HRSN Complaint Against Comcast

 

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IN THE UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In re: HOUSTON REGIONAL SPORTS NETWORK,, L.P. NETWORK Debtor. ROBERT E. OGLE, AS LITIGATION TRUSTEE OF THE HRSN LITIGATION LITIGATION TRUST, Plaintiff, v. COMCAST CORPORA TION, INC., COMCAST CORPORATION, SPORTS MANAGEMENT SERVICES, LLC, COMCAST CABLE COMMUNICATIONS, COMMUNICA TIONS, LLC, HOUSTON SPORTSNET FINANCE, LLC, HOUSTON SPORTSNET HOLDINGS, LLC, NATIONAL DIGITAL TELEVISION TELEVIS ION CENTER, LLC (D/B/A COMCAST MEDIA CENTER), COMCAST SPORTSNET CALIFORNIA, LLC, NBCUNIVERSAL MEDIA, LLC (F/K/A NBCUNIVERSAL, INC.), JON LITNER, JOHN RUTH, ROBERT PICK, AND MADISON BOND, Defendants.

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Chapter 11

Case No.: 13-35998

Adv. Proceeding No. _______

Demand For Jury Trial

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PLAINTIFF’S COMPLAINT

Robert E. Ogle, as Litigation Trustee of the HRSN Litigation Trust (“ Plaintiff ”) ”) files this Complaint against Comcast Corporation, Comcast Sports Management Services, LLC, Comcast Cable Communications, LLC, Houston SportsNet Finance, LLC, Houston SportsNet Holdings, LLC, National Digital Television Center, LLC (d/b/a Comcast Media Center), Comcast 1

 

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SportsNet California, LLC, NBCUniversal Media, LLC (f/k/a NBCUniversal, Inc.), Jon Litner, John Ruth, Robert Pick, and Madison Bond (collectively, “Comcast Defendants”) and respectfully states: Introduction

1. 

Comcast Corporation’s Code of Conduct requires its employees, officers,

directors, and subsidiaries to “[b]e honest, fair and trustworthy in all [their] business activities and relationships.” Yet, year after year, year, Comcast is consistently ranked amongst the worst in customer service in the country, with a number of particularly egregious examples of its customer interactions going viral this past past year. But individual customers are not the only ones who have borne the brunt of Comcast’s Comcast’s bad behavior. behavior. Houston Regional Sports Network, L.P L.P.. (the “Debtor” or the “ Network”) has experienced Comcast’s Comcast’s dishonesty firsthand. Through the Debtor, Comcast partnered with the Houston Astros and the Houston Rockets to operate a regional sports network that would produce and distribute sports-related programming to Houston’s sports fans. But instead of working with with its partners for for the good of the Debtor and the Houston community, Comcast did everything in its power to financially impair the Debtor so that Comcast would have the leverage to acquire the Debtor’s greatest assets ( i.e., the right to  broadcast Astros and Rockets games, and related programming) for itself at a significant discount. Parties

2. 

Plaintiff HRSN Litigation Trust is a litigation trust with its principal place of

 business in Houston, Texas. Robert E. Ogle is the Litigation Trustee of the HRSN Litigation Trust (the “Litigation Trustee”) and files files this action in this capacity. The HRSN Litigation Trust was created pursuant to the Third Amended Chapter 11 Plan of Reorganization Dated

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October 29, 2014 in Respect of Houston Regional Sports Network, L.P. (the “ Plan of Reorganization”), which was confirmed on October 30, 2014. On November 17, 2014 (the

“Effective Date”), the Debtor transferred to the HRSN Litigation Trust the Tr Transferred ansferred Causes of Action (as defined in the Plan of Reorganization), which includes certain causes of action of the Debtor against the Comcast Entities (as defined in the Plan of Reorganization). The HRSN Litigation Trust was established for the benefit of the holders of Litigation Trust Beneficial Interests, who are creditors of the Debtor’s estate as created under § 541 of the Bankruptcy Code upon the commencement of the above-captioned Chapter 11 case (the “ Estate”). The Litigation Trustee was appointed to be the representative of the Estate to pursue the Transferred Causes of Action on behalf of the Estate and its creditors who suffered generalized injuries as a result of Comcast Defendants’ wrongful conduct. 3. 

Defendant Comcast Corporation, Inc. (“Comcast Corp.”), on information and

 belief, is a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with its principal place of business located at One Comcast Center, 1701 John F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. Comcast Corp. has appeared in the above-captioned Chapter 11 bankruptcy proceeding as an interested party, and may be served with process pursuant to FED. R.  BANKR . P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail postage prepaid to Arthur R. Block (Senior VP, General Counsel, and Secretary for Comcast Corp.) c/o Comcast Corporation, One Comcast Center, 1701 John F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. Service is also also being made on Comcast Corp.’s counsel of record: Vincent P. Slusher, c/o DLA Piper (US) LLP, 1717 Main, Suite 4600, Dallas, TX 75201.

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4. 

Defendant Comcast Sports Management Services, LLC (“Comcast Services”), on

information and belief, is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business located at One Comcast Center, 1701 John F. F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. Comcast Services has appeared in the above-captioned Chapter 11 bankruptcy proceeding as an interested party, and may be served with process pursuant to FED.  R.  BANKR .  P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail postage prepaid to Jon D. Litner (President of Comcast Services) c/o Comcast Sports Management Services, LLC, 1 Blachley Road, Stamford, CT 06902. Service is also being made on Comcast Services’ counsel of record: Vincent P. P. Slusher, c/o DLA Piper (US) LLP, LLP, 1717 Main, Suite 4600, Dallas, TX 75201. 5. 

Defendant Comcast Cable Communications, LLC (“Comcast Cable”), on

information and belief, is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business located at 200 Cresson Boulevard, Oaks, PA PA 19456. Comcast Cable has appeared in the above-captioned Chapter 11 bankruptcy  proceeding as an interested party, and may be served with process pursuant to F ED. R. BANKR . P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail postage prepaid to Arthur R. Block (Senior VP and Secretary for Comcast Cable) c/o Comcast Corporation, One Comcast Center, Center, 1701 John F. F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. Service is also being made on Comcast Cable’s counsel of record Vincent P. P. Slusher, c/o DLA Piper (US) LLP,, 1717 Main, Suite 4600, Dallas, LLP Da llas, TX 75201. 6. 

Defendant Houston SportsNet Finance, LLC (“Comcast Lender”), on

information and belief, is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business located at One Comcast Center, 1701

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John F. F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. Comcast Lender has appeared in the above-captioned Chapter 11 bankruptcy proceeding as an interested party, and may be served with process pursuant to FED.  R.  BANKR .  P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail postage prepaid to Robert S. Pick (Senior VP of Comcast Lender) c/o Comcast Corporation, One Comcast Center, 1701 John F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. Service is also also being made on Comcast Lender’s counsel of record: Vincent P. P. Slusher, c/o DLA Piper (US) LLP, LLP, 1717 Main, Suite 4600, Dallas, TX 75201. 7. 

Defendant Houston SportsNet Holdings, LLC (“Comcast Partner”), on

information and belief, is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business located at One Comcast Center, 1701 John F. F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. Comcast Partner has appeared in the above-captioned Chapter 11 bankruptcy proceeding as an interested party, and may be served with process pursuant to FED.  R.  BANKR .  P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail postage prepaid to John Ruth (officer of Comcast Partner) c/o Comcast Sports Management Services, LLC, 1 Blachley Road, Stamford, CT 06902. Service is also being made on Comcast Partner’s counsel of record: Vincent P. Slusher, c/o DLA Piper (US) LLP, LLP, 1717 Main, Suite 4600, Dallas, TX 75201. 75 201. 8. 

Defendant National Digital Television Center, Center, LLC (d/b/a Comcast Media Center)

(“Comcast Media”), on information and belief, is a limited liability company organized and existing under the laws of the State of Colorado, with its principal place of business located at One Comcast Center, 1701 John F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. Comcast Media has appeared in the above-captioned Chapter 11 bankruptcy proceeding as an interested party, and may be served with process pursuant to F ED.  R.  BANKR .  P. 7004(b) by

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mailing a copy of this Complaint and the summons by first class mail postage prepaid to Bruce A. Davis (VP of Financial Operations for Comcast Media) c/o National Digital Television Center, LLC, 4100 E. Dry Creek Creek Road, Centennial, CO 80122. Service is also also being made on Comcast Media’s counsel of record: Vincent P. Slusher, c/o DLA Piper (US) LLP, 1717 Main, Suite 4600, Dallas, TX 75201. 9. 

Defendant Comcast SportsNet California, LLC (“ Comcast California”), on

information and belief, is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business located at 4450 East Commerce Way, Sacramento, CA 95834. Comcast California has appeared in the above-captioned Chapter 11 11  bankruptcy proceeding as an interested party, party, and may be served with process pursuant to FED.  R.  BANKR .  P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail  postage prepaid to John Ruth (Executive VP of Finance, Planning and Business Operations for Comcast California) c/o Comcast Sports Management Services, LLC, 1 Blachley Road, Stamford, CT 06902. Service is also being made on Comcast California’s California’s counsel of record: Vincent P. P. Slusher, c/o DLA Piper (US) LLP, LLP, 1717 Main, Suite 4600, Dallas, TX 75201. 10. 

Defendant NBCUniversal Media, LLC, formerly known as NBCUniversal, Inc. 1

(“NBCU”),   on information and belief, is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business located at 30 Rockefeller Plaza, New York, NY 10112. NBCU has appeared in the above-captioned Chapter 11 bankruptcy proceeding as an interested party, and may be served with process pursuant to FED.  R.  BANKR .  P. 7004(b) by mailing a copy of this Complaint and the summons by first class

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On information information and belief, NBCUniversal, Inc. wa wass co converted nverted to a limited liability company (NBCUniversal Media, LLC) on January 28, 2011.

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mail postage prepaid to Stephen B. Burke (CEO of NBCU) c/o NBCUniversal Media, LLC, 30 Rockefeller Plaza, New York, York, NY 10112. 10112. Service is also being made on NBCU’s NBCU’s counsel of record: Vincent P. Slusher, c/o DLA Piper (US) LLP, 1717 Main, Suite 4600, Dallas, TX 75201. On information and belief, at all times relevant to Plaintiff’s causes of action asserted herein,  NBCU was acting as an agent of Comcast Corp., Comcast Services, Comcast Cable, Comcast Lender, and/or Comcast Partner Pa rtner.. 11. 

Defendant Jon Litner (“Litner”), on information and belief, is an individual

residing in the Commonwealth of Pennsylvania. Litner has appeared in the above-captioned Chapter 11 bankruptcy proceeding as an interested party, and may be served with process  pursuant to F ED. R. BANKR . P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail postage prepaid to Jon Litner c/o Comcast Sports Management Services, LLC, 1 Blachley Road, Stamford, CT 06902 (the address where, on information and belief, Litner regularly conducts business). Service is also being made on Litner Litner’’s counsel of record V Vincent incent P. P. Slusher, c/o DLA Piper (US) LLP, LLP, 1717 Main, Suite 4600, Dallas, TX 75201. On information and belief, at all times material to this action, Litner was an officer, director, agent, and/or employee of Comcast Services, NBCU, Comcast Partner, and Houston Regional Sports Network, LLC. On information and belief, belief, Litner has actively participated in and/or benefitted directly from the tortious activities described herein, both in his individual capacity and as an officer, director, agent, and/or employee of Comcast Services, NBCU, Comcast Partner, and/or Houston Regional Sports Network, LLC. 12. 

Defendant John Ruth (“Ruth”), on information and belief, is an individual

residing in the State of Connecticut. Ruth has appeared in the above-captioned Chapter 1 11 1  bankruptcy proceeding as an interested party, party, and may be served with process pursuant to FED. 

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R.  BANKR .  P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail  postage prepaid to John Ruth c/o Comcast Sports Management Se Services, rvices, LLC, 1 Blachley Road, Stamford, CT 06902 (the address where, on information and belief, Ruth regularly conducts  business). Service is also being b eing made on Ruth’s Ruth’s counsel of record Vincent P. Slusher, c/o DLA Piper (US) LLP, LLP, 1717 Main, Suite 4600, Dallas, TX 75201.

On information information and belief, at all

times material to this action, Ruth was an officer, director, agent, and/or employee of Comcast Services, NBCU, Comcast California, California, and Houston Regional Sports Network, LLC.

On

information and belief, Ruth has actively participated in and/or benefitted directly from the tortious activities described herein, both in his individual capacity and as an officer, director, agent, and/or employee of Comcast Services, NBCU, Comcast California, and/or Houston Regional Sports Network, LLC. 13. 

Defendant Robert Pick (“ Pick”), on information and belief, is an individual

residing in the State of New Jersey. Jersey. Pick may be served with with process pursuant to FED.  R.  BANKR .  P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail  postage prepaid to Robert Pick c/o Comcast Corporation, One Comcast Center, 1701 John F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103 (the address where, on information and  belief, Pick regularly conducts business). b usiness). On information and an d belief, at a t all times material to this action, Pick was an officer, director, agent, and/or employee of Comcast Corp., Comcast Partner, and/or Comcast Lender.

On information information and belief, Pick Pick has actively participated participated in and/or

 benefitted directly from the tortious activities described herein, both in his individual capacity and as an officer, director, agent, and/or employee of Comcast Corp., Comcast Partner, and/or Comcast Lender. Lend er.

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14. 

Defendant Madison (Matt) Bond (“ Bond”), on information and belief, is an

individual residing in the State of New York. Bond may be served with process pursuant to FED.  R.  BANKR .  P. 7004(b) by mailing a copy of this Complaint and the summons by first class mail  postage prepaid to Matt Bond c/o NBCUniversal Media, LLC, 30 Rockefeller Plaza, New Y York, ork,  NY 10112 (the address where, on information and belief, Bond regularly conducts con ducts business). On information and belief, at all times material to this action, Bond was an officer, director, agent, and/or employee of NBCU and/or Comcast Services. On information and belief, Bond has actively participated in and/or benefitted directly from the tortious activities described herein,  both in his individual capacity and as an officer, officer, director, agent, and/or employee of NBCU and/or Comcast Services. Jurisdiction and Venue

15. 

The Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C.

§§ 157 and 1334 and FED. R. BANKR . P. 7001. Further, § 13.1(xiv) of the Plan of Reorganization  provides that this Court “shall retain and shall have exclusive jurisdiction . . . [t]o hear and determine all controversies, suits, and disputes that may related to, impact upon, or arise in connection with Causes of Action of the Debtor (including Avoidance Actions and Transferred Causes of Action) commenced by . . . the Litigation Trustee . . . before or after the Effective Date . . .” The present Complaint falls within this Court’ Court’ss retained jurisdiction. 16. 

This adversary proceeding is a non-core proceeding arising in or related to the

above-captioned chapter 11 case. Plaintiff consents to the entry of final orders or judgment by this Bankruptcy Court, pursuant to Rule 7008 of the Federal Rules of Bankruptcy Procedure.

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17. 

The Court has personal jurisdiction over Comcast Defendants pursuant to F ED.  R. 

BANKR .  P. 7004(f) and/or TEX.  CIV.  PRAC.  &  R EM EM.  CODE  § 17.042, and the exercise of such  jurisdiction is consistent with due process under the United States Constitution. Constitution. 18. 

Venue for this adversary proceeding is proper in this Court pursuant to 28 U.S.C.

§ 1409. Venue is also proper pursuant to 28 U.S.C. § 1391(b)(2) because a substantial part of the events, acts, errors, omissions, and misrepresentations that give rise to the claims at issue in this case occurred in this District. Factual Background A. 

The Debtor was formed.

19. 

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The Debtor was a Delaware limited partnership formed by the Astros   and the

Rockets3 in 2003 to operate a regional sports network (“ CSN Houston” or the “ Service”) that  produces and distributes content relating to Houston’s sports teams, including the Houston 4

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Astros,   the Houston Rockets,   and the Houston Dynamo.

The substantial majority of the

Debtor’s revenue would be derived from affiliation agreements with multi-channel video  programming distributors (“MVPDs”) for the redistribution of CSN Houston in exchange for monthly,, per-subscriber monthly pe r-subscriber rates. 20. 

As of May 8, 2003, the Debtor consisted of two limited partners, Rockets Partner,

L.P. (“Rockets Partner”) and Houston McLane Company, LLC (“HMC”), and one general

2

Unless otherwise specified, “Astros” refers to Houston Astros, LLC and/or its affiliates and predecessors including McLane Company, LLC f/k/a Houston McLane Company, Inc. d/b/a the Houston Astros.

3

Unless otherwise specified, “Rockets” refers to Rockets Partner, L.P., JTA Sports, Inc., Rocket Ball, Ltd., and/or their affiliates and predecessors.

4

Unless otherwise specified, “Houston Astros” refers to the Major League Baseball’s Houston Astros franchise.

5

Unless otherwise specified, “Houston Rockets” refers to the National Basketball Association’s Houston Rockets franchise.

 

 

 

 

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 partner, Houston Regional Sports Network, LLC (“General Partner”). The General Partner was formed as a Delaware limited liability company and consisted of two members: JTA Sports, Inc. (“Rockets Member”) and HMC. On or around May 10, 2010, HMC transferred transferred (i) its its limited  partnership interest in the Debtor to McLane HRSN LP Holdings, LLC (“ Astros Partner”) and (ii) its membership interest in the General Partner to McLane HRSN GP Holdings, LLC (“Astros 6

Member”).  

21. 

Rockets Partner and Rockets Member (collectively, “ Rockets Constituents”) are

affiliates of Rocket Ball, Ltd. (“Rocket Ball”), the owner of the Houston Rockets. As owner of the Houston Rockets, Rocket Ball has the right to exhibit and exploit, and license to others the rights to exhibit and exploit, certain team-related programming by licensed distribution means. Rocket Ball and the Debtor were parties to a Media Rights License Agreement (as amended through October 22, 2010, the “ Original Rockets Media Rights Agreement”), through which Rocket Ball granted the Debtor the exclusive right and license to produce and exhibit or otherwise exploit all of the specified programming of the Houston Rockets. 22. 

HMC was the prior owner of the Houston Astros, and is the predecessor to

Houston Astros, LLC (“Astros LLC”), the current owner of the Houston Astros.7  Astros Partner and Astros Member (collectively, “Astros Constituents”) are affiliates of Astros LLC (and former affiliates of HMC). As owner of the Houston Astros, Astros LLC (and previously HMC) has the right to exhibit and exploit, and license to others the rights to exhibit and exploit, certain team-related programming by licensed licensed distribution means. means. HMC and the Debtor were parties to

6

The terms “Astros Member” and “Astros Partner,” as used herein, also refer to the successors of such entities (i.e., Astros HRSN GP Holdings, LLC and Astros HRSN LP Holdings, LLC).

7

In 2011, Houston Baseball Partners LLC (“HBP”) purchased the Houston Astros, including the approximately 46% equity interest in the Debtor, from HMC and its affiliates for $615 million.

 

 

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a Media Rights License Agreement (as amended through October 22, 2010, the “Original Astros Media Rights Agreement”), through which HMC granted the Debtor the exclusive right and

license to produce and exhibit or otherwise exploit all of the specified programming of the Houston Astros. B. 

Comcast becomes involved with the Debtor.

23. 

In 2010, Comcast,8 the largest cable company in the Houston metropolitan area,

expressed an interest in purchasing an interest in the Debtor Debtor.. One of the largest largest and most sophisticated companies in the United States, Comcast is a Fortune 50 company with more than $68 billion in revenue reported last year. It is an experienced and aggressive player in the mergers and acquisitions market, as well as in the ownership and operation of sports television networks. Through its various affiliates affiliates and subsidiaries, Comcast owns and operates a chain of regional sports networks around the country. 24. 

After lengthy negotiations and a competitive bid process, on October 29, 2010,

Comcast Partner was admitted as a limited partner in the Debtor and a member of the General Partner. As a result, Comcast Partner held 22.443% of the equity interests in the D Debtor, ebtor, while Rockets Partner, Astros Partner, and the General Partner held 30.923%. 46.384%, and 0.25%, respectively.. Comcast Partner also held 22.5% of the equity interests respectively interests in the General Partner, Partner, while Rockets Member and Astros Member held 31.0% and 46.5%, respectively respectively.. The primary reason the Debtor chose to partner with Comcast was because it represented to the Debtor that it would use its immense market power to achieve ac hieve carriage of CSN Houston at the promised rates.

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Unless otherwise specified, “Comcast” refers to Comcast Corp. and/or its direct and indirect wholly-owned and  partially owned subsidiaries, in including cluding but not limited to Comcast Partner, Comcast Services, Comcast Cable, Comcast Finance, Comcast Media, and Comcast California.

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25. 

The rights and responsibilities of the Debtor’s partners were governed by the

Second Amended and Restated Agreement of Limited Partnership of Houston Regional Sports  Network, L.P. L.P. (as amended, the “LP Agreement”). Pursuant to the the LP Agreement, the Debtor was managed by the General Partner, which itself was governed by the Second Amended and Restated Limited Liability Company Agreement of the General Partner (as amended, the “ LLC Agreement”). The General Partner was managed by a board of directors directors (the “GP Board,” and

each member thereof a “ Director”). The GP Board consisted of one individual appointed by 9

Rockets Member (Tad Brown), one individual appointed by Astros Member (James Crane),  and two individuals appointed by Comcast Partner (Litner and Ruth). Under the LP Agreement and the LLC Agreement, unanimous consent of the Directors of the GP Board was required for various actions by the Debtor. 26. 

Also on October 29, 2010, the Debtor entered into various agreements with other

Comcast affiliates related to the operation and business of the Debtor, including, but not limited to, the following:

 

Credit Agreement (“Comcast Credit Agreement”) with Comcast Lender,  pursuant to which Comcast Lender agreed from time to time prior to a termination date of not later than September 30, 2017 to make advances to the Debtor in the maximum aggregate principal amount of $100 million;

 

Security Agreement with Comcast Lender (“Comcast Security Agreement”), through which the Debtor granted Comcast Lender security interests in certain assets of the Debtor to secure the Debtor’s obligations under the Comcast Credit Agreement;

 

Comcast Network Services Agreement (“Comcast Services Agreement”) with Comcast Services, pursuant to which Comcast Services agreed to provide management oversight and certain enumerated operational services (including affiliate sales services, affiliate finance services, executive oversight services, operations and engineering, business and legal affairs services, as well as certain

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Crane was replaced on the GP Board on Fe February bruary 5, 2 2013, 013, by Giles Kibbe.

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other services), identification of prospective MVPDs, and negotiation of distribution agreements with MVPDs interested in carrying and eligible to distribute CSN Houston, and, in return, the Debtor agreed to pay $5 million annually to Comcast Services (subject to certain increases or decreases as  provided in the agreement) along with all reasonable out-of-pocket costs; and

 

Affiliation Agreement (“Comcast Cable Affiliation Agreement”) with Comcast Cable, pursuant to which Comcast Cable carries CSN Houston on its cable system in exchange for a monthly per-subscriber rate that varies based upon the territory of the subscriber. subscriber.

27. 

In conjunction with executing the above agreements with the various Comcast

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entities, the Debtor also amended its Original Media Rights Agreements with the Astros and the Rockets on October 29, 2010. Specifically, Specifically, the Debtor and HMC executed an Amended and Restated Media Rights Agreement (“Astros Media Rights Agreement”), pursuant to which HMC granted the Network the exclusive right and license to produce and exhibit or otherwise exploit all of the Available Games, Related Shows and Additional Programming (each as defined 10

in the Astros Media Rights Agreement) of the Houston Astros through the year 2032.   In exchange for such right and license, the Debtor agreed to make, over time, hundreds of millions of dollars of payments to HMC. Similarly, Similarly, the Debtor and Rocket Ball executed an Amended and Restated Media Rights Agreement (“Rockets Media Rights Agreement,” and collectively with the Astros Media Rights Agreement, the “ Media Rights Agreements”), pursuant to which Rocket Ball granted the Network the exclusive right and license to produce and exhibit or otherwise exploit all of the Available Games, Related Shows and Additional Programming (each as defined in the Rockets Media Rights Agreement) of the Houston Rockets through the year 2032. In exchange for such right and license, the the Debtor agreed to make, over tim time, e, hundreds of millions of dollars of payments to Rocket Ball. Under both Media Rights Agreements, if the

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  HMC assigned its rights and interests in the Astros Media Rights Agreement to Astros LLC when HBP  purchased the Houston Astros Astros in 2011.

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Debtor failed to make a required media rights payment and did not cure such default within sixty (60) days, the Astros and the Rockets would each be entitled to terminate their respective Media Rights Agreement.

C. 

Comcast decides to financially cripple the Debtor in order to obtain the Debtor’s assets for itself.

28. 

On information and belief, by 2013 (and potentially as early as mid-2010),

Comcast decided that, instead of working to make the Debtor successful, it would do everything in its power to acquire for itself the Debtor’s primary and most valuable assets: the right to telecast programming related to the Houston Astros and Houston Rockets, and the right to receive revenue from affiliation agreements with MVPDs that carry CSN Houston (collectively, the “Assets”). 29. 

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In or around February 2012, Comcast Services and its affiliate, NBCU,  pursuant

to the Comcast Services Agreement,12  began to reach out to MVPDs in advance of a planned October 2012 launch of CSN Houston. On February 28, the GP Board approved the 2012 budget for the Debtor. This budget was based on a business plan and corresponding projections  prepared for the Debtor (the “Business Plan”).

11

  NBCU is a subsidiary of Comcast Corp.

12

  Although NBCU was not a party to the Comcast Services Agreement, on information information and belief, it was subcontracted and/or authorized by Comcast Services to provide certain services pursuant to that agreement, including but not limited to, services related to obtaining distribution of CSN Houston. Indeed, Matt Bond, Vice President of Content Distribution for NBCU, and Dana Zimmer, the number two affiliate sales person at  NBCU, were the two primary individuals responsible for leading the distribution effort. The Comcast Services Agreement allows Comcast Services to subcontract any of its obligations under the agreement, but notes that “any such subcontract shall not relieve Comcast [Services] of its obligations and duties under this Agreement.” See Comcast Services Agreement, attached hereto as Exhibit A, at § 2.6. The agreement further provides that “[a]s between Comcast [Services] and [the Debtor], Comcast [Services] shall be responsible for any breach of this Agreement by any subcontractor that is performing Services that are otherwise required to be performed directly by Comcast [Services] pursuant to Attachment B.”  Id. 

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30. 

By June 2012, the Debtor had not entered into any affiliation agreements with any

major MVPDs (other than Comcast Cable). By September 2012 (one month before the launch of 13

CSN Houston), the Debtor, through Comcast Services/NBCU,   had exchanged proposals with certain MVPDs, but it still had not ssigned igned any new major affiliation affiliation agreements. Throughout September and October 2012, the Debtor, through Comcast Services/NBCU, continued to exchange proposals with various MVPDs. But the Debtor was unable to reach agreement with a major MVPD at per-subscriber rates that would lead to a financially viable venture. 31. 

This development led to a dispute within the GP Board regarding the Debtor’s

strategic next steps. In November 2012, after CSN Houston launched, the affili affiliate ate sales team at  NBCU recommended that the Debtor make a proposal to a major MVPD that was significantly  below the rates called for in the Business Plan. These lower rates, when plugged into the  business model, would have been financially crippling to the Debtor. Debtor.

Concerned that the

Business Plan not viable, the Astros Constituents requested that Comcast Services/NBCU formulate an alternate business plan that demonstrated a profitable set of operating parameters, starting with revenue adequate to achieve viability. viability. The Astros Astros Constituents also objected to the MVPD proposal presented by Comcast Services/NBCU, reasoning that until a new viable  business plan was formulated, it would not be in the Debtor’s best interest to approve any key revenue agreements. Without knowing exactly what types of deals would be required to m make ake it financially viable, the Debtor could not reasonably assess whether a particular deal should be approved. 32. 

For months the Astros Constituents repeatedly requested that Comcast

Services/NBCU formulate a new business plan for the the Debtor. Comcast Services/NBCU had the

13

  For ease of reference, the term “Comcast Services/NBCU” shall mean Comcast Services and/or NBCU.

16

 

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relevant expertise in this area and were obligated to provide those services under the Comcast Services Agreement, so the Debtor was relying relying on them to put a new business plan together. Yet Comcast Services/NBCU did not consider the Debtor’s concerns in good faith, as they were required to do under the Comcast Services Agreement. See Ex. A, Comcast Services Agreement at § 2.2(e). Instead, when the Astros Director on the the GP Board raised reasonable and justifiable concerns about formulating a new business plan, Comcast Services/NBCU completely brushed off such concerns as premature and refused to comply with his request.

Comcast

Services/NBCU did so despite being aware that the Debtor could not enter into any affiliation agreements without the consent of the Astros Director. Director. They also knew that, without incoming revenue from major affiliation affiliation agreements, the the Debtor could never survive financially. financially. Indeed, as of Spring 2013, the Debtor had not negotiated or entered into an affiliation agreement with any major distributor other than Comcast Cable and, unsurprisingly, its revenue was far less than 14

the amount needed to keep pace with the Debtor’s costs.   33. 

