EXHIBIT 2.1
ASSET CONTRIBUTION AGREEMENT
dated August 15, 2000
among
COMMAND CABLE OF EASTERN ILLINOIS LIMITED PARTNERSHIP
MEDIAONE OF ILLINOIS, INC.,
NORTHWEST ILLINOIS TV CABLE COMPANY,
S/D CABLE PARTNERS, LTD.,
TCI AMERICAN CABLE HOLDINGS, L.P.,
TCI OF BLOOMINGTON/NORMAL, INC.,
TCI CABLEVISION OF TEXAS, INC.,
UACC MIDWEST, INC.,
UNITED CABLE TELEVISION OF ILLINOIS VALLEY, INC.,
UNITED CABLE TELEVISION OF SOUTHERN ILLINOIS, INC.,
TCI OF INDIANA HOLDINGS, LLC,
INSIGHT COMMUNICATIONS COMPANY, L.P.
and
INSIGHT MIDWEST, L.P.
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 2
1.1 1992 Cable Act................................................. 2
1.2 Affiliate...................................................... 2
1.3 Aggregate Gross Fair Market Value.............................. 2
1.4 Assets......................................................... 2
1.5 AT&T Assets.................................................... 2
1.6 AT&T Books and Records......................................... 3
1.7 AT&T Leased Property........................................... 3
1.8 AT&T Other Intangibles......................................... 3
1.9 AT&T Other Real Property Interests............................. 3
1.10 AT&T Owned Property............................................ 3
1.11 AT&T Required Consents......................................... 3
1.12 AT&T System Contracts.......................................... 4
1.13 AT&T System Franchises......................................... 4
1.14 AT&T System Licenses........................................... 4
1.15 AT&T Tangible Personal Property................................ 4
1.16 AT&T's Cable Business.......................................... 4
1.17 Basic Services................................................. 4
1.18 Business Day................................................... 4
1.19 Cable Act...................................................... 4
1.20 Cable Business................................................. 4
1.21 Central Ohio Common Interests.................................. 5
1.22 Closing Time................................................... 5
1.23 Communications Act............................................. 5
1.24 Contract....................................................... 5
1.25 Equivalent Basic Subscribers (or "EBSs")....................... 5
1.26 Environmental Law.............................................. 6
1.27 ERISA.......................................................... 6
1.28 ERISA Affiliate................................................ 6
1.29 Exchange....................................................... 6
1.30 Expanded Basic Services........................................ 6
1.31 FCC............................................................ 6
1.32 Financial Statements........................................... 6
1.33 GAAP........................................................... 6
1.34 Governmental Authority......................................... 7
1.35 Hazardous Substances........................................... 7
1.36 Holdings (Central Ohio)........................................ 7
1.37 HSR Act........................................................ 7
1.38 Insight Assets................................................. 7
1.39 Insight Books and Records...................................... 7
1.40 Insight Central Ohio........................................... 8
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1.41 Insight Contributed Assets or Insight Contributed Systems...... 8
1.42 Insight LLC Interest........................................... 8
1.43 Insight Leased Property........................................ 8
1.44 Insight Other Intangibles...................................... 8
1.45 Insight Other Real Property Interests.......................... 8
1.46 Insight Owned Property......................................... 8
1.47 Insight Required Consents...................................... 8
1.48 Insight System Contracts....................................... 9
1.49 Insight System Franchises...................................... 9
1.50 Insight System Licenses........................................ 9
1.51 Insight Tangible Personal Property............................. 9
1.52 Insight's Cable Business....................................... 9
1.53 Interim Period................................................. 9
1.54 Judgment....................................................... 10
1.55 Knowledge...................................................... 10
1.56 Leased Property................................................ 10
1.57 Legal Requirement.............................................. 10
1.58 Liberty Media Group............................................ 10
1.59 Lien........................................................... 10
1.60 Litigation..................................................... 10
1.61 Losses......................................................... 10
1.62 Other Real Property Interests.................................. 11
1.63 Owned Property................................................. 11
1.64 Pay TV......................................................... 11
1.65 Permitted Debt................................................. 11
1.66 Permitted Lien................................................. 11
1.67 Person......................................................... 11
1.68 Required Consents.............................................. 11
1.69 Sale........................................................... 12
1.70 System......................................................... 12
1.71 System Contracts............................................... 12
1.72 System Franchises.............................................. 12
1.73 System Licenses................................................ 12
1.74 Tangible Personal Property..................................... 12
1.75 Taxes.......................................................... 12
1.76 Third Party.................................................... 12
1.77 Transaction Documents.......................................... 12
1.78 Other Definitions.............................................. 13
1.79 Accounting Terms............................................... 15
SECTION 2. CONTRIBUTION; RESTRUCTURINGS................................... 15
2.1 Agreement to Contribute........................................ 15
2.2 Restructuring of the Partnership............................... 15
2.3 Coaxial Restructuring.......................................... 16
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SECTION 3. MEMBERSHIP INTERESTS AND CLOSING ADJUSTMENTS................... 16
3.1 Membership Interests........................................... 16
3.2 Gross Value of Contributions; Assumption of Debt............... 16
3.3 Closing Adjustments............................................ 19
3.4 Calculation of Adjustments..................................... 22
SECTION 4. ASSUMED LIABILITIES AND EXCLUDED ASSETS........................ 23
4.1 Assumed Obligations and Liabilities............................ 23
4.2 AT&T Excluded Assets........................................... 24
4.3 Insight Excluded Assets........................................ 25
SECTION 5. INSIGHT'S REPRESENTATIONS AND WARRANTIES....................... 27
5.1 Organization and Qualification of Insight...................... 27
5.2 Authority and Validity......................................... 27
5.3 No Conflict; Required Consents................................. 28
5.4 Assets......................................................... 28
5.5 Insight System Franchises, Insight System Licenses, Insight
System Contracts and Insight Other Real Property Interests.... 29
5.6 Real Property.................................................. 30
5.7 Environmental.................................................. 31
5.8 Compliance with Legal Requirements............................. 32
5.9 Patents, Trademarks and Copyrights............................. 34
5.10 Financial Statements; Undisclosed Liabilities; Absence
of Certain Changes or Events................................... 34
5.11 Litigation..................................................... 35
5.12 Tax Returns; Other Reports..................................... 36
5.13 Employment Matters............................................. 36
5.14 Accounts Receivable............................................ 38
5.15 Finders and Brokers............................................ 38
5.16 Transactions With Affiliates................................... 38
5.17 Holdings (Central Ohio) and Insight Central Ohio............... 38
SECTION 6. AT&T'S REPRESENTATIONS AND WARRANTIES.......................... 39
6.1 Organization and Qualification of AT&T......................... 40
6.2 Authority and Validity......................................... 40
6.3 No Conflict; Required Consents................................. 41
6.4 Assets......................................................... 41
6.5 AT&T System Franchises, AT&T System Licenses, AT&T System
Contracts and AT&T Other Real Property Interests............... 42
6.6 Real Property.................................................. 43
6.7 Environmental.................................................. 44
6.8 Compliance with Legal Requirements............................. 45
6.9 Patents, Trademarks and Copyrights............................. 47
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6.10 Financial Statements; Undisclosed Liabilities; Absence
of Certain Changes or Events.................................... 47
6.11 Litigation...................................................... 48
6.12 Tax Returns; Other Reports...................................... 48
6.13 Employment Matters.............................................. 48
6.14 Accounts Receivable............................................. 50
6.15 Finders and Brokers............................................. 50
6.16 Transactions With Affiliates.................................... 50
SECTION 7. ADDITIONAL COVENANTS............................................ 50
7.1 Access to Premises and Records.................................. 51
7.2 Continuity and Maintenance of Operations; Certain
Deliveries and Notices.......................................... 51
7.3 Employees....................................................... 53
7.4 Leased Vehicles; Other Capital Leases........................... 58
7.5 Required Consents............................................... 58
7.6 Title Commitments and Surveys................................... 59
7.7 HSR Notification................................................ 59
7.8 Taxes, Fees and Expenses........................................ 60
7.9 Distant Broadcast Signals....................................... 60
7.10 Use of Names and Logos.......................................... 60
7.11 Transitional Billing Services................................... 60
7.12 Confidentiality and Publicity................................... 61
7.13 Bulk Transfers.................................................. 61
7.14 Lien Searches................................................... 62
7.15 Further Assurances.............................................. 62
7.16 Consents........................................................ 62
7.17 Cooperation as to Rates and Fees................................ 62
7.18 Satisfaction of Conditions...................................... 64
7.19 Offers.......................................................... 64
7.20 Environmental Reports........................................... 64
7.21 Cooperation on SEC Matters...................................... 65
7.22 Value of Assets Contributed..................................... 65
7.23 Cooperation on Pending Litigation............................... 66
7.24 Franchise Consents.............................................. 66
7.25 [Intentionally Deleted.]........................................ 68
7.26 CSG............................................................. 68
7.27 Rebuild of AT&T Systems......................................... 68
7.28 Schedules....................................................... 69
SECTION 8. CONDITIONS PRECEDENT............................................ 70
8.1 Conditions to Insight's Obligations............................. 70
8.2 Conditions to AT&T's Obligations................................ 72
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SECTION 9. THE CLOSING.................................................... 75
9.1 The Closing; Time and Place.................................... 75
9.2 AT&T's Delivery Obligations.................................... 75
9.3 Insight's Delivery Obligations................................. 77
9.4 The Partnership's Delivery Obligations......................... 78
9.5 Refinancing of the AT&T and Insight Permitted Debt............. 78
SECTION 10. TERMINATION AND DEFAULT........................................ 79
10.1 Termination Events............................................. 79
10.2 Effect of Termination.......................................... 80
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.... 80
11.1 Survival of Representations and Warranties..................... 80
11.2 Indemnification by AT&T........................................ 80
11.3 Indemnification by Insight..................................... 82
11.4 Indemnification by the Partnership............................. 83
11.5 Third Party Claims............................................. 83
11.6 Limitations on Indemnification - AT&T.......................... 84
11.7 Limitations on Indemnification - Insight....................... 85
11.8 Limitations on Indemnification - the Partnership............... 85
SECTION 12. MISCELLANEOUS PROVISIONS....................................... 86
12.1 Parties Obligated and Benefitted............................... 86
12.2 Notices........................................................ 86
12.3 Right to Specific Performance.................................. 88
12.4 Waiver......................................................... 88
12.5 Captions....................................................... 88
12.6 Choice of Law.................................................. 88
12.7 Terms.......................................................... 88
12.8 Rights Cumulative.............................................. 88
12.9 Time........................................................... 88
12.10 Late Payments.................................................. 89
12.11 Counterparts................................................... 89
12.12 Entire Agreement............................................... 89
12.13 Severability................................................... 89
12.14 Construction................................................... 89
12.15 Expenses....................................................... 89
12.16 Risk of Loss................................................... 89
12.17 Tax Consequences............................................... 91
12.18 Commercially Reasonable Efforts................................ 91
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
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Schedule 1.7 AT&T Leased Property
Schedule 1.9 AT&T Other Real Property Interests
Schedule 1.10 AT&T Owned Property
Schedule 1.12 AT&T System Contracts
Schedule 1.13 AT&T System Franchises
Schedule 1.14 AT&T System Licenses
Schedule 1.25A Insight Rates
Schedule 1.25B AT&T Rates
Schedule 1.43 Insight Leased Property
Schedule 1.45 Insight Other Real Property Interests
Schedule 1.46 Insight Owned Property
Schedule 1.48 Insight System Contracts
Schedule 1.49 Insight System Franchises
Schedule 1.50 Insight System Licenses
Schedule 4.2 AT&T Excluded Assets
Schedule 4.3 Insight Excluded Assets
Schedule 5.3 Insight Required Consents
Schedule 5.4 Insight Liens
Schedule 5.7 Insight Environmental Matters
Schedule 5.8 Insight Cost of Service Elections
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Schedule 5.10 Insight Financial Statements; Insight Changes or Events
Schedule 5.11 Insight Litigation
Schedule 5.12 Insight Tax Matters
Schedule 5.13(a) Insight Employees
Schedule 5.13 Insight Plans; Employee Matters
Schedule 5.16 Insight Affiliate Transactions
Schedule 6.3 AT&T Required Consents
Schedule 6.4 AT&T Liens
Schedule 6.7 AT&T Environmental Matters
Schedule 6.8 AT&T Cost of Service Elections
Schedule 6.10 AT&T Financial Statements; AT&T Changes or Events
Schedule 6.11 AT&T Litigation
Schedule 6.12 AT&T Tax Matters
Schedule 6.13(a) AT&T Employees
Schedule 6.13 AT&T Plans; Employee Matters
Schedule 6.16 AT&T Affiliate Transactions
EXHIBITS
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Exhibit A Insight Systems
Exhibit B AT&T Systems
Exhibit C Exchange Systems
Exhibit D Sale Systems
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ASSET CONTRIBUTION AGREEMENT
----------------------------
THIS ASSET CONTRIBUTION AGREEMENT ("Agreement") is made and entered into as
of the 15/th/ day of August, 2000, by and among, Command Cable of Eastern
Illinois Limited Partnership, a New Jersey limited partnership, MediaOne of
Illinois, Inc., a Delaware corporation, Northwest Illinois TV Cable Company, an
Illinois limited partnership, S/D Cable Partners, Ltd., a Colorado limited
partnership, TCI American Cable Holdings, L.P., a Colorado limited partnership,
TCI of Bloomington/Normal, Inc., a Virginia corporation, TCI Cablevision of
Texas, Inc., a Texas corporation, UACC Midwest, Inc., a Delaware corporation,
United Cable Television of Illinois Valley, Inc., an Illinois corporation,
United Cable Television of Southern Illinois, Inc., a Delaware corporation, TCI
of Indiana Holdings, LLC, a Colorado limited liability company ("TCI LLC"),
Insight Communications Company, L.P., a Delaware limited partnership ("Insight")
and Insight Midwest, L.P., a Delaware limited partnership (the "Partnership").
MediaOne of Illinois, Inc., Northwest Illinois TV Cable Company, S/D Cable
Partners, Ltd., TCI American Cable Holdings, L.P., TCI of Bloomington/Normal,
Inc., TCI Cablevision of Texas, Inc., UACC Midwest, Inc., United Cable
Television of Illinois Valley, Inc., and United Cable Television of Southern
Illinois, Inc., are referred to herein as the "AT&T Subsidiaries" or "AT&T,"
individually and collectively as the context requires.
RECITALS
A. Insight owns and operates, directly or through its subsidiary, Insight
Central Ohio, cable television systems which are franchised or hold other
operating authority and operate in and around the communities in Illinois,
Indiana, Ohio and Georgia listed on Exhibit A (the "Insight Systems"). Exhibit A
separately identifies those Insight Systems that are owned directly by Insight
and those that are owned by Insight Central Ohio. The Insight Systems that are
owned by Insight Central Ohio are sometimes separately referred to herein as the
"Insight Central Ohio Systems."
B. The AT&T Subsidiaries own and operate cable television systems which
are franchised or hold other operating authority and operate in and around the
communities in Illinois listed on Exhibit B (the "AT&T Systems").
C. On the date hereof, MediaOne of Illinois, Inc. and Insight are
entering into an Asset Exchange Agreement pursuant to which MediaOne of
Illinois, Inc. will transfer and assign to Insight (or a permitted assignee of
Insight), substantially all of the assets relating to certain cable television
systems which are franchised or hold other operating authority and operate in
and around Freeport, Illinois and certain surrounding communities (as listed on
EXHIBIT C, the "Exchange Systems" and the assets of such Exchange Systems that
are transferred by MediaOne of Illinois, Inc. pursuant to the Asset Exchange
Agreement being referred to as the "Exchange Assets").
D. On the date hereof, TCI of Illinois, Inc., TCI of Racine, Inc. and
UACC Midwest, Inc. on the one hand (collectively, the "AT&T Sale Entities") and
Insight on the other hand, are entering into an Asset Purchase and Sale
Agreement pursuant to which the AT&T Sale Entities will transfer and sell to
Insight (or a permitted assignee of Insight), on the Closing Date immediately
prior to the Closing hereunder, substantially all of the assets relating to
certain cable television systems which are franchised or hold other operating
authority and operate in and around Central and North Central Illinois and
certain surrounding communities (as listed on EXHIBIT D, the "Sale Systems" and
the assets of such Sale Systems that are transferred by the AT&T Sale Entities
pursuant to the Asset Purchase and Sale Agreement being referred to as the "Sale
Assets").
E. Insight desires to contribute the Insight Systems, the Exchange
Systems, the Sale Systems and the Insight LLC Interest to the Partnership and
AT&T desires to contribute the AT&T Systems to the Partnership.
AGREEMENTS
In consideration of the mutual covenants and promises set forth herein, the
parties agree as follows:
SECTION 1. DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
capitalized terms or terms otherwise defined in this Section 1 shall have the
meanings set forth below:
1.1 1992 Cable Act. The Cable Television Consumer Protection and
--------------
Competition Act of 1992, as amended, and the FCC rules and regulations
promulgated thereunder.
1.2 Affiliate. With respect to any Person, any Person controlling,
---------
controlled by or under common control with such Person; "control" means the
ownership, directly or indirectly, of voting securities representing the right
generally to elect a majority of the directors (or similar officials) of a
Person or the possession, by contract or otherwise, of the authority to direct
the management and policies of a Person. For the avoidance of doubt,
notwithstanding anything in this Agreement or the Transaction Documents (a) no
member of the Liberty Media Group shall be deemed to be an Affiliate of AT&T and
(b) Insight Central Ohio is an Affiliate of Insight.
1.3 Aggregate Gross Fair Market Value. The Aggregate Gross Fair Market
---------------------------------
Value of the AT&T Assets or the Aggregate Gross Fair Market Value of the Insight
Contributed Assets or both, as the context requires.
1.4 Assets. The Insight Assets or the AT&T Assets or both, as the context
------
requires, but not including any of the Exchange Assets or Sale Assets unless
expressly indicated.
1.5 AT&T Assets. All assets, properties, privileges, rights, interests
-----------
and claims, real and personal, tangible and intangible, of every type and
description that are owned, leased, held for use or used in connection with
AT&T's Cable Business and in which AT&T has any right, title or interest or
acquires any right, title or interest on or before the Closing, including AT&T
Tangible Personal Property, AT&T Owned Property, AT&T Leased Property, AT&T
Other Real Property
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Interests, AT&T System Franchises, AT&T System Licenses, AT&T System Contracts,
AT&T Books and Records and AT&T Other Intangibles, but excluding any AT&T
Excluded Assets.
1.6 AT&T Books and Records. All engineering records, files, data,
----------------------
drawings, blueprints, schematics, reports, lists, plans and processes and all
other files of correspondence, lists, records and reports concerning AT&T's
Cable Business, including subscribers and prospective subscribers of the AT&T
Systems, signal and program carriage and dealings with Governmental Authorities,
including all reports filed by or on behalf of AT&T with the FCC and statements
of account filed by or on behalf of AT&T with the U.S. Copyright Office, but
excluding any AT&T Excluded Assets.
1.7 AT&T Leased Property. All leasehold interests in real property that
--------------------
is held for use or used in connection with AT&T's Cable Business which AT&T has
or acquires prior to Closing, including those described as AT&T Leased Property
on Schedule 1.7.
1.8 AT&T Other Intangibles. All intangible assets other than AT&T System
----------------------
Franchises, AT&T System Licenses and AT&T System Contracts, including subscriber
lists, accounts receivable, claims (excluding any claims relating to AT&T
Excluded Assets), patents, copyrights and going concern value, if any, that are
owned, held for use or used in connection with AT&T's Cable Business and in
which AT&T has, or acquires prior to Closing, any right, title or interest.
1.9 AT&T Other Real Property Interests. All easements and rights of
----------------------------------
access (other than those relating to multiple dwelling units) and other
interests in real property that are held for use or used in connection with
AT&T's Cable Business and in which AT&T has, or acquires prior to Closing, any
right, title or interest, including those interests described as AT&T Other Real
Property Interests on Schedule 1.9, but not including AT&T Leased Property or
AT&T Owned Property.
1.10 AT&T Owned Property. All fee interests in real property that is
-------------------
owned, held for use or used in connection with AT&T's Cable Business which AT&T
has or acquires prior to Closing, including those described as AT&T Owned
Property on SCHEDULE 1.10 and all improvements thereon.
1.11 AT&T Required Consents. Any and all consents, authorizations and
----------------------
approvals required for (i) AT&T to transfer the AT&T Assets to the Partnership
and the Partnership to, directly or indirectly, transfer the AT&T Assets to
Indiana LLC; (ii) Indiana LLC to operate the AT&T Systems and to own, lease, use
and operate the AT&T Assets and the AT&T Systems at the places and in the manner
in which the AT&T Assets are used and the AT&T Systems are operated as of the
date of this Agreement and as of the Closing; and (iii) Indiana LLC to assume
and perform the AT&T System Franchises, the AT&T System Licenses, the leases and
other documents evidencing AT&T Leased Property or AT&T Other Real Property
Interests and the AT&T System Contracts, including those consents,
authorizations and approvals required under the AT&T System Franchises, the AT&T
System Licenses, the leases and other documents evidencing AT&T Leased Property
and AT&T Other Real Property Interests and the AT&T System Contracts.
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1.12 AT&T System Contracts. All pole line agreements, underground conduit
---------------------
agreements, crossing agreements, multiple dwelling, bulk billing or commercial
service agreements, leased channel access agreements and other Contracts (other
than AT&T System Franchises and AT&T System Licenses) held for use or used in
connection with AT&T's Cable Business and to which AT&T is, or becomes prior to
Closing, as permitted by this Agreement, a party or bound, including those
described on Schedule 1.12.
1.13 AT&T System Franchises. All franchise agreements, operating permits
----------------------
or similar governing agreements, instruments, resolutions, statutes, ordinances,
approvals, authorizations and permits obtained from any franchising authority in
connection with AT&T's Cable Business, including all amendments and
modifications thereto and all renewals thereof, for the areas and communities
listed on Schedule 1.13.
1.14 AT&T System Licenses. The intangible cable television channel
--------------------
distribution rights, cable television relay service (CARS), business radio and
other licenses, copyright notices and other licenses, authorizations, consents
or permits issued by the FCC or any other Governmental Authority in connection
with AT&T's Cable Business (other than AT&T System Franchises, AT&T System
Contracts and AT&T Other Real Property Interests), including those described on
Schedule 1.14.
1.15 AT&T Tangible Personal Property. All tangible personal property that
-------------------------------
is owned, leased, held for use or used in connection with AT&T's Cable Business
and in which AT&T has, or acquires prior to Closing, any right, title or
interest, including towers, tower equipment, aboveground and underground cable,
distribution systems, headend amplifiers, line amplifiers, microwave equipment,
converters, testing equipment, motor vehicles, office equipment, computers and
billing equipment, furniture, fixtures, supplies, inventory and other physical
assets.
1.16 AT&T's Cable Business. The cable television business and other
---------------------
income-generating businesses related to the AT&T Systems conducted by AT&T
through the AT&T Systems.
1.17 Basic Services. The lowest tier of cable television service offered
--------------
to subscribers of a System that includes the retransmission of local broadcast
signals as defined by the Cable Act and the 1992 Cable Act.
1.18 Business Day. Any day other than a Saturday, Sunday or a day on
------------
which the banking institutions in Denver, Colorado or New York, New York are
required or authorized to be closed.
1.19 Cable Act. The Cable Communications Policy Act of 1984, as amended,
---------
and the rules and regulations promulgated thereunder.
1.20 Cable Business. Insight's Cable Business or AT&T's Cable Business,
--------------
or both as the context requires.
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1.21 Central Ohio Common Interests. The outstanding "Common Interests" in
-----------------------------
Insight Central Ohio (as defined in the Insight Central Ohio Operating
Agreement), 100% of which will be held as of Closing by Holdings (Central Ohio).
1.22 Closing Time. 12:01 A.M., Mountain Time, on the Closing Date.
------------
1.23 Communications Act. The Communications Act of 1934, as amended, and
------------------
the rules and regulations promulgated thereunder.
1.24 Contract. Any contract, mortgage, deed of trust, bond, indenture,
--------
lease, license, note, franchise, certificate, option, warrant, right or other
instrument, document, obligation or agreement, whether written or oral.
1.25 Equivalent Basic Subscribers (or "EBSs"). As of any date of
----------------------------------------
determination and for each franchise area served by a System, the sum of (a) the
total number of private residential customer accounts that are billed by
individual unit for at least Basic Services (regardless of whether such accounts
are in single-family homes or in individually billed units in apartment
buildings and other multi-unit buildings) (exclusive of (i) "second connects"
and "additional outlets" as such terms are commonly understood in the cable
television industry, and (ii) accounts that are not charged or are charged less
than the standard monthly service fees and charges then in effect for such
System for Basic Services) and (b) the quotient of (i) the total monthly
xxxxxxxx for sales of Basic Services and Expanded Basic Services by such System
for such franchise area during the most recent billing period ended prior to the
date of calculation to commercial, bulk-billed and other accounts not billed by
individual unit (whether on a discounted or non-discounted basis) and to private
residential customer accounts that are billed by individual unit but pay less
than the standard monthly service fees charged for Basic Services, but excluding
xxxxxxxx in excess of a single month's charges for any account, divided by (ii)
the standard monthly combined rate (without discount of any kind) charged by
such System for such franchise area to individually billed subscribers for the
highest level of Basic Services and Expanded Basic Services offered by such
System in effect during such billing period, which monthly rate will not be less
than the applicable current rate specified in Schedule 1.25A (Insight Rates) or
Schedule 1.25B (AT&T Rates), and such rate card specified in Schedule 1.25A and
Schedule 1.25B lists the current rates charged by AT&T and Insight, as
applicable, on the date of this Agreement. For purposes of calculating the
number of EBSs, there will be excluded (i) all accounts billed by individual
unit that are, and all xxxxxxxx to any commercial, bulk-billed and other
accounts not billed by individual unit that are, more than 60 days past due in
the payment of any amount in excess of the lesser of $10.00 or the standard rate
charged for Basic Services at the time of determination, (ii) any accounts
billed by individual unit and all commercial, bulk-billed and other accounts not
billed by individual units that, as of the date of calculation, have not paid in
full the charges for at least one full month of the subscribed service, (iii)
that portion of the xxxxxxxx to all accounts billed by individual unit included
in clause (b) above and any commercial, bulk-billed and other accounts not
billed by individual unit representing an installation or other non-recurring
charge, a charge for equipment or for any outlet or connection other than the
first outlet or first connection in any individually billed unit or, with
respect to a bulk account, in any residential unit
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(e.g., an individual apartment or rental unit), a charge for any tiered service
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other than Expanded Basic Services (whether or not included within Pay TV), any
charge for Pay TV or a pass-through charge for sales taxes, line-itemized
franchise fees, fees charged by the FCC and the like, (iv) any individually
billed unit and all xxxxxxxx to any commercial, bulk-billed and other accounts
not billed by individual unit whose service is pending disconnection for any
reason and (v) any individually billed unit and all xxxxxxxx to any commercial,
bulk-billed or other accounts not billed by individual unit that was solicited
within the 60 day period preceding the Closing Date to purchase such services by
promotions or offers of discounts other than those ordinarily made by the party
for which the determination of EBSs is being made. For purposes of this
definition, payments on account of monthly xxxxxxxx will be deemed due on the
first day of the period for which the service to which such xxxxxxxx relate is
provided.
1.26 Environmental Law. Any Legal Requirement concerning the protection
-----------------
of public or employee health, safety, welfare or the environment, including
Legal Requirements relating to emissions, discharges, releases or threatened
releases of Hazardous Substances into the environment, air (including both
ambient and within buildings and other structures), surface water, ground water
or land or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances.
1.27 ERISA. The Employee Retirement Income Security Act of 1974, as
-----
amended, and the rules and regulations promulgated thereunder and published
interpretations with respect thereto.
1.28 ERISA Affiliate. As to any Person, any trade or business, whether or
---------------
not incorporated, which together with such Person would be deemed a single
employer as determined under Section 4001 of ERISA.
1.29 Exchange. The exchange transaction contemplated by the Asset
--------
Exchange Agreement between Insight and MediaOne of Illinois, Inc. dated as of
the date of this Agreement (the "Exchange Agreement") to be consummated at the
closing thereunder.
1.30 Expanded Basic Services. Any level of video programming service
-----------------------
greater than Basic Services provided over a cable television System, regardless
of service tier, other than Basic Services, any new product tier and Pay TV.
1.31 FCC. The Federal Communications Commission.
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1.32 Financial Statements. Insight's Financial Statements or AT&T's
--------------------
Financial Statements or both, as the context requires.
1.33 GAAP. Generally accepted accounting principles as in effect from
----
time to time in the United States of America.
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1.34 Governmental Authority. The United States of America, any state,
----------------------
commonwealth, territory or possession of the United States of America and any
political subdivision or quasi-governmental authority of any of the same,
including any court, tribunal, department, commission, board, bureau, agency,
county, municipality, province, parish or other instrumentality of any of the
foregoing.
1.34 Hazardous Substances. (a) Any "hazardous waste" as defined by the
--------------------
Resource Conservation and Recovery Act of 1976 (RCRA) (42 U.S.C. (S)(S) 6901 et
seq.), as amended, and the rules and regulations promulgated thereunder; (b) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. (S)(S) 9601 et seq.) (CERCLA),
as amended, and the rules and regulations promulgated thereunder; (c) any
substance regulated by the Toxic Substances Control Act (TSCA) (15 U.S.C.
(S)(S)2601 et seq.), or the Insecticide, Fungicide and Rodenticide Act (IFRA) (7
U.S.C. (S)(S)136 et seq.), each as amended, and the rules and regulations
promulgated thereunder; (d) asbestos or asbestos-containing material of any kind
or character; (e) polychlorinated biphenyls; (f) any substances regulated under
the provisions of Subtitle I of RCRA relating to underground storage tanks; (g)
any substance the presence, use, handling, treatment, storage or disposal of
which on real property is prohibited by any Environmental Law; and (h) any other
substance which by any Environmental Law requires special handling, reporting or
notification of any Governmental Authority in its collection, storage, use,
treatment or disposal.
1.36 Holdings (Central Ohio). Insight Holdings of Ohio, LLC, a Delaware
-----------------------
limited liability company.
1.37 HSR Act. The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
-------
as amended, and the rules and regulations promulgated thereunder.
1.38 Insight Assets. All assets, properties, privileges, rights,
--------------
interests and claims, real and personal, tangible and intangible, of every type
and description that are owned, leased, held for use or used in connection with
Insight's Cable Business and in which Insight or Insight Central Ohio has any
right, title or interest or acquires any right, title or interest on or before
the Closing, including Insight Tangible Personal Property, Insight Owned
Property, Insight Leased Property, Insight Other Real Property Interests,
Insight System Franchises, Insight System Licenses, Insight System Contracts,
Insight Books and Records, Insight Other Intangibles and the Insight LLC
Interest, but excluding any Insight Excluded Assets. The Insight Assets that are
owned by Insight Central Ohio are sometimes separately referred to herein as the
"Insight Central Ohio Assets."
1.39 Insight Books and Records. All engineering records, files, data,
-------------------------
drawings, blueprints, schematics, reports, lists, plans and processes and all
other files of correspondence, lists, records and reports concerning Insight's
Cable Business, including subscribers and prospective subscribers of the Insight
Systems, signal and program carriage and dealings with Governmental Authorities,
including all reports filed by or on behalf of Insight or Insight Central Ohio
with the FCC and
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statements of account filed by or on behalf of Insight or Insight Central Ohio
with the U.S. Copyright Office, but excluding any Insight Excluded Assets.
1.40 Insight Central Ohio. Insight Communications of Central Ohio, LLC, a
--------------------
Delaware limited liability company.
1.41 Insight Contributed Assets or Insight Contributed Systems. The
---------------------------------------------------------
Insight Assets, the Exchange Assets and the Sale Assets or the Insight Systems,
the Exchange Systems and the Sale Systems.
1.42 Insight LLC Interest. Insight's membership interest in Holdings
--------------------
(Central Ohio).
1.43 Insight Leased Property. All leasehold interests in real property
-----------------------
that is held for use or used in connection with Insight's Cable Business which
Insight or Insight Central Ohio has or acquires prior to Closing, including
those described as Insight Leased Property on Schedule 1.43.
1.44 Insight Other Intangibles. All intangible assets other than Insight
-------------------------
System Franchises, Insight System Licenses and Insight System Contracts,
including subscriber lists, accounts receivable, claims (excluding any claims
relating to Insight Excluded Assets), patents, copyrights and going concern
value, if any, that are owned, held for use or used in connection with Insight's
Cable Business and in which Insight or Insight Central Ohio has, or acquires
prior to Closing, any right, title or interest.
1.45 Insight Other Real Property Interests. All easements and rights of
-------------------------------------
access (other than those relating to multiple dwelling units) and other
interests in real property that are held for use or used in connection with
Insight's Cable Business and in which Insight or Insight Central Ohio has, or
acquires prior to Closing, any right, title or interest, including those
interests described as Insight Other Real Property Interests on Schedule 1.45,
but not including Insight Leased Property or Insight Owned Property.
1.46 Insight Owned Property. All fee interests in real property that is
----------------------
held for use or used in connection with Insight's Cable Business which Insight
or Insight Central Ohio has or acquires prior to Closing, including those
described as Insight Owned Property on Schedule 1.46 and all improvements
thereon.
