ASSET EXCHANGE AGREEMENT dated September 30, 2002 between INTERMEDIA PARTNERS SOUTHEAST and INSIGHT COMMUNICATIONS MIDWEST, LLC
EXHIBIT 10.1
dated September 30, 2002
between
INTERMEDIA PARTNERS SOUTHEAST
and
INSIGHT COMMUNICATIONS MIDWEST, LLC
THIS ASSET EXCHANGE AGREEMENT (“Agreement”) is made and entered into as of the 30th day of September, 2002, by and between InterMedia Partners Southeast, a California general partnership
(“AT&T Broadband”), and Insight Communications Midwest, LLC, a Delaware limited liability company (“Insight”).
RECITALS
A. Insight owns and operates cable television systems which are franchised or hold other operating authority and operate in and around the communities listed on Exhibit A (the “Insight
Systems”).
B. AT&T Broadband owns cable television systems which are franchised
or hold other operating authority in and around the communities listed on Exhibit B (the “AT&T Systems”). The AT&T Systems are managed by Insight Communications Company, L.P., a Delaware limited partnership (“Insight
LP”), pursuant to the Amended and Restated Consulting Agreement dated March 17, 2000 between AT&T Broadband and Insight LP, as amended (the “Consulting Agreement”).
C. This Agreement sets forth the terms and conditions on which Insight will convey to AT&T Broadband substantially all of the assets comprising
or used or useful in connection with Insight’s Cable Business and AT&T Broadband will convey to Insight substantially all of the assets comprising or used or useful in connection with AT&T’s Cable Business, all in such a manner as
to effect, to the extent reasonably possible, like-kind exchanges of such assets under Section 1031 of the United States Internal Revenue Code of 1986, as amended (the “Code”).
AGREEMENTS
In consideration of the mutual covenants and promises set forth herein, the parties agree as follows:
SECTION 1. DEFINITIONS
In addition
to terms defined elsewhere in this Agreement, the following capitalized terms or terms otherwise defined in this Section 1 shall have the meanings set forth below:
1.1 1992 Cable Act. The Cable Television Consumer Protection and Competition Act of 1992, as amended, and the FCC rules and
regulations promulgated thereunder.
1.2 Affiliate. With respect to any
Person, any Person controlling, controlled by or under common control with such Person; “control” means the ownership, directly or indirectly, of voting securities representing the right generally to elect a majority of the directors (or
similar officials) of a
Person or the possession, by contract or otherwise, of the authority to direct the management and policies of a Person. For the avoidance of
doubt, notwithstanding anything in this Agreement or in the Transaction Documents, no member of the Liberty Media Group shall be deemed to be an Affiliate of AT&T Broadband.
1.3 Assets. The Insight Assets or the AT&T Assets or both, as the context requires.
1.4 AT&T Assets. All assets, properties, privileges, rights, interests and claims, real and
personal, tangible and intangible, of every type and description that are owned, leased, held for use or used in connection with AT&T’s Cable Business and in which AT&T Broadband has any right, title or interest or acquires any right,
title or interest on or before the Closing, including AT&T Tangible Personal Property, AT&T Owned Real Property, AT&T Leased Property, AT&T Other Real Property Interests, AT&T System Franchises, AT&T System Licenses, AT&T
System Contracts, AT&T Books and Records and AT&T Other Intangibles, but excluding any AT&T Excluded Assets.
1.5 AT&T Books and Records. All engineering records, files, data, drawings, blueprints, schematics, reports, lists, plans and processes and all other files of correspondence, lists,
records and reports concerning AT&T’s Cable Business, including subscribers and prospective subscribers of the AT&T Systems, signal and program carriage and dealings with Governmental Authorities, including all reports filed by or on
behalf of AT&T Broadband with the FCC and statements of account filed by or on behalf of AT&T Broadband with the U.S. Copyright Office, but excluding any AT&T Excluded Assets.
1.6 AT&T Leased Property. All leasehold interests in real property that is held for use or used in connection with
AT&T’s Cable Business which AT&T Broadband has or acquires prior to Closing, including those described as AT&T Leased Property on Schedule 1.6, which Schedule has been prepared by Insight.
1.7 AT&T Other Intangibles. All intangible assets other than AT&T System Franchises,
AT&T System Licenses and AT&T System Contracts, including subscriber lists, accounts receivable, claims (excluding any claims relating to AT&T Excluded Assets), patents, copyrights and going concern value, if any, that are owned, held
for use or used in connection with AT&T’s Cable Business and in which AT&T Broadband has, or acquires prior to Closing, any right, title or interest.
1.8 AT&T Other Real Property Interests. All easements and rights of access (other than those relating to multiple dwelling
units) and other interests in real property that are held for use or used in connection with AT&T’s Cable Business and in which AT&T Broadband has, or acquires prior to Closing, any right, title or interest, including those interests
described as AT&T Other Real Property Interests on Schedule 1.8, which Schedule has been prepared by Insight, but not including AT&T Leased Property or AT&T Owned Property.
1.9 AT&T Owned Property. All fee interests in real property that is owned, held for use or used in connection with
AT&T’s Cable Business which AT&T Broadband has or acquires prior to
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Closing, including those described as AT&T Owned Property on Schedule 1.9, which Schedule has been prepared by Insight and all
improvements thereon.
1.10 AT&T System Contracts. All pole line
agreements, underground conduit agreements, crossing agreements, multiple dwelling, bulk billing or commercial service agreements, leased channel access agreements and other Contracts (other than AT&T System Franchises and AT&T System
Licenses) held for use or used in connection with AT&T’s Cable Business and to which AT&T Broadband is, or becomes prior to Closing, as permitted by this Agreement, a party or bound, including those described on Schedule 1.10,
which Schedule has been prepared by Insight.
1.11 AT&T System
Franchises. All franchise agreements, operating permits or similar governing agreements, instruments, resolutions, statutes, ordinances, approvals, authorizations and permits obtained from any franchising authority in connection with
AT&T’s Cable Business, including all amendments and modifications thereto and all renewals thereof, for the areas and communities listed on Schedule 1.11, which Schedule has been prepared by Insight.
1.12 AT&T System Licenses. The intangible cable television channel distribution rights, cable
television relay service (CARS), business radio and other licenses, copyright notices and other licenses, authorizations, consents or permits issued by the FCC or any other Governmental Authority in connection with AT&T’s Cable Business
(other than AT&T System Franchises, AT&T System Contracts and AT&T Other Real Property Interests), including those described on Schedule 1.12, which Schedule has been prepared by Insight.
1.13 AT&T Tangible Personal Property. All tangible personal property that is owned, leased,
held for use or used in connection with AT&T’s Cable Business and in which AT&T Broadband has, or acquires prior to Closing, any right, title or interest, including towers, tower equipment, aboveground and underground cable,
distribution systems, headend amplifiers, line amplifiers, microwave equipment, converters, testing equipment, motor vehicles, office equipment, computers and billing equipment, furniture, fixtures, supplies, inventory and other physical assets.
1.14 AT&T’s Cable Business. The cable television business and
other income-generating businesses related to the AT&T Systems conducted by AT&T Broadband through the AT&T Systems.
1.15 Basic Services. The lowest tier of cable television service offered to subscribers of a System that includes the retransmission of local broadcast signals as defined by the Cable Act and
the 1992 Cable Act.
1.16 Business Day. Any day other than a Saturday,
Sunday or a day on which the banking institutions in Denver, Colorado or New York, New York are required or authorized to be closed.
1.17 Cable Act. The Cable Communications Policy Act of 1984, as amended, and the rules and regulations promulgated thereunder.
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1.18 Cable Business. Insight’s Cable Business or AT&T’s Cable
Business, as the context requires.
1.19 Closing Time. 12:01 A.M.,
Mountain Time, on the Closing Date.
1.20 Communications Act. The
Communications Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.21 Contract. Any contract, mortgage, deed of trust, bond, indenture, lease, license, note, franchise, certificate, option, warrant, right or other instrument, document, obligation or
agreement, whether written or oral.
1.22 Partnership. Insight Midwest,
L.P., a Delaware limited partnership equally owned by Insight LP and TCI of Indiana Holdings, LLC (“TCI LLC”).
1.23 [Intentionally Omitted]
1.24 Environmental
Law. Any Legal Requirement concerning the protection of public or employee health, safety, welfare or the environment, including Legal Requirements relating to emissions, discharges, releases or threatened releases of Hazardous
Substances into the environment, air (including both ambient and within buildings and other structures), surface water, ground water or land or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
1.25 ERISA. The Employee
Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder and published interpretations with respect thereto.
1.26 ERISA Affiliate. As to any Person, any trade or business, whether or not incorporated, which together with such Person would be deemed a single employer as
determined under Section 4001 of ERISA.
1.27 Expanded Basic
Services. Any level of video programming service greater than Basic Services provided over a cable television System, regardless of service tier, other than Basic Services, any new product tier and Pay TV.
1.28 FCC. The Federal Communications Commission.
1.29 [Intentionally Omitted]
1.30 GAAP. Generally accepted accounting principles as in effect from time to time in the United States of America.
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1.31 Governmental Authority. The United States of America, any state,
commonwealth, territory or possession of the United States of America and any political subdivision or quasi-governmental authority of any of the same, including any court, tribunal, department, commission, board, bureau, agency, county,
municipality, province, parish or other instrumentality of any of the foregoing.
1.32 Hazardous Substances. (a) Any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976 (RCRA) (42 U.S.C. §§ 6901 et seq.), as amended, and
the rules and regulations promulgated thereunder; (b) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.) (CERCLA), as amended, and
the rules and regulations promulgated thereunder; (c) any substance regulated by the Toxic Substances Control Act (TSCA) (15 U.S.C. §§2601 et seq.), or the Insecticide, Fungicide and Rodenticide Act (IFRA) (7 U.S.C. §§136 et
seq.), each as amended, and the rules and regulations promulgated thereunder; (d) asbestos or asbestos-containing material of any kind or character; (e) polychlorinated biphenyls; (f) any substances regulated under the provisions of Subtitle I of
RCRA relating to underground storage tanks; (g) any substance the presence, use, handling, treatment, storage or disposal of which on real property is prohibited by any Environmental Law; and (h) any other substance which by any Environmental Law
requires special handling, reporting or notification of any Governmental Authority in its collection, storage, use, treatment or disposal.
1.33 HSR Act. The ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
1.34 Insight Assets. All assets, properties, privileges, rights, interests and claims, real and
personal, tangible and intangible, of every type and description that are owned, leased, held for use or used in connection with Insight’s Cable Business and in which Insight has any right, title or interest or acquires any right, title or
interest on or before the Closing, including Insight Tangible Personal Property, Insight Owned Real Property, Insight Leased Property, Insight Other Real Property Interests, Insight System Franchises, Insight System Licenses, Insight System
Contracts, Insight Books and Records and Insight Other Intangibles, but excluding any Insight Excluded Assets.
1.35 Insight Books and Records. All engineering records, files, data, drawings, blueprints, schematics, reports, lists, plans and processes and all other files of correspondence, lists,
records and reports concerning Insight’s Cable Business, including subscribers and prospective subscribers of the Insight Systems, signal and program carriage and dealings with Governmental Authorities, including all reports filed by or on
behalf of Insight with the FCC and statements of account filed by or on behalf of Insight with the U.S. Copyright Office, but excluding any Insight Excluded Assets.
1.36 Insight Leased Property. All leasehold interests in real property that is held for use or used in connection with
Insight’s Cable Business which Insight has or acquires prior to Closing, including those described as Insight Leased Property on Schedule 1.36.
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1.37 Insight Other Intangibles. All intangible assets other than Insight System
Franchises, Insight System Licenses and Insight System Contracts, including subscriber lists, accounts receivable, claims (excluding any claims relating to Insight Excluded Assets), patents, copyrights and going concern value, if any, that are
owned, held for use or used in connection with Insight’s Cable Business and in which Insight has, or acquires prior to Closing, any right, title or interest.
1.38 Insight Other Real Property Interests. All easements and rights of access (other than those relating to multiple dwelling
units) and other interests in real property that are held for use or used in connection with Insight’s Cable Business and in which Insight has, or acquires prior to Closing, any right, title or interest, including those interests described as
Insight Other Real Property Interests on Schedule 1.38, but not including Insight Leased Property or Insight Owned Property.
1.39 Insight Owned Property. All fee interests in real property that is held for use or used in connection with Insight’s Cable Business which Insight has or acquires prior to
Closing, including those described as Insight Owned Property on Schedule 1.39 and all improvements thereon.
1.40 Insight Required Consents. Any and all consents, authorizations and approvals required for (i) Insight or any of its Affiliates to transfer the Insight Assets to AT&T Broadband; (ii)
AT&T Broadband to operate the Insight Systems and to own, lease, use and operate the Insight Assets and the Insight Systems at the places and in the manner in which the Insight Assets are used and the Insight Systems are operated as of the date
of this Agreement and as of the Closing; and (iii) AT&T Broadband to assume and perform the Insight System Franchises, the Insight System Licenses, the leases and other documents evidencing Insight Leased Property and Insight Other Real Property
Interests and the Insight System Contracts, including those consents, authorizations and approvals required under the Insight System Franchises, the Insight System Licenses, the leases and other documents evidencing Insight Leased Property and
Insight Other Real Property Interests and the Insight System Contracts, and any other consents, authorizations or approvals listed on Schedule 5.3.
1.41 Insight System Contracts. All pole line agreements, underground conduit agreements, crossing agreements, multiple dwelling, bulk billing or commercial
service agreements, leased channel access agreements and other Contracts (other than Insight System Franchises and Insight System Licenses) held for use or used in connection with Insight’s Cable Business and to which Insight is, or becomes
prior to Closing, as permitted by this Agreement, a party or bound, including those described on Schedule 1.41.
1.42 Insight System Franchises. All franchise agreements, operating permits or similar governing agreements, instruments, resolutions, statutes, ordinances, approvals, authorizations and
permits obtained from any franchising authority in connection with Insight’s Cable Business, including all amendments and modifications thereto and all renewals thereof, for the areas and communities listed on Schedule 1.42.
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1.43 Insight System Licenses. The intangible cable television channel
distribution rights, cable television relay service (CARS), business radio and other licenses, copyright notices and other licenses, authorizations, consents or permits issued by the FCC or any other Governmental Authority in connection with
Insight’s Cable Business (other than Insight System Franchises, Insight System Contracts and Insight Other Real Property Interests), including those described on Schedule 1.43.
1.44 Insight Tangible Personal Property. All tangible personal property that is owned, leased, held for use or used in connection
with Insight’s Cable Business and in which Insight has, or acquires prior to Closing, any right, title or interest, including towers, tower equipment, aboveground and underground cable, distribution systems, headend amplifiers, line amplifiers,
microwave equipment, converters, testing equipment, motor vehicles, office equipment, computers and billing equipment, furniture, fixtures, supplies, inventory and other physical assets.
1.45 Insight’s Cable Business. The cable television business and other income-generating businesses related to the Insight
Systems conducted by Insight through the Insight Systems.
1.46 Judgment. Any judgment, writ, order, injunction, award or decree of any court, judge, justice or magistrate, including any bankruptcy court or judge or the arbitrator in any binding
arbitration, and any order of or by any Governmental Authority.
1.47 Knowledge. The actual knowledge of a particular matter of one or more of the principal corporate personnel of such party involved in the transactions contemplated by this Agreement and,
in the case of Insight LP or Insight, of the general manager or one or more of the senior managers of the AT&T Systems or Insight Systems, as applicable.
1.48 Leased Property. The Insight Leased Property or AT&T Leased Property or both, as the context requires.
1.49 Legal Requirement. Applicable common law and any statute, ordinance, code or other law,
rule, regulation, order, technical or other written standard, requirement, policy or procedure enacted, adopted, promulgated, applied or followed by any Governmental Authority, including any Judgment and all judicial decisions applying common law or
interpreting any other Legal Requirement, in each case, as amended.
1.50 Liberty Media
Group. Liberty Media Corporation, any of its direct or indirect current or future subsidiaries, any Person in which it or they have or acquire any direct or indirect equity investment and any other Person directly or indirectly
controlled by any of the foregoing.
1.51 Lien. Any security interest,
security agreement, financing statement filed with any Governmental Authority, conditional sale or other title retention agreement, any lease, consignment or bailment given for purposes of security, any mortgage, lien, indenture, pledge, option,
encumbrance, adverse interest, constructive trust or other trust, claim, attachment, exception to, defect in or other condition affecting title or other ownership interest (including but not limited to
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reservations, rights of entry, possibilities of reverter, encroachments, protrusions, easements, rights-of-way, rights of first refusal,
restrictive covenants, leases and licenses) of any kind, which constitutes an interest in or claim against property, whether arising pursuant to any Legal Requirement, System License, System Franchise, System Contract or otherwise.
1.52 Litigation. Any written claim, action, suit, proceeding, arbitration, or hearing.
1.53 Losses. Any claims, losses, liabilities, damages, penalties, costs
and expenses, including interest that may be imposed in connection therewith, expenses of investigation, reasonable fees and disbursements of counsel and other experts, and the cost to any Person making a claim or seeking indemnification under this
Agreement with respect to funds expended by such Person by reason of the occurrence of any event or the existence or assertion of any Liens (other than Permitted Liens) with respect to which indemnification is sought, except Losses incurred by a
party or on behalf of such party in asserting any claim for indemnification against the other party where it is ultimately determined (including by agreement of the parties) that such party is not entitled to indemnification from the other party
(before giving effect to the limitations on such indemnification obligations set forth in Sections 11.5 and 11.6).
1.54 Other Real Property Interests. The Insight Other Real Property Interests or the AT&T Other Real Property Interests or both, as the context requires.
1.55 Owned Property. Insight Owned Property or AT&T Owned Property or both, as the context
requires.
1.56 Pay TV. A la carte tiers or premium programming services
selected by and sold to subscribers on a per channel or per program basis.
1.57 Permitted Lien. Any (a) Lien securing Taxes, assessments and governmental charges not yet due and payable, (b) zoning law or ordinance or any similar Legal Requirement, (c) right reserved
to any Governmental Authority to regulate the affected property or to acquire a Franchise or System upon default under, or termination of, any Franchise, (d) as to Owned Property and Other Real Property Interests, any Lien not securing indebtedness
or arising out of the obligation to pay money that does not individually or in the aggregate interfere with the right or ability to own, use or operate the Owned Property or Other Real Property Interests as they are being used or operated or
materially diminish the value of such Owned Property or Other Real Property Interests, (e) in the case of Owned Property and Leased Property, any lease or sublease by AT&T Broadband or Insight in favor of a third party that is disclosed in the
Schedules to this Agreement, (f) in the case of Leased Property, (i) the rights of any lessor and (ii) any Lien granted by any lessor of Leased Property; provided that “Permitted Lien” will not include any Lien securing a debt or claim
(other than inchoate materialmen’s, mechanics’, workmen’s, repairmen’s or other like Liens arising in the ordinary course of business or any Lien described in clause (f) above) or any Lien which could prevent or impair in any way
the conduct of the business of the affected System as it is currently being conducted, and provided further that the classification of any Lien as a “Permitted Lien” will
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not affect any liability which AT&T Broadband may have under this Agreement for any such Lien with respect to the exchange of the AT&T
Assets or which Insight may have under this Agreement for any such Lien with respect to the exchange of the Insight Assets, including pursuant to any indemnity obligation under this Agreement, and (g) in the case of AT&T Assets, any Lien created
as a result of Insight LP’s acts or omissions made in connection with its management of the AT&T Systems that constitute a breach by Insight LP under the Consulting Agreement.
1.58 Person. Any natural person, Governmental Authority, corporation, general or limited partnership, limited liability company,
joint venture, trust, association or unincorporated entity of any kind.
1.59 Required
Consents. Any and all consents, authorizations and approvals required for (i) AT&T Broadband to transfer the AT&T Assets to Insight; (ii) Insight to operate the AT&T Systems and to own, lease, use and operate the AT&T
Assets and the AT&T Systems at the places and in the manner in which the AT&T Assets are used and the AT&T Systems are operated as of the date of this Agreement and as of the Closing; and (iii) Insight to assume and perform the AT&T
System Franchises, the AT&T System Licenses, the leases and other documents evidencing AT&T Leased Property or AT&T Other Real Property Interests and the AT&T System Contracts, including those consents, authorizations and approvals
required under the AT&T System Franchises, the AT&T System Licenses, the leases and other documents evidencing AT&T Leased Property and AT&T Other Real Property Interests and the AT&T System Contracts, provided that any and all
consents, authorizations and approvals required pursuant to subsections (i), (ii) and (iii) of this Section 1.59 under any agreement to which AT&T Broadband or any of its Affiliates is individually a party (other than agreements included in the
AT&T Assets) or under any Legal Requirement to which AT&T Broadband or any of its Affiliates is subject (other than any Legal Requirements that would be applicable to any owner of the AT&T Assets) are referred to as “AT&T
Required Consents.”
1.60 System. Any of the Insight Systems or the
AT&T Systems or all of them, as the context requires.
1.61 System
Contracts. The Insight System Contracts or the AT&T System Contracts or both, as the context requires.
1.62 System Franchises. The Insight System Franchises or the AT&T System Franchises or both, as the context requires.
1.63 System Licenses. The Insight System Licenses or the AT&T System Licenses or both, as the context requires.
1.64 Tangible Personal Property. The Insight Tangible Personal Property or the
AT&T Tangible Personal Property or both, as the context requires.
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1.65 Taxes. All levies and assessments of any kind or nature imposed by any
Governmental Authority, including all income, sales, use, ad valorem, value added, franchise, severance, net or gross proceeds, withholding, payroll, employment, excise or property taxes and levies or assessments related to unclaimed property,
together with any interest thereon and any penalties, additions to tax or additional amounts applicable thereto.
1.66 Third Party. With respect to AT&T Broadband, any Person other than AT&T Corp. and its Affiliates and, with respect to Insight, any Person other than Insight and its Affiliates.
1.67 Transaction Documents. The instruments and documents described in
Sections 9.2 and 9.3 which are to be executed and delivered by or on behalf of Insight or AT&T Broadband in connection with this Agreement or the transactions contemplated hereby.
1.68 Other Definitions. The following terms are defined in the Sections or Recitals indicated:
| Term |
Section or Recital
| |
| Action |
11.4 | |
| Adjustment Amount |
3.2(i) | |
| Agreement |
Preamble | |
| Antitrust Division |
7.7 | |
| Appraiser |
7.15 | |
| Approved Leave of Absence |
7.3(a) | |
| AT&T Assumed Obligations and Liabilities |
4.1 | |
| AT&T Broadband |
Preamble | |
| AT&T Broadband Welfare Plans |
7.3(d) | |
| AT&T Damages |
11.6 | |
| AT&T Excluded Assets |
4.2 | |
| AT&T Required Consents |
1.59 | |
| AT&T Specifications |
7.25 | |
| AT&T Systems |
Recital B | |
| Cash Consideration |
3.1 | |
| Cause |
7.3(e) | |
| Closing |
9.1 | |
| Closing Date |
9.1 | |
| Code |
Recital C | |
| “commercially reasonable efforts” |
12.18 | |
| Consulting Agreement |
Recital B | |
| Copyright Act |
5.8(a) | |
| Cost of Service Election |
5.8(d) | |
| Employees on Leave Status |
7.3(a) | |
| FAA |
5.8(c) |
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| Final Adjustment Certificate |
3.3(b) | |
| Franchise Penalties |
3.2(g) | |
| FTC |
7.7 | |
| Hired Employee |
7.3(a) | |
| Indemnified Party |
11.4 | |
| Indemnifying Party |
11.4 | |
| Initial Adjustment Certificate |
3.3(a) | |
| Insight |
Preamble | |
| Insight Assumed Obligations and Liabilities |
4.3 | |
| Insight Balance Sheet |
5.10 | |
| Insight Damages |
11.5 | |
| Insight Excluded Assets |
4.4 | |
| Insight LP |
Recital B | |
| Insight Plans |
5.13(b) | |
| Insight Systems |
Recital A | |
| Insight Upgrade Plan |
7.25 | |
| Insight’s Financial Statements |
5.10 | |
| Management Agreement |
5.16 | |
| Outside Closing Date |
10.1(b) | |
| Past Service |
7.3(d) | |
| Prime Rate |
12.10 | |
| Pro Rata Adjustments |
3.3(a) | |
| Retained Employees |
7.3(a) | |
| Surveys |
7.6 | |
| Survival Period |
11.1 | |
| System Employees |
7.3(a) | |
| Taking |
12.16 | |
| TCI LLC |
1.22 | |
| Title Commitments |
7.6 | |
| Title Company |
7.6 | |
| Title Defect |
7.6 | |
| Title Policy |
7.6 | |
| Transitional Services |
7.12 | |
| Upgrade |
3.2(g) | |
| WARN |
5.13(a) |
1.69 Accounting Terms. All
accounting terms not otherwise defined in this Agreement will have the meanings ascribed to them under GAAP.
