Exhibit 2.1

EXECUTION COPY

ASSET PURCHASE AGREEMENT

between

ADELPHIA COMMUNICATIONS CORPORATION

and

TIME WARNER NY CABLE LLC

Dated as of April 20, 2005

TABLE OF CONTENTS

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EXHIBITS AND ANNEXES

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ASSET PURCHASE AGREEMENT, dated as of April 20, 2005, between Adelphia Communications Corporation, a Delaware corporation (“Seller”), and Time Warner NY Cable LLC, a Delaware limited liability company that has elected to be classified as a corporation for United States federal income tax purposes (“Buyer”).  Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in Article I.

W I T N E S S E T H:

WHEREAS, Seller and certain of its Affiliates are debtors and debtors in possession (the “Debtors”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§101 et seq. (the “Bankruptcy Code”), having each commenced voluntary cases (jointly administered as No. 02-41729 (REG)) (the “Reorganization Case”) on or after June 10, 2002 (the “Petition Date”) in the Bankruptcy Court;

WHEREAS, Seller and its Affiliates are engaged in the business of operating Systems providing customers with analog and digital video services, high-speed Internet access and other services, including telephony services, in the geographical areas listed on Schedule A of the Seller Disclosure Schedule and on Schedule A of the Seller Disclosure Schedule (as defined in the Friendco Purchase Agreement) to the Friendco Purchase Agreement, and are engaged in the other businesses and have such other holdings as are set forth on Schedule B of the Seller Disclosure Schedule (together, the “Business”);

WHEREAS, Time Warner Cable Inc., a Delaware corporation (“Parent”), and its Subsidiaries, including Buyer, are engaged in the business of operating Systems providing customers with analog and digital video services, high-speed Internet access and other services, including telephony services, in the geographical areas listed on Schedule C of the Buyer Disclosure Schedule (the “Parent Business”);

WHEREAS, Seller desires to sell and assign, and to cause certain of its Affiliates to sell and assign, to Buyer and Buyer desires to purchase and assume from Seller and such Affiliates certain Assets and Liabilities of the Business, as more particularly set forth herein, including the Systems servicing the geographical areas listed in Part 1 of Schedule A of the Seller Disclosure Schedule (the “Group 1 Systems”), Part 2A of Schedule A of the Seller Disclosure Schedule (the “Group 2 Systems”) and Part 2B of Schedule A of the Seller Disclosure Schedule (the “MCE Systems” and, together with the Group 1 Systems and Group 2 Systems, the “Acquired Systems”);

WHEREAS, the parties intend that the Transaction shall constitute a taxable transaction for all income Tax purposes and, for the avoidance of doubt, the Transaction shall not be governed by Sections 351 or 368(a) of the Code (or similar provisions of state, local or foreign Tax Law, as applicable);

WHEREAS, simultaneously with the execution hereof, Seller and Comcast Corporation, a Pennsylvania corporation (“Friendco”), are entering into an Asset Purchase Agreement (together with the schedules and exhibits thereto, all as

amended from time to time with the approval of Buyer and disregarding the effectiveness of any waiver by Friendco not approved by Buyer and any waiver by Seller not approved by Buyer to the extent it adversely affects Buyer, the “Friendco Purchase Agreement”) pursuant to which Seller has agreed to sell and assign, and to cause certain of its Affiliates to sell and assign, to Friendco and Friendco has agreed to purchase and assume from Seller and such Affiliates on the terms set forth therein, certain Assets and Liabilities of the Business, as more particularly set forth therein (the “Friendco Business”);

WHEREAS, simultaneously with the execution hereof, Parent, Friendco and certain of their Affiliates are entering into the Exchange Agreement, pursuant to which Buyer and/or certain of its Affiliates will convey to Friendco and/or certain of its Affiliates and Friendco and/or certain of its Affiliates will assume from Buyer and/or certain of its Affiliates the Business Related to the Group 1 Systems and the Group 1 Shared Assets and Liabilities (the “Group 1 Business”), together with additional Systems owned and managed by certain of Parent’s Subsidiaries, in exchange for a portion of the Friendco Business, together with additional Systems owned and managed by Friendco or its Affiliates, all as more specifically set forth in the Exchange Agreement (the “Exchange”);

WHEREAS, upon consummation of the Transaction and the Exchange, the portion of the Business retained by Buyer will be (a) that portion of the Business Related to the Group 2 Systems, (b) that portion of the Business Related to the MCE Systems and (c) the Group 2 Shared Assets and Liabilities (collectively, the “Group 2 Business” and together with the Group 1 Business, the “Acquired Business”); provided, however, that the Acquired Business shall exclude the Assets and Liabilities identified on Schedule D of the Seller Disclosure Schedule;

WHEREAS, as an inducement to Seller to enter into this Agreement, simultaneously with the execution hereof, Parent, Buyer and Seller are entering into a Parent Agreement pursuant to which Parent is guaranteeing the performance of Buyer hereunder (the “Parent Agreement”);

WHEREAS, prior to or at the Closing, Seller, Buyer and an escrow agent to be mutually selected by Buyer and Seller (the “Escrow Agent”) will enter into an escrow agreement in form and substance reasonably acceptable to Buyer and Seller (the “Escrow Agreement”);

WHEREAS, in connection with the Transaction, Seller and/or its Affiliates, on the one hand, and Buyer, Parent and/or certain of Parent’s Controlled Affiliates, on the other hand, shall enter into the other Ancillary Agreements; and

WHEREAS, the Debtors have agreed to file the Plan with the Bankruptcy Court to implement the Transaction upon the terms and subject to the conditions set forth herein.

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NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS AND TERMS

Section 1.1  Certain Definitions.  As used in this Agreement, the following terms have the meanings set forth below:

“Accounts Receivable” means, with respect to each Specified Business, all Subscriber, trade and other accounts and notes receivable, and other miscellaneous receivables of such Specified Business arising out of the sale or other disposition of goods or services of such Specified Business.

“Acquire” means to directly or indirectly acquire, receive in exchange or redemption, subscribe for, purchase (by merger, consolidation, combination, recapitalization or other reorganization) or otherwise obtain an interest in, by operation of Law or otherwise.

“Acquired Business” has the meaning set forth in the Recitals.

“Acquired Systems” has the meaning set forth in the Recitals.

“Acquisition” has the meaning set forth in Section 5.10.

“Acquisition Proposal” has the meaning set forth in Section 5.10.

“Additional Discharge” means, with respect to any Person, except as otherwise provided in the Plan and the Confirmation Order (or, to the extent approved by Buyer (such approval not to be unreasonably withheld), such other plan that includes such Person as a debtor and the confirmation order of the Bankruptcy Court approving such plan and effecting the Additional Discharge), the discharge and/or equivalent effect granted pursuant to such confirmation order and sections 363, 1123 and 1141 of the Bankruptcy Code, and in each case prior to or at the Closing, (i) of such Person, as a debtor in possession, from all Liabilities, (ii) of interests of, and rights, interests and Claims of the holders of Claims against and interests in, such Person and (iii) of Encumbrances on, or interests of other Persons (other than Seller and its Affiliates) in, the Transferred Assets that are related to such Person; it being understood that an Additional Discharge may occur pursuant to the Plan.

“Additional Financial Statements” has the meaning set forth in Section 5.11(b).

“Additional Reorganization Case” has the meaning set forth in Section 5.13(h).

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“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person as of the date on which, or at any time during the period for which, the determination of affiliation is being made.  For purposes of this definition, the term “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities or by contract or otherwise.  For purposes of this Agreement, (i) none of Seller or any of its Affiliates shall be deemed to be an Affiliate of any of Buyer, Parent, TWX, Friendco or any of their respective Affiliates, (ii) none of Buyer, Parent, TWX or any of their Affiliates shall be deemed to be an Affiliate of any of Seller, Friendco or any of their respective Affiliates, (iii) none of Friendco or any of its Affiliates shall be deemed to be an Affiliate of any of Seller, Buyer, Parent, TWX or any of their respective Affiliates, (iv) each Managed Cable Entity shall be deemed to be an Affiliate of Seller, (v) no member of the family of ▇▇▇▇ ▇▇▇▇▇ shall be deemed to control Seller or any of its Affiliates and (vi) each of the Tele-Media Entities shall be deemed to be an Affiliate of Seller.

“Aggregate Consideration” means the Purchase Price plus the Assumed Liabilities, as adjusted pursuant to this Agreement.

“Aggregate Purchase Price Value” means $14,114,000,000.

“Aggregate Value of the Purchase Shares” means $4,960,000,000.

“Agreement” means this Asset Purchase Agreement.

“Alternate Plan” has the meaning set forth in Section 5.10(b).

“Amended and Restated By-laws” means the Amended and Restated By-laws of Parent, in the form of
Exhibit 1.1(a), as the same may be amended, supplemented or modified from time to time (provided, that any such amendment, supplement or modification shall not (i) amend, modify or supplement Article VI or XII of such Amended and Restated By-laws or (ii) to the extent relating to any other matter, (A) affect Seller or its stakeholders in a manner that is adverse relative to the manner in which it affects TWX as a stockholder of Parent or (B) adversely affect Seller or its stakeholders in any material respect).

“Amended and Restated Charter” means the Amended and Restated Certificate of Incorporation of Parent, in the form of Exhibit 1.1(b), as the same may be amended, supplemented or modified from time to time (provided, that any such amendment, supplement or modification shall not (i) amend, modify or supplement Article VI or IX of such Amended and Restated Charter or (ii) to the extent relating to any other matter, (A) affect Seller or its stakeholders in a manner that is adverse relative to the manner in which it affects TWX as a stockholder of Parent or (B) adversely affect Seller or its stakeholders in any material respect).

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“Ancillary Agreements” means the Parent Agreement, the Escrow Agreement and each MCE Management Agreement, and the instruments and other agreements required to be delivered pursuant to Sections 2.9 and 2.10, including any ▇▇▇▇ of Sale.

“Applicable Employees” has the meaning set forth in Section 5.8(e).

“Applicable Monthly Rate” has the meaning set forth in the definition of “Permitted Promotion.”

“Asset Transferring Subsidiary” means those Subsidiaries of Seller that have any right, title or other interest in, to or under any Transferred Assets.

“Assets” means any asset, property or right, wherever located (including in the possession of vendors or other third parties or elsewhere), whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person, and all right, title, interest and claims therein.

“Assigned Contracts” has the meaning set forth in Section 5.13(b).

“Assignment and Assumption Agreement” means an agreement in form and substance reasonably acceptable to Seller and Buyer, providing for the effective assignment of any Assigned Contracts or other Transferred Assets Related to such Specified Business and the assumption of the Assumed Liabilities Related to such Specified Business other than, in each case, the Transferred Real Property Leases.

“Assumed Cure Costs” means the amounts designated as Assumed Cure Costs pursuant to Section 5.13(d) and the Cure Costs related to the Franchises for each of the localities listed on Schedule A of the Seller Disclosure Schedule.

“Assumed Liabilities” means, with respect to each Specified Business, only the following Liabilities of Seller or any of its Affiliates that are Debtors (or which become subject to an MCE Discharge or an Additional Discharge) that are Related to such Specified Business, in each case to the extent allocated to such Specified Business as required by Section 2.3:  (i) Liabilities attributable to actions, omissions, circumstances or conditions to the extent occurring following the Closing to the extent so allocated to such Specified Business or any of the Transferred Assets allocated to such Specified Business pursuant to the Designated Allocation, including under the Assigned Contracts and Authorizations, (ii) Liabilities of such Specified Business arising in the Ordinary Course of Business since the Petition Date but only to the extent of the amount reflected in the Closing Net Liabilities Amount used in calculating the Final Adjustment Amount for such Specified Business, (iii) the following Liabilities:  (A) Liabilities to provide severance pay and benefits pursuant to Section 5.8(d), (B) Liabilities for all expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date pursuant to Section 5.8(f) and (C) Liabilities to provide accrued but unused vacation and with respect to sale bonuses due under the Adelphia Communications Corporation Sale Bonus Program (the “Sale

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Bonus Program”) to Transferred Employees pursuant to Section 5.8(k) but only to the extent of the amount reflected in the Closing Net Liabilities Amount used in calculating the Final Adjustment Amount for such Specified Business, (iv) the Assumed Cure Costs, (v) the Liabilities Related to such Specified Business described in the proviso to the second sentence of Section 5.13(d), (vi) all Liabilities of such Specified Business set forth on Schedule 1.1(a) of the Seller Disclosure Schedule, (vii) Assumed Taxes, (viii) Liabilities in respect of Environmental Self-Audit Deficiencies or Environmental Transfer Act Liabilities, in each case (with respect to this clause (viii)), to the extent and only to the extent such Liabilities consist solely of monetary obligations (but only to the extent of the amount reflected in the Closing Net Liabilities Amount used in calculating the Final Adjustment Amount for such Specified Business) or non-monetary obligations agreed to by Buyer pursuant to Section 5.16 and (ix) Liabilities of such Specified Business under purchase orders outstanding as of the Closing but only to the extent of the amount reflected in the Closing Net Liabilities Amount used in calculating the Final Adjustment Amount for such Specified Business.

“Assumed Taxes” means, with respect to each Specified Business, any Taxes imposed with respect to such Specified Business or any Transferred Assets Related thereto or any income or gain derived with respect thereto for the taxable periods, or portions thereof, beginning after the Closing.

“Audited Financial Statements” has the meaning set forth in Section 3.7(a).

“Authorization” means any Governmental Authorization or Non-Governmental Authorization.

“Background Check” has the meaning set forth in Section 5.8(a).

“Bankruptcy Code” has the meaning set forth in the Recitals.

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of New York or, with respect to a Managed Cable Entity or Non-Debtor Subsidiary, the United States Bankruptcy Court in which any chapter 11 case that includes such Managed Cable Entity or Non-Debtor Subsidiary is pending.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure as promulgated by the United States Supreme Court under section 2075 of title 28 of the United States Code applicable to the Reorganization Case, and any Local Rules of the Bankruptcy Court.

“Base Net Liabilities Amount” means, with respect to each Specified Business, $0.00.

“Base Subscriber Number” means, with respect to each Specified Business, the number of Basic Subscribers of such Specified Business corresponding to the month prior to the month in which the Closing occurs, as set forth on Schedule 1.1(b) of the Seller Disclosure Schedule; provided, however, that, except for purposes of

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calculating the Initial Disputed MCE System Adjustment Amount pursuant to Section 2.7(a), in the event any Disputed MCE Systems exist as of the Closing, then the Base Subscriber Number for the Group 2 Business shall be reduced by the aggregate of the MCE Base Subscriber Numbers for all such Disputed MCE Systems.

“Basic Subscriber” means a “Basic Video Customer” as determined pursuant to the Seller Subscriber Accounting Policy.

“Benefit Plans” has the meaning set forth in Section 3.10(a).

“▇▇▇▇ of Sale” means, with respect to each Specified Business, an agreement in form and substance reasonably acceptable to Seller and Buyer, transferring the tangible personal property included in the Transferred Assets Related to such Specified Business.

“Board” has the meaning set forth in Section 5.10.

“Books and Records” means, with respect to each Specified Business, all books, ledgers, files, reports, records, manuals, maps and engineering data, tests, drawings, blueprints, schematics, lists, plans and processes and all files of correspondence and records concerning Subscribers and prospective Subscribers of any Cable System of such Specified Business or concerning signal or program carriage and all correspondence with Government Entities, including all reports filed by or on behalf of Seller or any of its Affiliates with the FCC and statements of account filed by or on behalf of Seller or any of its Affiliates with the United States Copyright Office, all Tax Returns of Seller or any of its Affiliates (including workpapers) and tax software to the extent directly related thereto and other materials (in any form or medium) of, or maintained for, such Specified Business, but excluding any such items to the extent (i) they are included in or primarily related to any Excluded Assets or Excluded Liabilities or (ii) with respect to any such items related to Employees, any Law prohibits their transfer; provided, however, that Books and Records shall include copies of any items excluded pursuant to the foregoing clause (i).

“Broadband Industry” means the industries in which any Specified Business and the Parent Business operate as of the date hereof and as such industries develop from time to time.

“Budget” has the meaning set forth in Section 5.2(s).

“Business” has the meaning set forth in the Recitals.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York City are authorized or obligated by Law or executive order to close.

“Buyer” has the meaning set forth in the Preamble.

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“Buyer Adverse Tax Event” means any change in Tax Law or Proposed Change in Tax Law that has a reasonable possibility (or, in the case of any Proposed Change in Tax Law (i) by a Specified HWMC Member or a Specified SFC Member, or (ii) that is a Non-Referred Proposal, a reasonable probability) of being enacted or adopted and such change in Tax Law or Proposed Change in Tax Law (assuming in the case of a Proposed Change in Tax Law, such Proposed Change in Tax Law were enacted pursuant to its terms) would cause Buyer, based upon Buyer’s consultation with ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP or other tax counsel reasonably selected by Buyer, not to conclude both (A) that Buyer should have an aggregate tax basis in the Transferred Assets that includes the fair market value of the Aggregate Consideration, and (B) that there should be no special limitations on Buyer’s ability to depreciate or amortize the Transferred Assets, in each case, because of (1) the method by which Buyer will acquire the Transferred Assets in the Transaction or (2) the fact that Seller or any of its Affiliates is a party to the Reorganization Case or any other special circumstances of the Seller or any of its Affiliates; provided, however, that the net effects of such change in Tax Law or of such Proposed Change in Tax Law insofar as it relates to Buyer’s aggregate tax basis in the Transferred Assets and Buyer’s ability to depreciate or amortize the Transferred Assets are adverse to Buyer other than in a de minimis manner; provided, further, that the adverse effects of such change in Tax Law or Proposed Change in Tax Law cannot be avoided by accelerating or deferring the Closing Date of the Transaction or by restructuring the Transaction, in each case in a manner reasonably satisfactory to Buyer and Seller (and that such acceleration, deferral or restructuring is in fact implemented).  Buyer agrees that assuming the Closing Date was the date hereof, Buyer would conclude that Buyer’s basis should include the fair market value of the Aggregate Consideration and there should be no such special limitations on Buyer’s ability to depreciate or amortize the Transferred Assets.

“Buyer Class 1 Representations and Warranties” has the meaning set forth in Section 6.3(a).

“Buyer Class 2 Representations and Warranties” has the meaning set forth in Section 6.3(a).

“Buyer Discharge Amount” has the meaning ascribed to such term in the Friendco Purchase Agreement.

“Buyer Disclosure Schedule” means the Buyer Disclosure Schedule attached hereto as Annex B.

“Buyer Indemnification Deadline” has the meaning set forth in Section 7.1.

“Buyer Indemnified Parties” has the meaning set forth in Section 7.2(a).

“Buyer JV Partner” has the meaning ascribed to such term in the Friendco Purchase Agreement.

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“Buyer Managed MCE System” has the meaning set forth in Section 2.7(c).

“Buyer Plan” has the meaning set forth in Section 5.8(h).

“Buyer Required Approvals” means all consents, approvals, waivers, authorizations, notices and filings from or with a Government Entity that are listed on Schedule 1.1(a) of the Buyer Disclosure Schedule other than the LFA Approvals.

“Buyer’s 401(k) Plan” has the meaning set forth in Section 5.8(j).

“Buyer’s Statement” has the meaning set forth in Section 2.6(b).

“Cable Act” means Title VI of the Communications Act, 47 U.S.C. §§521 et seq.

“Cable System” means, with respect to each Specified Business, each System that is Related to such Specified Business.

“Cap Amount” means the Group 1 Cap Amount or the Group 2 Cap Amount, as the case may be.

“Capital Expenditure Adjustment Amount” means, with respect to each Specified Business, an amount equal to the Target Capital Expenditure Amount minus the Closing Capital Expenditure Amount for such Specified Business.  Except to the extent (and only to the extent) the consent of Buyer is obtained as contemplated in the proviso to the definition of “Closing Capital Expenditure Amount,” in no event will the Capital Expenditure Adjustment Amount be a negative number.

“Capital Lease” means any lease that is required to be classified and accounted for as a capital lease under GAAP.

“Cash Consideration” has the meaning set forth in Section 2.5(b).

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

“Chapter 11 Expenses” means (a) any and all costs incurred and expenses paid or payable by Seller or any of its Affiliates in connection with the Sale Process, the Transaction or the transactions contemplated by the Friendco Purchase Agreement, other than costs that Buyer has expressly agreed to pay pursuant to this Agreement and (b) the following costs and expenses related to the administration of the Reorganization Case or the reorganization case of any Managed Cable Entity or Non-Debtor Subsidiary:  (i) obligations to pay any professionals’ fees and expenses in connection with the Reorganization Case incurred by Seller, its Affiliates, the Committees, and any other compensation or expenses payable in connection with the Reorganization Case (including fees of attorneys, accountants, investment bankers, financial advisors, auditors and consultants), other than fees and expenses Buyer has expressly agreed to pay pursuant to

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this Agreement, (ii) fees and expenses payable to the US Trustee under section 1930 of title 28, United States Code, (iii) fees and expenses of the members of the Committees, (iv) fees and expenses of the trustees of existing indentures of Seller and (v) fees and expenses related to the DIP Facility.

“Chosen Courts” has the meaning set forth in Section 9.10.

“Claim” means a claim (as defined in section 101(5) of the Bankruptcy Code) against a Debtor.

“Claim Notice” has the meaning set forth in Section 7.4(a).

“Class 1 Representations and Warranties” has the meaning set forth in Section 6.2(a).

“Class 2 Representations and Warranties” has the meaning set forth in Section 6.2(a).

“Closing” means the closing of the Transaction.

“Closing Adjustment Amount” means, with respect to each Specified Business, the sum (expressed as a positive, if positive, or as a negative, if negative) of (i) the Net Liabilities Adjustment Amount for such Specified Business, minus (ii) the Subscriber Adjustment Amount for such Specified Business, minus (iii) the Capital Expenditure Adjustment Amount for such Specified Business.

“Closing Capital Expenditure Amount” means, as to each Specified Business, the sum of all capital expenditures incurred by Seller and its Affiliates in respect of such Specified Business consistent with the Budget and in the Ordinary Course of Business (and excluding any amounts incurred or paid in connection with any casualty or damage), subsequent to December 31, 2004 and up to and including the end of the month immediately preceding the Closing Date or, if the Closing occurs on a month-end, up to and including such month; provided, however, that any capital expenditures incurred or paid for in excess of the aggregate amount set forth in the Budget for such Specified Business shall be included in the determination of Closing Capital Expenditure Amount only to the extent that Buyer shall have consented to such expenditures prior to the incurrence thereof.

“Closing Date” has the meaning set forth in Section 2.8.

“Closing Net Liabilities Amount” means, with respect to each Specified Business, the Current Assets of such Specified Business minus the Total Liabilities of such Specified Business.

“Closing Subscriber Number” means, with respect to each Specified Business, as of the Closing, the number of Eligible Basic Subscribers of such Specified Business.

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“Code” means the Internal Revenue Code of 1986.

“Collective Bargaining Agreements” means, with respect to each Specified Business, the collective bargaining agreements covering Employees listed on Schedule 1.1(c) of the Seller Disclosure Schedule and identified as Related to such Specified Business.

“Committees” means (i) the committee appointed by the US Trustee to represent the interests of the unsecured creditors of the Debtors, (ii) the committee appointed by the US Trustee to represent the interests of equity holders of the Debtors, (iii) any other committee appointed by the US Trustee in connection with the Reorganization Case and (iv) any committee appointed by the US Trustee in the reorganization case of any Managed Cable Entity or Non-Debtor Subsidiary.

“Communications Act” means the Communications Act of 1934.

“Condemnation Proceeds” means, with respect to any Specified Business, all amounts payable or paid to Seller or any of its Affiliates as proceeds of (i) a condemnation or other taking of any Asset Related to such Specified Business by any Government Entity following December 31, 2004 or (ii) the exercise of any Purchase Right Related to such Specified Business following December 31, 2004.

“Confidential Information” has the meaning set forth in Section 5.1(e).

“Confirmation Hearing” means the hearing held by the Bankruptcy Court to consider confirmation of the Plan.

“Confirmation Order” means an order or judgment of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code, satisfying the requirements of Section 5.13.

“Contract” means any agreement, contract, lease or sublease, license or sublicense, purchase order, arrangement, commitment, indenture, note, security, instrument, consensual obligation, promise, covenant or undertaking, including all franchises, rights-of-way, bulk service, commercial service or multiple dwelling unit agreements, access agreements, programming agreements, signal supply agreements, agreements with community groups, commercial leased access agreements, capacity license agreements, partnership, joint venture or other similar agreements or arrangements, and advertising interconnect agreements, or any other agreement, in each case, whether written or oral, and all rights associated therewith.

“Contract Categories Expected to be Assumed” means the following categories of Contracts, in each case to the extent Related to a Specified Business:

(i)            construction and installation Contracts;

(ii)           individual Subscriber service Contracts;

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(iii)          bulk service, commercial service or multiple dwelling unit Subscriber Contracts;

(iv)          Contracts (including open purchase orders) relating to Fixtures and Equipment and any other tangible personal property (excluding motor vehicles), in each case only if Related exclusively to a specific Cable System;

(v)           local Cable System leased access agreements required by Law;

(vi)          Rights-of-Way;

(vii)         Real Property Leases (excluding leases that would be Excluded Assets pursuant to Section 2.2(h)(i)) and Transferred Real Property Subleases;

(viii)        Franchises and Authorizations (other than state certificates of public convenience and necessity and similar state telecommunications Authorizations);

(ix)           advertising interconnect and local advertising sale Contracts (other than advertising representation Contracts, except as set forth on Schedule 1.1(e) of the Seller Disclosure Schedule); and

(x)            software licenses and related maintenance agreements, in each case only if Related exclusively to a specific Cable System.

“Controlled Affiliate” means, with respect to any Person, any Affiliate of such Person that is controlled directly or indirectly by such Person.

“Cost Center” means a so called cost center as used by Seller for internal management and bookkeeping purposes.

“CPA Firm” means KPMG LLP or such other firm of independent certified public accountants as to which Seller and Buyer shall mutually agree.

“Cure Costs” means, with respect to any Contract, the costs and expenses payable under section 365 of the Bankruptcy Code in connection with the assumption and/or assignment of such Contract.

“Current Assets” means, with respect to each Specified Business, the current assets of such Specified Business included in the Transferred Assets as of the Closing (after giving effect to the Transaction), as would be reflected on the face of a balance sheet for such Specified Business (excluding any footnotes thereto) prepared in accordance with GAAP, consistently applied (to the extent GAAP was previously applied) for such Specified Business; provided, however, that in no event shall Current Assets include (A) inventory, (B) any Assets with respect to Taxes (including duty and tax refunds and prepayments) and net operating losses of Seller or any of its Affiliates, (C) investments in Subsidiaries, (D) Assets held for sale (other than in connection with

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the Exchange), (E) Condemnation Proceeds, (F) Insurance Claims (except to the extent (and only to the extent) relating to an Assumed Liability), (G) Accounts Receivable related to Programming Agreements, (H) pre-paid insurance premiums and maintenance expenses (to the extent paid under Contracts other than Assigned Contracts) or (I) prepaid expenses except to the extent the Specified Business will receive the benefit thereof within one year of the Closing; provided, further, that Current Assets to be acquired under purchase orders outstanding as of the Closing will, for purposes hereof, be treated as being owned by the relevant Specified Business as of the Closing regardless of whether they would otherwise be treated as such under GAAP but subject in any event to the remainder of this definition.  For purposes of determining Current Assets in respect of any Disputed MCE System, all references above to the Closing shall be deemed to mean, with respect to any Disputed MCE System, the MCE Closing.

“Debtors” has the meaning set forth in the Recitals.

“Delayed Transfer Asset” has the meaning set forth in Section 2.11.

“Derivative 2003 Financial Statements” has the meaning set forth in Section 3.7(a).

“Derivative 2004 Financial Statements” has the meaning set forth in Section 3.7(a).

“Derivative Audited Financial Statements” has the meaning set forth in Section 5.11(b).

“Derivative Unallocated 2004 Financial Statements” has the meaning set forth in Section 3.7(a).

“Designated Allocation” has the meaning set forth in Section 2.1.

“Designated Litigation” means the litigation set forth on Schedule 1.1(f) of the Seller Disclosure Schedule.

“Digital Subscriber” means a “Digital Customer” as determined pursuant to the Seller Subscriber Accounting Policy.

“DIP Facility” means the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 25, 2005, among Seller, the Subsidiaries of Seller identified therein and the financial institutions identified therein, and any related documents, agreements and instruments.

“Discharge” means, except as otherwise provided in the Plan and the Confirmation Order, the discharge or equivalent granted pursuant to the Confirmation Order, and sections 363, 1123 and 1141 of the Bankruptcy Code, (i) of Seller and its Affiliates that are Debtors, as debtors in possession, from all Liabilities, (ii) of interests of, and rights, interest and Claims of the holders of Claims against and interests in, Seller

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and its Affiliates that are Debtors and (iii) of Encumbrances on, or interests of Persons (other than Seller or its Affiliates) in, the Transferred Assets.

“Disclosure Statement” has the meaning set forth in Section 5.13(a).

“Disclosure Statement Motion” has the meaning set forth in Section 5.13(a).

“Disputed MCE System” has the meaning set forth in Section 2.7(a).

“Disputed MCE System Adjustment Amount” means, with respect to the Disputed MCE Systems sold to Buyer pursuant to Section 2.7(c), the sum of the Net Liabilities Adjustment Amount in respect of such Disputed MCE Systems as determined pursuant to the last sentence of Section 2.7(c) plus the Initial Disputed MCE System Adjustment Amount in respect of such Disputed MCE Systems.

“Eligible Basic Subscriber” means a Basic Subscriber who, as of the Measurement Date, is a paying customer (A) who subscribes to at least the lowest level of video programming offered by an Acquired System, (B) who has been installed, and (C) either (1) whose rate of service for all services (not including any installation costs) provided to such Basic Subscriber is not subject to any discount or promotion as of the Measurement Date or for any period thereafter other than (x) as to any Cable System, the customary package rates applicable to such Cable System as in effect as of March 31, 2005 as may be subsequently increased by Seller or, with the consent of Buyer not to be unreasonably withheld, reduced by Seller or (y) standard employee rate discounts or (2) who is a Qualified Customer who is subject to no discount or promotion other than a Permitted Promotion or an Historic Promotion.  For the avoidance of doubt, the customary reduction in the HSI rate applicable to any HSI-only subscriber who subscribes to video services shall not be considered a discount or promotion for purposes of the definition of “Eligible Basic Subscriber.”

“Employees” means all current and former employees who are or were primarily employed in connection with the Acquired Business and all employees of the Business identified on Schedule 5.8(a)(ii) of the Seller Disclosure Schedule.  Employees does not include (a) any employees performing services in Puerto Rico or outside of the United States or (b) any individual performing services in connection with the Acquired Business who Seller or its Affiliates has classified as an independent contractor as of immediately prior to the Closing Date.

“Encumbrance” means any lien, pledge, charge, security interest, option, right of first refusal, mortgage, easement, right of way, lease, sublease, license, sublicense, adverse claim, title defect, encroachment, other survey defect, or other encumbrance of any kind, including, with respect to real property, any covenant or restriction relating thereto.  For purposes of this Agreement, a Person shall be deemed to own subject to an Encumbrance any Asset that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such Asset.

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“Environmental Law” means any Law (including common law), Governmental Authorization or agreement with any Government Entity or third party relating to (i) the protection of the environment or human health and safety (including air, surface water, ground water, drinking water supply, and surface or subsurface land or structures), (ii) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, management, release or disposal of, any Hazardous Substance or (iii) noise, odor or electromagnetic emissions.

“Environmental Permits” means all licenses, permits, certificates and other authorizations and approvals issued by or obtained from a Government Entity relating to or required by Environmental Laws.

“Environmental Self-Audit” means, subject to Section 5.16, the self-audit to be conducted by Seller pursuant to an agreement between the United States Environmental Protection Agency and Seller relating to compliance with Environmental Laws.

“Environmental Self-Audit Deficiencies” means any deficiencies identified as a result of the performance of the Environmental Self-Audit, including current or historical violations of, or actual or potential Liabilities under, any Environmental Law.

“Environmental Transfer Act Liabilities” means any Liabilities arising out of compliance with the Connecticut Transfer Act or the New Jersey Industrial Site Recovery Act as a result of the completion of the Transaction or the Exchange.

“Equipment Leases” means all leases for vehicles included in the Fixtures and Equipment and all Capital Leases of other Fixtures and Equipment.

“Equity Security” has the meaning ascribed to such term in Rule 405 promulgated under the Securities Act as in effect on the date hereof and, in any event, shall also include (i) any capital stock of a corporation, any partnership interest, any limited liability company interest and any other equity interest, (ii) any security or right convertible into, exchangeable for, or evidencing the right to subscribe for any such stock, equity interest or security referred to in clause (i), (iii) any stock appreciation right, contingent value right or similar security or right that is derivative of any such stock, equity interest or security referred to in clause (i) or (ii), and (iv) any contract to grant, issue, award, convey or sell any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” has the meaning set forth in Section 3.10(c).

“Escrow Account” has the meaning set forth in Section 2.5.

“Escrow Agent” has the meaning set forth in the Recitals.

“Escrow Agreement” has the meaning set forth in the Recitals.

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“Escrow Amount” has the meaning set forth in Section 2.5.

“Escrow Payment” means, as to any amount payable from the Escrow Account, an aggregate amount payable, first, in cash, and, to the extent no cash remains in the Escrow Account, in Purchase Shares or, if applicable, MCE Purchase Shares (where each share is valued at the Per Share Value of the Purchase Shares); provided, however, that (i) the cash portion of such amount shall be increased by (A) in respect of the portion of any cash payment pursuant to Section 2.6(f), interest on such portion from the date of the Closing to the date of payment at LIBOR calculated on a 365-day basis, and (B) in respect of the portion of any cash payment pursuant to Section 7.2, interest on such portion at LIBOR calculated on a 365-day basis from the date notice of the Losses for which indemnification is sought was delivered until the date of payment of indemnification by the Indemnifying Party, and (ii) the stock portion of such amount shall be increased by Interim Dividends made in respect of such shares.