It was in the Debtor’s best interest for Comcast Services/NBCU to formulate a

new business plan. But, unbeknownst to the Debtor Debtor,, Comcast had no intention intention of acting in the Debtor’s best interest. Comcast had decided that, instead instead of working to make the Debtor successful, it would do everything in its its power to obtain the Debtor’s Assets for itself. itself. If the Debtor was struggling financially, Comcast would be best positioned to acquire the Debtor, or substantially all of its assets, at a deeply discounted price.

14

  Notably, even Litner concedes concedes that by April 2013 it was no longer “pre “premature” mature” to prepare a new business plan for the Debtor, Debtor, yet Comcast Services/NBCU still failed to do so. And by September 2013, Litner admits that a new business plan for the Debtor was required. required. But again, Comcast Services/NBCU failed to prepare or present one.

17

 

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34. 

Failing to formulate a new business plan was not the only way Comcast sabotaged

the Debtor’s business.

Comcast Services/NBCU had the means means and resources to negotiate

affiliation agreements at higher rates, but intentionally chose not to do so. The primary reason that the Debtor entered into a business relationship with Comcast was that, in addition to being the largest cable provider in Houston, Comcast has enormous market power by virtue of the fact that, through NBCU, it owns and operates a large portfolio of news and entertainment television networks, including NBC.15  Thus, Comcast has business relationships with all of the major MVPDs (e.g., DirecTV, AT&T, FOX, DISH Network, etc.), as these MVPDs must contract with Comcast in order to carry these various networks. Due to Comcast’s Comcast’s increased market power by virtue of its larger networks, it had the ability to obtain carriage for its smaller regional sports networks (“Comcast RSNs”), including CSN Houston, at higher rates. 35. 

In fact, Comcast had indicated to the Debtor that it would use its strength in other

markets to get carriage for CSN Houston at financially viable viable rates. Yet, when negotiating with MVPDs regarding carriage for the Debtor, Comcast Services/NBCU did not leverage this market  power as they indicated they would. Comcast did, however, on information and belief, employ this strategy with its other Comcast RSNs. RSNs. For example, on information and beli belief, ef, in January 2013, Comcast entered into a global deal with Suddenlink that incorporated every network in Comcast’ss portfolio except for CSN Houston. Comcast never brought this potential deal to the Comcast’ the GP Board. Indeed, the Debtor did not find out about the Suddenlink deal until after it it had been entered into.

15

  Comcast’s proposed acquisition of NBCU was announced in December 2009, almost a year before it became involved with Debtor. The acquisition received government aapproval, Debtor. pproval, and Comcast took control of NBCU on January 28, the 2011.

18

 

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36. 

Comcast’s reason for prioritizing and providing a higher level of service to the

other Comcast RSNs than it it did for the Debtor is clear: money. money. On information and belief, Comcast owned most, if not all, of the equity in those other Comcast RSNs, while it only owned 22.5% of the Debtor. Thus, Comcast Services/NBCU (and their af affiliates) filiates) had a greater financial incentive to promote and obtain distribution for the Comcast RSNs than it did for CSN Houston.16  But an even greater motivating factor was Comcast’s Comcast’s desire to obtain the Debtor’s Assets for itself. itself. Comcast knew that the best way to acquire tthese hese Assets Assets at a low cost would be to financially cripple the Debtor so that it would have no choice but to sell itself to Comcast. Thus, on information and belief, Comcast Services/NBCU intentionally and willfully failed to negotiate and obtain the best possible carriage rates for the Debtor. 37. 

 Notably,, the conduct of Comcast Services/NBCU was directly contrary to their  Notably

obligations under § 2.4 of the Comcast Services Agreement: (b) Comcast [Services] shall devote such time, personnel and resources as are reasonably necessary to, and shall, ensure the  proper, timely and efficient provision of such Services to [the Debtor] in a manner that is, under the circumstances, at a minimum, consistent in all material respects with . . . (iii) the same highest level and quality of service that Comcast [Services] uses when providing similar services to any other Comcast-Related RSN . . . (c) In providing the Services, in general, Comcast [Services] shall allocate its time, personnel and resources equitably and fairly as  between the [Debtor] and all other Comcast-Related RSNs based on the totality of the circumstances and shall not base such allocation of time, personnel and resources on the amount or nature of any Comcast Party’s ownership interest in such Comcast-Related RSN.

16

  Moreover, Comcast Cable financially benefitted by being the only major MVPD that carried CSN Houston, as Houstonthe sports fans would the be more likely to move to and/or stay with Comcast as their cable provider if they wanted ability to watch Houston Astros and the Houston Rockets on their home televisions.

19

 

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(d) With respect to bulk purchases of products or services made by Comcast [Services] from non-Affiliate third-parties on behalf of the Comcast-Related RSNs negotiated primarily on the total volume of all participating Comcast-Related RSNs, Comcast [Services] agrees that it shall not discriminate against [the Debtor] in negotiating the pricing, benefits and other terms available to [the Debtor] under such agreements. With With respect to all other  purchases of products or services from non-Affiliate third-parties negotiated by Comcast [Services] on [the Debtor’s] behalf, Comcast [Services] shall use commercially reasonable efforts to obtain for [the Debtor] the best pricing, benefits and other terms available to [the Debtor] under the circumstances . . . . See Ex. A, Comcast Services Agreement at § 2.4(b)-(d) (emphasis added). adde d).

38. 

At a May 8, 2012 GP Board meeting, the Rockets’ GP Board Director raised

concerns about Comcast not using its leverage to obtain carriage for CSN Houston through  NBCU global distribution deals.

In response, Litner (GP Board Director and President of

Comcast Services) claimed that CSN Houston had not been included in some of the more recent global discussions because, as a timing matter, it was not in the Debtor’s best interest to do so.  Notably, this determination was made unilaterally by Comcast; the Debtor was never consulted about these discussions and, in fact, did not even find out about them until after the global deal had been finalized. Moreover, even assuming assuming the “timing” excuse was true at that time, this does not explain why Comcast Services/NBCU never included CSN Houston in a global distribution deal in the four years it worked with Debtor. 39. 

Unsurprisingly, due to Comcast’s actions and omissions, in early to mid-2013, the

Debtor experienced liquidity constraints. constraints. And just as Comcast had hoped, by April 2013, the Astros and the Rockets had proposed to sell their 77.5% equity interest in the Debtor to NBCU  based upon the original implied enterprise value of the Debtor (i.e., $700 million).

On

information and belief, Comcast did not want to pay that price and instead bided its time,

20

 

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allowing the Debtor to become even more financially distressed, in the hopes that it could get what it wanted at better terms. 40. 

On May 17, 2013, Pick (Senior Vice President of Corporate Development at

Comcast Corp. and Comcast Partner and Senior Vice President of Comcast Lender) sent an email to Rockets’ Rocke ts’ GP Board Director Brown and Margaret Barradas (Managing Director at Astros’ affiliate Crane Capital Group), with the terms of a debt restructuring proposal that Comcast was suggesting to the Debtor. In addition to suggesting suggesting that the Debtor enter into an affiliation agreement with a major MVPD at rates below those set forth in the Business Plan, Comcast  proposed certain governance changes ch anges that would increase its own aability bility to control the Debtor by taking control away from the Astros and Rockets. Not surprisingly, surprisingly, the Rockets’ and Astros’ GP Board Directors would not agree to such terms. 41. 

The Debtor’s liquidity concerns continued to worsen. On May 31, 2013, in in order

to continue to satisfy its obligations under the Astros Media Rights Agreement, the Debtor exhausted its $100 million line of credit under the Comcast Credit Agreement and the limited  partners of the Debtor agreed to a capital call. The limited partners then had to issue another capital call in order to satisfy the Debtor’s Debtor’s June media rights payment to the Astros. But by the next month, the Debtor was unable to make its July media rights payment to the Astros. Astros LLC immediately notified the Debtor by letter that the failure to make such payment was an “Event of Default” under the Astros Media Rights Agreement. The Debtor had until September 30, 2012 to cure the default; otherwise Astros LLC had the contractual right to terminate the Astros Media Rights Agreement. On August 31, 2013, the Debtor again failed to make make its monthly media rights payment to the Astros, leading Astros LLC to send another notice of default letter to the Debtor.

21

 

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42. 

Smelling blood in the water, Comcast Partner met with Astros Partner and

Rockets Partner on or around August 5, 2013, and proposed a potential buyout of the Astros’ 46.5% equity interest in the Debtor for more than $185 million (based on an implied enterprise value of $500 million for the Debtor). With With the Astros’ Astros’ equity interest, Comcast Partner would own the majority of, and be able to exercise total control over, the Debtor. Debtor. Rockets Partner, who had a contractual consent right to approve or veto the Astros’ sale of its equity, requested the same deal (at the same value) from Comcast Partner. Partner. Because Comcast Partner refused, Rockets Partner would not consent to the sale of the Astros’ equity. 43. 

But while Comcast Partner was seemingly negotiating a potential deal with the

Astros, in actuality Comcast had concocted a plan to get what it wanted at a much cheaper price. Comcast would put the Debtor into bankruptcy, which would cause its value to immediately decrease. Comcast would then publicly announce its intention to bid a substantial amount amount of money to acquire the Debtor, or substantially all of its assets, in bankruptcy, which would scare 17

away other potential purchasers.   Finally, Finally, once Comcast was the only viable purchaser, purchaser, it could  purchase the Debtor, or substantially all of its assets, at a steep discount from what it publicly  promised. D. 

Comcast has its affiliates file an involuntary bankruptcy petition against the Debtor and does everything in its power to ensure that an order for relief is entered.

44. 

Comcast knew that the unanimous consent of the Directors on the GP Board was

required in order for the Debtor to file a bankruptcy petition. So it conceived of a plan whereby

17

  Because Comcas Comcastt and the Debtor had an existing relationship, potential purchasers would reasonably assume that Comcast would be the Debtor’s preferred purchaser, in order to avoid the additional time and expenses associated with transitioning to a new owner. Thus, these potential purchaser purchaserss would reasonably expect expect that they would need to make a higher offer offer than Comcast in order to be considered. considered. This is compounded by the fact that Comcast Lender would likely be entitled to credit bid the $100 million it was owed pursuant to the Comcast Credit Agreement.

22

 

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its own affiliates affiliates would file a petition petition to place the Debtor into an involuntary bankruptcy. In September of 2013, Comcast approached the Rockets, informed them that it wanted to place the Debtor into bankruptcy, bankruptcy, and asked if the the Rockets would join them as petitioning creditors. The Rockets told Comcast that they would be willing to support the bankruptcy, but only if Comcast would commit to making a stalking horse bid for the Debtor in an amount equal to, or in the  proximity of, the valuation Comcast had placed on the Debtor just one month prior (i.e., $500 million). During a telephone call on or around September 26, 2013, Pick informed Tad Brown that Comcast refused to make such a commitment. As a follow-up follow-up to this call, Comcast’s Comcast’s counsel, Craig Goldblatt, called the Rockets’ counsel, Alan Gover and Douglas Mayer on September 26.

No representative of the Astros was on this call.

During this telephone

conversation the Rockets’ counsel asked Goldblatt why Comcast was not willing to make the requested commitment. On information and belief, Goldblatt responded that there was no reason for Comcast to commit to such a bid because the value of the Debtor would change ( i.e., decrease) due to the bankruptcy. 45. 

On September 27, 2013 (the “Petition Date”), a Chapter 11 Case was

commenced involuntarily against the Debtor by Comcast Services, Comcast Media, Comcast 18

California, and Comcast Lender (collectively, the “Comcast Petitioning Creditors”).   They claimed that they filed the involuntary petition (the “ Petition”) to prevent the Astros from terminating the Astros Media Rights Agreement in order to preserve the going concern value of the Debtor. Debtor. But the Astros had not actually confirmed confirmed that they would terminate the Astros Media Rights Agreement; on the contrary, the Astros were still negotiating in good faith for the sale of their equity in the Debtor to Comcast. Indeed, on the Petition Petition Date, but before the

18

  The Comcast Petitioning Cre Creditors ditors are affiliates of Comcast Corp.

23

 

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Petition was actually filed, Michael Angelakis (Comcast Corp. Vice Chairman and CFO) had received and read an e-mail from the Astros with a draft of term termss for the proposed sale. The Astros had no idea that, later that same day, the Comcast Petitioning Creditors would be placing the Debtor into an involuntary bankruptcy. 46. 

On September 28, 2013, the Comcast Petitioning Creditors filed a motion to

appoint a Chapter 11 trustee. They used this motion as an opportunity to express their interest in acquiring the assets of the Debtor at a price that would result in a material distribution for the limited partners and the General Partner (collectively, the “Partners”), stating: The Network does have assets – including the right to telecast Astros and Rockets games, the right to receive monthly fees under an affiliation agreement with [Comcast Cable] for distribution of the Network’s Services, and rights to receive These revenueassets from ahave few smaller operators that carry the Service. significant value, the protection of which is the central purpose of this involuntary bankruptcy filing. [Comcast Lender], the  Network’ss secured lender, believes the Network’s  Network’ Network’s assets have meaningful value, and would be prepared to make a bid to acquire either the Network (under a plan of reorganization) or substantially all of its assets. Comcast Lender believes that such a transaction – if it were to close by the end of the calendar year, and based on the Network’s indebtedness of which it is presently aware and that which it anticipates the Network would incur by year end – would likely lead to prepetition creditors’ claims and all reasonably foreseeable administrative expenses being paid in full, and a material distribution to equity holders . [emphasis added].

Pick (Senior VP of Comcast Corp., Comcast Partner, and Comcast Lender) made similar statements in his declaration filed in support of the motion. 47. 

At a September 30, 2013 hearing before the Bankruptcy Court, counsel for the

Comcast Petitioning Creditors (Goldblatt) publicly reaffirmed Comcast’s interest as a potential  bidder.

24

 

Case 15-03144 Document 1 Filed in TXSB on 06/11/15 Page 25 of 64

48. 

On October 7, 2013, the Comcast Petitioning Creditors filed an amended motion

to appoint a trustee, which again publicly reiterated Comcast Lender’s interest in purchasing the Debtor’s assets: [Comcast Lender], the Network’s sole secured lender, would be prepared to make a bid to acquire either the Network (under a plan of reorganization) or substantially all of its assets. Comcast Lender believes that such a transaction – if it were to close by the end of 2013, and based on the Network’s indebtedness of which Comcast Lender is presently aware and that which it anticipates the Network would incur by year end – would likely lead to full payment of all pre-petition creditors’ claims and all reasonably foreseeable administrative expenses, and also lead to a material distribution to equity holders . [emphasis added].

Pick again made similar statements in his declaration filed in support of the amended motion. 49. 

The Astros Constituents and Astros LLC (the “Astros Entities”) immediately

filed a motion to dismiss the Petition, as well as an opposition to the trustee motion, arguing, among other things, that the Petition should be dismissed because it was filed in bad faith and the Comcast Petitioning Creditors failed to satisfy satisfy the requirements of 11 U.S.C. § 303. In their opposition to the Astros Entities’ motion to dismiss, filed October 15, 2013, the Comcast Petitioning Creditors again reiterated Comcast Lender’s intention to bid on the Debtor’s assets: The critical facts are that the Network is losing money and has no  prospect of turning that around under the current governance structure. But it is also true that the Network has value. And in a fair and open bankruptcy auction conducted by a trustee, those assets would go to the highest bidder. Perhaps Comcast Lender will acquire the assets, and be in a position to operate the Network free of the Astros’ veto rights. If the Astros value (or any other party values) the Network more highly, that party would have every opportunity to acquire the Network, free of Comcast Owner’s rights under the partnership agreement to exercise control. [emphasis added] [internal footnote omitted]. And in their reply supporting their trustee motion, filed October 24, 2013, the Comcast Petitioning Creditors echoed the same same sentiments: “All that Comcast Lender has stated is that it 25

 

Case 15-03144 Document 1 Filed in TXSB on 06/11/15 Page 26 of 64

would be willing to make a bid in bankruptcy for the Network or substantially all of its assets as part of an open auction process, and that  such an acquisition a cquisition would  would likely lead to full payment of o f creditors’ claims.” [emphasis added].

50. 

At this time (October 2013), two of the three owners of the Debtor were at odds;

Comcast Partner supported the Petition, while the Astros Constituents opposed it. Thus, the Debtor’s ability to act depended on the position of the Rockets Constituents. 51. 

The Rockets Constituents, Clutch City Sports & Entertainment, L.P. (“ Clutch

19

City”),  and Rocket Ball (collectively, the “ Rockets Entities”) filed a statement on October 21,

2013, opposing the appointment of a trustee, but supporting the entry of an order for relief under Chapter 11. The Rockets Entities’ support of the Petiti Petition on was based entirely  on the Comcast Petitioning Creditors’ repeated assurances that Comcast Lender would bid on the Debtor (or substantially all of its assets) in the bankruptcy in an amount sufficient to pay all prepetition creditors, administrative expenses, and provide a material distributi distribution on to equity holders. In their statement, the Rockets Entities proposed, among other things, that (i) a responsible officer be appointed to run the day-to-day operations of the Debtor and carry out the normal administrative functions required of a debtor-in-possession, (ii) Comcast, the Rockets Entities, and the Astros Entities engage in negotiations for one week to attempt to reach consensus on a path forward, and (iii) the question of whether to appoint an estate fiduciary should be abated until it is absolutely necessary to preserve the value of the estate.

19

  Clutch City is an affiliate of Rocket Ball and the la landlord ndlord under a Suite Leas Lease, e, dated October 1, 2011, with the Debtor, pursuant which the Debtor is obligated to Clutch City for yearly rental installments in respect of a suite at the ToyotatoCenter.

26

 

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52. 

Based on the Rockets Entities’ support of the Petition, on October 24, 2013, HP

Fannin Properties, LP (“HP Fannin”), the Debtor’s landlord,20 also filed a statement in support of the Petition. HP Fannin would not have supported the Petition if the Rockets Entities had not supported it. In fact, the Rockets Entities affirmatively asked HP Fannin to support the Petition, and HP Fannin agreed so long as the Rockets Entities’ filed their support of the Petition first. 53. 

On October 28, 2013, the Bankruptcy Court held a hearing on the Petition, the

Astros Entities’ motion to dismiss, and the Comcast Petitioning Creditors’ trustee motion. While  being questioned by Arthur Burke (counsel for the Comcast Petitioning Creditors), Pick P ick testified as follows: Q: Is Comcast Lender prepared to bid to require [sic] the Network out of bankruptcy? A: It is. Q: And without giving a precise dollar figure, figure, can you describe the magnitude of the bid that Comcast Lender is prepared to make? A: Based on the facts as we know it today, if the Network were acquired by the end of this year, we believe we would bid an amount that would be sufficient to pay all prepetition claims, administrative expenses and return a significant amount of equity to the partners. [emphasis added]. That same day, Clutch City and Rocket Ball (collectively, the “ Rockets Petitioning Creditors”) each filed formal joinders to the Petition. HP Fannin followed suit the next morning. 54. 

The hearing on the motion to dismiss continued on October 29.

Near the

conclusion of that hearing, the Bankruptcy Court announced that it would abate consideration of whether an order for relief should be entered, whether the Petition should be dismissed, and whether the disputes among the Partners ought to be considered by the Bankruptcy Court at all.

20

   property The Debtor Debtor, , as tenant, and HP Fannin,itsasbusiness. landlord, were parties to a Lease Agreement in connec connection tion with the at which the Debtor operated

27

 

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The Court then, with the consent of all parties, entered an order appointing the Astros as lead negotiator for the Debtor and provided them through December 12, 2013 to conduct negotiations with third parties for the purpose of restructuring or reorganizing the Debtor (the “ Negotiations Order”). Any final agreement that purported to bind the Debtor Debtor,, however, would still be subject

to the approval of the GP Board and the Court. 55. 

During their time as lead negotiator, the Astros spoke with various third parties

(e.g., AT&T, DirecTV, FOX, Dish Network, Time Warner) regarding a potential restructuring or  purchase of the Debtor. But many of these third parties told the Astros that they were not interested in getting involved in the Debtor’s bankruptcy case, and, more importantly, that it was their understanding that Comcast would be buying the Debtor out of bankruptcy, so it would be futile for them to get involved. For example, FOX expressed its reluctance to become involved in the Debtor’s bankruptcy proceedings.21  But FOX also affirmatively stated that it would be willing to do a deal with better terms for the Debtor if the Debtor was not in bankruptcy. AT&T and DirecTV also noted their extreme hesitation with getting involved in the Debtor’s  bankruptcy proceedings. In fact, on numerous occasions AT&T AT&T and/or DirecTV told the Debtor that the bankruptcy was “getting ugly” and “hurting [the Debtor’s] value.” 56. 

Additionally, during the negotiation process, certain potential counterparties were

requesting information information and documents related to the Debtor from the Astros.

This

documentation and information, while property of the Debtor, was maintained by Comcast Services/NBCU pursuant to the Comcast Comcast Services Agreement.

The Astros requested that

Comcast provide such information so that the Astros could then provide it to the potential

21

  deal FOXwith did make an extremely low offer offerifto the Astros at this time, noting that it discounted would onlyrate. be worth its while to the bankruptcy proceedings it could acquire the Debtor at a deeply

28

 

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counterparties. But Comcast refused to release the requested inform information ation in a timely manner, manner, in violation of the Comcast Services Agreement. See Ex. A, Comcast Services Agreement at § 2.5. On information and belief, Comcast’s obstructive behavior impeded the negotiations process. 57. 

In late November (and on the eve of the statute of limitations), Astros’ affiliate,

HBP, filed a lawsuit in state court against McLane Champions, LLC, R. Drayton McLane Jr., Comcast Corp., NBCU, and Litner relating to HBP’s purchase of the Astros in 2011 (the “ Astros Lawsuit”). In response, on November 22, 2013, Comcast Corp. and NBCU released a public

statement denouncing the Astros Lawsuit and stating, yet again, that they “remain[] committed to a reorganization of the Network in Bankruptcy Court.” 58. 

By December 12, 2013, the Astros were still negotiating with DirecTV regarding

a potential restructuring or reorganization reorganization of the Debtor, but had not yet finalized a deal. On that same date, by agreement of the parties, the Bankruptcy Court entered an amended version of the  Negotiations Order pursuant to which the Rockets were named lead negotiator for the Debtor 22

through January 7, 2014 (the “Amended Negotiations Order”).   Immediately following entry of the Amended Negotiations Order, the Rockets began working with the Astros to continue the third-party negotiations that the Astros had previously initiated. 23  These negotiations continued throughout December and into January. 59. 

The Rockets also began to contact other potential transaction counterparties, both

strategic (i.e., within the media industry) and financial ( i.e., private private equity type investors). investors). But

22

  Similar to the Negotiations Order, the Amended Negotiations Order authorize authorized d the Rockets to investigate and negotiate potential agreements, but any final agreement that purported to bind the Debtor would still be subject to the approval of the GP Board and the Court.

23

  DirecTV would not talk to the Rockets at firs firstt because it was concerned about violating a non-disclosure agreement had entered into with the Astros. Astros. Ultimately, the Astros signed a release allowing DirecTV to include the itRockets in the negotiations.

29

 

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these third parties were still hesitant and/or unwilling to get involved in the Debtor’s bankruptcy  proceedings. FOX, for example, reiterated its unwillingness to do d o a market deal with the Debtor while it was in bankruptcy. 60. 

On or around January 6, 2014, Pick sent a letter (the “ Offer Letter”) to Rockets

GP Board Director Brown, in which he reiterated Comcast’s intention to bid for the Debtor: Comcast’s position throughout this matter, beginning with the pleadings it filed for the appointment of a trustee that accompanied the filing of the involuntary petition, has been that it is prepared to make a bid to acquire the Network, thus ensuring that the Network could successfully reorganize in bankruptcy. Although  the passage of time and other events have affected the valuation, Comcast Owner remains prepared to make a ‘stalking horse’ bid for the acquisition of the Network . [emphasis added].

In the Offer Letter,  Pick described that the stalking horse bid would (subject to a reasonable aggregate cap)  satisfy in full all prepetition secured, administrative, priority and general unsecured claims,  including the amounts necessary to cure existing defaults under the Media Rights Agreements. Notably, in contrast to its prior promises, promises, Comcast was no longer of offering fering to  bid an amount that would result in a “material” or “significant” distribution to the Debtor’s equity holders. 61. 

After receiving the Offer Letter, Rocket Ball and Astros LLC requested

clarification from Comcast regarding certain material terms of Comcast’s offer, but never received any substantive response.24  Contrary to Comcast’s Comcast’s later claims, the Rockets Entities 25

and the Astros Entities considered the Offer Letter in good faith.   They merely wanted

24

  Comcast’s counsel merely responded with general assura assurances nces that Comcast understood that, in order order for a plan to be confirmed, the deal would have to pay all of the Debtor’s debts and assume all of the Debtor’s contracts, and that that was what was intended.

25 

And, of cou course, rse, the Rockets were not author authorized ized at that time to accept aany ny deal on behalf of the Debtor without the Court’s approval.

30

 

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additional explanation from Comcast, which Comcast Comcast refused tto o provide. On information and  belief, Comcast refused to respond to the reasonable requests for clarification because, at the time Pick sent the Offer Letter, Comcast had no intention of submitting a bid in an amount that would pay all the Debtor ’s creditors in full. 62. 

The same day that they received the Offer Letter, the Rockets filed an emergency

request for an extension of exploratory period under the Amended Negotiations Order. On January 7, 2014, the Bankruptcy Court entered an order extending the Rockets’ authority to act as lead negotiator for the Debtor through February 4, 2014 (the “ Second Amended Negotiations Order”). Following entry of the the Second Amended Amended Negotiations Order, Order, the Rockets continued to

explore strategic opportunities for the Debtor. 63. 

On January 10, 2014, the Comcast Petitioning Creditors filed a motion to

terminate exclusivity and appoint an examiner, examiner, in which they st stated: ated: “Comcast remains prepared to serve as a stalking-horse bidder, and is prepared to acquire the Network, and thus permit the  Network successfully to reorganize in bankruptcy.” bankruptcy.” 64. 

On February 3, 2014 (the day before the Second Amended Negotiations Order

was set to expire), the Rockets learned that an agreement with a third-party ( i.e., DirecTV and AT&T) would not be possible. During their negotiations with DirecTV and A AT&T T&T,, the Rockets had been clear that any deal with them would have to be better than what had been publicly  promised by Comcast. This is because, unlike a deal with Comcast, a deal with a third party would necessarily involve the added hassle and expense of transitioning to a brand new owner. On February 3, DirecTV and AT&T informed the Rockets that while they were interested in doing deal on the same terms that Comcast had promised (in exchange for all or substantially all of the equity of the Debtor), they were not willing to exceed Comcast’s Comcast’s terms. Given that the

31

 

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terms were no better than Comcast’s, the Rockets, on behalf of the Debtor, felt that it would not make sense for the Debtor to pursue pursue such a deal. On February 4, 2014, at the continued hearing on the motion to dismiss, Brown advised the Bankruptcy Court of the foregoing and noted that the only remaining offer on the table was Comcast’s. 65. 

At that same hearing, the Bankruptcy Court asked Comcast’s counsel, Goldblatt,

whether, if an order for relief was entered, the two Comcast GP Board Directors (Litner and Ruth) would perform as fiduciaries fiduciaries to the Debtor and it itss Estate. In response, Goldblatt stated: stated: Your Honor, our answer to that question is yes. We believe that, as a matter of federal bankruptcy law and policy, individuals who, as a matter of non-bankruptcy or corporate law, exercise control over the affairs of a Debtor-in-possession, whether directly or indirectly, through the structure, have, if not by non-bankruptcy, then by implication, byBankruptcy – from bankruptcy interests of the Estate. law, the duty to act in the best Goldblatt also reaffirmed, on the record, that “Comcast believes that the Network can survive as a going concern, and is prepared to back that belief with a financial commitment.” E. 

The Bankruptcy Court enters an Order for Relief.

66. 

At the conclusion of the February 4 hearing, after listening to closing arguments,

the Bankruptcy Court orally issued preliminary findings of fact and conclusions of law, including that an order for relief would be entered against the Debtor.

On that same date (the

“Commencement Date”), an order for relief and case management order was issued against the Debtor (the “Order for Relief ”). ”). On February 12, the the Court entered its its Memorandum Opinion, which set forth its written findings of fact and conclusions of law relating to the Order for Relief. 67. 

The Court determined that the requirements of 11 U.S.C. U.S.C. § 303 had been met. In

 particular, § 303 requires that an involuntary petition be supported by at least three petitioning creditors holding claims not subject to bona fide dispute. Notably, Notably, the Court held that, of the 32

 

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four Comcast Petitioning Creditors, only two  (i.e., Comcast Services and Comcast Lender)  properly qualified as petitioning creditors. c reditors. Thus, without the joinder of the Rockets Petitioning Creditors (which led to the joinder of HP Fannin), there would not have been a sufficient number of petitioning creditors to allow the Court to to enter the Order for Relief. Brown, the Rockets’ GP Board Director and CEO of both of the Rockets Petitioning Creditors, and Rafael Stone, the Rockets’ general counsel, relied on Comcast’s repeated representations that it (or one of its affiliates) would purchase the Debtor in bankruptcy in an amount sufficient to pay all prepetition claims, administrative expenses, and return a significant amount of equity to the Partners. Without such assurances from Comcast, the Rockets Petitioning Creditors would have never supported the Petition. And without the support of the Rockets Petitioning Creditors, HP Fannin would not have supported the Petition either. 68. 

