparts. For the convenience of the parties and
to facilitate execution, this Agreement may (a) be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document, and (b) executed by facsimile.
Section 13.12. Amendments. This Agreement may not be amended or modified, nor
may compliance with any condition or covenant set forth herein be waived, except
by a writing duly and validly executed by Comcast, BTH and the BTH Subsidiaries
or in the case of a waiver, the party waiving compliance.
Section 13.13. Publicity and Disclosures. No press releases or public
disclosure, either written or oral, of the transactions contemplated by this
Agreement, shall be made by a party to this Agreement without the prior
Knowledge and written consent of Comcast, BTH and the BTH Subsidiaries which
consent shall not be unreasonably withheld, except as is otherwise required by
applicable laws, rules and regulations (including, without limitation, the HSR
Act, the Securities Act, the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder).
Section 13.14. Equitable Relief. Each party hereto expressly acknowledges that
damages alone will be an inadequate remedy for any breach or violation by them
of any of the provisions of this Agreement, and the opposing party, in addition
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<PAGE>
to all other remedies hereunder or thereunder, shall be entitled, as a matter of
right, to injunctive relief, including specific performance with respect to any
such breach or violation, in any court of competent jurisdiction.
Section 13.15. Severability. The invalidity of any term or terms of this
Agreement shall not invalidate or otherwise affect any other term of this
Agreement which shall remain in full force and effect.
Section 13.16. Surety of Payment. Within thirty days of the date of this
Agreement BTH shall either have posted a letter of credit securing its
obligations under Sections 7.3 and 8.8 or have obtained a guaranty by BCE, Inc.,
the parent company of BTH, of Comcast's right to collect sums from BTH under
Sections 7.3(e), 8.2(b) and 8.8.
Section 13.17. Miscellaneous. In the event BTH acts in accordance with Comcast's
Notice of Preference delivered or deemed to have been delivered pursuant to
Section 7.3(e), then any such acts or their direct effects shall not result in
BTH having breached a representation, warranty or covenant contained in this
Agreement.
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<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed as of the date set forth above by their duly authorized
representatives.
BCI TELECOM HOLDING INC.
By:
------------------------
Name:
Title:
COMCAST CORPORATION
By:
------------------------
Name:
Title:
BTH (U.S. CABLE) LIMITED
By:
------------------------
Name:
Title:
BTH (INTERCABLE) LIMITED
By:
------------------------
Name:
Title:
<PAGE>
Schedule 3.8
Investor Consent Rights (Section 2.6)
1. During July 1996, the Company sought the consent of BTH to purchase the
cable television system owned by Maryland Cable Partners, L.P. serving
the northern portion of Prince George's County for a purchase price of
US$235,000,000 and the incurrence of Debt in connection with such
purchase. BTH and US Cable granted such consent.
2. On February 18, 1997 the Company sought the consent of BTH to acquire
the cable television systems of SBC Media Ventures located in Virginia
and Maryland for $525,000,000 in cash and $150,000,000 through the
issuance to SBC of preferred stock. BTH denied the Company's request.
3. On August 28, 1995, the Company sought the consent of BTH to enter into
an Asset Exchange Agreement with Time Warner pursuant to which the
Company would convey to Time Warner substantially all of the assets of
the cable television systems serving communities in Florida, Indiana
and South Carolina in return for those of Time Warner serving other
communities in Virginia and in Maryland and West Virginia. BTH granted
such consent.
4. On July 23, 1997, the Company sought the consent of BTH to purchase the
cable television system serving the City of Albuquerque from one of the
Company's limited partnerships, Cable TV Fund 12-BCD for $222,963,267.
BTH granted such consent.
Investment Obligations (Section 3.1)
5. Notice from Jones dated July 28, 1997 and acknowledgment by BTH dated
August 7, 1997 regarding BTH's investment obligations pursuant to
Section 3.1 of the Shareholder's Agreement regarding the public
offering of shares of Class A Common Stock.
Transactions with Affiliates (Section 3.6)
6. During 1994, Jones sought the approval of the Unrelated Directors to
enter into the Great American Country Network Programming Agreement.
Such transaction was approved.
7. On or about December 23, 1997, Jones sought the approval of the
Unrelated Directors to enter into the Jones Internet Channel Affiliate
Agreement, which agreement would have provided for the Jones Internet
Channel to be the exclusive provider of Internet services to the
Company. Such transaction was denied.
8. During 1994, Jones sought the approval of the Unrelated Directors to
enter into the Billing System Agreement, which agreement provides for
the development of a customer care and billing system for the Company,
to be developed by Jones' Affiliates. Such transaction was approved.
Sale Offer Notices (Section 4.2)
1
<PAGE>
9. Sale offer notice dated March 25, 1997 delivered by Jones pursuant to
Section 4.2(b) of the Shareholders Agreement in relation to 550,000
shares of Class A Common Stock for aggregate consideration of
$9,762,500.00. BTH declined to purchase the shares.
10. Sale offer notice dated February 24, 1998 delivered by Jones pursuant
to Section 4.2(b) of the Shareholders Agreement in relation to 500,000
shares of Class A Common Stock for aggregate consideration of
$8,406,250.00. BTH declined to purchase the shares.
11. Sale offer notice dated December 17, 1997 delivered by Jones pursuant
to Section 4.2(b) of the Shareholders Agreement in relation to 877
shares of Class A Common Stock for aggregate consideration of
$14,196.44. BTH verbally declined to purchase the shares.
12. Sale offer notice dated December 17, 1997 delivered by Jones pursuant
to Section 4.2(b) of the Shareholders Agreement in relation to 136,946
shares of Class A Common Stock for aggregate consideration of
$2,216,813.38. BTH verbally declined to purchase the shares.
13. Sale offer notice dated December 17, 1997 delivered by Jones pursuant
to Section 4.2(b) of the Shareholders Agreement in relation to 37,626
shares of Class A Common Stock for aggregate consideration of
$609,070.88. BTH verbally declined to purchase the shares.
14. Sale offer notice dated December 17, 1997 delivered by Jones pursuant
to Section 4.2(b) of the Shareholders Agreement in relation to 48,705
shares of Class A Common Stock for aggregate consideration of
$788,412.19. BTH verbally declined to purchase the shares.
2
<PAGE>
SCHEDULE 3.10
1. Organization and Standing of the Company. The Company and each
of its subsidiaries, is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization with full corporate power and authority to own, lease, use and
operate its properties and to conduct its business as and where now owned,
leased, used, operated and conducted. The Company and each of its subsidiaries
is duly qualified to do business and in good standing in each jurisdiction in
which the nature of the business conducted by it or the property it owns, leases
or operates requires it to so qualify, except where the failure to be so
qualified or in good standing in such jurisdiction individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect on
the Company. The Company and each of its subsidiaries is not in default in the
performance, observance or fulfillment of any provision of their respective
certificate of incorporation or by-laws.
2. Organizational Documents. The certificate of incorporation and
bylaws of the Company are as set forth in Exhibits 3.1-3.4 to the Company's Form
10-K for the fiscal year ended December 31, 1997, as filed with the SEC and have
not been amended, modified, or rescinded and they remain in full force and
effect.
3. Capitalization. As of February 20, 1998, the Company's
authorized capital stock consisted solely of (a) 60,000,000 shares of Class A
Stock, of which (i) 35,578,398 shares were issued and outstanding, and (ii)
1,353,083 shares were reserved for issuance upon the exercise of outstanding
options, and no other shares were reserved for issuance for any other purposes;
and (b) 5,550,000 shares of Common Stock of which 5,113,021 shares were issued
and outstanding, and no shares were reserved for issuance for any purpose. Since
February 20, 1998 through the date of the Agreement and through the Initial
Closing Date, there have been no increases to any of the foregoing amounts other
than increases in the number of shares of Class A Stock outstanding by reason of
the exercise of the foregoing options, which exercise has reduced the number of
shares of Class A Stock reserved for issuance pursuant to options by a
corresponding amount. Since the date of the Agreement, there have been no
additional issuances of shares of Class A Stock or Common Stock other than
issuances of Class A Stock upon exercises of stock options outstanding on the
date of this Agreement. Except for the stock options described in the preceding
sentence, since the date of the Agreement there have been no subscriptions,
options, warrants, or other rights, convertible securities, agreements,
arrangements, or commitments of any character relating to the issued or unissued
capital stock of the Company to which the Company or any of its subsidiaries is
a party, or by which any of their properties are bound or affected, or
obligating the Company or any of its subsidiaries to issue or sell any shares of
capital stock of, or other equity interests in, the Company.