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SECTION 2. EXCHANGE
2.1 Exchange.
(a) Subject to the terms and conditions set forth in this Agreement, at the Closing, AT&T Broadband and Insight will exchange the AT&T Assets for the Insight Assets, in each case free and clear of all
Liens (except Permitted Liens). AT&T Broadband and Insight will use all reasonable efforts to structure the transaction in such a way that it will be a tax free exchange of like-kind assets under Section 1031 of the Code, the regulations
promulgated thereunder, and judicial and administrative interpretations thereof.
(b) To the maximum extent permitted by Section 1031 of the Code, the regulations promulgated thereunder, and judicial and administrative interpretations thereof, (i) the AT&T Tangible Personal Property and
the Insight Tangible Personal Property will be exchanged each for the other; (ii) the AT&T Owned Property, AT&T Leased Property and AT&T Other Real Property Interests and the Insight Owned Property, Insight Leased Property and Insight
Other Real Property Interests will be exchanged each for the other; and (iii) the AT&T System Contracts, AT&T System Franchises, AT&T System Licenses and AT&T Other Intangibles and the Insight System Contracts, Insight System
Franchises, Insight System Licenses and Insight Other Intangibles will be exchanged each for the other.
SECTION
3. CONSIDERATION
3.1 Value of Assets. In
order to equalize the value of the transaction for both AT&T Broadband and Insight, in addition to the exchange of the AT&T Assets for the Insight Assets as described in Section 2, at Closing Insight shall pay to AT&T Broadband
$25,000,000 by wire transfer in immediately available funds (the “Cash Consideration”). The parties agree that the value of the AT&T Assets being transferred to Insight and the value of the Insight Assets, plus the Cash Consideration
being transferred to AT&T Broadband are equal; provided that at Closing the value of such Assets will be subject to adjustment as provided in Section 3.2 and Section 3.3.
3.2 Adjustments to Value of Assets. The value of the AT&T Assets and the Insight Assets shall be adjusted as follows:
(a) Appropriate adjustments on a pro rata basis as of the Closing Time
will be made with respect to each of the AT&T Systems and Insight Systems for all prepaid expenses other than inventory (but only to the extent the full benefit of such prepaid expenses will be realizable by the other party within 12 months
after the Closing Date), accrued expenses (including real and personal property taxes), copyright fees and franchise or license fees or charges, prepaid income, subscriber prepayments and, subject to paragraph (e) below, accounts receivable related
to such party’s Cable Business to the extent specified in Section 3.2(e), all as determined in accordance with GAAP consistently applied and to reflect the principle that all expenses and income attributable to such party’s Cable Business
for the period through and including the Closing Time are for the
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account of such party, and all expenses and income attributable to such party’s Cable Business for the period after
the Closing Time are for the account of the other party.
(b) All advance
payments to, or funds of third parties on deposit with, AT&T Broadband or Insight as of the Closing Time and relating to such party’s Cable Business, including advance payments and deposits (including any accrued interest on such deposits)
by subscribers served by such party’s Cable Business for converters, encoders, decoders, cable television service and related sales, shall be assumed by, and credited to the account of, the other party.
(c) There shall be credited to AT&T Broadband the economic value of all accrued vacation time
that AT&T Broadband credits after the Closing Time to the employees of Insight that are hired by AT&T Broadband pursuant to Section 7.3(d), where economic value is the amount equal to the cash compensation that would be payable to each such
employee at his or her level of compensation on the Closing Date for a period equal to such employee’s credited accrued vacation.
(d) All deposits relating to the business and operations of each party’s Systems that are held by Third Parties as of the Closing Time for the account of such party or as
security for such party’s performance of its obligations, including deposits on leases and deposits for utilities, will be credited to the account of such party in their full amounts and will become the property of the other party; provided
that no adjustment will be made for any deposits the full benefit of which for contractual or other reasons cannot be made available to the other party within 12 months following the Closing Time.
(e) Neither AT&T Broadband nor Insight will receive credit for any of its (i) accounts
receivable resulting from cable television or internet service sales any portion of which is 60 days or more past due as of the Closing Time, or (ii) accounts receivable from customers whose accounts are inactive or whose service is pending
disconnection for any reason as of the Closing Time. AT&T Broadband and Insight will receive credit for their accounts receivable resulting from cable television or internet service sales the entire portion of which are 0-59 days past due as of
the Closing Time in an amount equal to 99% of the face amount of such accounts receivable. For purposes of making “past due” calculations under the foregoing sentence, the billing statements of a System will be deemed to be due and payable
on the first day of the period during which the service to which such billing statements relate is provided. AT&T Broadband and Insight will receive credit for their advertising accounts receivable as follows: (i) 100% of the face amount of the
advertising accounts receivable which are outstanding 30 days or less from the invoice date, (ii) 95% of the face amount of all advertising accounts receivable which are outstanding more than 30 but fewer than 61 days from the invoice date, (iii)
80% of the face amount of all advertising accounts receivable which are outstanding more than 60 but fewer than 91 days from the invoice date, and (iv) 50% of the face amount of all advertising accounts receivable which are outstanding more than 90
but fewer than 121 days from the invoice date. Neither AT&T Broadband nor Insight will receive credit for advertising accounts receivable which are outstanding more than 120 days from the invoice date. Notwithstanding the foregoing, each of
AT&T Broadband and Insight will receive credit for 100% of
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the face amount of their advertising accounts receivable from national and regional representation accounts, regardless
of the age thereof.
(f) Any amounts paid, or accrued as a current
liability, prior to the Closing Time by AT&T Broadband or its Affiliates with respect to retroactive franchise fees in respect of the AT&T Systems or by Insight or its Affiliates with respect to retroactive franchise fees in respect of
Insight’s Systems will be credited to the account of AT&T Broadband or Insight, as applicable, in their full amounts to the extent that (i) such amounts can legally be passed through to and collected from subscribers of the AT&T Systems
or the Insight Systems after Closing, and (ii) no agreement has been entered into prohibiting the collection of such amounts, with such amounts with respect to the AT&T Systems being assets of Insight upon collection and such amounts with
respect to the Insight Systems being assets of AT&T Broadband upon collection.
(g) Insight shall receive a credit at Closing equal to the amount by which the out-of-pocket costs Insight incurs through the Closing Date to perform the rebuild and upgrade of the Insight Systems in accordance
with Section 7.25 (the “Upgrade”) exceeds $7,100,000. AT&T Broadband shall receive a credit equal to the amount by which the out-of-pocket costs Insight incurs through the Closing Date to perform the Upgrade is less than $7,100,000.
Insight shall also receive a credit at Closing in an amount equal to 50% of any penalties or other monetary damages incurred by Insight pursuant to the Insight System Franchises that result directly from the failure of Insight to upgrade or rebuild
the Insight System in accordance with the Insight System Franchises or of amounts that Insight agrees to pay to a local franchising authority in connection with obtaining an extension of its upgrade or rebuild obligations in the Insight System
Franchises; provided that Insight shall obtain AT&T Broadband’s prior approval with respect to any such extension agreement that contemplates any payment by the franchisee or imposes any additional obligations on the franchisee, such
approval not to be unreasonably withheld (the “Franchise Penalties”). The remaining 50% of the Franchise Penalties shall be the sole responsibility of Insight. If this Agreement is terminated, the provisions in Section 7.25 will govern the
reimbursement obligations of the parties.
(h) The adjustments provided for
in this Section 3.2 will be made without duplication. In addition, none of the adjustments provided for in this Section 3.2 will be made with respect to any Excluded Asset or with respect to any item of income or expense related to an Excluded
Asset.
(i) The net amount of the adjustments calculated under this Section
3.2 (the “Adjustment Amount”), as preliminarily determined pursuant to Section 3.3, shall be paid by AT&T Broadband or Insight, as applicable, to the other party at the Closing by wire transfer of immediately available funds; provided
that if AT&T Broadband is required to make payment to Insight under this Section 3.2, then such payment shall be made by Insight reducing the Cash Consideration payable to AT&T Broadband at Closing by a corresponding amount.
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3.3 Calculation of Adjustments.
(a) Insight will estimate in good faith with respect to its Systems and the AT&T Systems, and set forth, together with a detailed
statement of the calculation thereof, the adjustments and prorations with respect to its Cable Business and the AT&T Cable Business prescribed by Section 3.2 (the “Pro Rata Adjustments”), in separate certificates for its Systems and
Cable Business and the AT&T Systems and the AT&T Cable Business (the “Initial Adjustment Certificates”) executed by an authorized representative of Insight and delivered to AT&T Broadband at least 10 Business Days prior to the
Closing. Each Initial Adjustment Certificate will be accompanied by appropriate supporting documentation, including an accounts receivable detail with relevant aging information as of the Closing Time, in summary form, supporting the determination
of the Pro Rata Adjustments proposed in such certificate. Following receipt of such Initial Adjustment Certificates, AT&T Broadband shall have 10 Business Days to review such schedules and supporting information and to notify Insight of any
disagreements with Insight’s estimates of the Pro Rata Adjustments. If AT&T Broadband provides a notice of disagreement with Insight’s estimates of such amounts within such 10 Business Day period, AT&T Broadband and Insight shall
negotiate in good faith to resolve any such dispute and to reach an agreement prior to the Closing on such estimated amounts as of the Closing Time. The estimates so agreed upon by AT&T Broadband and Insight or (if the parties do not reach such
an agreement on such estimated amounts set forth in the Initial Adjustments Certificates prior to the Closing Date or if AT&T Broadband fails to provide a notice of disagreement with Insight’s estimates of such amounts within the time
provided) the estimates of the Pro Rata Adjustments set forth in the Initial Adjustments Certificates shall be the basis for determining the preliminary Adjustment Amount payable pursuant to Section 3.2. All disagreements that may exist with respect
to the Initial Adjustment Certificates shall be resolved in connection with the preparation of the Final Adjustment Certificates pursuant to paragraph (b) below.
(b) Within 90 days after the Closing, Insight will deliver to AT&T Broadband separate certificates (the “Final Adjustment
Certificates”) showing in full detail its final determination of the Pro Rata Adjustments with respect to its Systems and the AT&T Systems, which certificate will be accompanied by appropriate documentation supporting the amounts proposed
in such certificate, including an accounts receivable detail with relevant aging information as of the Closing Time, and which will be executed by an officer of Insight. AT&T Broadband will review Insight’s Final Adjustment Certificates and
will give written notice to Insight of any objections it has to the calculations shown in such certificate within 30 days after its receipt thereof. AT&T Broadband and Insight will endeavor in good faith to resolve any such objections within 30
days after the receipt by Insight of AT&T Broadband’s objections. If any objections or disputes have not been resolved at the end of such 30-day period, the disputed portions of the Pro Rata Adjustments will be determined within the
following 30 days by a partner in a major accounting firm with substantial cable television audit experience which is not the auditor of either Insight or AT&T Broadband (or any Affiliate of either of them) and the determination of such auditor
will be final and will be binding upon all parties. If Insight and AT&T Broadband cannot agree with respect to the selection of an auditor, Insight and AT&T Broadband will each select an auditor and those two auditors will select a third
auditor whose determination will be final and will be binding upon all
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parties. Insight and AT&T Broadband will bear equally the expenses arising in connection with an auditor’s
determination of disputed amounts, and payment of the final Adjustment Amount (after taking into account any estimated Adjustment Amount paid at the Closing) will be made by the party responsible therefor to the other party in immediately available
funds within 15 Business Days after the final determination is made.
(c) Insight will provide AT&T Broadband reasonable access to all records in its possession which were used in the preparation of the Initial Adjustment Certificates and Final Adjustment Certificates.
AT&T Broadband will provide Insight reasonable access to all records in its possession, following the Closing, relating to the Systems as may be necessary in the preparation of the Final Adjustment Certificates.
3.4 Employee Expenses. The employees of the AT&T Systems are currently employed by Insight
but the expenses of such employees are paid by AT&T Broadband to the extent specified in the Consulting Agreement. To the extent that AT&T Broadband incurs any employee expenses with respect to the AT&T Systems that relate to the period
after the Closing Time, Insight shall reimburse AT&T Broadband for such expenses at the Closing (with any follow-up adjustment to be made within 90 days following Closing) to reflect the principle that AT&T Broadband is only responsible for
employee expenses relating to the AT&T Systems for the period through and including the Closing Time, subject to the terms of the Consulting Agreement. To the extent that Insight incurs any employee expenses with respect to the AT&T Systems
that relate to the period prior to the Closing Time and for which AT&T Broadband is responsible pursuant to the Consulting Agreement, AT&T Broadband shall reimburse Insight for such expenses at the Closing (with any follow-up adjustment to
be made within 90 days following Closing) to reflect the principle that Insight is only responsible for employee expenses relating to the AT&T Systems for the period after the Closing Time.
SECTION 4. ASSUMED LIABILITIES AND EXCLUDED ASSETS
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4.1 AT&T Assumed Obligations and Liabilities. As of the Closing, AT&T
Broadband will assume and after the Closing, AT&T Broadband will pay, discharge and perform the following (the “AT&T Assumed Obligations and Liabilities”): (a) those obligations and liabilities accruing and relating to periods
after the Closing Time under or with respect to the Insight Assets assigned and transferred to AT&T Broadband at the Closing; (b) those obligations and liabilities of Insight to customers of Insight’s Cable Business for (i) subscriber
deposits related to the Insight Systems held by Insight as of the Closing Time in the amount for which AT&T Broadband received credit under Section 3.2 and (ii) customer, advertising and other advance payments held by Insight as of the Closing
Time in the amount for which AT&T Broadband received credit under Section 3.2; (c) all obligations and liabilities accruing and relating to Insight’s Cable Business prior to the Closing Time in respect of which AT&T Broadband received a
credit pursuant to Section 3.2; and (d) all other obligations and liabilities accruing and relating to periods after the Closing Time and arising out of the ownership of the Insight Assets or the operation of the Insight Systems after the Closing
Time, except to the extent that such obligations or liabilities relate to any Insight Excluded Asset. All obligations and liabilities, contingent, fixed or otherwise, arising out of or relating to the Insight Assets or the Insight Systems other than
the AT&T Assumed Obligations and Liabilities will remain and be the obligations and liabilities solely of Insight including any obligation, liability or claim relating to or arising pursuant to (x) rate refunds to subscribers of the Insight
Systems with respect to rates charged to such subscribers during periods through and including the Closing Time, (y) litigation commenced prior to, or related to an event occurring at any time prior to the Closing Time, or (z) any Insight Excluded
Asset.
4.2 AT&T Excluded Assets. “AT&T Excluded
Assets” means all: (a) programming (including music programming and cable guide Contracts) and retransmission consent Contracts of AT&T Broadband other than those listed on Schedule 1.10 (AT&T System Contracts), it being agreed
that leased channel access agreements are not programming agreements for purposes of this Section 4.2; (b) each employee benefit plan (as defined in Section 3(3) of ERISA) or any multiemployer plan (as defined in Section 3(37) of ERISA) which is
sponsored or maintained by AT&T Broadband or its Affiliates or to which AT&T Broadband or its Affiliates contributes and which benefits AT&T Broadband employees (“AT&T Plans”) and any cash, reserve, trust or funding
arrangement held or set aside for the payment of benefits to employees of AT&T Broadband or any of its Affiliates; (c) insurance policies of AT&T Broadband and rights and claims thereunder (except as otherwise provided in Section 12.16); (d)
bonds, letters of credit, surety instruments and other similar items and any stocks, bonds, certificates of deposit and similar investments of AT&T Broadband; (e) cash and cash equivalents and notes receivable of AT&T Broadband; (f) AT&T
Broadband’s trademarks, trade names, service marks, service names, logos and similar proprietary rights, subject to Section 7.11; (g) subscriber billing Contracts and related leased equipment and software of AT&T Broadband; (h) all
contracts and related accounts receivable for providing DMX service to commercial accounts via direct broadcast satellite; (i) all AT&T Contracts relating to national advertising sales representation, including any Contracts with National Cable
Communications or Cable Networks, Inc.; (j) all agreements pursuant to which AT&T Broadband has created, incurred, assumed or guaranteed indebtedness for borrowed money or under which any Lien securing such indebtedness has been or may be
imposed on any AT&T Asset; (k) any claims,
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rights or choses in action of AT&T Broadband related to the period prior to the Closing Time (other than customer and advertising accounts
receivable), including, without limitation, any Litigation and the proceeds thereof and any claims, rights and interest in and to any refunds of federal, state or local franchise, income or other taxes or payments of any nature for the periods prior
to the Closing Time, including copyright fees; (l) any books and records that AT&T Broadband is required by any Legal Requirement to retain and any books of account, tax reports and returns and the like related to the AT&T Systems; provided
that copies of such books and records will be made available to Insight for a period of three years (and six years in the case of tax reports and returns and underlying books and records, although in the case of underlying books and records, the
parties acknowledge that they are not retained for periods for which an IRS field examination has been completed) from the Closing Date upon reasonable request; (m) AT&T Broadband’s corporate minute books and other books and records related
to internal corporate matters and financial relationships with AT&T Broadband’s lenders and affiliates; (n) any employment, union, collective bargaining, compensation, bonus, deferred compensation, consulting, agency or management
agreements of AT&T Broadband; (o) all documents, reports and records relating to the employees of the AT&T Systems that are employed by AT&T Broadband or its Affiliates; provided that copies of such books and records will be made
available to Insight for a period of three years from the Closing Date upon reasonable request by Insight accompanied by a waiver and release from the employee whose records are sought in form and substance reasonably satisfactory to AT&T
Broadband; (p) any agreement, right, asset or property owned, leased or held by AT&T Broadband that is not used or held for use in connection with the operation of the AT&T Systems; (q) AT&T Broadband’s or its Affiliates’
rights under the @Home Distribution Agreement (as defined in the Limited Partnership Agreement of the Partnership), it being agreed that the parties’ rights and obligations with respect thereto shall be as specified in the Limited Partnership
Agreement of the Partnership; and (r) rights, assets and properties described on Schedule 4.2.
4.3 Insight Assumed Obligations and Liabilities. As of the Closing, Insight will assume and after the Closing, Insight will pay, discharge and perform the following (the “Insight Assumed
Obligations and Liabilities”): (a) those obligations and liabilities accruing and relating to periods after the Closing Time under or with respect to the AT&T Assets assigned and transferred to Insight at the Closing; (b) those obligations
and liabilities of AT&T Broadband to customers of AT&T’s Cable Business for (i) subscriber deposits related to the AT&T Systems held by AT&T Broadband as of the Closing Time in the amount for which Insight received credit under
Section 3.2 and (ii) customer, advertising and other advance payments held by AT&T Broadband as of the Closing Time in the amount for which Insight received credit under Section 3.2; (c) all obligations and liabilities accruing and relating to
AT&T’s Cable Business prior to the Closing Time in respect of which Insight received a credit pursuant to Section 3.2; and (d) all other obligations and liabilities accruing and relating to periods after the Closing Time and arising out of
the ownership of the AT&T Assets or operation of the AT&T Systems after the Closing Time, except to the extent that such obligations or liabilities relate to any AT&T Excluded Asset. All obligations and liabilities, contingent, fixed or
otherwise, arising out of or relating to the AT&T Assets or the AT&T Systems other than the Insight Assumed Obligations and Liabilities will remain and be the obligations and liabilities solely of AT&T Broadband including any obligation,
liability or claim relating to or arising
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pursuant to (x) rate refunds to subscribers of the AT&T Systems with respect to rates charged to such subscribers during periods through and
including the Closing Time, (y) litigation commenced prior to, or related to an event occurring at any time prior to the Closing Time, or (z) any AT&T Excluded Asset.
4.4 Insight Excluded Assets. “Insight Excluded Assets” means all: (a) programming (including music programming and cable
guide Contracts) and retransmission consent Contracts of Insight other than those listed on Schedule 1.41 (Insight System Contracts), it being agreed that leased channel access agreements are not programming agreements for purposes of this
Section 4.4; (b) Insight Plans and any cash, reserve, trust or funding arrangement held or set aside for the payment of benefits to employees of Insight or any of its Affiliates; (c) insurance policies of Insight and rights and claims thereunder
(except as otherwise provided in Section 12.16); (d) bonds, letters of credit, surety instruments and other similar items and any stocks, bonds, certificates of deposit and similar investments of Insight; (e) cash and cash equivalents and notes
receivable of Insight; (f) Insight’s trademarks, trade names, service marks, service names, logos and similar proprietary rights, subject to Section 7.11; (g) subscriber billing Contracts and related leased equipment and software of Insight,
subject to Section 7.12; (h) all Insight Contracts relating to national advertising sales representation; (i) all agreements pursuant to which Insight has created, incurred, assumed or guaranteed indebtedness for borrowed money or under which any
Lien securing such indebtedness has been or may be imposed on any Insight Asset; (j) any claims, rights or choses in action of Insight related to the period prior to the Closing Time (other than customer and advertising accounts receivable),
including, without limitation, any Litigation and the proceeds thereof and any claims, rights and interest in and to any refunds of federal, state or local franchise, income or other taxes or payments of any nature for the periods prior to the
Closing Time, including copyright fees; (k) any books and records that Insight is required by any Legal Requirement to retain and any books of account, tax reports and returns and the like related to the Insight Systems; provided that copies of such
books and records will be made available to AT&T Broadband for a period of three years (and six years in the case of tax reports and returns and underlying books and records, although in the case of underlying books and records, the parties
acknowledge that they are not retained for periods for which an IRS field examination has been completed) from the Closing Date upon reasonable request; (l) Insight’s limited liability company record books and other books and records related to
internal limited liability company matters and financial relationships with Insight’s lenders and affiliates; (m) any employment, union, collective bargaining, compensation, bonus, deferred compensation, consulting, agency or management
agreements of Insight; (n) all documents, reports and records relating to the employees of the Insight Systems that are employed by Insight or its Affiliates; provided that copies of such books and records will be made available to AT&T
Broadband for a period of three years from the Closing Date upon reasonable request by AT&T Broadband accompanied by a waiver and release from the employee whose records are sought in form and substance reasonably satisfactory to Insight; (o)
any agreement, right, asset or property owned, leased or held by Insight that is not used or held for use in connection with the operation of the Insight Systems; (p) the @ Home Network Distribution Agreement dated May 1, 1998 between @ Home
Corporation and Insight LP; and (q) rights, assets and properties described on Schedule 4.4.
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SECTION 5. INSIGHT’S REPRESENTATIONS AND WARRANTIES
Insight represents and warrants to AT&T Broadband as of the date of this Agreement (or, if a different date is specified in this Section 5 or in Insight’s
Schedules, as of such specified date) as follows:
5.1 Organization and Qualification of
Insight. Insight is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to own, lease and use
the Insight Assets and to conduct Insight’s Cable Business as it is currently conducted. Insight is duly qualified to do business and is in good standing under the laws of each jurisdiction in which the ownership, leasing or use of the Insight
Assets or the nature of its activities in connection with the Insight Systems makes such qualification necessary, except in any such jurisdiction where the failure to be so qualified and in good standing would not have a material adverse effect on
the ownership or operation of Insight’s Cable Business, the Insight Assets or Insight Systems or on the ability of Insight to perform its obligations under this Agreement.