Additionally, in deciding to enter the Order for Relief, the Bankruptcy Court

noted that, under § 303, it was “required to grant relief to an involuntary petition unless it is timely contested by the Debtor . . . . [and] [t]here ha[d] been no timely contest by the Debtor.” But, in fact, it was Comcast’s misrepresentations that induced the Debtor to refrain from moving to dismiss the Petition. Based on its own governance provisions, the Debtor could not have objected to the Petition without the consent of the Rockets’ GP Board Director. Director. The Debtor is controlled by the General Partner, Partner, which in turn is controlled by the GP Board. Pursuant to § 5.8 and § 5.9 of the LLC Agreement, the affirmative vote of a majority of Directors entitled to vote was required in order for the Debtor to file a motion to dismiss the Petition. The two Comcast representatives would not have been entitled to vote, as they were Conflicted Directors pursuant to § 5.8. Thus, the affirmative affirmative vote of both the Astros GP Board Director (Kibbe) and  the Rockets GP Board Director (Brown) would have been required in order for the Debtor to be able

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to take such an action. And in reliance on Comcast’s Comcast’s misrepresentations, Brown chose not to oppose the Petition and instead caused the Rockets Petitioning Creditors to join the Petition. F. 

Comcast shows its true colors once the Order for Relief is entered.

69. 

As soon as Comcast got what it wanted ( i.e. the Order for Relief), it suddenly

 became very quiet with respect to its proposed acquisition of the Debtor. When the Rockets and the Astros reached out to Comcast to to get specifics, Comcast became evasive. It ignored the Rockets’ and the Astros’ requests for additional information and, as a stall tactic, instructed them that the Debtor would need to hire its own counsel before Comcast could move any further with the deal. The Debtor hired its own bankruptcy counsel on or around February 25, 2014. The Debtor’s counsel continued the effort effort to finalize the deal with Comcast. But Comcast continued to stall. This continued for approximately six weeks. 70. 

Meanwhile, Bond, without the Debtor’s knowledge, resumed discussions with

DirecTV and AT&T about their potential carriage carriage of CSN Houston. On information and belief, Bond undertook these discussions in order to acquire confidential information regarding the Debtor to be used for the benefit of Comcast and to the detriment of the Debtor. Debtor. DirecTV informed Bond that the proposed rate card was ten times too high and that they were not going to  pay anywhere near what the Debtor was asking for carriage. Such information was property of the Debtor, which Bond and Comcast Services/NBCU were obligated to provide to the Debtor  pursuant to the Comcast Services Agreement. See Ex. A, Comcast Services Agreement at § 2.5. But Bond did not inform the Debtor or the GP Board about his discussions discussions with DirecTV. DirecTV. Bond did, however, provide this information to certain individuals at NBCU, including, on information and belief, Litner and Ruth. On information and belief, Litner and Ruth immediately passed thi thiss

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information along to Comcast Lender (or directed others to do so), while withholding such information from the Rockets’ and Astros’ GP Board Directors. 71. 

Then, on March 17, 2014, a mere six weeks after the Order for Relief was

entered, the Comcast Petitioning Creditors publicly filed a statement with the Bankruptcy Court declaring that Comcast was no longer interested in acquiring the Debtor or its assets (the “Notice”).26  They stated: Comcast initiated this bankruptcy proceeding in the belief that the chapter 11 process would permit the Network to reorganize, thus  preserving the Network’s Network’s value and the jobs of many employees. Much has happened, however, in the nearly six months since this involuntary case was filed. In view of these developments, Comcast is no longer prepared to purchase the Network . Comcast remains open to considering any proposal by the Debtor for reorganizing the or Network in chapter 11, additional including through an auction throughsuccessfully further efforts to obtain carriage. [emphasis added]. Unsurprisingly,, the news of Comcast’s Unsurprisingly Comcast’s Notice spread quickly. quickly. The same day the Notice was filed, the Houston Chronicle ran an article titled “Comcast won’t purchase struggling CSN,” which quoted the Notice in its entirety. See 3/17/14 Houston Chronicle Article, attached hereto as Exhibit B. On information and belief, most, if not all, of the MVPDs in the industry industry heard about the Notice. 72. 

But contrary to the statements made in the Notice, there had been no material

change in the Debtor’s finances or circumstances between February 4, when Comcast last  publicly reiterated its intention to bid on the Debtor, and March 17, when the Comcast Petitioning Creditors filed the Notice.27  Nor had the Debtor’s finances or circumstances changed

26

  Notably, filing the Notice publicly was entirely inconsistent with Comcast’s Comcast’s prior behavior during the  bankruptcy,, when it regularly filed pleadings and other documents under seal.  bankruptcy

27

  The only arguably ne new w piece o off information obtained by Comcast during this time period period was the information related to Bond’s discussion with DirecTV. DirecTV. Even if this conversation could be considered a material change in

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materially in the previous six months, other than as a result of the Comcast Petitioning Creditors  placing it into bankruptcy and publicly promising to bid on the Debtor. 73. 

Indeed, on information and belief, at the time the Notice was filed, Comcast still

had every intention of purchasing the Debtor (or substantially all of its assets), just not at the  price it had previously promised. And it did not want to have any competition driving up the  price.

On information and belief, by filing the Notice publicly, publicly, Comcast was intentionally

sending a false message to potential third-party purchasers that it was no longer interested in  purchasing the Debtor because, in Comcast’s view, view, the Debtor had little to no value. As Comcast was intimately involved with the Debtor, a reasonable potential purchaser would believe that Comcast had superior knowledge regarding the Debtor’s value. Thus, on information and belief, the purpose of the Notice was to chill any outside interest in the Debtor, so that the Debtor would have no choice but to sell itself, or substantially all of its assets, to Comcast at whatever low  price Comcast was willing to pay. pay. 74. 

 Now aware of Comcast’s Comcast’s true intentions, the Rockets and the Astros began the

search for new purchasers as soon as they received the Notice. They reached out to, and engaged in extensive discussions with, several counterparties in an effort to develop a transaction to successfully restructure the Debtor. 75. 

Meanwhile, from early February to mid-April, Litner and Ruth still had not

informed the GP Board about Bond’s Bond’s discussions with DirecTV. DirecTV. In early April 2014, at the insistence of the Astros and the Rockets, Debtor’s counsel requested that Comcast Services  provide details about abou t what it had done to obtain carriage for the Debtor since the Petition Date.

the Debtor’s circumstances, Comcast Lender obtained such information unlawfully and in breach of Bond’s contractual duties, and Litner’s and Ruth’s Ruth’s fiduciary duties, to the Debtor. Debtor. Regardless, on information and  belief, Bond’s conversation conversation with DirecTV was not the reason Comcast filed the Notice.

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During the April 10, 2014 GP Board Meeting, the Rockets and the Astros requested that the Comcast representatives in attendance, including including Litner and Ruth, provide these details. On information and belief, at that time, Litner and Ruth had knowledge of Bond’s prior discussions with DirecTV, DirecTV, yet withheld such knowledge from the GP Board. Moreover, in response to tthe he Rockets’ and the Astros’ questions, Goldblatt, Comcast’s counsel, indicated that Comcast Services had not engaged in any efforts on behalf of the Debtor to solicit potential carriage deals  because the Debtor had not requested that Comcast Services do so. Goldblatt did, however, agree to make Bond available to the GP Board to provide a general discussion on the carriage market. 76. 

On April 15, Bond presented the GP Board with an update on current carriage

market conditions. It was at this meeting that Bond first informed the Rockets’ and Astros’ Astros’ GP Board Directors of his discussions with with DirecTV (and AT&T) several months prior. prior. Bond also acknowledged during this meeting that while the Debtor’s “bankruptcy filing in and of itself was not fatal [to the Debtor’s ability to negotiate potential carriage deals with interested parties,] it indicated instability to operators . . .” 77. 

Throughout the spring and early summer of 2014, contrary to the statements made

in the Notice, Comcast continued to actively pursue a purchase of the Debtor, or substantially all of its assets. In late May or early June, Comcast’s Comcast’s counsel (Golblatt and Rockford) requested a call with the Rockets’ general counsel (Stone) and the Astr Astros’ os’ general counsel (Kibbe). On that call, Comcast’s counsel proposed an offer that was significantly less than the amount Comcast had previously represented it would offer. offer. Kibbe immediately dismissed such of offer, fer, while Stone agreed to take the offer under advisement. As a follow-up to that call, on June 2, 2014, Goldblatt sent a letter to counsel for the Rockets and Astros, enclosing a revised term sheet for Comcast’s

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 proposed restructuring of the Debtor. Contrary to its prior representations, Comcast’s Comcast’s lowball  bid would not have even paid the Debtor’s Debtor ’s creditors in full, 28 let alone made any contribution to equity. Moreover, Comcast Comcast expected the Rockets and Astros to add additional value to the Debtor by taking significantly significantly less in future media rights payments. Comcast knew that such such a condition was a nonstarter for the Astros and the Rockets, whose consent was necessary for such a deal to get done. And without a deal, the Debtor would continue to languish in bankruptcy, bankruptcy, incurring more and more debt along the way. 78. 

At a GP Board meeting the following day (June 3), Stone acknowledged that the

Rockets had received and were considering Comcast’s Comcast’s offer to purchase the Debtor Debtor.. Stone also noted that the Rockets and the Astros were considering other options for the Debtor. Debtor. Indeed, the Rockets and the Astros were then in discussions with DIRECTV, LLC (“ DTV”) and AT&T Services, Inc. (“AT&T”) regarding a potential reorganization of the Debtor Deb tor..29  79. 

Ultimately, the Debtor, Rocket Ball, and Astros LLC (the “Proponents”) were

able to reach a deal with DTV and a nd AT&T AT&T (the “ DTV/AT&T Deal”), who each agreed to execute an affiliation agreement, subject to AT&T Teleholdings, Inc. (“ AT&T Teleholdings”) and DIRECTV Sports Networks, LLC (“DTV Sports”) collectively receiving 100% of the equity interests in the Reorganized Debtor. 30  The DTV/AT&T DTV/AT&T Deal was incorporated into a plan of reorganization for the Debtor, which was approved unanimously by the GP GP Board. After an

28

  For example, under Comcast’s proposal, the Astros would not be paid in full for amounts due under the Astros Media Rights Agreement for the 2014 MLB season.

29

  On or around May 18, 2014, AT&T had announced its intent to mer merge ge with DirecTV. Believing this proposed merger might have changed AT&T and/or DirecTV’s view on potentially purchasing the Debtor, the Astros immediately reached out to the CEO of AT&T, flying up to meet with him in Dallas within days of the announcement. AT&T expressed an interest in a potential acquisition and, from that point on, the Astros and the Rockets focused primarily on pursuing that deal.

30

  The Reorga Reorganized nized Debtor is a new legal entity and is not a successor to the Debtor. Debtor. As of the Effective Date, the Debtor, as a legal entity, no longer exists.

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extensive multi-day confirmation hearing, the Plan of Reorganization was confirmed, despite Comcast’s objection, on October 30, 2014, with an Effective Date of November 17, 2014. 80. 

While Comcast may have failed in its ultimate plan to acquire the Assets for itself,

it certainly succeeded in severely damaging the Debtor and its Estate along the way. way. Comcast’s Comcast’s wrongful conduct put the Debtor in a far worse position than it would have been in otherwise. Had Comcast lived up to its repeated promises, the Debtor’s prepetition claims and administrative expenses would have been paid in full and its equity holders would have received 31

32

a significant distribution.   But instead, under the DTV/AT&T DTV/AT&T Deal,  the Debtor’s unsecured creditors and equity holders received no money on the Effective Date.33  Additionally Additionally,, on information and belief, the terms of the DTV/AT&T Deal were significantly less favorable to the 34

Debtor than they would have been if Comcast had not publicly filed the Notice.   In fact, the DTV/AT&T DTV/A T&T Deal provided less value to the Debtor’s Debtor ’s Estate than the Debtor would have received if it had just liquidated (or sold all of its assets) in September 2013. Under either scenario the Debtor would have lost the Assets and ceased to exist. But in September 2013, the Debtor had significantly less debt than than it did at the time time the Plan of Reorganization Reorganization was confirmed. Instead,

31

  Even Comcast’ Comcast’ss reduced offer on January 6, 2014, while not including a distribution to equity holders, promised to pay all the Debtors’ ccreditors reditors in full.

32

  Because of Comcast’s wrongful conduct, by the late summer/fall of 2014 2014,, the DTV/AT&T DTV/AT&T Deal was the best  possible deal available to the Debtor. It was certainly superior to Comcast’s lowball lo wball offer from June 2014, especially given Comcast’s unreasonable conditions related to the reduction of the Astros’ and the Rockets’ media rights fees which foreclosed any reasonable prospect for a reorganization of the Debtor under such a  proposal.

33

  Instead, under the Plan, the Debtor’s Debtor’s uns unsecured ecured creditors and equity holders holders became holders of beneficial interests in the HRSN Litigation Trust. Trust. The only assets owned by the HRSN Litigation T Trust rust are certain Transferred Transferre d Causes of Action of the Debtor, including the causes of actions asserted herein. Thus, the claims of the Debtor’s unsecured creditors and equity holders will only be paid if and to the extent that the HRSN Litigation Trust is successful in prosecuting the Transferred Causes of Action.

34

  On February 3, 2014, Dire DirecTV cTV and AT&T had expresse expressed d their interest in doing a deal on the same terms as those promised by Comcast. Just a few months later, later, after the Notice was filed, the pr proposed oposed terms of the new DTV/AT&T DTV/A T&T Deal were significantly significantl y less favorable tto o the Debtor.

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the prolonged bankruptcy proceedings, resulting from Comcast’s wrongful conduct, caused the Debtor’s Estate to incur a substantial amount of additional debt and increased the exposure of the Debtor’s creditors. Causes of Action Count 1 - Fraudulent Misrepresentation

81. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 82. 

Plaintiff asserts a claim against Defendants Comcast Lender, Comcast Services,

Comcast Media, Comcast California, Comcast Corp., Comcast Partner, and Pick for common law fraudulent misrepresentation. 83. 

35

From late September 2013 until January 6, 2014, Defendants  falsely represented

to the Debtor, on at least four separate occasions, that Comcast Lender (or some other Comcast entity) would bid on and/or purchase the Debtor, or substantially all of its assets, in bankruptcy in an amount sufficient to (i) satisfy all prepetition claims and administrative expenses in full, and (ii) return a “significant” or “material” amount of equity to the Partners. Partners. From January 6, 2014 through February 4, 2014, Defendants falsely represented to the Debtor that Comcast Lender (or some other Comcast entity) would bid on and/or purchase the Debtor, or substantially all of its assets, in bankruptcy in an amount sufficient to satisfy in full all prepetition secured, administrative, priority, and general unsecured claims, including the amounts necessary to cure the existing defaults under the Media Rights Righ ts Agreements. Agreements.

35

  For ease of reference, the term “Defendants” as used in each separate Count will mean the specific Comcast Defendants identified under such Count.

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84. 

Defendants also made these misrepresentations to the GP Board, the Astros, and

the Rockets, with the intent or expectation that such misrepresentations would be repeated to the Debtor. 85. 

Defendants’ misrepresentations to the Debtor were material in that they were of a

nature that a reasonable person, such as the Debtor, would attach importance to and be induced to act, or refrain from acting, on such information in determining whether to seek to dismiss, or otherwise contest, the Petition. 86. 

At the time the misrepresentations were made, Defendants knew the

misrepresentations were false, or made the misrepresentations recklessly, as positive assertions, and without knowledge of their truth. 87. 

These misrepresentations were false promises of future performance which were

made by Defendants while purporting to have special knowledge regarding those future events and/or with the knowledge that such representations were were false.

The promises made by

Defendants were sufficiently certain and of the type that a person such as the Debtor could reasonably and justifiably rely on them. Defendants had no intention of performing when they made the promises.

Additionally and/or alternatively alternatively,, these misrepresentations were false

statements of fact, false statements of opinion, and/or false representations by conduct, including silence and deceptive conduct. Defendants knew such misrepresentations were false at the time they were made, supported such misrepresentations with false statements of fact, and/or knew that the Debtor would justifiably rely on such misrepresentations because of Defendants’ special knowledge. 88. 

Defendants intended for the Debtor to rely on the misrepresentations or had

reason to expect that the Debtor would do so.

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89. 

The Debtor actually and justifiably relied on the misrepresentations when it

refrained from contesting or seeking to dismiss dismiss the Petition. Additionally, Additionally, the Rockets GP Board Director, acting on behalf of the Debtor (as well as the Rockets), actually and justifiably relied on the misrepresentations when he took actions to support the Petition, including but not limited to, causing the Rockets Petitioning Creditors to formally join the Petition, which in turn caused HP Fannin to formally join the Petition. 90. 

The Debtor’s reliance was to its detriment. detriment. By the Debtor not contesting the

Petition, the Bankruptcy Court entered the Order for Relief. Prior to the bankruptcy, bankruptcy, the Debtor owned the Assets, which had significant value. Because of the bankruptcy proceedings, the value of the Debtor decreased and the Debtor lost opportunities to (i) restructure or reorganize itself such that it could maintain its Assets and run a profitable business, (ii) sell such Assets for an amount sufficient to fully satisfy the claims of its creditors and provide a distribution to its equity owners, or (iii) dissolve in order to prevent further harm to the Debtor’s creditors. Ultimately, as a result of the Plan of Reorganization, the Debtor no longer exists and its Assets now belong to AT&T AT&T Teleholding Teleholding and DTV Sports. The amount received by the Debtor Debtor’s ’s Estate Estate through the AT&T/DTV Deal was significantly less than the pre-bankruptcy value of the Assets and was insufficient to pay any of the claims of the Debtor’s unsecured creditors or to provide any distribution to the equity owners. The amount received by the Debtor’s Debtor’s Estate through tthe he AT&T/DTV Deal was also significantly less than the proposed purchase price promised by Defendants. Additionally, Additionally, the Debtor incurred debts, fees, and expenses that it would would not have incurred if it had not been placed into bankruptcy, including, but not limited to, hundreds of millions of dollars in additional media rights payments owed to the Astros and the Rockets.

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91. 

Defendants’ misrepresentations directly and proximately caused injury to the

Debtor and its Estate, resulting in damages that exceed the minimum jurisdictional limits of the Court, and for which Plaintiff Plaintiff herein sues. These damages include, but are not limited to, actual damages, consequential damages, incidental damages, compensatory damages, out-of-pocket damages, benefit-of-the-bargain damages, lost profits, loss of sales, loss of credit and/or investment, loss of business reputation and goodwill, loss of business, mitigation expenses and/or increased business expenses, exemplary damages, costs of court, prejudgment interest, and post-judgment interest. Count 2 - Fraud by Nondisclosure

92. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 93. 

Additionally and/or alternatively, Plaintiff asserts a claim against Defendants

Comcast Lender, Comcast Services, Comcast Media, Comcast California, Comcast Corp., Comcast Partner, Pick, Bond, Litner, and Ruth for common law fraud by nondisclosure. n ondisclosure. 94. 

From late September 2013 until March 17, 2014, Defendants concealed or failed

to disclose material facts to the Debtor relating to Comcast’s intention of purchasing the Debtor, or substantially all of its assets, assets, in bankruptcy at a particular particular price. Prior to the Commencement Date, Defendants knew that Comcast had no intention of submitting a bid for the Debtor, or substantially all of its assets, assets, at the price it had publicly prom promised. ised. This information was material in that it was of a nature that a reasonable person, such as the Debtor, would attach importance to and be induced to act, or refrain from acting, on such information in determining whether to seek to dismiss, or otherwise contest, the Petition. Defendants had a duty to disclose such informat information ion to the Debtor because (i) the information was new, and it made Defendants’ earlier representations to the Debtor false or misleading, (ii) Defendants partially disclosed the 43

 

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information to the Debtor, which created a substantially false impression, and/or (iii) Defendants voluntarily disclosed some of the information to the Debtor. Debtor. Defendants Litner and Ruth also also had a duty to disclose such information to the Debtor because as early as the Petition Date (but in no event later than the Commencement Date) they owed a fiduciary duty to the Debtor. 95.  Additionally and/or alternatively, Defendants Bond, Litner, Ruth, Comcast Services, and NBCU concealed or failed to disclose material facts to the Debtor regarding Bond’s conversations with with DirecTV. DirecTV. Defendants knew that (i) Bond had spoken with DirecTV in February 2014 regarding carriage of CSN Houston, (ii) DirecTV had told Bond that it had no interest in carrying CSN Houston because the rate card was too high by a factor of ten, and (iii) the Debtor was not aware that such discussions had taken place or of the substance of such conversations. Defendants concealed or failed to disclose such information to the Debtor. Debtor. This information was material in that it was of a nature that a reasonable person, such as the Debtor, would attach importance to and be induced to act, or refrain from acting, on such information in determining whether to pursue potential restructuring opportunities with Comcast or other third  parties. Defendants Litner and Ruth had a duty to disclose the information to the Debtor because as early as the Petition Date (but in no event later than the Commencement Date) they owed a fiduciary duty to the Debtor. Debtor. Defendants Comcast Services, NBCU, and Bond had a duty to disclose the information to to the Debtor pursuant to the Comcast Services Agreement. Defendants also had a duty to disclose such information to the Debtor because (i) the information was new, and it made their earlier representations to the Debtor false or misleading, (ii) they partially disclosed the information to the Debtor, which created a substantially false impression, and/or (iii) they voluntarily disclosed some of the information to the Debtor.

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96. 

Defendants knew that the Debtor was ignorant of the concealed information and

did not have an equal opportunity to discover the truth. 97. 

Defendants deliberately remained silent and did not disclose the information to

the Debtor. Debtor. By deliberately remaining silent, Defendants intended for the Debtor to act without the information. 98. 

The Debtor justifiably justifiably relied on Defendants’ deliberate silence. The Debtor’s

reliance was to its its detriment. By the Debtor not contesting the Petition, the Bankruptcy Court entered the Order for Relief. Prior to the bankruptcy, bankruptcy, the Debtor owned the Assets, which had significant value. Because of the bankruptcy proceedings, the value of the Debtor decreased and the Debtor lost opportunities to (i) restructure or reorganize itself such that it could maintain its Assets and run a profitable business, (ii) sell such Assets for an amount sufficient to fully satisfy the claims of its creditors and provide a distribution to its equity owners, or (iii) dissolve in order to prevent further harm to the Debtor’s creditors.

Ultimately, Ultimately, as a result of the Plan of

Reorganization, the Debtor no longer exists and its Assets now belong to AT&T Teleholding and DTV Sports. The amount received by the Debtor’s Estate Estate through the AT&T/DTV Deal was significantly less than the pre-bankruptcy value of the Assets and was insufficient to pay any of the claims of the Debtor’s unsecured creditors or to provide any distribution to the equity owners. The amount received by the Debtor’s Estate through the AT&T/DTV Deal was also significantly less than the proposed purchase price price promised by Defendants. Defendants. Additionally, Additionally, the Debtor incurred debts, fees and expenses that it would not have incurred if it had not been placed into bankruptcy, including, but not limited to, hundreds of millions of dollars in additional media rights payments owed to the Astros and the Rockets.

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99. 

Additionally and/or alternatively, to the extent information regarding Bond’s

conversations with DirecTV were material to the Debtor or to Comcast’s decision on whether to  purchase the Debtor, the Debtor relied on o n the concealment of such information to its detriment. d etriment. Believing Comcast’s promises, the Debtor chose to negotiate a potential deal with Comcast instead of a potential deal with DirecTV and AT&T on the same terms. If the Debtor had been told such information at the time it occurred (February 2014), the Debtor could have re-opened negotiations with DirecTV and AT&T AT&T sooner (prior to Comcast filing the Notice) and potentially obtained better terms than those the Debtor ultimately obtained in the final DTV/AT&T DTV/AT&T Deal. 100. 

By deliberately remaining silent, Defendants directly and proximately caused

injury to the Debtor and its Estate, resulting in damages that exceed the minimum jurisdictional limits of the the Court, and for which Plaintiff Plaintiff herein sues. These damages include, but are not limited to, actual damages, consequential damages, incidental damages, compensatory damages, out-of-pocket damages, benefit-of-the-bargain damages, lost profits, loss of sales, loss of credit and/or investment, loss of business reputation and goodwill, loss of business, mitigation expenses and/or increased business expenses, exemplary damages, costs of court, prejudgment interest, and post-judgment interest. Count 3 – Business Disparagement Disparagement

101. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 102. 

Additionally and/or alternatively, Plaintiff asserts a claim against Defendants

Comcast Lender, Comcast Services, Comcast Media, and Comcast California for business disparagement. 103. 

By filing the Notice, Defendants published a disparaging written statement about

the Debtor’s value and/or financial position. In the Notice, Defendants stated: stated: “Comcast initiated 46

 

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this bankruptcy proceeding in the belief that the chapter 11 process would permit the Network to reorganize, thus preserving the Network’s Network’s value and the jobs of many employees. Much has happened, however, in the nearly six months since this involuntary case was filed. In view of these developments, Comcast is no longer prepared to purchase the Network.” 104. 

The disparaging and false statements contained in the Notice cast serious doubt on

the value and financial viability of the Debtor.

In addition, the statements published by

Defendants, taken as a whole, created a substantially false and defamatory impression to a reasonable reader by omitting and/or juxtaposing facts in a misleading way. way. These statements imply that Comcast, an insider with special knowledge, determined that the Debtor had little to no value. These statements also imply that the Debtor’s financial financial circumstances had materially materially changed in the prior six months to warrant Comcast’s apparent change of heart. 105. 

The statements in the Notice were false because, at the time the Notice was filed,

(i) Comcast still intended on purchasing the Debtor, (ii) the Debtor had significant value, and (iii) there had been no material changes in the Debtor’s circumstances to justify Comcast’s apparent reversal on its decision to purchase the Debtor. 106. 

The statements in the Notice were seen by and/or published to all persons and

entities that had made an appearance in the bankruptcy proceedings and/or had requested notice of pleadings filed filed in the bankruptcy proceedings.

The statements in the Notice were also

 published to the general public, as the Notice was publicly filed on the Court’s Court’s docket and was available for anyone to view (including various third-party MVPDs that were following the  bankruptcy proceedings carefully). Additionally, Additionally, the statements in the Notice were re-published to the public by the Houston Chronicle. A reasonable pers person on would recognize that Defendants’ actions created an unreasonable risk that the disparaging statements would be communicated to

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other parties. And, in fact, a number of MVPDs, including but not limited to, AT&T and DirecTV confirmed to the Rockets that they had in fact seen the Notice. 107. 

Defendants published the statements with malice because they: (i) knew the

statements were false; (ii) acted with reckless disregard for whether the statement was true; (3) acted with ill will; and/or (iv) intended to interfere with the Debtor’s economic interests. 108. 

Defendants published the statements without privilege.

109. 

Defendants’ disparaging statements played a substantial part in inducing third

 parties not to deal with the Debtor, causing actual, consequential, incidental, compensatory, compensatory, and special damages to the Debtor and its Estate in an amount that exceeds the minimum  jurisdictional limits of the Court, and for which Plaintiff herein h erein sues. These damages include,  but are not limited to, loss of sales, loss of credit and/or and /or investment, loss of business reputation and goodwill, loss of business, mitigation expenses and/or increased business expenses, exemplary damages, costs of court, prejudgment interest, and post-judgment interest. Count 4 – Tortious Interference with Prospective Business Relations

110. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 111. 

Additionally and/or alternatively, Plaintiff asserts a claim against Defendants

Comcast Lender, Comcast Services, Comcast Media, Comcast California, Comcast Corp., Comcast Partner, and Pick for tortious interference with prospective business relations. 112. 

Both prior to and after the Petition was filed, the Debtor engaged in discussions

with certain third parties, including MVPDs and potential investors/purchasers, regarding a  potential purchase or restructuring of the Debtor. Debtor. 113. 

There was a reasonable probability the Debtor would have entered into contracts

and/or business relationships with one or more of these third parties if Defendants had not (i) 48

 

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filed the Petition, (ii) publicly announced Comcast’s intention to purchase the Debtor, or substantially all of its assets, for a particular price, (iii) obtained an Order for Relief from the Bankruptcy Court based on false pretenses, pretenses, and/or (iv) publicly fi filed led the Notice. The bankruptcy filing, along with Comcast’s involvement and public interest in the Debtor, chilled interest and alternative opportunities because these potential counterparties were aware of Comcast’s supposed interest in the Debtor, Comcast Lender’s potential right to credit bid its $100 million claim, and Comcast’s commitment to paying a price that would pay all creditors in full and  provide a material return for equity. equity. Additionally, Additionally, by filing the Notice, Defendants Comcast Lender, Comcast Services, Comcast Media, and Comcast California chilled interest and alternative opportunities because these potential counterparties reasonably interpreted the Notice as a determination by Comcast that the Debtor had little to to no value. Moreover, there there are not many MVPDs competing in this space,36 so when one MVPD (i.e., Comcast) publicly withdraws itself from the running, as Comcast did by filing the Notice, it changes the economics for everyone. The Debtor would have been able to negotiate more favorable terms with the other MVPDs if Comcast had not publicly stated that it was no longer interested in purchasing the Debtor and implied that the Debtor had little to no value. 114. 

Defendants knew of the Debtor’s prospective business relationships with these

third parties and intentionally interfered with those relationships through their actions as delineated above. 115. 