1.47 Insight Required Consents. Any and all consents, authorizations and
-------------------------
approvals required for (i) Insight to transfer the Insight Assets to the
Partnership and the Partnership to, directly or indirectly, transfer the Insight
Assets (other than the Insight LLC Interest) to Indiana LLC and, if applicable,
for the Partnership to transfer the Insight LLC Interest to Newco LLC; (ii)
Indiana LLC to operate the Insight Systems (other than the Insight Central Ohio
Systems) and to own, lease, use and operate the Insight Assets (other than the
Insight Central Ohio Assets) and the Insight Systems (other than the Insight
Central Ohio Systems) at the places and in the manner in which such Insight
Assets are used and such Insight Systems are operated as of the date of this
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Agreement and as of the Closing; and (iii) Indiana LLC to assume and perform the
Insight System Franchises, the Insight System Licenses, the leases and other
documents evidencing Insight Leased Property and Insight Other Real Property
Interests and the Insight System Contracts, including those consents,
authorizations and approvals required under the Insight System Franchises, the
Insight System Licenses, the leases and other documents evidencing Insight
Leased Property and Insight Other Real Property Interests and the Insight
System Contracts (in each case other than those included in the Insight Central
Ohio Assets).
1.48 Insight System Contracts. All pole line agreements, underground
------------------------
conduit agreements, crossing agreements, multiple dwelling, bulk billing or
commercial service agreements, leased channel access agreements and other
Contracts (other than Insight System Franchises and Insight System Licenses)
held for use or used in connection with Insight's Cable Business and to which
Insight or Insight Central Ohio is, or becomes prior to Closing as permitted by
this Agreement, a party or bound, including those described on SCHEDULE 1.48.
1.49 Insight System Franchises. All franchise agreements, operating
-------------------------
permits or similar governing agreements, instruments, resolutions, statutes,
ordinances, approvals, authorizations and permits obtained from any franchising
authority in connection with Insight's Cable Business, including all amendments
and modifications thereto and all renewals thereof for the areas and communities
listed on Schedule 1.49.
1.50 Insight System Licenses. The intangible cable television channel
-----------------------
distribution rights, cable television relay service (CARS), business radio and
other licenses, copyright notices and other licenses, authorizations, consents
or permits issued by the FCC or any other Governmental Authority in connection
with Insight's Cable Business (other than Insight System Franchises, Insight
System Contracts and Insight Other Real Property Interests), including those
described on Schedule 1.50.
1.51 Insight Tangible Personal Property. All tangible personal property
----------------------------------
that is owned, leased, held for use or used in connection with Insight's Cable
Business and in which Insight or Insight Central Ohio has, or acquires prior to
Closing, any right, title or interest, including towers, tower equipment,
aboveground and underground cable, distribution systems, headend amplifiers,
line amplifiers, microwave equipment, converters, testing equipment, motor
vehicles, office equipment, computers and billing equipment, furniture,
fixtures, supplies, inventory and other physical assets.
1.52 Insight's Cable Business. The cable television business and other
------------------------
income-generating businesses related to the Insight Systems conducted by Insight
and Insight Central Ohio through the Insight Systems.
1.53 Interim Period. The period, if any, after the closing of the
--------------
Exchange and before the Closing, unless the Exchange closes immediately prior to
the Closing, in which event there shall be no Interim Period.
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1.54 Judgment. Any judgment, writ, order, injunction, award or decree of
--------
any court, judge, justice or magistrate, including any bankruptcy court or judge
or the arbitrator in any binding arbitration, and any order of or by any
Governmental Authority.
1.55 Knowledge. The actual knowledge of a particular matter of, in the
---------
case of AT&T, one or more of the principal corporate personnel of AT&T, or in
the case of Insight, one or more of principal corporate personnel of Insight,
Holdings (Central Ohio) or Insight Central Ohio, as applicable, involved in the
transactions contemplated by this Agreement or the general manager or one or
more of the managers of such party's Systems.
1.56 Leased Property. The Insight Leased Property or AT&T Leased Property
---------------
or both, as the context requires.
1.57 Legal Requirement. Applicable common law and any statute, ordinance,
-----------------
code or other law, rule, regulation, order, technical or other written standard,
requirement, policy or procedure enacted, adopted, promulgated, applied or
followed by any Governmental Authority, including any Judgment and all judicial
decisions applying common law or interpreting any other Legal Requirement, in
each case, as amended.
1.58 Liberty Media Group. Liberty Media Corporation, any of its direct or
-------------------
indirect current or future subsidiaries, any Person in which it or they have or
acquire any direct or indirect equity investment and any other Person directly
or indirectly controlled by any of the foregoing.
1.59 Lien. Any security interest, security agreement, financing statement
----
filed with any Governmental Authority, conditional sale or other title retention
agreement, any lease, consignment or bailment given for purposes of security,
any mortgage, lien, indenture, pledge, option, encumbrance, adverse interest,
constructive trust or other trust, claim, attachment, exception to, defect in or
other condition affecting title or other ownership interest (including but not
limited to reservations, rights of entry, possibilities of reverter,
encroachments, protrusions, easements, rights-of-way, rights of first refusal,
restrictive covenants, leases and licenses) of any kind, which constitutes an
interest in or claim against property, whether arising pursuant to any Legal
Requirement, System License, System Franchise, System Contract or otherwise.
1.60 Litigation. Any written claim, action, suit, proceeding,
----------
arbitration, or hearing.
1.61 Losses. Any claims, losses, liabilities, damages, penalties, costs
------
and expenses, including interest that may be imposed in connection therewith,
expenses of investigation, reasonable fees and disbursements of counsel and
other experts, and the cost to any Person making a claim or seeking
indemnification under this Agreement with respect to funds expended by such
Person by reason of the occurrence of any event or the existence or assertion of
any Liens (other than Permitted Liens) with respect to which indemnification is
sought, except Losses incurred by a party or on behalf of such party in
asserting any claim for indemnification against the other party where it is
ultimately determined (including by agreement of the parties) that such party is
not
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entitled to indemnification from the other party (before giving effect to the
limitations on such indemnification obligations set forth in Sections 11.6, 11.7
and 11.8).
1.62 Other Real Property Interests. The Insight Other Real Property
-----------------------------
Interests or the AT&T Other Real Property Interests or both, as the context
requires.
1.63 Owned Property. Insight Owned Property or AT&T Owned Property or
--------------
both, as the context requires.
1.64 Pay TV. A la carte tiers or premium programming services selected by
------
and sold to subscribers on a per channel or per program basis.
1.65 Permitted Debt. The AT&T Permitted Debt or the Insight Permitted
--------------
Debt or both, as the context requires.
1.66 Permitted Lien. Any (a) Lien securing the Insight Permitted Debt or
--------------
the AT&T Permitted Debt, (b) Lien securing Taxes, assessments and governmental
charges not yet due and payable, (c) zoning law or ordinance or any similar
Legal Requirement, (d) right reserved to any Governmental Authority to regulate
the affected property or to acquire a Franchise or System upon default under, or
termination of, any Franchise, (e) as to Owned Property and Other Real Property
Interests, any Lien not securing indebtedness or arising out of the obligation
to pay money that does not individually or in the aggregate interfere with the
right or ability to own, use or operate the Owned Property or Other Real
Property Interests as they are being used or operated or materially diminish the
value of such Owned Property or Other Real Property Interests, (f) in the case
of Owned Property and Leased Property, any lease or sublease by AT&T, Insight or
Insight Central Ohio in favor of a third party that is disclosed in the
Schedules to this Agreement, and (g) in the case of Leased Property, (i) the
rights of any lessor and (ii) any Lien granted by any lessor of Leased Property;
provided that "Permitted Lien" will not include any Lien securing a debt or
claim (other than inchoate materialmen's, mechanics', workmen's, repairmen's or
other like Liens arising in the ordinary course of business or any Lien
described in clause (g) above) or any Lien which could prevent or impair in any
way the conduct of the business of the affected System as it is currently being
conducted, and provided further that the classification of any Lien as a
"Permitted Lien" will not affect any liability which AT&T may have under this
Agreement for any such Lien with respect to the contribution of the AT&T Assets
or which Insight may have under this Agreement for any such Lien with respect to
the contribution of the Insight Assets, including pursuant to any indemnity
obligation under this Agreement.
1.67 Person. Any natural person, Governmental Authority, corporation,
------
general or limited partnership, limited liability company, joint venture, trust,
association or unincorporated entity of any kind.
1.68 Required Consents. The Insight Required Consents or the AT&T
-----------------
Required Consents or both, as the context requires.
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1.69 Sale. The sale transaction contemplated by the Asset Purchase and
----
Sale Agreement among Insight and the AT&T Sale Entities dated as of the date of
this Agreement (the "Sale Agreement") to be consummated at the closing
thereunder.
1.70 System. Any of the Insight Systems or the AT&T Systems or all of
------
them, as the context requires, but not including any of the Exchange Systems or
Sale Systems unless expressly indicated.
1.71 System Contracts. The Insight System Contracts or the AT&T System
----------------
Contracts or both, as the context requires.
1.72 System Franchises. The Insight System Franchises or the AT&T System
-----------------
Franchises or both, as the context requires.
1.73 System Licenses. The Insight System Licenses or the AT&T System
---------------
Licenses or both, as the context requires.
1.74 Tangible Personal Property. The Insight Tangible Personal Property
--------------------------
or the AT&T Tangible Personal Property or both, as the context requires.
1.75 Taxes. All levies and assessments of any kind or nature imposed by
-----
any Governmental Authority, including all income, sales, use, ad valorem, value
added, franchise, severance, net or gross proceeds, withholding, payroll,
employment, excise or property taxes and levies or assessments related to
unclaimed property, together with any interest thereon and any penalties,
additions to tax or additional amounts applicable thereto.
1.76 Third Party. With respect to AT&T, any Person other than AT&T and
-----------
its Affiliates and, with respect to Insight, any Person other than Insight and
its Affiliates.
1.77 Transaction Documents. The instruments and documents described in
---------------------
Sections 9.2, 9.3 and 9.4 which are to be executed and delivered by or on behalf
of Insight, AT&T or the Partnership in connection with this Agreement or the
transactions contemplated hereby; provided, that for purposes of Section 11,
"Transaction Documents" does not include the Amended Programming Supply
Agreement, the Management Agreements, or the Retained Franchise Management
Agreement, it being agreed that the parties' indemnification rights and
obligations with respect to the matters covered by such agreements and other
rights and obligations with respect thereto shall be as specified in those
agreements.
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1.78 Other Definitions. The following terms are defined in the Sections
-----------------
or Recitals indicated:
Term Section or Recital
---- ------------------
Action 11.5
Aggregate Gross Fair Market Value of the AT&T Assets 3.2(a)
Aggregate Gross Fair Market Value of the
Insight Contributed Assets 3.2(a)
Agreement Preamble
Amended Programming Supply Agreement 8.1(k)
Antitrust Division 7.7
Approved Leave of Absence 7.3(a)
Assumed Obligations and Liabilities 4.1
AT&T Preamble/12.1(b)
AT&T Balance Sheets 6.10
AT&T Claimed Damages 11.6
AT&T Closing Adjustment 3.3
AT&T Excluded Assets 4.2
AT&T Financial Statements 6.10
AT&T Late Fee Settlement 4.1
AT&T Permitted Debt 3.2(c)
AT&T Plans 6.13(b)
AT&T Sale Entities Recital D
AT&T Subsidiaries Preamble
AT&T Systems Recital B
Coaxial Repurchase Agreement 2.3
Closing 9.1
Closing Adjustments 3.3
Closing Date 9.1
Code 5.13(b)
Commercially Reasonable Efforts 12.18
Control 1.2
Copyright Act 5.8(a)
Cost of Service Election 5.8(d)
Coaxial Central Ohio 2.3
Coaxial Central Ohio Debt 3.2(c)
Coaxial Central Ohio Common Interest 2.3
Coaxial Restructuring 2.3
EBSs 1.25
Employees on Leave Status 7.3(a)
Exchange Agreement 1.29
Exchange Assets Recital C
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Exchange Franchises 7.24
Exchange Systems Recital C
FAA 5.8(c)
Final Adjustment Certificate 3.4(b)
FTC 7.7
Hired Employees 7.3(a)
Hiring Party 7.3(f)
Holdings (Central Ohio) Operating Agreement 8.1(p)
Indemnified Party 11.5
Indemnifying Party 11.5
Indiana LLC 2.2
Initial Adjustment Certificate 3.4(a)
Insight Preamble
Insight Balance Sheets 5.10
Insight Central Ohio Assets 1.38
Insight Central Ohio Credit Agreement 3.2(d)
Insight Central Ohio Component of the Insight Permitted Debt 3.2(c)
Insight Central Ohio Operating Agreement 2.3
Insight Central Ohio Systems Recital A
Insight Claimed Damages 11.7
Insight Closing Adjustment 3.3
Insight Excluded Assets 4.3
Insight Permitted Debt 3.2(c)
Insight Plans 5.13(b)
Insight Systems Recital A
Insight's Financial Statements 5.10
Kentucky L.P. 2.2
Management Agreements 8.1(r)
MediaOne Social Contract 4.1(z)
NCE Agreement 7.3(h)
New Credit Agreement 3.2(d)
Newco LLC 2.2
Outside Closing Date 10.1(b)
Partnership Preamble
Partnership Agreement 3.1
Partnership Claimed Damages 11.8
Partnership Financing Arrangements and Agreements 3.2(d)
Partnership Restructuring 2.2
Primary Transfer 7.24(a)
Prime Rate 12.10
Retained Employees 7.3(a)
Retained Franchise Management Agreement 7.24(c)
Retained Franchises 7.24(a)
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Sale Agreement 1.69
Sale Assets Recital D
Sale Franchises 7.24
Sale Systems Recital D
Subsequent Transfer 7.24(b)
Survival Period 11.1
Taking 12.16(e)
TCI LLC Preamble
Time Warner Social Contract 7.27
Title Defect 11.3
Transitional Billing Services 7.11
WARN 5.13(a)
1.79 Accounting Terms. All accounting terms not otherwise defined in this
----------------
Agreement will have the meanings ascribed to them under GAAP.
SECTION 2. CONTRIBUTION; RESTRUCTURINGS
2.1 Agreement to Contribute. Subject to the terms and conditions set
-----------------------
forth in this Agreement, at the Closing, (a) each of AT&T and Insight agrees to
contribute to the Partnership all of the Assets of such Person, free and clear
of all Liens (except Permitted Liens) and (b) Insight agrees to contribute (or
cause to be contributed) to the Partnership, subject to consummation of the
Exchange, all of the Exchange Assets, subject only to Liens arising prior to the
consummation of the Exchange and, subject to consummation of the Sale, all of
the Sale Assets, subject only to Liens arising prior to the consummation of the
Sale. Notwithstanding the foregoing, the Insight Central Ohio Assets will be
indirectly contributed by Insight to the Partnership through its contribution of
the Insight LLC Interest.
2.2 Restructuring of the Partnership. It is currently anticipated that
--------------------------------
prior to the Closing, the Partnership will form a wholly-owned limited liability
company ("Newco LLC") that will hold the Partnership's interests in Insight
Communications of Indiana, LLC ("Indiana LLC") and in Insight Communications of
Kentucky, L.P. ("Kentucky L.P."). It is currently anticipated that immediately
following the Closing, the Partnership will contribute the Assets (other than
the Insight LLC Interest if Insight determines this interest should be held
directly by the Partnership) to Newco LLC which in turn will contribute such
Assets (other than the Insight LLC Interest) to Indiana LLC; provided, that if
Newco LLC is not formed, the Partnership will contribute the Assets (other than
the Insight LLC Interest) to Indiana LLC. Insight and TCI LLC will also
mutually determine whether any amendments are required to the operating
agreements of Indiana LLC, Kentucky L.P. or the Partnership's other subsidiaries
in connection with the formation of Newco LLC, the contribution by the
Partnership to Indiana LLC of the Assets (other than the Insight LLC Interest)
or the other transactions contemplated by this Agreement. The transactions
contemplated by this Section 2.2 are referred to herein as the "Partnership
Restructuring." Any changes to the Partnership Restructuring as currently
anticipated and any agreements related to the Partnership Restructuring,
-15-
including, without limitation, the operating agreement of Newco LLC and an
amended and restated Partnership Agreement (which agreement will contain, among
other things, provisions relating to programming and @Home that comply with the
provisions set forth in the Term Sheet dated March 23, 2000 by and between AT&T
Broadband, LLC and Insight Communications Company, L.P.), shall require the
written consent of Insight and TCI LLC, which consent shall not be unreasonably
withheld.
2.3 Coaxial Restructuring. On August 8, 2000, Insight Central Ohio
---------------------
repurchased the 25% of the Central Ohio Common Interests that were owned by
Coaxial Communications of Central Ohio, Inc. ("Coaxial Central Ohio") pursuant
to a Purchase and Option Agreement dated as of August 8, 2000 among Insight and
certain of its Affiliates and Coaxial Central Ohio and certain of its Affiliates
(the "Coaxial Repurchase Agreement"). Insight will provide a fully executed
copy of the Coaxial Repurchase Agreement to TCI LLC, together with all Exhibits
and Schedules thereto, by September 15, 2000. Insight will not amend the
Coaxial Repurchase Agreement without the written consent of TCI LLC, which
consent shall not be unreasonably withheld. The Operating Agreement of Insight
Central Ohio was amended and restated as of August 8, 2000 (the "Insight Central
Ohio Operating Agreement") in connection with the closing under the Coaxial
Repurchase Agreement. Insight and TCI LLC agree to cooperate in good faith to
make any additional amendments to the Insight Central Ohio Operating Agreement
by Closing that may be reasonably requested by either party to make such
agreement more closely conform to the constituent documents of the Partnership's
other subsidiaries (taking into account the unique nature of the preferred
interests in Insight Central Ohio) or to avoid any adverse tax consequences to
Insight or AT&T or their Affiliates, provided that to the extent any such
amendment would require the consent of Coaxial Central Ohio or the Principals
(as that term is defined in the Insight Central Ohio Operating Agreement) under
the terms of the Insight Central Ohio Operating Agreement, Insight agrees to use
commercially reasonable efforts to obtain their consent but if such consent is
withheld the making of such amendment shall not be a condition to AT&T's
obligation to close hereunder.
SECTION 3. MEMBERSHIP INTERESTS AND CLOSING ADJUSTMENTS
3.1 Membership Interests. Following the contributions to the Partnership
--------------------
by AT&T and Insight of their respective Assets and the contribution to the
Partnership by Insight of the Exchange Assets and Sale Assets, AT&T and Insight
shall each continue to have from and after the Closing a 50% partnership
interest in the Partnership as set forth in, and in accordance with the terms
of, the Limited Partnership Agreement of the Partnership dated as of October 1,
1999 between TCI LLC and Insight (as hereafter amended in accordance with the
terms of this Agreement, the "Partnership Agreement").
3.2 Gross Value of Contributions; Assumption of Debt.
------------------------------------------------
(a) For purposes of this Agreement, the "Aggregate Gross Fair Market
Value of the AT&T Assets" means $981,622,400, minus the AT&T Closing Adjustment
if such amount is to be paid to the Partnership or plus the AT&T Closing
Adjustment if such amount is to be paid by
-16-
the Partnership, in each case as the AT&T Closing Adjustment is estimated as of
the Closing Date pursuant to Section 3.3 and subject to reduction as provided in
Section 3.3(f). For purposes of this Agreement, the "Aggregate Gross Fair Market
Value of the Insight Contributed Assets" is $1,207,432,000 minus the Insight
Closing Adjustment if such amount is to be paid to the Partnership or plus the
Insight Closing Adjustment if such amount is to be paid by the Partnership, in
each case as the Insight Closing Adjustment is estimated as of the Closing Date
pursuant to Section 3.3.
(b) The capital account (as described in the Partnership Agreement) of
TCI LLC shall be credited on the Closing Date by an amount equal to the Net Fair
Market Value of the AT&T Assets, with such value being defined as the Aggregate
Gross Fair Market Value of the AT&T Assets minus the AT&T Permitted Debt. The
capital account (as described in the Partnership Agreement) of Insight shall be
credited on the Closing Date by an amount equal to the Net Fair Market Value of
the Insight Contributed Assets, with such value being defined as the Aggregate
Gross Fair Market Value of the Insight Contributed Assets minus the Insight
Permitted Debt.
(c) The AT&T Assets will be contributed to the Partnership subject to
debt in the amount of $311,762,400, minus the AT&T Closing Adjustment if such
amount is to be paid to the Partnership or plus the AT&T Closing Adjustment if
such amount is to be paid by the Partnership, in each case as the AT&T Closing
Adjustment is estimated as of the Closing Date pursuant to Section 3.3 (the
"AT&T Permitted Debt"). The Insight Contributed Assets will be contributed to
the Partnership subject to debt in the amount of $537,572,000, minus the Insight
Closing Adjustment if such amount is to be paid to the Partnership or plus the
Insight Closing Adjustment if such amount is to be paid by the Partnership, in
each case as the Insight Closing Adjustment is estimated as of the Closing Date
pursuant to Section 3.3 (the "Insight Permitted Debt"). The Insight Permitted
Debt will include, without limitation (i) the amount to be borrowed by Insight
under its existing credit agreement and/or the New Credit Agreement to finance
the purchase price payable by Insight under the Asset Purchase and Sale
Agreement and (ii) the obligation of Insight Central Ohio to make payments to
its preferred interest holder, Coaxial Central Ohio (the "Insight Central Ohio
Component of the Insight Permitted Debt"), in an amount sufficient to enable
Coaxial Central Ohio to pay (1) principal on its $140,000,000 10% Senior Notes
due 2006 and (2) the accreted value on Coaxial LLC's $55,869,000 12 7/8% Senior
Discount Notes due 2008 (collectively, the "Coaxial Central Ohio Debt").
Insight represents that it has delivered to AT&T (or will deliver by September
15, 2000) correct and complete copies of all documents evidencing the Coaxial
Central Ohio Debt (other than the actual notes) and all other material documents
related to the Coaxial Central Ohio Debt.
(d) TCI LLC, Insight and Newco (or, if Newco is not formed, the
Partnership) will use commercially reasonable efforts to enter into a credit
agreement on commercially reasonable terms immediately prior to the Closing (the
"New Credit Agreement"), pursuant to which (1) TCI LLC will refinance debt in an
amount equal to all or a portion of the AT&T Permitted Debt and (2) Insight will
refinance debt in an amount equal to all or a portion of the Insight Permitted
Debt (including an amount sufficient to allow it to finance the purchase price
payable by Insight under the Asset Purchase and Sale Agreement), other than the
Insight Central Ohio Component of
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the Insight Permitted Debt and other than the indebtedness under the Revolving
Credit Agreement dated as of October 7, 1998, as heretofore amended, among
Insight Central Ohio and the lenders party thereto (the "Insight Central Ohio
Credit Agreement") if Insight determines in its good faith discretion that
refinancing the Insight Central Ohio Credit Agreement would be impracticable or
unduly burdensome in light of applicable indenture restrictions, and (3) Newco
(or if Newco is not formed, the Partnership or its subsidiaries) may refinance
all or a portion of the indebtedness outstanding under the respective bank
credit agreements of Indiana LLC and Insight Kentucky Partners I, L.P. (the
"Existing Bank Debt"). Prior to Newco becoming the sole borrower under the New
Credit Agreement, Insight shall be solely liable for the Insight Permitted Debt
and the indebtedness incurred under the New Credit Agreement to refinance a
portion of the Insight Permitted Debt and TCI LLC shall not be liable for the
foregoing indebtedness. Prior to Newco becoming the sole borrower under the New
Credit Agreement, TCI LLC shall be solely liable for the AT&T Permitted Debt and
the indebtedness incurred under the New Credit Agreement to refinance the AT&T
Permitted Debt and Insight shall not be liable for the foregoing indebtedness.
It is currently anticipated that simultaneously with the Closing, Newco (or, if
Newco is not formed, the Partnership or its subsidiaries) shall become the sole
borrower(s) under the New Credit Agreement, and TCI LLC and Insight will be
released from all of their obligations under the New Credit Agreement and the
New Credit Agreement will thereafter be non-recourse to TCI LLC and Insight. It
is also currently contemplated that the Partnership may enter into additional
financing arrangements (e.g., a high yield debt offering) at the Closing to
refinance any portion of the AT&T Permitted Debt and the Insight Permitted Debt
and Existing Bank Debt to be refinanced in connection with the Closing that is
not refinanced by the New Credit Agreement (the "Partnership High Yield
Financing"). The New Credit Agreement, the Partnership High Yield Financing and
all other arrangements and agreements related to the refinancing of the
Permitted Debt and the financing structure of the Partnership and its
subsidiaries as it will be put in place on the Closing Date, including, without
limitation, the terms of the Insight Central Ohio Component of the Permitted
Debt and the Insight Central Ohio Credit Agreement (if such agreement is not
refinanced) and any refinancing of, or amendments to, the current debt of the
Partnership and its subsidiaries, are referred to collectively herein as the
"Partnership Financing Arrangements and Agreements." Insight shall negotiate the
Partnership Financing Arrangements and Agreements on behalf of the Partnership;
provided that TCI LLC's consent to the Partnership Financing Arrangements and
Agreements, which consent shall not be unreasonably withheld, shall be required
(i) to the extent it would be required pursuant to the terms of Section 6.6(a)
or any other provision of the Partnership Agreement (as in effect on the date of
this Agreement), (ii) to the extent that any Partnership Financing Arrangement
or Agreement would have adverse tax consequences to TCI LLC or its Affiliates or
(iii) to the extent that any Partnership Financing Arrangement or Agreement
imposes any obligation on TCI LLC or its Affiliates (other than the Partnership
or its subsidiaries), including liability for indebtedness. Without limiting the
generality of the foregoing, if desired by Insight or TCI LLC to avoid any
adverse tax consequences, the Partnership and/or its subsidiaries will enter
into a "keepwell" agreement with Insight or Insight Communications Company, Inc.
or TCI LLC or its Affiliates, as appropriate, on terms reasonably acceptable in
either case to Insight and TCI LLC. Insight and TCI LLC acknowledge that any
changes to the Partnership's financing structure after the Closing Date will not
be subject to consent under this Agreement but will be subject to the
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provisions of the Partnership Agreement. Each of AT&T and Insight shall cause
any Liens securing their debt that is refinanced pursuant to Section 3.2(d) to
be released in connection with the refinancing of such debt.
3.3 Closing Adjustments. The adjustments provided for below in this
-------------------
Section 3.3 shall be made as of Closing with respect to AT&T on the one hand and
Insight and Insight Central Ohio on the other hand (the net amount of such
adjustments being referred to herein as the "AT&T Closing Adjustment" as made
with respect to AT&T and as the "Insight Closing Adjustment" as made with
respect to Insight and Insight Central Ohio and as the "Closing Adjustments" as
made with respect to either or both AT&T and Insight and Insight Central Ohio),
with AT&T paying the Partnership or the Partnership paying AT&T, as the case may
be, and with Insight paying the Partnership or the Partnership paying Insight,
as the case may be; provided that, the Closing Adjustments as preliminarily
determined as of the Closing Date will be paid through the adjustments described
in Section 3.2. Subject to Section 3.3(j), the Insight Closing Adjustment shall
be made in respect of each of the Insight Systems, the Exchange Systems and the
Sale Systems.
(a) Appropriate adjustments on a pro rata basis as of the Closing Time
will be made with respect to each of the AT&T Systems and Insight Contributed
Systems for all prepaid expenses other than inventory (but only to the extent
the full benefit of such prepaid expenses will be realizable by the Partnership
within 12 months after the Closing Date), accrued expenses (including real and
personal property taxes), copyright fees and franchise or license fees or
charges, prepaid income, subscriber prepayments and, subject to paragraph (e)
below, accounts receivable related to such party's Cable Business (and, in the
case of Insight, those related to the Exchange Systems and Sale Systems) to the
extent specified in Section 3.3(e), all as determined in accordance with GAAP
consistently applied and to reflect the principle that all expenses and income
attributable to such party's Cable Business (and in the case of Insight
attributable to the Exchange Systems and Sale Systems) for the period through
and including the Closing Time are for the account of such party, and all
expenses and income attributable to such party's Cable Business (and, in the
case of Insight, attributable to the Exchange Systems and Sale Systems) for the
period after the Closing Time are for the account of the Partnership.
(b) All advance payments to, or funds of third parties on deposit
with, AT&T, Insight or Insight Central Ohio as of the Closing Time and relating
to AT&T's or Insight's Cable Business (and in the case of Insight relating to
the Exchange Systems and Sale Systems), including advance payments and deposits
(including any accrued interest on such deposits) by subscribers served by such
party's Cable Business (and in the case of Insight by the Exchange Systems or
Sale Systems) for converters, encoders, decoders, cable television service and
related sales, shall be assumed by, and credited to the account of, the
Partnership.
(c) There shall be credited to the Partnership the economic value of
all accrued vacation time that the Partnership credits after the Closing Time to
the employees of Insight and AT&T that are hired by the Partnership pursuant to
Section 7.3(f) and the economic value of all accrued vacation time of the
employees of Insight Central Ohio as of the Closing Time, where
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economic value is the amount equal to the cash compensation that would be
payable to each such employee at his or her level of compensation on the Closing
Date for a period equal to such employee's credited accrued vacation.
(d) All deposits relating to the business and operations of each
party's Systems (and in the case of Insight those relating to the Exchange
Systems and Sale Systems) that are held by Third Parties as of the Closing Time
for the account of such party or as security for such party's performance of its
obligations, including deposits on leases and deposits for utilities, will be
credited to the account of such party in their full amounts and will become the
property of the Partnership; provided that no adjustment will be made for any
deposits the full benefit of which for contractual or other reasons cannot be
made available to the Partnership within 12 months following the Closing Time.
(e) Neither AT&T nor Insight will receive credit for any (i) accounts
receivable of their Cable Businesses resulting from cable television service or
internet service sales any portion of which is 60 days or more past due as of
the Closing Time, or (ii) accounts receivable from customers whose accounts are
inactive or whose service is pending disconnection for any reason as of the
Closing Time. AT&T and Insight will receive credit for accounts receivable of
their Cable Businesses resulting from cable television service or internet
service sales the entire portion of which are 0-59 days past due as of the
Closing Time in an amount equal to 99% of the face amount of such accounts
receivable. For purposes of making "past due" calculations under the foregoing
sentence, the billing statements of a System (including an Exchange System or
Sale System) will be deemed to be due and payable on the first day of the period
during which the service to which such billing statements relate is provided.
AT&T and Insight will receive credit for advertising accounts receivable of
their Cable Businesses as follows: (i) 100% of the face amount of the
advertising accounts receivable which are outstanding 30 days or less from the
invoice date, (ii) 95% of the face amount of all advertising accounts receivable
which are outstanding more than 30 but fewer than 61 days from the invoice date,
(iii) 80% of the face amount of all advertising accounts receivable which are
outstanding more than 60 but fewer than 91 days from the invoice date, and (iv)
50% of the face amount of all advertising accounts receivable which are
outstanding more than 90 but fewer than 121 days from the invoice date. Neither
AT&T nor Insight will receive credit for advertising accounts receivable of
their Cable Businesses which are outstanding more than 120 days from the invoice
date. Notwithstanding the foregoing, each of AT&T and Insight will receive
credit for 100% of the face amount of advertising accounts receivable of their
Cable Businesses from national and regional representation accounts, regardless
of the age thereof.
(f) Insight shall receive a credit equal to $17,500,000, which credit
will be effected by a reduction in the Aggregate Gross Fair Market Value of the
AT&T Assets, for aggregate capital expenditures made by Insight or Insight
Central Ohio during the period from September 30, 1999 through the Closing Date
relating to (i) upgrades and rebuilds of the Insight System plant capacity and
associated items (including headend sites and headend equipment to expand
channel capacity), and (ii) the launch of digital services for the Insight
Systems, including the purchase of digital converters (but not including digital
converters purchased in the ordinary
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course of business to replace lost, stolen or defective digital converters), the
launch of telephony services and the launch of high speed data services,
including the purchase of modems. To the extent Insight makes any upgrades to
the Exchange Systems during the Interim Period pursuant to Section 7.24 of the
Exchange Agreement, Insight shall receive a credit equal to the cost of such
upgrades.
(g) AT&T shall receive a credit, not to exceed $200,000, equal to the
amount of capital expenditures by AT&T during the period from September 30, 1999
through the Closing Date relating to (i) upgrades and rebuilds of the Cayuga and
Indianola AT&T Systems plant capacity and associated items (including headend
sites and headend equipment to expand channel capacity), and (ii) the launch of
digital services for the Cayuga and Indianola AT&T Systems, including the
purchase of digital converters (but not including digital converters purchased
in the ordinary course of business to replace lost, stolen or defective digital
converters), the launch of telephony services, and the launch of high speed data
services, including the purchase of modems.
(h) Any amounts paid, or accrued as a current liability, prior to the
Closing Time by AT&T or its Affiliates with respect to retroactive franchise
fees in respect of the AT&T Systems, or by Insight or its Affiliates with
respect to retroactive franchise fees in respect of the Insight Contributed
Systems that have not been collected prior to the Closing Time will be credited
to the account of AT&T or Insight, as applicable, in their full amounts to the
extent that (i) such amounts can legally be passed through to and collected from
subscribers of the AT&T Systems, the Insight Systems, the Exchange Systems or
the Sale Systems, as applicable, after Closing, and (ii) no agreement has been
entered into prohibiting the collection of such amounts, with such amounts upon
collection being assets of the Partnership.
(i) The adjustments provided for in this Section 3.3 will be made
without duplication. In addition, none of the adjustments provided for in this
Section 3.3 will be made with respect to any Excluded Asset or with respect to
any item of income or expense related to an Excluded Asset.
