Document:

Restated TCC License Agreement, dated as of January 1,2005

 Exhibit 10.3 
  
 CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 
  
 TESSERA, INC. 
 Restated TCC® License Agreement 
  
 This Agreement is entered into as of January 1, 2005, (the “Effective Date”) between Tessera, Inc., a corporation
organized under the laws of Delaware, having a principal place of business at 3099 Orchard Drive, San Jose CA 95134 and its Affiliates (“Tessera”) and Samsung Electronics Co., Ltd. a corporation organized under the laws of Republic of
Korea having a principal place of business at 250 Taepyung-Ro, 2 Ga, Chung-Ku, Seoul, Korea and its Affiliates (“Licensee”) with reference to the following facts: 
  
 Scope: 
  
 WHEREAS Tessera owns patents and other intellectual property rights to certain semiconductor integrated circuit (“IC”) package types;

  
 WHEREAS, Tessera and Licensee entered into a License Agreement
entitled “TCC License Agreement” having an effective date of May 17, 1997 (“the 1997 Agreement”); 
  
 WHEREAS, there has been litigation pending between Licensee and Tessera relating to Tessera’s patent rights and to alleged breach of the 1997
Agreement in the United States District Court for the Northern District of California, titled Samsung Electronics Co. v. Tessera Technologies, Inc. and Tessera, Inc., and related counterclaims, Civil Action No. 02-05837(CW)(MEJ)(“the
Oakland Action”); 
  
 WHEREAS trial of a number of the claims
and counterclaims in the Oakland Action commenced on November 1, 2004; 
  
 WHEREAS, Tessera and Licensee have agreed to settle the Oakland Action and, as partial consideration for that Settlement Agreement have agreed to enter into a new license agreement that supersedes the 1997 Agreement in its entirety; and

  
 WHEREAS, Licensee wishes to license Tessera’s patents and
to pay royalties for the disputed packages and other TCC packages as specified herein as consideration for the settlement of this pending litigation. 
  
 THEREFORE, Tessera and Licensee (herein collectively referred to as “Parties” or singularly referred to as “Party”) agree to the
following terms: 
  
 The Parties Hereto Agree: 
  
 I. Definitions: 
  

 Page 1 of 27 

 As used herein, the following terms shall have the following meaning: 
  
 A. The term “TCC” is an acronym for Tessera Compliant Chip, a type
of integrated circuit (“IC”) package made under certain issued Tessera Patents licensed hereunder. Generally, a TCC has substantially coplanar bump or solder contacts disposed in a grid array pattern and comprises a thin compliant
multi-layer structure mounted to at least one surface of an IC die, with permanent flexible electrical connections between at least one of said contacts and a corresponding bond pad on said IC die. For the purposes of this Agreement, the parties
agree that the definition of Licensed Product shall be treated as a subset of TCC, i.e. included in the term “TCC” as it is used throughout this Agreement. 
  
 B. The term “Licensed Product” includes Licensee’s IC packages using (a) polyimide or glass-epoxy or
glass-laminate substrate; (b) one or more solder balls under the IC; (c) die attach adhesive attaching the IC to the polyimide or glass-epoxy or glass-laminate substrate; and (d) solder ball pitch less than or equal to 1.0mm. For avoidance of doubt,
Licensed Product shall include but is not limited to the DRAM and Non-DRAM Licensed Product. 
  
 C. The term “μBGA®” is a type of TCC package. 
  
 D. The term “DRAM Device” means a Dynamic Random Access Memory (DRAM) IC device comprised solely of an array of DRAM cells and the associated control and I/O circuitry that are necessary to allow data to be written to, stored by,
and read from the DRAM cells. A TCC package that contains one or more DRAM Devices is a “DRAM TCC package” or a “DRAM Licensed Product,” and a TCC package that contains at least one IC that is not a DRAM Device is a
“Non-DRAM TCC package” or a “Non-DRAM Licensed Product.” For example, if a TCC package contains both a DRAM Device and an IC that is not a DRAM Device, the TCC package shall be considered a Non-DRAM TCC package. 
  
 E. The term “Logic Device” means an IC device whose primary
function is to provide logic or processing functions. Logic Devices include, by way of example and not limitation, microprocessors, digital signal processors (DSPs), application specific integrated circuits (ASICs), systems-on-chip (SoCs),
programmable logic devices (PLDs), programmable logic arrays (PLAs), field programmable grid arrays (FPGAs), microcontrollers and analog and mixed-signal devices. A TCC package that contains one or more Logic Devices is a “Non-DRAM TCC
package.” 
  
 F. The term “Technology” means
Tessera Patents relating to the design, manufacture, and assembly of TCC packages (excluding Batch Technology as defined herein) and any related Tessera copyrights and know-how previously transferred to Licensee pursuant to the 1997 Agreement.
 
  
 G. The term “Patent” means letters patents,
utility models, allowances and applications therefor in all countries of the world, including re-issues, re-examinations, continuations, divisions, and all corresponding foreign patents. 
  

 Page 2 of 27 

 H. The term “Tessera Patent” means Patent(s) which arise out of inventions based on the
Technology made and/or acquired by Tessera based on the Technology prior to expiration or termination of this Agreement. The term Tessera Patent shall further include any third party patent based on the Technology under which Tessera or any
successor thereof has the right to grant licenses of the scope granted herein, as of the Effective Date or at any time during the term of this Agreement, without the payment of royalty or other consideration to such third parties except for payment
to third parties for inventions made by said parties while employed by Tessera or any successor thereof, including US patents and US patent applications set forth in Attachment A attached and Improvements thereto which had or have a first effective
filing date in any country prior to expiration or termination of this Agreement. 
  
 I. The term “Batch Technology” as used herein means Technology including: (i) any method or result of U.S. Patent Number 5,518,964 (and related Patents) for making flexible electrically conducting
element(s), joining said elements to electrical contact(s) on a substantially planar electrical element such as a semiconductor integrated circuit, undiced IC wafer, or interconnect substrate, and forming said element(s) away from the plane of said
contacts in a predetermined fashion into the flexible electrical lead(s) of a TCC package; (ii) any method or result of U.S. Patent 5,455,390 (and related Patents) for making and forming flexible conducting element(s) on a dielectric film and then
simultaneously joining said elements to electrical contacts on a substantially planar electrical element such as a semiconductor integrated circuit, undiced IC wafer or interconnect substrate to produce the flexible electrical leads of a TCC
package; and/or (iii) any method or result of further invention or Patent made or acquired by Tessera during the term hereof covering any batch processing method for simultaneously forming, producing and/or connecting a plurality of flexible
electrical leads of a TCC package. Notwithstanding, the parties expressly agree that any TCC package made and/or connected individually on a semiconductor integrated circuit or undiced wafer by traditional wire bonding methods and/or tape automated
bonding (“TAB”) gang bonding methods, is not included in Batch Technology. 
  
 J. The term “IC Contact” means an electrical connection (e.g. wire bond or lead bond) to an IC bond pad contained in any TCC package licensed
hereunder. 
  
 K. The term “Licensee’s
Improvements” means device design modifications, derivatives, improvements, or enhanced specifications, relating to the TCC packages or related materials that may be made by Licensee arising out of Technology or incorporated in a TCC package
licensed hereunder for sale or other transfer to a third party during the term of this Agreement or extension hereof. Notwithstanding, the term “Licensee Improvements” does not include manufacturing process improvements unless such a
process improvement enables a particular package structure to the exclusion of other practically feasible methods of making such a structure. The parties agree that Licensee’s inventions that do not arise out of the Technology shall be excluded
from the definition of Licensee’s Improvements unless such invention infringes a Tessera Patent or is incorporated in a TCC package by or for Licensee for sale or other transfer to a third party. 
  
 L. The term “Affiliate” means any company which agrees to be bound
by the terms and conditions of this Agreement and is more than fifty percent (50%) of the voting stock is owned or controlled by Licensee. A company shall be considered an Affiliate only so long as such majority ownership or control exists.

  

 Page 3 of 27 

 N. The term “Licensed Package Assembler” means a party licensed by Tessera to assemble, use and
sell TCC packages for others. 
  
 II. Licensee Rights:

  
 A. License Grant. Subject to the terms and
conditions hereinafter set forth, Licensee’s agreement to the provisions hereof including all attachments hereto, and conditioned upon Licensee’s payment of the royalties stated herein in Paragraph III, Tessera hereby grants Licensee a
non-exclusive, worldwide, non-transferable, non-sub-licensable limited license under the Technology to make, use, sell, offer to sell, and/or have made TCC packages that are sold as Licensee’s own products (e.g., the TCC packages bear the
Licensee’s commercial indicia) or that are sold by Licensee but do not bear Licensee’s commercial indicia where (i) all of the IC’s incorporated within such TCC packages are manufactured by Licensee; or (ii) the TCC package contains
multiple ICs at least one of which is manufactured by Licensee and at least one of which is a Logic Device. 
  
 B. Use of Have Made Rights. When Licensee exercises its “have made” right, it shall provide a written notice to the applicable package
subcontractor, with a copy to Tessera, stating that the TCC packages are being assembled under a “have made” license from Tessera and that the package subcontractor need not obtain a license or pay royalties for such TCC packages because
the royalties are being paid directly from Licensee to Tessera. Licensee may also use a Licensed Package Assembler to make TCC packages that are licensed under the Licensed Package Assembler’s own license with Tessera; provided, however, that
(i) Licensee provides written notice to Tessera of the name of such Licensed Package Assembler and the quantity and type of such TCC packages, and (ii) if such Licensed Package Assembler does not pay such royalties to Tessera when due, Licensee
shall pay the royalties due under the license agreement of their chosen Licensed Package Assembler within forty-five (45) days after Tessera notifies Licensee of such nonpayment by their chosen Licensed Package Assembler, provided that such notice
shall be given if Tessera is unable to collect such royalties after exhausting good faith and commercially reasonable efforts to collect such royalties from the chosen Licensed Package Assembler, but not requiring Tessera to commence litigation
against any such Licensed Package Assembler. By way of clarification, if Samsung elects to have a Licensed Package Assembler make TCC packages under the Licensed Package Assembler’s agreement with Tessera, any payment made by Samsung as
guarantor shall be under Samsung’s “have made” rights under Paragraph II.A., hereof, and the royalty rate shall be calculated under the applicable Paragraph of this Agreement; with the further agreement that if Licensee makes a
payment in guarantee of any such Licensed Package Assembler, (i) Licensee shall be obligated to use its “have made” rights hereunder with such Licensed Package Assembler for a period totaling four quarterly payments for any TCC packages
made by such Licensed Package Assembler and shall pay the applicable royalties directly to Tessera for such time period, and (ii) Licensee shall provide a written notice to the applicable package subcontractor, with a copy to Tessera, stating that
the royalty payments for the TCC packages are, for that time period, being guaranteed by Licensee and being assembled under Licensee’s “have made” license from Tessera and that the Licensed Package Assembler should not pay royalties
for such TCC packages because the royalties are being paid directly from Licensee to Tessera. For avoidance of doubt, Licensee’s payment of royalties in guarantee of a Licensed Package Assembler pursuant to this paragraph shall be fully subject
to all terms and conditions applicable to Licensee’s exercise of its “have 
  

 Page 4 of 27 

 made” rights, including but not limited to Paragraphs III.B.1, III.C, III.D and III.E. Further, if Licensee elects
to have TCC packages made under the license of the Licensed Package Assembler, such TCC Packages shall not apply to any of the financial terms (e.g. target royalties) of Paragraph III of this Agreement. 
  
 C. Batch Technology Excluded. Notwithstanding anything herein to the
contrary, Batch Technology is excluded from the scope of this Agreement, and Licensee’s rights herein expressly exclude any right to package and/or assemble, or sell any product made using Batch Technology. Notwithstanding, when Tessera decides
to license such Batch Technology to others, Tessera agrees to enter into good faith negotiations with Licensee on the terms and conditions of a separate agreement to define the parties relationship with respect to Batch Technology. 
  
 D. No Implied License. Notwithstanding the foregoing, nothing in this
Agreement shall be construed to grant Licensee, Affiliates, successors or assigns or any third parties an implied license under any patent owned by Tessera other than the Tessera Patents. 
  
 E. No Assembly Services. Subject to the express terms of Paragraph II.A, hereof, nothing in this Agreement shall be
construed as granting Licensee the right to assemble TCC packages to be sold as the product of third party (e.g., the TCC packages bear the third party’s commercial indicia). 
  
 III. Fee and Royalty: 
  
 A. License Fee. No license fee is due hereunder. 
  
 B. Running Royalties. For the license rights and benefits granted in Paragraph II.A, Licensee shall pay a royalty for each TCC package sold by
Licensee in US currency, as follows: 
  
 1. DRAM TCC
Packages. For each DRAM TCC package sold by Licensee, Licensee shall pay a royalty to Tessera as set forth below: 
  
 a. Initial DRAM Royalty Rate. Until one of [*] agrees to pay royalties to Tessera for all DRAM Licensed Products that any such company is shipping
in volume (“First Triggering Event”), the royalty for DRAM TCC packages sold by Licensee shall be [*] per DRAM TCC package. In any calendar year prior to the year in which the First Triggering Event occurs, if Licensee pays Tessera [*] in
royalties for DRAM TCC Packages sold in a particular calendar year (“Initial DRAM Royalty Target”), then the royalty rate for DRAM TCC Packages sold thereafter in that same calendar year shall be [*] per package unless the First Triggering
Event is met, in which case the royalty rate set forth in Paragraph III.B.1.b shall apply. The requirement of an Initial DRAM Royalty Target shall be removed for the year in which the First Triggering Event is satisfied. If [*], or the DRAM business
of these companies, are acquired by another of these companies, then an agreement with the acquiring company to pay royalties for all DRAM Licensed Products that the acquiring company is shipping in volume shall satisfy the First Triggering Event.

  
 b. Mid-point DRAM Royalty Rate. After the First
Triggering Event is satisfied, the royalty for DRAM TCC packages sold by Licensee shall be increased to [*] per DRAM TCC package and the associated requirement for a Initial DRAM Royalty Target shall be removed, as discussed above. 
  

 Page 5 of 27 

 c. Base DRAM Royalty Rate. After a second one of [*] agrees to pay royalties to Tessera for all
DRAM Licensed Products that any such company is shipping in volume (“Second Triggering Event”), the royalty for DRAM TCC packages sold by Licensee shall be [*] per DRAM TCC package. If, in a given calendar year, Licensee pays royalties at
the Base DRAM Royalty Rate for a number of DRAM TCC packages equal to the average of (1) the number of DRAM TCC packages sold by the second largest manufacturer of DRAM in the previous year as determined by Gartner/Dataquest and (2) the number of
256 Mb unit equivalents sold by the second largest manufacturer in DRAM TCC packages in the previous year as determined by Gartner/Dataquest (hereafter, the average of these two numbers shall be referred to as “the Average”), then
Licensee’s royalty pursuant to this Agreement for all further DRAM TCC Packages sold by Licensee in that year above and beyond the Average shall be [*] per package. If Gartner/Dataquest fails to provide the data necessary for calculating the
Average set forth in the previous sentence, then Tessera shall identify an alternative third party source of such information, and Licensee shall not unreasonably withhold its agreement to use such alternative source instead of Gartner/Dataquest to
calculate the average. If Hynix, Micron or Infineon, or the DRAM business of these companies, are acquired by another of these companies (or if a controlling interest of at least the DRAM portion one of these companies is acquired by another of
these companies), then an agreement with the acquiring company to pay royalties for all DRAM Licensed Products that the acquiring company is shipping in volume shall satisfy the Second Triggering Event. 
  
 2. Non-DRAM TCC Packages. 
  
 a. Single-Chip Non-DRAM TCC packages. For each Non-DRAM TCC package
sold by Licensee that includes no more than one IC device, Licensee shall pay Tessera a royalty based on the total number of IC Contacts to each IC device in the Licensed Product, as shown on the following schedule: 
  

			
	 Number of IC Contacts

	  	Royalty Per IC Device

	 [*]
	  	[*]
	 [*]
	  	[*]
	 [*]
	  	[*]
	 [*]
	  	[*]
	 [*]
	  	[*]
	 [*]
	  	[*]
	 [*]
	  	[*]

  
 b. Multiple-chip
Non-DRAM TCC packages. For Non-DRAM TCC packages sold by Licensee that include more than one IC device, the royalty shall be calculated by applying the royalty schedule set forth in Paragraph III.B.2.a to the IC device having the greatest number
of IC Contacts, to the IC device having the second greatest number of IC Contacts, to the IC device having the third greatest number of IC Contacts, and to the IC device having the fourth greatest number of IC contacts to determine the Royalty Per
IC device of each, provided, however, that the royalty for the IC device having the second greatest number of IC Contacts shall be no more than the lesser of the royalty amount per the royalty schedule or [*], the royalty for the IC device

  

 Page 6 of 27 

 having the third greatest number of IC Contacts shall be no more than the lesser of the royalty amount per the royalty
schedule or [*], and the royalty amount for the fourth IC device shall be no more than the lesser of the royalty amount per the royalty schedule or [*]. The royalty for any additional IC devices shall be [*]. Moreover, the royalty per package for
Multiple-chip Non-DRAM TCC packages that contain at least one Logic Device shall be no more than the greater of (i) [*] per package or (ii) the royalty for the packaged IC device having the greatest number of IC contacts as determined by the royalty
schedule set forth in Paragraph III.B.2.a. Further still, the royalty per package for Multiple-chip Non-DRAM TCC packages that do not contain a Logic Device shall be no more than the greater of [*] per package or the royalty for the packaged IC
having the greatest number of IC contacts as determined by the royalty schedule set forth in Paragraph III.B.2.a. 
  
 C. All Products. If, in a given calendar year, beginning in calendar year 2005, Licensee pays Tessera [*] in royalties for TCC packages sold in a
particular calendar year (“Annual Royalty Target”), then the royalty rate for both DRAM TCC packages and Non-DRAM TCC packages sold thereafter in that same calendar year shall be [*] per package. The Annual Royalty Target set forth in this
paragraph III.C applies solely to the sales of TCC packages licensed pursuant to Paragraph II.A for each of the years 2005 through 2011 and for which royalties are paid directly by the Licensee to Tessera, and the Annual Royalty Target shall be
applied pro rata for the year 2012. If Licensee acquires another company after the Effective Date, the Annual Royalty Target shall be adjusted upwards based on the annual sales of TCC Packages by the acquired company relative to the annual sales of
TCC packages by Licensee prior to the acquisition. 
  
 D.
Royalty Adjustments. In making the royalty payments due Tessera, Licensee may subtract from such royalty payments any preceding royalty payments for defective royalty bearing TCC packages that are returned to Licensee from Licensee’s
customers (“Royalty Adjustment”). However, if at any time such defective TCC packages are resold by Licensee, Licensee shall pay a royalty to Tessera for such resold TCC packages, as set forth in the Agreement. Before a Royalty Adjustment
can be so subtracted, Licensee must have originally paid a royalty on the particular returned Licensed Product. All Royalty Adjustments must be specified with the information set forth in Attachment B. 
  
 E. Most Favored Royalty. As of November 16, 2004, Tessera
intends that any license agreement that Tessera enters into henceforth for TCC packages shall be on royalty rate terms no more favorable to such other licensee than the royalty terms for TCC packages set forth in this Agreement. Tessera further
represents that it has no current license agreement with more favorable royalty terms for TCC packages when all elements of the royalty terms in such current license agreements are considered as a whole. The following shall not be deemed agreements
subject to this Paragraph: (i) agreements between Tessera and Tessera Affiliates; and (ii) agreements with governmental or educational agencies with non-profitable nature. In the event that Tessera grants another license to any such TCC packages
having better royalty terms than the corresponding royalty terms set forth in this Agreement, Tessera shall promptly notify Licensee of the royalty terms of such other license for any such particular defined product(s). Upon notice by Licensee that
it wants to accept any such better royalty terms for such particular TCC package(s) provided no later than sixty (60) days from the date of Tessera’s notice, this Agreement shall be amended to substitute those royalty terms of such particular
TCC package(s) selected by Licensee for the applicable royalty terms of this Agreement, provided that such amendment shall not affect 
  

 Page 7 of 27 

 Tessera’s rights with respect to royalties or other moneys accrued and/or paid prior to such amendment.
“Royalty terms” as used in this paragraph means monetary consideration only. 
  
 Licensee shall have the right to examine and audit through a mutually satisfactory major international public accounting firm, not more frequently than once per year, relevant records of Tessera that contain information bearing upon
Tessera’s compliance with this Paragraph; provided, that the accounting firm shall have agreed in advance in writing to maintain in confidence and not to disclose to Licensee or any third party any Tessera proprietary information or the
proprietary information of third parties associated with any Tessera license agreement obtained during the course of such examination. 
  
 IV. Taxes: 
  
 Licensee agrees to make all commercially reasonable efforts to aid Tessera’s efforts to obtain a multi-year tax exemption for any payments due
hereunder for all taxes levied against Tessera by the Government of Korea pursuant to this Agreement. After such initial tax exempt period (if any), Licensee shall withhold the amount of taxes levied by the Government of Korea on the royalty
payments made by Licensee to Tessera. Licensee shall promptly provide Tessera with copies of bonafide tax certificates showing that such Tessera tax payments have been made by Licensee to the Government of Korea. 
  
 V. Licensee Reports and Payment: 
  
 A. Quarterly Royalty Payments. Beginning with the quarter annual
period starting on January 1, 2005, royalties shall be calculated and paid in full in quarter annual payment periods ending March 31, June 30, September 30 and December 31 of each year. Beginning with the first such royalty payment and until the
annual cumulative total of Licensee’s royalty payments and reports to Tessera equal or exceed the Annual Royalty Target, Licensee shall deliver a written report (as shown in Attachment B) within thirty (30) days from the last day of each
quarter annual payment period describing (i) the basis upon and containing the information sufficient to determine the royalties due Tessera for the applicable payment period (by facsimile, with an original by mail courier), (ii) the purchases by
Licensee of TCC packages from companies that are not Licensee Affiliate companies, and (iii) any Royalty Adjustments. After Licensee’s royalty payments to Tessera equal the Annual Royalty Target, Licensee shall deliver a written report (as
shown in Attachment C) within thirty (30) days from the last day of each quarter annual payment period describing (i) the basis upon and containing the information sufficient to determine the royalties due Tessera for the applicable payment period
(by facsimile, with an original by mail courier), (ii) the purchases by Licensee of TCC packages from companies that are not Licensee Affiliate companies, and (iii) any Royalty Adjustments. Tessera shall then invoice Licensee (by facsimile, with an
original by mail courier) for any royalties due Tessera as set forth in each such Licensee written royalty report. Licensee shall then have thirty (30) days from first receipt of Tessera’s invoice to pay the royalties due under Tessera’s
invoice. All payments under this Paragraph shall be made in US Dollars by wire transfer to Union Bank of California, 99 Almaden Blvd., San Jose, CA 95113, Account Name: Tessera, Account No.: 6450148359, Routing No. 122000496, International Swift
Code: UBLAUS66, or such other bank or account as Tessera may from time to time designate in writing. The payments of royalties shall be considered to be made as of the day on which such payments are received in Tessera’s designated bank
account. 
  

 Page 8 of 27 

 VI. Improvements Grantback: 
  
 A. Licensee hereby grants to Tessera a fully-paid, non-sub-licensable, non-transferable, perpetual, right to use
Licensee’s Improvements and Licensee’s Patent covering any inventions contained in such Licensee’s Improvements to manufacture, have manufactured for Tessera, use or sell products. If Licensee receives a paid up license right at the
termination of this Agreement, under paragraph VIII.B below, Tessera shall have a fully paid up and perpetual license on the terms set forth herein to use Licensee Improvements and Licensee Patents to the same extent as Tessera had been licensed to
use Licensee Improvements and Licensee Patents immediately prior to such expiration. 
  
 B. Licensee agrees to negotiate in good faith with other licensees of Tessera on commercially reasonable terms a non-exclusive, non-transferable, non-sub-licensable license under Licensee’s Patents covering any
inventions contained in such Licensee’s Improvements unless such other licensees refuse to grant to Licensee similar licenses under any of such other licensees’ patents relating to any improvements developed by such other licensee on
similar commercially reasonable terms. In no event shall Licensee be under any obligation to grant such licenses to other licensees of Tessera, unless Licensee’s Improvements are used in IC packages sold externally to non-Affiliates. If
requested by Licensee, Tessera agrees that it will assist the initiation of such discussions between Licensee and such other licensees. 
  
 C. Any improvement that is made through the joint efforts of Tessera and Licensee shall be deemed a “Joint Improvement” hereunder and shall be
the joint property of both Tessera and Licensee, and both Tessera and Licensee shall have a fully-paid, non-assessable, transferable, perpetual, sub-licensable right and license to use such Joint Improvements, but such right and license shall not
include any right of license by implication with respect to any part of the Technology. Licensee and Tessera shall reasonably consult with one another with respect to applying for and maintaining jointly owned patents with respect to such Joint
Improvements at shared expense. In the event that one party hereto (the “Notifying Party”) notifies the other party that the Notifying Party wishes to apply for or maintain a patent in any country for any such Joint Improvement and the
other party hereto does not confirm to the Notifying Party, within thirty (30) days thereafter, that such other party will join in such patent application and share the cost thereof, the Notifying Party shall have a right, at its own expense, to
apply for or maintain such patent in its own name, in which case such patent shall be the sole property of the Notifying Party, and the Joint Invention in the country covered by such patent shall be treated as an improvement made solely by the
Notifying party, and shall be subject to the provisions of this Agreement covering such party improvements. The parties hereto shall execute such documents and render such assistance as may be appropriate to enable the party properly having title to
such Improvements to maintain or obtain patents for the same. 
  
 D. Notwithstanding the foregoing, Licensee is under no obligation to transfer and/or license any information whether confidential, proprietary or otherwise that it may be prohibited from transferring to Tessera by contract with a third
party or applicable law. Notwithstanding any provision to the contrary, Licensee shall not be under any obligation to disclose actual patent applications or related documents to Tessera. 
  

 Page 9 of 27 

 VII. Supplier: 
  
 Licensee, at its sole option, may enter agreements (“Subcontract”) with suppliers (“Supplier”) to
manufacture TCC packages or components, materials or services thereof which are licensed hereunder for Licensee only and not for Supplier’s use or sale to anyone other than Licensee, provided that: (a) prior to any disclosure of Tessera
Confidential Information, Licensee and Supplier shall execute a Non-Disclosure Agreement having substantially similar terms as Paragraph XII herein (Confidentiality of Agreement Terms); (b) Licensee shall ensure that Supplier receives no property
rights to the Technology transferred under Subcontract and that the rights to any improvements to the Technology made by Supplier shall be Licensee Improvements as set forth in this Agreement; (c) Licensee shall ensure that Supplier respect
Licensee’s duty to affix the appropriate patent numbers, trademarks and other designations to each product or material made using the Technology as set forth under this Agreement; and (d) Licensee shall indemnify and hold harmless Tessera and
its successors and assigns against any breach or any damages, costs, or expenses arising from or related to any breach by Licensee or Supplier of the foregoing obligations. 
  
 VIII. Term and Termination: 
  

A. Term: This Agreement shall become effective on Effective Date and, unless earlier terminated as provided for elsewhere in this Agreement,
shall remain in full force until it automatically expires on the May 17, 2012 provided that: 
  
 1. On or before six months prior to the expiration date hereof, Licensee must elect one of the following options and notify Tessera in writing of its election, for the period beginning upon the expiration of this
Agreement: 
  
 a. Licensee may elect to extend the term of this
Agreement for five years, which includes (i) continuing, for the said five year period, the payment of full royalties hereunder, and (ii) continuing during such five year period, all of the obligations, privileges, rights and licenses granted to the
parties hereunder including issued Tessera Patents and the use of know-how previously transferred to Licensee pursuant to the 1997 Agreement up to the expiration of such five year period; or 
  
 b. If Licensee wishes to use further any applicable issued Tessera patent
granted prior to the expiration of this Agreement, Licensee may elect to enter into a patent license agreement with Tessera for any such issued Tessera patents and shall pay royalties for TCC Packages equal to the average of [*] per IC Contact and
[*] of the amounts due under Paragraph III herein for the lesser of five (5) additional years or the life of the last expiring Tessera patent so licensed by Licensee without the option to use know-how previously transferred to Licensee pursuant to
the 1997 Agreement during such five year period; or 
  
 c.
Licensee may elect to permit the Agreement to expire in accordance with its terms (including termination of any payments of royalties to Tessera and termination of any rights of Licensee to use further any Tessera Patent licensed hereunder).

  
 2. Licensee shall give Tessera written notice of its elected
option by the above said notice date. In the event Licensee elects option (a) or (b) above, the parties agree to 
  

 Page 10 of 27 

 meet at a mutually agreed time and place during the year before the year of expiration of any extension of (a) or (b)
above to discuss and negotiate in good faith the reasonable terms and conditions for a patent cross license agreement between the parties concerning any valid patents owned by either party relating to the Technology, Licensee’s Improvement, or
any packaging related improvements thereto, not otherwise covered in the provisions of Subparagraph B. below. 
  
 B. Paid-up license: Upon expiration of any extension hereof under option (a) above or expiration of any one-half royalty patent license under (b)
above, Licensee shall have a fully paid-up and perpetual license on the terms set forth herein to use the Tessera Patents or Technology to the same extent as Licensee had been licensed to use such Tessera Patents or Technology immediately prior to
such expiration. Said paid-up license shall be as follows: 
  
 1.
In the event that Licensee elects option VIII.A.(1)(a) above, such license shall be for applicable Tessera Patent granted through May 17, 2017; or 
  
 2. In the event that Licensee elects option VIII.A.(1)(b) above, such license shall be for applicable Tessera Patent granted through May 17, 2012.

  
 C. Termination for Breach. Either party may terminate
this Agreement due to the other party’s breach of this Agreement, such as failure to perform its material duties, obligations, or responsibilities herein (including, without limitation, failure to pay royalties and provide reports and perform
technology transfer as set forth herein). The parties agree that such breach will cause substantial damages to the party not in breach. Therefore, the parties agree to work together to mitigate the effect of any such breach; however, the
non-breaching party may terminate this Agreement if such breach is not cured or sufficiently mitigated (to the non-breaching party’s satisfaction) within sixty (60) days of notice thereof. 
  