“Estimated Closing Adjustment Amount” has the meaning set forth in Section 2.6(a).

“Exchange” has the meaning set forth in the Recitals.

“Exchange Act” means the Securities Exchange Act of 1934.

“Exchange Agreement” means the Exchange Agreement, dated as of the date hereof, by and among Friendco, Comcast Cable Communications Holdings, Inc., Comcast of Georgia, Inc., TCI Holdings, Inc., Parent, Buyer and Urban Cable Works of Philadelphia, L.P.

“Excluded Assets” has the meaning set forth in Section 2.2.

“Excluded Claim” means any claim to the extent (and only to the extent) relating to (i) the failure of the Purchase Shares to have been issued in compliance with section 1145 of the Bankruptcy Code or Section 5 of the Securities Act, as applicable, or (ii) the failure of Parent to be deemed a successor to Seller in accordance with Rule 12(g)-3 of the Exchange Act.

“Excluded Liabilities” means, notwithstanding anything to the contrary in this Agreement, all Liabilities of Seller or any of its Affiliates other than the Assumed Liabilities.  For the avoidance of doubt, Excluded Liabilities shall include (i) Liabilities to the extent related to the Excluded Assets, including Liabilities under any Contract that is not an Assigned Contract (other than as set forth in clause (v) of the definition of “Assumed Liabilities”), (ii) subject to clause (ii) of the definition of “Assumed Liabilities” (except with respect to litigation that is pending or threatened as of the Closing), Liabilities to the extent arising in connection with the ownership, use, operation or maintenance of the Transferred Assets or the conduct of any Specified Business on or prior to the Closing, including those arising under or related to (A) Environmental Laws (other than as expressly provided in clause (viii) of the definition of “Assumed Liabilities”) or (B) any Claim (other than under clauses (ii) (except with respect to litigation that is pending or threatened as of the Closing), (iii), (iv), (v), (vii), (viii) or (ix) 

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of the definition of “Assumed Liabilities”) including any Claim in respect of Losses to Persons or property, and any Claim relating to any filings made by Seller or any of its Affiliates under the Exchange Act or the Securities Act (other than any Excluded Claim), (iii) Liabilities under any Indebtedness of Seller or any of its Affiliates, (iv) except for the Assumed Cure Costs, Liabilities for Cure Costs, (v) Liabilities for Chapter 11 Expenses, (vi) Excluded Taxes, (vii) Intercompany Payables, (viii) Liabilities related to the SEC/DOJ Matters, including any SEC/DOJ Settlement, (ix) Liabilities for any Claims filed against Seller or any other Debtor after the bar date established in the Reorganization Case, (x) Liabilities that are subject to the Discharge, any MCE Discharge or any Additional Discharge, (xi) except as provided in clause (iii) of the definition of “Assumed Liabilities,” Liabilities under any Benefit Plan, including under the Adelphia Communications Corporation Key Employee Continuity Program, the Amended and Restated Adelphia Communications Corporation Performance Retention Plan, the Sale Bonus Program and any Stock Award, (xii) Liabilities identified as Excluded Liabilities in Sections 5.2(j), 5.8(a) and 5.8(q), (xiii) Liabilities to Seller, any member of the Rigas family, any Managed Cable Entity or any of their respective Affiliates other than Liabilities under this Agreement or any Ancillary Agreement, (xiv) except pursuant to Section 5.13(d), Liabilities in respect of Rejection Claims and (xv) Liabilities allocated to the Friendco Business pursuant to the proviso to Section 2.3.

“Excluded Taxes” means any Taxes imposed with respect to any Specified Business or any Transferred Assets Related thereto or any income or gain derived with respect thereto, in each case, other than Assumed Taxes.  For the avoidance of doubt, Excluded Taxes shall include any income Tax liability payable by Seller or its Subsidiaries in respect of the Transaction.

“Expanded Agreement” has the meaning set forth in Section 5.15(a)(i).

“Extended Outside Date” has the meaning set forth in Section 8.2.

“FCC” means the Federal Communications Commission.

“Final Adjustment Amount” means, with respect to each Specified Business, the Closing Adjustment Amount as set forth in the Buyer’s Statement for such Specified Business and, in the event of a Seller’s Objection, as adjusted by either the agreement of Buyer and Seller, or by the CPA Firm, acting pursuant to Section 2.6.

“Final MCE Purchase Price” means the Initial MCE Purchase Price in respect of all Disputed MCE Systems the Assets of which are to be transferred to Buyer at the MCE Closing plus the Disputed MCE System Adjustment Amount in respect of all such Disputed MCE Systems.

“Final Order” means an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction with respect to the subject matter, (i) which has not been reversed, stayed, modified, amended, enjoined, set aside, annulled or suspended, (ii) with respect to which no request for a stay, motion or application for reconsideration or rehearing, notice of appeal or petition for certiorari is filed within the deadline

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provided by applicable statute or regulation or as to which any appeal that has been taken or any petition for certiorari that has been or may be filed has been resolved by the highest court to which the order or judgment was appealed or from which certiorari was sought and (iii) as to which the deadlines for filing such request, motion, petition, application, appeal or notice referred to in clause (ii) above have expired; provided, however, that a request for a stay, appeal, motion to reconsider or petition for certiorari referred to in clause (ii) shall be disregarded for purposes of such clause if such appeal, motion to reconsider or petition for certiorari would not, individually or in the aggregate, reasonably be expected to be materially adverse to the Transaction, any Specified Business, Parent or any of its Affiliates (in the case of Parent or its Affiliates, only to the extent related to the Transaction and not in their capacity as creditors or, with respect to Plan distribution matters, equityholders) (taking into account whether such request for a stay, appeal, motion to reconsider or petition for certiorari would be rendered moot under the doctrine of “equitable mootness” as a result of the occurrence of the Closing and any findings of the Bankruptcy Court contained in any such order or judgment, including under section 363(m) of the Bankruptcy Code).

“Financial Advisors” has the meaning set forth in Section 4.26.

“Financial Information” has the meaning set forth in Section 5.11(a).

“Fixtures and Equipment” means, with respect to each Specified Business, all furniture, office equipment, furnishings, fixtures, vehicles, equipment, testing equipment, computers, set-top boxes, tools, electronic devices, towers, tower equipment, trunk and distribution cable, other aboveground and underground cable, decoders and spare decoders for scrambled satellite signals, amplifiers, microwave equipment, power supplies, conduits, vaults and pedestals, grounding and pole hardware, installed subscriber devices (including drop lines, converters, encoders, transformers behind television sets and fittings), headends and hubs (origination, transmission and distribution systems) hardware, spare parts, supplies and closed circuit devices, inventory, other physical Assets (other than real property) and other tangible personal property Related to such Specified Business, wherever located.

“Franchise” means, with respect to each Specified Business, each franchise, as such term is defined in the Communications Act, granted by a Government Entity authorizing the construction, upgrade, maintenance or operation of any part of the Cable Systems that are part of such Specified Business.

“Friendco” has the meaning set forth in the Recitals.

“Friendco Business” has the meaning set forth in the Recitals.

“Friendco Purchase Agreement” has the meaning set forth in the Recitals.

“Friendco Purchase Price” has the meaning ascribed to the term “Purchase Price” in the Friendco Purchase Agreement.

“Friendco Transaction” means the Redemptions and the Exchange.

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“Friendco Transferred Assets” has the meaning ascribed to the term “Transferred Assets” in the Friendco Purchase Agreement.

“Fully Diluted Basis” means all Equity Securities of Parent, without regard to any restrictions or conditions with respect to the exercisability of such Equity Securities, other than (i) any Equity Securities issued following the date hereof on arm’s length terms for fair consideration, as determined in good faith by Parent’s board of directors or any committee thereof, and, in connection with any such issuance to TWX or any of its Affiliates (other than Parent or its wholly owned Subsidiaries), also subject to Section 5.3(c), and (ii) any Equity Securities issued following the date hereof pursuant to employee stock option or restricted stock programs (A) as approved by Parent’s board of directors or compensation committee from time to time pursuant to which Permitted Parent Incentive Awards are issued or (B) in connection with any acquisition transaction satisfying clause (i) of this definition.

“GAAP” means United States generally accepted accounting principles in effect from time to time.

“Government Antitrust Entity” means any Government Entity with jurisdiction over the enforcement of any U.S. Antitrust Law or other similar Law.

“Government Entity” means any federal, state or local court, administrative body or other governmental or quasi-governmental entity with competent jurisdiction.

“Governmental Authorizations” means, with respect to each Specified Business, all licenses (including cable television relay service, business radio and other licenses issued by the FCC or any other Government Entity), permits (including construction permits), certificates, waivers, amendments, consents, Franchises (including similar authorizations or permits), exemptions, variances, expirations and terminations of any waiting period requirements (including pursuant to the HSR Act), other actions by, and notices, filings, registrations, qualifications, declarations and designations with, and other authorizations and approvals Related to such Specified Business and issued by or obtained from a Government Entity or Self-Regulatory Organization.

“Group 1 Business” has the meaning set forth in the Recitals.

“Group 1 Cap Amount” means $296,700,000, plus any amounts paid into the Escrow Account by Buyer minus any amounts paid out of the Escrow Account to Buyer, in each such case after Closing with respect to adjustments in respect of the Group 1 Business under Sections 2.6(f) and 2.7(c).

“Group 1 Shared Assets and Liabilities” means the Shared Assets and Liabilities that are allocated to the Group 1 Business as set forth on Schedule 1.1(h) of the Seller Disclosure Schedule and any other Assets or Liabilities (other than those solely Related to the Group 1 Business), as applicable, that are allocated to the Group 1 Business pursuant to the Designated Allocation or the proviso to Section 2.3.

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“Group 1 Systems” has the meaning set forth in the Recitals.

“Group 1 Threshold Amount” means $74,000,000.

“Group 2 Business” has the meaning set forth in the Recitals.

“Group 2 Cap Amount” means $267,900,000, plus any amounts paid into the Escrow Account by Buyer minus any amounts paid out of the Escrow Account to Buyer, in each such case after Closing with respect to adjustments in respect of the Group 2 Business under Sections 2.6(f) and 2.7(c).

“Group 2 Shared Assets and Liabilities” means the Shared Assets and Liabilities that are allocated to the Group 2 Business as set forth on Schedule 1.1(h) of the Seller Disclosure Schedule and any other Assets or Liabilities (other than those solely Related to the Group 2 Business), as applicable, that are allocated to the Group 2 Business pursuant to the Designated Allocation or the proviso to Section 2.3.

“Group 2 Systems” has the meaning set forth in the Recitals.

“Group 2 Threshold Amount” means $67,000,000.

“Hazardous Substance” means any substance that is listed, defined, designated or classified as hazardous, toxic or otherwise harmful under applicable Laws or is otherwise regulated by a Government Entity, including petroleum products and byproducts, asbestos-containing material, polychlorinated biphenyls, lead-containing products and mold.

“Historic Promotion” means, as to any Basic Subscriber (other than Subscribers that only receive the lowest tier of service (i.e., lifeline or “B1 only” Subscribers)), any discount or promotion that (i) such Basic Subscriber is subject to as of the date hereof (without any modification, extension or renewal thereof after the date hereof) and (ii) does not extend beyond twelve months following the date hereof.

“HSI Subscriber” means an “HSI Customer” as determined pursuant to the Seller Subscriber Accounting Policy.

“HSR Act” means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976.

“Indebtedness” of any Person shall mean, without duplication, (i) all indebtedness of such Person for money borrowed or with respect to deposits or advances of any kind, whether short-term or long-term and whether secured or unsecured and whether or not required to be disclosed on a balance sheet or in the related notes to financial statements under GAAP, (ii) the undrawn face amount of, and unpaid reimbursement obligations in respect of, all letters of credit and bankers’ acceptances issued for the account of such Person, (iii) obligations under any Capital Lease, (iv) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (v) all obligations of such Person upon which interest charges are

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customarily paid (excluding trade accounts payable and accrued obligations in the ordinary course of business) excluding Cure Costs or Rejection Claims, (vi) all obligations of such Person under conditional sale or other title retention agreements relating to Assets purchased by such Person, (vii) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations in the ordinary course of business), (viii) all obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements or other interest or exchange rate hedging arrangements, (ix) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any Equity Securities of such Person or any trust or Subsidiary of such Person (including any preferred stock of such Person or any obligations of such Person in respect of trust preferred, but excluding any such obligations under the Investment Documents listed on
Schedule 1.1(i) of the Seller Disclosure Schedule and provided that such Investment Documents have been made available to Buyer prior to the date hereof), (x) any “keep well” or other agreement to maintain the financial condition of another Person (other than a wholly owned Subsidiary of such Person), (xi) any arrangement having the economic effect of any of the foregoing, (xii) any indebtedness of the types referred to in clauses (i) through (xi) above of another Person that is guaranteed directly or indirectly by such Person or secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) the Assets of such Person, whether or not the obligations secured thereby have been assumed, (xiii) renewals, extensions, refundings, deferrals, restructurings, amendments and modifications of any such indebtedness, obligation or guarantee and (xiv) any interest, charges or penalties in respect of any of the foregoing.

“Indemnified Parties” has the meaning set forth in Section 7.2(a).

“Indemnifying Party” has the meaning set forth in Section 7.4(a).

“Initial Disputed MCE System Adjustment Amount” has the meaning set forth in Section 2.7(a).

“Initial MCE Purchase Price” has the meaning set forth in Section 2.7(a).

“Insurance Claims” means, with respect to each Specified Business, all title, property, casualty, fire or, to the extent it relates to periods following the Closing, business interruption, insurance proceeds received or receivable by such Specified Business in respect of any Transferred Asset or Assumed Liability, all title, property, casualty, fire or, to the extent it relates to periods following the Closing, business interruption, insurance proceeds (to the extent not already expended (including expenditures of other monies) by Seller or any Affiliate of Seller to restore or replace the lost or damaged Asset, which replacement Asset shall be a Transferred Asset) received or receivable by such Specified Business in respect of any Asset damaged or lost after December 31, 2004 and which, if not so damaged or lost, would have been a Transferred Asset and all insurance proceeds received or receivable by such Specified Business in respect of business interruption of such Specified Business to the extent relating to any period after the Closing.

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“Insurance Policies” has the meaning set forth in Section 3.23.

“Intellectual Property” means, as they exist anywhere in the world, (i) trademarks, service marks, brand names, certification marks, collective marks, logos, symbols, trade dress, trade names, and other indicia of origin, all applications and registrations for the foregoing, and all goodwill associated therewith and symbolized thereby, including all renewals of same, (ii) inventions and discoveries, whether patentable or not, and all patents, invention disclosures and applications therefor, and designs and improvements claimed therein, including divisions, continuations, continuations-in-part and renewal applications, and including renewals, reexaminations, interferences, extensions and reissues, (iii) trade secrets, confidential information and know-how, including processes, schematics, business methods, formulae, drawings, prototypes, models, designs, customer lists and supplier lists, (iv) published and unpublished works of authorship, whether copyrightable or not (including databases and other compilations of information), including mask rights and computer software (including all source code, object code, specifications, designs and documentation related to such programs), copyrights therein and thereto, registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof, (v) domain names, Internet addresses and other computer identifiers, web sites, web pages and similar rights and items, and (vi) any other intellectual property or proprietary rights to the extent entitled to legal protection as such.

“Intellectual Property Assignment Agreement” means, with respect to each Specified Business, an agreement in form and substance reasonably acceptable to Seller and Buyer, providing for the assignment of the Transferred Intellectual Property Related to such Specified Business.

“Intercompany Payables” means, with respect to each Specified Business, all account, note or loan payables (including credit balance intercompany receivables), whether or not recorded on the books of Seller or any of its Affiliates, for goods or services purchased by such Specified Business or provided to such Specified Business, or advances (cash or otherwise) or any other extensions of credit to such Specified Business, in each case from Seller or any of its Affiliates, including amounts recorded on the Derivative 2004 Financial Statements, whether current or non-current, as either intercompany, affiliate or related party payables, on a gross or net basis.

“Intercompany Receivables” means, with respect to each Specified Business, all account, note or loan receivables, whether or not recorded on the books of Seller or any of its Affiliates, for goods or services sold or provided by such Specified Business to Seller, any of its Affiliates or advances (cash or otherwise) or any other extensions of credit made by such Specified Business to Seller or any of its Affiliates, including amounts recorded on the Derivative 2004 Financial Statements, whether current or non-current, as either intercompany, affiliate or related party receivables, on a gross or net basis.

“Interim Dividends” means, with respect to any shares of Parent Class A Common Stock delivered after the Closing, any dividends declared and paid between the

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Closing and the delivery of such shares, plus (to the extent of any dividends paid in cash) interest from the respective dates on which such dividends were paid to the date of payment, at LIBOR calculated on a 365-day basis; it being understood that the holder of such shares shall be entitled to receive any dividends declared but not paid between the Closing and the delivery of such shares upon the payment of such dividend to the holders of Parent Class A Common Stock.

“Intermediate Subsidiary” has the meaning set forth in Section 3.2(a).

“Investment Documents” means the documents governing any Transferred Investment.

“Investment Entity” means any issuer of a Transferred Investment.

“Investment Entity Securities” means, with respect to each Investment Entity, the Equity Securities of such Investment Entity.

“IRS” means the United States Internal Revenue Service.

“Knowledge” means (i) with respect to Seller and its Affiliates, the collective actual knowledge of any of Seller’s executive officers, the vice president of law and governmental affairs, the vice president for engineering, the vice president for finance, the vice president of financial planning, the vice president – treasurer, the applicable regional senior vice presidents, the applicable direct reports to the regional senior vice presidents, including the senior executive officer of each Cable System or group of Cable Systems, the most senior employee that is responsible for tax matters (currently, the vice president of taxation), the senior officer responsible for environmental matters including the Environmental Self-Audit and each regional vice president of finance, each regional vice president of engineering, and each regional vice president of law and governmental affairs, and (ii) with respect to Buyer, the collective actual knowledge of Buyer’s Chief Executive Officer, and any of Parent’s executive officers, applicable executive vice presidents and applicable division presidents and each group vice president of finance.

“Law” means any law, statute, ordinance, rule, regulation, code, order, judgment, injunction or decree enacted, issued, promulgated, enforced or entered by a Government Entity or Self-Regulatory Organization.

“Lease Assignment Agreement” means, with respect to each Specified Business, one or more agreements in form and substance reasonably acceptable to Seller and Buyer and reasonably necessary to cause such agreements to be recordable, assigning to Buyer the Transferred Real Property Leases Related to such Specified Business.

“Leased Real Property” means real property subject to the Real Property Leases.

“LFA Approvals” means all consents, approvals or waivers required to be obtained from Government Entities with respect to the transfer or change in control of

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Franchises in connection with the Transaction and, except for purposes of Section 6.2(e), the Exchange.

“Liabilities” means any and all Indebtedness, losses, claims, charges, demands, actions, damages, obligations, payments, costs and expenses, sums of money, bonds, indemnities and similar obligations, covenants, contracts, controversies, omissions, make whole agreements and similar obligations, and other liabilities, including all contractual obligations, whether due or to become due, fixed, contingent or absolute, inchoate or otherwise, matured or unmatured, liquidated or unliquidated, accrued or not accrued, asserted or not asserted, known or unknown, determined, determinable or otherwise, whenever or however arising, including, those arising under any Law, principles of common law (including out of any contract or tort based on negligence or strict liability) action, threatened or contemplated action (including the costs and expenses of demands, assessments, judgments, settlements and compromises relating thereto and attorneys’ fees and any and all costs and expenses (including allocated costs of in-house counsel and other personnel), whatsoever reasonably incurred in investigating, preparing or defending against any such actions or threatened or contemplated actions), order or consent decree of any Government Entity or any award of any arbitrator or mediator of any kind, and those arising under any contract, commitment or undertaking, whether or not the same would be required by GAAP to be recorded or reflected in financial statements or disclosed in the notes thereto.

“LIBOR” means the six-month Interbank Official Rate with respect to deposits in Dollars which appears on the Telerate Page 3750 as of 11:00 a.m., London time, on the day that is two business days in London preceding the Closing.

“Losses” has the meaning set forth in Section 7.2(a).

“Managed Cable Entity” means, with respect to an MCE System, each Person (other than the Debtors, Buyer and its Affiliates) that owns or purports to own any Equity Security or profits interest in such MCE System.

“Material Adverse Effect” means (i) a material adverse effect on the business, condition (financial or otherwise), Assets or results of operations of any Specified Business (or, solely for purposes of Section 6.2(f), any Specified Business or the Acquired Business), taken as a whole, or (ii) a material impairment or delay of Seller’s or its Affiliates’ ability to effect the Closing or to perform its obligations under this Agreement or any Ancillary Agreement to which it is a party; provided, however, that none of the following (or the results thereof) shall be taken into account:  (A) any change in Law or accounting standards or interpretations thereof that is of general application; (B) any change in general economic or business conditions or industry-wide or financial market conditions generally; (C) except with respect to Sections 3.4, 3.5, 6.1(f) and 6.2(e), any adverse effect as a result of the execution or announcement of this Agreement, the Ancillary Agreements, the Transaction or the transactions contemplated by the Ancillary Agreements; and (D) any loss of Subscribers reflected in the Base Subscriber Number for such Specified Business (or, solely for purposes of Section 6.2(f), any or all Specified Businesses ) and any loss of Subscribers to the extent reflected in the

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Subscriber Change used in calculating the Final Adjustment Amount for such Specified Business (or, solely for purposes of Section 6.2(f), any or all Specified Businesses).

“MCE Base Subscriber Number” means, with respect to each MCE System, the number of Basic Subscribers of such MCE System corresponding to the month prior to the month in which the Closing occurs, as set forth on Schedule 1.1(j) of the Seller Disclosure Schedule.

“MCE Closing” has the meaning set forth in Section 2.7(c).

“MCE Discharge” means, with respect to each MCE System, except as otherwise provided in the Plan and the Confirmation Order (or, to the extent approved by Buyer (such approval not to be unreasonably withheld), such other plan that includes the applicable Managed Cable Entity as a debtor and the confirmation order of the Bankruptcy Court approving such plan and effecting the MCE Discharge), the discharge and/or equivalent effect granted pursuant to such confirmation order and sections 363, 1123 and 1141 of the Bankruptcy Code or the equivalent effect pursuant to any other governmental proceeding to the extent approved by Buyer (such approval not to be unreasonably withheld; it being understood that it would be reasonable for Buyer to refuse to grant such approval if such other governmental proceeding would not have the same effect as a bankruptcy discharge in all respects relative to the Transaction), of (i) each applicable Managed Cable Entity, as a debtor in possession, from Liabilities, (ii) interests of, and rights, interest and Claims of the holders of Claims against and interests in, such MCE System and Managed Cable Entity and (iii) Encumbrances on, or interests of Persons (other than Seller and its Affiliates) in, the Transferred Assets that are Related to such MCE System; it being understood that an MCE Discharge may occur pursuant to the Plan.

“MCE Financial Statements” has the meaning set forth in Section 5.11(b).

“MCE Fraction” means, with respect to the Disputed MCE Systems transferred to Buyer at the MCE Closing (or, as used in the definitions of “MCE Subscriber Cap Component” and “MCE Subscriber Basket Component,” with respect to all Disputed MCE Systems not transferred to Buyer at the Closing), a fraction, the numerator of which is the aggregate number of Basic Subscribers served by such Disputed MCE Systems and the denominator of which is the aggregate number of Basic Subscribers served by all Group 2 Systems and MCE Systems, in each case as of December 31, 2004.

“MCE Management Agreement” has the meaning set forth in Section 2.7(b).

“MCE Period” has the meaning set forth in Section 2.7(b).

“MCE Purchase Price” means $390,000,000.

“MCE Purchase Shares” has the meaning set forth in Section 2.7(c).

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“MCE Resolution” has the meaning set forth in Section 2.7(b).

“MCE Subscriber Basket Component” means the Subscriber Basket set forth on Schedule 1.1(q)(i) of the Seller Disclosure Schedule with respect to the Group 2 Systems multiplied by the MCE Fraction.

“MCE Subscriber Cap Component” means the Subscriber Cap set forth with respect to the Group 2 Systems on Schedule 1.1(q)(ii) of the Seller Disclosure Schedule multiplied by the MCE Fraction.

“MCE Systems” has the meaning set forth in the Recitals.

“Measurement Date” means the subscriber cut-off date during the calendar month immediately preceding the month in which the Closing occurs.

“Most Recent Balance Sheet” means, with respect to each Specified Business, the unaudited balance sheet included in the Derivative 2004 Financial Statements for such Specified Business.

“Multiemployer Plan” has the meaning set forth in Section 3.10(a).

“Net Liabilities Adjustment Amount” means, with respect to each Specified Business, the Closing Net Liabilities Amount minus the Base Net Liabilities Amount of such Specified Business, expressed as a positive, if positive, or as a negative, if negative.

“Non-Debtor Subsidiaries” has the meaning set forth in Section 5.13(h).

“Non-Debtor Transfer” has the meaning set forth in Section 5.13(h).

“Non-Governmental Authorizations” means, with respect to each Specified Business, all licenses, permits (including construction permits), certificates, waivers, amendments, consents, franchises, exemptions, variances, expirations and terminations of any waiting period requirements, other actions by, and notices, filings, registrations, qualifications, declarations and designations with, any Person and other authorizations and approvals that are Related to such Specified Business other than Governmental Authorizations.

“Non-Referred Proposal” has the meaning set forth in the definition of “Proposed Change in Tax Law.”

“Notice Period” has the meaning set forth in Section 7.4(a).

“NYSE” means the New York Stock Exchange.

“OCB Contract” means, with respect to each Specified Business, a Contract Related to such Specified Business that (i) (A) is in a Contract Category Expected to be Assumed, (B) is entered into in the Ordinary Course and (C) contains no

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Special Terms (provided, that with respect to Contracts described on Schedule 1.1(k)(i) of the Seller Disclosure Schedule, clause (i) of the definition of “Special Terms” shall be disregarded for purposes of this definition) or (ii) is set forth on Schedule 1.1(k)(ii) of the Seller Disclosure Schedule; provided, however, that any Contract that would otherwise be an OCB Contract and which cannot be assigned to Buyer at the Closing without consent or waivers of a third party that are not obtained by the Closing (and the use and benefits of which cannot in all material respects be provided to Buyer pursuant to Section 2.11) shall be deemed not to be an OCB Contract; provided, further, that Buyer shall be entitled to remove from Schedule 1.1(k)(i) of the Seller Disclosure Schedule any Contract that was amended in any material respect prior to the date hereof if such amendment is not identified with such Contract on Schedule 1.1(k)(i).

“Ordinary Course” or “Ordinary Course of Business” means (i) with respect to each Specified Business, the conduct of such Specified Business as a going concern in accordance with Seller’s normal day-to-day customs, practices and procedures, without regard to the Sale Process (it being understood that the use of regional or national resources utilized by a Cable System shall be deemed to be so conducted if utilized in accordance with Seller’s normal, day-to-day customs, practices and procedures in the Business as applied to such Cable System), and (ii) with respect to the Parent Business, the conduct of the Parent Business as a going concern in accordance with Parent’s normal day-to-day customs, practices and procedures, except to the extent such customs, practices and procedures relate to transactions entered into following the date hereof that have the intended effect of benefiting any Affiliate of Parent (other than any Subsidiary of Parent) at the expense of Parent or any Subsidiary of Parent in a manner that would deprive Parent or any Subsidiary of Parent of the benefit they would otherwise have obtained if the transaction were to have been effected on terms that were negotiated on an arm’s length basis.

“Outside Date” has the meaning set forth in Section 8.2.

“Owned Real Property” means, with respect to each Specified Business, all fee interests in real property (including improvements thereon) Related to such Specified Business, including those listed on Schedule 1.1(l) of the Seller Disclosure Schedule and identified as Related to such Specified Business.

“Parent” has the meaning set forth in the Recitals.

“Parent Agreement” has the meaning set forth in the Recitals.

“Parent Audited Financial Statements” has the meaning set forth in Section 4.9(a).

“Parent Basic Subscriber” means a paying customer who subscribes to at least the lowest level of video programming offered by the Parent Cable Systems as determined pursuant to the Parent Subscriber Accounting Policy.

“Parent Benefit Plans” has the meaning set forth in Section 4.12(a).

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“Parent Business” has the meaning set forth in the Recitals.

“Parent Cable System” means each System that is Related to the Parent Business.

“Parent Capital Stock” has the meaning set forth in Section 4.4(b).

“Parent Class A Common Stock” has the meaning set forth in Section 2.5(c).

“Parent Class B Common Stock” has the meaning set forth in Section 4.4(b).

“Parent Digital Subscriber” means a paying customer who subscribes to any level of service received via digital technology (including the digital guide tier, digital basic tier, digital sports tier and digital movie tier) from the Parent Cable Systems as determined pursuant to the Parent Subscriber Accounting Policy.

“Parent Franchise” means each franchise, as such term is defined in the Communications Act, granted by a Government Entity authorizing the construction, upgrade, maintenance or operation of any part of the Parent Cable Systems.

“Parent Governmental Authorizations” means all licenses (including cable television relay service, business radio and other licenses issued by the FCC or any other Government Entity), permits (including construction permits), certificates, waivers, amendments, consents, franchises (including similar authorizations or permits), exemptions, variances, expirations and terminations of any waiting period requirements (including pursuant to the HSR Act), other actions by, and notices, filings, registrations, qualifications, declarations and designations with, and other authorizations and approvals Related to the Parent Business and issued by or obtained from a Government Entity or Self-Regulatory Organization.

“Parent HSD Subscriber” means a paying customer who subscribes to high speed data service offered by the Parent Cable Systems as determined pursuant to the Parent Subscriber Accounting Policy.

“Parent Material Adverse Effect” means (i) a material adverse effect on the business, condition (financial or otherwise), Assets or results of operations of the Parent Business, taken as a whole or (ii) a material impairment or delay of Parent’s or its Controlled Affiliates’ ability to effect the Closing or to perform its obligations under this Agreement or any Ancillary Agreement to which it is a party; provided, however, that none of the following (or the results thereof) shall be taken into account:  (A) any change in Law or accounting standards or interpretations thereof that is of general application; (B) any change in general economic or business conditions or Broadband Industry-wide or financial market conditions generally; and (C) except with respect to Sections 4.6, 4.7 and 6.1(f), any adverse effect as a result of the execution or announcement of this Agreement, the Ancillary Agreements, the Transaction or the transactions contemplated by the Ancillary Agreements.

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“Parent Material Contracts” means those Contracts set forth on Schedule 4.17(a) of the Buyer Disclosure Schedule.

“Parent Preferred Stock” has the meaning set forth in Section 4.4(b).

“Parent Real Property” means all fee interests in real property (including improvements thereon) Related to the Parent Business.

“Parent Redemption” means the redemption of the Parent Class A Common Stock pursuant to the Parent Redemption Agreement.

“Parent Redemption Agreement” means the Redemption Agreement, dated as of the date hereof, by and among Friendco, Comcast Cable Communications Holdings, Inc., MOC Holdco II, Inc., TWE Holdings I Trust, TWE Holdings II Trust, Cable Holdco II Inc., TWE Holding I LLC, TWX and Parent.

“Parent Subscriber” means any Parent Basic Subscriber, Parent Digital Subscriber or Parent HSD Subscriber.

“Parent Subscriber Accounting Policy” has the meaning set forth in Section 4.18(e).

“Per Share Value of the Purchase Shares” means the amount obtained by dividing the Aggregate Value of the Purchase Shares by the aggregate number of Purchase Shares that would be delivered by Buyer at the Closing before giving effect to any adjustment thereto pursuant to Section 2.6(f) or 2.7.

“Permitted Encumbrances” means (i) Encumbrances reflected or reserved against or otherwise disclosed in the Most Recent Balance Sheet, (ii) mechanics’, materialmen’s, warehousemen’s, carriers’, workers’, or repairmen’s liens or other similar common law or statutory Encumbrances arising or incurred in the Ordinary Course and that are not material in amount or effect on any Specified Business or are being contested in good faith by appropriate proceedings, (iii) liens for Taxes, assessments and other governmental charges that are not due or payable or are being contested in good faith by appropriate proceedings, (iv) with respect to real property, (A) easements, quasi-easements, licenses, covenants running with the land, rights-of-way, rights of re-entry, restrictions or other similar encumbrances, conditions or restrictions that would be disclosed on current title reports or surveys, which do not, individually or in the aggregate with one or more other Encumbrances, interfere in any material respect with the right or ability to own, use, enjoy or operate such real property as currently used or operated or to convey good and indefeasible fee simple title to the same (with respect to Owned Real Property) or materially detract from the

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value of such real property, (B) zoning, building, subdivision or other similar requirements or restrictions, provided, that the same are not violated in any material respect by the existing improvements or the current use and operation of such real property, and (C) Transferred Real Property Subleases which do not, individually or in the aggregate with one or more other Encumbrances, interfere in any material respect with the right or ability to use, enjoy or operate such real property as currently used or operated or materially detract from the value of such real property, (v) Encumbrances, other than Encumbrances on real property, incurred in the Ordinary Course that are not material to any Specified Business, (vi) any transfer restrictions set forth in any Assigned Contract (other than any such restriction that could reasonably be expected, individually or in the aggregate, to adversely affect the Transaction or the Exchange in any material respect) and (vii) Encumbrances imposed by any Contract or any Law governing a Franchise, provided, that in the case of clauses (i), (ii), (iii), (iv) (as to any Encumbrances that can be satisfied solely through the payment of money) and (v), any such Encumbrance shall be a Permitted Encumbrance only to the extent that such Encumbrance (x) shall be discharged pursuant to the Discharge or, with respect to MCE Systems or Transferred Assets owned by Non-Debtor Subsidiaries, an MCE Discharge or Additional Discharge, respectively, or (y) is reflected in the Closing Net Liabilities Amount used in calculating the Final Adjustment Amount.

