Document:

Exhibit 10.1

 

INTEREST
ACQUISITION AGREEMENT

 

BY
AND AMONG

 

ML
MEDIA PARTNERS, L.P.,

 

CENTURY
COMMUNICATIONS CORPORATION,

 

CENTURY
ML CABLE VENTURE,

 

CENTURY
ML CABLE CORP.

 

 

AND

 

 

SAN
JUAN CABLE, LLC,

AS
BUYER

 

 

 

Dated
as of

 

 

June 3,
2005

 

 

TABLE
OF CONTENTS

 

	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
  1.1

  	
  Certain Definitions

  	
   

  
	
   

  	
  1.2

  	
  Additional Defined Terms

  	
   

  
	
  2.

  	
  PURCHASE AND SALE OF ACQUIRED INTERESTS

  	
   

  
	
   

  	
  2.1

  	
  Transfer of
  Acquired Interests

  	
   

  
	
   

  	
  2.2

  	
  Transferred
  Assets

  	
   

  
	
   

  	
  2.3

  	
  Excluded
  Liabilities

  	
   

  
	
  3.

  	
  CLOSING; PURCHASE PRICE; ADJUSTMENTS

  	
   

  
	
   

  	
  3.1

  	
  Closing
  Date and Location

  	
   

  
	
   

  	
  3.2

  	
  Purchase
  Price; Payment of the Purchase Price

  	
   

  
	
   

  	
  3.3

  	
  Purchase
  Price Adjustments.

  	
   

  
	
   

  	
  3.4

  	
  Determination
  of Purchase Price Adjustments

  	
   

  
	
  4.

  	
  REPRESENTATION AND WARRANTIES REGARDING THE COMPANIES

  	
   

  
	
   

  	
  4.1

  	
  Existence;
  Good Standing and Power; Capitalization.

  	
   

  
	
   

  	
  4.2

  	
  Authorization, Company Required Consents.

  	
   

  
	
   

  	
  4.3

  	
  Financial Statements; Indebtedness; Budget;
  Absence of Changes.

  	
   

  
	
   

  	
  4.4

  	
  Cable Venture and Cable Corp. Assets

  	
   

  
	
   

  	
  4.5

  	
  The
  Systems.

  	
   

  
	
   

  	
  4.6

  	
  Franchises.

  	
   

  
	
   

  	
  4.7

  	
  Pole Attachment Agreements

  	
   

  
	
   

  	
  4.8

  	
  Real Property.

  	
   

  
	
   

  	
  4.9

  	
  Material Contracts

  	
   

  
	
   

  	
  4.10

  	
  Employees.

  	
   

  
	
   

  	
  4.11

  	
  Litigation and Judgments

  	
   

  
	
   

  	
  4.12

  	
  Tax Returns and Payments of Taxes

  	
   

  
	
   

  	
  4.13

  	
  Compliance with Laws

  	
   

  
	
   

  	
  4.14

  	
  Insurance

  	
   

  
	
   

  	
  4.15

  	
  Environmental Matters

  	
   

  
	
   

  	
  4.16

  	
  Affiliate Transactions

  	
   

  
	
   

  	
  4.17

  	
  Intellectual Property

  	
   

  
	
   

  	
  4.18

  	
  Brokers’ Fees

  	
   

  
	
  5.

  	
  REPRESENTATIONS OF ML MEDIA AND CENTURY

  	
   

  
	
   

  	
  5.1

  	
  Representations and Warranties of ML Media

  	
   

  
	
   

  	
  5.2

  	
  Representations and Warranties of Century

  	
   

  
	
  6.

  	
  REPRESENTATIONS AND WARRANTIES OF BUYER

  	
   

  
	
   

  	
  6.1

  	
  Existence

  	
   

  
	
   

  	
  6.2

  	
  Authorization; No Conflicts

  	
   

  
	
   

  	
  6.3

  	
  Litigation

  	
   

  
	
   

  	
  6.4

  	
  Financing

  	
   

  
	
  7.

  	
  ADDITIONAL COVENANTS

  	
   

  
	
   

  	
  7.1

  	
  Confidentiality.

  	
   

  
	
   

  	
  7.2

  	
  Notification

  	
   

  
	
   

  	
  7.3

  	
  HSR Act Compliance

  	
   

  

 

i

 

	
   

  	
  7.4

  	
  Required Consents.

  	
   

  
	
   

  	
  7.5

  	
  Tax
  Matters.

  	
   

  
	
   

  	
  7.6

  	
  Non-Solicitation

  	
   

  
	
   

  	
  7.7

  	
  Further Assurances; Satisfaction of
  Covenants, etc.

  	
   

  
	
   

  	
  7.8

  	
  Change of Business Name

  	
   

  
	
   

  	
  7.9

  	
  Insurance

  	
   

  
	
   

  	
  7.10

  	
  Full
  Access

  	
   

  
	
   

  	
  7.11

  	
  Bankruptcy Process.

  	
   

  
	
   

  	
  7.12

  	
  Continuity and Maintenance of Operations

  	
   

  
	
   

  	
  7.13

  	
  Completion of the Rebuild of the San Juan
  System.

  	
   

  
	
   

  	
  7.14

  	
  Risk of Loss

  	
   

  
	
   

  	
  7.15

  	
  Additional
  Covenants Regarding the Companies

  	
   

  
	
   

  	
  7.16

  	
  Non-Solicitation; No Competitive Use of Confidential Information

  	
   

  
	
   

  	
  7.17

  	
  Further Action Regarding Financial Statements

  	
   

  
	
   

  	
  7.18

  	
  Financing

  	
   

  
	
   

  	
  7.19

  	
  Intercompany
  Liabilities

  	
   

  
	
   

  	
  7.20

  	
  Sale of ML Media’s Joint Venture Interests

  	
   

  
	
   

  	
  7.21

  	
  Release of Obligations Under Letters of Credit

  	
   

  
	
   

  	
  7.22

  	
  Stand-Alone

  	
   

  
	
   

  	
  7.23

  	
  Publicity

  	
   

  
	
  8.

  	
  CONDITIONS PRECEDENT TO THE PARTIES’
  OBLIGATIONS

  	
   

  
	
   

  	
  8.1

  	
  Consents
  from Governmental Authorities

  	
   

  
	
   

  	
  8.2

  	
  Judgments

  	
   

  
	
   

  	
  8.3

  	
  Confirmation Order

  	
   

  
	
  9.

  	
  CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS

  	
   

  
	
   

  	
  9.1

  	
  Representations and Warranties of Companies and Sellers

  	
   

  
	
   

  	
  9.2

  	
  Covenants

  	
   

  
	
   

  	
  9.3

  	
  Material Consents

  	
   

  
	
   

  	
  9.4

  	
  Delivery of Certificates and Documents

  	
   

  
	
   

  	
  9.5

  	
  Escrow Agreement

  	
   

  
	
   

  	
  9.6

  	
  Financial Statements

  	
   

  
	
   

  	
  9.7

  	
  Material Adverse Change

  	
   

  
	
   

  	
  9.8

  	
  Subscribers; Operating Cash Flow

  	
   

  
	
   

  	
  9.9

  	
  Financing

  	
   

  
	
   

  	
  9.10

  	
  Confirmation
  Order

  	
   

  
	
   

  	
  9.11

  	
  Payment Motion

  	
   

  
	
   

  	
  9.12

  	
  Extension
  of Rebuild Deadline

  	
   

  
	
   

  	
  9.13

  	
  Franchise
  Extensions

  	
   

  
	
  10.

  	
  CONDITIONS
  PRECEDENT TO COMPANIES’ AND SELLERS’ OBLIGATIONS

  	
   

  
	
   

  	
  10.1

  	
  Representations and Warranties of Buyer

  	
   

  
	
   

  	
  10.2

  	
  Covenants

  	
   

  
	
   

  	
  10.3

  	
  Material
  Consents

  	
   

  
	
   

  	
  10.4

  	
  Delivery
  of Certificates and Documents

  	
   

  

 

ii

 

	
   

  	
  10.5

  	
  Escrow Agreement

  	
   

  
	
  11.

  	
  SURVIVAL
  OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

  	
   

  
	
   

  	
  11.1

  	
  Survival
  of Representations, Warranties and Covenants

  	
   

  
	
   

  	
  11.2

  	
  Indemnification.

  	
   

  
	
   

  	
  11.3

  	
  Assertion
  of Claims; Notice of and Right to Defend Third Party Claims

  	
   

  
	
   

  	
  11.4

  	
  Limitations
  on Liability.

  	
   

  
	
   

  	
  11.5

  	
  Excluded
  Tax Liabilities

  	
   

  
	
   

  	
  11.6

  	
  Exclusive
  Remedy

  	
   

  
	
   

  	
  11.7

  	
  No
  Third Party Beneficiaries

  	
   

  
	
  12.

  	
  TERMINATION

  	
   

  
	
   

  	
  12.1

  	
  Termination

  	
   

  
	
   

  	
  12.2

  	
  Surviving
  Obligations

  	
   

  
	
  13.

  	
  FEES AND EXPENSES

  	
   

  
	
  14.

  	
  ENTIRE AGREEMENT

  	
   

  
	
  15.

  	
  PARTIES OBLIGATED AND BENEFITED

  	
   

  
	
  16.

  	
  NOTICES

  	
   

  
	
  17.

  	
  AMENDMENTS AND WAIVERS

  	
   

  
	
  18.

  	
  SEVERABILITY

  	
   

  
	
  19.

  	
  SECTION HEADINGS AND TERMS

  	
   

  
	
  20.

  	
  COUNTERPARTS

  	
   

  
	
  21.