 D. Termination for Assignment. In the event that (i) a party either
sells or assigns substantially all of its assets or business to a third party or (ii) a third party acquires more than fifty percent (50%) of the capital stock entitled to vote for directors of such party (“Selling Party”), the Selling
Party shall notify the other party of such sale or assignment of assets or the third party’s acquisition. In any case of sale, assignment or acquisition, the Selling Party shall provide to the other party a written confirmation from such third
party stating that such third party shall expressly undertake all the terms and conditions of this Agreement to be performed by Selling Party. In the event that such assignee/transferee does not agree to fulfill such obligations under this
Agreement, the other party shall reserve a right to terminate this Agreement. 
  
 E. Termination for Bankruptcy. In the event that one party becomes bankrupt, permanently ceases doing business, makes an assignment for the benefit of its creditors, commits an act of bankruptcy, commences any
bankruptcy proceedings or other proceedings in the nature of bankruptcy proceedings, or has commenced against it any bankruptcy proceedings or other proceedings in the nature of bankruptcy proceedings that are not dismissed within sixty (60) days,
then the other party shall have the right to terminate this Agreement immediately upon its notice. Upon such termination the non-bankrupt party shall have an option to terminate the obligations of both the parties to transfer or license the
Technology or Licensee’s Improvement that is filed after the date of termination for bankruptcy, with the parties retaining all rights to use any Technology transferred prior to such termination and/or Technology covering any inventions in
Licensee’s Improvements, to the extent licensed hereunder, just prior to such termination for bankruptcy, all such rights remaining in full force and good standing, subject to continuation of the royalty payments as stipulated in Paragraph III
hereof. 
  

 Page 11 of 27 

 F. Any termination of this Agreement pursuant to this paragraph VIII, except as provided in Subparagraphs
VIII.B. and VIII.E. above, shall be deemed a termination of this Agreement in accordance with its terms (including termination of any payments of royalties to Tessera and any rights of Licensee to use any Technology or Tessera Patent licensed
hereunder). 
  
 G. Survival Clause. Unless otherwise
provided elsewhere in this Agreement, the following provisions shall survive the termination or expiration of this Agreement: 
  
 1. Licensee’s obligation to make payment to Tessera accrued under this Agreement on or prior to expiration or termination. 
  
 2. Licensee’s obligation to submit written reports stipulated in
Paragraph V, Licensee Reports and Payment, and to permit the inspection and audit of its account record stipulated in Paragraph IX, Reasonable Audit, unless such termination is pursuant to Paragraph VIII.B. in which case Paragraphs V and IX shall
not survive the termination of this Agreement. 
  
 3. Paragraph
XII, Non-Disclosure. 
  
 4. Paragraph VIII, Term and Termination.

  
 5. Paragraph X, No Warranties 
  
 6. Paragraph XI, Limitation on Damages 
  
 7. Paragraph XIII, Indemnity 
  
 8. Paragraph XV, Miscellaneous 
  
 IX. Reasonable Audit: 
  
 Upon reasonable written prior notice, Tessera shall have the right to
examine and audit through an independent third party CPA firm, not more frequently than once per year, all records of Licensee that may contain information bearing upon the amount of fees payable under this Agreement from the previous three (3)
years from the date of notification of the audit; provided, however, that the said auditor shall have agreed in advance in writing to maintain in confidence and not to disclose to Tessera or any third party any proprietary information obtained
during the course of such audit. The results of any such audit shall be final, and within thirty (30) days after receiving the auditor’s report, Licensee shall make payment to Tessera of any amount which may be found to be payable, if any.
Tessera shall bear the expenses of such audit examinations unless royalties due and owing to Tessera are determined by the auditor to be at least five percent (5%) greater than such similar amounts as calculated and/or paid by Licensee, in which
case Licensee shall bear such expenses. 
  

 Page 12 of 27 

 X. No Warranties: 
  
 Licensee acknowledges and agrees that the rights and licenses, and Technology granted or otherwise provided hereunder are
provided to Licensee “AS IS”, with no warranty of any kind. TESSERA MAKES NO WARRANTY, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE, QUALITY, USEFULNESS OR NONINFRINGEMENT. Tessera makes no warranty that the Technology will be sufficient or yield any particular result. 
  
 Notwithstanding the foregoing, Tessera represents that to Tessera’s knowledge, as of the Effective Date, there are no pending claims that have been
made or actions commenced against Tessera for breach of any third party patents, copyrights or trade secrets. 
  
 XI. Limitation on Damages: 
  
 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY (UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER
THEORY) FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES. 
  
 XII. Confidentiality of Agreement Terms: 
  
 A. Confidential Terms. Tessera and Licensee shall keep the terms of
this Agreement (including all Attachments hereto) confidential except: 
  
 (1) to any court or governmental body or agency compelling such disclosure; however, any disclosure shall be limited to that compelled by the governmental body or agency and the disclosing party will take all reasonable actions to obtain a
protective order protecting the disclosure; 
  
 (2) as may
otherwise be required by law; or 
  
 (3) either party may disclose
to third parties the existence of this Agreement to the extent described in the Recitals section hereof. 
  
 B. Order to Disclose. A party receiving a request, subpoena or order for the disclosure of the terms or conditions of this Agreement shall notify
the other party as soon as practicable and if, at all possible, in sufficient time to allow the other party to oppose disclose or seek appropriate protective orders. The party receiving such request, subpoena or order shall cooperate to the extent
reasonably possible with the other party in any effort to oppose disclosure or seek protective orders. 
  
 C. Breach of Confidentiality. If either party learns of a breach of this Paragraph XII, such party shall immediately send a written notification to
the other party describing the circumstances of such breach. 
  
 D. Employee Agreements. Licensee will disclose the terms of this Agreement solely to its employees who have a need to know such information. 
  

 Page 13 of 27 

 E. Prior Confidentiality Terms. This Paragraph XII applies only to the matters described herein
this Agreement and does not supersede any prior written agreements between the parties. Specifically, the Non-Disclosure Agreement contained within the 1997 Agreement is not superceded for the items disclosed thereunder. 
  
 XIII. Indemnity: 
  
 A. Licensee agrees to defend, indemnify and hold Tessera harmless from and
against any and all damages, liabilities, costs and expenses (including reasonable attorney’s’ fees and expenses) arising out of or related to Licensee’s use of Technology or Technical Information. Notwithstanding, Licensee shall not
bear the obligation or expense of defending the validity of any Tessera Patent. Tessera shall have sole control over and bear the expense for so defending the validity of the Tessera Patents. 
  
 B. Tessera agrees to defend, indemnify and hold Licensee harmless from and
against any and all damages, liabilities, costs and expenses (including reasonable attorney’s fees and expenses) arising out of or related to Tessera’s use of Licensee Improvements. Notwithstanding, Tessera shall not bear the obligation or
expense of defending the validity of any Licensee Patent. Licensee shall have sole control over and bear the expense for so defending the validity of the Licensee Patents. 
  
 XIV. Termination of 1997 Agreement: 
  
 The parties agree that the 1997 Agreement is terminated and replaced and superceded with the current Agreement effective
November 16, 2004, except as expressly stated herein and excepting the provisions of the 1997 Agreement that expressly survive termination. The parties agree that the license granted to Licensee in paragraph II.A of the 1997 Agreement for Technology
and Technical Information embodied in the Tessera know-how in Licensee’s possession under the 1997 Agreement survives the termination of the 1997 Agreement with respect to the grant for Licensee’s TCC packages under this Agreement for as
long as this Agreement remains in effect. 
  
 XV.
Miscellaneous: 
  
 The following additional terms shall apply
to this Agreement: 
  
 A. Governing Law. This Agreement
shall be governed, interpreted and construed in accordance with the laws of the State of California, irrespective of choice of laws provisions. Both parities shall use their best efforts to resolve by mutual agreement any disputes, controversies,
claims or difference which may arise from, under, out of or in connection with this Agreement. If such disputes, controversies, claims or differences cannot be settled between the parties, any litigation between the parties relating to this
Agreement shall take place in Federal District Court, Northern District of California. The parties hereby consent to personal jurisdiction and venue in the state and federal courts of California. 
  
 B No Waiver. Any waiver, express or implied, by either of the parties
hereto of any right hereunder or default by the other party, shall not constitute or be deemed a continuing waiver or a waiver of any other right or default. No failure or delay on either party in the 
  

 Page 14 of 27 

 
exercise of any right or privilege hereunder shall operate as waiver thereof, nor shall any single or partial exercise of such right or privilege preclude
other or further exercise thereof or any other right or privilege. 
  
 C. Equitable Relief: Nothing herein shall preclude either party from taking whatever actions are necessary to prevent immediate, irreparable harm to its interests. Otherwise, these procedures are exclusive and shall be fully
exhausted prior to the initiation of any litigation. 
  
 D.
Notices. All notices, required documentation, and correspondence in connection herewith shall be in the English language, shall be provided in writing and shall be given by facsimile transmission or by registered or certified letter to
Tessera and Licensee at the addresses and facsimile numbers set forth below: 
  

			
	 Tessera:
	  	Tessera, Inc.
	 	  	3099 Orchard Dr.
	 	  	San Jose, California 95134
	 	  	Facsimile No.: 408-894-0768
	 	  	Attn.: Chief Executive Officer
		
	 Licensee:
	  	Samsung Electronics Co., Ltd.
	 	  	San #24 Nongseo-Ri, Kiheung-Eup
	 	  	Youngin- City, Kyungki-Do, KOREA
	 	  	Facsimile: 82-31-208-7398 or 7399
	 	  	Attn.:  Jay Shim
	 	  	            Vice President
	 	  	            Intellectual Property Team
	 	  	            Semiconductor Division

  
 Either Party may
change its address and/or facsimile number by giving the other party notice of such new address and/or facsimile number. All notices if given or made by registered or certified letter shall be deemed to have been received on the earlier of the date
actually received and the date three days after the same was posted and if given or made by facsimile transmission shall be deemed to have been received at the time of dispatch, unless such date of deemed receipt is not a business day, in which case
the date of deemed receipt shall be the next succeeding business day. 
  
 E. Entire Understanding. This Agreement embodies the entire understanding between the parties relating to the subject matter hereof, whether written or oral, and there are no prior representations, warranties or agreements between
the parties not contained in this Agreement. Any amendment or modification of any provision of this Agreement must be in writing, dated and signed by both parties hereto. 
  
 F. Invalidity. If any provision of this Agreement is declared invalid or unenforceable by a court having competent
jurisdiction, it is mutually agreed that this Agreement shall endure except for the part declared invalid or unenforceable by order of such court. The parties shall consult and use their best efforts to agree upon a valid and enforceable provision
which shall be a reasonable substitute for such invalid or unenforceable provision in light of the intent of this Agreement. 
  

 Page 15 of 27 

 G. Assignment. Neither party may assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of the other party except as otherwise provided elsewhere in this Agreement. 
  
 H. Export Regulations. Both parties shall comply with the laws and regulations of the government of the United States, and of any other country as
applicable relating to the export of commodities and technical data, any direct product of such data, or any product received the other, to any proscribed country listed in such laws and regulations unless properly authorized by the appropriate
government, and not knowingly export, or allow the export or re-export of any Technology or Proprietary Information, or any system, component, item, material or package made under or using the foregoing, in violation of any restrictions, laws or
regulations, or without all required licenses and authorizations, to Afghanistan, the People’s Republic of China or any Group Q, S, W, Y or Z country specified in the then current Supplement No. 1 to Section 770 of the US Export Administration
Regulations (or any successor supplement or regulations). 
  

 Page 16 of 27 

 I. Paragraph Headings. The headings and captions used herein shall not be used to interpret or
construe this Agreement. 
  
 IN WITNESS WHEREOF, the parties
hereto have executed and delivered this Agreement as of the date first above written. 
  

							
	 TESSERA, INC.
	 	 SAMSUNG ELECTRONICS CO., LTD.

				
	 By:
	 	  	 	 By:
	 	  
				
	 Print Name:
	 	  	 	 Print Name:
	 	  
				
	 Title:
	 	  	 	 Title:
	 	  
				
	 Date:
	 	  	 	 Date:
	 	  

  

 Page 17 of 27 

 Attachment A 
  
 List of Patents/Patent Applications (as of January 31, 2004) 
  

					
	US PATENT
NO.

	  	 TITLE

	  	EXPIRATION

	5,148,265	  	SEMICONDUCTOR CHIP ASSEMBLIES WITH FAN-IN LEADS	  	9/24/2010
			
	5,148,266	  	SEMICONDUCTOR CHIP ASSEMBLIES HAVING INTERPOSER AND FLEXIBLE LEAD	  	9/24/2010
			
	5,258,330	  	SEMICONDUCTOR CHIP ASSEMBLIES WITH FAN-IN LEADS	  	11/2/2010
			
	5,346,861	  	SEMICONDUCTOR CHIP ASSEMBLIES AND METHODS OF MAKING SAME	  	9/13/2011
			
	5,347,159	  	SEMICONDUCTOR CHIP ASSEMBLIES WITH FACE-UP MOUNTING AND REAR-SURFACE CONNECTION TO SUBSTRATE	  	9/13/2011
			
	5,390,844	  	SEMICONDUCTOR INNER LEAD BONDING TOOL	  	7/23/2013
			
	5,398,863	  	SHAPED LEAD STRUCTURE AND METHOD	  	7/23/2013
			
	5,414,298	  	SEMICONDUCTOR CHIP ASSEMBLIES AND COMPONENTS WITH PRESSURE CONTACT	  	3/26/2013
			
	5,477,611	  	METHOD OF FORMING INTERFACE BETWEEN DIE AND CHIP CARRIER	  	9/20/2013
			
	5,489,749	  	SEMICONDUCTOR CONNECTION COMPONENTS AND METHODS WITH RELEASABLE LEAD SUPPORT	  	2/6/2013
			
	5,491,302	  	MICROELECTRONIC BONDING WITH LEAD MOTION	  	9/19/2014
			
	5,525,545	  	SEMICONDUCTOR CHIP ASSEMBLIES AND COMPONENTS WITH PRESSURE CONTACT	  	6/11/2013
			
	5,536,909	  	SEMICONDUCTOR CONNECTION COMPONENTS AND METHODS WITH RELEASABLE LEAD SUPPORT	  	7/16/2013
			
	5,548,091	  	SEMICONDUCTOR CHIP CONNECTION COMPONENTS WITH ADHESIVES AND METHODS FOR BONDING TO THE CHIP	  	10/26/2013
			
	5,597,470	  	METHOD OF MAKING A FLEXIBLE LEAD FOR A MICROELECTRONIC DEVICE	  	6/19/2015
			
	5,619,017	  	MICROELECTRONIC BONDING WITH LEAD MOTION	  	9/19/2014
			
	5,629,239	  	MANUFACTURE OF SEMICONDUCTOR CONNECTION COMPONENTS WITH FRANGIBLE LEAD SECTIONS	  	3/21/2015
			
	5,659,952	  	METHOD OF FABRICATING COMPLIANT INTERFACE FOR A SEMICONDUCTOR CHIP	  	9/20/2014
			
	5,663,106	  	METHOD OF ENCAPSULATING DIE AND CHIP CARRIER	  	9/2/2014
			
	5,679,194	  	FABRICATION OF LEADS ON SEMICONDUCTOR CONNECTION COMPONENTS	  	5/4/2015
			
	5,679,977	  	SEMICONDUCTOR CHIP ASSEMBLIES, METHODS OF MAKING SAME AND COMPONENTS FOR SAME	  	9/24/2010
			
	5,682,061	  	COMPONENT FOR CONNECTING A SEMICONDUCTOR CHIP TO A SUBSTRATE	  	10/28/2014

  

 Page 18 of 27 

					
			
	5,685,885	  	WAFER-SCALE TECHNIQUES FOR FABRICATION OF SEMICONDUCTOR CHIP ASSEMBLIES	  	9/13/2011
			
	5,706,174	  	COMPLIANT MICROELECTRONIC MOUNTING DEVICE	  	7/7/2014
			
	5,766,987	  	MICROELECTRONIC ENCAPSULATION METHODS AND EQUIPMENT	  	9/22/2015
			
	5,776,796	  	METHOD OF ENCAPSULATING A SEMICONDUCTOR PACKAGE	  	5/19/2014
			
	5,777,379	  	SEMICONDUCTOR ASSEMBLIES WITH REINFORCED PERIPHERAL REGIONS	  	8/18/2015
			
	5,787,581	  	METHODS OF MAKING SEMICONDUCTOR CONNECTION COMPONENTS WITH RELEASABLE LOAD SUPPORT	  	7/24/2012
			
	5,801,446	  	MICROELECTRONIC CONNECTIONS WITH SOLID CORE JOINING UNITS	  	9/1/2015
			
	5,807,453	  	FABRICATION OF LEADS ON SEMICONDUCTOR CONNECTION COMPONENTS	  	5/4/2015
			
	5,821,608	  	LATERALLY SITUATED STRESS/STRAIN RELIEVING LEAD FOR A SEMICONDUCTOR CHIP PACKAGE	  	9/6/2016
			
	5,821,609	  	SEMICONDUCTOR CONNECTION COMPONENT WITH FRANGIBLE LEAD SECTIONS	  	3/21/2015
			
	5,834,339	  	METHODS FOR PROVIDING VOID FREE LAYERS FOR SEMICONDUCTOR ASSEMBLIES	  	3/7/2016
			
	5,848,467	  	METHODS OF MAKING SEMICONDUCTOR CHIP ASSEMBLIES	  	9/13/2011
			
	5,852,326	  	FACE-UP SEMICONDUCTOR CHIP ASSEMBLY	  	9/24/2010
			
	5,861,666	  	STACKED CHIP ASSEMBLY	  	8/29/2016
			
	5,868,301	  	SEMICONDUCTOR INNER LEAD BONDING TOOL	  	4/10/2016
			
	5,875,545	  	METHOD OF MOUNTING A CONNECTION COMPONENT ON A SEMICONDUCTOR CHIP WITH ADHESIVES	  	10/26/2013
			
	5,885,849	  	MICROELECTRONIC CONNECTIONS WITH SOLID CORE JOINING UNITS	  	3/28/2015
			
	5,915,170	  	MULTIPLE PART COMPLIANT INTERFACE FOR PACKAGING OF A SEMICONDUCTOR CHIP AND METHOD THEREFOR	  	9/16/2017
			
	5,915,752	  	METHOD OF MAKING CONNECTIONS TO A SEMICONDUCTOR CHIP ASSEMBLY	  	7/24/2012
			
	5,929,517	  	COMPLIANT INTEGRATED CIRCUIT PACKAGE AND METHOD OF FABRICATING THE SAME	  	7/27/2016
			
	5,932,254	  	SYSTEM FOR ENCAPSULATING MICROELECTRONIC DEVICES	  	9/22/2015
			
	5,937,276	  	BONDING LEAD STRUCTURE WITH ENHANCED ENCAPSULATION	  	10/8/2017
			
	5,950,304	  	METHODS OF MAKING SEMICONDUCTOR CHIP ASSEMBLIES	  	9/24/2010
			
	5,966,587	  	METHODS OF MAKING SEMICONDUCTOR ASSEMBLIES WITH REINFORCED PERIPHERAL REGIONS	  	8/18/2015
			
	5,966,592	  	STRUCTURE AND METHOD FOR MAKING A COMPLIANT LEAD FOR A MICROELECTRONIC DEVICE	  	11/21/2015
			
	5,977,618	  	SEMICONDUCTOR CONNECTION COMPONENTS AND METHODS WITH RELEASABLE LEAD SUPPORT	  	7/24/2012

  

 Page 19 of 27 

					
			
	5,989,939	 	PROCESS OF MANUFACTURING COMPLIANT WIRE BOND PACKAGE	  	12/12/2017
			
	5,994,222	 	METHOD OF MAKING CHIP MOUNTINGS AND ASSEMBLIES	  	4/25/2017
			
	5,994,781	 	SEMICONDUCTOR CHIP PACKAGE WITH DUAL LAYER TERMINAL AND LEAD STRUCTURE	  	5/29/2018
			
	6,002,168	 	MICROELECTRONIC COMPONENT WITH RIGID INTERPOSER	  	11/25/2017
			
	6,012,224	 	METHOD OF FORMING COMPLIANT MICROELECTRONIC MOUNTING DEVICE	  	7/7/2014
			
	6,030,856	 	BONDABLE COMPLIANT PADS FOR PACKAGING OF A SEMICONDUCTOR CHIP AND METHOD THEREFOR	  	6/10/2017
			
	6,045,655	 	METHOD OF MOUNTING A CONNECTION COMPONENT ON A SEMICONDUCTOR CHIP WITH ADHESIVE	  	10/26/2013
			
	6,046,076	 	VACUUM DISPENSE METHOD FOR DISPENSING AN ENCAPSULANT AND MACHINE THEREFOR	  	12/29/2014
			
	6,049,972	 	UNIVERSAL STRIP/CARRIER FRAME ASSEMBLY AND METHODS	  	1/23/2018
			
	6,054,337	 	METHODS OF MAKING A COMPLIANT MULTICHIP PACKAGE	  	12/12/2017
			
	6,054,756	 	CONNECTION COMPONENTS WITH FRANGIBLE LEADS AND BUS	  	7/24/2012
			
	6,080,605	 	METHOD OF ENCAPSULATING A SEMICONDUCTOR CHIP USING A SETTABLE ENCAPSULANT	  	10/6/2018
			
	6,080,932	 	SEMICONDUCTOR PACKAGE ASSEMBLIES WITH MOISTURE VENTS	  	4/14/2018
			
	6,081,035	 	MICROELECTRONIC BOND RIBBON DESIGN	  	10/24/2016
			
	6,083,837	 	FABRICATION OF COMPONENTS BY COINING	  	12/12/2017
			
	6,107,123	 	METHODS FOR PROVIDING VOID-FREE LAYERS FOR SEMICONDUCTOR ASSEMBLIES	  	3/7/2016
			
	6,107,682	 	COMPLIANT WIRE BOND PACKAGES HAVING WIRE LOOP	  	12/12/2017
			
	6,121,676	 	STACKED MICROELECTRONIC ASSEMBLY AND METHOD THEREFOR	  	12/11/2017
			
	6,126,428	 	VACUUM DISPENSE APPARATUS FOR DISPENSING AN ENCAPSULANT	  	12/29/2014
			
	6,127,724	 	PACKAGED MICROELECTRONIC ELEMENTS WITH ENHANCED THERMAL CONDUCTION	  	10/31/2017
			
	6,130,116	 	METHOD OF ENCAPSULATING A MICROELECTRONIC ASSEMBLY UTILIZING A BARRIER	  	12/4/2017
			
	6,133,627	 	SEMICONDUCTOR CHIP PACKAGE WITH CENTER CONTACTS	  	9/24/2010
			
	6,133,639	 	COMPLIANT INTERFACE FOR A SEMICONDUCTOR CHIP AND METHOD THEREFOR	  	9/20/2014
			
	6,147,401	 	COMPLIANT MULTICHIP PACKAGE	  	12/12/2017
			
	6,157,075	 	SEMICONDUCTOR ASSEMBLIES WITH REINFORCED PERIPHERAL REGIONS	  	8/18/2015
			
	6,162,661	 	SPACER PLATE SOLDER BALL PLACEMENT FIXTURE AND METHODS THEREFOR	  	5/29/2018
			
	6,169,328	 	SEMICONDUCTOR CHIP ASSEMBLY	  	9/20/2014
			
	6,170,151	 	UNIVERSAL UNIT STRIP/CARRIER FRAME ASSEMBLY AND METHODS	  	1/23/2018

  

 Page 20 of 27 

					
			
	6,182,546	 	APPARATUS AND METHODS FOR SEPARATING MICROELECTRONIC PACKAGES FROM A COMMON SUBSTRATE	  	3/4/2018
			
	6,184,140	 	METHODS OF MAKING MICROELECTRONIC PACKAGES UTILIZING COINING	  	12/12/2017
			
	6,191,473	 	BONDING LEAD STRUCTURE WITH ENHANCED ENCAPSULATION	  	10/8/2017
			
	6,196,042	 	COINING TOOL AND PROCESS OF MANUFACTURING SAME FOR MAKING CONNECTION COMPONENTS	  	3/31/2019
			
	6,197,665	 	LAMINATION MACHINE AND METHOD TO LAMINATE A COVERLAY TO A MICROELECTRONIC PACKAGE	  	4/15/2019
			
	6,202,299	 	SEMICONDUCTOR CHIP CONNECTION COMPONENTS WITH ADHESIVES AND METHOD OF MAKING SAME	  	10/26/2013
			
	6,204,091	 	METHOD OF ASSEMBLING A SEMICONDUCTOR CHIP PACKAGE	  	12/4/2017
			
	6,208,025	 	MICROELECTRONIC COMPONENT WITH RIGID INTERPOSER	  	11/25/2017
			
	6,214,640	 	METHOD OF MANUFACTURING A PLURALITY OF SEMICONDUCTOR PACKAGES	  	8/3/2019
			
	6,215,191	 	COMPLIANT LEAD STRUCTURES FOR MICROELECTRONIC DEVICES	  	11/21/2015
			
	6,218,213	 	MICROELECTRONIC COMPONENTS WITH FRANGIBLE LEAD SECTIONS	  	6/3/2019
			
	6,218,215	 	METHODS OF ENCAPSULATING A SEMICONDUCTOR CHIP USING A SETTABLE ENCAPSULANT	  	10/6/2018
			
	6,225,688	 	STACKED MICROELECTRONIC ASSEMBLY AND METHOD THEREFOR	  	12/11/2017
			
	6,232,152	 	METHOD OF MANUFACTURING A PLURALITY OF SEMICONDUCTOR PACKAGES AND THE RESULTING SEMICONDUCTOR PACKAGE STRUCTURES	  	5/19/2014
			
	6,248,656	 	METAL-JACKETED LEAD MANUFACTURING PROCESS USING RESIST LAYERS	  	8/13/2019
			
	6,253,992	 	SOLDER BALL PLACEMENT FIXTURES AND METHODS	  	3/17/2019
			
	6,255,723	 	LAYERED LEAD STRUCTURES	  	10/27/2018
			
	6,255,738	 	ENCAPSULANT FOR MICROELECTRONIC DEVICES	  	9/30/2017
			
	6,261,863	 	COMPONENTS WITH RELEASABLE LEADS AND METHODS OF MAKING RELEASABLE LEADS	  	10/24/2015
			
	6,265,759	 	LATERALLY SITUATED STRESS/STRAIN RELIEVING LEAD FOR A SEMICONDUCTOR CHIP PACKAGE	  	9/6/2016
			
	6,266,872	 	METHOD FOR MAKING A CONNECTION COMPONENT FOR A SEMICONDUCTOR CHIP PACKAGE	  	12/9/2017
			
	6,272,744	 	SEMICONDUCTOR CONNECTION COMPONENTS AND METHODS WITH RELEASABLE LEAD SUPPORT	  	7/24/2012
			
	6,274,822	 	MANUFACTURE OF SEMICONDUCTOR CONNECTION COMPONENTS WITH FRANGIBLE LEAD SECTIONS	  	7/2/2018

  

 Page 21 of 27 

					
			
	6,294,040	  	TRANSFERABLE RESILIENT ELEMENT FOR PACKAGING OF A SEMICONDUCTOR CHIP AND METHOD THEREFOR	  	6/20/2017
			
	6,300,231	  	METHOD FOR CREATING A DIE SHRINK INSENSITIVE SEMICONDUCTOR PACKAGE AND COMPONENT THEREFOR	  	5/28/2019
			
	6,300,254	  	METHODS OF MAKING COMPLIANT INTERFACES AND MICROELECTRONIC PACKAGES USING SAME	  	4/16/2019
			
	6,306,752	  	CONNECTION COMPONENT AND METHOD OF MAKING SAME	  	9/15/2019
			
	6,309,910	  	MICROELECTRONIC COMPONENTS WITH FRANGIBLE LEAD SECTIONS	  	5/18/2019
			
	6,309,915	  	SEMICONDUCTOR CHIP PACKAGE WITH EXPANDER RING AND METHOD OF MAKING SAME	  	2/5/2019
			
	6,313,528	  	COMPLIANT MULTICHIP PACKAGE	  	12/12/2017
			
	6,324,754	  	METHOD FOR FABRICATING MICROELECTRONIC ASSEMBLIES	  	3/25/2018
			
	6,329,224	  	ENCAPSULATION OF MICROELECTRONIC ASSEMBLIES	  	4/28/2018
			
	6,334,942	  	SELECTIVE REMOVAL OF DIELECTRIC MATERIALS AND PLATING PROCESS USING SAME	  	2/9/2019
			
	6,358,780	  	SEMICONDUCTOR PACKAGE ASSEMBLIES WITH MOISTURE VENTS AND METHODS OF MAKING SAME	  	4/14/2018
			
	6,359,236	  	MOUNTING COMPONENT WITH LEADS HAVING POLYMERIC STRIPS	  	7/24/2012
			
	6,359,335	  	METHOD OF MANUFACTURING A PLURALITY OF SEMICONDUCTOR PACKAGES AND THE RESULTING SEMICONDUCTOR PACKAGE STRUCTURES	  	5/19/2014
			
	6,370,032	  	COMPLIANT MICROELECTRONIC MOUNTING DEVICE	  	7/7/2014
			
	6,373,128	  	SEMICONDUCTOR ASSEMBLIES WITH REINFORCED PERIPHERAL REGIONS	  	8/18/2015
			
	6,373,141	  	BONDABLE COMPLIANT PADS FOR PACKAGING OF A SEMICONDUCTOR CHIP AND METHOD THEREFOR	  	6/10/2017
			
	6,380,060	  	OFF-CENTER SOLDER BALL ATTACH AND METHODS THEREFOR	  	8/31/2020
			
	6,388,340	  	COMPLIANT SEMICONDUCTOR CHIP PACKAGE WITH FAN-OUT LEADS AND METHOD OF MAKING SAME	  	2/5/2019
			
	6,423,907	  	COMPONENTS WITH RELEASABLE LEADS	  	2/9/2018
			
	6,433,419	  	FACE-UP SEMICONDUCTOR CHIP ASSEMBLIES	  	9/24/2010
			
	6,458,628	  	METHODS OF ENCAPSULATING A SEMICONDUCTOR CHIP USING A SETTABLE ENCAPSULANT	  	10/6/2018
			
	6,458,681	  	METHODS FOR PROVIDING VOID-FREE LAYERS FOR SEMICONDUCTOR ASSEMBLIES	  	3/7/2016
			
	6,460,245	  	METHOD OF FABRICATING SEMICONDUCTOR CHIP ASSEMBLIES	  	10/26/2013
			
	6,465,744	  	GRADED METALLIC LEADS CONNECTION TO MICROELECTRONIC ELEMENTS	  	3/26/2019
			
	6,465,747	  	MICROELECTRONIC ASSEMBLIES HAVING SOLDER-WETTABLE PADS AND CONDUCTIVE ELEMENTS	  	3/25/2018
			
	6,465,893	  	STACKED CHIP ASSEMBLY	  	9/24/2010

  

 Page 22 of 27 

					
			
	6,468,830	  	COMPLIANT SEMICONDUCTOR PACKAGE WITH ANISOTROPIC CONDUCTIVE MATERIAL INTERCONNECTS AND METHODS	  	1/25/2019
			
	6,468,836	  	LATERALLY SITUATED STRESS/STRAIN RELIEVING LEAD FOR A SEMICONDUCTOR CHIP PACKAGE	  	9/6/2016
			
	6,486,003	  	EXPANDABLE INTERPOSER FOR A MICROELECTRONIC PACKAGE AND METHOD THEREFOR	  	12/10/2017
			
	6,489,674	  	METHOD FOR CREATING A DIE SHRINK INSENSITIVE SEMICONDUCTOR PACKAGE AND COMPONENT THEREFOR	  	5/28/2019
			
	6,492,201	  	FORMING MICROELECTRONIC COMPONENTS BY ELECTROPHORETIC DEPOSITION	  	7/10/2018
			
	6,518,662	  	METHOD OF ASSEMBLING A SEMICONDUCTOR CHIP PACKAGE	  	8/13/2018
			
	6,521,480	  	A METHOD FOR MAKING A SEMICONDUCTOR CHIP PACKAGE	  	7/25/2015
			
	6,525,429	  	METHODS OF MAKING MICROELECTRONIC ASSEMBLIES INCLUDING COMPLIANT INTERFACES	  	9/20/2014
			
	6,527,163	  	METHODS OF MAKING BONDABLE CONTACTS AND A TOOL FOR MAKING SUCH CONTACTS	  	11/21/2020
			
	6,534,392	  	METHODS OF MAKING MICROELECTRONIC ASSEMBLIES USING BONDING STAGE AND BONDING STAGE THEREFOR	  	9/14/2021
			
	6,541,845	  	COMPONENTS WITH RELEASABLE LEADS AND METHODS OF MAKING RELEASABLE LEADS	  	10/24/2015
			
	6,541,874	  	ENCAPSULATION OF MICROELECTRONIC ASSEMBLIES	  	4/28/2018
			
	6,572,781	  	MICROELECTRONIC PACKAGING METHODS AND COMPONENTS	  	5/16/2021
			
	6,573,459	  	GRADED METALLIC LEADS FOR CONNECTION TO MICROELECTRONIC ELEMENTS	  	3/26/2019
			
	6,602,740	  	ENCAPSULATION OF MICROELECTRONIC ASSEMBLIES	  	11/22/2020
			
	6,603,209	  	COMPLIANT INTEGRATED CIRCUIT PACKAGE	  	12/29/2014
			
	6,653,172	  	METHODS FOR PROVIDING VOID-FREE LAYERS FOR SEMICONDUCTOR ASSEMBLIES	  	3/7/2016
			
	6,664,484	  	COMPONENTS WITH RELEASABLE LEADS	  	5/1/2018
			
	6,686,015	  	TRANSFERABLE RESILIENT ELEMENT FOR PACKAGING OF A SEMICONDUCTOR CHIP AND METHODTHEREFOR	  	6/30/2017
			
	6,687,980	  	APPARATUS FOR PROCESSING FLEXIBLE TAPE FOR MICROELECTRONIC ASSEMBLIES	  	12/14/2018
			
	6,699,730	  	STACKED MICROELECTRONIC ASSEMBLY AND METHOD THEREFOR	  	4/15/2018
			
	6,707,149	  	LOW COST AND COMPLIANT MICROELECTRONIC PACKAGES FOR HIGH I/O AND FINE PITCH	  	10/1/2021
			
	US
APPLICATION
SERIAL NO.