“Permitted Parent Incentive Awards” means an amount of Equity Securities that, during the 12-month period commencing on the date hereof, does not exceed 1.5% of the outstanding Equity Securities of Parent calculated on a Fully Diluted Basis and, for each 90-day period thereafter, does not exceed an additional 0.375% of the outstanding Equity Securities of Parent calculated on a Fully Diluted Basis (provided, that (i) no more than ten percent of Permitted Parent Incentive Awards shall be shares of restricted stock and (ii) any such employee stock option shall not be issued at less than fair market value as determined in good faith by Parent’s board of directors or compensation committee).

“Permitted Promotion” means, as to any Basic Subscriber (other than Subscribers that only receive the lowest tier of service (i.e., lifeline or “B1 only” Subscribers)), any discount or promotion (i) which does not extend beyond two months following the Closing Date or provide for a discount equal to (or in excess of) the entire Applicable Monthly Rate in any consecutive months or in more than any one month if such discount or promotion is for a period of less than four months and (ii) the dollar amounts or values of which do not (A) exceed, over the life of such discount or promotion, an amount equal to two times the full monthly rate card pricing applicable to all services provided to such Subscriber (the “Applicable Monthly Rate”) or (B) exceed 50% of an amount equal to the product of (x) the Applicable Monthly Rate multiplied by (y) the number of months (including any fraction thereof) in the life of such discount or promotion.

“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a Government Entity, a trust, a labor union or other entity or organization.

“Petition Date” has the meaning set forth in the Recitals.

“Plan” means the chapter 11 plan filed by Seller and/or its Affiliates in connection with the Reorganization Case, providing, among other things, for the effectuation of the Transaction, as amended from time to time, and satisfying the requirements of Section 5.13.

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“Primarily Related” means, with respect to any business or System, owned or held primarily by, required primarily for, or used, intended for use, leased, licensed, accrued, reserved or incurred primarily in connection with, such business or System, including to the extent allocated thereto pursuant to Schedule 1.1(m) of the Seller Disclosure Schedule.

“Pro Rata Payment” means, as to any amount, an aggregate amount of cash and Purchase Shares (where each Purchase Share is valued at the Per Share Value of the Purchase Shares) equal to such amount and allocated as between cash and Purchase Shares such that 35.14% of such amount shall be in the form of Purchase Shares and 64.86% of such amount shall be in cash; provided, however, that (i) the cash portion of such amount shall be increased by (A) any Interim Dividend paid in cash on the Purchase Shares included in such Pro Rata Payment and (B) in respect of the portion of any cash payment by Buyer pursuant to (x) Section 2.6(f), interest on such portion (without giving effect to the foregoing clause (A)) from the date of the Closing, as applicable, to the date of payment at LIBOR calculated on a 365-day basis and (y) Section 7.2, interest on such portion (without giving effect to the foregoing clause (A)) at LIBOR calculated on a 365-day basis from the date notice of the Losses for which indemnification is sought was delivered until the date of payment of indemnification by the Buyer Indemnifying Party and (ii) the stock portion of such amount shall be increased by Interim Dividends paid in stock on the Purchase Shares included in such Pro Rata Payment.

“Programming Agreement” means any Contract pursuant to which Seller or any of its Affiliates has the right to carry audio and/or video content or programming (or pay for or otherwise provide compensation with regard to cable television programming) on any Cable System and all related arrangements, including with respect to programming and launch initiatives and support; provided, that “Programming Agreement” shall not include any local Cable System leased access agreement required by Law.

“Proposed Change in Tax Law” means a proposal published in writing by (i) the President of the United States, (ii) the U.S. Treasury Department or any official on behalf of the U.S. Treasury Department (including the Office of Tax Policy), (iii) the Commissioner of the Internal Revenue Service or any official on behalf of the Internal Revenue Service, (iv) the House Ways and Means Committee or any member thereof (each such member, except for the chair and ranking minority member, a “Specified HWMC Member”), (v) the Senate Finance Committee or any member thereof (each such member, except for the chair and ranking minority member, a “Specified SFC Member”) or (vi) any other Congressional Committee (any such proposal that is not reported out of such Congressional Committee for sequential referral to either the House Ways and Means Committee or the Senate Finance Committee, a “Non-Referred Proposal”).

“Protections Order” means an order of the Bankruptcy Court approving Section 5.10 and Article VIII pursuant to sections 105, 363, 503(b) and 364 of the Bankruptcy Code.

“Proximate Cause Party” has the meaning set forth in Section 8.2.

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“Purchase Price” has the meaning set forth in Section 2.5(c).

“Purchase Price Allocation Schedule” has the meaning set forth in Section 5.7(d).

“Purchase Price Per Subscriber” means $3,810.

“Purchase Rights” means any purchase options, rights of first refusal or other rights that any Person may have (under the terms of any franchise or otherwise) to purchase all or any portion of a System owned or operated by any Person as a result of the Transaction or the transfer of any System pursuant to the Exchange.

“Purchase Shares” has the meaning set forth in Section 2.5(c).

“Qualified Customer” means a Basic Subscriber who, prior to the Closing, has been billed and, prior to one month following the Closing, has paid (disregarding payments subject to any rebates or similar programs) for services delivered during the period commencing two months prior to the Measurement Date and ending on the Measurement Date an amount no less than (i) for each month in such period, 50% of the Applicable Monthly Rate or (ii) 66.67% of the Applicable Monthly Rate in respect of any single month during such period.  For the avoidance of doubt, in calculating a Qualified Customer for purposes of the Estimated Closing Adjustment Amount and the condition set forth in the second sentence of Section 6.2(h), the parties shall assume that no payments will be made by such Basic Subscriber after the Closing.

“Rate Regulatory Matter” means any proceeding or investigation with respect to a Cable System arising out of or related to the Cable Act (other than those affecting the cable television industry generally) dealing with, limiting or affecting the rates which can be charged by such Cable System for programming, equipment, installation, service or otherwise.

“Real Property Leases” means, with respect to each Specified Business, those leases, subleases, license agreements, and sublicense agreements, together with all extensions, supplements, amendments, other modifications and nondisturbance agreements relating thereto, governing real property Related to such Specified Business, including those with respect to the real properties listed on Schedule 1.1(n) of the Seller Disclosure Schedule and identified as Related to such Specified Business.

“Real Property Sublease” means, with respect to any Specified Business, any lease, sublease, license or sublicense, together with all extensions, supplements, amendments and other modifications relating thereto, pursuant to which the Owned Real Property or the Leased Real Property (or any portion thereof) Related to such Specified Business is leased, subleased, licensed or sublicensed to others.

“Redemptions” means the transactions that are the subject matter of the Parent Redemption Agreement and of the TWE Redemption Agreement, including the Parent Redemption and the TWE Redemption.

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“Registered” means issued by, registered with, renewed by, or the subject of a pending application before, any Government Entity or domain name registrar.

“Rejected Contracts” has the meaning set forth in Section 5.13(b).

“Rejection Claim” means, with respect to a Contract, any Claim arising out of (i) the termination of such Contract or the rejection of such Contract under section 365 of the Bankruptcy Code or (ii) a breach of or default under any such Contract entered into following the Petition Date as a result of the termination, rejection or breach of such Contract as a result of Buyer’s determination not to make such Contract an Assigned Contract, in each case assuming such termination, rejection or breach occurred as of the earlier of (A) the date on which such Contract is terminated or rejected or (B) the Closing Date.

“Related” means, with respect to any business or System, owned or held by, required for, or used, intended for use, leased, licensed, accrued, reserved or incurred in connection with, such business or System.

“Related to the Parent Business” means owned or held by, required for, used or intended for use, leased or licensed in connection with, the Parent Business as conducted by Parent and its Affiliates prior to the Closing.

“Reorganization Case” has the meaning set forth in the Recitals.

“Retained Books and Records” has the meaning set forth in Section 5.1(d).

“Rigas Litigation” means the litigation described on Schedule 1.1(o) of the Seller Disclosure Schedule.

“Rights-of-Way” means, with respect to each Specified Business, the written rights-of-way easements, rights of access, rights of use, pole line or joint line agreements, underground conduit agreements, crossing agreements, railroad agreements, leases, subleases, licenses, sublicenses and other similar interests in real property (other than Owned Real Property and Leased Real Property), together with all extensions, supplements, amendments, other modifications and nondisturbance agreements relating thereto, Related to such Specified Business.

“Rights-of-Way Assignment Agreement” means, with respect to each Specified Business, an agreement in form and substance reasonably acceptable to Seller and Buyer and, to the extent relating to Transferred Rights-of-Way that are currently recorded, reasonably necessary to cause such assignments to be in recordable form, assigning to Buyer the Transferred Rights-of-Way Related to such Specified Business.

“Sale Bonus Program” has the meaning set forth in the definition of “Assumed Liabilities.”

“Sale Process” means the formal sale process of Seller’s Business announced by Seller on April 22, 2004 and commenced by Seller in September 2004.

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“Schedule A Part” has the meaning set forth in the definition of “System Group.”

“SEC” means the Securities and Exchange Commission.

“SEC/DOJ Matters” means (i) the civil enforcement action captioned Securities and Exchange Commission v. Adelphia Communications Corporation, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, filed on July 24, 2002, alleging various securities fraud claims arising out of the Rigas family’s alleged misconduct, and the Department of Justice’s investigation related thereto, in each case as amended, modified and/or supplemented from time to time, and any related action or investigation commenced from time to time and (ii) any and all other Claims that the SEC or Department of Justice may have against Seller or any of its Affiliates (other than any Excluded Claim); provided, that, solely for purposes of Section 6.1(c), clause (ii) shall be deemed to exclude any such Claims that shall not have been asserted or threatened by the SEC or Department of Justice as of the Closing Date.

“SEC/DOJ Settlement” means a settlement, dismissal or other resolution of the SEC/DOJ Matters in full and pursuant to which after the Closing no Specified Business or any owner thereof shall have any Liability (including risk of criminal prosecution), including any obligation with respect to behavioral relief or similar action or limitation other than obligations not greater than those set forth in the form of letter agreement delivered by representatives of Friendco to representatives of Seller and Buyer on April 17, 2005.

“Securities Act” means the Securities Act of 1933.

“Self-Regulatory Organization” means the National Association of Securities Dealers, Inc., the American Stock Exchange, the NYSE, any national securities exchange (as defined in the Exchange Act) or any other similar self-regulatory body or organization.

“Seller” has the meaning set forth in the Preamble.

“Seller Audited Financial Statements” has the meaning set forth in Section 5.11(b).

“Seller Confidentiality Agreement” means the letter agreement, dated October 22, 2004, among Seller, Friendco and TWX, as amended by the letter agreement, dated November 9, 2004, the letter agreement, dated January 7, 2005 and the letter agreement dated as of the date hereof.

“Seller Disclosure Schedule” means the disclosure schedule attached hereto as Annex A.

“Seller Indemnified Parties” has the meaning set forth in Section 7.3.

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“Seller Required Approvals” means, with respect to each Specified Business, all consents, approvals, waivers, authorizations, notices and filings, (a) required to be obtained by Seller or any of its Affiliates from, or to be given by Seller or any of its Affiliates to, or made by Seller or any of its Affiliates with, any Person, in connection with the execution, delivery and performance by Seller or any of its Affiliates of this Agreement, the Ancillary Agreements and the agreements contemplated thereby to which it is (or will be) a party, the failure of which to obtain or make would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, other than the Confirmation Order and the LFA Approvals, or (b) that are listed on Schedule 1.1(p) of the Seller Disclosure Schedule and identified as Related to such Specified Business.

“Seller Severance Plan” has the meaning set forth in Section 5.8(c).

“Seller Subscriber Accounting Policy” has the meaning set forth in Section 3.16(e).

“Seller’s 401(k) Plan” has the meaning set forth in Section 5.8(j).

“Seller’s Objection” has the meaning set forth in Section 2.6(c).

“Seller’s Statement” has the meaning set forth in Section 2.6(a).

“Shared Assets and Liabilities” means the Assets and Liabilities set forth on Schedule 1.1(h) of the Seller Disclosure Schedule and any other Assets required to have been listed thereon in order for the representation and warranty in Section 3.20(b) to be true and correct.

“Significant Subsidiary” of any Person means a Subsidiary of such Person that would constitute a “significant subsidiary” (within the meaning of Rule 102 of Regulation S-X of the SEC).

“SOA” means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.

“Special Term” has the meaning set forth in Section 3.15(b).

“Specified Business” means each of the Group 1 Business and the Group 2 Business.

“Specified HWMC Member” has the meaning set forth in the definition of “Proposed Change in Tax Law.”

“Specified SFC Member” has the meaning set forth in the definition of “Proposed Change in Tax Law.”

“Specified Systems” means each of the Group 1 Systems, the Group 2 Systems and the MCE Systems.

“Stock Awards” has the meaning set forth in Section 5.8(q).

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“Sublease Assignment Agreement” means, with respect to each Specified Business, one or more agreements in form and substance reasonably acceptable to Seller and Buyer and reasonably necessary to cause such agreements to be recordable, assigning to Buyer the Transferred Real Property Subleases Related to such Specified Business.

“Subscriber” means any Basic Subscriber, Digital Subscriber or HSI Subscriber.

“Subscriber Accounting System” has the meaning set forth in Section 5.23.

“Subscriber Adjustment Amount” means, with respect to each Specified Business, the product of (i) Purchase Price Per Subscriber multiplied by (ii) if (A) the absolute value of the Subscriber Change is less than or equal to the Subscriber Basket, zero and (B) the absolute value of the Subscriber Change is greater than the Subscriber Basket, (1) if the Subscriber Change is a negative amount, the sum of the Subscriber Change plus the Subscriber Basket for such Specified Business and (2) if the Subscriber Change is a positive amount, the sum of the Subscriber Change minus the Subscriber Basket for such Specified Business.

“Subscriber Basket” means, with respect to each Specified Business, the number of Basic Subscribers set forth opposite such Specified Business in Schedule 1.1(q)(i) of the Seller Disclosure Schedule; provided, however, that the Subscriber Basket allocated to the Group 2 Business shall be reduced by the MCE Subscriber Basket Component (if there are any Disputed MCE Systems).

“Subscriber Cap” means, with respect to each Specified Business, the number of Basic Subscribers set forth with respect to such Specified Business in Schedule 1.1(q)(ii) of the Seller Disclosure Schedule; provided, however, that the Subscriber Cap allocated to the Group 2 Business shall be reduced by the MCE Subscriber Cap Component (if there are any Disputed MCE Systems).

“Subscriber Change” means, with respect to each Specified Business, the Base Subscriber Number for such Specified Business minus the Closing Subscriber Number for such Specified Business, expressed as a positive, if positive, or as a negative, if negative; provided, that, except for purposes of calculating the Subscriber Adjustment Amount for each Disputed MCE System pursuant to Section 2.7(a),  the absolute value of the Subscriber Change shall not exceed the Subscriber Cap for such Specified Business.

“Subsequent Adjustment Amount” has the meaning set forth in Section 2.6(f).

“Subsidiary” means, with respect to any Person, any entity whether incorporated or unincorporated, of which at least a majority of the securities or ownership interests having by their terms voting power to elect a majority of the board of directors or other persons performing similar functions is directly or indirectly owned or controlled by such Person or by one or more of its respective Subsidiaries; it being understood that (i) Bright House Networks, LLC shall be deemed not to be a Subsidiary of Parent or any

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of its Affiliates so long as its day-to-day operations are managed by Advance Publications, Inc., a New York corporation, Advance/▇▇▇▇▇▇▇▇ Partnership, a New York general partnership, or any of their respective Affiliates pursuant to the Partnership Agreement for Time Warner Entertainment-Advance/▇▇▇▇▇▇▇▇ Partnership, a New York general partnership (“TWE-A/N”), (ii) TWE-A/N shall be deemed a wholly owned, indirect Subsidiary of Parent, and (iii) the Tele-Media Entities shall be deemed to be Subsidiaries of Seller.

“Superior Alternate Plan” has the meaning set forth in Section 5.10(b).

“Superior Proposal” has the meaning set forth in Section 5.10(a).

“System” means (i) a cable system, as such term is defined in the Communications Act, and (ii) to the extent relating to areas referred to on a Schedule A Part as a non-primary Cost Center, a multichannel video programming distribution system operated through (A) bulk, commercial or multiple dwelling units, (B) satellite master antenna television units or (C) former Verizon cable systems in Thousand Oaks, Oxnard, Port Hueneme and El Rio, California.

“System Group” means, with respect to each Specified Business and each Specified Business (as defined in the Friendco Purchase Agreement), the Systems that are a part of such Specified Business as set forth in the applicable part of Schedule A of the Seller Disclosure Schedule or Schedule A of the Seller Disclosure Schedule (as defined in the Friendco Asset Purchase Agreement) (each, a “Schedule A Part”).

“Target Capital Expenditure Amount” means, with respect to each Specified Business, the aggregate amount of capital expenditures budgeted to be made in respect thereof, respectively, subsequent to December 31, 2004 and up to and including the end of the month immediately preceding the Closing Date or, if the Closing occurs on a month-end, up to and including such month, as set forth in the Budget; provided, however, that in the event any Disputed MCE Systems exist as of the Closing, then the Target Capital Expenditure Amount in respect of the Group 2 Business shall be reduced by the amounts included in the Budget in respect of each Disputed MCE System through the month ending (i) on the Closing Date if the Closing occurs on a month-end or (ii) immediately prior to the Closing Date if the Closing does not occur on a month-end (it being understood that the amounts included in the Budget in respect of each Disputed MCE System shall be deemed for purposes hereof to equal the amounts included in the Budget in respect of all MCE Systems multiplied by the quotient obtained by dividing (x) the aggregate number of Basic Subscribers served by such Disputed MCE System as of December 31, 2004 by (y) the aggregate number of Basic Subscribers served by all MCE Systems as of December 31, 2004); provided, further, that, if the Subscriber Change for a Specified Business is a positive number, the Target Capital Expenditure Amount for such Specified Business shall be reduced by an amount equal to the lesser of (A) the product of the Subscriber Change multiplied by $210.00 and (B) (1) with respect to the Group 1 Business, $21,100,000 and (2) with respect to the Group 2 Business, $19,100,000.

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“Tax Law” means the Code, final, temporary or proposed Treasury regulations, published pronouncements of the U.S. Treasury Department or IRS, court decisions or other relevant binding legal authority (and similar provisions, pronouncements, decisions and other authorities of state, local and foreign Law).

“Tax Return” shall mean any report, return or other information (including any attached schedules or any amendments to such report, return or other information) required to be supplied to or filed with a Government Entity with respect to any Tax, including an information return, claim for refund, amended return, declaration, or estimated Tax returns in connection with the determination, assessment, collection or administration of any income Tax.

“Taxes” means all federal, state or local and all foreign taxes, including income, gross receipts, windfall profits, value added, severance, property, production, sales, use, duty, license, excise, franchise, employment, withholding or similar taxes (including any payment required to be made to any state abandoned property administrator or other public official pursuant to an abandoned property, escheat or similar Law) together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

“Tele-Media Entities” means each of TMC Holding Corporation, a Delaware corporation, TMC Holdings, LLC, a Delaware limited liability company, Adelphia Company of Western Connecticut, a Connecticut corporation, Tele-Media Investment Partnership, L.P., a Delaware limited partnership, Eastern Virginia Cablevision, L.P., a Delaware limited partnership, Eastern Virginia Cablevision Holdings LLC, a Delaware limited liability company, Tele-Media Company of Hopewell-Prince ▇▇▇▇▇▇, a Virginia general partnership, Tele-Media Company of Tri-States, L.P., a Delaware limited partnership, CMA Cablevision Associates VII, L.P., a Pennsylvania limited partnership, and CMA Cablevision Associates XI, L.P., a Pennsylvania limited partnership.

“Third Party Claim” has the meaning set forth in Section 7.4(a).

“Third Party Confidentiality Agreement” has the meaning set forth in Section 5.21.

“Total Liabilities” means, with respect to each Specified Business, all Liabilities, expressed as a positive number, of such Specified Business as of the Closing (after giving effect to the Transaction), as would be reflected on the face of a balance sheet (excluding any footnotes thereto) prepared in accordance with GAAP consistently applied (to the extent GAAP was previously applied) for such Specified Business; provided, however, that Total Liabilities shall include the following:  accounts payable, accrued expenses (including all accrued vacation time, sick days, paid time off, copyright fees, franchise fees and other license fees or charges), Liabilities with respect to unearned income and advance payments (including subscriber prepayments and deposits for converters, encoders, cable television service and related sales) and interest, if any, required to be paid on advance payments; provided, further, that (a) in no event shall

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Total Liabilities include (i) Liabilities that constitute Assumed Liabilities pursuant to clauses (iii) (other than part (C) thereof), (iv) (other than accrued but unpaid Franchise fees and any reserves for Franchise fee audits), (v), (vi), and (vii) of the definition of “Assumed Liabilities” or (ii) Excluded Liabilities, and (b) Liabilities (i) under the Sale Bonus Program included in clause (iii)(C) of the definition of “Assumed Liabilities” and (ii) under purchase orders outstanding as of the Closing will be treated, for purposes hereof, as part of the Total Liabilities of the relevant Specified Business as of the Closing regardless of whether they would otherwise be treated as such under GAAP but subject in any event to the remainder of this definition.  For purposes of determining Total Liabilities in respect of any Disputed MCE System, all references above to the Closing shall be deemed to mean, with respect to any Disputed MCE System, the MCE Closing.

“Transaction” means the transactions that are the subject of this Agreement, including the purchase and sale of the Transferred Assets and the assumption of the Assumed Liabilities; provided, however, that Transaction shall not include the Friendco Transaction.

“Transfer Tax Returns” has the meaning set forth in Section 5.7(c)(ii).

“Transfer Taxes” has the meaning set forth in Section 5.7(c)(i).

“Transferred Assets” has the meaning set forth in Section 2.1.

“Transferred Cash” has the meaning set forth in Section 2.1(a).

“Transferred Employees” has the meaning set forth in Section 5.8(e)(ii).

“Transferred Employees’ Records” means all personnel files related to the Transferred Employees, but not including any files the transfer of which would be prohibited by Law.

“Transferred Intellectual Property” means, with respect to each Specified Business, the Intellectual Property owned by Seller or its Affiliates and Related to such Specified Business, including that set forth on Schedule 1.1(r) of the Seller Disclosure Schedule and identified as Related to such Specified Business.

“Transferred Intellectual Property Contracts” means, with respect to each Specified Business, (i) the licenses, sublicenses, distributor agreements and permissions, and royalty agreements concerning Intellectual Property to which Seller or any of its Affiliates is a party and which are Related to such Specified Business and are Assigned Contracts and (ii) the rights and entitlements, including the right to receive royalty payments, pursuant to any licenses, sublicenses, distributor agreements and permissions or royalty agreements to which Seller or any of its Affiliates is a party and under which a third party licensee obtains benefits pursuant to section 365(n) of the Bankruptcy Code and which are Related to such Specified Business and are Assigned Contracts.

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“Transferred Investment Assignment Agreement” means, with respect to each Specified Business, an agreement in form and substance reasonably acceptable to Seller and Buyer, providing for the assignment and assumption of Transferred Investments Related to such Specified Business.

“Transferred Investments” means, with respect to each Specified Business, (i) the Equity Securities identified on Schedule 1.1(s)(i)  of the Seller Disclosure Schedule and allocated to such Specified Business pursuant to the Designated Allocation, it being understood that, by written notice to Seller delivered on one or more occasions and no fewer than 10 Business Days prior to the Closing, Buyer shall be entitled to remove any item from Schedule 1.1(s)(i) of the Seller Disclosure Schedule with respect to which any material Investment Document was not provided to Buyer prior to the date hereof, and (ii) those Equity Securities identified on Schedule 1.1(s)(ii) of the Seller Disclosure Schedule that Buyer selects to be allocated to a Specified Business, it being understood that such selection shall be made in the same manner, and subject to the same conditions, as are applicable to the selection of Contracts as Assigned Contracts pursuant to Section 5.13 (with the determination of whether or not an item will be treated as an OCB Contract made on the basis of the primary agreement containing the business terms applicable to the applicable Investment Entity).

“Transferred Joint Venture Parents” has the meaning ascribed to such term in the Friendco Purchase Agreement.

“Transferred Leased Real Property” means Leased Real Property that is the subject of a Transferred Real Property Lease.

“Transferred Owned Real Property” means Owned Real Property that is not an Excluded Asset pursuant to Section 2.2(h).

“Transferred Real Property Leases” means Real Property Leases that are Assigned Contracts.

“Transferred Real Property Subleases” means Real Property Subleases that are Assigned Contracts and that relate to (i) the Transferred Owned Real Property or (ii) the Transferred Leased Real Property.

“Transferred Rights-of-Way” means all Rights-of-Way, provided that to the extent a Right-of-Way is a Contract, Transferred Rights-of-Way shall mean Rights-of-Way that are Assigned Contracts.

“Transitional Services” has the meaning set forth in Section 5.24.

“TWE” means Time Warner Entertainment Company, L.P., a Delaware limited partnership.

“TWE-A/N” has the meaning set forth in the definition of “Subsidiary.”

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“TWE Redemption” means the redemption of limited partnership interests in TWE pursuant to the TWE Redemption Agreement.

“TWE Redemption Agreement” means the Redemption Agreement, dated as of the date hereof, by and among Friendco, Comcast Cable Communications Holdings, Inc., MOC Holdco I, LLC, TWE Holdings I Trust, Cable Holdco III LLC, TWE, TWX and Parent.

“TWX” means Time Warner Inc., a Delaware corporation.

“TWX Agreement” means that certain Agreement, dated March 31, 2003, between TWX, Parent and an Affiliate of Friendco.

“TWX Confidentiality Agreement” means the letter agreement, dated November 9, 2004, between TWX and Seller.

“Unallocated Shared Assets and Liabilities” means those Assets and Liabilities (and the related revenue and expenses) identified as such on Schedule 1.1(h) of the Seller Disclosure Schedule.

“Union Employee” has the meaning set forth in Section 5.8(b).

“U.S. Antitrust Laws” means the ▇▇▇▇▇▇▇ Act, the ▇▇▇▇▇▇▇ Act, the HSR Act, the Federal Trade Commission Act, and all other federal and state statutes, rules, regulations, orders, decrees, administrative and judicial doctrines, and other Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade.

“US Trustee” means the United States Trustee for Region 2 or such other region in which the reorganization case of any Managed Cable Entity or Non-Debtor Subsidiary is pending.

“WARN” means the Worker Adjustment and Retraining Notification Act.

Section 1.2  Other Interpretive Provisions.  Unless the express context otherwise requires:

(a)           the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(b)           the terms defined in the singular have a comparable meaning when used in the plural, and vice versa;

(c)           the terms “Dollars” and “$” mean United States Dollars;

(d)           any payment hereunder to be made in the form of shares of Parent Class A Common Stock shall be made only in whole shares and, in lieu of payment of

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any fractional shares, a cash payment shall be made in an amount equal to the value of such fractional shares valued at the Per Share Value of the Purchase Shares;

(e)           references herein to a specific Section, Subsection, Recital, Schedule or Exhibit shall refer, respectively, to Sections, Subsections, Recitals, Schedules or Exhibits of this Agreement;

(f)            wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”;

(g)           references herein to any gender include each other gender;

(h)           references herein to any Person include such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, however, that nothing contained in this clause (h) is intended to authorize any assignment or transfer not otherwise permitted by this Agreement;

(i)            references herein to a Person in a particular capacity or capacities exclude such Person in any other capacity;

(j)            references herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof;

(k)           with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”;

(l)            references herein to any Law or any license mean such Law or license as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to time;

(m)          references herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise;

(n)           references herein to sections of the Code shall be construed to also refer to any successor sections;

(o)           the rules of construction contained in section 102 of the Bankruptcy Code (except section 102(8) of the Bankruptcy Code) shall apply; and

(p)           in the event of any inconsistency between the terms of the Plan and this Agreement, the terms of this Agreement shall control.

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ARTICLE II

PURCHASE AND SALE OF THE SPECIFIED BUSINESSES

Section 2.1  Purchase and Sale of Assets.  Subject to Sections 2.7, 2.11 and 5.13(h), on the terms and subject to the conditions set forth herein, at the Closing, Seller shall, and shall cause each of its Affiliates to, sell, convey, transfer, assign and deliver to Buyer, and Buyer shall purchase from Seller and each of its Affiliates (x) the Transferred Investments and (y) all of Seller’s and each of its Affiliates’ Assets that are Related to the Acquired Business, including the Acquired Systems, except for the Excluded Assets (clauses (x) and (y), collectively, the “Transferred Assets”), free and clear of all Encumbrances, other than Permitted Encumbrances (or, in the case of the Transferred Investments, Encumbrances under the Investment Documents), including the following:

(a)           all cash and cash equivalents consisting of (i) ▇▇▇▇▇ cash-on-hand, (ii) Condemnation Proceeds and (iii) Insurance Claims (collectively, the “Transferred Cash”);

(b)           Accounts Receivable;

(c)           Assigned Contracts;

(d)           Transferred Intellectual Property and Transferred Intellectual Property Contracts;

(e)           Books and Records;

(f)            Fixtures and Equipment;

(g)           Transferred Real Property Leases;

(h)           Transferred Real Property Subleases;

(i)            Transferred Owned Real Property;

(j)            Transferred Rights-of-Way;

(k)           Insurance Claims and Condemnation Proceeds to the extent not included under subsection (a) above;

(l)            except as set forth in Section 2.2(k), all claims (and the proceeds related thereto) available to or being pursued by Seller or any of its Affiliates to the extent related to the Transferred Assets, the Assumed Liabilities or the ownership, use, function or value of any Transferred Asset;

(m)          all credits, prepaid expenses, advance payments, security deposits, prepaid items and duties to the extent related to a Transferred Asset;

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(n)           to the extent their transfer is not prohibited by Law, all Authorizations held by Seller or any of its Affiliates and all applications therefor;

(o)           all guaranties, representations, warranties, indemnities and similar rights in favor of Seller or any of its Affiliates to the extent related to any Transferred Asset, except to the extent included in Excluded Assets;

(p)           all other current assets; and

(q)           all rights of Seller set forth in Section 5.12 of the Friendco Purchase Agreement;

provided, that the sale, conveyance, transfer, assignment or delivery of a Transferred Asset shall, except as otherwise directed by Buyer in a manner consistent with the like allocations of Friendco pursuant to the Friendco Purchase Agreement (provided, that the effect of any such allocation so directed by Buyer that is different than the allocation that would occur in the absence of such direction shall be disregarded for the purposes of making any determination with respect to (x) the representations, warranties or covenants of Seller herein, (y) the Closing Adjustment Amount and (z) the satisfaction of the conditions set forth in Article VI, in each case, to the extent such determination would be different (but in the case of the Closing Adjustment Amount, only to the extent the aggregate Closing Adjustment Amount and the Closing Adjustment Amount (as defined in the Friendco Purchase Agreement) would be different) as a result of such direction), be allocated among each of the Specified Businesses and the Friendco Business in the following manner (provided, that (A) in no event will any of the following allocations result in the transfer of subscribers from one System Group to another and (B) any allocation of capital expenditures shall be made in accordance with Schedule 5.2(s) of the Seller Disclosure Schedule or, if not addressed in such Schedule as set forth below):  if such Transferred Asset is (i) Related only to a single Specified Business and not to the Friendco Business, to such Specified Business, (ii) included in the Group 1 Shared Assets and Liabilities pursuant to Schedule 1.1(h) of the Seller Disclosure Schedule, to the Group 1 Business, (iii) included in the Group 2 Shared Assets and Liabilities pursuant to Schedule 1.1(h) of the Seller Disclosure Schedule, to the Group 2 Business, (iv) solely Related to the Friendco Business or allocated to the Friendco Business pursuant to Schedule 1.1(f) of the Seller Disclosure Schedule (as defined in the Friendco Purchase Agreement), to the Friendco Business, (v) is readily divisible, Related to more than one of the Group 1 Business, the Group 2 Business and the Friendco Business and not allocated pursuant to clause (i), (ii), (iii) or (iv), allocated to such Group 1 Business, Group 2 Business and/or Friendco Business to which it is Related pro rata based on the number of Basic Subscribers served by such Group 1 Business, Group 2 Business or Friendco Business (as applicable) as of the Closing and (vi) not allocated pursuant to clause (i), (ii), (iii), (iv) or (v) and is (A) Primarily Related to the Friendco Business, to the Friendco Business, (B) Primarily Related to the Group 1 Business, to the Group 1 Business or (C) not Primarily Related to the Friendco Business or the Group 1 Business, to the Group 2 Business (the allocation of such assets pursuant to this proviso to this Section 2.1, the “Designated Allocation”).  Notwithstanding anything to the contrary in this Section 2.1, any Asset included in the Unallocated Shared Assets and Liabilities that

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is not a Transferred Asset pursuant to the Designated Allocation shall not be deemed to be a Transferred Asset.