5.2 Authority and Validity. Insight has all requisite limited liability company power and authority to execute and deliver, to
perform its obligations under, and to consummate the transactions contemplated by, this Agreement and the Transaction Documents to which Insight is a party. The execution and delivery by Insight, the performance by Insight under, and the
consummation by Insight of the transactions contemplated by, this Agreement and the Transaction Documents to which Insight is a party have been duly and validly authorized by all required limited liability company action by or on behalf of Insight.
This Agreement has been, and when executed and delivered by Insight the Transaction Documents will be, duly and validly executed and delivered by Insight and the valid and binding obligations of Insight, enforceable against Insight in accordance
with their terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to the enforcement of creditors’ rights generally or by principles
governing the availability of equitable remedies.
5.3 No Conflict; Required
Consents. Except for, and subject to receipt of, the Insight Required Consents, all of which are listed on Schedule 5.3, the AT&T Required Consents, and the other Required Consents, and the notification and expiration or
earlier termination of the waiting period under the HSR Act, the execution and delivery by Insight, the performance of Insight under, and the consummation of the transactions contemplated by, this Agreement and the Transaction Documents to which
Insight is a party do not and will not: (a) conflict with or violate any provision of its operating agreement or certificate of formation; (b) violate any provision of any Legal Requirement; (c) require any consent, approval or authorization of, or
filing of any certificate, notice, application, report or other document with, any Governmental Authority or other Person; or (d) (i) conflict with, violate, result in a breach of or constitute a default under (without regard to requirements of
notice, lapse of time or elections of other Persons or any combination thereof), (ii) permit or result in the termination, suspension or modification of, (iii) result in the acceleration of (or give any Person the right to accelerate) the
performance of Insight under, (iv) result in the creation or
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imposition of any Lien under any Insight System Franchise, Insight System License or any Insight System Contract or other instrument evidencing
any of the Insight Assets or by which Insight or its Affiliates or any of their respective assets is bound or affected, except for purposes of clauses (c) and (d) such consents, approvals, authorizations and filings that, if not obtained or made,
would not, and such violations, conflicts, breaches, defaults, terminations, suspensions, modifications and accelerations as would not, individually or in the aggregate, have a material adverse effect on any Insight System, Insight’s Cable
Business or on the ability of Insight to perform its obligations under this Agreement or the Transaction Documents to which Insight is a party.
5.4 Assets.
(a) Insight has good and valid title to (or, in the case of Assets that are leased, valid leasehold interests in) the Insight Assets (other than Insight Owned Real Property, Insight Leased Property and Insight
Other Real Property Interests, as to which the representations and warranties in Section 5.6 apply). The Insight Assets are free and clear of all Liens, except (i) Permitted Liens and (ii) Liens described on Schedule 5.4, all of which Liens
on Schedule 5.4 will be terminated, released or, in the case of the rights of first refusal listed on Schedule 5.4, waived, as appropriate, at or prior to the Closing. The Insight Tangible Personal Property is in good operating
condition and repair (ordinary wear and tear excepted).
(b) Except for
items included in the Insight Excluded Assets, the Insight Assets constitute all the assets necessary to permit AT&T Broadband to conduct Insight’s Cable Business and to operate the Insight Systems substantially as they are being conducted
and operated on the date of this Agreement and in compliance in all material respects with all applicable Legal Requirements, Insight System Contracts, Insight System Licenses and Insight System Franchises and to perform all of the AT&T Assumed
Obligations and Liabilities.
(c) Except as described on Schedule
5.4, as of the date of this Agreement, (i) the Insight Systems do not offer telephony, high speed data or internet access services and (ii) the Insight Systems do not have any digital transport arrangement (e.g., HITS).
5.5 Insight System Franchises, Insight System Licenses, Insight System Contracts and Insight Other Real Property
Interests.
(a) Except pursuant to the agreements referenced on
Schedules 1.36 (Insight Leased Property), 1.38 (Insight Other Real Property Interests), 1.41 (Insight System Contracts), 1.42 (Insight System Franchises) and 1.43 (Insight System Licenses), or as described on
Schedule 4.4 (Insight Excluded Assets) or otherwise included in the definition of Insight Excluded Assets, as of the date of this Agreement, Insight is not bound or affected by any of the following that relate primarily or in whole to
Insight’s Cable Business: (i) leases of real or personal property; (ii) franchises for the construction or operation of cable television systems or Contracts of substantially equivalent effect; (iii) other licenses, authorizations, consents or
permits of the FCC or any other Governmental Authority; (iv) material easements, rights of access, underground conduit
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agreements, crossing agreements or other interests in real property; (v) pole line or attachment agreements; (vi)
agreements pursuant to which the Insight Systems receive or provide advertising sales representation services; (vii) agreements pursuant to which an Insight System has constructed or agreed to construct for Third Parties or any Affiliate of Insight,
an institutional network or otherwise provides to Third Parties or any Affiliate of Insight, telecommunications services other than one-way video; (viii) agreements pursuant to which any bandwidth capacity of the Insight Systems is leased or
otherwise made available to any Third Party or any Affiliate of Insight; (ix) construction and development agreements (other than installation agreements where services are provided in the ordinary course of business on an as-needed basis); or (x)
Contracts relating to the operation of Insight’s Cable Business other than those described in any other clause of this Section which contemplate payments by or to Insight in any 12-month period exceeding $25,000 individually or $150,000 in the
aggregate or that have a remaining term of two years or more as of the Closing Date; provided that multiple dwelling unit agreements, including bulk billed agreements and commercial service agreements, are not required to be listed. Except as
described on the Schedules to this Agreement, no Affiliate of Insight is a party to any documents listed on such Schedules.
(b) Complete and correct copies of the Insight System Franchises and Insight System Licenses have been delivered by Insight to AT&T Broadband. Except as set forth on
Schedule 1.42 (Insight System Franchises), the Insight System Franchises contain all of the commitments and obligations of Insight to the applicable Governmental Authority granting such Franchises with respect to the construction, ownership
and operation of the Insight Systems. The Insight System Franchises and Insight System Licenses are currently in full force and effect and are valid and enforceable under all applicable Legal Requirements according to their terms. There is no legal
action, governmental proceeding or, to Insight’s Knowledge, investigation, pending or to Insight’s Knowledge threatened, to terminate, suspend or modify any Insight System Franchise or any Insight System License and, except as set forth on
Schedule 1.42 (Insight System Franchises), Insight is in material compliance with the terms and conditions of all the Insight System Franchises and Insight System Licenses and with other applicable requirements of all Governmental Authorities
(including the FCC and the Register of Copyrights) relating to the Insight System Franchises and Insight System Licenses, including all requirements for notification, filing, reporting, posting and maintenance of logs and records. All areas served
by the Insight Systems are served pursuant to one of the Insight System Franchises except as set forth on Schedule 1.42 (Insight System Franchises).
(c) Complete and correct copies of all Insight System Contracts required to be listed on Insight’s Schedules (including all
Contracts relating to Leased Property and Other Real Property Interests described on Schedule 1.38) have been provided to AT&T Broadband. Such documents constitute the entire agreement with the other party. Each such Insight System
Contract is in full force and effect and constitutes the valid, legal, binding and enforceable obligation of Insight and Insight is not and to Insight’s Knowledge, each other party thereto is not in breach or default of any material terms or
conditions thereunder. Insight has also provided to AT&T Broadband a complete and correct list of all bulk-billed accounts and commercial service accounts of the Insight Systems as of the date of this Agreement.
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5.6 Real Property. As of the date of this Agreement, all Insight Assets
consisting of Insight Owned Property, Insight Leased Property and material Insight Other Real Property Interests are described on Schedules 1.36 (Insight Leased Property), 1.38 (Insight Other Real Property Interests) and 1.39
(Insight Owned Property). Except as otherwise disclosed on Schedule 1.39 (Insight Owned Property), Insight holds title to the Insight Owned Property free and clear of all Liens except (a) Permitted Liens and (b) Liens described on
Schedule 5.4, all of which Liens on Schedule 5.4 will be terminated, released or, in the case of the rights of first refusal listed on Schedule 5.4, waived, as appropriate, at or prior to the Closing, and has the valid and
enforceable right to use and possess such Insight Owned Property, subject only to the above-referenced Liens. Except as otherwise disclosed on Schedules 1.36 (Insight Leased Property) and 1.38 (Insight Other Real Property Interests),
Insight has valid and enforceable leasehold interests in all Insight Leased Property and, with respect to Insight Other Real Property Interests, has valid and enforceable rights to use such Insight Other Real Property Interests, subject only to the
above-referenced Liens. Except for ordinary wear and tear and routine repairs and except as disclosed on Schedules 1.36 (Insight Leased Property) or 1.39 (Insight Owned Property), all of the material improvements, leasehold
improvements and the premises of the Insight Owned Property and the premises demised under the leases and other documents evidencing the Insight Leased Property are in good condition and repair and are suitable for the purposes used. Except as
disclosed on Schedules 1.36 (Insight Leased Property) or 1.39 (Insight Owned Property), each parcel of Insight Owned Property and each parcel of Insight Leased Property and any improvements thereon and their current use (x) has access
to and over public streets or private streets for which Insight has a valid right of ingress and egress, (y) conforms in its current use and occupancy to all material zoning requirements without reliance upon a variance issued by a Governmental
Authority or a classification of the parcel in question as a nonconforming use and (z) conforms in its current use to all restrictive covenants, if any, or other Liens affecting all or part of such parcel. Except where the failure of the
representations made in this sentence to be true and correct would not have a material adverse effect on the Insight Assets or Insight’s Cable Business and except as disclosed on Schedules 1.36 (Insight Leased Property) or 1.39
(Insight Owned Property), all buildings, towers, guy wires and anchors, headend equipment, earth-receiving dishes and related facilities used in the operations of the Insight Systems are located entirely on Insight Owned Property or Insight Leased
Property or other real property in which Insight has an Insight Other Real Property Interest and are maintained, placed and located in accordance with the provisions of all applicable Legal Requirements, deeds, leases, licenses, permits or other
legally enforceable arrangements.
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5.7 Environmental.
(a) To Insight’s Knowledge, except as disclosed on Schedule 5.7, the Insight Owned Property and Insight Leased Property
comply in all material respects with and have previously been operated in compliance in all material respects with all Environmental Laws. Insight has not, either directly or indirectly (i) generated, stored, used, treated, handled, discharged,
released or disposed of any Hazardous Substances at, on, under, in or about, to or from or in any other manner affecting, any Insight Owned Property or Insight Leased Property, (ii) transported any Hazardous Substances to or from any Insight Owned
Property or Insight Leased Property or (iii) undertaken or caused to be undertaken any other activities relating to the Insight Owned Property or Insight Leased Property, which could reasonably give rise to any liability under any Environmental Law
and, to Insight’s Knowledge, no other present or previous owner, tenant, occupant or user of any Insight Owned Property or Insight Leased Property or any other Person has committed or suffered any of the foregoing. To Insight’s Knowledge,
no release of Hazardous Substances outside the Insight Owned Property or Insight Leased Property has entered or threatens to enter any Insight Owned Property or Insight Leased Property, nor is there any pending or threatened Litigation based on
Environmental Laws which arises from any condition of the land adjacent to or immediately surrounding any Insight Owned Property or Insight Leased Property. No Litigation based on Environmental Laws which relates to any Insight Owned Property or
Insight Leased Property or any operations or conditions on it (1) has been asserted or conducted in the past with respect to, or is currently pending against, Insight or, to Insight’s Knowledge, any other Person or (2) to Insight’s
Knowledge, is threatened or contemplated.
(b) To Insight’s Knowledge,
except as disclosed on Schedule 5.7, (i) no aboveground or underground storage tanks are currently or have been located on any Insight Owned Property or Insight Leased Property, (ii) no Insight Owned Property or Insight Leased Property has
been used at any time as a gasoline service station or any other facility for storing, pumping, dispensing or producing gasoline or any other petroleum products or wastes and (iii) no building or other structure on any Insight Owned Property or
Insight Leased Property contains asbestos, asbestos-containing material or material presumed to be asbestos-containing material under any Environmental Law.
(c) Insight has provided AT&T Broadband with complete and correct copies of (i) all studies, reports, surveys or other written
materials in Insight’s possession relating to the presence or alleged presence of Hazardous Substances at, on, under or affecting the Insight Owned Property or Insight Leased Property, (ii) all notices (other than general notices made by
general publication) or other materials in Insight’s possession that were received from any Governmental Authority having the power to administer or enforce any Environmental Laws relating to current or past ownership, use or operation of the
Insight Owned Property or Insight Leased Property or activities at the Insight Owned Property or Insight Leased Property and (iii) all materials in Insight’s possession relating to any Litigation or allegation by any private third party
concerning any Environmental Law.
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5.8 Compliance with Legal Requirements.
(a) The ownership, leasing and use of the Insight Assets as they are currently owned, leased and
used and the conduct of Insight’s Cable Business and the operation of the Insight Systems as they are currently conducted and operated do not violate or infringe in any material respect any Legal Requirements currently in effect (other than
Legal Requirements described in Sections 5.7, 5.8(d) and 5.13, as to which the representations and warranties set forth in those subsections shall apply), including (i) the Communications Act, (ii) Section 111 of the U.S. Copyright Act of 1976, and
the U.S. Copyright Office rules and regulations promulgated thereunder (the “Copyright Act”) and (iii) all other applicable Legal Requirements relating to the construction, maintenance, ownership and operation of the Insight Assets, the
Insight Systems and Insight’s Cable Business. Insight has received no written notice of any violation by Insight or Insight’s Cable Business of any Legal Requirement applicable to the operation of Insight’s Cable Business as currently
conducted, or the Insight Systems as currently operated and to Insight’s Knowledge, there is no existing fact, circumstance or condition that could reasonably form the basis for a finding by any Governmental Authority of any such violation.
(b) Except as set forth in Schedule 5.8, a valid request for
renewal has been duly and timely filed under Section 626 of the Communications Act with the proper Governmental Authority with respect to all Insight System Franchises that have expired prior to or will expire within 36 months after the date of this
Agreement.
(c) Except as set forth
in Schedule 5.8, (i) no written notices or demands have been received from the FCC, from any television station, or from any other Person or Governmental Authority (1) challenging the right of the Insight Systems to carry any television
broadcast station or deliver the same or (2) claiming that any Insight System has failed to carry a television broadcast station required to be carried pursuant to the Communications Act or has failed to carry a television broadcast station on a
channel designated by such station consistent with the requirements of the Communications Act; (ii) all necessary Federal Aviation Administration (“FAA”) approvals have been obtained with respect to the height and location of towers used
in connection with the operation of the Insight Systems and such towers are being operated in compliance in all material respects with applicable FCC and FAA rules; and (iii) Insight has received no written notice from any Governmental Authority
with respect to an intention to enforce customer service standards pursuant to the 1992 Cable Act and Insight has not agreed with any Governmental Authority to establish customer service standards that exceed the FCC standards promulgated pursuant
to the 1992 Cable Act except as set forth in the Insight System Franchises.
(d) Notwithstanding the foregoing, to Insight’s Knowledge, each Insight System is in compliance in all material respects with the provisions of the 1992 Cable Act as such Legal Requirements relate to the
rates and other fees charged to subscribers of Insight’s Cable Business. Insight has used reasonable good faith efforts to establish rates charged to subscribers, effective since September 1, 1993, that are or were allowable under the 1992
Cable Act and any authoritative interpretation thereof now or then in effect, to the extent such rates are or were subject to regulation
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at such time by any Governmental Authority, including any local franchising authority and/or the FCC. Notwithstanding the foregoing, Insight
makes no representation or warranty that any of its rates that are not subject to rate regulation would be allowable if such rates were subject to regulation and makes no representation or warranty that the rates charged to subscribers would be
allowable under any rules and regulations of the FCC or any authoritative interpretation thereof, promulgated after the Closing Date. Insight has delivered to AT&T Broadband complete and correct copies of all FCC Forms and other information
reasonably requested by AT&T Broadband relating to rate regulation generally or specific rates charged to subscribers with respect to the Insight Systems. Insight has not entered into and, to Insight’s Knowledge, is not subject to any
so-called social contract or proposed resolution with the FCC with respect to rates charged for cable television services in the Insight Systems and is not currently negotiating or anticipating entering into or being subject to the same. Except as
set forth on Schedule 5.8, Insight has not made any election with respect to any cost of service proceeding conducted in accordance with Part 76.922 of Title 47 of the Code of Federal Regulations or any similar proceeding with respect to any
of the Insight Systems (a “Cost of Service Election”). Except as otherwise described on Schedule 5.8, as of the date of this Agreement, (i) to the Knowledge of Insight, there are no outstanding or unresolved proceedings or
investigations (other than those affecting the cable industry generally) dealing with or otherwise affecting the rates that any cable television system included in the Insight Systems can charge (whether for programming, equipment, installation,
service or otherwise), (ii) no cable television system included in the Insight Systems is subject to any currently effective order issued by a Governmental Authority that reduced the rates that it may charge (whether for programming, equipment,
installation, service, or otherwise), (iii) no local franchising authority has been certified by the FCC as a rate regulating authority with respect to any of the Insight Systems and (iv) there is no unresolved complaint pending with respect to the
CPST tier (as defined by the FCC) of any Insight System and no rate order with respect to the Insight Systems that is being appealed.
5.9 Patents, Trademarks and Copyrights. Insight has deposited with the U.S. Copyright Office all statements of account and other documents and instruments, and has paid all royalties,
supplemental royalties, fees and other sums to the U.S. Copyright Office under the Copyright Act with respect to the business and operations of the Insight Systems as are required to obtain, hold and maintain the compulsory license for cable
television systems prescribed in Section 111 of the Copyright Act. To Insight’s Knowledge, there is no inquiry, claim, action or demand pending before the U.S. Copyright Office or from any other Person which questions the copyright filings or
payments made by Insight with respect to the Insight Systems. Insight has delivered to AT&T Broadband complete and correct copies of all current reports and filings for the past three years, made or filed pursuant to copyright rules and
regulations with respect to Insight’s Cable Business. Insight does not possess any patent, patent right, trademark or copyright related to or material to the operation of the Insight Systems and Insight is not a party to any license or royalty
agreement with respect to any such patent, patent right, trademark or copyright, except for licenses respecting program material and obligations under the Copyright Act applicable to cable television systems generally. The Insight Systems and
Insight’s Cable Business have been operated in such a manner so as not to violate or infringe upon the rights, or give rise to any rightful claim of any Person for copyright, trademark, service ▇▇▇▇, patent or license infringement or the like.
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5.10 Financial Statements; Undisclosed Liabilities; Absence of Certain Changes or
Events. Insight has delivered to AT&T Broadband complete and correct copies of an unaudited statement of assets and liabilities for each Insight System as of March 31, 2002 and an unaudited income and expense summary statement for
each Insight System for the year ended December 31, 2001 and the three-month period ended March 31, 2002, including all notes and schedules thereto, if any (all of such financial statements and notes being hereinafter referred to as
“Insight’s Financial Statements”). Insight’s Financial Statements are in accordance with the books and records of Insight, were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered
thereby, and, except as may be described therein, present fairly the financial condition of the Insight Systems at the dates and for the periods indicated, subject only to standard year-end adjustments and the omission of footnotes. The unaudited
statements of assets and liabilities of the Insight Systems as of March 31, 2002 are herein called the “Insight Balance Sheet.” At the date of the Insight Balance Sheet, Insight had no material liabilities with respect to the Insight
Systems required by GAAP to be reflected or reserved against therein that were not fully reflected or reserved against on the Insight Balance Sheet, other than liabilities as set forth on Schedule 5.10. Except as set forth on Schedule
5.10, since the date of the Insight Balance Sheet through the date of this Agreement: (x) Insight has not incurred any obligation or liability (contingent or otherwise), except normal trade or business obligations incurred in the ordinary course
of business, the performance of which will not, to Insight’s Knowledge, individually or in the aggregate, have a material adverse effect on the financial condition of Insight or the results of operations of Insight’s Cable Business; (y)
there has been no material adverse change in the Insight Assets comprising any Insight System or in the business, condition, financial or otherwise, or liabilities of Insight’s Cable Business or any Insight System and, to Insight’s
Knowledge, no fact or condition exists or is contemplated or threatened which would result in such a change in the future; and (z) Insight’s Cable Business has been conducted only in the ordinary course of business consistent with past
practice. For the purpose of this Agreement, the impact of general economic conditions (including changes in capital and financial markets), governmental legislation and regulations and other events which affect the cable industry as a whole in the
State of Georgia or the United States, shall not be considered in determining whether there has been a material adverse change in the business, condition, financial or otherwise or liabilities of Insight’s Cable Business or any Insight System
or the Insight Assets.
5.11 Litigation. Except as set forth in
Schedule 5.11: (a) there is no Litigation pending or, to Insight’s Knowledge, threatened, and, to Insight’s Knowledge, there is no investigation pending or threatened, by or before any Governmental Authority or private arbitration
tribunal against Insight which, if adversely determined, would materially adversely affect the financial condition or operations of Insight’s Cable Business, Insight Systems, the Insight Assets or the ability of Insight to perform its
obligations under this Agreement, or which, if adversely determined, would result in the modification, revocation, termination, suspension or other limitation of any of the Insight System Franchises, Insight System Licenses, Insight System Contracts
or leases or other documents evidencing the Insight Leased Property or the Insight Other Real Property Interests; and (b) there is not in existence any Judgment requiring Insight to take any action of any kind with respect to the Insight Assets or
the operation of the Insight Systems, or to which Insight (with respect to the Insight
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Systems), the Insight Systems or the Insight Assets are subject or by which they are bound or affected.
5.12 Tax Returns; Other Reports. Insight has duly and timely filed in correct form all federal,
state, local and foreign Tax returns and other Tax reports required to be filed by Insight, and has timely paid all Taxes which have become due and payable, whether or not so shown on any such return or report, the failure of which to be filed or
paid could adversely affect or result in the imposition of a Lien upon the Insight Assets or that could impose on AT&T Broadband any transferee liability for any taxes, penalties or interest due or to become due from Insight, except such amounts
as are being contested diligently and in good faith and are not in the aggregate material. Except as set forth on Schedule 5.12, Insight has received no notice of, nor does Insight have any Knowledge of, any deficiency, assessment or audit,
or proposed deficiency, assessment or audit from any taxing Governmental Authority which could affect or result in the imposition of a Lien upon the Insight Assets.
5.13 Employment Matters.
(a) Schedule 5.13(a) contains a complete and correct list of the names and positions of all employees engaged by Insight or its Affiliates principally in connection with the Insight Systems as
of the date set forth on Schedule 5.13(a). Except to the extent that any noncompliance would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Insight Systems, Insight and its Affiliates
have, with respect to the Insight Systems, complied in all material respects with all applicable Legal Requirements relating to the employment of labor, including, the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq.
(“WARN”), ERISA, continuation coverage requirements with respect to group health plans and those relating to wages, hours, collective bargaining, unemployment insurance, worker’s compensation, equal employment opportunity, age, sex,
race and disability discrimination, occupational safety, immigration control and the payment and withholding of Taxes. Except as set forth in Schedule 5.13(a), to Insight’s Knowledge, there are no current or threatened investigations
relating to the classification of independent contractors engaged by Insight or its Affiliates principally in connection with the Insight Systems.