4. Public Filings. Since December 31, 1995, the Company has
timely filed all material forms, reports, and documents (the "Company Public
Reports") required to be filed with the SEC and the National Association of
Securities Dealers and other US federal or state securities law authorities,
exchanges or self-regulatory bodies (the "Securities Authorities") prior to the
<PAGE>
Initial Closing Date. The Company Public Reports (including, without limitation,
any financial statements or schedules included therein) filed on or prior to the
Initial Closing Date (i) have been prepared in compliance with the requirements
of applicable law, and (ii) did not at the time of filing (or, if amended,
supplemented, or superseded by a filing prior to the Initial Closing Date, on
the date of that filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
5. Financial Statements. Each of the consolidated financial
statements contained in the Company Public Reports filed on or prior to the
Initial Closing Date and the Company's audited consolidated financial statements
for the years ended December 31, 1997, 1996 and 1995 and the quarter ended March
31, 1998 (together, the "Financial Statements") (including, in each case, any
related notes thereto) have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto), and each of
them present fairly in all material respects the consolidated financial position
of the Company and its Subsidiaries at their respective dates and the
consolidated results of their operations and cash flows for the periods
indicated, except that unaudited interim financial statements included in any
quarterly reports may have been subject to normal and recurring year-end
adjustments that were not expected to be material in amount.
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<PAGE>
Schedule 7.3
1. The purchase of the following assets by Jones or a Jones Entity at a price
equal to the fair market value (determined by appraisal) of such assets:
(i) that certain real estate located on Lot 1,
Jones Intercable's Headquarters, according to the recorded plot thereof, County
of Anapahoe, State of Colorado and the Panorama Falls Office Building.
(ii) the Company's equity interest in each of
Jones Futurex, Inc., Jones Global Group and Jones Customer Service Management
LLC
(iii) all of the Company's interest in the "Jones
Spacelink" tradename.
2. The assumption by the Jones Entities of the Company's rights and obligations
under that certain lease dated, December 23, 1997, by and between the Company
and PNC Leasing Corp. ("Lessor") relating to the aircraft presently leased by
the Company and the release by the Lessor of the Company from such lease.
3. The amendment of (i) that certain lease, dated November 30, 1989, by and
between the Company and Jones Properties, Inc. (the "Lease") (a) providing the
Company with a right to terminate the Lease upon (x) vacating the entire
premises which are subject to the Lease and occupied by the Company with the
intention not to re-occupy such leased premises and (y) the payment by the
Company to Jones Properties, Inc. of an amount determined pursuant to section
27(a)(v) of such Lease (without the offset for fair market rental value of such
premises provided in such section calculated until the end of the stated term of
such lease, June 30, 2000, and (b) prohibiting the Company from subleasing the
premises to any person other than Jones, through the stated term of such lease,
and (ii) any subleases relating to the premises providing that such subleases
automatically terminate upon the termination of the Lease and relieving the
Company of any further obligations under such sublease following such
termination.
4. The adoption of a Severance Plan for certain associates of the Intercable
Group Entities located in Denver, Colorado, and Lanham, Maryland. Amounts
payable under the plan shall be in cash and shall not exceed $32,000,000 in the
aggregate, of which not more than $14,000,000 shall be non-deductible by the
Company from its income under Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code").
<PAGE>
All such severance payments shall, as a condition to payment, require that the
recipient be an employee of the Company at all times from the date hereof to the
date which is 90 days after the Closing Date unless such employee is terminated
without cause prior to the expiration of such 90-day period. Jones shall not be
a recipient of any such severance payments.
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<PAGE>
SCHEDULE F
Owned Systems
FRANCHISES HELD BY
JONES INTERCABLE, INC.
Panama City Beach, Florida System
City of Panama City Beach
Oxnard, California System
City of Oxnard
FRANCHISES HELD BY
JONES COMMUNICATIONS OF MARYLAND, INC.
Prince George's County System:
North Prince George's County
South Prince George's County
City of Bowie
Chesapeake Bay Group (including Annapolis,
Anne Arundel County and
Charles County Systems):
Anne Arundel County
City of Annapolis
<PAGE>
FRANCHISES HELD BY
JONES COMMUNICATIONS OF
GEORGIA/SOUTH CAROLINA, INC.
Savannah System:
Chatham County
City of Savannah
FRANCHISES HELD BY
JONES COMMUNICATIONS OF VIRGINIA, INC.
Alexandria System:
City of Alexandria
Prince William Group (including
Dale City, Reston and
Manassas Systems):
Fairfax County (Reston)
City of Manassas
FRANCHISES HELD BY
JONES COMMUNICATIONS OF ARIZONA, INC.
Pima County System:
Town of Oro Valley
FRANCHISES HELD BY
JONES COMMUNICATIONS OF MISSOURI, INC.
Independence System:
City of Olathe, KS
City of Raytown
<PAGE>
FRANCHISES HELD BY
JONES COMMUNICATIONS OF NEW MEXICO, INC.
Albuquerque System:
City of Albuquerque
FRANCHISES HELD BY
JONES OF WISCONSIN, INC.
Manitowoc System:
City of Manitowoc
Managed Systems
FRANCHISES HELD BY
CABLE TV FUND 14-A, Ltd.
Calvert County System:
Calvert County
Naperville System
City of Naperville
FRANCHISES HELD BY
JONES GROWTH PARTNERS, L.P.
Wheaton System
City of Wheaton
Village of Addison
<PAGE>
FRANCHISES HELD BY
IDS/JONES JOINT VENTURE PARTNERS
Aurora System
City of Aurora
FRANCHISES HELD BY
CABLE TV FUND 12-BCD VENTURE
Palmdale and Littlerock Systems:
Los Angeles County
City of Lancaster
City of Palmdale
FRANCHISES HELD BY
JONES CABLE INCOME FUND 1-A, LTD.
Owatonna/Glencoe System
City of Owatonna
FRANCHISES HELD BY
CABLE TV FUND 12-A, LTD.
Cook County/Orland Park System
Village of Mundelein
FRANCHISES HELD BY
CABLE TV FUND 15-A, LTD.
South Suburban System
Village of Lansing
<PAGE>
EXHIBIT 14
Amendment No. 1 to Option Agreements
<PAGE>
Execution Copy
AMENDMENT NO. 1 TO OPTION AGREEMENTS
This AMENDMENT to each of those certain Option Agreements described
more fully herein is entered into as of this 12 day of August 1998, by and among
Jones International, Ltd. ("International"), Glenn Jones Grantor Business Trust
(the "Jones Trust"), Jones International Grantor Business Trust (the "JI Trust",
and together with the Jones Trust, the "Trusts"), Jones Space Segment, Inc.
("Space"), Jones Global Group, Inc. ("Global"), Jones Interdigital, Inc.
("Interdigital"), Jones Entertainment Group, Ltd. ("Entertainment" and together
with International, the Trusts, Space, Global and Interdigital, the "Jones
Entities") and The Bank of New York (as successor agent to Morgan Guaranty Trust
Company of New York) (the "Purchaser"), as agent for, in the case of a Section
3.1(a)(vi) Exercise (as defined herein), Comcast Corporation, a Pennsylvania
corporation ("Comcast"), and in all other cases BTH (Intercable) Limited, a
British Virgin Islands corporation f/k/a Bell Canada International BVI VI
Limited ("BTH Intercable") as assignee of BCI Telecom Holdings Inc., a Canadian
corporation, f/k/a Bell Canada International, Inc. ("BTH").
WHEREAS, the Jones Entities have entered into those certain Option
Agreements, each dated as of December 20, 1994 (the "Option Agreements"),
pursuant to which BTH Intercable, as assignee of BTH and through its agent, has
the option (the "Control Option") to purchase the shares of Common Stock, par
value $.01 per share (the "Common Stock"), of Jones Intercable, Inc. (the
"Company") owned beneficially or of record by the Jones Entities (the "Control
Shares");
WHEREAS, BTH, BTH Intercable and BTH (US Cable) Limited, a British
Virgin Islands corporation f/k/a Bell Canada International BVI III, Limited ("US
Cable") have entered into a Purchase and Sale Agreement with Comcast, dated as
of May 22, 1998, and amended and restated as of the date hereof (the
"Comcast/BTH Agreement") in connection with the transactions contemplated by the
Jones/Comcast Agreement (as defined herein), including the exercise of the
Control Option pursuant to the Option Agreements. BTH, BTH Intercable and US
Cable are sometimes referred to herein as the "Bell Entities."