Section 2.2  Excluded Assets.  Notwithstanding anything herein to the contrary, from and after the Closing, Seller and its Affiliates shall retain, and there shall be excluded from the sale, conveyance, assignment or transfer to Buyer hereunder, and the Transferred Assets shall not include, any of the Friendco Transferred Assets (except as set forth in Section 5.15) or the following Assets (collectively, the “Excluded Assets”):

(a)           all Assets with respect to Taxes (including duty and tax refunds and prepayments) and net operating losses of Seller or any of its Affiliates;

(b)           except to the extent set forth in Section 5.1(d), all Tax Returns of Seller or any of its Affiliates and all Books and Records (including working papers) and tax software to the extent directly related thereto;

(c)           all insurance policies and rights thereunder other than the Insurance Claims;

(d)           all credits, prepaid expenses, deferred charges, advance payments, security deposits and prepaid items, in each case, only to the extent related to any Asset that is not a Transferred Asset;

(e)           all cash and cash equivalents, except for the Transferred Cash;

(f)            all Intercompany Receivables;

(g)           all Contracts (including all Third Party Confidentiality Agreements) other than Assigned Contracts;

(h)           (i) any Owned Real Property that, and any lease (other than a lease designated by Buyer as an Assigned Contract) for real property that, (A) is vacant, (B) contains only inactive headends, inactive hubsites or inactive optical transition nodes or (C) is solely residential in nature and (ii) the Owned Real Property set forth on Schedule 2.2(h) of the Seller Disclosure Schedule; provided, however, that, from time to time prior to the Closing but no later than ten Business Days prior to the Closing, Buyer may designate any other Owned Real Property to be included on such Schedule 2.2(h) of the Seller Disclosure Schedule;

(i)            all Programming Agreements (other than any retransmission consent agreement that is an Assigned Contract);

(j)            all Assets listed on Schedule 2.2(j) of the Seller Disclosure Schedule;

(k)           (i) all claims (and proceeds related thereto) set forth on Schedule 2.2(k) of the Seller Disclosure Schedule relating to (A) the Rigas Litigation or (B) the Designated Litigation, (ii) all other claims (and proceeds related thereto) that

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Seller or any of its Affiliates may make after the date hereof to the extent not affecting any Specified Business (including any Transferred Asset or Assumed Liability) in any material respect and (iii) any claims of Seller or its Affiliates against Seller or any of its Affiliates (other than any claim against any Investment Entity) to the extent not affecting any Specified Business (including any Transferred Asset or Assumed Liability);

(l)            all personnel records, other than the Transferred Employees’ Records;

(m)          all rights in connection with and Assets of the Benefit Plans;

(n)           except for the Transferred Investments, all Equity Securities or other rights of Seller or any of its Affiliates in any other Person, including any Asset Transferring Subsidiary;

(o)           Assets allocated to the Friendco Business pursuant to the Designated Allocation; and

(p)           state certificates of public convenience and necessity or similar state telecommunication Authorizations except for those that Buyer designates in writing as Transferred Assets at least ten Business Days prior to the Closing.

Section 2.3  Assumption of Liabilities.  On the terms and subject to the conditions set forth herein and in partial consideration of the sale of the Transferred Assets, at the Closing, Buyer shall assume and discharge or perform when due all the Assumed Liabilities; it being understood that the assumption of an Assumed Liability shall, except as otherwise allocated by Buyer in a manner consistent with the like allocations of Friendco pursuant to the Friendco Purchase Agreement (provided, that the effect of any such allocation so directed by Buyer that is different than the allocation that would occur in the absence of such direction shall be disregarded for the purposes of making any determination with respect to (x) the representations, warranties or covenants of Seller herein, (y) the Closing Adjustment Amount and (z) the satisfaction of the conditions set forth in Article VI, in each case, to the extent such determination would be different (but in the case of the Closing Adjustment Amount, only to the extent the aggregate Closing Adjustment Amount and the Closing Adjustment Amount (as defined in the Friendco Purchase Agreement) would be different) as a result of such direction), be allocated among each of the Specified Businesses and the Friendco Business in the following manner:  if such Assumed Liability is (i) Related only to a single Specified Business and not to the Friendco Business, to such Specified Business, (ii) included in the Group 1 Shared Assets and Liabilities pursuant to Schedule 1.1(h) of the Seller Disclosure Schedule, to the Group 1 Business, (iii) included in the Group 2 Shared Assets and Liabilities pursuant to Schedule 1.1(h) of the Seller Disclosure Schedule, to the Group 2 Business, (iv) solely Related to the Friendco Business or allocated to the Friendco Business pursuant to
Schedule 1.1(f) of the Seller Disclosure Schedule (as defined in the Friendco Purchase Agreement), to the Friendco Business and (v) not allocated pursuant to clause (i), (ii), (iii) or (iv), then to the Friendco Business, to the extent Related to the Friendco Business, to the Group 1 Business, to the extent Related to the Group 1

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Business, and to the Group 2 Business, to the extent Related to the Group 2 Business (which allocations shall be made in each case after giving effect to the allocations to each such Friendco Business and Specified Business pursuant to the Designated Allocation).

Section 2.4  Excluded Liabilities.  Seller and its Affiliates shall retain and be responsible for all Excluded Liabilities.  Notwithstanding anything to the contrary in this Agreement, Buyer shall not assume, and neither Buyer nor any of its Affiliates shall have any Liability for, any Liability of Seller or any Affiliate of Seller that is not expressly assumed by Buyer pursuant to Section 2.3.

Section 2.5  Purchase Price.  On the terms and subject to the conditions set forth herein, in consideration of the sale of the Transferred Assets, at the Closing, Buyer shall:

(a)           assume the Assumed Liabilities;

(b)           pay to Seller an aggregate amount in cash equal to $9,154,000,000, as adjusted pursuant to Sections 2.6(a) and 2.6(f) (as so adjusted, the “Cash Consideration”); and

(c)           cause Parent to issue and deliver, on behalf of Buyer, to Seller such number of shares of Parent’s Class A Common Stock, par value $0.01 per share (the “Parent Class A Common Stock”), as shall represent 16% of the outstanding Equity Securities of Parent calculated on a Fully Diluted Basis (after giving effect to such issuance and assuming for purposes of such calculation the completion of the Redemption pursuant to the Parent Redemption Agreement but without giving effect to any adjustment pursuant to Section 2.6 or 2.7), subject to adjustment of such number of shares pursuant to Sections 2.6(f) and 2.7 (as so adjusted, the “Purchase Shares” and, together with the Cash Consideration, the “Purchase Price”);

provided, however, that, in lieu of payment to Seller, Buyer shall deliver or cause to be delivered, at the Closing, 4% of the Purchase Price in the form of a Pro Rata Payment (after giving effect to any adjustment thereof that is effected as of the Closing) (collectively, as such amount may be increased in accordance with Section 2.6(f) or 2.7(c), the “Escrow Amount”) to be held by the Escrow Agent in an account, the cash component of which shall bear interest (the “Escrow Account”), pursuant to the Escrow Agreement, which Escrow Amount shall be paid in whole or in part in accordance with the terms of the Escrow Agreement to (i) the Buyer Indemnified Parties to the extent necessary to satisfy any obligation of Seller pursuant to Section 7.2(a), (ii) Buyer to the extent necessary to satisfy a payment obligation of Seller, if any, pursuant to Section 2.6(f) or 2.7(d), (iii) Seller, on the date that is six months following the Closing Date, to the extent of the excess, if any, of 33% of the Escrow Amount deposited at the Closing over the sum of (A) all amounts paid pursuant to the immediately preceding clauses (i) and (ii), plus (B) the maximum amount that could reasonably be expected to be necessary to satisfy all claims by the Buyer Indemnified Parties pursuant to Section 7.2(a) asserted on or prior to such date, and (iv) Seller to the extent of any remaining funds and/or shares in the Escrow Account as of the Buyer Indemnification Deadline (subject, with respect only to the MCE Purchase Shares, to Section 2.7(d)),

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except to the extent of the maximum amount that could reasonably be expected to be necessary to satisfy all claims by the Buyer Indemnified Parties pursuant to Section 7.2(a) asserted on or prior to the Buyer Indemnification Deadline (subject, with respect only to the MCE Purchase Shares, to Section 2.7(d)).  All amounts payable from the Escrow Account shall be paid in the form of an Escrow Payment.  Any Escrow Payment or Pro Rata Payment to be made hereunder shall be made (x) in respect of any distribution of shares of Parent Class A Common Stock by (I) delivery of stock certificates representing such shares, registered in the name of Buyer or Seller, as the case may be, or (II) confirmation of a book-entry transfer of such shares in form and substance reasonably satisfactory to Buyer or Seller, as the case may be, and the Escrow Agent, and (y) in respect of any distribution of cash, by wire transfer of immediately available funds to an account designated by Buyer or Seller, as the case may be, at least five Business Days prior to such payment.

Section 2.5A         Purchase Shares.  For the avoidance of doubt, 156.380952 shares of Parent Class A Common Stock would be the number of shares required to be delivered pursuant to Section 2.5(c) at the Closing (before giving effect to any adjustment under Section 2.6 or 2.7) assuming that (a) the number of outstanding Equity Securities as of the date hereof is as represented in Sections 4.4(b)(i) and (b)(ii), (b) the Equity Securities subject to redemption under the Parent Redemption Agreement is 179 shares of Parent Class A Common Stock, and (c) no additional Equity Securities were issued by Parent on or after the date hereof in violation of Section 5.3 hereof; provided that if any pro rata stock dividend (or any stock split or similar recapitalization) is effected between the date hereof and Closing as permitted hereunder then such number of shares would be adjusted accordingly (by operation of the definition of Fully Diluted Basis).

Section 2.6  Closing Adjustment Amount.

(a)           No later than ten Business Days prior to the Closing Date, Seller shall prepare, or cause to be prepared, and deliver to Buyer, with respect to each Specified Business, a statement (each, a “Seller’s Statement”), which shall set forth Seller’s good faith estimate of the Closing Adjustment Amount which shall be determined in accordance with this Agreement (the “Estimated Closing Adjustment Amount”).  Each Seller’s Statement shall be accompanied by a certification of Seller’s Chief Financial Officer to the effect that such Seller’s Statement has been prepared in good faith in accordance with this Agreement based on the books and records of such Specified Business and be reasonably satisfactory to Buyer.  If the sum of the Estimated Closing Adjustment Amounts for the Specified Businesses is a negative number, then the Cash Consideration payable at the Closing shall be decreased by the absolute value of such sum.  If the sum of the Estimated Closing Adjustment Amounts for the Specified Businesses is a positive number, then the Cash Consideration payable at the Closing shall be increased by such sum.

(b)           As soon as practicable but in no event more than 90 days following the Closing, Buyer shall prepare, or cause to be prepared, and deliver to Seller, with respect to each Specified Business, a statement (each, a “Buyer’s Statement”) of the actual Closing Adjustment Amount, as of the Closing Date, which shall be determined in

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accordance with this Agreement.  Each Buyer’s Statement shall be accompanied by a certification of Buyer’s Chief Financial Officer to the effect that such Buyer’s Statement has been prepared in accordance with this Agreement based on the books and records of such Specified Business.

(c)           Seller and Seller’s accountants shall complete their review of each of the Buyer’s Statements and Buyer’s calculations of the Closing Adjustment Amount within 30 days after delivery thereof by Buyer.  In the event that Seller determines in good faith that any Buyer’s Statement has not been prepared in accordance with this Agreement, Seller shall, on or before the last day of such 30-day period, so inform Buyer in writing setting forth a specific description of the basis of Seller’s determination and the adjustments to such Buyer’s Statement and the corresponding adjustments to the applicable Closing Adjustment Amount that Seller believes should be made in accordance with this Agreement (a “Seller’s Objection”).  If no Seller’s Objection is received by Buyer on or before the last day of such 30-day period, then the Closing Adjustment Amount set forth in a Buyer’s Statement shall be final and binding upon Seller.  Buyer shall have 30 days from its receipt of a Seller’s Objection to review and respond to such Seller’s Objection.

(d)           If Seller and Buyer are unable to resolve all of their disagreements with respect to the proposed adjustments set forth in any Seller’s Objection within 15 days following the completion of Buyer’s review of such Seller’s Objection, they shall refer any remaining disagreements to the CPA Firm which, acting as experts and not as arbitrators, shall determine, in accordance with this Agreement based on the books and records of the applicable Specified Business, and only with respect to the remaining differences so submitted (and within the range of dispute between Buyer’s Statement and Seller’s Objection with respect to each such difference), whether and to what extent, if any, any Closing Adjustment Amount requires adjustment.  Buyer and Seller shall instruct the CPA Firm to deliver its written determination to Buyer and Seller no later than 30 days after the remaining differences underlying any such Seller’s Objection are referred to the CPA Firm.  The CPA Firm’s determination shall be conclusive and binding upon Buyer and Seller and their respective Affiliates.  With respect to each Seller’s Objection, the fees and disbursements of the CPA Firm shall be borne equally by Seller and Buyer.  Buyer and Seller shall make readily available to the CPA Firm all relevant books and records and any work papers (including those of the parties’ respective accountants, to the extent permitted by such accountants) relating to the determination of any Closing Adjustment Amount and all other items reasonably requested by the CPA Firm in connection therewith.

(e)           Buyer shall provide to Seller and its accountants full access to the books and records of each Specified Business and to any other information, including work papers of its accountants (to the extent permitted by such accountants), and to any employees during regular business hours and on reasonable advance notice, to the extent reasonably necessary for Seller to review each Buyer’s Statement, to prepare a Seller’s Objection, if any, and to prepare materials for presentation to the CPA Firm in connection with Section 2.6(d).  Seller and its accountants shall have full access to all information

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used by Buyer in preparing such Buyer’s Statement, including the work papers of its accountants (to the extent permitted by such accountants).

(f)            Upon satisfaction of the applicable procedures of this Section 2.6, the Purchase Price shall be adjusted with respect to each Specified Business by an amount equal to (i) the Final Adjustment Amount of such Specified Business minus (ii) the Estimated Closing Adjustment Amount of such Specified Business (the “Subsequent Adjustment Amount”).  If the Subsequent Adjustment Amount is a positive number, then the Purchase Price allocated to such Specified Business shall be increased by the Subsequent Adjustment Amount and Buyer shall promptly (and in any event within five Business Days) after the final determination thereof pay to the Escrow Agent, for deposit into the Escrow Account, a Pro Rata Payment equal to the Subsequent Adjustment Amount.  If the Subsequent Adjustment Amount is a negative number, then the Purchase Price allocated to such Specified Business shall be decreased by the absolute value of the Subsequent Adjustment Amount and Buyer shall be entitled to an Escrow Payment equal to the Subsequent Adjustment Amount from the Escrow Account promptly (and in any event within five Business Days) after the final determination of the Subsequent Adjustment Amount; provided, however, that, to the extent the payment obligations pursuant to this sentence exceed the remaining funds in the Escrow Account, Seller shall promptly (and in any event with five Business Days) after the final determination of the Subsequent Adjustment Amount, pay such excess amount to Buyer by wire transfer of immediately available funds to an account designated by Buyer.

Section 2.7  MCE Systems.

(a)           Notwithstanding anything to the contrary contained herein, if any MCE System has not been finally determined to be wholly owned by Seller or its wholly owned Subsidiaries (it being understood that, for purposes of this Section 2.7(a), if Seller has the right to cause the transfer of good and marketable title to the Assets of any MCE System (free and clear of all Encumbrances other than Permitted Encumbrances) to Buyer (or has otherwise arranged for such transfer to occur at the Closing to the reasonable satisfaction of Buyer), such Disputed MCE System shall be deemed to be wholly owned by Seller) or has been finally determined to be so owned but as to which there has not been an MCE Discharge as of the date on which the Seller’s Statements are delivered under Section 2.6(a) (each such MCE System, a “Disputed MCE System”), then (i) the geographical areas serviced by such Disputed MCE System shall be deemed not to be listed on Schedule A of the Seller Disclosure Schedule and such Disputed MCE System shall be deemed not to be included in the Group 2 Business or otherwise Related to the Group 2 Business or the Acquired Business, (ii) any Assets, Liabilities or Employees that would, but for clause (i) above, have been Transferred Assets, Assumed Liabilities or Transferred Employees shall be deemed not to be Transferred Assets, Assumed Liabilities or Transferred Employees, respectively, (iii) the Closing shall be effected without such Disputed MCE System, (iv) the Purchase Price (before adjustment under Section 2.6) shall be reduced by an aggregate amount equal to the product of (A) the MCE Purchase Price multiplied by (B) the quotient obtained by dividing (1) the aggregate number of Basic Subscribers served by all such Disputed MCE Systems as of December 31, 2004 by (2) the aggregate number of Basic Subscribers served by all MCE

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Systems as of December 31, 2004, such reduction to be applied solely to the Purchase Shares (where each Purchase Share is valued at the Per Share Value of the Purchase Shares) (the amount of such Purchase Share reduction with respect to each such Disputed MCE System, the “Initial MCE Purchase Price”), (v) the Seller’s Statement delivered in respect of the Group 2 Business shall be prepared to reflect the foregoing and (vi) with respect to the Disputed MCE Systems, the determination of the Closing Adjustment Amount (calculated as to each such Disputed MCE System separately as if it were its own Specified Business and assuming the Net Liabilities Adjustment Amount for each such Disputed MCE System is zero) shall be made in accordance with Section 2.6 except that the Subscriber Cap shall not apply to the determination of the Subscriber Adjustment Amount and there shall be no adjustment to the Purchase Price at the Closing as a result of such determination (the amount by which the Purchase Price would have been adjusted (expressed as a negative if decreased and as a positive if increased) in respect of each such Disputed MCE System as determined pursuant to this clause (vi), the “Initial Disputed MCE System Adjustment Amount”).

(b)           With respect to any Disputed MCE System, Seller shall (i) use commercially reasonable efforts to cause each such Disputed MCE System to be bound by a written management agreement with Buyer (or its designee) as of the Closing, in form and substance reasonably acceptable to Buyer and Seller (each such agreement, an “MCE Management Agreement”), and (ii) continue during the succeeding 15 months (the “MCE Period”) using commercially reasonable efforts to obtain full direct or indirect ownership of, and an MCE Discharge with respect to, such Disputed MCE System (it being understood that, for purposes of this Section 2.7(b), if Seller has the right to cause the transfer of good and marketable title to the Assets of any MCE System (free and clear of all Encumbrances other than Permitted Encumbrances) to Buyer (or has otherwise arranged for such transfer to occur at the MCE Closing to the reasonable satisfaction of Buyer), such Disputed MCE System shall be deemed to be wholly owned by Seller) (an “MCE Resolution”).  Buyer shall not have any obligation to enter into an MCE Management Agreement unless Buyer is provided with reasonably satisfactory evidence of (A) the enforceability of such MCE Management Agreement from and after the Closing, (B) the authority of the counterpart(ies) to enter into and perform such MCE Management Agreement and to bind such Disputed MCE System and (C) the creditworthiness of such MCE System (or such other Person who or such instrument that guarantees the Liabilities of such MCE System pursuant to the applicable MCE Management Agreement).  Seller shall notify Buyer of any MCE Resolution as promptly as practicable and in any event within three Business Days of obtaining any such MCE Resolution and shall provide Buyer with such information and documentation related thereto as Buyer reasonably requests.

(c)           As to any Disputed MCE System that is the subject of an MCE Resolution that occurs prior to the expiration of the MCE Period, and with respect to which (i) Buyer (or its designee) enters into an MCE Management Agreement that has not been terminated in accordance with its terms (other than by Seller as a direct result of a breach by Buyer (or its designee)) or rejected and remains in full force and effect until the completion of the MCE Closing (a “Buyer Managed MCE System”) or (ii) Buyer (or its designee) does not enter into such an MCE Management Agreement but, within 60

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days of such MCE Resolution, Buyer makes an election to purchase such Disputed MCE System, the parties agree that Seller shall sell, or cause to be sold, to Buyer and Buyer shall purchase from Seller (or the applicable transferor which Seller causes to sell) the Assets of such Disputed MCE Systems in exchange for shares (the “MCE Purchase Shares”) of Parent Class A Common Stock (where each such share is valued at the Per Share Value of the Purchase Shares) in an amount equal to the Final MCE Purchase Price to be delivered by Buyer at a single closing (the “MCE Closing”), plus any Interim Dividends thereon, that, subject to satisfaction of the conditions set forth in Sections 6.1, 6.2 (other than, without limiting Section 2.7(d)(ii), Sections 6.2(a), 6.2(f) (but only if Buyer is a Proximate Cause Party) and 6.2(h)) and 6.3 (other than, without limiting Section 2.7(d)(ii), Sections 6.3(a) and 6.3(e)) (applied with respect to such Disputed MCE Systems (treating such Systems as a Specified Business) and applied with respect to the MCE Purchase Shares (treating such MCE Purchase Shares as Purchase Shares) mutatis mutandis), shall occur on the fifth Business Day following the earlier of (A) the expiration of the MCE Period and (B) the date all Disputed MCE Systems have been subject to an MCE Resolution; provided, however, that 4% of the MCE Purchase Shares so delivered plus any Interim Dividends thereon will be deposited in the Escrow Account.  At the MCE Closing, the parties will assign or assume, as applicable, the Transferred Assets and Assumed Liabilities with respect to each such Disputed MCE System (treating such System as a Specified Business) that would have been assigned and assumed as if the Closing had been delayed until the date of the MCE Closing and shall execute such conveyance, assumption and other instruments as are required pursuant to Sections 2.9 and 2.10 (applied with respect to such Disputed MCE Systems (treating such Systems as a Specified Business) and applied with respect to the MCE Purchase Shares (treating such MCE Purchase Shares as Purchase Shares) mutatis mutandis.  For purposes of determining the Disputed MCE System Adjustment Amount, the Net Liabilities Adjustment Amount in respect of each such Disputed MCE System shall be determined as of the date of the MCE Closing in accordance with Section 2.6 applied mutatis mutandis (treating each such System as a Specified Business) except that any resulting adjustments shall be made solely in MCE Purchase Shares, where each MCE Purchase Share is valued at the Per Share Value of the Purchase Shares.

(d)           In connection with the transfer to Buyer of any Disputed MCE Systems, (i) Assumed Liabilities related to such Disputed MCE Systems shall be deemed to have been assumed effective as of the date of the MCE Closing only, and (ii) at, and as a condition to, the MCE Closing, (A) Seller shall be deemed to have restated the representations and warranties in Article III in respect of such Disputed MCE Systems (x) with respect to the Class 2 Representations and Warranties, as of the date made and as of the Closing, and (y) with respect to the Class 1 Representations and Warranties, as of the date made and as of the MCE Closing, (B) Seller shall deliver to Buyer a certificate certifying to the satisfaction of Section 6.2(a) with respect to such Disputed MCE Systems (treating such Disputed MCE Systems as if they were a Specified Business and multiplying all applicable monetary and materiality thresholds by the MCE Fraction) (x) with respect to the Class 2 Representations and Warranties, as of the Closing, and (y) with respect to the Class 1 Representations and Warranties, as of the MCE Closing, (C) Article VII shall apply to such Disputed MCE Systems mutatis mutandis (including by multiplying the applicable basket and cap amounts by the MCE Fraction), provided,

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that, notwithstanding Section 7.1, all the representations and warranties in Article III shall, with respect to such Disputed MCE Systems, survive the MCE Closing until the expiration of the later of the survival period in Section 7.1 and twelve months after the date of the MCE Closing (and the Buyer Indemnification Deadline shall be extended with respect to such Disputed MCE Systems by a corresponding period), (D) Buyer shall deliver to Seller a certificate certifying as to the truth and accuracy of the first sentence of Section 4.5 as to the MCE Purchase Shares as of the MCE Closing and (E) Sections 2.11 and 5.12 shall apply mutatis mutandis.  For purposes of any covenants in this Agreement governing the parties hereto following the Closing and any Ancillary Agreement, any Assets related to any such Disputed MCE Systems which are transferred to Buyer after Closing under this Section 2.7 shall become part of the Group 2 Business as of the time of the MCE Closing.

Section 2.8  Closing.  The Closing shall take place at the offices of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ at 10:00 a.m.  New York City time, on the last Business Day of the calendar month in which the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing but subject to the fulfillment or waiver of those conditions) have been satisfied or waived, unless such conditions have not been so satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing but subject to the fulfillment or waiver of those conditions) by the fifth Business Day preceding the last Business Day of such calendar month, in which case the Closing shall take place on the last Business Day of the next calendar month (or at such other time and place as the parties hereto may mutually agree); provided, however, that the Closing shall not occur prior to the earliest of (a) immediately following the closing of the Redemption under the Parent Redemption Agreement, (b) 30 days following the date on which the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing but subject to the fulfillment or waiver of those conditions) have been satisfied or waived (provided, that the Outside Date or the Extended Outside Date, as the case may be, shall be extended to the last Business Day of the calendar month in which the end of such 30-day period occurs if the Outside Date or Extended Outside Date, as the case may be, would otherwise occur prior to such last Business Day), and (c) the termination of the Parent Redemption Agreement.  The date on which the Closing occurs is called the “Closing Date.”

Section 2.9  Deliveries by Buyer.  At the Closing, Buyer shall:

(a)           deliver to Seller, the Cash Consideration less the cash portion of the Escrow Amount to be delivered at Closing in immediately available funds by wire transfer to an account which has been designated by Seller at least two Business Days prior to the Closing Date;

(b)           deliver, or cause to be delivered, to Seller, (i) stock certificates representing the Purchase Shares (less the stock portion of the Escrow Amount to be delivered at the Closing), duly endorsed for transfer or accompanied by executed stock transfer powers or other appropriate instruments of assignment and transfer or (ii) confirmation of a book-entry transfer of the Purchase Shares (less the stock portion of

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the Escrow Amount to be delivered at the Closing) in form and substance reasonably satisfactory to Buyer and Seller, in each case, free and clear of all Encumbrances, other than those arising as a result of the ownership of such Purchase Shares by the recipient thereunder or under applicable securities Laws;

(c)           deliver to the Escrow Agent, (i) the cash portion of the Escrow Amount to be delivered at Closing in immediately available funds by wire transfer to the Escrow Agent and (ii) the stock portion of the Escrow Amount to be delivered at Closing, by (A) delivery of stock certificates representing such stock portion of the Escrow Amount or (B) confirmation of a book-entry transfer of such stock portion of the Escrow Amount in form and substance reasonably satisfactory to Buyer, Seller and the Escrow Agent, each to be held by the Escrow Agent in the Escrow Account;

(d)           deliver to Seller (or to the applicable Affiliate of Seller), with respect to each Specified Business, such bills of sale, instruments of assumption and other instruments or documents, in form and substance reasonably acceptable to Seller and Buyer, as may be reasonably necessary to effect, in each case in accordance with the terms of this Agreement (x) the assumption by Buyer of the Assumed Liabilities Related to such Specified Business and (y) the conveyance, transfer and assignment to Buyer of the Transferred Assets Related to such Specified Business, including the following:

(i)            a duly executed counterpart of one or more Bills of Sale;

(ii)           a duly executed counterpart of one or more Assignment and Assumption Agreements;

(iii)          evidence of the obtaining of, or, with respect to Buyer Required Approvals that only require notice or filing, the notice or filing with respect to, the Buyer Required Approvals;

(iv)          a duly executed counterpart of one or more Transferred Investment Assignment Agreements;

(v)           a duly executed counterpart of one or more Intellectual Property Assignment Agreements;

(vi)          a duly executed counterpart of one or more Lease Assignment Agreements;

(vii)         a duly executed counterpart of one or more Sublease Assignment Agreements;

(viii)        a duly executed counterpart of one or more Rights-of-Way Assignment Agreements;

(ix)           the certificate to be delivered pursuant to Section 6.3(d);

(x)            a duly executed counterpart of the Escrow Agreement;

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(xi)           duly executed counterparts of such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to Buyer and Seller, as may be reasonably required to give effect to this Agreement; and

(e)           deliver to Seller the opinion of counsel referred to in Section 6.3(f).

Section 2.10  Deliveries by Seller.  At the Closing, Seller shall deliver, or cause to be delivered, to Buyer, with respect to each Specified Business, such bills of sale, instruments of assumption and other instruments or documents, in form and substance reasonably acceptable to Seller and Buyer, as may be reasonably necessary to effect, in each case in accordance with the terms of this Agreement (x) the assumption by Buyer of the Assumed Liabilities Related to such Specified Business and (y) the conveyance, transfer and assignment to Buyer of the Transferred Assets Related to such Specified Business, including the following:

(a)           a duly executed counterpart of one or more Bills of Sale;

(b)           a duly executed counterpart of one or more Assignment and Assumption Agreements;

(c)           a duly executed counterpart of one or more Transferred Investment Assignment Agreements;

(d)           a duly executed counterpart of one or more Intellectual Property Assignment Agreements;

(e)           a duly executed counterpart of one or more Lease Assignment Agreements;

(f)            a duly executed counterpart of one or more Sublease Assignment Agreements;

(g)           a duly executed counterpart of one or more Rights-of-Way Assignment Agreements;

(h)           special warranty deeds (or local equivalent) in respect of the Transferred Owned Real Property Related to such Specified Business;

(i)            duly executed certifications from Seller and each Subsidiary that in this Transaction will be a transferor described in Treasury Regulations Section 1.1445-1(g)(3) that Seller and such Subsidiaries are not foreign Persons within the meaning set forth in Treasury Regulation Section 1.1445-2(b)(2)(iii)(A); it being understood that, notwithstanding anything to the contrary contained herein, if Seller fails to provide Buyer with such certifications, Buyer shall be entitled to withhold a portion of the Purchase Price in accordance with Section 1445 of the Code and the applicable Treasury Regulations;

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(j)            the Books and Records Related to such Specified Business that are Transferred Assets (it being understood that Books and Records located on real property interests conveyed to Buyer at the Closing shall be deemed delivered pursuant to this Section 2.10(j));

(k)           evidence of the obtaining of, or, with respect to Seller Required Approvals that only require notice or filing, the notice or filing with respect to, the Seller Required Approvals or any LFA Approvals, in each case, Related to such Specified Business;

(l)            the certificate to be delivered pursuant to Section 6.2(d);

(m)          a certified copy of the Confirmation Order (including any amendments thereto);

(n)           duly executed counterparts of instruments providing Buyer the limited, irrevocable right, in the name, place and stead of Seller and any of its Affiliates, as attorney-in-fact of Seller and any of its Affiliates, to cash, deposit, endorse or negotiate checks received on or after the Closing Date made out to Seller or any of its Affiliates in payment for cable television, high speed Internet, telephony and related services and charges provided by the Specified Systems Related to such Specified Business, and evidence of written instructions to the lock-box service provider or similar agents of Seller and any of its Affiliates to promptly forward to Buyer upon receipt all such cash, deposits and checks representing accounts receivable of such Specified Systems;

(o)           to the extent available using commercially reasonable efforts, (i) subject only to Permitted Encumbrances, such certificates and affidavits of Seller or its applicable Affiliate as may be reasonably requested by Buyer’s title insurance company necessary and satisfactory to Buyer in connection with the issuance of title insurance with respect to any Owned Real Property or Leased Real Property Related to such Specified Business and (ii) customary gap indemnities covering Seller’s acts for the period between Closing and the recording of the applicable deed or assignment of lease with respect to such Owned Real Property or Leased Real Property; provided, that, except with respect to the customary gap indemnities described in clause (ii) above, such certificates or affidavits shall be deemed not to have been reasonably requested if they would increase, in each case other than in a de minimis manner, the Liability of Seller or any of its Affiliates beyond the liability that would be incurred by Seller or its applicable Affiliates under a special warranty deed or would contain representations that are more extensive than those set forth in this Agreement;

(p)           the Transferred Cash Related to such Specified Business in immediately available funds by wire transfer to an account which has been designated by Buyer at least two Business Days prior to the Closing Date (it being understood that Transferred Cash shall be deemed delivered if it is either (i) located on real property interests being conveyed to Buyer at Closing or (ii) held in accounts assigned to Buyer pursuant to duly executed instruments of assignment that are reasonably satisfactory to Buyer);

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(q)           stock certificates (or other comparable evidence of ownership, if issued) representing the Transferred Investments Related to such Specified Business, duly endorsed for transfer or accompanied by executed stock transfer powers or other appropriate instruments of assignment and transfer;

(r)            a duly executed counterpart of the Escrow Agreement; and

(s)           duly executed counterparts of such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to Buyer and Seller, as may be reasonably required to give effect to this Agreement.

Section 2.11  Non-Assignability of Assets.

(a)           Without limiting Sections 6.1(f) and 6.2(e), if and to the extent that the transfer or assignment from Seller or any of its Affiliates to Buyer of any Transferred Asset would be a violation of applicable Law with respect to such Transferred Asset or otherwise adversely affect the rights of the applicable transferee thereunder as a result of the failure to obtain or make any consent, approval, waiver, authorization, notice or filing required to be made in connection with the Transaction, then the transfer or assignment to Buyer of such Transferred Asset (each, a “Delayed Transfer Asset”) shall be automatically deemed deferred and any such purported transfer or assignment shall be null and void until such time as all legal impediments are removed and/or Authorizations have been made or obtained; it being understood that no adjustment to the Purchase Price will be made as a result of the failure to transfer or assign any Delayed Transfer Asset.

(b)           If the transfer or assignment of any Transferred Asset (other than, at the Closing, a Transferred Asset Related to a Disputed MCE System) intended to be transferred or assigned hereunder is not consummated prior to or at the Closing as a result of the failure to obtain any Authorization, then Seller or its Affiliate shall thereafter, directly or indirectly, hold such Transferred Asset for the use and benefit of Buyer (at the expense of Buyer), insofar as reasonably possible.  In addition, to the extent not prohibited by Law, Seller shall take or cause to be taken such other actions as may be reasonably requested by Buyer in order to place Buyer, insofar as reasonably possible, in the same position as if such Transferred Asset had been transferred as contemplated hereby and so that all the benefits and burdens relating to such Transferred Asset, including possession, use, risk of loss, potential for gain, and dominion, control and command over such Transferred Asset, are to inure from and after the Closing to Buyer.  To the extent permitted by Law and to the extent otherwise permissible in light of any required Authorization, Buyer shall be entitled to, and shall be responsible for, the management of any Transferred Assets not yet transferred to it as a result of this Section 2.11 and the parties hereto agree to use commercially reasonable efforts to cooperate and coordinate with respect thereto.