(b) For purposes of this Agreement, “Insight Plans” means each employee benefit plan (as defined in Section 3(3) of ERISA) or any multi-employer plan (as defined in
Section 3(37) of ERISA) which is sponsored or maintained by Insight or its Affiliates or to which Insight or its Affiliates contributes, and which benefits Insight employees. The Insight Plans in which any employee of the Insight Systems
participates are set forth on Schedule 5.13. Except to the extent that any violation would not reasonably be expected to have a material adverse effect on the Insight Systems, none of Insight, none of its ERISA Affiliates, and none of the
Insight Plans other than a multiemployer plan (as defined in Section 3(37) of ERISA), or to the Knowledge of Insight or any of its ERISA Affiliates, any Insight Plan that is a multiemployer plan (as defined in Section 3(37) of ERISA), is in material
violation of any provision of the Code or ERISA. Each Insight Plan which is intended to qualify under Section 401(a) of the Code is the subject of a favorable determination
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letter, and each such Insight Plan has been operated in material compliance with all applicable requirements under the Code. No material
“reportable event” (described in Sections 4043(c)(1), (2), (3), (5), (6), (7), (10) and (13) of ERISA), non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code), “accumulated
funding deficiency” (as defined in Section 302 of ERISA), or “withdrawal liability” (as determined under Section 4201 et seq. of ERISA) has occurred or exists and is continuing with respect to any Insight Plan other than a
multiemployer plan (as defined in Section 3(37) of ERISA), or to the Knowledge of Insight, any Insight Plan that is a multiemployer plan (as defined in Section 3(37) of ERISA in which any employee of the Insight System participates). After the
Closing, neither AT&T Broadband nor any of its Affiliates will be required, under ERISA, the Code, any collective bargaining agreement or this Agreement, to establish, maintain or continue any Insight Plan currently maintained by Insight or any
of its Affiliates.
(c) Except as set forth on Schedule 5.13, (i) there are no
collective bargaining agreements applicable to any Person employed by Insight or its Affiliates principally in connection with the Insight Systems; (ii) neither Insight nor its Affiliates has any duty to and neither has agreed to bargain with any
labor organization with respect to any such Person and (iii) there are not pending any unfair labor practice charges against Insight or its Affiliates with respect to any such Person, any demand for recognition or any other effort of or request or
demand from a labor organization for representative status with respect to any Person employed by Insight or its Affiliates principally in connection with the Insight Systems now or, to the Knowledge of Insight and its Affiliates, within the last
one year and (iv) there are not currently pending or threatened nor, to the Knowledge of Insight and its Affiliates, have there been within the last one year any strikes, picketing, work slow downs or other labor disputes involving or relating to
employees of the Insight Systems. Except as described on Schedule 5.13, neither Insight nor its Affiliates has any employment agreements, either written or oral, except for oral contracts terminable at will without penalty, with any employee
of the Insight Systems and none of the employment agreements listed on Schedule 5.13 requires Insight or its Affiliates or will require AT&T Broadband or its Affiliates to employ any Person after the Closing.
(d) The following documents and records will be located at one of the Insight System offices included in the
Insight Assets on the Closing Date: Forms 395A for calendar years 1996 through 2001, all correspondence to and from the FCC regarding such 395A reports, proof of EEO certification for calendar years 1994 through 2001, and OSHA 200 logs and loss runs
for calendar years 2001 and 2002 (through the most recent practicable date).
5.14 Accounts Receivable. Insight’s accounts receivable for its Cable Business are actual and bona fide receivables representing obligations for the total dollar amount of such
receivables, as shown on the books of Insight, that resulted from the regular course of Insight’s Cable Business. Such receivables are subject to no offset or reduction of any nature, except for a reserve for uncollectible amounts consistent
with the reserve established by Insight in Insight’s Financial Statements and those credits or reductions to such accounts made in the ordinary course of business.
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5.15 Finders and Brokers. Insight has not employed any financial advisor, broker
or finder or incurred any liability for any financial advisory, brokerage, finder’s or similar fee or commission in connection with the transactions contemplated by this Agreement for which AT&T Broadband could be liable.
5.16 Transactions With Affiliates. Except to the extent set forth on Schedule
5.16 or included in the Insight Excluded Assets and except with respect to customary corporate overhead services provided by the corporate, division or regional offices of Insight or Insight LP and management services provided by Insight LP
under the Amended and Restated Management Agreement, dated October 1, 1999, as amended (the “Management Agreement”), with respect to the Insight Systems between Insight and Insight LP, Insight is not a party to any material business
arrangement or business relationship with any of its Affiliates that affects the Insight Systems, and none of its Affiliates owns any property or right, tangible or intangible, that is used principally in the business or operations of the Insight
Systems.
SECTION 6. AT&T BROADBAND’S REPRESENTATIONS AND
WARRANTIES
AT&T Broadband represents and warrants to Insight, as of the date of this Agreement (or, if a
different date is specified in this Section 6 or in AT&T Broadband’s Schedules, as of such specified date) as follows; provided that AT&T Broadband makes no representation or warranty with respect to, and will not be deemed to be in
breach of any representation or warranty set forth in this Section 6 relating to, any matter for which Insight LP or any of its employees or agents is or was responsible pursuant to the terms of the Consulting Agreement (or that was otherwise caused
by the acts or omissions of Insight LP or its employees or agents) or of which Insight has or had Knowledge or Insight LP or any of its employees or agents has or had knowledge as of the date of this Agreement in connection with Insight LP’s
management of the AT&T Systems:
6.1 Organization and Qualification of AT&T
Broadband. AT&T Broadband is a general partnership which has been duly formed under the laws of the State of California and has all requisite partnership power and authority to own, lease and use the AT&T Assets owned, leased
or used by it and to conduct the AT&T Cable Business as it is currently conducted.
6.2 Authority and Validity. AT&T Broadband has all requisite partnership power and authority to execute and deliver, to perform its obligations under, and to consummate the transactions
contemplated by, this Agreement and the Transaction Documents to which it is a party. The execution and delivery by AT&T Broadband, the performance by AT&T Broadband under, and the consummation by AT&T Broadband of the transactions
contemplated by, this Agreement and the Transaction Documents to which it is a party have been duly and validly authorized by all required partnership action by or on behalf of AT&T Broadband. This Agreement has been, and when executed and
delivered by AT&T Broadband the Transaction Documents will be, duly and validly executed and delivered by AT&T Broadband and the valid and binding obligations of AT&T Broadband, enforceable against AT&T Broadband in accordance with
their terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
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now or hereafter in effect relating to the enforcement of creditors’ rights generally or by principles governing the availability of
equitable remedies.
6.3 No Conflict; Required Consents. Except for, and
subject to receipt of, the AT&T Required Consents, all of which are listed on Schedule 6.3, the Insight Required Consents, and the other Required Consents, and the notification and expiration or earlier termination of the waiting period
under the HSR Act, the execution and delivery by AT&T Broadband, the performance of AT&T Broadband under, and the consummation of the transactions contemplated by, this Agreement and the Transaction Documents to which it is a party do not
and will not: (a) conflict with or violate any provision of AT&T Broadband’s partnership agreement; (b) violate any provision of any Legal Requirement; (c) require any consent, approval or authorization of, or filing of any certificate,
notice, application, report or other document with, any Governmental Authority or other Person; or (d) (i) conflict with, violate, result in a breach of or constitute a default under (without regard to requirements of notice, lapse of time or
elections of other Persons or any combination thereof), (ii) permit or result in the termination, suspension or modification of, (iii) result in the acceleration of (or give any Person the right to accelerate) the performance of AT&T Broadband
under, (iv) result in the creation or imposition of any Lien under any other instrument or agreement to which AT&T Broadband or its Affiliates is individually a party or by which AT&T Broadband or any of its assets is bound or affected
(other than agreements included in the AT&T Assets), except for purposes of clauses (c) and (d) such consents, approvals, authorizations and filings that, if not obtained or made, would not, and such violations, conflicts, breaches, defaults,
terminations, suspensions, modifications and accelerations as would not, individually or in the aggregate, have a material adverse effect on any AT&T System, AT&T’s Cable Business or on the ability of AT&T Broadband to perform its
obligations under this Agreement or the Transaction Documents to which AT&T Broadband is a party.
6.4 Assets. AT&T Broadband has good and valid title to (or, in the case of Assets that are leased, valid leasehold interests in) the AT&T Assets. The AT&T Assets are free and clear
of all Liens, except (i) Permitted Liens and (ii) Liens described on Schedule 6.4, all of which Liens on Schedule 6.4 will be terminated, released or, in the case of the rights of first refusal listed on Schedule 6.4, waived, as
appropriate, at or prior to the Closing.
6.5 Litigation. Except as set
forth in Schedule 6.5: (a) there is no Litigation pending or, to AT&T Broadband’s Knowledge, threatened, and, to AT&T Broadband’s Knowledge, there is no investigation pending or threatened, by or before any Governmental
Authority or private arbitration tribunal against AT&T Broadband which, if adversely determined, would materially adversely affect (i) the financial condition or operations of the AT&T Cable Business, the AT&T Systems, the AT&T
Assets or (ii) the ability of AT&T Broadband to perform its obligations under this Agreement, or which, if adversely determined, would result in the modification, revocation, termination, suspension or other limitation of any of the AT&T
System Franchises, AT&T System Licenses, AT&T System Contracts or leases or other documents evidencing the AT&T Leased Property or the AT&T Other Real Property Interests; and (b) there is not in existence any Judgment requiring
AT&T Broadband to take any action of any kind with respect to the AT&T Assets or the operation of the AT&T Systems,
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or to which AT&T Broadband (with respect to the AT&T Systems), the AT&T Systems or the AT&T Assets are subject or by which they
are bound or affected.
6.6 Finders and Brokers. AT&T Broadband has
not employed any financial advisor, broker or finder or incurred any liability for any financial advisory, brokerage, finder’s or similar fee or commission in connection with the transactions contemplated by this Agreement for which Insight
could be liable.
6.7 Systems. AT&T Broadband has delivered to
Insight a true and complete copy of (i) the Asset Exchange Agreement, dated as of April 20, 1999 among AT&T Broadband, Charter Communications, LLC, Charter Communications Properties, LLC, and Marcus Cable Associates, L.L.C. (collectively,
“Charter”) and the Amendment to Asset Exchange Agreement, dated as of October 1, 1999 among AT&T Broadband and Charter, pursuant to which AT&T Broadband acquired the AT&T Systems from Charter, as filed by Charter or its
Affiliates with the Securities and Exchange Commission and (ii) the Amended and Restated Common Agreement dated June 29, 1999 among AT&T Broadband, Charter and various other parties, in each case including a true and complete copy of the
disclosure schedules to such agreements delivered to AT&T Broadband in connection therewith that relate to the AT&T Systems except for Schedule, 3.1.1-B, 5.10, 5.11. 5.14, 5.18, 7.2, 7.2.4, 7.2-B, 7.3, 7.20.1(b)-B, and 7.20.1.(c)-B to the
Asset Exchange Agreement. AT&T Broadband has not entered into any AT&T System Franchise, AT&T System License, AT&T System Contract or any other material agreement with respect to the AT&T Systems that is not listed on the
Schedules prepared by Insight (other than any of the foregoing that Insight LP has entered into or incurred on behalf of the AT&T Systems). AT&T Broadband has delivered to Insight LP, as manager, true and complete copies of all notices and
other correspondence that AT&T Broadband has received from any Governmental Authority, AT&T System Contract party or other Person that relates to the AT&T Systems (other than any of the foregoing that AT&T Broadband reasonably
believes was also delivered directly to Insight LP). There are no employees, former employees, independent contractors or former independent contractors engaged or previously engaged by AT&T Broadband or its Affiliates to perform services
exclusively with respect to the AT&T Systems. The AT&T Assumed Obligations and Liabilities do not include any employee-related obligations or liabilities as the owner of the AT&T Systems that Insight LP did not already assume pursuant to
the terms of the Consulting Agreement. None of AT&T Broadband’s Affiliates owns any property or right that is used principally in the business or operations of the AT&T Systems (other than AT&T Excluded Assets). Since the date of
AT&T Broadband’s acquisition of the AT&T Systems: (a) no proceedings or investigations (other than those affecting the cable industry generally) dealing with or otherwise affecting the rates or late fees that any of the AT&T Systems
can charge (whether for programming, equipment, installation, service or otherwise) have been instituted against AT&T Broadband or any Affiliate of AT&T Broadband and are still outstanding or in effect; (b) except for the Order adopted May
6, 2002, by the Federal Communications Commission, File No. EB-02-TC-035, In the Matter of Charter Communications Complaint Regarding Cable Programming Services Tier Rates and Refund Plan, no Governmental Authority has issued a currently
effective order in a proceeding to which AT&T Broadband or any Affiliate of AT&T Broadband was a party that reduced the rates or late fees that AT&T Broadband may charge with respect to the AT&T Systems
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(whether for programming, equipment, installation, service or otherwise) or requires any rate refund or credit, penalty and/or interest payment
be made by AT&T Broadband or its Affiliates with respect to the AT&T Systems; and (c) AT&T Broadband has not entered into and, to AT&T Broadband’s Knowledge, is not subject to any so-called social contract or other rate
agreement with the FCC or any local franchising authority with respect to the rates or late fees that may be charged for television services in the AT&T Systems (whether for programming, equipment, installation, service or otherwise) which would
limit or specify the rates or late fees that may be charged for cable television services provided by the AT&T Systems (whether for programming, equipment, installation, service or otherwise) following the Closing and is not currently
negotiating or anticipating entering into or being subject to any new social contract or other rate agreement with respect to the AT&T Systems.
SECTION 7. ADDITIONAL COVENANTS
7.1 Access to Premises and Records. Between the date of this Agreement and the Closing Date each of AT&T Broadband and Insight will give to the other and its representatives full access
during normal business hours to all the premises and books and records of its Cable Business and to all its Assets and Systems’ personnel and will furnish to the other and its representatives all such documents, financial information and other
information regarding its Cable Business and its Assets as the other from time to time reasonably may request, including the employment records described in Section 7.3; provided that no investigation by AT&T Broadband or Insight will affect or
limit the scope of any of the representations, warranties, covenants and indemnities of the other party in this Agreement or in any Transaction Document or limit such party’s liability for breach of any of the foregoing.
7.2 Continuity and Maintenance of Operations; Certain Deliveries and Notices. Between
the date of this Agreement and the Closing:
(a) Insight will conduct its
Cable Business and operate its Systems only in the usual, regular and ordinary course and consistent with past practices, including continuing to make ordinary marketing, advertising and promotional expenditures, and, to the extent consistent with
such conduct and operation, will use its commercially reasonable efforts to (i) preserve its current business intact in all material respects, including preserving existing relationships with franchising authorities, suppliers, customers and others
having business dealings with its Systems, and (ii) keep available the services of its employees and agents providing services in connection with the Cable Business but will be under no obligation to incur cost to do so (other than employee salaries
and similar costs);
(b) Insight will maintain its Assets in good repair,
order and condition, ordinary wear and tear excepted; will maintain equipment and inventory for its Systems at not less than normal historical levels consistent with past practices; will maintain in full force and effect policies of insurance with
respect to its Cable Business consistent with past practices; and will maintain its books, records and accounts with respect to its Assets and the operation of its Systems in the usual, regular and ordinary manner on a basis consistent with past
practices;
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(c) Except with respect to Insight Excluded Assets, Insight will not (i) modify,
terminate, renew, suspend, abrogate or enter into any Insight System Contract or other instrument that would be included in Insight’s Assets, other than in the ordinary course of business provided that AT&T Broadband’s consent, not to
be unreasonably withheld or delayed, will be required to modify, terminate, renew, suspend, abrogate or enter into any retransmission consent or programming agreement, any Insight System Franchise, any lease or document evidencing Insight Leased
Property or any other agreement that contemplates payments to or by Insight in any 12-month period exceeding $25,000 individually or $150,000 in the aggregate; (ii) take or omit to take any action that would result in the condition set forth in
Section 8.2(a) not being satisfied at any time prior to the Closing; (iii) engage in any marketing, subscriber installation, disconnection or collection practices other than in the ordinary course of business consistent with its past practices; (iv)
make any Cost of Service Election; (v) enter into any agreement with or commitment to any competitive access providers with respect to any Insight System; (vi) sell, transfer or assign any portion of its Assets other than sales in the ordinary
course of business and assets sold or disposed of and replaced by other assets of comparable utility and value or permit the creation of a Lien, other than a Permitted Lien, on any Asset; (vii) engage in any hiring or employee compensation practices
(including severance plans or policies) that are inconsistent with past practices except for changes in such practices implemented by Insight and its Affiliates on a company-wide basis (and it being agreed that such party will give prompt notice to
the other party of any such changes); or (viii) take any actions that would cause the transactions contemplated hereby to fail to qualify as like-kind exchanges under Section 1031 of the Code;
(d) Insight will promptly deliver to AT&T Broadband true and complete copies of all quarterly financial statements and all
monthly and quarterly operating reports with respect to the operation of the Insight Cable Business prepared in the ordinary course of business by or for such party at any time from the date of this Agreement until the Closing;
(e) Insight will give or cause to be given to AT&T Broadband and its counsel,
accountants and other representatives, as soon as reasonably possible but in any event prior to the date of submission to the appropriate Governmental Authority, copies of all FCC Forms 1200, 1205, 1210, 1215, 1220, 1225, 1235 and 1240 or any other
FCC forms required to be filed with any Governmental Authority under the 1992 Cable Act with respect to rates and prepared with respect to any of Insight’s Systems, such forms to be reasonably satisfactory in form and substance to AT&T
Broadband;
(f) Insight will duly and timely file a valid notice of renewal
under Section 626 of the Cable Act with the appropriate Governmental Authority with respect to any Insight System Franchise that will expire within 36 months after any date between the date of this Agreement and the Closing Date;
(g) Insight will promptly notify AT&T Broadband of any fact, circumstance, event or
action by it or otherwise (i) which if known at the date of this Agreement would have been
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required to be disclosed by it in or pursuant to this Agreement or (ii) the existence, occurrence or taking of which
would result in the condition set forth in Section 8.2(a) not being satisfied at any time prior to the Closing, and, with respect to clause (ii), will use its commercially reasonable efforts to remedy the same, subject to Section 12.16;
(h) Insight will consult AT&T Broadband prior to decreasing or
increasing the rate charged for any level of Basic Services, Expanded Basic Services or Pay TV for the Insight Systems and prior to adding, deleting, retiering or repackaging any programming services for the Insight Systems; provided that AT&T
Broadband’s consent is not required for any such action.
(i) AT&T
Broadband agrees that it will allow Insight LP to operate the AT&T Systems in the ordinary course and consistent with past practices in accordance with the terms of the Consulting Agreement;
(j) AT&T Broadband agrees that it will continue to operate the AT&T Systems in the ordinary course and consistent with
past practices in accordance with the terms of the Consulting Agreement;
(k) AT&T Broadband will promptly notify Insight of any fact, circumstance, event or action by it or otherwise (i) which if known at the date of this Agreement would have been required to be disclosed by
AT&T Broadband in or pursuant to this Agreement or (ii) the existence, occurrence or taking of which would result in the condition set forth in Section 8.1(a) not being satisfied at any time prior to the Closing, and, with respect to clause
(ii), will use its commercially reasonable efforts to remedy the same, subject to Section 12.16; and
(l) AT&T Broadband will not take any actions that would cause the transactions contemplated hereby to fail to qualify as like-kind exchanges under Section 1031 of the Code.
7.3 Employees.
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(a) AT&T Broadband may, but shall have no obligation to, employ or offer
employment to all employees of Insight’s Cable Business. Within fifteen (15) days after the date of this Agreement, Insight shall provide AT&T Broadband a list of all employees of Insight Systems by work location as of a recent date,
showing the original hire date, then-current positions and rates of compensation, rate type (hourly or salary) and scheduled hours per week, whether the employee is subject to an employment agreement, a collective bargaining agreement or represented
by a labor organization and indicating which of such employees such party desires to retain as its employees (the “Retained Employees”). Such list shall be updated as necessary to reflect new hires or other personnel changes. Within
forty-five (45) days after receipt of such list, or such other date as the parties may agree, AT&T Broadband will provide in writing a list of employees that AT&T Broadband or its Affiliates may desire to employ following the Closing Time
(subject only to the evaluations and return to active service conditions permitted by this Section 7.3), which list shall not include any Retained Employees. Insight agrees and shall cause Insight’s Affiliates, to cooperate in all reasonable
respects with AT&T Broadband to allow AT&T Broadband or AT&T Broadband’s Affiliates to evaluate the employees of Insight’s Cable Business to make hiring decisions. In this regard, AT&T Broadband shall have the opportunity
to make such appropriate prehire investigation of the employees of Insight’s Cable Business, as it deems necessary, including the right to review personnel files, which shall include attendance and discipline records and performance
evaluations, and the right to interview such employees during normal working hours so long as such interviews are conducted after notice to Insight and do not unreasonably interfere with Insight’s operations and such investigations and
interviews do not violate any law or contract. Except as otherwise required by law, all employment offers shall include base compensation at least equal to the employee’s rate of base compensation as of the Closing Time. AT&T Broadband may,
if it wishes, condition any offer of employment upon the employee’s being an active employee at Closing, performance and conduct remaining at a satisfactory level or above through the Closing Time, passing a pre-employment drug screening test,
the completion of a satisfactory background check and, if the employee is on Approved Leave of Absence at the Closing Time (the “Employees on Leave Status”), upon the employees’ return to full-time active service (with or without
reasonable accommodations requirements) within twelve (12) weeks after the Closing Time or, if earlier, on the first Business Day following expiration of the employees’ Approved Leave of Absence. For purposes of this Agreement, employees on
“Approved Leave of Absence” means employees absent from work at the Closing Time and unable to perform their regular job duties by reason of illness or injury under approved plans or policies of the employer (other than employee’s
absence for less than seven (7) calendar days due to short term illness or injury not requiring written approval by the employer) or otherwise absent from work under approved or unpaid leave policies of the employer. AT&T Broadband shall bear
the expense of such examination but Insight shall, upon reasonable notice, cooperate in the scheduling of such examinations so long as the examinations do not unreasonably interfere with the Insight’s operations. The selection of employees will
be made at the sole and absolute discretion of AT&T Broadband. As of the Closing Date, AT&T Broadband shall have no obligation to Insight, its Affiliates or Insight’s employees, with regard to any Insight employee AT&T Broadband has
determined not to hire. As of the Closing Date, Insight shall, and shall cause its appropriate Affiliates to, terminate the employment of all employees of Insight that are employed in connection with the Insight Systems (“System
Employees”) that become employees of AT&T
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Broadband as of the Closing Date (“Hired Employees”). Notwithstanding any of the foregoing, from the date
hereof until Closing, AT&T Broadband will not solicit any System Employee for employment prior to Closing (other than through general advertisements), without the written consent of Insight.
(2) Insight shall be responsible for and shall cause to be discharged and satisfied in full all amounts due and owing to each
System Employee as of the Closing (whether or not such employees are hired by AT&T Broadband as of or after the Closing) with respect to and in accordance with the terms of all compensation plans or Insight Plans, including without limitation,
any compensation including salaries, commissions, deferred compensation, severance (if applicable), insurance, pension, profit sharing, disability payment, medical, sick pay, holiday, accrued and unused vacation or paid time off (PTO) in excess of
the amount AT&T Broadband assumes pursuant to Section 7.3(d), payments under any incentive compensation or bonus agreement, in each case, which has accrued prior to the Closing Date and other compensation or benefits to which they are entitled
for periods prior to the Closing Date (including, for employees on Approved Leave of Absence, such amounts accrued through the date of their termination by Insight, or its appropriate Affiliate, or their employment by AT&T Broadband, or its
appropriate Affiliate, as set forth in this Section 7.3). Insight shall satisfy any legal obligation with respect to continuation of group health coverage required pursuant to Section 4980B of the Code or Section 601, et seq., of ERISA and
shall specifically retain any and all liablity for such continuation coverage for any System Employee who does not become employed by AT&T Broadband pursuant to this Agreement and any former employee of Insight whose employment with Insight
terminated at any time prior to the Closing Date. Any liability under WARN with regard to any employee terminated on or prior to the Closing Date, or not hired by AT&T Broadband on or after the Closing Date, shall, as a matter of contract
between the parties, be the responsibility of Insight or Insight’s Affiliates. AT&T Broadband and its Affiliates shall cooperate with Insight and Insight’s Affiliates, if requested, in the giving of WARN notices on behalf of Insight.