(j) The parties presently intend that the adjustments made in respect
of the Exchange Systems (if the Exchange Agreement closes contemporaneously with
this Agreement) pursuant to Section 3 of the Exchange Agreement and of the Sale
Systems pursuant to Section 3 of the Sale Agreement will be made between AT&T
and the Partnership directly without the necessity of Insight making any
duplicating adjustments with the Partnership pursuant to Section 3 of this
Agreement. If for any reason Insight and AT&T determine that the foregoing
procedure may have adverse tax or other consequences to Insight, AT&T or the
Partnership, Insight and AT&T will cooperate in all reasonable respects to give
effect to the adjustments contemplated with respect to the Exchange Systems and
the Sale Systems in a manner that preserves the benefit of the economic bargain
between Insight and AT&T and avoids any such adverse consequences, provided that
to the extent Insight would be required to make any payment to the Partnership
(or decrease the amount of Insight Permitted Debt) in respect of any such
duplicating adjustments, Insight shall not be required to make such payment (or
give effect to any such decrease) until it receives a payment from
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AT&T pursuant to the Exchange Agreement or the Sale Agreement, as applicable, in
the amount of such payment or decrease. Notwithstanding the foregoing, for
purposes of making the calculations specified in Section 3.3, the Insight
Closing Adjustment will include the adjustments in respect of the Exchange
Systems and the Sale Systems in accordance with the following: (i) the Insight
Closing Adjustment with respect to the Sale Systems will duplicate the
adjustments made in respect of the Sale Systems pursuant to Section 3.1 of the
Sale Agreement, (ii) if the Exchange Agreement closes contemporaneously with
this Agreement, the Insight Closing Adjustment with respect to the Exchange
Systems will duplicate the adjustments made in respect of the Exchange Systems
pursuant to Section 3.2 of the Exchange Agreement, and (iii) if the Exchange
Agreement closes prior to this Agreement, the Insight Closing Adjustment with
respect to the Exchange Systems will duplicate the adjustments made in respect
of the Exchange Systems pursuant to Section 3.2 of the Exchange Agreement, with
appropriate adjustments thereto to take into account the Interim Period.
3.4 Calculation of Adjustments.
--------------------------
(a) Each of AT&T and Insight will estimate in good faith the Closing
Adjustments with respect to its Systems and in the case of Insight, with respect
to the Exchange Systems and Sale Systems (subject to Section 3.3(j) and provided
that Insight's Closing Adjustments with respect to the Exchange Systems (if the
Exchange Agreement closes contemporaneously with this Agreement) and the Sale
Systems will be based solely on the certificates provided by AT&T under the
Exchange Agreement and the Sale Agreement), and set forth the same, together
with a detailed statement of the calculation thereof, in a certificate (the
"Initial Adjustment Certificate") executed by an authorized representative of
such party and delivered to the other party at least 10 Business Days prior to
the Closing. Each Initial Adjustment Certificate will be accompanied by
appropriate supporting documentation, including an accounts receivable detail
with relevant aging information as of the Closing Time, in summary form,
supporting the determination of the Closing Adjustment proposed in such
certificate. Following receipt of such Initial Adjustment Certificate, the
recipient shall have five Business Days to review such schedule and supporting
information and to notify the preparer of such Initial Adjustment Certificate of
any disagreements with the preparer's estimates of its Closing Adjustment. If
the recipient provides a notice of disagreement with the preparer's estimates of
such amounts within such five Business Day period, AT&T and Insight shall
negotiate in good faith to resolve any such dispute and to reach an agreement
prior to the Closing on such estimated amounts as of the Closing Time. The
estimates so agreed upon by AT&T and Insight or (if the parties do not reach
such an agreement on such estimated amounts set forth in the Initial Adjustments
Certificate prior to the Closing Date or if the recipient fails to provide a
notice of disagreement with the preparer's estimates of such amounts within the
time provided) the estimates of such Closing Adjustments set forth in the
Initial Adjustments Certificate shall be the basis for determining Aggregate
Gross Fair Market Value and Permitted Debt pursuant to Section 3.2. All
disagreements that may exist with respect to the Initial Adjustment Certificate
shall be resolved in connection with the preparation of the Final Adjustment
Certificate pursuant to paragraph (b) below.
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(b) Within 90 days after the Closing, each of AT&T and Insight will
deliver to the other a certificate (the "Final Adjustment Certificate") showing
in full detail its final determination of the Closing Adjustment with respect to
its Systems and in the case of Insight, with respect to the Exchange Systems and
Sale Systems (subject to Section 3.3(j) and provided that Insight's Closing
Adjustments with respect to the Exchange Systems (if the Exchange Agreement
closes contemporaneously with this Agreement) and Sale Systems will be based
solely on the certificates provided by AT&T under the Exchange Agreement and the
Sale Agreement), which certificate will be accompanied by appropriate
documentation supporting the amounts proposed in such certificate, including an
accounts receivable detail with relevant aging information as of the Closing
Time, and which will be executed by an officer of such party. Each recipient
party will review the other's Final Adjustment Certificate and will give written
notice to the preparing party of any objections it has to the calculations shown
in such certificate within 30 days after its receipt thereof. AT&T and Insight
will endeavor in good faith to resolve any such objections within 30 days after
the receipt by the parties of each other's objections. If any objections or
disputes have not been resolved at the end of such 30-day period, the disputed
portions of the Closing Adjustments will be determined within the following 30
days by a partner in a major accounting firm with substantial cable television
audit experience which is not the auditor of either Insight or AT&T (or any
Affiliate of either of them) and the determination of such auditor will be final
and will be binding upon all parties. If Insight and AT&T cannot agree with
respect to the selection of an auditor, Insight and AT&T will each select an
auditor and those two auditors will select a third auditor whose determination
will be final and will be binding upon all parties. Insight and AT&T will bear
equally the expenses arising in connection with an auditor's determination of
disputed amounts, and payment of the final amounts due under Section 3.3 (after
taking into account any amounts included in the calculation of Aggregate Gross
Fair Market Value and Permitted Debt pursuant to Section 3.2) will be made by
the party responsible therefor to the party to whom such payment is required to
be made pursuant to this Agreement in immediately available funds within 15
Business Days after the final determination is made.
(c) Each of Insight and AT&T will provide to the other reasonable
access to all records in its possession which were used in the preparation of
its Initial Adjustment Certificate and Final Adjustment Certificate and as may
be necessary in the preparation of the other party's Initial Adjustment
Certificate and Final Adjustment Certificate.
SECTION 4. ASSUMED LIABILITIES AND EXCLUDED ASSETS
4.1 Assumed Obligations and Liabilities. As of the Closing, the
-----------------------------------
Partnership will assume and after the Closing, the Partnership will pay,
discharge and perform the following (the "Assumed Obligations and Liabilities"):
(a) those obligations and liabilities accruing and relating to periods after the
Closing Time under or with respect to the Assets, Exchange Assets and Sale
Assets; (b) those obligations and liabilities of AT&T, Insight and Insight
Central Ohio to customers of their respective Cable Businesses and to customers
of the Exchange Systems and Sale Systems for (i) subscriber deposits related to
the Systems, Exchange Systems and Sale Systems held by AT&T, Insight, or Insight
Central Ohio as of the Closing Time in the amount credited to the Partnership
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under Section 3.3 and (ii) customer, advertising and other advance payments held
by AT&T, Insight or Insight Central Ohio as of the Closing Time in the amount
credited to the Partnership under Section 3.3; (c) all obligations and
liabilities accruing and relating to the Cable Businesses, the Exchange Systems
and the Sale Systems prior to the Closing Time in respect of which the
Partnership received a credit pursuant to Section 3.3; (d) the AT&T Permitted
Debt and the Insight Permitted Debt (including the Insight Central Ohio
Component of the Insight Permitted Debt and the Insight Central Ohio Credit
Agreement if such agreement is not refinanced) to the extent related to the
period from and after the Closing Time; and (e) all other obligations and
liabilities accruing and relating to periods after the Closing Time and arising
out of the ownership of the Assets, Exchange Assets or Sale Assets or operation
of the Systems, Exchange Systems or Sale Systems after the Closing Time, except
to the extent that such obligations or liabilities relate to any AT&T Excluded
Asset or Insight Excluded Asset. All obligations and liabilities, contingent,
fixed or otherwise, arising out of or relating to the Assets or the Systems
other than the Assumed Obligations and Liabilities will remain and be the
obligations and liabilities solely of AT&T or Insight, as the case may be,
including any obligation, liability or claim relating to or arising pursuant to
(x) rate refunds to subscribers of their Systems with respect to rates charged
to such subscribers during periods through and including the Closing Time, (y)
litigation commenced prior to, or related to an event occurring at any time
prior to the Closing Time (including in the case of Insight, litigation against
Holdings (Central Ohio) or Insight Central Ohio) or (z) any AT&T Excluded Asset
or Insight Excluded Asset, including the Social Contract released on August 3,
1995 (FCC 95-335) between Continental Cablevision and the FCC, as amended by the
Social Contract Amendment released on August 23, 1996 (FCC 96-358) (the
"MediaOne Social Contract"), the Time Warner Social Contract, and, subject to
Section 7.17, the pending Settlement Agreement and Release that relates to
certain of the AT&T Systems with respect to late fees charged by them, a copy of
which, in the form submitted to the courts, has been provided to Insight by AT&T
(the "AT&T Late Fee Settlement").
The parties acknowledge that while the Partnership will acquire ownership
of Holdings (Central Ohio) and Insight Central Ohio and therefore, certain
liabilities and obligations may remain in Holdings (Central Ohio) and Insight
Central Ohio as a matter of law that are not Assumed Obligations and
Liabilities, the parties intend that as between Insight and the Partnership and
its Affiliates, the Partnership and its Affiliates will only be responsible for
those liabilities and obligations for which it would have been responsible if
the Partnership did not acquire ownership of such entities and instead acquired
direct ownership of the Insight Central Ohio Assets in the same manner and on
equivalent terms and conditions as it is acquiring the other Insight Assets.
Without limiting the foregoing, Insight will be responsible for all obligations
and liabilities, contingent, fixed or otherwise, of Holdings (Central Ohio) and
Insight Central Ohio that are not included in the definition of Assumed
Obligations and Liabilities.
4.2 AT&T Excluded Assets. "AT&T Excluded Assets" means all: (a)
--------------------
programming (including music programming and cable guide Contracts) and
retransmission consent Contracts of AT&T other than those listed on SCHEDULE
1.12 (AT&T System Contracts) and those hereafter designated by AT&T as being
included in the AT&T Assets by written notice to Insight given on
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or before September 15, 2000, it being agreed that leased channel access
agreements are not programming agreements for purposes of this Section 4.2; (b)
AT&T Plans; (c) insurance policies of AT&T and rights and claims thereunder
(except as otherwise provided in Section 12.16); (d) bonds, letters of credit,
surety instruments and other similar items and any stocks, bonds, certificates
of deposit and similar investments of AT&T; (e) cash and cash equivalents and
notes receivable of AT&T; (f) AT&T's trademarks, trade names, service marks,
service names, logos and similar proprietary rights, subject to Section 7.10;
(g) subscriber billing Contracts and related leased equipment and software of
AT&T, subject to Section 7.11; (h) all contracts and related accounts receivable
for providing DMX service to commercial accounts via direct broadcast satellite;
(i) all AT&T System Contracts relating to national advertising sales
representation, including any Contracts with National Cable Communications or
Cable Networks, Inc.; (j) all agreements pursuant to which AT&T has created,
incurred, assumed or guaranteed indebtedness for borrowed money or under which
any Lien securing such indebtedness has been or may be imposed on any AT&T
Asset, other than agreements evidencing AT&T Permitted Debt and the New Credit
Agreement; (k) any claims, rights or choses in action of AT&T related to the
period prior to the Closing Time (other than customer and advertising accounts
receivable), including, without limitation, any Litigation and the proceeds
thereof and any claims, rights and interest in and to any refunds of federal,
state or local franchise, income or other taxes or payments of any nature for
the periods prior to the Closing Time, including copyright fees; (l) any books
and records that AT&T is required by any Legal Requirement to retain and any
books of account, tax reports and returns and the like related to the AT&T
Systems; provided that copies of such books and records will be made available
to the Partnership for a period of three years (and six years in the case of tax
reports and returns and underlying books and records, although in the case of
underlying books and records, the parties acknowledge that they are not retained
for periods for which an IRS field examination has been completed) from the
Closing Date upon reasonable request; (m) AT&T's corporate minute books,
partnership and limited liability company records and other books and records
related to internal matters and financial relationships with AT&T's lenders and
affiliates; (n) any employment, union, collective bargaining, compensation,
bonus, deferred compensation, consulting, agency or management agreements of
AT&T; (o) all documents, reports and records relating to the employees of the
AT&T Systems; provided that copies of such books and records will be made
available to the Partnership for a period of three years from the Closing Date
upon reasonable request by the Partnership accompanied by a waiver and release
from the employee whose records are sought in form and substance reasonably
satisfactory to AT&T; (p) any agreement, right, asset or property owned, leased
or held by AT&T that is not used or held for use in connection with the
operation of the AT&T Systems; (q) AT&T's rights under the @Home Distribution
Agreement (as defined in the Partnership Agreement), it being agreed that the
parties' rights and obligations with respect thereto shall be as specified in
the Partnership Agreement; (r) all obligations under the Media One Social
Contract and the Time Warner Social Contract, and (s) rights, assets and
properties described on SCHEDULE 4.2.
4.3 Insight Excluded Assets. "Insight Excluded Assets" means all: (a)
-----------------------
programming (including music programming and cable guide Contracts) and
retransmission consent Contracts of Insight and Insight Central Ohio other than
those listed on Schedule 1.48 (Insight System Contracts)
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and those hereafter designated by Insight as being included in the Insight
Assets by written notice to AT&T given on or before September 15, 2000, it being
agreed that leased channel access agreements are not programming agreements for
purposes of this Section 4.3; (b) Insight Plans; (c) insurance policies of
Insight and Insight Central Ohio and rights and claims thereunder (except as
otherwise provided in Section 12.16); (d) bonds, letters of credit, surety
instruments and other similar items and any stocks, bonds, certificates of
deposit and similar investments of Insight and Insight Central Ohio; (e) cash
and cash equivalents and notes receivable of Insight and Insight Central Ohio;
(f) Insight's and Insight Central Ohio's trademarks, trade names, service marks,
service names, logos and similar proprietary rights, subject to Section 7.10;
(g) subscriber billing Contracts and related leased equipment and software of
Insight and Insight Central Ohio, subject to Section 7.11; (h) all Insight
System Contracts relating to national advertising sales representation; (i) all
agreements pursuant to which Insight, Holdings (Central Ohio) or Insight Central
Ohio has created, incurred, assumed or guaranteed indebtedness for borrowed
money or under which any Lien securing such indebtedness has been or may be
imposed on any Insight Asset or Exchange Asset, other than agreements evidencing
Insight Permitted Debt and the New Credit Agreement; (j) any claims, rights or
choses in action of Insight and Insight Central Ohio related to the period prior
to the Closing Time (other than customer and advertising accounts receivable),
including, without limitation, any Litigation and the proceeds thereof and any
claims, rights and interest in and to any refunds of federal, state or local
franchise, income or other taxes or payments of any nature for the periods prior
to the Closing Time, including copyright fees; (k) any books and records that
Insight is required by any Legal Requirement to retain and any books of account,
tax reports and returns and the like related to the Insight Systems (other than
the Insight Central Ohio Systems); provided that copies of such books and
records will be made available to the Partnership for a period of three years
(and six years in the case of tax reports and returns and underlying books and
records, although in the case of underlying books and records, the parties
acknowledge that they are not retained for periods for which an IRS field
examination has been completed) from the Closing Date upon reasonable request;
(l) Insight's partnership record books and other books and records related to
internal partnership matters and financial relationships with Insight's lenders
and affiliates; (m) any employment, union, collective bargaining, compensation,
bonus, deferred compensation, consulting, agency or management agreements of
Insight, Holdings (Central Ohio) or Insight Central Ohio; (n) all documents,
reports and records relating to the employees of the Insight Systems (other than
the Insight Central Ohio Systems) or the Exchange Systems, with respect to the
Interim Period; provided that copies of such books and records will be made
available to the Partnership for a period of three years from the Closing Date
upon reasonable request accompanied by a waiver and release from the employee
whose records are sought in form and substance reasonably satisfactory to
Insight; (o) any agreement, right, asset or property owned, leased or held by
Insight, Holdings (Central Ohio) or Insight Central Ohio that is not used or
held for use in connection with the operation of the Insight Systems, Exchange
Systems or Sale Systems; (p) the At Home Network Distribution Agreement dated
May 1, 1998 between At Home Corporation and Insight; and (q) rights, assets and
properties described on Schedule 4.3. The parties recognize that certain of the
foregoing Excluded Assets may need to remain in Insight Central Ohio due to
contractual restrictions, Legal Requirements, operational considerations, or
other considerations and will negotiate in good faith to reach agreement prior
to Closing regarding which of such Excluded
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Assets, if any, will remain in Insight Central Ohio, it being agreed that any of
such assets that remain in Insight Central Ohio are included in the definition
of Insight Assets. To the extent any Insight Central Ohio Assets are determined
in accordance with the preceding sentence to be Excluded Assets, Insight will
use commercially reasonable efforts to terminate any such Excluded Assets or
transfer them to Insight on or before the Closing and Insight shall indemnify
and hold the Partnership and its subsidiaries harmless from any Losses
associated therewith. If Insight and TCI LLC mutually determine that cash, cash
equivalents, proceeds or refunds need to remain in Insight Central Ohio, Insight
will get credit in computing the Insight Closing Adjustment for any cash, cash
equivalents, proceeds or refunds that remain in Insight Central Ohio.
SECTION 5. INSIGHT'S REPRESENTATIONS AND WARRANTIES
Insight represents and warrants to AT&T and the Partnership as of the date
of this Agreement (or, if a different date is specified in this Section 5 or in
Insight's Schedules, as of such specified date) as follows, it being understood
that the representations and warranties in Sections 5.1, 5.2 and 5.3 assume that
the Exchange Agreement and Sale Agreement will be consummated in accordance with
their respective terms prior to the Closing hereunder and Insight makes no
representation or warranty with respect to any of the Exchange Systems, Sale
Systems, Exchange Assets or Sale Assets unless expressly indicated.
5.1 Organization and Qualification of Insight. Insight is a limited
-----------------------------------------
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware; Insight Central Ohio is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware; Holdings (Central Ohio) is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware; and each of Insight, Insight Central Ohio, and Holdings (Central Ohio)
has all requisite partnership or limited liability company power, as applicable,
and authority to own, lease and use the Insight Assets, the Central Ohio Common
Interests and to conduct Insight's Cable Business as it is currently conducted.
Insight, Insight Central Ohio and Holdings (Central Ohio) are duly qualified to
do business and are in good standing under the laws of each jurisdiction in
which the ownership, leasing or use of the Insight Assets or the Central Ohio
Common Interests or the nature of their activities in connection with the
Insight Systems makes such qualification necessary, except in any such
jurisdiction where the failure to be so qualified and in good standing would not
have a material adverse effect on the ownership or operation of Insight's Cable
Business, the Insight Assets, the Central Ohio Common Interests or the Insight
Systems or on the ability of Insight to perform its obligations under this
Agreement. Insight's U.S. taxpayer identification number is 000000000. Insight
Central Ohio's taxpayer identification number is 00-0000000. Holdings (Central
Ohio)'s U.S. taxpayer identification number is 00-0000000.
5.2 Authority and Validity. Insight has all requisite partnership power
----------------------
and authority to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement and the Transaction
Documents to which Insight is a party. The execution and delivery by Insight,
the performance by Insight under, and the consummation by
-27-
Insight of the transactions contemplated by, this Agreement and the Transaction
Documents to which Insight is a party have been duly and validly authorized by
all required partnership action by or on behalf of Insight. This Agreement has
been, and when executed and delivered by Insight the Transaction Documents will
be, duly and validly executed and delivered by Insight and the valid and binding
obligations of Insight, enforceable against Insight in accordance with their
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to the enforcement of creditors' rights generally or by principles governing the
availability of equitable remedies.
5.3 No Conflict; Required Consents. Except for, and subject to receipt of
------------------------------
the Insight Required Consents, all of which are listed on Schedule 5.3, the AT&T
Required Consents, all consents, authorizations and approvals required for
Insight to transfer the Exchange Assets and Sale Assets to the Partnership and
the notification and expiration or earlier termination of the waiting period
under the HSR Act and except as otherwise disclosed on Schedule 5.3, the
execution and delivery by Insight, the performance of Insight under, and the
consummation of the transactions contemplated by, this Agreement and the
Transaction Documents to which Insight is a party do not and will not: (a)
conflict with or violate any provision of its agreement of limited partnership
or the operating agreements of Holdings (Central Ohio) and Insight Central Ohio;
(b) violate any provision of any Legal Requirement; (c) require any consent,
approval or authorization of, or filing of any certificate, notice, application,
report or other document with, any Governmental Authority or other Person; or
(d) (i) conflict with, violate, result in a breach of or constitute a default
under (without regard to requirements of notice, lapse of time or elections of
other Persons or any combination thereof), (ii) permit or result in the
termination, suspension or modification of, (iii) result in the acceleration of
(or give any Person the right to accelerate) the performance of Insight,
Holdings (Central Ohio) or Insight Central Ohio under, (iv) result in the
creation or imposition of any Lien under any Insight System Franchise, Insight
System License or any Insight System Contract or other instrument evidencing
any of the Insight Assets or the Central Ohio Common Interests or by which
Insight, Insight Central Ohio or Holdings (Central Ohio)or any of their
respective assets is bound or affected, except for purposes of clauses (c) and
(d) such consents, approvals, authorizations and filings that, if not obtained
or made, would not, and such violations, conflicts, breaches, defaults,
terminations, suspensions, modifications and accelerations as would not,
individually or in the aggregate, have a material adverse effect on any Insight
Asset, the Central Ohio Common Interests, any Insight System, Insight's Cable
Business or on the ability of Insight to perform its obligations under this
Agreement or the Transaction Documents to which Insight is a party.
5.4 Assets.
------
(a) Insight or Insight Central Ohio, as applicable, has good and
valid title to (or, in the case of Assets that are leased, valid leasehold
interests in) the Insight Assets (other than Insight Owned Property, Insight
Leased Property and Insight Other Real Property Interests, as to which
representations and warranties in Section 5.6 apply). The Insight Assets are
free and clear of all Liens, except (i) Permitted Liens and (ii) Liens described
on Schedule 5.4, all of which Liens on Schedule 5.4 (other than Permitted Liens)
will be terminated, released or, in the case of the
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rights of first refusal listed on SCHEDULE 5.4, waived, as appropriate, at or
prior to the Closing. The Insight Tangible Personal Property is in good
operating condition and repair (ordinary wear and tear excepted).
(b) Except for items included in the Insight Excluded Assets, the
Insight Assets constitute all the assets necessary to permit the Partnership to
conduct Insight's Cable Business and to operate the Insight Systems
substantially as they are being conducted and operated on the date of this
Agreement and in compliance in all material respects with all applicable Legal
Requirements, Insight System Contracts, Insight System Licenses and Insight
System Franchises and to perform all of the Assumed Obligations and Liabilities
as they relate to the Insight Systems.
(c) Except as described on SCHEDULE 5.4, as of the date of this
Agreement, (i) the Insight Systems do not offer telephony, high speed data or
internet access services and (ii) the Insight Systems do not have any digital
transport arrangement (e.g., HITS).
----
5.5 Insight System Franchises, Insight System Licenses, Insight System
------------------------------------------------------------------
Contracts and Insight Other Real Property Interests.
---------------------------------------------------
(a) Except pursuant to the agreements referenced on Schedules 1.43
(Insight Leased Property), 1.45 (Insight Other Real Property Interests), 1.48
(Insight System Contracts), 1.49 (Insight System Franchises) and 1.50 (Insight
System Licenses), or as described on Schedule 4.3 (Insight Excluded Assets) or
otherwise included in the definition of Insight Excluded Assets, as of the date
of this Agreement, neither Insight nor Insight Central Ohio is bound or affected
by any of the following that relate primarily or in whole to Insight's Cable
Business: (i) leases of real or personal property; (ii) franchises for the
construction or operation of cable television systems or Contracts of
substantially equivalent effect; (iii) other licenses, authorizations, consents
or permits of the FCC or any other Governmental Authority; (iv) material
easements, rights of access, underground conduit agreements, crossing agreements
or other interests in real property; (v) pole line or attachment agreements;
(vi) agreements pursuant to which the Insight Systems receive or provide
advertising sales representation services; (vii) agreements pursuant to which an
Insight System has constructed or agreed to construct for third parties an
institutional network or otherwise provides to third parties telecommunications
services other than one-way video; (viii) agreements pursuant to which any
bandwidth capacity of the Insight Systems is leased or otherwise made available
to any Third Party or any Affiliate of Insight; (ix) construction and
development agreements (other than installation agreements where services are
provided in the ordinary course of business on an as-needed basis); (x)
agreements evidencing (other than the actual notes), and other material
agreements related to, the Coaxial Central Ohio Debt and the Insight Central
Ohio Credit Agreement and all agreements related to the management of the
Insight Central Ohio Assets, or the relationship between Insight or any of its
Affiliates on the one hand, and any of the following Persons on the other hand
with respect to the ownership, management, goverance or operation of Insight
Central Ohio and Holdings (Central Ohio) or the Coaxial Central Ohio Debt or the
Insight Central Ohio Credit Agreement: Coaxial Central Ohio, any of the direct
or indirect owners of Coaxial Central Ohio, Coaxial Financing Corp., Phoenix
Associates or any of the direct or indirect
-29-
owners of Phoenix Associates; or (xi) Contracts relating to the operation of
Insight's Cable Business other than those described in any other clause of this
Section which contemplate payments by or to Insight or Insight Central Ohio in
any 12-month period exceeding $25,000 individually or $150,000 in the aggregate
or that have a remaining term of two years or more as of the Closing Date;
provided that multiple dwelling unit agreements, including bulk-billed
agreements and commercial service agreements, are not required to be listed.
Except as described on the Schedules to this Agreement, no Affiliate of Insight
is a party to any documents listed on such Schedules.
(b) Complete and correct copies of the Insight System Franchises and
Insight System Licenses have been delivered by Insight to AT&T or will be
delivered by Insight to AT&T by September 15, 2000. Except as set forth on
Schedule 1.49 (Insight System Franchises), the Insight System Franchises contain
all of the commitments and obligations of Insight or Insight Central Ohio to the
applicable Governmental Authority granting such Franchises with respect to the
construction, ownership and operation of the Insight Systems. The Insight
System Franchises and Insight System Licenses are currently in full force and
effect and are valid and enforceable under all applicable Legal Requirements
according to their terms. There is no legal action, governmental proceeding or,
to Insight's Knowledge, investigation, pending or to Insight's Knowledge
threatened, to terminate, suspend or modify any Insight System Franchise or any
Insight System License and, except as set forth on Schedule 1.49 (Insight System
Franchises), Insight and Insight Central Ohio are in material compliance with
the terms and conditions of all the Insight System Franchises and Insight System
Licenses and with other applicable requirements of all Governmental Authorities
(including the FCC and the Register of Copyrights) relating to the Insight
System Franchises and Insight System Licenses, including all requirements for
notification, filing, reporting, posting and maintenance of logs and records.
All areas served by the Insight Systems are served pursuant to one of the
Insight System Franchises except as set forth on Schedule 1.49 (Insight System
Franchises).
(c) Complete and correct copies of all Insight System Contracts
required to be listed on Insight's Schedules (including all Contracts relating
to Leased Property and Other Real Property Interests described on Schedules 1.43
and 1.45) have been provided to AT&T or will be provided to AT&T by September
15, 2000. Such documents constitute the entire agreement with the other party.
Each such Insight System Contract is in full force and effect and constitutes
the valid, legal, binding and enforceable obligation of Insight or Insight
Central Ohio and Insight or Insight Central Ohio is not and to Insight's
Knowledge, each other party thereto is not in breach or default of any material
terms or conditions thereunder. Insight also has provided to AT&T or will
provide to AT&T by September 15, 2000, a complete and correct list of all bulk-
billed accounts and commercial service accounts of the Insight Systems as of the
date of this Agreement.
5.6 Real Property. As of the date of this Agreement, all Insight Assets
-------------
consisting of Insight Owned Property, Insight Leased Property and material
Insight Other Real Property Interests are described on Schedules 1.43 (Insight
Leased Property), 1.45 (Insight Other Real Property Interests) and 1.46 (Insight
Owned Property). Except as otherwise disclosed on Schedule 1.46 (Insight Owned
Property), Insight or Insight Central Ohio holds title to the Insight Owned
Property free and clear of all Liens except (a) Permitted Liens and (b) Liens
described on Schedule 5.4 (all
-30-
of which Liens on Schedule 5.4 (other than Permitted Liens) will be terminated,
released or, in the case of the rights of first refusal listed on Schedule 5.4,
waived, as appropriate, at or prior to the Closing), and has the valid and
enforceable right to use and possess such Insight Owned Property, subject only
to the above-referenced Liens. Except as otherwise disclosed on Schedules 1.43
(Insight Leased Property) or 1.45 (Insight Other Real Property Interests),
Insight or Insight Central Ohio has valid and enforceable leasehold interests in
all Insight Leased Property and, with respect to Insight Other Real Property
Interests, has valid and enforceable rights to use such Insight Other Real
Property Interests, subject only to the above-referenced Liens. Except for
ordinary wear and tear and routine repairs and except as disclosed on Schedules
1.43 (Insight Leased Property) or 1.46 (Insight Owned Property), as applicable,
all of the material improvements, leasehold improvements and the premises of the
Insight Owned Property and the premises demised under the leases and other
documents evidencing the Insight Leased Property are in good condition and
repair and are suitable for the purposes used. Unless otherwise disclosed on
Schedules 1.43 (Insight Leased Property) or 1.46 (Insight Owned Property), as
applicable, each parcel of Insight Owned Property and each parcel of Insight
Leased Property and any improvements thereon and their current use (x) has
access to and over public streets or private streets for which Insight or
Insight Central Ohio has a valid right of ingress and egress, (y) conforms in
its current use and occupancy to all material zoning requirements without
reliance upon a variance issued by a Governmental Authority or a classification
of the parcel in question as a nonconforming use and (z) conforms in its current
use to all restrictive covenants, if any, or other Liens affecting all or part
of such parcel. Except where the failure of the representations made in this
sentence to be true and correct would not have a material adverse effect on the
Insight Assets, the Central Ohio Common Interests or Insight's Cable Business
and except as disclosed on Schedules 1.43 (Insight Leased Property) and 1.46
(Insight Owned Property), as applicable, all buildings, towers, guy wires and
anchors, headend equipment, earth-receiving dishes and related facilities used
in the operations of the Insight Systems are located entirely on Insight Owned
Property or Insight Leased Property or other real property in which Insight or
Insight Central Ohio has an Insight Other Real Property Interest and are
maintained, placed and located in accordance with the provisions of all
applicable Legal Requirements, deeds, leases, licenses, permits or other legally
enforceable arrangements.
5.7 Environmental.
-------------
(a) To Insight's Knowledge, except as disclosed on Schedule 5.7, the
Insight Owned Property and Insight Leased Property comply in all material
respects with and have previously been operated in compliance in all material
respects with all Environmental Laws. Neither Insight nor Insight Central Ohio
has, either directly or indirectly (i) generated, stored, used, treated,
handled, discharged, released or disposed of any Hazardous Substances at, on,
under, in or about, to or from or in any other manner affecting, any Insight
Owned Property or Insight Leased Property, (ii) transported any Hazardous
Substances to or from any Insight Owned Property or Insight Leased Property or
(iii) undertaken or caused to be undertaken any other activities relating to the
Insight Owned Property or Insight Leased Property, which could reasonably give
rise to any liability under any Environmental Law and, to Insight's Knowledge,
no other present or previous owner, tenant, occupant or user of any Insight
Owned Property or Insight Leased Property or any
-31-
other Person has committed or suffered any of the foregoing. To Insight's
Knowledge, no release of Hazardous Substances outside the Insight Owned Property
or Insight Leased Property has entered or threatens to enter any Insight Owned
Property or Insight Leased Property, nor is there any pending or threatened
Litigation based on Environmental Laws which arises from any condition of the
land adjacent to or immediately surrounding any Insight Owned Property or
Insight Leased Property. No Litigation based on Environmental Laws which relates
to any Insight Owned Property or Insight Leased Property or any operations or
conditions on it (1) has been asserted or conducted in the past with respect to,
or is currently pending against, Insight or Insight Central Ohio or, to
Insight's Knowledge, any other Person or (2) to Insight's Knowledge, is
threatened or contemplated.
(b) To Insight's Knowledge, except as disclosed on Schedule 5.7 (i)
no aboveground or underground storage tanks are currently or have been located
on any Insight Owned Property or Insight Leased Property, (ii) no Insight Owned
Property or Insight Leased Property has been used at any time as a gasoline
service station or any other facility for storing, pumping, dispensing or
producing gasoline or any other petroleum products or wastes and (iii) no
building or other structure on any Insight Owned Property or Insight Leased
Property contains asbestos, asbestos-containing material or material presumed to
be asbestos-containing material under any Environmental Law.
(c) Insight has provided AT&T or will provide AT&T by September 15,
2000, with complete and correct copies of (i) all studies, reports, surveys or
other written materials in Insight's or Insight Central Ohio's possession
relating to the presence or alleged presence of Hazardous Substances at, on,
under or affecting the Insight Owned Property or Insight Leased Property, (ii)
all notices (other than general notices made by general publication) or other
materials in Insight's or Insight Central Ohio's possession that were received
from any Governmental Authority having the power to administer or enforce any
Environmental Laws relating to current or past ownership, use or operation of
the Insight Owned Property or Insight Leased Property or activities at the
Insight Owned Property or Insight Leased Property and (iii) all materials in
Insight's or Insight Central Ohio's possession relating to any Litigation or
allegation by any private third party concerning any Environmental Law.