(c)           If and when the Authorizations, the absence of which caused the deferral of transfer of any Transferred Asset pursuant to this Section 2.11, are obtained, the transfer of the applicable Transferred Asset to Buyer shall automatically and without

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further action be effected in accordance with the terms of this Agreement and the applicable Ancillary Agreements.

(d)           Prior to the Closing Date, Seller shall deliver to Buyer a list identifying, in reasonable detail and to the Knowledge of Seller, the Delayed Transfer Assets and the Authorizations required therefor.

(e)           The parties hereto further agree that, assuming as set forth in Section 2.11(b) that all or substantially all of the benefits and burdens relating to the Transferred Assets inure to Buyer, (i) any Delayed Transferred Assets referred to in this Section 2.11(e) shall be treated for all income Tax purposes as Assets of Buyer and (ii) neither Buyer nor Seller shall take, and each of Buyer and Seller shall prevent any of their respective Affiliates from taking, any position inconsistent with such treatment for any income Tax purposes (unless required by a change in applicable income Tax Law or a good faith resolution of a contest).

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that, except as set forth on the Seller Disclosure Schedule, as of the date hereof and as of the Closing:

Section 3.1  Organization and Qualification.  Seller is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has all requisite corporate power and authority to own, lease and operate its Assets, and to carry on each Specified Business as currently conducted.  Seller is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership or operation of the Transferred Assets or the conduct of each Specified Business requires such qualification, except for failures to be so qualified or in good standing, as the case may be, that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Prior to the date hereof, Seller has made available to Buyer a true and complete copy of Seller’s certificate of incorporation and bylaws, each as amended and in effect as of the date hereof.

Section 3.2  Subsidiaries and Transferred Investments.

(a)           Schedule 3.2(a) of the Seller Disclosure Schedule sets forth a true and complete list of each Asset Transferring Subsidiary, together with its jurisdiction of organization.  The Asset Transferring Subsidiaries are the only Subsidiaries of Seller that have any right, title or other interest in or to the Assets of Seller and its Affiliates that are Related to the Acquired Business.  Except for the Non-Debtor Subsidiaries, all of the Asset Transferring Subsidiaries and Intermediate Subsidiaries are Debtors.  Each Asset Transferring Subsidiary and each Intermediate Subsidiary is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization and, in the case of the Asset Transferring Subsidiaries, has all requisite corporate or similar power and authority to own, lease and operate its Assets and to carry on its portion of each

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Specified Business as currently conducted, except for failures to be in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each Asset Transferring Subsidiary and each Intermediate Subsidiary is duly qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction where the ownership or operation of its Assets or the conduct of its business requires such qualification, except for failures to be so duly organized, validly existing, qualified or in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Except to the extent of any Claims that will be discharged (or the functional equivalent thereof in terms of its effect on Buyer, each Specified Business, the Transferred Assets and the Assumed Liabilities) pursuant to the Discharge (or, as applicable, the MCE Discharge or an Additional Discharge), (i) Seller owns, directly or indirectly, through one or more other Subsidiaries (each such Subsidiary that is not also an Asset Transferring Subsidiary is referred to herein as an “Intermediate Subsidiary”), all right, title and interest in and to all of the outstanding Equity Securities of the Asset Transferring Subsidiaries and (ii) all of the outstanding Equity Securities of the Asset Transferring Subsidiaries and Intermediate Subsidiaries have been duly authorized, and are validly issued, fully paid and non-assessable.  Except to the extent of any Claims that will be discharged (or the functional equivalent thereof in terms of its effect on Buyer, each Specified Business, the Transferred Assets and the Assumed Liabilities) pursuant to the Discharge (or, as applicable, the MCE Discharge or an Additional Discharge), Seller has, directly or indirectly, good and valid title to the Equity Securities of each Asset Transferring Subsidiary and each Intermediate Subsidiary, free and clear of all Encumbrances, other than Permitted Encumbrances.

(b)           Schedule 3.2(b) of the Seller Disclosure Schedule sets forth a true and complete list of each Investment Entity, the Equity Securities of Seller and its Affiliates in each Investment Entity and, to the Knowledge of Seller, with respect to those Investment Entities identified on Schedule 3.2(b)(i) of the Seller Disclosure Schedule, the jurisdiction of organization and authorized and outstanding Equity Securities of such Investment Entities.  Seller has provided or made available to Buyer true and complete copies of the Investment Documents.  Except to the extent of any Claims that will be discharged (or the functional equivalent thereof in terms of its effect on Buyer, each Specified Business, the Transferred Assets and the Assumed Liabilities) pursuant to the Discharge (or, as applicable, the MCE Discharge or an Additional Discharge), the outstanding Equity Securities held by Seller or any of its Affiliates in respect of each Transferred Investment identified on Schedule 3.2(b)(i) of the Seller Disclosure Schedule and, to the Knowledge of Seller, in respect of any other Investment Entities, have been duly authorized, and are validly issued, fully paid and non-assessable.

(c)           Except to the extent of any Claims that will be discharged (or the functional equivalent thereof in terms of its effect on Buyer, each Specified Business, the Transferred Assets and the Assumed Liabilities) pursuant to the Discharge (or, as applicable, the MCE Discharge or an Additional Discharge), Seller has good and valid title to the Transferred Investments, free and clear of all Encumbrances, other than as set forth in any Investment Document, and upon delivery by Seller and/or any of its Affiliates of the Transferred Investments at Closing, good and valid title to the Transferred Investments,

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free and clear of all Encumbrances, other than as set forth in any Investment Document and those resulting from Buyer’s ownership, will pass to Buyer.  Except for the Transferred Investments, none of Seller or any of its Affiliates owns, directly or indirectly, any Equity Securities of any Person (other than a Subsidiary of Seller) or has any direct or indirect equity or ownership interest in any business (other than any business operated by a Subsidiary of Seller), or is a member of or participant in any partnership, joint venture or similar Person (other than a Subsidiary of Seller) that is Related to the Acquired Business or the Friendco Business.

Section 3.3  Corporate Authorization.

(a)           Seller has, with respect to Section 5.10 and Article VIII, full corporate power and authority to execute and deliver this Agreement, and to perform its obligations hereunder.  The execution, delivery and performance by Seller of this Agreement, with respect to Section 5.10 and Article VIII, have been duly and validly authorized and no additional corporate, shareholder or similar authorization or consent is required in connection with the execution, delivery and performance by Seller of this Agreement.

(b)           Without limiting Section 3.3(a), subject to the entry of the Confirmation Order and its effectiveness at the Closing, (i) Seller has full corporate power and authority to execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party, and to perform its obligations hereunder and thereunder and (ii) the execution, delivery and performance by Seller of this Agreement and each of the Ancillary Agreements to which it is a party have been duly and validly authorized and no additional corporate, shareholder or similar authorization or consent is required in connection with the execution, delivery and performance by Seller of this Agreement or any of the Ancillary Agreements to which it is a party.

(c)           Each Affiliate of Seller has or prior to the Closing will have, subject to the entry of the Confirmation Order and its effectiveness at the Closing, full corporate, partnership or similar power and authority to execute and deliver each Ancillary Agreement or Closing document to which it is (or will be) a party and to perform its obligations thereunder.  Subject to the entry of the Confirmation Order, the execution, delivery and performance by each Affiliate of Seller of each Ancillary Agreement or Closing document to which it is (or will be) a party has been or prior to the Closing will have been duly and validly authorized, and no additional corporate authorization or consent is or will be required in connection with the execution, delivery and performance by any Affiliate of Seller of the Ancillary Agreements or Closing documents to which such Affiliate is (or will be) a party or signatory.

(d)           At a meeting duly called and held, the Board and the board of directors (or similar governing body) of each Asset Transferring Subsidiary (other than the Tele-Media Entities (without limiting Section 5.6(h))) has by the requisite vote (i) determined that this Agreement and the Transaction are in the best interests of Seller, such Asset Transferring Subsidiaries and their respective stakeholders, (ii) approved and

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adopted this Agreement and (iii) resolved to cause each Asset Transferring Subsidiary to perform its obligations under the Ancillary Agreements to which it is (or will be) a party.

Section 3.4  Consents and Approvals.  No consent, approval, waiver, authorization, notice or filing is required to be obtained by Seller or any of its Affiliates from, or to be given by Seller or any of its Affiliates to, or made by Seller or any of its Affiliates with, any Person (and assuming solely for this purpose that all Contracts Related to the Acquired Business shall constitute Assigned Contracts but, for purposes of Section 6.2(a) only, excluding any Contract that is not an Assigned Contract if the consent, approval, waiver, authorization, notice or filing is required only to the extent such Contract would have been an Assigned Contract), in connection with (a) the execution, delivery and performance by Seller or any of its Affiliates of Section 5.10 and Article VIII and (b) other than the entry by the Bankruptcy Court of the Confirmation Order (or the entry of an order pursuant to section 365(f) of the Bankruptcy Code authorizing the assumption and, if applicable, assignment of Assigned Contracts), the execution, delivery and performance by Seller or any of its Affiliates of the remainder of this Agreement and the Ancillary Agreements to which it is (or will be) a party, other than, in the case of this clause (b) only, the consents, approvals, waivers, authorizations, notices or filings the failure of which to obtain or make would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.5  Non-Contravention.  The execution, delivery and performance by Seller and its Affiliates of this Agreement and the Ancillary Agreements to which they are a party, and the consummation of the transactions contemplated hereby and thereby (and assuming solely for this purpose that all Contracts Related to the Acquired Business shall constitute Assigned Contracts but, for purposes of Section 6.2(a) only, excluding any Contract that is not an Assigned Contract), do not and will not (a) violate any provision of the articles of incorporation, bylaws or other organizational documents of Seller or any of its Affiliates, (b) assuming (i) the entry of the Confirmation Order (or the entry of an order pursuant to section 365(f) of the Bankruptcy Code authorizing the assumption and, if applicable, assignment of Assigned Contracts), and (ii) the receipt of all consents, approvals, waivers and authorizations and the making of the notices and filings set forth on Schedule 3.4 of the Seller Disclosure Schedule with respect to any Person which is not a Government Entity or Self-Regulatory Organization (which assumption shall not apply to Section 5.10 and Article VIII), conflict with, or result in the breach of, or constitute a default under, or result in the termination, cancellation, modification or acceleration of any right or obligation of Seller or any of its Affiliates under, or result in a loss of any benefit to which Seller or any of its Affiliates is entitled under, any Contract, or result in the creation of any Encumbrance upon any of the Transferred Assets or give rise to any Purchase Right, in each case, whether after the filing of notice or the lapse of time or both, or (c) assuming the entry of the Confirmation Order and the receipt of all consents, approvals, waivers and authorizations and the making of notices and filings set forth on Schedule 3.4 of the Seller Disclosure Schedule with respect to Government Entities or Self-Regulatory Organizations or required to be made or obtained by Buyer (which assumption shall not apply to Section 5.10 and Article VIII), violate or result in a breach of or constitute a default under any Law to which Seller or any of its Affiliates is subject, or under any Governmental

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Authorization, except for (which exception shall not apply to Section 5.10 and Article VIII), in the cases of clauses (b) and (c), conflicts, breaches, terminations, defaults, cancellations, accelerations, losses, violations, Encumbrances or Purchase Rights that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.6  Binding Effect.  Subject to the Bankruptcy Court’s entry of the Confirmation Order and its effectiveness at the Closing, this Agreement and each of the Ancillary Agreements dated the date hereof is, and each other Ancillary Agreement will constitute, when executed and delivered by Seller and each Affiliate of Seller party to such agreements and by Buyer and the other parties thereto, a valid and legally binding obligation of Seller and each Affiliate of Seller party to such agreements, enforceable against Seller and each such Affiliate in accordance with their respective terms.  Notwithstanding the foregoing, Section 5.10 and Article VIII constitute valid and legally binding obligations of Seller, enforceable against Seller in accordance with their respective terms.  Upon the Bankruptcy Court’s entry of the Confirmation Order and subject to its effectiveness at the Closing, each of the unexecuted Ancillary Agreements to be entered into on or prior to the Closing Date, when executed and delivered by Seller and each Affiliate of Seller party to such agreements and by Buyer and the other parties thereto, will constitute a valid and legally binding obligation of Seller and each Affiliate of Seller party to such agreements, enforceable against Seller and each such Affiliate in accordance with its terms.

Section 3.7  Financial Statements.

(a)           Set forth on Schedule 3.7(a) of the Seller Disclosure Schedule is a copy of (i) the consolidated audited balance sheets and audited statements of income, stockholders’ equity and cash flows for Seller and its Affiliates for the fiscal years ended December 31, 2001, December 31, 2002, and December 31, 2003 (the “Audited Financial Statements”), (ii) the unaudited balance sheet and unaudited statements of income, stockholders’ equity and cash flows of each Specified Business, but including the Excluded Assets and the Excluded Liabilities to the extent Related to such Specified Business, at and for the fiscal year ended December 31, 2003 (but not including, except with respect to the unaudited statements of income, Unallocated Shared Assets and Liabilities), in each case derived from the Audited Financial Statements for the corresponding time period (the “Derivative 2003 Financial Statements”), (iii) the unaudited balance sheet and unaudited statements of income, stockholders’ equity and cash flows for each Specified Business, but including the Excluded Assets and the Excluded Liabilities Related to such Specified Business, at and for the fiscal year ended December 31, 2004 (but not including, except with respect to the unaudited statements of income, Unallocated Shared Assets and Liabilities) (the “Derivative 2004 Financial Statements”) and (iv) the unaudited balance sheet and unaudited statements of income, stockholders’ equity and cash flows for the Unallocated Shared Assets and Liabilities at and for the fiscal year ended December 31, 2004 (the “Derivative Unallocated 2004 Financial Statements”).  The Audited Financial Statements have been prepared from the books and records of Seller and its Affiliates in accordance with GAAP consistently applied (except as may be indicated in the notes thereto), and fairly present, in all

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material respects, the financial condition and results of operations, stockholders’ equity and cash flows of Seller and its Affiliates (assuming the exclusion of the MCE Systems and the MCE Systems (as defined in the Friendco Purchase Agreement) from the Business) as of the dates thereof or for the periods then ended.  The Derivative 2003 Financial Statements and the Derivative 2004 Financial Statements have been specially prepared from the books and records of Seller and its Affiliates in accordance with GAAP consistently applied (except as may be indicated in the notes thereto) and fairly present, in all material respects, the financial condition and results of operations, stockholders’ equity and cash flows of each such Specified Business (including the MCE Systems) as of the dates thereof or for the periods then ended, subject to the absence of footnotes and similar presentation items therein and excluding the Unallocated Shared Assets and Liabilities (other than the related revenues and expenses).  The Derivative Unallocated 2004 Financial Statements have been specially prepared from the books and records of Seller and its Affiliates in accordance with GAAP consistently applied (except as may be indicated in the notes thereto) and fairly present, in all material respects, the Unallocated Shared Assets and Liabilities as of December 31, 2004 or for the period ended thereon.

(b)           The Chief Executive Officer and the Chief Financial Officer of Seller and any Significant Subsidiary of Seller have disclosed, based on their most recent evaluation, to Seller’s auditors and the audit committee of the Board (i) all significant deficiencies in the design or operation of internal controls that could adversely affect Seller’s or any of Seller’s Affiliates’ ability to record, process, summarize and report financial data and have identified for Seller’s auditors any material weaknesses in internal controls and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Seller’s or any of Seller’s Subsidiaries’ internal controls.  Copies of all disclosures described in the foregoing sentence have been made available to Buyer.  Seller and its consolidated Subsidiaries have established and maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to Seller, including its consolidated Subsidiaries, is made known to Seller’s Chief Executive Officer and its Chief Financial Officer by others within those entities; and such disclosure controls and procedures are effective in alerting Seller’s Chief Executive Officer and its Chief Financial Officer to material information of the nature required to be disclosed in periodic reports pursuant to the Exchange Act in a timely fashion.

(c)           The financial statements prepared by Seller and delivered to Buyer pursuant to Section 5.11(a) shall, when so delivered, be prepared from the books and records of Seller and its Affiliates in accordance with GAAP consistently applied (except as may be indicated in the notes thereto), and fairly present, in all material respects, the financial condition and results of operations, stockholders’ equity and cash flows of each Specified Business as of the dates thereof or the period then ended, subject to, in the case of interim financial statements, normal year-end adjustments and the absence of footnotes and similar presentation items therein.

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(d)           The Additional Financial Statements prepared by Seller and delivered to Buyer pursuant to
Section 5.11(b) shall, when so delivered, be prepared from the books and records of Seller and its Affiliates in accordance with GAAP consistently applied (except as may be indicated in the notes thereto), and will fairly present, in all material respects, the financial condition and results of operations, stockholders’ equity and cash flows of (i) in the case of the Seller Audited Financial Statements, Seller and its Affiliates (assuming, with respect to any period prior to January 1, 2004, the exclusion of the MCE Systems and the MCE Systems (as defined in the Friendco Purchase Agreement) from the Business), (ii) in the case of the Derivative Audited Financial Statements, each such Specified Business (assuming, with respect to any period prior to January 1, 2004, the exclusion of the MCE Systems and the MCE Systems (as defined in the Friendco Purchase Agreement) from such Specified Business) and (iii) in the case of the MCE Financial Statements, the MCE Systems, in each case as of the dates thereof or for the periods then ended, subject, solely in the case of the MCE Financial Statements, to the absence of footnotes and similar presentation items therein.

Section 3.8  Litigation and Claims.

(a)           Except (i) to the extent of any Claims that will be discharged (or the functional equivalent thereof in terms of its effect on Buyer, each Specified Business, the Transferred Assets and the Assumed Liabilities) pursuant to the Discharge (or, as applicable, the MCE Discharge or an Additional Discharge) and, to the Knowledge of Seller, not arising from actions, omissions or circumstances continuing as of the Closing and affecting or otherwise relating to Seller or any of its Affiliates, the Transferred Assets or any Specified Business and (ii) for the SEC/DOJ Matters and the pendency of the Reorganization Case, there are no civil, criminal or administrative actions, suits, demands, claims, hearings, proceedings or investigations pending against, or, to the Knowledge of Seller, threatened against or affecting, or otherwise relating to Seller or any of its Affiliates, the Transferred Assets, any Specified Business or the Transaction, other than those that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)           Except (i) to the extent of any Claims that will be discharged (or the functional equivalent thereof in terms of its effect on Buyer, each Specified Business, the Transferred Assets and the Assumed Liabilities) pursuant to the Discharge (or, as applicable, the MCE Discharge or an Additional Discharge) and, to the Knowledge of Seller, not arising from actions, omissions or circumstances continuing as of the Closing and affecting or otherwise relating to Seller or any of its Affiliates, the Transferred Assets or any Specified Business and (ii) for the SEC/DOJ Matters and the pendency of the Reorganization Case, none of Seller, any of its Affiliates or any of the Transferred Assets is subject to any order, writ, judgment, award, injunction or decree of any court or governmental or regulatory authority of competent jurisdiction or any arbitrator or arbitrators, other than those that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 3.9  Taxes.

(a)           All material Tax Returns with respect to each Specified Business or any Transferred Assets that are required to be filed have been filed (or extensions have been duly obtained) and all amounts shown to be due and owing or to be withheld thereon have been duly and timely paid or withheld as the case may be (except for the period prior to the commencement of the Reorganization Case, that may not be paid except pursuant to a Plan); provided, that, solely for purposes of Section 6.2(a), this Section 3.9(a) shall be qualified by the Knowledge of Seller.

(b)           There is no material lien for Taxes upon any of the Transferred Assets nor is any taxing authority in the process of imposing, or has threatened to impose, any material lien for Taxes on any of the Transferred Assets, other than liens for Taxes that are not yet due and payable or for Taxes the validity or amount of which is being contested by Seller or one of its Affiliates in good faith by appropriate action and for which appropriate provision has been made in accordance with GAAP; provided, that, solely for purposes of Section 6.2(a), this Section 3.9(b) shall be qualified by the Knowledge of Seller.

(c)           Seller and its Affiliates have each withheld from their respective employees, independent contractors, creditors, stockholders and third parties and timely paid to the appropriate taxing authority proper and accurate amounts in all material respects for all taxable periods, or portions thereof, ending on or before the Closing Date in compliance with all Tax withholding and remitting provisions of applicable laws and have each complied in all material respects with all withholding Tax information reporting provisions of all applicable Laws; provided, that, solely for purposes of Section 6.2(a), this Section 3.9(c) shall be qualified by the Knowledge of Seller.

(d)           None of the Transferred Assets: (i) is property required to be treated as being owned by another Person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect immediately prior to the enactment of the Tax Reform Act of 1986, (ii) constitutes “tax-exempt use property” within the meaning of Section 168(h)(1) of the Code or (iii) is “tax-exempt bond financed property” within the meaning of Section 168(g)(5) of the Code.

Section 3.10  Employee Benefits.

(a)           All benefit and compensation plans, programs, contracts, policies, agreements or arrangements, including any trusts (including any trusts required in the future as a result of the Transaction or otherwise), trust instruments, funding arrangements or insurance contracts, any “employee benefit plans” within the meaning of Section 3(3) of ERISA, including any multiemployer pension plans within the meaning of Section 3(37) of ERISA (each, a “Multiemployer Plan”), any pension, profit-sharing, savings, retirement, deferred compensation, stock option, stock purchase, stock appreciation rights, stock based, incentive, bonus, workers’ compensation, short term disability, sick leave, group insurance, hospitalization, medical, dental, life, cafeteria or flexible spending, vacation, continuity, sale bonus, retention, fringe benefit, employee

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loan and severance plans and all employment, collective bargaining, consulting, severance and change in control agreements, plans, policies, programs or arrangements whether formal or informal, written or oral, and all amendments thereto, under which (i) any Employee, director or consultant of Seller or any of its Affiliates has any present or future right to benefits and which are contributed to, sponsored by or maintained by Seller or any of its Affiliates, or (ii) Seller or any of its ERISA Affiliates has any present or future liability (whether contingent or otherwise) (the “Benefit Plans”), are listed on Schedule 3.10(a) of the Seller Disclosure Schedule.  Each Benefit Plan which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service National Office and has been separately identified.  Seller has provided or made available to Buyer true and complete copies of all Benefit Plans (or with respect to any individual employment agreements shall provide such agreements to Buyer no later than fourteen Business Days following the date hereof) and, with respect to each Benefit Plan, to the extent applicable, all related service agreements, summaries, summary plan descriptions, actuarial reports, the most recently filed Forms 5500 and the most recent determination letters.

(b)           All Benefit Plans, other than Multiemployer Plans, have been established, maintained and administered in substantial compliance with all applicable Laws, including ERISA and the Code.  Neither Seller nor any of its Affiliates has engaged in a transaction with respect to any Benefit Plan that is subject to ERISA that could subject Seller to a tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA.  No actions, suits, claims, litigation, audits, investigations, administrative proceedings or disputes are pending, or, to Seller’s Knowledge threatened, with respect to (i) any Benefit Plan that would be material to any Specified Business or (ii) any Seller stock fund or trust in any Benefit Plan, and, to Seller’s Knowledge, no facts or circumstances exist that could give rise to any such actions, suits, claims, litigation, audits, investigations, administrative proceedings or disputes.

(c)           Neither Seller nor any other entity which, together with Seller, would be treated as a single employer under Section 4001 of ERISA or Section 414 of the Code (an “ERISA Affiliate”) contributes to or has in the past six years sponsored, maintained or contributed to any defined benefit pension plan (as defined in Section 3(35) of ERISA) or is subject to Section 412 of the Code or Section 302 of ERISA.

(d)           Neither Seller nor any of its ERISA Affiliates has, within the six years preceding the date of this Agreement, or expects to incur any obligation to contribute to, or any withdrawal liability under Subtitle E of Title IV of ERISA with respect to, a Multiemployer Plan (whether based on contributions of Seller or an ERISA Affiliate) nor do Seller or any of its ERISA Affiliates have any Liabilities under any such plan that remain unsatisfied.

(e)           There has been no amendment to, or announcement by Seller or any of its Affiliates (whether or not written) in respect of the Employees relating to any Benefit Plan which would increase materially the expense of maintaining such Benefit

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Plan above the level of the expense incurred therefor for the most recent fiscal year, except as would not directly or indirectly adversely affect Buyer or Parent.

(f)            Neither Seller nor any of its Affiliates has incurred any current or projected liability in respect of post-employment or post-retirement health, medical or life insurance benefits for current, former or retired employees of Seller or any of its Affiliates, except as required to avoid an excise tax under Section 4980B of the Code or otherwise, or as may be required pursuant to any other applicable Law.

(g)           No Benefit Plan is a split-dollar life insurance program or otherwise provides for loans to executive officers (within the meaning of the SOA).

(h)           As of the date hereof with respect to those Employees listed on Schedule 5.8(a)(ii) of the Seller Disclosure Schedule and as of the date hereof and as of the Closing Date with respect to all other Employees, no Benefit Plan exists that, as a result of the execution of this Agreement or the Transaction (whether alone or in connection with any subsequent event(s)), will (i) entitle any Employee, director or consultant of Seller or any of its Affiliates to severance pay or any increase in severance pay upon any termination of employment after the date of this Agreement, (ii) accelerate the time of payment or vesting or result in any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or result in any other material obligation pursuant to, any of the Benefit Plans, (iii) limit or restrict the right of Seller or any of its Affiliates to merge, amend or terminate any of the Benefit Plans or (iv) result in payments under any of the Benefit Plans which would subject any recipient of the payments to excise taxes under Section 4999 of the Code.

(i)            To the extent that, after the Closing, Parent operates each Specified Business in the same manner operated by Seller and its Affiliates during the six-month period prior to the Closing, Parent will not incur any Liability under WARN or any other applicable Law other than on account of any action or inaction taken by Parent or Buyer following the Closing Date relating to plant closings or employee separations or severance pay.

(j)            Neither Seller nor any of its Affiliates has any material Liability with respect to any misclassification of any person as an independent contractor rather than as an employee, or with respect to any employee leased from another employer, except as would not directly or indirectly adversely affect Buyer or Parent.

Section 3.11  Compliance with Laws.  Each Specified Business and all of the Transferred Assets have since July 1, 2003 and currently are being conducted, held and operated in compliance with all applicable Laws and Governmental Authorizations, including the Communications Act, the Cable Communications Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, the Telecommunications Act of 1996, the Copyright Act of 1976 and all rules and regulations of the FCC and the United States Copyright Office, except for failures to comply that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Since July 1, 2003 and, to the Knowledge of Seller, and except to the

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extent of any Claims that will be discharged (or the functional equivalent thereof in terms of its effect on Buyer, each Specified Business, the Transferred Assets and the Assumed Liabilities) pursuant to the Discharge (or, as applicable, the MCE Discharge or an Additional Discharge), prior to July 1, 2003, neither Seller nor any of its Affiliates has received any notice alleging any violation by Seller or any of its Affiliates under any applicable Law for a violation, except for violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each Specified Business has all Governmental Authorizations necessary for the conduct of such Specified Business as currently conducted and such Governmental Authorizations are in full force and effect.  Nothing in this representation is intended to address any compliance matter that is specifically addressed by Sections 3.10 (Employee Benefits), 3.12 (Environmental Matters), 3.14 (Labor) and 3.17 (Franchises).  Schedule 3.11 of the Seller Disclosure Schedule sets forth, with respect to each Specified Business, each Governmental Authorization issued by the FCC, each Governmental Authorization for the provision of telephony services and each other material Governmental Authorization, in each case Related to such Specified Business.

Section 3.12  Environmental Matters.

(a)           Each Specified Business, the Owned Real Property and the Transferred Assets are in compliance in all material respects with all applicable Environmental Laws and Environmental Permits and there are no material Liabilities under any Environmental Law with respect to any Specified Business, the Owned Real Property or the Transferred Assets.

(b)           As of the date hereof, none of Seller or any of its Affiliates (nor, to Seller’s Knowledge, any predecessor in interest) has received from any Person any notice, demand, claim, letter, citation, summons, order or request for information, relating to any material violation or alleged violation of, or any material Liability under, any Environmental Law in connection with or affecting any Specified Business, the Owned Real Property or the Transferred Assets.

(c)           There are no material complaints filed, penalties assessed, writs, injunctions, decrees, orders or judgments outstanding, or any material actions, suits, proceedings or investigations pending or, to Seller’s Knowledge, threatened, relating to compliance with or Liability under any Environmental Law affecting any Specified Business, the Owned Real Property or the Transferred Assets.

(d)           There are no underground storage tanks, asbestos-containing materials, lead-based products or polychlorinated biphenyls on, at or under any of the Owned Real Property or Transferred Assets other than in compliance in all material respects with all Environmental Laws; provided, that, solely for purposes of Section 6.2(a), this Section 3.12(d) shall be deemed to exclude any such items of which Seller does not have Knowledge.

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(e)           None of the Owned Real Property or the Transferred Assets nor any property to which Hazardous Substances located on or resulting from the use of any Owned Real Property or Transferred Assets have been transported, nor any property to which Seller has, directly or indirectly, transported or arranged for the transportation of any Hazardous Substances is listed or, to Seller’s Knowledge, proposed for listing on the National Priorities List promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or on any similar federal, state, local or foreign list of sites requiring investigation or cleanup.

(f)            All material Environmental Permits Related to any Specified Business, the Owned Real Property or the Transferred Assets are valid, are in full force and effect, are transferable and, except as would not, individually or in the aggregate, reasonably be expected to be material, will not be terminated or impaired or become terminable as a result of the transactions contemplated hereby.

(g)           As of the date hereof, there has been no material environmental investigation, study, audit, test, review or other analysis conducted of which Seller has Knowledge in relation to any Owned Real Property or the Transferred Assets which has not been delivered to Buyer at least ten days prior to the date hereof.

Section 3.13  Intellectual Property.  Seller and its Affiliates own the Transferred Intellectual Property free and clear of any material Encumbrances other than Permitted Encumbrances.  The Transferred Intellectual Property that is Registered is subsisting and enforceable in all material respects.  None of the Transferred Intellectual Property or, to the Knowledge of Seller, the Intellectual Property that is provided to Seller and its Affiliates pursuant to the Transferred Intellectual Property Contracts, is subject to any outstanding order, judgment or decree adversely affecting Seller’s or its Affiliates’ use thereof or rights thereto as currently used by Seller and its Affiliates in each Specified Business.  Neither Specified Business and none of the Transferred Assets infringes or has infringed or otherwise violates or has violated any Person’s Intellectual Property rights in any material respect.  To the Knowledge of Seller, no Person is infringing or otherwise violating any Intellectual Property rights of Seller or its Affiliates in the Transferred Intellectual Property or the Intellectual Property that is provided to Seller and its Affiliates pursuant to the Transferred Intellectual Property Contracts, other than violations that would not, individually or in the aggregate, reasonably be likely to have a Material Adverse Effect.  Immediately after the Closing, Buyer or its designated Affiliate will own the Transferred Intellectual Property and hold the Transferred Intellectual Property Contracts on terms and conditions that are the same in all material respects as those in effect immediately prior to the Closing, except to the extent that any of the Transferred Intellectual Property is the subject of a license back to Friendco or any of its Affiliates pursuant to Section 5.12 of the Friendco Purchase Agreement.  None of Seller, any of its Affiliates or any Specified Business has infringed or otherwise violated the Intellectual Property rights of any Person except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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Section 3.14  Labor.

(a)           Except for the Collective Bargaining Agreements, none of Seller or any of its Affiliates is a party to or bound by any labor agreement, union contract or collective bargaining agreement respecting any of the Employees, nor are there any Employees represented by a collectively bargained unit or labor organization who are not covered by a Collective Bargaining Agreement.

(b)           Seller and its Affiliates are in compliance in all material respects with all labor Laws applicable to any Specified Business and the Employees, and are not engaged in any unfair labor practices, as defined in the National Labor Relations Act or other Law applicable to Employees.  There are no outstanding unfair labor practice charges pending before the National Labor Relations Board with respect to any Employee.

(c)           There is no pending or, to the Knowledge of Seller, threatened strike, shutdown, dispute, walkout or other work stoppage or any union organizing effort by, or with respect to, any of the Employees.

Section 3.15  Contracts.

(a)           Schedule 3.15(a) of the Seller Disclosure Schedule contains, with respect to each Specified Business, Seller’s good faith estimate, as of the date hereof, of the number of Contracts (other than Programming Agreements, Franchises and Governmental Authorizations) to which Seller or any of its Affiliates or any of their respective Assets are party, bound or subject which are executory and are Related to such Specified Business.  Such list represents Seller’s good faith estimate of the number of such Contracts in each of the categories set forth on Schedule 3.15(a) of the Seller Disclosure Schedule, and indicates as to each category, the number of such Contracts that (i) were entered into prior to the Petition Date, (ii) were entered into following the Petition Date or (iii) Relate to any Specified Business and any other business of Seller or its Affiliates, including any part of the Friendco Business.