(3) AT&T Broadband will not have or assume any obligation or liability
under or in connection with any Insight Plan of Insight or any Affiliate of Insight. In regard to any Employee on an Approved Leave of Absence, the responsibility for benefit coverage of such employee, and liability for payment of benefits, shall
remain that of Insight, or the appropriate Affiliate of Insight, until such employee becomes an employee of AT&T Broadband or its appropriate Affiliate. For purposes of this Agreement, the following claims and liabilities shall be deemed to be
incurred as follows: (i) medical, dental and/or prescription drug benefits upon the rendering of the medical, dental, pharmacy or other services giving rise to the obligation to pay such benefits, except with respect to such benefits provided in
connection with a continuous period of hospitalization, which shall be deemed to be incurred at the time of admission to the hospital, (ii) life, accidental death and dismemberment and business travel accident insurance benefits and workers’
compensation benefits, upon the occurrence of the event giving rise to such benefits; and (iii) salary continuation or other short-term disability benefits, or long-term disability, upon commencement of the disability giving rise to such benefit.
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(4 Notwithstanding anything to the contrary herein, AT&T Broadband or an
Affiliate of AT&T Broadband shall (i) upon receipt of a schedule showing the vacation balances and value of such balances of each Hired Employee, which schedule shall be delivered by Insight within 10 days after the Closing Date, credit each
Hired Employee the lesser of the amount of vacation accrued and unused by him or her as an employee of Insight through and including the Closing Time or the amount of accrued vacation permitted to be accrued by similarly situated employees of
AT&T Broadband in accordance with AT&T Broadband’s standard practices (to a maximum of four weeks) accrued and unused by him or her as an employee of Insight through and including the Closing Time; provided, however, that if any Hired
Employee has accrued vacation time in excess of the amount credited by AT&T Broadband, then Insight shall pay to such employee the amount of such excess and AT&T Broadband shall not assume any liability or obligation in respect of such
excess; (ii) give each Hired Employee credit for such employee’s past service with Insight or its Affiliates as of the Closing Time as reflected on the list required by Section 7.3(a) (“Past Service”) (including past service with any
prior owner or operator of such party to the extent such Hired Employee previously received credit for such service) for purposes of eligibility to participate in AT&T Broadband’s employee welfare benefit (including medical, dental,
flexible spending accounts, accident, life insurance plans and programs, disability plans, and other employee welfare benefits) plans (the “AT&T Broadband Welfare Plans”) that are generally available to other similarly situated
employees of AT&T Broadband and their dependents; (iii) give each Hired Employee credit for his or her Past Service for purposes of participation and vesting under AT&T Broadband’s 401(k) plan. pension plan (but not for purposes of
benefit accrual under any such plan), savings plan, profit-sharing and participation, but not vesting, in other stock plans that are generally available to other similarly situated employees of AT&T Broadband; (iv) give each Hired Employee
credit for such employee’s Past Service for any waiting periods under the AT&T Broadband Welfare Plans that are generally applicable to other similarly situated employees of AT&T Broadband, and not subject any Hired Employees to any
limitations on benefits for any preexisting conditions or requirements for evidence of insurability provided that the treatment is covered or level of benefit is available under the AT&T Broadband Welfare Plans; (v) credit each Hired Employee
under any group health plans for any deductible and out of pocket expenses and similar limits applicable and previously met by a Hired Employee as of the Closing Time under Insight’s or its Affiliates’ group health plans for the plan year
in which the transfer of employment occurs; and (vi) provide the Hired Employees as of the Closing Time with employee benefits and compensation no less favorable in the aggregate than those employee benefits and compensation that are generally
applicable to other similarly situated employees of AT&T Broadband. Notwithstanding anything set forth in Section 7.3(d), AT&T Broadband shall have no obligation to employees of the Insight’s Cable Business who are Employees on Leave
Status until they become employees of AT&T Broadband pursuant to Section 7.3(a) hereof.
(5 If AT&T Broadband discharges without Cause within 120 days after the Closing any Hired Employee, then (1) AT&T Broadband shall pay cash severance benefits to such Hired Employee in accordance
with Insight’s severance benefit plan based on the terms of such plan as in effect as of the Closing Time and delivered to AT&T Broadband at or prior to the Closing Time and (2) AT&T Broadband shall give such Hired Employee any non-cash
severance benefits available to similarly situated employees of AT&T Broadband, and shall in
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each case count the period of such Hired Employee’s employment with Insight or its Affiliates and with AT&T
Broadband or its Affiliates for purposes of calculating severance benefits due to the Hired Employee pursuant to this sentence. Following such 120 day period, such Hired Employee shall be covered under the AT&T Broadband’s severance benefit
plan counting the period of employment with Insight or its Affiliates and AT&T Broadband or its Affiliates for purposes of calculating benefits under such plan. For purposes of this Section 7.3(e), “Cause” shall mean:
1) conviction (including a plea of guilty or nolo contendere) of a crime
involving theft, fraud, dishonesty or moral turpitude;
2) intentional or
grossly negligent disclosure of confidential or trade secret information of AT&T Broadband or any of its Affiliates to anyone who is not entitled to receive such information;
3) gross omission or gross dereliction of any statutory or common law duty of loyalty to AT&T Broadband or any of its Affiliates;
4) willful violation of AT&T Broadband’s code of conduct or other
written policies and procedures;
5) repeated failure to carry out the
duties of the employee’s position despite specific instruction to do so; or
6) such other matters consistent with AT&T Broadband’s employment policies, procedures or agreements applicable to AT&T Broadband employees who are similarly situated to the discharged Hired
Employee.
(6 If Insight has, or acquires, a duty to bargain with any labor
organization with respect to employees of its Cable Business, then Insight will (i) give prompt written notice of such development to AT&T Broadband and (ii) not, without AT&T Broadband’s written consent, enter into any Contract with
such labor organization that purports to bind AT&T Broadband, including any successor clause or other clause that would have this purpose or effect.
(7 Nothing in this Section 7.3 or elsewhere in this Agreement shall be deemed to make any employee of Insight or its Affiliates a
third party beneficiary of this Agreement.
7.4 Leased Vehicles. Each of
AT&T Broadband and Insight will pay the remaining balances on any leases for vehicles included in its Tangible Personal Property and will deliver valid and good title to such vehicles free and clear of all Liens (other than Permitted Liens) to
the other party at the Closing.
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7.5 Required Consents; Franchise Renewal.
(a) Insight will review the AT&T Assets and will prepare a true and accurate list of the
Required Consents (other than the AT&T Required Consents) as of the date of this Agreement, which will be set forth at Schedule 7.5(a). During the period of time commencing on the date of this Agreement and ending on the Closing Date,
Insight will promptly inform AT&T Broadband of any additions, deletions or modifications to Schedule 7.5(a) as Insight becomes aware of them. Insight will not be liable to AT&T Broadband for any failure to list a Required Consent or
failure to obtain an unlisted Required Consent unless such failure constitutes gross negligence, willful misconduct or willful breach by Insight. AT&T Broadband will not be liable to Insight with respect to the omission of a Required Consent on
said Schedule 7.5(a), provided that if such omission becomes known to either of the parties to this Agreement, such party agrees to promptly notify the other party thereof and AT&T Broadband agrees to take such actions with respect to
such Required Consent as is required on its part pursuant to this Section 7.5. Without limiting the generality of the foregoing, Insight also will not be liable to AT&T Broadband for any failure to list a Required Consent or failure to obtain an
unlisted Required Consent if Insight is not aware of the existence of an agreement that gives rise to such Required Consent.
(b) Insight will use its commercially reasonable efforts to obtain in writing as promptly as possible, all of the Required Consents (other than the AT&T Required Consents)
and all of the Insight Required Consents, in each case in form and substance reasonably satisfactory to Insight and AT&T Broadband, and will deliver to AT&T Broadband copies of such Required Consents and Insight Required Consents promptly
after they are obtained by Insight; provided however that Insight will afford AT&T Broadband the opportunity to review, approve and revise the form of Required Consent and Insight Required Consent prior to delivery to the party whose consent is
sought. All out-of-pocket expenses incurred by Insight in obtaining the Required Consents will be borne by AT&T Broadband; provided, that Insight shall obtain AT&T Broadband’s authorization to incur such expenses to the extent they
exceed $10,000 in the aggregate. All expenses incurred by Insight in obtaining the Insight Required Consents will be borne by Insight. AT&T Broadband will use its commercially reasonable efforts to obtain in writing as promptly as possible at
its expense, all of the AT&T Required Consents, in form and substance reasonably satisfactory to Insight and AT&T Broadband, and will deliver to Insight copies of such Required Consents promptly after they are obtained by AT&T Broadband;
provided however that AT&T Broadband will afford Insight the opportunity to review, approve and revise the form of AT&T Required Consent prior to delivery to the party whose consent is sought.
(c) Each party will cooperate with the other party in its efforts to obtain the Insight Required
Consents, AT&T Required Consents or Required Consents, as applicable, but neither party will be required to accept or agree or accede to any condition to transfer of any Asset, or any modifications or amendments to any of the System Franchises,
System Licenses, System Contracts or leases or documents evidencing Leased Property or Other Real Property Interests of the other party’s Cable Business that, in either case, would make, or are reasonably likely to make, the underlying
instrument materially more onerous in any respect or that would materially reduce, or are
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reasonably likely to materially reduce, the benefits available under the instrument in respect of which the consent relates.
(d) As soon as practicable after the date of this Agreement, but in any event no later than 20 days after the date of this Agreement,
the parties will cooperate with each other to complete, execute and deliver to the appropriate Governmental Authority, a request for such Governmental Authority’s consent to transfer each System Franchise as to which such consent is required.
In the case of the Insight System Franchises, such request will include a request that the Governmental Authority extend any period designated in the Insight System Franchise for the completion of any required upgrade or rebuild, to a period that
ends no sooner than (i) the date by which Upgrade can be completed in accordance with the AT&T Specifications, as agreed upon by AT&T Broadband and Insight or (ii) if the parties are unable to agree on such date, June 1, 2003.
(e) Notwithstanding Sections 7.5(b) and 7.5(c), neither party will have any further
obligation to obtain AT&T Required Consents, Insight Required Consents or Required Consents, as applicable: (i) with respect to license agreements relating to pole attachments where the licensing party will not, after the assigning party’s
exercise of commercially reasonable efforts, consent to an assignment of such license agreement but requires that the proposed assignee enter into a new agreement with such licensing authority, in which case the proposed assignee shall use its
commercially reasonable efforts to enter into such agreement prior to the Closing or as soon as practicable thereafter and the party to the license agreement will cooperate with and assist the other party in obtaining such agreements; provided
however that the proposed assignee’s commercially reasonable efforts shall not require it to take any action of the type that such party is not required to take pursuant to this Section 7.5; and (ii) for any business radio license which such
party reasonably expects can be obtained within 120 days after the Closing and so long as a temporary authorization is available to the other party under FCC rules with respect thereto.
(f) Prior to Closing, each party will provide all cooperation reasonably requested by the other party in its efforts to obtain
renewals and/or extensions of any System Franchise.
7.6 Title Commitments and
Surveys. With respect to the real property that it is acquiring, within 45 days after the date of this Agreement, AT&T Broadband may obtain, at its own expense, (a) current commitments to issue title insurance policies
(“Title Commitments”), committing to insure fee simple title in AT&T Broadband to each parcel of the Insight Owned Property and easements that provide access to such Insight Owned Property included in the Insight Assets to be acquired
by AT&T Broadband, subject only to Permitted Liens, and (b) surveys of each parcel of Owned Property in such form as is necessary to obtain the title insurance to be issued pursuant to the Title Commitments (the “Surveys”). For
purposes of this Agreement “Title Policy” or “Title Policies” shall mean the policies of title insurance issued by an agent writing for Old Republic Insurance Company, Chicago Title Insurance Company or another nationally
recognized title insurance company (the “Title Company”) for each parcel of real property chosen by AT&T Broadband to be insured pursuant to this Section 7.6. If AT&T Broadband notifies Insight within 90 days after the date of this
Agreement of any Lien (other than a Permitted Lien) or other matter
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affecting title to Insight Owned Property which prevents access to or which could prevent or impede in any way the use or operation of any
parcel of Insight Owned Property for the purposes for which it is currently used or operated by Insight (a “Title Defect”), Insight will exercise commercially reasonable efforts to (i) remove such Title Defect at or prior to Closing, or
(ii) with the consent of AT&T Broadband, cause the Title Company to commit to insure over each such Title Defect prior to the Closing. If such Title Defect cannot be removed at or prior to Closing or the Title Company does not commit to insure
over such Title Defect prior to Closing and if AT&T Broadband elects to waive such Title Defect and proceed towards consummation of the transaction in accordance with this Agreement in its reasonable discretion, AT&T Broadband and Insight
shall enter into a written agreement at Closing containing the commitment of Insight to use commercially reasonable efforts to remedy the Title Defect following Closing on terms satisfactory to AT&T Broadband, in its reasonable discretion.
7.7 HSR Notification. As soon as practicable but in any event no later
than 60 days after the date of this Agreement, Insight and AT&T Broadband will each complete and file, or cause to be completed and filed by such party’s ultimate parent, any notification and report required to be filed under the HSR Act
and each such filing shall request early termination of the waiting period imposed by the HSR Act. The parties shall use their commercially reasonable efforts to respond as promptly as reasonably practicable to any inquiries received from the
Federal Trade Commission (the “FTC”) and the Antitrust Division of the Department of Justice (the “Antitrust Division”) for additional information or documentation and to respond as promptly as reasonably practicable to all
inquiries and requests received from any other Governmental Authority in connection with antitrust matters. The parties shall use their respective commercially reasonable efforts to overcome any objections which may be raised by the FTC, the
Antitrust Division or any other Governmental Authority having jurisdiction over antitrust matters. Notwithstanding the foregoing, no party shall be required to make any significant change in the operations or activities of the business (or any
material assets employed therein) of such party or any of its Affiliates, if a party determines in good faith that such change would be materially adverse to the operations or activities of the business (or any material assets employed therein) of
such party or any of its Affiliates having significant assets, net worth or revenue. Each of the parties will coordinate with the other party with respect to its filings and will cooperate to prevent inconsistencies between their respective filings
and will furnish to each other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of necessary filings or submissions under the HSR Act. Notwithstanding anything to the
contrary in this Agreement if either party determines in its reasonable business judgment that a request for additional data and information in connection with the HSR Act is unduly burdensome, either party may terminate this Agreement by notifying
the other party within 30 days following the unduly burdensome request.
7.8 Transfer
Taxes. All sales, use or excise Taxes arising from or payable by reason of the transfer of any of the AT&T Assets and the Insight Assets will be shared equally by AT&T Broadband and Insight. All transfer and similar Taxes or
assessments, including transfer and recording fees and similar assessments for or under System Franchises, System Licenses and System Contracts, arising from or payable by reason of the conveyance of the AT&T Assets and the Insight
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Assets will be paid by AT&T Broadband with respect to the AT&T Assets and by Insight with respect to the Insight Assets. AT&T
Broadband and Insight agree that to the extent one party makes any of the foregoing payments on behalf of the other party, reimbursement may be effected through appropriate adjustments to the value of the Assets in accordance with Section 3.2. Tax
returns required to be filed in respect of any Taxes referenced in this Section 7.8 will be prepared by the party that has the primary responsibility under applicable law for filing such returns.
7.9 Distant Broadcast Signals. Unless otherwise restricted or prohibited by any Governmental Authority or applicable Legal
Requirement, if requested 45 days or more prior to the anticipated Closing Date by the party to which a System will be transferred under this Agreement, the transferor of such System will delete prior to the Closing Date any distant broadcast
signals which the transferee determines will result in unacceptable liability on the part of the transferee for copyright payments with respect to continued carriage of such signals after the Closing.
7.10 Programming. Not later than 20 Business Days prior to the Closing, Insight will deliver a
letter in a form reasonably requested by AT&T Broadband to all programmers from which Insight purchases programming and will execute and deliver to AT&T Broadband such other documents as may be reasonably requested by AT&T Broadband to
comply with the requirements of its programming Contracts and channel line-up requirements with respect to acquisitions and divestitures of cable television systems. AT&T Broadband will execute and deliver such documents as may be reasonably
requested by Insight or the Partnership to comply with the requirements of its programming Contracts and channel line-up requirements with respect to acquisitions and divestitures of cable television systems. Neither party will be required to make
any payments to the other’s programmers or assume any other obligations in the fulfillment of its obligations under this Section 7.10.
7.11 Use of Names and Logos. For a period of 90 days after the Closing, each of Insight and AT&T Broadband will be entitled to use the trademarks, trade
names, service marks, service names, logos and similar proprietary rights of the other to the extent incorporated in or on the Assets transferred to it at the Closing, provided that each will exercise reasonable efforts to remove all such names,
marks, logos and similar proprietary rights of the other from the Assets by such earlier date as reasonably practicable following the Closing. Notwithstanding the foregoing, the transferee party will not be required to remove or discontinue using
any such name or ▇▇▇▇ that is affixed to converters or other items in or to be used in customer homes or properties, or as are used in similar fashion making such removal or discontinuation impracticable for the transferee party.
7.12 Transitional Services. Insight will provide AT&T Broadband access to and the
right to use (i) Insight’s (or its appropriate Affiliate’s) billing system computers, software and related fixed assets (including assets associated with lockbox payment processing) in connection with the Insight Systems to allow for
conversion of existing billing arrangements, and (ii) Insight’s (or its appropriate Affiliate’s) data circuits to the extent necessary to permit the Hired Employees to access the Internet and e-mail in connection with the operation of the
Insight Systems until AT&T Broadband is able to transfer computer and other related operations from Insight’s data circuits to circuits maintained by AT&T Broadband. The services described in clauses (i) and (ii) are “Transitional
Services.” Insight
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will provide the Transitional Services for up to 180 days after the Closing Date. All Transitional Services that are requested by AT&T
Broadband will be provided on terms and conditions reasonably satisfactory to each party; provided however that the amount to be paid by AT&T Broadband will not exceed the cost to Insight of providing such Transitional Services. Insight will
notify AT&T Broadband at least 45 days prior to the Closing of the cost to Insight of providing such Transitional Services.
7.13 Confidentiality and Publicity.
(a) Each party will use commercially reasonable efforts to assure that any non-public information that such party may obtain from the other in connection with this Agreement with respect to the other’s
Cable Business and Systems (it being understood and agreed that all proprietary information of the transferring party that is included among the Assets of such transferring party shall become the proprietary information of the transferee party at
Closing) will be kept confidential and, such party will not disclose, and will cause its employees, consultants, advisors and agents not to disclose, any such information to any other Person (other than its directors, officers and employees and
representatives of its advisers and lenders whose knowledge thereof is necessary in order to facilitate the consummation of the transactions contemplated hereby) or use, and will cause its employees, consultants, advisors and agents not to use, such
information to the detriment of the other; provided that (i) such party may use and disclose any such information once it has been publicly disclosed (other than by such party in breach of its obligations under this Section) or which rightfully has
come into the possession of such party (other than from the other party) and (ii) to the extent that such party may, in the reasonable opinion of its counsel, be compelled by Legal Requirements to disclose any of such information, such party may
disclose such information if it will have used all reasonable efforts, and will have afforded the other the opportunity, to obtain an appropriate protective order or other satisfactory assurance of confidential treatment, for the information
compelled to be disclosed. The obligation of either party to hold information in confidence pursuant to this Section will be satisfied if such party exercises the same care with respect to such information as it would exercise to preserve the
confidentiality of its own similar information. In the event of termination of this Agreement, each party will use all reasonable efforts to cause to be delivered to the other, and retain no copies of, any documents, work papers and other materials
obtained by such party or on its behalf from the other, whether so obtained before or after the execution hereof.
(b) Neither Insight or AT&T Broadband will issue any press release or make any other public announcement or any oral or written statement to its or the other party’s employees concerning this Agreement
and the transactions contemplated hereby, except as already issued or made or except as required by applicable Legal Requirements, without the prior written consent and approval of the other, which consent and approval may not be unreasonably
withheld.
7.14 Bulk Transfers. Insight and AT&T Broadband each
waives compliance by the other with Legal Requirements relating to bulk transfers applicable to the transactions contemplated hereby.
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7.15 Allocation of Value to Exchanged Assets. As soon as practicable after the
execution of this Agreement, the parties agree to jointly hire ▇▇▇▇ ▇▇▇▇▇ or another mutually acceptable appraiser (the “Appraiser”) to prepare, prior to the Closing, a written report regarding the value to be allocated to the tangible
personal property included in the Assets pursuant to Internal Revenue Service regulations relating to like-kind exchanges of assets under Section 1031 of the Code. The fees of the Appraiser will be split equally between AT&T Broadband and
Insight. Insight will be solely responsible for managing the process of obtaining such appraisal, including the process of getting all necessary information about the Systems to the Appraiser. AT&T Broadband will cooperate with Insight in its
efforts to obtain the appraisal, but AT&T Broadband will not be liable to Insight if the appraisal is not completed prior to Closing. The parties agree that for purposes of Sections 1031 and 1060 of the Code and the regulations thereunder, each
will report the transactions contemplated by this Agreement in accordance with the values determined by the Appraiser. Liabilities assumed or taken subject to by each party are being exchanged each for the other to the maximum extent permitted under
Section 1031 of the Code and regulations thereunder. Each party promptly will give the other notice of any disallowance or challenge of asset values by the Internal Revenue Service or any state or local tax authority.
7.16 Lien Searches. Within 20 Business Days prior to the anticipated Closing Date, (a) Insight
will obtain at its expense and deliver to AT&T Broadband, the results of a lien search conducted by a professional search company of records in the offices of the secretaries of state in each state and county clerks in each county where there
exists any of the Insight Owned Property or Insight Tangible Personal Property, and in the state and county where Insight’s principal offices are located, including copies of all financing statements or similar notices or filings (and any
continuation statements) discovered by such search company, and (b) Insight may obtain at AT&T Broadband’s expense and deliver to AT&T Broadband the results of a lien search conducted by a professional search company of records in the
offices of the secretaries of state in each state and county clerks in each county where there exists any of the AT&T Owned Property or AT&T Tangible Personal Property, and in the state and county where AT&T Broadband’s principal
offices are located, including copies of all financing statements or similar notices or filings (and any continuation statements) discovered by such search company.
7.17 Further Assurances. At, and after the Closing, each of Insight and AT&T Broadband at the request of the other, will
promptly execute and deliver, or cause to be executed and delivered, to the other all such documents and instruments, in addition to those otherwise required by this Agreement, in form and substance reasonably satisfactory to the other as the other
may reasonably request in order to carry out or evidence the terms of this Agreement or to collect on behalf of the transferee party any accounts receivable or other claims included in the Insight Assets or AT&T Assets. Without limiting the
generality of the foregoing, Insight and AT&T Broadband will take, or cause to be taken, all actions consistent with the terms of this Agreement, including execution and delivery of any documents or instruments, as the other may reasonably
request to effect the qualification of the transactions contemplated hereby as a like-kind exchange under Section 1031 of the Code.
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7.18 Consents. If and to the extent Insight shall have waived the receipt of any
Required Consent as a condition to Closing, Insight may continue its efforts to obtain any such Required Consent which was not obtained on or before the Closing and AT&T Broadband will cooperate in such efforts as reasonably requested. If and to
the extent AT&T Broadband shall have waived satisfaction of the condition to Closing set forth in Section 8.2(e), then subsequent to the Closing, Insight will continue to use commercially reasonable efforts to obtain in writing as promptly as
possible any Insight Required Consent which was not obtained on or before the Closing (other than consents which Insight has no further obligation to obtain pursuant to Section 7.5(e)) and will deliver copies of the same, reasonably satisfactory in
form and substance, to AT&T Broadband. The obligations set forth in this Section will survive the Closing for a period of thirty (30) days and will not be merged in the consummation of the transactions contemplated hereby. After the expiration
of the survival period set forth in this Section 7.18, Insight will no longer be obligated to obtain any of the Insight Required Consents which were not obtained on or before the Closing and will be released from all liability for any failure to
obtain such consents with respect to which it used commercially reasonable efforts to obtain. To the extent that AT&T Broadband continues to try to obtain any Insight Required Consents that were not obtained by the end of such survival period
Insight will cooperate with AT&T Broadband in such efforts as reasonably requested.