WHEREAS, the Jones Entities have entered into an Agreement with
Comcast, dated August 12, 1998 (the "Jones/Comcast Agreement"), concerning the
exercise of the Control Option;
WHEREAS, in connection with the execution and delivery of the
Comcast/BTH Agreement as so amended and restated and the Jones/Comcast Agreement
and in light of the transactions contemplated thereby, the parties hereto desire
to amend each of the Option Agreements as described herein to provide for, among
other things, a new Exercise Period (as defined in the Option Agreements) which
will cause the Control Option to become currently exercisable;
<PAGE>
THEREFORE, in consideration of the mutual covenants contained herein,
and intending to be legally bound hereby, the parties agree as follows.
1. Definitions. All terms used but not otherwise defined herein shall
have the same meanings as ascribed to them in the Option Agreements.
2. Amendment of Preamble. The preamble to the Option Agreements is
hereby amended by:
(a) inserting after the date "December 20, 1994" the phrase
"and amended as of August 12, 1998" and
(b) inserting after the word "between" the phrase "The Bank of
New York (as successor agent to Morgan Guaranty Trust Company of New York) (the
"Purchaser"), as agent for, in the case of a Section 3.1(a)(vi) Exercise (as
defined herein), Comcast Corporation, a Pennsylvania corporation and in all
other cases BTH (Intercable) Limited, a British Virgin Islands corporation f/k/a
Bell Canada International BVI VI Limited ("BTH Intercable") as assignee of BCI
Telecom Holdings Inc., a Canadian corporation, f/k/a Bell Canada International,
Inc. ("BTH")".
3. Substitution of the term "BCI". All instances of the term "BCI" in
the Option Agreements are hereby deleted and replaced with the term "BTH".
4. Amendment to Section 1.1(a). Section 1.1(a) is amended by:
(a) deleting the definition of "BCI" and inserting in lieu
thereof the following definition:
""BTH" means BCI Telecom Holding Inc. f/k/a Bell Canada
International Inc., a corporation organized under the Canada Business
Corporations Act."
(b) deleting the definition of "Shareholders Agreement" and
inserting in lieu thereof the following definition:
""Shareholders Agreement" means the Shareholders Agreement
dated as of December 20, 1994 among BTH, the Company, Jones and Jones
International, as amended on August 12, 1998."
(c) and adding thereto the following definitions:
""BTH/Comcast Agreement" means that certain Purchase and Sale
Agreement, dated May 22, 1998, and amended and restated as of August 12, 1998 by
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<PAGE>
and among Comcast, BTH, BTH (US Cable) Limited, a British Virgin Islands
corporation f/k/a Bell Canada International BVI III Limited, and BTH Intercable.
"Comcast" means Comcast Corporation, a Pennsylvania
corporation.
"Franchise Authority" has the meaning that term is given by
Section 602(9) of the Cable Communications Act of 1984 (47 U.S.C. (S) 522(10)).
"Jones/Comcast Agreement" means that certain Agreement dated
August 12, 1998 by and among Comcast and the Jones Entities (as defined
therein).
"Jones/Comcast Closing" means the "Closing" as defined in the
Jones/Comcast Agreement.
"Jones/Comcast Closing Date" means the "Closing Date" as
defined in the Jones/Comcast Agreement.
"Section 3.1(a)(vi) Exercise" shall refer to the exercise of
the Control Option in accordance with Article III hereof pursuant to Section
3.1(a)(vi).
"Simultaneous Closing" means the Simultaneous Closing as such
term is defined in the BTH/Comcast Agreement."
5. Amendment to Section 1.1(b). Section 1.1(b) is hereby amended by
inserting the following:
"Other Transactions 3.2(b)"
6. Amendment of Section 3.1. Section 3.1 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"SECTION 3.1 Exercise Periods. (a) The Control Option may be exercised
either as provided in Section 7.2(c), or by Purchaser at any time during any of
the following periods (each, an "Exercise Period"):
(i) the period commencing on the day of an Event and ending
270 days after Purchaser receives written notice from or on behalf of any
Optionor of the occurrence of an Event;
(ii) the period commencing on the day of a Resignation Event
and ending 90 days after Purchaser receives a written notice from (or on behalf
of) any Optionor of the occurrence of a Resignation Event;
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<PAGE>
(iii) the period commencing on the day that Purchaser receives
a written notice from (or on behalf of) Grantor requesting that Purchaser
exercise the Control Option (the "Grantor's Notice"), which notice may be
delivered only on or after the fifth anniversary of the SPA Closing, and ending
180 days after such day;
(iv) the period commencing on the seventh anniversary of the
SPA Closing and ending on the eighth anniversary of the SPA Closing;
(v) the period commencing on the day of a Jones Bankruptcy
Event and ending 30 days after Purchaser receives written notice of the
occurrence of a Jones Bankruptcy Event; and
(vi) the period commencing on August 12, 1998, which period
shall only apply to the exercise of the Control Option pursuant to the
Jones/Comcast Agreement; provided, that upon the occurrence of the Initial
Closing as defined in the BTH/Comcast Agreement the Exercise Period described in
this Section 3.1(a)(vi) shall automatically terminate.
provided that no Exercise Period will expire if immediately preceding such
expiration there is in effect a law, regulation or order that stays or otherwise
prohibits Purchaser from delivering an Exercise Notice after (or as a result of)
the occurrence of a Jones Bankruptcy Event; provided further however, that the
commencement of any Exercise Period described in Sections 3.1(a)(i) through (v)
inclusive shall be postponed until such time, if ever, on the earlier to occur
of the date the Jones/Comcast Agreement shall have expired or been terminated or
the date of the Initial Closing under the BTH/Comcast Agreement, but in no event
shall such Exercise Periods described in Sections 3.1(a)(i) - 3.1(a)(v) end
later than December 20, 2002.
(b) The notices delivered pursuant to clauses (i), (ii), (iii) and (v)
will be in the form attached hereto as Exhibit A. A Grantor's Notice delivered
pursuant to clause (iii) will be effective only if a similar notice is
simultaneously delivered to Purchaser under the Related Option Agreements. Once
delivered to Purchaser, a Grantor's Notice will be irrevocable.
(c) Subject to the termination provisions of Section 3.6, the parties
acknowledge that at any given time there may be more than one Exercise Period in
effect at such time.
(d) Grantor acknowledges and agrees that the delivery of an Exercise
Notice pursuant to a Section 3.1(a)(vi) Exercise is being made for the account
of Comcast. BTH shall not be liable to Grantor under this Agreement if the
closing of the Section 3.1(a)(vi) Exercise shall not occur for any reason
provided that this Section 3.1(d) shall not be deemed to be a waiver by Grantor
of any claim which it may have against BTH due to a breach by BTH of its
obligations hereunder or preserved pursuant to the second sentence of Section
1.6 of the Agreement and Amendment No. 1 to Shareholders Agreement of even date
herewith."
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<PAGE>
7. Amendment of Section 3.2. Section 3.2 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"SECTION 3.2 Exercise of Control Option. (a) Purchaser may exercise the
Control Option at any time during an Exercise Period by delivery to Grantor of
an irrevocable written notice in the form attached hereto as Exhibit B (the
"Exercise Notice"). The execution and delivery of this Agreement as amended on
August 12, 1998 shall be deemed to be delivery by Purchaser of a valid Exercise
Notice as of such date pursuant to a Section 3.1(a)(vi) Exercise. Purchaser has
no obligation to deliver an Exercise Notice pursuant to Section 3.1(a)(i)
through (v) and may allow the Control Option to expire and terminate without
purchasing the Optioned Shares. The Control Option may only be exercised
simultaneously with the exercise of the option granted under the Related Option
Agreements and the Closing hereunder will only take place simultaneously with
the closing of the exercise of the option granted under the Related Option
Agreements; provided that the Closing pursuant to a Section 3.1(a)(vi) Exercise
will also only take place on the same date as the Jones/Comcast Closing and the
Simultaneous Closing.