  	
  GOVERNING LAW; CONSENT TO JURISDICTION

  	
   

  
	
  22.

  	
  SPECIFIC PERFORMANCE

  	
   

  
	
  23.

  	
  FURTHER ASSURANCES.

  	
   

  
	
  24.

  	
  CONSTRUCTION

  	
   

  

 

iii

 

INDEX OF SCHEDULES AND EXHIBITS

 

Schedules

 

	
  Schedule 1.1(p)

  	
  Management, Retention and Sale Bonuses;
  Other Closing Date Current Liabilities

  
	
  Schedule 1.1(q)

  	
  Closing Date Working Capital

  
	
  Schedule 1.1(w)

  	
  Rebuild

  
	
  Schedule 1.1(y)

  	
  Deferred Revenue

  
	
  Schedule 1.1(ee)

  	
  Discounts and Promotions

  
	
  Schedule 1.1(jj)

  	
  Additional Excluded Liabilities

  
	
  Schedule 1.1(lll)

  	
  Material Consents

  
	
  Schedule 1.1(ppp)(1)

  	
  Operating Cash Flow Adjustments — Force
  Majeure Events

  
	
  Schedule 1.1(ppp)(2)

  	
  Operating Cash Flow Adjustments — Other
  Adjustments

  
	
  Schedule 1.1(gggg)

  	
  Reference Accounting Principles

  
	
  Schedule 1.1(llll)

  	
  Retained Programming Agreements

  
	
  Schedule 2.2(e)

  	
  Retained Intellectual Property Rights

  
	
  Schedule 2.2(i)

  	
  Transferred Assets

  
	
  Schedule 3.2(d)

  	
  Tax Matters

  
	
  Schedule 4.1

  	
  Joint Venture Existence

  
	
  Schedule 4.2(b)

  	
  Company Required Consents

  
	
  Schedule 4.3(f)

  	
  Certain Changes

  
	
  Schedule 4.3(g)

  	
  Certain Liabilities

  
	
  Schedule 4.4(b)

  	
  Sufficiency of Assets

  
	
  Schedule 4.5(a)

  	
  System Information

  
	
  Schedule 4.5(b)

  	
  Rates and FCC Compliance

  
	
  Schedule 4.5(c)

  	
  Copyright Registrations

  
	
  Schedule 4.5(d)

  	
  Towers and Tower Leases

  
	
  Schedule 4.6

  	
  Franchises and Other Governmental
  Authorizations

  
	
  Schedule 4.7

  	
  Pole Attachment and Utility Agreement

  
	
  Schedule 4.8(a)

  	
  Owned Real Property

  
	
  Schedule 4.8(b)

  	
  Leases

  
	
  Schedule 4.9

  	
  Other Material Contracts

  
	
  Schedule 4.10

  	
  Employee Matters

  
	
  Schedule 4.11

  	
  Litigation

  
	
  Schedule 4.12

  	
  Taxes

  
	
  Schedule 4.13

  	
  Compliance with Laws

  
	
  Schedule 4.14

  	
  Insurance

  
	
  Schedule 4.16

  	
  Affiliate Transactions

  
	
  Schedule 4.17

  	
  Intellectual Property

  
	
  Schedule 4.18

  	
  Brokers’ Fees

  
	
  Schedule 5.2(c)

  	
  Consents

  
	
  Schedule 5.1(f)

  	
  Brokers’ Fees

  
	
  Schedule 5.2(d)

  	
  Century Liens

  
	
  Schedule 5.2(e)

  	
  Century Litigation

  
	
  Schedule 5.2(f)

  	
  Brokers’ Fees

  

 

iv

 

	
  Schedule 7.5

  	
  Tax Matters

  
	
  Schedule 7.6

  	
  Certain Employees of Sellers and Sellers’
  Affiliates

  
	
  Schedule 7.8

  	
  Change of Business Name

  
	
  Schedule 7.12

  	
  Continuity of Operations

  
	
  Schedule 7.13

  	
  Rebuild

  
	
  Schedule 7.15(c)(iii)

  	
  Additional Programming Agreements

  
	
  Schedule 7.22

  	
  Stand-Alone Conversion

  
	
  Schedule 9.6(a)

  	
  Allocations

  
	
   

  	
   

  
	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Intentionally Omitted

  
	
  Exhibit B

  	
  Intentionally Omitted

  
	
  Exhibit C

  	
  Transition Services Schedule of
  Services

  
	
  Exhibit D

  	
  Intentionally Omitted

  
	
  Exhibit E

  	
  2005 Budget

  
	
  Exhibit F

  	
  2003 Unaudited Historical Financials

  
	
  Exhibit G

  	
  Unaudited 2004 Financials

  
	
  Exhibit H

  	
  Example of Closing Date Working Capital
  Calculation

  
	
  Exhibit I

  	
  Example of Equivalent Subscribers
  Calculation

  
	
  Exhibit J

  	
  Example of Operating Cash Flow Calculation

  
	
  Exhibit K

  	
  Form of Investor Guaranty of Deferred
  Purchase Price

  

 

v

 

INTEREST ACQUISITION AGREEMENT

 

THIS INTEREST
ACQUISITION AGREEMENT (“Agreement”) is made as of this 3rd day of
June, 2005, by and among ML MEDIA PARTNERS, L.P., a Delaware limited
partnership (“ML Media”), CENTURY COMMUNICATIONS CORPORATION, a Texas
corporation (“Century”) and a debtor in possession under Chapter 11 of
Title 11 of the United States Bankruptcy Code (the “Bankruptcy Code”);
ML Media and Century being referred to herein together as “Sellers”, and
each being referred to herein individually as a “Seller”, CENTURY-ML
CABLE VENTURE (the “Cable Venture”), a New York general partnership and
a debtor in possession under Chapter 11 of the Bankruptcy Code, consisting of
ML Media and Century, CENTURY ML CABLE CORP., a Delaware corporation d/b/a
Cable TV of Greater San Juan (“Cable Corp.”, and together with the Cable
Venture, the “Companies”), and San Juan Cable, LLC, a Puerto Rico
limited liability company (the “Buyer”).

 

W I  T  N  E  S  S
E  T  H:

 

WHEREAS, the Cable Venture owns and operates the community antenna
television (“CATV”) system and the activities and operations ancillary
thereto serving the community of Levittown, located in the Municipality of Toa
Baja, Puerto Rico and the Municipalities of Toa Alta and Catano, Puerto Rico
(the “Levittown System”) and, through its wholly owned subsidiary Cable
Corp., owns and operates the CATV system and the activities and operations
ancillary thereto serving the Municipality of San Juan, Puerto Rico and the
Municipalities of Bayamon, Carolina, Guaynabo and Trujillo Alto, Puerto Rico
(the “San Juan System”; the Levittown System and the San Juan System are
referred to herein together as the “Systems” and each individually as a “System”);

 

WHEREAS, on September 30, 2002, Century commenced a case for the
Cable Venture under Chapter 11 of the Bankruptcy Code (the “Chapter 11
Case”) in the U.S. Bankruptcy Court for the Southern District of New York
(the “Bankruptcy Court”);

 

WHEREAS, the Sellers hold all right, title and interest in and to 100%
of the outstanding joint venture interests in the Cable Venture;

 

WHEREAS, the Buyer desires to purchase from the Sellers, and the
Sellers wish to sell to the Buyer, 100% of the outstanding joint venture
interests in the Cable Venture pursuant to this Agreement and the Plan (as
defined below);

 

WHEREAS, the Cable Venture will file a Plan of Reorganization (the “Plan”)
in the Chapter 11 Case for the Cable Venture that implements the foregoing; and

 

WHEREAS, the Sellers and the Cable Venture will seek entry by the
Bankruptcy Court of an Order or Orders approving this Agreement on behalf of
the Cable Venture and approving the transactions contemplated hereby pursuant
to the Plan, and, in the case of Century, authorizing Century to consummate and
perform under the terms of this Agreement and the Plan.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth and for other good and valuable consideration, the receipt and
sufficiency of 

 

 

which are hereby acknowledged, the parties
hereto, intending to be legally bound, do represent, warrant, covenant and
agree as follows:

 

1.                                      DEFINITIONS

 

1.1                                 Certain Definitions.  The following capitalized terms, when used in
this Agreement, shall have the meaning set forth below:

 

(a)                                  “Accounts
Receivable” shall mean the accounts receivable of the Companies arising
prior to the Closing Date, including those arising from advertising sales and
tower rentals, as well as Subscriber Accounts Receivable and all other accounts
receivable, and for which the balances are unpaid as of such date, reflected
net of an allowance for doubtful accounts and other required reserves, all determined
in accordance with GAAP and with the Reference Accounting Principles.

 

(b)                                 “Acquisition
Proposal” shall mean a proposal (other than by the Buyer or its Affiliates)
relating to any merger, consolidation, business combination, sale or other
disposition of 10% or more of the Companies’ assets pursuant to one or more
transactions, the sale of 10% or more of the outstanding shares of capital
stock or equity interests of the Cable Venture or Cable Corp. (including,
without limitation, by way of a tender offer, foreclosure, plan of
reorganization or liquidation or the sale or other disposition of Claims
against the Cable Venture held by any Seller or its Affiliates) or a similar
transaction or business combination involving one or more third parties (other
than the Buyer or its Affiliates) and the Cable Venture, Cable Corp. or any
Seller, as the case may be; provided, however, that a proposed
transaction involving interests in or assets of Adelphia or its subsidiaries,
other than its interests in or assets of the Cable Venture, shall not be deemed
an Acquisition Proposal.

 

(c)                                  “Adelphia”
shall mean Adelphia Communications Corporation, a Delaware corporation.