5.8 Compliance with Legal Requirements.
----------------------------------
(a) The ownership, leasing and use of the Insight Assets and Central
Ohio Common Interests as they are currently owned, leased and used and the
conduct of Insight's Cable Business and the operation of the Insight Systems as
they are currently conducted and operated do not violate or infringe in any
material respect any Legal Requirements currently in effect (other than Legal
Requirements described in Sections 5.7, 5.8(d) and 5.13, as to which the
representations and warranties set forth in those subsections shall apply),
including (i) the Communications Act, (ii) Section 111 of the U.S. Copyright Act
of 1976, and the U.S. Copyright Office rules and regulations promulgated
thereunder (the "Copyright Act") and (iii) all other applicable Legal
Requirements relating to the construction, maintenance, ownership and operation
of the Insight Assets, the Insight Systems and Insight's Cable Business. None
of Insight, Insight Central Ohio or Holdings (Central
-32-
Ohio) has received any written notice of any violation by Insight, Insight
Central Ohio or Holdings (Central Ohio)or Insight's Cable Business of any Legal
Requirement (in the case of Insight and Insight Central Ohio applicable to the
operation of Insight's Cable Business as currently conducted, or the Insight
Systems as currently operated) and to Insight's Knowledge, there is no existing
fact, circumstance or condition that could reasonably form the basis for a
finding by any Governmental Authority of any such violation.
(b) Except as set forth in Schedule 5.8, a valid request for renewal
has been duly and timely filed under Section 626 of the Communications Act with
the proper Governmental Authority with respect to all Insight System Franchises
that have expired prior to or will expire within 36 months after the date of
this Agreement.
(c) Except as set forth in Schedule 5.8, (i) no written notices or
demands have been received from the FCC, from any television station, or from
any other Person or Governmental Authority (1) challenging the right of the
Insight Systems to carry any television broadcast station or deliver the same or
(2) claiming that any Insight System has failed to carry a television broadcast
station required to be carried pursuant to the Communications Act or has failed
to carry a television broadcast station on a channel designated by such station
consistent with the requirements of the Communications Act; (ii) all necessary
Federal Aviation Administration ("FAA") approvals have been obtained with
respect to the height and location of towers used in connection with the
operation of the Insight Systems and such towers are being operated in
compliance in all material respects with applicable FCC and FAA rules; and (iii)
neither Insight nor Insight Central Ohio has received any written notice from
any Governmental Authority with respect to an intention to enforce customer
service standards pursuant to the 1992 Cable Act and neither of Insight nor
Insight Central Ohio has agreed with any Governmental Authority to establish
customer service standards that exceed the FCC standards promulgated pursuant to
the 1992 Cable Act except as set forth in the Insight System Franchises.
(d) Notwithstanding the foregoing, to Insight's Knowledge, each
Insight System is in compliance in all material respects with the provisions of
the 1992 Cable Act as such Legal Requirements relate to the rates and other fees
charged to subscribers of Insight's Cable Business. Insight and Insight Central
Ohio have used reasonable good faith efforts to establish rates charged to
subscribers, effective since September 1, 1993, that are or were allowable under
the 1992 Cable Act and any authoritative interpretation thereof now or then in
effect, to the extent such rates are or were subject to regulation at such time
by any Governmental Authority, including any local franchising authority and/or
the FCC. Notwithstanding the foregoing, Insight makes no representation or
warranty that any of its or Insight Central Ohio's rates that are not subject to
rate regulation would be allowable if such rates were subject to regulation and
makes no representation or warranty that the rates charged to subscribers would
be allowable under any rules and regulations of the FCC or any authoritative
interpretation thereof, promulgated after the Closing Date. Insight has
delivered to AT&T or will deliver to AT&T by September 15, 2000, complete and
correct copies of all FCC Forms and other information reasonably requested by
AT&T relating to rate regulation generally or specific rates charged to
subscribers with respect to the Insight Systems.
-33-
Except as set forth on Schedule 5.8, neither Insight nor Insight Central Ohio
has made any election with respect to any cost of service proceeding conducted
in accordance with Part 76.922 of Title 47 of the Code of Federal Regulations or
any similar proceeding with respect to any of the Insight Systems (a "Cost of
Service Election"). Neither Insight nor Insight Central Ohio has entered into or
is subject to any so-called social contract or proposed resolution with the FCC
with respect to rates charged for cable television services in the Insight
Systems or is currently negotiating or anticipating entering into or being
subject to the same. Except as otherwise described on SCHEDULE 5.8, as of the
date of this Agreement, (i) to the Knowledge of Insight there are no outstanding
or unresolved proceedings or investigations (other than those affecting the
cable industry generally) dealing with or otherwise affecting the rates that any
cable television system included in the Insight Systems can charge (whether for
programming, equipment, installation, service or otherwise), (ii) no cable
television system included in the Insight Systems is subject to any currently
effective order issued by a Governmental Authority that reduced the rates that
it may charge (whether for programming, equipment, installation, service, or
otherwise), (iii) no local franchising authority has been certified by the FCC
as a rate regulating authority with respect to any of the Insight Systems and
(iv) there is no unresolved complaint pending with respect to the CPST tier of
any Insight System and no rate order with respect to the Insight Systems that is
being appealed.
5.9 Patents, Trademarks and Copyrights. Insight or Insight Central Ohio
----------------------------------
have deposited with the U.S. Copyright Office all statements of account and
other documents and instruments, and have paid all royalties, supplemental
royalties, fees and other sums to the U.S. Copyright Office under the Copyright
Act with respect to the business and operations of the Insight Systems as are
required to obtain, hold and maintain the compulsory license for cable
television systems prescribed in Section 111 of the Copyright Act. To Insight's
Knowledge, there is no inquiry, claim, action or demand pending before the U.S.
Copyright Office or from any other Person which questions the copyright filings
or payments made by Insight or Insight Central Ohio with respect to the Insight
Systems. Insight has delivered to AT&T or will deliver to AT&T by September 15,
2000, complete and correct copies of all current reports and filings for the
past three years, made or filed pursuant to copyright rules and regulations with
respect to Insight's Cable Business. Neither Insight nor Insight Central Ohio
possesses any patent, patent right, trademark or copyright related to or
material to the operation of the Insight Systems and neither Insight nor Insight
Central Ohio is a party to any license or royalty agreement with respect to any
such patent, patent right, trademark or copyright, except for licenses
respecting program material and obligations under the Copyright Act applicable
to cable television systems generally. The Insight Systems and Insight's Cable
Business have been operated in such a manner so as not to violate or infringe
upon the rights, or give rise to any rightful claim of any Person for copyright,
trademark, service xxxx, patent or license infringement or the like.
5.10 Financial Statements; Undisclosed Liabilities; Absence of Certain
-----------------------------------------------------------------
Changes or Events. Insight has delivered to AT&T complete and correct copies of
-----------------
an unaudited statement of assets and liabilities for each Insight System as of
March 31, 2000 and an unaudited income and expense summary statement for each
Insight System for the year ended December 31, 1999 and the three-month period
ended March 31, 2000 (with the following exceptions: (i) for the Scottsburg,
Indiana
-34-
Insight System, the 1999 income and expense summary statement is for the period
commencing on March 22, 1999 (the date of acquisition) and ending December 31,
1999, (ii) for the Portland, Indiana Insight System, the 1999 income and expense
summary statement is for the period commencing on March 31, 1999 (the date of
acquisition) and ending December 31,1999, and (iii) there are no financial
statements for the Campbellsburg and Medora, Indiana Insight Systems
(approximately 700 subscribers)), including all notes and schedules thereto, if
any (all of such financial statements and notes being hereinafter referred to as
"Insight's Financial Statements"). Insight's Financial Statements are in
accordance with the books and records of Insight or Insight Central Ohio, as
applicable, were prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby, and, except as may be described therein,
present fairly the financial condition of the Insight Systems at the dates and
for the periods indicated, subject only to standard year-end adjustments and the
omission of footnotes. The unaudited statements of assets and liabilities of the
Insight Systems as of March 31, 2000 are herein called the "Insight Balance
Sheets." At the date of the Insight Balance Sheets, neither Insight with respect
to the Insight Systems, nor Insight Central Ohio had any material liabilities
required by GAAP to be reflected or reserved against therein that were not fully
reflected or reserved against on the Insight Balance Sheets, other than
liabilities as set forth on Schedule 5.10. Except as set forth on Schedule 5.10,
since the date of the Insight Balance Sheets through the date of this Agreement:
(x) neither Insight nor Insight Central Ohio has incurred any obligation or
liability (contingent or otherwise), except normal trade or business obligations
incurred in the ordinary course of business, the performance of which will not,
to Insight's Knowledge, individually or in the aggregate, have a material
adverse effect on the financial condition of Insight or Insight Central Ohio or
the results of operations of Insight's Cable Business; (y) there has been no
material adverse change in the Insight Assets comprising any Insight System, the
Central Ohio Common Interests or in the business, condition, financial or
otherwise, or liabilities of Insight's Cable Business or any Insight System and,
to Insight's Knowledge, no fact or condition exists or is contemplated or
threatened which would result in such a change in the future; and (z) Insight's
Cable Business has been conducted only in the ordinary course of business
consistent with past practice. For the purpose of this Agreement, the impact of
general economic conditions (including changes in capital and financial
markets), governmental legislation and regulations and other events which affect
the cable industry as a whole in the States of Georgia, Illinois, Indiana or
Ohio or the United States, shall not be considered in determining whether there
has been a material adverse change in the business, condition, financial or
otherwise or liabilities of Insight's Cable Business or any Insight System or
the Insight Assets. Except as disclosed on Schedule 5.10, Holdings (Central
Ohio) does not have any liabilities.
5.11 Litigation. Except as set forth in Schedule 5.11: (a) there is no
----------
Litigation pending or, to Insight's Knowledge, threatened, and, to Insight's
Knowledge, there is no investigation pending or threatened, by or before any
Governmental Authority or private arbitration tribunal against Insight, Insight
Central Ohio or Holdings (Central Ohio) which, if adversely determined, would
materially adversely affect the financial condition or operations of Insight's
Cable Business, Insight Systems, the Insight Assets, the Central Ohio Common
Interests or the ability of Insight to perform its obligations under this
Agreement, or which, if adversely determined, would result in the modification,
revocation, termination, suspension or other limitation of any of the Insight
System
-35-
Franchises, Insight System Licenses, Insight System Contracts or leases or other
documents evidencing the Insight Leased Property or the Insight Other Real
Property Interests; and (b) there is not in existence any Judgment requiring
Insight, Insight Central Ohio or Holdings (Central Ohio) to take any action of
any kind with respect to the Insight Assets, the Central Ohio Common Interests
or the operation of the Insight Systems, or to which Insight (with respect to
the Insight Systems), Insight Central Ohio or Holdings (Central Ohio), the
Insight Systems or the Insight Assets are subject or by which they are bound or
affected.
5.12 Tax Returns; Other Reports. Insight, Insight Central Ohio and
--------------------------
Holdings (Central Ohio) have duly and timely filed in correct form all federal,
state, local and foreign Tax returns and other Tax reports required to be filed
by each of them, and has timely paid all Taxes which have become due and
payable, whether or not so shown on any such return or report, the failure of
which to be filed or paid could adversely affect or result in the imposition of
a Lien upon the Insight Assets or the Central Ohio Common Interests or that
could impose on the Partnership any transferee liability or liability as the
owner of Insight Central Ohio or Holdings (Central Ohio) or impose any liability
on Insight Central Ohio or Holdings (Central Ohio) for any taxes, penalties or
interest due or to become due from Insight, Insight Central Ohio or Holdings
(Central Ohio), except such amounts as are being contested diligently and in
good faith and are not in the aggregate material. Except as set forth on
SCHEDULE 5.12, none of Insight, Insight Central Ohio or Holdings (Central Ohio)
has received any notice of, nor does Insight have any Knowledge of, any
deficiency, assessment or audit, or proposed deficiency, assessment or audit
from any taxing Governmental Authority which could affect or result in the
imposition of a Lien upon the Insight Assets or the Central Ohio Common
Interests.
5.13 Employment Matters.
------------------
(a) Schedule 5.13(A) contains a complete and correct list of the
names and positions of all employees engaged by Insight or its Affiliates
principally in connection with the Insight Systems as of the date set forth on
Schedule 5.13(A). Except to the extent that any noncompliance would not
reasonably be expected to have a material adverse effect on the Insight Systems,
Insight and its Affiliates have, with respect to the Insight Systems, complied
in all material respects with all applicable Legal Requirements relating to the
employment of labor, including, the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. (S) 2101, et seq. ("WARN"), continuation coverage
requirements with respect to group health plans and those relating to wages,
hours, collective bargaining, unemployment insurance, worker's compensation,
equal employment opportunity, age, sex, race and disability discrimination,
occupational safety, immigration control and the payment and withholding of
Taxes. Except as set forth on Schedule 5.13, to Insight's Knowledge, there are
no current or threatened investigations relating to the classification of
independent contractors engaged by Insight or its Affiliates principally in
connection with the Insight Systems.
(b) For purposes of this Agreement, "Insight Plans" means each
employee benefit plan (as defined in Section 3(3) of ERISA) or any multi-
employer plan (as defined in Section 3(37)
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of ERISA) with respect to which Insight or any of its ERISA Affiliates (it being
agreed by Insight that Insight Central Ohio is an ERISA Affiliate of Insight)
has any liability or in which any employees or agents, or any former employees
or agents, of Insight or any of its ERISA Affiliates participate. The Insight
Plans in which any employee of the Insight Systems participates are set forth on
Schedule 5.13. Except to the extent that any violation would not reasonably be
expected to have a material adverse effect on the Insight Systems, none of
Insight, any of its ERISA Affiliates, any Insight Plan other than a
multiemployer plan (as defined in Section 3(37) of ERISA), or to the Knowledge
of Insight or any of its ERISA Affiliates, any Insight Plan that is a
multiemployer plan (as defined in Section 3(37) of ERISA), is in violation of
any provision of the United States Internal Revenue Code of 1986, as amended,
(the "Code") or ERISA. No material "reportable event" (described in Sections
4043(c)(1), (2), (3), (5), (6), (7), (10) and (13) of ERISA), non-exempt
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code), "accumulated funding deficiency" (as defined in Section 302 of
ERISA), or "withdrawal liability" (as determined under Section 4201 et seq. of
-- ---
ERISA) has occurred or exists with respect to any Insight Plan which reasonably
could result in material liability to Insight or any of its ERISA Affiliates. No
material "accumulated funding deficiency" (as defined in Section 302 of ERISA)
or "withdrawal liability" (as determined under Section 4201 et seq. of ERISA)
-- ---
has occurred or exists and is continuing with respect to any Insight Plan other
than a multiemployer plan (as defined in Section 3(37) of ERISA) or to the
Knowledge of Insight or any of its ERISA Affiliates, any Insight Plan that is a
multiemployer plan (as defined in Section 3(37) of ERISA). After the Closing,
neither the Partnership nor any of its ERISA Affiliates will be required, under
ERISA, the Code, any collective bargaining agreement or this Agreement, to
establish, maintain or continue any Insight Plan currently maintained by Insight
or any of its ERISA Affiliates.
(c) Except as set forth on Schedule 5.13, (i) there are no collective
bargaining agreements applicable to any Person employed by Insight or its
Affiliates principally in connection with the Insight Systems; (ii) neither
Insight nor its Affiliates has any duty to nor has agreed to bargain with any
labor organization with respect to any such Person and (iii) there are not
pending any unfair labor practice charges against Insight or its Affiliates with
respect to any such Person, any demand for recognition or any other effort of or
request or demand from a labor organization for representative status with
respect to any Person employed by Insight or its Affiliates principally in
connection with the Insight Systems now or, to the Knowledge of Insight and its
Affiliates, within the last one year and (iv) there are not currently pending or
threatened nor, to the Knowledge of Insight and its Affiliates, have there been
within the last one year any strikes, picketing, work slow downs or other labor
disputes involving or relating to employees of the Insight System. Except as
described on Schedule 5.13, neither Insight nor its Affiliates has any
employment agreements, either written or oral, except for oral contracts
terminated at will without penalty, with any employee of the Insight Systems and
none of the employment agreements listed on Schedule 5.13 requires Insight or
its Affiliates or will require the Partnership or its Affiliates to employ any
Person after the Closing.
(d) The following documents and records will be located at one of the
Insight System offices included in the Insight Assets on the Closing Date:
Forms 395A for calendar years
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1995 through 1999, all correspondence to and from the FCC regarding such 395A
reports, proof of EEO certification for calendar years 1993 through 1999, and
OSHA 200 logs and loss runs for calendar years 1999 and 2000.
5.14 Accounts Receivable. Insight's and Insight Central Ohio's accounts
-------------------
receivable for Insight's Cable Business are actual and bona fide receivables
representing obligations for the total dollar amount of such receivables, as
shown on the books of Insight or Insight Central Ohio, that resulted from the
regular course of Insight's Cable Business. Such receivables are subject to no
offset or reduction of any nature, except for a reserve for uncollectible
amounts consistent with the reserve established by Insight or Insight Central
Ohio in Insight's Financial Statements and those credits or reductions to such
accounts made in the ordinary course of business.
5.15 Finders and Brokers. None of Insight, Insight Central Ohio or
-------------------
Holdings (Central Ohio) have employed any financial advisor, broker or finder or
incurred any liability for any financial advisory, brokerage, finder's or
similar fee or commission in connection with the transactions contemplated by
this Agreement for which AT&T or the Partnership could be liable.
5.16 Transactions With Affiliates. Except to the extent set forth on
----------------------------
Schedule 5.16 or included in the Insight Excluded Assets and except with respect
to customary corporate overhead services provided by the corporate, division or
regional offices of Insight, none of Insight, Insight Central Ohio or Holdings
(Central Ohio)is a party to any material business arrangement or business
relationship with any of its Affiliates that affects the Insight Systems, and
none of its Affiliates owns any property or right, tangible or intangible, that
is used principally in the business or operations of the Insight Systems.
5.17 Holdings (Central Ohio) and Insight Central Ohio.
------------------------------------------------
(a) Holdings (Central Ohio) has one class of membership interests,
100% of which are owned by Insight. Insight Central Ohio has three classes of
membership interests that are owned as follows: 100% of the Central Ohio Common
Interests are owned by Holdings (Central Ohio), and 100% of each of the
Preferred A Interest and Preferred B Interest in Insight Central Ohio are owned
by Coaxial Central Ohio. All of the issued and outstanding membership interests
in Holdings (Central Ohio) and Insight Central Ohio have been duly authorized
and validly issued, are fully paid and nonassessable, were issued in compliance
with all applicable state and federal laws concerning the issuance of securities
and are held by their respective owners free and clear of all Liens other than
Permitted Liens and Liens created under the Coaxial documents listed on Schedule
1.48 (Insight System Contracts). Except pursuant to the Coaxial Repurchase
Agreement, the Insight Central Ohio Operating Agreement and the other Coaxial
documents listed on Schedule 1.48 (Insight System Contracts), there are no
outstanding preemptive or other rights, plans, options, warrants, conversion
rights or agreements for the purchase or acquisition from Holdings (Central
Ohio), Insight Central Ohio or any other Person of any membership interests in
such entities and no securities convertible or exchangeable for such membership
interests. Following Closing, except pursuant to the Insight Central Ohio
Operating Agreement, the Holdings (Central Ohio) Operating
-38-
Agreement, the Coaxial Repurchase Agreement and the Partnership Financing
Arrangements and Agreements (including the Coaxial Central Ohio Debt and the
Insight Central Ohio Credit Agreement), there will be no outstanding preemptive
or other rights, plans, options, warrants, conversion rights or agreements for
the purchase or acquisition from Holdings (Central Ohio), Insight Central Ohio
or any other Person of any membership interests in such entities and no
securities convertible or exchangeable for such membership interests. Except
pursuant to the Insight Central Ohio Operating Agreement and the Holdings
(Central Ohio) Operating Agreement and except pursuant to the Coaxial Repurchase
Agreement and the other Coaxial documents listed on Schedule 1.48 (Insight
System Contracts) and except pursuant to Insight's credit agreement, there are
no restrictions upon the voting or transfer of any membership interests in
Holdings (Central Ohio) or Insight Central Ohio and there are no agreements of
any kind among the members of Holdings (Central Ohio) or Insight Central Ohio or
between such entities and any of their members that relate to their ownership in
such entities or the operation of such entities. Following Closing, except
pursuant to the Insight Central Ohio Operating Agreement, the Holdings (Central
Ohio) Operating Agreement, the Coaxial Repurchase Agreement and the Partnership
Financing Arrangements and Agreements (including the Coaxial Central Ohio Debt
and the Insight Central Ohio Credit Agreement), there will be no restrictions
upon the voting or transfer of any membership interests in Holdings (Central
Ohio) or Insight Central Ohio (other than the preferred interests). Correct and
complete copies of the Insight Central Ohio Operating Agreement (dated August 8,
2000) and the Holdings (Central Ohio) Operating Agreement (dated August 21,
1998) have been delivered to AT&T (or will be delivered prior to September 15,
2000) and no amendments to such agreements will be made prior to Closing without
the prior written consent of Insight and TCI LLC, which consent shall not be
unreasonably withheld.
(b) Insight Central Ohio has not conducted any business other than
Insight's Cable Business and does not own, lease or use any assets other than
those included in the Insight Assets and the Insight Excluded Assets.
(c) Holdings (Central Ohio) does not currently hold, own or use any
assets other than its Central Ohio Common Interests nor has it previously held,
owned or used any other assets (except that it is a party to certain of the
Coaxial documents listed on Schedule 1.48 (Insight System Contracts).
(d) The only economic interest of the preferred interest holders in
Insight Central Ohio under the terms of the Insight Central Ohio Operating
Agreement, including, without limitation, upon dissolution or liquidation of
Insight Central Ohio, is to receive payments in an amount equal to payments due
on the Coaxial Central Ohio Debt. The defined term "Senior Notes" in the
Insight Central Ohio Operating Agreement now means the Coaxial Central Ohio
$140,000,000 10% Senior Notes due 2006.
-39-
SECTION 6. AT&T'S REPRESENTATIONS AND WARRANTIES
AT&T represents and warrants to Insight and the Partnership as of the date
of this Agreement (or, if a different date is specified in this Section 6 or in
AT&T's Schedules, as of such specified date), as follows.
6.1 Organization and Qualification of AT&T. Command Cable of Eastern
--------------------------------------
Illinois Limited Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of New Jersey;
MediaOne of Illinois, Inc. is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware; Northwest Illinois
TV Cable Company is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Illinois; S/D Cable Partnership,
Ltd. is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Colorado; TCI American Cable Holdings,
L.P. is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Colorado; TCI of Bloomington/Normal,
Inc. is a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Virginia; TCI Cablevision of Texas, Inc.
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Texas; UACC Midwest, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
United Cable Television of Illinois Valley, Inc. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois; United Cable Television of Southern Illinois, Inc. is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware; and TCI LLC is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Colorado.
Each of the AT&T Subsidiaries (a) has all requisite corporate, partnership or
limited liability company power and authority to own, lease and use the AT&T
Assets owned, leased or used by it and to conduct its portion of AT&T's Cable
Business as it is currently conducted and (b) is duly qualified to do business
and is in good standing under the laws of each jurisdiction in which the
ownership, leasing or use of the AT&T Assets owned or leased by it or the nature
of its activities in connection with the AT&T Systems makes such qualification
necessary, except in any such jurisdiction where the failure to be so qualified
and in good standing would not have a material adverse effect on the ownership
or operation of AT&T's Cable Business, the AT&T Assets or AT&T Systems or on the
ability of AT&T to perform its obligations under this Agreement. Command Cable
of Eastern Illinois Limited Partnership's U.S. taxpayer identification number is
22-310348; MediaOne of Illinois, Inc.'s taxpayer identification number is 37-
0889911; Northwest Illinois TV Cable Company's U.S. taxpayer identification
number is 00-0000000, S/D Cable Partners, Ltd.'s U.S. taxpayer identification
number is 00-0000000, TCI American Cable Holdings, L.P.'s U.S. taxpayer
identification number is 00-0000000, TCI of Bloomington/Normal, Inc.'s U.S.
taxpayer identification number is 00-0000000, TCI Cablevision of Texas, Inc.'s
U.S. taxpayer identification number is 00-0000000, UACC Midwest, Inc.'s U.S.
taxpayer identification number is 61116778, United Cable Television of Illinois
Valley, Inc.'s U.S. taxpayer identification number is 00-0000000, and United
Cable Television of Southern Illinois, Inc.'s U.S. taxpayer identification
number is 00-0000000.
-40-
6.2 Authority and Validity. Each of the AT&T Subsidiaries and TCI LLC has
----------------------
all requisite corporate, partnership or limited liability company power and
authority to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement and the Transaction
Documents to which it is a party. The execution and delivery by AT&T and TCI
LLC, the performance by AT&T and TCI LLC under, and the consummation by AT&T and
TCI LLC of the transactions contemplated by, this Agreement and the Transaction
Documents to which either AT&T or TCI LLC is a party have been duly and validly
authorized by all required corporate, partnership or limited liability company
action by or on behalf of AT&T or TCI LLC, as applicable. This Agreement has
been, and when executed and delivered by AT&T and TCI LLC, the Transaction
Documents will be duly and validly executed and delivered by AT&T and TCI LLC
and the valid and binding obligations of AT&T and TCI LLC, enforceable against
AT&T and TCI LLC in accordance with their terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to the enforcement of
creditors' rights generally or by principles governing the availability of
equitable remedies.
6.3 No Conflict; Required Consents. Except for, and subject to receipt
------------------------------
of, the AT&T Required Consents, all of which are listed on Schedule 6.3, the
Insight Required Consents, all consents, authorizations and approvals for
Insight to transfer the Exchange Assets and Sale Assets to the Partnership and
the notification and expiration or earlier termination of the waiting period
under the HSR Act and except as otherwise disclosed in Schedule 6.3, the
execution and delivery by AT&T and TCI LLC, the performance of AT&T and TCI LLC
under, and the consummation of the transactions contemplated by, this Agreement
and the Transaction Documents to which AT&T and TCI LLC, as applicable, is a
party do not and will not: (a) conflict with or violate any provision of their
respective charter or bylaws, partnership agreement or limited liability company
agreement; (b) violate any provision of any Legal Requirement; (c) require any
consent, approval or authorization of, or filing of any certificate, notice,
application, report or other document with, any Governmental Authority or other
Person; or (d) (i) conflict with, violate, result in a breach of or constitute a
default under (without regard to requirements of notice, lapse of time or
elections of other Persons or any combination thereof), (ii) permit or result in
the termination, suspension or modification of, (iii) result in the acceleration
of (or give any Person the right to accelerate) the performance of AT&T under,
(iv) result in the creation or imposition of any Lien under any AT&T System
Franchise, AT&T System License or any AT&T System Contract or other instrument
evidencing any of the AT&T Assets or by which AT&T or any of its assets is bound
or affected, except for purposes of clauses (c) and (d) such consents,
approvals, authorizations and filings, that, if not obtained or made, would not,
and such violations, conflicts, breaches, defaults, terminations, suspensions,
modifications and accelerations as would not, individually or in the aggregate,
have a material adverse effect on any AT&T System, AT&T's Cable Business or on
the ability of either AT&T or TCI LLC to perform its obligations under this
Agreement or the Transaction Documents to which either AT&T or TCI LLC is a
party.
-41-
6.4 Assets.
------
(a) AT&T has good and valid title to (or, in the case of Assets that
are leased, valid leasehold interests in) the AT&T Assets (other than AT&T Owned
Real Property, AT&T Leased Property and AT&T Other Real Property Interests, as
to which representations and warranties in Section 6.6 apply). The AT&T Assets
are free and clear of all Liens, except (i) Permitted Liens and (ii) Liens
described on Schedule 6.4, all of which Liens on SCHEDULE 6.4 (other than
Permitted Liens) will be terminated, released or, in the case of the rights of
first refusal listed on Schedule 6.4, waived, as appropriate, at or prior to the
Closing. The AT&T Tangible Personal Property is in good operating condition and
repair (ordinary wear and tear excepted).
(b) Except for items included in the AT&T Excluded Assets, the AT&T
Assets constitute all the assets necessary to permit the Partnership to conduct
AT&T's Cable Business and to operate the AT&T Systems substantially as they are
being conducted and operated on the date of this Agreement and in compliance in
all material respects with all applicable Legal Requirements, AT&T System
Contracts, AT&T System Licenses and AT&T System Franchises and to perform all of
the Assumed Obligations and Liabilities as they relate to the AT&T Systems.
(c) Except as described on Schedule 6.4, as of the date of this
Agreement (i) the AT&T Systems do not offer telephony, high speed data or
internet access services and (ii) the AT&T Systems do not have any digital
transport arrangement (e.g., HITS).
----
6.5 AT&T System Franchises, AT&T System Licenses, AT&T System Contracts
-------------------------------------------------------------------
and AT&T Other Real Property Interests.
--------------------------------------
(a) Except pursuant to the agreements referenced on Schedules 1.7
(AT&T Leased Property), 1.9 (AT&T Other Real Property Interests), 1.12 (AT&T
System Contracts), 1.13 (AT&T System Franchises) and 1.14 (AT&T System Licenses)
or as described on Schedule 4.2 (AT&T Excluded Assets) or otherwise included in
the definition of AT&T Excluded Assets, as of the date of this Agreement, AT&T
is not bound or affected by any of the following that relate primarily or in
whole to AT&T's Cable Business: (i) leases of real or personal property; (ii)
franchises for the construction or operation of cable television systems or
Contracts of substantially equivalent effect; (iii) other licenses,
authorizations, consents or permits of the FCC or any other Governmental
Authority; (iv) material easements, rights of access, underground conduit
agreements, crossing agreements or other interests in real property; (v) pole
line or attachment agreements; (vi) agreements pursuant to which the AT&T
Systems receive or provide advertising sales representation services; (vii)
agreements pursuant to which a AT&T System has constructed or agreed to
construct for third parties an institutional network or otherwise provide to
third parties telecommunications services other than one-way video; (viii)
agreements pursuant to which any bandwidth capacity on the AT&T Systems is
leased or otherwise made available to any third party or any Affiliate of AT&T;
(ix) construction and development agreements (other than installation agreements
where services are provided in the ordinary course of business on an as-needed
basis); or (x) Contracts relating to the operation of AT&T's Cable Business
other than those described in
-42-
any other clause of this Section which contemplate payments by or to AT&T in any
12-month period exceeding $25,000 individually or $150,000 in the aggregate or
that have a remaining term of two years or more as of the Closing Date; provided
that multiple dwelling unit agreements, including bulk-billed agreements and
commercial service agreements, are not required to be listed. Except as
described on the Schedules to this Agreement, no Affiliate of AT&T is a party to
any documents listed on such Schedules.
(b) Complete and correct copies of the AT&T System Franchises and AT&T
System Licenses have been delivered by AT&T to Insight or will be deliver by
AT&T to Insight by September 15, 2000. Except as set forth on Schedule 1.13
(AT&T System Franchises), the AT&T System Franchises contain all of the
commitments and obligations of AT&T to the applicable Governmental Authority
granting such Franchises with respect to the construction, ownership and
operation of the AT&T Systems. The AT&T System Franchises and AT&T System
Licenses are currently in full force and effect and are valid and enforceable
under all applicable Legal Requirements according to their terms. There is no
legal action, governmental proceeding or, to AT&T's Knowledge, investigation,
pending or to AT&T's Knowledge threatened, to terminate, suspend or modify any
AT&T System Franchise or AT&T System License and, except as set forth on
Schedule 1.13, AT&T is in material compliance with the terms and conditions of
all the AT&T System Franchises and AT&T System Licenses and with other
applicable requirements of all Governmental Authorities (including the FCC and
the Register of Copyrights) relating to the AT&T System Franchises and AT&T
System Licenses, including all requirements for notification, filing, reporting,
posting and maintenance of logs and records. All areas served by the AT&T
Systems are served pursuant to one of the AT&T System Franchises except as set
forth on Schedule 1.13.
(c) Complete and correct copies of all AT&T System Contracts required
to be listed on AT&T's Schedules (including all Contracts relating to Leased
Property and Other Real Property Interests described on Schedules 1.7 AND 1.9)
have been provided to Insight or will be provided to Insight by September 15,
2000. Such documents constitute the entire agreement with the other party.
Each such AT&T System Contract is in full force and effect and constitutes the
valid, legal, binding and enforceable obligation of AT&T and AT&T is not and to
AT&T's Knowledge, each other party thereto is not in breach or default of any
material terms or conditions thereunder. AT&T also has provided to Insight or
will provide to Insight by September 15, 2000, a complete and correct list of
all bulk-billed accounts and commercial service accounts of the AT&T Systems as
of the date of this Agreement.
6.6 Real Property. As of the date of this Agreement, all AT&T Assets
-------------
consisting of AT&T Owned Property, AT&T Leased Property and material AT&T Other
Real Property Interests are described on Schedules 1.7 (AT&T Leased Property),
1.9 (AT&T Other Real Property Interests) and 1.10 (AT&T Owned Property). Except
as otherwise disclosed on Schedule 1.10 (AT&T Owned Property), AT&T holds title
to the AT&T Owned Property free and clear of all Liens except (a) Permitted
Liens and (b) Liens described on Schedule 6.4 (all of which Liens on Schedule
6.4 (other than Permitted Liens) will be terminated, released or, in the case of
the rights of first refusal
-43-
listed on Schedule 6.4, waived, as appropriate, at or prior to the Closing), and
has the valid and enforceable right to use and possess such AT&T Owned Property,
in each case subject only to the above-referenced Liens. Except as otherwise
disclosed on Schedules 1.7 (AT&T Leased Property) or 1.9 (AT&T Other Real
Property Interests); AT&T has valid and enforceable leasehold interests in all
AT&T Leased Property and, with respect to AT&T Other Real Property Interests,
has valid and enforceable rights to use all AT&T Other Real Property Interests,
subject only to the above-referenced Liens. Except for ordinary wear and tear
and routine repairs and except as disclosed on Schedules 1.7 (AT&T Leased
Property) or 1.10 (AT&T Owned Property), as applicable, all of the material
improvements, leasehold improvements and the premises of the AT&T Owned Property
and the premises demised under the leases and other documents evidencing the
AT&T Leased Property are in good condition and repair and are suitable for the
purposes used. Unless otherwise disclosed on Schedules 1.7 (AT&T Leased
Property) or 1.10 (AT&T Owned Property), as applicable, each parcel of AT&T
Leased Property and each parcel of AT&T Owned Property and any improvements
thereon and their current use (x) has access to and over public streets or
private streets for which AT&T has a valid right of ingress and egress, (y)
conforms in its current use and occupancy to all material zoning requirements
without reliance upon a variance issued by a Governmental Authority or a
classification of the parcel in question as a nonconforming use and (z) conforms
in its current use to all restrictive covenants, if any, or other Liens
affecting all or part of such parcel. Except where the failure of the
representations made in this sentence to be true and correct would not have a
material adverse effect on the AT&T Assets or AT&T's Cable Business and except
as disclosed on Schedules 1.7 (AT&T Leased Property) or 1.10 (AT&T Owned
Property), all buildings, towers, guy wires and anchors, headend equipment,
earth-receiving dishes and related facilities used in the operations of the AT&T
Systems are located entirely on AT&T Owned Property or AT&T Leased Property or
other real property in which AT&T has a AT&T Other Real Property Interest and
are maintained, placed and located in accordance with the provisions of all
applicable Legal Requirements, deeds, leases, licenses, permits or other legally
enforceable arrangements.