(b) The closing for the exercise of the Control Option (the "Closing")
(1) in the case of any exercise of the Control Option other than a Section
3.1(a)(vi) Exercise, will take place not more than 20 Business Days after the
date that the Exercise Notice is delivered to Grantor, provided that (x) if it
is necessary to determine Market Value pursuant to Section 3.4(b), the Closing
will be postponed as provided in Section 3.4(c) and (y) so long as Purchaser is
using its reasonable efforts to consummate the Closing promptly, and subject to
Section 3.6 hereof, Purchaser may postpone the Closing until such time as the
following conditions have been satisfied or waived by Purchaser and (2) in the
case of a Section 3.1(a)(vi) Exercise, will take place on the same date as the
Jones/Comcast Closing and the Simultaneous Closing at such time as the following
conditions have been satisfied or waived by Purchaser:
(i) The waiting period (including any extension thereof
resulting from additional inquiries, if any) under the HSR Act
applicable to (x) the purchase of the Optioned Shares by Purchaser and
(y) in the case of a Section 3.1(a)(vi) Exercise, the consummation of
the transactions contemplated by the Jones/Comcast Agreement and the
BTH/Comcast Agreement including the sale of the Optioned Shares from
Purchaser to Comcast (the "Other Transactions") shall have expired or
been earlier terminated.
(ii) All other actions by, in respect of or filings with any
Governmental Authority in the United States, England or Spain, or any
other country where the Intercable Group conducts material business,
required to permit (x) the consummation of the Closing and (y) in the
case of a Section 3.1(a)(vi) Exercise, the consummation of the Other
Transactions, shall have been taken or obtained, as the case may be,
and shall be in full force and effect; provided that, in the case of a
Section 3.1(a)(vi) Exercise, if all authorizations, consents and
approvals from applicable Franchise Authorities necessary to effect the
change of control of the Franchises (A) relating to the Franchises in
Systems (whether Owned Systems or Managed Systems) set forth on
Schedule F hereto, (B) relating to Franchises in Managed Systems which
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<PAGE>
as of the date of Closing are subject to a letter of intent or
agreement of sale providing for the sale or other disposition of such
Managed Systems to a person other than the Company (or its wholly owned
Subsidiaries), and (C) relating to Franchises with not less than 10,000
basic subscribers in Systems (whether Owned Systems or Managed Systems)
acquired by any Intercable Group Entity (except for Managed Systems
which, as of the Closing Date, are subject to a letter of intent or
agreement of sale providing for the sale or other disposition of such
Managed System to the Company or one of its wholly owned Subsidiaries)
after the date hereof (the "Required Franchise Approvals") shall have
been so obtained, be in effect and not be subject to withdrawal or
appeal then the condition contained in this paragraph (ii) shall be
deemed to be fulfilled as it relates to authorizations, consents or
approvals from applicable Franchise Authorities on the date on which
all of the Required Franchise Approvals are so obtained and are in
effect and not subject to withdrawal or appeal and provided further
that this condition shall not be satisfied if any Required Franchise
Approval shall not have been obtained.
(iii) There shall not then be in effect any applicable law,
rule or regulation or any judgment, injunction, order or decree that
has one or more of the effects described in clauses (a), (b) or (c) of
the following paragraph (iv), provided that (x) if after the date
hereof BTH or any of its Affiliates and (y) in the case of a Section
3.1(a)(vi) Exercise, if after August 12, 1998 Comcast or any of its
Affiliates enters into a new line of business and at such time there is
a law, rule or regulation that has, or is reasonably expected to have,
one or more of such effects, then this clause (iii) will not apply to
any such law, rule or regulation.
(iv) There shall not then be instituted or pending any action
or proceeding before any federal or state court or other Governmental
Authority brought by a Governmental Authority challenging the
consummation of the Closing or, in the case of a Section 3.1(a)(vi)
Exercise, the Other Transactions or seeking to (a) prevent BTH (or its
agent) or, in the case of a Section 3.1(a)(vi) Exercise, Comcast (or
its agent) from exercising the Control Option, (b) require BTH (or its
agent) or, in the case of a Section 3.1(a)(vi) Exercise, Comcast (or
its agent) to divest, or otherwise limit BTH's, Comcast's (or their
respective agent's) ability to exercise full rights of ownership over,
the shares of Capital Stock owned by BTH and its Affiliates, Comcast
and its Affiliates, the Control Option or the Optioned Shares or (c)
require, after the exercise of the Control Option, the Intercable Group
or, in the case of a Section 3.1(a)(vi) Exercise the Intercable Group
or Comcast to divest any material business or assets or would impose a
material limitation on the conduct of Intercable Group's or Comcast's
business, provided that (A) if after the date hereof BTH or any of its
Affiliates, or, in the case of a Section 3.1(a)(vi) Exercise, if after
August 12, 1998 Comcast or any of its Affiliates enters into a new line
of business and at such time there is a law, rule or regulation that
has, or is reasonably expected to have, one or more of the foregoing
effects, then this paragraph (iv) will not apply to actions or
proceedings that seek to enforce such law, rule or regulation and (B)
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<PAGE>
any actions or proceedings described in clause (a) or (b) will be based
on the business or assets of BTH and Comcast or their respective
Affiliates and not the Purchaser.
(v) The Intercable Group Entities shall have received all
material third party consents required to be obtained in connection
with the Closing, and, in the case of a Section 3.1(a)(vi) Exercise,
the consummation of the Other Transactions in each case in form and
substance reasonably satisfactory to Purchaser.
(vi) The representations and warranties of Grantor contained
in Article V shall be true at and as of the date of the Closing, as if
made at and as of such date.
(vii) In the case of a Section 3.1(a)(vi) Exercise only, the
Jones/Comcast Closing and the Simultaneous Closing shall have occurred
on the same date as the Closing hereunder."
8. Amendment of Section 3.3. Section 3.3 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"SECTION 3.3 Purchase Price For the Optioned Shares. (a) The purchase
price per Optioned Share will be calculated as follows:
(i) (A) if the Trigger Date occurs prior to or on June 18,
1995, 200% of the Market Value of a share of Class A Common Stock on
the applicable Trigger Date, or (B) except in the case of a Section
3.1(a)(vi) Exercise, if the Trigger Date occurs after June 18, 1995,
the sum of (x) two-thirds of the Option Price on the applicable Trigger
Date and (y) one-third of 120% of the Market Value of a share of Class
A Common Stock on the applicable Trigger Date(1) or (c) in the case of
a Section 3.1 (a)(vi) Exercise, $69.4891 per Optioned Share, in each
case reduced by
(ii) (A) the amount (or in the case of property other than
cash, fair market value) of any dividends and distributions other than
stock dividends paid, declared or otherwise distributed by the Company
in respect of the Optioned Shares between the date hereof and the date
of Closing and (B) in the case of a Section 3.1(a)(vi) Exercise, the
amount of any Initial Consideration (as such term is used in the
Jones/Comcast Agreement) which has been paid to Jones, Grantor or any
party to the Related Option Agreements (or their respective Affiliates)
in respect of the Optioned Shares plus interest accrued at the
Applicable Rate (as such term is used in the Jones/Comcast Agreement)
from the date such Initial Consideration was
- ------------------
1. As an example of the calculation described in clause (i)(B), if on the
applicable Trigger Date the Option Price were $50 per Share and the Market
Value of a share of Class A Common Stock were $60 per share, the purchase
price would be 2/3 of $50 ($33.3333) plus 1/3 of 120% of $60 ($24),
or $57.3333 (computed to four decimal places).
-7-
<PAGE>
paid by Comcast to and including the date of Closing; provided that the
amount of such Initial Consideration (plus interest) deemed to have
been paid in respect of each Optioned Share shall be equal to the total
amount of such Initial Consideration (plus interest) paid (and accrued)
under the Jones/Comcast Agreement divided by the sum of the aggregate
number of Optioned Shares actually acquired by Purchaser on the date of
Closing under this Option Agreement plus the aggregate number of
Optioned Shares (as such term is used in the Related Option Agreements)
actually acquired by Purchaser on the date of Closing under the Related
Option Agreements.(2) In the event any such dividends or distributions
are made in property other than cash, the fair market value of such
dividends or distributions will be determined pursuant to the valuation
procedures described in Section 3.4(b).
(b) The applicable "Trigger Date" will depend on the Exercise Period
under which Purchaser is delivering an Exercise Notice and will be earliest of
the following days:
(i) in the case of an Exercise Period described in clauses (i)
or (ii) of Section 3.1(a), the day of an Event or Resignation Event, as
the case may be;
(ii) in the case of an Exercise Period described in clause
(iii) of Section 3.1(a), the day immediately preceding the day on which
Grantor delivers a Grantor's Notice;
(iii) in the case of an Exercise Period described in clause
(iv) of Section 3.1(a), the day immediately preceding day on which
Purchaser delivers an Exercise Notice;
(iv) in the case of an Exercise Period described in clause (v)
of Section 3.1(a), the day immediately preceding the day of a Jones
Bankruptcy Event; or
(v) in the case of a Section 3.1(a)(vi) Exercise, the date
hereof."