	  	 TITLE

	  	ESTIMATED
EXPIRATION
DATE

			
	09/534,939	  	CONNECTION COMPONENTS WITH FRANGIBLE LEADS AND BUS	  	7/24/2012
			
	09/628,049	  	PACKAGED MICROELECTRONIC ELEMENTS WITH ENHANCED THERMAL CONDUCTION	  	10/31/2017

  

 Page 23 of 27 

					
			
	09/656,690	  	FACE-UP SEMICONDUCTOR CHIP ASSEMBLIES	  	9/24/2010
			
	09/766,814	  	MICROELECTRONIC PACKAGES HAVING DEFORMED BONDED AND METHODS THEREFOR	  	7/7/2014
			
	09/827,840	  	MICROELECTRONIC ASSEMBLY HAVING ENCAPSULATED WIRE BONDING LEADS	  	9/24/2010
			
	09/942,386	  	COMPONENTS WITH CONDUCTIVE SOLDER MASK LAYERS	  	3/26/2019
			
	10/044,121	  	STACKED MICROELECTRONIC ASSEMBLIES AND METHODS OF MAKING SAME	  	1/11/2022
			
	10/077,145	  	OFF-CENTER SOLDER BALL ATTACH ASSEMBLY	  	8/31/2020
			
	10/077,388	  	ASSEMBLIES HAVING STACKED SEMICONDUCTOR CHIPS AND METHODS OF MAKING SAME	  	2/15/2022
			
	10/095,561	  	METHOD OF MANUFACTURING A PLURALITY OF SEMICONDUCTOR PACKAGES AND THE RESULTING SEMICONDUCTOR PACKAGE	  	5/19/2014
			
	10/097,032	  	METHODS FOR PROVIDING VOID-FREE LAYERS FOR SEMICONDUCTOR ASSEMBLIES	  	3/7/2016
			
	10/123,547	  	METHODS OF MAKING MICROELECTRONIC ASSEMBLIES INCLUDING COMPLIANT INTERFACES	  	9/20/2014
			
	10/162,957	  	CONNECTION COMPONENTS WITH FRANGIBLE LEADS AND BUS	  	7/24/2012
			
	10/164,116	  	SEMICONDUCTOR CHIP ASSEMBLIES, METHODS OF MAKING SAME AND COMPONENTS FOR SAME	  	9/24/2010
			
	10/210,160	  	HIGH-FREQUENCY CHIP PACKAGES	  	8/1/2022
			
	10/210,811	  	METHOD OF FABRICATING SEMICONDUCTOR CHIP ASSEMBLIES	  	3/7/2016
			
	10/235,102	  	MICROELECTRONIC ASSEMBLY FORMATION WITH RELEASABLE LEADS	  	9/5/2022
			
	10/254,926	  	FORMING MICROELECTRONIC CONNECTION COMPONENTS BY ELECTROPHORETIC DEPOSITION	  	7/10/2018
			
	10/255,297	  	METHODS OF MAKING MICROELECTRONIC ASSEMBLIES INCLUDING COMPLIANT LAYERS	  	9/20/2014
			
	10/267,450	  	STACKED PACKAGES	  	10/9/2022
			
	10/281,550	  	METHODS OF MAKING MICROELECTRONIC ASSEMBLIES INCLUDING FOLDED SUBSTRATES	  	12/11/2017
			
	10/301,188	  	MICROELECTRONIC COMPONENT AND ASSEMBLY HAVING LEADS WITH OFFSET PORTIONS	  	9/24/2010
			
	FOREIGN
PATENT NO.

	  	 TITLE

	  	EXPIRATION
DATE

			
	EP0551382
(Euro)	  	SEMICONDUCTOR CHIP ASSEMBLIES AND METHODS OF MAKING SAME AND COMPONENTS FOR SAME	  	9/24/2011
			
	121621
(Korea)	  	SEMICONDUCTOR CHIP ASSEMBLIES AND METHODS OF MAKING SAME AND COMPONENTS FOR SAME	  	9/24/2011
			
	209457
(Korea)	  	SEMICONDUCTOR CONNECTION COMPONENTS AND METHODS WITH RELEASABLE LEAD SUPPORT	  	7/23/2013
			
	0322289
(Korea)	  	METHOD OF FORMING INTERFACE BETWEEN DIE AND CHIP CARRIER	  	8/5/2014

  

 Page 24 of 27 

						
			
	0334990
(Korea)	  	MICROELECTRONIC BONDING WITH LEAD MOTION	  	9/19/2015	 
			
	2924923
(Japan)	  	SEMICONDUCTOR CHIP ASSEMBLIES AND METHODS OF MAKING SAME AND COMPONENTS FOR SAME	  	9/24/2011	 
			
	3151219
(Japan)	  	SEMICONDUCTOR CONNECTION COMPONENTS AND METHODS WITH RELEASABLE LEAD SUPPORT	  	7/23/2013	 
			
	2,091,438
(Canada)	  	SEMICONDUCTOR CHIP ASSEMBLIES AND METHODS OF MAKING SAME AND COMPONENTS FOR SAME	  	9/24/2011	 
			
	NI-142874
(Taiwan)	  	ENCAPSULATION OF MICROELECTRONIC ASSEMBLIES	  	4/25/2019	 
			
	0384255
(Korea)	  	COMPLIANT INTERFACE FOR A SEMICONDUCTOR CHIP	  	9/20/2015	 
			
	800753
(Germany)	  	MICROELECTRONIC BONDING WITH LEAD MOTION	  	9/19/2015	 
			
	800753
(FRANCE)	  	MICROELECTRONIC BONDING WITH LEAD MOTION	  	9/19/2015	 
			
	800753
(GR.BRIT)	  	MICROELECTRONIC BONDING WITH LEAD MOTION	  	9/19/2015	 
			
	FOREIGN
APPLICATION
SERIAL NO.

	  	 TITLE

	  	ESTIMATED
EXPIRATION
DATE

	 
			
	94924580.7
(Euro)	  	METHOD OF FORMING INTERFACE BETWEEN DIE AND CHIP CARRIER	  	8/5/2014	*
			
	95933164.6
(Euro)	  	COMPLIANT INTERFACE FOR A SEMICONDUCTOR CHIP	  	9/20/2015	*
			
	1200301.8
(Euro)	  	SEMICONDUCTOR CHIP ASSEMBLIES	  	9/24/2011	 
			
	7-505309
(Japan)	  	SHAPED LEAD STRUCTURE AND METHOD	  	7/21/2014	 
			
	8-511028
(Japan)	  	MICROELECTRONIC BONDING WITH LEAD MOTION	  	9/19/2015	 
			
	8-511045
(Japan)	  	COMPLIANT INTERFACE FOR A SEMICONDUCTOR CHIP	  	9/20/2015	 
			
	8-533523
(Japan)	  	FABRICATION OF LEADS ON SEMICONDUCTOR CONNECTION COMPONENTS	  	5/3/2016	 
			
	546394/2000
(Japan)	  	ENCAPSULATION OF MICROELECTRONIC ASSEMBLIES	  	4/26/2019	 
			
	10-2000-
7012035
(Korea)	  	ENCAPSULATION OF MICROELECTRONIC ASSEMBLIES	  	4/26/2019	 

  

 Page 25 of 27 

 ATTACHMENT B 
  
 Reporting Period: From
                         through
                         
  
 ROYALTY REPORT UNDER TESSERA TCC LICENSE AGREEMENT 
  

									
	 PARTY
 ASSEMBLING
 TCC PACKAGE
 (Licensee or
 Subcontractor)
	 	 TYPE OF IC DEVICE
 (DRAM, NON-DRAM
 SINGLE CHIP, OR
NON-
DRAM MULTI-CHIP)
	 	NUMBER OF TCC
PACKAGES	 	ROYALTY
RATE	  	ROYALTY (US$)
	 	 	 	 	 
	 	 	 	 	 	 	 	  	 
	 	 	 	 	 
	 	 	 	 	 	 	 	  	 
	 	 	 	 	 
	 	 	 	 	 	 	 	  	 

  
 PURCHASES OF TCC PACKAGES FROM
OTHERS 
  

									
	SUPPLIER OF TCC
PACKAGES	 	TYPE OF TCC
PACKAGES	 	 TYPE OF IC
 DEVICE
	  	 NUMBER OF
 TCC
 PACKAGES
	  	NUMBER OF IC
CONTACTS PER
TCC
PACKAGE
	 	 	 	 	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 
	 	 	 	 	 	  	 	  	 

  
 ROYALTY ADJUSTMENTS 

 

									
	CUSTOMER	 	DATE OF ROYALTY
PAYMENT	 	 NUMBER OF
 RETURNED
 TCC
 PACKAGES
	  	 ROYALTY
 RATE
	  	 ROYALTY
ADJUSTMENT
 (US$)

	 	 	 	 	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 
	 	 	 	 	 	  	 	  	 

  

			
	TOTAL ROYALTY:	  	US$                            
		
	LESS TOTAL ROYALTY	  	 
	ADJUSTMENT:	  	US$                            
		
	ACTUAL REMITTANCE:	  	US$                            

  

 Page 26 of 27 

 ATTACHMENT C 
  
 Reporting Period: From                      through
                     
  
 ROYALTY REPORT UNDER TESSERA TCC LICENSE AGREEMENT 
  

							
	 PARTY ASSEMBLING
 TCC PACKAGE (Licensee
 or Subcontractor)
	 	 NUMBER OF
TCC
 PACKAGES
	 	 ROYALTY
 RATE
	  	ROYALTY (US$)
	 	 		 
	 	 	 	 	 	  	 
	 	 		 
	 	 	 	 	 	  	 
	 	 		 
	 	 	 	 	 	  	 

  
 PURCHASES OF TCC PACKAGES FROM
OTHERS 
  

					
	SUPPLIER OF TCC PACKAGES	 	TYPE OF TCC PACKAGES	 	NUMBER OF TCC PACKAGES
	 	 	 
	 	 	 	 	 
	 	 	 
	 	 	 	 	 
	 	 	 
	 	 	 	 	 

  
 ROYALTY ADJUSTMENTS 

 

									
	CUSTOMER	 	DATE OF ROYALTY
PAYMENT	 	 NUMBER
OF
 RETURNED TCC
PACKAGES
	  	 ROYALTY
 RATE
	  	ROYALTY
ADJUSTMENT (US$)
	 	 	 	 	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 
	 	 	 	 	 	  	 	  	 

  

			
	TOTAL ROYALTY:	  	US$                            
		
	LESS TOTAL ROYALTY	  	 
	ADJUSTMENT:	  	US$                            
		
	ACTUAL REMITTANCE:	  	US$                            

  

 Page 27 of 27Asset Purchase Agreement

 Exhibit 10.1 
  
 EXECUTION COPY 
  
 ASSET PURCHASE AGREEMENT 
  
 between 
  
 KNOLOGY BROADBAND OF CALIFORNIA, INC. 
  
 and 
  
 WAVEDIVISION HOLDINGS, LLC 
  
 March 24, 2005

 TABLE OF CONTENTS 
  

							
	 	  	 	  	 	  	Page

	ARTICLE I Definitions and Interpretation	  	1
	 	  	1.1	  	Definitions	  	1
	 	  	1.2	  	Interpretation	  	12
		
	ARTICLE II Purchase and Sale of Acquired Assets	  	12
	 	  	2.1	  	Acquired Assets Subject to Agreement	  	12
	 	  	2.2	  	Excluded Assets	  	14
	 	  	2.3	  	Third-Party Consents	  	16
		
	ARTICLE III Assumption of Liabilities	  	16
	 	  	3.1	  	Assumption of Liabilities	  	16
	 	  	3.2	  	Excluded Liabilities	  	16
		
	ARTICLE IV Consideration	  	17
	 	  	4.1	  	Consideration	  	17
	 	  	4.2	  	Deposit; Payment of Purchase Price; Post-Closing Escrow	  	17
	 	  	4.3	  	Adjustments to Purchase Price	  	18
	 	  	4.4	  	Final Adjustment Amount	  	19
	 	  	4.5	  	Allocation of the Purchase Price	  	20
		
	ARTICLE V Representations and Warranties of Seller	  	20
	 	  	5.1	  	Organization, Standing and Power	  	20
	 	  	5.2	  	Authority	  	21
	 	  	5.3	  	No Breach or Conflict	  	21
	 	  	5.4	  	Material Consents	  	21
	 	  	5.5	  	Accounts Receivable	  	21
	 	  	5.6	  	Tangible Assets	  	22
	 	  	5.7	  	Claims, Litigation and Disputes	  	22
	 	  	5.8	  	Acquired Contracts	  	22
	 	  	5.9	  	Compliance with the Law	  	23
	 	  	5.10	  	Taxes, Fees and Utilities	  	24
	 	  	5.11	  	Franchises and Permits	  	24
	 	  	5.12	  	Financial Statements.	  	25
	 	  	5.13	  	Employees and Related Matters	  	26
	 	  	5.14	  	Environmental Matters	  	28
	 	  	5.15	  	Brokerage Fees	  	28
	 	  	5.16	  	Exclusive Dealing	  	28
	 	  	5.17	  	Title to and Condition of Real Property	  	28
	 	  	5.18	  	Intellectual Property and Trademarks	  	29
	 	  	5.19	  	System.	  	30
	 	  	5.20	  	Conduct of Business in Ordinary Course of Business	  	31
	 	  	5.21	  	Letters of Credit, Bonds, Etc	  	31
	 	  	5.22	  	No Material Adverse Effect	  	31

  

 i 

							
	 	  	5.23	  	Condition and Suitability of Assets	  	32
	 	  	5.24	  	Disclaimer	  	32
		
	ARTICLE VI Representations and Warranties of Buyer	  	32
	 	  	6.1	  	Organization, Standing and Power	  	32
	 	  	6.2	  	Authority	  	32
	 	  	6.3	  	No Breach or Conflict	  	33
	 	  	6.4	  	Third-Party Consents	  	33
	 	  	6.5	  	Claims, Litigation and Disputes	  	33
	 	  	6.6	  	Financing	  	33
	 	  	6.7	  	Brokerage Fees	  	33
	 	  	6.8	  	Qualification	  	33
	 	  	6.9	  	Buyer’s Investigation	  	33
		
	ARTICLE VII Covenants of Seller	  	34
	 	  	7.1	  	Access	  	34
	 	  	7.2	  	Conduct of Business Pending Closing	  	34
	 	  	7.3	  	Further Assurances	  	36
	 	  	7.4	  	Confidentiality	  	36
	 	  	7.5	  	Risk of Loss	  	36
	 	  	7.6	  	Third-Party Consents.	  	38
	 	  	7.7	  	Interim Financial Statements	  	39
	 	  	7.8	  	Payroll Taxes	  	39
	 	  	7.9	  	Accounts Receivable	  	39
	 	  	7.10	  	Lien and Judgment Searches	  	39
	 	  	7.11	  	Estoppel Certificates	  	40
	 	  	7.12	  	Title Policies	  	40
	 	  	7.13	  	Customer Privacy Policies	  	40
	 	  	7.14	  	Transition Services Agreement	  	40
		
	ARTICLE VIII Covenants of Buyer	  	40
	 	  	8.1	  	Third-Party Consents	  	40
	 	  	8.2	  	Discharge of Assumed Liabilities	  	42
	 	  	8.3	  	Confidentiality	  	42
	 	  	8.4	  	Access	  	42
	 	  	8.5	  	Bonds, Letters of Credit, Etc	  	42
	 	  	8.6	  	Further Assurances	  	43
	 	  	8.7	  	Intellectual Property	  	43
	 	  	8.8	  	Vehicles	  	43
	 	  	8.9	  	Payroll Taxes	  	43
		
	ARTICLE IX Conditions to Seller’s Obligations	  	43
	 	  	9.1	  	Buyer’s Representations and Warranties	  	43
	 	  	9.2	  	Buyer’s Covenants	  	43
	 	  	9.3	  	Consents	  	44
	 	  	9.4	  	Buyer’s Deliveries	  	44
	 	  	9.5	  	No Proceedings	  	44

  

 ii 

							
		
	ARTICLE X Conditions to Buyer’s Obligations	  	44
	 	  	10.1	  	Seller’s Representations and Warranties	  	44
	 	  	10.2	  	Seller’s Covenants	  	44
	 	  	10.3	  	Consents	  	44
	 	  	10.4	  	Seller’s Deliveries	  	45
	 	  	10.5	  	No Proceedings	  	45
	 	  	10.6	  	Statutes, Proceedings, Etc	  	45
	 	  	10.7	  	FIRPTA Affidavit	  	45
	 	  	10.8	  	New Franchise	  	45
	 	  	10.9	  	Manhole Access Agreement	  	45
	 	  	10.10	  	Lease Extension	  	45
		
	ARTICLE XI Closing and Termination	  	45
	 	  	11.1	  	Closing	  	45
	 	  	11.2	  	Termination	  	46
	 	  	11.3	  	Effect of Termination	  	47
		
	ARTICLE XII Seller’s Deliveries at Closing	  	48
	 	  	12.1	  	Bring-Down Certificate	  	48
	 	  	12.2	  	Secretary’s Certificate	  	48
	 	  	12.3	  	Ancillary Agreements	  	48
	 	  	12.4	  	Seller Non-Compete Agreement	  	48
		
	ARTICLE XIII Buyer’s Deliveries at Closing	  	48
	 	  	13.1	  	Purchase Price	  	48
	 	  	13.2	  	Bring-Down Certificate	  	48
	 	  	13.3	  	Secretary’s Certificate	  	48
	 	  	13.4	  	Buyer Ancillary Agreements	  	48
	 	  	13.5	  	Seller Non-Compete Agreement	  	48
		
	ARTICLE XIV Tax Matters	  	49
	 	  	14.1	  	Filing of Returns	  	49
	 	  	14.2	  	Access to Books and Records	  	49
	 	  	14.3	  	Indemnification for Taxes	  	49
	 	  	14.4	  	Transaction Taxes	  	50
	 	  	14.5	  	Tax Prorations	  	51
	 	  	14.6	  	Tax Refunds	  	51
		
	ARTICLE XV Indemnification	  	51
	 	  	15.1	  	Survival of Representations, Warranties and Covenants	  	51
	 	  	15.2	  	Indemnification	  	52
	 	  	15.3	  	Limitations on Liability	  	53
	 	  	15.4	  	Defense of Claims	  	55
	 	  	15.5	  	No Indemnifiable Claims Resulting From Governmental Entity Action	  	57
	 	  	15.6	  	Infringement	  	57
	 	  	15.7	  	Inapplicability to Taxes	  	57

  

 iii 

							
		
	 ARTICLE XVI Miscellaneous
	  	57
	 	  	16.1	  	Expenses	  	57
	 	  	16.2	  	Governing Law	  	58
	 	  	16.3	  	Notices	  	58
	 	  	16.4	  	Definition of Agreement	  	59
	 	  	16.5	  	Headings, Gender	  	59
	 	  	16.6	  	Counterparts; Third Party Beneficiaries	  	59
	 	  	16.7	  	Modifications	  	59
	 	  	16.8	  	Schedules	  	59
	 	  	16.9	  	Assignment and Binding Effect	  	60
	 	  	16.10	  	Public Announcements	  	60
	 	  	16.11	  	Right to Specific Performance	  	60
	 	  	16.12	  	Bulk Sales Laws	  	60
		
	ARTICLE XVII Employee Matters	  	61
	 	  	17.1	  	Buyer’s Offers	  	61
	 	  	17.2	  	Employment Status	  	61

  

			
	INDEX OF SCHEDULES*
		
	Schedule 1.1	  	Seller’s Knowledge
	Schedule 2.1(c)	  	Equipment
	Schedule 2.1(d)(iii)	  	Bulk Agreements and Right of Entry Agreements
	Schedule 2.1(d)(v)	  	Advertising Agreements
	Schedule 2.1(d)(vi)	  	Programming Agreements
	Schedule 2.1(d)(vii)	  	Easements, Rights of Way and Access
	Schedule 2.1(d)(viii)	  	Other Contracts
	Schedule 2.2(l)	  	Other Excluded Assets
	Schedule 4.5	  	Agreed-Upon Allocation
	Schedule 5.3	  	No Breach or Conflict
	Schedule 5.4	  	Material Consents
	Schedule 5.5	  	Pro Forma Working Capital Statement
	Schedule 5.6	  	Tangible Assets
	Schedule 5.8	  	Material Acquired Contracts
	Schedule 5.9	  	Compliance with Laws
	Schedule 5.10	  	Taxes, Fees and Utilities
	Schedule 5.11(a)	  	Franchises and Permits
	Schedule 5.11(b)	  	Exceptions to Franchises and Permits
	Schedule 5.12(a)	  	Financial Statements
	Schedule 5.13(a)	  	Seller Benefit Plans
	Schedule 5.13(d)	  	List of Employees
	Schedule 5.13(e)	  	Employee Related Matters
	Schedule 5.17(c)	  	Leased Real Property
	Schedule 5.18	  	Software
	Schedule 5.19(a)	  	System
	Schedule 5.19(b)	  	System Information

  

 iv 

			
	Schedule 5.19(e)	 	Commitments
	Schedule 5.20	 	Ordinary Course of Business–Exceptions
	Schedule 7.2	 	Conduct of Business Pending Closing
	Schedule 9.3	 	Required Consents
	Schedule 10.9	 	Manhole Access Terms
	Schedule 10.10	 	Headend Lease Terms

	*	Schedules have been omitted but will be provided to the Securities and Exchange Commission upon request. 

  

 v 

			
	INDEX OF EXHIBITS*
	Exhibit A	  	Assumption Agreement
	Exhibit B	  	Bill of Sale and Assignment Agreement
	Exhibit C	  	Assignment of Intellectual Property Agreement
	Exhibit D	  	Assignment of Manhole Access Agreement
	Exhibit E	  	Seller Non-Compete Agreement
	Exhibit F	  	Escrow Agreement

	*	Exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request. 

  

 vi 

 ASSET PURCHASE AGREEMENT 
  
 This Asset Purchase Agreement (this “Agreement”) is made and entered into this 24th day of March, 2005, by and
between Knology Broadband of California, Inc., a Delaware corporation (“Seller”), and WaveDivision Holdings, LLC, a Delaware limited liability company (“Buyer”). Each of Buyer and Seller shall be referred to herein individually
as a “Party” and collectively as the “Parties.” 
  
 W I T N E S S E T H 
  
 WHEREAS, Seller owns and operates
a cable television franchise and cable television system serving the City of Cerritos, California, together with certain related assets and rights; 
  
 WHEREAS, Seller desires to sell, convey, transfer and assign to Buyer, and Buyer desires to acquire from Seller, the Acquired Assets (as such term is
defined herein) other than the Excluded Assets (as such term is defined herein), and, in connection therewith, Buyer has agreed to assume certain liabilities of Seller relating to the Business, all on the terms and conditions set forth herein; and

  
 WHEREAS, in connection with the transactions contemplated by
this Agreement and in order to induce Buyer to enter into this Agreement, Seller shall, and shall cause its Affiliates to, as applicable, enter into the Ancillary Agreements (as such term is defined herein) with Buyer. 
  
 NOW THEREFORE, the Parties hereto agree as follows: 
  
 ARTICLE I 
  
 Definitions and Interpretation 
  
 1.1 Definitions. 
  
 “Accounts Receivable” means all accounts receivable resulting from the operation of the Business, both billed and accrued, but excluding any
accounts which have been fully written off. 
  
 “Accounts
Receivable Settlement Amount” means (a) the face amount of all Accounts Receivable that are not past due as of the Closing Date, plus (b) 98% of the face amount of all Accounts Receivable that are between 1 and 30 days past due as of the
Closing Date, plus (c) 98% of the face amount of all Accounts Receivable that are between 31 and 60 days past due as of the Closing Date, less the face value of all Accounts Receivable which have been billed but relate to services to be rendered
following the Closing Time, in all cases, with the number of days past due being determined from the due date stated on the bill for which the applicable billing relates (and if no due date is stated then the first day of the period to which such
billing relates); provided, however, that any such Accounts Receivable shall be excluded from such amount if such Accounts Receivable (i) relate to customers whose service is pending disconnection for reason of non-payment on the Closing Date or
(ii) arose from billings that were not made in the ordinary course of business consistent with past practices. For the sake of clarity, the Accounts Receivable Settlement Amount will not include any amounts which are 61 days or more past due.
“Accounts Receivable Settlement Amount” shall not include any accounts receivable with respect to advertising sales. 
  

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 “Acquired Assets” is defined in Section 2.1. 
  
 “Acquired Contracts” is defined in Section
2.1(d). 
  
 “Acquired Intellectual
Property” means (i) all of Seller’s right and interest in and to the Intellectual Property Agreement as assigned by Seller to Buyer and (ii) all Intellectual Property that Seller acquired (A) pursuant to the Intellectual Property Agreement
(which Intellectual Property shall be deemed transferred to Buyer pursuant to the Bill of Sale) or (B) as part of or pursuant to the assignment of any license. 
  

“Acquired Records” means, except to the extent included in Acquired Intellectual Property, all the files, books, records, whether in tangible
or intangible form or embodied in any electronic or other format (including service, production, maintenance, customer and vendor records), and ledgers or other similar information (in any form or medium) used or held for use in the Business,
including manuals, correspondence, price lists, Customer Proprietary Information, mailing lists, purchasing materials and records, papers, construction, as-built maps and engineering maps and data, schematics and blueprints, and other similar data,
except for the materials, data or information retained by Seller pursuant to Section 2.2, provided that, “Acquired Records” shall be deemed to include any and all construction and engineering maps applicable to areas which
are outside the geographical area actually served by the System, but are contiguous to the geographical area actually served by the System. 
  
 “Acquisition Date” means December 1, 2003. 
  
 “Affiliate” means, with respect to any specified Person, any Person who, directly or indirectly, controls, is controlled by or is under common
control with such specified Person. 
  
 “Aging Report”
means those certain reports regarding the aging of Accounts Receivable that are provided by Seller to Buyer pursuant to Section 7.7 of this Agreement. 
  