(b)           Except as set forth on Schedule 3.15(b) of the Seller Disclosure Schedule, none of the Contracts of Seller or any of its Affiliates Related to a Specified Business contains any of the following terms or provisions (each such term or provision, a “Special Term”):

(i)            consideration payable or receivable by Seller or any of its Affiliates in excess of $100,000 in any twelve month period or in excess of $1,000,000 over the remaining term;

(ii)           limitations on the freedom of Seller or any of its Affiliates to compete in any line of business, with any Person or in any geographic area, and which would limit the freedom of Buyer or any of its Affiliates to do so after the Closing Date if it were an Assigned Contract;

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(iii)          so-called “most favored nation” provisions or any similar provision requiring Seller or any of its Affiliates to offer a third party terms or concessions at least as favorable as those offered to one or more other parties, or which would require Buyer or any of its Affiliates to do so after the Closing Date if it were an Assigned Contract;

(iv)          any terms that do not reflect in all material respects those that would be obtained in arm’s length negotiations;

(v)           any exclusivity provision or provision that requires the purchase of all or a given portion of a party’s requirements or any other similar provision that would, in each case, bind Buyer or its Affiliates after the Closing if it were an Assigned Contract;

(vi)          any terms for the benefit of any members of the Rigas family (except terms for the general benefit of holders of Equity Securities in Seller or any of its Affiliates), Seller, any Managed Cable Entity or any of its or their current or former Affiliates or associates (as defined in Rule 405 under the Securities Act), in each case that would continue to benefit any such Person after the Closing if it were an Assigned Contract;

(vii)         any provision relating to the use by third parties of any of the Transferred Assets to provide telephone, Internet or data services other than in Contracts with Subscribers of any such services and other than under the Contracts listed on Schedule 3.15(b)(vii) of the Seller Disclosure Schedule; or

(viii)        with respect to any Contract entered into following the entry of the Confirmation Order, any provision that directly or indirectly restricts (or imposes a penalty or loss of benefit upon) the assignment or transfer of the rights or obligations thereunder to Buyer, Friendco or their Affiliates.

(c)           Schedule 3.15(c) of the Seller Disclosure Schedule contains a true and complete list, as of the date hereof, of all Contracts (other than Equipment Leases and Programming Agreements) to which Seller or any of its Affiliates or any of their respective Assets are party, bound or subject that Relate to more than one Specified Business or to both a Specified Business and any part of the Friendco Business.

(d)           Subject to the entry of the Confirmation Order, all Assigned Contracts will be, when assumed by Seller and assigned to Buyer hereunder and under the Confirmation Order, in full force and effect and will be enforceable against each party thereto in accordance with the express terms thereof and any violation, breach or event of default, or alleged violation, breach or event of default, or event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default thereunder on the part of Seller or any of its Affiliates existing prior to such assumption and assignment will be fully discharged and Buyer shall have no responsibility therefor except for any Assumed Cure Costs.  To the Knowledge of Seller, no other party to any Contract of Seller or any of its Affiliates is in default, violation or breach of such

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Contract, and there are no disputes pending or threatened under any such Contract other than those defaults, violations, breaches and disputes that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  In the last five years, none of Seller or any of its Affiliates has made any material claim under any Contract pursuant to which any of the Cable Systems were acquired.

Section 3.16  Cable System and Subscriber Information.

(a)           Except for the Friendco Transferred Assets, none of Seller or any of its Affiliates, directly or indirectly, owns any Systems other than the Cable Systems listed on Schedule 3.16(a) of the Seller Disclosure Schedule.

(b)           Except for the MCE Systems and the Friendco Transferred Assets, none of Seller or any of its Affiliates, directly or indirectly, manages or operates any Systems which it does not, directly or indirectly, wholly own.

(c)           None of Seller or any of its Affiliates, directly or indirectly, owns any Systems that it does not, directly or indirectly, manage and operate.

(d)           Schedule 3.16(d) of the Seller Disclosure Schedule sets forth the aggregate number of Basic Subscribers, Digital Subscribers and HSI Subscribers of each Specified Business (detailed by Cable System) as of December 31, 2004.  Each such aggregate number has been determined in accordance with the Seller Subscriber Accounting Policy.

(e)           Schedule 3.16(e) of the Seller Disclosure Schedule sets forth Seller’s policy with respect to calculating subscribers (the “Seller Subscriber Accounting Policy”).

(f)            Schedule 3.16(f) of the Seller Disclosure Schedule sets forth the average total revenue per Basic Subscriber of each Specified Business as of December 31, 2004.

(g)           Schedule 3.16(g) of the Seller Disclosure Schedule sets forth the Basic Subscriber monthly churn rate for each Specified Business as of December 31, 2004.

(h)           Schedule 3.16(h) of the Seller Disclosure Schedule sets forth a true and complete list of the Cost Centers comprising each Specified Business.

Section 3.17  Franchises.

(a)           Schedule 3.17(a) of the Seller Disclosure Schedule sets forth (i) a true and complete list of each Franchise operated by Seller or any of its Affiliates, detailed by Specified Business, Cable System and Cost Center and (ii) Seller’s good faith estimate of the number of Basic Subscribers served by each such Franchise as of December 31, 2004.  Except as disclosed by Seller to Buyer prior to the date of this Agreement, the Cable Systems are in compliance with the applicable Franchises in all

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material respects.  There are no material ongoing or, to the Knowledge of Seller, threatened audits or similar proceedings undertaken by Government Entities with respect to the Franchises.

(b)           Except as disclosed by Seller to Buyer prior to the date of this Agreement, (i) each of the Franchises is in full force and effect in all material respects, and a valid request for renewal has been duly and timely filed under Section 626 of the Communications Act with the proper Government Entity with respect to each of the Franchises that has expired or will expire within 30 months after the date of this Agreement, (ii)  notices of renewal have been filed pursuant to the formal renewal procedures established by Section 626(a) of the Communications Act, (iii)  there are no applications relating to any Franchises pending before any Government Entity that are material to any Specified Business, (iv) none of Seller or any of its Affiliates has received notice from any Person that any Franchise will not be renewed or that the applicable Government Entity has challenged or raised any material objection to or, as of the date hereof, otherwise questioned in any material respect, a Seller’s request for any such renewal under Section 626 of the Communications Act, and Seller and its Affiliates have duly and timely complied in all material respects with any and all inquiries and demands by any and all Government Entities made with respect to Seller’s or such Affiliates’ requests for any such renewal, (v) none of Seller, any of its Affiliates or any Government Entity has commenced or requested the commencement of an administrative proceeding concerning the renewal of a material Franchise as provided in Section 626(c)(1) of the Communications Act, and (vi) to the Knowledge of Seller, there exist no facts or circumstances that make it likely that any material Franchise shall not be renewed or extended on commercially reasonable terms.

(c)           With respect to the Franchises, none of Seller or any of its Affiliates has made any material commitment to any Government Entity except (i) as set forth in the Contracts listed on Schedule 3.17(c)(i) of the Seller Disclosure Schedule, true and complete copies of which have been made available to Buyer prior to March 31, 2005, and (ii) such other Franchise commitments that (A) are commercially reasonable given the relevant Franchise and locality and (B) do not contain unfulfilled commitments except (1) those commitments reflected in the Budget or the Derivative 2004 Financial Statements (provided, that any commitment so reflected only in part will be deemed to be covered by this exception only to the extent so reflected) and (2) those commitments that are not material relative to Seller’s operations or financial performance in the applicable Franchise area.

(d)           Set forth on Schedule 3.17(d) of the Seller Disclosure Schedule is a list of each Franchise subject to a Purchase Right and except as set forth on such Schedule no such Purchase Right provides for purchase thereunder at a price less than fair market value or a third party offer price.

Section 3.18  Network Architecture.  Schedule 3.18 of the Seller Disclosure Schedule sets forth a true and complete statement (detailed by Cable System) as of December 31, 2004 (or, in the case of clauses (c) and (f), as of the date hereof), of (a) the approximate number of plant miles (aerial and underground) for each headend located in

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each Specified Business, (b) the approximate bandwidth capability expressed in MHz of each such headend, (c) the stations and signals carried by each such headend and the channel position of each such signal and station, (d) the approximate number of multiple dwelling units served by such Specified Business, (e) the approximate number of homes passed in such Specified Business as reflected in the system records of Seller or any of its Affiliates, (f) a description of basic and optional or tier services available and the rates charged for each such Specified Business, (g) the bandwidth capacity of each Cable System in such Specified Business for each headend, and (h) the municipalities served by each of the Cable Systems in such Specified Business and the public service numbers of such municipalities.

Section 3.19  Absence of Changes.  Since the date of the Most Recent Balance Sheet, Seller and its Affiliates have conducted each Specified Business only in the Ordinary Course, and each Specified Business has not experienced any event, occurrence, condition or circumstance, and, to Seller’s Knowledge, no event, occurrence, condition or circumstance is threatened, other than those that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.20  Assets.

(a)           Other than the Excluded Assets, the right, title and interest of Seller and its Affiliates in the Transferred Assets constitute all of the Assets of Seller and its Affiliates owned or held by, used or intended for use, leased, licensed, accrued, reserved, allocated or incurred in connection with the conduct of any Specified Business in all material respects as currently conducted and, immediately after the Closing, shall be sufficient for Buyer to continue to operate and conduct such Specified Business in all material respects as currently conducted.  At the Closing (after giving effect to the Transaction), Buyer or its designated Affiliate will have good and marketable title to (or in the case of Transferred Assets that are leased, valid leasehold interests in) the Transferred Assets free and clear of any Encumbrances, other than Permitted Encumbrances (or in the case of the Transferred Investments, Encumbrances under the Investment Documents), and those created by Buyer or its Affiliates.

(b)           The Shared Assets and Liabilities are the only Assets and Liabilities of Seller or any of its Affiliates that Relate to both of the Specified Businesses or to any Specified Business and any other business of Seller or its Affiliates, including any part of the Friendco Business.

(c)           The Friendco Transferred Assets are the only Assets that are Primarily Related to the Cable Systems being purchased by Friendco.  None of the Friendco Transferred Assets are Primarily Related to any Specified Business except to the extent Buyer has otherwise so consented.  Other than the Friendco Transferred Assets, the Transferred Assets and the Excluded Assets, there are no Assets of Seller or any of its Affiliates Related to the Business.

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(d)           Schedule 3.20(d) of the Seller Disclosure Schedule sets forth a true and complete list of all of the material Assets Related to each Specified Business owned, held by, leased or licensed by any Subsidiary of Seller that is not a Debtor.

(e)           Other than the Tele-Media Entities, the Transferred Investments and the wholly owned Subsidiaries of Seller and as set forth on Schedule 3.20(e) of the Seller Disclosure Schedule, Seller and its Affiliates have no Equity Security in any Person which holds Assets Primarily Related to the operations and business conducted by the Cable Systems.

Section 3.21  Real Property.

(a)           Schedule 3.21(a) of the Seller Disclosure Schedule sets forth a complete and accurate list of all the Real Property Leases and Real Property Subleases, in each case providing for annual payments in excess of $50,000.  Seller has delivered to Buyer true and complete copies of each of such Real Property Leases and Real Property Subleases.

(b)           Schedule 3.21(b) of the Seller Disclosure Schedule sets forth the address and/or location and the general use within each Specified Business of each Owned Real Property and each Leased Real Property listed on Schedule 3.21(a) of the Seller Disclosure Schedule.

(c)           Subject to the entry of the Confirmation Order, all Transferred Real Property Leases and Transferred Rights-of-Way, when assumed by Seller or its Affiliates and assigned to Buyer or its Affiliates pursuant to this Agreement and the Confirmation Order, will be in full force and effect and will be enforceable against each party thereto in accordance with the express terms thereof and will not require any consent of any Person or any payment thereunder in respect of such assignment (unless such payment is made by Seller or any of its Affiliates on or prior to the Closing) and any violation, breach or event of default, or event or condition that, after notice or lapse of time or both (to the extent required), would constitute a violation, breach or event of default thereunder on the part of Seller or any of its Affiliates existing prior to such assumption and assignment will be fully discharged and none of Buyer nor any of its Affiliates shall have any responsibility therefor.  To the Knowledge of Seller, no other party to any Transferred Real Property Lease or Transferred Right-of-Way is in default, violation or breach of such Transferred Real Property Lease or Transferred Right-of-Way and there are no disputes pending or threatened thereunder other than those defaults, violations, breaches and disputes that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Neither the Transferred Owned Real Property nor the Transferred Leased Real Property is subject to any material Real Property Sublease.

(d)           Seller has not received notice and has no Knowledge of any pending, threatened or contemplated material condemnation proceeding affecting the Transferred Owned Real Property or the Leased Real Property or any part thereof, or of

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any sale or other disposition of the Transferred Owned Real Property or the Leased Real Property or any part thereof in lieu of condemnation.

Section 3.22  Absence of Liabilities.  Except to the extent of any Claims that will be discharged (or the functional equivalent thereof in terms of its effect on Buyer, each Specified Business, the Transferred Assets and the Assumed Liabilities) pursuant to the Discharge (or, as applicable, the MCE Discharge or an Additional Discharge), each Specified Business has no Liabilities and there is no existing condition, situation or set of circumstances that, individually or in the aggregate, would reasonably be expected to result in a Liability of any Specified Business, other than (a) Liabilities specifically reflected, reserved against or otherwise disclosed in the Derivative 2004 Financial Statements or, only with respect to Liabilities included in the Unallocated Shared Assets and Liabilities that become Assumed Liabilities pursuant to Section 2.3, the Derivative Unallocated 2004 Financial Statements, (b) Excluded Liabilities and (c) Liabilities that were incurred in the Ordinary Course of Business since the date of the Derivative 2004 Financial Statements and that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.23  Insurance.  Schedule 3.23 of the Seller Disclosure Schedule lists all material insurance policies covering the properties, assets, employees and operations of the Business (including policies providing property, casualty, liability and workers’ compensation coverage) (the “Insurance Policies”).  All of the Insurance Policies or renewals thereof are in full force and effect in all material respects.  With such exceptions as would not be material, all premiums due in respect of the Insurance Policies have been paid by Seller or its Affiliate and Seller and its Affiliates are otherwise in compliance with the terms of such policies.  Seller carries sufficient third party insurance to insure in all material respects all reasonable insurable risks of the Business.  Following the Closing, the Insurance Policies shall continue to provide coverage with respect to acts, omissions and events occurring prior to the Closing in accordance with their terms as if the Closing had not occurred.  To the Knowledge of Seller, there has not been any threatened termination of, material premium increase (other than with respect to customary annual premium increases) with respect to, or material alteration of coverage under, any Insurance Policy.

Section 3.24  Friendco Purchase Agreement.  Seller has previously delivered to Buyer a true and complete copy of the Friendco Purchase Agreement as of the date hereof.  Except for the Friendco Purchase Agreement and the JV Documents and any Ancillary Agreements (each as defined in the Friendco Purchase Agreement) to which Friendco or any of its Affiliates is party, Seller and/or any of its Affiliates, on the one hand, and Friendco and/or any of its Affiliates, on the other hand, are not party to any Contract related to the Transaction or the Friendco Transaction.

Section 3.25  Transactions with Affiliates.  Except for this Agreement, the Ancillary Agreements to which it is a party and any Liability arising under this Agreement or any such Ancillary Agreement, from and after the Closing, none of Buyer or its respective Subsidiaries shall, as a result of the Transaction, be bound by any

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Contract or any other arrangement of any kind whatsoever with, or have any Liability to, Seller, any Managed Cable Entity or any of their respective Affiliates.

Section 3.26  Finders’ Fees.  Except for UBS Securities LLC and ▇▇▇▇▇ & Company LLC, whose fees will be paid by Seller, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Seller or any of its Affiliates who might be entitled to any fee or commission in connection with the Transaction.

Section 3.27  No Other Representations or Warranties.  Except for the representations and warranties contained in this Article III, neither Seller nor any other Person makes any other express or implied representation or warranty on behalf of Seller.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller that, except as set forth on the Buyer Disclosure Schedule, as of the date hereof and as of the Closing:

Section 4.1  Organization and Qualification.

(a)           Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware.  Buyer has all requisite limited liability company power and authority to own and operate its Assets and to carry on its business as currently conducted.  Buyer has made available to Seller a true and complete copy of Buyer’s limited liability company agreement, as amended and in effect as of the date hereof.

(b)           Parent is a corporation duly organized, validly existing and in good standing under the laws of Delaware.  Parent has all requisite corporate power and authority to own and operate its Assets and to carry on its business as currently conducted.  Buyer has made available to Seller a true and complete copy of Parent’s certificate of incorporation and bylaws, each as amended and in effect as of the date hereof.

Section 4.2  Subsidiaries.

(a)           Schedule 4.2(a) of the Buyer Disclosure Schedule sets forth a true and complete list of each Significant Subsidiary of Parent and each other Subsidiary of Parent that is not directly or indirectly wholly owned by Parent or its Significant Subsidiaries, together with its jurisdiction of organization and its authorized and outstanding Equity Securities as of the date hereof.  Each Subsidiary of Parent is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease and operate its Assets and to carry on its portion of the Parent Business as currently conducted and is duly qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction where the ownership or operation of its

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Assets or the conduct of its business requires such qualification, except for failures to be so duly organized, validly existing, qualified or in good standing that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  Buyer has provided or made available to Seller true and complete copies of the certificate of incorporation and bylaws (or similar organizational documents) of each of the Significant Subsidiaries of Parent as in effect as of the date hereof.  As of the date hereof, Parent owns, directly or indirectly, through one or more of its other Subsidiaries, all right, title and interest in and to all outstanding Equity Securities of the Subsidiaries indicated as owned by it on Schedule 4.2(a) of the Buyer Disclosure Schedule.  All of the outstanding Equity Securities of the Subsidiaries of Parent have been duly authorized, and are validly issued, fully paid and non-assessable.

(b)           As of the date hereof and except in respect of any of the following rights that are for the benefit of any Person that is, directly or indirectly, a wholly owned Subsidiary of Parent, (i) there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments of any character under which the Subsidiaries of Parent are or may become obligated to issue or sell, or giving any Person a right to subscribe for or acquire, or in any way dispose of, any shares of the Equity Securities of the Subsidiaries of Parent, and no securities or obligations evidencing such rights are authorized, issued or outstanding, (ii) the outstanding Equity Securities of the Subsidiaries of Parent are not subject to any voting trust agreement or other Contract restricting or otherwise relating to the voting, dividend rights or disposition of such Equity Securities and (iii) there are no phantom stock or similar rights providing economic benefits based, directly or indirectly, on the value or price of the Equity Securities of the Subsidiaries of Parent.

Section 4.3  Corporate Authorization.

(a)           Buyer has full limited liability company power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance by Buyer of this Agreement have been duly and validly authorized and no additional limited liability company member or similar authorization or consent is required in connection with the execution, delivery and performance by Buyer of this Agreement.

(b)           Parent has full corporate power and authority to execute and deliver the Parent Agreement and to perform its obligations thereunder.  The execution, delivery and performance by Parent of the Parent Agreement have been duly and validly authorized and no additional corporate, shareholder or similar authorization or consent is required in connection with the execution, delivery and performance by Parent of the Parent Agreement.

(c)           Prior to the Closing, each of Buyer, Parent and Parent’s Subsidiaries (other than Buyer) will have full limited liability company, corporate, partnership or similar power and authority to execute and deliver each of the Ancillary Agreements to which it will be a party and to perform its obligations thereunder.  Prior to

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the Closing, the execution, delivery and performance by each of Buyer, Parent and Parent’s Subsidiaries (other than Buyer) of each of the Ancillary Agreements to which it will be a party will have been duly and validly authorized and no additional limited liability company member, shareholder or similar authorization or consent will be required in connection with the execution, delivery and performance by each of Buyer, Parent and Parent’s Subsidiaries (other than Buyer) of any of the Ancillary Agreements to which it will be a party.

Section 4.4  Buyer Interests and Parent Capital Stock.

(a)           As of the date hereof, Parent owns directly all right, title and interest in and to all outstanding Equity Securities of Buyer.  As of the Closing, Buyer will be a Subsidiary of Parent.

(b)           As of the date hereof, (i) the authorized capital stock of Parent (the “Parent Capital Stock”) consists of (A) 1,000 shares of common stock, of which (1) 925 have been designated Parent Class A Common Stock, and (2) 75 have been designated Class B Common Stock, par value $0.01 per share (the “Parent Class B Common Stock”), and (B) 1,000 shares of preferred stock, par value $0.01 per share (the “Parent Preferred Stock”); (ii) there are issued and outstanding (A) 925 shares of Parent Class A Common Stock and 75 shares of Parent Class B Common Stock and (B) no shares of Parent Preferred Stock; (iii) except for the Parent Capital Stock, there are no Equity Securities of Parent issued, reserved for issuance or outstanding; (iv) the Parent Capital Stock and any other Equity Securities of Parent have been duly authorized, and are validly issued, fully paid and nonassessable; (v) there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments of any character under which Parent is or may become obligated to issue or sell, or giving any Person a right to subscribe for or acquire, or in any way dispose of, any shares of Parent Capital Stock or other Equity Securities of Parent, and no securities or obligations evidencing such rights are authorized, issued or outstanding; (vi) the outstanding Parent Capital Stock and other Equity Securities of Parent are not subject to any voting trust agreement or other contract, agreement or arrangement restricting or otherwise relating to the voting, dividend rights or disposition of such stock or other Equity Securities; (vii) there are no phantom stock or similar rights providing economic benefits based, directly or indirectly, on the value or price of the Parent Capital Stock or other Equity Securities of Parent; (viii) there are not any bonds, debentures, notes or other Indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of the Parent Capital Stock may vote; and (ix) there are not any outstanding contractual obligations of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Parent.

(c)           As of the Closing, the Purchase Shares (before adjustments under Section 2.6 or 2.7) shall represent 16% of the total outstanding Equity Securities of Parent calculated on a Fully Diluted Basis, after giving effect to the issuance of the Purchase Shares and assuming for purposes of such calculation the consummation of the

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Redemption under the Parent Redemption Agreement but without giving effect to any adjustments under Section 2.6 or 2.7; provided, however, that Equity Securities issued pursuant to clause (ii) of the definition of “Fully Diluted Basis” shall not exceed the Permitted Parent Incentive Awards; provided, further, that such limitation shall not apply to any Equity Securities issued as contemplated by clause (ii)(B) of the definition of “Fully Diluted Basis.”

Section 4.5  Purchase Shares.  Upon issuance, the Purchase Shares will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of all Encumbrances of any kind whatsoever, including any preemptive rights, rights of first refusal, call options, subscription rights or any similar rights under any provision of applicable Law, the charter documents or bylaws of Parent or any of its Subsidiaries or any Contract to which Parent is a party or otherwise bound and subject to applicable securities Laws.  At the Closing, Parent will have sufficient authorized but unissued shares of Parent Capital Stock for Buyer to meet its obligation to cause Parent to deliver the Purchase Shares under this Agreement.  Upon consummation of the Transaction, good and valid title to the Purchase Shares will pass to the recipients thereof, free and clear of any Encumbrances, other than those arising as a result of the ownership of such Purchase Shares by the recipient thereof or under applicable securities Laws.

Section 4.6  Consents and Approvals.  No consent, approval, waiver, authorization, notice or filing is required to be obtained by Buyer, Parent or any of Parent’s Affiliates from, or to be given by Buyer, Parent or any of Parent’s Affiliates to, or made by Buyer, Parent or any of Parent’s Affiliates with, any Person in connection with the execution, delivery and performance by Buyer of this Agreement and by Buyer, Parent or any of Parent’s Affiliates of the Ancillary Agreements to which it is a party, other than the consents, approvals, waivers, authorizations, notices or filings the failure of which to obtain, give or make would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.7  Non-Contravention.  The execution, delivery and performance by Buyer of this Agreement and the execution, delivery and performance by each of Buyer and Parent of each of the Ancillary Agreements to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not (a) violate any provision of the certificate of incorporation, bylaws or other organizational documents of Buyer, Parent or any of Parent’s Affiliates, (b) assuming the receipt of all consents, approvals, waivers and authorizations and the making of notices and filings set forth on Schedule 4.6 of the Buyer Disclosure Schedule with respect to any Person which is not a Government Entity or Self-Regulatory Organization, conflict with, or result in the breach of, or constitute a default under, or result in the termination, cancellation, modification or acceleration (whether after the filing of notice or the lapse of time or both) of any right or obligation of Buyer, Parent or any of Parent’s Affiliates, under, or result in a loss of any benefit to which Buyer, Parent or any of Parent’s Affiliates is entitled under, any Contract to which any of them is a party or result in the creation of any Encumbrance upon any of their Assets or give rise to any Purchase Right or (c) assuming the receipt of all consents, approvals, waivers and authorizations and the making of notices and filings set forth on Schedule 4.6 of the Buyer Disclosure

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Schedule with respect to Government Entities or Self-Regulatory Organizations or required to be made or obtained by Seller, violate or result in a breach of or constitute a default under any Law to which Buyer, Parent or any of Parent’s Affiliates is subject, or under any Parent Governmental Authorization, other than, in the case of clauses (b) and (c), conflicts, breaches, terminations, defaults, cancellations, accelerations, losses, violations or Encumbrances that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.8  Binding Effect.  This Agreement and each of the Ancillary Agreements dated the date hereof is, and each other Ancillary Agreement will constitute, when executed and delivered by Buyer and each Affiliate of Buyer party to such agreements and by Seller and the other parties thereto, a valid and legally binding obligation of Buyer and each Affiliate of Buyer party to such agreements, enforceable against Buyer and each such Affiliate in accordance with their respective terms.

Section 4.9  Financial Statements.

(a)           Set forth on Schedule 4.9(a) of the Buyer Disclosure Schedule is a copy of the consolidated audited balance sheets and audited statements of income, stockholders’ equity and cash flows for Parent (and its predecessors in interest, as the case may be) and its Subsidiaries for the fiscal years ended December 31, 2002, December 31, 2003 and December 31, 2004 (the “Parent Audited Financial Statements”).  The Parent Audited Financial Statements have been prepared from the books and records of Parent in accordance with GAAP consistently applied, and fairly present, in all material respects, the financial condition and results of operations and cash flows of Parent as of the dates thereof or the periods then ended.

(b)           The Chief Executive Officer and the Chief Financial Officer of Parent have disclosed, based on their most recent evaluation, to Parent’s auditors and the audit committee of Parent’s board of directors (i) all significant deficiencies in the design or operation of internal controls that could adversely affect Parent’s or any of Parent’s Affiliates’ ability to record, process, summarize and report financial data and have identified for Parent’s auditors any material weaknesses in the internal controls and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Parent’s internal controls.  Copies of all disclosures described in the foregoing sentence have been made available to Seller.  Parent and its Significant Subsidiaries have established and maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to Parent, including its Significant Subsidiaries, is made known to Parent’s Chief Executive Officer and its Chief Financial Officer by others within those entities; and such disclosure controls and procedures are effective in alerting Parent’s Chief Executive Officer and its Chief Financial Officer to material information of the nature required to be disclosed in periodic reports pursuant to the Exchange Act in a timely fashion.

Section 4.10  Litigation and Claims.  There are no civil, criminal or administrative actions, suits, demands, claims, hearings, proceedings or investigations

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pending against, or, to the Knowledge of Buyer, threatened against or affecting, or otherwise relating to Parent or any of its Affiliates, or the Transaction, other than those that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  None of Parent or any of its Affiliates is subject to any order, writ, judgment, award, injunction or decree of any court or governmental or regulatory authority of competent jurisdiction or any arbitrator or arbitrators, other than those that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  To the Knowledge of Buyer, as of the date hereof, the matters described in the Current Report on Form 8-K, filed December 15, 2004, by TWX with the SEC would not reasonably be expected to have a Parent Material Adverse Effect.

Section 4.11  Taxes.  Each of Parent and its Subsidiaries has filed all Tax Returns required to have been filed (or extensions have been duly obtained) and has paid all Taxes required to have been paid by it, except where failure to file such Tax Returns or pay such Taxes would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.12  Employee Benefits.  Except as would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect:

(a)           all material benefit and compensation plans, programs, contracts, policies or arrangements, including any trusts, trust instruments and insurance contracts forming a part thereof, any “employee benefit plans” within the meaning of
Section 3(3) of ERISA, any deferred compensation, stock option, stock purchase, stock appreciation rights, stock based, incentive, bonus, workers’ compensation, short term disability, vacation, retention and severance plans and all employment, collective bargaining, consulting, severance and change in control agreements, and all amendments thereto, in each case under which any current or former employee of Parent has any right to benefits and which are contributed to, sponsored by or maintained by Parent (the “Parent Benefit Plans”), have been maintained in substantial compliance with their terms and with the requirements prescribed by any applicable statutes, orders, rules and regulations, including ERISA and the Code;

(b)           each Parent Benefit Plan that is intended to be qualified under an applicable provision of the Code or any regulation thereunder, including Section 401(a) of the Code, is so qualified and has been so qualified during the period since its adoption;

(c)           each trust created under any such Parent Benefit Plan is exempt from tax and has been so exempt since its creation and, to the Knowledge of Buyer, nothing has occurred with respect to the operation of any Parent Benefit Plan that would cause the loss of such qualification or exemption; and

(d)           the Transaction will not result in any new or additional Liability of Parent or any of its Subsidiaries under any Parent Benefit Plan that would not have been a Liability of Parent or any of its Subsidiaries absent the consummation of the Transaction.

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Section 4.13  Compliance with Laws.  The Parent Business has been since July 1, 2003 and is being conducted in compliance with all applicable Laws and Parent Governmental Authorizations, including the Communications Act, the Cable Communications Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, the Telecommunications Act of 1996, the Copyright Act of 1976 and all rules and regulations of the FCC and the United States Copyright Office, except for failures to comply that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  Neither Parent nor any of its Affiliates has received any notice alleging any material violation by Parent or any of its Subsidiaries under any applicable Law, except for violations that have been cured or that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  Parent has all Parent Governmental Authorizations necessary for the conduct of the Parent Business as currently conducted other than those the absence of which would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  Nothing in this representation is intended to address any compliance matter that is specifically addressed by Sections 4.12 (Employee Benefits), 4.14 (Environmental Matters), 4.16 (Labor) and 4.19 (Parent Franchises).

Section 4.14  Environmental Matters.

(a)           Since July 1, 2003, the Parent Business and the Parent Real Property have been in material compliance with all applicable Environmental Laws and there are no material Liabilities under any Environmental Law with respect to the Parent Business.

(b)           Since July 1, 2003, none of Parent or any of its Subsidiaries (nor, to Buyer’s Knowledge, any predecessor in interest) has received from any Person any notice, demand, claim, letter or request for information, relating to any material violation or alleged material violation of, or any material Liability under, any Environmental Law in connection with or affecting the Parent Business or the Parent Real Property.

(c)           There are no writs, injunctions, decrees, orders or judgments outstanding, or any actions, suits, proceedings or investigations pending or, to Buyer’s Knowledge, threatened, relating to material compliance with or material Liability under any Environmental Law affecting the Parent Business or the Parent Real Property.

(d)           To Buyer’s Knowledge, there are no underground storage tanks, asbestos containing materials, lead based products or polychlorinated biphenyls on any of the Parent Real Property other than as in compliance in all material respects with all Environmental Laws.

Section 4.15  Intellectual Property.  Except as would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect, as of the Closing Date, Parent or its Subsidiaries will own or have a valid license or other right to use the Intellectual Property necessary to conduct the Parent Business substantially as currently conducted.  Parent has not received any notice that (a) use of such Intellectual Property in the Parent Business substantially as currently used by Parent and its

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Subsidiaries infringes or otherwise violates any Person’s Intellectual Property rights or (b) any Person is infringing or otherwise violating any Intellectual Property rights of Parent or its Subsidiaries in such Intellectual Property, that, in either such case, would, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.16  Labor.

(a)           None of Parent or any of its Subsidiaries is a party to or bound by any material labor agreement, union contract or collective bargaining agreement respecting the employees of Parent and its Subsidiaries, nor are there any employees of Parent or its Subsidiaries represented by a collectively bargained unit or labor organization who are not covered by a Collective Bargaining Agreement.

(b)           Parent and its Subsidiaries are in compliance in all material respects with all labor Laws applicable to the Parent Business and the employees of Parent, and are not engaged in any unfair labor practices, as defined in the National Labor Relations Act or other Law applicable to employees of Parent and its Subsidiaries.  There are no outstanding unfair labor practice charges pending before the National Labor Relations Board with respect to any employees of Parent.

(c)           There is no pending, or to the Knowledge of Buyer threatened, strike, walkout or other work stoppage or any union organizing effort by any of the employees of Parent and its Subsidiaries.

Section 4.17  Contracts.

(a)           Except for such Contracts or arrangements as are entered into between the date hereof and the Closing and that are not prohibited by this Agreement, neither Parent nor any of its Subsidiaries is bound by or subject to (i) except for programming agreements or Contracts with Affiliates, any Contract that is material (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated under the Securities Act) to the Parent Business, (ii) any programming agreement involving consideration in excess of $25,000,000 in any twelve month period, (iii) any Contract involving consideration in excess of $1,000,000 in any twelve month period with any Affiliate of Parent (other than any Subsidiary of Parent) or having the intended effect of benefiting any Affiliate of Parent (other than any Subsidiary of Parent) at the expense of Parent or any Subsidiary of Parent in a manner that would deprive Parent or such Parent Subsidiary of the benefit it would otherwise have obtained if the transaction were to have been effected on terms that were on an arm’s length basis or (iv) any material Contract with Friendco or any of its Affiliates (A) related to or entered into in connection with the Transaction or (B) in connection with the sale or exchange of any Transferred Assets or any Transferred Assets (as defined in the Friendco Purchase Agreement).

(b)           All Parent Material Contracts are in full force and effect and are enforceable against each party thereto in accordance with the express terms thereof.  There does not exist under any Contract to which Parent or any of its Affiliates is a party

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or by which its Assets are bound any violation, breach or event of default, or alleged violation, breach or event of default, or event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default thereunder on the part of Parent or any of its Affiliates or, to the Knowledge of Buyer, any other party thereto, except for such violations, breaches, events or conditions that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  There are no disputes pending or threatened under any Contract to which Parent or any of its Subsidiaries is a party or by which its Assets are bound other than those disputes that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  All of the Parent Material Contracts set forth on Schedule 4.17(a)(iii) of the Buyer Disclosure Schedule were entered into on an arm’s length basis and in the Ordinary Course of Business.

Section 4.18  Parent Cable Systems and Subscriber Information.