9. Amendment of Section 3.5. Section 3.5 is amended by adding a new
subsection (c) thereto as follows:
- ---------
2. As an example of the calculation described in clause (ii)(B),
if on the date of Closing the total amount of the Initial
Consideration (plus interest) paid (and accrued) under the
Jones/Comcast Agreement is equal to $51,000,000 and the sum of
the aggregate number of Optioned Shares actually acquired by
Purchaser on the date of Closing under this Option Agreement
plus the aggregate number of Optioned Shares (as such term is
used in the Related Option Agreements) actually acquired by
Purchaser on the date of Closing under the Related Option
Agreements is equal to 2,700,000 Optioned Shares, the amount
of the reduction per Optioned Share would be $51,000,000
divided by 2,700,000, or $18.8889 (computed to four decimal
places).
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<PAGE>
"(c) In the case of a Section 3.1(a)(vi) Exercise, the transactions
described in paragraphs (a) and (b) of this Section 3.5 shall occur on the same
date as the Jones/Comcast Closing and the Simultaneous Closing. If the
Simultaneous Closing and the Jones/Comcast Closing shall not have occurred on
the same date as the Closing, then the transactions described in paragraphs (a)
and (b) of Section 3.5 shall be rescinded and deemed not to have occurred. In
the case of a Section 3.1(a)(vi) Exercise, the procedures at the Closing shall
be as follows:
(i) the directors of the Company other than the Joint Nominees
(as such term is defined in the Shareholders Agreement) shall resign
seriatim and the remaining directors shall appoint individuals
designated by Comcast to fill the vacancies created thereby, all as
more fully described in the Jones/Comcast Agreement and the BTH/Comcast
Agreement.
(ii) the transactions described in paragraphs (a) and (b) of
Section 3.5 of this Agreement and of the Related Option Agreements
shall occur; and
(iii) the transactions to be effected at the Simultaneous
Closing shall occur."
10. Amendment of Section 3.6. Section 3.6 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"SECTION 3.6 Termination of Control Option. (a) The Control Option
shall terminate at 5:00 p.m. Denver time when the first Exercise Period
described in clauses (i), (iii) or (iv) of Section 3.1 expires (the "Termination
Time"), provided that, subject to the following paragraph (b), the Control
Option will not terminate if Purchaser has previously delivered to Grantor an
Exercise Notice. The Control Option shall also terminate (A) at such time as
Purchaser withdraws an Exercise Notice pursuant to Section 3.4(c), or (B) if the
Closing has been postponed pursuant to Section 3.2(b)(1), ten Business Days
after Grantor has delivered written notice to Purchaser stating that it believes
Purchaser is not using its reasonable efforts to consummate the Closing promptly
(which notice will set forth the basis for such claim) and Purchaser has failed
to use its reasonable efforts prior to the expiration of such period to cure the
problem identified by Grantor. The Control Option will not terminate solely
because of the expiration of the Exercise Periods described in clauses (ii) and
(v) of Section 3.1, or in the case of a Section 3.1(a)(vi) Exercise, upon the
termination of the Jones/Comcast Agreement and the failure of the Closing
hereunder to occur.
(b) Notwithstanding anything in this Agreement to the contrary, (i) if
an Exercise Period is extended pursuant to the proviso in Section 3.1(a), the
Termination Time will occur twenty Business Days after such stay or prohibition
has been lifted and Purchaser has received notice of such action and (ii) each
Exercise Notice other than a Section 3.1(a)(vi) Exercise Notice shall terminate,
and be of no further force or effect, 18 months after its delivery, unless a
Closing shall have occurred by such time.
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<PAGE>
(c) Notwithstanding the foregoing provisions of this Section 3.6, in no
event shall the Control Option expire or terminate prior to the termination of
the Jones/Comcast Agreement."
11. Amendment of Section 4.1. Section 4.1 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"SECTION 4.1 No Proxies for or Encumbrances on Optioned Shares. Except
as contemplated by this Agreement, until the termination of this Agreement
pursuant to Section 10.1, Grantor shall not, directly or indirectly, (i) grant
any proxies (other than a revocable proxy granted in connection with a meeting
of stockholders) or enter into any voting trust or other agreement or
arrangement with respect to the voting of any Optioned Shares, (ii) sell,
assign, transfer, encumber or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to the direct or
indirect sale, assignment, transfer, encumbrance or other disposition of, any
Optioned Shares or (iii) seek or solicit any transaction or arrangement
described in clauses (i) and (ii). Grantor will notify Purchaser promptly (and
provide all details reasonably requested by Purchaser) if Grantor is approached
or solicited, directly or indirectly, by any person with respect to any of the
foregoing. Nothing herein shall be deemed to prevent or restrict (x) Grantor or
its Affiliates from voting its shares in its sole discretion on all matters,
except as otherwise agreed to between Grantor, its Affiliates, and BTH in the
Shareholders Agreement or otherwise, or between Grantor, its Affiliates and
Comcast in the Jones/Comcast Agreement or otherwise or (y) any Affiliate of
Grantor from taking or refraining from taking any other action not provided
herein or otherwise agreed to between Grantor, its Affiliates and BTH in the
Shareholders Agreement, the Jones/Comcast Agreement or otherwise or between
Grantor, its Affiliates and Comcast in the Jones/Comcast Agreement."
12. Amendment of Section 4.2. Section 4.2 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"SECTION 4.2 Further Assurances. BTH (and its agent) and Grantor will
each execute and deliver or cause to be executed and delivered all further
documents and instruments and use their reasonable best efforts to secure such
consents and take all such further action as may be reasonably necessary in
order to consummate the transactions contemplated hereby or to enable Purchaser
and BTH or Comcast, as applicable, to enjoy all benefits and rights of the
Optioned Shares."
13. Amendment of Section 6.1. Section 6.1 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"SECTION 6.1 Acquisition for Purchaser's Account. Purchaser represents
and warrants to Grantor that as of the date hereof and the date of the Closing
the Optioned Shares to be acquired upon exercise of the Control Option will be
acquired by Purchaser as the agent for, in the case of a Section 3.1(a)(vi)
Exercise, Comcast's, and in all other instances BTH's own account and not with a
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<PAGE>
view to the public distribution thereof and will not be transferred except in
compliance with the Securities Act."
14. Amendment of Section 9.3(c). Section 9.3(c) is hereby deleted in
its entirety and the following is substituted in lieu thereof:
"(c) In connection with an exercise of rights pursuant to Section
9.1(d), Purchaser may cause any or all of the Optioned Shares to be transferred
of record into the name of Purchaser, in the case of a Section 3.1(a)(vi)
Exercise, to Comcast and in the case of any other exercise, to BTH, or in any
event, to any of their respective nominees. After notice thereof, Grantor will
promptly give to the Purchaser (or its designee) copies of any notices or other
communications received by it with respect to the Optioned Shares registered in
the name of Grantor, and Purchaser will promptly give to Grantor copies of any
notices and communications received by Purchaser, to the extent the same have
been delivered to Purchaser (or Comcast, BTH or a nominee) with respect to any
Optioned Shares registered in the name of Purchaser (or Comcast, BTH or a
nominee)."
15. Amendment of Section 10.2(a). Section 10.2(a) is hereby deleted in
its entirety and the following is substituted in lieu thereof:
"SECTION 10.2 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors. No party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
written consent of the other parties hereto, provided that (i) Purchaser may
assign its rights, but not its obligations, hereunder to any Eligible Assignee
(or an agent of such Eligible Assignee), (ii) Purchaser may assign its rights
and obligations hereunder as provided in Article VII, (iii) Purchaser may assign
its rights (but not its obligations) hereunder at any time after the delivery by
it of an Exercise Notice to Grantor if at the time of any such assignment
pursuant to this clause (iii) the assignee purchases the Optioned Shares
pursuant to Section 3.5(a) and (b) and (iv) Purchaser may, at the Closing of a
Section 3.1(a)(vi) Exercise and the consummation of the Jones/Comcast Closing,
assign all its rights and obligations hereunder to Comcast."
16. Amendment of Section 10.4. Section 10.4 is hereby amended by (a)
deleting the address of Bell Canada International, Inc. in its entirety and
substituting in lieu thereof the following:
"BCI Telecom Holding Inc.