 

(d)                                 “Affiliate”
shall mean, with respect to any Person, any other Person controlling,
controlled by or under common control with such Person, with “control” for such
purpose meaning the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities or voting interests, by contract or
otherwise; provided that (i) for purposes hereof Century and ML
Media shall be deemed to be Affiliates of the Cable Venture; (ii) under no
circumstances shall creditors of the Cable Venture or Century be considered
Affiliates of the Cable Venture solely by virtue of their ownership of creditor
claims against the Cable Venture or Century; and (iii) Merrill Lynch &
Co., Inc. and its subsidiaries and affiliates (other than ML Media and the
general partner of ML Media) shall not be considered Affiliates of ML Media,
the Cable Venture or Cable Corp.

 

(e)                                  “Assumed
Executory Contracts” shall mean all of the executory contracts, unexpired
leases, agreements, commitments, or other binding arrangements or
understandings, whether written or oral, of the Cable Venture, excluding any
Transferred Assets.

 

(f)                                    “Bankruptcy
Rules” shall mean the Federal Rules of Bankruptcy Procedure.

 

2

 

(g)                                 “Business
Day” shall mean any day other than a Saturday, a Sunday or a day on which
banking institutions in New York, New York are required or authorized to be
closed.

 

(h)                                 “Buyer
Confidential Information” shall mean, collectively, the Buyer Group
Confidential Information and, after the Closing, the Company Confidential
Information.

 

(i)                                     “Buyer
Group” shall mean, collectively, (i) the Buyer, (ii) the Parent,
(iii) San Juan Cable Ventures, LLC, (iv) MCNA Cable Holdings LLC, (v) the
Investors, (vi) each of their respective Affiliates and (vii) the respective
members, officers, directors, employees, professional advisors, representatives
and other agents of all of the foregoing.

 

(j)                                     “Buyer
Group Confidential Information” shall mean, collectively, all information
relating to the business and affairs of the Buyer Group and their respective
Affiliates (including, without limitation, all nonpublic information concerning
the terms of the Transactions) other than information that is as of the date
hereof or subsequently becomes generally available to the public through no
fault of, or breach of any confidentiality obligation by, the Sellers, the
Companies or any of their respective Affiliates, agents or representatives.

 

(k)                                  “Calculation
Date” shall mean the Previous Month End unless the Closing shall
occur on the last Business Day of a month, in which case the Calculation Date
shall be the last day of the month.

 

(l)                                     “CapEx
Cash” shall mean an amount of cash equal to the CapEx Surplus.

 

(m)                               “CapEx
Surplus” shall mean the excess, if any, of (i) the amount of capital
expenditures required to be made by the Companies between January 1, 2005 and
the Previous Month End pursuant to Section 7.12(a)(vi) over (ii) the
actual amount of capital expenditures made by the Companies between January 1,
2005 and the Closing Date.

 

(n)                                 “Claim”
and “Claims” shall have the meaning set forth in Section 101(5) of the
Bankruptcy Code.

 

(o)                                 “Closing
Date Current Assets” shall mean the following, calculated as of the close
of business on the day preceding the Closing Date in accordance with GAAP, to
the extent GAAP would require such amounts to be set forth in a regularly
prepared balance sheet (except as otherwise provided herein): the Companies’
cash on hand and in bank accounts (net of any non-cancelled uncashed checks
issued by the Companies and less an amount equal to the Unpaid Cost to Complete
the Rebuild (if any), which shall be deposited into the Rebuild Escrow Account
pursuant to Section 3.2(b)(i) or paid to the Buyer pursuant to Section 3.2(b)(ii)),
cash equivalents, Accounts Receivable, notes receivable, deposits properly
characterized as current assets arising in connection with the Companies’
operation of the Systems, prepaid expenses of the Companies, Inventory and
other current assets of the Companies; provided, that Closing Date
Current Assets shall be calculated net of all reserves for obsolete,
slow-moving, damaged or defective Inventory, which reserves shall be calculated
in accordance with GAAP and on a basis that is consistent with the Reference
Accounting Principles and will not include (i) any Transferred Assets (as
hereinafter defined), (ii) any prepaid expenses or deposits, to the extent
that for contractual or other reasons, such prepaid expenses or deposits will
not be available to

 

3

 

the Companies
after the Closing Date, (iii) any deferred Tax assets or any receivable or
other accrued amount representing any Tax refund to be received, (iv) the
CapEx Cash (if any) or (v) any Rebuild Inventory.

 

(p)                                 “Closing
Date Current Liabilities” shall mean the following, calculated as of the
close of business on the day preceding the Closing Date in accordance with
GAAP, to the extent GAAP would require such amounts to be set forth in a
regularly prepared balance sheet (except as otherwise provided herein): all
subscriber prepayments and deposits with respect to services to be provided by
the Companies, all of the Companies’ trade payables and all accounts payable
relating to the Rebuild of the San Juan System and all accrued expenses of the
Companies (including, without limitation, (i) franchise and copyright
fees, utility charges, Taxes, and assessments levied against the Companies’
assets, property and equipment rentals and similar items, (ii) any
management bonuses and any retention or sale bonuses payable in connection with
the Transactions and set forth on Schedule 1.1(p) (to the extent
not paid prior to the Closing), (iii) accrued expenses relating to the
Rebuild of the San Juan System, and (iv) any Liability of the Companies
for fees or commissions to any broker, finder or agent with respect to the
Transactions (to the extent not paid prior to the Closing)); provided
that Closing Date Current Liabilities will not include (i) any
pre-petition liabilities of the Cable Venture, which if not satisfied prior to
the Closing shall be satisfied pursuant to the Plan from the Sellers Escrow
Account (as hereinafter defined) or otherwise discharged without liability of
the Buyer or the Companies, (ii) any Affiliate Liabilities, all of which
shall be satisfied pursuant to Section 7.19, (iii) any Deferred
Revenues or deferred Tax liabilities, (iv) any Excluded Liabilities; (v) any
Indemnified Tax Liabilities of the Companies other than accruals, in accordance
with GAAP, for Taxes incurred in the ordinary course of operations consistent
with past practice for any tax period or portion of any tax period ending on or
prior to the day preceding the Closing Date; (vi) any withholding tax payable
with respect to pre-petition programming payment obligations of the Companies,
(vii) any accrual of payments with respect to the Pole Attachment
Agreements in excess of the actual amount payable by the Companies under the
current terms of the Pole Attachment Agreements, or (viii) any rejection
damage claim relating to an executory contract that the Buyer has requested be
rejected by the Cable Venture.

 

(q)                                 “Closing
Date Working Capital” shall mean the sum of (i) the amount of the Closing
Date Current Assets, less (ii) the amount of Closing Date Current Liabilities,
plus (iii) except as otherwise provided in Section 7.22, any one-time
amounts spent by the Companies after the date of this Agreement to implement
the Companies’ ability to operate as a Stand-Alone as provided in Section 7.22,
plus (iv) the amount set forth on Schedule 1.1(q).  As the Closing Date Working Capital is
calculated as of the close of business on the day preceding the Closing Date,
the operations of the Systems on the Closing Date are for the account of the
Buyer.  An example of how the Closing
Date Working Capital would have been calculated if the Closing had been held on
January 1, 2005 is attached as Exhibit H.

 

(r)                                    “Code”
shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder as in effect from time to time.

 

(s)                                  “Commonwealth”
shall mean the Commonwealth of Puerto Rico.

 

4

 

(t)                                    “Companies’
Knowledge”, or words to similar effect, shall mean the actual knowledge
after due inquiry of (i) the current members of the management board of
the Cable Venture and the board of directors of the Company (I. Martin
Pompadur, Elizabeth McNey Yates, Jeffrey Lawton and Joseph Bagan), (ii) each
other person who serves as a member of the management board of the Cable
Venture or the board of directors of Cable Corp. after the date of this
Agreement, and (iii) each of the following persons: David Beyth, Mark
Chambers (with respect to tax matters only), Bob DeLucia (with respect to
accounting matters only), Keith Hayes (with respect to engineering matters
only), Jean Simmons, Mayra Torres (with respect to local accounting matters
only) and Mark Spiecker.

 

(u)                                 “Company
Confidential Information” shall mean all information relating to the
business and affairs of the Cable Venture or Cable Corp. other than information
that is as of the date hereof or subsequently becomes generally available to
the public through no fault of, or breach of any confidentiality obligation by,
the Buyer or any of its Affiliates, agents or representatives.

 

(v)                                 “Company
Required Consents” shall mean the Required Consents set forth on Schedule 4.2(b).

 

(w)                               “Completion
of the Rebuild of the San Juan System” shall mean the completion of the
Rebuild of the San Juan System to the specifications set forth on Schedule 1.1(w).

 

(x)                                   “Copyright
Office” shall mean the United States Copyright Office.

 

(y)                                 “Deferred
Revenues” shall mean all deferred revenue of the types set forth on Schedule 1.1(y)
calculated in accordance with GAAP consistently applied in accordance with the
Reference Accounting Principles resulting from (i) liabilities related to
the receipt of cash prior to the delivery of service to customers, (ii) deferred
revenue recognized in connection with the Centennial Lease, and (iii) liabilities
resulting from the receipt of cash in connection with Launch Incentives and/or
repositioning incentives which have been amortized into revenue in subsequent
periods.

 

(z)                                   “DOJ”
shall mean the Antitrust Division of the United States Department of Justice.

 

(aa)                            “Employee
Benefit Plan” shall mean each: (a) Employee Pension Benefit Plan
(including any Multiemployer Plan); (b) Employee Welfare Benefit Plan; and
(c) any other employee benefit plan, program or arrangement that is
maintained, sponsored, contributed or required to be contributed to by either
Company or with respect to which either Company has any actual or potential
Liability.