6.7 Environmental.
-------------
(a) To AT&T's Knowledge, except as disclosed on Schedule 6.7, the AT&T
Owned Property and AT&T Leased Property comply in all material respects with and
has previously been operated in compliance in all material respects with all
Environmental Laws. AT&T has not either directly or indirectly (i) generated,
stored, used, treated, handled, discharged, released or disposed of any
Hazardous Substances at, on, under, in or about, to or from or in any other
manner affecting, any AT&T Owned Property or AT&T Leased Property, (ii)
transported any Hazardous Substances to or from any AT&T Owned Property or AT&T
Leased Property or (iii) undertaken or caused to be undertaken any other
activities relating to the AT&T Owned Property or AT&T Leased Property, which
could reasonably give rise to any liability under any Environmental Law and, to
AT&T's Knowledge, no other present or previous owner, tenant, occupant or user
of any AT&T Owned Property or AT&T Leased Property or any other Person has
committed or suffered any of the foregoing. To AT&T's Knowledge, no release of
Hazardous Substances outside the AT&T Owned Property or AT&T Leased Property has
entered or threatens to enter any AT&T
-44-
Owned Property or AT&T Leased Property, nor is there any pending or threatened
Litigation based on Environmental Laws which arises from any condition of the
land adjacent to or immediately surrounding any AT&T Owned Property or AT&T
Leased Property. No Litigation based on Environmental Laws which relates to any
AT&T Owned Property or AT&T Leased Property or any operations or conditions on
it (1) has been asserted or conducted in the past with respect to, or is
currently pending against, AT&T or, to AT&T's Knowledge, any other Person, or
(2) to AT&T's Knowledge, is threatened or contemplated.
(b) To AT&T's Knowledge, except as disclosed on Schedule 6.7, (i) no
aboveground or underground storage tanks are currently or have been located on
any AT&T Owned Property or AT&T Leased Property, (ii) no AT&T Owned Property or
AT&T Leased Property has been used at any time as a gasoline service station or
any other facility for storing, pumping, dispensing or producing gasoline or any
other petroleum products or wastes and (iii) no building or other structure on
any AT&T Owned Property or AT&T Leased Property contains asbestos, asbestos-
containing material or material presumed to be asbestos-containing material
under any Environmental Law.
(c) AT&T has provided Insight or will provide Insight by September 15,
2000, with complete and correct copies of (i) all studies, reports, surveys or
other written materials in AT&T's possession relating to the presence or alleged
presence of Hazardous Substances at, on, under or affecting the AT&T Owned
Property or AT&T Leased Property, (ii) all notices (other than general notices
made by general publication) or other materials in AT&T's possession that were
received from any Governmental Authority having the power to administer or
enforce any Environmental Laws relating to current or past ownership, use or
operation of the AT&T Owned Property or AT&T Leased Property or activities at
the AT&T Owned Property or AT&T Leased Property and (iii) all materials in
AT&T's possession relating to any Litigation or allegation by any private third
party concerning any Environmental Law.
6.8 Compliance with Legal Requirements.
----------------------------------
(a) The ownership, leasing and use of the AT&T Assets as they are
currently owned, leased and used and the conduct of AT&T's Cable Business and
the operation of the AT&T Systems as they are currently conducted and operated
do not violate or infringe in any material respect any Legal Requirements
currently in effect (other than Legal Requirements described in Sections 6.7,
6.8(d) and 6.13, as to which the representations and warranties set forth in
those subsections shall apply), including (i) the Communications Act, (ii)
Section 111 of the Copyright Act and (iii) all other applicable Legal
Requirements relating to the construction, maintenance, ownership and operation
of the AT&T Assets, the AT&T Systems and AT&T's Cable Business. AT&T has
received no written notice of any violation by AT&T or AT&T's Cable Business of
any Legal Requirement applicable to the operation of AT&T's Cable Business as
currently conducted, or the AT&T Systems as currently operated and to AT&T's
Knowledge, there is no existing fact, circumstance or condition that could
reasonably form the basis for a finding by any Governmental Authority of any
such violation.
-45-
(b) Except as set forth in Schedule 6.8, a valid request for renewal
has been duly and timely filed under Section 626 of the Communications Act with
the proper Governmental Authority with respect to all AT&T System Franchises
that have expired prior to or will expire within 36 months after the date of
this Agreement.
(c) Except as set forth in Schedule 6.8, (i) no written notices or
demands have been received from the FCC, from any television station, or from
any other Person or Governmental Authority (1) challenging the right of the AT&T
Systems to carry any television broadcast station or deliver the same or (2)
claiming that any AT&T System has failed to carry a television broadcast station
required to be carried pursuant to the Communications Act or has failed to carry
a television broadcast station on a channel designated by such station
consistent with the requirements of the Communications Act; (ii) all necessary
FAA approvals have been obtained with respect to the height and location of
towers used in connection with the operation of the AT&T Systems, and such
towers are being operated in compliance in all material respects with applicable
FCC and FAA rules; and (iii) AT&T has received no written notice from any
Governmental Authority with respect to an intention to enforce customer service
standards pursuant to the 1992 Cable Act and AT&T has not agreed with any
Governmental Authority to establish customer service standards that exceed the
FCC standards promulgated pursuant to the 1992 Cable Act except as set forth in
the AT&T System Franchises.
(d) Notwithstanding the foregoing, to AT&T's Knowledge, each AT&T
System is in compliance in all material respects with the provisions of the 1992
Cable Act as such Legal Requirements relate to the rates and other fees charged
to subscribers of AT&T's Cable Business. AT&T has used reasonable good faith
efforts to establish rates charged to subscribers, effective since September 1,
1993, that are or were allowable under the 1992 Cable Act and any authoritative
interpretation thereof now or then in effect, to the extent such rates are or
were subject to regulation at such time by any Governmental Authority, including
any local franchising authority and/or the FCC. Notwithstanding the foregoing,
AT&T makes no representation or warranty that any of its rates that are not
subject to rate regulation would be allowable if such rates were subject to
regulation and makes no representation or warranty that the rates charged to
subscribers would be allowable under any rules and regulations of the FCC or any
authoritative interpretation thereof, promulgated after the Closing Date. AT&T
has delivered to Insight or will deliver to Insight by September 15, 2000,
complete and correct copies of all FCC Forms and other information reasonably
requested by Insight relating to rate regulation generally or specific rates
charged to subscribers with respect to the AT&T Systems. AT&T has not entered
into and is not subject to any so-called social contract or proposed resolution
with the FCC with respect to rates charged for cable television services in the
AT&T Systems which would limit or specify the rates that may be charged for
cable television services provided by the AT&T Systems following Closing and is
not currently negotiating or anticipating entering into or being subject to any
new social contract with respect to the AT&T Systems. Except as set forth on
Schedule 6.8, AT&T has not made any Cost of Service Election with respect to any
of the AT&T Systems. Except as otherwise described on Schedule 6.8, as of the
date of this Agreement, (i) to the Knowledge of AT&T, there are no outstanding
or unresolved proceedings or investigations (other than those affecting the
cable industry generally)
-46-
dealing with or otherwise affecting the rates that any cable television system
included in the AT&T Systems can charge (whether for programming, equipment,
installation, service or otherwise), (ii) except pursuant to the Media One
Social Contract and the Time Warner Social Contract, no cable television system
included in the AT&T Systems is subject to any currently effective order issued
by a Governmental Authority that reduced the rates that it may charge (whether
for programming, equipment, installation, service, or otherwise), (iii) no local
franchising authority has been certified by the FCC as a rate regulating
authority with respect to any of the AT&T Systems and (iv) there is no
unresolved complaint pending with respect to the CPST tier of any AT&T System
and no rate order with respect to the AT&T Systems is being appealed.
6.9 Patents, Trademarks and Copyrights. AT&T has deposited with the U.S.
----------------------------------
Copyright Office all statements of account and other documents and instruments,
and has paid all royalties, supplemental royalties, fees and other sums to the
U.S. Copyright Office under the Copyright Act with respect to the business and
operations of the AT&T Systems as are required to obtain, hold and maintain the
compulsory license for cable television systems prescribed in Section 111 of the
Copyright Act. To AT&T's Knowledge, there is no inquiry, claim, action or
demand pending before the U.S. Copyright Office or from any other Person which
questions the copyright filings or payments made by AT&T with respect to the
AT&T Systems. AT&T has delivered to Insight or will deliver to Insight by
September 15, 2000, complete and correct copies of all current reports and
filings for the past three years, made or filed pursuant to copyright rules and
regulations with respect to AT&T's Cable Business. AT&T does not possess any
patent, patent right, trademark or copyright related to or material to the
operation of the AT&T Systems and AT&T is not a party to any license or royalty
agreement with respect to any such patent, patent right, trademark or copyright,
except for licenses respecting program material and obligations under the
Copyright Act applicable to cable television systems generally. The AT&T
Systems and AT&T's Cable Business have been operated in such a manner so as not
to violate or infringe upon the rights, or give rise to any rightful claim of
any Person for copyright, trademark, service xxxx, patent or license
infringement or the like.
6.10 Financial Statements; Undisclosed Liabilities; Absence of Certain
-----------------------------------------------------------------
Changes or Events. AT&T has delivered to Insight complete and correct copies of
-----------------
an unaudited balance sheet for each AT&T System as of March 31, 2000 and an
unaudited statement of operations for each AT&T System for the year ended
December 31, 1999 and the three-month period ended March 31, 2000, including all
notes and schedules thereto, if any (all of such financial statements and notes
being hereinafter referred to as "AT&T's Financial Statements"). AT&T's
Financial Statements are in accordance with the books and records of AT&T, were
prepared in accordance with GAAP, applied on a consistent basis throughout the
periods covered thereby, and except as may be described therein, present fairly
the financial condition of the AT&T Systems at the dates and for the periods
indicated, subject only to standard year-end adjustments and the omission of
footnotes. The unaudited balance sheets of the AT&T Systems as of March 31,
2000 are herein called the "AT&T Balance Sheets." At the date of the AT&T
Balance Sheets, AT&T had no material liabilities with respect to the AT&T
Systems required by GAAP to be reflected or reserved against therein that were
not fully reflected or reserved against on the AT&T Balance Sheets, other than
liabilities as set forth on Schedule 6.10. Except as set forth on Schedule
6.10, since the date of the AT&T
-47-
Balance Sheets through the date of this Agreement: (x) AT&T has not incurred any
obligation or liability (contingent or otherwise), except normal trade or
business obligations incurred in the ordinary course of business, the
performance of which will not, to AT&T's Knowledge, individually or in the
aggregate, have a material adverse effect on the financial condition of AT&T or
the results of operations of AT&T or AT&T's Cable Business; (y) there has been
no material adverse change in the AT&T Assets comprising any AT&T System or in
the business, condition, financial or otherwise, or liabilities of AT&T's Cable
Business or any AT&T System and, to AT&T's Knowledge, no fact or condition
exists or is contemplated or threatened which would result in such a change in
the future; and (z) AT&T's Cable Business has been conducted only in the
ordinary course of business consistent with past practice. For the purpose of
this Agreement, the impact of general economic conditions (including changes in
capital and financial markets), governmental legislation and regulations and
other events which affect the cable industry as a whole in the State of Illinois
or the United States, shall not be considered in determining whether there has
been a material adverse change in the business, condition, financial or
otherwise or liabilities of AT&T's Cable Business or any AT&T System or the AT&T
Assets.
6.11 Litigation. Except as set forth in Schedule 6.11: (a) there is no
----------
Litigation pending or, to AT&T's Knowledge, threatened, and, to AT&T's
Knowledge, there is no investigation pending or threatened, by or before any
Governmental Authority or private arbitration tribunal against AT&T which, if
adversely determined, would materially adversely affect the financial condition
or operations of AT&T's Cable Business, AT&T Systems, the AT&T Assets or the
ability of AT&T to perform its obligations under this Agreement, or which, if
adversely determined, would result in the modification, revocation, termination,
suspension or other limitation of any of the AT&T System Franchises, AT&T System
Licenses, AT&T System Contracts or leases or other documents evidencing the AT&T
Leased Property or the AT&T Other Real Property Interests; and (b) there is not
in existence any Judgment requiring AT&T to take any action of any kind with
respect to the AT&T Assets or the operation of the AT&T Systems, or to which
AT&T (with respect to the AT&T Systems), the AT&T Systems or the AT&T Assets are
subject or by which they are bound or affected.
6.12 Tax Returns; Other Reports. AT&T has duly and timely filed in correct
--------------------------
form all federal, state, local and foreign Tax returns and other Tax reports
required to be filed by AT&T, and has timely paid all Taxes which have become
due and payable, whether or not so shown on any such return or report, the
failure of which to be filed or paid could adversely affect or result in the
imposition of a Lien upon the AT&T Assets or that could impose on the
Partnership any transferee liability for any taxes, penalties or interest due or
to become due from AT&T, except such amounts as are being contested diligently
and in good faith and are not in the aggregate material. Except as set forth on
Schedule 6.12, AT&T has received no notice of, nor does AT&T have any Knowledge
of, any deficiency, assessment or audit, or proposed deficiency, assessment or
audit from any taxing Governmental Authority which could affect or result in the
imposition of a Lien upon the AT&T Assets.
6.13 Employment Matters.
------------------
-48-
(a) Schedule 6.13(A) contains a complete and correct list of the
names and positions of all employees engaged by AT&T or its Affiliates
principally in connection with the AT&T Systems as of the date set forth on
SCHEDULE 6.13(A). Except to the extent that any noncompliance would not
reasonably be expected to have a material adverse effect on the AT&T Systems,
AT&T and its Affiliates have, with respect to the AT&T Systems, complied in all
material respects with all applicable Legal Requirements relating to the
employment of labor, including WARN, continuation coverage requirements with
respect to group health plans and those relating to wages, hours, collective
bargaining, unemployment insurance, worker's compensation, equal employment
opportunity, age, sex, race and disability discrimination, occupational safety,
immigration control and the payment and withholding of Taxes. Except as set
forth on Schedule 6.13, to AT&T's Knowledge, there are no current or threatened
investigations relating to the classification of independent contractors engaged
by AT&T or its Affiliates principally in connection with the AT&T Systems.
(b) For purposes of this Agreement, "AT&T Plans" means each employee
benefit plan (as defined in Section 3(3) of ERISA) or any multi-employer plan
(as defined in Section 3(37) of ERISA) with respect to which AT&T or any of its
ERISA Affiliates has any liability or in which any employees or agents, or any
former employees or agents, of AT&T or any of its ERISA Affiliates participate.
The AT&T Plans in which any employee of the AT&T Systems participates are set
forth on Schedule 6.13. Except to the extent that any violation would not
reasonably be expected to have a material adverse effect on the AT&T Systems,
none of AT&T, any of its ERISA Affiliates, any AT&T Plan other than a
multiemployer plan (as defined in Section 3(37) of ERISA), or to the Knowledge
of AT&T or any of its ERISA Affiliates, any AT&T Plan that is a multiemployer
plan (as defined in Section 3(37) of ERISA), is in violation of any provision of
the Code or ERISA. No material "reportable event" (as defined in Sections
4043(c)(1), (2), (3), (5), (6), (7), (10) and (13) of ERISA), non-exempt
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code, "accumulated funding deficiency" (as defined in Section 302 of ERISA),
or "withdrawal liability" (as determined under Section 4201 et seq. of ERISA)
-- ---
has occurred or exists with respect to any AT&T Plan which reasonably could
result in material liability to AT&T or any of its ERISA Affiliates. No
material "accumulated funding deficiency" (as defined in Section 302 of ERISA)
or "withdrawal liability" (as determined under Section 4201 et seq. of ERISA)
-- ---
has occurred or exists and is continuing with respect to any AT&T Plan other
than a multiemployer plan (as defined in Section 3(37) of ERISA) or to the
Knowledge of AT&T or any of its ERISA Affiliates, any AT&T Plan that is a
multiemployer plan (as defined in Section 3(37) of ERISA). After the Closing,
neither the Partnership nor any of its ERISA Affiliates will be required, under
ERISA, the Code, any collective bargaining agreement or this Agreement, to
establish, maintain or continue any AT&T Plan currently maintained by AT&T or
any of its ERISA Affiliates.
(c) Except as set forth on Schedule 6.13, (i) there are no collective
bargaining agreements applicable to any Person employed by AT&T or its
Affiliates principally in connection with the AT&T Systems; (ii) neither AT&T
nor its Affiliates has any duty to nor has agreed to bargain with any labor
organization with respect to any such Person; and (iii) there are not pending
-49-
any unfair labor practice charges against AT&T or its Affiliates with respect to
any such Person, any demand for recognition or any other effort of or request or
demand from, a labor organization for representative status with respect to any
Person employed by AT&T or its Affiliates principally in connection with the
AT&T Systems now or, to the Knowledge of AT&T or its Affiliates, within the last
one year; and (iv) there are not currently pending or threatened nor, to the
Knowledge of AT&T and its Affiliates, have there been within the last one year
any strikes, picketing, work slow downs or other labor disputes involving or
relating to employees of the AT&T Systems. Except as described on Schedule
6.13, neither AT&T nor its Affiliates has any employment agreements, either
written or oral, except oral contracts terminable at will without penalty, with
any employee of the AT&T Systems and none of the employment agreements listed on
SCHEDULE 6.13 requires AT&T or its Affiliates or will require the Partnership or
its Affiliates to employ any Person after the Closing.
(d) The following documents and records will be located at one of
the AT&T System offices included in the AT&T Assets on the Closing Date: Forms
395A for calendar years 1995 through 1999, all correspondence to and from the
FCC regarding such 395A reports, proof of EEO certification for calendar years
1993 through 1999, and OSHA 200 logs and loss runs for calendar years 1999 and
2000.
6.14 Accounts Receivable. AT&T's accounts receivable for its Cable
-------------------
Business are actual and bona fide receivables representing obligations for the
total dollar amount of such receivables, as shown on the books of AT&T, that
resulted from the regular course of AT&T's Cable Business. Such receivables are
subject to no offset or reduction of any nature, except for a reserve for
uncollectible amounts consistent with the reserve established by AT&T in AT&T's
Financial Statements and those credits or reductions to such accounts made in
the ordinary course of business.
6.15 Finders and Brokers. AT&T has not employed any financial advisor,
-------------------
broker or finder or incurred any liability for any financial advisory,
brokerage, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement for which Insight or the Partnership
could be liable.
6.16 Transactions With Affiliates. Except to the extent set forth in
----------------------------
Schedule 6.16 or included in the AT&T Excluded Assets and except with respect to
customary corporate overhead services provided by the corporate, division or
regional offices of AT&T, AT&T is not a party to any material business
arrangement or business relationship with any of its Affiliates, and none of its
Affiliates owns any property or right, tangible or intangible, that is used
principally in the business or operations of the AT&T Systems.
SECTION 7. ADDITIONAL COVENANTS
It is understood and agreed that the covenants in this Section 7 shall not
apply to Insight with respect to the Exchange Systems, the Sale Systems, the
Exchange Assets, or the Sale Assets except as expressly set forth below.
Notwithstanding the foregoing, if the transactions contemplated by the
-50-
Exchange Agreement are consummated prior to the Closing, (i) the covenants in
this Section 7 shall apply to the Exchange Systems and the Exchange Assets
during the Interim Period and (ii) except where the context otherwise requires
or the Exchange Systems are expressly covered in a separate provision, the terms
"Insight Systems," "Insight Assets" (including any category of Insight Assets)
and all defined terms related to or incorporating such terms shall be deemed to
include the Exchange Systems and Exchange Assets with respect to the Interim
Period. Notwithstanding the foregoing, Insight will not be in breach of its
obligations to the extent a breach results from any action or omission of AT&T
prior to the Interim Period, and the covenants set forth in Sections 7.4, 7.5
and 7.28 shall not apply to Insight with respect to the Exchange Assets
received by Insight from AT&T Illinois.
7.1 Access to Premises and Records. Between the date of this Agreement
------------------------------
and the Closing Date each of Insight, Insight Central Ohio and AT&T will give to
the other and its representatives full access during normal business hours to
all the premises and books and records of its Cable Business and to all its
Assets and Systems' personnel and will furnish to the other and its
representatives all such documents, financial information and other information
regarding its Cable Business and its Assets as the other from time to time
reasonably may request including the employment records described in Section
7.3; provided that no investigation by a party will affect or limit the scope of
any of the representations, warranties, covenants and indemnities of the other
party in this Agreement or in any Transaction Document or limit the other
party's liability for breach of any of the foregoing.
7.2 Continuity and Maintenance of Operations; Certain Deliveries and
----------------------------------------------------------------
Notices. Between the date of this Agreement and the Closing, AT&T with respect
-------
to AT&T's Cable Business, the AT&T Systems and the AT&T Assets and Insight and
Insight Central Ohio with respect to Insight's Cable Business, the Insight
Systems and the Insight Assets:
(a) will conduct its Cable Business and operate its Systems only in
the usual, regular and ordinary course and consistent with past practices,
including continuing to make ordinary marketing, advertising and promotional
expenditures, and, to the extent consistent with such conduct and operation,
will use its commercially reasonable efforts to (i) preserve its current
business intact in all material respects, including preserving existing
relationships with franchising authorities, suppliers, customers and others
having business dealings with its Systems, and (ii) keep available the services
of its employees and agents providing services in connection with the Cable
Business but will be under no obligation to incur cost to do so (other than
employee salaries and similar costs);
(b) will maintain its Assets in good repair, order and condition,
ordinary wear and tear excepted; will maintain equipment and inventory for its
Systems at not less than normal historical levels consistent with past
practices; will maintain in full force and effect policies of insurance with
respect to its Cable Business consistent with past practices; and will maintain
its books, records and accounts with respect to its Assets and the operation of
its Systems in the usual, regular and ordinary manner on a basis consistent with
past practices;
-51-
(c) except with respect to Excluded Assets, will not (i) modify,
terminate, renew, suspend, abrogate or enter into any System Contract or other
instrument that would be included in such party's Assets, other than in the
ordinary course of business; provided that the other party's consent, not to be
unreasonably withheld or delayed, will be required to modify, terminate, renew,
suspend, abrogate or enter into any retransmission consent or programming
agreement, any System Franchise, any lease or document evidencing Leased
Property or any other agreement that contemplates payments to or by the
transferring party in any 12-month period exceeding $25,000 individually or
$150,000 in the aggregate; (ii) take or omit to take any action that would
result in the condition set forth in Section 8.1(a) with respect to AT&T or
Section 8.2(a) with respect to Insight not being satisfied at any time prior to
the Closing; (iii) engage in any marketing, subscriber installation,
disconnection or collection practices other than in the ordinary course of
business consistent with its past practices; (iv) make any Cost of Service
Election; (v) enter into any agreement with or commitment to any competitive
access providers with respect to any System; (vi) sell, transfer or assign any
portion of its Assets other than sales in the ordinary course of business and
assets sold or disposed of and replaced by other assets of comparable utility
and value or permit the creation of a Lien, other than a Permitted Lien, on any
Asset; or (vii) engage in any hiring or employee compensation practices
(including severance plans or policies) that are inconsistent with past
practices except for changes in such practices implemented by such party and its
Affiliates on a company-wide basis (and it being agreed that such party will
give prompt notice to the other party of any such changes);
(d) will promptly deliver to the other true and complete copies of
all quarterly financial statements and all monthly and quarterly operating
reports with respect to the operation of the Cable Business prepared in the
ordinary course of business by or for such party at any time from the date of
this Agreement until the Closing;
(e) will give or cause to be given to the other and its counsel,
accountants and other representatives, as soon as reasonably possible but in any
event prior to the date of submission to the appropriate Governmental Authority,
copies of all FCC Forms 1200, 1205, 1210, 1215, 1220, 1225, 1235 and 1240 or any
other FCC forms required to be filed with any Governmental Authority under the
1992 Cable Act with respect to rates and prepared with respect to any of its
Systems, such forms to be reasonably satisfactory in form and substance to the
other;
(f) will duly and timely file a valid notice of renewal under Section
626 of the Cable Act with the appropriate Governmental Authority with respect to
any System Franchise that will expire within 36 months after any date between
the date of this Agreement and the Closing Date;
(g) will promptly notify the other of any fact, circumstance, event
or action by it or otherwise (i) which if known at the date of this Agreement
would have been required to be disclosed by it in or pursuant to this Agreement
or (ii) the existence, occurrence or taking of which would result in the
condition set forth in Section 8.1(a) with respect to AT&T or Section 8.2(a)
with
-52-
respect to Insight not being satisfied at any time prior to the Closing, and,
with respect to clause (ii), will use its commercially reasonable efforts to
remedy the same, subject to Section 12.16; and
(h) will consult the other prior to decreasing or increasing the rate
charged for any level of Basic Services, Expanded Basic Services or Pay TV and
prior to adding, deleting, retiering or repackaging any programming services;
provided that the other's consent is not required for any such action.
7.3 Employees. The Partnership will employ or offer employment to all
---------
employees of the Exchange Systems and Sale Systems that were hired by Insight
pursuant to Section 7.3 of the Exchange Agreement and Section 7.3 of the Sale
Agreement. Any employee of the Exchange Systems or Sale Systems that is hired
by the Partnership will not be deemed to have been discharged by Insight by
virtue of such hiring but the obligations of Insight as Hiring Party under the
Exchange Agreement or Sale Agreement shall also apply to the Partnership. In
the event that there is an Interim Period, the employees hired by Insight
pursuant to Section 7.3 of the Exchange Agreement will be treated as employees
of Insight for purposes of this Section 7.3. Subject to the foregoing:
(a) The Partnership may, but shall have no obligation to employ or
offer employment to all employees of AT&T's Cable Business and Insight's Cable
Business; provided that the provisions of this Section 7.3(a) shall not apply to
employees of Insight Central Ohio who shall continue as employees of Insight
Central Ohio following Closing, subject to Insight Central Ohio's employment
policies. Within 15 days after the date of this Agreement AT&T and Insight
shall provide to the Partnership a list of all employees of their respective
Systems by work location as of a recent date, showing the original hire date,
then-current positions and rates of compensation, rate type (hourly or salary)
and scheduled hours per week, whether the employee is subject to an employment
agreement, a collective bargaining agreement or represented by a labor
organization and indicating which of such employees such party desires to retain
as its employees (the "Retained Employees"). Within 45 days after receipt of
such list, or such other date as the parties may agree, the Partnership will
provide to AT&T or Insight, as applicable, in writing a list of employees that
the Partnership or its Affiliates may desire to employ following the Closing
Time (subject only to the evaluations and return to active service conditions
permitted by this Section 7.3), which list shall not include any Retained
Employees. AT&T and Insight agree and shall cause each of its appropriate
Affiliates, to cooperate in all reasonable respects with the Partnership to
allow the Partnership or its Affiliates to evaluate the employees each of AT&T's
and Insight's Cable Business to make hiring decisions. In this regard, the
Partnership shall have the opportunity to make such appropriate prehire
investigation of the employees of AT&T's and Insight's Cable Business, as it
deems necessary, including the right to review personnel files, which shall
include attendance and discipline records and performance evaluations, and the
right to interview such employees during normal working hours so long as such
interviews are conducted after notice to AT&T or Insight, as applicable, and do
not unreasonably interfere with AT&T's or Insight's operations and such
investigations and interviews do not violate any law or contract. All
employment offers shall include base compensation at least equal to the
employee's rate of base compensation as of the Closing Time. The Partnership
may, if it wishes, condition any offer of employment upon the
-53-
employee passing a pre-employment drug screening test, the completion of a
satisfactory background check and, if the employee is on Approved Leave of
Absence at the Closing Time (the "Employees on Leave Status"), upon the
employees' return to active service (with or without reasonable accommodations
requirements) within 16 weeks after the Closing Time or, if earlier, on the
first Business Day following expiration of the employees' Approved Leave of
Absence. For purposes of this Agreement, employees on "Approved Leave of
Absence" means employees absent from work at the Closing Time and unable to
perform their regular job duties by reason of illness or injury under approved
plans or policies of the employer (other than employee's absence for less than
10 days due to short term illness or injury not requiring written approval by
the employer) or otherwise absent from work under approved or unpaid leave
policies of the employer. The Partnership shall bear the expense of such
examination but AT&T or Insight, as applicable, shall, upon reasonable notice,
cooperate in the scheduling of such examinations so long as the examinations do
not unreasonably interfere with its operations. Each of AT&T and Insight agrees
that as of the Closing Time, the only employees of its Systems shall be the
employees to be hired by the Partnership and the current employees of Insight
Central Ohio, including employees of Insight Central Ohio who are on leave
(collectively, the "Hired Employees") which employees will be listed on a
schedule provided by each of AT&T and Insight, as applicable, on the day before
the Closing Date. Such schedule also will include a list of Employees on Leave
Status as of the Closing Date for each System. The Partnership and its
Affiliates shall not be deemed to employ any of the employees of AT&T's Cable
Business or Insight's Cable Business at any time except for (i) the Hired
Employees, as of the Closing Time and (ii) such Employees on Leave Status as are
hired by the Partnership or its Affiliates after the Closing Time, at the time
such Employee on Leave Status begins employment with Insight in accordance with
this Section 7.3(a). The Partnership and its Affiliates shall have no obligation
to either AT&T or Insight or their respective Affiliates or to the employees of
AT&T's or Insight's Cable Business, other than the Hired Employees as of the
Closing Time and the Employees on Leave Status when, and to the extent that,
such Employees on Leave Status become employed by the Partnership or its
Affiliates after the Closing Time, it being acknowledged that the Partnership or
its Affiliates will hire any Employee on Leave Status to whom it has made an
offer of employment if such employee returns to active service (with or without
reasonable accommodations requirements) within sixteen (16) weeks after the
Closing Time or, if earlier, on the first Business Day following expiration of
the employee's Approved Leave of Absence, provided that the employee returns to
active service (with or without reasonable accommodation) by such date.
(b) Each of AT&T, Insight or their Affiliates will pay to all
employees of its Cable Business all compensation, including salaries,
commissions, bonuses, deferred compensation, severance (if applicable),
insurance, vacation (except for accrued vacation included in the adjustments
calculated pursuant to Section 3.3(c) to be carried over pursuant to Section
7.3(f)), pension, profit sharing, disability payment, medical, sick pay and
other compensation or benefits to which they are entitled for periods through
and including the date of termination of the employee's employment with AT&T or
Insight, as applicable, or with respect to employees of Insight Central Ohio,
through the Closing Time, in accordance with the terms and conditions of any
arrangement providing for such compensation or benefits, including, without
limitation, all amounts,
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if any, payable on account of the termination of their employment. Each of AT&T
and Insight shall promptly satisfy any legal obligation with respect to
continuation of group health coverage for their respective employees required
pursuant to Section 4980B of the Code or Section 601, et seq., of ERISA.
(c) If the transactions contemplated by this Agreement do not result
in a permissible distribution event under Section 401(k) of the Code, and if the
parties mutually agree to do so, the parties shall cooperate in arranging
transfers between AT&T Corp.'s or Insight's 401(k) plan and the Partnership's
401(k) plan with respect to the Hired Employees as of the effective date of such
asset transfer. If there is no plan-to-plan transfer, and if no permissible
distribution is allowed, in order to permit either AT&T or Insight or its
appropriate Affiliate, to make distributions to any former employee of such
party who becomes a Hired Employee of the Partnership of the balance of such
employee's 401(k) account in either AT&T's or Insight's, or either of their
Affiliate's, tax qualified plan, if any, as soon as legally permitted, the
Partnership shall notify AT&T or Insight, as applicable, of the date of
termination of such employee's employment with the Partnership for any reason.
(d) All claims and obligations under, pursuant to or in connection
with any welfare, medical, insurance, disability or other employee benefit plans
of either AT&T or Insight or their Affiliates or arising under any Legal
Requirement affecting System employees of such party or its Affiliates incurred
through and including the Closing Time or resulting from or arising from events,
obligations or occurrences occurring or commencing through and including the
Closing Time will remain the responsibility of such party, whether or not such
employees are hired by the Partnership after the Closing Time. The Partnership
will not have nor assume any obligation or liability under or in connection with
any such plan maintained by either AT&T or Insight or either of its Affiliates.
For purposes of this Agreement, the following claims and liabilities shall be
deemed to be incurred as follows: (i) medical, dental and/or prescription drug
benefits when the treatment is provided, except with respect to such benefits
provided in connection with a continuous period of hospitalization, which shall
be deemed to be incurred at the time of admission to the hospital; (ii) life,
accidental death and dismemberment and business travel accident insurance
benefits and workers' compensation benefits, upon the death, disability or
accident giving rise to such benefits; and (iii) salary continuation or other
short-term disability benefits, or long-term disability, upon commencement of
the disability giving rise to such benefit. In regard to any Employee on Leave
Status, such responsibility for benefit coverage of such employee, and liability
for payment of benefits, shall remain that of AT&T or Insight, as applicable,
until such employee becomes a Hired Employee of the Partnership after the
Closing Time pursuant to Section 7.3.(a) or is terminated by AT&T or Insight or
their respective Affiliates.