1000, rue de la Gauchetiere West
Suite 1100
Montreal, Quebec
Canada H3B 4Y8
Fax: 514-392-2342
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<PAGE>
Attention: Corporate Secretary
with copies to (unless the Initial Closing (as defined in the
BTH/Comcast Agreement) shall have occurred or the Jones/Comcast Agreement shall
have terminated):
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
Fax: 215-981-7794"
and (b) deleting the name and address of the Purchaser and substituting in lieu
thereof:
"The Bank of New York, as successor agent to
Morgan Guaranty Trust Company of New York
101 Barclay Street
Floor 12E
New York, NY 10286
Fax: 212-815-7181
Attention: Robert W. Rich, Assistant Vice President"
17. Amendment to Section 10.10. Section 10.10 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"Section 10.10 Entire Agreement. This Agreement, together with the
Jones/Comcast Agreement, the Shareholders Agreement (including the Agreement and
Amendment No. 1 to Shareholders Agreement) and the BTH/Comcast Agreement
constitutes the entire agreement between the parties with respect to the subject
matter of this Agreement and supersedes all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement."
18. Amendment to Section 10.12. Section 10.12 is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"SECTION 10.12 Agency Capacity of Purchaser. Grantor expressly
acknowledges and agrees that Purchaser is acting solely as agent on behalf of,
in the case of a Section 3.1(a)(vi) Exercise, Comcast, and in all other
instances, BTH and not in a principal capacity. Grantor further acknowledges and
agrees that in executing and delivering this Agreement, making any payment,
delivering any notice or instruction, making any determination or taking any
other action provided for or contemplated herein, Purchaser is acting and shall
act solely upon the instruction and at the direction of, in the case of a
Section 3.1(a)(vi) Exercise, Comcast, and in all other instances, BTH."
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<PAGE>
19. Addition of Section 10.13. Immediately following Section 10.12, a
new Section 10.13 is hereby added as follows:
"SECTION 10.13 Termination of Jones/Comcast Agreement. All references
to the Jones/Comcast Agreement, the BTH/Comcast Agreement, the Jones/Comcast
Closing and Closing Date, Comcast and the Section 3.1(a)(vi) Exercise shall be
deemed deleted and of no force or effect if and at such time as the earlier to
occur of the Initial Closing under the BTH/Comcast Agreement and the date the
Jones/Comcast Agreement shall have been terminated."
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed by their duly authorized representatives as of the day and year
first above written.
GLENN JONES GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
---------------------------------------
JONES INTERNATIONAL GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
---------------------------------------
JONES INTERNATIONAL, LTD.
By: /s/ Glenn R. Jones
---------------------------------------
JONES SPACE SEGMENT, INC.
By: /s/ Glenn R. Jones
---------------------------------------
JONES GLOBAL GROUP, INC..
By: /s/ Glenn R. Jones
---------------------------------------
JONES INTERDIGITAL, INC..
By: /s/ Glenn R. Jones
---------------------------------------
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<PAGE>
JONES ENTERTAINMENT GROUP, LTD.
By: /s/ Glenn R. Jones
---------------------------------------
THE BANK OF NEW YORK, as successor agent to
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
agent for BTH Telecom Holding Inc. f/k/a Bell
Canada International Inc. and Comcast
Corporation
By: /s/ Robert Rich
---------------------------------------
This Amendment is consented to and approved of by the following:
BCI TELECOM HOLDING, INC.
By: /s/ Siim Vanaselja
---------------------------------------
BTH (INTERCABLE) LIMITED
By: /s/ Christopher S. McKenzie
---------------------------------------
COMCAST CORPORATION
By: /s/ Arthur Block
---------------------------------------
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<PAGE>
SCHEDULE F
Owned Systems
FRANCHISES HELD BY
JONES INTERCABLE, INC.
Panama City Beach, Florida System
City of Panama City Beach
Oxnard, California System
City of Oxnard
FRANCHISES HELD BY
JONES COMMUNICATIONS OF MARYLAND, INC.
Prince George's County System:
North Prince George's County
South Prince George's County
City of Bowie
Chesapeake Bay Group (including Annapolis,
Anne Arundel County and
Charles County Systems):
Anne Arundel County
City of Annapolis
<PAGE>
FRANCHISES HELD BY
JONES COMMUNICATIONS OF
GEORGIA/SOUTH CAROLINA, INC.
Savannah System:
Chatham County
City of Savannah
FRANCHISES HELD BY
JONES COMMUNICATIONS OF VIRGINIA, INC.
Alexandria System:
City of Alexandria
Prince William Group (including
Dale City, Reston and
Manassas Systems):
Fairfax County (Reston)
City of Manassas
FRANCHISES HELD BY
JONES COMMUNICATIONS OF ARIZONA, INC.
Pima County System:
Town of Oro Valley
FRANCHISES HELD BY
JONES COMMUNICATIONS OF MISSOURI, INC.
Independence System:
City of Olathe, KS
City of Raytown
<PAGE>
FRANCHISES HELD BY
JONES COMMUNICATIONS OF NEW MEXICO, INC.
Albuquerque System:
City of Albuquerque
FRANCHISES HELD BY
JONES OF WISCONSIN, INC.
Manitowoc System:
City of Manitowoc
Managed Systems
FRANCHISES HELD BY
CABLE TV FUND 14-A, Ltd.
Calvert County System:
Calvert County
Naperville System
City of Naperville
FRANCHISES HELD BY
JONES GROWTH PARTNERS, L.P.
Wheaton System
City of Wheaton
Village of Addison
<PAGE>
FRANCHISES HELD BY
IDS/JONES JOINT VENTURE PARTNERS
Aurora System
City of Aurora
FRANCHISES HELD BY
CABLE TV FUND 12-BCD VENTURE
Palmdale and Littlerock Systems:
Los Angeles County
City of Lancaster
City of Palmdale
FRANCHISES HELD BY
JONES CABLE INCOME FUND 1-A, LTD.
Owatonna/Glencoe System
City of Owatonna
FRANCHISES HELD BY
CABLE TV FUND 12-A, LTD.
Cook County/Orland Park System
Village of Mundelein
FRANCHISES HELD BY
CABLE TV FUND 15-A, LTD.
South Suburban System
Village of Lansing
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Exhibit 15
Execution Copy
AGREEMENT AND AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT
This AGREEMENT AND AMENDMENT No. 1 (this "Agreement and Amendment") is
entered into as of this 12 day of August 1998, and amends that certain
Shareholders Agreement dated as of December 20, 1994 (the "Shareholders
Agreement") by and among Jones International, Inc. ("International"), Glenn R.
Jones ("Jones"), Jones Intercable, Inc., a Colorado corporation (the "Company")
and BCI Telecom Holding Inc., a Canadian corporation, f/k/a Bell Canada
International Inc. ("BTH"), and is also entered into by BTH (US Cable) Limited,
a British Virgin Islands corporation, f/k/a Bell Canada International BVI III,
Limited ("US Cable") as assignee of BTH and by BTH (Intercable) Limited, a
British Virgin Islands corporation, f/k/a Bell Canada International BVI VI
Limited ("BTH Intercable" and together with BTH and US Cable, the "BTH
Entities") and the other Jones Entities (as defined herein).
WHEREAS, on December 20, 1994, International, Jones, the Company and
BTH entered into the Shareholders Agreement;
WHEREAS, BTH assigned its rights but not its obligations under the
Shareholders Agreement to US Cable by that certain assignment dated December 20,
1994;
WHEREAS, in connection with the execution and delivery of the
Shareholders Agreement, Glenn Jones Grantor Business Trust ("Trust"), Jones
International Grantor Business Trust ("JI Trust"), Jones Space Segment, Inc.
("Space"), Jones Global Group, Inc. ("Global"), Jones Interdigital, Inc.