7.19 Cooperation as to Rates and Fees.
(a) Each party shall diligently pursue any current rate proceedings with respect to its Systems and shall make available to the other party upon request copies of any documents, correspondence or notices sent
by or received by such party in connection with the current rate proceedings or any rate regulatory matter with respect to its Systems instituted after the date of this Agreement.
(b) Prior to Closing, without the prior consent of the other party, neither party shall settle any rate proceeding with respect to
its Systems if such settlement would (i) impose upon the other party any liability, or (ii) adversely affect the rates to be charged by the other party during the post-Closing time period unless such party compensates the other party therefor in the
manner agreed by the parties, or if the parties do not agree, as determined by an independent auditor in accordance with the procedures established in Section 3.3(b).
(c) After Closing, notwithstanding the terms of Section 11.4 hereof, the transferee of a System shall have the right at its own
expense to assume control of the defense of any rate proceeding with respect to such System that remains pending as of Closing or that arises after Closing but relates to the pre-Closing operation of a System. The transferee of a System shall notify
the other party regarding the commencement of any such rate proceeding relating to the pre-Closing operation of such System. In any such rate proceeding involving a System, the transferor of such System shall cooperate in such proceeding and
promptly deliver to the other party all information in its possession that is reasonably requested by the other party as necessary or helpful in such proceeding.
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(i) If the transferee of a System elects to assume control of the defense of any
such rate proceeding, then (1) the other party shall have the right to participate, at its expense, in the defense in such rate proceeding, and (2) the transferee shall have the right to settle any rate proceeding relating to the pre-Closing
operation of a System unless under such settlement the other party would be required to bear liability with respect to the pre-Closing time period, in which event such settlement shall require the other party’s prior written consent, which
consent shall not be unreasonably withheld.
(ii) If the transferee of a
System does not elect to assume control of the defense of any such rate proceeding, then (1) the transferee shall have the right to participate, at its expense, in the defense in such rate proceeding, and (2) without the prior consent of the
transferee, the other party shall not settle such rate proceeding if such settlement would require the transferee to bear any liability or would adversely affect the rates to be charged by the transferee unless the other party compensates the
transferee therefor in the manner agreed by the parties, or if the parties do not so agree, as determined by an independent auditor in accordance with the procedures established in Section 3.3(b). In any such rate proceeding involving a System, the
transferee party shall cooperate with the transferor party in such proceeding and promptly deliver to the transferor party all information reasonably requested by the transferor party as necessary or helpful in such proceeding.
(d) If AT&T Broadband or the AT&T Systems are required following Closing
pursuant to any Legal Requirement, settlement or otherwise, to reimburse or provide in-kind or another form of consideration to any subscribers of the AT&T Systems in respect of any subscriber payments previously made by them, including fees for
cable television service, late fees and similar payments, Insight agrees that it will make such reimbursement or provide such in-kind or other form of consideration through Insight’s billing system on terms specified by AT&T Broadband and
AT&T Broadband will reimburse Insight for all such payments and other consideration made by Insight following Closing and for Insight’s reasonable out-of-pocket expenses incurred in connection therewith. Without limiting the foregoing,
Insight will provide AT&T Broadband with all information in Insight’s possession that is reasonably required by AT&T Broadband in connection with such reimbursement.
(e) If Insight or the Insight System is required following Closing pursuant to any Legal Requirement, settlement or otherwise to
reimburse or provide in-kind or another form of consideration to any subscribers of the Insight Systems in respect of any subscriber payments previously made by them, including fees for cable television service, late fees and similar payments,
AT&T Broadband agrees that it will make such reimbursement or provide such in-kind or other form of consideration through AT&T Broadband’s billing system on terms specified by Insight and Insight will reimburse AT&T Broadband for
all such payments and other consideration made by AT&T Broadband following Closing and for AT&T Broadband’s reasonable out-of-pocket expenses incurred in connection therewith. Without limiting the foregoing, AT&T Broadband will
provide Insight with all information in AT&T Broadband’s possession that is reasonably required by Insight in connection with such reimbursement.
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7.20 Satisfaction of Conditions. Each party will use its commercially reasonable
efforts to satisfy, or to cause to be satisfied, the conditions to the obligations of the other party to consummate the transactions contemplated by this Agreement, as set forth in Section 8, with “commercially reasonable efforts” being
determined with respect to any particular matter as set forth elsewhere in this Agreement. Without limiting the foregoing, each party agrees to cooperate with the other in its efforts to obtain any required retransmission consents prior to Closing.
7.21 Offers. Neither party will sell or offer its Assets or Cable
Business for sale, entertain offers for such Assets or Cable Business or otherwise negotiate for the sale of such Assets or Cable Business or make information about such Assets or Cable Business available to any third party in connection with the
possible sale of such Assets or Cable Business prior to the Closing Date or the date this Agreement is terminated in accordance with its terms.
7.22 Environmental Reports. AT&T Broadband may obtain at its expense, such environmental assessments and reports with respect to the real property that it
is acquiring as it may determine. Without limiting the generality of the foregoing, if requested by AT&T Broadband, Insight shall give AT&T Broadband and all environmental engineers and consultants acting on its behalf such access during
normal business hours to the sites and facilities relating to Insight’s Systems as is reasonably required to permit such engineers and consultants to conduct the physical on-site inspections and prepare the environmental surveys and assessments
with respect to such sites and facilities as AT&T Broadband shall reasonably request. If the results of AT&T Broadband’s environmental investigation reveal a matter that would be a breach of Insight’s representations given with
respect to environmental matters, without taking into account the Knowledge limitations in such representations, AT&T Broadband shall have the right to terminate this Agreement, by written notice given to Insight not later than 120 days after
the date of this Agreement unless Insight agrees to, and by Closing does, make satisfactory arrangements, as reasonably determined by AT&T Broadband, to either fix the problem or indemnify AT&T Broadband. Insight agrees that it will not
obtain environmental assessments or reports with respect to the real property that it is acquiring pursuant to this Agreement.
7.23 Cooperation on SEC Matters. Each transferor party agrees to cooperate, and cause its Affiliates and independent accountants to cooperate in all commercially reasonable respects with the
transferee party and its counsel and accountants in connection with any filing required to be made in connection with this Agreement by the transferee party or its Affiliates with the SEC or any securities exchange or pursuant to applicable Legal
Requirements, including the Securities Act and the Exchange Act and requirements of securities exchanges (including any filing required in connection with any public financing proposed to be obtained by the transferee party). The transferor party
shall provide to the transferee party such financial statements, schedules and other information relating to the transferor party’s Cable Business and Systems as the transferee party may reasonably request for inclusion in any such filing, in
appropriate form as provided in applicable federal or state securities laws. The transferee party or its Affiliates shall promptly reimburse the transferor party or its Affiliates or, upon request, advance to the transferor party or its Affiliates,
all
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out-of-pocket costs, expenses and fees incurred by the transferor party or its Affiliates or its independent accountants or attorneys in
connection with the preparation or provision of such financial statements, schedules and other information to the transferee party and the transferee party or its Affiliates shall likewise bear any out-of-pocket costs, expenses and fees incurred by
the transferee party or its Affiliates in connection with the preparation by the transferee and inclusion by the transferee party or its Affiliates of such information in any such filing. The transferor party hereby consents to the inclusion by the
transferee party or its Affiliates of such financial statements, schedules and other information of the transferor party’s Cable Business and Systems, if requested to be so included by the transferee party, in any report required to be filed
with the SEC or any securities exchange or pursuant to applicable Legal Requirements, including the Securities Act and the Exchange Act and requirements of securities exchanges. The transferor party agrees to use, and will cause its Affiliates to
use, commercially reasonable efforts to obtain the consent of the independent public accountants of the transferor party or its Affiliates to the inclusion of such financial statements in any report to be filed by the transferee party. The
transferee party shall indemnify and hold harmless the transferor party and its Affiliates from any Losses resulting from the inclusion of any such financial statements, schedules and other information in any such filing, except the transferee party
shall not have any indemnification liability to the transferor party or its Affiliates to the extent such Losses arise out of any information included by the transferee party or its Affiliates in reliance upon and in conformity with written
information furnished to the transferee party or its Affiliates by the transferor party or its Affiliates for use in connection with such filings.
7.24 Cooperation on Pending Litigation. With respect to any defense or prosecution of any Litigation with respect to the Systems that relates to the period
prior to the Closing Time and for which the transferor party and its Affiliates are responsible pursuant to this agreement, the transferee party will cooperate with and assist the transferor party and its Affiliates, upon reasonable request, by
making witnesses reasonably available and providing all information in its possession (including reasonable access to employees with information regarding such proceedings and access to books and records that may relate to the proceedings) that the
transferor party and its Affiliates may reasonably require in connection with such Litigation or in response to any complaint, claim, inquiry, order or requirements of any Governmental Authority or other Third Party so long as such cooperation and
assistance does not unreasonably interfere with the transferee party’s business, as determined by the transferee party in good faith. The transferor party will promptly reimburse the transferee party for all reasonable direct out-of-pocket
expenses incurred by the transferee party or its Affiliates in connection with such cooperation; provided that the provisions of this Section 7.24 shall not in any way be interpreted to limit the transferee party’s indemnification rights in
accordance with Section 11 of the Agreement or be subject to the limitations on indemnification set forth in Sections 11.5 and 11.6, as applicable.
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7.25 Insight System Upgrade.
(a) Insight currently plans to rebuild and/or upgrade the Insight Systems’ plant capacity to 750MHz pursuant to the capital
expenditures budget set forth on Schedule 7.25 (the “Insight Upgrade Plan”). AT&T Broadband has requested that Insight modify the Insight Upgrade Plan by purchasing related equipment as designated by AT&T Broadband, and by
employing the plant design that AT&T Broadband provides to Insight provided that such design specifications shall be in accordance with AT&T Broadband network architecture standards TS-NETW-981006 and shall include conventional powering and
not powering for 911 telephone reliability (such capacity and equipment designation and plant design specification, the “AT&T Specifications”). Insight agrees to use commercially reasonable efforts to complete the Upgrade in accordance
with this Section 7.25 prior to the Closing.
(b) Insight shall consult
with AT&T Broadband from time to time as requested by AT&T Broadband regarding the costs to complete the Upgrade and will use good faith efforts to minimize the cost of the Upgrade. Insight will notify AT&T Broadband on the 1st and 15th of each month of the costs Insight has incurred for the Upgrade as of the date of each such notification and of the status of the Upgrade. Unless Insight has obtained AT&T Broadband’s prior written
consent to do so, which consent shall not be unreasonably withheld, Insight will not, after the date of this Agreement, enter into any agreement with any contractor, supplier, vendor or other Person in connection with the Upgrade if such agreement
requires payments in the aggregate that exceed $250,000. Any equipment, plant, materials, inventory or other assets purchased, obtained or ordered by Insight or its representatives in connection with the Upgrade (including any such items purchased
from AT&T Broadband) will be incorporated into and considered a necessary part of the Insight Systems and will be included in the Insight Assets. If AT&T Broadband or any of its Affiliates own any equipment, plant, materials inventory or
other assets that meet the requirements of the AT&T Specifications and are available for use in the Upgrade, Insight will purchase such items from AT&T Broadband or its appropriate Affiliate for use in the Upgrade, which purchase will be at
a price not less than the cost of such items to AT&T Broadband or its Affiliate but Insight shall not be required to purchase such assets from AT&T Broadband or its Affiliates, and may purchase such assets from any other supplier if Insight
is able to do so upon more favorable pricing and other terms.
(c) Insight
will use good faith efforts to (i) avoid or minimize any loss in subscribers during the Upgrade, and (ii) avoid or minimize any adverse effect on services provided to subscribers of the Insight Systems as a result of the Upgrade. AT&T Broadband
agrees to designate a point of contact who will be available throughout the period of the Upgrade, which point of contact shall be authorized on AT&T Broadband’s behalf to approve matters related to the Upgrade, and who shall monitor the
Upgrade and confirm to Insight upon Insight’s request whether the Upgrade is being performed in accordance with the AT&T Specifications. Insight will hire a contractor chosen by AT&T Broadband to sweep and certify the plan on a node by
node basis at the time of completion of each node. AT&T Broadband
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may modify the AT&T Specifications from time to time (such modifications to be in accordance with AT&T Broadband
network architecture standards TS-NETW-981006) and will provide Insight with notice of any such modifications. Such modifications will become part of the AT&T Specifications.
(d) If this Agreement is terminated for any reason other than a termination by AT&T Broadband pursuant to Section 10.1(b),
AT&T Broadband shall be obligated to pay or reimburse Insight an amount equal to the lesser of (i) the amount by which Insight’s out-of-pocket costs incurred prior to the date of termination for the Upgrade exceed $7,100,000, plus an amount
equal to 50% of any Franchise Penalties, or (ii) $5,200,000. Notwithstanding the preceding sentence, if Insight, as of the date of termination of this Agreement, has not incurred out-of-pocket costs for the Upgrade that exceed $7,100,000, AT&T
Broadband will not be obligated to reimburse Insight for any costs associated with the Upgrade, other than an amount equal to 50% of any Franchise Penalties; provided, that AT&T Broadband shall not be obligated to pay any amount to Insight
pursuant to this Section 7.25(d) if this Agreement is terminated by AT&T Broadband pursuant to Section 10.1(b). Any obligation that AT&T Broadband has to reimburse Insight under this 7.25(d) shall survive the termination of this Agreement
and continue in full force and effect. If Insight does not enter into extension agreements prior to Closing with respect to those Insight System Franchises that have past-due upgrade obligations as of the Closing: (x) if any penalties or other
monetary damages are incurred by AT&T Broadband after the Closing that result directly from the failure of Insight (or, with respect to any time period after the Closing during which any required upgrade or rebuild is being completed by AT&T
Broadband in a timely manner, AT&T Broadband) to upgrade or rebuild the Insight System in accordance with such Insight System Franchises, or (y) if AT&T Broadband agrees following Closing to pay any amount to a local franchising authority in
connection with obtaining an extension of the upgrade or rebuild obligations in such Insight System Franchises, then Insight shall promptly reimburse AT&T Broadband for an amount equal to 50% of such penalties, damages or amounts; provided that
AT&T Broadband shall obtain Insight’s prior approval with respect to any such extension agreement that contemplates any payment by the franchisee, such approval not to be unreasonably withheld.
SECTION 8. CONDITIONS PRECEDENT
8.1 Conditions to Insight’s Obligations. The obligations of Insight to consummate the transactions contemplated by
this Agreement are subject to the satisfaction at or before the Closing of the following conditions, any of which may be waived by Insight.
(a) Accuracy of Representations and Warranties. The representations and warranties of AT&T Broadband in this Agreement and in any Transaction
Document, if specifically qualified by materiality, are true in all respects and, if not so qualified, are true in all material respects, in each case at and as of the Closing with the same effect as if made at and as of the Closing.
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(b) Performance of Agreements. AT&T Broadband has performed
in all material respects all obligations and agreements and complied in all material respects with all covenants in this Agreement and in any Transaction Document to be performed and complied with by it at or before the Closing.
(c) Deliveries. AT&T Broadband has delivered the items and
documents required to be delivered by it pursuant to this Agreement, including those required under Section 9.2.
(d) Legal Proceedings. No action, suit or proceeding is pending or threatened by or before any Governmental Authority and no Legal Requirement has been enacted, promulgated or issued or become
or deemed applicable to any of the transactions contemplated by this Agreement by any Governmental Authority, which would (i) prohibit Insight’s ownership or operation of all or a material portion of any AT&T System, AT&T’s Cable
Business or the AT&T Assets, (ii) compel Insight to dispose of or hold separately all or a material portion of any AT&T System, AT&T’s Cable Business or the AT&T Assets as a result of any of the transactions contemplated by this
Agreement, (iii) if determined adversely to Insight’s interest, materially impair the ability of Insight to realize the benefits of the transactions contemplated by this Agreement or have a material adverse effect on the right of Insight to
exercise full rights of ownership of the AT&T Systems or (iv) prevent or make illegal the consummation of any transactions contemplated by this Agreement.
(e) Consents. Insight has received evidence, in form and substance reasonably satisfactory to it, that the AT&T
Required Consents have been obtained and that the following Required Consents have been obtained without the imposition of any condition or any modification that in either case makes, or is reasonably likely to make, the underlying instrument
materially more onerous in any respect or materially reduces in any respect, or is reasonably likely to materially reduce in any respect, the benefits available under the instrument in respect of which the consent relates: Required Consents for the
AT&T System Franchises, the AT&T System Licenses, and any AT&T Leased Property or AT&T Other Real Property Interest on which a headend, tower or other reception site is located. In addition, the Insight Required Consents for the
Insight System Franchises and Insight System Licenses shall have been obtained.
(f) No Material Adverse Change. There has not been any material adverse change in the AT&T Assets or the financial condition or operations of AT&T’s Cable Business or the AT&T
Systems since the date of this Agreement other than a material adverse change caused by acts of omissions by Insight LP that constitute a breach by Insight LP under the Consulting Agreement. For the purpose of this Agreement, the impact of general
economic conditions (including changes in capital and financial markets), governmental legislation and regulations and other events which affect the cable industry as a whole in the State of Indiana, the Commonwealth of Kentucky or the United
States, shall not be considered in determining whether there has been a material adverse change in the business, condition, financial or otherwise or liabilities of AT&T’s Cable Business or any AT&T System or the AT&T Assets.
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(g) HSR Act. All filings required under the HSR Act have been
made and the applicable waiting period has expired or been earlier terminated.
(h) Retransmission Consents. With respect to any retransmission consent agreements for broadcast signals carried on the AT&T Systems on the date of this Agreement and on the date of the
Closing that are included as part of the AT&T Excluded Assets, all required retransmission consents for continued carriage of such broadcast signals by Insight have been obtained on terms and conditions reasonably acceptable to Insight.
8.2 Conditions to AT&T Broadband’s Obligations. The obligations
of AT&T Broadband to consummate the transactions contemplated by this Agreement are subject to the satisfaction at or before the Closing of the following conditions, any of which may be waived by AT&T Broadband.
(a) Accuracy of Representations and Warranties. The representations and
warranties of Insight in this Agreement and in any Transaction Document, if specifically qualified by materiality, are true in all respects and, if not so qualified, are true in all material respects, in each case at and as of the Closing with the
same effect as if made at and as of the Closing (it being understood that Insight makes no representation or warranty relating to the Schedules prepared by it relating to the AT&T Assets and the Required Consents).
(b) Performance of Agreements. Insight has performed in all material respects all
obligations and agreements and complied in all material respects with all covenants in this Agreement and in any Transaction Document to be performed and complied with by it at or before the Closing.
(c) Deliveries. Insight has delivered the items and documents required to be
delivered by it pursuant to this Agreement, including those required under Section 9.3.
(d) Legal Proceedings. No action, suit or proceeding is pending or threatened by or before any Governmental Authority and no Legal Requirement has been enacted, promulgated or issued or become
or deemed applicable to any of the transactions contemplated by this Agreement by any Governmental Authority, which would (i) prohibit AT&T Broadband’s ownership or operation of all or a material portion of any Insight System,
Insight’s Cable Business or the Insight Assets, (ii) compel AT&T Broadband to dispose of or hold separately all or a material portion of any Insight System, Insight’s Cable Business or Insight Assets as a result of any of the
transactions contemplated by this Agreement, (iii) if determined adversely to AT&T Broadband’s interest, materially impair the ability of AT&T Broadband to realize the benefits of the transactions contemplated by this Agreement or have
a material adverse effect on the right of AT&T Broadband to exercise full rights of ownership of the Insight Systems or (iv) prevent or make illegal the consummation of any transactions contemplated by this Agreement.
(e) Consents. AT&T Broadband has received evidence, in form and
substance reasonably satisfactory to it, that the Insight Required Consents marked with an asterisk on Schedule 5.3 have been obtained and that the following Insight Required Consents have been obtained without
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the imposition of any condition or any modification that in either case makes, or is reasonably likely to make, the
underlying instrument materially more onerous in any respect or materially reduces in any respect, or is reasonably likely to materially reduce in any respect, the benefits available under the instrument in respect of which the consent relates:
Insight Required Consents for the Insight System Franchises, the Insight System Licenses, and any Insight Leased Property or Insight Other Real Property Interest on which a headend, tower or other reception site is located. In addition, the Required
Consents for the AT&T System Franchises and AT&T System Licenses shall have been obtained.
(f) No Material Adverse Change. There has not been any material adverse change in the Insight Assets or the financial condition or operations of Insight’s Cable Business or the Insight
Systems since the date of this Agreement. In making the determination required by the preceding sentence, the last sentence of Section 5.10 shall be applicable.
(g) HSR Act. All filings required under the HSR Act have been made and the applicable waiting period has expired or
been earlier terminated.
(h) Retransmission
Consents. With respect to any retransmission consent agreements for broadcast signals carried on the Insight Systems on the date of this Agreement and on the date of the Closing that are included as part of the Insight Excluded
Assets, all required retransmission consents for continued carriage of such broadcast signals by AT&T Broadband have been obtained on terms and conditions reasonably acceptable to AT&T Broadband.
(i) Merger Closing. The closing under the Agreement and Plan of Merger dated as
of December 19, 2001, and as has been or may be amended from time to time, by and among AT&T Corp., AT&T Broadband Corp., Comcast Corporation, AT&T Broadband Acquisition Corp., Comcast Acquisition Corp., and AT&T Comcast Corporation
shall have occurred.
SECTION 9. THE CLOSING
9.1 The Closing; Time and Place. The closing of the transactions contemplated by this Agreement (the “Closing”) will take
place at a date (the “Closing Date”) and time mutually determined by AT&T Broadband and Insight, which Closing Date shall be within ten days after the date on which all conditions set forth in Sections 8.1 and 8.2 (other than those
based on acts to be performed at the Closing) have either been satisfied or waived in writing by the party entitled to the benefit of such condition.
9.2 AT&T Broadband’s Delivery Obligations. At the Closing, AT&T Broadband will deliver or cause to be delivered to Insight the following.
(a) Closing Payment. Amounts, if any, payable by
AT&T Broadband to Insight pursuant to Section 3.
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(b) ▇▇▇▇ of Sale and Assignment and Assumption Agreement. An
executed ▇▇▇▇ of Sale and Assignment and an executed Assumption Agreement in form and substance mutually and reasonably acceptable to AT&T Broadband and Insight and such other instruments of transfer, assignment or assumption, in form and
substance mutually satisfactory to AT&T Broadband and Insight, as Insight may reasonably require to further document the transfer and assignment of the AT&T Assets to Insight and AT&T Broadband’s assumption of the AT&T Assumed
Obligations and Liabilities.
(c) Deeds. A special or
limited warranty deed in a form reasonably acceptable to Insight (and complying with applicable state laws) with respect to each parcel of AT&T Owned Property, duly executed and acknowledged and in recordable form, warranting only to defend
title to such AT&T Owned Property in the peaceable possession of Insight against all Persons claiming by, through or under AT&T Broadband, subject however, to any Permitted Liens.
(d) Lien Releases. Evidence reasonably satisfactory to Insight that all Liens (other than Permitted Liens)
affecting or encumbering the AT&T Assets have been terminated, released or waived, as appropriate, or original, executed instruments in form reasonably satisfactory to Insight effecting such terminations, releases or waivers.
(e) Vehicle Titles. Title certificates to all vehicles included among
the AT&T Assets, endorsed for transfer of valid and good title to Insight free and clear of all Liens (other than Permitted Liens), and separate bills of sale therefor or other transfer documentation, if required by the laws of the States in
which such vehicles are titled.
(f) Evidence of Authorization
Actions. Evidence reasonably satisfactory to Insight that AT&T Broadband has taken all partnership action necessary to authorize the execution of this Agreement and the Transaction Documents and the consummation of the
transactions contemplated hereby.