 

(bb)                          “Employee
Pension Benefit Plan” shall have the meaning set forth in Section 3(2)
of ERISA.

 

(cc)                            “Employee
Welfare Benefit Plan” shall have the meaning set forth in Section 3(1)
of ERISA.

 

5

 

(dd)                          “Environmental
Law” shall mean any Legal Requirement (including, without limitation, all
common law) relating to or concerning pollution or the protection of the
environment, including those relating to emissions, discharges, releases or
threatened releases of Hazardous Substances into the environment and natural
resources (including ambient air, surface water, ground water or land), or
otherwise relating to the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of, or exposure
of persons to, Hazardous Substances, including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. §§ 9601 et seq.) (“CERCLA”); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. §§ 2601 et seq.); the Clean Air Act (42
U.S.C. §§ 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C. §§ 1251 et seq.); the Safe Drinking Water Act (42 U.S.C. §§ 300(f)
et seq.); the Wildlife Act of 1999 (12 L.P.R.A. §§ 107 et seq.); the Act
to Protect the Purity of Drinking Water of Puerto Rico (12 L.P.R.A. §§ 405
et seq.); the Law of Waters of 1903 (12 L.P.R.A. §§ 501 et seq.); the Law
of Waters of 1976 (12 L.P.R.A. §§ 1115 et seq.); the Puerto Rico Public
Policy Environmental Act (12 L.P.R.A. §§ 1121 et seq.); and the
Environmental Emergencies Fund Act (12 L.P.R.A. §§ 1271 et seq.), each as
from time to time amended, and any and all regulations promulgated thereunder,
and all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.

 

(ee)                            “Equivalent
Subscriber” shall mean, as of any date of determination, the sum of (1) the
number of first outlet residential customers of the Systems who subscribe for
basic CATV or high-speed data service only at the normal applicable monthly
rate (or at a discount rate resulting from the discounts and promotions set
forth on Schedule 1.1(ee) or other discounts or promotions in the
ordinary course of business and not materially different from those set forth
on Schedule 1.1(ee)) for basic CATV or high-speed data service then
in effect in the relevant System (except as provided below), and whose accounts
(other than amounts (including Non-Recurring Charges, disputed amounts and
other amounts) collectively not in excess of $10.00) are not outstanding more
than eighty-nine (89) days from the original invoice date; plus (2) the
result obtained by dividing (a) the aggregate of the gross monthly
billings during the most recent one-month billing period prior to the date of
calculation for basic and expanded basic CATV service (but excluding (i) billings
in excess of a single month’s charge and (ii) billings for a la carte
tiers or premium services, installation or other Non-Recurring Charges,
converter rental or new product tiers, any outlet or connection other than such
customer’s first, or from any pass through charges for sales taxes, line-itemized
franchise fees, fees charged by the FCC and the like) from non-standard bulk
billed and commercial subscribers who subscribe for basic CATV service whose
accounts (other than amounts (including Non-Recurring Charges, disputed amounts
and other amounts) collectively not in excess of $10.00) are not outstanding
more than eighty-nine (89) days from the original invoice date, by (b) the
Franchise Area prevailing monthly service charge in effect during such period
for a first outlet residential connection for basic and expanded basic CATV
service (but excluding billings for a la carte tiers or premium services,
installation or other Non-Recurring Charges, converter rental or new product
tiers, any outlet or connection other than such customer’s first, or from any
pass through charges for sales taxes, line-itemized franchise fees, fees
charged by the FCC and the like); provided, that for purposes of this
Agreement, a subscriber does not include (i) any person, commercial
establishment or multi-unit dwelling that has requested that basic CATV or, in
the case of high

 

6

 

speed data
only subscribers, high-speed data service be terminated (other than any person
requesting such termination who has re-located within the area covered by the
Franchises and has requested CATV or high-speed data service in the new
location) and (ii) any Promotional Subscriber in excess of 13,000
Promotional Subscribers.  An example of
how Equivalent Subscribers would have been calculated if the Closing had been
held on March 31, 2005 is attached as Exhibit I.  A “Promotional Subscriber” is either
(i) a residential subscriber who pays less than the normal applicable
monthly rate for a first outlet residential connection for basic CATV service
or (ii) a residential subscriber who subscribes only for high-speed data
and who pays less than the normal applicable monthly rate for high-speed data
service.

 

(ff)                                “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

(gg)                          “ERISA
Affiliate” shall mean any entity treated as a single employer with the
Companies for purposes of Section 414 of the Code.

 

(hh)                          “Escrow
Agent” shall mean the Escrow Agent under the Escrow Agreement.

 

(ii)                                  “Escrow
Agreement” shall mean an escrow agreement in form and substance reasonably
acceptable to the Buyer and the Sellers and consistent with the terms of this
Agreement among the Escrow Agent, the Sellers and the Buyer to be dated as of
the Closing Date, pursuant to which funds shall be deposited into the Indemnity
Escrow Account and, to the extent necessary hereunder, the Rebuild Escrow
Account as set forth in this Agreement. 
The Escrow Agreement shall provide that on June 30, 2006 an amount
equal to $12,500,000 (less any claims previously asserted by the Buyer and paid
to the Buyer or then pending) shall be released, any amount held past June 30,
2006 pending resolution of a claim previously asserted by the Buyer shall be
released upon resolution of that claim (except to the extent payable to the
Buyer), and the remainder shall be released on December 31, 2006 (less any
then pending claims asserted by the Buyer).

 

(jj)                                  “Excluded
Liabilities” shall mean: (i) all Liabilities of the Companies in
connection with the Chapter 11 Case including, without limitation, any cure
amounts associated with the assumption of the Assumed Executory Contracts, but
excluding any rejection damage claims relating to executory contracts that the
Buyer has requested be rejected by the Cable Venture; (ii) all Affiliate
Liabilities; (iii) all Liabilities of the Companies to Highland Holdings,
any member of the Rigas family or their respective Affiliates (including,
without limitation, claims arising out of or in respect of the Leveraged
Recapitalization Agreement); (iv) all Liabilities of the Companies arising
from or relating to any matter set forth on Schedule 1.1(jj);
(v) all Liabilities of the Companies with respect to management retention,
change of control or sale bonuses, accelerated incentive obligations or severance
payments, if any, to the extent such Liabilities arise as a result of the
Transactions and are not reflected as a Closing Date Current Liability; (vi) all
Liabilities which arise, whether before, on or after the Closing, out of or in
connection with the Transferred Assets (other than any costs incurred by the
Buyer or the Companies in replacing any Transferred Assets), including any Tax
liability with respect to the transfer of the Transferred Assets or any Liabilities
under Environmental Laws with respect to the Transferred Assets; (vii) all
Rebuild Cost Overruns (but only if the Buyer has not elected to

 

7

 

accept a
reduction of the Purchase Price in respect of the Rebuild of the San Juan
System pursuant to Section 3.2(b)(ii)); (viii) all Liabilities
(including any contractual or statutory severance payments or benefits) arising
from the discharge of any employees working exclusively on the Rebuild of the
San Juan System upon the Completion of the Rebuild of the San Juan System (but
only if the Buyer has not elected to accept a reduction of the Purchase Price
in respect of the Rebuild of the San Juan System pursuant to Section 3.2(b)(ii));
(ix) all Liabilities of the Companies arising under ERISA to the extent
that such Liabilities (a) arise (1) under an Employee Benefit Plan
covering both employees of the Companies and employees of a member of the
Seller Group or (2) as a result of either of the Companies’ being an ERISA
Affiliate of any other member of the Seller Group or (b) arise from or
relate to pre-Closing actions or inactions of the Sellers, their Affiliates, or
the Companies, including, without limitation, the costs of any corrective
actions taken post-Closing, and regardless of whether such costs and
liabilities relate to items that have been listed on the Schedules attached
hereto; (x) all Liabilities for amounts payable or allowed to
professionals retained by the Sellers or the Companies in respect of the
Chapter 11 Case or the bankruptcy of Century (whether pursuant to sections 327
or 105 of the Bankruptcy Code or otherwise); and (xi) all withholding tax
payable with respect to pre-petition programming payment obligations of the
Companies.

 

(kk)                            “FAA”
shall mean the Federal Aviation Administration.

 

(ll)                                  “FCC”
shall mean the Federal Communications Commission.

 

(mm)                      “Final
Order” shall mean an Order with respect to the subject matter (a) that
has not been reversed, stayed, modified, or amended and as to which (i) any
right to appeal or to seek certiorari, review, reargument, stay, or rehearing
has been waived or (ii) the time to appeal or to seek certiorari, review,
reargument, stay or rehearing has expired and no appeal or petition for
certiorari, review, reargument, stay, or rehearing is pending, or (b) as
to which an appeal has been taken or petition for certiorari, review,
reargument, stay, or rehearing has been filed and (i) such appeal or
petition for certiorari, review, reargument, stay, or rehearing has been
resolved by the highest court to which the order or judgment was appealed or
from which certiorari, review, reargument, stay, or rehearing was sought or
(ii) the time to appeal further or seek certiorari, further review,
reargument, stay, or rehearing has expired and no such further appeal or
petition for certiorari, further review, reargument, stay, or rehearing is
pending, provided, however, that the possibility that a motion
under Rule 59 or 60 of the Federal Rules of Civil Procedure or an analogous
rule under the Federal Rules of Bankruptcy Procedure may be filed shall not
cause such order not to be a Final Order.