Defendants’ conduct was independently tortious or unlawful in nature, regardless

of the effect such conduct had on the Debtor’s prospective business relationships with these third

36

  It was critical that any deal the Debtor negotiated included carriage of CSN Houston. There aare re only a few MVPDs in the industry that could provide such carriage (e.g., Comcast, AT&T, DirecTV, DISH Network).

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 parties. In particular, Defendants’ conduct condu ct was fraudulent and disparaging, as set forth in the  paragraphs above. 116. 

Defendants’ interference proximately caused injury to the Debtor and its Estate,

resulting in damages that exceed the minimum jurisdictional limits of the Court, and for which Plaintiff herein sues.

These damages include, but are not limited to, to, actual damages,

consequential damages, incidental damages, compensatory damages, out-of-pocket damages,  benefit-of-the-bargain damages, lost profits, loss of sales, loss loss of credit and/or investment, loss of  business reputation and goodwill, loss of business, mitigation expenses and/or increased business expenses, exemplary damages, costs of court, prejudgment interest, and post-judgment interest. Count 5 – Promissory Estoppel

117. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 118. 

Additionally and/or alternatively, Plaintiff asserts a claim against Defendants

Comcast Lender, Comcast Services, Comcast Media, Comcast California, Comcast Corp., Comcast Partner, and Pick for promissory estoppel. 119. 

From late September 2013 until January 6, 2014, Defendants repeatedly promised

the Debtor that Comcast Lender (or some other Comcast entity) would bid on and/or purchase the Debtor, or substantially all of its assets, in bankruptcy in an amount sufficient to (i) satisfy all  prepetition claims and administrative expenses in full, and (ii) return a “significant” or “material” “material” amount of equity to the Partners. From January 6, 2014 through through February 4, 2014, Defendants  promised the Debtor that Comcast Lender (or some other Comcast entity) would bid on and/or  purchase the Debtor, or substantially all of its assets, in bankruptcy in an amount sufficient to satisfy in full all prepetition secured, administrative, priority, and general unsecured claims,

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including the amounts necessary to cure the existing defaults under the Media Rights Agreements. 120. 

The Debtor relied on Defendants’ promises by refraining from contesting or

seeking to dismiss the Petition. Because of the nature of the promise, promise, the Debtor’s reli reliance ance was  both reasonable and substantial. The Debtor’s reliance was to its detriment. By the t he Debtor not contesting the Petition, the Bankruptcy Court entered the Or Order der for Relief.  bankruptcy, the Debtor owned the Assets, which had significant value.

Prior to the

Because of the

 bankruptcy proceedings, the value of the Debtor decreased and the Debtor lost opportunities to (i) restructure or reorganize itself such that it could maintain its Assets and run a profitable  business, (ii) sell such Assets for an amount sufficient to fully satisfy the claims of its creditors cred itors and provide a distribution to its equity owners, or (iii) dissolve in order to prevent further harm to the Debtor’s creditors. Ultimately, Ultimately, as a result of the Plan of Reorganization, the Debtor no longer exists and its Assets now belong to AT&T AT&T Teleholding Teleholding and DTV Sports. The amount received by the Debtor’s Estate through the AT&T/DTV Deal was significantly less than the pre-bankruptcy value of the Assets and was insufficient to pay any of the claims of the Debtor’s unsecured creditors or to provide any distribution distribution to the equity owners. Additionally, Additionally, the Debtor incurred debts, fees and expenses that it would not have incurred if it had not been placed into bankruptcy, including, but not limited to, hundreds of millions of dollars in additional media rights payments owed to the Astros and the Rockets. 121. 

Defendants knew, or reasonably should have known, that the Debtor would rely

on Defendants’ Defendan ts’ promises. promises. 122. 

Injustice to the Debtor can be avoided only if Defendants’ promise is enforced.

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123. 

The Debtor’s reliance on Defendants’ promise resulted in injury to the Debtor and

its Estate, resulting in damages that exceed the minimum jurisdictional limits of the Court, and for which Plaintiff Plaintiff herein sues. These damages include, but are not limited to, actual damages, out-of-pocket damages, reliance damages, costs of court, prejudgment interest, post-judgment interest, and attorney’s attorney’s fees. Count 6 – Breach of Fiduciary Duty

124. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 125. 

Additionally and/or alternatively, Plaintiff asserts a claim against Defendants

Litner and Ruth for breach of fiduciary duty. 126. 

Defendants had a fiduciary relationship with the Debtor as early as the Petition

Date (but in no event later than the Commencement Date). Pursuant to federal bankruptcy law (including, but not limited to, 11 U.S.C. §§ 704, 1106-1107 and Local Bankruptcy Rule 4002-1), Defendants, as GP Board Directors, owed fiduciary duties to the Debtor and its Estate. Additionally and/or alternatively, by causing Comcast Services and Comcast California to file the Petition and by affirmatively confirming to the Debtor and the Bankruptcy Court that they owed fiduciary duties to the Debtor and its Estate, Defendants voluntarily assumed a fiduciary duty such that the Debtor was justified in relying on Defendants to act in the best interests of the Debtor and its Estate. 127. 

Defendants breached their fiduciary duties to the Debtor and its Estate by

concealing or failing to disclose material facts to the Debtor regarding Bond’s conversations with DirecTV.. Defendants were in possession of material confidential inform DirecTV information ation with respect to the Debtor’s inability to obtain additional carriage with DirecTV which they did not share with the non-Comcast GP Board Directors. Additionally, Additionally, Defendants breached their fiduciary duties to 52

 

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the Debtor and its Estate by disclosing, or causing the disclosure of, such material confidential information (which was the Debtor’s property) to Comcast affiliates for Comcast to use to the detriment of the Debtor. 128.

 

By such actions, Defendants: (i) failed to make full and fair disclosure of

important information to the Debtor; (ii) failed to act with loyalty (iii) failed to act in good faith; (iv) failed to act with integrity of the strictest kind; (v) failed to act with utmost candor; (vi) failed to act in the best interests of the Debtor and its Estate; (vii) failed to act to promote the Debtor’s long-term profitable operation; (viii) engaged in self-dealing; (ix) placed p laced the interests of Comcast above the interests of the Debtor and its Estate; and/or (x) failed to act with due care. Defendants’ actions were fraudulent, intentional, reckless, malicious, in bad faith, and/or grossly negligent. 129. 

Defendants’ breaches of fiduciary duty injured the Debtor and its Estate, resulting

in damages that exceed the minimum jurisdictional limits of the Court, and for which Plaintiff herein sues. These damages include, but are not limit limited ed to, actual damages, consequential damages, incidental damages, compensatory damages, out-of-pocket damages, benefit-of-the bargain damages, lost profits, loss of sales, loss of credit and/or investment, loss of business reputation and goodwill, loss of business, mitigation expenses and/or increased business expenses, exemplary damages, costs of court, c ourt, prejudgment interest, and post-judgment interest. 130. 

Additionally and/or alternatively, Defendants benefitted from their breaches of

fiduciary duty. Accordingly, Accordingly, Plaintiff seeks the return, disgorgement, and/or forfeiture of, and/or a constructive trust upon, all funds, profits, fees, and benefits that Defendants realized, received, or obtained as a result of their breaches of fiduciary duty.

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Count 7 – Breach of Contract

131. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 132. 

Additionally and/or alternatively, Plaintiff asserts a claim against Defendants

Comcast Services and NBCU for breach of the Comcast Services Agreement. 133. 

On October 29, 2010, the Debtor and Comcast Services executed the Comcast

Services Agreement, which was a valid and enforceable wr written itten contract. The Comcast Services Agreement provided that Comcast Services would provide management oversight and certain enumerated operational services (including affiliate sales services, affiliate finance services, executive oversight services, operations and engineering, business and legal affairs services, as well as certain other services), identification of prospective MVPDs, and negotiation of distribution agreements with MVPDs interested in carrying and eligible to distribute CSN Houston, and, in return, the Debtor agreed to pay $5 million annually to Comcast Services (subject to certain increases or decreases as provided in the agreement) along with all reasonable out-of-pocket costs. 134. 

The Comcast Services Agreement remained in effect until the Effective Date, at

which time it was terminated pursuant to the Plan of Reorganization. 135. 

The Debtor fully performed its contractual obligations under the Comcast

Services Agreement. 136. 

Comcast Services subcontracted NBCU to perform its contractual obligations

under the Comcast Services Agreement. Additionally and/or alternatively, alternatively, NBCU was acting as Comcast Services’ agent when it provided, or failed to provide, services to the Debtor pursuant to the Comcast Services Agreement.

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137. 

Through their conduct discussed herein, Defendants intentionally and/or willfully

 breached §§ 2.2(e) and 2.4 of the Comcast Services Agreement by (i) failing to consider the Debtor’s concerns in good faith, (ii) failing to provide services to the Debtor in a manner that was, “under the circumstances, at a minimum, consistent in all material respects with . . . the same highest level and quality of service that Comcast [Services] uses when providing similar services to any other Comcast-Related RSN[,]” (iii) improperly basing their “allocation of time,  personnel and resources” to the Debtor “on the amount or nature of” Comcast’s Comcast’s ownership interest in the Debtor; and/or (iv) failing to “use commercially reasonable efforts to obtain for [the Debtor] the best pricing, benefits and other terms available to [the Debtor] under the circumstances[.]” 138. 

Defendants also intentionally and/or willfully breached the Comcast Services

Agreement by (i) failing to engage in negotiations with MVPDs to obtain additional carriage for the Debtor between the Commencement Date and the Effective Date, notwithstanding their contractual obligation to do so, (ii) failing to disclose to the Debtor confidential information obtained by Defendants in connection with their provision of services under the Comcast Services Agreement, and (iii) withholding, and/or delaying the provision of, the Debtor’s records and documents in order to impede the Debtor’s negotiations with third parties. 139. 

Defendants’ breaches of the Comcast Services Agreement caused injury to the

Debtor and its Estate, resulting in damages that exceed the minimum jurisdictional limits of the Court, and for which Plaintiff Plaintiff herein sues. These damages include, but are not limited to, actual damages, consequential damages, incidental damages, compensatory damages, nominal damages, out-of-pocket damages, benefit-of-the-bargain damages, restitution damages, loss of sales, loss of credit and/or investment, mitigation expenses and/or increased business expenses,

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costs of delay in performance, costs of substitute performance, costs of court, prejudgment interest, post-judgment interest, and attorney’s attorney’s fees. Such damages are the result of Defendants’ intentional misrepresentations, fraud, and/or willful misconduct related to their breaches of the Comcast Services Agreement. 140. 

All conditions precedent to Plaintiff’s claim for relief have been performed or

have occurred. Count 8 – Vicarious Liability (Agency, Respondeat Superior, Ratification, Vice Pr in ci pa l Li ab il it y)

141. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 142. 

Additionally and/or alternatively, Comcast Defendants are vicariously liable for

the wrongful acts and omissions of their agents, employees, and representatives (whether defendants or non-defendants), as alleged herein, under the doctrines of agency (authorized agency, apparent agency, ostensible agency, and agency by estoppel), respondeat superior , ratification, and/or vice-principal liability. liability.

In all circumstances, the acts or omissions

complained of were committed or omitted with authorization and/or ratification of Comcast Defendants, and/or were done in the course and scope of the actor’s employment or agency relationship with Comcast Defendants. 143. 

Additionally and/or alternatively, Comcast Corp. is vicariously liable for the

wrongful acts and omissions of Defendants Comcast Services, Comcast Cable, Comcast Lender, Comcast Partner, Comcast Comcast Media, Comcast California, NBCU, Lit Litner, ner, Ruth, Bond, and Pick. At all times relevant herein, Defendants Comcast Services, Comcast Cable, Comcast Lender, Comcast Partner, Comcast Media, Comcast California, NBCU, Litner, Ruth, Bond, and Pick (i) were agents, employees, and/or vice-principals of Defendant Comcast Corp., and, (ii) were 56

 

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acting within their general authority as agents, employees, and/or vice-principals of Comcast Corp. in furtherance of Comcast Corp.’s business and for the accomplishment of the object for which such agent, employee, or vice-principal was hired. 144.

 

Additionally and/or alternatively, Comcast Services is vicariously liable for the

wrongful acts and omissions of Defendants NBCU, Litner, Litner, Ruth, and Bond. At all times relevant herein, Defendants NBCU, Litner, Ruth, and Bond (i) were agents, employees, and/or vice principals of o f Defendant Comcast Services, and (ii) were acting within their general authority as as agents, employees, and/or vice-principals of Comcast Services in furtherance of Comcast Service’s business and for the accomplishment of the object for which such agent, employee, or vice-principal was hired. 145. 

Additionally and/or alternatively, Comcast Lender is vicariously liable for the

wrongful acts and omissions of Defendant Pick. At all times relevant herein, Defendant Pick (i (i)) was an agent, employee, and/or vice-principal of Defendant Comcast Lender, and (ii) was acting within his general authority as agent, employee, and/or vice-principal of Comcast Lender in furtherance of Comcast Lender’s business and for the accomplishment of the object for which he was hired. 146. 

Additionally and/or alternatively, Comcast Partner is vicariously liable for the

wrongful acts and omissions of Defendants Litner, Litner, Ruth, and Pick. At all times relevant herein, Defendants Litner, Ruth, and Pick (i) were agents, employees, and/or vice-principals of Defendant Comcast Partner, and, (ii) were acting within their general authority as agents, employees, and/or vice-principals of Comcast Partner in furtherance of Comcast Partner’s  business and for the accomplishment of the object for which such agent, employee, or vice principal was hired.

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147. 

Additionally and/or alternatively, NBCU is vicariously liable for the wrongful

acts and omissions omissions of Defendants Litner, Litner, Ruth, and Bond.

At all times relevant herein,

Defendants Litner, Ruth, and Bond (i) were agents, employees, and/or vice-principals of Defendant NBCU, and, (ii) were acting within their general authority as agents, employees, and/or vice-principals of NBCU in furtherance of NBCU’s business and for the accomplishment of the object for which such agent, employee, or vice-principal was hired. Count 9 – Aiding & Abetting

148. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 149. 

Additionally and/or alternatively, Plaintiff asserts a claim against all Comcast

Defendants for aiding and abetting. 150. 

Defendants Comcast Lender, Comcast Services, Comcast Media, Comcast

California, Comcast Corp., Comcast Partner, NBCU, Pick, Bond, Litner, and Ruth committed tort(s) against the Debtor, as set forth in the factual allegations and causes of action detailed above, including, but not limited to, fraud, business disparagement, tortious interference with  prospective relations, and breach of fiduciary duty. With respect to each tort for which a  particular Comcast Defendant was a primary actor, the other Comcast Defendant(s) knew that such primary actor’s conduct constituted constituted tort(s). With With the intent to assist the primary primary actor in the tort(s), the other Comcast Defendant(s) substantially assisted and/or encouraged the primary actor. The other Comcast Defendant(s)’ assistance or encouragement was a substantial factor in causing the tort(s). Therefore, all of the Comcast Defendants are considered joint tortfeasors and are responsible for the consequences of the tort(s), including joint and several liability for the damages suffered suffered by the Debtor and its Estate as described herein.

Additionally and/or

alternatively, Plaintiff seeks the return, disgorgement, and/or forfeiture of, and/or a constructive 58

 

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trust upon, all funds, profits, fees, and benefits that each Comcast Defendant realized, received, or obtained as a result of its participation in and/or benefit from Litner’s or Ruth’s breaches of fiduciary duty. 151.

 

Additionally and/or alternatively, Defendants Litner and Ruth substantially

assisted Comcast Lender, Comcast Services, Comcast Media, Comcast California, Comcast Corp., Comcast Partner, Partner, NBCU, Bond, and/or Pick in causing the tort(s). tort(s). Litner’s and Ruth’s assistance and participation, separate from the primary actor’s acts, breached Litner’s and Ruth’s fiduciary duties to the Debtor and its Estate. Litner’s and Ruth’ Ruth’ss assistance and participation was a substantial factor factor in causing the the tort(s). Therefore, Litner and Ruth are considered joint tortfeasors and are responsible for the consequences of the tort(s), including joint and several liability for the damages suffered suffered by the Debtor and its Estate as descr described ibed herein. Additionally and/or alternatively, Plaintiff seeks the return, disgorgement, and/or forfeiture of, and/or a constructive trust upon, all funds, profits, fees, and benefits that Litner and/or Ruth realized, received, or obtained as a result of their assistance and/or participation in Comcast Defendants’ torts. Count 10 – Conspiracy

152. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 153. 

Additionally and/or alternatively, Plaintiff asserts a claim against all Comcast

Defendants for conspiracy c onspiracy.. 154. 

Comcast Defendants, in combination with each other, agreed to accomplish an

unlawful purpose and/or a lawful purpose by unlawful means, as set forth in the factual allegations and causes of action detailed above, by financially crippling the Debtor in order for Comcast to obtain the Assets for itself through fraud, business disparagement, tortious 59

 

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interference with prospective business relations, and/or breach of fiduciary fiduciary duty. duty.

Comcast

Defendants had a meeting of the minds on the object or course of action, acting with the intent to harm the Debtor. Debtor.

To accomplish the object of their agreement, one or more more of Comcast Comcast

Defendants committed an unlawful, overt act, including, but not limited to, fraud, business disparagement, tortious interference with prospective business relations, and/or breach of fiduciary duty. duty. 155. 

The Debtor and its Estate suffered injuries as a proximate result of Comcast

Defendant(s)’ agreement to financially cripple the Debtor through fraud, business disparagement, tortious interference with prospective business relations, and/or breach of fiduciary duty. Therefore, all of the Comcast Defendants are considered joint tortfeasors and are responsible for the consequences of the tort(s), including joint and several liability for the damages suffered by the Debtor and its Estate as described herein. Additionally and/or alternatively, alternatively, Plaintiff seeks the return, disgorgement, and/or forfeiture of, and/or a constructive trust upon, all funds, profits, fees, and benefits that each Comcast Defendant realized, received, or obtained as a result of the conspiracy to breach Litner’s and Ruth’s fiduciary duties to the Debtor. Count 11 – Piercing the Corporate Veil

156. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 157. 

Additionally and/or alternatively, Defendant Comcast Corp. is vicariously liable

for the actions and omissions of Defendants Comcast Services, Comcast Lender, Comcast Partner, Comcast Media, Comcast California, and NBCU (collectively, the “Alter Ego Defendants”) under the theory of piercing the corporate veil.

158. 

The corporate forms of the Alter Ego Defendants should be disregarded and their

corporate veil should be pierced because (i) they were each organized and operated as mere tools 60

 

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or business conduits (alter egos) of Comcast Corp., (ii) their corporate forms were used by Comcast Corp. as a sham to perpetrate a fraud on the Debtor, (iii) their corporate forms were used by Comcast Corp. to evade a legal obligation, (iv) their corporate forms were used by Comcast Corp. to achieve or perpetrate a monopoly, (v) they were formed by Comcast Corp. to circumvent statutes, (vi) they were formed by Comcast Corp. to hide a crime or to justify a wrong, and/or (vii) they were allowed by Comcast Corp. to operate with inadequate capital for the type of business they were conducting. 159. 

On information and belief, Defendant Comcast Corp., wholly owns, either

directly or indirectly, indirectly, each of the Alter Ego Defendants. The Alter Ego Defendants were created, established, and/or operated by Comcast Corp. for the purpose of facilitating its own business interests and limiting limiting its liability in that effort. On information and belief, at all all times relevant herein, Comcast Corp. exercised complete dominion and control over the Alter Ego Defendants such that the separateness thereof had ceased and they functioned as a single economic entity. On information and belief, (i) Comcast Corp. and the Alter Ego Defendants share many of the same officers, directors, and employees, (ii) Comcast Corp. files consolidated financial statements for itself and its subsidiaries, including the Alter Ego Defendants, (iii) most of the Alter Ego Defendants share a principal place of business with Comcast Corp., and (iv) Comcast Corp. and the Alter Ego Defendants were represented by the same counsel during the Debtor’s  bankruptcy proceedings. Moreover, Defendants Comcast Lender and Comcast Partner were created approximately one month before Comcast acquired an interest in the Debtor and, on information and belief, were created solely to insulate Comcast Corp. from any liability to the Debtor.

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160. 

Comcast Corp. used the Alter Ego Defendants for the purpose of perpetrating, and

did perpetrate, an actual fraud and/or injustice upon the Debtor for Comcast Corp.’s direct  personal benefit bene fit by, among other things, causing some or all of the Alter Ego Defendants Defenda nts to file the Petition against the Debtor and make false representations regarding Comcast’s intentions to  purchase the Debtor. 161. 

Adherence to the fiction that the Alter Ego Defendants are entities wholly

independent from Comcast Corp. would promote a grave injustice to the Debtor aand nd its Estate. Count 12 – Exemplary Damages

162. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 163. 

The wrongful acts and/or omissions of Comcast Defendants described herein were

committed intentionally, knowingly, maliciously, wantonly and willfully, and in conscious disregard of the well-established rights of the Debtor and its Estate. Estate. As a result of their malice, actual fraud, and/or gross negligence, Comcast Defendants have caused significant harm to the Debtor and its Estate. Estate. Thus, Plaintiff is entitled to to recover exemplary and/or punitive damages under TEX. CIV. PRAC. & R EM EM. CODE § 41.003(a). 164. 

Plaintiff also seeks exemplary and/or punitive damages from Comcast Defendants

 based on the fraudulent, malicious, and/or grossly negligent actions and omissions of their agents, employees, and/or vice-principals that were taken on behalf of Comcast Defendants, in the course and duty of their employment of Comcast Defendants, and/or were authorized, approved, and/or ratified by Comcast Defendants. Count 13 – Attorney’s Fees

165. 

Plaintiff re-alleges and incorporates the facts and allegations set forth in the

foregoing paragraphs as if fully set forth herein. 62

 

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166. 

Plaintiff has been required to retain the undersigned counsel and has agreed to pay

them a reasonable fee for their services in prosecuting Plaintiff’s Plaintiff’s claims in this this action. Plaintiff is entitled to recover reasonable and necessary attorney fees under TEX. CIV. PRAC. & R EM EM. CODE  § 38.001(8) with respect to its claims for promissory estoppel (Count 5) and breach of contract (Count 7). Jury Demand

167. 

Plaintiff demands trial by jury of all issues so triable. Prayer for Relief

For these reasons, Plaintiff asks that the Court issue citation for Comcast Defendants to appear and answer, and that Plaintiff be awarded a judgment against Comcast Defendants for the following: a.

actual damages;

 b.

nominal damages;

c.

exemplary damages;

d.

equitable relief, including but not limited to, fee forfeiture, disgorgement, and/or constructive trust;

e.

prejudgment and post-judgment interest;

f.

court costs;

g.

attorney’s attorney’s fees; and

h.

any and all other relief, in law and in equity, both special and general, to which Plaintiff is entitled.

[SIGNATURE BLOCK ON NEXT PAGE]

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Respectfully submitted, THE LANIER LAW FIRM, P.C.

/s/ W. Mark Lanier

. 

W. Mark Lanier Texas State Bar No.: 11934600 [email protected]  [email protected]  Eugene Egdorf Texas State Bar No.: 06479570 [email protected]  [email protected]  M. Michelle Carreras Texas State Bar No.: 24040647 [email protected]  [email protected]  6810 FM 1960 West Houston, Texas 77069 Telephone: (713) 659-5200 Fax: (713) 659-2204

 Attorneys for Plaintiff Robert E. Ogle, as  Litigation Trustee of the HRSN Litigation Trust

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IN THE UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In re:

§ §

§ § § Debtor. § § ROBERT E. OGLE, AS LITIGATION § TRUSTEE OF THE HRSN LITIGATION LITIGATION § TRUST, § § Plaintiff, § § v. § § COMCAST CORPORATION, CORPORATION, INC., § COMCAST SPORTS MANAGEMENT § SERVICES, LLC, COMCAST CABLE § COMMUNICATIONS, COMMUNICA TIONS, LLC, HOUSTON § SPORTSNET FINANCE, LLC, HOUSTON § SPORTSNET HOLDINGS, LLC, § NATIONAL DIGITAL TELEVISION TELEVIS ION § CENTER, LLC (D/B/A COMCAST MEDIA § CENTER), COMCAST SPORTSNET § CALIFORNIA, LLC, NBCUNIVERSAL § MEDIA, LLC (F/K/A NBCUNIVERSAL, § INC., JON LITNER, JOHN RUTH, § ROBERT PICK, AND MADISON BOND, § § Defendants. § § 

Chapter 11

HOUSTON REGIONAL SPORTS NETWORK , L.P. NETWORK,

Case No.: 13-35998

Adv. Proceeding No. _______

Demand For Jury Trial

EXHIBIT A TO PLAINTIFF’S COMPLAINT  

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 2 of 55 EXECUTION VERSION

HOUSTON REGIONAL SPORTS NETWORK, L.P. COMCAST NETWORK SERVICES AGREEMENT

This COMCAST NETWORK SERVICES AGREEMENT (the “Agreement”), dated as of October 29, 2010, is made by and between Comcast Sports Management Services, LLC, a Delaware limited liability company (“Comcast”), and Houston Regional Sports Network, L.P., a Delaware limited partnership (“Network ”). ”). WHEREAS, Network is primarily engaged in the business (the “Business”) of creating, developing, operating, promoting, marketing and exploiting a regional sports network (“ RSN”) to be distributed principally to subscribers in the greater Houston metropolitan area and surrounding areas throughout portions of Texas and adjoining states (the “ Program Service”); and

WHEREAS, this Agreement is being entered into in conjunction with the execution and delivery of the Transaction Documents (as defined in Attachment A) as of the date of this

Agreement; and a nd support to WHEREAS, Comcast currently provides management oversight, services and various Comcast-Related RSNs (as defined in Attachment A), and each of Network and Comcast desires that Comcast provide such oversight services and support to assist Network in its operation of the Program Service and the Business, in each case subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, do hereby agree as follows: ARTICLE 1 - RULES OF CONSTRUCTION Section 1.1  

D efi ne ned d T er ms.  All initially capitalized terms used and not otherwise

defined herein shall have the meanings ascribed thereto in Attachment A. Section 1.2  

G ene nerr al R ule uless o off I nte nterr pr eta tation. tion.  Whenever the context requires, any

 pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” Except as specifically otherwise provided provided in this Agreement, a reference to an Article, Section or Attachment is a reference to an Article or Section of this Agreement or an Attachment hereto, and the terms “hereof,” “herein,” and other like terms refer to this Agreement as a whole, including the Attachments hereto. The terms “Dollars” and “$” shall mean United States Dollars. 1

(NY) 05726/377/AGTS/MSA.doc

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 3 of 55

  Section 1.3  

H eadi ngs ng s and C Cap aptions tions.  The division of this Agreement into Articles and

Sections, the insertion of headings and the use of particular words as defined terms are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. ARTICLE 2 - SERVICES Section 2.1  

 Scop  Sco pe of Se Serr vice ices; s; Sta Start-Up Service Services; s; Com Comca cast st A utho uthori ri ty . 

(a)  In accordance with the terms of this Agreement, Comcast shall provide, or shall cause one or more Comcast Affiliates or its or their subcontractors to provide, provide , to  Network management oversight, and those operational services that are set forth on Attachment B attached hereto ( the “Operational Services” and, together with the management oversight services, the “Services”). In connection with with Comcast’s provision of the Services, Comcast intends to provide, or o r cause to be provided, to Network programming content, where available, consistent with the current c urrent practices of Comcast and the Comca ComcaststRelated RSNs, and to formalize such practices by entering into separate program and content sharing and license agreements with each of Network and such Comcast-Related RSNs, respectively, similar to the form of agreement attached hereto as Exhibit 1 (it being understood that certain (i) withdecisions respect toarising certainthereunder of such Comcast-Related R SNs, RSNs, theComcast-Related form of such agreement, and (including whether such RSN elects to participate in the content sharing “pool” contemplated in such agreement), may  be subject to the comment and/or approval (as applicable) of certain persons or entities which are not Affiliates of Comcast but which hold an a n ownership interest in such Comcast-Related RSN, (ii) the failure to obtain any such approval shall not constitute a breach of this Agreement and (iii) upon the form of such agreement being approved by aall ll necessary parties,  Network and Comcast intend to enter into such agreement). (b)  Commencing at least twelve (12) months prior to the anticipated commercial launch date of the Program Service (with such launch date to be determined in accordance with the Transaction Documents and referred to herein as the “ Launch Date”, and the date on which Comcast commences providing such services, the “Start-Up Date”), Comcast shall provide such Services if and to the extent reasonably necessary in connection with preparations for such Launch Date, including those technical operations, financial, legal and other back-office functions that are reasonably necessary prior to, and in preparation for, the Launch Date (the “Start-Up Services”). For the avoidance of doubt, Comcast shall not be obligated to perform any of the Start-Up Services or other Services hereunder prior to the Start-Up Date. (c)   Network agrees that, in connection with providing the Services for  Network, Comcast may need to enter into contracts on behalf of and binding upon Network (which contracts may also bind other Comcast-Related RSNs) or incur certain expenses chargeable to Network without the need to obtain Network’s prior approval in each instance  because such Service-related contracts are essential for the basic operational infrastructure or  basic operational needs of the Business and therefore are non-discretionary in nature (collectively, “Non-Discretionary Transactions”). Subject to Section 4.1 hereof, provided that (i) such Non-Discretionary Transactions are entered into by Comcast in good faith and

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  are consistent with similar transactions entered into on behalf of or chargeable chargea ble to other Comcast-Related RSNs in similar circumstances and (ii) such Non-Discretionary Transactions are entered into consistent with Section 2.4(d) below (if applicable), Comcast shall be free to enter into such Non-Discretionary Transactions and bind the Network without the need to obtain the prior approval of Network. By way of illustration, but not limitation, NonDiscretionary Transactions include purchases of products or services necessary for Comcast to  provide the Services described in Sections 2, 3, 4, 5, 6, 7 and 12 of Attachment B (e.g. payroll  processing services, IT services, benefits plans, audit services, services, treasury services, insurance, and, where appropriate in accordance with Section 12 of Attachment B, engagement of outside counsel). Comcast agrees to use reasonable reasonable efforts to provide notice of and consider in good faith any Network requests reque sts or preferences with respect to Non-Discretionary Transactions. Except as set forth above in this Section 2.1(c), Comcast acknowledges and agrees that any and all other undertakings and actions by Comcast on behalf of Network in connection with providing the Services (i.e. all Service-related transactions other than NonDiscretionary Transactions) shall shall be subject to approval by N Network. etwork. For the avoidance of doubt, Network acknowledges and agrees that, where any approval right exists for Network, such approval right shall be exercised by Network in accordance with the LLC Agreement and, except to the extent Comcast seeks to bind Network to an agreement with a Comcast Affiliate, the mere fact that Comcast is binding the Network in a transaction in which other Comcast-Related RSNs are interested parties shall not in and of itself render the Comcast Member (as defined in the LLC Agreement) Agree ment) an interested or conflicted party under Se Section ction 5.8 of the LLC Agreement with respect to its appointed director’s right to vote on Network’s granting of any such approval.  Section 2.2  

E mploy ployee ee M at atte terr s. 