(g) FIRPTA
Certificate. A FIRPTA Non-Foreign Seller Certificate from AT&T Broadband certifying that it is not a foreign person within the meaning of Section 1445 of the Code reasonably satisfactory in form and substance to Insight.
(h) Officer’s Certificate. A certificate from
AT&T Broadband executed by an executive officer of the managing general partner of AT&T Broadband, dated the Closing Date, reasonably satisfactory in form and substance to Insight certifying that the conditions specified in Sections 8.1(a)
and 8.1(b) have been satisfied.
(i) Documents and
Records. All AT&T Books and Records, including a list of all pending subscriber hook-ups, disconnect and repair orders, supply orders and any other lists reasonably necessary to the operation of the AT&T Systems. Delivery of
the foregoing will be deemed made to the extent such AT&T Books and Records are then located at any of the offices included in the AT&T Owned Property or AT&T Leased Property.
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(j) Other. Such other documents and instruments as may be
reasonably necessary to effect the intent of this Agreement and consummate the transactions contemplated hereby.
9.3 Insight’s Delivery Obligations. At the Closing, except as otherwise provided below, Insight will deliver or cause to be delivered to AT&T Broadband the following.
(a) Closing Payments. The Cash Consideration and amounts, if any,
payable by Insight to AT&T Broadband pursuant to Section 3.
(b) ▇▇▇▇ of Sale and Assignment and Assumption Agreement. An executed ▇▇▇▇ of Sale and Assignment and an executed Assumption Agreement in form and substance mutually and reasonably acceptable
to AT&T Broadband and Insight and such other instruments of transfer, assignment or assumption for each exchange transaction, in form and substance mutually satisfactory to Insight and AT&T Broadband, as AT&T Broadband may reasonably
require to further document the transfer and assignment of the Insight Assets to AT&T Broadband and Insight’s assumption of the Insight Assumed Obligations and Liabilities.
(c) Deeds. A special or limited warranty deed in a form reasonably acceptable to AT&T Broadband (and complying
with applicable state laws) with respect to each parcel of Insight Owned Property, duly executed and acknowledged and in recordable form, warranting only to defend title to such Insight Owned Property in the peaceable possession of AT&T
Broadband against all Persons claiming by, through or under Insight, subject however, to any Permitted Liens and any Title Defects insured over pursuant to Section 7.6, and in form sufficient to permit the applicable Title Company, if any, to issue
the Title Policies to AT&T Broadband, together with any title affidavit reasonably required by the title insurer, if any, that does not expand the aforesaid limited or special warranty of Insight.
(d) Lien Releases. Evidence reasonably satisfactory to AT&T Broadband that
all Liens (other than Permitted Liens) affecting or encumbering the Insight Assets have been terminated, released or waived, as appropriate, or original, executed instruments in form reasonably satisfactory to AT&T Broadband effecting such
terminations, releases or waivers.
(e) Vehicle
Titles. Title certificates to all vehicles included among the Insight Assets, endorsed for transfer of valid and good title to AT&T Broadband, free and clear of all Liens (other than Permitted Liens) and separate bills of sale
therefor or other transfer documentation, if required by the laws of the States in which such vehicles are titled.
(f) Evidence of Authorization Actions. Evidence reasonably satisfactory to AT&T Broadband that Insight has taken all limited liability company action necessary to authorize the
execution of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby.
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(g) FIRPTA Certificate. A FIRPTA Non-Foreign Seller Certificate
certifying that Insight is not a foreign person within the meaning of Section 1445 of the Code reasonably satisfactory in form and substance to AT&T Broadband.
(h) Officer’s Certificates. A certificate executed by an executive officer of the ultimate corporate manager
of Insight dated the Closing Date, reasonably satisfactory in form and substance to AT&T Broadband certifying that the conditions specified in Sections 8.2(a) and 8.2(b) have been satisfied.
(i) Documents and Records. All Insight Books and Records, including a list of all pending subscriber hook-ups,
disconnect and repair orders, supply orders and any other lists reasonably necessary to the operation of the Insight Systems. Delivery of the foregoing will be deemed made to the extent such Insight Books and Records are then located at any of the
offices included in the Insight Owned Property or Insight Leased Property.
(j) Other. Such other documents and instruments as may be reasonably necessary to effect the intent of this Agreement and consummate the transactions contemplated hereby.
SECTION 10. TERMINATION AND DEFAULT
10.1 Termination Events. This Agreement may be terminated and the transactions contemplated
hereby may be abandoned:
(a) at any time by the mutual agreement of
Insight and AT&T Broadband;
(b) by either Insight or AT&T
Broadband at any time (if such party itself is not then in material breach of any of its covenants, agreements or other obligations contained in this Agreement), if the other is in material breach or default of any of its covenants, agreements or
other obligations herein, or if any of its representations herein if specifically qualified by materiality, is not true in all respects or, if qualified by materiality, is not true in all material respects when made or when otherwise required by
this Agreement to be true, if the non-breaching party provides the breaching party with prompt written notice that provides a reasonably detailed explanation of the facts and circumstances surrounding such breach or default; provided that such party
shall have no right to terminate if (i) the breaching party cures such breach or default within 30 days after its receipt of such written notice, unless such breach or default cannot be cured within such 30-day period; or (ii) the breach or default
is capable of being cured prior to the one year anniversary of the date of this Agreement (the “Outside Closing Date”) and the breaching party commences to cure such breach or default within such 30-day period and diligently continues to
take all action reasonably necessary to cure such breach or default prior to the Outside Closing Date and such breach or default is cured prior to the Outside Closing Date; or
(c) by either Insight or AT&T Broadband upon written notice to the other given not earlier than the Outside Closing Date, if any
of the conditions to its obligations set forth in Sections 8.1 and 8.2, respectively, are not satisfied on or before the Outside Closing Date for any
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reason other than a material breach or default by the terminating party of its respective covenants, agreements or other
obligations under this Agreement, or if any of its representations herein, if specifically qualified by materiality, is not true in all respects or, if qualified by materiality, is not true in all material respects when made or when otherwise
required by this Agreement to be true; or
(d) as otherwise provided in
this Agreement.
10.2 Effect of Termination. If this Agreement is
terminated pursuant to Section 10.1, all obligations of the parties under this Agreement will terminate, except for the obligations set forth in Sections 7.13, 7.23 (with respect to the transferee party’s obligation to pay for the transferor
party’s and its Affiliates’ expenses as specified therein) and 12.15. Notwithstanding the preceding sentence, termination of this Agreement pursuant to Sections 10.1(b) or 10.1(c) or 10.1(d) or 12.16 will not limit or impair any remedies
that AT&T Broadband or Insight may have with respect to a breach or default by the other of its covenants, agreements or obligations under this Agreement prior to Closing.
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
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11.1 Survival of Representations and Warranties. The representations and
warranties of AT&T Broadband and Insight in this Agreement and in the Transaction Documents and the covenants of AT&T Broadband and Insight in this Agreement and the Transaction Documents to be performed prior to the Closing will survive
until the first anniversary of the Closing Date except that (a) all such representations and warranties of Insight and, to the extent applicable, AT&T Broadband with respect to Taxes, rates, Environmental Laws, ERISA, employment matters or
copyright matters will survive until 60 days after the expiration of the applicable statute of limitations (including any extensions) for such Taxes, rates, Environmental Laws, ERISA, employment matters or copyright matters, respectively and (b) the
representations and warranties as to title to the Assets in Sections 5.4(a) and 6.4, respectively, and as to title to Insight Owned Property set forth in Section 5.6, and in the special warranty deed or deeds delivered with respect to Owned Property
will survive the Closing and the delivery of such deeds and will continue in full force and effect without limitation with the understanding that, notwithstanding any language contained in any such deed, the representations and warranties as to
title to the AT&T Owned Property in Section 6.4 and title to the Insight Owned Property set forth in Section 5.6, will not be merged into any such deed or other Transaction Document. The periods of survival of the representations and warranties
and of the covenants to be performed prior to the Closing prescribed by this Section 11.1 are referred to as the “Survival Period.” The liabilities of each party under its respective representations and warranties and its respective
covenants to be performed prior to the Closing will expire as of the expiration of the applicable Survival Period; provided however that such expiration will not include, extend or apply to any such representation or warranty or covenant, the breach
of which has been asserted by a party in a written notice to the other party before such expiration or about which a party has given the other party written notice before such expiration indicating that facts or conditions exist that, with the
passage of time or otherwise, can reasonably be expected to result in a breach (and describing such potential breach in reasonable detail). The covenants and agreements of each party in this Agreement and in the Transaction Documents to be performed
after the Closing will survive the Closing and will continue in full force and effect in accordance with their terms.
11.2 Indemnification by AT&T Broadband. From and after the Closing AT&T Broadband will indemnify, defend and hold harmless Insight and its members and its and their respective
Affiliates, and the members, partners, shareholders, officers, directors, employees, agents, successors and assigns of them and any Person claiming by or through any of them, as the case may be, from and against any and all Losses arising out of or
resulting from (a) any breach of any representation or warranty made by AT&T Broadband in this Agreement or any Transaction Document; (b) any breach of any covenant, agreement or obligation of AT&T Broadband contained in this Agreement or
any Transaction Document; (c) any act or omission of AT&T Broadband with respect to, or any event or circumstance related to, the ownership or operation of the AT&T Assets or the conduct of the AT&T Cable Business, which act, omission,
event or circumstance occurred or existed prior to or at the Closing Time, without regard to whether a claim with respect to such matter is asserted before or after the Closing Time, including any matter described on Schedule 6.5; (d) any
liability or obligation of AT&T Broadband not included in the Insight Assumed Obligations and Liabilities; (e) any matter affecting title to AT&T Owned Property which prevents access to or which could prevent or impede in any way the use or
operation of any parcel of AT&T Owned Property for purposes for
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which it is currently used or operated by AT&T Broadband; (f) any claim that the transactions contemplated by this
Agreement to be performed by AT&T Broadband violate any Legal Requirement or any bulk transfer or fraudulent conveyance laws of any jurisdiction; (g) any claim by a third party relating to the presence, generation, removal or transportation of a
Hazardous Substance on or from any of the AT&T Owned Property or AT&T Leased Property through and including the Closing Time, including the costs in response to a third party claim of removal or clean-up of such Hazardous Substance and other
compliance with the provisions of any Environmental Laws (whether before or after Closing); (h) any rate refund or credit, penalty and/or interest payment with respect thereto ordered by any Governmental Authority with respect to the AT&T
Systems for periods through and including the Closing Time, including, without limitation, any payments required by the FCC Order referred in Section 6.7 of this Agreement and any additional payments arising out of the underlying CPST complaint; or
(i) the failure of AT&T Broadband to perform the AT&T Assumed Obligations and Liabilities; provided that AT&T Broadband shall not be responsible for and shall not be required to indemnify Insight for Losses caused by any acts or
omissions of Insight LP that constitute a breach by Insight LP under the Consulting Agreement.
In
the event that an indemnified item arises under both clause (a) and under one or more of clauses (b) through (i) of this Section, Insight’s rights to pursue its claim under clauses (b) through (i) as applicable will exist notwithstanding the
expiration of the Survival Period applicable to such claim under clause (a).
11.3 Indemnification by Insight. From and after the Closing, Insight will indemnify, defend and hold harmless AT&T Broadband and its partners and its and their respective Affiliates and
the members, partners, shareholders, officers, directors, employees, agents, successors and assigns of them and any Person claiming by or through any of them, as the case may be, from and against any and all Losses arising out of or resulting from
(a) any breach of any representation or warranty made by Insight in this Agreement or any Transaction Document (it being understood that Insight makes no representation or warranty relating to the Schedules prepared by it relating to the AT&T
Assets and the Required Consents and Insight shall have no liability relating to Schedule 7.5(a) except as expressly provided in Section 7.5(a)); (b) any breach of any covenant, agreement or obligation of Insight contained in this Agreement or any
Transaction Document (provided that Insight’s liability relating to its covenant to obtain the Required Consents is limited as provided in Section 7.5); (c) any act or omission of Insight with respect to, or any event or circumstance related
to, the ownership or operation of the Insight Assets or the conduct of Insight’s Cable Business, which act, omission, event or circumstance occurred or existed prior to or at the Closing Time, without regard to whether a claim with respect to
such matter is asserted before or after the Closing Time, including any matter described on Schedule 5.11; (d) any liability or obligation not included in the AT&T Assumed Obligations and Liabilities; (e) any Title Defect relating to any
Insight Owned Property; (f) any claim that the transactions contemplated by this Agreement violate WARN (to the extent Insight is responsible for compliance with WARN pursuant to Section 7.3) or any similar Legal Requirement or any bulk transfer or
fraudulent conveyance laws of any jurisdiction; (g) any claim relating to “continuation coverage” under Code Section 4980B with respect to former employees of Insight at and after the Closing Time or that AT&T Broadband is deemed to be
a successor employer of Insight or its Affiliates under Code Section 4980B; (h) any claim by a third
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party relating to the presence, generation, removal or transportation of a Hazardous Substance on or from any of the Insight Owned Property or Insight Leased Property through and including the
Closing Time, including the costs in response to a third party claim of removal or clean-up of such Hazardous Substance and other compliance with the provisions of any Environmental Laws (whether before or after Closing); (i) any rate refund or
credit, penalty and/or interest payment with respect thereto ordered by any Governmental Authority with respect to the Insight Systems for periods through and including the Closing Time; or (j) the failure of Insight to perform the Insight Assumed
Obligations and Liabilities.
In the event that an indemnified item arises under both clause (a) and under one or
more of clauses (b) through (j) of this Section, AT&T Broadband’s rights to pursue its claim under clauses (b) through (j) as applicable will exist notwithstanding the expiration of the Survival Period applicable to such claim under clause
(a).
11.4 Third Party Claims. Promptly after the receipt by
a party of notice of any claim, action, suit or proceeding by any third party (collectively, an “Action”), which Action is subject to indemnification under this Agreement, such party (the “Indemnified Party”) will give reasonable
written notice to the party from whom indemnification is claimed (the “Indemnifying Party”). The Indemnified Party will be entitled, at the sole expense and liability of the Indemnifying Party, to exercise full control of the defense,
compromise or settlement of any such Action unless the Indemnifying Party, within a reasonable time after the giving of such notice by the Indemnified Party, (a) admits in writing to the Indemnified Party the Indemnifying Party’s liability to
the Indemnified Party for such Action under the terms of this Section 11, (b) notifies the Indemnified Party in writing of the Indemnifying Party’s intention to assume such defense, (c) provides evidence reasonably satisfactory to the
Indemnified Party of the Indemnifying Party’s ability to pay the amount, if any, for which the Indemnified Party may be liable as a result of such Action and (d) retains legal counsel reasonably satisfactory to the Indemnified Party to conduct
the defense of such Action. The other party will cooperate with the party assuming the defense, compromise or settlement of any such Action in accordance with this Agreement in any manner that such party reasonably may request. If the Indemnifying
Party so assumes the defense of any such Action, the Indemnified Party will have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement of the Action, but the fees and expenses of such
counsel will be at the expense of the Indemnified Party unless (x) the Indemnifying Party has agreed to pay such fees and expenses, (y) any relief other than the payment of money damages is sought against the Indemnified Party or (z) the Indemnified
Party will have been advised by its counsel that there may be one or more defenses available to it which are different from or additional to those available to the Indemnifying Party, and in any such case that portion of the fees and expenses of
such separate counsel that are reasonably related to matters covered by the indemnity provided in this Section 11 will be paid by the Indemnifying Party. No Indemnified Party will settle or compromise any such Action for which it is entitled to
indemnification under this Agreement without the prior written consent of the Indemnifying Party, unless the Indemnifying Party has failed, after reasonable notice, to undertake control of such Action in the manner provided in this Section 11.4. No
Indemnifying Party will settle or compromise any such Action (A) in which any relief other than the
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payment of money damages is sought against any Indemnified Party and then only if the settlement or compromise includes
as an unconditional term thereof a release of the Indemnified Party from all liability relating to such matter or (B) in the case of any Action relating to the Indemnified Party’s liability for any Tax, if the effect of such settlement would be
an increase in the liability of the Indemnified Party for the payment of any Tax for any period beginning after the Closing Date, unless the Indemnified Party consents in writing to such compromise or settlement.
11.5 Limitations on Indemnification—AT&T Broadband. AT&T Broadband
will not be liable to Insight with respect to any matter or claim for which indemnification could be sought pursuant to Section 11.2(a) or (b) for (a) any Losses of or to Insight or any other Person entitled to indemnification from AT&T
Broadband or (b) any Losses incidental to or relating to or resulting from any of the foregoing (the items described in clauses (a) and (b) collectively being referred to for purposes of this Section 11 as “Insight Damages”) unless the
amount of Insight Damages for which AT&T Broadband would, but for the provisions of this Section, be liable exceeds, on an aggregate basis, $100,000, in which case AT&T Broadband will be liable for all such Insight Damages from dollar zero,
which will be due and payable within 15 days after AT&T Broadband’s receipt of a statement therefor. AT&T Broadband will not have any liability under Section 11.2(a) or (b) to the extent that the aggregate amount of Losses otherwise
subject to its indemnification obligation thereunder exceeds $2,750,000. The limitations set forth in this Section 11.5 do not apply to (i) the Pro Rata Adjustments to the extent they are included in the calculation of Pro Rata Adjustments pursuant
to Sections 3.2 and 3.3; (ii) direct out-of-pocket expenses incurred by Insight or its Affiliates in connection with cooperation on pending litigation pursuant to Section 7.24 or other expenses and costs for which AT&T Broadband is responsible
pursuant to this Agreement, including, without limitation, pursuant to Sections 7.8, 7.12, 7.19 or 7.25; or (iii) any claim made pursuant to Sections 11.2(c)-(i), including, without limitation, any Losses related to any liability or obligation for
late fees; any liability or obligation with respect to paying franchise fees on franchise fees; subscriber refunds or AT&T Broadband’s litigation listed in the Schedules to this Agreement. AT&T Broadband will not be liable under Section
11.2(c) to the extent that an adjustment was made in favor of Insight pursuant to Sections 3.2 and 3.3.
11.6 Limitations on Indemnification—Insight. Insight will not be liable to AT&T Broadband with respect to any matter or claim for which indemnification could be sought pursuant to
Section 11.3(a) or (b) for (a) any Losses of or to AT&T Broadband or any other Person entitled to indemnification from Insight or (b) any Losses incidental to or relating to or resulting from any of the foregoing (the items described in clauses
(a) and (b) collectively being referred to for purposes of this Section 11 as “AT&T Damages”) unless the amount of AT&T Damages for which Insight would, but for the provisions of this Section, be liable exceeds, on an aggregate
basis, $100,000, in which case Insight will be liable for all such AT&T Damages from dollar zero, which will be due and payable within 15 days after Insight’s receipt of a statement therefor. Insight will not have any liability under
Section 11.3(a) or (b) to the extent that the aggregate amount of Losses otherwise subject to its indemnification obligations thereunder exceeds $2,750,000. The limitations set forth in this Section 11.6 do not apply to (i) the Pro Rata Adjustments
to the extent they are included in the calculation of Pro Rata Adjustments pursuant to Section 3.2 and 3.3; (ii) direct out-of-pocket expenses incurred by
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AT&T or its Affiliates in connection with cooperation on pending litigation pursuant to Section 7.24 or other expenses and costs for which Insight is responsible pursuant to this Agreement,
including, without limitation, pursuant to Sections 7.8 and 7.19; (iii) costs, expenses and fees incurred by AT&T Broadband or its Affiliates, accountants or attorneys pursuant to Section 7.23 or (iv) any claims made pursuant to Sections
11.3(c)-(j), including, without limitation, any Losses related to any liability or obligation for late fees; any liability or obligation with respect to paying franchise fees on franchise fees; subscriber refunds or Insight litigation listed in the
Schedules to this Agreement. Insight will not be liable under Section 11.3(c) to the extent that an adjustment was made in favor of AT&T Broadband pursuant to Sections 3.2 and 3.3.
SECTION 12. MISCELLANEOUS PROVISIONS
12.1 Parties Obligated and Benefitted. Subject to the limitations set forth below, this Agreement will be binding upon the parties and their
respective assigns and successors in interest and will inure solely to the benefit of the parties and their respective assigns and successors in interest, and no other Person will be entitled to any of the benefits conferred by this Agreement.
Without the prior written consent of the other parties, no party will assign any of its rights under this Agreement or delegate any of its duties under this Agreement, provided that a party may, without the consent of any other party, prior to
Closing assign all of such party’s rights and obligations under this Agreement to any Affiliate of such party; provided such assignee can make all of the representations and warranties applicable to the assigning party hereunder (other
than those relating to jurisdiction of incorporation), the assigning party can provide reasonable assurances that such assignee can otherwise perform the covenants, agreements and obligations applicable to the assigning party hereunder and such
assignment would not materially delay or hinder the consummation of the transactions contemplated by this Agreement. In addition, (a) any party may grant to its lenders a security interest in the indemnification rights hereunder inuring to the
benefit of such party and (b) AT&T Broadband may assign its rights under this Agreement but not its obligations to a qualified intermediary within the meaning of Code Section 1.1031(k)-1(g)(4)(iii) (“Qualified Intermediary”) and
Insight hereby consents to any such assignment by AT&T Broadband. If AT&T Broadband elects to assign its rights under this Agreement to a Qualified Intermediary, Insight will cooperate with AT&T Broadband as may be reasonably necessary
in connection with such assignment and the deferred tax-free exchange to be accomplished in connection therewith, including acknowledging the execution of a written agreement between AT&T Broadband and the Qualified Intermediary. No assignment
by any party of its rights hereunder shall release such party from its obligations hereunder.
12.2 Notices. Any notice, request, demand, waiver or other communication required or permitted to be given under this Agreement will be in writing and will be deemed to have been
duly given only if delivered in person or by first class, prepaid, registered or certified mail, or sent by courier or, if receipt is confirmed, by telecopier:
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To AT&T Broadband at:
Intermedia Partners Southeast
c/o AT&T Broadband, LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy similarly addressed to the attention of Legal Department, Suite 600
With a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
To Insight at:
Insight Communications Company, L.P.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ PLLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may
change the address to which notices are required to be sent by giving notice of such change in the manner provided in this Section. All notices will be deemed to have been received on
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the date of delivery, which in the case of deliveries by telecopier will be the date of the sender’s confirmation.
12.3 Right to Specific Performance. The parties
acknowledge that the unique nature of the Assets to be exchanged by the parties pursuant to this Agreement renders money damages an inadequate remedy for the breach by the parties of its obligations under this Agreement, and the parties agree that
in the event of such breach, the parties will upon proper action instituted by either of them, be entitled to a decree of specific performance of this Agreement.
12.4 Waiver. This Agreement or any of its provisions may not be waived except in writing. The failure of any party
to enforce any right arising under this Agreement on one or more occasions will not operate as a waiver of that or any other right on that or any other occasion.
12.5 Captions. The section and other captions of this Agreement are for convenience only and do not constitute a
part of this Agreement.
12.6 Choice of Law. THIS
AGREEMENT AND THE RIGHTS OF THE PARTIES UNDER IT WILL BE GOVERNED BY AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES OF DELAWARE.
12.7 Terms. Terms used with initial capital letters or otherwise defined in this
Agreement will have the meanings specified, applicable to both singular and plural forms, for all purposes of this Agreement. The word “include” and derivatives of that word are used in this Agreement in an illustrative sense rather than
limiting sense.
12.8 Rights Cumulative. All rights and
remedies of each of the parties under this Agreement will be cumulative, and the exercise of one or more rights or remedies will not preclude the exercise of any other right or remedy available under this Agreement or applicable law.
12.9 Time. Time is of the essence under this Agreement. If the last
day permitted for the giving of any notice or the performance of any act required or permitted under this Agreement falls on a day which is not a Business Day, the time for the giving of such notice or the performance of such act will be extended to
the next succeeding Business Day.
12.10 Late
Payments. If a party fails to pay any other party any amounts when due under this Agreement, the amounts due will bear interest from the due date to the date of payment at the annual rate publicly announced from time to time by The
Bank of New York as its prime rate (the “Prime Rate”) plus 2%, adjusted as and when changes in the Prime Rate are made.