 “Agreed-Upon Allocation” is defined in Section 4.5. 
  
 “Agreement” is defined in the introductory paragraph and
Section 16.4 of this Agreement. 
  
 “Ancillary
Agreements” means the Assumption Agreement, the Bill of Sale and Assignment Agreement, the Assignment of Intellectual Property Agreement, the Assignment of Manhole Access Agreement and the Escrow Agreement. “Ancillary Agreements”
shall also include the Transition Services Agreement, as and when it is executed by the Parties. 
  
 “Assignment of Intellectual Property Agreement” means the Assignment of Intellectual Property Agreement between Seller and Buyer, dated as of
the Closing Date, in substantially the form of Exhibit C. 
  

 2 

 “Assignment of Manhole Access Agreement” means the Assignment of Manhole Access Agreement
between Seller, Buyer and Verizon California Inc., dated on or before the Closing Date, in substantially the form of Exhibit D. 
  
 “Assumed Liabilities” is defined in Section 3.1. 
  
 “Assumption Agreement” means the Assumption Agreement of Buyer, dated as of the Closing Date, in substantially the
form of Exhibit A. 
  
 “Assurances” is defined in
Section 8.1(a). 
  
 “Basket Amount” is
defined in Section 15.3(c). 
  
 “Bill of Sale
and Assignment Agreement” means the Bill of Sale and Assignment Agreement of Seller, dated as of the Closing Date, in substantially the form of Exhibit B. 
  
 “Broadcast Basic Service” means broadcast basic services consisting of Channels 2 – 26, as described on
Schedule 5.19(b). 
  
 “Bulk Agreements”
are defined in Section 2.1(d)(iii). 
  
 “Business” means the business of owning and operating the System, including the provision of System-related services to the customers served by the System and all other System-related activities, as such business is conducted on
the date hereof and as of the Closing Date. 
  
 “Buyer”
is defined in the introductory paragraph of this Agreement. 
  
 “Buyer Ancillary Agreements” is defined in Section 6.2. 
  
 “Cable Act” means Title VI of the Communications Act of 1934, as amended, 47 U.S.C. Sections 151 et seq., all other provisions of the Cable Communications Policy Act of 1984 and the provisions
of the Cable Television Consumer Protection and Competition Act of 1992, and the provisions of the Telecommunications Act of 1996, amending Title VI of the Communications Act of 1934, in each case as amended and the rules and regulations, policies
and published decisions of the FCC thereunder, as in effect from time to time. 
  
 “Closing,” “Closing Date” and “Closing Time” are defined in Section 11.1. 
  
 “Code” means the United States Internal Revenue Code of 1986, as amended. 
  
 “Communications Act” means the Communications Act of 1934, as amended, inter alia, by the Cable Communications
Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992 and the Telecommunications Act of 1996, as such statutes may be amended from time to time. 
  
 “Consents” means all of the consents, notices, filings or approvals of Governmental Entities or other Third
Parties necessary (i) for the execution, delivery and performance by Seller 
  

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 of this Agreement and the Ancillary Agreements, (ii) to transfer the Acquired Assets to Buyer and otherwise to consummate
the transactions contemplated hereby and by the Ancillary Agreements and (iii) for Buyer to assume the Permits and the Acquired Contracts. 
  
 “Contract” means any contract, agreement, lease, license, commitment or other legally binding agreement. 
  
 “Copyright Act” means the U.S. Copyright Act of 1976, Pub. L. No.
94-553, 90 Stat. 2541, October 19, 1976, as amended. 
  
 “Court Order” means any judgment, decree, injunction, order, writ or ruling of any Governmental Entity or arbitrator. 
  
 “Current Assets” is defined in Section 4.3(a). 
  
 “Current Liabilities” is defined in Section 4.3(b). 
  
 “Customer Proprietary Information” means, to the extent contained
in the billing system that is used to bill customers of the Business or in other Business related books or records, that portion of the non-technical, non-public information included in the Non-Statutory Intellectual Property that is owned by Seller
as of the Closing, is used in the Business as of the Closing Date and comprises personal information of a customer of the Business that was provided by such customer in connection with the Business and all information about such customer’s
subscription and account, including, without limitation, such customer’s name, mailing address, email address, telephone number, category of subscription services, and billing and payment information. 
  
 “Delaware Courts” is defined in Section 16.2.

  
 “Deposit” is defined in Section 4.2(a)

  
 “Employee” means each active employee, full-time or
part-time, of Seller who, as of the date of this Agreement, has performed (during the four-month period immediately preceding the date of this Agreement (or the period of the employee’s employment with Seller, if less)) a majority of such
employee’s services in connection with or for the benefit of the System (other than employees based in West Point, Augusta and Alpharetta, Georgia). The term “active employee” shall include any employee who is on military leave,
maternity/paternity leave, other approved leave of absence, short-term disability, long term disability, workers’ compensation, or layoff with recall or other return rights. 
  
 “Employee Benefit Plan” means any of the following arrangements (whether formal or informal, and whether written
or unwritten) under which an employer has any liability to provide benefits or compensation to or on behalf of any employee, or the spouse or dependents of any employee: 
  
 (a) any employee benefit plan within the meaning of Section 3(3) of ERISA, and 
  

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 (b) any other profit-sharing, deferred compensation, incentive compensation, bonus,
commission, stock option, stock purchase, medical, dental or life insurance, severance pay, unemployment benefit, vacation pay, savings, dependent care, scholarship, accident, disability, weekly income, salary continuation or other compensation or
fringe benefit plan, program or agreement. 
  
 “End
Date” is defined in Section 11.2(e). 
  
 “Environmental Laws” means the Comprehensive Environmental Response, Compensation, and Liability Act, the Emergency Planning and Community Right-to-Know Act, the Federal Water Pollution Control Act, the Clean Air Act, the Air
Pollution Control Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, the Hazardous Materials Transportation Act, the Federal Insecticide, Fungicide and Rodenticide Act, as well as all other federal, state or local
Laws, regulations or requirements, or such portions thereof, that are similar to the above-referenced Laws or that otherwise govern chemicals, products, materials or wastes that pose risks to the environment or the public welfare. 
  
 “Equipment” is defined in Section 2.1(c). 

 
 “Equivalent Billing Units” means with respect to the System, the
sum of: 
  
 (a) the quotient obtained by dividing
(x) the aggregate revenue (without duplication and excluding any revenue related to billings in excess of a single month’s charge and any other Excluded Revenue) derived by the System during the most recent billing period ended prior to the
Measurement Date for providing Basic Cable Service or Expanded Basic Service to hotels, motels, apartment houses, residential multiple dwelling units, commercial establishments or other subscribers that are billed for such services on a bulk-billed
basis or which for any reason pay less than the System’s regular monthly subscription rate for Expanded Basic Service, by (y) the System’s regular monthly subscription rate for Expanded Basic Service; and 
  
 (b) the quotient obtained by dividing (x) the aggregate
revenue (without duplication and excluding any revenue related to billings in excess of a single month’s charge and any other Excluded Revenue) derived by the System during the most recent billing period ended prior to the Measurement Date from
individual subscribers who subscribe only to Basic Cable Services, by (y) the System’s regular monthly subscription rate for Expanded Basic Service. 
  
 For purposes of the foregoing calculations, the term “Excluded Revenue” means: (i) franchise fees, FCC-user fees, PEG operating support or
capital payments, sales taxes, other taxes or “pass through” charges collected by Seller or the System for or on behalf of any governmental entity, deposits, installation fees or other non-recurring charges, (ii) deposits, late fees or
field collection fees, installations, set-top box converter or modem rentals or sales, or remote control unit rentals or sales, (iii) advertising revenue, (iv) revenue from any subscriber that has not been an active paying subscriber for at least
one complete billing cycle, (v) revenue from any subscriber that has provided notice of termination or is pending disconnection for any reason, (vi) revenue from any subscriber that is more than 60 days past due from the original due date as stated
on the billing to 
  

 5 

 which such payment relates (and if no due date is stated then the first day of the period to which such
payment relates), and (vii) revenue from any subscriber that has become a subscriber pursuant to non-customary marketing promotions conducted outside the ordinary course of Seller’s business or which were inconsistent with Seller’s usual
and customary marketing efforts and past practices 
  
 “Equivalent Subscribers” means, as of the Measurement Date, the sum of: 
  
 (a) the number of subscribers of the System (exclusive of “second connects” or “additional outlets,” as such terms are
commonly understood in the cable television industry, or any other account duplication) subscribing to Expanded Basic Service at the System’s regular monthly subscription rate for Expanded Basic Service, which subscribers (i) have been active
paying subscribers for at least one billing cycle, (ii) have not provided notice of termination or are pending disconnection for any reason, (iii) are not more than 60 days past due from the original due date as stated on the billing to which such
payment relates (and if no due date is stated then the first day of the period to which such payment relates), and (iv) have become subscribers only pursuant to customary marketing promotions conducted in the ordinary course of Seller’s
business consistent with past practices; and 
  
 (b) the number of “Equivalent Billing Units.” 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder. 
  
 “ERISA Affiliate” means any entity that with the subject Person is: 
  
 (a) a member of a controlled group of corporations within the meaning of Section 414(b) of the Code;

  
 (b) a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the Code; 
  
 (c) a member of an affiliated service group within the meaning of Section 414(m) of the Code; or 
  
 (d) a member of a group of organizations required to be
aggregated under Section 414(o) of the Code. 
  
 “Escrow
Agent” means SunTrust Bank, N.A., as escrow agent under the Escrow Agreement. 
  
 “Escrow Agreement” means the Escrow Agreement among Buyer, Seller and the Escrow Agent, dated the date hereof, in the form of Exhibit F, pursuant to which the Escrow Agent will hold the Deposit and
the Post-Closing Escrow for the benefit of the Parties. 
  
 “Estimate Statement” is defined in Section 4.3(f). 
  
 “Excluded Assets” is defined in Section 2.2. 
  

 6 

 “Excluded Liabilities” is defined in Section 3.2. 
  
 “Excluded Marks” means all Trademarks and related registrations and
applications for registration owned by Seller or an Affiliate of Seller, or licensed to Seller or an Affiliate of Seller by any Person, and any derivations of the foregoing; it being understood and agreed that Excluded Marks are Excluded Assets.

  
 “Expanded Basic Service” means video programming
service that includes the Broadcast Basic Service and expanded basic levels of services that are offered separately from Broadcast Basic Service and for a charge in addition to that charged for Broadcast Basic Service, and that can be purchased only
by subscribers that also receive Broadcast Basic Service, but not including any “a la carte” programming, new product tiers, or any programming offered on a per channel or per program basis. 
  
 “Expiration Date” is defined in Section 15.1(a).

  
 “FCC” means the Federal Communications Commission.

  
 “Final Adjustment Amount” is defined in
Section 4.4(a). 
  
 “Final Escrow Amount”
is defined in Section 4.2(b). 
  
 “Final
Holdback Period” is defined in Section 4.2(c). 
  
 “Final Statement” is defined in Section 4.4(a). 
  
 “Financial Statements” is defined in Section 5.12(a). 
  
 “Franchise” means the municipal franchise that is listed on Schedule 5.11(a). 
  
 “Franchising Authority” means the City of Cerritos, California
franchising authority, which issued the Franchise. 
  
 “GAAP” means United States generally accepted accounting principles, consistently applied over all applicable periods. 
  
 “Governmental Entity” means any court, administrative agency, regulatory agency or body or commission or other governmental authority or
instrumentality, domestic or foreign, including the Franchising Authority. 
  
 “Headend Lease” is defined in Section 10.10. 
  
 “Homes Passed” means single family residences, individual dwellings in multi-unit dwellings, and commercial establishments that can be served
through the System. 
  
 “Indemnifiable Losses” is
defined in Section 15.3(a). 
  
 “Indemnification Payment” is defined in Section 15.3(a). 
  

 7 

 “Indemnifying Party” is defined in Section 15.3(a). 
  
 “Indemnitee” is defined in Section 15.3(a).

  
 “Independent Accountants” is defined in
Section 4.4(b). 
  
 “Initial Escrow
Amount” is defined in Section 4.2(b). 
  
 “Initial Holdback Period” is defined in Section 4.2(c). 
  
 “Intellectual Property” means all Statutory Intellectual Property and Non-Statutory Intellectual Property. 
  
 “Intellectual Property Agreement” means the Intellectual Property Agreement between Verizon Media Ventures Inc. and Seller, dated as of December
1, 2003. 
  
 “Interim Financial Statements” is defined
in Section 7.7. 
  
 “Inventory” means all
inventory located on the Leased Real Property, all operating inventory owned by Seller and all other inventory of every kind and nature existing for the System and used or held for use in the Business. 
  
 “Launch Fees” means any advance or lump sum payments received by
Seller or its Affiliates or the Business in connection with any programming agreement used in the operation of the System, so long as Buyer either (i) assumes such programming agreement or (ii) makes alternative arrangements to carry the programming
service for the remainder of the term of such programming agreement. 
  
 “Law” means any federal, state, provincial, local or foreign law, statute, rule, regulation or ordinance of any Governmental Entity, excluding the Franchise (but not any such Law related to the Franchise). For the sake of clarity,
“Law” includes the Communications Act, the Copyright Act, the rules and regulations of the FCC and the rules and regulations of the United States Copyright Office, and Environmental Laws. 
  
 “Leased Real Property” means the leasehold interests in all real
property used or held for use in the Business and located in the City of Cerritos, California, all of which is listed on Schedule 5.17(c). 
  
 “Leases” means, collectively, the lease agreements pursuant to which leasehold estates and interests in the Leased Real Property have been
granted. 
  
 “Lien” means any lien, charge, mortgage,
option, security interest, restriction or other encumbrance affecting title, including any exception to or defect in title. 
  
 “Manhole Access Agreement” means the Manhole and Handhole Licensing Agreement between Verizon California Inc. and Seller, dated November 20,
2003. 
  
 “Material Acquired Contracts” is defined in
Section 5.8. 
  

 8 

 “Material Adverse Effect” means a material adverse effect on the condition (financial or
otherwise) or results of operations of the Business, the System or the Acquired Assets, taken as a whole, or the liabilities (contingent or actual) of the Business, but shall specifically exclude any such material adverse effect resulting directly
from the announcement of this Agreement or the pendency of the transactions contemplated hereby. 
  
 “Material Consents” is defined in Section 5.4. 
  
 “Material Permit” means any Permit, the loss of which would or would reasonably be expected to have a Material
Adverse Effect. 
  
 “Measurement Date” means the last
day of the calendar month immediately preceding the Closing Date. 
  
 “New Franchise” is defined in Section 8.1(a). 
  
 “New Franchise Commitments” is defined in Section 8.1(a). 
  
 “Non-Disclosure Agreement” means the non-disclosure agreement between Seller and Buyer dated on or about January 2005. 
  
 “Non-Statutory Intellectual Property” means all unpatented
inventions (whether or not patentable), trade secrets, know-how and proprietary information, including but not limited to (in whatever form or medium), discoveries, ideas, compositions, formulas, Software, Software documentation, database, drawings,
designs, plans, proposals, specifications, photographs, samples, models, processes, procedures, data, information, manuals, reports, financial, marketing and business data, and pricing and cost information, correspondence and notes, and any rights
or licenses in the foregoing which may be sublicensed to any Person who is not an Affiliate of Seller without the payment of compensation or other consideration to any Person. 
  
 “Normal Business Level” is defined in Section 7.5(b). 
  
 “Notice of Disagreement” is defined in Section
4.4(a). 
  
 “Parties” and “Party” are
defined in the introductory paragraph of this Agreement. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation. 
  
 “Periodic Taxes” is defined in Section 14.5. 
  
 “Permit” means any permit, license, consent, approval or authorization (or any amendment thereto or modification thereof) from any Governmental
Entity and any satellite, business radio and other FCC licenses, excluding only the Franchise. 
  
 “Permitted Liens” means: 
  
 (a) mechanics’, carriers’, workmen’s, repairmen’s and other like Liens imposed by law arising or incurred in the ordinary course of business consistent with past practices, 
  

 9 

 (b) Liens for Taxes that are not yet due and payable or that are being contested in good
faith, 
  
 (c) such other immaterial
imperfections in title, charges, easements, restrictions and encumbrances which do not detract from or impair the value of or interfere with the present use of the assets to which they relate, 
  
 (d) retention of title agreements with suppliers entered
into in the ordinary course of business, or 
  
 (e) other Liens that are released concurrently with or prior to the Closing. 
  
 “Person” means any individual, corporation, partnership, joint venture, trust, limited liability company, business association or other entity. 
  
 “Post-Closing Escrow” is defined in Section 4.2(b). 
  
 “Prepaid Expenses” means all prepaid expenses as of the Closing
Date relating to the operation of the Business to the extent the benefit of such prepaid expenses can be realized by Buyer within 12 months after the Closing Date (which prepaid expenses shall be prorated between Seller and Buyer as of the Closing
Date on the basis of the period covered by the respective prepayment); provided, however, that notwithstanding anything herein to the contrary, Prepaid Expenses shall not include (A) prepaid expenses which relate to supplies and Inventory, (B)
prepaid insurance expenses, (C) prepaid wages, salaries, payroll taxes and expenses, benefits, perquisites and other compensation related expenses and (D) prepaid expenses which relate to the Excluded Assets. 
  
 “Pro Forma Working Capital Statement” means the statement dated
December 31, 2004 and set forth on Schedule 5.5, which contains the calculation as of December 31, 2004 of the (i) the Current Assets contemplated by Section 4.3(a), including without limitation the Accounts Receivable
Settlement Amount, minus (ii) the Current Liabilities contemplated by Section 4.3(b), in each case reasonably estimated by Seller, in good faith, to be the calculation as of such date that would be included in the Final Statement if
the Closing had occurred on that date. 
  
 “Proration
Periods” is defined in Section 14.5. 
  
 “Purchase Price” is defined in Section 4.1. 
  
 “Required Consents” is defined in Section 9.3. 
  
 “Right of Entry Agreements” means all agreements used or held for use in the Business with owners or owners’ representatives of multi-unit
dwellings or private single family developments that authorize the provision of cable service to such multi-unit dwellings or developments. 
  

 10 

 “Seller” is defined in the introductory paragraph of this Agreement. 
  
 “Seller Ancillary Agreements” is defined in Section
5.2. 
  
 “Seller Benefit Plans” is defined in
Section 5.13(a). 
  
 “Seller’s
Knowledge” (or any similar phrase) means the actual knowledge (after reasonable inquiry in good faith) of the individuals listed on Schedule 1.1. 
  
 “Seller Non-Compete Agreement” is defined in Section
12.4. 
  
 “Software” means all software, in
object, human-readable or source code form, as such software exists as of the Closing, including to the extent such exist: programs, applications, databases, data files, components or elements thereof; and all versions, upgrades, updates,
enhancements and error corrections of all of the foregoing and documentation therefor. 
  
 “Standards” is defined in Section 8.1(a). 
  
 “Statutory Intellectual Property” means all United States and foreign patents and patent applications of any kind, United States and foreign
works of authorship, mask-works, copyrights, and copyright and mask work registrations and applications for registration, and any rights or licenses in the foregoing. 
  
 “System” means the franchised cable television system serving the City of Cerritos, California geographical area
and operating pursuant to the Franchise. 
  
 “Tax
Indemnitee” is defined in Section 14.3(c). 
  
 “Tax Indemnitor” is defined in Section 14.3(c). 
  
 “Tax Returns” means all federal, state, local and foreign tax returns, reports, forms, certificates and declarations of estimated tax reports, including attachments, schedules, workpapers and amendments.

  
 “Tax Records” means all Tax Returns and workpapers
related thereto and all books and records relating thereto. 
  
 “Tax” and “Taxes” means (i) all federal, state, provincial, local and foreign taxes, charges, fees, levies and other assessments, including any income, alternative or minimum, business and occupation, gross receipts,
disability, unemployment compensation, social security, sales, use, ad valorem, value-added, transfer, franchise, profits, withholding, wage, payroll, employment, excise, stamp, real and personal property, environmental or other tax, together with
all interest, penalties and additions with respect thereto, and (ii) any transferee liability in respect of any items described in clause (i) above. 
  

 11 

 “Third Party” or “Third Parties” means any Person other than Seller, Buyer or any of
their respective Affiliates. 
  
 “Third Party Claim” is
defined in Section 15.4(a). 
  
 “Third Party
Intellectual Property” means any and all Intellectual Property owned by any Person, other than Seller, including (Affiliates of Seller), without regard as to whether Seller has any rights therein or the right to assign such rights to Buyer.

  
 “Total Losses” is defined in Section
7.5(b). 
  
 “Trademarks” means trademarks,
tradenames, applications for trademark registration, service marks, applications for service mark registration, logos, domain names, registrations and applications for registrations pertaining thereto, and all goodwill associated therewith.

  
 “Transition Services Agreement” is defined in
Section 7.14. 
  
 “Transaction Taxes” is
defined in Section 14.4. 
  
 “Upgrade
Commitment” means a commitment to be made by Buyer to the Franchising Authority to commence within a reasonable period of time following Closing the upgrade of the System to provide digital cable services and high speed internet services to
customers of the System and to spend up to $5 million to complete such upgrade. 
  
 1.2 Interpretation. When a reference is made in this Agreement to a Section, recital, Schedule or Exhibit, such reference shall be to a Section, recital, Schedule or Exhibit of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “included,” “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by the phrase “without limitation.” When used in this Agreement, the word “primarily” shall be deemed to be followed by the phrase “or
exclusively.” All accounting terms not defined in this Agreement shall have the meanings determined by GAAP. Unless otherwise indicated, all references to dollars refer to United States dollars. The Parties acknowledge that both Parties have
participated in the drafting and preparation of this Agreement and the Ancillary Agreements and agree that any rule of construction to the effect that ambiguities are to be construed against the drafting party shall not be applied to the
construction or interpretation of this Agreement or the Ancillary Agreements. 
  
 ARTICLE II 
  
 Purchase and Sale
of Acquired Assets 
  
 2.1 Acquired Assets Subject to
Agreement. Effective as of the Closing and upon the terms and subject to the conditions of this Agreement, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase, assume and acquire from Seller, all right,
title and interest in, to and under the Acquired Assets (as defined hereafter) as the same shall exist at the Closing Time. “Acquired Assets” shall mean, at the Closing Time, all properties, assets and rights, tangible and intangible, of
every kind, nature and description, whether real, personal or  
  

 12 

 mixed, that are owned, leased or used or held for use in the Business (in each case, other than the Excluded Assets), in
which Seller or any Affiliate of Seller has any right, title or interest or acquires any right, title or interest on or before the Closing Date, including: 
  
 (a) Accounts Receivable. All Accounts Receivable. 
  
 (b) Inventory. All Inventory, but not including Inventory used, sold or destroyed in the ordinary
course of business. 
  
 (c) Equipment. All
of Seller’s equipment and other personal property that is used or held for use in the Business (the “Equipment”), including (without limiting the generality of the foregoing) (i) the Equipment described on Schedule 2.1(c),
(ii) all microcode embedded in the Equipment that was conveyed to Seller at the time it purchased the Equipment, and (iii) all origination equipment, transmission and electronic equipment; set-top boxes and other customer premises devices;
distribution equipment, including trunk and coaxial cable and drop lines; amplifiers; power supplies, conduit, vaults, pedestals, grounding and hardware; routers; customer devices, including converters, encoders and taps; installer and technician
equipment, including vehicles; tools and test equipment; cable data terminals; lab and test equipment; supplies and office equipment, including furniture, personal computers, billing equipment and telephone desk sets; telephone numbers (including
toll free numbers); microwave transmission and reception equipment; and subscriber terminal equipment. 
  
 (d) Acquired Contracts. All of the following: 
  
 (i) All Leases with Third Parties (and interests in all Leased Real Property thereunder); 
  
 (ii) All copier leases entered into by Seller pursuant to
Section 7.2 of this Agreement; 
  
 (iii) All agreements with customers of the Business for video services, including the bulk agreements (the “Bulk Agreements”) and all Right of Entry Agreements for multi-unit dwellings and other bulk customers of the Business with
the parties set forth on Schedule 2.1(d)(iii); 
  
 (iv) All unfilled service orders for services to customers or prospective customers of the Business to the extent consistent with Seller’s ordinary course of business; 
  
 (v) All agreements with advertisers set forth on
Schedule 2.1(d)(v) (which Schedule contains a narrative description of any arrangement, if any, whereby Seller has agreed to barter or provide a discount with respect to goods or services in exchange for advertising); 
  
 (vi) All programming contracts, affiliation agreements,
retransmission consent agreements and similar agreements between Seller and Third Parties set forth on Schedule 2.1(d)(vi); 
  

 13 

 (vii) All easements, rights of way and access with Third Parties used or held for use in
the System, including those set forth on Schedule 2.1(d)(vii); 
  
 (viii) Except as otherwise described in this Section 2.1(d), all of the Contracts with Third Parties used or held for use in the Business identified on Schedule 2.1(d)(viii) and all of the
Permits identified on Schedule 2.1(d)(viii); and 
  
 (ix) All letters of intent and agreements under negotiation with potential customers of the Business (including potential bulk customers), to the extent consistent with Seller’s ordinary course of business.

  
 Collectively, the items in clauses (i) through (ix) being the
“Acquired Contracts”. 
  
 (e)
Acquired Records. All Acquired Records. 
  
 (f) Prepaid Assets. All Prepaid Expenses and all rights to deposits with Third Parties, to the extent contemplated by Section 4.3(a). 
  
 (g) Assumed Liabilities. All rights relating to the Assumed Liabilities. 
  
 (h) Acquired Intellectual Property. All Acquired
Intellectual Property. 
  
 (i)
Intangibles. All rights under warranties from vendors and other Third Parties, claims (excluding only those claims described in Section 2.2(b)), causes of action, going-concern value, and goodwill, if any, owned, used or held
for use in the operation of the Business. 
  
 2.2 Excluded
Assets. Notwithstanding anything contained in Section 2.1 hereof to the contrary, the term “Excluded Assets” shall consist of the following properties, assets and rights: 
  
 (a) Cash. Cash, cash equivalents owned by Seller (or
its Affiliates), certificates of deposit, bank or savings and loan accounts, U.S. government securities, any other marketable securities of any kind or nature or notes receivable, whether on hand, in banks or in other accounts. 
  
 (b) Claims. Claims or other rights against Third
Parties relating to the Business and arising out of transactions occurring prior to the Closing Time, except to the extent such claims or rights relate to (i) Third-Party warranties associated with the Acquired Assets, (ii) damage incurred by the
Acquired Assets or (iii) the Assumed Liabilities. 
  
 (c) Intellectual Property and Trademarks. Except for the Acquired Intellectual Property, all Intellectual Property of Seller (excluding any Intellectual Property included in the Acquired Records) and Trademarks of Seller or its
Affiliates (including any Excluded Marks) and any Third Party Intellectual Property, Software and any rights or licenses in the foregoing. 
  

 14 

 (d) Bonds and Insurance. Subject to Section 4.3(b), all of the bonds
and insurance policies furnished by Seller pursuant to the Franchise or other Permit, authorization or agreement. 
  
 (e) Tax Refunds and Insurance Claims. Rights to any (i) Tax refunds or credits for Tax periods (or portions thereof) ending on or
prior to the Closing Date, and (ii) insurance claims or rights to payment relating to such claims arising with respect to the Acquired Assets on or before the Closing Date, except as provided in Section 7.5 to the extent that such
Acquired Assets were not adequately repaired or replaced prior to the Closing Date. 
  
 (f) Corporate Documents. The charter, bylaws, minute books, corporate seal, stock certificates, Tax Records, general ledger and
other records relating to the existence or governance of Seller in any jurisdiction and all records relating to the Excluded Assets. 
  
 (g) Rights under Agreements. All rights of Seller and its Affiliates under this Agreement, the Ancillary Agreements, and the
certificates and other documents delivered to Seller by Buyer in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, and all rights of Seller, its Affiliates or any other Person under that certain Asset
Purchase Agreement between Seller and Verizon Media Ventures Inc. dated July 15, 2003 and all documents and agreements executed or delivered in connection therewith, except with respect to any such agreements as may be specifically enumerated in
this Agreement as Acquired Assets. 
  
 (h)
Records of Sale. All records prepared in connection with the sale of the System, including bids received from Third Parties and analyses relating to the System. 
  
 (i) Excluded Liabilities. All rights related to the Excluded Liabilities. 
  
 (j) Programming Agreements. All of Seller’s
programming contracts, affiliation agreements, retransmission consent agreements and similar agreements with Third Parties not listed on Schedule 2.1(d)(vi) (as such Schedule may be amended by the Parties in accordance with its terms).

  
 (k) Brand Phaseout License Agreement.
All of Seller’s right and interest in and to the Brand Phaseout License Agreement among Corporate Media Partners, Ameritech Media Ventures, Inc. BellSouth Interactive Media Services, LLC, Verizon Media Ventures, Inc., SNET Personal Vision, Inc.
and Seller dated December 1, 2003. 
  
 (l)
Other Excluded Assets. (i) All assets that are located outside of the City of Cerritos, California, which assets are generally described on Schedule 2.2(l), (ii) all other specifically identifiable tangible assets which are
listed on Schedule 2.2(l), and (iii) all Seller Benefit Plans (and any other Employee Benefit Plans maintained or contributed to by Seller or any ERISA Affiliate in respect of or for the benefit of Seller’s or any such ERISA
Affiliate’s employees) and any assets of any Seller Benefit Plan or any such other Employee Benefit Plan. 
  

 15 

 2.3 Third-Party Consents. Nothing in this Agreement shall be construed as an attempt by Seller to
transfer the Franchise, to assign any Contract or to transfer any Permit to the extent that the Franchise or such Contract or Permit is not assignable without the necessary consent, authorization or approval of the other party or parties thereto
(including any Governmental Entity). If the Closing is consummated notwithstanding the absence of one or more Consents, at such time as such Consent has been obtained, or any requisite filing or notice has been made or delivered, as applicable, such
Contract or Permit shall be assigned or transferred to Buyer automatically without any other conveyance or other action by Buyer. 
  