 

(nn)                          “Franchise”
shall mean all franchise agreements and similar governing agreements,
instruments and resolutions and franchise related statutes and ordinances or
written acknowledgements of a Governmental Authority authorizing the
construction, upgrade, maintenance and operation of any part of the Systems and
provision of cable television, data services and communication and information
services in San Juan, Puerto Rico and the municipalities comprised within the
San Juan System and in Levittown and the municipalities comprised within the
Levittown System.

 

8

 

(oo)                          “Franchise
Area” shall mean, with respect to a Franchise, the geographic area in which
the Cable Venture or Cable Corp. is authorized to operate any part of a System
pursuant to such Franchise.

 

(pp)                          “Franchising
Authority” shall mean, with respect to a Franchise, the Governmental
Authority granting such Franchise.

 

(qq)                          “FTC”
shall mean the Federal Trade Commission.

 

(rr)                                “Funded
Debt” of the Companies shall mean, without duplication, all obligations
under indebtedness for borrowed money (including, without limitation,
principal, interest, overdrafts, penalties, premiums, fees, expenses,
indemnities and breakage costs), all obligations under leases required to be
capitalized under GAAP, notes payable, guaranties, drafts accepted representing
extensions of credit.

 

(ss)                            “GAAP”
shall mean generally accepted accounting principles as in effect from time to
time in the United States of America.

 

(tt)                                “Governmental
Authority” shall mean the government of the United States of America and
the Commonwealth, any state, commonwealth, territory or possession thereof and
any political subdivision or quasi-governmental authority of any of the same,
including, but not limited to, courts, tribunals, departments, commissions,
bureaus, agencies, boards, counties, municipalities, provinces, parishes and
other instrumentalities.

 

(uu)                          “Governmental
Authorizations” shall mean, collectively, all Franchises and other
authorizations, agreements, Licenses, permits, approvals, easements,
registrations, qualifications, leases, variances and similar rights for and
with respect to the installation, construction, ownership or operation of the
Systems obtained from any Governmental Authority or pursuant to any Legal
Requirements.

 

(vv)                          “Hazardous
Substance” shall mean any hazardous material, pollutant, contaminant,
waste, toxic substance, hazardous substance or nuisance substance which is
regulated by or forms the basis of liability now or hereafter under any
Environmental Laws, including without limitation, (i) petroleum or any
refined product or fraction or derivative thereof, (ii) asbestos,
(iii) polychlorinated biphenyls (PCBs) and (iv) radioactive
substances.

 

(ww)                      “HSR Act”
shall mean the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder as in effect from
time to time.

 

(xx)                              “Indemnified
Tax Liabilities” shall mean all Liabilities for Taxes of the Companies or
the Sellers for taxable periods ending on, or prior to, the day immediately
preceding the Closing Date and the portion of Liabilities for Taxes relating to
the Pre-Closing Tax Straddle Period as determined pursuant to Section 7.5(a)(ii),
other than Liabilities for Taxes to the extent accrued for on the Closing Date
Balance Sheet and included in Closing Date Current Liabilities.

 

9

 

(yy)                          “Intellectual
Property” shall mean trademarks, trade names, service marks, service names,
fictitious names, logos and Internet domain names, together with all goodwill,
registrations and applications related to the foregoing; patents and industrial
designs (including any continuations, divisionals, continuations-in-part,
renewals, reissues, and applications for any of the foregoing); copyrights
(including any registrations and applications for any of the foregoing);
computer software and related documentation; mask works and registrations and
applications for registrations thereof; trade secrets and confidential business
information (including research and development, know-how, data, databases,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals); and all other intellectual property and
proprietary rights.

 

(zz)                              “Inventory”
shall mean, without limitation, all amplifiers, active electronics, passive
electronics, processor/receivers, coaxial cable/fiber cable, connectors,
installation materials, parts, packaging materials and other accessories and
inventories related thereto which are held at, or are in transit from or to, or
located at any of the Companies’ facilities, which are used or held for use by
the Companies in the operation and maintenance of the Systems, determined in
accordance with GAAP; provided, however, that Inventory shall not
include Rebuild Inventory.

 

(aaa)                      “JV
Agreement” shall mean the Amended and Restated Management Agreement and Joint
Venture Agreement of Century/ML Cable Venture dated January 1, 1994.

 

(bbb)                   “Launch
Incentives” shall mean cash payments or other launch fee incentives
received by the Companies or their Affiliates in respect of programming
launches, or other changes in programming, by the Companies.

 

(ccc)                      “Leased
Real Property” shall mean all leasehold or subleasehold estates and other
rights to use or occupy any land, buildings, structures, improvements, fixtures
or other interest in real property held by the Companies other than (a) Owned
Real Property, (b) rights pursuant to Pole Attachment Agreements, and (c) rights
pursuant to easements, licenses and similar instruments.

 

(ddd)                   “Legal
Requirements” shall mean any statute, ordinance, code, law, rule,
regulation, permit or permit condition, administrative or judicial decree,
order or other requirement, standard or procedure enacted or adopted by any
Governmental Authority, including judicial decisions applying or interpreting
common law or statutory law.

 

(eee)                      “Leveraged
Recapitalization Agreement” shall mean the Leveraged Recapitalization
Agreement dated December 13, 2001, among Century, ML Media, the Cable
Venture, Adelphia and Highland Holdings.

 

(fff)                            “Liability”
shall mean any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due and
regardless of when or by whom asserted), including, without limitation, any
liability for Taxes.

 

(ggg)                   “Licenses”
shall mean any license, permit or other authorization (other than a Franchise)
issued by a Governmental Authority, including, but not limited to, the FCC,

 

10

 

used in the
construction, operation or maintenance of the Systems (including, but not
limited to, TV translator station licenses and microwave licenses (including,
but not limited to, Cable Television Relay Services “CARS” and Television
Receive Only “TVRO” earth station registrations)).

 

(hhh)                   “Lien”
shall mean any mortgage, lien (statutory or otherwise), security interest,
security agreement, conditional sale or other title retention agreement,
pledge, option, charge, assessment, restrictive agreement, restriction, encumbrance,
adverse interest, adverse claim, voting agreement, restriction on transfer or
any exception to or defect in title or other ownership interest.

 

(iii)                               [Intentionally
Omitted]

 

(jjj)                               “Management
Fee” shall mean, collectively, (i) the management fee payable to
Century pursuant to Section 7.3(b) of the JV Agreement and (ii) any
reimbursement to Century for out-of-pocket expenses incurred in connection with
its management of the Systems payable to Century pursuant to Section 7.3(c)
of the JV Agreement.

 

(kkk)                      “Material
Adverse Effect” shall mean a material adverse effect on the assets,
business, operations, condition (financial or otherwise) or results of
operations of the Cable Venture, Cable Corp. and the Systems taken as a whole; provided,
however, that a Material Adverse Effect shall not include any event,
change or effect relating to or caused by (i) the Transactions, (ii) a
general economic downturn or any other change in the Puerto Rican economy
generally, including, but not limited to, an increase in interest rates (provided
that such general economic downturn or change does not disproportionately
adversely affect the Companies or the Systems), or (iii) changes affecting
the CATV or communications industry generally (provided that such
changes do not disproportionately adversely affect the Companies or the
Systems); provided, however, for purposes of Section 9.1,
Material Adverse Effect shall not include any event, change, or effect relating
to or caused by acts of war or terrorism.

 

(lll)                               “Material
Consents” shall mean the Required Consents set forth on Part B of Schedule 4.2(b).

 

(mmm)             “Material Contract”
shall mean (i) the Pole Attachment Agreements, (ii) the Leases,
(iii) the Collective Bargaining Agreements, (iv) the IP Licenses and
(v) each other contract, agreement, lease, permit, license, fiber lease,
microwave agreement or commitment, whether written or oral, to which the Cable
Venture or Cable Corp. is a party and that is material to the operation of its
respective System (other than the Programming Agreements), including each
material underground conduit agreement, crossing agreement, retransmission
consent agreement and multiple dwelling, bulk billing or commercial service
agreement.

 

(nnn)                   “Multiemployer
Plan” shall have the meaning set forth in Section 3(37) of ERISA.

 

(ooo)                   “Non-Recurring
Charges” shall mean late charges, disconnect fees, amounts that are the
subject of a bona fide dispute and any other similar non-recurring charges.

 

11

 

(ppp)                   “Operating
Cash Flow” shall mean, for any 12-month period, an amount, calculated for
the Cable Venture and Cable Corp. on a consolidated basis in accordance with
GAAP (without duplication), equal to the consolidated net income of the Cable
Venture and Cable Corp., adjusted by:

 

(i)                                     excluding
(to the extent taken into account in calculating such consolidated net income,
and without duplication), (1) audit expenses with respect to any fiscal
year in excess of $102,000, (2) costs and expenses payable to non-Affiliate
third parties of the Chapter 11 Case including, but not limited to,
non-recurring third party professional expenses directly relating to the
bankruptcy or the reconstruction and restatement of the Companies’ books and
records (exclusive of financial statement audit expenses payable to
non-Affiliate third parties included in clause (1) above), (3) reorganization
expenses due to the bankruptcy, impairments, and write-offs of fixed assets and
intangible assets, (4) costs and expenses relating to the proposed sale of
the Acquired Interests, including negotiation, preparation and closing under
this Agreement and the Related Agreements and the Transactions and any
additional expenses payable to non-Affiliated third parties in connection with
the review by PWC of the Interim Financials in accordance with Section 7.17
or otherwise relating to the Buyer’s financing, and any retention bonuses
payable upon consummation of the Transactions (exclusive of financial statement
audit expenses payable to non-Affiliated third parties included in clause (1)
above), (5) the historical non-recurring amounts resulting from hurricanes
and other force majeure events, all as set forth specifically on Schedule 1.1(ppp)(1),
(6) the items set forth on Schedule 1.1(ppp)(2); or (7) other
items that are requested by Sellers to be included as adjustments (including,
without limitation, adjustments intended to “normalize” expenses that are paid
within a particular period but that reflect (in whole or in part) costs that
are attributable to past or future periods), but only as and to the extent such
amounts in this clause (7) are agreed to by the Buyer and are accepted as
Permitted Add-Backs by the lenders who are parties to the Commitment Letters
for debt financing (or such other lenders as may provide debt financing to the
Buyer); provided, that if after the date of this Agreement there is a
hurricane or other force majeure event that has a non-recurring effect on the
Systems, the Buyer shall accept as additional exclusions from the calculation
of Operating Cash Flow for the applicable period an amount equal to the lesser
of (x) the actual non-recurring amounts attributable to such hurricane or
other force majeure event that were deducted in calculating the consolidated
net income of the Companies in such period and (y) $500,000 (with any
amount over $500,000 being subject to the agreement of the Buyer and the
acceptance by the Buyer’s lenders, as contemplated by clause (6) above);