(e) Each of AT&T and Insight or its appropriate Affiliate will remain
solely responsible for, and will indemnify and hold harmless the Partnership
from and against all Losses arising from or with respect to, all salaries,
commissions, bonuses, deferred compensation and all severance, insurance,
pension, profit sharing, disability payment, vacation (except for accrued
vacation included in the adjustments calculated pursuant to Section 3.3(c)),
medical, sick, holiday,
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continuation coverage and other compensation or benefits to which the employees
of its Cable Business may be entitled, whether or not such employees may be
hired by the Partnership or any of its Affiliates, as a result of their
employment by either AT&T or Insight or their Affiliates, as applicable, or any
of their Affiliates, the termination of their employment with either AT&T or
Insight or their respective Affiliates, as applicable, the consummation of the
transactions contemplated hereby or pursuant to any applicable Legal Requirement
or otherwise relating to their employment with AT&T or Insight or either of
their Affiliates. Any liability under WARN with regard to any employee
terminated on or prior to the Closing Time or not hired by the Partnership on or
after the Closing Time, shall, as a matter of contract between the parties, be
the responsibility of the party by which such employee was employed prior to the
Closing Time. Each of AT&T, Insight and their respective Affiliates shall
cooperate with the Partnership and its Affiliates, if requested, in the giving
of WARN notices on behalf of the Partnership.
(f) Notwithstanding anything to the contrary herein, the Partnership
or its Affiliate (a "Hiring Party") shall (i) upon receipt of a schedule showing
the vacation balances and value of such balances of each Hired Employee, which
schedule shall be delivered by each of AT&T and Insight (with respect to
employees of the Exchange Systems, Insight may rely on the schedule provided by
AT&T Sub pursuant to Section 7.3(f) of the Exchange Agreement for periods prior
to the closing under the Exchange Agreement) within 10 days after the Closing
Date, credit each Hired Employee the lesser of the amount of vacation accrued
and unused by him or her as an employee of AT&T or Insight, as applicable,
through and including the Closing Time or the amount of accrued vacation
permitted to be accrued by similarly situated employees of the Hiring Party in
accordance with the Hiring Party's standard practices (to a maximum of four
weeks) accrued and unused by him or her as an employee of the AT&T or Insight,
as applicable, through and including the Closing Time; provided, however, that
if any Hired Employee has accrued vacation time in excess of the amount credited
by the Hiring Party, then AT&T or Insight, as applicable, shall pay to such
employee the amount of such excess and the Hiring Party shall not assume any
liability or obligation in respect of such excess; (ii) give each Hired Employee
credit for such employee's past service with AT&T or Insight or their
Affiliates, as applicable, as of the Closing Time (including past service with
any prior owner or operator of such party to the extent such Hired Employee
previously received credit for such service) for purposes of eligibility to
participate in the Hiring Party's employee benefit plans that are generally
applicable to other similarly situated employees and their dependents of the
Hiring Party; (iii) give each Hired Employee credit for his or her past service
with AT&T or Insight or their Affiliates, as applicable, at the Closing Time
(including past service with any prior owner or operator of such party to the
extent such Hired Employee previously received credit for such service) for
purposes of participation and vesting under the Hiring Party's 401(k) plan,
stock plans and pension plan, if any, that are generally applicable to other
similarly situated employees of the Hiring Party; (iv) give each Hired Employee
credit for such employee's past service with AT&T or Insight or their
Affiliates, as applicable, as of the Closing Time (including past service with
any prior owner or operator of such party to the extent such Hired Employee
previously received credit for such service) for any waiting periods under the
Hiring Party's employee benefit plans, including any group health and disability
plans, that are generally applicable to other similarly situated employees of
the Hiring Party, and not subject any Hired
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Employees to any limitations on benefits for any preexisting conditions provided
that the treatment is covered under the Hiring Party's group health plans; (v)
credit each Hired Employee under any group health plans for any deductible and
out-of-pocket expenses previously met by a Hired Employee under AT&T's or
Insight's or their Affiliates', as applicable, group health plans for the plan
year in which the transfer of employment occurs; and (vi) provide the Hired
Employees as of the Closing Time with employee benefits and compensation no less
favorable in the aggregate than those employee benefits and compensation that
are generally applicable to other similarly situated employees of the Hiring
Party. Notwithstanding anything set forth in this Section 7.3(f), the Hiring
Party shall have no obligation to employees of either AT&T's or Insight's Cable
Business who are Employees on Leave Status until they become employees of the
Hiring Party pursuant to Section 7.3(a) hereof.
(g) If the Hiring Party discharges without cause within 120 days
after the Closing any Hired Employee, then (1) the Hiring Party shall pay cash
severance benefits to such Hired Employee in accordance with the transferor's
severance benefit plan based on the terms of such plan as in effect as of the
Closing Time and delivered to the Hiring Party at or prior to the Closing Time
and (2) the Hiring Party shall give such Hired Employee any non-cash severance
benefits available to similarly situated employees of the Hiring Party, and
shall in each case count the period of such Hired Employee's employment with
AT&T or Insight or their Affiliates, as applicable, and with the Partnership or
its Affiliates for purposes of calculating severance benefits due to such Hired
Employee pursuant to this sentence. Following such 120 day period, such Hired
Employee shall be covered under the Partnership's severance benefit plan
counting the period of employment with AT&T or Insight or their Affiliates, as
applicable, and the Partnership or its Affiliates for purposes of calculating
benefits under such plan. For purposes of this Section 7.3(g), "cause" shall
have the meaning set forth in the Hiring Party's employment policies, procedures
or agreements applicable to Hiring Party's employees who are similarly situated
to the discharged Hired Employee.
(h) If any of AT&T, Insight or Insight Central Ohio has, or acquires,
a duty to bargain with any labor organization with respect to employees of its
Cable Business, then such party will (i) give prompt written notice of such
development to the Hiring Party, including notice of the date and place of any
negotiating sessions as they are planned or contemplated and permit the Hiring
Party to have a representative present at all negotiating sessions with such
labor organization and at all meetings preparatory thereto (including making the
Hiring Party's representative a representative of the Partnership's delegation
if required by the labor organization) and (ii) not, without the Hiring Party's
written consent, enter into any Contract with such labor organization that
purports to bind the Hiring Party, including any successor clause or other
clause that would have this purpose or effect, except in the case of AT&T,
pursuant to a Contract required to be entered into under the NCE Agreement.
Each of AT&T and Insight acknowledges and agrees that the Partnership has not
agreed to be bound, and will not be bound, without an explicit assumption of
such liability or responsibility by the Hiring Party, by any provision of any
collective bargaining agreement or similar Contract with any labor organization
to which AT&T or Insight is or may become bound, except in the case of AT&T, to
the extent that such a Contract entered into pursuant to the NCE Agreement so
requires. Except as may be required on the part of AT&T or its Affiliates
-57-
under the terms of the Neutrality and Consent Agreement dated July 1, 1999 by
and among CWA, IBEW and certain business operating units and divisions of AT&T
Corp. (the "NCE Agreement"), no party shall take any action or engage in any
inaction which might obligate or require it or another party to the Agreement or
its Affiliates to recognize or bargain with any labor organization on behalf of
its System employees. Further, except as may be required on the part of AT&T
under the NCE Agreement, each party shall cooperate fully with the other parties
in resisting union organization of System employees. For purposes of this
Agreement and determining what is required under the NCE Agreement, Insight and
the Partnership acknowledge that AT&T in its sole discretion may elect to treat
all of the AT&T Systems as covered by the NCE Agreement.
(i) Nothing in this Section 7.3 or elsewhere in this Agreement shall
be deemed to make any employee of the parties or their respective Affiliates a
third party beneficiary of this Agreement.
7.4 Leased Vehicles; Other Capital Leases. Each of AT&T, Insight and
-------------------------------------
Insight Central Ohio will pay the remaining balances on any leases for vehicles
included in its Tangible Personal Property and will deliver valid and good title
to such vehicles free and clear of all Liens (other than Permitted Liens) to the
Partnership at the Closing.
7.5 Required Consents.
-----------------
(a) Each of AT&T and Insight will use its commercially reasonable
efforts to obtain in writing as promptly as possible and at its expense, all of
its Required Consents, in form and substance reasonably satisfactory to the
other, and will deliver to the other copies of such Required Consents promptly
after they are obtained by such party; provided however that each of AT&T and
Insight will afford the other the opportunity to review, approve and revise the
form of Required Consent prior to delivery to the party whose consent is sought.
Each of AT&T and Insight will cooperate with the other in its efforts to obtain
its Required Consents, but neither the other party nor the Partnership will be
required to accept or agree or accede to any condition to transfer of any Asset,
or any modifications or amendments to any of the System Franchises, System
Licenses, System Contracts or leases or documents evidencing Leased Property or
Other Real Property Interests that in either case would make, or are reasonably
likely to make, the underlying instrument materially more onerous in any respect
or that would materially reduce, or are reasonably likely to materially reduce,
the benefits available under the instrument in respect of which the consent
relates. AT&T shall make the decision as to whether the foregoing standard is
met with respect to the Insight Required Consents and Insight shall make such
decision with respect to the AT&T Required Consents. As soon as practicable
after the date of this Agreement, but in any event no later than 20 days after
the date of this Agreement, Insight and AT&T will cooperate with each other to
complete, execute and deliver, or cause to be completed, executed and delivered
to the appropriate Governmental Authority, a request for such Governmental
Authority's consent to transfer each System Franchise as to which such consent
is required.
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(b) Each of AT&T and Insight will use commercially reasonable efforts
to obtain and will cooperate with the other to obtain renewals or extensions of
any System Franchise for which a valid notice of renewal pursuant to the formal
renewal procedures established by Section 626 of the Cable Act has not been
timely delivered to the appropriate Governmental Authority for a period expiring
no earlier than three years after the date of this Agreement.
(c) Each of AT&T and Insight will use commercially reasonable efforts
to obtain and cooperate with the other to obtain renewals or extensions for a
period expiring no earlier than two years after the date of this Agreement of
any System Franchise which is expired or has a term of less than one year
remaining as of the date of this Agreement.
(d) Each of AT&T and Insight will cooperate with the other in its
efforts to obtain renewals or extensions of any System Franchises pursuant to
Section 7.5(b) or (c), but the Partnership will not be required to accept or
agree or accede to any renewal or extended System Franchise that contains terms
that would make, or are reasonably likely to make, the System Franchise that is
being renewed or extended materially more onerous in any respect or that would
materially reduce, or are reasonably likely to materially reduce, the benefits
available under the System Franchise that is being renewed or extended. AT&T
shall make the decision as to whether the foregoing standard is met with respect
to the Insight System Franchises and Insight shall make such decision with
respect to the AT&T System Franchises.
(e) Notwithstanding Section 7.5(a), neither AT&T nor Insight will
have any further obligation to obtain Required Consents: (i) with respect to
license agreements relating to pole attachments where the licensing party will
not, after the assigning party's exercise of commercially reasonable efforts,
consent to an assignment of such license agreement but requires that the
Partnership enter into a new agreement with such licensing authority, in which
case the Partnership shall use its commercially reasonable efforts to enter into
such agreement prior to the Closing or as soon as practicable thereafter and the
party to the license agreement will cooperate with and assist the Partnership in
obtaining such agreements; provided however that the Partnership's commercially
reasonable efforts shall not require it to take any action of the type that such
party is not required to take pursuant to this Section 7.5; and (ii) for any
business radio license which such party reasonably expects can be obtained
within 120 days after the Closing and so long as a temporary authorization is
available to the Partnership under FCC rules with respect thereto.
7.6 Title Commitments and Surveys. The parties agree that the Partnership
-----------------------------
will not obtain title insurance or surveys with respect to any real property to
be contributed to the Partnership in connection with the transactions
contemplated by this Agreement.
7.7 HSR Notification. As soon as practicable but in any event no later
----------------
than 60 days after the date of this Agreement, Insight and AT&T will each
complete and file, or cause to be completed and filed by such party's ultimate
parent, any notification and report required to be filed under the HSR Act and
each such filing shall request early termination of the waiting period imposed
by the HSR Act. Insight and AT&T shall use their commercially reasonable
efforts to respond as promptly
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as reasonably practicable to any inquiries received from the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "Antitrust Division") for additional information or documentation and to
respond as promptly as reasonably practicable to all inquiries and requests
received from any other Governmental Authority in connection with antitrust
matters. Insight and AT&T shall use their respective commercially reasonable
efforts to overcome any objections which may be raised by the FTC, the Antitrust
Division or any other Governmental Authority having jurisdiction over antitrust
matters. Notwithstanding the foregoing, neither Insight nor AT&T shall be
required to make any significant change in the operations or activities of the
business (or any material assets employed therein) of such party or any of its
Affiliates, if a party determines in good faith that such change would be
materially adverse to the operations or activities of the business (or any
material assets employed therein) of such party or any of its Affiliates having
significant assets, net worth or revenue. Each of Insight and AT&T will
coordinate with the other party with respect to its filings and will cooperate
to prevent inconsistencies between their respective filings and will furnish to
each other such necessary information and reasonable assistance as the other may
reasonably request in connection with its preparation of necessary filings or
submissions under the HSR Act. Notwithstanding anything to the contrary in this
Agreement if either Insight or AT&T determines in its reasonable business
judgment that a request for additional data and information in connection with
the HSR Act is unduly burdensome, it may terminate this Agreement by notifying
the other party within 30 days following the unduly burdensome request.
7.8 Taxes, Fees and Expenses. All sales, use or excise Taxes arising from
------------------------
or payable by reason of the transfer to the Partnership of any of the AT&T
Assets, the Insight Assets, the Exchange Assets or the Sale Assets will be paid
by the Partnership. All transfer and similar Taxes or assessments, including
transfer and recording fees and similar assessments for or under System
Franchises, System Licenses and System Contracts, arising from or payable by
reason of the conveyance of the AT&T Assets, the Insight Assets, the Exchange
Assets and Sale Assets will be paid by AT&T with respect to the AT&T Assets and
by Insight with respect to the Insight Assets, the Exchange Assets and the Sale
Assets (to the extent related to the transfer from Insight to the Partnership);
provided, that to the extent any such transfer or similar Taxes or assessments
are paid or payable only once with respect to the two transfers from AT&T to
Insight and then from Insight to the Partnership, such amounts shall be shared
equally by AT&T and Insight.
7.9 Distant Broadcast Signals. Unless otherwise restricted or prohibited
-------------------------
by any Governmental Authority or applicable Legal Requirement, if requested 45
days or more prior to the anticipated Closing Date by the Partnership, the
transferor of a System will delete prior to the Closing Date any distant
broadcast signals which the Partnership determines will result in unacceptable
liability on the part of the Partnership for copyright payments with respect to
continued carriage of such signals after the Closing. AT&T shall make the
foregoing request and determination on behalf of the Partnership with respect to
the Insight Systems and Insight shall make such request and determination on
behalf of the Partnership with respect to the AT&T Systems.
7.10 Use of Names and Logos. For a period of 90 days after the Closing,
----------------------
the Partnership will be entitled to use the trademarks, trade names, service
marks, service names, logos and similar proprietary rights of AT&T and Insight
to the extent incorporated in or on the Assets transferred to it at the Closing,
provided that the Partnership will exercise reasonable efforts to remove all
such names, marks, logos and similar proprietary rights of Insight and AT&T from
the Assets by such earlier date as reasonably practicable following the Closing.
Notwithstanding the foregoing, the Partnership will not be required to remove or
discontinue using any such name or xxxx that is affixed to converters or other
items in or to be used in customer homes or properties, or as are used in
similar fashion making such removal or discontinuation impracticable for the
Partnership.
7.11 Transitional Billing Services. Subject to Section 7.26, Insight and
-----------------------------
AT&T will each provide to the Partnership, access to and the right to use its
billing system computers, software and related fixed assets in connection with
its Systems for a period of up to 180 days following the Closing to allow for
conversion of existing billing arrangements ("Transitional Billing Services").
All Transitional Billing Services that are requested by the Partnership will be
provided on terms and conditions reasonably satisfactory to each party; provided
however that the amount to be paid by the Partnership will not exceed the cost
to the party providing such Transitional Billing Services. Each of AT&T and
Insight will notify the Partnership at least 45 days prior to the Closing of the
cost to such party of providing such Transitional Billing Services.
7.12 Confidentiality and Publicity.
-----------------------------
(a) Each of Insight and AT&T will use commercially reasonable efforts
to assure that any non-public information that such party may obtain from the
other in connection with this Agreement with respect to the other's Cable
Business and Systems (it being understood and agreed that all proprietary
information of AT&T or Insight that is included among the Assets of AT&T or
Insight shall become the proprietary information of the Partnership at Closing)
will be kept confidential and, such party will not disclose, and will cause its
employees, consultants, advisors and agents not to disclose, any such
information to any other Person (other than its directors, officers and
employees and representatives of its advisers and lenders whose knowledge
thereof is necessary in order to facilitate the consummation of the transactions
contemplated hereby) or use, and will cause its employees, consultants, advisors
and agents not to use, such information to the detriment of the other; provided
that (i) such party may use and disclose any such information once it has been
publicly disclosed (other than by such party in breach of its obligations under
this Section) or which rightfully has come into the possession of such party
(other than from the other party) and (ii) to the extent that such party may, in
the reasonable opinion of its counsel, be compelled by Legal Requirements to
disclose any of such information, such party may disclose such information if it
will have used all reasonable efforts, and will have afforded the other the
opportunity, to obtain an appropriate protective order or other satisfactory
assurance of confidential treatment, for the information compelled to be
disclosed. The obligation of Insight and AT&T to hold information in confidence
pursuant to this Section will be satisfied if such party exercises the same care
with respect to such information as it would exercise to preserve the
confidentiality of its own similar information. In the event of termination of
this Agreement, each of Insight and AT&T
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will use all reasonable efforts to cause to be delivered to the other, and
retain no copies of, any documents, work papers and other materials obtained by
such party or on its behalf from the other, whether so obtained before or after
the execution hereof.
(b) Neither Insight nor AT&T will issue (or cause the Partnership to
issue) any press release or make any other public announcement or any oral or
written statement to its or the other party's employees concerning this
Agreement and the transactions contemplated hereby, except as required by
applicable Legal Requirements, without the prior written consent and approval of
the other, which consent and approval may not be unreasonably withheld.
7.13 Bulk Transfers. The Partnership waives compliance by AT&T and Insight
--------------
with Legal Requirements relating to bulk transfers applicable to the
transactions contemplated hereby.
7.14 Lien Searches. Within 20 Business Days prior to the anticipated
-------------
Closing Date, each of AT&T and Insight will obtain at its expense and deliver to
the other, the results of a lien search conducted by a professional search
company of records in the offices of the secretaries of state in each state and
county clerks in each county where there exists any of its Owned Property or
Tangible Personal Property, and in the state and county where such party's (or
Holdings (Central Ohio)'s or Insight Central Ohio's) principal offices are
located, and in the state of incorporation of Holdings (Central Ohio) and
Insight Central Ohio, including copies of all financing statements or similar
notices or filings (and any continuation statements) discovered by such search
company.
7.15 Further Assurances. At and after the Closing, each of the parties
------------------
will promptly execute and deliver, or cause to be executed and delivered, to the
other parties all such documents and instruments, in addition to those otherwise
required by this Agreement, in form and substance reasonably satisfactory to the
other parties as they may reasonably request in order to carry out or evidence
the terms of this Agreement or to collect on behalf of the Partnership any
accounts receivable or other claims included in the Insight Assets or the AT&T
Assets.
7.16 Consents. If and to the extent Insight or AT&T shall have waived
--------
satisfaction of the condition to Closing set forth in Section 8.1(e) or Section
8.2(e), respectively, subsequent to the Closing (other than Required Consent
relating to System Franchises, as to which AT&T's and Insight's obligations are
governed by Section 7.24), each of AT&T with respect to the AT&T Systems and the
AT&T Assets and Insight with respect to the Insight Systems and the Insight
Assets will continue to use commercially reasonable efforts to obtain in writing
as promptly as possible any Required Consent which was not obtained on or before
the Closing (other than consents which such party has no further obligation to
obtain pursuant to Section 7.5(e)) and will deliver copies of the same,
reasonably satisfactory in form and substance, to the other. The obligations
set forth in this Section will survive the Closing for a period of 30 days and
will not be merged in the consummation of the transactions contemplated hereby.
After the expiration of the survival period set forth in this Section 7.16,
neither AT&T nor Insight will be obligated to obtain Required Consents which
were not obtained on or before the Closing and will be released from all
liability for any failure to obtain such consents with respect to which AT&T or
Insight used commercially reasonable efforts to
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obtain. To the extent the Partnership continues to try to obtain any Required
Consents that were not obtained by the end of such survival period, each of AT&T
and Insight will cooperate with and provide information to the Partnership to
the extent reasonably necessary for the Partnership to obtain any such Required
Consents pursuant to this Section 7.16.
7.17 Cooperation as to Rates and Fees.
--------------------------------
(a) Each of AT&T, Insight and Insight Central Ohio shall diligently
pursue any current rate proceedings with respect to its Systems and shall make
available to the other upon request copies of any documents, correspondence or
notices sent by or received by AT&T, Insight or Insight Central Ohio in
connection with the current rate proceedings or any rate regulatory matter with
respect to its Systems instituted after the date of this Agreement.
(b) Prior to Closing, without the prior consent of the other, none of
AT&T, Insight or Insight Central Ohio shall settle any rate proceeding with
respect to its Systems (or in the case of Insight with respect to the Exchange
Systems during any Interim Period) if such settlement would (i) impose upon the
Partnership or Insight Central Ohio any liability, or (ii) adversely affect the
rates to be charged by the Partnership or Insight Central Ohio during the post-
Closing time period unless such party compensates the Partnership therefor in
the manner agreed by the parties, or if the parties do not agree, as determined
by an independent auditor in accordance with the procedures established in
Section 3.4(b). Notwithstanding the foregoing, the Partnership agrees that AT&T
may complete the AT&T Late Fee Settlement.
(c) After Closing, notwithstanding the terms of Section 11.5 hereof,
the Partnership shall have the right at its own expense to assume control of the
defense of any rate proceeding with respect to any System, Exchange System or
Sale System transferred to it at Closing that remains pending as of Closing or
that arises after Closing but relates to the pre-Closing operation of a System,
Exchange System or Sale System; provided, that AT&T may complete the pending
AT&T Late Fee Settlement and the defense of such litigation as it relates to the
AT&T Systems shall not be turned over to the Partnership. The Partnership shall
promptly notify the transferor of the System, Exchange System or Sale System of
the commencement of any such rate proceeding relating to the pre-Closing
operation of such System, Exchange System or Sale System. In any such rate
proceeding involving a System, Exchange System or Sale System, the transferor
of such System, Exchange System or Sale System (or AT&T in the case of the
Exchange Systems and Sale Systems) shall cooperate in such proceeding and
promptly deliver to the Partnership all information in its possession that is
reasonably requested by the Partnership as necessary or helpful in such
proceeding.
(i) If the Partnership elects to assume control of the defense of
any such rate proceeding, then (1) the transferor of the affected System,
Exchange System or Sale System (or AT&T in the case of the Exchange Systems and
Sale Systems) shall have the right to participate, at its expense, in the
defense in such rate proceeding, and (2) the Partnership shall have the right to
settle any rate proceeding relating to the pre-Closing operation of a System,
Exchange System or
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Sale System unless under such settlement the transferor (or AT&T in the case of
the Exchange Systems and Sale Systems) would be required to bear liability with
respect to the pre-Closing time period, in which event such settlement shall
require the transferor's prior written consent, which consent shall not be
unreasonably withheld.
(ii) If the Partnership does not elect to assume control of the
defense of any such rate proceeding, then (1) the Partnership shall have the
right to participate, at its expense, in the defense in such rate proceeding,
and (2) without the prior consent of the Partnership, the transferor (or AT&T in
the case of the Exchange Systems and Sale Systems) shall not settle such rate
proceeding if such settlement would require the Partnership to bear any
liability or would adversely affect the rates to be charged by the Partnership
unless the transferor compensates the Partnership therefor in the manner agreed
by Insight and AT&T, or if the parties do not so agree, as determined by an
independent auditor in accordance with the procedures established in Section
3.4(b). In any such rate proceeding involving a System, the Partnership shall
cooperate in such proceeding and promptly deliver to AT&T or Insight, as
applicable, all information requested by AT&T or Insight as necessary or helpful
in such proceeding.
(d) If AT&T, Insight or Insight Central Ohio are required following
Closing pursuant to any Legal Requirement, settlement or otherwise, including,
without limitation, the MediaOne Social Contract, the Time Warner Social
Contract or the AT&T Late Fee Settlement, to reimburse or provide in-kind or
another form of consideration to any subscribers of such party's Systems any
subscriber payments previously made by them, including fees for cable television
service, late fees and similar payments, the Partnership agrees that it will
make such reimbursement or provide in-kind or another form of consideration
through its billing system on terms specified by AT&T or Insight (which will
make such specification on behalf of Insight Central Ohio), as applicable, and
AT&T or Insight (individually and on behalf of Insight Central Ohio), as
applicable, will reimburse the Partnership for all such payments and other
consideration made by the Partnership following Closing and for the
Partnership's reasonable out-of-pocket expenses incurred in connection
therewith. Without limiting the foregoing, the parties will provide each other
with all information in their possession that is reasonably required in order to
fulfill the terms of this Section 7.17(d). In addition, the Partnership agrees
that from and after Closing, it or its subsidiary that owns such Systems will
comply with paragraph 16 of the AT&T Late Fee Settlement on its current terms
with respect to those AT&T Systems covered by such settlement and will hereafter
execute from time to time such documentation as may be reasonably requested by
AT&T to further evidence such agreement (it being understood that this shall be
the Partnership's and its subsidiaries' sole obligation with respect to the AT&T
Late Fee Settlement). The Partnership also is responsible for the fulfillment
of Insight's obligations under Section 7.19 of the Exchange Agreement and
Section 7.18 of the Sale Agreement with respect to the Exchange Systems and the
Sale Systems.
7.18 Satisfaction of Conditions. Each of Insight and AT&T will use its
--------------------------
commercially reasonable efforts to satisfy, or to cause to be satisfied, the
conditions to the obligations of the other party to consummate the transactions
contemplated by this Agreement, as set forth in Section 8, with "commercially
reasonable efforts" being determined with respect to any particular matter as
set forth
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elsewhere in this Agreement. Without limiting the foregoing, Insight agrees to
use its commercially reasonable efforts to obtain prior to Closing at the
Partnership's expense and obligation, any retransmission consents that the
Partnership will need from and after Closing and AT&T agrees to cooperate with
Insight in its efforts to obtain the same.
7.19 Offers. None of AT&T, Insight or Insight Central Ohio will offer its
------
Assets or Cable Business for sale, entertain offers for such Assets or Cable
Business or otherwise negotiate for the sale of such Assets or Cable Business or
make information about such Assets or Cable Business available to any third
party in connection with the possible sale of such Assets or Cable Business
prior to the Closing Date or the date this Agreement is terminated in accordance
with its terms.
7.20 Environmental Reports. The parties agree that the Partnership will
---------------------
not obtain environmental assessments or reports with respect to any real
property included in the Assets.
7.21 Cooperation on SEC Matters. AT&T and Insight each agrees to
--------------------------
cooperate, and cause its Affiliates and independent accountants to cooperate, in
all commercially reasonable respects with the Partnership and its counsel and
accountants in connection with any filing required to be made in connection with
this Agreement by the Partnership or its Affiliates with the SEC or any
securities exchange or pursuant to applicable Legal Requirements, including the
Securities Act and the Exchange Act and requirements of securities exchanges
(including any filing required in connection with any public financing proposed
to be obtained by the Partnership). AT&T and Insight each shall provide to the
Partnership such financial statements, schedules and other information relating
to AT&T's or Insight's, as applicable, Cable Business and Systems as the
Partnership may reasonably request for inclusion in any such filing, in
appropriate form as provided in applicable federal or state security laws. The
Partnership or its Affiliates shall promptly reimburse AT&T, Insight or their
respective Affiliates, as applicable, or, upon request, advance to such party or
its Affiliates all out-of-pocket costs, expenses and fees incurred by AT&T,
Insight or their respective Affiliates, independent accountants or attorneys in
connection with the preparation or provision of such financial statements,
schedules and other information to the Partnership and the Partnership or its
Affiliates shall likewise bear any out-of-pocket costs, expenses and fees
incurred by the Partnership or its Affiliates in connection with the preparation
by the Partnership and inclusion by the Partnership or its Affiliates of such
information in any such filing. AT&T and Insight each hereby consents to the
inclusion by the Partnership or its Affiliates of such financial statements,
schedules and other information of each of its Cable Business and Systems, if
requested to be so included by the Partnership, in any report required to be
filed with the SEC or any securities exchange or pursuant to applicable Legal
Requirements, including the Securities Act and the Exchange Act and requirements
of securities exchanges. Each of AT&T and Insight agrees to use, and will cause
its Affiliates to use, commercially reasonable efforts to obtain the consent of
its independent public accountants or the independent public accountants of its
Affiliates to the inclusion of such financial statements in any such report to
be filed by the Partnership. The Partnership shall indemnify and hold harmless
each of AT&T and Insight and their respective Affiliates from any Losses
resulting from the inclusion of any such financial statements, schedules and
other information in any such filing, except the Partnership shall not have any
indemnification liability to AT&T or Insight, as
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applicable, or any of their Affiliates to the extent such Losses arise out of
any information included by the Partnership or its Affiliates in reliance upon
and in conformity with written information furnished to the Partnership by
either AT&T or Insight or either of their Affiliates for use in connection with
such filings. Notwithstanding the foregoing, to the extent that any filing
described in this Section 7.21 is required to be made by Insight or Insight
Communications Company, Inc., Insight shall bear all of the expenses, costs and
indemnification liabilities specified in this Section 7.21 with respect to such
filing.
7.22 Value of Assets Contributed. AT&T and Insight will negotiate in good
---------------------------
faith to reach agreement prior to Closing on the allocation of the Aggregate
Gross Fair Market Value among the Assets, Exchange Assets and Sale Assets that
will be contributed by each of them to the Partnership. If AT&T and Insight are
unable to reach such agreement prior to Closing, then promptly following Closing
they will mutually agree on an appraiser to be hired by the Partnership to
allocate the Aggregate Gross Fair Market Values among the Assets, Exchange
Assets and Sale Assets contributed by them. Neither AT&T nor Insight will take a
position that is inconsistent with the allocations determined by such appraiser.
With respect to any of the Assets contributed to the Partnership by Insight
pursuant to Section 2.1 that were acquired by Insight pursuant to the Exchange
Agreement or Sale Agreement, Insight and AT&T agree to use the allocations
determined by any appraiser hired by Insight and AT&T's Affiliates in connection
with the Exchange Agreement or Sale Agreement.
7.23 Cooperation on Pending Litigation. With respect to any defense or
---------------------------------
prosecution of any Litigation with respect to the Systems that relates to the
period prior to the Closing Time and for which AT&T or Insight or their
Affiliates are responsible pursuant to this Agreement, the Partnership will
cooperate with and assist AT&T, Insight and their Affiliates, upon reasonable
request, by making witnesses available and providing all information in its
possession (including access to employees with information regarding such
proceedings and access to books and records that may relate to the proceedings)
that AT&T, Insight and their Affiliates may reasonably require in connection
with such Litigation or in response to any complaint, claim, inquiry, order or
requirement of any Governmental Authority or other Third Party so long as such
cooperation and assistance does not unreasonably interfere with AT&T's,
Insight's or their respective Affiliates' business, as determined by AT&T,
Insight or their respective Affiliates in good faith. AT&T or Insight, as
applicable, will promptly reimburse the Partnership for all reasonable direct
out-of-pocket expenses incurred by the Partnership or its Affiliates in
connection with such cooperation; provided that the provisions of this Section
7.23 shall not in any way be interpreted to limit the Partnership's
indemnification rights in accordance with Section 11 of the Agreement or be
subject to the limitations on indemnification set forth in Sections 11.6, 11.7
or 11.8, as applicable.
7.24 Franchise Consents. If by the date that is 210 days after the date of
------------------
this Agreement (i) the aggregate number of AT&T EBSs located in areas that are
served without a franchise or that are served pursuant to AT&T System Franchises
that either do not require consent or as to which Required Consents have been
obtained is at least 95% of the number of EBSs for all AT&T Systems as of the
last day of the month preceding the month in which Closing occurs; (ii) the
aggregate
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number of Insight EBSs (including EBSs that relate to the Exchange Systems and
Sale Systems) located in areas that are served without a franchise or that are
served pursuant to Insight System Franchises (or system franchises that relate
to the Exchange Systems or the Sale Systems) that either do not require consent
or as to which all required consents have been obtained is at least 95% of the
number of EBSs for all Insight Systems , Exchange Systems, and Sale Systems as
of the last day of the month preceding the month in which Closing occurs; (iii)
all conditions precedent to the obligations of the parties have been satisfied
or waived by the applicable parties (other than any condition that all Required
Consents for System Franchises have been obtained and any conditions precedent
that are to be satisfied at Closing by delivery of documents), and (iv) the
System Franchises for which consents have not then been obtained do not, and
applicable Legal Requirements do not, in the reasonable judgment of the party
transferring such System Franchises, prohibit the actions contemplated by this
Section 7.24, then the following shall occur:
(a) Closing shall occur with respect to, and Insight and AT&T shall
transfer, convey and assign to the Partnership (the "Primary Transfer") all of
the AT&T Assets and all of the Insight Contributed Assets other than any System
Franchises for which Required Consents have not been obtained (such excepted
System Franchises, including any Assets that are located in the franchise area
for such franchises or that relate exclusively to such franchises, are referred
to herein as the "Retained Franchises").