 ARTICLE III 
  
 Assumption of Liabilities 
  
 3.1 Assumption of Liabilities. Upon the terms and subject to the conditions of this Agreement, Buyer shall assume, effective as of the Closing, and pay, perform and discharge when due, only the following
liabilities, responsibilities and obligations relating to the Acquired Assets (other than the Excluded Liabilities) (the “Assumed Liabilities”): 
  
 (a) Acquired Contracts. All of Seller’s liabilities, responsibilities and obligations under the
Acquired Contracts, except to the extent such liabilities (x) relate to any period prior to the Closing Time and are not Current Liabilities assumed pursuant to Section 3.1(b) or (y) are the result of any breach or default of Seller
thereunder. 
  
 (b) Current and
Accrued Liabilities. All Current Liabilities, to the extent and only up to the amount included in the calculation of Current Liabilities pursuant to Section 4.3 and Section 4.4 and, for the avoidance of doubt,
excluding all liabilities, losses, expenses, damages, costs or other amounts arising out of or relating to litigation pending, existing or threatened as of the Closing Time, and any other contingent or unknown liability existing as of the Closing
Time. 
  
 (c) Operating Liabilities. All
liabilities, responsibilities, obligations, costs and expenses with respect to claims arising in any way with respect to or as a result of the operation of the System if and only to the extent that they relate to Buyer’s ownership of the
Acquired Assets or arising out of its operation of the Business, in each case, after the Closing Time, including, without limitation, any and all franchise fees, copyright fees, Taxes or tort claims arising out of the operation of the Business or
the ownership of the corresponding Acquired Assets, in each case, after the Closing Time (except for Taxes, which shall be assumed for periods commencing after the Closing Date in accordance with Section 14.5). 
  
 3.2 Excluded Liabilities. Except for the Assumed Liabilities
identified in Section 3.1, Buyer shall not assume and shall have no responsibility, obligation or liability for, and Seller shall retain and shall pay, perform and discharge when due, all liabilities, responsibilities and obligations
of Seller or any Affiliate of Seller or arising out of or relating to the System or the Business of whatever kind or nature, whether presently in existence or arising hereafter, known or unknown, contingent or otherwise (the “Excluded
Liabilities”). For the avoidance of doubt, the fact that any of the foregoing Excluded Liabilities are set forth or described on a Schedule to this Agreement does not change their status as Excluded Liabilities. 
  

 16 

 ARTICLE IV 
  
 Consideration 
  
 4.1 Consideration. The total consideration to be paid by Buyer to Seller for the Acquired Assets shall be (i) the payment to Seller of cash or by
wire transfer of immediately available funds in the amount of $10,000,000 (the “Purchase Price”), subject to the adjustments required by Section 4.3 hereof, and (ii) the assumption by Buyer of the Assumed Liabilities.

  
 4.2 Deposit; Payment of Purchase Price; Post-Closing
Escrow. Subject to the satisfaction or waiver of the conditions set forth in Article X, Buyer shall pay the Purchase Price as adjusted pursuant to Section 4.3, if applicable, to Seller as follows: 
  
 (a) $500,000 of the Purchase Price will be paid by Buyer on
the date hereof (or on the next following business day, if the date hereof is not a business day) by wire transfer of immediately available funds to an escrow account designated by the Escrow Agent (the “Deposit”) to be held in escrow by
the Escrow Agent for the benefit of Seller against payment of the Purchase Price and as security for the performance by Buyer of its obligations under this Agreement, as provided in this Agreement and the Escrow Agreement. The Escrow Agent will hold
the Deposit and all interest, dividends and other amounts earned thereon in escrow and invest the Deposit and all interest, dividends and other amounts earned thereon in accordance with the Escrow Agreement. At Closing, the Deposit and interest
accrued thereon shall be transferred by the Escrow Agent as provided in Section 4.2(c) below. 
  
 (b) Subject to the satisfaction or waiver of the conditions set forth in Article X, upon the Closing the amounts calculated
pursuant to Section 4.2(b)(i) and Section 4.2(b)(ii) below will be paid by Buyer to, and at the direction of, Seller by wire transfer of immediately available funds, as follows: 
  
 (i) The Purchase Price, as adjusted pursuant to
Section 4.3, less $1,000,000.00 shall be delivered to an account designated by Seller (Seller shall provide wire transfer instructions to Buyer for such account no less than two (2) business days prior to the Closing Date); and

  
 (ii) $500,000.00 shall be delivered to the
Escrow Agent, on behalf and at the direction of Seller, to be held together with the funds transferred to an account designated by the Escrow Agent pursuant to Section 4.2(c) below. 
  
 (c) Upon the consummation of the Closing, the Escrow Agent
shall distribute to Buyer all interest, dividends and other amounts earned on the Deposit prior to the Closing Date, and the Escrow Agent, on behalf of Buyer and in partial payment of the Purchase Price by Buyer to Seller, shall transfer, on behalf
and at the direction of Seller, the Deposit to a segregated account designated by the Escrow Agent (such amount plus the amount to be delivered to the Escrow Agent pursuant to Section 4.2(b)(ii), together with all interest, dividends
and other amounts earned that accrue thereon from the Closing Date through and until the date upon which such escrowed funds are distributed in accordance with the Escrow Agreement, the “Post-Closing Escrow”) to be held 
  

 17 

 pursuant to the Escrow Agreement to secure for Buyer’s benefit the indemnification obligations of
Seller pursuant to this Agreement. Subject to the Escrow Agreement, fifty percent (50%) of the Post-Closing Escrow (the “Initial Escrow Amount”) shall be held for a period of six months after the Closing Date, which period is subject to
increase as provided for in the Escrow Agreement (the “Initial Holdback Period”). Upon the expiration of the Initial Holdback Period, Buyer and Seller shall deliver written notice to the Escrow Agent in accordance with the terms of the
Escrow Agreement regarding the disbursement and retention of funds from the Initial Escrow Amount. Subject to the Escrow Agreement, the remaining fifty percent (50%) of the Post-Closing Escrow (the “Final Escrow Amount”) shall be held for
a period of twelve months after the Closing Date, which period is subject to increase as provided for in the Escrow Agreement (the “Final Holdback Period”). Upon the expiration of the Final Holdback Period, Buyer and Seller shall deliver
written notice to the Escrow Agent in accordance with the terms of the Escrow Agreement regarding the disbursement and retention of funds from the Final Escrow Amount. From time to time and upon a joint written notice from Buyer and Seller, the
Escrow Agent shall disburse funds from the Post-Closing Escrow to pay Buyer for indemnification claims timely made to Seller and determined payable in accordance with Section 14.3 and Article XV hereof, such disbursements
to be made in accordance with the terms of the Escrow Agreement. 
  
 4.3 Adjustments to Purchase Price. The Purchase Price will be adjusted as follows: 
  
 (a) The Purchase Price shall be increased by an amount (if any) equal to the sum, as of the Closing Time, of (i) the Accounts Receivable
Settlement Amount, (ii) Buyer’s prorated portion of all Prepaid Expense payments made to Third Parties, and (iii) the amount of any monies that are on deposit with Third Parties as security for Seller’s performance of the Acquired
Contracts (which such deposits, to the extent not replaced by undertakings of Buyer as contemplated by Section 8.5 and 8.6, will be deemed Acquired Assets), in each case to the extent such amounts will be treated as
Acquired Assets (clause (i), (ii) and (iii) collectively, the “Current Assets”). 
  
 (b) The Purchase Price shall be decreased by an amount (if any) equal to the sum, as of the Closing Time, of the accrued and unpaid
expenses, prepaid income from customers of the Business, accounts payable and accrued current liabilities that are incurred in the ordinary course, consistent with past practice (except, in all cases, for Tax items which are governed by
Article XIV hereof) and to the extent such amounts will be treated as Assumed Liabilities (the “Current Liabilities”). 
  
 (c) If the number of Equivalent Subscribers is less than 6,357 at the Closing Time, then the Purchase Price (and the amount payable
pursuant to Section 4.2(b)) shall be decreased by an amount equal to $1,547 multiplied by the difference between the number of Equivalent Subscribers at the Closing Time and 6,357. 
  
 (d) The Purchase Price shall also be decreased by the amount
of any Launch Fees, which shall be prorated between Seller and Buyer as of the Closing Time on the basis of the period to which such fees relate assuming such fees are earned proportionately over the relevant term. 
  

 18 

 (e) All values and amounts used to adjust the Purchase Price pursuant to this
Section 4.3 shall be determined in accordance with GAAP, to reflect the principle that, except as qualified in this Section 4.3, all revenues and refunds, and all costs, expenses and liabilities, attributable to the
operation of the System for any period prior to the Closing Time are for the account of Seller, and all revenues and refunds, and all costs, expenses and liabilities (other than Excluded Liabilities) attributable to the operation of the System from
and after the Closing Time are for the account of Buyer. 
  
 (f) Seller shall prepare and deliver to Buyer, at least ten business days prior to the Closing Date, a statement (the “Estimate Statement”) showing in reasonable detail the amount reasonably estimated by
Seller, in good faith, to be the net amount, if any, of the adjustments provided for in this Section 4.3. The Purchase Price paid by Buyer shall be the estimated amount set forth in the Estimate Statement and shall be adjusted after
the Closing, if necessary, pursuant to Section 4.4. 
  
 4.4 Final Adjustment Amount. 
  
 (a) Within 45 days after the Closing Date, Buyer shall prepare and deliver to Seller a statement (the “Final Statement”), setting forth Buyer’s good faith determination of the actual adjustment to the Purchase Price (the
“Final Adjustment Amount”). The Final Adjustment Amount in respect of the Purchase Price shall be calculated in a manner consistent with the Pro Forma Working Capital Statement as set forth on Schedule 5.5. Each of Seller and
Buyer shall provide the other Party with access during normal business hours to any books, records, working papers or other information in its possession after the Closing Date reasonably necessary or useful in the preparation of the Final Statement
and the calculation of the Final Adjustment Amount for the Purchase Price. The Final Statement shall become final and binding upon all Parties hereto on the 16th day following delivery thereof (without counting such day of delivery) to Seller unless
Seller gives written notice of a good faith disagreement with the Final Statement (a “Notice of Disagreement”) to Buyer prior to such date. Any Notice of Disagreement shall specify in reasonable detail the nature of any disagreement so
asserted and relate solely to the review of the Final Statement and the calculation of the Final Adjustment Amount. 
  
 (b) If a Notice of Disagreement is delivered by Seller as required pursuant to Section 4.4(a), then the Final Statement
shall become final and binding upon all parties hereto on the earlier of (x) the date Seller and Buyer resolve in writing any differences they may have with respect to all matters specified in the Notice of Disagreement and (y) the date all disputed
matters are finally resolved in writing by KPMG, LLP, an independent public accounting firm (the “Independent Accountants”). During the 30-day period following the delivery of a Notice of Disagreement, Seller and Buyer shall seek in good
faith to resolve any differences which they may have with respect to any matter specified in the Notice of Disagreement and each shall provide the other with reasonable access to any books, records, working papers or other information reasonably
necessary or useful in the preparation or calculation of (i) the Final Adjustment Amount, (ii) the Final Statement, or (iii) the Notice of Disagreement. At the end of such 30-day period if there has been no resolution of the matters specified in the
Notice of Disagreement, Seller 
  

 19 

 and Buyer shall make a written submission of any and all matters arising under this Section
4.4 that remain in dispute to the Independent Accountants for review and resolution. The Independent Accountants shall be KPMG, LLP or, if such firm is unable or unwilling to act, such other nationally recognized independent public
accounting firm as shall be reasonably agreed upon by Seller and Buyer. The Independent Accountants shall render a decision resolving the matters submitted to the Independent Accountants within thirty (30) days following submission thereto (or as
soon thereafter as reasonably practicable). All fees and expenses of the Independent Accountants incurred pursuant to this Agreement shall be shared equally by Buyer and Seller. 
  
 (c) If as a result of any adjustments made pursuant to this Section 4.4, Buyer is finally
determined to owe any amount to Seller, Buyer shall within three business days pay such amount to Seller, and if Seller is finally determined to owe any amount to Buyer, Seller shall within three business days pay such amount to Buyer. Any such
payments shall be made by federal wire transfer of immediately available funds to an account designated in writing by the Party receiving payment and shall bear interest from the Closing Date at the rate of 6% per annum. 
  
 4.5 Allocation of the Purchase Price. Buyer and Seller agree, with
respect to the assets and liabilities to be acquired, sold and transferred hereunder, to allocate the Purchase Price, Assumed Liabilities and other relevant items (including, for example, adjustments to the Purchase Price) to individual assets
(including the Intellectual Property Agreement and the Seller’s Non-Compete Agreement) or classes of assets for all purposes (including financial accounting purposes and for all matters regarding Taxes and Tax Returns) in accordance with the
allocation schedule attached hereto as Schedule 4.5 (the “Agreed-Upon Allocation”). Buyer and Seller (and their Affiliates) agree to use the Agreed-Upon Allocation in preparing and filing all required forms under Section 1060
of the Code and all other Tax Returns, and neither Buyer nor Seller (nor their Affiliates) will take any position before any Governmental Entity on any Tax Return or in any judicial proceeding that is in any way inconsistent with such Agreed-Upon
Allocation unless otherwise required by Law. Each of Buyer and Seller (and their Affiliates) shall notify the other within 15 business days if it receives written notice that any Governmental Entity proposes any allocation that is different from the
Agreed-Upon Allocation. 
  
 ARTICLE V 
  
 Representations and Warranties of Seller 
  
 Seller represents and warrants to Buyer as follows: 
  
 5.1 Organization, Standing and Power. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware. Seller has the requisite power and authority to own, lease, use, operate and transfer its properties, including the Acquired Assets, and to conduct the
Business as currently conducted. Seller is qualified or registered to do business and is in good standing in the State of California, and this is the only state in which the ownership of the System and the Acquired Assets or operation of the
Business makes such qualification necessary. 
  

 20 

 5.2 Authority. Seller has all corporate power and authority necessary to execute this Agreement
and the Ancillary Agreements to which it is or will be a party (the “Seller Ancillary Agreements”) and to consummate the transactions contemplated thereby and by this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Seller have been duly authorized by all necessary corporate action, and the execution and performance of the Seller Ancillary Agreements by Seller will be authorized by all necessary corporate
action prior to the Closing. This Agreement constitutes, and upon execution of each of the Seller Ancillary Agreements such agreements will constitute, valid and binding obligations of Seller, enforceable against Seller in accordance with their
respective terms, such enforcement subject to bankruptcy, insolvency, reorganization, moratorium, or similar Laws of general application affecting creditors’ rights and the application of general principles of equity. 
  
 5.3 No Breach or Conflict. Except as set forth on Schedule
5.3 and subject to the receipt of the Material Consents, neither the execution, delivery and performance of this Agreement and the Seller Ancillary Agreements, nor the consummation of the transactions contemplated hereby and thereby, will
(a) cause Seller to breach any Law or Court Order that is applicable to the System or the Business and such breach would, individually or in the aggregate, result or would reasonably be expected to result in a Material Adverse Effect, (b) conflict
with or result in a violation of Seller’s certificate of incorporation or bylaws, (c) conflict with or result in a breach, termination, cancellation, revocation or acceleration (with or without the giving of notice, the lapse of time, or the
happening of any further event or condition) of any right, obligation or benefit of or under (i) any Material Acquired Contract, the Franchise or any Material Permit or (ii) any Seller Benefit Plan that could result in liability to Buyer, or (d)
result in the creation of any Lien (other than a Permitted Lien), or give to others any interest, rights or claims, in or with respect to any of the Acquired Assets. 
  
 5.4 Material Consents. Schedule 5.4 contains a true, complete and correct list of (i) all Consents
required in respect of Material Acquired Contracts, and (ii) all Consents required from Governmental Entities (collectively, the “Material Consents”). 
  

5.5 Accounts Receivable. All of the accounts receivable related to the Business (including the Accounts Receivable set forth in the Pro Forma
Working Capital Statement, which is attached to Schedule 5.5) (a) are reflected and properly recorded on the books and records of the Business, including the Financial Statements; (b) represent sales actually made in the ordinary
course of business consistent with past practice for goods or services delivered or rendered in bona fide arm’s-length transactions; (c) constitute to Seller’s Knowledge only valid undisputed claims, (d) are not subject to any assertions
of set-off, reduction, counterclaim, claim or, to Seller’s Knowledge, dispute; (e) have not been extended or rolled over in order to make them current; (f) are current (except as set forth in the Aging Report provided to Buyer prior to entering
into this Agreement and any subsequent Aging Report delivered by Seller pursuant to Section 7.7); and (g) are or will be represented by one or more invoices, each of which has been generated in the ordinary course, and provides for
payment to be made, in the name of Seller. The Accounts Receivable data set forth in the Aging Report provided to Buyer prior to entering into this Agreement and the Pro Forma Working Capital Statement is true, complete and correct in all material
respects as of the date thereof and has been prepared consistent with past practice. 
  

 21 

 5.6 Tangible Assets. Except as set forth on Schedule 5.6, all of the tangible
Acquired Assets with a replacement value in excess of $1,000 individually or $50,000 in the aggregate and that are used in the operation of the System are in good operating condition and repair, normal wear and tear excepted, other than, as of the
Closing Date, obsolete assets no longer necessary for the operation of the System, set top boxes that have become inoperable in the ordinary course of business, or other assets that have been sold or disposed of in the ordinary course of business;
provided, however, Seller shall have obtained, as of the Closing Date, suitable replacements for such sold or disposed of assets (it being understood that any sold or disposed obsolete assets may be replaced with like-kind obsolete assets) and shall
maintain an inventory of operable set top boxes, each as reasonably necessary or advisable for the continued operation of the System as it is currently being operated. Except as set forth on Schedule 5.6, Seller has not received any
written notice of a violation of any ordinance, regulation or building, zoning or other similar Law with respect to such assets. Seller has good and marketable title to (or, in the case of Acquired Assets that are leased, valid leasehold interests
in) the tangible Acquired Assets free and clear of all Liens (including leases and licenses granted by Seller to a Third Party) other than Permitted Liens; provided that no representation shall be deemed given as of the Closing Date with respect to
obsolete assets no longer usable in the operation of the Business (including set top boxes that become inoperable in the ordinary course of business) or other assets that have been used and not replaced in the ordinary course of business or assets
sold or disposed of in the ordinary course of business. At Closing, the amount of Permitted Liens (other than Liens for Taxes that are not yet due and payable or that are being contested in good faith) shall not exceed $25,000 in the aggregate.

  
 5.7 Claims, Litigation and Disputes. There is no
existing or pending claim, litigation, challenge, action, charge, arbitration, legal proceeding, grievance or investigation, before any arbitrator, mediator or Governmental Entity or, to Seller’s Knowledge, are any of the foregoing threatened
against Seller or the System, which, if adversely determined, would or would reasonably be expected to adversely affect (i) Seller’s (or any of its Affiliates’) ability to perform its obligations hereunder or under the Seller Ancillary
Agreements, (ii) the rights granted under the Acquired Contracts, (iii) the financial condition or business operations of the System or (iv) the ownership, use, maintenance or operation of the Acquired Assets, including the System, or the conduct of
the Business by Seller or Buyer. 
  
 5.8 Acquired
Contracts. Except as set forth on any applicable Schedule, Seller has provided to Buyer true, complete and correct copies of all Acquired Contracts (and any and all amendments or modifications thereof and related correspondence) for which
written copies exist or Seller has provided a description of such Acquired Contract on the Schedules to the Agreement. Schedule 5.8 sets forth a true, complete and correct list of all Material Acquired Contracts. Each Material Acquired
Contract is valid, binding upon Seller and in full force and effect, and neither Seller nor, to Seller’s Knowledge, any other party to any Material Acquired Contract is in material breach thereof or default thereunder and there does not exist
any event, occurrence, condition, or act that, with or without the giving of notice, the lapse of time, or the happening of any further event or condition, would become a material breach or default by Seller under any Material Acquired Contract. As
of the date hereof neither Seller nor any Affiliate of Seller has received any written notice of the intention of any party to terminate any Material Acquired Contract and, to Seller’s Knowledge, except with respect to the passage of time there
is no reasonable basis for any such action to be taken by a Third Party for cause. The term  
  

 22 

 “Material Acquired Contracts” means the (a) the Bulk Agreements and Right of Entry Agreements, (b)
Seller’s programming agreements which constitute Acquired Contracts pursuant to Section 2.1(d)(vi), (c) any other Acquired Contract that provides for the payment of aggregate annual payments or other consideration (including any
penalties explicitly set forth in such Acquired Contract) over the current term of such Acquired Contract to or from Seller in excess of $12,000, (d) any other Acquired Contract, the term of which extends more than 12 months after the Closing Date,
and (e) any Acquired Contract, the loss of which would or would reasonably be expected to have a Material Adverse Effect. 
  
 5.9 Compliance with the Law.  
  
 (a) Except as disclosed on Schedule 5.9, neither the conduct of the Business as it is currently conducted nor the operation
of the System as it is currently operated violates or infringes any Laws, any Court Orders or the Franchise currently in effect, except as would not have or would not reasonably be expected to have a Material Adverse Effect. Except as disclosed on
Schedule 5.9, Seller has not received any written notice of any violation or default by Seller, the System or the Business of any Law, any Court Order or the Franchise applicable to the operation of the Business as it is currently
conducted or the System as it is currently operated. Except as disclosed on Schedule 5.9, no Person or Governmental Entity has alleged any violation, and no event or circumstance has occurred since the Acquisition Date that with
notice, lapse of time or both would constitute a violation or event of default thereunder. Schedule 5.9 sets forth the true, complete and correct 2004 Basic Signal Leakage Performance Report (FCC Form 320), which contains Seller’s
cumulative leakage index audit for the System as required under FCC Rule 76.611. The System is in compliance with all the signal leakage criteria prescribed by the FCC for each relevant reporting period. 
  
 (b) Seller has delivered to Buyer true, complete and correct
copies of (i) all FCC rate forms filed by Seller with respect to the System, (ii) all other FCC forms filed by Seller with respect to the System and (iii) all correspondence by Seller with any Governmental Entity relating to rate regulation
generally or specific rates charged to subscribers with respect to the System, including copies of any complaints filed with the FCC with respect to any rates charged to subscribers of the System, and any other documentation supporting an exemption
from the rate regulation provisions of the Cable Act claimed by Seller with respect to any of the System. Schedule 5.9 sets forth a list of (a) all pending complaints with respect to any rates which have been filed by Seller with the
FCC for the System and (b) any Franchising Authority that has filed FCC Form 328 for certification to regulate any of the rates of the System. Seller has received no notice from any Governmental Entity with respect to an intention to enforce
customer service standards pursuant to the Cable Act, and Seller has not agreed with any Governmental Entity to establish customer service standards that exceed the FCC standards promulgated pursuant to the Cable Act. Except as set forth on
Schedule 5.9, the System has been conducted and at Closing will be conducted in accordance with the Cable Act and the rules and regulations of the FCC promulgated thereunder. Seller has timely submitted to the FCC all required filings,
including cable television registration statements, annual reports, employment reports and aeronautical frequency usage notices. 
  

 23 

 (c) Seller has delivered to Buyer true, complete and correct copies of all current
reports and filings for the reporting periods beginning with that reporting period which included the Acquisition Date, that have been made or filed by Seller pursuant to the Copyright Act and the rules and regulations of the U.S. Copyright Office
with respect to the System, and, regarding those reports and filings to be made or filed by Seller with the U.S. Copyright Office with respect to the System between the date of this Agreement and the Closing, Seller will deliver the same to Buyer
promptly after filing. Since the Acquisition Date, Seller has timely filed all semi-annual statements of account and paid all compulsory licensing fees required by the Copyright Act and the rules and regulations of the United States Copyright
Office, with respect to the System. 
  
 5.10 Taxes, Fees and
Utilities. Except as disclosed on Schedule 5.10, and with regard to the System and the Acquired Assets: 
  
 (a) (i) all Tax Returns required to be filed by Seller prior to the Closing Date have or will have been timely filed, all such Tax Returns
were or will be true, complete and correct in all respects when filed, and all Taxes due and payable have been or will be paid by Seller when required by applicable Law, except, in any case, as would not have or would not reasonably be expected to
have a Material Adverse Effect, (ii) there are no Tax Liens upon any of the Acquired Assets except for Permitted Liens, (iii) Seller is not a “foreign person” within the meaning of Section 1445(b)(2) of the Code, (iv) none of the Acquired
Assets is “tax exempt use property” within the meaning of Section 168(h) of the Code, (v) none of the Acquired Assets is subject to a lease made pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954, and (vi) no claim has ever
been made by a taxing authority in a jurisdiction where Seller does not currently file Tax Returns that Seller is or may be subject to taxation by such jurisdiction in respect of the income, assets or operation of the Business. No portion of any Tax
Return that relates to the Acquired Assets or the operation of the Business has been the subject of any audit, action, suit, proceeding, claim or examination by any governmental authority, and no such audit, action, suit, proceeding, claim,
deficiency or assessment is pending or, to the Seller’s Knowledge, threatened. Seller is not currently the beneficiary of any extension of time within which to file any Tax Return, and Seller has not waived any statute of limitation with
respect to any Tax or agreed to any extension of time with respect to a Tax assessment, or deficiency. Seller has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee,
stockholder, independent contractor, creditor, or other Third Party. 
  
 (b) Seller has paid in full any and all franchise fees and material license fees, business permit costs, unemployment and worker’s compensation insurance contributions and utility bills required to be paid.

  
 5.11 Franchises and Permits. 
  
 (a) Schedule 5.11(a) contains a description of
the Franchise and a true, complete and correct list of all Material Permits required to operate the Business as it is operated on the date hereof and as would reasonably be expected to be required as of the Closing Time. Seller has delivered to
Buyer a true, complete and correct copy of the 
  

 24 

 Franchise and each Material Permit. Except as set forth on Schedule 5.11(a) or contained in
the Franchise, neither the Franchise nor any Material Permit is subject to any conditions or restrictions other than such as may exist by virtue of acts of the United States Congress, the rules and regulations of federal regulatory agencies or laws
and rules adopted by the various local governing authorities of the jurisdiction in which the System is located. Other than orders, actions, proceedings or investigations generally applicable to the cable television industry in the United States or
in the State of California, there are no proceedings pending which would materially and adversely affect the validity of the Franchise, any Material Permit or the terms and provisions thereof. Except as disclosed on Schedule 5.11(a)
and Schedule 5.11(b), (i) the System and the other Acquired Assets are being operated and the Business is being conducted, in compliance with the Franchise and all Material Permits in all material respects, (ii) neither Seller nor any
of its Affiliates has received any written notice from the Franchising Authority threatening any enforcement action with respect to the Franchise, stating that the System is in noncompliance with the terms of the Franchise or stating that the
Franchise will not be renewed, (iii) neither Seller nor any of its Affiliates has received any written notice threatening any enforcement action with respect to any Material Permit, stating that the System is in noncompliance with the terms of such
Material Permit or stating that such Material Permit will not be renewed, (iv) the Franchising Authority currently has no right to purchase the System or any portion thereof, (v) the Franchise is not, to Seller’s Knowledge, under consideration
to be revoked or adversely modified in any material respect and (vi) there are no undisclosed material obligations with respect to the Franchise or any Material Permit, other than those set forth in the Franchise or such Material Permit. 

 
 (b) Except as set forth on Schedule
5.11(b), (i) Seller holds the Franchise and all Material Permits necessary to operate the System in the manner in which it is operated on the date hereof and (ii) the Franchise and the Material Permits are valid, binding and enforceable in
accordance with their respective terms or, solely with respect to the Manhole Access Agreement, by operation of Law. 
  
 5.12 Financial Statements. 
  
 (a) Schedule 5.12(a) sets forth true, complete and correct copies of the unaudited balance sheets and statements of
operations of the System as of and for the year ended December 31, 2004 (the “Financial Statements”). The Financial Statements (i) were prepared from the consolidated books and records of account of Seller, which books and records of
account have been prepared in accordance with GAAP and are kept in the normal course of business, and (ii) were prepared in good faith using reasonable assumptions but excluding all allocations for accounting, legal, marketing overhead and other
corporate overhead. Except as disclosed on Schedule 5.12(a), the Financial Statements fairly and accurately reflect in all material respects the financial position, results of operations, income and cash flows of the System as of such
dates and for the periods then ended. 
  
 (b)
Except as disclosed in the Financial Statements or except for liabilities and obligations incurred in the ordinary course of business since December 31, 2004, the 
  

 25 

 System and the Business do not have any material undisclosed liability or obligation, whether accrued,
absolute, fixed or contingent, which would become Assumed Liabilities pursuant to Section 3.1. 
  
 5.13 Employees and Related Matters. 
  
 (a) Schedule 5.13(a) sets forth a true, complete and correct list of all Employee Benefit Plans maintained or contributed to
by Seller or any ERISA Affiliate in respect of or for the benefit of Employees (the “Seller Benefit Plans”). Seller has made available to Buyer true, complete and correct copies of the current Seller Benefit Plan documents, summary plan
descriptions and all related documents. 
  
 (i)
Each Seller Benefit Plan has been maintained and operated in all material respects in compliance with applicable Law, including the Code and ERISA, and in accordance with the terms of such plan. Each Seller Benefit Plan intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service (or an application for such a letter is pending or will be filed within the applicable remedial amendment period). 
  
 (ii) No Seller Benefit Plan is (A) a multiemployer plan, as
defined in Section 3(37) of ERISA or (B) a multiple employer plan subject to Sections 4063 or 4064 of ERISA. 
  
 (iii) All contributions (including all employer contributions and employee salary reduction contributions) required to have been made
under any of the Seller Benefit Plans or by Law (without regard to any waivers granted under Section 412 of the Code) to any funds or trusts established thereunder or in connection therewith have been made by the due date thereof (including any
valid extension), and all contributions for any period ending on or before the Closing Date which are not yet due will be paid by the required due date. No accumulated funding deficiencies (whether or not waived) exist in any Seller Benefit Plan
subject to Section 412 of the Code or Section 302 of ERISA. Neither Seller nor any ERISA Affiliate thereof has provided, or is required to provide, security to any Seller Benefit Plan under Section 401(a)(29) of the Code. 
  
 (iv) No event has occurred nor shall any event occur as a
result of the transactions contemplated by this Agreement which will result in the imposition upon Buyer or any Affiliates of Buyer of any liability directly or indirectly attributable to or relating to the Seller Benefit Plans or any other Employee
Benefit Plan maintained or sponsored by, or contributed to by, Seller or any ERISA Affiliate thereof. 
  