(a) Network   shall make its General Manager (or person in comparable  position) and other employees available to Comcast, as reasonably necessary in connection with Comcast’s performance of the Services, and shall direct such persons to cooperate with Comcast  by undertaking tasks and performing such functions (within the scope of applicable employee  job descriptions) in connection with the performance of the Services as Comcast may reasonably request; provided, however, the parties agree that such persons shall be made available and shall cooperate in the undertaking of tasks and the performance of functions in a manner so as not to materially interfere with Network’s operations. (b)  Comcast shall, in its sole discretion, rely upon its own employees, consultants and subcontractors (and/or those of any Comcast Affiliate) in providing the Services, and shall have the right to recruit, hire, train and terminate personnel on its own behalf and at its own expense (or at the expense of the applicable Comcast Affiliate), in each case to perform any Service pursuant to this Agreement to the extent Comcast deems the same to be necessary or advisable in providing the Services. Comcast shall ensure that all employees, agents and subcontractors comply in all material respects with the provisions of this Agreement to the extent applicable to such employees, agents and contractors. (c)   Network shall have the sole and exclusive right to recruit, hire, assign, train and terminate its personnel (i.e. those employed by Network) on its own behalf. Such Persons shall be deemed to be employees of Network for all purposes under this Agreement.

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  (d)  Comcast shall provide the Services solely as an independent contractor of  Network. No employee, nor any independent contractor, of either Comcast or any Comcast Affiliate, on the one hand, or of either Network or any Network Party, on the other hand, as a result of providing or cooperating or assisting in providing any Services hereunder, shall be considered an employee of the other for any purpose. Notwithstanding the foregoing, it is understood that as part of the Services, Comcast may make certain staffing (including hiring) recommendations to the Network Board, Network’s General Manager and other applicable  Network staff. (e)  Notwithstanding anything to the contrary contained herein, Comcast agrees to meaningfully consult with Network and to consider, in good faith, Network con concerns cerns in  providing the Services hereunder and to take such actions in response to such concerns as it deems advisable. Section 2.3  

T ang ngii ble Assets Assets U Use sed d iin nC Co onnect nnectii on wi with th the Servi Service cess. Except as

otherwise agreed to in writing by Comcast and Network: (a)  To the extent Comcast, in connection with performing the Services, and/or  Network, in connection with the Services, in each case in accordance with this Agreement, uses any of Comcast’s, or any ComcastAssets Affiliate’s, equipment, facilities or other tangible  personal property (the “Comcast ”), titleassets, to such Comcast Assets shall remain with Comcast or any Comcast Affiliate (as applicable) at all times and Network shall have no right, title or interest therein. Network acknowledges that nothing in this Agreement shall grant  Network any right, title or interest in any Comcast Asset, except as otherwise expressly expressly set forth in a Transaction Document or any other agreement between the parties. (b)  To the extent Comcast uses any of Network’s assets, equipment, facilities or other tangible personal property (the “ Network Assets”) in connection with performing the Services in accordance with this Agreement, title to such Network Assets shall remain with  Network at all times and Comcast shall have no right, title or interest therein. Comcast acknowledges that nothing in this Agreement shall grant Comcast any right, title or interest in any Network Asset. Section 2.4  

Quality Quali ty of Se S er vice vi cess P Prr ovid vi ded .

(a)  Any packaging or bundling of Network with any other network or other services owned or operated by Comcast (or a Comcast Affiliate) as a part of Comcast’s affiliation sales strategy for Network shall be subject to the Network’s and Comcast’s mutual agreement. (b)  Comcast shall devote such time, personnel and resources as are reasonably necessary to, and shall, ensure the proper, timely and efficient provision of such Services to  Network in a manner that is, under the circumstances, at a minimum, consistent in all material respects with (i) operational needs of the Program Service, (ii) the specifications and descriptions of such Services set forth on Attachment B, (iii) the same highest level and quality service uses when similarleague services to and/or any other ComcastRelatedof RSN, andthat (iv)Comcast Applicable Law andproviding any applicable rules regulations.

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  (c)  In providing the Services, in general, gen eral, Comcast shall allocate its time,  personnel and resources equitably and fairly as between the Network and all other ComcastRelated RSNs based on the totality of the circumstances and shall not base such allocation of time, personnel and resources on the amount or nature of any Comcast Party’s ownership interest in such Comcast-Related RSN.

 

(d) With respect to purchases of products or services made by Comcast from non-Affiliate third-parties onbulk behalf of the Comcast-Related RSNs negotiated primarily on the total volume of all participating Comcast-Related RSNs, Comcast agrees that it shall not discriminate against Network in negotiating the pricing, benefits and other terms available to Network under such agreements. With respect to all other purchases of products or services from non-Affiliate third-parties negotiated by Comcast on Network’s behalf, Comcast shall use commercially reasonable efforts to obtain for Network the best pricing, benefits and other terms available to Network under the circumstances. Notwithstanding anything stated in thi thiss Agreement to the contrary, however, with respect to all purchases, Network acknowledges that the availability of such pricing and other terms may be based on third party-imposed factors or conditions (e.g. the timing of the transaction, a prerequisite that a participating network be a controlled affiliate of Comcast, have ha ve a certain volume of subscribers, distribute a certain amount of games, be distributed in a certain geographic area, or have a particular  programming composition and other factors or considerations), which may result in certain  products or services not being available to Network or being available to Network at higher  pricing, or different terms than those available to other Comcast-Related Comcast-Related RSNs.  (e)  Network shall be responsible for payment of any and all fees and expenses  payable pursuant to any third party contracts entered in accordance with this Agreement to which it is a party. Comcast or a Comcast Affiliate Affiliate may, with the prior prior approval of the  Network, enter into agreements that bind the Network, which agreements may or may not include other Comcast-Related RSNs or other Comcast entities. Network shall either pay third parties directly for any amounts payable under third party contracts or reimburse Comcast as an Out-of-Pocket Cost any amounts allocated to (so long as such allocation methodology was approved in connection with Network’s approval of the agreement) or  payable by Network under such contracts that are paid by any Comcast Affiliate. Section 2.5  

I nf nfo or mat atii on P Prr ovide vi ded db byy N Ne etw two or k.   Network acknowledges and agrees that

in providing the Services (including preparation of financial information and reports as set forth in Attachment B) pursuant to this Agreement, Comcast will rely upon, up on, and assume the accuracy accu racy and completeness of, any financial and other information provided by Network to Comcast for such purposes, and Comcast shall not assume responsibility for the accuracy and completeness of information to the extent that it is generated or provided in reliance on inaccurate information  provided for such purpose by Network to Comcast (and not originally provided to Network by Comcast), which information information Comcast does not actually know is inaccurate. Comcast acknowledges and agrees that all information relating to Network that is obtained by Comcast in connection with the provision by Comcast of the Services, including any information, ana analyses, lyses, summaries, notes, data and other documents do cuments and materials prepared by Comcast containing or or reflecting or generated from such information (including preparation of financial information and reports as set forth in Attachment B) (but excluding, for the avoidance of doubt, any such information, analyses, summaries, notes, data and other documents doc uments and materials (or any portion

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  thereof) to the extent not based on o n information (x) obtained by Comcast in co connection nnection with the  provision by Comcast of the Services or (y) otherwise provided to Comcast by the Network), is the property of Network, and Comcast shall promptly provide all such information to Network at the request of Network and such information shall be treated as Confidential Materials of  Network in accordance with Section 6.8 hereof. Section 2.6  

respect toshall any have Service portion to be  Subco ntrac ract tor s. WithComcast  provided by Comcast  Sub undercont this Agreement, the or right, in itsthereof sole discretion, to subcontract any of its obligations under this Agreement to any other Person;  provided , however , that (i) any such subcontract shall not relieve Comcast of its obligations and duties under this Agreement and (ii) Comcast shall subcontract only in a manner and to the degree consistent with the manner and degree it subcontracts for similar services provided to other Comcast-Related RSNs. Except as otherwise provided in Attachment Attachment B or as otherwise may be agreed by  Network, the costs and expenses of any subcontractor engaged by Comcast pursuant to such subcontract in the ordinary course for the purpose of fulfilling the Services (by way of ex example ample and not limitation, because in-house personnel are for any reason unavailable to perform such services at a given point in time) shall not be deemed to be Out-of-Pocket Costs subject to Section 3.2.; provided, however, that the use of a subcontractor shall not in any way affect the treatment of Out-of-Pocket Costs that would have otherwise been bee n payable or reimbursable by Network hereunder had the Service been provided directly by Comcast. As between Comcast and  Network, Comcast shall be responsible for any breach of this Agreement by any subcontractor that is performing Services that are otherwise required to be performed directly by Comcast  pursuant to Attachment B. Section 2.7  

N o L i mi ta tation tion o on n Oblig Obligat atii ons o orr A utho uthorr i ty of N etwork  twork . Nothing

contained in this Agreement shall either (a) relieve the managers, officers or employees of  Network from the performance of their duties or (b) limit limit the exercise of their powers or authority as required by Applicable Law or otherwise. Section 2.8  

L eg al C Co onfli nflict ct Waive Waiverr .  Network hereby acknowledges that Comcast

attorneys performing legal services as contemplated by Attachment B hereunder are employees or sub-contractors of Comcast or certain of its Affiliates (for itself and on behalf of its non-Comcast owners), and such Comcast attorneys shall timely disclose to Network any conflicts of interest that may arise as to any material issue that may exist in connection with or arise out of such representation. After such notice, Network shall either (i) waive such conflict or (ii) (ii) require that Comcast attorneys not represent Network in the applicable matter and engage independent counsel (unless Comcast otherwise agrees in writing to non-independent counsel) to represent its interests in such matter at Network’s sole cost and expense, with such counsel to be selected by  Network in accordance with the other Transaction Documents. In addition, Network shall be entitled to raise any potential conflict of interest by notifying Comcast of such a perceived conflict, and after such notice require that Comcast attorneys not represent Network in the applicable matter and engage its own counsel to represent its interests in such matter at Network’s sole cost and expense. In such case (as to an unwaived Comcast Comcast-disclosed -disclosed conflict or an unwaived Network-raised conflict), Comcast shall be relieved from any obligation to provide legal services for such matter with no reduction in any fees or expenses (to the extent such expenses were incurred prior to Network’s election to engage alternate counsel) payable to Comcast hereunder.

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  Section 2.9  

R i g hts Re R ese serr ved ved tto o Net Netwo worr k . Except as may be otherwise agreed to in

writing by the parties (i) Network reserves all rights in the production, origination and marketing of the Program Service, and Comcast receives no license or other rights to the Program Service; and (ii) Network shall have the right to retain any and all reven revenues ues derived from exhibition of the Program Service, including, without limitation, all advertising revenues and subscription fees. ARTICLE 3 - SERVICE FEE AND PAYMENTS Section 3.1  

C onsi nsid der ation ffo or S er vice vi ces; s; P aym yme ents. In consideration for Comcast’s

 performance of the Services (including Start-Up Services), in accordance with the terms of this Agreement during the Term, and commencing on the Start-Up Date, Network shall pay to Comcast an annual fee in an amount initially equal to Five Million Dollars ($5,000,000) per annum (which fee shall be payable in respect of each successive twelve-month period during the Term, with the first twelve-month period commencing on the Start-Up Date), which amount (the “Service Fee”) shall increase three and one-half percent (3.5%) on each anniversary of the StartUp Date; provided, that Network’s obligation to pay the Service Fee may be reduced as set forth in Section 3.5 below. The Service Fee shall be paid quarterly, on the basis of three-month periods in each such twelve-month period, in four (4) equal installments, and each installment shall be due and payable within fifteen (15) days following the last Business Day of each such threemonth period in which any Services are provided. Each installment of the Service Fee shall shall be  prorated, calculated based upon a thirty (30) day calendar month, for any partial three-month  period for which the Services are provided. For the avoidance of doubt, in the event that this Agreement is terminated prior to the anniversary of the Start-Up Date, the Service Fee shall be  pro-rated for such period less than twelve (12) months. Section 3.2  

 A  Ad ddi tion iona al Cos Costts; Pa Payyments. nts.  In addition to the Service Fee, Network shall

 promptly pay to Comcast any and all reasonable Out-of-Pocket Costs; provided, however, that Comcast shall, to the extent practical under the circumstances, consult with Network before it incurs any significant and/or non-ordinary course Out-of-Pocket Costs on Network’s behalf. Otherwise, Comcast shall be responsible for all of its own costs co sts in connection with its  performance of the Services and Comcast shall not be responsible for any of Network’s costs, except as specifically set forth forth in Attachment B. Thus, by way of example, Comcast would bear the costs related to management oversight in assisting Network with its selection of equipment for inclusion in Network’s studio, and any travel-related costs incurred by Comcast associated with Comcast’s negotiating and documentation of a third party contract (to be executed by Network subject to any applicable Network approvals) by which Network would purchase such equipment, and Network would be responsible for the costs of purchasing such equipment from the third  party on the terms set forth in such contract, for any travel-related costs incurred by Network in connection with meetings with such third parties and selection of such equipment for Network, and for costs associated with integrating such equipment int into o Network’s facilities. To the extent any costs are incurred by Comcast in any calendar month that will be reimbursed by Network, Comcast shall deliver to Network an invoice (with reasonable supporting backup documentation) of such costs within thirty (30) days after the end of such calendar month, and Network shall pay Comcast such costs within thirty (30) days after the date of delivery of such invoice.

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  Section 3.3  

 Metho  Met hod d of Pa Payyment . All payments ttoo Comcast hereunder shall shall be made by

wire transfer of immediately available funds to an account owned by Comcast in accordance with wire transfer instructions provided in writing to Network by Comcast. Section 3.4  

L ate P aym ayments ents. If Network does not make a payment on or before tthe he

date such payment is due under this Agreement, such payment shall ac accrue crue interest at the lower of eight percent annumisorpaid the to highest ratein permitted by Applicable monthly, until(8%) suchper payment Comcast full; provided, however,Law, that compounded Comcast shall be required to give the Network a minimum of five (5) business days notice, with a cop copy y to each  Network Board member, prior to any accrual of interest (for purposes of clarification clarification such notice may be given to the Network beginning five (5) business days prior to the payment due date). Section 3.5  

R educt ductii on of P aym ayments. Notwithstanding anything to the contrary

contained here, (a) if Network is not able ab le to exploit substantially all of the rights granted to it under the Media Rights Agreements on or by October 1, 2012 as a result of any action, suit, claim or proceeding made by ARC Holding, Ltd., a Texas limited partnership (“Fox”), or any Affiliate of Fox, Network shall only be obligated to pay fifty percent (50%) of the Service Fee (as adjusted  pursuant to Section 3.1 but without giving effect to any adjustment pursuant to Section 5.3, but remaining subject to Section 5.3) until the earlier of (i) such time as Network is able to exploit substantially all of such rights and (ii) the exercise of the Put/Call Right (as defined in the Transaction Agreement) in accordance with Section 6.01 of the Transaction Agreement and (b) in the event that either of the Media Rights Agreements ceases to be in effect, the Service Fee shall  be reduced to an amount equal to eighty percent (80%) of the otherwise applicable Service Fee (as adjusted pursuant to Section 3.1 but without giving any effect to any adjustment pursuant to Section 5.3, but remaining subject to Section 5.3). Section 3.6  

C omcast cast Certi Certififi ca cation tion.  Comcast shall cause a Comcast officer, after

conducting reasonable investigation, to certify to Network on each anniversary of this Agreement Comcast’s compliance with its obligations under Section 2.4(c) hereof; provided, however, that failure to provide such certification shall not be deemed a breach of this Agreement unless such failure remains uncured for thirty (30) days following written notice to Comcast by Network.   ARTICLE 4 - TERM AND TERMINATION

 Sect  Se ction ion 4.1

Te Terr m; Susp Suspe ens nsii on.

(a) The term of this Agreement and the rights and obligations set forth herein shall commence on the Effective Date and shall terminate as set forth in Section 4.2 below (the “Term”). In the event this Agreement is terminated, such term termination ination shall be effective as sset et forth in Section 4.2. (b) Upon delivery of an Exercise Notice pursuant pursuant to Section 6.01 of the Tr Transaction ansaction Agreement, Comcast’s rights under Section 2.1(c) shall be suspended suspende d until the earlier to occur of (i) the Unwind Termination Date (as defined below) or (ii) the date on which Astros Member or Rockets Member delivers notice to Comcast Member that it or any of its Affiliates disputes the right of Comcast Parent to to deliver such Exercise Notice. The “Unwind Termination Date” shall mean the earlier to occur of (x) provided that Comcast’s rights under Section 2.1(c) remain

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  suspended pursuant to this Section 4.1(b), the fifth Business Day after delivery of an Exercise  Notice pursuant to Section 6.01 of the Transaction Agreement and (y) the date on or following delivery of such an Exercise Notice on which Rockets Member and Astros Member deliver to Comcast Member an irrevocable written notice indicating that none of Rockets Member, Astros Member or any of their Affiliates (other than Network and the General Partner or any Subsidiaries thereof) disputes the exercise of the Put/Call Right (as defined in the Transaction Agreement) contemplated by Section 6.01 of the Transaction Agreement.

 Sect  Se ction ion 4.2

Te Terr mina inatti on.  Prior to the expiration of the Term, this Agreement shall be

terminated as follows: (a) automatically upon dissolution of Network in accordance with the terms of the Partnership Agreement, with such termination to be effective upon the effective date of such dissolution; (b) automatically, if Comcast (i) (i) applies for or consents to the appointment of a custodian of any kind, whether in bankruptcy, common law or equity proceedings, with respect to all or any substantial portion of its assets; (ii) becomes insolvent or is unable, or admits in writing its inability, to pay its debts generally as they become due; (iii) makes a general gene ral assignment for the Code, benefitorofifits creditors; (iv)isfiles petition relief under the United States Bankruptcy such a petition fileda by any ofseeking its creditors, such petition is approved by a court of competent jurisdiction and such approval is not vacated within sixty (60) days; (v) shall have had an order of relief entered under the United States Bankruptcy Code with respect to its debts by a court cou rt of competent jurisdiction, whether such order of relief was  proposed by a creditor or any other person whomsoever; or (vi) dissolves and liquidates or otherwise ceases to do business; (c) at the election of Comcast, by written notice executed by Comcast (the (the “Comcast Termination Notice”) and delivered to Network, if Network (i) applies app lies for or consents to the appointment of a custodian of any kind, whether in bankruptcy, common law or equity proceedings, with respect to all or any substantial portion of its assets; (ii) becomes insolvent or is unable, or admits in writing its inability, to pay its debts generally as they become due; (iii) makes a general assignment for the benefit of its creditors; (iv) files a petition seeking relief under the United States Bankruptcy Code, Code , or if such a petition is filed by any of its creditors, such petition is approved by a court of competent jurisdiction and such approval is not vacated within sixty (60) days; (v) shall have ha ve had an order of relief eentered ntered under the United States Bankruptcy Code with respect to its debts by a court of competent jurisdiction, whether such order of relief was proposed by a creditor or any other pe person rson whomsoever; or (vi) dissolves and liquidates or otherwise ceases to do business;   (d) at the election of Network, by  by written notice executed by Network (the “Network Termination Notice”) and delivered to Comcast, in the event that Comcast is in material breach of any of its obligations or o r covenants in this Agreement, such termination to be effective upon delivery of such written notice (if such breach is of a nature that cannot be cured) or thirty (30) days following the delivery of such notice (for a curable breach that has not been cured within such thirty (30)-day period);

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  (e) at the election of Network, by Network Ter Termination mination Notice delivered within ten (10) business days after delivery of the notice pursuant to Section 4.3 of a Comcast Strategic Transaction, unless (i) Comcast Parent (or NBCU) remains in Control (as defined in the LLC Agreement) of the Comcast Member (as defined in the LLC Agreement) and the Comcast Partner (as defined in the Partnership Agreement) immediately after such Comcast Strategic Transaction or (ii) (A) the acquiror in such Comcast Strategic Transaction (x) has or, after giving effect to such Comcast Strategic Transaction, will have a substantial business operating,  promoting, marketing and exploiting regional sports networks or a national sports network or (y) is acquiring all or substantially all of Comcast Parent’s and its Affiliates’ regional sports network  business and all or substantially all of the group within Comcast Parent that manages Comcast Parent’s and its Affiliates’ regional sports network business and (B) this Agreement is assigned to such acquiror in accordance with Section 6.5(c) at the time of the closing of the Comcast Strategic Transaction, such termination to be effective upon the later of the delivery of the  Network Termination Notice and the closing of such transaction;  (f) at the election of Network, by Network Termination Notice delivered within ten (10) business days after delivery of the notice pursuant to Section 4.3 of o f a sale transaction (other than a Comcast Strategic Transaction) pursuant to which Comcast Parent (or from and after the closing under the Master Agreement, NBCU) and its Affiliates cease to own as a result of such transaction (i) all or substantially all of the group that manages the regional sports network business managed by Comcast Parent (or NBCU) and its Affiliates on the date hereof or (ii) when aggregated with all sale transactions after the date hereof, a majority of the regional sports networks managed by Comcast Parent (or NBCU) and its Affiliates on the date hereof, such termination to be effective upon the later of the delivery of the Network Termination Notice and the closing of such transaction; (g) at the election of Network, by Network Termination Notice delivered within ten (10) business days after delivery of the notice pursuant to Section 4.3 of o f a sale transaction resulting from a Comcast Regulatory Condition (as defined in the Partnership Agreement), unless (A) the acquiror in such transaction (i) has or, after giving effect to such transaction, will have a substantial business operating, promoting, marketing and exploiting regional sports networks or a national sports network or (ii) is acquiring all or substantially all of Comcast Parent’s and its Affiliates’ regional sports network business and all or substantially all of the group within Comcast Parent that manages Comcast Parent’s and its Affiliates’ regional sports network business and (B) this Agreement is assigned to such acquiror in accordance with Section 6.5(c) at the time of the closing of such transaction, such termination to be effective upon the later of the delivery of the Network Termination Notice and the closing of such transaction;  (h) at the election of Comcast, by Comcast Termination Notice delivered to  Network at any time after Comcast ceases to provide services of the type set forth in Attachment B to other Comcast-Related RSNs; provided that Comcast shall deliver such Comcast Termination Notice at least one hundred eighty (180) days in advance of the effective date of such termination, or such shorter period of time as may be required in the eevent vent Comcast is no longer able to provide such services under Applicable Law; (i) at the election of Comcast, by Comcast Termination Notice delivered to  Network within ten (10) business days after delivery of the notice pursuant to Section 4.3 of a

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  transaction which would result in neither Comcast nor any Comcast Affiliate owning a direct equity interest in Network, such termination to be effective upon the closing of such transaction; (j) at the election of Comcast, by  by Comcast Termination Notice delivered to  Network, in the event that Network is in material breach of any of its obligations or covenants in this Agreement, such termination to be effective upon upo n delivery of such written notice (if such  breach is ofaacurable nature breach that cannot be cured) or thirty days following the delivery of such notice (for that has not been cured (30) within such 30 day period); (k) in the case of a Force Majeure Event, in accordance with Section 5.3; (l) automatically upon the the Unwind Termination Termination Date; (m) at the election of Network, by Network Termination Notice delivered to Comcast, in the event that Comcast Parent (or NBCU) ceases directly or indirectly to own all of the LP Interests (as defined in the LLC Agreement) and Shares (as defined in the LLC Agreement) owned by it immediately following the closing of the Transaction Agreement, except pursuant to a Comcast Strategic Transaction or a transaction resulting from a Comcast Regulatory Condition; and (n) automatically in the event that both of the Media Rights Agreements cease to be in effect.

 Sect  Se ction ion 4.3 

fifteen teen (15) business days after Notice of Certain Transactions. Within fif Comcast Parent or any of its Affiliates enters into a definitive agreement providing for a transaction of the type referred to in Section Sec tion 4.2(e), 4.2(f), 4.2(g), 4.2(i) or 4.2(m) that would give rise to a termination right, Comcast shall provide written notice to Network of the execution of such agreement.

 Sect  Se ction ion 4.4

Tr Tra ans nsii tion. Upon the termination of this Agreement Agreement pursuant to Section

4.2, (a) Comcast shall deliver to Network all books, records and other materials maintained on  behalf of Network; provided , however , that Comcast shall have a right to maintain a copy thereof for archival purposes; and (b) the Parties shall cooperate in good faith to ensure the smooth and orderly transition of the Services from Comcast to Network or such other third party(ies) that  Network designates to provide such Services following such expiration or termination, subject to  Network’s compliance with the provisions of this Agreement, including payment of Service Fees, through the date of termination in accordance with Section 4.2, and Out-of-Pocket Costs.

 Sect  Se ction ion 4.5

Surviva Survival. l.  The termination or expiration of this Agreement shall not affect

any of the provisions of this Agreement which are expressly or by implication to come into o orr continue in force after such termination or expiration, ex piration, including Articles 3 (for all periods prior to such termination or expiration as well as with respect to any Out-of-Pocket Costs incurred following the Term in accordance with Section 4.4), 5, 6 and this Article 4 (and any Section or  provision hereof required to implement or establish the meaning of the provisions of such Articles).

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  ARTICLE 5 - INDEMNIFICATION; FORCE MAJEURE Section 5.1  

I nd nde emni nififi cation. cation. 