(b) Following the Closing of the Primary Transfer, the applicable
transferor party and the Partnership shall continue to use commercially
reasonable efforts to obtain Required Consents for any Retained Franchises as
promptly as possible, with the provisions of Section 7.5(a) continuing to be
applicable to such Retained Franchises. The Partnership will deliver copies of
the Required Consents for any Retained Franchises to each of Insight and TCI LLC
once they are obtained. Within 10 Business Days of obtaining a Required Consent
for a Retained Franchise, the owner of such franchise shall transfer, convey and
assign such franchise to the Partnership (a "Subsequent Transfer"), free and
clear of all Liens other than Permitted Liens. The conditions to closing shall
not apply to any Subsequent Transfer of a Retained Franchise other than the
delivery of appropriate transfer documents.
(c) Insight and AT&T shall negotiate in good faith to reach agreement
at the Closing on a management agreement pursuant to which the Partnership (or
Indiana LLC) will manage all Retained Franchises, which management agreement
shall also contain any required signal sharing arrangements (the "Retained
Franchise Management Agreement"). The Retained Franchise Management Agreement
shall provide that the Partnership will bear all expenses relating to the
Retained Franchises and the operation thereof (including any expenses related to
defending any challenges raised with respect to a Retained Franchise or the
transactions described in this Section as applied to such Retained Franchise)
and will receive the net cash flow from the Retained Franchises as its
management fee. The Retained Franchise Management Agreement shall provide that
its term will continue with respect to each Retained Franchise until there is a
Subsequent Transfer of such Retained Franchise, or such Retained Franchise is
revoked as a result of the transactions described in this Section or a court
orders the termination of the Retained Franchise
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Management Agreement with respect to such Retained Franchise. If the Retained
Franchise Management Agreement is terminated with respect to a Retained
Franchise prior to its Subsequent Transfer, then (i) if such termination is due
to the revocation of the Retained Franchise, the Partnership shall use
reasonable commercial efforts to obtain a replacement franchise, or (ii) if such
termination is due to a court ordering the termination of the Retained Franchise
Management Agreement with respect to such Retained Franchise, the Partnership,
AT&T and Insight shall negotiate in good faith to reach some other structure
that will allow the Partnership to continue to receive the benefits of the
Retained Franchise. If the Partnership is unable to obtain a replacement
franchise or the parties are unable to negotiate a structure that will allow the
Partnership to continue to receive the benefits of the Retained Franchise, AT&T
and Insight will negotiate in good faith the amount of the cash contribution
that AT&T or Insight (or both) is required to make to the Partnership to
maintain the membership interests of AT&T and Insight at 50% each, based upon
the circumstances of the termination and the value of the Retained Franchise at
the time of loss.
(d) All references in this Agreement to the Closing and the Closing
Date will mean the Closing and Closing Date of the Primary Transfer and the
Aggregate Gross Fair Market Value determinations to be made pursuant to Section
3.2 and the Closing Adjustments to be determined pursuant to Section 3.3 will be
made as of the Closing Date for the Retained Franchises as if they were
transferred on the Closing Date. In addition, the Partnership will become
liable for the Assumed Obligations and Liabilities with respect to the Retained
Franchises as of the Closing Date rather than the Subsequent Transfer date. All
representations and warranties (except as to those Required Consents that have
not been obtained) made in connection with the Retained Franchises will be made
as of the Closing Date rather than the Subsequent Transfer date.
(e) If the provisions of this Section 7.24 become operative, the
parties agree to use commercially reasonable efforts and act in good faith in
taking such actions and negotiating such additional provisions or other
agreements, including amendments to this Agreement, as may be necessary or
appropriate to carry out the intent of this Section 7.24, including without
limitation, keeping franchise transfers effective.
7.25 [Intentionally Deleted.]
7.26 CSG. The Partnership will continue to use CSG as the billing service
---
provider for the AT&T Systems and the Sale Systems that currently use CSG as the
billing service provider, unless AT&T consents to a change in billing service
provider for such Systems.
7.27 Rebuild of AT&T Systems. Following the Closing, the Partnership
-----------------------
agrees to use commercially reasonable efforts to upgrade the Cayuga and
Indianola AT&T Systems in accordance with the requirements of the Time Warner
Social Contract (which will be specified by AT&T to Insight by September 15,
2000 but in no event will require an upgrade to greater than 750 MHZ) as soon as
reasonably practicable. Subject to the following sentence, the Partnership will
be responsible for the capital expenditures and other expenses required to
complete the upgrades. Notwithstanding the foregoing, AT&T shall be responsible
for all subscriber refunds, interest,
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penalties and all other costs and expenses and other Losses resulting from the
applicable AT&T System's compliance or non-compliance with the terms of the
Social Contract released on November 30, 1995 (FCC 95-478) between Time Warner
Cable and the FCC, as amended by the FCC Orders released May 21, 1999 (DA 99-
968) and December 15, 1995 (DA 95-2491) (the "Time Warner Social Contract"),
whether such compliance or non-compliance occurs before or after the Closing,
including obtaining or not obtaining an extension of time under the Time Warner
Social Contract to complete the upgrades for the Cayuga and Indianola Systems,
and AT&T shall indemnify and hold the Partnership and its subsidiaries harmless
from all of the foregoing. If requested by AT&T, the Partnership agrees that it
will render any refunds or other payments (including in-kind payments) to the
subscribers of the Cayuga and Indianola AT&T Systems through the Partnership's
billing system, and AT&T shall reimburse the Partnership for all such payments
(including in-kind payments) and for the Partnership's reasonable out-of-pocket
expenses incurred in connection therewith. Insight, the Partnership and its
subsidiaries are not required to assume or agree to any obligations or burdens
on the Systems in connection with the satisfaction of any obligations arising
from the Time Warner Social Contract as currently in effect or as subsequently
modified.
7.28 Schedules. Insight and AT&T acknowledge that the parties may need to
---------
provide copies of additional due diligence materials and make additional
revisions to their Schedules and that they need to reach final agreement on,
among other things, which of their System Contracts will be Excluded Assets and
whether, and the terms on which, any arrangements between Insight and its
Affiliates relating to the Insight Systems or any arrangements between AT&T and
its Affiliates relating to the AT&T Systems will continue after the Closing. In
addition, Insight and AT&T acknowledge that the AT&T Systems owned by Command
Cable of Eastern Illinois Limited Partnership (the "Command Cable Systems") were
added to this Agreement shortly before signing and that no Schedules are being
delivered with respect to such Systems as of the date of this Agreement. Prior
to September 15, 2000 (or prior to October 15, 2000 with respect to the Command
Cable Systems), either AT&T or Insight may update its Schedules or make
revisions thereto and either may request the other party to make revisions to
such party's Schedules (but the delivering party shall not be obligated to make
the requested revisions). Each party shall deliver to the other party prior to
September 15, 2000 (or prior to October 15, 2000 with respect to the Command
Cable Systems), copies of any agreements or other information that is required
to be provided hereunder or that the other party may reasonably request in
connection with its review of the Schedules. The Schedules of each of AT&T and
Insight in the form attached to this Agreement as of the date hereof, together
with all revisions thereto delivered to the other party prior to September 15,
2000 (or prior to October 15, 2000 with respect to the Command Cable Systems),
shall constitute the final Schedules of each of them and shall be deemed to have
been attached to this Agreement and to have been a part hereof for all purposes
as of the date of this Agreement, whether or not this Agreement is hereafter
terminated pursuant to this Section 7.28. If any issue or matter, individually,
or in the aggregate, disclosed in the delivering party's Schedules would affect
the economic or legal substance of the transactions contemplated hereby in any
manner materially adverse to the other party, and such other party notifies the
delivering party in writing (a "Schedule Objection Notice") of such effect on or
before September 30, 2000 (or on or before October 31, 2000 in the case of the
Command Cable Systems), the parties will negotiate in good faith to reach
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an appropriate agreement with respect to such issue or matter so as to effect
the original benefit of the bargain of the parties as closely as possible. If a
valid Schedule Objection Notice is given and the parties are unable to reach an
appropriate agreement as contemplated by the foregoing sentence prior to October
15, 2000 (or prior to November 15, 2000 with respect to the Command Cable
Systems), the party that delivered such notice may terminate this Agreement by
written notice given to the other party no later than October 20, 2000 (or no
later than November 20, 2000 with respect to the Command Cable Systems) but
prior to such agreement being reached. In addition, the parties will negotiate
in good faith to reach a final agreement on or before September 15, 2000 (or
prior to October 15, 2000 with respect to the Command Cable Systems) as to which
of the System Contracts will be Excluded Assets and whether, and the terms on
which, any arrangements between Insight and its Affiliates and arrangements
between AT&T and its Affiliates will continue after the Closing. If the parties
are unable to reach a final agreement on these matters on or prior to September
15, 2000 (or prior to October 15, 2000 with respect to the Command Cable
Systems), either party may terminate this Agreement by written notice given to
the other party no later than September 20, 2000 (or no later than October 20,
2000 with respect to the Command Cable Systems) but prior to an agreement being
reached.
SECTION 8. CONDITIONS PRECEDENT
8.1 Conditions to Insight's Obligations. Subject to Section 7.24, the
-----------------------------------
obligations of Insight to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or before the Closing of the
following conditions, any of which may be waived by Insight.
(a) Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of AT&T in this Agreement and in any Transaction Document, if
specifically qualified by materiality, are true in all respects and, if not so
qualified, are true in all material respects, in each case at and as of the
Closing with the same effect as if made at and as of the Closing.
(b) Performance of Agreements. AT&T has performed in all material
-------------------------
respects all obligations and agreements and complied in all material respects
with all covenants in this Agreement and in any Transaction Document to be
performed and complied with by it at or before the Closing.
(c) Deliveries. AT&T and the Partnership have delivered the items
----------
and documents required to be delivered by them pursuant to this Agreement,
including those required under Sections 9.2 and 9.4.
(d) Legal Proceedings. No action, suit or proceeding is pending or
-----------------
threatened by or before any Governmental Authority and no Legal Requirement has
been enacted, promulgated or issued or become or deemed applicable to any of the
transactions contemplated by this Agreement by any Governmental Authority, which
would (i) prohibit the Partnership's or Indiana LLC's ownership or operation of
all or a material portion of any AT&T System, AT&T's Cable Business
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or the AT&T Assets, (ii) compel the Partnership or Indiana LLC to dispose of or
hold separately all or a material portion of any AT&T System, AT&T's Cable
Business or the AT&T Assets as a result of any of the transactions contemplated
by this Agreement, (iii) if determined adversely to Insight's or the
Partnership's interest, materially impair the ability of Insight or the
Partnership to realize the benefits of the transactions contemplated by this
Agreement or have a material adverse effect on the right of the Partnership or
Indiana LLC to exercise full rights of ownership of the AT&T Systems or (iv)
prevent or make illegal the consummation of any transactions contemplated by
this Agreement.
(e) Consents. Subject to Section 7.24, Insight has received evidence,
--------
in form and substance reasonably satisfactory to it, that the following AT&T
Required Consents have been obtained without the imposition of any condition or
any modification that in either case makes, or is reasonably likely to make, the
underlying instrument materially more onerous in any respect or materially
reduces in any respect, or is reasonably likely to materially reduce in any
respect, the benefits available under the instrument in respect of which the
consent relates: AT&T Required Consents for the AT&T System Franchises, the
AT&T System Licenses, and any AT&T Leased Property or AT&T Other Real Property
Interest on which a headend, tower or other reception site is located. In
addition, (i) Insight shall have received evidence, in form and substance
reasonably satisfactory to it, that the AT&T Required Consents obtained in
accordance with the Exchange Agreement or Sale Agreement, as applicable, also
contain all consents, authorizations and approvals required for Insight to
transfer the Exchange Assets and Sale Assets to the Partnership and for the
Partnership to transfer such assets to Indiana LLC and (ii) subject to Section
7.24, the Insight Required Consents for the Insight System Franchises and
Insight System Licenses shall have been obtained.
(f) No Material Adverse Change. There has not been any material
--------------------------
adverse change in the AT&T Assets or the financial condition or operations of
AT&T's Cable Business or the AT&T Systems since the date of this Agreement. In
making the determination required by the preceding sentence, the last sentence
of Section 6.10 shall be applicable.
(g) Subscribers. The AT&T Systems are serving at least 240,000
-----------
Equivalent Basic Subscribers as of the Closing Date.
(h) HSR Act. All filings required under the HSR Act have been made
-------
and the applicable waiting period has expired or been earlier terminated.
(i) Exchange. Closing under the Exchange Agreement shall have
--------
occurred or all of the conditions to Insight's obligation to consummate the
Exchange shall have been satisfied or waived (other than those based on acts to
be performed at such closing) by Insight in accordance with the terms of the
Exchange Agreement and AT&T shall stand ready, willing and able to consummate
the Exchange in accordance with the terms and conditions set forth in the
Exchange Agreement.
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(j) Sale. Closing under the Sale Agreement shall have occurred or all
----
of the conditions to Insight's obligation to consummate the Sale shall have been
satisfied or waived (other than those based on acts to be performed at such
closing) by Insight in accordance with the terms of the Sale Agreement and AT&T
shall stand ready, willing and able to consummate the Sale in accordance with
the terms and conditions set forth in the Sale Agreement.
(k) Supply Agreement. The Partnership and Satellite Services, Inc.
----------------
shall have entered into or shall enter into contemporaneously with Closing, an
amendment to the Partnership's existing programming supply agreement in form and
substance reasonably satisfactory to Insight (the "Amended Programming Supply
Agreement").
(l) Retransmission Consents. With respect to any retransmission
-----------------------
consent agreements for broadcast signals carried on the Systems on the date of
this Agreement and on the date of the Closing that are included as part of the
AT&T Excluded Assets or the Insight Excluded Assets, all required retransmission
consents for continued carriage of such broadcast signals by the Partnership
have been obtained on terms and conditions reasonably acceptable to the
Partnership.
(m) Partnership Agreement and Subsidiary Partnership or Operating
-------------------------------------------------------------
Agreements. The parties shall have entered into an amended and restated limited
----------
partnership agreement of Insight Midwest, L.P., in form and substance reasonably
satisfactory to Insight. In addition, any amendments that Insight reasonably
believes are required to the partnership or operating agreements of the
Partnership's subsidiaries shall have been made in form and substance reasonably
satisfactory to Insight.
(n) Partnership Restructuring. Any changes to the Partnership
-------------------------
Restructuring as currently anticipated and all agreements related to the
Partnership Restructuring, including, without limitation, the Newco operating
agreement, shall have been approved by Insight, such approval not to be
unreasonably withheld.
(o) Retained Franchise Management Agreement. If Section 7.24 has
---------------------------------------
become operative, the parties shall have reached agreement on the Retained
Franchise Management Agreements and other agreements contemplated thereby.
(p) [Intentionally Deleted.]
(q) Partnership Financing Arrangement and Agreements. The Partnership
------------------------------------------------
and its subsidiaries shall have secured financing in accordance with Section 3.2
to enable the Insight Permitted Debt (including that portion of it that will
finance the purchase price payable by Insight pursuant to the Asset Purchase and
Sale Agreement) and the AT&T Permitted Debt and the Existing Bank Debt to be
refinanced immediately prior to the Closing to the extent it is to be refinanced
in accordance with Section 3.2.
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(r) Management Agreements. Indiana LLC and Insight Central Ohio shall
---------------------
have entered into management agreements or amended management agreements with
Insight with respect to the Systems on substantially the same terms as the
existing management agreement between Indiana LLC and Insight with respect to
Indiana LLC's cable television systems (the "Management Agreements").
(s) Overbuilds. Between the date of this Agreement and the Closing,
----------
there shall not have been approved by the applicable municipal government and
its citizens in any AT&T System Franchise area, the construction of a municipal
overbuild of AT&T's cable television system in such AT&T System Franchise area.
8.2 Conditions to AT&T's Obligations. Subject to Section 7.24, the
--------------------------------
obligations of AT&T to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or before the Closing of the
following conditions, any of which may be waived by AT&T, it being understood
that (i) to the extent any closing condition hereunder would not (but for this
provision) be satisfied as to an Exchange System, Exchange Asset, Sale System or
Sale Asset as a result of an action or omission by AT&T or an event or
circumstance that occurred or arose prior to the applicable closings under the
Exchange Agreement and Sale Agreement, such condition shall be deemed satisfied
and AT&T may not refuse to close hereunder as a result thereof, and (ii) to the
extent Insight waived one or more closing conditions under the Exchange
Agreement or Sale Agreement that corresponds to one or more of AT&T's closing
conditions under this Section 8.2 with respect to the Exchange Systems or Sale
Systems, such corresponding condition of AT&T shall also be deemed satisfied
hereunder with respect to the Exchange Systems or Sale Systems, as applicable.
(a) Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of Insight in this Agreement and in any Transaction Document, if
specifically qualified by materiality, are true in all respects and, if not so
qualified, are true in all material respects, in each case at and as of the
Closing with the same effect as if made at and as of the Closing.
(b) Performance of Agreements. Insight has performed in all material
-------------------------
respects all obligations and agreements and complied in all material respects
with all covenants in this Agreement and in any Transaction Document to be
performed and complied with by it at or before the Closing.
(c) Deliveries. Insight and the Partnership have delivered the items
----------
and documents required to be delivered by them pursuant to this Agreement,
including those required under Sections 9.3 and 9.4.
(d) Legal Proceedings. No action, suit or proceeding is pending or
-----------------
threatened by or before any Governmental Authority and no Legal Requirement has
been enacted, promulgated or issued or become or deemed applicable to any of the
transactions contemplated by this Agreement by any Governmental Authority, which
would (i) prohibit the Partnership's or Indiana LLC's
-73-
ownership or operation of all or a material portion of any Insight System,
Insight's Cable Business or the Insight Assets, (ii) compel the Partnership or
Indiana LLC to dispose of or hold separately all or a material portion of any
Insight System, Insight's Cable Business or Insight Assets as a result of any of
the transactions contemplated by this Agreement, (iii) if determined adversely
to AT&T's or the Partnership's interest, materially impair the ability of AT&T
or the Partnership to realize the benefits of the transactions contemplated by
this Agreement or have a material adverse effect on the right of the Partnership
or Indiana LLC to exercise full rights of ownership of the Insight Systems or
(iv) prevent or make illegal the consummation of any transactions contemplated
by this Agreement.
(e) Consents. Subject to Section 7.24, AT&T has received evidence, in
--------
form and substance reasonably satisfactory to it, that the following Insight
Required Consents have been obtained without the imposition of any condition or
any modification that in either case, makes, or is reasonably likely to make,
the underlying instrument materially more onerous in any respect or materially
reduces in any respect, or is reasonably likely to materially reduce in any
respect, the benefits available under the instrument in respect of which the
consent relates: Insight Required Consents for the Insight System Franchises,
the Insight System Licenses, and any Insight Leased Property or Insight Other
Real Property Interest on which a headend, tower or other reception site is
located. In addition, subject to Section 7.24, the AT&T Required Consents for
the AT&T System Franchises and AT&T System Licenses shall have been obtained.
(f) No Material Adverse Change. There has not been any material
--------------------------
adverse change in the Insight Assets or the financial condition or operations of
Insight's Cable Business or the Insight Systems since the date of this
Agreement. In making the determination required by the preceding sentence, the
last sentence of Section 5.10 shall be applicable.
(g) Subscribers. The Insight Systems are serving at least 171,000
-----------
Equivalent Basic Subscribers as of the Closing Date.
(h) HSR Act. All filings required under the HSR Act have been made
-------
and the applicable waiting period has expired or been earlier terminated.
(i) Exchange. Closing under the Exchange Agreement shall have
--------
occurred or all of the conditions to AT&T's obligation to consummate the
Exchange shall have been satisfied or waived (other than those based on acts to
be performed at such closing) by AT&T in accordance with the terms of the
Exchange Agreement and Insight shall stand ready, willing and able to consummate
the Exchange in accordance with the terms and conditions set forth in the
Exchange Agreement.
(j) Sale. Closing under the Sale Agreement shall have occurred or all
----
of the conditions to AT&T's obligation to consummate the Sales shall have been
satisfied or waived (other than those based on acts to be performed at such
closing) by AT&T in accordance with the terms
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of the Sale Agreement and Insight shall stand ready, willing and able to
consummate the Sales in accordance with the terms and conditions set forth in
the Sale Agreement.
(k) Supply Agreement. The Partnership and Satellite Services, Inc.
----------------
shall have entered into the Amended Programming Supply Agreement in form and
substance reasonably satisfactory to TCI LLC.
(l) Retransmission Consents. With respect to any retransmission
-----------------------
consent agreements for broadcast signals carried on the Systems on the date of
this Agreement and on the date of the Closing that are included as part of the
AT&T Excluded Assets or the Insight Excluded Assets, all required retransmission
consents for continued carriage of such broadcast signals by the Partnership
have been obtained on terms and conditions reasonably acceptable to the
Partnership.
(m) Partnership Agreement and Subsidiary Partnership or Operating
-------------------------------------------------------------
Agreements. The parties shall have entered into an amended and restated limited
----------
partnership agreement of Insight Midwest, L.P., in form and substance reasonably
satisfactory to TCI LLC. In addition, any amendments that TCI LLC reasonably
believes are required to the partnership or operating agreements of the
Partnership's subsidiaries, including Insight Central Ohio to the extent
specified in Section 2.3, shall have been made in form and substance reasonably
satisfactory to TCI LLC.
(n) Partnership Restructuring. Any changes to the Partnership
-------------------------
Restructuring as currently anticipated and all agreements related to the
Partnership Restructuring, including, without limitation, the Newco Operating
Agreement, shall have been approved by TCI LLC, such approval not to be
unreasonably withheld.
(o) Retained Franchise Management Agreements. If Section 7.24 has
----------------------------------------
become operative, the parties shall have reached agreement on the Retained
Franchise Management Agreements and other agreements contemplated thereby.
(p) [Intentionally Deleted.]
(q) Partnership Financing Arrangement and Agreements. The Partnership
------------------------------------------------
and its subsidiaries shall have secured financing in accordance with Section 3.2
to enable the Insight Permitted Debt (including that portion of it that will
finance the purchase price payable by Insight pursuant to the Asset Purchase and
Sale Agreement) and the AT&T Permitted Debt and the Existing Bank Debt to be
refinanced immediately prior to the Closing to the extent it is to be refinanced
in accordance with Section 3.2. In addition, TCI LLC shall have consented to
the Partnership Financing Arrangements and Agreements to the extent its consent
is required as specified in Section 3.2.
(r) Management Agreements. Indiana LLC, Insight Central Ohio and
---------------------
Insight shall have entered into the Management Agreements.
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SECTION 9. THE CLOSING
9.1 The Closing; Time and Place. Subject to Section 7.24, the closing of
---------------------------
the transactions contemplated by this Agreement (the "Closing") will take place
at a date (the "Closing Date") and time mutually determined by AT&T and Insight,
which Closing Date shall be within ten days after the date on which all
conditions set forth in Sections 8.1 and 8.2 (other than those based on acts to
be performed at the Closing) have either been satisfied or waived in writing by
the party entitled to the benefit of such condition.
9.2 AT&T's Delivery Obligations. At the Closing, AT&T will deliver or
---------------------------
cause to be delivered to the Partnership the following:
(a) Xxxx of Sale and Assignment. The executed Xxxx of Sale and
---------------------------
Assignment in form and substance reasonably satisfactory to Insight and such
other instruments of transfer, assignment or assumption, in form and substance
mutually satisfactory to the parties, as Insight may reasonably require to
further document the transfer and assignment of the AT&T Assets to the
Partnership.
(b) Deeds. A special or limited warranty deed in a form reasonably
-----
acceptable to Insight (and complying with applicable state laws) with respect to
each parcel of AT&T Owned Property, duly executed and acknowledged and in
recordable form, warranting only to defend title to such AT&T Owned Property in
the peaceable possession of the Partnership against all Persons claiming by,
through or under AT&T, subject however, to any Permitted Liens.
(c) Lien Releases. Evidence reasonably satisfactory to Insight that
-------------
all Liens (other than Permitted Liens) affecting or encumbering the AT&T Assets
have been terminated, released or waived, as appropriate, or original, executed
instruments in form reasonably satisfactory to Insight effecting such
terminations, releases or waivers.
(d) Vehicle Titles. Title certificates to all vehicles included
--------------
among the AT&T Assets, endorsed for transfer of valid and good title to the
Partnership free and clear of all Liens (other than Permitted Liens), and
separate bills of sale therefor or other transfer documentation, if required by
the laws of the States in which such vehicles are titled.
(e) Evidence of Authorization Actions. Certified resolutions of the
---------------------------------
Board of Directors or other evidence reasonably satisfactory to Insight that
AT&T has taken all corporate action necessary to authorize the execution of this
Agreement and the Transaction Documents and the consummation of the transactions
contemplated hereby.
(f) FIRPTA Certificate. FIRPTA Non-Foreign Seller Certificate
------------------
certifying that AT&T is not a foreign person within the meaning of Section 1445
of the Code reasonably satisfactory in form and substance to Insight.
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(g) Officer's Certificate. A certificate executed by an executive
---------------------
officer of the managing member of TCI LLC dated the Closing Date, reasonably
satisfactory in form and substance to Insight certifying (i) that the conditions
specified in Sections 8.1(a) and 8.1(b) have been satisfied; and (ii) the total
number of EBSs for all the AT&T Systems, estimated in good faith as of the
Closing Date.
(h) Documents and Records. All AT&T Books and Records, including a
---------------------
list of all pending subscriber hook-ups, disconnect and repair orders, supply
orders and any other lists reasonably necessary to the operation of the AT&T
Systems. Delivery of the foregoing will be deemed made to the extent such AT&T
Books and Records are then located at any of the offices included in the AT&T
Owned Property or AT&T Leased Property.
(i) Other. Such other documents and instruments as may be reasonably
-----
necessary to effect the intent of this Agreement and consummate the transactions
contemplated hereby, including a signature page to the Retained Franchise
Management Agreement, if applicable.
9.3 Insight's Delivery Obligations. At the Closing, except as otherwise
------------------------------
provided below, Insight will deliver or cause to be delivered to the Partnership
the following.
(a) Xxxx of Sale and Assignment. The executed Xxxx of Sale and
---------------------------
Assignment in form and substance reasonably satisfactory to AT&T and such other
instruments of transfer, assignment or assumption, in form and substance
mutually satisfactory to the parties, as AT&T may reasonably require to further
document the transfer and assignment of the Insight Assets, the Exchange Assets
and the Sale Assets to the Partnership; provided, that Insight's assignment of
the Exchange Assets and the Sale Assets to the Partnership will be made without
representation or warranty of any kind.
(b) Deeds. A special or limited warranty deed in a form reasonably
-----
acceptable to AT&T (and complying with applicable state laws) with respect to
each parcel of Insight Owned Property, duly executed and acknowledged and in
recordable form, warranting only to defend title to such Insight Owned Property
in the peaceable possession of the Partnership against all Persons claiming by,
through or under Insight, subject however, to any Permitted Liens, and if the
owned property included in the Exchange Assets or the Sale Assets is not deeded
directly from AT&T to the Partnership, a quit claim deed from Insight to the
Partnership with respect to each parcel of owned property included in the
Exchange Assets or the Sale Assets.
(c) Lien Releases. Evidence reasonably satisfactory to AT&T that all
-------------
Liens (other than Permitted Liens) affecting or encumbering the Insight Assets
have been terminated, released or waived, as appropriate, or original, executed
instruments in form reasonably satisfactory to AT&T effecting such terminations,
releases or waivers.
(d) Vehicle Titles. Title certificates to all vehicles included among
--------------
the Insight Assets, the Exchange Assets or the Sale Assets (to the extent
Insight receives such vehicles from
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AT&T), endorsed for transfer of valid and good title to the Partnership, free
and clear of all Liens (other than Permitted Liens) and separate bills of sale
therefor or other transfer documentation, if required by the laws of the States
in which such vehicles are titled.
(e) Evidence of Authorization Actions. Evidence reasonably
---------------------------------
satisfactory to AT&T that Insight has taken all action necessary to authorize
the execution of this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby.
(f) FIRPTA Certificates. FIRPTA Non-Foreign Seller Certificates
-------------------
certifying that neither Insight nor Insight Central Ohio is a foreign person
within the meaning of Section 1445 of the Code reasonably satisfactory in form
and substance to AT&T.
(g) Officer's Certificates. A certificate executed by an executive
----------------------
officer of the ultimate corporate general partner of Insight dated the Closing
Date, reasonably satisfactory in form and substance to AT&T certifying (i) that
the conditions specified in Sections 8.2(a) and 8.2(b) have been satisfied; and
(ii) the total number of EBSs for all the Insight Systems, estimated in good
faith as of the Closing Date.
(h) Documents and Records. All Insight Books and Records, including a
---------------------
list of all pending subscriber hook-ups, disconnect and repair orders, supply
orders and any other lists reasonably necessary to the operation of the Insight
Systems. Delivery of the foregoing will be deemed made to the extent such
Insight Books and Records are then located at any of the offices included in the
Insight Owned Property or Insight Leased Property.
(i) Agreement Assignments. An assignment to the Partnership of
---------------------
Insight's rights and obligations under the Exchange Agreement and the Sale
Agreement (provided that, without limiting the Partnership's indemnification
rights, Insight shall retain its indemnification rights thereunder provided in
the Exchange Agreement and Sale Agreement and rights and obligations that
Insight is not permitted to assign under the Exchange Agreement or the Sale
Agreement), in form and substance reasonably satisfactory to AT&T.
(j) Other. Such other documents and instruments as may be reasonably
-----
necessary to effect the intent of this Agreement and consummate the transactions
contemplated hereby, including a signature page to the Retained Franchise
Management Agreement, if applicable.
9.4 The Partnership's Delivery Obligations. At the Closing, except as
--------------------------------------
otherwise provided below, the Partnership will deliver or cause to be delivered
the following.
(a) Assumption Agreements. (i) Assumption agreements in form and
---------------------
substance reasonably satisfactory to Insight and AT&T with respect to the AT&T
Assets and the Insight Assets, (ii) an assumption agreement in form and
substance reasonably
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satisfactory to AT&T and for the benefit of AT&T and its Affiliates, with
respect to Insight's obligations under the Exchange Agreement and Sale Agreement
and (iii) an assumption agreement in form and substance reasonably satisfactory
to AT&T and Insight, with respect to the New Credit Agreement and liabilities
incurred by AT&T and Insight thereunder.
(b) Other. Such other documents and instruments as may be reasonably
-----
necessary to effect the intent of this Agreement and to consummate the
transactions contemplated hereby, including a signature page to the Retained
Franchise Management Agreement, if applicable.
9.5 Refinancing of the AT&T and Insight Permitted Debt. As a condition to
--------------------------------------------------
the obligations of AT&T and Insight under this Agreement, immediately prior to
the Closing, the lenders providing the refinancing described in Section 3.2(d)
shall pay an amount equal to (i) the AT&T Permitted Debt to AT&T or to such
other Persons as designated by AT&T by wire transfer of immediately available
funds in accordance with wire transfer instructions provided by AT&T and (ii)
the Insight Permitted Debt (other than the Insight Central Ohio Component of the
Insight Permitted Debt and the Insight Central Ohio Credit Agreement if such
agreement is not refinanced) to Insight or to such other Persons as designated
by Insight by wire transfer of immediately available funds in accordance with
wire transfer instructions provided by Insight.
SECTION 10. TERMINATION AND DEFAULT
10.1 Termination Events. This Agreement may be terminated and the
------------------
transactions contemplated hereby may be abandoned:
(a) at any time by the mutual agreement of Insight and AT&T;
(b) prior to the Primary Transfer, by either Insight or AT&T at any
time (if such party itself is not then in material breach of any of its
covenants, agreements or other obligations contained in this Agreement or the
Partnership Agreement), if the other is in material breach or default of any of
its covenants, agreements or other obligations herein or the Partnership
Agreement, or if any of its representations herein or in the Partnership
Agreement if specifically qualified by materiality, is not true in all respects
or, if qualified by materiality, is not true in all material respects when made
or when otherwise required by this Agreement or the Partnership Agreement to be
true, if the non-breaching party provides the breaching party with prompt
written notice that provides a reasonably detailed explanation of the facts and
circumstances surrounding such breach or default; provided that such party shall
have no right to terminate if (i) the breaching Party cures such breach or
default within 30 days after its receipt of such written notice, unless such
breach or default cannot be cured within such 30-day period; or (ii) the breach
or default is capable of being cured prior to the one year anniversary of the
date of this Agreement (the "Outside Closing Date") and the breaching party
commences to cure such breach or default within such 30-day period and
diligently continues to take all action reasonably necessary to cure such breach
or default prior to the Outside Closing Date and such breach or default is cured
prior to the Outside Closing Date; or
(c) prior to the Primary Transfer, by either Insight or AT&T upon
written notice to the other given not earlier than the Outside Closing Date, if
any of the conditions to its obligations
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set forth in Sections 8.1 and 8.2, respectively, are not satisfied on or before
the Outside Closing Date for any reason other than a material breach or default
by the terminating party of its respective covenants, agreements or other
obligations under this Agreement, or if any of its representations herein or in
any Transaction Document, if specifically qualified by materiality, is not true
in all respects or, if qualified by materiality, is not true in all material
respects when made or when otherwise required by this Agreement or the
Partnership Agreement to be true; or
(d) by either Insight or AT&T, by written notice to the other party,
if the Exchange Agreement or Sale Agreement has been terminated prior to any
closing thereunder in accordance with each of its terms; or
(e) as otherwise provided in this Agreement.
10.2 Effect of Termination. If this Agreement is terminated pursuant to
---------------------
Section 7.28 or 10.1, all obligations of the parties under this Agreement will
terminate, except for the obligations set forth in Section 7.12, 7.21 (with
respect to the Partnership's obligation to pay for AT&T's, Insight's and their
respective Affiliates' expenses as specified therein) and 12.15.