("Interdigital"), Jones Entertainment Group, Ltd. ("Entertainment" and together
with Jones, International, Trust, JI Trust, Space, Global and Interdigital, the
"Jones Entities") and Morgan Guaranty Trust Company of New York, as agent for
BTH and BTH Intercable entered into certain option agreements each dated as of
December 20, 1994 and amended and restated as of the date hereof, granting an
option (the "Control Option") to purchase the shares of Common Stock, par value
$.01 per share (the "Common Stock"), of the Company owned beneficially or of
record by the Jones Entities (the "Control Shares");
WHEREAS, the Jones Entities, BTH, through its agent, have entered into
an amendment to the foregoing option agreements (as amended, the "Option
Agreements") to provide for, among other things, a new Exercise Period (as
defined therein) which has caused the Control Option to become currently
exercisable as provided in Section 3.1(a)(vi) of the Option Agreements (the
"Accelerated Exercise");
WHEREAS, the Shareholders Agreement currently provides that upon the
consummation of the purchase and sale of the Optioned Shares (as defined
therein) such Shareholders Agreement terminates with the proviso that certain
provisions of such Shareholders Agreement shall survive such termination;
WHEREAS, Comcast Corporation, a Pennsylvania corporation ("Comcast"),
and the BTH Entities have entered into a Purchase and Sale Agreement, dated as
of May 22, 1998,
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providing, among other things, for the acquisition by Comcast
of the Control Shares at such time that the BTH Entities are entitled to acquire
the Control Shares pursuant to the Control Option, which agreement has been
amended and restated on the date hereof, in connection with the Accelerated
Exercise (the "Comcast/BTH Agreement");
WHEREAS, the Jones Entities and Comcast have entered into an Agreement,
dated as of the date hereof, relating to certain arrangements between the Jones
Entities and Comcast concerning the exercise of the Control Option (the
"Comcast/Jones Agreement");
WHEREAS, the parties hereto desire to amend the Shareholders Agreement
to amend the termination provision of the Shareholders Agreement so that in the
event the Optioned Shares are purchased pursuant to the Accelerated Exercise
certain provisions of the Shareholders Agreement shall not survive such
termination; and
WHEREAS, the parties hereto desire to set forth certain other
agreements relating to the consummation of the transactions contemplated by the
Comcast/Jones Agreement and the Comcast/BTH Agreement;
THEREFORE, in consideration of the mutual covenants contained herein,
and intending to be legally bound hereby, the parties agree as follows.
ARTICLE I
AMENDMENT TO SHAREHOLDERS AGREEMENT
1.1. Definitions. All terms used but not otherwise defined herein shall
have the same meanings as ascribed to them in the Shareholders Agreement.
1.2. Amendment to Section 1.1. Section 1.1 of the Shareholders
Agreement is hereby amended by deleting therefrom the definitions of "Option
Agreements" and "Option Termination Date" in their entirety and substituting in
lieu thereof the following:
"Option Termination Date" means the earlier of (i) the date on
which the Control Option terminates pursuant to Section 3.6 of the Option
Agreements, or otherwise, (ii) the date on which BTH (or its agent) purchases
the Option Shares pursuant to the Option Agreements or (iii) the Closing, as
defined in the Comcast/Jones Agreement, and the Simultaneous Closing, as defined
in the Comcast/BTH Agreement, shall have occurred.
"Option Agreements" means the Option Agreements dated as of
the Closing Date between Bank of New York, as successor agent to Morgan Guaranty
Trust Company of New York, acting as agent for Investor and in the case of a
Section 3.1(a)(vi) Exercise, for Comcast, and each of Jones International
Grantor Business Trust, Glenn Jones Grantor Business Trust,
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Jones Space Segment, Inc., Jones Global Group, Inc., Jones Interdigital Inc. and
Jones Entertainment Group, Ltd., as amended on August 12, 1998.
1.3. Amendment to Section 3.10. Section 3.10 of the Shareholders
Agreement is hereby amended by adding the following to the end of such section:
"Notwithstanding the foregoing, the parties hereto agree that this
Section 3.10 shall not prohibit any of the parties from disclosing all
such documents and information received after August 12, 1998 and until
the earlier to occur of (x) the Closing of the transactions
contemplated by that certain Agreement, dated August 12, 1998, by and
among Comcast Corporation, a Pennsylvania corporation ("Comcast") Jones
International and certain JI Group Entities named therein (the
"Comcast/Jones Agreement") or (y) the expiration or termination of the
Comcast/Jones Agreement from the other parties to this Agreement (and
Affiliates of such other parties), including any information provided
by the Company to any Investor Nominee, to Comcast, and to the
officers, directors, employees, agents, representatives and advisors
(including, without limitation, legal and financial advisors) of
Comcast.
1.4. Amendment to Section 3.5. Effective as of and conditioned upon the
consummation of the transactions contemplated by the Jones/Comcast Agreement.
Section 3.5 of the Shareholders Agreement shall be deleted in its entirety and
the following substituted in lieu thereof:
"3.5 Programming Services. Notwithstanding
any other provision in this Agreement to the contrary: (a) The
Bell International Group Entities shall have the right to
distribute, on a full-time (or, if requested from time to time
by Investor, part-time to be extended or restored, as
applicable to full time upon Investor's request), daily basis,
programming packaged (as opposed to brokered) by, created by
or created primarily for a Bell International Group Entity
("Investor Programming") on such number of channels (not to
exceed two at any one time) on the Systems as Investor may
designate from time to time.
(b) Prior to exercising its distribution
right with respect to any programming under this Section 3.5,
the relevant Bell International Group Entity (a "Programmer")
will present to the Board a reasonably detailed business plan
that, among other things, describes (i) the general content of
such programming, (ii) the marketing strategy for such
programming, including service level (such as basic, tier or a
la carte) and (iii) pricing for such service levels. The
Investor Programming shall be carried and priced by the
Intercable Group Entities on such level or levels of services
as such programming is intended to be carried under the
business plan for such programming.
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(c) Notwithstanding the rights granted
pursuant to paragraph (a) above:
(i) the Intercable Group Entities shall not
be required to delete from any System any programming acquired
from any third-party programmer prior to the expiration of the
term of the program carriage agreement with such third-party
programmer in order to carry any Investor Programming,
(ii) in the event there is insufficient
channel capacity to carry Investor Programming, carriage of
such Investor Programming on a System shall be given priority
over any third party programming not then carried by such
System and over any third party programming then carried by
the System at such time as the initial or then current renewal
term, as applicable, is scheduled to expire, provided that (x)
such priority shall not apply to off-air programming carried
by the four major broadcast networks or as mandated by law, or
the 20 most widely viewed third party programs as then carried
by the System at the time as reported by Cablevision magazine,
and (y) in addition to the foregoing requirements, the Company
shall use its reasonable best efforts to add Investor
Programming to the Systems whenever opportunities to do so
arise, and
(iii) Investor shall give the Company at
least four months' prior notice of any proposed commencement
or termination of use of any channel.
(d) During the Validation Period (as defined
herein), the license fee payable by the Intercable Group
Entities for any unit of Investor Programming ("New
Programming") shall be such license fee as the Programmer
establishes in good faith based on its reasonable estimate of
the market value of such New Programming. A Programmer shall
notify the Company and the Disinterested Directors in writing
promptly following the end of the Validation Period whether
the Programmer has entered into an agreement providing for (a)
the distribution of such New Programming by a cable television
operator or other distributor of video programming (a
"Distributor") having at least 400,000 subscribers
("Validating Distributor") and (b) the payment of a license
fee by such Validating Distributor at a rate equal to or
greater than the license fee payable by the Intercable Group
Entities ("Validating Programming Agreement"). If no
Validating Programming Agreement has been entered into during
the Validation Period, the Company or any Disinterested
Director may, by written notice given within sixty (60) days
after receipt by the Company and the Disinterested Directors
of the above-referenced notification, require that such
Programmer reduce the license fee payable by the Intercable
Group Entities for such New Programming to the greater of (i)
a license agreement approved by the Disinterested Directors,
(ii) the average license fee charged by the applicable
Programmer to all Distributors for such New Programming and
(iii) the Agreed Rate in effect at such time. For purposes of
this Section 3.5, "Agreed Rate" means, at any time, the rate
set forth in the Affiliate Agreement between Mind Extension
University, Inc. and the Company dated December 28, 1993, as
amended as of June 1, 1994. Thereafter, the license fee
payable by the Intercable Group Entities for such New
Programming shall be subject to such adjustments as are
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similar to adjustments in the license fee permitted by the
Validating Programming Agreement or, if there is no such
agreement in effect, by the programming agreement pursuant to
which such New Programming is carried by the largest
Distributor serving fewer than 400,000 subscribers. A
Programmer may elect at any time to terminate carriage of such
unit of New Programming upon not less than ninety days prior
written notice to the Company if it does enter into a
Validating Programming Agreement during the Validation Period.
"Validation Period" shall mean, as to any New Programming, the
fifteen (15) month period commencing with the first month with
respect to which a license fee is payable by an Intercable
Group Entity for the right to distribute such New Programming.