(a)  Subject to Section 5.1(c) hereof, Network shall, at its expense, defend, indemnify and hold harmless each Comcast Party from and against any and all damages, liabilities, losses, judgments and costs and Comcast expenses Party (including reasonable fees) (collectively “Damages ”) incurred by any Pa rty (i) arising out of attorneys any material breach of this Agreement by Network or (ii) in connection with the defense or settlement of all claims, suits, judgments, proceedings or causes of action brought by any other third party (collectively “Claims”) in which a Comcast Party may be involved or threatened to be involved, as a party or otherwise, solely arising out of a Comcast Party’s performance of its obligations under un der this Agreement, regardless of whether this Agreement continues to be in effect or the Comcast Party continues to be a Comcast Party at the time any such Claims are made or Damages incurred;  provided , however , that such Claims or Damages did not arise out of the gross negligence, fraud or willful misconduct, as determined by a final, non-appealable court order, of an any y Comcast Party or any subcontractor of any Comcast Party or a material breach of this Agreement by any Comcast Party. (b)  Subject to Section 5.1(c) hereof, Comcast shall, at its expense, defend, indemnify and hold harmless each Network Party from and against any and all Damages incurred  by any Network Party (i) arising out of any material breach of this Agreement by any Comcast Party or (ii) in connection with the defense d efense or settlement of all Claims in which a Network Party may be involved or threatened to be involved, as a party or otherwise, arising out of the gross negligence, fraud or willful misconduct, as determined by a final, non-appealable court cou rt order, of any Comcast Party or any subcontractor of any Comcast Party in connection with the  performance of such Comcast Party’s or subcontractor’s obligations under this Agreement, Agreement, regardless of whether this Agreement continues to be in effect or the Network Party continues to  be a Network Party at the time any such Claims are made or Damages incurred; provided , however , that such Claims or Damages did not arise out of the gross negligence, fraud or willful misconduct, as determined by a final, non-appealable court order, of any Network Party or any subcontractor of any Network Party or a material breach of this Agreement by an any y Network Party. (c)  The Parties hereto acknowledge and agree that (i) Comcast’s indemnification rights under Section 5.1(a) shall not be limited as a result of, and its indemnification obligations under Section 5.1(b) shall not include, any Damages to the extent they result from the inaccuracy or omission of any financial or other information provided by such Network personnel having apparent authority to provide such information, provided that Comcast had no reasonable basis to believe such financial or other information was wa s inaccurate or incomplete, and (ii) the indemnification rights of the Comcast Parties and the Network Parties set forth in this Section 5.1 are not an exclusive remedy for a breach of this Agreement by any Party. (d)  Notwithstanding  Notwithstanding any provision of this Agreement to the contrary, Comcast shall not be liable to any of the Network Parties, and Network shall not be liable to any of the Comcast Parties (in each case whether under un der the indemnification provisions of this Section 5.1 or otherwise), for any consequential, reliance or special spec ial Damages suffered by the Network Parties

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  or the Comcast Parties, as the case may be (including Damages for harm to business, lost revenues, lost savings, or lost profits suffered by the Network Parties or the Comcast Parties, as the case may be), whether in contract, warranty, strict liability, tort or otherwise, including negligence of any kind, kind , whether active or passive, and regardless of whether the possibility that such Damages could result was known, except to the extent that any such Damages are the result of intentional misrepresentations, fraud or willful misconduct of, as applicable, Network or its Affiliates, on the one hand, or Comcast or its Affiliates, on the other hand; provided, however, that the terms of this Section 5.1(d) shall not apply in the event o off such consequential, reliance or special Damages actually suffered by the Network Parties or the Comcast Parties as a result of third party Claims. Section 5.2  

I nde ndem mni nififi ca cation tion P r oce ced dur ure e. Each Comcast Party and each Network Party

(an “Indemnified Party,” as applicable) will promptly notify the Indemnifying Party in writing of any claims subject to this indemnity and the Indemnifying Party, upon the Indemnified Party’s request, will assume the defense of any third-party claim for which indemnification is sought, including the employment of counsel. So long as the Indemnifying Part Party y is actively conducting the defense of such third-party claim, the Indemnified Party will have the right to retain its own counsel, but the fees and expenses of such counsel will be at the expense of the Indemnified Party unless (i) the Indemnifying Party has agreed to the retention of such counsel or (ii) the named  parties to any such proceeding include both Comcast and Network and, based upon the advice of of counsel to either Comcast or Network, representation of both parties by the same counsel would  be inappropriate due to actual or potential differing interests between them that would interfere with such defense. So long as the Indemnifying Party is conducting the defense of any Claim  pursuant to this Section 5.2, (x) the Indemnifying Party will not be liable for any settlement settlement of any Claim effected without its written consent (such consent not to be unreasonably withheld) and (y) the Indemnified Party must cooperate in the defense of such Claim at the expense of the Indemnifying Party (such expenses not to include fees and expenses of counsel for the Indemnified Party unless clause clause (i) or (ii) above is applicable). The Indemnifying Party shall not settle any Claims without the written consent of the Indemnified Party (with such consent not to  be unreasonably withheld) unless such settlement is solely for monetary monetary payment, does not include any admission of liability by or on behalf of the Indemnified Party, and contains an explicit and unconditional release of the Indemnified Party.  Section 5.3  

F or ce M ajeu jeurr e. Neither of the Parties hereto will will be liable for

nonperformance or defective or late performance p erformance of any of its obligations hereunder (excep (exceptt with respect to the payment of money), or o r be in breach of aany ny term or condition of this Agreement for such nonperformance or defective or late performance, to the extent and for such periods of time as such nonperformance, defective or late performance is due to reasons outside such Party’s control, including acts of God, war (declared or undeclared), acts (including failure to act) of any a ny governmental authority, riots, revolutions, acts of terrorism, fire, floods, explosions, sabotage, nuclear incidents, lightning, weather, earthquakes, storms, sinkholes, epidemics, labor disputes (including strikes, lockouts or other work stoppage), restrictions imposed by law or government g overnment order, mechanical or computer breakdown (to the extent not within a Party’s reasonable control), or delays of suppliers or subcontractors for the same causes (each a “ Force Majeure Event”);   provided , however , that the Party affected by a Force Majeure Event sha shall ll promptly notify the other Party of the condition constituting such Force Majeure Event and shall exert reasonable efforts to overcome any of the causes c auses thereof and to resume performance of its obligations

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   promptly. If a condition constituting a Force Majeure Event exists for more than ninety (90) consecutive days, the Parties shall negotiate in good faith a mutually satisfactory solution to the  problem, if practicable, which, for the avoidance of doubt, may include, without limitation, an equitable adjustment of the Service Fee; provided , however , that if a Force Majeure Event  prevents Comcast from performing a material portion of the Services in accordance with this Agreement and the Parties cannot agree upon a solution within ninety (90) days of such meeting, then (a) Network may give notice no tice of its intent to terminate this Agreement and (b) this Agreement shall terminate five (5) days following receipt by Comcast of such notice. For the avoidance of doubt, upon the termination of this Agreement pursuant to the foregoing sentence, Comcast shall not be required to forfeit any installment of any Service Fee (or portion thereof) that has been paid to Comcast pursuant to Section 3.1. Notwithstanding the foregoing provisions of this Section 5.3, neither of the Parties hereto shall be required to settle any labor dispute in any manner.   ARTICLE 6 - MISCELLANEOUS Section 6.1  

 A  Am mend ndm ments nts and Wa Waii ver s. 

(a)  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, or in the case of a waiver, waive r, by the Party against whom the waiver is to be effective. (b) No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor n or shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or pri privilege. vilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies  provided by law.  Section 6.2  

G overni rning ng L aw; J uri urisd sdii ct ction ion;; Wa Waii ver of J ury Tr Trii al. 

(a) This Agreement shall be governed, construed construed and interpreted in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws. (b) The Parties hereto agree that any suit, suit, action or proceeding seeking to enforce any  provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought exclusively in any federal court located in the State of Delaware or any Delaware state court, and each of the Parties hereby irrevocably consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent  permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding  brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. (c) Each of the Parties hereto voluntarily and irrevocably waives trial by jury in any suit, action or other proceeding arising out of or in connection with this Agreement.

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Section 6.3  

Notices.   All notices, requests, requests, demands and other other communications

required or permitted to be given or delivered under or by reason of the provisions of this Agreement shall be in writing (which shall include notice by telecopy or like transmission), shall  be deemed given upon actual receipt (or refusal of such receipt) and may be sent by personal delivery, facsimile transmission, overnight Federal Express, or similar bonded, overnight courier service or certified first-class mail, return receipt requested, to the parties at the following addresses and facsimile numbers (or such other addresses and facsimile numbers as a Party may have specified by notice given to the other parties hereto pursuant to this provision): If to Network to:

Houston Regional Sports Network, L.P. 1510 Polk Street Houston, TX 77002 Telecopier: (713) 758-7404 Attention: Rafael Stone With copies to:

Rocket Ball, Ltd. 1510 Polk Street Houston, TX 77002 Attention: Tad Brown, Chief Executive Officer Phone: (713) 758-7386 Facsimile: (713) 963-7313 and JTA Sports, Inc. 1200 North Federal Highway, Suite 411 Boca Raton, Florida 33432 Attention: Leslie L. Alexander Facsimile: (561) 368-4143 and Houston McLane Company, LLC Union Station Building Minute Maid Park 501 Crawford Houston, Texas 77002 Attention: Pam Gardner, President of Business Operations Facsimile: (713) 259-8909

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  If to Comcast to:

Comcast Sports Management Services, LLC 1701 JFK Boulevard Philadelphia, Pennsylvania 19103 Attn: President Telephone: 215-286-5786 Facsimile: 215-286-5548 and Attn: SVP & General Counsel Telephone: 215-286-5758 Facsimile: 215-286-5746

with copies to:

Comcast Corporation One Comcast Center 1701 John F. Kennedy Blvd. Philadelphia, Pennsylvania 19103 Attention: SVP & General Counsel Telephone: 215-286-7564 Facsimile: 215-286-7794 Section 6.4  

Counterparts.  This Agreement may may be executed in two or more

counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one instrument. Section 6.5  

 A  Ass ssig ignm nme ent. nt.

(a) This Agreement shall be binding upon and inure to the benefit of tthe he Parties hereto.  No Party may assign, delegate or otherwise transfer any of its rights or obligations obligations under this Agreement without the prior written consent of each other Party, and any assignment, delegation deleg ation or transfer without such consent shall be null and void and of no effect, except that Comcast may assign, delegate or otherwise transfer its rights and obligations under this Agreement to an Affiliate which provides similar services to other Comcast-Related RSNs and Network may assign, delegate or otherwise transfer its rights and obligations under this Agreement to one or more of its Affiliates (any such Affiliate, an “ Affiliate Transferee”) at any time; provided, however, that in the event an Affiliate Transferee ceases to be an Affiliate (or, in the case of Comcast, ceases either to be an Affiliate or ceases to provide similar services to other ComcastRelated RSNs) of the Party that transferred such rights and/or obligations (such party, the Party “Transferorback AffiliateParty; Transferee shallfurther, promptly transfer such rights and/or or obligations to ”), thethe Transferor provided, that no assignment, delegation

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  transfer shall relieve the assigning Party of its obligations hereunder or enlarge, e nlarge, alter or change any obligation of any other Party hereto. (b) Notwithstanding anything to to the contrary contained in Section 6.5(a), unless otherwise required by Applicable Law or unless 100% of Comcast is transferred to NBC Universal, Inc., a Delaware corporation, or any successor thereto (“ NBCU”), or an NBCU Affiliate Controlled (as defined in the Partnership Agreement) by NBCU, in connection with the closing of the transactions contemplated by the Master Agreement dated as of December 3, 2009  by and among General Electric Company, Comcast Corporation, NBCU and the other parties referred to therein (the “Master Agreement”), pursuant to an Assignment and Assumption Agreement substantially in the form attached as Exhibit M to the Transaction Agreement, Comcast shall assign, delegate or transfer all (but not less than all) of its rights and obligations under this Agreement to NBCU or an NBCU Affiliate Controlled by NBCU contemporaneously with the closing of the transactions contemplated by the Master Agreement. Such assignment, delegation or transfer shall be effective contemporaneously with the closing of the transactions contemplated by the Master Agreement; provide  provided  d  that  that if Comcast fails to send the Network the Assignment and Assumption Agreement duly executed by Comcast and NBCU within one Business Day of such closing, such assignment, delegation or transfer shall be effective at the time Comcast sends such executed agreement to the Network. From and after the date of any such assignment, delegation or transfer, NBCU or such NBCU Affiliate Controlled by NBCU shall assume all of Comcast’s rights and obligations under this Agreement and an d Comcast shall have no further rights or obligations under this Agreement. For the avoidance of doubt, if the closing under the Master Agreement does not occur for any reason, no assignment, delegation or transfer otherwise required pursuant to this Section 6.5(b) shall be required. (c) Notwithstanding anything to the contrary contained in Section 6.5(a), pursuant to an Assignment and Assumption Agreement substantially in the form attached as Exhibit Exh ibit M to the Transaction Agreement, Comcast may assign, delegate and a nd transfer all (but not less than all) of its rights and obligations under this Agreement to the acquiror in a Comcast Strategic Transaction or a transaction resulting from a Comcast Regulatory Condition upon the closing of such Comcast Strategic Transaction or such transaction resulting from a Comcast Regulatory Condition, but in either case only o nly if the acquiror (i) has or, after giving effect to such Comcast Strategic Transaction or such transaction resulting from a Comcast Regulatory Condition, will have a substantial business operating, promoting, marketing and exploiting regional sports networks or a national sports network or (ii) is acquiring substantially all of Comcast Parent’s and its Affiliates’ regional sports network business and substantially all of the group within Comcast Parent that manages Comcast Parent’s and its Affiliates’ regional sports network  business. Such assignment, delegation or transfer shall be effective contemporaneously with the closing of such Comcast Strategic Transaction or such transaction resulting from a Comcast Regulatory Condition; provided  that  that if Comcast fails to send the Network the Assignment and Assumption Agreement duly executed by Comcast and such acquiror within one Business Day of such closing, such assignment, delegation or transfer shall be effective at the time Comcast sends such executed agreement to the Network. From and after the date of any such assignment, delegation or transfer, Comcast shall have no further rights or obligations under this Agreement. Section 6.6  

participated jointly in the negotiation and Construction.   The Parties have participated

drafting of this Agreement. In the event an ambiguity or question of intent or iinterpretation nterpretation

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  arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or  burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Section 6.7  

Days.  All references herein, including the Attachments Attachments attached hereto, to

the term “days” shall mean calendar days. Section 6.8  

Confidentiality.  

(a) Each of the Parties agrees that both the terms and conditions of this Agreement and the Confidential Materials will be kept confidential by each Party and its respective employees and will not be disclosed in any manner, in whole or in part, by such Party or its employees without the prior written consent of the other Party, except (i) as may be required by Applicable Law or any stock exchange e xchange on which such Party’s or such Party's Affiliates' securities are traded, (ii) to such Party’s attorneys, accountants, financial advisors, other representatives, lenders (to such Party or to any Affiliate of such party) and Affiliates (provided that such persons agree to keep such information confidential and such disclosing party is responsible for any breach by any such person), (iii) as necessary in connection conn ection with negotiating the terms of a direct or indirect transfer of interests in Network or General Partner that is permitted by the Transaction Documents (provided that such transferees agree in writing to keep such information confidential and such disclosing party is responsible for any breach by any such potential transferee), (iv) to Major League Baseball and the National Basketball Association if mandated by such entities (provided that such Party agrees to seek confidential treatment from such entities to the extent available), and (v) in the case c ase of Comcast, to General Electric Company aand nd its Affiliates (provided that such persons agree in writing to keep such iinformation nformation confidential). The foregoing notwithstanding, nothing herein shall be deemed to limit or restrict a party from disclosing any information in any action or proceeding by such party that is necessary to enforce any rights that such party may have under this Agreement. (b) As used herein, the term “Confidential Materials” means any information information or materials, whether written or oral, tangible or intangible, concerning the General Partner, its Subsidiaries (as defined in the LLC Agreement) and their businesses, markets, products,  prospects and finances in such Party’s possession. Notwithstanding the foregoing, with respect to a Party, the term “Confidential Materials” shall not include (A) information that was known to, and material that was in the possession of, such Party prior to the date such Party became a Party, (B) information that is or becomes generally known kno wn to, and materials possessed by, the  public at large or entities involved in the businesses in which the General Partner and its Subsidiaries operate (other than as a result of a breach hereof by such Party), (C) information or material acquired by such Party independently inde pendently from a third party (other than a third party that such Party knows, or has reason to know, is under an obligation of confidentiality to the General Partner or Network) and (D) information or material independently developed by such Party and not as a result of the disclosure d isclosure of information or provision of materials by the General Partner or any of its Subsidiaries.

Relationship.  Nothing in this Agreement shall be construed to render Comcast and Network partners or joint venturers or to impose upon any of them any liability as Section 6.9  

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  such, except as otherwise specifically specifically provided in the Partnership Agr Agreement. eement. Neither Party has any authorization to enter into any contracts or assume any obligations for the other Party or make any warranties or representations on behalf of another Party other than as expressly authorized herein or in the other Transaction Transaction Documents. No subscriber of Network or its distributors shall  be deemed to have any privity of contract or direct contractual or other relationship with Comcast  by virtue of this Agreement or Comcast’s provision of the Services to Network hereunder.  Network disclaims any present or future right, interest or estate in or to the facilities or intellectual  property of Comcast or any Comcast Affiliate, except for such rights as may may be expressly granted to Network herein or in any of the Transaction Documents. Comcast disclaims any present or future right, interest or estate in or to the facilities or intellectual property of Network or any  Network Party, except to the extent incorporating Comcast intellectual property and for such rights as may be expressly granted to Comcast herein or in any of the Transaction Documents. Section 6.10  

N o Thi Thirr d Party B ene nefificiari ciarie es. This Agreement shall inure solely to the

 benefit of each of the Parties and their permitted successors and assigns, and, except as otherwise expressly set forth in Article V of this Agreement, nothing in this Agreement is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement. Section 6.11    Se  Seve verab rabili ilitty. If any covenant or provision hereof is determined to be void or unenforceable in whole or in part, it shall not be deemed to affect or impair the validity of any other covenant or provision, each of which is hereby declared to be separate and dis distinct. tinct. If any  provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is is enforceable. If any provision of this Agreement is declared invalid or unenforceable for any reason other than overbreadth, the offending provision will be modified so as to maintain the essential benefits of the bargain among Comcast and Network to the maximum extent possible, consistent with Applicable Law and public policy. Section 6.12  

No R Re ecour course se.  Notwithstanding anything contained in this this Agreement to

the contrary, it is expressly understood and agreed by the Parties hereto that each and every representation, warranty, covenant, undertaking and agreement made in this Agreement was not made or intended to be made as a personal representation, undertaking, warranty, covenant or agreement on the part of any a ny incorporator, stockholder, director, officer, partner, member, manager, employee or agent of the Network or its general partner (including Astros Partner, Astros Member or Astros Parent and Rockets Partner, Rockets Member or Rockets Parent (as defined in the LLC Agreement) and any Comcast Party that is a member of the general partner),  past, present or future, or any of them, and any recourse, whether in common law, in equity, by statute or otherwise, against any of them in connection co nnection with the matters set forth in this Agreement is hereby forever waived and released. Section 6.13  

E nt ntii r e A Agr gr eement nt..  This Agreement, together with the other Transaction

Documents and the letter agreement referred to in Section 4.04(e) of the Transaction Agree Agreement, ment, sets forth the entire understanding of the Parties with respect to the subject matter hereof and supersedes any prior oral or written agreements, understandings, representations or covenants with respect to the transactions contemplated herein.

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IN WITNESS WHEREOF the Parties have executed and delivered this Comcast Network Services Agreement as o f the date first written above. above . COMCAST SPORTS MANAGEMENT

~

~

ame:Robert S Pick Title: S e n i o r V i c e P r e s i d e n t

C o r p o r a t e Development

HOUSTON REGIONAL SPORTS NETWORK L.P. By: HOUSTON REGIONAL REGIONAL SPORTS SPORTS NETWORK LLC its general partner By: _ _

_______________ _

Name: Tad Brown Title: Authorized Representative __ By: _ _ _ _ Name: Pamela Gardner Title: Authorized Representative

[SIGN TURE P GE TO COMC ST NETWORK SERVICES

GREEMENT]

 

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IN WITNESS WHEREOF the Parties have executed and delivered this Corncast Network Services Agreement as of the date first written above.

COMCAST SPORTS MANAGEMENT SERVICES LLC By: Name: Title:

HOUSTON REGIONAL SPORTS NETWORK L.P. By: HOUSTON REGIONAL SPORTS NETWORK. NETWO RK. LLC its general partn partner er By: Name: Tad Brown Title: Authorized Representative By: Name: Pamela Gardner Title: Authorized Representative

[SIGNATURE PAGE TO COMCAST NETWORK SERVICES AGREEMENT]

_

 

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IN WITNE WITNESS SS WHEREOF WHER EOF the Partie Partiess have have executed and delivered delivered this Comcast Network Services Agreement as of the date first written above.

COMCAST SPORTS MANAGEMENT SERVICES LLC By:

Name: Title:

HOUSTON REGIONAL SPORTS

NETWORK, L.P.

By: HOUSTON REGIONAL SPORTS

NETWORK, LLC, its general partner By: ~ ~ = Name: Tad Brown

B

i

a m ~ e ~

Y

t

l

~

~

P ~ a ~ m ~ e ~ l a ~ G ~ M ~ d n = e r ~ ~ ~ ~ ~ r

Title: Authorized Representative

[SIGNATIJRE PAGE TO COMCAST NETWORK SERVICES AGREEMENT

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 24 of 55   ATTACHMENT A DEFINITIONS

 Affi  A ffi lia liatte shall have the meaning ascribed thereto in the Partnership Agreement.  Affi  A ffi lia liatte Tra Tr ansfe nsferr ee has the meaning ascribed thereto in Section 6.5(a).  Agr  A gre eement  shall have the meaning ascribed thereto in the preamble.  Ap  A pplica licab ble L aw  means  means any applicable constitution, treaty, statute, rule, regulation, ordinance, order, directive, code, interpretation, judgment, decree, injunction, writ, determination, award,  permit, license, authorization, directive, requirement or decision of or agreement with or by any government, any governmental entity, department, commission, board, agency or instrumentality, and any court, tribunal or judicial or arbitral body, whether federal, state, local or foreign.

 Ast  A strr os M ember  has  has the meaning ascribed thereto in the LLC Agreement.  Board means the Board of Directors of the General Partner. Claims  has the meaning ascribed ascribed thereto in Section 5.1(a). Comcast  has  has the meaning ascribed thereto in the preamble. C omcast cast A ffi ff i lilia ation A Agg r eement   means means that certain affiliation agreement by and between the  Network and Comcast Cable dated as of the date hereof.

Comcast Assets has the meaning ascribed thereto in Section 2.3(a). Comcast Cable means Comcast Cable Communications, LLC, a Delaware limited liability company. 

C om omcast cast M Mem embe ber  r  has the meaning ascribed thereto in the LLC Agreement.  C om omcast cast Par Pare ent  means  means Comcast Corporation.  C om omcast cast P arty  means: (i) Comcast; (ii) its Affiliates; (iii) the directors, shareholders, employees and officers of Comcast and its Affiliates; and (iv) the respective successors, heirs, executors and legal representatives of the foregoing.

C om omcast cast-R -R elat late ed R RS SN  means any other RSN in which a Comcast Affiliate owns a direct or indirect interest and as to which Comcast or any Comcast Affiliate provides services of the type contemplated herein.

Comcast Termination Notice has the meaning ascribed thereto in Section 4.2(c).

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  Confidential Materials has the meaning ascribed thereto in Section 6.8(b). Damages has the meaning ascribed thereto in Section 5.1(a). E ffe ff ecti cti ve D ate shall mean the Closing Date (as determined pursuant to the Transaction Agreement).

F or ce M aj eure ur e E ve vent  nt  has  has the meaning ascribed thereto in Section 5.3. G ene nerr al Par Partne tner  r  means Houston Regional Sports Network, LLC, a Delaware limited liability company and the general partner of the Network.

I nd nde emnifi ni fi ed Party  has  has the meaning ascribed thereto in Section 5.2. I nd nde emnif nifying ying Party  means  means as applicable: (i) Network, if a Comcast Co mcast Party is the Indemnified Party pursuant to Section 5.2, or (ii) Comcast, if a Network Party is the Indemnified Party  pursuant to Section 5.2.

Launch Date has the meaning ascribed thereto in Section 3.1.  means that certain amended and restated limited liability company agreement L L C A gr eement  means

entered into by JTA Sports, Inc., McLane HRSN GP Holdings LLC, Houston SportsNet Holdings, LLC, Leslie L. Alexander, Rocket Ball, Ltd., Robert Drayton McLane, Jr., Houston McLane Company, LLC, and Comcast Corporation, dated as of the date hereof, including any amendment, modification or supplement thereto.

 Ma  M ast ste er Ag Agree reem ment  has the meaning ascribed thereto in Section 6.5(b).  Me  M edi a R i ght ghtss A gre gr eements nts has the meaning ascribed thereto in the Comcast Affiliation Agreement.

NBCU  has  has the meaning ascribed thereto in Section 6.5(b).  has the meaning ascribed thereto in the preamble. Network  has

N etw two or k B oar d  the  the Board of Directors of Houston Regional Sports Network, LLC as specified in the LLC Agreement.

N etw two or k P ar ty(ie y(i es)  means: (i) Network; (ii) its Affiliates; (iii) the partners, partners, members, employees and officers of Network and its Affiliates (excluding any Comcast Comca st Party); (iv) the Affiliates, officers and employees of Network’s partners (excluding any Comcast Party); and (v) the respective successors, heirs, executors and legal representatives of the foregoing.

N on-D n-Dii scret scretii ona narr y T Trr ansa nsact ctii ons has the meaning ascribed thereto in Section 2.1(c). Out-of-Po Out-of-P ocket Cost Costss means all reasonable and actual out-of-pocket costs and expenses incurred  by Comcast (or its Affiliates) on Network’s Network’s behalf in connection with the provision of each Service (as set forth on Attachment B), including all third party costs except to the extent such

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  costs (i) are incurred solely for the convenience of Comcast because Comcast personnel that otherwise would provide a particular Service are unavailable or unable for any reason to provide such Service directly, or (ii) are in connection conne ction with Comcast fulfilling its indemnification obligations as described in Section 5.1(b). Out-of-Pocket Costs shall include professional fees, insurance premiums, third-party collection fees, costs incurred on matters specific to Network requiring expertise beyond the expertise of Comcast employees, and license and other fees due under third party contracts (e.g. music library fees, fees under content licenses, Nielsen and other research fees, production fees, etc.).

P ar tne tnerr shi ship p A g r eement  means  means that certain amended and restated agreement of limited  partnership of Network entered into by its general partner and its limited partners, dated as of the date hereof, including any amendment, modification or supplement thereto.

Party  means,  means, as applicable, Comcast or Network. Pr ogr gra am Se Serr vice has the meaning ascribed thereto in the recitals. R ockets M Me embe ber  r  has the meaning ascribed thereto in the LLC Agreement.   has the meaning ascribed thereto in the recitals. R SN  has  Service  Se rvice F ee has the meaning ascribed thereto in Section 3.1.

 Service  Se rvicess has the meaning ascribed thereto in Section 2.1.  Subsid  Sub sidii ari es has the meaning ascribed thereto in the LLC Agreement.  Term has the meaning ascribed thereto in Section 4.1. Territory  has  has the meaning ascribed thereto in the Comcast Affiliation Agreement and Media Rights Agreements.

T r ansa nsact ctii on A Agg r eement  means  means the Transaction Agreement, dated as of the date hereof, by and among Houston McLane Company, LLC, McLane HRSN GP Holdings LLC, McLane HRSN LP Holdings LLC, Rocket Ball, Ltd., JTA Sports, Inc., Rockets Partner, L.P., Houston SportsNet Holdings, LLC, Comcast Corporation, Houston Regional Sports Network, LLC and Houston Regional Sports Network, L.P., including any a ny amendments, modifications or supplements thereto.

Transaction Documents has the meaning ascribed thereto in the Transaction Agreement. Tr ansfe nsferr or Party  has  has the meaning ascribed thereto in Section 6.5(a).

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Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 27 of 55   ATTACHMENT B SERVICES

Unless otherwise expressly indicated below, Network will retain and have responsibility, at its expense, for staffing and providing the services set forth below. Comcast’s responsibilities shall  be to ensure the timely oversight and support of, and to provide the below-listed services to, 1  Network and its own personnel in carrying out these functions:  

1.

Executive Oversight Services 

Comcast executives shall provide guidance and general oversight of Network’s operations. Specifically, with respect to Start-Up Services, Comcast shall assist Network and the  Network Board with conducting a search for, recommending candidates and advising  Network and the Network Board on the hiring, at Network’s cost, of (i) an individual to serve as the general manager manag er (or comparable title) of Network and the P Program rogram Service (the “General Manager”), in accordance with the Transaction Documents, and (ii) additional strategic and necessary senior personnel to perform major job functions/duties with respect to the Network and/or Program Service. In the event that a General Manager leaves the employ or subcontract subco ntract of Network, Comcast will assist Network and the  Network Board with promptly conducting a search for, and recommending, one or more replacement candidate(s), in accordance with the Transaction Documents. 2.

Payroll Services 

Comcast will provide the following payroll services on Network’s behalf: beh alf: All payroll processing/reporting to outside vendor regarding actual payroll, pay roll, associated tax filings and annual reporting. 3.

IT Support/Infrastructure Services 

Comcast will provide the following IT support/infrastructure services on Network’s  behalf: a.

1

data center management and operation of data center computing equipment and its ancillary equipment, systems, services and associated networks;

 To the extent Comcast or any Affiliate thereof enters into any agreements for the benefit of Network and one or more Comcast-Related RSN or other networks managed by any Comcast Party, associated expenses or revenue shares (as applicable) associated with the above will be apportioned among Network and other Comcast-related networks in accordance with Section 8 of this Attachment B.

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   b.

c.

d. e.

policy formulation, planning, process and procedure creation, service level development and oversight of Network’s upgrading of o f equipment, services and systems; network operating system architecture and implementation; evaluation and redesign of server architecture, communications network evaluation and structuring for improved connectivity and efficiency; design and implementation of e-mail solutions, rollout; and help desk services, asset management support and control, and operations support.

The Parties agree that this Service shall not include 1) provision of computers, phone, handheld devices or other computer and communication peripherals or hardware to  Network employees or 2) any of items (a) through (e) in relation to operation of  Network’s distribution outlets in television, television, broadband or any other media (e.g., web hosting services). 4.

Human Resources Services 

Comcast will provide the following human resource services on Network’s behalf: a.  b. c. d.

benefit plan administration; employee relations; recruitment; and labor relations.

The Parties agree that this Service shall not include payment of outside legal or consulting fees directly relating to Network human resource matters, which shall be  billable to Network as Out-of-Pocket Costs. 5.