 (v) No liability under Subtitle C or D of Title IV of ERISA has been or is expected to be incurred by Seller or any ERISA Affiliate
thereof with respect to any ongoing, frozen or terminated “single-employer plan”, within the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by Seller or an ERISA Affiliate thereof for the Business. No notice of a
“reportable event”, 
  

 26 

 within the meaning of Section 4043 of ERISA for which the 30-day reporting requirement has not been
waived or extended, other than pursuant to PBGC Regulation Section 4043.66, has been required to be filed for any Seller Benefit Plan within the four-month period ending on the date hereof or will be required to be filed in connection with the
transactions contemplated by this Agreement. Neither Seller nor any ERISA Affiliate thereof, when operating the Business, has engaged in a transaction described in Section 4069 of ERISA. 
  
 (vi) Neither Seller nor any ERISA Affiliate has any direct or indirect liability with respect to any
misclassification of any individual as an independent contractor rather than as an employee of Seller or such ERISA Affiliate, or with respect to any employee of Seller or such ERISA Affiliate leased from another employer, in each case in respect of
the System. 
  
 (vii) Neither the execution,
delivery or performance of this Agreement nor the consummation of the transactions contemplated herein will (i) result in any payment becoming due or increase the compensation due to any Employee; (ii) increase any benefits due to any Employee; or
(iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits. 
  
 (b) There are no pending actions, claims or lawsuits which have been asserted or instituted against the Seller Benefit Plans, the assets
of any of the trusts under such plans or the plan sponsor or the plan administrator, or against any fiduciary of the Seller Benefit Plans with respect to the operation of such plans (other than routine benefit claims), nor to Seller’s Knowledge
are there any facts which could form the basis for any such claim or lawsuit. 
  
 (c) There are no collective bargaining agreements currently in effect with respect to Seller, the System or the Business. None of the Employees is represented by a labor union or labor organization. Neither
Seller nor any Affiliate thereof is subject or is a party to any collective bargaining agreement covering any Employee. There are no labor strikes, picketing, handbilling, disputes, grievances, arbitrations, slowdowns, work stoppages or lockouts
currently pending or, to Seller’s Knowledge, threatened by or with respect to any Employees. Since the Acquisition Date, there have not been any labor union organizational campaigns by or directed at any Employees. There is no unfair practice
complaint pending with respect to any Employees or, to Seller’s Knowledge, threatened before the National Labor Relations Board or any other Governmental Entity. There is no grievance arising under any collective bargaining agreement pending
against or involving Seller or its Affiliates with respect to any Employees. To Seller’s Knowledge no representation petition with respect to any Employee has been filed with the National Labor Relations Board. Seller has not experienced any
primary work stoppage. 
  
 (d) Schedule
5.13(d) contains a true, complete and correct list of (i) all of Employees and their salary or wage rate and bonus and other monetary compensation as of March 15, 2005 (including an indication as to whether any such Employee is on leave) and
(ii) all independent contractors (other than independent contractors who have only worked in West Point, Georgia) who performed services for the Business for the three months ended March 15, 2005. 
  

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 (e) Except as set forth on Schedule 5.13(e), (i) there is no employment or
employment related agreement with any Employee and none is being negotiated, (ii) there is no existing, or to Seller’s Knowledge, threatened litigation involving any Employee, (iii) there is no existing, or to Seller’s Knowledge,
threatened charge involving any Employee filed with any Governmental Entity, (iv) there is no existing, or to Seller’s Knowledge, threatened internal charge, claim, action, suit, complaint, arbitration, inquiry, proceeding or investigation
involving any Employee and (v) neither Seller nor any Affiliate thereof is a party to, or otherwise bound by, any consent decree with, or citation by, any Governmental Entity relating to any Employee or any employment practice. 
  
 5.14 Environmental Matters. Seller’s operation of the Business,
including on the Leased Real Property, has been and is currently being conducted in full compliance with (i) all Environmental Laws and (ii) all environmental, health and safety Permits required under all applicable Environmental Laws to conduct the
Business as it is being conducted, except for any noncompliance that has not had, would not have, or would not reasonably be expected to have, a Material Adverse Effect. All such Permits are in full force and effect. Since the Acquisition Date: (i)
no notice, notification, demand, request for information, citation, summons or order has been issued with respect to the Business or its assets or operations; (ii) no written complaint has been filed; (iii) no material penalty has been assessed; and
(iv) to Seller’s Knowledge, no investigation or review is pending or threatened by any Governmental Entity with respect to any alleged failure to have any environmental, health or safety Permit required under any applicable Environmental Law,
in each case, in connection with the operation of the Business. 
  
 5.15 Brokerage Fees. Except for DH Capital, LLC, whose fee will be paid by Seller pursuant to a separate agreement, no Person or other entity acting on behalf of Seller is entitled to any brokerage or finder’s fee or commission
in connection with the transactions contemplated by this Agreement. 
  
 5.16 Exclusive Dealing. Neither Seller nor any of its Affiliates is a party to any currently effective agreement involving, directly or indirectly, the sale or transfer of any securities issued by Seller, the
Acquired Assets (other than Inventory in the ordinary course), or the System to any Person other than Buyer. 
  
 5.17 Title to and Condition of Real Property. 
  
 (a) Seller does not own any fee title in any real property used or held for use in the Business. 
  
 (b) As to all of the Leased Real Property, Seller holds a
valid leasehold interest in such property, not subject or subordinate to any Lien (including reservations, rights of way, possibilities of reverter, encroachments, easements, rights of entry, restrictive covenants, leases and licenses, in each case
that materially interfere with Seller’s use of the Leased Real Property), except for Permitted Liens. 
  

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 (c) Schedule 5.17(c) sets forth a true, complete and correct list of all
the Leased Real Property and the parties to each of the Leases. To Seller’s Knowledge, all of the Leased Real Property is zoned so as to permit the current use of such property, and Seller has received no notice of the violation of any zoning
or land use requirement. To Seller’s Knowledge, all buildings, improvements (and the structural elements and mechanical systems thereof), fixtures, machinery, equipment and systems that are a part of, or located on, any portion of the Leased
Real Property that Seller occupies or uses are in good condition and repair and in good working order, ordinary wear and tear excepted, and except, in each case, where a failure to be in such condition would not reasonably be expected to be material
to the operation of the System, assuming Buyer continues to conduct the business and operation of the System as currently conducted. Seller has a valid and legally created right of ingress and egress pursuant to a written agreement or instrument
with respect to each parcel of Leased Real Property. 
  
 (d) Seller has delivered to Buyer true, complete and correct copies of all Leases (including any and all amendments or modifications). 
  
 (e) Seller is in compliance in all respects with the easements on the Leased Real Property, and to Seller’s Knowledge, no event or
circumstance has occurred that with notice, lapse of time, or both would constitute an event of default thereunder by Seller, in each case except for any noncompliance or default, individually or in the aggregate, that has not had and would not, or
would not reasonably be expected to, have a Material Adverse Effect. 
  
 5.18 Intellectual Property and Trademarks. 
  
 (a) Seller has not received any written notice that it has infringed any rights with respect to the Intellectual Property or Trademarks of any Third Party as a result of Seller’s conduct of the Business, and
there is no reasonable basis for any claim of infringement, except for a claim that would not have or would not reasonably be expected to have a Material Adverse Effect. To Seller’s Knowledge, Schedule 5.18 sets forth a list of
the Software (other than microcode embedded in Equipment) used in the Business as it is conducted on the date hereof. 
  
 (b) Seller owns or otherwise possesses all rights necessary to transfer all its rights in and to the Acquired Intellectual Property. The
Acquired Intellectual Property, the Third Party Intellectual Property and the Excluded Marks are all of the Intellectual Property used by Seller to conduct the Business. 
  
 (c) To Seller’s Knowledge, no Person is misappropriating, violating or infringing upon, or has violated
or infringed upon, any of the Acquired Intellectual Property not owned by a Third Party. 
  
 (d) Seller has one or more privacy policies governing the collection and use of information by Seller and its Affiliates, including
Customer Proprietary Information. To Seller’s Knowledge, Seller has not collected or used any such information, including any Customer Proprietary Information, in any manner in violation of any such privacy policies. 
  

 29 

 5.19 System. 
  
 (a) Schedule 5.19(a) sets forth a true, correct and complete statement, to Seller’s
Knowledge, as of the date set forth in said Schedule, of the following information with respect to the System: 
  
 (i) the approximate number of route miles included in the Acquired Assets and served by the System’s headend; 
  
 (ii) the approximate number of Homes Passed; 
  
 (iii) the applicable MHz capacity and the channel capacity
of the System; 
  
 (iv) the number of Equivalent
Subscribers served by the System by subscriber type; and 
  
 (v) the architecture for the System. 
  
 (b) Schedule 5.19(b) sets forth a complete and accurate description of the following information relating to the System, as of the date of this Agreement: 
  
 (i) (A) a description of the Broadcast Basic Service,
Expanded Basic Service, pay TV and a la carte services available from the System, (B) a rate code table showing all rate codes including retail rates and discounts as of February 28, 2005, (C) retail rate cards for February 28, 2005, and (D)
subscriber counts by tier of service for February 28, 2005; and 
  
 (ii) the stations and signals carried by the System, the channel position of each such signal and station and all FCC aeronautical frequencies utilized by the System. 
  
 The System is capable of providing all channels, stations and signals
reflected as being carried on the System on  
 Schedule 5.19(b). 
  
 (c) Franchise and Conduit Fees. Except for regularly
scheduled franchise fees that have accrued under the Franchise, which fees have been computed in accordance therewith and timely paid in full, there are no franchise fees payable with respect to the Franchise. Except as provided in the Manhole
Access Agreement, there are no fees payable with respect to any conduit agreement. Neither Seller nor any Affiliate of Seller has been notified in writing by any Governmental Entity or other Person regarding any material adjustment to the amount of
franchise fees to be paid by Seller to such Governmental Entity or third party. 
  
 (d) Request for Signal Carriage. Neither Seller nor any Affiliate of Seller has received any FCC order since the Acquisition Date
requiring the System to carry a television broadcast signal or to terminate carriage of a television broadcast signal and, to Seller’s Knowledge, no television broadcast station has complained to Seller or filed a written complaint with the FCC
since the Acquisition Date claiming that Seller carried or refused to carry a television broadcast signal in violation of the requirements of the FCC’s mandatory broadcast signal carriage rules. 
  

 30 

 (e) Commitments. Except as described on Schedule 5.19(e), (i) there
are no unfulfilled binding material commitments for capital improvements obligated to be made in connection with the System, (ii) no commitment to the Franchising Authority or any other Governmental Entity has been made to maintain a local office in
any location and (iii) no commitment has been made to the Franchising Authority or any other Governmental Entity to pay franchise fees or other amounts to any such authority after the date hereof in excess of the amounts set forth in the Franchise.

  
 (f) Conduit. The Manhole Access
Agreement, which provides for the means of access to the System’s conduit, is the only conduit access agreement used in the Business or needed to conduct the Business as conducted on the date hereof. All of the conduit in which any underground
coaxial cable used to serve customers of the System on the date hereof and on the Closing Date is located is owned by Seller and included in the Acquired Assets. To Seller’s Knowledge, all underground coaxial cable used in the operation of the
System to serve customers on the date hereof and on the Closing Date is located within such conduit (except for “drops” that are direct-buried and except for other non-material portions of such coaxial cable). Neither Seller nor, to
Seller’s Knowledge, any other Person, has granted a Third Party any right to use such conduit. 
  
 5.20 Conduct of Business in Ordinary Course of Business. Except as disclosed on Schedule 5.20, since December 31, 2004, Seller has
conducted the Business in the ordinary course of business consistent with Seller’s past practice, and has not (i) made any material increase in compensation payable or to become payable, or benefits provided or to become provided, to any of the
Employees, or any material change in personnel policies, insurance benefits or other compensation arrangements affecting the Employees, in each case other than in the ordinary course of business, (ii) made any sale, assignment, lease or other
transfer of, or incurred any indebtedness or Lien including leases and licenses granted by Seller to a Third Party (other than a Permitted Lien) with respect to, any of the Acquired Assets (other than Inventory used, sold or destroyed in the
ordinary course of business), other than obsolete assets no longer usable in the operation of the Business or other assets sold or disposed of in the ordinary course of business with suitable replacements being obtained therefor as reasonably
necessary or advisable for the continued operation of the Business, or (iii) made any offers to existing or prospective customers inconsistent with the disclosure set forth on Schedule 5.19(b). 
  
 5.21 Letters of Credit, Bonds, Etc.. There are no letters of credit or
franchise, construction, fidelity, performance, surety or other bonds, or guarantees in lieu of bonds, posted or required to be posted by Seller or its Affiliates in connection with the operation of the Business. 
  
 5.22 No Material Adverse Effect. Since December 31, 2004, there has
not been any event or circumstance, individually or in the aggregate, which has had, or would or would reasonably be expected to have, a Material Adverse Effect. 
  

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 5.23 Condition and Suitability of Assets. Except for the Franchise, the Excluded Assets and the
Employees, the Acquired Assets constitute all of the properties, rights, interests and assets necessary to permit Buyer to conduct the Business and operate the System in the same manner as the Business is being conducted and the System is being
operated on the date hereof and at the Closing Date. 
  
 5.24
Disclaimer. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT AND THE ANCILLARY AGREEMENTS, OR IN INSTRUMENTS OR CERTIFICATES DELIVERED BY SELLER AT THE CLOSING, NEITHER SELLER NOR ANY OF ITS AFFILIATES MAKES ANY OTHER
EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO THE BUSINESS, THE ACQUIRED ASSETS OR OTHERWISE WITH RESPECT TO ANY OTHER INFORMATION PROVIDED TO BUYER, WHETHER ON BEHALF OF SELLER OR ITS AFFILIATES, INCLUDING AS TO (A) MERCHANTABILITY
OR FITNESS FOR ANY PARTICULAR USE OR PURPOSE, (B) THE OPERATION OF THE BUSINESS BY BUYER AFTER THE CLOSING IN ANY MANNER, OR (C) THE PROBABLE SUCCESS OR PROFITABILITY OF THE OWNERSHIP, USE OR OPERATION OF THE ACQUIRED ASSETS BY BUYER AFTER THE
CLOSING. Neither Seller nor any other Person will have or be subject to any liability or indemnification obligation to Buyer or any other Person resulting from the distribution to Buyer, or Buyer’s use of, any such information, including the
Offering Memorandum dated January, 2005 prepared by DH Capital, LLC relating to the Business and any information, document or material made available to Buyer in “data rooms,” management presentations, functional “break out”
discussions, site visits, responses to questions submitted by or on behalf of Buyer, whether orally or in writing, or in any other form in expectation of the transactions contemplated by this Agreement. 
  
 ARTICLE VI 
  
 Representations and Warranties of Buyer 
  
 Buyer represents and warrants to Seller as follows: 
  
 6.1 Organization, Standing and Power. Buyer is a limited liability company duly organized, validly existing and in
good standing under the Laws of the State of Delaware, has the requisite power and authority to conduct its business as currently conducted and as contemplated by this Agreement, and to own, lease, operate or hold the Acquired Assets. Buyer is duly
qualified or registered and in good standing in the States of Washington and California, which states are the only states in which the character of the properties owned or leased by Buyer makes such qualification necessary. 
  
 6.2 Authority. Buyer has all requisite power and authority necessary
to execute this Agreement and the Ancillary Agreements to which it is or will be a party (the “Buyer Ancillary Agreements”) and to consummate the transactions contemplated thereby and by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action of Buyer, and the execution and performance of the Buyer Ancillary Agreements will be authorized by
all necessary limited liability company action of Buyer prior to Closing. This 
  

 32 

 Agreement constitutes, and upon execution each of the Buyer Ancillary Agreements such agreements will constitute, valid
and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, such enforcement subject to bankruptcy, insolvency, reorganization, moratorium, or similar Laws of general application affecting creditors’
rights and the application of general principles of equity. 
  
 6.3 No Breach or Conflict. The execution, delivery and performance of this Agreement and the Buyer Ancillary Agreements and consummation of the transactions contemplated thereby and by this Agreement will not (a) cause Buyer to
breach any Law or Court Order, (b) conflict with or result in a violation of the certificate of formation or limited liability company agreement (or similar organizational and governing documents) of Buyer, or (c) conflict with or result in a
material breach of any of the terms, conditions or provisions of any material Contract or material Permit to which Buyer is a party or by which it may be bound, or constitute a default thereunder. 
  
 6.4 Third-Party Consents. Subject to obtaining any such consent, each
Person whose consent to the execution, delivery or performance of this Agreement and the Ancillary Agreements by Buyer is legally or contractually required has been or will be obtained prior to Closing. 
  
 6.5 Claims, Litigation and Disputes. Except for actions, proceedings
or investigations affecting the cable television industry in general, there is no claim or litigation or investigative proceeding pending or, to the knowledge of Buyer, threatened against Buyer which would materially affect Buyer’s ability to
perform its obligations hereunder and under the Ancillary Agreements. 
  
 6.6 Financing. Buyer has adequate financing from cash on hand or sufficient borrowing capacity to enable it to fulfill its obligations under this Agreement and the Ancillary Agreements. Buyer will have sufficient financial resources
to operate the System after the Closing Time. 
  
 6.7 Brokerage
Fees. No Person or other entity acting on behalf of Buyer is entitled to any brokerage or finder’s fee or commission in connection with the transactions contemplated by this Agreement or the Ancillary Agreements. 
  
 6.8 Qualification. Buyer believes that it will qualify as an owner or
transferee, as applicable, of the Franchise and the Permits listed on Schedule 5.11(a) that are to be assigned to Buyer pursuant to this Agreement; provided, however, that nothing in this Section 6.8 shall be construed as
a representation or warranty that the ownership or transfer, as applicable, of the Franchise or any such Permit will actually be approved by the Franchising Authority or any other Governmental Entity. 
  
 6.9 Buyer’s Investigation. Buyer represents that it is a
sophisticated entity that was advised by knowledgeable counsel and financial advisors and hereby acknowledges that it has conducted an investigation of the physical plant of the System which investigation included evaluation of the condition and
performance of such physical plant. Buyer acknowledges that Seller makes no warranty, express or implied, as to the condition of the Acquired Assets except as expressly set forth in (i) this Agreement, (ii) the Ancillary Agreements or (iii) the
instruments 
  

 33 

 or certificates delivered by Seller at the Closing. Buyer has not relied upon, and Seller shall not be liable for or
bound in any manner by, any express or implied verbal or written information, warranties, guarantees, promises, statements, inducements, representations or opinions pertaining to the System or the Acquired Assets, except as may be contained in this
Agreement, the Ancillary Agreements and the instruments and certificates delivered by Seller at the Closing. This representation shall not limit or otherwise affect any of the representations or warranties made by Seller in this Agreement.

  
 ARTICLE VII 
  
 Covenants of Seller 
  
 Except and to the extent Buyer may otherwise permit in writing, Seller
covenants and agrees as follows: 
  
 7.1 Access. Between
the date of this Agreement and the Closing, Seller shall give to Buyer, its officers, agents, employees, counsel, accountants, engineers and other representatives, reasonable access to the premises and books and records relating to the System and,
to the extent permitted by Law, cause Seller’s employees to furnish to Buyer such information related to the System as Buyer shall from time to time reasonably request for the purposes of preparing for the transition of the System to Buyer or
any other reasonable purpose relating to the transactions contemplated by this Agreement; provided, however, that any such investigation shall be conducted (a) during normal business hours and (b) in such a manner as not to interfere with the
operation of the System. Notwithstanding the foregoing, (i) no environmental sampling or other testing may be performed without Seller’s prior written consent, which consent will not be unreasonably withheld, delayed or conditioned, and (ii)
Buyer will not contact any employee, customer or supplier of Seller with respect to this Agreement without the prior written consent of Seller, which consent will not be unreasonably withheld, delayed or conditioned. Buyer acknowledges that any
information made available to Buyer pursuant to this Section 7.1 is subject to the terms of the Non-Disclosure Agreement and Section 8.3. 
  
 7.2 Conduct of Business Pending Closing. Except as contemplated on Schedule 7.2, until the Closing,
Seller shall continue to operate the System and conduct the Business in the ordinary course of business, consistent with past practice or in accordance with the current operating budget for the Business (as disclosed to Buyer). Seller shall use
commercially reasonable efforts to preserve a business relationship with the customers of the Business, Governmental Entities, employees and others having business relations with Seller in connection with the System. Without limiting the generality
of the foregoing, Seller shall: 
  
 (a)
Use, preserve and maintain the System and the other Acquired Assets on a basis consistent with past practice and keep the Acquired Assets, in all material respects, in good working condition, ordinary wear and tear excepted; 
  
 (b) Continue to maintain the insurance covering the Acquired
Assets in effect as of the date of this Agreement; 
  
 (c) Pay all debts and obligations incurred by it in the operation of the System in the ordinary course of business consistent with past practice; 
  

 34 

 (d) Not commit any act or omit to do any act, nor permit any act or omission to act,
which effectuates or may cause an amendment to, or a breach or termination of (excluding any expiration due to the passage of time, in which case Seller shall consult with Buyer and, on Buyer’s reasonable request, Seller shall use its
commercially reasonable efforts to extend the term of any such agreement on terms and conditions reasonably acceptable to Buyer), any of the Material Acquired Contracts; provided that anything in this Agreement notwithstanding, Seller shall be
allowed to review, modify and enter into programming agreements (other than retransmission consent agreements for the carriage of broadcast television station signals) in the ordinary course of business; provided further that anything in this
Agreement notwithstanding, prior to entering into any Contract that would be a Material Acquired Contract hereunder if it were in existence on the date hereof, Seller shall consult with Buyer in advance and provide Buyer with reasonably sufficient
time under the circumstances to provide input as to the substance of such Contract, and, in the event that Seller elects to enter into any such Contract that Buyer does not believe (and Buyer has informed Seller prior to Seller’s execution
thereof that Buyer does not believe) to be in the best interests of the Business, then nothing herein shall prohibit Seller from entering into such Contract, but Seller shall use commercially reasonable efforts to enter into such Contract on a
month-to-month basis; 
  
 (e) Maintain the books,
accounts and records with respect to the Acquired Assets and the System in the usual manner and on a basis consistent with past practice and maintain its accounting practices and policies and the application thereof (except as may be required in
accordance with GAAP (but excluding allocations for accounting, legal, marketing overhead and other corporate overhead); 
  
 (f) Not enter into any agreement or agreements (or discussions regarding any such agreement) for the sale of any of the Acquired Assets,
except for sales of Equipment provided that any item of Equipment sold shall be replaced with an item of Equipment of like value and quality; 
  
 (g) Not decrease any of the rates for customers of the Business; provided, however, that this Agreement shall not preclude Seller from (i)
seeking rate increases proposed by Seller and approved by Buyer (it being understood and agreed that Buyer’s approval will not be unreasonably conditioned, delayed or withheld), or (ii) decreasing rates required by applicable Laws or in
connection with marketing programs proposed by Seller and approved by Buyer (it being understood and agreed that Buyer’s approval will not be unreasonably conditioned, delayed or withheld); 
  
 (h) Bill and collect from customers of the Business on a
basis consistent with past practices and take such other actions in the ordinary course of business as previously conducted to preserve all customers of the Business, including making ordinary marketing, advertising and promotional expenditures;

  
 (i) Promptly inform Buyer in writing of any
event, individually or in the aggregate, that would be reasonably expected to result in a Material Adverse Effect or that would cause any of Seller’s representations and warranties set forth in Article V to be untrue; 
  

 35 

 (j) Maintain Inventory and spare equipment for the System in a manner adequate to support
customer service levels and such Inventory, supplies, spare parts and spare equipment shall be of such quality and quantity as are consistent with Seller’s past practice; 
  
 (k) Maintain capital expenditures in the ordinary course of business and as necessary to comply with the
Franchise and all Material Permits and fulfill installation requests in the ordinary course of business; 
  
 (l) Not create, assume or permit to exist any Lien (including leases and licenses granted by Seller to a Third Party) upon any Acquired
Assets except for Permitted Liens; 
  
 (m)
Continue to engage advertisers of the Business in a manner that is consistent with past practice; 
  
 (n) Not agree or commit to take any action inconsistent with the foregoing; and 
  
 (o) Timely notify Buyer of and, at Buyer’s timely
request discuss, all planned material sales and marketing programs, including without limitation, all new sales offers, discount plans or customer retention plans. 
  
 7.3 Further Assurances. Subject to the terms and conditions of this Agreement, Seller shall use all commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate and make effective the transactions contemplated by this
Agreement, the Ancillary Agreements and the other documents and instruments to be delivered pursuant hereto. 
  
 7.4 Confidentiality. Seller covenants and agrees that it will not make use of or divulge, or permit any of its agents or employees to make use of
or divulge, any Acquired Intellectual Property, except as permitted by the Intellectual Property Agreement, or any Customer Proprietary Information. The obligations contained in this Section 7.4 are in addition to and independent of
the obligations contained in the Non-Disclosure Agreement. Seller covenants and agrees that it shall not retain any Acquired Records in its possession. 
  

7.5 Risk of Loss 
  
 (a) The risk of any loss, damage or impairment, confiscation or condemnation of any of the Acquired Assets from any cause whatsoever,
including, without limitation, any loss or damage to, or impairment of the operations, financial condition or results of operations related to the foregoing, shall be borne by Seller at all times prior to the Closing Time. Seller shall promptly
notify Buyer in the event of any loss, damage or impairment, confiscation or condemnation of any of the Acquired Assets from any cause whatsoever (other than incidental loss incurred and consistent with past experience in connection with conducting
the Business) prior to the Closing Time. Such notice shall report the loss or damage incurred, the cause thereof (if known) and the insurance coverage related thereto. 
  

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 (b) In the event of any damage or destruction of any Acquired Assets prior to the Closing
Time, with respect to which the actual cost to repair or replace such Acquired Assets and to restore the services provided thereby to their levels immediately prior to such event (the “Normal Business Level”) (collectively, the “Total
Losses”) is reasonably estimated to be more than the Basket Amount, and if such Acquired Assets have not been repaired, restored or replaced to their prior condition and the System’s normal and usual operation and the Normal Business Level
have not been resumed by the Closing Date, Buyer may elect at its option: 
  
 (i) to consummate the Closing (assuming all conditions set forth in Articles IX and X have been met or waived by the applicable Party) and complete the restoration and replacement of such damaged
Acquired Assets after the Closing Date, in which event (A) Seller shall deliver to Buyer all insurance proceeds received from a Third Party, if any, received in respect of such Total Losses, to the extent such proceeds were not already expended by
Seller in connection with remedying such Total Losses (such expenditure to be in reasonable and documented amounts) and (B) Seller shall reimburse Buyer for all reasonable and documented expenses and costs relating to the Total Losses, to the extent
not covered by the insurance proceeds from Third Parties remitted in the preceding clause (i); provided that Seller shall not be obligated to pay more than the Basket Amount pursuant to this Section 7.5(b)(i)(B); or 
  
 (ii) to delay the Closing until such Acquired Assets are
repaired or restored to their prior condition and the System’s normal and usual operation and the Normal Business Level is resumed; provided, that in no event may the Closing be delayed pursuant to this Section 7.5(b) beyond the
End Date; and provided, further, that, to the extent such Acquired Assets are not so repaired or restored as of the Closing, Seller shall remit to Buyer the amounts contemplated by clause (i) above. 
  
 The exercise by Buyer of any of its rights, pursuant to clause
(b)(i) and/or (b)(ii) above shall not constitute a waiver of any conditions to Closing or of any other rights or remedies available to Buyer pursuant to this Agreement. 
  
 (c) In the event of any damage or destruction of any
Acquired Assets prior to the Closing Time or any other event with respect to which the cost to repair, restore and cover the Total Losses is reasonably estimated to be less than the Basket Amount, Seller shall promptly take all actions necessary to
repair and restore the Acquired Assets to their prior condition by the Closing Date so as to resume the System’s normal and usual operation and the Normal Business Level; provided, that Seller shall not be obligated to pay more with respect to
such repair or restoration than the sum of (x) the Basket Amount and (y) all insurance proceeds received from a Third Party, if any, in respect of such Total Losses pursuant to this Section 7.5(c). The exercise by Buyer of any of its
rights pursuant to this Section 7.5(c) shall not constitute a waiver of any conditions to Closing or of any other rights or remedies available to Buyer pursuant to this Agreement. 
  

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 7.6 Third-Party Consents. 
  
 (a) Seller shall give all notices to Governmental Entities and any other Person required to be given by it
under the Material Acquired Contracts or otherwise in connection with the transactions contemplated hereby. In order to facilitate the orderly assignment and transfer of all rights and privileges necessary to own and operate the Business, and to
facilitate the securing of all Consents, other than with respect to the New Franchise, Seller shall proceed after the execution of this Agreement to prepare, file and prosecute each request and application therefor together with such information as
may be necessary and appropriate to effect such Consents. Seller shall on a timely basis cooperate and work with Buyer to obtain all other Consents from the appropriate Third Party. Seller shall consult with Buyer and provide Buyer and its agents
with the opportunity to review and comment with respect to all notices, filings, submissions and consent solicitations made in connection with securing any Consents prior to delivery to the Third Party whose consent is sought, and at Buyer’s
reasonable request, Seller shall discuss with such Third Party any suggestions made by Buyer with respect to the substance of any such notices, filings, submissions and consent solicitations. 
  
 (b) Seller shall use its commercially reasonable efforts to
obtain all Consents as expeditiously as possible and, to the extent not obtained by the Closing, Seller shall continue to use its commercially reasonable efforts to obtain such Consents for six months after the Closing. During this six-month time
period and pending or in the absence of any such Consent, the Parties shall cooperate with each other in any reasonable and lawful arrangements to provide to Buyer the benefits and liabilities of use of such Acquired Contract. Without Buyer’s
prior written consent, no such Consent shall (at such time or in the future) impose any additional adverse restrictions or obligations on Buyer, other than as described in Section 8.1, or include any adverse change to the terms or
benefits of the underlying instrument other than immaterial restrictions, obligations or changes. If, notwithstanding their commercially reasonable efforts, Buyer and Seller are unable to obtain such Consents, Seller shall not be liable to Buyer for
breach of the covenants set forth in this Section 7.6 (but Buyer shall have no obligation to effect the Closing unless the condition set forth in Section 10.3 hereof shall have been satisfied or waived). Notwithstanding
anything to the contrary contained in this Agreement, nothing herein shall require Seller to pay any funds (other than its usual or customary attorneys fees, consulting fees, filing fees or other normal costs of doing business) or to give any other
consideration in order to obtain any Consent, provided, however, that Seller shall be solely responsible for and shall pay all fees imposed by a Governmental Entity incurred in connection with obtaining the Consents, other than any fees imposed by
the Franchising Authority or anyone acting on its behalf in connection with the New Franchise which shall be solely the responsibility of Buyer. 
  