Notwithstanding the preceding sentence, termination of this Agreement pursuant
to Sections 10.1(b) or 10.1(c) or 10.1(d) or 12.16 will not limit or impair any
remedies that either of AT&T or Insight may have with respect to a breach or
default by the other of its covenants, agreements or obligations under this
Agreement prior to Closing.
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
11.1 Survival of Representations and Warranties. The representations and
------------------------------------------
warranties of AT&T and Insight in this Agreement and in the Transaction
Documents and the covenants of AT&T, Insight and the Partnership in this
Agreement and the Transaction Documents to be performed prior to the Closing
will survive until the first anniversary of the Closing Date except that (a) all
such representations and warranties with respect to Taxes, rates, Environmental
Laws, ERISA, employment matters or copyright matters will survive until 60 days
after the expiration of the applicable statute of limitations (including any
extensions) for such Taxes, rates, Environmental Laws, ERISA, employment matters
or copyright matters, respectively, and (b) the representations and warranties
as to title to the Assets in Sections 5.4(a) and 6.4(a), respectively, and as to
title to Owned Property set forth in Sections 5.6 and 6.6, respectively, and in
the special warranty deed or deeds delivered with respect to Owned Property
will survive the Closing and the delivery of such deeds and will continue in
full force and effect without limitation with the understanding that,
notwithstanding any language contained in any such deed, the representations and
warranties as to title to Owned Property set forth in Sections 5.6 and 6.6,
respectively, will not be merged into any such deed or other Transaction
Document. The periods of survival of the representations and warranties and of
the covenants to be performed prior to the Closing prescribed by this Section
11.1 are referred to as the "Survival Period." The liabilities of each party
under its respective representations and warranties and its respective covenants
to be performed prior to the Closing will
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expire as of the expiration of the applicable Survival Period; provided however
that such expiration will not include, extend or apply to any such
representation or warranty or covenant, the breach of which has been asserted by
a party in a written notice to the other party before such expiration or about
which a party has given the other party written notice before such expiration
indicating that facts or conditions exist that, with the passage of time or
otherwise, can reasonably be expected to result in a breach (and describing such
potential breach in reasonable detail). The covenants and agreements of each
party in this Agreement and in the Transaction Documents to be performed after
the Closing will survive the Closing and will continue in full force and effect
in accordance with their terms. The Survival Periods and the other provisions of
this Section shall apply to any Retained Franchises as if they were transferred
on the Closing Date.
11.2 Indemnification by AT&T. From and after the Closing, AT&T will
-----------------------
indemnify, defend and hold harmless Insight, its partners and the Partnership
and their respective Affiliates, and the members, partners, shareholders,
officers, directors, employees, agents, successors and assigns of them and any
Person claiming by or through any of them, as the case may be, from and against
any and all Losses arising out of or resulting from (a) any breach of any
representation or warranty made by AT&T in this Agreement or any Transaction
Document; (b) any breach of any covenant, agreement or obligation of AT&T
contained in this Agreement or any Transaction Document; (c) any act or omission
of AT&T with respect to, or any event or circumstance related to, the ownership
or operation of the AT&T Assets or the conduct of AT&T's Cable Business, which
act, omission, event or circumstance occurred or existed prior to or at the
Closing Time, without regard to whether a claim with respect to such matter is
asserted before or after the Closing Time, including any matter described on
SCHEDULE 6.11; (d) any liability or obligation with respect to the AT&T Assets
or AT&T Systems not included in the Assumed Obligations and Liabilities; (e) any
matter affecting title to AT&T Owned Property, which prevents access to or which
could prevent or impede in any way the use or operation of any parcel of AT&T
Owned Property for the purposes for which it is currently used or operated by
AT&T; (f) any claim that the transactions contemplated by this Agreement with
respect to the AT&T Systems violate WARN (to the extent AT&T is responsible for
compliance with WARN pursuant to Section 7.3(e)) or any Legal Requirement or any
bulk transfer or fraudulent conveyance laws of any jurisdiction; (g) any claim
relating to "continuation coverage" under Code Section 4980B with respect to
former employees of the AT&T Systems at and after the Closing Time or that the
Partnership is deemed to be a successor employer of AT&T or its Affiliates under
Code Section 4980B; (h) any claim by a third party relating to the presence,
generation, removal or transportation of a Hazardous Substance on or from any of
the AT&T Owned Property or AT&T Leased Property through and including the
Closing Time, including the costs in response to a third party claim of removal
or clean-up of such Hazardous Substance and other compliance with the provisions
of any Environmental Laws (whether before or after Closing); (i) any rate refund
or credit, penalty and/or interest payment with respect thereto ordered by any
Governmental Authority with respect to the AT&T Systems for periods through and
including the Closing Time; (j) the merger consummated pursuant to the Agreement
and Plan of Merger, dated as of May 6, 1999, as amended, by and among AT&T
Corp., Meteor Acquisition Inc. and MediaOne Group, Inc., including, without
limitation, any claim brought by the sellers or MediaOne Group, Inc. or their
Affiliates or any other Third Party relating to such merger, except
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to the extent that such Losses arise out of a breach by the Partnership of its
obligations under this Agreement; (k) the MediaOne Social Contract or the Time
Warner Social Contract, without regard to whether the Losses arise as a result
of actions or omissions before or after the Closing Time, including as provided
in Section 7.27; or (l) the $975,000 mortgage on the Peoria System
office/headend tower site (to the extent not included in the AT&T Permitted
Debt) or the clean-up of the Bloomington site included in the AT&T Assets that
is located on West Division Street in Normal, IL, to the extent that the failure
to clean-up such site would have a material adverse effect on the Partnership
and provided further that (1) if clean-up of such site is so instituted, the
Partnership shall institute such clean-up in the most cost-effective manner
practicable under the circumstances, taking into account Legal Requirements, and
shall consult with AT&T in advance regarding the nature and extent of such
clean-up and (2) the Partnership shall not be entitled to recover any Losses
related to relocating the AT&T Assets located on such site. The terms of the
preceding clause (l) shall not limit the Partnership's indemnification rights
under clause (h) of this Section 11.2.
In the event that an indemnified item arises under both clause (a) and under one
or more of clauses (b) through (l) of this Section, Insight's and the
Partnership's rights to pursue its claim under clauses (b) through (l) as
applicable will exist notwithstanding the expiration of the Survival Period
applicable to such claim under clause (a).
11.3 Indemnification by Insight. From and after the Closing, Insight will
--------------------------
indemnify, defend and hold harmless AT&T, its members and the Partnership and
their respective Affiliates and the members, partners, shareholders, officers,
directors, employees, agents, successors and assigns of them and any Person
claiming by or through any of them, as the case may be, from and against any and
all Losses arising out of or resulting from (a) any breach of any representation
or warranty made by Insight in this Agreement or any Transaction Document; (b)
any breach of any covenant, agreement or obligation of Insight contained in this
Agreement or any Transaction Document; (c) any act or omission of Insight,
Holdings (Central Ohio) or Insight Central Ohio with respect to, or any event or
circumstance related to: (i) the ownership or operation of the Insight Assets or
the Insight Central Ohio LLC Interests or the conduct of Insight's Cable
Business, which act, omission, event or circumstance occurred or existed prior
to or at the Closing Time, or (ii) the ownership or operation of Exchange Assets
or the conduct of the business of the Exchange Systems, which act, omission,
event or circumstance arose or occurred during the Interim Period and for which
AT&T is not obligated to indemnify Insight under the Exchange Agreement without
regard to Section 11.5 of the Exchange Agreement, in each case of (i) and (ii),
without regard to whether a claim with respect to such matter is asserted before
or after the Closing Time, including any matter described on SCHEDULE 5.11; (d)
any liability or obligation with respect to the Insight Assets, Insight Systems,
Insight Central Ohio LLC Interests, Exchange Assets or Exchange Systems not
included in the Assumed Obligations and Liabilities and, in the case of the
Exchange Assets and Exchange Systems, for which AT&T is not obligated to
indemnify Insight under the Exchange Agreement without regard to Section 11.5 of
the Exchange Agreement; (e) any matter affecting title to Insight Owned Property
which prevents access to or which could prevent or impede in any way the use or
operation of any parcel of Insight Owned Property for the purposes for which it
is currently used
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or operated by Insight, (each a "Title Defect") which property will be deemed to
include any fee interests in real property that Insight acquired pursuant to the
Exchange Agreement provided the Title Defect arose during the Interim Period as
a result of an action by Insight and AT&T is not obligated to indemnify Insight
under the Exchange Agreement without regard to Section 11.5 of the Exchange
Agreement; (f) any claim that the transactions contemplated by this Agreement
with respect to the Insight Systems or the Exchange Systems (to the extent
related to the Interim Period) violate WARN (to the extent Insight is
responsible for compliance with WARN pursuant to Section 7.3(e)) or any similar
Legal Requirement or any bulk transfer or fraudulent conveyance laws of any
jurisdiction; (g) any claim relating to "continuation coverage" under Code
Section 4980B with respect to former employees of the Insight Systems which
employees will be deemed to include employees of the Exchange Systems hired by
Insight pursuant to the Exchange Agreement and employed by Insight during the
Interim Period, at and after the Closing Time or that the Partnership is deemed
to be a successor employer of Insight or its Affiliates under Code Section
4980B; (h) any claim by a third party relating to the presence, generation,
removal or transportation of a Hazardous Substance on or from any of the Insight
Owned Property or Insight Leased Property through and including the Closing
Time, and with respect to the Exchange Systems, to the extent such presence,
generation, removal or transportation arose or occurred during the Interim
Period as a result of an action by Insight and AT&T is not obligated to
indemnify Insight under the Exchange Agreement without regard to Section 11.5 of
the Exchange Agreement, including the costs in response to a third party claim
of removal or clean-up of such Hazardous Substance and other compliance with the
provisions of any Environmental Laws (whether before or after Closing); (i) any
rate refund or credit, penalty and/or interest payment with respect thereto
ordered by any Governmental Authority with respect to the Insight Systems for
periods through and including the Closing Time or during the Interim Period with
respect to the Exchange Systems and for which AT&T is not obligated to indemnify
Insight under the Exchange Agreement without regard to Section 11.5 of the
Exchange Agreement or (j) any liabilities of Insight Central Ohio or Holdings
(Central Ohio) that are not Assumed Obligations and Liabilities, including,
without limitation, any liabilities of Insight Central Ohio, Holdings (Central
Ohio) or their Affiliates under the Coaxial Repurchase Agreement and any
agreements or arrangements entered into in connection therewith.
In the event that an indemnified item arises under both clause (a) and under one
or more of clauses (b) through (j) of this Section, AT&T's and the Partnership's
rights to pursue its claim under clauses (b) through (j) as applicable will
exist notwithstanding the expiration of the Survival Period applicable to such
claim under clause (a).
11.4 Indemnification by the Partnership. From and after the Closing, the
----------------------------------
Partnership will indemnify, defend and hold harmless AT&T and Insight and their
shareholders, members and partners and their respective Affiliates and the
members, shareholders, partners, officers, directors, employees, agents,
successors and assigns of them and any other Person claiming by or through any
of them, as the case may be, from and against any and all Losses arising out of
or resulting from (a) any breach of any covenant, agreement or obligation of the
Partnership contained in this Agreement; or (b) the failure of the Partnership
to perform the Assumed Obligations and Liabilities.
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11.5 Third Party Claims. Promptly after the receipt by any party of notice
------------------
of any claim, action, suit or proceeding by any third party (collectively, an
"Action"), which Action is subject to indemnification under this Agreement, such
party (the "Indemnified Party") will give reasonable written notice to the party
from whom indemnification is claimed (the "Indemnifying Party"). The
Indemnified Party will be entitled, at the sole expense and liability of the
Indemnifying Party, to exercise full control of the defense, compromise or
settlement of any such Action unless the Indemnifying Party, within a reasonable
time after the giving of such notice by the Indemnified Party, (a) admits in
writing to the Indemnified Party the Indemnifying Party's liability to the
Indemnified Party for such Action under the terms of this Section 11, (b)
notifies the Indemnified Party in writing of the Indemnifying Party's intention
to assume such defense, (c) provides evidence reasonably satisfactory to the
Indemnified Party of the Indemnifying Party's ability to pay the amount, if any,
for which the Indemnified Party may be liable as a result of such Action and (d)
retains legal counsel reasonably satisfactory to the Indemnified Party to
conduct the defense of such Action. The other party or parties will cooperate
with the party assuming the defense, compromise or settlement of any such Action
in accordance with this Agreement in any manner that such party reasonably may
request. If the Indemnifying Party so assumes the defense of any such Action,
the Indemnified Party will have the right to employ separate counsel and to
participate in (but not control) the defense, compromise or settlement of the
Action, but the fees and expenses of such counsel will be at the expense of the
Indemnified Party unless (x) the Indemnifying Party has agreed to pay such fees
and expenses, (y) any relief other than the payment of money damages is sought
against the Indemnified Party or (z) the Indemnified Party will have been
advised by its counsel that there may be one or more defenses available to it
which are different from or additional to those available to the Indemnifying
Party, and in any such case that portion of the fees and expenses of such
separate counsel that are reasonably related to matters covered by the indemnity
provided in this Section 11 will be paid by the Indemnifying Party. No
Indemnified Party will settle or compromise any such Action for which it is
entitled to indemnification under this Agreement without the prior written
consent of the Indemnifying Party, unless the Indemnifying Party has failed,
after reasonable notice, to undertake control of such Action in the manner
provided in this Section 11.5. No Indemnifying Party will settle or compromise
any such Action (A) in which any relief other than the payment of money damages
is sought against any Indemnified Party and then only if the settlement or
compromise includes as an unconditional term thereof a release of the
Indemnified Party from all liability relating to such matter or (B) in the case
of any Action relating to the Indemnified Party's liability for any Tax, if the
effect of such settlement would be an increase in the liability of the
Indemnified Party for the payment of any Tax for any period beginning after the
Closing Date, unless the Indemnified Party consents in writing to such
compromise or settlement.
11.6 Limitations on Indemnification - AT&T. AT&T will not be liable with
-------------------------------------
respect to any matter or claim for which indemnification could be sought
pursuant to Section 11.2(a) or (b) for (a) any Losses of or to Insight, the
Partnership or any other Person entitled to indemnification from AT&T or (b) any
Losses incidental to or relating to or resulting from any of the foregoing (the
items described in clauses (a) and (b) collectively being referred to for
purposes of this Section 11 as "AT&T Claimed Damages") unless the amount of AT&T
Claimed Damages for which AT&T
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would, but for the provisions of this Section, be liable exceeds, on an
aggregate basis, $500,000, in which case AT&T will be liable for all such AT&T
Claimed Damages from dollar zero, which will be due and payable within 15 days
after AT&T's receipt of a statement therefor. AT&T will not have any liability
under Section 11.2(a) or (b) to the extent that the aggregate amount of Losses
otherwise subject to its indemnification obligation thereunder exceeds
$25,000,000. The limitations set forth in this Section 11.6 do not apply to (i)
the Closing Adjustments to the extent they are included in the calculation of
Closing Adjustments pursuant to Sections 3.3 and 3.4; (ii) direct out-of-pocket
expenses incurred by the Partnership in connection with cooperation on pending
litigation pursuant to Section 7.23 or other expenses and costs for which AT&T
is responsible pursuant to this Agreement, including, without limitation,
pursuant to Sections 7.8 and 7.17; or (iii) any claims made pursuant to Sections
11.2(c)-(l), including, without limitation, any Losses related to any liability
or obligation for late fees; any liability or obligation with respect to paying
franchise fees on franchise fees; subscriber refunds; or any matters listed in
the Schedules to this Agreement. AT&T will not be liable under Section 11.2(c)
to the extent that an adjustment was made in favor of the Partnership pursuant
to Sections 3.3 and 3.4.
11.7 Limitations on Indemnification - Insight. Insight will not be liable
----------------------------------------
with respect to any matter or claim for which indemnification could be sought
pursuant to Section 11.3(a) or (b) for (a) any Losses of or to AT&T, the
Partnership or any other Person entitled to indemnification from Insight or (b)
any Losses incidental to or relating to or resulting from any of the foregoing
(the items described in clauses (a) and (b) collectively being referred to for
purposes of this Section 11 as "Insight Claimed Damages") unless the amount of
Insight Claimed Damages for which Insight would, but for the provisions of this
Section, be liable exceeds, on an aggregate basis, $500,000, in which case
Insight will be liable for all such Insight Claimed Damages from dollar zero,
which will be due and payable within 15 days after Insight's receipt of a
statement therefor. Insight will not have any liability under Section 11.3(a)
or (b) to the extent that the aggregate amount of Losses otherwise subject to
its indemnification obligations thereunder exceeds $25,000,000. The limitations
set forth in this Section 11.7 do not apply to (i) the Closing Adjustments to
the extent they are included in the calculation of Closing Adjustments pursuant
to Section 3.3 and 3.4; (ii) direct out-of-pocket expenses incurred by the
Partnership in connection with cooperation on pending litigation pursuant to
Section 7.23 or other expenses and costs for which Insight is responsible
pursuant to this Agreement, including, without limitation, pursuant to Sections
7.8, 7.17 and 7.21; or (iii) any claims made pursuant to Sections 11.3(c)-(j),
including, without limitation, any Losses related to any liability or obligation
for late fees; any liability or obligation with respect to paying franchise fees
on franchise fees; subscriber refunds; or litigation listed in the schedules to
this Agreement. Except with respect to any Interim Period, once Insight
contributes the Exchange Systems and Sale Systems to the Partnership it shall
have no obligation to the Partnership with respect thereto and, following the
assumption by the Partnership of Insight's obligations under the Exchange
Agreement or Sale Agreement with respect to the Exchange Systems or Sale
Systems, as applicable, except with respect to any Interim Period, Insight shall
have no obligation to AT&T with respect to the Exchange Systems or Sale Systems,
as applicable. Insight will not be liable under Section 11.3(c) to the extent
that an adjustment was made in favor of the Partnership pursuant to Sections 3.3
and 3.4.
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11.8 Limitations on Indemnification - the Partnership. The Partnership
------------------------------------------------
will not be liable with respect to any matter or claim for which indemnification
could be sought pursuant to Section 11.4(a) for (a) any Losses of or to AT&T,
Insight or any other Person entitled to indemnification from the Partnership or
(b) any Losses incidental to or relating to or resulting from any of the
foregoing (the items described in clauses (a) and (b) collectively being
referred to for purposes of this Section 11 as "Partnership Claimed Damages")
unless the amount of Partnership Claimed Damages for which the Partnership
would, but for the provisions of this Section, be liable exceeds, on an
aggregate basis, $500,000, in which case the Partnership will be liable for all
such Partnership Claimed Damages from dollar zero, which will be due and payable
within 15 days after the Partnership's receipt of a statement therefor. The
Partnership will not have any liability under Section 11.4(a) to the extent that
the aggregate amount of Losses otherwise subject to its indemnification
obligations thereunder exceeds $25,000,000. The limitations set forth in this
Section 11.8 do not apply to (i) the Closing Adjustments to the extent they are
included in the calculation of Closing Adjustments pursuant to Section 3.3 and
3.4 or (ii) costs, expenses and fees incurred by AT&T, Insight or their
respective Affiliates, accountants or attorneys pursuant to Section 7.21 or
other expenses and costs for which the Partnership is responsible pursuant to
this Agreement, including, without limitation, pursuant to Section 7.8.
SECTION 12. MISCELLANEOUS PROVISIONS
12.1 Parties Obligated and Benefitted.
--------------------------------
(a) Subject to the limitations set forth below, this Agreement will be
binding upon the parties and their respective assigns and successors in interest
and will inure solely to the benefit of the parties and their respective assigns
and successors in interest, and no other Person will be entitled to any of the
benefits conferred by this Agreement. Without the prior written consent of the
other parties, no party will assign any of its rights under this Agreement or
delegate any of its duties under this Agreement, provided that Insight or AT&T
may, without the consent of any other party, prior to Closing assign all of such
party rights and obligations under this Agreement to any Affiliate of such party
provided such assignee can make all of the representations and warranties
applicable to the assigning party hereunder (other than those relating to
jurisdiction of incorporation), the assigning party can provide reasonable
assurances that such assignee can otherwise perform the covenants, agreements
and obligations applicable to the assigning party hereunder and such assignment
would not materially delay or hinder the consummation of the transactions
contemplated by this Agreement and provided further that AT&T may make the
assignments described in Section 12.1(b). After the Closing, each of the
parties may grant to the Partnership's lenders, a security interest in the
indemnification rights hereunder inuring to the benefit of such party. Except
as specified herein, no assignment by either party of its rights hereunder shall
release such party from its obligations hereunder.
(b) Immediately prior to Closing, the AT&T Subsidiaries will transfer
the AT&T Assets and their rights and obligations under this Agreement to TCI
LLC, through one or more direct or indirect transfers. Upon completion of such
transfers, all references in this Agreement to
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"AT&T" will thereafter be deemed to be references to TCI LLC and from and after
the Closing the AT&T Subsidiaries will be released from all liabilities and
obligations under this Agreement. Insight shall have the right to approve the
transfer documents evidencing the foregoing, such consent not to be unreasonably
withheld.
12.2 Notices. Any notice, request, demand, waiver or other communication
-------
required or permitted to be given under this Agreement will be in writing and
will be deemed to have been duly given only if delivered in person or by first
class, prepaid, registered or certified mail, or sent by courier or, if receipt
is confirmed, by telecopier:
To AT&T at:
AT&T Broadband, LLC
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy similarly addressed to the attention of Legal
Department
With a copy to:
Xxxxxxx & Xxxxxx L.L.C.
000 - 00/xx/ Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
To Insight at:
Insight Communications Company, L.P.
000 0/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
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With a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
and
Dow, Xxxxxx & Xxxxxxxxx PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000
Any party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this Section. All
notices will be deemed to have been received on the date of delivery, which in
the case of deliveries by telecopier will be the date of the sender's
confirmation.
12.3 Right to Specific Performance. Insight and AT&T acknowledge that the
-----------------------------
unique nature of the Assets to be contributed by them pursuant to this Agreement
renders money damages an inadequate remedy for the breach by them of their
obligations under this Agreement, and they agree that in the event of such
breach, they will upon proper action instituted by either of them, be entitled
to a decree of specific performance of this Agreement.
12.4 Waiver. This Agreement or any of its provisions may not be waived
------
except in writing. The failure of any party to enforce any right arising under
this Agreement on one or more occasions will not operate as a waiver of that or
any other right on that or any other occasion.
12.5 Captions. The section and other captions of this Agreement are for
--------
convenience only and do not constitute a part of this Agreement.
12.6 CHOICE OF LAW. THIS AGREEMENT AND THE RIGHTS OF THE PARTIES UNDER IT
-------------
WILL BE GOVERNED BY AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES OF
DELAWARE.
12.7 Terms. Terms used with initial capital letters or otherwise defined
-----
in this Agreement will have the meanings specified, applicable to both singular
and plural forms, for all purposes of
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this Agreement. The word "include" and derivatives of that word are used in this
Agreement in an illustrative sense rather than limiting sense.
12.8 Rights Cumulative. All rights and remedies of each of the parties
-----------------
under this Agreement will be cumulative, and the exercise of one or more rights
or remedies will not preclude the exercise of any other right or remedy
available under this Agreement or applicable law.
12.9 Time. Time is of the essence under this Agreement. If the last day
----
permitted for the giving of any notice or the performance of any act required or
permitted under this Agreement falls on a day which is not a Business Day, the
time for the giving of such notice or the performance of such act will be
extended to the next succeeding Business Day.
12.10 Late Payments. If any party fails to pay the other any amounts when
-------------
due under this Agreement, the amounts due will bear interest from the due date
to the date of payment at the annual rate publicly announced from time to time
by The Bank of New York as its prime rate (the "Prime Rate") plus 2%, adjusted
as and when changes in the Prime Rate are made.
12.11 Counterparts. This Agreement may be executed in counterparts, each of
------------
which will be deemed an original.
12.12 Entire Agreement. Except for the Exchange Agreement, the Sale
----------------
Agreement and the Partnership Agreement, this Agreement (including the
Transaction Documents and the Schedules and Exhibits referred to in this
Agreement, which are incorporated in and constitute a part of this Agreement)
contains the entire agreement of the parties and supersedes all prior oral or
written agreements and understandings with respect to the subject matter. This
Agreement may not be amended or modified except by a writing signed by the
parties.
12.13 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining rights
of the Person intended to be benefitted by such provision or any other
provisions of this Agreement.
12.14 Construction. This Agreement has been negotiated by the parties and
------------
their respective legal counsel, and legal or equitable principles that might
require the construction of this Agreement or any provision of this Agreement
against the party drafting this Agreement will not apply in any construction or
interpretation of this Agreement.
12.15 Expenses. Except as otherwise expressly provided in this Agreement
--------
(which expenses the parties shall pay as so provided), each party will pay all
of its expenses, including attorneys' and accountants' fees, in connection with
the negotiation of this Agreement, the performance of its obligations and the
consummation of the transactions contemplated by this Agreement.
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12.16 Risk of Loss. If the Exchange Agreement closes prior to this
------------
Agreement, references to Insight Assets in this Section 12.16 shall include the
Exchange Assets during the Interim Period.
(a) The risk of any loss or damage to the Insight Assets or AT&T
Assets resulting from fire, theft or other casualty (except reasonable wear and
tear) will be borne by Insight or AT&T, respectively, at all times through and
including the Closing (except with respect to the Exchange Assets for which such
risk will be borne by Insight only during the Interim Period). If any such loss
or damage is sufficiently substantial so as to preclude and prevent resumption
of normal operations of any material portion of a System or the replacement or
restoration of the lost or damaged property within twenty days or, if earlier,
prior to the Outside Closing Date, Insight or AT&T as appropriate, will
immediately notify the other in writing of that fact and subject to the other
provisions of this Section 12.16, Insight, in the event of loss or damage to the
Insight Assets, or AT&T, in the event of loss or damage to the AT&T Assets, as
appropriate, will use its commercially reasonable efforts to repair, replace and
restore the lost or damaged property to its former condition as soon as
practicable at its sole expense, subject to Section 12.16(b), including applying
any insurance proceeds to restore such assets to their prior condition.
(b) If the aggregate cost to repair, replace or restore the lost or
damaged property to its former condition would exceed $5,000,000, Insight, in
the event of loss or damage to the Insight Assets, or AT&T, in the event of loss
or damage to the AT&T Assets, as appropriate, may, subject to the other party's
right to cause the Partnership to consummate the Closing as described below,
elect to terminate this Agreement by written notice to the other party at any
time within ten days of the occurrence of the event of loss or damage, and upon
such termination both parties will stand fully released and discharged of any
and all obligations under this Agreement (except with respect to any then
existing breaches by either such party).
(c) If any such loss or damage to the AT&T Assets is sufficiently
substantial so as to preclude and prevent resumption of normal operations of any
material portion of a AT&T System or the repair, replacement or restoration of
the lost or damaged property within twenty days, or if earlier, the Outside
Closing Date, and AT&T is not obligated to correct the problem because the cost
would exceed $5,000,000, and AT&T elects not to repair, replace and restore the
lost or damaged property, Insight may elect to terminate this Agreement upon
written notice to AT&T at any time within ten days after it receives written
notice from AT&T of the occurrence of the event of such loss or damage and the
fact that AT&T is not obligated to correct the problem and AT&T has elected not
to correct the problem, and upon such termination both parties will stand fully
released and discharged of any and all obligations under this Agreement (except
with respect to any then existing breaches by either such party). In the
absence of a timely election to terminate this Agreement, Insight shall be
deemed to have waived such loss or damage and to have elected to consummate the
Closing in accordance with all of the remaining provisions of this Agreement and
notwithstanding AT&T's election to terminate this Agreement pursuant to Section
12.16(b), Insight may elect to consummate the Closing in accordance with all of
the remaining provisions of this Agreement, in which event at the Closing, the
amount of any insurance deductible payable by AT&T and all insurance proceeds
payable as a result of the occurrence of the event resulting in such
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loss or damage to the AT&T Assets (in each case to the extent not used to
repair, replace or restore such lost or damaged AT&T Assets), except for any
proceeds from business interruption insurance relating to the loss of revenue
for the period through and including the Closing Time, will be delivered by AT&T
to the Partnership or the rights to such proceeds will be assigned by AT&T to
the Partnership if not yet paid over to AT&T, and upon such delivery or
assignment and consummation of the Closing AT&T shall have no additional
liability to Insight or the Partnership in respect of any such loss or damage to
the AT&T Assets.
(d) If any such loss or damage to the Insight Assets is sufficiently
substantial so as to preclude and prevent resumption of normal operations of any
material portion of an Insight System or the repair, replacement or restoration
of the lost or damaged property within twenty days, or if earlier, the Outside
Closing Date, and Insight is not obligated to correct the problem because the
cost would exceed $5,000,000, and Insight elects not to repair, replace and
restore the lost or damaged property, AT&T may elect to terminate this Agreement
upon written notice to Insight at any time within ten days after it receives
written notice from Insight of the occurrence of the event of such loss or
damage and the fact that Insight is not obligated to correct the problem and has
elected not to correct the problem, and upon such termination both parties will
stand fully released and discharged of any and all obligations under this
Agreement (except with respect to any then existing breaches by either such
party). In the absence of a timely election to terminate this Agreement, AT&T
shall be deemed to have waived such loss or damage and to have elected to
consummate the Closing in accordance with all of the remaining provisions of
this Agreement, and notwithstanding Insight's election to terminate this
Agreement pursuant to Section 12.16(b), AT&T may elect to consummate the Closing
in accordance with all of the remaining provisions of this Agreement in which
event at the Closing, the amount of any insurance deductible payable by Insight
and all insurance proceeds payable as a result of the occurrence of the event
resulting in such loss or damage to the Insight Assets (in each case to the
extent not used to repair, replace or restore such lost or damaged Insight
Assets), except for any proceeds from business interruption insurance relating
to the loss of revenue for the period through and including the Closing Time,
will be delivered by Insight to the Partnership or the rights to such proceeds
will be assigned by Insight to the Partnership if not yet paid over to Insight,
and upon such delivery or assignment and consummation of the Closing Insight
shall have no additional liability to AT&T or the Partnership in respect of any
such loss or damage to the Insight Assets.
(e) If, prior to the Closing, any part of or interest in any material
Insight Assets or any material AT&T Assets is taken or condemned as a result of
the exercise of the power of eminent domain, or if a Governmental Authority
having such power informs Insight or AT&T that it intends to condemn all or any
part of any material Assets of such party (such event being called, in either
case, a "Taking"), then the other party may terminate this Agreement. If the
other party does not elect to terminate this Agreement, then (a) the other party
will have the sole right, in the name of the party on behalf of the Partnership,
if the other party so elects, to negotiate for, claim, contest and receive all
damages with respect to the Taking, (b) the party will be relieved of its
obligation to convey to the Partnership the Assets or interests that are the
subject of the Taking, (c) at the Closing the party will assign to the
Partnership all of the party's rights to all damages payable
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with respect to the Taking and (d) following the Closing, the party will give
the Partnership such further assurances of such rights and assignment with
respect to the Taking as the Partnership may from time to time reasonably
request.
12.17 Tax Consequences. No party to this Agreement makes any representation
----------------
or warranty, express or implied, with respect to the Tax implications of any
aspect of this Agreement on any other party to this Agreement, and all parties
expressly disclaim any such representation or warranty with respect to any Tax
consequences arising under this Agreement. Each party has relied solely on its
own Tax advisors with respect to the Tax implications of this Agreement.
12.18 Commercially Reasonable Efforts. For purposes of this Agreement,
-------------------------------
unless a different standard is expressly provided with respect to any particular
matter, "commercially reasonable efforts" will not be deemed to require a party
to undertake extraordinary measures, including the initiation or prosecution of
legal proceedings or the payment of amounts in excess of normal and usual filing
fees and processing fees, if any.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
MEDIAONE OF ILLINOIS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
NORTHWEST ILLINOIS TV CABLE COMPANY
By:________________________________
Name:______________________________
Title:_____________________________
S/D CABLE PARTNERS, LTD.
By:________________________________
Name:______________________________
Title:_____________________________
TCI AMERICAN CABLE HOLDINGS, L.P.
By:________________________________
Name:______________________________
Title:_____________________________
TCI OF BLOOMINGTON/NORMAL, INC.
By:________________________________
Name:______________________________
Title:_____________________________
-00-
XXX XXXXXXXXXXX XX XXXXX, INC.
By:________________________________
Name:______________________________
Title:_____________________________
UACC MIDWEST, INC.
By:________________________________
Name:______________________________
Title:_____________________________
UNITED CABLE TELEVISION OF ILLINOIS
VALLEY, INC.
By:________________________________
Name:______________________________
Title:_____________________________
UNITED CABLE TELEVISION OF SOUTHERN
ILLINOIS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
TCI OF INDIANA HOLDINGS, LLC
By: TCI of Indiana, Inc., its
managing member
By:________________________________
Name:______________________________
Title: Vice President
-00-
XXXXXXX XXXXX XX XXXXXXX XXXXXXXX
LIMITED PARTNERSHIP
By: TCI Command II, Inc., its general
partner
By:____________________________________
Name: Xxxxxxx Xx Xxxxxx
Title: Vice President
INSIGHT COMMUNICATIONS COMPANY, L.P.
By: Insight Communications Company, Inc.,
its general partner
By:____________________________________
Name:__________________________________
Title:_________________________________
INSIGHT MIDWEST, L.P.
By: Insight Communications Company, L.P.,
its general partner
By: Insight Communications Company, Inc.,
its general partner
By:____________________________________
Name:__________________________________
Title:_________________________________
and
By: TCI of Indiana Holdings, LLC, its
limited partner
By: TCI of Indiana, Inc., its
managing member
By:____________________________________
Name: Xxxxxxx Xx Xxxxxx
Title: Vice President
-95-