 

(ii)                                  adding
back (in each case to the extent deducted in calculating such consolidated net
income, and without duplication) (1) income tax expense, (2) interest
expense (whether paid or accrued), (3) depreciation and amortization
expense, (4) any accrual of expenses to the extent related to a period
other than such 12-month period, (5) the Management Fee (whether paid or
accrued) and (6) any loss on sale of assets;

 

(iii)                               subtracting
(in each case to the extent included in calculating such consolidated net
income, and without duplication) (1) interest income, (2) any gain on
sale of assets, (3) any accrual of revenue or income to the extent related
to a period other than such 12-month period and (4) any non-recurring
credits or reductions of expenses (including, without

 

12

 

limitation,
credits or reductions of expenses resulting from settlement or rejection of
obligations by the Bankruptcy Court);

 

(iv)                              adding
back any expenses to non-Affiliated third parties incurred in complying with
the covenants in Sections 7.15(a)(i) and (iv), (b)(i), (c)(i), (ii) and (iv)
and (d)(i); and

 

(v)                                 except
as otherwise provided in Section 7.22, adding back (i) any one-time
expenses incurred in converting the Companies to a Stand-Alone as required by Section 7.22,
(ii) any incremental expenses incurred in operating as a Stand-Alone
(measured by comparison to the ongoing expenses that were incurred for the
comparable service(s) replaced by the Stand-Alone service(s)), and
(iii) any expenses incurred in recording any lease pursuant to Section 7.24.

 

For purposes of calculating Operating Cash Flow, any increase or
decrease in expenses resulting from a change in the methods of determining the
Allocations or the products or services included within the Allocations from
that set forth on Schedule 9.6(a) shall be excluded.

 

An example of how Operating
Cash Flow would have been calculated if the Closing had
been held on December 31, 2004 is attached as Exhibit J.

 

(qqq)                   “Order”
shall mean an order or judgment of the Bankruptcy Court or other court of
competent jurisdiction.

 

(rrr)                            “Other
Material Contracts” shall mean Material Contracts other than (i) the
Pole Attachment Agreements, (ii) the Leases, (iii) the Collective
Bargaining Agreements and (iv) the IP Licenses.

 

(sss)                      “Owned
Real Property” shall mean all land, together with all buildings,
structures, improvements and fixtures located thereon, and all easements and
other rights and interests appurtenant thereto owned by the Companies (other
than any interests in real property granted or created under the Pole
Attachment Agreements).

 

(ttt)                            “Parent”
shall mean San Juan Cable Holdings LLC, a limited liability company organized
under the laws of Puerto Rico, and “Investors” shall mean, collectively, (i) MidOcean
Partners, LP, (ii) MidOcean Partners II, LP, (iii) Crestview Capital
Partners, LP, (iv) AlpInvest Partners CS Investments 2005 C.V., (v) AlpInvest
Partners Later Stage 

Co-Investments Custodian II B.V., (vi) AlpInvest Partners Later Stage
Co-Investments Custodian IIA B.V. and (vii) The Northwestern Mutual Life
Insurance Company.

 

(uuu)                   “Permitted
Add-Back” shall mean any amount that the lenders who are parties to the
Commitment Letters for debt financing (or such other lenders as may provide
debt financing to the Buyer) allow to be counted as an add-back to or an
exclusion from the calculation of EBITDA (or any comparable metric used by the
lenders) that has the effect of increasing EBITDA, but only if, as a result of
such allowance, the lenders do not alter the terms or the pricing of the debt
financing in any manner that is adverse to the Buyer.

 

13

 

(vvv)                   “Permitted
Liens” shall mean the following: (i) statutory landlord’s liens and
liens for current Taxes, assessments and governmental charges not yet due and
payable (or being contested in good faith by appropriate proceedings for which
there is an adequate reserve determined in accordance with GAAP); (ii) zoning
and other land use laws, regulations and ordinances and similar Legal
Requirements regulating the construction, use or occupancy of Real Property
which are not violated by the current use or occupancy of such Real Property or
the operation of the business associated with the Systems thereon; (iii) as
to interests in real property, any easements, rights of way, servitudes,
permits, restrictions and minor imperfections or irregularities in title that
are reflected in the public records or that do not individually or in the
aggregate materially interfere with the right or ability to own, use, occupy,
lease or operate the real property as presently utilized or the right or
ability to construct, install, maintain, use or operate any part of the
Systems; (iv) Liens that will be released or terminated at or before the
Closing and (v) other Liens that do not, individually or in the aggregate,
materially interfere with Buyer’s right to own the interest in the property to
which they relate or operate the Systems.

 

(www)             “Person” shall
mean any natural person, corporation, partnership, trust, unincorporated
organization, association, limited liability company, Governmental Authority or
other entity.

 

(xxx)                         “PR
Tax Code” shall mean the Puerto Rico Internal Revenue Code of 1994, as
amended.

 

(yyy)                   “PR Treasury
Regulations” shall mean the regulations and pronouncements issued by the
Puerto Rico Department of the Treasury that interpret the provisions of the PR
Tax Code.

 

(zzz)                         “Previous
Month End” shall mean the last day of the month preceding the month in
which the Closing occurs.

 

(aaaa)                “Programming Agreements”
shall mean all satellite-delivered programming agreements and other agreements
under which the Systems obtain CATV and broadcast programming to which either
of the Companies, the Sellers or their respective Affiliates is a party.

 

(bbbb)            “Puerto Rico Board”
shall mean the Puerto Rico Telecommunications Regulatory Board.

 

(cccc)                “PWC” shall
mean PriceWaterhouseCoopers LLP.

 

(dddd)            “Real Property”
shall mean the Leased Real Property and the Owned Real Property.

 

(eeee)                “Rebuild
Inventory” shall mean stocks of parts, equipment and materials inventories
maintained by the Companies required for the purpose of completing the Rebuild
of the San Juan System, but shall not include any stocks in excess of the
amounts required to complete the Rebuild.

 

14

 

(ffff)                        “Rebuild
of the San Juan System” or “Rebuild” shall mean the rebuild and/or
upgrade of the portion of the San Juan System described in Schedule 1.1(w)
to achieve the specifications set forth on Schedule 1.1(w).

 

(gggg)            “Reference
Accounting Principles” shall mean the accounting principles, policies and
methodologies of the Companies, which are in accordance with GAAP, that were
employed in the preparation of the unaudited financial statements as of and for
the year ended December 31, 2003 (which are attached to this Agreement as Exhibit
F) and are reflected in the footnotes to such financial statements,
including without limitation the principles, policies and methodologies
employed with respect to Allocations and capitalization of labor, as modified
by Schedule 1.1(gggg); provided, however, that if (i) the
accounting principles used in preparing the 2004 Audited Financials differ from
the Reference Accounting Principles and (ii) the Buyer has consented to any
such differences, the term “Reference Accounting Principles” with respect to
the 2004 Audited Financials and the interim financials for 2005 and for
purposes of Section 3.4 shall be deemed to incorporate any such changes
accepted by the Buyer.

 

(hhhh)            “Regulatory Law”
shall mean the HSR Act, the Federal Trade Commission Act, as amended, the
Communications Act of 1934, as amended, the Puerto Rico Telecommunications Act
of 1996, as amended, and all other Legal Requirements that are designed or
intended to (x) prohibit, restrict or regulate actions having the purpose
or effect of monopolization or restraint of trade or lessening of competition
through merger or acquisition or (y) regulate the provision of cable
television, telecommunications or other services by the Companies.

 

(iiii)                            “Related
Agreement” shall mean each of (i) the Transition Services Agreement, (ii) the
Escrow Agreement, (iii) the Investor Guaranty, (iv) the Expense Reimbursement Letter
dated April 29, 2005 by and among MidOcean Partners, L.P., the Sellers and
the Companies and (v) any other written agreement or certificate, other than
this Agreement, that is executed and delivered by the Buyer, the Sellers, the
Cable Venture or Cable Corp. pursuant to or contemporaneously with this
Agreement.

 

(jjjj)                            “Required
Consent” shall mean any approval, consent, authorization or act of, or any
declaration, notice, filing, application, registration or other action with or
to, any Governmental Authority or other Person under any Governmental
Authorization, Material Contract, agreement or other instrument or otherwise
that is necessary to be obtained in connection with the consummation or
effectiveness of the Transactions in accordance with the terms of this
Agreement and the Related Agreements.

 

(kkkk)                “Restricted
Cash” shall mean (i) subscriber prepayments and deposits with respect
to services to be provided by the Companies and (ii) Launch Incentives
received by the Companies since January 1, 2005 to the extent that such
Launch Incentives relate to post-Closing programming obligations of the
Companies.