Financial Services 

Comcast will provide the following financial services on Network’s behalf: a.  b.

c. d. e.

f. g. h.

subject to receipt of theand necessary from to Network, maintenance of books records input according GAAP; preparation and subject to receipt of the necessary input from Network, preparation of financial statements and operational results reporting and other items related to consolidated reporting; audit facilitation; accounts payable processing and reporting; accounts receivable/revenue billings and in-house collection-related services,  provided that this shall not include any outside counsel or collection agency costs, which shall be billable to Network as an Out-of-Pocket Cost, or any charge or write-off for bad debt, which shall be solely at Network’s expense; treasury relationships; tax management including preparation and filing; and oversight of Network’s advertising sales trafficking, including oversight of  Network’s management, at Network’s cost, of commercial insertion on the Program Service.

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6.

Corporate Recordkeeping Services 

Comcast will provide the following corporate recordkeeping services on Network’s  behalf: a.  b. 7.

oversee and maintain Network’s corporate books and records, including minutes; and preparation of corporate documents (e.g., written consents, owner approvals, etc.).

Insurance Services/Risk Management Administration Services 

Comcast will provide insurance services/risk management administration services, including the following areas: a.  b. c. d. e. f. g.

property; workers compensation; auto; primary general; excess liability; media; and D&O.

The Parties agree that the payment of insurance premiums (including any agency commissions) shall be billed billed to Network as Out-of-Pocket Out-of-Pocket Costs. Network will be charged for all premiums, (i) as allocated among Network and Comcast’s other managed networks, in proportion to their respective size and policy limits, or (ii) 100% for policies obtained specifically for Network. 8.

Centralized Purchasing/Licensing Services 

From time to time, Comcast may have the opportunity to purchase or provide goods, services or rights on Network’s behalf on terms more favorable than Network could achieve through independent negotiations (e.g., discount purchase programs, software licenses, national content licenses, closed captioning services, original music development, national spot/infomercial advertising sales representation, website development or hosting). When Comcast has such opportunities opportunities that are relevant to the operations of its other Comcast-Related RSNs and is able to offer Network the opportunity to participate (e.g. eligibility is not conditioned on the Comcast-Related RSN  being a (controlled) Affiliate), Comcast shall offer Network the the opportunity to participate and, upon approval of Network’s General Manager (including any apportionment of associated revenues or costs), may enter into such agreements on Network’s behalf. 9.

Affiliate Sales Services 

Comcast will provide affiliate sales services with cooperation and support from  Network’s affiliate sales/marketing sales/marketing manager, including:

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  a.

development and implementation of affiliate sales distribution strategies for the Program Service and other Network content via applicable forms of media distribution, including distribution via cable, satellite, telco or other form of multichannel video distribution, VOD platforms, HD, 3D or other enhanced e nhanced feeds,  broadband and wireless/mobile platforms, all in accordance with reasonable  parameters established by Network;

 b.

recommendation of a Network distribution “footprint” and applicable rate-based zones within such footprint; development of a launch sales pitch and marketing plan with implementation of any such marketing plan to be approved (such approval not to be unreasonably withheld, conditioned or delayed) and performed by Network and any associated costs constituting Out-of-Pocket Costs payable by Network; (for the avoidance of doubt, such approval right is expressly exp ressly limited to Network’s approval of the sales  pitch and marketing plan and shall not be construed so as to provide Network with any approval rights with respect to the affiliate sales distribution strategies or any other affiliate sales services); identification of prospect MVPDs, including primary cable, satellite, “telco” and other MVPDs; negotiation of distribution agreements with MVPDs interested in carrying and eligible to distribute the Program Service; development and monitoring overall affiliate sales budget; maintenance of relationships with MVPDs and assistance to Network with local ad sales and general promotion of Network (by providing, as requested by  Network, research, marketing materials and marketing analyses, which materials and analyses shall be payable by Network as Out-of-Pocket Costs); coordination of Program Service launch, including dissemination of launch forms, coordination with technical operations regarding signal transmission and (as necessary or applicable) blackout implementation; work with Network to ensure MVPD compliance with contract terms, including any applicable provisions of Media Rights Agreements or league restrictions; and At the request of Network, report to, consult with and provide relevant documents

c.

d. e. f. g.

h.

i.  j.

and other information totake Network regarding affiliate sales distribution matters and further directionNetwork’s from Network if and to and the extent required by the Transaction Documents; 10.

Affiliate Finance Services 

Comcast will provide affiliate finance services, including: a.  b. c.

maintenance of affiliate data and reporting; subscriber tracking and database management; affiliate billing, collection and reconciliation, including working with affiliates on  Network’s behalf to resolve and reconcile any discrepancies, consistent with Comcast’s standard practices and policies for other Comcast-Related RSNs,  provided that shall to notNetwork include as any counsel or collection agencyor costs, which shall bethis billable anoutside Out-of-Pocket Cost, or any charge write-off for bad debt, which shall be solely at Network’s expense;

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  d. e. f. g.

affiliate budgeting, forecasting and long-range planning; at Network’s request, provision of monthly reports with respect to affiliate sales; coordination of affiliate audits (with the cost of such audits payable by  Network as Out-of-Pocket Costs); in consultation with Network, forecast revenues for the annual period (including any revenue-dependent expenses such as incentives), and project annually revenue and revenue-related expenses, all in accordance with the Partnership Agreement

11.

Advertising Services 

Comcast will provide general guidance for advertising sales-related functions, including: a.   b.  c.  d.  e.  f. 

12.

consultation with Network to develop upfront and spot advertising market presentations, if necessary, and advertising sales strategy; advancing new business development through advertising sales category analysis; development of sponsorship sales; management of the representation relationships for unwired, national spot, DR and infomercial inventory; consultation with Network to develop national advertising sales strategy; and consultation with Network to develop other strategies, policies and procedures regarding the sale of advertising inventory.

Business & Legal Affairs Services 

Comcast will provide internal legal resources to perform day-to-day, recurring business bu siness and legal affairs functions on behalf of Network, as follows: a.  b.

provision of general knowledge, consultation and advice regarding legal issues; review and preparation of contracts and other legal documents, deal structuring and negotiation, including (i) Network programming and content rights licenses (including live and taped sporting events and other sports-related programming and content from teams, leagues, collegiate conferences and other program suppliers, news feeds, stock footage and photos, music, etc.; (ii) affiliation/distribution agreements with MVPDs and other distributors or sublicensees and related matters (including assistance with Network’s monitoring of any “most-favored nations” provision compliance and consultation c onsultation with Network regarding certification of same, preparation for Network of any requisite notices or certifications that may be due under und er such agreements); (iii) advertising and sponsorship agreements; marketing and creative services agreements; and related representation agreements; (iv) talent and other personnel agreements (e.g. contract employees, freelancers) to the extent necessary or desirable; (v) ordinary course labor or union agreements; (vi) new media agreements, including all contracts necessary for operation, hosting and content conten t delivery on Network’s website and other new media platforms; (vii) transmission and facilities

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  agreements, including satellite/transponder and fiber transmission agreements; (viii) technical equipment; (ix) software licensing; mobile facilities/crewing and other third party production agreements; (x) ordinary course real estate leasing and construction agreements related to Master Control build-out; (xi) syndication and other licensing or sub-licensing agreements; and (xii) consulting and outsourcing agreements; c. d.

e.

f. g. h.

coordination with other Comcast Affiliates that may be providing in-house legal services (e.g. employment and labor and real estate) and risk management as a sub-contractor to Comcast. engagement of outside counsel as necessary and provision of associated supervision of, including budgeting and other rules of engagement, and coordination with outside counsel in areas requiring specialized advice (including FCC/regulatory, labor relations/disputes and employment, local law issues, attorney collection services, loan facilities, trademark clearance prosecution and clearance, and rights and clearances advice and other intellectual property matters, and other matters requiring special expertise); develop and communicate standard advertising sales content guidelines, contract approval policies, website terms of use and privacy policies, employee handbook and other policies, as modified from time-to-time; provide advice and counsel regarding Applicable Laws and monitor Network for compliance with such Applicable Laws;  work with and advise Network personnel to take action designed to avoid, minimize or resolve disputes so as to minimize litigation; and work with public relations/communications teams on issues management.

For the avoidance of o f doubt, Business & Legal Affairs Services shall not include highlevel, specialized legal advice relating to matters of 1) local law, 2) outside collection costs, or 3) issues unique and discrete to Network, each of which will be referred to outside counsel. The Parties agree that outside counsel fees shall be billed to Network as Out-of-Pocket Costs. If a matter for for which Network is charged outside outside counsel fees affects Comcast’s other managed networks, such fees will be allocated among Network

13.

and such other networks in proportion to their respective uses of such services. News/Original Programming Development  Comcast will provide general guidance and oversight in the following areas: a.   b.  c.  d.  e.  f. 

14.

negotiation of all on-air talent contracts; recruitment of news personnel;  provision of guidance on day-to-day editorial issues; coordination of general news coverage for big events; original program development; and rd  negotiation of 3  party contracts with common vendors (e.g. CNN).

Operations and Engineering

Comcast will provide general guidance and oversight in the following areas:

 

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a.  b. c. d. e.

HD/SD studio & ENG production; master control facilities; acquisition & editing technology; studio & technical plant design; site selection, studio construction and/or renovations;

f. g. h.

uplink and transmission services and technologies; standards and practices; and staff selection and training.

Additionally, in the event of a Force Majeure Event or other occurrence that prevents  Network’s use of its own studio, production facilities or personnel, Comcast shall use use commercially reasonable efforts to arrange for the use by Network, and at Network’s cost (which shall constitute Out-of-Pocket Costs), of studios, facilities and personnel at Comcast-Related RSNs or other Comcast Affiliate facilities as designated by Comcast, if and to the extent available without interruption to other Comcast Affiliate or ComcastRelated RSN operations, to address any short-term needs. Specifically, with respect to Start-Up Services, Comcast will do the following (subject to  Network approval of terms and conditions of any binding agreements applicable to any of the following): a.  b. c. d. e.

f. g. h.  j.

15.

Work with vendors selected by Network to design, at Network’s cost, the HD Studio and technical facility Develop an RFP with respect to vendor selection Oversee construction from site selection through launch Advise Network as to staff selection and hiring Arrange with appropriate vendor(s), at Network’s cost, for start-up training to Network employees and provide such employees with on-going feedback and training, as and to the extent necessary Provide Network with on-going evaluation of channel quality Review requirements under Applicable Laws for closed-captioning and  program ratings Work with Network and its vendors to design the distribution infrastructure for the Program Service; and Make available members of its technical operations team (currently comprised of its SVP of Technical Operations and VP Engineering) and live event production team (currently comprised of its VP/Executive Producer of Live Events) on-site in Houston, in each case to the extent reasonably necessary, for the purpose of  providing technical advice and oversight in connection with Start-Up Services, with associated travel, food and lodging expenses payable by Comcast (but with all other associated expenses being treated as Out-of-Pocket Costs payable by  Network)

Live Event Production 

Comcast will provide general guidance and oversight in the following areas:

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a. 

16.

 b.  c. 

vendor recommendation and negotiation on Network’s behalf and at Network’s cost, in matters regarding remote production facilities, transmission, graphics hardware and software providers, statistical services and technology vendors; creation and distribution of all in-game production elements; experimental technology enhancements;

d.  e.  f.  g.  h.  i.   j. 

annual “best practices” production reviews; coordination with Comcast-Related RSNs and other Comcast Affiliate networks; liaison with the professional leagues; liaison with unaffiliated regional sports networks;  budget creation and management; selection of on-air talent, producers and directors; and ongoing production and editorial critique.

Digital and Other New Media 

Comcast will provide general guidance and oversight in the following areas: a.  b.  c.  d.  e.  f. 

17.

develop and oversee digital media strategy for Network together with other Comcast-Related RSNs;  provide intelligence on site reporting, analytics and competitive landscape; rd  negotiate and manage 3  party content relationships, syndication agreements, SEO and SEM; liaison with other digital properties p roperties Affiliated with Comcast; identify emerging technologies and relevant business opportunities (i.e. social media, mobile, live streaming, VOD); and share best practices across Comcast-Related RSNs.

Creative Services and Marketing:

Comcast will provide general guidance and oversight in the following areas: a.   b.  c. 

f.  g.  h. 

chyron insert graphics packages for sports, news and talk programs (SD & HD); animation (3D & 2D) Packages for sports, news and talk programs (SD & HD); internal on-going graphic support for special events including logo supervision, show packaging and design and branding direction; internal creation of league and team-specific in-game animated elements (SD & HD); set and lighting design for studio productions for news, talk & pre-/post-game  programs; overall on-air look, including music for news, talk and a nd live event programs; coordination of spot production for Network TV advertising; creative services for on-air promotions, print and outdoor advertising;

i. 

media planning and analysis; and

d.  e. 

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   j. 

at Network’s request and cost, procurement of marketing research in support of  Network’s programming, sales activities and promotional campaigns.

In connection with the foregoing and subject to payment of Out-of-Pocket Costs, if applicable, Comcast shall make available to Network, consistent with the manner and terms upon which Comcast makes available such items to other Comcast-Related RSNs, a generic graphics package, packag e, promotional tool kits for news programs, network ID’s, and live events, music libraries, customizable elements for playoffs and special events, and sports ticker including automated statistical information, game schedules, scores and live game tracker updates, customizable (where applicable) for Network. For the sake of clarity, Network agrees that any customization of such graphics or other elements according to Network’s particular needs and requirements shall be additional Out-ofPocket Costs, and shall be paid or reimbursed by Network. 18.

Communications

Comcast will provide general guidance and oversight in the following areas: a.   b.  c.  d.  e.  19.

external and internal communications counseling; issues management; media relations support including review of press releases and other communications documents; crisis communications support; and media training. 

Programming Rights 

Subject to Network’s eligibility for participation in such contracts, and provided Network elects to be included in such contracts, Comcast will, consistent with its provision or  procurement of programming rights to or for other Comcast-Related RSNs and the consideration and other terms applicable to other Comcast-Related RSNs: a. 

 b. c. d. e.

negotiate any national rights agreements with collegiate conferences (e.g. SEC, CUSA, A-10, CAA) and national leagues (e.g. MLS, NLL, AVP, WPS, etc.) on  behalf of Network together with other relevant Comcast-Related RSNs; negotiate any national time-buy sports agreements; negotiate any national infomercial programming agreements; provide guidance regarding structuring local time-buy and infomercial rates; and facilitate communications with respect to best practices with other ComcastRelated RSNs.

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Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 36 of 55   EXHIBIT 1 FORM OF PROGRAM AND CONTENT SHARING AND LICENSE AGREEMENT

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Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 37 of 55 Exhibit 1

COMCAST SPORTS MANAGEMENT SERVICES PROGRAM AND CONTENT SHARING AND LICENSE AGREEMENT THIS PROGRAM AND CONTENT LICENSE AGREEMENT ( Agreement ) is made on the day o f October, 2 0 1 _ by and between COMCAST SPORTS MANAGEMENT SERVICES, LLC, a Delaware limited liability company ( Comcast ), and HOUSTON REGIONAL SPORTS NETWORK, L.P. L.P.,, a Delaware limited partnership ( Network ). As used herein, each o f Comcast and Network may be referred to as a Party and, collectively, as the Parties .

WHEREAS, Comcast provides management oversight, services and support to Network in connection with Network's business o f creating, developing, operating, promoting, marketing and exploiting a regional sports network ( RSN ) to be distributed principally to subscribers in its Distribution Footprint (as defined in Attachment A) (the Program Service ); and

WHEREAS, Comcast currently provides management oversight, services and support to various Comcast-Related RSNs (as defined in Attac hment A) which Comcast-Rela ted RSNs may, from time to time, create and/or produce (or cause to be created and/or produced), or may license from third parties rights to use, create and/or and/ or produc producee (or cause to be used, created and/or produced), audio, visual and/or audio-visual works, including television progra ms or segments, news content, graphic elements, music, promotional materials, and other original or licensed works for their businesses (collectively, the Comcast-Related RSN Content );

WHEREAS, each Comcast-Rel Comc ast-Related ated RSN RS N also has entered ent ered into (or is is or will will be entering into) an agreement with Comcast on terms and conditions substantially similar to those set forth in this Agreement whereby Comcast has been (or will be) granted the right to sublicense to Network Comcast-Related Comcast-R elated RSN Content as and to the extent exten t such content has been made available for license license by such Comcast-Related RSN;

WHEREAS, Comcast itself, from time to time, may create and/or produce (or cause to be created and/or produced) or may license from third parties rights to use, create and/or produce (or cause to be used, created and/or produced) audio, visual and/or audio-visual works, including television televi sion programs pro grams or segments, news content, graphics elements, elements, music, promotional materials, and other original or licensed works (collectively, the Comcast Content ); WHEREAS, Network from time to time may create and/or produce (or cause to be created and/ or produced) or and/or o r may license from third parties pa rties rights to use, create and/or produce (or cause cause to be used, created and/or produced), audio, visual and/or audio-visual works, including television programs or segments, news content, graphic elements, music, promotional materials, and other original or licensed works (collectively, the Network Content ); and

WHEREAS, Comcast wishes to grant Network a license to Exhibit (as defined in Attachment A) the Comcast-Related RSN Content and the Com cast Content as and to the extent available for license to, and use by, Network in accordance with and subject to the terms and conditions o f this Agreement Agr eement (collectively, the Available Comcast Content ), and Network wishes

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to grant Comcast a license to Exhibit the Network Content as and to the extent available for license to, and use by, Comcast and/or the Comcast-Related RSNs, as applicable, in accordance with and subject to the terms and conditions o f this Agreement (the Ava Availa ilable ble Network Content and, together with the Available Comcast Content, the Lic Licens ensed ed Content Conte nt ); for good and valuable consideration, the receipt and sufficiency o f which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as NOW, THEREFORE,

follows: 1.

Rules o f Construction. (a)

Defined Terms All initially capitalized terms used and not otherwise define defined d herein shall have the meanings ascribed thereto in Attachment A.

(b)

General Rules o nterpretation Whenever the context requires, any pronoun shall include the corresponding masculine, feminine and neuter forms. forms. The words includ include, e, include includess and including shal shalll be deemed to be followe followed d by the phrase without limitation. Except as specifically otherwise provided in this Agreement, Agreement , a reference to an Article, Section or Attachment is a reference to o f this Agreement or an Attachment hereto, and the terms an Article or Sectionand hereof, herein, other like terms refer to this Agreement as a whole whole,, including the Attachment Attac hment hereto.

(c)

2.

Headings and Captions The division o f this Agreement into Articles and Sections, the insertion o f headings and the use o f particular words as defined terms are for convenience o f reference only and shall not affect the construction or interpretation o f this Agreement.

Grant o f Rights. (a)

From Comeast to Network (1) Subject to the terms and conditions o f this Agreement, Comcast hereby grants Network the right during the Term to Exhibit (including by incorporation into works produced by or on behalf o f Network) the Available Comcast Content via all means o f Med Media ia Distribution, subject s ubject to (i) usage limitations and restrictions (if any) imposed by third parties, including programming and content Supplier and Sports Association Restrictions and (ii) reasonable usage limitations and restrictions imposed by Comcast (including any limitations and restrictions restrictio ns imposed impose d by the applicable applica ble Comcast-Relate Comcast -Related d RSN with respect to it itss Comcast-Related RSN Content) (clause (i) and (ii) above being collectively referred to herein here in as Comcast Usage Limi tati ons ). Unless otherwise agre agreed ed by Comcast or the relevant Comcast-Related RSN (as applicable) in writing and subject to Comcast Usage Limitations, (x) the right o f Network to Exhibit the Available Comcast Content shall be non-exclusive, and (y) the rights o f Network to Exhibit the Available Comcast Content shall be limited to its

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Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 39 of 55 Distribution Footprin Footprint. t. Subject to Comcast Usage Limitations, Comca Comcast's st's license to Network includes the right to use brief excerpts o f the Available Comcast Content to adverti advertise se and promote Network Ne twork and its properties and for related and institutional advertising. (2) Nothing Nothi ng set forth herein shall be deemed to grant Network any copyright copyright or other intellectual property p roperty right in the Availab Available le Comcast Comc ast Content, except the right to Exhibit the Available Comcast Content, and, where permitted, incorporate the Available Available Comcast Content in works produced by or on behal f o f Network, all as expressly set forth in this Agreement and subject to any Comcast Usage Limitatio Limitations. ns. With respect respect to Available Comcast Content, Content, as between Network, on the one hand, and Comcast and the Comcast-Related RSNs, on the other hand, Comcast and the Comcast-Related RSNs shall retain all copyrights and other intellectual property rights in the Available Comcast Content, as applicable. Notwit Notwithstandin hstanding g anything herein to the contrary, for for the the avoidance of doubt, in no event shall Available Comcast Content be construed to include any audio, visual and/or audio-visual works, including television programs or segments, news content, graphics elements, music, promotional materials, and other original or licensed works which are owned, or licensed to Comcast, by any Affiliate

of

Comcast which is not a Comcast-Related RSN.

(3) Network Net work shall not have the right to sublicen sublicense se any Availabl Availablee Comcast Content to any third part(ies) (except, subject to Comcast Comcas t Usage Limitations, to distributors o f the Program Service as part of the license o f such Program Service) without the prior written consent o f Comcast (or the applicable Comcast-Related RSN with respect to its Comcast-Related RSN Content). (b)

From Networ k to Comcast

Subject to the terms and conditions ofthis Agreement, Network hereby (1) grants Comcast the right during the Term to, and to sublicense to Comcast Related RSNs the right to, Exhibit (including by incorporation into works produced by or on behalfof behal fofCom Comcas cas t or a Comcast-Related RSN) RSN) the Available Network Content via all means o f Media Distribution, subject to (i) usage limitations and restrictions if any) imposed by third parties, including Supplier and Sports Association Regulations and (ii) reasonable usage limitations and restrictions imposed by Network (clause (i) and (ii) above being collectively referred to herein as Netwo Network rk Usag Usagee Limitations , and together with Comcast Usage Limitations, shall be referred to herein collectively as Usage Limitations ). Unless otherwise agreed by Network in writing and subject to Network Usage Limitations, (x) the rights of Comcast (including those rights sublicensed to the Comcast-Related RSNs) to Exhibit the Available Network Content shall be non-exclusive, and (y) the rights o f Comcast, and each Comcast-Related RSN to which Comcast grants a sublicense, to Exhibit the Available Network Content shall be limited, to the extent applicable, to such Comcast-Related RSN RSN's 's Distributio Distribution n Footprin Footprint. t. Subject to Network Usage

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Limitatio ns, such Limitations, suc h license includes the right for Comcast (including (including the the Comcast Related RSNs to which Comcast has granted a sublicense) to use (1) brief excerpts o he Available Av ailable Network Net work Content and (2) the name, voice, voice, likeness and and biographical material o all persons working or appearing in the Available Network Content, to advertise and promote Comcast and the Comcast-Related RSNs and for related and institutional advertising. (2) Except Exce pt as provide provided d herein, Comcast shall not have the right to sublicense any Available Network Content to any third part(ies) (except, subject to Network Usage Limitations, to Comcast-Related RSNs and/or distributors o Comcast Comca st s or the Comcast-Related RSNs programming services services as as part o the license o such programming services), without the prior written consent o Network. (3) Nothing set forth herein shall be deemed to grant Comcast or the Comcast-Related RSNs any copyright or other intelle intellectual ctual property right right in the Available Network Content, except the right to Exhibit the Available Network Content, and, where permitted, incorporate the Available Network Content in works produced by or on behalf o Comcast or Comcast-Related RSNs (as applicable), all as expressly. set forth in this AgreementNetwork and subject Network Usage Limitations Limitations. With respect to Available to Contto Content, ent,any as between Network, on the one hand, and Comcast and the Comcast-Related RSNs, on the other hand, Network shall retain all copyrights and intellectual property rights in the Available Network Content Content.. (c) Addi tio nal Use Use Limitations; Limitatio ns; Responsibility For Clearances Clearances Notwithstanding anything in this Agreement to the contrary, the Parties hereby acknowledge and agree that: (i) the rights and obligations o the Parties (and any applicable Comcast-Related RSN or authorized sublicensees) are subject and subordinate to all Supplier and Sports Association Restrictions, and that use by a Receiving Party o Restricted Content therefore may be limited or restricted; and (ii) use o Restricted Content may be conditioned on the Receiving Party Par ty s compliance with certain obligations imposed by third parties or imposed by the Providing Party, including territorial limitations, clearance requirements, advertising category restrictions or other restrictions on advertising, editing or modification restrictions, and limitations on the forms or means o Media Distribution used by the Receiving Party with respect to particular Restricted Content. Althoug Although h a Providing Provi ding Party shall endeavor to provide the Receiving Party Party with with part icularr clearance or other requirements or other conditions o use written notice o he particula related to any Restricted Content when it is provided, it shall be the sole responsibility o the Receiving Party to determine the existence and applicability of, and to comply with, any applicable Usage Limitations, and the Receiving Party shall be liable to the Providing Party for any non-compliance with such restrictions. (d)

Other License Cond Condition itionss For the avoidance o doubt, the Parties acknowledge o

and (i)be subject to the terms and conditions Section Sections and 4(d), Partyagree maythat only a Receiving Party, and shall only have thes 4(b), right 4( toc)Exhibit thea

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Licensed Content which is licensed to it hereunder during the Term and (ii) each Comcast-Related RSN shall only have the right to receive and Exhibit Available Network Content under sublicense from Comcast to the extent that such Comcast Related RSN has entered enter ed into an agreement agreeme nt with Comcast Comcas t on substantially similar terms and conditions to those set forth in this Agreement. (e)

Scope o Licensed Content. The Parties acknowledge and agree that (i) the

Licensed Content shall only be licensed to the Receiving Party hereunder as and to the extent the Providing Party makes such Licensed Content available for license to the Receiving Party and subject to Section 4(d), the Providing Party shall have absolute discretion as to what content it makes available to the Receiving Party and nothing herein shall be construed as requiring the Providing Party to make any other content available to the Receiving Party, even ifsuch content is fully licensable by the Providing Party; and (ii) unless otherwise agreed by the Receiving Receivi ng Party, the Receiving Receivin g Party shall have the right, but not the obligation, obligat ion, to Exhibit such suc h Licensed Content Con tent during the Term in accordance with the terms and conditions of this Agreement. 3. Commercial Commerc ial Inventory. Subject Subjec t to Comcast Usage Limitatio Limitations, ns, Netw Network ork (and its designees) shall have the right to use or sell any and all Available Commercial Inventory within Network's Exhibition o f the Available Comcast Content and shall have the right to retain any and all revenues from any sale of such Available Commercial Invent Inventory. ory. Subject to Network Usage Limitations, Limitations, Comcast and the Comcast-Related RSNs, as applicable, (and their respective designees) shall shall have the right to use or sell any and all Available Commercial Inventory within Comcast and/or the Comcast-Related RSNs, as applicable, Exhibition o f he Available Network Content and shall have the right to retain any and all revenues from any sale of such Available Commercial Inventory. 4

Termination; Suspension. (a) This Agreemen Agreementt may be terminated terminated,, in whole or in part, as follows (each an of Termination ):

i)

Event

immediately by Comcast in the event that (A) the Applicable Services Agreement (1) expires or terminates or (2) is assigned by Comcast to a Person that is not an Affiliate o f Com cast cast Parent, in either case in accordance with the terms and conditions thereof the reof or (B) no Affiliate o f Comcast Parent holds an equity interest in Network;

(ii)

immediat ely by either Party in the event that the othe immediately otherr Party is in material breach o f this Agreement and fails to remedy the same (or develop a plan reasonably acceptable to the other Party to cure such breach) within thirty (30) days after receipt o f a written notice giving particulars ofthe breach and requiring it to be remedied;

(iii)

as to any particular Available Network Content or Available Comcast Content, as applicable, immediately upon written notice to the other Party that a Providing Party elects to withdraw its license to Exhibit the specific

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Available Network Content or o r Available Comcast Content, as applicable; (iv)

in the event ofa Change o f Control o f he other Party (for the purposes purposes ofthis ofth is Agreement, Change o Control o f a Party means (A) the sale, lease, transfer, conveyance or other disposition, in one or a series o f related transactions, o f all or substantially all o f the assets o f such Party and its Subsidiaries (if any), taken as a whole, or (B) a transaction or series o f transactions (including by way o f merger, consolidation, sale o f stock or otherwise) the result o f which is that any person, entity or group (as defined in Section 13 o f the Securities Exchange Act o f 1934) acquires Control of such Party; or

(v)

immediately immedia tely by Comca Comcast st in accorda accordance nce with Section 4(d).