(a)           None of Parent or any of its Subsidiaries, directly or indirectly, owns any Systems other than the Parent Cable Systems listed on Schedule 4.18(a) of the Buyer Disclosure Schedule.

(b)           None of Parent or any of its Subsidiaries, directly or indirectly, manages or operates any Systems which it does not, directly or indirectly, wholly own.

(c)           None of Parent or any of its Subsidiaries, directly or indirectly, owns any Systems that it does not, directly or indirectly, manage and operate.

(d)           Schedule 4.18(d) of the Buyer Disclosure Schedule sets forth the aggregate number of Parent Basic Subscribers, Parent Digital Subscribers and Parent HSD Subscribers as of December 31, 2004.  Each such aggregate number has been determined in accordance with the Parent Subscriber Accounting Policy.

(e)           Schedule 4.18(e) of the Buyer Disclosure Schedule sets forth Parent’s policy with respect to calculating Parent Subscribers (the “Parent Subscriber Accounting Policy”).

(f)            Schedule 4.18(f) of the Buyer Disclosure Schedule sets forth the average total revenue per Parent Basic Subscriber as of December 31, 2004.

(g)           Schedule 4.18(g) of the Buyer Disclosure Schedule sets forth the Parent Basic Subscriber monthly churn rate for the Parent Business as of December 31, 2004.  Each such aggregate number has been determined in accordance with the Parent Subscriber Accounting Policy.

Section 4.19  Parent Franchises.

(a)           Schedule 4.19(a) of the Buyer Disclosure Schedule sets forth a true and complete list of each Parent Franchise operated by Parent or any of its Subsidiaries as of the date hereof, detailed by Parent Cable System.  The Parent Cable Systems are in compliance with the applicable Parent Franchises except for such failures to comply that

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would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.  As of the date hereof, there are no material ongoing or, to the Knowledge of Buyer, threatened audits or similar proceedings undertaken by Government Entities with respect to the Parent Franchises.

(b)           Each of the Parent Franchises is in full force and effect in all material respects, and as of the date hereof a valid request for renewal has been duly and timely filed under Section 626 of the Communications Act with the proper Government Entity with respect to each of the Franchises that has expired or will expire within 30 months after the date of this Agreement.  None of Parent or any of its Subsidiaries has received notice as of the date hereof from any Person that any Parent Franchise will not be renewed or that the applicable Government Entity has challenged or raised any objection to or otherwise questioned a Parent’s request for any such renewal under Section 626 of the Communications Act, and Parent and its Subsidiaries have duly and timely complied in all material respects with any and all inquiries and demands by any and all Government Entities made with respect to Parent’s or such Subsidiaries’ requests for any such renewal.

(c)           With respect to the Parent Franchises, none of Parent or any of its Subsidiaries has made any commitments to any Government Entity, except any commitments that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.20  Network Architecture.  Schedule 4.20 of the Buyer Disclosure Schedule sets forth in all material respects a true and complete statement as of December 31, 2004, of (a) the approximate number of plant miles (aerial and underground) for each division of the Parent Business, (b) the approximate bandwidth capability expressed in MHz of each such division of the Parent Business, (c) the stations and signals carried by each such division and the channel position of each such signal and station of the Parent Business, (d) the approximate number of bulk accounts served by the Parent Cable Systems, (e) the approximate number of homes passed in the Parent Business as reflected in the system records of Parent or any of its Affiliates, (f) a description of basic and optional or tier services available from each such division of the Parent Business and the rates charged for each, (g) the channel capacity of each such division of the Parent Business, and (h) the municipalities served by each such division of the Parent Business and the community unit numbers of such municipalities.

Section 4.21  Absence of Changes.  Since December 31, 2004, the Parent Business has not experienced any event, occurrence, condition or circumstance, and, to Buyer’s Knowledge, no event, occurrence, condition or circumstance is threatened that, individually or in the aggregate, has had or is reasonably expected to have, a Parent Material Adverse Effect.

Section 4.22  Assets.  The Assets held by Parent and its Subsidiaries constitute all the Assets and rights of Parent and its Subsidiaries owned, used or held for use primarily in connection with the conduct of the Parent Business in all material respects as currently conducted.

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Section 4.23  Absence of Liabilities.  The Parent Business has no Liabilities and there is no existing condition, situation or set of circumstances that, individually or in the aggregate, would reasonably be expected to result in a Liability of the Parent Business, other than (a) Liabilities specifically reflected, reserved against or otherwise disclosed in the Parent Audited Financial Statements and (b) Liabilities that were incurred since the date of the Parent Audited Financial Statements and that would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.

Section 4.24  Friendco Agreements.

(a)           Buyer has delivered to Seller true and complete copies of the Parent Redemption Agreement, TWE Redemption Agreement and Exchange Agreement, each as in effect as of the date hereof.

(b)           Each of the Parent Redemption Agreement, the TWE Redemption Agreement and the Exchange Agreement constitutes a valid and legally binding obligation of each of Buyer, Parent and any of their Affiliates that are parties thereto, enforceable against each of them in accordance with its terms.

(c)           As of the date hereof, except for the Exchange Agreement, the TWE Redemption Agreement and the Parent Redemption Agreement, none of Buyer or its Affiliates have entered into any material agreements or understandings with Friendco or any of its Affiliates Relating to any of the Transferred Assets or otherwise in connection with the Transaction or the Friendco Transaction.

Section 4.25  No On-Sale Agreements.  Except with respect to the Transaction, the Exchange or the Redemptions, as of the date hereof, Buyer and its Affiliates have not entered into any binding agreement with any third party (other than Seller) with respect to a purchase and sale transaction, whether by merger, stock sale, asset sale or otherwise, for any of the Transferred Assets.

Section 4.26  Finders’ Fees.  Except for Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇ Brothers Inc. (the “Financial Advisors”), whose fees will be paid by Buyer, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Buyer or any Affiliate of Buyer who might be entitled to any fee or commission in connection with the Transaction.

Section 4.27  Opinion of Financial Advisors.  The board of directors of Parent and the Managing Member of Buyer have received the opinions of the Financial Advisors, each dated April 19, 2005, to the effect that, as of such date and subject to the assumptions, qualifications and other limitations set forth therein, (i) to the Parent, the consideration to be paid in the Parent Redemption, (ii) to TWE, the consideration to be paid in the TWE Redemption, and (iii) to Parent and Buyer, the consideration to be received in the Exchange are fair from a financial point of view.  The opinions were delivered solely for the use and benefit of the board of directors of Parent, the managing member of Buyer and the board of representatives of TWE and may not be relied upon by Seller or any third party or used for any other purpose without the prior approval of the

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Financial Advisors, which approval shall not be implied by inclusion of this representation in the Agreement.

Section 4.28  No Other Representations or Warranties.  Except for the representations and warranties contained in this Article IV, neither Buyer nor any other Person makes any other express or implied representation or warranty on behalf of Buyer.

ARTICLE V

COVENANTS

Section 5.1   Access and Information.

(a)           From the date hereof until the Closing (and, with respect to any Disputed MCE System, until the expiration of the MCE Period), subject to applicable Laws, Seller shall (i) afford Buyer and its authorized representatives reasonable access, during regular business hours, upon reasonable advance notice, to the Employees, each Specified Business, the Friendco Business, Assets that will be Transferred Assets as of the Closing and the Friendco Transferred Assets, (ii) furnish, or cause to be furnished, to Buyer any financial and operating data and other information with respect to each Specified Business or in furtherance of the Transaction or the Exchange as Buyer from time to time reasonably requests, including, subject to Section 5.11, by providing to Buyer or its accountants sufficient information (A) for the preparation of the pro-forma balance sheet and statements of income, stockholders’ equity and cash flows for the Parent Business (in each case, if requested, assuming the Friendco Transaction and/or the Exchange have occurred) and (B) regarding compliance by Seller and its Affiliates with the requirements of the SOA with respect to the Business, and (iii) instruct the Employees, and its counsel and financial advisors to cooperate with Buyer in its investigation of each Specified Business and the Friendco Business, including instructing its accountants to give Buyer access to their work papers; provided, however, that in no event shall Buyer have access to any information that, based on advice of Seller’s counsel, would (A) reasonably be expected to create Liability under applicable Laws, including U.S. Antitrust Laws, or waive any material legal privilege (provided, that in such latter event Buyer and Seller shall use commercially reasonable efforts to cooperate to permit disclosure of such information in a manner consistent with the preservation of such legal privilege), (B) result in the disclosure of any trade secrets of third parties or (C) violate any obligation of Seller with respect to confidentiality so long as, with respect to confidentiality, to the extent specifically requested by Buyer, Seller has made commercially reasonable efforts to obtain a waiver regarding the possible disclosure from the third party to whom it owes an obligation of confidentiality; it being understood that Buyer shall not conduct any environmental sampling without the prior written consent of Seller, which consent may be withheld in Seller’s reasonable discretion.  All requests made pursuant to this Section 5.1(a) shall be directed to an executive officer of Seller or such Person or Persons as may be designated by Seller.  All information received pursuant to this Section 5.1(a) shall, prior to the Closing, be governed by the terms of the Seller Confidentiality Agreement.  No information or knowledge obtained in any

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investigation by Buyer pursuant to this Section 5.1(a) shall affect or be deemed to modify any representation or warranty made by Seller hereunder.

(b)           From the date hereof until the Closing, subject to applicable Laws, Buyer shall, and shall cause Parent and its Controlled Affiliates to, (i) afford Seller and its authorized representatives reasonable access, during regular business hours and upon reasonable advance notice, to the Parent Business, (ii) furnish, or cause to be furnished, to Seller any financial and operating data and other information with respect to the Parent Business, the Exchange, the Redemptions or in furtherance of the Transaction as Seller from time to time reasonably requests and (iii) instruct its employees, and its counsel and financial advisors to cooperate with Seller in its investigation of the Parent Business including instructing its accountants to give Seller access to their work papers; provided, however, that in no event shall Seller have access to any information that, based on advice of Buyer’s counsel, would (A) reasonably be expected to create Liability under applicable Laws, including U.S. Antitrust Laws, or waive any material legal privilege (provided, that in such latter event Buyer and Seller shall use commercially reasonable efforts to cooperate to permit disclosure of such information in a manner consistent with the preservation of such legal privilege), (B) result in the disclosure of any trade secrets of third parties or (C) violate any obligation of Parent with respect to confidentiality so long as, with respect to confidentiality, to the extent specifically requested by Seller, Buyer or Parent has made commercially reasonable efforts to obtain a waiver regarding the possible disclosure from the third party to whom it owes an obligation of confidentiality; it being understood that Seller shall not conduct any environmental sampling without the prior written consent of Buyer, which consent may be withheld in Buyer’s absolute discretion.  All requests made pursuant to this Section 5.1(b) shall be directed to an executive officer of Buyer or such Person or Persons as may be designated by Buyer.  All information received pursuant to this Section 5.1(b) shall be governed by the terms of the TWX Confidentiality Agreement.  No information or knowledge obtained in any investigation by Seller pursuant to this Section 5.1(b) shall affect or be deemed to modify any representation or warranty made by Buyer hereunder.

(c)           Following the Closing and until all applicable statutes of limitations (including periods of waiver) have expired, Buyer agrees to retain all Books and Records in existence on the Closing Date, and to the extent permitted by Law and confidentiality obligations existing as of the Closing Date, grant to Seller and its representatives during regular business hours and subject to reasonable rules and regulations, the right, at the expense of Seller, (i) to inspect and copy the Books and Records and (ii) to have personnel of Buyer made reasonably available to them or have Buyer otherwise cooperate to the extent reasonably necessary, including in connection with (A) preparing and filing Tax Returns and/or any Tax inquiry, audit, investigation or dispute, (B) any litigation or investigation or (C) the claims resolution, plan administration and case closing processes in the Reorganization Case; provided, however, that in no event shall Seller have access to any information that, based on advice of Buyer’s counsel, would (1) reasonably be expected to create Liability under applicable Laws, including U.S. Antitrust Laws, or waive any material legal privilege (provided, that in such latter event Buyer and Seller shall use commercially reasonable efforts to cooperate to permit disclosure of such information in a manner consistent with the

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preservation of such legal privilege), (2) result in the disclosure of any trade secrets of third parties or (3) violate any obligation of Buyer with respect to confidentiality (provided, that with respect to clause (3), to the extent specifically requested by Seller, Buyer or Parent has in good faith sought to obtain a waiver regarding the possible disclosure from the third party to whom it owes an obligation of confidentiality).  In no event shall Seller or its representatives have access to the Tax Returns of Buyer.  No Books and Records shall be destroyed by Buyer without first advising Seller in writing and giving Seller a reasonable opportunity to obtain possession thereof at the transferee’s expense.  All information received pursuant to this Section 5.1(c) shall be governed by the terms of Section 5.1(e).

(d)           Following the Closing and until all applicable statutes of limitations (including periods of waiver) have expired (and with respect to Tax Returns, until the later of (I) the five year anniversary of the Closing and (II) the expiration of the statute of limitations with respect to such Tax Return), Seller agrees to retain all Books and Records in existence on the Closing Date and not transferred to Buyer (the “Retained Books and Records”), and to the extent permitted by Law and confidentiality obligations existing as of the Closing Date, (i) convey to Buyer copies of any Tax Returns of Seller or its Subsidiaries relating to periods (or portions thereof) ending on or after December 31, 1999 and on or before the Closing (including any amended Tax Returns relating to such periods that are filed by Seller after the Closing) (ii) grant to Buyer and its representatives the right, at the expense of Buyer and subject to reasonable rules and regulations, to inspect and make copies of any other Tax Returns of Seller or any of its Subsidiaries relating to periods (or portions thereof) ending on or before the Closing and any workpapers and tax software related to the Tax Returns described in clauses (i) or (ii) hereof, (iii) grant to Buyer and its representatives during regular business hours and subject to reasonable rules and regulations the right to inspect and make copies of Retained Books and Records not described in clauses (i) or (ii) hereof, and (iv) grant to Buyer and its representatives during regular business hours and subject to reasonable rules and regulations, the right, at the expense of Buyer, to have personnel of Seller made reasonably available to them or have Seller otherwise cooperate to the extent reasonably necessary, in each case, including in connection with (A) preparing and filing Tax Returns and/or any Tax inquiry, audit, investigation or dispute or (B) any litigation or investigation; provided, however, that in no event may Buyer or its representatives inspect, examine, review, distribute or disclose in any form the specific contents of any of Seller’s or its Subsidiaries’ income or franchise Tax Returns (or copies thereof) provided by Seller either at Closing or at a later date or of workpapers or tax software related to any such income or franchise Tax Returns (or copies thereof) until the specific contents of such income or franchise Tax Returns become relevant to Buyer in connection with (x) preparing and filing Tax Returns, or (y) any Tax inquiry, audit, investigation or dispute with a Government Entity, in each case, at which time Buyer may use such Tax Returns and related workpapers and tax software (or copies thereof) for purposes reasonably related to the activities described in (x) or (y) above; provided, further, that in no event shall Buyer or its representatives have access to any information that, based on advice of Seller’s counsel, would (1) reasonably be expected to create Liability under applicable Laws, including U.S. Antitrust Laws, or waive any material legal privilege (provided, that in such latter event Buyer and Seller shall use commercially reasonable

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efforts to cooperate to permit disclosure of such information in a manner consistent with the preservation of such legal privilege), (2) result in the disclosure of any trade secrets of third parties or (3) violate any obligation of Seller with respect to confidentiality (provided, that with respect to clause (3), to the extent specifically requested by Buyer or Parent, Seller has in good faith sought to obtain a waiver regarding the possible disclosure from the third party to whom it owes an obligation of confidentiality).  No Retained Books and Records shall be destroyed by Seller without first advising Buyer in writing and giving Buyer a reasonable opportunity to obtain possession thereof at the transferee’s expense.

(e)           From and after the Closing, Seller and its Affiliates shall keep confidential any non-public information in their possession Related to the Business or related to the Transferred Assets (any such information that is required to keep confidential pursuant to this sentence shall be referred to as “Confidential Information”).  Neither Seller nor its Affiliates shall disclose, or permit any of their respective directors, officers, employees or representatives to disclose, any Confidential Information to any other Person or use such information to the detriment of Buyer or its Affiliates; provided, that such party may use and disclose any such information (i) once it has been publicly disclosed (other than by such party in breach of its obligations under this Section 5.1(e)) or (ii) to the extent that such party may, in the reasonable judgment of its counsel, be compelled by Law to disclose any of such information, such party may disclose such information if it has used commercially reasonable efforts, and has afforded Buyer the opportunity, to obtain an appropriate protective order, or other satisfactory assurance of confidential treatment, for the information compelled to be disclosed.  Except in respect of Excluded Assets and Excluded Liabilities, the Seller Confidentiality Agreement shall terminate upon the Closing with no further Liability thereunder on the part of any party thereto.

Section 5.2  Conduct of Business.  During the period from the date hereof to the Closing (and, following the Closing, with respect to any Disputed MCE System that is not a Buyer Managed MCE System, until the expiration of the MCE Period), except as otherwise expressly contemplated by this Agreement, as set forth on Schedule 5.2 of the Seller Disclosure Schedule or as Buyer otherwise agrees in writing in advance, Seller shall (x) conduct, and shall cause its Affiliates to conduct, each Specified Business in the Ordinary Course and in accordance with applicable material Laws (including, subject to Section 5.2(s), completing line extensions, placing conduit or cable in new developments, fulfilling installation requests and work on existing and planned construction projects), (y) use its commercially reasonable efforts to preserve intact each Specified Business and its relationship with its customers, suppliers, creditors and employees (it being understood that no increases in any compensation or any incentive compensation or similar compensation shall be required in respect thereof except to the extent such increase is required in the Ordinary Course of Business) and (z) use its commercially reasonable efforts to perform and honor all of its post-petition obligations under any Contract as they become due and otherwise discharge and satisfy all Liabilities thereunder as and when they become due.  During the period from the date hereof to the Closing (and, following the Closing, with respect to any Disputed MCE System that is not a Buyer Managed MCE System, until the expiration of the MCE Period), except as

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otherwise contemplated by this Agreement or any Ancillary Agreement or as Buyer shall otherwise consent (provided, that Buyer shall respond as soon as reasonably practicable but in no event later than five Business Days following receipt of Seller’s written request for such response) or as set forth in the applicable sections of Schedule 5.2 of the Seller Disclosure Schedule, Seller shall, and shall cause each of its Affiliates to, with respect to each Specified Business:

(a)           not incur, create or assume any Encumbrance on any of its Assets other than a Permitted Encumbrance;

(b)           not sell, lease, license, transfer or dispose of any Assets other than in the Ordinary Course of Business; provided, however, that in any event, such Assets shall not (i) constitute a Cable System or material portion thereof or (ii) include any Equity Securities of any Asset Transferring Subsidiary (other than in connection with a transfer to Seller or any of its wholly owned Subsidiaries that is an Asset Transferring Subsidiary and a Debtor);

(c)           not (i) assume pursuant to an order of the Bankruptcy Court any OCB Contract, (ii) enter into any Contract in the Contract Categories Expected to be Assumed that contains any Special Terms (except with respect to clause (i) of the definition thereof), (iii) modify, renew (except in respect of Governmental Authorizations pursuant to Section 5.2(r)), suspend, abrogate or amend in any material respect (including the addition of any Special Term) any (A) Governmental Authorization that is material, (B) Contract Related to any Specified Business that is material or that contains Special Terms (except with respect to clause (i) of the definition thereof), (C) retransmission consent agreement (in a manner which would result in any compensation being payable thereunder, other than compensation that is customary, consistent with Seller’s past practice and, in any event, non-monetary), (D) Third Party Confidentiality Agreement or (E) Contract listed on Schedule 1.1(k)(ii) of the Seller Disclosure Schedule (other than, with respect to this clause (E), with the consent of Buyer, such consent not to be unreasonably withheld (other than in the case of extending the term or amending with like effect any lease on Schedule 1.1(k)(ii), with respect to which such consent shall be at Buyer’s discretion)), (iv) reject or terminate any Contract Related to any Specified Business or (v) with respect to any Contract Related to any Specified Business, take any action outside the Ordinary Course of Business or fail to take any action in the Ordinary Course of Business;

(d)           not declare, set aside or pay any dividend or distribution on any Investment Entity Securities;

(e)           not amend any of the Investment Documents;

(f)            not issue, sell, pledge, transfer (other than to Seller or any wholly owned Subsidiary of Seller; provided, that any such wholly owned Subsidiary shall be an Asset Transferring Subsidiary and a Debtor), dispose of or encumber any Investment Entity Securities;

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(g)           not split, combine, subdivide, reclassify or redeem, or purchase or otherwise acquire, any Investment Entity Securities;

(h)           provide prompt written notice to Buyer of Seller or any of its Affiliates entering into any OCB Contract that is material to any Specified Business;

(i)            not dispose of, license or permit to abandon, invalidate or lapse any rights in, to or for the use of any material Transferred Intellectual Property;

(j)            not (i) increase the compensation of any Employee or current director of Seller or any of its Subsidiaries, except for increases in salary or wage rates in the Ordinary Course of Business or as required by the terms of agreements or plans currently in effect and listed on Schedule 3.10(a) of the Seller Disclosure Schedule or with respect to any Employee listed on Schedule 5.8(a)(ii) of the Seller Disclosure Schedule, (ii) establish, amend, pay, agree to grant or increase any special bonus, sale bonus, stay bonus, retention bonus, deal bonus, emergence award or change in control bonus or any other benefit under Seller’s Performance Retention Plan or other plan, agreement, award or arrangement, other than any such award, entitlement or arrangement that will be fully paid and satisfied on or prior to the Closing Date (other than any sale bonus under the Sale Bonus Program as provided below or as otherwise provided in the parenthetical at the end of this clause (ii) with respect to awards other than awards under the Sale Bonus Program or Seller’s Performance Retention Plan) and the Liabilities of which will be Excluded Liabilities or, with respect to any sale bonus under the Sale Bonus Program, to the extent (but only to the extent) any such sale bonus amount is reflected in the Closing Net Liabilities Amount used in calculating the Final Adjustment Amount (provided, however, that an award, entitlement or arrangement under this clause (ii) granted to an Employee listed on Schedule 5.8(a)(ii) of the Seller Disclosure Schedule may be paid by Seller in accordance with its terms; provided, further, that (x) all payments that pursuant to the term of such award, entitlement or arrangement are to be paid on or prior to the Closing shall be paid by Seller on or prior to the Closing and (y) if Buyer offers employment to any such Employee pursuant to Section 5.8(a) and such Employee becomes a Transferred Employee, Seller shall fully pay and satisfy any such award, entitlement or arrangement as to such individual on or prior to the Closing Date), (iii) except as provided in clause (ii) or as required by Law, establish, adopt, enter into, amend or terminate any Benefit Plan (other than any broad based health or welfare plan) or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Benefit Plan if it were in existence as of the date of this Agreement, (iv) hire any employee for any Specified Business with annual compensation in excess of the amount of compensation for a Person in a similar position consistent with past practice, other than to fill vacancies arising in the Ordinary Course of Business, (v) enter into any new employment or severance agreements or amend any such existing agreement with any Employee (provided, that the foregoing shall not restrict Seller from taking any such action with respect to an Employee listed on Schedule 5.8(a)(ii) of the Seller Disclosure Schedule so long as Parent or Buyer, as applicable, will not be bound by any such action (including as it may relate to the terms of employment of any such Employee pursuant to Section 5.8 hereof) if the Employee becomes employed by Parent or Buyer in connection with the Transaction), (vi) establish, adopt, enter into, amend or terminate any plan,

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policy or arrangement providing for severance or termination pay or benefits (provided, that the foregoing shall not restrict Seller from taking any such action so long as Parent or Buyer, as applicable, will not be bound by any such action (including as it may relate to the terms of any offer to any Employee pursuant to Section 5.8(a) hereof) if any Employee covered thereby becomes employed by Parent or Buyer in connection with the Transaction), or (vii) engage in any hiring practices that are not in the Ordinary Course of Business;

(k)           not make any material loans, advances or capital contributions to, or investments in, any other Person (other than, to the extent not in violation of applicable Law, customary loans or advances to employees in amounts not material to the maker of such loan or advance and other than to any Subsidiary of Seller in the Ordinary Course);

(l)            not settle any claims, actions, arbitrations, disputes or other proceedings that would result in Seller or any of its Affiliates being enjoined in any respect material to the Transaction or any Specified Business or that would affect any Specified Business after the Closing (other than in a de minimis manner);

(m)          not make any material change in any method of accounting, keeping of books of account or accounting practices or in any material method of Tax accounting of Seller or any of its Subsidiaries unless required (i) by a concurrent change in GAAP or applicable Law or (ii) upon prior written notice to Buyer, in order to comply with any GAAP requirements or FASB interpretations or in order to comply with the view of Seller’s independent auditors;

(n)           except for capital expenditures, which shall be governed by Section 5.2(s), not Acquire any Assets or any business (including Equity Securities) in one or a series of related transactions, other than (i) pursuant to agreements in effect as of the date hereof that were disclosed to Buyer prior to the date hereof, (ii) Assets used by Seller in the Ordinary Course of Business (which Assets do not constitute a System, a business unit, division or all or substantially all of the Assets of the transferor), (iii) any interest in or Assets of any entity which nominally owns any interest in any MCE System and (iv) any Equity Securities in any Tele-Media Entity;

(o)           use commercially reasonable efforts to continue normal marketing, advertising and promotional expenditures with respect to each Specified Business;

(p)           use commercially reasonable efforts to (i) maintain or cause to be maintained (A) the Transferred Assets in adequate condition and repair for their current use in the Ordinary Course, ordinary wear and tear excepted, and (B) in full force and effect the Insurance Policies (with the same amounts and scopes of coverage) with respect to the Transferred Assets and the operation of each Specified Business and (ii) enforce in good faith the rights under the Insurance Policies;

(q)           use commercially reasonable efforts to perform all post-petition obligations under all of the Franchises, other material Governmental Authorizations and

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Assigned Contracts without material breach or default and pay all post-Petition Date Liabilities arising thereunder in the Ordinary Course of Business;

(r)                                    use commercially reasonable efforts to renew any material Governmental Authorizations which expire prior to the Closing Date;

(s)                                  use commercially reasonable efforts to make capital expenditures and operate in accordance with the capital and operating budget set forth on Schedule 5.2(s) of the Seller Disclosure Schedule (the “Budget”) and, in the case of capital expenditures, on a line item basis;

(t)                                    maintain inventory sufficient for the operation of each Specified Business in the Ordinary Course of Business;

(u)                                 not engage in any marketing, Subscriber installation or collection practices other than in the Ordinary Course of Business;

(v)                                 not convert any billing systems used by any Specified Business;

(w)                               use commercially reasonable efforts to implement all rate changes provided for in the Budget and except for rate increases provided for in the Budget not change the rate charged for any level of cable television, telephony or high speed data services;

(x)                                   except as required by applicable Law (including applicable must-carry laws), not add or voluntarily delete any channels from any Cable System, or change the channel lineup in any Cable System or commit to do any of the foregoing in the future; except for (i) pending channel additions and deletions or changes in channel lineups to the extent customer notifications have, as of the date hereof, been mailed or otherwise made in a manner permitted by each applicable Franchise; (ii) channel additions or changes in lineups as required in order to fulfill distribution commitments or broadcast station retransmission consent obligations (in either case, existing as of the date hereof) pursuant to existing Contracts, and solely to the extent the commitment and/or obligation must, pursuant to such Contract, be satisfied prior to the Closing Date; (iii) channel additions, migrations or changes in channel lineups in connection with headend consolidations (provided, however, that no new channels may be added to a system unless immediately prior to the headend consolidation, the channel was so carried on one headend or the other, provided, further, that if such channel is carried on both headends and the channel is not carried on the same tier or level of service on the two headends, then after such consolidation, the channel shall be carried on the tier or level of service of the dominant headend); (iv) the addition of one or more of the channels listed on Schedule 5.2(x)(iv) of the Seller Disclosure Schedule in connection with a system upgrade; (v) the roll-out of any video on demand service listed on Schedule 5.2(x)(v) of the Seller Disclosure Schedule or any free video on demand services for which Seller is not required to pay any fee or consideration; (vi) the addition of one or more of the high definition services listed on Schedule 5.2(x)(vi) of the Seller Disclosure Schedule, which additions shall not, except as otherwise noted on Schedule 5.2(x)(vi) of the Seller

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Disclosure Schedule, require Seller to pay any fee or consideration for such services; or (vii) the addition of the high definition signal of a NBC, ABC, CBS, or Fox station that is licensed to the same designated market area as the system on which such signal is being launched, so long as such signal is a simulcast of such station’s analog signal, to the extent Seller is not required to pay any fee or consideration for such high definition signal;

(y)                                 not file a cost-of-service rate justification;

(z)                                   use commercially reasonable efforts to launch telephony and video on demand services in the Cable Systems identified on Schedule 5.2(z) of the Seller Disclosure Schedule substantially in accordance with the timetable set forth on such Schedule 5.2(z), and provide Buyer with written notice promptly following any such launch;

(aa)                            continue to conduct the Business in accordance with, and not make any change to, the Seller Subscriber Accounting Policy, including as to disconnects;

(bb)                          not transfer the employment duties of any Applicable Employee from any Cable System to a different Cable System or business unit other than in the Ordinary Course of Business;

(cc)                            use commercially reasonable efforts to maintain or cause to be maintained its Books and Records and accounts with respect to each Specified Business in the usual, regular and ordinary manner on a basis consistent with past practice;

(dd)                          give or cause to be given to Buyer, and its counsel, accountants and other representatives, (i) as soon as reasonably possible, but in any event prior to the date of submission to the appropriate Government Entity, copies of all FCC rate Forms 1205, 1210, 1235, and 1240, and simultaneous with, or as soon as reasonably possible after submission to the appropriate Government Entity, any other FCC Forms required under the regulations of the FCC promulgated under the Cable Act that are prepared with respect to any of the Cable Systems and (ii) as soon as reasonably possible after filing copies of all copyright returns filed in connection with any Cable System; provided, that, in the case of clause (i), before any such FCC Forms 1205, 1210, 1235, or 1240 are filed, Seller and Buyer shall consult in good faith concerning the contents of such forms; and

(ee)                            not announce an intention, authorize or enter into any agreement or commitment with respect to any of the foregoing.

Section 5.3  Conduct of Parent Business.  During the period from the date hereof to the Closing, except as otherwise expressly contemplated by this Agreement, the Parent Redemption Agreement, the TWE Redemption Agreement, the Exchange Agreement, as set forth on Schedule 5.3 of the Buyer Disclosure Schedule or as Seller otherwise agrees in writing in advance, Buyer shall, and shall cause Parent and its Subsidiaries to, use commercially reasonable efforts to preserve intact the Parent Business and its relationship with its material customers, suppliers, creditors and key

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employees (it being understood that no increases in any compensation or any incentive compensation or similar compensation shall be required in respect thereof except to the extent such increase is required in the Ordinary Course of Business).  Without limiting the generality of the foregoing, during the period from the date hereof to the Closing, except as otherwise contemplated by this Agreement or any Ancillary Agreement or as Seller shall otherwise consent (which consent shall not be unreasonably withheld and, provided, that Seller shall respond as soon as reasonably practicable but in no event later than five Business Days following receipt of Buyer’s written request for such response) or as set forth in the applicable sections of Schedule 5.3 of the Buyer Disclosure Schedule, Buyer shall not, and shall cause Parent and each its Subsidiaries not to:

(a)                                  sell, lease, license, transfer or dispose of any Assets (it being understood that for purposes of this Section 5.3(a), Assets do not include Equity Securities of Parent or cash or cash equivalents) for consideration not consisting primarily of Systems other than (i) in the Ordinary Course of Business, (ii) pursuant to the Friendco Transaction or (iii) Assets which, in the aggregate, the fair market value of the total consideration therefor would not exceed the amount specified on Schedule 5.3(a)(iii) of the Buyer Disclosure Schedule;

(b)                                 declare, set aside or pay any dividend or distribution on any shares of Parent Capital Stock or other Equity Security in Parent or any of its Subsidiaries other than dividends or distributions by any Subsidiary of Parent to Parent or another Subsidiary of Parent;

(c)                                  enter into any transaction (other than pursuant to any Contract in effect as of the date hereof) having the intended effect of benefiting any Affiliate of Parent (other than any Subsidiary of Parent) at the expense of Parent or any Subsidiary of Parent in a manner that would deprive Parent or any such Subsidiary of the benefit they would otherwise have obtained if the transaction were to have been effected on terms that were on an arm’s length basis or any transaction that does not satisfy the requirements of Article VI of Parent’s bylaws, as in effect as of the date hereof;

(d)                                 except pursuant to Section 5.4, amend the certificate of incorporation, bylaws or other organizational documents of Parent in a manner adverse to Seller or its stakeholders;

(e)                                  issue any shares of Parent Capital Stock or other Equity Securities of Parent other than (i) Equity Securities issued following the date hereof on arm’s-length terms for consideration determined in good faith by Parent’s board of directors or any committee thereof to be fair, including, subject to Section 5.3(c), Equity Securities issued to TWX or any of its Affiliates (other than Parent or its wholly owned Subsidiaries), and (ii) Equity Securities issued following the date hereof pursuant to employee option or restricted stock programs approved by Parent’s board of directors or the compensation committee thereof; provided, however, that Equity Securities issued pursuant to clause (ii) of this sentence shall not exceed the Permitted Parent Incentive Awards; provided, however, that such limitation shall not apply to any Equity Securities issued as contemplated by clause (ii)(B) of the definition of “Fully Diluted Basis”;

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(f)                                    settle any claims, actions, arbitrations, disputes or other proceedings not involving a Government Entity that would result in Parent or any of its Affiliates being enjoined in any respect material to the Transaction; or

(g)                                 authorize or enter into any agreement or commitment with respect to any of the foregoing;

provided, however, that, except in respect of Sections 5.3(c) and 5.3(d), the foregoing limitations shall not restrict transactions solely among or between Parent and any of its direct or indirect Subsidiaries.