 (c) Seller shall use commercially reasonable efforts to cooperate fully with Buyer in Buyer’s efforts to obtain the New Franchise and
will help to arrange and facilitate Buyer’s negotiations with the Franchising Authority or any other Governmental Entity and other Third Parties with respect to the New Franchise. 
  

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 (d) Seller may elect, in its sole discretion, to satisfy any monetary obligation imposed
by a contract party by reducing the Purchase Price by the amount thereof, as determined by the mutual agreement of Buyer and Seller, each acting reasonably (in which case the amount of such monetary obligation shall be paid by Buyer). 
  
 (e) Seller shall, at its sole cost and expense, obtain new
Permits with respect to any railroad crossings necessary for the continued placement of the System’s distribution facilities as in place at Closing (the “Railroad Permits”), which Railroad Permits shall either be on the standard form
used by such railroad or otherwise in form and substance reasonably acceptable to Buyer. 
  
 7.7 Interim Financial Statements. Within 10 days following the date hereof, Seller shall provide Buyer with true, complete and correct copies of the Aging Reports and unaudited balance sheet and statements of
operations for the System for each monthly period between the date of the Financial Statements and the month ending immediately prior to the date of this Agreement. Not later than 15 days after the end of each month following the date hereof and
through and until the Closing, Seller shall prepare and deliver to Buyer an updated Aging Report and unaudited balance sheet and statements of operations for the System, each as of the end of and for each calendar month following the date hereof
(collectively, the “Interim Financial Statements”). Such Interim Financial Statements will be prepared in good faith, consistent with past practice, using reasonable assumptions, but excluding all allocations for accounting, legal,
marketing overhead and other corporate overhead), from the consolidated books and records of account of Seller, which have been prepared in accordance with GAAP and are kept in the normal course of business. The Interim Financial Statements will
fairly and accurately reflect in all material respects the financial position, results of operations, income and cash flows of the System as of such dates and for the periods then ended. 
  
 7.8 Payroll Taxes. For purposes of payroll taxes with respect to all Employees of Seller that become employees of
Buyer, Seller shall not act in a manner inconsistent with Buyer’s treatment of the transactions contemplated hereby as a transaction described in Treasury Regulation Sections 31.3121(a)(1)-I(b)(2) and 31.3306(b)(1)-(1)(b)(2). Seller shall
timely pay all payroll taxes with respect to the Employees relating to all periods prior to the Closing Time. 
  
 7.9 Accounts Receivable. Seller will write off an entire customer account if such customer account contains an Account Receivable which is 61 days
or more past due, with the number of days past due being determined from the due date stated on the bill for which the applicable billing relates (and if no due date is stated then the first day of the period to which such billing relates);
provided, however, that the Seller will not write off an Account Receivable with an amount which is 61 days or more past due if such amount does not relate to Broadcast Basic Service. 
  
 7.10 Lien and Judgment Searches. Seller will obtain, at its expense within 10 days prior to the Closing Date, and
will provide to Buyer (a) the results of a lien search conducted by a professional search company of records in the offices of the Secretary of State of the State of California, and county clerks in each county where there exists any real property
or tangible 
  

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 personal property included in the Assets, and in the State and county where Seller is organized and its principal offices
are located, including true, complete and correct copies of all financing statements or similar notices or filings (and any continuation statements) discovered by such search company and (b) the results of a search of the dockets of the clerk of
each federal and state court sitting in the city, county or other applicable political subdivision where the principal office or any material assets of Seller may be located, with respect to judgments, orders, writs or decrees against or affecting
Seller or any of the Assets. 
  
 7.11 Estoppel
Certificates. Prior to Closing, Seller shall use its commercially reasonable efforts (which in no case shall include the payment of funds, excluding back rental amounts or other payments required to cure a breach or default) to obtain estoppel
certificates for each lease pursuant to which the Leased Real Property is leased in a form reasonably acceptable to Buyer and its lenders. 
  
 7.12 Title Policies. Buyer will have the option to obtain, at its own expense, commitments to issue title insurance policies and surveys. Seller
shall deliver such reasonable affidavits as are required by Buyer’s title company in order to delete the standard printed exceptions relating to mechanics liens and the interests of other parties in possession. 
  
 7.13 Customer Privacy Policies. Prior to Closing, Seller shall deliver
to the customers of the Business a privacy policy governing the collection and use of information by Seller and its Affiliates, which policy shall be in accordance with the Cable Act and the rules and regulations of the FCC. 
  
 7.14 Transition Services Agreement. The Parties agree to enter into
negotiations promptly following the date of this Agreement in order to reach agreement on the form of Transition Services Agreement to be entered into by and between the Parties. The Parties agree to conduct such negotiations in good faith for a
minimum of thirty (30) days in order to reach agreement with respect to terms upon which Seller would provide transition services to Buyer (including the use of Seller’s service marks, billing transition services, website support, answering
service, and other services reasonably requested by Buyer) in order to assist Buyer in connection with the transition of the Business from Seller to Buyer. 
  
 ARTICLE VIII 
  
 Covenants of Buyer 
  
 Except and to the extent Seller may otherwise permit in writing, Buyer covenants and agrees as follows: 
  
 8.1 Third-Party Consents. 
  
 (a) Buyer will pursue the grant of a new franchise from the City of Cerritos, California with such new franchise to have at least a ten
(10) year term and to provide Buyer with substantially the same rights and privileges that Seller enjoys under the Franchise (the “New Franchise”). The Parties acknowledge that the willingness of the Franchising 
  

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 Authority to grant the New Franchise may be contingent upon Buyer (i) meeting certain standards
(including those established or employed by the Franchising Authority as permitted under Section 621(a)(4)(C) of the Communications Act and utilized to assure the Franchising Authority that Buyer has the financial, technical and legal qualifications
to provide cable service) (collectively, the “Standards”), and (ii) providing the Franchise Authority with the Upgrade Commitment and evidence of Buyer’s financing (the “Assurances”). In order to satisfy the Franchise
Authority that Buyer is willing and able to satisfy the Standards and the Assurances, Buyer agrees (x) to make and maintain the Upgrade Commitment and to provide the Franchising Authority with reasonable documentation and information regarding the
same, and (y) to deliver to the Franchising Authority professional biographies and descriptions of experience of the principals of Buyer together with a description of Buyer’s other cable television system operations and a description of
Buyer’s relationship with its equity and debt sources ((x) and (y) collectively being, the “New Franchise Commitments”). If the Franchising Authority determines not to issue the New Franchise, and Buyer has failed to provide or has
withdrawn the New Franchise Commitments, then Seller, upon written notice to Buyer, shall be entitled to terminate this Agreement, whereupon Seller immediately shall be paid the Deposit in full pursuant to Section 11.3(b). Buyer and
Seller agree that the payment of the Deposit, as contemplated in the preceding sentence, constitutes liquidated damages and not a penalty, and has been arrived at between them as a reasonable estimate of actual damages in light of the difficulty of
determining with certainty the actual damages that Seller would suffer by reason of Buyer’s failure to make and maintain the New Franchise Commitments. If Buyer has made and maintained the New Franchise Commitments through the earlier of the
date of determination by the Franchising Authority or the End Date, but the Franchising Authority nonetheless does not grant the New Franchise for any reason or no reason whatsoever, including a determination that Buyer does not satisfy the
Standards and Assurances, then either Party shall have the right to terminate this Agreement without penalty, Seller shall not be entitled to the payment of the Deposit pursuant to this Section 8.1(a), and the Deposit shall be
immediately paid to Buyer. 
  
 (b) Buyer shall
use its commercially reasonable efforts to obtain all Consents as expeditiously as possible and, to the extent not obtained by the Closing, Buyer shall continue to use its commercially reasonable efforts to obtain such Consents for six months after
the Closing. During this six-month time period and pending or in the absence of any such consent, authorization or approval, the Parties shall cooperate with each other in any reasonable and lawful arrangements to provide to Buyer the benefits and
liabilities of the use of such Acquired Contract. Buyer shall use commercially reasonable efforts to satisfy the concerns, if any, of the Franchising Authority or other Governmental Entity or other Third Parties as to Buyer’s ability to perform
pursuant to the New Franchise and the Material Acquired Contracts, excluding any concerns relating to Seller’s operation of the System. If, notwithstanding their commercially reasonable efforts, Buyer and Seller are unable to obtain any
Consent, Buyer shall not be liable to Seller for breach of the covenants set forth in this Section 8.1 (but Seller shall have no obligation to effect the Closing unless the condition set forth in Section 9.3 hereof shall
have been satisfied or waived). 
  
 (c) Buyer
shall cooperate fully with Seller in obtaining any necessary Consents. Buyer shall use its commercially reasonable efforts to attend such meetings as 
  

 41 

 Seller may reasonably request in connection with obtaining the Consents, and Buyer shall provide such
financial information as Third Parties may reasonably request in connection with the review of the requested Consent. Buyer acknowledges that it may need to enter into direct agreements with Governmental Entities or other Third Parties. Buyer shall
bear any and all costs arising with respect to the performance of the New Franchise. 
  
 8.2 Discharge of Assumed Liabilities. From and after the Closing Time, Buyer shall pay, perform and discharge the Assumed Liabilities relating to the System as they become due, including, without limitation,
the discharge and performance when due of each and every obligation of Seller to be satisfied or performed on or after the Closing Time under the Acquired Contracts and which constitutes an Assumed Liability. Buyer shall not, without
Seller’s consent, which shall not be unreasonably withheld, delayed or conditioned by Seller, renew or extend (by action or inaction) any Acquired Contract, other than any Bulk Agreement or Right of Entry Agreement, unless Seller and Verizon
Media Ventures Inc., if applicable, have been released from all of their respective obligations under such Acquired Contract by all parties to such Acquired Contract. 
  
 8.3 Confidentiality. Buyer covenants and agrees that until three years after the date of the Closing, it will not,
directly or indirectly, except in connection with the transactions contemplated hereby or in conducting the business of operating the System as proposed to be conducted by Buyer, or to the extent required by Law, regulatory process or proceeding or
Court Order (provided prior timely notice has been provided to Seller to permit Seller to limit such disclosure or to seek appropriate protective orders), make use of or divulge, or permit any of its agents or employees to make use of or divulge,
nonpublic information concerning the business, financial or other affairs of or any of the methods of doing business used by Seller or any of its Affiliates except as otherwise permitted in the Intellectual Property Agreement as assigned to Buyer
pursuant to the Assignment of Intellectual Property Agreement. The obligations contained in this Section 8.3 are in addition to and independent of the obligations contained in the Non-Disclosure Agreement and in the Intellectual
Property Agreement. Notwithstanding the foregoing, this Section 8.3 shall not restrict Buyer’s use of any Acquired Asset, Buyer’s use of any financial statements relating to the Business prepared by the Buyer’s auditor
or otherwise restrict Buyer’s ability to comply with Federal securities laws. 
  
 8.4 Access. Subject to Section 7.4 and Section 14.2, Seller shall, for a period of three years from the Closing, have access to, and the right to copy, at its expense, for bona fide
business purposes and during usual business hours upon reasonable prior notice to Buyer, all books and records relating to the operation of the System prior to the Closing, to the extent such books and records were transferred to Buyer. Buyer shall
retain and preserve all such books and records for such three year period. Buyer may discard or destroy any such books or records, provided that Buyer shall so notify Seller and allow Seller, within 30 days of such notification, to elect to take
possession of such books and records. 
  
 8.5 Bonds, Letters of
Credit, Etc. Buyer shall use commercially reasonable efforts, and execute and deliver all commercially reasonable documents, to ensure that as of the Closing Time, Buyer has in place the bonds, letters of credit, indemnity agreements and similar
instruments necessary to operate the System. 
  

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 8.6 Further Assurances. Subject to the terms and conditions of this Agreement, Buyer will use all
commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, the Ancillary Agreements and the other documents and instruments to be delivered pursuant hereto. 
  
 8.7 Intellectual Property. Subject to the rights and licenses expressly granted to Buyer pursuant to the Assignment of Intellectual Property
Agreement, Buyer shall promptly return or destroy and shall not use any Intellectual Property, including any Third Party Intellectual Property, Software or Excluded Marks, of which Buyer acquires possession in connection with the Acquired Assets and
which is not Acquired Intellectual Property. 
  
 8.8
Vehicles. Promptly after the Closing, Buyer shall file the appropriate vehicle title applications and registrations to change the name of the titled owner on each vehicle title certificate and change the motor vehicle registration (with
respect to license plate information) on each vehicle being transferred to Buyer from Seller at the Closing pursuant to this Agreement. Buyer agrees that it shall remove and destroy Seller’s existing license plates from all vehicles received
upon the earlier of receipt of new license plates or 60 days following the Closing. Seller shall reasonably cooperate with Buyer and sign vehicle title certificates. 
  
 8.9 Payroll Taxes. For purposes of payroll taxes with respect to all Employees of Seller that become employees of
Buyer, Buyer shall treat the transactions contemplated hereby as a transaction described in Treasury Regulation Sections 31.3121(a)(1)-1(b)(2) and 31.3306(b)(1)-1(b)(2). 
  
 ARTICLE IX 
  
 Conditions to Seller’s Obligations 
  
 The obligation of Seller to consummate the Closing shall be subject to the fulfillment, prior to or at the Closing, of each of the following conditions
unless waived by Seller in writing: 
  
 9.1 Buyer’s
Representations and Warranties. Each representation and warranty made by Buyer in Article VI hereto shall be true, complete and correct in all material respects on and as of the Closing Date (disregarding for such purposes any
qualifications as to “materiality” or “Material Adverse Effect” set forth in such representations and warranties) with the same effect as though each such representation or warranty had been made or given on and as of the Closing
Date, other than (i) representations and warranties made as of a specific date, which shall be true, complete and correct as of such specific date, and (ii) any breach of a representation or warranty that does not materially and adversely impact
Buyer’s ability to consummate the transactions contemplated hereby. 
  
 9.2 Buyer’s Covenants. Buyer shall have performed and complied, in all material respects, with all of the covenants set forth herein which are to be performed or complied with by it before or as of the
Closing Time. 
  

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 9.3 Consents. The Material Consents listed on Schedule 9.3 (the “Required
Consents”) shall have been obtained; provided, that Seller shall not have the benefits of this condition in respect of any Required Consent that is waived by Buyer pursuant to  
 Section 10.3 if the failure to obtain such Required Consent would not result in any material liability to Seller or would not cause Seller to materially
violate any Law. 
  
 9.4 Buyer’s Deliveries. Buyer
shall have executed and delivered to Seller the Buyer Ancillary Agreements and the other documents and items referred to in Article XIII hereof. 
  

9.5 No Proceedings. No action, suit or proceeding shall be pending or threatened by or before any Governmental Entity to enjoin, restrain,
prohibit or obtain substantial damages in respect of the transfer of the System or the Acquired Assets as contemplated by this Agreement or the Ancillary Agreements, or which would prevent or make illegal the consummation of any transactions
contemplated by this Agreement. 
  
 ARTICLE X 
  
 Conditions to Buyer’s Obligations 
  
 The obligation of Buyer to consummate the Closing shall be subject to the
fulfillment, prior to or at the Closing, of each of the following conditions unless waived by Buyer in writing (it being agreed that any such written waiver shall also constitute an irrevocable waiver by Buyer with respect to, and Buyer’s
agreement to hold Seller harmless against, any breach, violation or non-compliance by Seller of all representations, warranties, covenants and agreements of Seller that were the subject of such waived condition): 
  
 10.1 Seller’s Representations and Warranties. Each
representation and warranty made by Seller in Article V hereof shall be true, complete and correct in all respects on and as of the Closing Date (disregarding for such purposes any qualifications as to “materiality” or
“Material Adverse Effect” set forth in such representations or warranties) with the same effect as though each such representation and warranty had been made or given on and as of the Closing Date other than (i) representations and
warranties made as of a specific date, which shall be true, complete and correct as of such specific date, and (ii) any breach of a representation or warranty that individually or in the aggregate has not had, or would or would not reasonably be
expected to have, a Material Adverse Effect (it being agreed that the Parties proceeding to effect the Closing shall not, in the absence of a written waiver by Buyer, constitute a waiver by Buyer with respect to, and shall not reduce or otherwise
affect Seller’s obligations herein to indemnify and hold Buyer harmless against, any such breach of or non-compliance with a representation, warranty, covenant or agreement of Seller. 
  
 10.2 Seller’s Covenants. Seller shall have performed and
complied, in all material respects, with all of the covenants set forth herein which are to be performed by or complied with by it before or as of the Closing Time. 
  
 10.3 Consents. The Required Consents shall have been obtained in form and substance reasonably satisfactory to Buyer.

  

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 10.4 Seller’s Deliveries. Seller shall have executed or shall have caused its Affiliates to
execute, as applicable, and delivered to Buyer the Seller Ancillary Agreements and the other documents referred to in Article XII hereof. 
  

10.5 No Proceedings. No action, suit or proceeding shall be pending or threatened by or before any Governmental Entity to enjoin, restrain,
prohibit or obtain substantial damages in respect of the transfer of the System or the Acquired Assets as contemplated by this Agreement or the Ancillary Agreements, or which would prevent or make illegal the consummation of any transactions
contemplated by this Agreement or the Ancillary Agreements. 
  
 10.6 Statutes, Proceedings, Etc. No statute, rule, regulation, executive order, judgment, decree or injunction shall have been enacted or promulgated from and after the date hereof and no action or proceeding shall have been brought
by the Franchising Authority or other Governmental Entity, or shall be pending which would or would reasonably be expected to (i) prevent Buyer from holding or operating the Acquired Assets to provide multi-channel video services or cable
programming services or (ii) impose material limitations on the ability of Buyer effectively to acquire, hold or operate and conduct the Business. 
  
 10.7 FIRPTA Affidavit. Seller shall have furnished Buyer with a certificate stating that Seller is not a “foreign” person within the
meaning of Section 1445 of the Code, which certificate shall set forth all information required by, and otherwise be executed in accordance with, Treasury Regulation Section 1.1445-2(b)(2). 
  
 10.8 New Franchise. Buyer shall have obtained the New Franchise in
form and substance satisfactory to Buyer. 
  
 10.9 Manhole
Access Agreement. Buyer shall have obtained an assignment of the Manhole Access Agreement as provided on Schedule 10.9. 
  
 10.10 Lease Extension. The Lease for the Leased Property located at 13100 Alondra Boulevard, Suite 104, Cerritos, California, as amended (the
“Headend Lease”) shall be extended in accordance with Schedule 10.10. 
  
 ARTICLE XI 
  
 Closing and
Termination 
  
 11.1 Closing. 
  
 (a) Upon receipt of the Required Consents, Seller shall
designate by written notice to Buyer the date for the closing (the “Closing”) of the sale and transfer of the Acquired Assets and Assumed Liabilities; provided, however, that the date of the Closing must be at least 10 days after the date
of the written notice to Buyer setting the date of the Closing. Subject to the satisfaction or waiver of the conditions set forth in Articles IX and X, the Closing will take place on the date established in accordance
with this Section 11.1(a). The Closing will take place at the offices of Morris, Manning & Martin, LLP, 1600 Atlanta Financial Center, 3343 Peachtree Road, NE, Atlanta, Georgia 30326, at 10:00 a.m. Atlanta, Georgia time on such
date. The date on which the Closing occurs is referred to herein as the “Closing Date.” 
  

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 (b) Seller and Buyer shall meet on the date preceding the Closing Date at the offices of
Seller to conduct a pre-Closing at which all deliveries to be made at the Closing will be reviewed by the parties and placed in escrow. At 11:59 p.m. California time on the date preceding the Closing Date, Seller shall terminate its operation of the
System. At 12:01 a.m. California time (the “Closing Time”) on the Closing Date, Buyer shall commence operation of the System. At 10:00 a.m. on the Closing Date Atlanta, Georgia time: 
  
 (i) all instruments and payments held in escrow shall be
distributed and disbursed to the Parties, and all deliverables required to be delivered under Article XII and XIII shall be delivered; 
  
 (ii) The Escrow Agent shall return the interest, dividends and other amounts earned on the Deposit to Buyer;

  
 (iii) Buyer shall make the payments to, and
on behalf of, Seller as contemplated by Section 4.2(b)(i) and 4.2(b)(ii); 
  
 (iv) The Escrow Agent, on behalf of Buyer and in partial payment of the Cash Payment, shall fund the Post-Closing Escrow by transferring
at the direction of Seller $500,000.00 in immediately available funds from the Deposit to an account designated by the Escrow Agent; and 
  
 (v) contingent upon such matters occurring, the Closing shall be consummated. 
  
 11.2 Termination. This Agreement (and the transactions contemplated
hereby) may not be terminated except as follows: 
  
 (a) Upon the mutual written consent of Seller and Buyer; 
  
 (b) By Seller, upon and effective as of the date of written notice to Buyer, if Seller is not then in material default of any of its representations, warranties or obligations under this Agreement, if Buyer is in
material breach of this Agreement and such breach has not been cured within ten days following the delivery of notice thereof to Buyer; 
  
 (c) By Buyer, upon and effective as of the date of written notice to Seller, if Buyer is not then in material default of any of its
representations, warranties or obligations under this Agreement, if Seller is in material breach of this Agreement and such breach has not been cured within ten days following the delivery of notice thereof to Seller; 
  
 (d) By either party in accordance with and subject to the
terms of Section 8.1(a); or 
  

 46 

 (e) By either Party, if the Closing has not occurred on or before August 15, 2005 (the
“End Date”). 
  
 11.3 Effect of Termination.

  
 (a) Upon the termination of this Agreement in
accordance with Section 11.2 hereof, and except as set forth in  
 Section 11.3(b) below, the
Parties shall be relieved of any further obligations or liability under this Agreement that are the subject of a termination except that in the case of a termination of this Agreement prior to the Closing occurring, only (1) the confidentiality
obligations contained in Section 7.4 (with respect only to confidential information regarding Buyer) and Section 8.3 (with respect only to confidential information regarding Seller), (2) the confidentiality obligations
under the Non-Disclosure Agreement, and (3) the expense allocation provisions under Section 16.1 shall survive such termination; provided, that, nothing herein shall relieve any Party from its obligations for a breach of this Agreement
occurring prior to such termination. 
  
 (b) Upon
termination by Seller pursuant to Sections 8.1(a) and 11.2(d) or any termination pursuant to 11.2(b), Seller shall be entitled to retain the entire Deposit as reimbursement for its out-of-pocket expenses incurred
in connection with this Agreement and the transactions contemplated hereby, and Seller shall be paid the Deposit in accordance with the terms of the Escrow Agreement. Upon any termination by Buyer pursuant to Sections 8.1(a) and
11.2(d) or any termination pursuant to Section 11.2(a), (c), or (e), Buyer shall be entitled to the return of the entire Deposit and all interest, dividends and other amounts earned thereon,
and Buyer shall be paid such amounts in accordance with the terms of the Escrow Agreement. Notwithstanding anything to the contrary set forth in Sections 15.3 or 16.11, the receipt of the Deposit by Seller shall
constitute liquidated damages to Buyer in respect of all claims and shall be the sole and exclusive remedy available to Seller upon a termination under Sections 8.1(a), 11.2(b) or 11.2(d). In the event the
Parties disagree as to whether a proper termination has occurred under Section 11.2, neither Buyer nor Seller will be entitled to the payment of, nor shall the Escrow Agent be obligated to disburse, the Deposit or any interest,
dividends or other amounts earned thereon until the Escrow Agent has received (i) joint written instructions from Buyer and Seller directing the Escrow Agent to disburse all or a portion of the Deposit and any income earned thereon to Buyer or
Seller as the case may be, or (ii) a copy of an arbitrator’s final decision directing the disposition of the Deposit and income thereon. 
  
 (c) Notwithstanding anything to the contrary contained herein, the provisions of this Section 11.3, Article XV
and Article XVI shall survive any termination of this Agreement. 
  

 47 

 ARTICLE XII 
  
 Seller’s Deliveries at Closing 
  
 At the Closing, Seller shall deliver the following to Buyer: 
  
 12.1 Bring-Down Certificate. A bring-down certificate executed by an executive officer of Seller certifying that the conditions specified in
Sections 10.1, 10.2, 10.3 and, to such executive officer’s knowledge after reasonable inquiry, 10.5, have been satisfied. 
  
 12.2 Secretary’s Certificate. A certificate executed on behalf of Seller by Seller’s Secretary or Assistant
Secretary certifying as to the incumbency, and authenticating the signatures of, officers executing this Agreement and certificates delivered hereunder on behalf of Seller, and certifying as to the adoption and continuing effect of appropriate
resolutions authorizing Seller’s execution, delivery and performance of this Agreement and the Ancillary Agreements. 
  
 12.3 Ancillary Agreements. The Seller Ancillary Agreements duly executed by Seller. 
  
 12.4 Seller Non-Compete Agreement. The non-competition agreement duly executed by Seller, Knology, Inc. and Buyer in
substantially the form of Exhibit E (the “Seller Non-Compete Agreement”). 
  
 ARTICLE XIII 
  
 Buyer’s
Deliveries at Closing 
  
 At the Closing, Buyer shall deliver
the following to the Seller: 
  
 13.1 Purchase Price. The
Purchase Price shall be delivered at the Closing in accordance with Section 4.2(b). 
  
 13.2 Bring-Down Certificate. A bring-down certificate executed by an executive officer of Buyer certifying that the conditions specified in
Sections 9.1 and 9.2 and, to such executive officer’s knowledge after reasonable inquiry, Section 9.5, have been satisfied. 
  
 13.3 Secretary’s Certificate. A certificate executed on behalf of Buyer by an authorized signatory of Buyer
certifying as to the incumbency, and authenticating the signatures of, officers executing this Agreement and certificates delivered hereunder on behalf of Buyer, and certifying as to the adoption and continuing effect of appropriate resolutions
authorizing Buyer’s execution, delivery and performance of this Agreement and the Ancillary Agreements. 
  
 13.4 Buyer Ancillary Agreements. The Buyer Ancillary Agreements duly executed by Buyer. 
  
 13.5 Seller Non-Compete Agreement. The Seller Non-Compete Agreement
duly executed by Buyer. 
  

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 ARTICLE XIV 
  
 Tax Matters 
  
 14.1 Filing of Returns. In connection with the preparation and filing of Tax Returns as of and after the Closing Date, Buyer and Seller shall
cooperate and exchange information as reasonably required to accomplish the matters contemplated by this Article XIV. 
  
 14.2 Access to Books and Records. After the Closing Date, upon reasonable notice, and subject to Section 7.4 and Section
8.3 hereof (as applicable to each Party), each Party will give to the representatives, employees, counsel and accountants of the other Party, access, during normal business hours, to records relating to periods prior to or including the
Closing Date, and will permit such persons to examine and copy such records, in each case to the extent reasonably requested by the other Party in connection with and for the purpose of Tax and financial reporting matters, audits, legal proceedings,
governmental investigations and other business purposes relating to the transfer of the System and any Acquired Assets (including such financial information and any receipts evidencing payment of Taxes as may be requested by Seller to substantiate
any claim for Tax credits or refunds); provided, however, that nothing herein will obligate any Party to take actions that would unreasonably disrupt the normal course of its business or violate the terms of any Contract to which it is a party or to
which any of its assets is subject. The Parties agree to maintain any Tax Records for a period of seven (7) years from the Closing Date; and without limiting the foregoing, Buyer agrees to retain and preserve all books and records pertaining to the
operation of the System prior to the Closing Date, to the extent such books and records were transferred to Buyer, for a period of three (3) years after the Closing Date. Buyer may discard or destroy any such books and records, provided that Buyer
shall so notify Seller and allow Seller, within thirty (30) days of such notification, to elect to take possession of such books and records. Seller and Buyer will cooperate with each other in the conduct of any Tax audit or similar proceedings
involving or otherwise relating to the System or the Business (or the income therefrom or assets thereof) with respect to any Tax, and each will execute and deliver such powers of attorney and other documents as are necessary to carry out the intent
of this Section 14.2. and Section 14.3. 
  
 14.3 Indemnification for Taxes. 
  
 (a) In accordance with the provisions of Article III, and subject to Section 14.4 and Section 14.5, Seller agrees to indemnify and hold harmless Buyer, its Affiliates, successors and permitted
assigns from and against any and all Indemnifiable Losses incurred or suffered by Buyer arising from (i) any Taxes (other than Taxes that are Assumed Liabilities) of Seller or its Affiliates or Taxes attributable to the operation of the System or
ownership of the Acquired Assets for all Tax periods (or portions thereof) ending on or prior to the Closing Date, (ii) any breach of the representations contained in Section 5.10(a) or (iii) the failure of Seller to perform any of the
agreements or undertakings made by Seller in this Article XIV. 
  
 (b) In accordance with the provisions of Article III, and subject to Section 14.4 and Section 14.5, Buyer agrees to indemnify and hold harmless Seller, its Affiliates,
successors and permitted assigns from and against any and all Indemnifiable Losses incurred or suffered by Seller arising from (i) any Taxes that are Assumed 
  

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 Liabilities of Buyer or its Affiliates or Taxes attributable to the operation of the System or ownership
of the Acquired Assets for all Tax periods (or portions thereof) ending after the Closing Date, or (ii) the failure of Buyer to perform any of the agreements or undertakings made by Buyer in this Article XIV. 
  