(b) Upon the occurrence o f any Event o f Termination with respect to any Receiving Party, said Receiving Party shall cease using the Available Network Content or Available Comcast Content (as applicable), or any derivation thereof, in any form (other than in connection connec tion with a partial termination terminat ion pursuant pursua nt to Section 4(a)(iii), which shall apply only to to the affected Available Availa ble Network Netwo rk Content Conten t or Availab Available le Com cast Content). Each Party, in its capacity as a Receiving Party acknowledges that the Providing Party shall be entitled to injunctive relief (in addition to any other rights and remedies) in a court o f competent jurisdiction in the event that a Receiving Party fails to promptly cease using any Available Network Content or Available Comcast Content Conten t as required hereunder. hereunder. (c) Notwithstanding the termination o f this Agreement, the Parties acknowledge and agree that to the extent exten t any Licensed Content is embedded within with in any derivative work created or produced pursuant to a license granted herein during the Term in accordance with this Agreement (a New Work ), the Receiving Party's Party 's right to continue to Exhibit such New Work shall be limited to the form and manner in which it exists as the date o f termination and shall survive termination termina tion (subject (subjec t to any any and all Usage Limitations ;providedthat, in the event the Receiving Party makes any modifications to the New Ne w Work after the Term, unless the Providing Party otherwise consents to the use o f he Licensed Content in connection with such modified version o f the New Work, the Receiving Party must remove the Licensed Content from such modified version o f the New Ne w Work. (d) Notwithsta Notwi thstanding nding anything in this Agreem Agreement ent to the contrary, subject to Section 4(c) above, in the event that Comcast believes in good faith that Network, in its capacity as a Providing Party Party,, is not participating sufficient sufficiently ly in in the pool described in Section Sea), taking into account the type and amount of Licensed Content being made available by the other Providing Providi ng Parties, Comcast Com cast reserves the right righ t to terminate this Agreement or otherwise suspend the license granted to Network pursuant to Section 2(a)(I) 2(a )(I) indefi indefinitel nitely. y. (e) Notwithstan Notwit hstanding ding anything in this Agreem Agreement ent to the contrary, Sections 2(c) and Articles 4, 7, 8 and 10 shall survive any termination o f this Agreement. S.

Consideration.

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(a) Each Party recogn recognizes izes the benefit benefitss it receives by electing to be part ofa pool o f (i) Network Netwo rk Content, (ii) Comcast-Related RSN Content and (iii) Comcast Content Content and that in order to exercise the rights granted herein (and, in the case o f Comcast, to sublicense the right to Exhibit Available Network Netwo rk Content Co ntent to Comcast-Related Comcast-Related RSNs) RSNs) a Receiving Party must be willing to participate as a Providing Party in the pool (subject in all cases to Usage Limitations). (b) Network Networ k acknowledges and agrees that: (i) in order to receive certain Available Comcast Comca st Content, Network, Ne twork, along with Comcast-Related Comcast-Related RSNs, RSNs, may, from time to time, be required to contribute contri bute to the costs (including (includin g any third party license fees) fees) associated with the creation, production, development, acquisition and/or licensing from a third party o f such Available Comcast Content, in whole or part, by or on behalf o f Comcast or a Comcast-Related RSN (as applicable) ( Paid Content ) prior to being authorized to Exhibit Exhi bit such Paid Content; and (ii) unless otherwise oth erwise agreed by Network and Comcast Comcast (including in any Applicable Services Agreement), Agreement), Networ k's share o f costs for such Paid Content Conten t shall be allocated allocated by Comcast in good faith (it being understood that only those Comcast-Related Comcast -Related RSNs which wh ich agree to so contribute to the costs associated with the creation, production, development, acquisition acquisition and/or licensing licensing o f such Paid Content may be granted rights to Exhibit such Paid Content). 6.

Production and Transmission. (a) Except as set forth in Section 5(b) above or as may be otherwise agreed by the Parties, (i) any and all costs associated with creating or producing and making makin g available Licensed Content to the Receiving Party under this Agreement shall be the sole responsibility o f the Providing Party, and (ii) any and all Exhibition costs o f the Receiving Party, including (x) all costs o f delivery to (including transmission, and tape delivery) and (y) receipt, transmission and other Exhibition o f the Licensed Content by the Receiving Party, shall be the sole responsibility o f the Receiving Party. (b) The Receiving Party shall include such credits as may be required o f the Providing Provid ing Party or any applicable third party for the Licensed Licensed Content Content.. Without limiting limiting the generality o f he foregoing, foregoin g, a Receiving Rec eiving Party P arty shall, to the extent it is reasonably able to do so, and consistent with industry practice, provide credit (on-screen (on-screen or otherwise) to the Providing Party in accordance with news (as applicable) and other applicable and customary industry practices in connection with each Receiving Party's Exhibition o f the Providing Party's Licensed Content hereunder.

7

Warranties and Representations; Disclaimer. (a) Each Party represents and warrants to the other Party that (i) it possess possesses es the fu full ll power pow er and authority to enter into this this Agreement and perform its obligations hereunder hereund er and to grant the licenses granted hereby; and (ii) its execution, execution, delivery delivery and performance performance o f this Agreement does not violate any agreement, instrument, judgment, order, or

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award o f any court or arbitrator or o r any law, rule, or regulation under which it is bound or subject. (b) EXCEPT AS OTHERWISE PROVIDED IN SECTION 7(a) ABOVE, EACH PROVIDING PARTY EXPRESSLY DISCLAIMS ANY AND AN D ALL WARRANTIES OF ANY KIND; HOWEVER, TO THE EXTENT AVAILABLE, EACH PROVIDING PROVIDING PARTY AGREES TO PASS THROUGH THROU GH TO THE RECEIVING PARTY ANY AND ALL THIRD PARTY WARRANTIES AND INDEMNITIES RELATED TO THE LICENSED CONTENT TO THE EXTENT SUCH PROVIDING PARTY HAS THE RIGHT TO DO SO SO.. 8.

Infringement and Indemnification. (a) Upon becoming aware o f any actions, allegations, claims, or demands (actual or threatened) against a Receiving Party for infringement o f any intellectual property right o f any third party by reason o f Receivi Receiving ng Part y s use o f any Licensed Content from a Providing Party, the Receiving Party shall immediately notify the Providing Party of such circumstances and provide all particulars requested by the Providing Party (it being understood that any delay or failure in providing such notice that does not materially prejudice the Providing Providin g Party shall shall not be deemed a breach hereunder). The Receiving Part Party y and the Providing Party shall cooperate with w ith the other in the event even t that such a suit is brought brought. The Providing Providin g Party shall shall have the right, but not the obligation, or threatened to be brought. to employ separate counsel at its own expense expen se and to participate p articipate in and control the defens defensee o f such action or to intervene in any such infringement action against the Receiving Party. Upon intervention by the Providing Party, the Providing Party shall have the right to settle the action (including the right to agree to cease all use o f any o f the Providing Party s Licensed Content that is the subject o f the action) (it being understood that in the event that that the Providing Party exercises its right to control the defense o f such action, the Providing Party will consult with each Receiving Party against which such action has been b een threatened or brought and will consider the input o f any such Receiving Receivin g Party relating to the conduct o f such defense). I f the Providing Party provides notice to the Receiving Party that the Providing Party will not intervene in the infringement action or provide providess no response within thirty (30) days o f a reasonable request for intervention by the Receiving Party, the Receiving Party shall shall have full full responsibility with respect to such infringement i nfringement action and the right to defend such action, but shall not enter into any settlement, admit adm it any liability or consent to to any adverse judgment without the pr ior written consent o f the Providing Provid ing Party (which shall not be unreasonably withheld, conditioned or delayed); provi e that, i f such settlement would adversely affect the rights or interest o f the Providing Provi ding Party or Comcast Comc ast in and to any any o f the Licensed Content, then the providing Party may withhold such consent in its sole discretion. (b) Without limiting the Providing Part y s obligations unde underr Section 2, each Receiving Party acknowledges and agrees that it is solely responsible for determining determin ing what third party licenses, clearances, consents and releases if any) must be obtained before utilizing any Licensed Content provided by the the Providing Providi ng Party hereunder. In the event any third third party alleges that the Receiving Party s use o f Licensed Content violates any rights o f such third

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party, then, if requested by the Providing Party, the Receiving Party agrees to immediately cease use o f such Licensed Content and otherwise cooperate with the Providing Party in the resolution o f such dispute. Neit Neither her the Providi Providing ng Party nor the Receiving Party shall have any obligation to incur inc ur any incremental out-of-pocke out -of-pockett costs or fees fees in order to clear Licensed Content Conte nt for use by the other Party. Notwit Notwithstand hstanding ing the foregoing, foregoing, the Providing Party and Receiving Receivin g Party agree to cooperate cooperat e in good faith faith to inform each other o f necessary clearances and to provide status o f clearan clearance ce issues upon request from the other Party. Party. In addition, notwithstanding anything stated in this Agreement to the contrary, unless otherwise agreed between the Providing Party and Receiving Party, no Providing Party furnishing Licensed Content Conte nt hereunder hereun der shall be liable lia ble to a Receiving Receivin g Party for clearing any music music performance or synchronization or other music rights or licenses, it being understood that any Receiving Party utilizing any Licensed Content containing such music shall be responsible, at its cost, for obtain any necessary licenses to the extent required. (c) Unless otherwi otherwise se agreed by the Parties in writing, each Receiving Party shall indemnify, defend, and hold hol d harmless harml ess the Providing Party from from and against all all loss losses, es, claims, claims, damages, liabilities, demands, proceedings, and costs (including reasonable legal costs) related to or arising out o f the use o f the Licensed Content by the Receiving Party and the exercise of the Receiving Party P arty's 's rights and obligations under this Agreement. Agreement. 9. Force Majeure. Neither of the Parties will be liable for nonperformance or defective or late performance o f any o f its obligations hereunder, or be in breach o f any term or condition o f this Agreement for such nonperformance or defective or late performance, to the extent and for such periods o f time as such nonperformance, defective, or late performance is due to reasons outside such Party's Party 's control, including acts o f God, war (declared or undeclared), acts (including failure to act) o f any governmental authority, riots, revolutions, acts o f terrorism, fire, floods, explosions, sabotage, nuclear incidents, lightning, weather, earthquakes, storms, sinkholes, epidemics, labor disputes (including strikes, lockouts or other work stoppage), restrictions imposed by law or government gover nment order, mechanical mechani cal or o r computer breakdown breakdo wn (to the exten extentt not within a Party's reasonable reasonable control), or delays o f suppliers or subcontractors for the same causes (each a Force Majeure Event ); provided, however, that the Party affected by a Force Majeure Event shall promptly promptl y notify the other Party o f the condition con dition constituting such Force Majeure Event and shall exert reasonable efforts to overcome any o f the causes there thereof of and and to resume performance ofi o fits ts obligations obligations prompt promptly. ly. If a condition conditio n constituting constitut ing a Force Majeure Event Even t exists for more than ninety (90) consecutive day days, s, the Parties shall negotiate nego tiate in good faith a mutually mutual ly satisfactory satisfactory solution to the problem, if practicable. Notwithstanding the foregoing, neither Party shall be required to settle any labor dispute in any manner. 10.

Miscellaneous.

Amendments. This Agreement may only be amended by a writing signed by (a) Network and Comcast. (b)

Governi g Law; Jllrisdiction; Waiver o JUry Trial

This Agreement shall be

governed, construed and interpreted in accordance with the laws of the State o f New York without regard to principles of conflicts o f laws. The Parties agree that any any suit, suit, action or

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proceeding seeking to enforce any provision of, or based on any matter arising out o f or in connection with, this Agreement Agre ement or the transactions contemplated contempla ted hereby shall be brought in in the United States District Court for the Southern District o f New York or any New York State court sitting in New York City, and each o f the Parties hereby irrevocably consents to the jurisdiction o f such courts and o f he appropriate approp riate appellate courts co urts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent exte nt permitted by law, any objection that it may now or hereafter have to the laying o f the venue o f any such suit, action proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. forum. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without without the jurisdiction o f any such court. court. Without limiting the foregoing, each Party agrees agrees that that service service o f process on such Party as provided in Section IO c) shall be deemed effective service o f process on such Party. Each Party voluntarily and irrevocably waives waives trial trial by jur y in any any suit, suit, action or other proceeding arising out o f or in connection with this Agreement. or

c) All notices, requests, demands and other communications required or Notices permitted to be given or delivered under or by reason o f the provisions o f this Agreement shall be in in writing which shall include notice by telecopy or like transmission), shall be deemed given upon actual receipt or refusal o f such receipt) and may be sent by personal delivery, facsimile transmission, overnight Federal Express, or similar bonded, overnight courier service or certified first-class mail, return receipt requested, to the parties at the following addresses and facsimile numbers or such other addresses and facsimile numbers as a Party may have specified by notice given to the other Party pursuant purs uant to this provision); f

to

etwork

to

Houston Regional Sports Network, LLC d/ba/ [Comcast SportsNet Houston] [Address] Attention: [General Manager] Phone: Facsimile: With copies

to

Rocket Ball, Ltd. 1510 Polk Street Houston, TX 77002 Attention: General Counsel Phone: 713) 758-7386 Facsimile: And Rocket Ball, Ltd. 1510 Polk Street Houston, TX 77002 Attention: hief Executive Officer

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Phone: (713) 758-7336 Facsimile: And Houston McLane Company, LLC P.O. Box 288 Houston, Texas 77001 Attention: President Phone: (713)259-8951 Facsimile: (713) 259-8 259-8909 909

f

o Corneast to:

Comcast Sports Management Services, LLC 1701 JFK Boulevard Philadelphia, Pennsylvania 19103 Attn: President Telephone:: 215-286-5786 Telephone 21 5-286-5786 Facsimile: 215-286-5548 And Attn: SVP General Counsel Telephone: Telepho ne: 215-286-5758 Facsimile: Facsi mile: 215-286-5746 215-286-574 6

with copies cop ies to: Comcast Corporation One Comcast Center 1701 John F. Kennedy Blvd. Attention: SVP General Counsel Telephone: 215-286-7564 Facsimile: 215-286-7794

Counterparts This Agreement (d) Ag reement may be executed in one or more counterparts, each o which shall be an original and all o which, when wh en taken together, shall constitute one and the same instrument. (e) Assignment; B inding Effect Neither Party to this Agreement Agreemen t will have the right to assign any right, responsibility or obligation arising under this Agreement, except that Comcast may, at its election, assign assig n its rights and obligations arising under this Agreement without the consent o Network to any Person to whom it has the right to assign the

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Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 48 of 55 Applic able Services Agreement. Applicable Any assignment attempte attempted d in derogation o f this SectionlO(e) will be null and void and will be o f no force or effect whatsoever.

(t) Construction. The Parties have participated jointly jointl y in the t he negotiation negotiation and drafting o f this Agreement. Agreement. In the event an an ambiguity or question o f intent or interpretation arises arises,, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden o f proof shall arise favoring or disfavoring any Party by virtue o f the authorship o f any o f the provisions o f this Agreement. (g) Confidentiality. (i) Each Receiving Party shall retain the Confidential Information o f the Providing Providi ng Party (including (includi ng the Confidential Confidential Information o f any Comcast-Related RSN) in the strictest confidence (on a need to know basis) and shall not disclose such Confidential Information Informatio n to any Person without the Providing Party Part y s express written consent, other than on a need-to-know basis to an employee, agent or profession professional al advisor adv isor ofthe Receiving Party or an Affiliate thereof. Notwit Notwithstand hstanding ing anything to the contrary in this Agreement, the obligation to maintain the confidentiality o f such Confidential Confid ential Informatio Inf ormation n shall not apply to the extent that the Receiving Party (A) is required to disclose such Confidential Information pursuant to law or a legally enforceable order o f a court or judicial body body;; provided that the Receiving Receiv ing Party provides provi des notice notic e to the Providing Provid ing Party to enable the Providing Party Party to seek a protective order or an injunction, or (B) has not yet been notified (in writing and within ten days o f disclosu disclosure) re) that information given orally is confidential or proprietary. With respect to the terms and conditions o f this Agreement, it is understood and agreed that each Party may disclose the terms and conditions o f this Agreement: Agreeme nt: (A) in confidence, to its accountants, banks and present and prospective financing sources and their advisors; advisors; (B) in connection with the enforc ement o f this Agreement or rights under this Agreement; (C) in confidence, in connection with an actual or proposed merger, acquisition or similar transaction involving suc h Party; Party; (D) in confidence, to its Affiliates; (E) in confidence, to its third party contractors who have a need to know, solely in connection with their provision o f services to such Party; (F) as required by applicable securities laws or the rules o f any stock exchange on which securities of such party are traded or any other applicable regulatory rule or regulation or (ii)

governmental agency directive or request; provided however that prior to making any such disclosure, such Party shall provide notice to the other Party regarding the nature and extent o f the disclosure to enable the other party to seek to obta in confidential treatment, to the extent available, for such Confidential Information; or 0 ) as mutually agreed upon by the Parties. (h) No Implied Waivers. Except for a written waiver executed by a Party, no action taken pursuant to this Agreement, including any investigation investigation by or on beha lf o f either Party, shall be deemed to constitute constit ute a waiver waiv er by the Party taking such action o f compliance with any representations, warranties, warranties, agreements agreements,, covenants, obligations or commitments contained herein or made pursuant hereto. hereto. The waiver by either Party Party o f a breach o f any provision o f this Agreement shall not operate or be construed as a waiver o f any preceding or succeeding breach. Except where a time period is specified, no delay on the part o f any Party in the exercise o f any right, power, privilege privi lege or remedy hereunder here under shall operate as a waiver thereof, thereof,

2

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Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 49 of 55 nor shall any exercise o f any such right, power, privilege or remedy preclude any fUliher exercise exerc ise thereof or the exercise o f any other right, power, privilege or remedy. Said rights and remedies are given in addition to any other rights the Parties may have by law, statute, ordinance or otherwise.

i) Relationship. Nothing in this Agreement shal shalll be construed to render Comcast and Network partners or joint venturers or to impose upon any o f them any liability as such, except as otherwise specifically provided in the Partnership Agreement. Neither Party has has any authorization to ente r into any contracts or assume any obligations for the other Party or make any warranties or representations on behalf of another Party other than as expressly authorized herein herein.. No subscriber o f Network or its distributors distributo rs shall be deemed to have any privity o f contract or direct contractual or other relationship with Comcast or any Comcast Related RSN by virtue o f this Agreement. Agreement. Netwo rk disclaims any present or futur futuree right, right, interest or estate in or to the facilities or intellectual property o f Comcast or any Comcast Related RSN, except to the extent incorporated intellectual property o f Network or any any ofit s Subsidiaries and for such rights as ma y be expressly granted to Network herein or any other agreement between Network and Comcast or any Comcast-Related RSN. Comcast disclaims disclaims any present or future right, interest or estate in or to the facilities or intellectual property o f Network or any o f its Subsidiaries, except to the extent ext ent incorporating intellectual propert property y of Comcastt or a Comcast Affiliate Comcas Affiliat e and for such rights as may be expressly granted to Comcast herein or any other agreement between Networ k and Comcast. U) enefit and Burden, No Third Party Beneficiaries. This Agreement shall inure solely to the benefit o f each o f the Parties a nd their permitted successors and assigns, assigns, and nothing nothi ng in this Agreement Agree ment is intended inten ded to confer conf er upon any other othe r person any rights rights or remedies o f any nature whatsoever unde r or by reason o f this Agreement; provided, however, each Comcast-Related RSN, in its capacity as a Providing Party, shall be an intended third party beneficiary o f his Agreement for the purposes o f Sections 2 c), 2 d), 4 b), 4 c) and 6 b) and Articles 8 and 10 to the extent applicable to such Providing Party. Party.

k) Severability. f any covenant or provision hereof is determined to be void or unenforceable in whole or in part, it shall not be dee med to affect or impair the validity o f any other covenant or provision, each of which is hereby h ereby declared decla red to be separate and distinct. distinct. f any provision o f this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable. f any provision of this Agreement is declared invalid or unenforceable for any reason other than overbreadth, the offending provision will be modified so as to maintain the essential benefits o f the bargain among Comcast and Network to the maximum maxi mum exte nt possible, consistent with Applicable Law and and public policy. 1)

No Recourse. Notwit Notwithstandi hstanding ng anything contained in this Agreement to the contrary, contrary,

it is expressly understood and agreed by the Parties that each and every representation, warranty, warra nty, covenant, undertaking and agreement made in this Agreement was not made or intended to be made as a personal representation, undertaking, warranty, covenant or agreement on the part o f any incorporator, stockholder, director, officer, partner, member, manager, employee or agent of Net Network work or its general partner, past, present pre sent or future, future, or any

13 (NY) 05726/371 AGTSlProgram and Content License Agreemenl.doc

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 50 of 55 them, and any recourse, whether wh ether in common comm on law, in equity, by statute statute or otherwise, against against any o them in connection with the matters set forth in this Agreement is hereby forever waived and released. o

m) Entire Aereement. This Agreement, together with the Applicable Services Agreement, represent the entire understanding and agreement between the Parties with respect to the subject matter o and the transactions contemplated hereby and thereby and supersede all prior negotiations among the partners o Network with respect to the transactions contemplated hereby and thereby; provided. however nothing herein is intended to alter, modify or otherwise amend any other understanding or agreement between the Parties to the extent exte nt not directly related to to the subject matter o this Agreement. Reasonable efforts shall be made to interpret and give full force and effect to the provisions o this Agreement within the four comers o this Agreement. [The Remainder

O This

Page s Intentionally Left Blank]

4

NY) 05726f377 AGTSfProgram

and

ontent License

Agreement.doc

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 51 of 55

IN WITNESS WHEREOF the undersigned have executed this Agreement by their duly authorized representatives on the date first written above COMCAST SPORTS MANAGEM MANAGEMENT ENT

HOUSTON REGIONAL SPORTS NETWORK

SERVICES LLC

LP

y:

___

Name: Title:

y:

Name: Title:

5 NY) 05726/377/AGTS/Program and Content License Agreement doc

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 52 of 55

ATTACHMENT

A

EFINITIONS

Affiliate means, with respect to a specified Person, any other Person that directly or indirectly through one or more intermediaries Controls, is Controlled by, or is under common Control with, such specified Person; provided, however, that neither Network nor any o f its Subsidiaries shall be deemed to be an Affiliate o f Comcast or any o f its Affiliates (and, for the avoidance o f doubt, vice versa). Applicab le Services greement means the applicable services agreement or similar arrangem arrangement ent between the Parties pursuant to which Comcast provides management oversight, services and support to Network in connection with the Program Service. Service. Available Commercial Inventorv means all commercial spot time if any) that is available for use within any Licensed Content during the Receiving Party's (or it itss sublicensee's, sublice nsee's, to the extent permitted hereunder) Exhibition o f such Licensed Content (but only to the extent that such

commercial spot time if any) is not reserved by the Providing Party or a third party) (it being understood that Available Commercial Inventory shall not include commercial spot time that is available for use within any Licensed Content during any any other Person's Perso n's Exhibition o f such Licensed Content). Comeast Parent means Comcast Corporation i.e., Comca Comcast's st's ultimate parent company). company). Comcast-Related RSNmeans any RSN (other than Network or any o f its Subsidiaries) in which a Comcast Affiliate owns a direct or indirect interest and as to which Comcast or any Comcast Affiliate provides services o f the type contemplated in the Services Agreement, in each case that is set forth in Attachment B, as the same may be updated from time to time by Com cast upon providing prior written notice to Network. Confidential Informat ion means i) the terms o f this Agreement and (ii) any non-public, confidential or proprietary information relating to a Party (including a Comcast-Related RSN) ( disclosing party), party), including any information that is designated by the disclosing party as Confidential Information at the time o f its disclosure, either by a written or visual confidentiality designation, or o r orally; provided that (i) written confirmation o f such confidential status is provided to the receiving party within ten (10) days thereafter or (ii) such information would, under the circumstances, appear to a reasonable person to be confidential or o r proprietary proprietary.. Notwithstanding the foregoing foregoing,, Confidential Information does not include information, technical data or know-how which: (A) is in the public domain at the time of disclosure or becomes available thereafter to the public without restriction, restriction, and in either case not as a result o f the act or omission o f the receiving party; (B) is rightfully obtained by the receiving party from a third party without restriction as to disclosure; (C) is lawfully in the possession o f the receiving

party at the time o f disclosure by the disclosing party and not otherwise subject to restriction on disclosure; (D) is approved for disclosure by prior written authorization o f the disclosing party;

(NY

OS7

6/ 77 /AGTSlProgr AGTSlProgra am and COnl ent Licens Licensee Agr ee men t. do c

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 53 of 55

or (E) is developed independently and separately by either party without use party's Confidential Information.

o

the disclosing

powe r to direct, direct, or cause the direction of, the Control shall mean the direct or indirect power management and policies o any Person, whether through the ownership o voting securities, by contract, by membership or involvement in the board o directors, management committee or other management structure o such Person or otherwise, and the terms Controlled and Controlling have correlative meanings.

Distribution Footprint means, with respect to Network and any Comcast-Related RSN, the primary distribution footprint for Network or such Comcast-Related Comcast-Related RSN, as applica applicable ble i.e., the territory that corresponds to the local territory(ies) o the Major League Baseball, National Basketball Association and/or National Hockey League teams in respect o which Network or such Comcast-Related RSN, as applicable, is licensed the local rights to Exhibit a substantial package o live games o such teams, or, with respect to any Comcast-Related RSN that does not distribute a substantial package o live games o any such teams, such other geographic area as may be mutually agreed between Comcast and Network to permit Exhibition o Network Content by such Comcast-Related RSN. Effective Date means effective date

o

the Applicable Services Agreement.

Exhibit means transmit, retransmit, telecast, retelecast, exhibit, re-exhibit, distribute, re distribute and otherwise exploit, perform, and display. Media Distribution means any and all forms, means or modalities o electronic or other tangible or non-tangible transmission, distribution, or exhibition o audio, visual or audio-visual programming (whether now existing or developed in the future), including by means o cable, wire or fiber o any material, direct broadcast satellite, internet protocol television (IPTV), wireless, open video systems, over-the-air, telecast, broadcast, in any frequency band and any format, and any and all forms o electronic or other tangible or non-tangible transmission (whether analog or digital, via the Internet or any other electronic or non-tangible medium) to or from any location for transmission, distribution or exhibition or for taping, recording or other storage on tape, disc or any other means o data retention for subsequent replay (whether now existing or developed in the future), master antenna, satellite master antenna, full power or low power transmission, HDTV transmission or any other form o enhanced transmission, closed circuit transmission, radio, single and multichannel multipoint distribution service and satellite transmission directly to the home on all basis including broadcast, subscription, pay-per-view, video-on-demand, interactive download, license, rental, sale or any other means or basis including broadcast television. Person means any individual, group, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or agency or political subdivision thereof, or other entity, whether acting in an individual, fiduciary or other oth er capacity.

J7 NY) 05726/377/AGTS/Program and Conlenl License Agreemenl doc

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 54 of 55

Providing Party means a Party providing Licensed Content to the other Party (including, (including, in the case o Com cast as the provider o Licensed Content, each relevant Comcast-Related RSN with respect to its Comcast-Related RSN Content). Receiving Party means a Party receiving Licensed Content from or o r through the other Party. Party. Restricted Content means Licensed Content that is subject s ubject to Usage Limitations. Limitations. Supplier nd Sports Association Restriction Restrictionss means, with respect to programming or content provided by any Providing Party, (i) all rules, regulations and agreements o applicable third party programming or content suppliers suppliers and al alll applicable sports leagues and associations (as (as such rules, regulations and agreements presently exist and as they may from time to time be entered into or amended, and as they may be interpreted by the the commissioner or other chi ef executive thereof) and (ii) any any applicable restrictions under any any Providing Party s affiliation agreements. Subsidiary means, with respect to any specified Person, any other Person directly or indirectly through one or more intermediaries Controlled by such specified Person; provided however that neither Network nor any o its Subsidiaries shall be deemed to be a Subsidiary o Comcast or any o

its Affiliates.

Term means the period commencing commenc ing on the Effective Date and ending upon the termination o this Agreement pursuant to Section 4 (other than a partial termination pursuant to Section Secti on 4(a)(iii».

8 NY) 05726/377/AGTS/Program and Content License Agreement.doc

 

Case 15-03144 Document 1-1 Filed in TXSB on 06/11/15 Page 55 of 55

ATTACHMENT B COMCAST RELATED RSNs RSNs

[Cable Sports Southeast] [Corneast SportsNet Bay Area] Corneastt SportsNet California Corneas [Corneast SportsNet Chieago] Corneast SportsNet Mid-Atlantic Corneast SportsNet ew England Corneast SportsNet Philadelphia Corneastt SportsNet Northwest Corneas

Pending any necessary third party approvals

NY) 05726 377 AGTSlProgram and Content License Agreement.doc

 

Case 15-03144 Document 1-2 Filed in TXSB on 06/11/15 Page 1 of 8

IN THE UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In re:

v.

§ § § § § § § § § § § § § §

COMCAST CORPORATION, CORPORATION, INC., COMCAST SPORTS MANAGEMENT SERVICES, LLC, COMCAST CABLE COMMUNICATIONS, COMMUNICA TIONS, LLC, HOUSTON SPORTSNET FINANCE, LLC, HOUSTON SPORTSNET HOLDINGS, LLC, NATIONAL DIGITAL TELEVISION TELEVIS ION CENTER, LLC (D/B/A COMCAST MEDIA CENTER), COMCAST SPORTSNET CALIFORNIA, LLC, NBCUNIVERSAL MEDIA, LLC (F/K/A NBCUNIVERSAL, INC., JON LITNER, JOHN RUTH,

§ § § § § § § § § § § § §

HOUSTON REGIONAL SPORTS NETWORK,, L.P. NETWORK Debtor. ROBERT E. OGLE, AS LITIGATION TRUSTEE OF THE HRSN LITIGATION LITIGATION TRUST, Plaintiff,

ROBERT PICK, AND MADISON BOND, Defendants.

Chapter 11

Case No.: 13-35998

Adv. Proceeding No. _______

Demand For Jury Trial

§ § § § 

EXHIBIT B TO PLAINTIFF’S COMPLAINT

 

 

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