12.11 Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original.
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12.12 Entire Agreement. This Agreement (including the Transaction Documents and
the Schedules and Exhibits referred to in this Agreement, which are incorporated in and constitute a part of this Agreement) contains the entire agreement of the parties and supersedes all prior oral or written agreements and understandings with
respect to the subject matter. This Agreement may not be amended or modified except by a writing signed by the parties.
12.13 Severability. Any term or provision of this Agreement which is invalid or unenforceable will be ineffective to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining rights of the Person intended to be benefitted by such provision or any other provisions of this Agreement.
12.14 Construction. This Agreement has been negotiated by the parties and their respective legal counsel, and legal or equitable principles that might require the construction of this
Agreement or any provision of this Agreement against the party drafting this Agreement will not apply in any construction or interpretation of this Agreement.
12.15 Expenses. Except as otherwise expressly provided in this Agreement (which expenses the parties shall pay as so provided), each party will pay all of its
expenses, including attorneys’ and accountants’ fees, in connection with the negotiation of this Agreement, the performance of its obligations and the consummation of the transactions contemplated by this Agreement.
12.16 Risk of Loss.
(a) The risk of any loss or damage to the Insight Assets or AT&T Assets resulting from fire, theft or other casualty (except
reasonable wear and tear) will be borne by Insight or AT&T Broadband, respectively, at all times through and including the Closing. If any such loss or damage is sufficiently substantial so as to preclude and prevent resumption of normal
operations of any material portion of a System or the replacement or restoration of the lost or damaged property within twenty days or, if earlier, prior to the Outside Closing Date, Insight or AT&T Broadband as appropriate, will immediately
notify the other in writing of that fact and subject to the other provisions of this Section 12.16, Insight, in the event of loss or damage to the Insight Assets, or AT&T Broadband, in the event of loss or damage to the AT&T Assets, as
appropriate, will use its commercially reasonable efforts to repair, replace and restore the lost or damaged property to its former condition as soon as practicable at its sole expense, subject to Section 12.16(b), including applying any insurance
proceeds to restore such assets to their prior condition.
(b) If the
aggregate cost to repair, replace or restore the lost or damaged property to its former condition would exceed $2,000,000, Insight, in the event of loss or damage to the Insight Assets, or AT&T Broadband, in the event of loss or damage to the
AT&T Assets, as appropriate, may, subject to the other party’s right to consummate the Closing as described below, elect to terminate this Agreement by written notice to the other party at any time within ten days of the occurrence of the
event of loss or damage, and upon such termination both parties will stand fully
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released and discharged of any and all obligations under this Agreement (except with respect to any then existing
breaches by either such party).
(c) If any such loss or damage to the
AT&T Assets is sufficiently substantial so as to preclude and prevent resumption of normal operations of any material portion of a AT&T System or the repair, replacement or restoration of the lost or damaged property within twenty days, or
if earlier, the Outside Closing Date and AT&T Broadband is not obligated to correct the problem because the cost would exceed $2,000,000, and AT&T Broadband elects not to repair, replace and restore the lost or damaged property, Insight may
elect to terminate this Agreement upon written notice to AT&T Broadband at any time within ten days after it receives written notice from AT&T Broadband of the occurrence of the event of such loss or damage and the fact that AT&T
Broadband is not obligated to correct the problem and AT&T Broadband has elected not to correct the problem, and upon such termination both parties will stand fully released and discharged of any and all obligations under this Agreement (except
with respect to any then existing breaches by either such party). In the absence of a timely election to terminate this Agreement, Insight shall be deemed to have waived such loss or damage and to have elected to consummate the Closing in accordance
with all of the remaining provisions of this Agreement and notwithstanding AT&T Broadband’s election to terminate this Agreement pursuant to Section 12.16(b), Insight may elect to consummate the Closing in accordance with all of the
remaining provisions of this Agreement, in which event at the Closing the amount of any insurance deductible payable by AT&T Broadband and all insurance proceeds payable as a result of the occurrence of the event resulting in such loss or damage
to the AT&T Assets (in each case to the extent not used to repair, replace or restore such lost or damaged AT&T Assets), except for any proceeds from business interruption insurance relating to the loss of revenue for the period through and
including the Closing Time, will be delivered by AT&T Broadband to Insight or the rights to such proceeds will be assigned by AT&T Broadband to Insight if not yet paid over to AT&T Broadband, and upon such delivery or assignment and
consummation of the Closing AT&T Broadband shall have no additional liability to Insight in respect of any such loss or damage to the AT&T Assets.
(d) If any such loss or damage to the Insight Assets is sufficiently substantial so as to preclude and prevent resumption of normal operations of
any material portion of an Insight System or the repair, replacement or restoration of the lost or damaged property within twenty days, or if earlier, the Outside Closing Date, and Insight is not obligated to correct the problem because the cost
would exceed $2,000,000, and Insight elects not to repair, replace and restore the lost or damaged property, AT&T Broadband may elect to terminate this Agreement upon written notice to Insight at any time within ten days after it receives
written notice from Insight of the occurrence of the event of such loss or damage and the fact that Insight is not obligated to correct the problem and has elected not to correct the problem, and upon such termination both parties will stand fully
released and discharged of any and all obligations under this Agreement (except with respect to any then existing breaches by either such party). In the absence of a timely election to terminate this Agreement, AT&T Broadband shall be deemed to
have waived such loss or damage and to have elected to consummate the Closing in accordance with all of the remaining provisions of this Agreement, and notwithstanding Insight’s election to terminate this Agreement pursuant to
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Section 12.16(b), AT&T Broadband may elect to consummate the Closing in accordance with all of the remaining provisions of this Agreement in
which event at the Closing the amount of any insurance deductible payable by Insight and all insurance proceeds payable as a result of the occurrence of the event resulting in such loss or damage to the Insight Assets (in each case to the extent not
used to repair, replace or restore such lost or damaged Insight Assets), except for any proceeds from business interruption insurance relating to the loss of revenue for the period through and including the Closing Time, will be delivered by Insight
to AT&T Broadband or the rights to such proceeds will be assigned by Insight to AT&T Broadband if not yet paid over to Insight, and upon such delivery or assignment and consummation of the Closing Insight shall have no additional liability
to AT&T Broadband in respect of any such loss or damage to the Insight Assets.
If, prior to the Closing, any
part of or interest in any material Insight Assets or any material AT&T Assets is taken or condemned as a result of the exercise of the power of eminent domain, or if a Governmental Authority having such power informs Insight or AT&T
Broadband that it intends to condemn all or any part of any material Assets of such party (such event being called, in either case, a “Taking”), then the transferee party with respect to such Assets may terminate this Agreement. If the
transferee party does not elect to terminate this Agreement, then (a) the transferee party will have the sole right, in the name of the transferor party if the transferee party so elects, to negotiate for, claim, contest and receive all damages with
respect to the Taking, (b) the transferor party will be relieved of its obligation to convey to the transferee party the Assets or interests that are the subject of the Taking, (c) at the Closing the transferor party will assign to the transferee
party all of the transferor party’s rights to all damages payable with respect to the Taking and (d) following the Closing, the transferor party will give the transferee party such further assurances of such rights and assignment with respect
to the Taking as the transferee party may from time to time reasonably request.
12.17 Tax Consequences. No party to this Agreement makes any representation or warranty, express or implied, with respect to the Tax implications of any aspect of this Agreement on any other
party to this Agreement, and all parties expressly disclaim any such representation or warranty with respect to any Tax consequences arising under this Agreement. Each party has relied solely on its own Tax advisors with respect to the Tax
implications of this Agreement.
12.18 Commercially Reasonable
Efforts. For purposes of this Agreement, unless a different standard is expressly provided with respect to any particular matter, “commercially reasonable efforts” will not be deemed to require a party to undertake
extraordinary measures, including the initiation or prosecution of legal proceedings or the payment of amounts in excess of normal and usual filing fees and processing fees, if any.
12.19 Consulting Agreement and Management Agreement. Notwithstanding anything in this Agreement to the contrary, Insight LP shall
be permitted to comply with its obligations under the Consulting Agreement and Insight LP shall not be deemed in breach of the Consulting Agreement by virtue of any act or omission by Insight or Insight LP consistent with their obligations under
this Agreement. Other than the Insight Assumed Obligations and Liabilities, after the Closing Insight
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and Insight LP shall have no obligations or liabilities with respect to the AT&T Systems other than as provided in the Consulting Agreement.
Other than the AT&T Assumed Obligations and Liabilities, after the Closing AT&T shall have no obligations or liabilities with respect to the Insight Systems. The term of the Consulting Agreement is hereby extended so that the same shall
terminate effective as of 11:59 P.M. on June 30, 2003. Simultaneously with the Closing, solely with respect to the AT&T Systems, the Consulting Agreement will automatically terminate and will thereafter be of no further force or effect except to
the extent that any of the obligations of the parties thereto survive the termination of the Consulting Agreement pursuant to its terms (it being understood that Insight LP shall be entitled to accrued but unpaid consulting fees and expense
reimbursements in accordance with the terms of the Consulting Agreement). Notwithstanding anything in this Agreement to the contrary, Insight LP shall be permitted to comply with its obligations under the Management Agreement relating to the Insight
Systems and Insight LP shall not be deemed in breach of the Management Agreement by virtue of any act or omission by Insight or Insight LP consistent with their obligations under this Agreement. Simultaneously with the Closing, the Management
Agreement will automatically terminate as to the Insight Systems and will thereafter be of no further force or effect with respect to the Insight Systems except to the extent that any of the obligations of the parties thereto with respect to the
Insight Systems survive the termination of the Management Agreement pursuant to its terms (it being understood that Insight LP shall be entitled to collect from Insight accrued but unpaid Management Fees and expense reimbursements in accordance with
Section 4 of the Management Agreement). Except as otherwise expressly set forth herein, the Consulting Agreement and the Management Agreement shall remain in full force and effect. TCI LLC consents to and approves all of the transactions
contemplated by this Agreement for all purposes on its own behalf and on behalf of its Affiliates to the extent its or its Affiliates’ consent is required therefor and consents to and approves the transactions contemplated by this Agreement for
all purposes of the Limited Partnership Agreement of the Partnership and acknowledges that Insight, Insight LP and their Affiliates have no obligation to reimburse TCI LLC pursuant to Section 6.5 of the Limited Partnership Agreement of the
Partnership.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Asset Exchange Agreement as of
the day and year first written above.
| INTERMEDIA PARTNERS SOUTHEAST | ||
| By: |
TCI Spartanburg IP-IV, LLC, its managing general partner | |
| By: TCI Central, Inc., its manager | ||
| By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Title: Vice President | ||
| INSIGHT COMMUNICATIONS MIDWEST, LLC | ||
| By:
Name:
Title:
| ||
FOR PURPOSES OF SECTION 12.19 ONLY:
INSIGHT COMMUNICATIONS COMPANY, L.P.
By: |
Insight Communications Company, Inc., its general partner |
By:
Name:
Title:
TCI OF INDIANA HOLDINGS, LLC
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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EXHIBIT A
Insight Systems
Griffin, GA
System
City of Griffin, GA
City of Orchard Hill, GA
Spalding County, GA
City of Sunnyside, GA
EXHIBIT B
AT&T Systems
New Albany, IN System
Town of Corydon, IN
▇▇▇▇▇ County, IN
Town of Georgetown, IN
Town of Greenville, IN
▇▇▇▇▇▇▇▇ County, IN
Town of Lanesville, IN
City of New Albany, IN
Town of Palmyra, IN
Shelbyville, KY System
City of Eminence, ▇▇
▇▇▇▇▇ County, KY
City of New Castle, KY
City of Pleasureville, KY
Shelby County, KY
City of Shelbyville, KY
City of Simpsonville, KY
TABLE OF CONTENTS
| Page | ||||
| SECTION 1. |
DEFINITIONS |
1 | ||
| 1.1 |
1992 Cable Act |
1 | ||
| 1.2 |
Affiliate |
1 | ||
| 1.3 |
Assets |
2 | ||
| 1.4 |
AT&T Assets |
2 | ||
| 1.5 |
AT&T Books and Records |
2 | ||
| 1.6 |
AT&T Leased Property |
2 | ||
| 1.7 |
AT&T Other Intangibles |
2 | ||
| 1.8 |
AT&T Other Real Property Interests |
2 | ||
| 1.9 |
AT&T Owned Property |
3 | ||
| 1.10 |
AT&T System Contracts |
3 | ||
| 1.11 |
AT&T System Franchises |
3 | ||
| 1.12 |
AT&T System Licenses |
3 | ||
| 1.13 |
AT&T Tangible Personal Property |
3 | ||
| 1.14 |
AT&T's Cable Business |
3 | ||
| 1.15 |
Basic Services |
3 | ||
| 1.16 |
Business Day |
3 | ||
| 1.17 |
Cable Act |
4 | ||
| 1.18 |
Cable Business |
4 | ||
| 1.19 |
Closing Time |
4 | ||
| 1.20 |
Communications Act |
4 | ||
| 1.21 |
Contract |
4 | ||
| 1.22 |
Partnership |
4 | ||
| 1.23 |
[Intentionally Omitted] |
4 | ||
| 1.24 |
Environmental Law |
4 | ||
| 1.25 |
ERISA |
4 | ||
| 1.26 |
ERISA Affiliate |
4 | ||
| 1.27 |
Expanded Basic Services |
4 | ||
| 1.28 |
FCC |
4 | ||
| 1.29 |
[Intentionally Omitted] |
4 | ||
| 1.30 |
GAAP |
5 | ||
| 1.31 |
Governmental Authority |
5 | ||
| 1.32 |
Hazardous Substances |
5 | ||
| 1.33 |
HSR Act |
5 | ||
| 1.34 |
Insight Assets |
5 | ||
| 1.35 |
Insight Books and Records |
5 | ||
| 1.36 |
Insight Leased Property |
6 | ||
| 1.37 |
Insight Other Intangibles |
6 | ||
| 1.38 |
Insight Other Real Property Interests |
6 |
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| 1.39 |
Insight Owned Property |
6 | ||
| 1.40 |
Insight Required Consents |
6 | ||
| 1.41 |
Insight System Contracts |
6 | ||
| 1.42 |
Insight System Franchises |
6 | ||
| 1.43 |
Insight System Licenses |
7 | ||
| 1.44 |
Insight Tangible Personal Property |
7 | ||
| 1.45 |
Insight's Cable Business |
7 | ||
| 1.46 |
Judgment |
7 | ||
| 1.47 |
Knowledge |
7 | ||
| 1.48 |
Leased Property |
7 | ||
| 1.49 |
Legal Requirement |
7 | ||
| 1.50 |
Liberty Media Group |
7 | ||
| 1.51 |
Lien |
7 | ||
| 1.52 |
Litigation |
8 | ||
| 1.53 |
Losses |
8 | ||
| 1.54 |
Other Real Property Interests |
8 | ||
| 1.55 |
Owned Property |
8 | ||
| 1.56 |
Pay TV |
8 | ||
| 1.57 |
Permitted Lien |
8 | ||
| 1.58 |
Person |
9 | ||
| 1.59 |
Required Consents |
9 | ||
| 1.60 |
System |
9 | ||
| 1.61 |
System Contracts |
9 | ||
| 1.62 |
System Franchises |
9 | ||
| 1.63 |
System Licenses |
9 | ||
| 1.64 |
Tangible Personal Property |
10 | ||
| 1.65 |
Taxes |
10 | ||
| 1.66 |
Third Party |
10 | ||
| 1.67 |
Transaction Documents |
10 | ||
| 1.68 |
Other Definitions |
10 | ||
| 1.69 |
Accounting Terms |
11 | ||
| SECTION 2. |
EXCHANGE |
12 | ||
| 2.1 |
Exchange |
12 | ||
| SECTION 3. |
CONSIDERATION |
12 | ||
| 3.1 |
Value of Assets |
12 | ||
| 3.2 |
Adjustments to Value of Assets |
12 | ||
| 3.3 |
Calculation of Adjustments |
15 | ||
| SECTION 4. |
ASSUMED LIABILITIES AND EXCLUDED ASSETS |
16 | ||
| 4.1 |
AT&T Assumed Obligations and Liabilities |
16 |
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| 4.2 |
AT&T Excluded Assets |
17 | ||
| 4.3 |
Insight Assumed Obligations and Liabilities |
18 | ||
| 4.4 |
Insight Excluded Assets |
18 | ||
| SECTION 5. |
INSIGHT'S REPRESENTATIONS AND WARRANTIES |
19 | ||
| 5.1 |
Organization and Qualification of Insight |
19 | ||
| 5.2 |
Authority and Validity |
20 | ||
| 5.3 |
No Conflict; Required Consents |
20 | ||
| 5.4 |
Assets |
20 | ||
| 5.5 |
Insight System Franchises, Insight System Licenses, Insight System Contracts and Insight Other Real Property Interests |
21 | ||
| 5.6 |
Real Property |
22 | ||
| 5.7 |
Environmental |
23 | ||
| 5.8 |
Compliance with Legal Requirements |
24 | ||
| 5.9 |
Patents, Trademarks and Copyrights |
26 | ||
| 5.10 |
Financial Statements; Undisclosed Liabilities; Absence of Certain Changes or Events |
26 | ||
| 5.11 |
Litigation |
27 | ||
| 5.12 |
Tax Returns; Other Reports |
27 | ||
| 5.13 |
Employment Matters |
27 | ||
| 5.14 |
Accounts Receivable |
29 | ||
| 5.15 |
Finders and Brokers |
29 | ||
| 5.16 |
Transactions With Affiliates |
29 | ||
| SECTION 6. |
AT&T BROADBAND'S REPRESENTATIONS AND WARRANTIES |
29 | ||
| 6.1 |
Organization and Qualification of AT&T Broadband |
30 | ||
| 6.2 |
Authority and Validity |
30 | ||
| 6.3 |
No Conflict; Required Consents |
30 | ||
| 6.4 |
Assets |
31 | ||
| 6.5 |
Litigation |
31 | ||
| 6.6 |
Finders and Brokers |
31 | ||
| 6.7 |
Systems |
31 | ||
| SECTION 7. |
ADDITIONAL COVENANTS |
32 | ||
| 7.1 |
Access to Premises and Records |
32 | ||
| 7.2 |
Continuity and Maintenance of Operations; Certain Deliveries and Notices |
33 | ||
| 7.3 |
Employees |
35 | ||
| 7.4 |
Leased Vehicles |
39 | ||
| 7.5 |
Required Consents; Franchise Renewal |
39 | ||
| 7.6 |
Title Commitments and Surveys |
40 | ||
| 7.7 |
HSR Notification |
41 | ||
| 7.8 |
Transfer Taxes |
42 |
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| 7.9 |
Distant Broadcast Signals |
42 | ||
| 7.10 |
Programming |
42 | ||
| 7.11 |
Use of Names and Logos |
42 | ||
| 7.12 |
Transitional Services |
43 | ||
| 7.13 |
Confidentiality and Publicity |
43 | ||
| 7.14 |
Bulk Transfers |
44 | ||
| 7.15 |
Allocation of Value to Exchanged Assets |
44 | ||
| 7.16 |
Lien Searches |
44 | ||
| 7.17 |
Further Assurances |
44 | ||
| 7.18 |
Consents |
45 | ||
| 7.19 |
Cooperation as to Rates and Fees |
45 | ||
| 7.20 |
Satisfaction of Conditions. |
47 | ||
| 7.21 |
Offers. |
47 | ||
| 7.22 |
Environmental Reports |
47 | ||
| 7.23 |
Cooperation on SEC Matters |
48 | ||
| 7.24 |
Cooperation on Pending Litigation |
48 | ||
| SECTION 8. |
CONDITIONS PRECEDENT |
50 | ||
| 8.1 |
Conditions to Insight's Obligations |
50 | ||
| 8.2 |
Conditions to AT&T Broadband's Obligations |
52 | ||
| SECTION 9. |
THE CLOSING |
53 | ||
| 9.1 |
The Closing; Time and Place |
53 | ||
| 9.2 |
AT&T Broadband's Delivery Obligations |
53 | ||
| 9.3 |
Insight's Delivery Obligations |
55 | ||
| SECTION 10. |
TERMINATION AND DEFAULT |
56 | ||
| 10.1 |
Termination Events |
56 | ||
| 10.2 |
Effect of Termination |
57 | ||
| SECTION 11. |
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION |
57 | ||
| 11.1 |
Survival of Representations and Warranties |
57 | ||
| 11.2 |
Indemnification by AT&T Broadband |
58 | ||
| 11.3 |
Indemnification by Insight |
59 | ||
| 11.4 |
Third Party Claims |
59 | ||
| 11.5 |
Limitations on Indemnification—AT&T Broadband |
60 | ||
| 11.6 |
Limitations on Indemnification—Insight |
61 | ||
| SECTION 12. |
MISCELLANEOUS PROVISIONS |
61 | ||
| 12.1 |
Parties Obligated and Benefitted |
61 | ||
| 12.2 |
Notices |
62 |
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| 12.3 |
Right to Specific Performance |
63 | ||
| 12.4 |
Waiver |
63 | ||
| 12.5 |
Captions |
64 | ||
| 12.6 |
Choice of Law |
64 | ||
| 12.7 |
Terms |
64 | ||
| 12.8 |
Rights Cumulative |
64 | ||
| 12.9 |
Time |
64 | ||
| 12.10 |
Late Payments |
64 | ||
| 12.11 |
Counterparts |
64 | ||
| 12.12 |
Entire Agreement |
64 | ||
| 12.13 |
Severability |
64 | ||
| 12.14 |
Construction |
64 | ||
| 12.15 |
Expenses |
65 | ||
| 12.16 |
Risk of Loss |
65 | ||
| 12.17 |
Tax Consequences |
67 | ||
| 12.18 |
Commercially Reasonable Efforts |
67 | ||
| 12.19 |
Consulting Agreement and Management Agreement |
67 |
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LIST OF SCHEDULES AND EXHIBITS
| Schedules |
||||
| Schedule 1.6 |
AT&T Leased Property | |||
| Schedule 1.8 |
AT&T Other Real Property Interests | |||
| Schedule 1.9 |
AT&T Owned Property | |||
| Schedule 1.10 |
AT&T System Contracts | |||
| Schedule 1.11 |
AT&T System Franchises | |||
| Schedule 1.12 |
AT&T System Licenses | |||
| Schedule 1.36 |
Insight Leased Property | |||
| Schedule 1.38 |
Insight Other Real Property Interests | |||
| Schedule 1.39 |
Insight Owned Property | |||
| Schedule 1.41 |
Insight System Contracts | |||
| Schedule 1.42 |
Insight System Franchises | |||
| Schedule 1.43 |
Insight System Licenses | |||
| Schedule 4.2 |
AT&T Excluded Assets | |||
| Schedule 4.4 |
Insight Excluded Assets | |||
| Schedule 5.3 |
Insight Required Consents | |||
| Schedule 5.4 |
Insight Liens and Permitted Liens | |||
| Schedule 5.7 |
Insight Environmental Matters | |||
| Schedule 5.8 |
Insight Cost of Service Elections | |||
| Schedule 5.10 |
Insight Financial Statements; Insight Changes or Events |
-vi-
| Schedule 5.11 |
Insight Litigation | |||
| Schedule 5.12 |
Insight Tax Matters | |||
| Schedule 5.13(a) |
Insight Employees | |||
| Schedule 5.13 |
Insight Plans; Employee Matters | |||
| Schedule 5.16 |
Insight Affiliate Transactions | |||
| Schedule 6.3 |
AT&T Required Consents | |||
| Schedule 6.4 |
AT&T Liens and Permitted Liens | |||
| Schedule 6.5 |
AT&T Litigation | |||
| Schedule 7.5(a) |
Required Consents | |||
| Schedule 7.25 |
Insight Upgrade Plan | |||
| Exhibits |
||||
| Exhibit A |
Insight Systems | |||
| Exhibit B |
AT&T Systems |
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