(e) The Intercable Group Entities shall
carry Investor Programming on the Systems until December 20,
2009 (or the expiration date of the applicable programming
agreement with the Company) in accordance with this Section
3.5.
(f) For purposes of this Section 3.5 the
term "Disinterested Directors" shall mean any director who
would be considered a "disinterested director" for the
purposes of Section 7-108-501 of the Colorado Business
Corporation Act.
(g) Notwithstanding anything to the contrary
contained in this Agreement, Investor may assign on behalf of
itself and the Bell International Group Entities its rights
under this Section 3.5 to Comcast."
1.5. Upon the amendment to Section 3.5 of the Shareholders Agreement
contained in Section 1.4 hereof becoming effective the Company shall pay to
Jones and International $25,000,000 in immediately available funds to such bank
account or accounts as Jones shall designate in consideration of the termination
of the JI Group Entities' rights under Section 3.5 of this Agreement.
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1.6. General. Except as expressly modified by this Agreement and
Amendment, the provisions of the Shareholders Agreement shall remain in full
force and effect. Except as set forth in Section 2.2, below, execution and
delivery of this Agreement and Amendment, the Option Agreements and the
Comcast/Jones Agreement shall not constitute or be deemed to be a waiver by any
party of (a) any rights or claims that such party had or may have under the
Shareholders Agreement as amended hereby or (b), in the event that the
Comcast/Jones Agreement is terminated, any rights or claims that the Jones
Entities or the Company had or may have against the BTH Entities by reason of
the execution, delivery or performance of the Comcast/BTH Agreement.
ARTICLE II
OTHER AGREEMENTS
2.1. Agreement to Stay Proceedings. In consideration of Comcast's
execution and delivery of the Comcast/Jones Agreement and the Comcast/BTH
Agreement, each of the parties hereto hereby agrees to take any and all actions
and refrain from taking any and all actions necessary or advisable to seek a
stay of any proceedings relating to that certain lawsuit brought by BTH against
Jones Intercable, Inc., Jones International, Ltd., Jones Internet Channel, Inc.
and Glenn R. Jones, which was filed before the U.S. District Court for the
District of Colorado (the "Litigation"), including, without limitation, any
hearings or proceedings relating to any damage claims relating to the subject
matter of the Litigation and the appeal of the order entered on May 5, 1998
until the first to occur of (i) the date on which both the Closing (as defined
in the Comcast/Jones Agreement) and the Simultaneous Closing (as defined in the
Comcast/BTH Agreement) shall have occurred, at which time the parties shall
dismiss the Litigation with prejudice or (ii) the termination of the
Comcast/Jones Agreement.
2.2. General Release. In consideration of Comcast's execution and
delivery of the Comcast/Jones Agreement and the Comcast/BTH Agreement each of
(i) the Jones Entities and the Company and (ii) each of the BTH Entities, in the
case of each of (i) and (ii), on behalf of itself and each of its Affiliates
(including the Company and its subsidiaries) (the "Releasing Parties"),
effective as of and conditioned upon the consummation of both the Closing (as
defined in the Comcast/Jones Agreement) and the Simultaneous Closing (as defined
in the Comcast/BTH Agreement), except as otherwise provided below, releases and
forever holds harmless, and waives and relinquishes from and against all
obligations, actions, causes of action, claims, demands, damages, costs,
expenses and liabilities whatsoever, at law or in equity, known or unknown,
fixed or contingent, which the Releasing Parties ever had, now have or which
their successors, predecessors, assigns, heirs, executors and administrators
hereafter can, shall or may have against any of the BTH Entities and the Jones
Entities, their Affiliates (including the Company and its subsidiaries),
officers, directors, employees, shareholders and their successors or assigns
(the "Released Parties") on account or arising out of any matter, cause or thing
whatsoever from the beginning of the world to the date on which the Closing Date
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(as defined in the Comcast/Jones Agreement) and the Simultaneous Closing Date
(as defined in the Comcast/BTH Agreement) shall both have occurred.
Notwithstanding the foregoing nothing in this Section 2.2 shall release any
obligations, rights, actions, causes of action, claims, demands, damages, costs,
expenses or liabilities of the Released Parties to the Releasing Parties under
the Option Agreements or with respect to any judgment previously obtained in any
court of competent jurisdiction.
2.3. (a) Tax Matters. (a) The Company shall and International shall
cause Jones Education Company ("Education") and Entertainment to provide BTH
with certification and file notice(s) with the Internal Revenue Service within
10 days after the request of BTH regarding any disposition undertaken in
connection with the Comcast/BTH Agreement, which certification or notification,
as the case may be, shall attest to the fact that the BTH Entities' interest in
such corporations does not constitute a "real property interest" within the
meaning of the Internal Revenue Code and shall otherwise conform with the
requirements of United States Treasury Regulation 1.897-2(h).
(b) Promptly upon request the Company shall, and
International shall cause Education and Entertainment to, accord the BTH
Entities reasonable access to the books and records and employees of the
Company, Education and Entertainment to enable the BTH Entities to confirm
whether or not their respective investments in such entities will constitute
"excluded property" within the meaning of the Income Tax Act (Canada) (i.e.,
that no more than 10% of the assets of such entities consist of passive assets)
as of the Simultaneous Closing Date or the Initial Closing Date and the Final
Closing Date, as the case may be.
2.4. Termination of Certain Agreements. The BTH Entities, the Jones
Entities and the Company agree and acknowledge, on their own behalf and on
behalf of their respective Affiliates, that the Secondment Agreement, the Fee
Sharing Agreement, the Financial Services Agreement and the Supply and Services
Agreement (each as defined in the Shareholders Agreement) shall terminate as of
and conditioned upon the consummation of the Closing and the Simultaneous
Closing; provided that anything contained in Section 2.2 to the contrary
notwithstanding, any moneys accrued for the account of BTH prior to termination
of such agreements shall be paid to BTH at the Closing or as soon as is
reasonably practicable thereafter.
2.5. Approval of this Agreement. Each of the parties to this Agreement
and Amendment represents and warrants to the other parties hereto that (i) if it
is a corporation, it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, (ii) if
it is a trust, the trust agreement governing its operation is in full force and
effect, (iii) it has the power and authority to execute, deliver and perform
this Agreement and Amendment and (iv) this Agreement and Amendment has been duly
executed and delivered by it and is a valid and binding agreement by it. The
parties hereto hereby agree with each other that (i) this Agreement and
Amendment, (ii) the termination of Jones' employment with Company pursuant to
the form of Termination Agreement presented to the Board of Directors of the
Company and (iii) the assumption by an Affiliate of a Jones Entity of the
Company's rights and obligations under that certain lease dated December 23,
1997 by and
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between the Company and PNC Leasing Corp. shall be subject to the
approval of the Joint Nominees (as such term is defined in the Shareholders
Agreement) and that such approval shall satisfy the requirements of Section 3.6
of the Shareholders Agreement. The Company represents and warrants to the other
parties to this Agreement that this Agreement and Amendment has been approved by
a majority of the Joint Nominees at a meeting duly called and held for such
purpose.
ARTICLE III
MISCELLANEOUS
3.1. General. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws (as opposed to the conflicts of
laws provisions) of the State of Colorado. The agreement of the parties, which
is comprised of this Agreement and Amendment and the Shareholders Agreement,
sets forth the entire agreement and understanding between the parties relating
to the subject matter hereof and supersedes any prior agreement or
understanding, written or oral, relating to the subject matter of this Agreement
and Amendment and the Shareholders Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement and
Amendment to be executed by their duly authorized representatives as of the day
and year first above written.
JONES INTERCABLE, INC.
By: /s/ Kevin T. Coyle
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/s/ Glenn R. Jones
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Glenn R. Jones
JONES INTERNATIONAL, LTD.
By: /s/ Glenn R. Jones
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GLENN JONES GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
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JONES INTERNATIONAL GRANTOR BUSINESS TRUST
By: /s/ Christine Jones Marocco
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JONES SPACE SEGMENT, INC.
By: /s/ Glenn R. Jones
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JONES GLOBAL GROUP, INC.
By: /s/ Glenn R. Jones
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JONES INTERDIGITAL, INC.
By: /s/ Glenn R. Jones
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JONES ENTERTAINMENT GROUP, LTD.
By: /s/ Glenn R. Jones
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BCI TELECOM HOLDING INC.
By: /s/ Siim Vanaselja
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BTH (US CABLE) LTD.
By: /s/ Christopher S. McKensie
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BTH (INTERCABLE) LIMITED
By: /s/ Christopher S. McKensie
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