PARENT UNDERTAKING
This PARENT UNDERTAKING (the "Undertaking"), entered into as of the
21st day of August 1998, is given by Insight Communications Company, L.P., a
Delaware limited partnership ("Insight Parent"), for and in favor of Coaxial
Communications of Central Ohio, Inc., an Ohio corporation ("Central"), Phoenix
Associates, a Florida general partnership, Coaxial LLC, a Delaware limited
liability company, Coaxial DJM LLC, a Delaware limited liability company, and
Coaxial DSM LLC, a Delaware limited liability company, Xxxxx Xxxxxxxxxxx, Xxxxxx
XxXxxxxxxxxx, and X. Xxxxxxx XxXxx.
WITNESSETH:
WHEREAS, Central and Insight Parent have entered into a Contribution
Agreement, dated as of June 30, 1998, as amended (the "Contribution Agreement"),
relating to the formation of Insight Communications of Central Ohio, LLC (the
"Operating LLC"), and the contribution to the Operating LLC (i) by Central of
substantially all the assets of its cable television systems in and around
Columbus, Ohio, and (ii) by Insight of cash in the amount of Ten Million
Dollars, all as specified in the Contribution Agreement;
WHEREAS, pursuant to Section 12.4 of the Contribution Agreement and
concurrently with the execution and delivery of this Undertaking, Insight Parent
is assigning all of Insight Parent's rights and delegating all of Insight
Parent's obligations under the Contribution Agreement to a Delaware limited
liability company ("Insight") of which Insight Parent is the sole member;
WHEREAS, pursuant to the Contribution Agreement, Central, the
Principals, and Insight (as assignee of Insight Parent) will enter into an
Operating Agreement substantially in the form of Exhibit A to the Contribution
Agreement (the "Operating Agreement"), relating to the organization of the
Operating LLC, the respective rights, obligations, and interests of the Members
to each other and to the Operating LLC, and certain other matters; and
WHEREAS, Insight Parent's entering into this Undertaking is a material
inducement for Central to have agreed to such assignment to Insight under the
Contribution Agreement and for Central to enter into the Operating Agreement
with Insight;
NOW, THEREFORE, in consideration of Central's entering into the
Contribution Agreement and agreeing to the assignment of Insight Parent's rights
and the delegation of Insight Parent's duties under the Contribution Agreement
to Insight, Insight Parent hereby agrees, for the benefit and in favor of
Central, the other Borrowers, and the Principals:
SECTION 1. DEFINITIONS
Certain capitalized terms used herein but not otherwise defined herein
shall have the meanings given to such terms in the Operating Agreement.
SECTION 2. OBLIGATIONS
2.1 Indemnity. From and after the execution and delivery of the
Operating Agreement, in the event of any breach of Section 3.5(e) of the
Operating Agreement, Insight Parent agrees to indemnify, defend, and hold
harmless Central, each other Borrower, and each of the Principals, from any
liability, loss, or damage incurred by any such Person, including costs and
attorneys' fees (which attorneys' fees may be paid as incurred) and any amounts
expended in the settlement of any claims of liability, loss, or damage, and
including any tax liabilities incurred as a result of the receipt of any
indemnification payment under this Section 2.1 or any indemnification payment
under Section 4.4(b)(i) of the Operating Agreement, that either (A) arise out of
or result from such breach or (B) arise out of or result from any failure of the
Senior Debt and the Subordinated Debt to prevent those adverse tax consequences
to the Principals that were intended to be avoided by the Senior Debt and the
Subordinated Debt, as it will exist at the Closing. Insight Parent acknowledges
and agrees that any breach of Section 3.5(e) of the Operating Agreement could
result in significant tax liabilities being incurred by the Principals, and that
such tax liabilities are included in the possible damages for which the
Principals would be entitled to indemnity under this Section 2.1.
2.2 Limitation. The indemnity provided in Section 2.1 shall not apply
to any breach of Section 3.5(e) of the Operating Agreement that occurs after the
consummation of any transaction or series of related transactions described in
Section 9.9 of the Operating Agreement and the execution and delivery to Central
and the Principals of the substitute parent undertaking required to be executed
and delivered to Central and the Principals pursuant to Section 9.9 of the
Operating Agreement.
2.3 Representations. Insight Parent hereby represents and warrants to
Central, each other Borrower, and each of the Principals that this Undertaking
has been duly executed and delivered by Insight Parent and constitutes its
legal, valid, and binding obligation, enforceable against it in accordance with
its terms except as the enforceability of this Undertaking may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally or
by general principles of equity.
SECTION 3. WAIVER; REMEDIES
The observance of any term of this Undertaking may be waived (either
generally or in a particular instance and either retroactively or prospectively)
by the Principals, but any such waiver shall be effective only if in a writing
signed by the Principals. Except as otherwise provided herein, no failure or
delay of Central, any other Borrower, or any of the Principals
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in exercising any power or right under this Undertaking shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power.
SECTION 4. ASSIGNMENT
Insight Parent's obligations under this Undertaking shall not be
assignable without the prior written consent of the Principals. The rights of
Central, each other Borrower, and each of the Principals under this Undertaking
shall not be assignable without the prior written consent of Insight Parent.
This Undertaking shall (a) be binding upon Insight Parent and its successors,
and (b) inure to the exclusive benefit of, and be enforceable by, Central, each
other Borrower, and each of the Principals.
SECTION 5. MISCELLANEOUS
5.1 Severability. Every provision of this Undertaking is intended to be
severable. If any term or provision hereof is illegal, invalid or unenforceable
for any reason whatsoever, that term or provision will be enforced to the
maximum extent permissible and such illegality, invalidity, or unenforceability
shall not affect the validity or legality of the remainder of this Undertaking.
5.2 Governing Law. The internal laws of the State of New York (without
regard to principles of conflict of law) shall govern the validity of this
Undertaking, the construction of its terms, and the interpretation of the rights
and duties of Insight Parent.
5.3 Notices. Any notice, payment, demand, or communication required or
permitted to be given pursuant to this Undertaking shall be given in the manner
specified in the Operating Agreement, with any notice to Insight Parent being
sent to the address of Insight and any notice to any of the Borrowers being sent
to the address of Central.
5.4 Entire Agreement. The provisions of this Undertaking set forth the
entire agreement and understanding of Insight Parent in favor of Central, the
other Borrowers, and the Principals as to the subject matter hereof and
supersede all prior agreements, oral or written, and other communications among
Insight Parent, Central, the other Borrowers, and the Principals relating to the
subject matter hereof, except that nothing in this Undertaking is intended to
supersede or otherwise impair any of the rights or obligations of Insight under
the Operating Agreement, including Section 3.5 and Section 4.5 thereof.
[signature follows on separate page]
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IN WITNESS WHEREOF, Insight Parent has caused this Undertaking to be
duly executed and delivered by its officer or other duly authorized signatory
thereunto duly authorized as of the date first above written.
INSIGHT COMMUNICATIONS COMPANY, L.P.
By: ICC Associates, L.P., its General Partner
By: Insight Communications, Inc., General Partner
By:
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Xxxxxxx X. Xxxxxxx
President
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