 

(llll)                            “Retained
Programming Agreements” shall mean the Programming Agreements set forth on Schedule 1.1(llll).

 

15

 

(mmmm)    “SEC” shall mean the
United States Securities and Exchange Commission.

 

(nnnn)            “Seller
Confidential Information” shall mean, collectively, the Seller Group
Confidential Information and the Company Confidential Information.

 

(oooo)            “Seller Group”
shall mean, collectively, (i) the Sellers, (ii) the Companies, and
(iii) their respective members, officers, directors, employees,
professional advisors, representatives and other agents.

 

(pppp)            “Seller Group
Confidential Information” shall mean all information relating to the
business and affairs of ML Media or Century or their respective Affiliates
other than information that is as of the date hereof or subsequently becomes
generally available to the public through no fault of, or breach of any
confidentiality obligation by, the Buyer or any of its Affiliates, agents or
representatives.

 

(qqqq)            “Seller Person”
shall mean any Seller or any Affiliate of any Seller.

 

(rrrr)                        “Subscriber
Accounts Receivable” shall mean accounts receivable of the Companies
resulting from the provision of cable television and/or data service (excluding
receivables from the sale of advertising and tower rental) prior to the Closing
Date.

 

(ssss)                “Termination
Date” shall mean December 31, 2005, except that if Sellers fail to
deliver the Audited Financials by August 31, 2005 or the Interim
Financials by September 15, 2005 to meet the conditions in Section 9.6
then Buyer may, by notice to the Sellers given by November 15, 2005,
extend the Termination Date to January 31, 2006.

 

(tttt)                        “Transactions”
shall mean, collectively, (i) the purchase of the Acquired Interests,
(ii) the merger immediately thereafter of Cable Corp. with and into the
Buyer, and (iii) the other transactions contemplated by this Agreement and
the Related Agreements.

 

(uuuu)            “Transition
Services Schedule of Services” shall mean those services to be
provided by Century to the Buyer after the Closing Date and the costs for those
services as set forth on Exhibit C pursuant to a transition services
agreement (the “Transition Services Agreement”) to be negotiated in good faith
by Century and the Buyer reflecting such services and costs.  Century shall only be required to provide the
transition services until the earlier of (a) June 30, 2006, or (b) the
closing of the sale of Adelphia.

 

(vvvv)            “Unpaid Cost to
Complete the Rebuild” shall mean the estimated unpaid cost to complete the
Rebuild of the San Juan System as of the Closing Date, as determined by the
Cable Venture in good faith based on costs previously incurred by the Cable
Venture in connection with the Rebuild of the San Juan System (with amounts
spent to purchase Rebuild Inventory and accounts payable or accrued expenses
relating to the Rebuild of the San Juan System included as Closing Date Current
Liabilities deemed for all purposes of this Agreement as amounts paid prior to
the Closing Date).

 

(wwww)    “Working Capital Target”
shall mean $0.

 

16

 

1.2                                 Additional Defined Terms.  The following terms are defined in the
respective Sections set forth below:

 

	
  Term

  	
   

  	
  Section

  
	
  1992 Act

  	
   

  	
  4.5(b)

  
	
  2005 Budget

  	
   

  	
  4.3(e)

  
	
  ACM

  	
   

  	
  7.15(a)(iv)

  
	
  Acquired Interests

  	
   

  	
  2.1

  
	
  Affiliate Liabilities

  	
   

  	
  7.19

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Allocation Schedule

  	
   

  	
  9.6(a)

  
	
  Allocations

  	
   

  	
  9.6(a)

  
	
  Alternate Agreements

  	
   

  	
  7.11(c)(ii)(C)

  
	
  Audited 2004 Financials

  	
   

  	
  9.6(c)

  
	
  Audited Financials

  	
   

  	
  4.3(c)

  
	
  Bankruptcy Code

  	
   

  	
  Recitals

  
	
  Bankruptcy Court

  	
   

  	
  Recitals

  
	
  Basket

  	
   

  	
  11.4(a)

  
	
  Board

  	
   

  	
  7.11(c)(ii)(A)

  
	
  Break-Up Fee

  	
   

  	
  7.11(c)(iv)(B)

  
	
  Buyer

  	
   

  	
  Recitals

  
	
  Cable Corp.

  	
   

  	
  Recitals

  
	
  Cable Venture

  	
   

  	
  Recitals

  
	
  Cash Purchase Price

  	
   

  	
  3.2 (a)

  
	
  CATV

  	
   

  	
  Recitals

  
	
  Century

  	
   

  	
  Recitals

  
	
  Chapter 11 Case

  	
   

  	
  Recitals

  
	
  Closing

  	
   

  	
  3.1

  
	
  Closing Date

  	
   

  	
  3.1

  
	
  Closing Date Balance Sheet

  	
   

  	
  3.4(b)(i)

  
	
  Collective Bargaining Agreement

  	
   

  	
  4.10(e)

  
	
  Commitment Letters

  	
   

  	
  6.4

  
	
  Communications Act

  	
   

  	
  4.5(b)

  
	
  Companies

  	
   

  	
  Recitals

  
	
  Company Intellectual Property

  	
   

  	
  4.17(c)

  
	
  Confirmation Order

  	
   

  	
  7.11(a)

  
	
  Copyright Act

  	
   

  	
  4.5(b)

  
	
  Debt Commitment Letter

  	
   

  	
  6.4

  
	
  Deferred Purchase Price

  	
   

  	
  3.2 (a)

  
	
  Disclosure Statement

  	
   

  	
  7.11(a)

  
	
  Draft 2004 Financials

  	
   

  	
  9.6(b)

  
	
  Estimated Adjustment Certificate

  	
   

  	
  3.4(a)

  
	
  Estimated Closing Date Balance Sheet

  	
   

  	
  3.4(a)

  
	
  Expense Reimbursement

  	
   

  	
  7.11(c)(iv)(A)

  
	
  Expense Reimbursement Agreement

  	
   

  	
  7.11(c)(iv)(A)

  
	
  Franchise Extensions

  	
   

  	
  7.4(b)

  
	
  Indemnitee

  	
   

  	
  11.3

  

 

17

 

	
  Term

  	
   

  	
  Section

  
	
  Indemnitor

  	
   

  	
  11.3

  
	
  Indemnity Escrow Account

  	
   

  	
  3.2(c)(i)

  
	
  Independent Accountant

  	
   

  	
  3.4(b)(ii)

  
	
  Independent Engineer

  	
   

  	
  7.13(d)

  
	
  Interim Financials

  	
   

  	
  4.3(c)

  
	
  Investor Guaranty

  	
   

  	
  3.2(e)

  
	
  Investors

  	
   

  	
  1.1(ttt)

  
	
  IP Licenses

  	
   

  	
  4.17(b)

  
	
  IRS

  	
   

  	
  4.10(j)

  
	
  Key Personnel

  	
   

  	
  7.6

  
	
  Leases

  	
   

  	
  4.8(b)

  
	
  Levittown System

  	
   

  	
  Recitals

  
	
  Losses

  	
   

  	
  11.2(a)

  
	
  Mark Owner

  	
   

  	
  7.8

  
	
  Matching Right

  	
   

  	
  7.11(c)(ii)(C)

  
	
  Maximum Permissible Reduction

  	
   

  	
  12.1(l)

  
	
  ML JV Interests

  	
   

  	
  7.20

  
	
  ML Media

  	
   

  	
  Recitals

  
	
  Non-Solicitation Period

  	
   

  	
  7.16

  
	
  Objection Notice

  	
   

  	
  3.4(b)(ii)

  
	
  Offering Documents

  	
   

  	
  7.17(c)

  
	
  Operating Cash Flow Statement

  	
   

  	
  3.4(b)(i)

  
	
  Plan

  	
   

  	
  Recitals

  
	
  Pole Attachment Agreement

  	
   

  	
  4.7

  
	
  Post-Closing Period

  	
   

  	
  4.12(e)

  
	
  Pre-Closing Period

  	
   

  	
  4.12(e)

  
	
  Pre-Closing Tax Straddle Period

  	
   

  	
  7.5(a)(ii)

  
	
  Puerto Rico Telecommunications Act

  	
   

  	
  4.5(b)

  
	
  Purchase Price

  	
   

  	
  3.2(a)

  
	
  Rebuild Cost Overrun

  	
   

  	
  7.13(e)

  
	
  Rebuild Employees

  	
   

  	
  4.10(m)

  
	
  Rebuild Escrow Account

  	
   

  	
  3.2(b)

  
	
  Rebuild Escrow Amount

  	
   

  	
  3.2(b)

  
	
  Rebuild Extension Date

  	
   

  	
  7.4(b)

  
	
  Remaining Unpaid Cost

  	
   

  	
  3.2(b)

  
	
  Retained Marks

  	
   

  	
  2.2(e)

  
	
  Revised Schedule 4.6(e)

  	
   

  	
  7.21

  
	
  S-1 Financial Statements7.17(b)

  	
   

  	
  7.17(b)

  
	
  San Juan System

  	
   

  	
  Recitals

  
	
  Securities Act

  	
   

  	
  7.17(b)

  
	
  Sellers

  	
   

  	
  Recitals

  
	
  Sellers’ Adjustment Certificate

  	
   

  	
  3.4(b)(i)

  
	
  Sellers Escrow Account

  	
   

  	
  3.2(c)(iii)

  
	
  Shortfall

  	
   

  	
  11.6

  
	
  Stand-Alone

  	
   

  	
  7.22

  

 

18

 

	
  Term

  	
   

  	
  Section

  
	
  Superior Proposal

  	
   

  	
  7.11(c)(ii)(A)

  
	
  Supplemental Interim Financials

  	
   