Section 5.4  Amended and Restated Charter and Amended and Restated By-laws.  On or prior to the Closing, Buyer will cause Parent to (a) file the Amended and Restated Charter with the Secretary of State of the State of Delaware and (b) adopt the Amended and Restated By-laws.  Buyer will cause Parent (i) for a period of two years following the Closing, not to enter into any merger pursuant to Section 253 of the Delaware General Corporation Law and (ii) for a period of eighteen months following the Closing, not to issue any Equity Securities to any Person (other than, subject to Section 5.3(c) and, following the Closing, the Amended and Restated By-laws, TWX and its Affiliates (other than Parent or its wholly owned Subsidiaries)) that have a higher vote per share than the Parent Class A Common Stock.

Section 5.5  Listing of Purchase Shares.  Subject to there being a SEC/DOJ Settlement and Seller having satisfied the covenant in Section 5.19(a), Buyer shall, and shall cause Parent and its Subsidiaries to, use commercially reasonable efforts to cause, (a) effective as of the Closing, the Purchase Shares to be either registered under the Securities Act or exempt from any such registration under section 1145 of the Bankruptcy Code and to be listed for trading on the NYSE and (b) effective as of the MCE Closing, the MCE Purchase Shares to be either registered under the Securities Act or exempt from any such registration and to be listed for trading on the NYSE.

Section 5.6  Commercially Reasonable Efforts.

(a)                                  Subject to the Bankruptcy Code and any orders of the Bankruptcy Court, Seller and Buyer shall, and Buyer shall cause Parent to, cooperate and use their respective commercially reasonable efforts to fulfill as promptly as practicable the conditions precedent to the other party’s obligations hereunder and shall use their respective commercially reasonable efforts to fulfill as promptly as practicable the conditions precedent to their obligations hereunder to the extent they have the ability to control the satisfaction of such obligations.  Without limiting the generality of the foregoing, Seller and Buyer shall, and Buyer shall cause Parent to, (i) make all filings and submissions required by the U.S. Antitrust Laws and any other Laws, and promptly file any additional information requested as soon as practicable after receipt of such request therefor and promptly file any other information that is necessary, proper or advisable to permit consummation of the Transaction and the Exchange and (ii) use commercially reasonable efforts to obtain and maintain all Seller Required Approvals and Buyer Required Approvals in form and substance reasonably satisfactory to Buyer and Seller. 

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In connection with the foregoing, Seller and Buyer will, and Buyer will cause Parent to, endeavor to consummate the Transaction without (or with minimal) costs, conditions, limitations or restrictions associated with the grant of such Seller Required Approvals and Buyer Required Approvals.

(b)                                 Notwithstanding anything to the contrary herein, nothing in this Agreement shall require Buyer or Parent to agree to or to effect any divesture, hold separate or similar agreement with respect to any business or Assets or agree to enter into, or amend, or agree to amend, any Contracts or governmental authorizations or take or refrain from taking any other action or conduct any business in any manner if doing so would reasonably be expected, individually or in the aggregate, to have (i) an adverse impact (other than a de minimis adverse impact) on TWX or any of its Affiliates (excluding Parent and its Subsidiaries) or any of their respective businesses or Assets (excluding businesses and Assets of Parent and its Subsidiaries) or (ii) an adverse impact that is material to the Parent Business or the Transferred Assets or would materially constrain the operations of Parent and its Subsidiaries or of the Transferred Assets; it being understood that the incurrence of legal, accounting, investment banking and other customary forms of transaction expenses and the commitment of reasonable management time and effort shall not be considered an adverse impact for the purpose of this clause (ii).

(c)                                  No later than 45 days following the date hereof, Buyer and Seller shall, and Buyer shall cause Parent to, provide each other (or shall cause their respective Subsidiaries to provide) with all necessary documentation to allow filing of FCC Forms 394 with respect to the Franchises with respect to which a LFA Approval is or may be required.  Buyer and Seller shall, and Buyer shall cause Parent to, use commercially reasonable efforts to cooperate with one another and, no later than 60 days following the date hereof, file with the applicable Government Entity FCC Forms 394 for each of the Franchises with respect to which a LFA Approval is or may be required.  Buyer and Seller shall, and Buyer shall cause Parent to, cooperate and use their commercially reasonable efforts to have Buyer enter into a substitute performance bond arrangement with respect to those Assets of each Specified Business the transfer of which to Buyer would require Buyer to enter into such a substitute bond arrangement, on substantially the same terms as the substitute bond arrangement with respect to such Assets in effect as of the date hereof.  Notwithstanding anything to the contrary herein, Seller shall not accept, agree to or accede to any modifications or amendments to, or in connection with, or any conditions to the transfer of, any Franchises that are not approved by Buyer in writing, such approval not to be unreasonably withheld; provided, however, that if Seller affords Buyer reasonable notice of, and opportunity to attend and participate in, meetings or other discussions relating to LFA Approvals where modifications, amendments or conditions are expected to be discussed or negotiated, Buyer shall approve any such modifications, amendments or conditions that are approved by Seller so long as such modifications, amendments or conditions are commercially reasonable and are similar in nature, extent and impact (giving due consideration to such factors as the relative size of the Franchise involved, the proximity of other Franchises, the financial and operational impact of the change and the precedential impact thereof) to modifications, amendments or conditions agreed to by Parent or Buyer or Friendco in connection with material

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acquisitions of cable assets effected since 2001.  In addition, if Buyer seeks any LFA Approval pursuant to this Transaction, Buyer shall agree to any modifications, amendments or conditions that are commercially reasonable and are similar in nature, extent and impact (giving due consideration to such factors as the relative size of the Franchise involved, the proximity of other Franchises, the financial and operational impact of the change and the precedential impact thereof) to modifications, amendments or conditions agreed to by Parent or Buyer or Friendco in connection with material acquisitions of cable assets effected since 2001.

(d)                                 Each of the parties hereto agrees to execute and deliver such other documents, certificates, agreements and other writings and to take such other commercially reasonable actions as may be necessary or desirable in order to evidence, consummate or implement expeditiously the transactions contemplated by this Agreement and to vest in Buyer good and marketable title to the Transferred Assets to the same extent as held by Seller and its Affiliates, free and clear of all Encumbrances other than, in the case of Transferred Assets, Permitted Encumbrances, and in the case of the Transferred Investments, Encumbrances under the Investment Documents.

(e)                                  Seller and Buyer shall, and Buyer shall cause Parent to, cooperate with each other and shall furnish to the other party all information reasonably necessary or desirable in connection with making any filing under the HSR Act, and in connection with resolving any investigation or other inquiry by any Government Antitrust Entity with respect to the Transaction and the Exchange; provided, however, that Buyer shall reimburse Seller for the reasonable out-of-pocket costs, if any, incurred by Seller as a result of such cooperation solely to the extent it relates to the consummation of the Exchange.  Each of the parties shall promptly inform the other party of any communication with, and any proposed understanding, undertaking or agreement with, any Government Entity regarding any such filings or any such transaction.  Seller and Buyer shall not, and Buyer shall cause Parent not to, participate in any meeting with any Government Antitrust Entity in respect of any such filings, investigation or other inquiry without giving the other party prior notice of, and the opportunity to participate in, such meeting.  The parties hereto will consult and cooperate with one another in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with all meetings, actions and proceedings under or relating to the HSR Act (including, with respect to making a particular filing, by providing copies of all such documents (other than those that will not be publicly available) to the non-filing party and their advisors prior to filing and, if requested, giving due consideration to all reasonable additions, deletions or changes suggested in connection therewith); provided, however, that in no event shall Buyer or Seller be required to furnish, or Buyer be required to cause Parent to furnish, any information that, based on advice of such party’s counsel, would reasonably be expected to create any potential Liability under applicable Laws, including U.S. Antitrust Laws, or would constitute a waiver of any material legal privilege (provided, that in such latter event Buyer and Seller shall use commercially reasonable efforts to cooperate to permit disclosure of such information in a manner consistent with the preservation of such legal privilege).

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(f)                                    In furtherance and not in limitation of the foregoing, each of Buyer and Seller agrees to make, and Buyer agrees to cause Parent to make, as promptly as practicable, (i) an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transaction and the Exchange (which filing shall be made in any event within 20 Business Days of the date hereof), (ii) appropriate filings with the FCC, and any state public service commissions having jurisdiction over any Transferred Assets or any services provided by any Specified Business or the Assets of or services provided by the Parent Business with respect to the Transaction and the Exchange, and (iii) all other necessary filings with other Government Entities relating to the Transaction and the Exchange, and to use commercially reasonable efforts to cause the expiration or termination of the applicable waiting periods under the HSR Act and the receipt of the Seller Required Approvals and the Buyer Required Approvals under such other Laws or from such authorities or third parties as soon as practicable; provided, however, that Buyer shall reimburse Seller for the reasonable out-of-pocket costs, if any, incurred by Seller as a result of such cooperation solely to the extent it relates to the consummation of the Exchange.

(g)                                 Each of Seller and Buyer shall, and Buyer shall cause Parent to, give (or shall cause their respective Subsidiaries to give) any notices to third parties, and use, and cause their respective Subsidiaries to use, commercially reasonable efforts to obtain any third party (excluding Government Entities) consents related to or required in connection with the Transaction and the Exchange that are Seller Required Approvals or Buyer Required Approvals; provided, however, that Buyer shall reimburse Seller for the reasonable out-of-pocket costs, if any, incurred by Seller as a result of such cooperation solely to the extent it relates to the consummation of the Exchange.

(h)                                 Seller shall, and shall cause its Affiliates to, take all actions as may be necessary or desirable in order that, as of the Closing, all of the Assets (other than any Equity Securities or other Excluded Assets) of the Tele-Media Entities and each of their respective Subsidiaries shall constitute Transferred Assets.

(i)                                     Notwithstanding anything in this Agreement to the contrary, Buyer shall have the sole responsibility for any filing, submission or other action (including, for the avoidance of doubt, obtaining any required LFA Approval) that is necessary, proper or advisable to permit the consummation of the Exchange (it being understood that Seller shall use its commercially reasonable efforts to cooperate with Buyer with respect to any action required to be taken by Buyer pursuant to this sentence; provided, however, that Buyer shall reimburse Seller for the reasonable out-of-pocket costs, if any, incurred by Seller as a result of such cooperation solely to the extent it relates to the consummation of the Exchange.

(j)                                     After the Closing, Buyer shall, in the Ordinary Course of Business of Parent, use its commercially reasonable efforts to ▇▇▇▇ and collect from each Basic Subscriber that is potentially a Qualified Customer any amounts due and payable in respect of services delivered to such Basic Subscriber prior to the Closing.

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Section 5.7  Tax Matters.

(a)                                  Proration of Taxes.  To the extent necessary to determine the liability for Taxes for a portion of a taxable year or period that begins before and ends after the Closing, the determination of the Taxes for the portion of the year or period ending on, and the portion of the year or period beginning after, the Closing shall be determined by assuming that the taxable year or period ended as of the close of business on the Closing, except that those annual property taxes and exemptions, allowances or deductions that are calculated on an annual basis shall be prorated on a time basis.  For the avoidance of doubt, (i) any Taxes that are apportioned to the portion of a taxable period that ends on the Closing pursuant to this Section 5.7(a) shall be Excluded Taxes and (ii) any Taxes that are apportioned to the portion of a taxable period beginning after the Closing pursuant to this Section 5.7(a) shall be Assumed Taxes.

(b)                                 Tax Returns.  Buyer shall not file any amended Tax Returns with respect to the Transferred Assets that include periods ending on or prior to the Closing without Seller’s written consent, which shall not be unreasonably withheld or delayed.

(c)                                  Transfer Taxes.

(i)                                     To the extent not otherwise exempt to the fullest extent permitted by section 1146(c) of the Bankruptcy Code and except as otherwise provided in this Section 5.7(c)(i), all federal, state, local or foreign or other excise, sales, use, value added, transfer (including real property transfer or gains), stamp, documentary, filing, recordation and other similar taxes and fees that may be imposed or assessed as a result of the Transaction, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties (“Transfer Taxes”), shall, subject to the provisos to Sections 5.7(c)(iii) and 5.7(c)(v), be borne by Buyer.

(ii)                                  Any Tax Returns that must be filed in connection with Transfer Taxes (“Transfer Tax Returns”) shall be prepared by Buyer and Buyer shall prepare such Transfer Tax Returns in a manner consistent with the allocation of the Aggregate Consideration pursuant to Section 5.7(d); provided, however, that if Buyer and Seller do not jointly agree to a Purchase Price Allocation Schedule as provided in Section 5.7(d) and except as provided in Section 5.7(c)(iii), any such Transfer Tax Return shall be prepared by Buyer in good faith in a manner consistent with the purchase price allocation of Buyer or Seller that Buyer and Seller, as the case may be, use for Tax purposes, that results in the higher aggregate Transfer Tax liability with respect to each applicable jurisdiction.  The party filing any Transfer Tax Return (or similar form claiming an applicable exemption from Transfer Taxes) pursuant to this Section 5.7 shall furnish a copy of such Transfer Tax Return (or similar form) to the other party.

(iii)                               Except as provided in the following proviso, all Transfer Tax Returns shall be filed by Buyer, and Buyer shall be responsible for remitting all amounts shown as due on such Transfer Tax Returns to the appropriate Government Entity; provided, however, that, in the case of any Transfer Tax Return in which Seller’s purchase price allocation would result in a higher aggregate Transfer Tax liability than

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Buyer’s purchase price allocation (w) Buyer shall prepare such Transfer Tax Return unless Seller reasonably determines that the positions taken on such Transfer Tax Return as prepared by Buyer would reasonably be expected to give rise to a material risk of civil and/or criminal penalties (other than interest) if challenged by the applicable Government Entity, in which case, Seller may prepare such Transfer Tax Return, (x) Seller shall be responsible for filing such Transfer Tax Return and for remitting all amounts shown as due thereon to the appropriate Government Entity, (y) notwithstanding any other provision of this Section 5.7(c) to the contrary, Buyer shall pay to Seller an amount equal to the Transfer Tax liability that would have resulted if such return had been prepared by Buyer (it being understood that, for purposes of this clause (y), the Transfer Tax Return that would have been prepared by Buyer shall be determined by using (1) the Buyer’s purchase price allocation, and (2) Buyer’s interpretation of applicable Tax Law as reflected in the Transfer Tax Return prepared by Buyer pursuant to clause (x) hereof), and (z) Seller shall have sole responsibility for the balance of the Transfer Tax liability with respect to such Transfer Tax Return.  Buyer and Seller shall (and shall cause each of their respective Affiliates to) cooperate in the timely completion and filing of all such Tax Returns, and Buyer and Seller shall (and shall cause each of their respective Affiliates to) execute such documents in connection with such filings as shall have been required by Law or reasonably requested by the other party.

(iv)                              Buyer shall control the conduct of any audit, claim, contest or administrative or judicial proceeding relating to such Transfer Taxes, subject to Seller’s right to make any statement or report to any tax authority reflecting the purchase price allocation prepared by Seller; provided, however, that Seller shall be entitled to make any such statement and/or report only (A) to the extent Seller reasonably determines is reasonably necessary to rebut any presumption under applicable Tax Law that would otherwise deem Seller to have agreed to and adopted the purchase price allocation prepared by Buyer in the absence of such statement or report and (B) if such presumption could reasonably be expected to result in an adverse effect on Seller other than a de minimis adverse effect.  If Buyer or Seller receives any written notice of assessment or other claim from any Government Entity with respect to Transfer Taxes for which the other party may be liable pursuant to this Section 5.7(c), the notified party shall notify the other party in writing of the receipt of such notice of assessment or other claim promptly after the receipt thereof.

(v)                                 Any additional Transfer Taxes resulting from an adverse determination by a Government Entity shall be borne by Buyer; provided, however, that, so long as the adverse determination by the applicable Government Entity does not relate directly to purchase price allocation, Seller shall be responsible for any such additional Transfer Taxes to the extent that such additional Transfer Taxes are attributable to the use of Seller’s purchase price allocation rather than Buyer’s purchase price allocation.

(vi)                              Any Transfer Taxes resulting from any subsequent increase in the Purchase Price pursuant to this Agreement shall be borne in accordance with the provisions of this Section 5.7(c).

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(vii)                           Buyer and Seller shall cooperate in good faith to minimize the amount of Transfer Taxes that may be imposed or assessed as a result of the Transaction, including pursuant to one or more restructuring transactions consummated pursuant to the Plan prior to the Closing; provided, that Buyer and Seller conclude in good faith that such restructuring would have a more likely than not probability of prevailing if challenged by the applicable Government Entity.

(d)                                 Determination and Allocation of Purchase Price.  Seller and Buyer undertake to act in good faith to jointly agree to a schedule setting forth the allocation of the Aggregate Consideration among the Transferred Assets (the “Purchase Price Allocation Schedule”) for Tax purposes.  If Seller and Buyer so agree within 180 days of the Closing Date, Seller and Buyer shall, and Seller and Buyer shall cause each of their respective Affiliates, (i) to report the federal, state, and local income and other Tax consequences of the Transaction contemplated herein in a manner consistent with such Purchase Price Allocation Schedule and (ii) not to take any position inconsistent therewith for any Tax purposes (unless required by a change in applicable Tax Law or as a result of a good faith resolution of a contest).  If Seller and Buyer do not so agree within 180 days of the Closing Date, each of Seller and Buyer may prepare their own purchase price allocation and, for the avoidance of doubt and except as provided in Sections 5.7(c)(iii) and
5.7(c)(v), each of Buyer and Seller will have no liability to the other for any additional Taxes that may be imposed by any Government Entity as a result of inconsistencies between the respective allocations of Buyer and Seller.

(e)                                  Employee Withholding and Reporting Matters.  With respect to those Transferred Employees who are employed by Buyer within the same calendar year as the Closing, Buyer shall, in accordance with and to the extent permitted pursuant to Revenue Procedure 2004-53, 2004-34 I.R.B. 320, assume all responsibility for preparing and filing Form W-2, Wage and Tax Statement, Form 941, Employer’s Quarterly Federal Tax Return, Form W-4, Employee’s Withholding Allowance Certificate and Form W-5, Earned Income Credit Advance Payment Certificate.  Seller and Buyer agree to comply with the procedures described in Section 5 of the Revenue Procedure 2004-53.  Notwithstanding any provision of this Agreement, all Taxes required to have been withheld by Seller and its Subsidiaries from their respective employees and independent contractors with respect to any taxable periods, or portions thereof, ending on or before the Closing shall be Excluded Liabilities and shall not be treated as Assumed Liabilities.

(f)                                    Consistent Treatment.  The parties intend that the Transaction shall constitute a taxable transaction and, for the avoidance of doubt, the Transaction shall not be governed by Sections 351 or 368(a) of the Code (or similar provisions of state, local or foreign Tax law, as applicable).  The parties agree to, and to cause their respective Affiliates to, treat the Transaction in the foregoing manner for all income Tax purposes (unless otherwise required by a change in applicable income Tax law or as a result of a good faith resolution of a contest).

(g)                                 Notice of Buyer Adverse Tax Event.  If any change in Tax Law or Proposed Change in Tax Law occurs and Buyer or ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP (or such other counsel that Buyer selects to represent Buyer with respect to

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the Transaction) believes that such change in Tax Law or such Proposed Change in Tax Law has a reasonable possibility of constituting a Buyer Adverse Tax Event as of the Closing Date, Buyer shall within ten Business Days of such determination provide written notice to Seller describing the change in Tax Law or the Proposed Change in Tax Law and a statement that such change in Tax Law or Proposed Change in Tax Law may constitute a Buyer Adverse Tax Event as of the Closing Date (a “Buyer Adverse Tax Event Notice”).  Upon reasonable request by Seller, Buyer will make its counsel reasonably available to Seller to discuss why Buyer believes the described change in Tax Law or Proposed Change in Tax Law has a possibility of constituting a Buyer Adverse Tax Event.

Section 5.8  Post-Closing Obligations of each Specified Business to Certain Employees.

(a)                                  Seller shall provide to Buyer no later than 14 Business Days following the date hereof, a copy of each employment agreement or other individual agreement governing the terms and conditions of any Applicable Employee’s employment entered into with any Applicable Employee and a schedule of each Applicable Employee with his or her title, job location, employer, primary place of residence, salary or wage rate, commission status, bonus opportunity, date of hire, level or other job classification, full or part time status, “exempt” or “non-exempt” status, whether such Applicable Employee is part of a collective bargaining unit and regularly scheduled work shift, as applicable, and shall supplement such schedule no later than 60 Business Days following the date hereof, indicating for each Applicable Employee, such Applicable Employee’s direct supervisor and most recent performance rating or evaluation.  In addition, no later than 55 Business Days prior to the Closing Date, Seller shall update such schedule, including with respect to each Applicable Employee’s direct supervisor and most recent performance rating or evaluation.  No later than 40 Business Days prior to the Closing Date, Buyer shall make offers of employment commencing on the Closing Date to all Applicable Employees, and such offers shall be contingent upon (i) the Closing, (ii) such Employee being an Applicable Employee on the Closing Date and (iii) such Applicable Employee’s satisfaction of customary employment conditions applicable to all Parent employees which customary employment conditions are set forth on Schedule 5.8(a)(i) of the Buyer Disclosure Schedule (it being understood that such conditions will not include the evaluation of prior performance) (the “Background Check”); provided, however, that Buyer shall have no obligation to extend an offer of employment to any Employee who as of the date hereof or as of the Closing Date is identified by job function, description or title or otherwise noted on Schedule 5.8(a)(ii) of the Seller Disclosure Schedule.  Buyer shall, and shall cause Parent to, cooperate with Seller from and after the date hereof to communicate with Applicable Employees other than those set forth on Schedule 5.8(a)(ii) of the Seller Disclosure Schedule regarding the anticipated offers of employment to be made by Buyer to such Applicable Employees hereunder.  Offers of employment required by this Section 5.8(a) shall be for a position of similar or greater status, authority, duties and aggregate compensation (excluding any equity-based compensation, severance, retention, sale, stay, special bonus, emergence or other change in control payments or awards or any similar compensation or award) as such Employee enjoys with Seller and/or its Affiliates immediately prior to the Closing

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Date, that is within a 50-mile radius from such Employee’s primary place of residence as of the Closing Date, and with any such additional rights and benefits as are prescribed by this Section 5.8.  Consistent with and subject to the foregoing and the other terms of this Agreement, Buyer shall have the right to establish the terms and conditions under which such offers will be made.  No later than two Business Days following the date offers are required to be made hereunder, Buyer shall provide to Seller a list of the Applicable Employees who do not satisfy the Background Check, by job position or name and region, and as to whom Buyer as a result of such Background Check failure has not made offers of employment pursuant to this Section 5.8(a).  The parties hereto shall cooperate with each other to give effect to this Section 5.8(a) and neither Seller nor its Affiliates shall take any actions that would interfere with the Applicable Employees so offered employment from becoming employed by Buyer as of the Closing Date.  If any Employee, other than a Transferred Employee, becomes entitled to any payments or benefits under any severance policy, plan, agreement, arrangement or program which exists or arises or may be deemed to exist or arise, under any applicable Law or otherwise, as a result of the consummation of the Transaction or otherwise, Seller shall be liable for such amounts, which Liability shall constitute an Excluded Liability except to the extent Buyer does not comply with the requirement to offer employment on the terms set forth in this Section 5.8(a).

(b)                                 Beginning on the Closing Date and ending no earlier than the first anniversary of the Closing Date, Buyer shall, or shall cause Parent to, provide each Transferred Employee, other than any Transferred Employee included in a collective bargaining unit covered by the Collective Bargaining Agreements as in effect on the Closing Date (each, a “Union Employee”) with, at Buyer’s sole discretion, either compensation and employee benefits that are (i) no less favorable in the aggregate (excluding any equity-based compensation, severance, retention, sale, stay, special bonus, emergence or other change in control payments or awards or any similar compensation or award) than the compensation and employee benefits provided to each such Transferred Employee immediately prior to the Closing Date or (ii) substantially comparable in the aggregate (excluding any severance) to the compensation and employee benefits provided to similarly situated employees of Parent; provided, that for purposes of any equity-based compensation, such employees shall be deemed newly hired employees of Parent.  In addition, to the extent Parent maintains a tax-qualified defined benefit pension plan, from and after the date each Transferred Employee satisfies the applicable eligibility and service requirements of any such plan as in effect on any date of determination, such Transferred Employee shall participate in such plan to the same extent as similarly situated employees of Parent.  With respect to Union Employees, Buyer will retain any and all of the rights and obligations it may have pursuant to applicable labor Law.

(c)                                  Notwithstanding Section 5.8(b), beginning on the Closing Date, Buyer shall, or shall cause Parent to, for a period ending no earlier than the first anniversary of the Closing Date, maintain a severance plan for the benefit of each Transferred Employee, other than any Union Employee, that is no less favorable to Transferred Employees than the Amended and Restated Adelphia Communications Corporation Severance Plan effective September 21, 2004 (the “Seller Severance Plan”) and which includes the same general terms and conditions regarding eligibility and

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exclusion from eligibility for severance pay and benefits as the Seller Severance Plan.  It is intended that this Section 5.8(c) shall not result in any duplication of benefits to any Transferred Employee.

(d)                                 To the extent (and only to the extent) set forth on Schedule 5.8(d) of the Seller Disclosure Schedule, Buyer shall assume all Liabilities and obligations to provide any severance pay and benefits to any Transferred Employee whose employment is terminated following the Closing.  Buyer shall reimburse Seller for any severance costs incurred with respect to any Employee who is not offered employment by Buyer pursuant to this Transaction in the event Parent or any of its Subsidiaries hires such Employee within three months after the Closing.

(e)                                  For purposes of this Agreement, (i)  “Applicable Employees” means all of the following:

(A)                              All persons who are active Employees on the Closing Date, including Employees on vacation and Employees on a regularly scheduled day off from work.  Employees on temporary leave for purposes of jury or annual two-week national service/military duty shall be deemed to be active Employees;

(B)                                Employees who on the Closing Date are on nonmedical leave of absence; provided, however, that no such Employee shall be guaranteed reinstatement to active service if his return to employment is contrary to the terms of his leave, unless otherwise required by applicable Law (for purposes of the foregoing, nonmedical leave of absence shall include maternity or paternity leave, leave under the Family and Medical Leave Act of 1993, educational leave, military leave with veteran’s reemployment rights under federal Law, or personal leave, unless any of such is determined to be a medical leave); and

(C)                                Employees who on the Closing Date are on disability or medical leave and for whom it has been 180 calendar days or less since their last day of active employment; provided, however, that no such Employee shall be guaranteed reinstatement to active service if he is incapable of working in accordance with the policies, practices and procedures of Buyer; and

(ii)                                  “Transferred Employees” means those Applicable Employees who accept offers of employment with Buyer.

(f)                                    Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employee or his or her covered dependents prior to the Closing Date except to the extent (and only to the extent) such liabilities are reflected in the determination of the Closing Net Liabilities used in the determination of the Final Adjustment Amount for the Specified Business in which such Transferred Employee is employed.  Buyer shall be responsible for all expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date.  For purposes of this paragraph, a claim

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is deemed incurred:  (i) in the case of medical or dental benefits, when the services that are the subject of the claim are performed, (ii) in the case of life insurance, when the death occurs, (iii) in the case of long-term disability benefits, when the Employee becomes disabled, and (iv) in the case of workers compensation benefits, when the event giving rise to the benefits occurs.

(g)                                 With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Parent, Buyer shall (i) provide coverage for Transferred Employees under its medical, dental and health plans as of the Closing Date in accordance with the terms of such plans, (ii) cause there to be waived any pre-existing conditions, actively at work requirements and waiting periods or other eligibility requirements to the extent such conditions, requirements or waiting periods were satisfied by a Transferred Employee under a corresponding Benefit Plan, and (iii) cause such plans to honor any expenses incurred by the Transferred Employees and their dependents or beneficiaries under similar plans of Seller and its Affiliates during the portion of the calendar year in which the Closing Date occurs for purposes of satisfying applicable deductible, co-insurance and maximum out-of-pocket expenses.

(h)                                 Transferred Employees shall be given credit for purposes of eligibility and vesting and other entitlement to benefits or rights, under each employee benefit plan of Parent (each, a “Buyer Plan”) in which such Transferred Employees are or become eligible to participate, for all service (including service with Seller or any of its Affiliates) for which such Transferred Employees were credited for such purposes under a corresponding Benefit Plan of Seller prior to the Closing Date; provided, however, that nothing in this Section 5.8(h) shall result in any duplication of benefits.

(i)                                     Except as required by applicable Law, as of the Closing Date, the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Affiliates.  From and after the Closing, Seller shall remain solely responsible for any and all Liabilities in respect of the Employees, including the Transferred Employees, related to the Benefit Plans, except as otherwise provided in this Section 5.8.  None of Buyer or any of its Affiliates shall assume or have transferred to them the sponsorship of any of the Benefit Plans or any other benefit plans or arrangements maintained by Seller or any of its Affiliates, including any non-qualified deferred compensation or rabbi trust plans or arrangements, pursuant to or in connection with the Transaction.

(j)                                     Seller shall take all actions necessary to fully vest the Transferred Employees in their account balances under Seller’s tax-qualified 401(k) plan (“Seller’s 401(k) Plan”) effective as of the Closing Date.  In accordance with the terms of the applicable plan, each Transferred Employee shall be eligible to participate in a Parent-sponsored defined contribution plan intended to qualify under Sections 401(a) and 401(k) of the Code (“Buyer’s 401(k) Plan”).  Buyer shall take all actions reasonably necessary to permit beginning as soon as reasonably practical following the Closing Date each Transferred Employee who has received an eligible rollover distribution (as defined in

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Section 402(c)(4) of the Code) from Seller’s 401(k) Plan to roll over the distribution, to an account in Buyer’s 401(k) Plan.

(k)                                  With respect to any accrued but unused vacation time (including flexible time-off and sick pay) to which any Transferred Employee is entitled pursuant to the vacation policy applicable to such Transferred Employee immediately prior to the Closing Date, Buyer shall, to the extent permitted by applicable Law, assume the liability for such accrued vacation and allow such Transferred Employee to use such accrued vacation to the extent such Transferred Employee would have been entitled to such accrued vacation based on his level and years of service under the vacation policy of Parent in effect as of the Closing Date as if such Transferred Employee had been employed by Buyer during such Transferred Employee’s employment with Seller; provided, however, that if the Transferred Employee’s accrued vacation is greater than the amount of vacation to which such Transferred Employee would have been entitled under Parent’s vacation policy, Buyer shall pay to such Transferred Employee within 90 days of the Closing Date an amount in cash equal to the difference but only to the extent of the amount reflected in the Closing Net Liabilities Amount used in calculating the Final Adjustment Amount for the Specified Business in which such Transferred Employee is employed.  With respect to any sale bonuses under the Sale Bonus Program, Seller shall be responsible for the payment to all Employees of that portion of the bonus that is to be paid on the “First Sale Bonus Payment Date” (as defined in the Sale Bonus Program), which bonuses shall be paid prior to or on the Closing.  Buyer shall be responsible for the payment to Transferred Employees on a timely basis of any sale bonuses under the Sale Bonus Program to be paid after the “First Sale Bonus Payment Date” but only to the extent of the amount reflected in the Closing Net Liabilities Amount used in calculating the Final Adjustment Amount for the Specified Business in which such Transferred Employee is employed.

(l)                                     Buyer shall be responsible for providing or discharging any and all notifications, benefits and liabilities to Transferred Employees and governmental authorities required by WARN or by any other applicable Law relating to plant closings or employee separations that are required (i) to be provided after the Closing or (ii) with respect to any plant closing or mass layoff that occurs within the 60-day period immediately following the Closing.  Seller agrees to cooperate in preparing and distributing any notices that Buyer may desire to provide prior to the Closing.  No later than five Business Days prior to the Closing Date, Seller shall provide Buyer with a schedule setting forth each Employee whose employment was terminated or is anticipated to be terminated during the six month period prior to the Closing Date and the work location of such Employee.

(m)                               Buyer shall assume any liability under COBRA arising from the actions (or inactions) of Buyer or its Affiliates with respect to the Transferred Employees after the Closing Date.  Seller shall retain all obligations with respect to continued coverage under COBRA (and any similar state Law), Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA and the regulations thereunder for all Employees, including Applicable Employees, who do not become Transferred Employees.  Notwithstanding the immediately preceding sentence, to the extent required by Treasury

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Regulation Section 54.4980B-9, Q&A-8(c), Buyer shall perform all obligations under COBRA and the foregoing provisions of the Code and ERISA with respect to each employee of Seller who is an “M&A qualified beneficiary” with respect to the Transaction, as such term is defined by Treasury Regulation section 54.4980B-9, Q&A-4.

(n)                                 For Employees who participate in Seller’s short term incentive bonus program, including the Short-Term Incentive Plan, Sales Incentive Plan and Marketing Incentive Plan, Seller shall be responsible for paying their respective annual bonuses for the period from the January 1 immediately preceding the Closing Date through the Closing (pro-rated for the partial year) and shall pay such bonuses to such Employees no later than the Closing; and, solely with respect to Transferred Employees who participated immediately prior to the Closing Date in such Seller’s short term incentive bonus programs, Buyer shall be responsible for paying respective annual bonuses for the period from the Closing Date through the December 31 immediately following the Closing Date pro-rated for the partial year.

(o)                                 With respect to any Transferred Employee who becomes employed by Friendco or any of its Affiliates pursuant to the Exchange Agreement, references to any benefit plans maintained by Buyer or Parent shall be deemed to be references to benefit plans maintained by Friendco or its Affiliates and references to similarly situated employees of Buyer shall be deemed to be references to similarly situated employees of Friendco or its Affiliates.