 (c) Any Party seeking indemnification under this
Article XIV (the “Tax Indemnitee”) shall give the other Party (the “Tax Indemnitor”) written notice of any audit, proposed adjustment or assessment, or proceeding by a Tax authority involving Taxes for which the Tax
Indemnitee intends to seek indemnification no later than 20 business days after receipt of notice of such proceeding by the Tax Indemnitee; provided, however, that the failure of the Tax Indemnitee to so notify the Tax Indemnitor shall not preclude
any indemnity hereunder unless and to the extent that such failure has materially and adversely affected the Tax Indemnitor’s contest rights with respect to the proceeding. At its cost, the Tax Indemnitor shall have the right to control and
settle such proceeding; provided, however, that to the extent the Tax Indemnitor is not liable under this Article XIV for the entire amount of the Tax relating to such proceeding, at the Tax Indemnitee’s option, (i) the Tax
Indemnitor shall have the right to control the proceeding at its cost and to settle such proceeding with the written approval of the Tax Indemnitee (which approval shall not be unreasonably withheld), (ii) the Tax Indemnitee shall have the right to
control the proceeding at its cost and to settle such proceeding with the written approval of the Tax Indemnitor (which approval shall not be unreasonably withheld), or (iii) the Tax Indemnitor and Tax Indemnitee shall jointly control and share the
cost and mutually agree on a settlement of such proceeding. 
  
 (d) Neither Party shall be entitled to indemnification relating to Taxes unless the claim for indemnification is asserted in writing within one year following the final determination of (including the expiration of
the time to appeal) any audit examination, investigation or other proceeding relating to the Taxes for which indemnification is sought. 
  
 (e) Notwithstanding anything to the contrary in this Agreement, the obligations imposed by this Article XIV shall survive
until the expiration of 60 days following the expiration of the applicable statute of limitations for assessment and collection of each Tax; provided, however, that in the event that a notice of claim for indemnity pursuant to this Article
XIV is made during such period, indemnity with respect to such claim shall survive until such time as the claim is finally resolved. 
  
 14.4 Transaction Taxes. Notwithstanding any other provision in this Agreement, Seller shall be solely responsible for and shall pay 100% of any
sales, use, stamp, transfer, documentary, registration, business and occupation and other similar taxes (including related penalties (civil or criminal), additions to tax and interest) imposed by any Governmental Entity with respect to the transfer
of the System and any Acquired Assets to Buyer but not including any income, capital gains, gross profits or other similar taxes based on the income or receipts of such Party (“Transaction Taxes”), regardless of whether the Tax authority
seeks to collect such taxes from Seller or Buyer. Seller shall be responsible for administering the payment of such Transaction Taxes. Seller shall give prompt written notice to Buyer of any proposed adjustment or assessment of any Transaction Taxes
with respect to the transactions contemplated hereby and in the Ancillary Agreements. In any proceedings, whether formal or informal, Seller shall permit Buyer to participate in the defense of such proceeding with respect to such Transaction Taxes,
and shall take all actions and execute all documents required to allow such participation. 
  

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 14.5 Tax Prorations. Notwithstanding any other provision in this Agreement, as to the System and
other Acquired Assets acquired by Buyer, Seller and Buyer shall apportion the liability for real and personal property taxes, ad valorem taxes, franchise fees or taxes or other similar periodic Taxes (“Periodic Taxes”) for all Tax periods
including but not beginning or ending on the Closing Date (all such periods of time being hereinafter called “Proration Periods”). The Periodic Taxes described in this Section 14.5 shall be apportioned between Seller and
Buyer as of the Closing Date, with Buyer liable for that portion of the Periodic Taxes equal to the Periodic Tax for the Proration Period multiplied by a fraction, the numerator of which is the number of days remaining in the Proration Period
including and after the Closing Date, and the denominator of which is the total number of days covered by the Proration Period. Seller shall be liable for that portion of the Periodic Taxes for the Proration Period for which Buyer is not liable
under the preceding sentence. Buyer and Seller shall pay or be reimbursed for real and personal property taxes (including instances in which such property taxes have been paid before the Closing Date) on this prorated basis. If a payment on a tax
bill is due after the Closing, the Party that is legally required to make such payment shall make such payment and promptly forward an invoice to the other Party for its pro rata share, if any. If the other Party does not pay the invoice within 30
calendar days of receipt, the amount of such payment shall bear interest at the rate of 6% per annum. The Party responsible for paying a Tax described in this Section 14.5 shall be responsible for administering the payment of (and any
reimbursement for) such Tax. For purposes of this Section 14.5, the Proration Period for ad valorem taxes and real and personal property taxes shall be the fiscal period for which such taxes were assessed by the Tax jurisdiction.

  
 14.6 Tax Refunds. Any Tax refunds (including any
interest related thereto) received by Buyer, its Affiliates or successors relating to Tax periods (or portions thereof) ending on or prior to the Closing Date shall be for the account of Seller, and Buyer shall pay over to Seller any such amount
within 5 business days of receipt thereof. Buyer shall, if Seller so reasonably requests and at Seller’s direction and expense, file or cause its Affiliates to file for and obtain any Tax refunds with respect to Tax periods or portions thereof
ending prior to the Closing Date. 
  
 ARTICLE XV 
  
 Indemnification 
  
 15.1 Survival of Representations, Warranties and Covenants.

  
 (a) All covenants in this Agreement shall
survive the Closing and remain in full force and effect indefinitely (unless any such covenant by its terms terminates as of an earlier date). The representations and warranties contained in Section 5.1, Section 5.2, Section
5.15, Section 6.1, Section 6.2 and Section 6.7 will survive the Closing and remain in full force and effect indefinitely. Except as otherwise provided in this Agreement, each of the other representations and
warranties contained in Article V and Article VI will terminate, without further action, on the date which is 18 months following the Closing Date except for Sections 5.10(a) and 5.14, which
representations and warranties shall continue until expiration of their respective statutes of limitations (the “Expiration Date”). 
  

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 (b) This Article XV will survive any termination of this Agreement and the
indemnification contained in this Article XV will survive the Closing and shall remain in effect: 
  
 (i) indefinitely, with respect to any indemnifiable claim related to the breach of any covenant or the breach of any representation or
warranty which pursuant to Section 15.1(a) survives indefinitely, 
  
 (ii) indefinitely, with respect to any indemnifiable claim arising under or related to Indemnifiable Losses pursuant to Sections
15.2(a)(iii) or pursuant to Sections 15.2(b)(iii); and 
  
 (iii) until the Expiration Date for any indemnifiable claims that are not specified in any of the preceding clauses. 
  
 Unless a claim for indemnification with respect to any alleged breach of any representation or warranty is asserted by notice given as herein provided
that identifies a particular breach and the underlying facts relating thereto, which notice is given within the applicable period of survival for such representation or warranty, such claim may not be pursued and is irrevocably waived after such
time. Without limiting the generality or effect of the foregoing sentence, no claim for indemnification with respect to any representation or warranty will be deemed to have been properly made except (i) to the extent it is based upon a Third Party
Claim, such indemnification claim is made or brought prior to the expiration of the survival period for such representation or warranty, or (ii) to the extent based on Indemnifiable Losses incurred by an Indemnitee, such indemnification claim is
made or brought prior to the expiration of the survival period for such representation or warranty. For purposes of clarity, claims asserted in writing before the applicable period of survival for such representation or warranty terminates shall be
deemed timely made regardless of whether litigation or arbitration proceedings are commenced by such date. Notwithstanding anything to the contrary in this Agreement, if either party makes a claim for indemnification in writing and in accordance
with the terms of this Agreement with respect to any alleged breach under Section 15.2(a)(i) or Section 15.2(b)(i) prior to the Expiration Date as provided by Section 15.1(a), the indemnification contained
in this Article XV with respect to such claim shall remain in effect for so long as the Indemnitee suffers Indemnifiable Losses as the result of such claim. 
  
 15.2 Indemnification. 
  
 (a) Following the Closing, and subject to the other sections of this Article XV, Seller will indemnify, defend and hold
harmless Buyer and its Affiliates and their respective directors, officers, and agents from and against all Indemnifiable Losses, relating to, resulting from or arising out of: 
  
 (i) any inaccuracy in or breach of any of the representations and warranties made by Seller in Article
V of this Agreement or any Seller Ancillary Agreement; 
  

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 (ii) a breach by Seller of any covenant or agreement of Seller contained in this
Agreement or any Seller Ancillary Agreement; and 
  
 (iii) any of the Excluded Liabilities. 
  
 (b) Following the Closing, and subject to the other sections of this Article XV, Buyer will indemnify, defend and hold harmless Seller and its Affiliates and their respective directors, officers and agents from and against all
Indemnifiable Losses relating to, resulting from or arising out of: 
  
 (i) any inaccuracy in or breach of any of the representations or warranties made by Buyer in Article VI of this Agreement or any Buyer Ancillary Agreement; 
  
 (ii) a breach by Buyer of any covenant or agreement of Buyer
contained in this Agreement or any Buyer Ancillary Agreement; and 
  
 (iii) any of the Assumed Liabilities. 
  
 (c) Payments made under Article XIV or this Section 15.2 shall be treated by Buyer and Seller as purchase price adjustments and Buyer and Seller shall file all Tax Returns consistent with
such treatment. Notwithstanding anything to the contrary contained herein, Buyer and Seller shall not be indemnified or reimbursed for any Tax consequences arising from the receipt or accrual of an indemnity payment hereunder including any Tax
consequences arising from adjustments to the basis of any asset resulting from an adjustment to the Purchase Price, or any additional or reduced Taxes resulting from any such basis adjustment. As between Buyer and Seller, upon the settlement or
resolution of any claim for indemnification by Buyer while the Post-Closing Escrow remains held by the Escrow Agent, Buyer and Seller agree to provide joint written instructions to the Escrow Agent regarding the disbursement of funds to the
applicable Party, all in accordance with the Escrow Agreement. 
  
 15.3 Limitations on Liability. 
  
 (a) For purposes of this Agreement: 
  
 (i) “Indemnification Payment” means any amount of Indemnifiable Losses required to be paid pursuant to this Agreement, 
  
 (ii) “Indemnitee” means any Person or entity entitled to indemnification under this Agreement, provided, however, that any claim
for a pre-Closing breach by Seller of a covenant or an agreement contained in this Agreement must be brought by Buyer within 18 months after the Closing Date; and 
  

 53 

 (iii) “Indemnifying Party” means any Person or entity required to provide
indemnification under this Agreement, and 
  
 (iv) “Indemnifiable Losses” means any losses, liabilities, damages, costs, assessments, fines, interest, penalties, deficiencies and other obligations and expenses (including reasonable out-of-pocket attorneys’ fees and
expenses) actually incurred in connection with any actual or threatened (provided that any such threats are in writing) actions, suits, demands, assessments, judgments and settlements, in any such case (x) reduced by the amount of insurance proceeds
actually recovered from any Person or entity with respect thereto and (y) excluding any such losses, liabilities, damages, costs and expenses to the extent that the underlying liability or obligation is the result of the gross negligence or willful
misconduct of the Indemnitee. 
  
 (b) As between
Seller and any Affiliate of Seller, on the one hand, and Buyer and any Affiliate of Buyer, on the other hand, the remedies, rights and obligations set forth in this Article XV, Section 14.3 (Indemnification for Taxes),
and Sections 11.2 and 11.3 (Termination) will be the exclusive remedies, rights and obligations with respect to the liabilities and obligations referred to in Section 15.2(a)(i) and 15.2(b)(i)
and any breach of the representations or warranties set forth in this Agreement or the Ancillary Agreements, except with respect to matters of fraud. Without limiting the foregoing, as a material inducement to entering into this Agreement, to the
fullest extent permitted by Law, each of the Parties waives any claim or cause of action that it otherwise might assert, and any breach of the representations or warranties set forth in this Agreement or the Ancillary Agreements, except for claims
or causes of action brought under and subject to the terms and conditions of this Article XV, Section 14.3 (Indemnification for Taxes), and Sections 11.2 and 11.3 (Termination). 
  
 (c) Except as provided by Section 15.7,
notwithstanding any other provision of this Agreement or of any applicable Law, no Indemnitee will be entitled to indemnification for a claim against an Indemnifying Party for any Indemnifiable Losses arising out of or relating to any inaccuracy of
representations or warranties under Sections 15.2(a)(i) or 15.2(b)(i) until the aggregate amount of Indemnifiable Losses incurred by such Indemnitee exceeds $100,000 (all amounts up to and including such amount, the
“Basket Amount”); provided however, that in the event the aggregate amount of Indemnifiable Losses incurred by such Indemnitee exceeds the Basket Amount, then the Indemnifying Party shall not be liable for the Basket Amount but shall be
liable for the Indemnifiable Losses incurred by such Indemnitee that exceed the Basket Amount but subject to Section 15.3(d). 
  
 (d) Notwithstanding any other provision of this Agreement, the indemnification obligations of Seller under Section
15.2(a)(i) or the indemnification obligation of Buyer under Section 15.2(b)(i) will not exceed an amount equal to 50% of the Purchase Price, respectively (the “Cap Limitation”); provided, however, Seller’s
indemnification obligations under Section 15.2(a)(i) as they relate to Seller’s representation of holding good and marketable title to the Acquired Assets pursuant to the third sentence of Section 5.6 shall be
limited to 100% of the Purchase Price. Either Party shall be obligated to provide indemnification for all Indemnifiable Losses that may be asserted pursuant to Sections 15.2(a)(ii), 15.2(a)(iii), 15.2(b)(ii)
and 15.2(b)(iii), as applicable. 
  

 54 

 (e) No Indemnifying Party shall be liable to or obligated to indemnify any Indemnitee
hereunder for any punitive or exemplary damages, or any consequential, special or multiple damages, except to the extent such damages have been recovered by a third person (including a Governmental Entity) and are the subject of a Third Party Claim
for which indemnification is available under this Article XV. 
  
 (f) Seller and Buyer shall cooperate with each other with respect to resolving any claim or liability with respect to which one Party is obligated to indemnify the other Party hereunder, including by making
commercially reasonable efforts to mitigate or resolve any such claim or liability. 
  
 15.4 Defense of Claims. 
  
 (a) If any Indemnitee receives notice of the assertion of any claim or of the commencement of any action or proceeding by any Third Party (a “Third Party Claim”) against such Indemnitee, with respect to
which an Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnitee will give such Indemnifying Party reasonably prompt written notice thereof, but in any event not later than ten (10) calendar days after receipt
of notice of such Third Party Claim; provided, however, that the failure of the Indemnitee to so notify the Indemnifying Party shall only relieve the Indemnifying Party from its obligation to indemnify the Indemnitee pursuant to this Article
XV to the extent that the Indemnifying Party is materially prejudiced by such failure (whether as a result of the forfeiture of substantive rights or defenses or otherwise). Upon receipt of notification of a Third Party Claim, the
Indemnifying Party shall be entitled, upon written notice to the Indemnitee, to assume the investigation and defense thereof; provided, however, that the Indemnifying Party shall not have the right to control the defense unless and
until the Indemnifying Party agrees in writing to indemnify the Indemnitee with respect to such Third Party Claim, subject to the applicable limitations set forth herein. Whether or not the Indemnifying Party elects to assume the investigation and
defense of any Third Party Claim, the Indemnitee shall have the right to employ separate counsel and to participate in the investigation and defense thereof; provided, however, that the Indemnitee shall pay the fees and disbursements of such
separate counsel unless (i) the employment of such separate counsel has been specifically authorized in writing by the Indemnifying Party, (ii) the Indemnifying Party has failed to assume the defense of such Third Party Claim within a reasonable
time after receipt of notice thereof, or (iii) the named parties to the proceeding in which such claim, demand, action or cause of action has been asserted include both the Indemnifying Party and such Indemnitee and, in the reasonable judgment of
counsel to such Indemnitee, there exists one or more defenses that may be available to the Indemnitee that are not available to or are in conflict with those available to the Indemnifying Party. Notwithstanding the foregoing, the Indemnifying Party
shall not be liable for the fees and disbursements of more than one counsel for all Indemnified Parties in connection with any one proceeding or any similar or related proceedings arising from the same general allegations or circumstances. Without
the prior written consent of the Indemnitee, the 
  

 55 

 Indemnifying Party will not enter into any settlement of any Third Party Claim that would lead to
liability or create any financial or other obligation on the part of the Indemnitee unless such settlement includes as an unconditional term thereof the release of the Indemnitee from all liability in respect of such Third Party Claim. If a
settlement offer solely for money damages is made by the applicable third party claimant (which offer provides for a full and unconditional release of the Indemnitee), and the Indemnifying Party notifies the Indemnitee in writing of the Indemnifying
Party’s willingness to accept the settlement offer and pay the amount called for by such offer without reservation of any rights or defenses against the Indemnitee, the Indemnitee may continue to contest such claim, free of any participation by
the Indemnifying Party, and the amount of any ultimate liability with respect to such Third Party Claim that the Indemnifying Party has an obligation to pay hereunder shall be limited to the lesser of (A) the amount of the settlement offer that the
Indemnitee declined to accept plus the Indemnifiable Losses of the Indemnitee relating to such Third Party Claim through the date of its rejection of the settlement offer or (B) the aggregate Indemnifiable Losses of the Indemnitee with respect to
such claim. 
  
 (b) Any claim by an Indemnitee on
account of an Indemnifiable Loss that does not result from a Third Party Claim will be asserted by giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 calendar days after the incurrence thereof,
provided, however, that the failure of the Indemnitee to notify the Indemnifying Party shall only relieve the Indemnifying Party from its obligation to indemnify the Indemnitee pursuant to this Article XV to the extent that the
Indemnifying Party is materially prejudiced by such failure (whether as a result of the forfeiture of substantive rights or defenses or otherwise). The Indemnifying Party will have a period of 30 calendar days within which to respond in writing to
such claim. If the Indemnifying Party does not so respond within such thirty (30) calendar day period, the Indemnifying Party will be deemed to have rejected such claim, in which event the Indemnitee will be free to pursue such remedies as may be
available to the Indemnitee on the terms and subject to the provisions of this Article XV. 
  
 (c) If, after the making of any Indemnification Payment, the amount of the Indemnifiable Loss to which such payment relates is reduced by
actual recovery, settlement or otherwise under any insurance coverage, or pursuant to any claim, recovery, settlement or payment by or against any other entity, the amount of such reduction (less any costs, expenses, premiums or Taxes incurred in
connection therewith) will promptly be repaid by the Indemnitee to the Indemnifying Party. Upon making any Indemnification Payment, the Indemnifying Party will, to the extent of such Indemnification Payment, be subrogated to all rights of the
Indemnitee against any third party that is not an Affiliate of the Indemnitee in respect of the Indemnifiable Loss to which the Indemnification Payment relates; provided that (i) the Indemnifying Party shall then be in compliance with its
obligations under this Agreement in respect of such Indemnifiable Loss, and (ii) until the Indemnitee recovers full payment of its Indemnifiable Loss, all claims of the Indemnifying Party against any such third party on account of said
Indemnification Payment will be subrogated and subordinated in right of payment to the Indemnitee’s rights against such third party. Without limiting the generality or effect of any other provision of this Article XV, each such
Indemnitee and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above-described subrogation and subordination rights. 
  

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 (d) The Indemnifying Party shall, upon presentation of appropriate invoices containing
reasonable detail, reimburse the Indemnitee for all expenses incurred in connection with any Third Party Claim, as such expenses are incurred by such Indemnitee; provided, however, that such expenses shall be refunded to the extent that such
expenses arose primarily from the gross negligence, bad faith or willful misconduct of such Indemnitee. 
  
 15.5 No Indemnifiable Claims Resulting From Governmental Entity Action. Buyer has no indemnifiable or otherwise compensable claim that any of
Seller’s representations or warranties in Article V is inaccurate, or that any covenant or agreement has been breached, if such claim is predicated on any new Law or any action or order enacted or taken by a Governmental Entity
after the Closing and that is effective retroactively for periods of time prior to the Closing; provided that Seller had no Knowledge of such Law, action or order prior to the Closing. 
  
 15.6 Infringement. 
  
 (a) Notwithstanding anything in this Agreement to the contrary, Seller shall have no obligation to defend, indemnify or hold harmless
Buyer or any of its Affiliates from damages, costs or expenses resulting from any obligation, suit or proceeding based upon any claim that any activity subsequent to the Closing Time engaged in by Buyer, a customer of Buyer’s or anyone claiming
under Buyer constitutes direct or contributory infringement, misuse or misappropriation of or inducement to infringe any Third Party Intellectual Property. 
  
 (b) Buyer shall defend, indemnify and hold harmless Seller and any of its Affiliates from and against any and all Indemnifiable Losses
resulting from any obligation, proceeding or suit based upon any claim alleging or asserting direct or contributory infringement, misuse or misappropriation of or inducement to infringe by, Seller or any of its Affiliates of any Third Party
Intellectual Property to the extent that such claim is based on, or would not have arisen but for, activity conducted or engaged in subsequent to the Closing Time by Buyer, a customer of Buyer’s or anyone claiming under Buyer. 
  
 15.7 Inapplicability to Taxes. This Article XV shall not
apply with respect to Tax matters, including indemnification of the Parties for Taxes, which liability shall be governed by Article XIV hereof. 
  
 ARTICLE XVI 
  
 Miscellaneous 
  
 16.1 Expenses. Except as otherwise expressly provided for elsewhere in this Agreement, each Party hereto shall pay its own expenses and costs relating to the negotiation, execution and performance of this
Agreement. Except as provided in Section 7.6 and Section 8.1, Seller and Buyer shall each bear all of its cost and expense incurred in securing the appropriate Consents in respect of the assignment of the Acquired
Contracts. 
  

 57 

 16.2 Governing Law. This Agreement shall be governed by the Laws of the State of Delaware
regardless of the Laws that might otherwise govern under applicable conflicts of law principles. Buyer and Seller irrevocably submit to the exclusive jurisdiction of any Delaware state court and any United States Federal court located in Delaware
(collectively the “Delaware Courts”) for the purposes of any suit, action or other proceeding arising out of this Agreement or any of the Ancillary Agreements or any transaction contemplated hereby or thereby. Buyer and Seller further
agree that service of any process, summons or notice at the addresses set forth in  
 Section 16.3 shall be effective service of
process for any action, suit or proceeding in Delaware with respect to any matters to which they have submitted to jurisdiction as set forth above. Buyer and Seller irrevocably and unconditionally waive any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or any of the Ancillary Agreements or the transactions contemplated hereby or thereby in the Delaware Courts and hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Except to the extent required to enforce any order (including any order for injunctive relief, award or judgment of
or by the Delaware Courts), Buyer and Seller agree not to pursue any legal action against the other Party in respect of the transactions contemplated hereby or by the Ancillary Agreements or in any manner related thereto other than in the Delaware
Courts. 
  
 16.3 Notices. All notices, requests, demands
and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) when personally delivered by hand, by overnight courier (such as FedEx) or transmitted by facsimile or (ii) five days after having been mailed,
certified or registered mail, with postage prepaid addressed as follows (or to such other person or address as the Party to receive such notice may have designated from time to time by notice in writing pursuant hereto): 
  

			
	If to Seller:	    	  
 Knology Broadband of California, Inc.
 1241 O.G. Skinner Drive
 West Point, Georgia 31833
 Attn: General Counsel
 Fax Number: (706) 645-0148

		
	With a copy to:	    	  
 Morris, Manning & Martin, LLP
 3343 Peachtree Road, N.E.
 1600 Atlanta Financial Center
 Atlanta, Georgia 30326
 Attn: Terresa R. Tarpley, Esq.
 Fax Number: (404) 365-9532

  

 58 

			
	If to Buyer:	    	  
 WaveDivision Holdings, LLC
 401 Kirkland Park Place, Suite 410
 Kirkland, WA 98033
 Attention: Steven Weed, Chief Executive Officer
 Facsimile No.: (425)
576-8221

	With a copy to:	    	  
 Cairncross & Hempelmann, P.S.
 524 Second Avenue, Suite 500
 Seattle, WA 98104
 Attention: James A. Penney, Esq.
 Facsimile No.: (206)
587-2308

	and a copy to:	    	  
 Sandler Capital Management
 767 Fifth Avenue, 45th Floor
 New York, NY 10153
 Attention: William A. Bianco, Esq.
 Facsimile No.: (212)
826-0280

  
 16.4 Definition of
Agreement. Unless the context clearly otherwise requires, as used herein, the term “Agreement” means this Agreement and the Schedules and Exhibits hereto. The words “herein”, “hereof” and “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, paragraph or other subdivision. 
  
 16.5 Headings, Gender. The headings to Articles and Sections of this Agreement are for reference only and shall not be used in construing or
interpreting the provisions hereof or otherwise affect the meaning hereof. The use of the neuter pronoun “it” shall also refer to, as appropriate, the masculine and/or feminine gender. The use of the singular herein shall, where
appropriate, be deemed to include the plural and vice versa. 
  
 16.6 Counterparts; Third Party Beneficiaries. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. No provision
of this Agreement, other than as expressly provided in the indemnification provisions of Articles XIV and XV, is intended to (i) confer upon any Person other than the Parties hereto and their successors and permitted
assigns, any rights or remedies hereunder, (ii) relieve or discharge the obligation or liability of any third party or (iii) give any third party any right of subrogation or action against Seller or Buyer. 
  
 16.7 Modifications. Any modification, amendment or waiver of or with
respect to any provision of this Agreement or any agreement, instrument or document delivered pursuant hereto shall not be effective unless it shall be in writing and signed by Seller and Buyer and shall designate specifically the terms and
provisions so modified. 
  
 16.8 Schedules. Any matter
disclosed on any Schedule hereto shall be deemed to be disclosed on any other Schedule hereto to which such matter, on its face, clearly applies. 
  

 59 

 16.9 Assignment and Binding Effect. This Agreement shall be binding upon and inure to the benefit
of the Parties hereto and their respective successors and permitted assigns, but (except as provided for in this Section 16.9) neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any
Party without the prior written consent of the others. Notwithstanding the previous sentence, any Party may assign this Agreement or any Ancillary Agreement, or any interest herein or therein, (a) in connection with a change of control, merger or
reorganization of such Party or a sale of all or substantially all of such Party’s stock, membership interests or assets or (b) to any Affiliate of such Party, provided that the assignee of such Party agrees in writing to be bound by the
provisions of this Agreement. For the sake of clarity, and without limitation, Buyer and its permitted transferees may transfer the obligation to purchase the System and any Ancillary Agreement to any subsidiary of Buyer, provided that such
transferee agrees in writing to be bound by the provisions of this Agreement and any applicable Ancillary Agreement. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto, their
respective successors and assigns. 
  
 16.10 Public
Announcements. Except for communications by Seller to customers of the Business, and subject to Section 7.6, Seller and Buyer will consult with each other before issuing or prior to the issuance by any Affiliate of, and will
provide each other the opportunity to review and comment upon, any press release or other public statements (or relevant portions thereof) relating to the transactions contemplated by this Agreement and shall not issue, and shall ensure that their
respective Affiliates shall not issue, any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any
national securities exchange. The obligations contained in this Section 16.10 shall be the exclusive obligations of the Parties with respect to the confidentiality of the terms and conditions of this Agreement and such matters shall
not be subject to the Non-Disclosure Agreement (which shall otherwise remain in full force and effect). 
  
 16.11 Right to Specific Performance. The Parties acknowledge that the unique nature of the transactions contemplated by this Agreement may render
money damages an inadequate remedy for the breach by either Party of its obligations under this Agreement, provided that Seller acknowledges that Buyer’s forfeiture of the Deposit to Seller under the terms of Section 11.3 shall
constitute liquidated damages and Buyer’s forfeiture of the Deposit to Seller shall be Seller’s sole remedy. Each Party agrees that in the event of such breach, (i) the non-breaching Party may, upon proper action instituted by it, be
entitled to seek a decree of specific performance of this Agreement, and (ii) such rights are cumulative and in addition to any other remedy to which the Parties may be entitled at law or equity. 
  
 16.12 Bulk Sales Laws. Buyer and Seller waive compliance with
applicable Laws under any version of Article 6 of the Uniform Commercial Code adopted by any state or any similar Law relating to the sale of inventory, equipment or other assets in bulk in connection with the sale of the System. 
  

 60 

 ARTICLE XVII 
  
 Employee Matters 
  
 17.1 Buyer’s Offers. Prior to the Closing, Buyer may (but shall not be obligated to) make written offers of employment (which offers shall be
contingent upon and effective only as of the Closing) to Employees on such terms and conditions as may be determined by Buyer in its sole discretion; provided, however, that Buyer shall not make offers to the Employees or other
Persons, if any, who are specifically designated as “excluded Employees” on Schedule 5.13(d), and provided further, however, that without Seller’s prior written consent, Buyer shall not make any such
offer less than fifteen (15) days prior to Closing to any Employee to whom Buyer had not previously made an offer of employment pursuant to this Section 17.1. Nothing in this Agreement shall create, or shall be construed to create, an
obligation on behalf of Buyer to hire any Employee or an obligation of Seller to continue to employ an Employee from the date of this Agreement until the Closing, and no Employee shall be a third party beneficiary of this Agreement. 
  
 17.2 Employment Status. Buyer shall have no obligation with respect to
Employees who are not hired by Buyer as contemplated by Section 17.1, it being acknowledged and agreed that Seller may, in its discretion, continue to employ such Employees as of and after the Closing Date. 
  
 [Remainder of page intentionally left blank. Signature page follows.]

  

 61 

 IN WITNESS WHEREOF, the Parties, acting through their duly authorized representatives, have executed this
Agreement as of the date first above written. 
  

			
	KNOLOGY BROADBAND OF CALIFORNIA, INC.
		
	By:	 	 /s/ Rodger L. Johnson

	Name:	 	Rodger L. Johnson
	Title:	 	President & CEO
	
	WAVEDIVISION HOLDINGS, LLC
		
	By:	 	 /s/ Steve B. Weed

	Name:	 	Steve B. Weed
	Title:	 	CEO

  
 Knology, Inc.
hereby joins in this Agreement for the limited purpose of guaranteeing payment when due by Seller of amounts agreed by Seller, or finally determined, to be due from Seller pursuant to (a) Seller’s obligations, if any, to make payments as
adjustments to the Purchase Price upon the terms and conditions set forth in Section 4.4, (b) Seller’s indemnification obligations contained in Section 15.2 upon the terms and conditions set forth therein, and (c)
Seller’s obligations, if any, under Section 11.3 upon termination of this Agreement. 
  

			
	KNOLOGY, INC.
		
	By:	 	 /s / Rodger L. Johnson

	Name:	 	Rodger L. Johnson
	Title:	 	President & CEO

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