  	
  7.17(e)

  
	
  System

  	
   

  	
  Recitals

  
	
  Tax

  	
   

  	
  4.12(a)

  
	
  Tax Benefit

  	
   

  	
  11.4(c)

  
	
  Tax Return

  	
   

  	
  4.12(a)

  
	
  Taxing Authority

  	
   

  	
  4.12(a)

  
	
  Third-Party Claim11.3

  	
   

  	
  11.3

  
	
  Transferred Assets

  	
   

  	
  2.2(i)

  
	
  Transferred Programming Agreements

  	
   

  	
  2.2(a)

  
	
  Treasury Regulations

  	
   

  	
  4.12(a)

  
	
  Unaudited 2004 Financials

  	
   

  	
  4.3(a)

  
	
  Unaudited Financials

  	
   

  	
  4.3(a)

  
	
  Unaudited Historical Financials

  	
   

  	
  4.3(a)

  
	
  WARN Act

  	
   

  	
  4.3(h)(ix)

  

 

2.                                      PURCHASE AND SALE OF ACQUIRED
INTERESTS

 

2.1                                 Transfer
of Acquired Interests.  Subject to
the terms, provisions and conditions contained in this Agreement, on the
Closing Date, in consideration for payment by the Buyer of the Purchase Price
pursuant to Section 3.2, the Sellers shall sell to the Buyer, and the
Buyer shall purchase from the Sellers, all of the Sellers’ joint venture
interests in the Cable Venture (the “Acquired Interests”) pursuant to
the terms of the Plan and, as a result of such sale and purchase, the Cable
Venture shall, by operation of law, be liquidated into the Buyer.  Immediately thereafter, the Buyer shall cause
Cable Corp. to be merged with and into the Buyer, and the Buyer shall be the
surviving entity in such merger.

 

2.2                                 Transferred
Assets.  Notwithstanding anything in
this Agreement to the contrary, the Buyer expressly agrees and acknowledges
that, immediately following the merger of Cable Corp. with and into the Buyer, the
following rights and assets will be terminated or will be assumed and assigned
to Century or its designee (in the case of items (a), (b), (c), (e), (f) and
(i)), to ML Media (in the case of item (g)) and to the Sellers Escrow Account
(in all other cases) (or as Century and ML Media may otherwise agree in writing
or as otherwise provided in the Plan) and that neither the Buyer nor the
Companies otherwise will have any right, title or interest with respect to such
rights and assets from and after the Closing:

 

(a)                                  all
Programming Agreements other than the Retained Programming Agreements (collectively,
the “Transferred Programming Agreements”), all of which Transferred
Programming Agreements will be terminated with respect to the Systems on the
Closing Date;

 

(b)                                 except
as provided in Section 2.2(d), insurance policies, surety instruments and
bonds held by the Companies or in respect of any of the Companies’ assets, and
all rights and claims of the Companies thereunder, but only to the extent
indicated on Schedule 4.14;

 

19

 

(c)                                  except
as provided in Section 7.15(c)(iv), licenses for billing and customer
service software used by the Companies and any rights to receive billing
services or management services;

 

(d)                                 all
claims, rights and interests of the Companies in and to any refunds or credits
in respect of federal, state, Commonwealth or local Taxes to the extent such
refunds are for the account of the Sellers pursuant to Section 7.5(a)(iii)
and any refunds of fees for periods prior to and including the Closing Date,
including, without limitation, excise taxes and copyright fees and any refunds
of pre-paid insurance premiums or other pre-paid expenses relating to the
insurance policies transferred pursuant to Section 2.2(b);

 

(e)                                  the
trademarks, trade names, service marks, service names, fictitious names and
logos set forth on Schedule 2.2(e) (collectively, the “Retained
Marks”);

 

(f)                                    all
claims, rights and interests of the Cable Venture or Cable Corp. against ML
Media and its Affiliates;

 

(g)                                 all
claims, rights and interests of the Cable Venture or Cable Corp. against
Century and its Affiliates or against any member of the Rigas family or any of
their Affiliates (subject to a 50% interest in the net recovery received from
any member of the Rigas family or their Affiliates in favor of Century);

 

(h)                                 any
preference, fraudulent transfer and/or avoidance claims asserted by the Cable
Venture against any Affiliate (other than ML Media or Century) prior to the
Closing and pending as of the Closing Date; and

 

(i)                                     the
other rights and assets set forth on Schedule 2.2(i) (all of the
foregoing in clauses (a) through (i), collectively, the “Transferred Assets”).

 

2.3                                 Excluded
Liabilities.  Notwithstanding
anything in this Agreement to the contrary, the Sellers and the Companies
expressly agree and acknowledge that the Buyer shall have no liability for any
Excluded Liability, and that at the Closing all Excluded Liabilities shall be
assumed and assigned from the Cable Venture or Cable Corp., as the case may be,
to the Sellers or the Seller Escrow Account and the Buyer shall not thereafter
bear any obligation or liability of any kind with respect to such Excluded
Liabilities.

 

3.                                      CLOSING;
PURCHASE PRICE; ADJUSTMENTS

 

3.1                                 Closing
Date and Location.  The consummation
of the sale and delivery of the Acquired Interests to the Buyer and the receipt
of the consideration therefor by payment as provided in Section 3.2 shall
constitute the “Closing.”  Unless
otherwise agreed by the parties or if this Agreement shall be terminated
pursuant to the terms hereof, the Closing shall take place at 10:00 a.m., local
time, at the offices of Proskauer Rose LLP, 1585 Broadway, New York, New York
10036 and shall occur on the date that is three (3) Business Days following
satisfaction or waiver of all of the conditions to Closing set forth in
Sections 8, 9 and 10, other than those conditions which by their terms can only
be satisfied on the Closing Date; provided that if such third Business
Day shall fall on or after the 20th day of any month, then the Closing shall
occur on the last Business Day of such month. 
The date on which the Closing actually occurs shall

 

20

 

constitute the “Closing Date.” 
Notwithstanding the foregoing, this Agreement may be terminated pursuant
to Section 12.1(b) hereof if the Closing has not occurred by the
Termination Date.  The parties hereto
agree to use their respective commercially reasonable efforts to cause the
Closing to occur on or before October 31, 2005.

 

3.2                                 Purchase
Price; Payment of the Purchase Price.

 

(a)                                  The
purchase price for the Acquired Interests shall be the aggregate amount of Five
Hundred Twenty Million Dollars ($520,000,000) in cash (the “Purchase Price”),
subject to adjustment in accordance with Sections 3.3 and 3.4, plus the
transfer of the Transferred Assets pursuant to Section 2.2.  The Purchase Price payable in cash shall be
payable as follows:  $506,500,000 (the “Cash
Purchase Price”), subject to adjustment in accordance with Sections 3.3
and 3.4, shall be payable at the Closing as provided in Section 3.3(c),
and $13,500,000 (the “Deferred Purchase Price”) shall be payable as
provided in Section 3.3(d).

 

(b)                                 On
the Closing Date, if the Completion of the Rebuild of the San Juan System has
not occurred (as finally determined pursuant to Section 7.13(d)), the
Companies shall, at the Buyer’s option, either (i) deposit in cash, by
wire transfer of immediately available funds, an amount equal to the Unpaid
Cost to Complete the Rebuild to the Escrow Agent, to be held in a separate
interest bearing rebuild escrow account (the “Rebuild Escrow Account”)
pursuant to the Escrow Agreement, which funds (the “Rebuild Escrow Amount”)
shall be applied to pay any remaining costs to complete the Rebuild of the San
Juan System in accordance with Section 7.13, or (ii) pay that amount,
in cash, by wire transfer of immediately available funds, to the Buyer as a
reduction of the Purchase Price, in which case the Sellers shall no have no
further obligations with respect to the Rebuild pursuant to Section 7.13
or otherwise. If (x) the Buyer elects to cause the Companies to deposit an
amount equal to the Unpaid Cost to Complete the Rebuild in the Rebuild Escrow
Account and (y) the Companies have insufficient cash on the Closing Date
to make such deposit, then the Buyer shall remedy any such deficiency (the “Remaining
Unpaid Cost”) by depositing an amount equal to the Remaining Unpaid Cost in
the Rebuild Escrow Account and reducing the amount payable to the Sellers at
the Closing pursuant to Section 3.2(c)(ii) by an equal amount.

 

(c)                                  On
the Closing Date, the Buyer shall pay, by wire transfers of immediately
available funds, an aggregate amount equal to the Cash Purchase Price, as
preliminarily adjusted in accordance with Sections 3.3 and 3.4(a), as follows:

 

(i)                                     The
Buyer shall deliver or cause to be delivered to the Escrow Agent an amount
equal to $25,000,000, to be held by the Escrow Agent in a separate interest
bearing account (the “Indemnity Escrow Account”) pursuant to the Escrow
Agreement, which funds (together with interest thereon) shall be paid in whole
or in part in accordance with the terms of the Escrow Agreement to (1) the
Buyer if and to the extent it is determined that the Buyer is entitled to
indemnification payments under Section 11.2(b) of this Agreement (other
than pursuant to Section 11.2(b)(v) except as permitted by Section 11.5),
or (2) the Sellers Escrow Account (as defined below) (or in accordance
with any other written instructions given by both of the Sellers to Buyer and
the Escrow Agent prior to the payment) to the extent the Buyer is not
determined to be entitled to any such payments referred to in clause (1).

 

21

 

(ii)                                  The
Buyer shall deliver or cause to be delivered to a separate interest bearing
escrow account for the benefit of the Sellers (the “Sellers Escrow Account”)
or in accordance with any other written instructions jointly given by the
Sellers to the Buyer prior to the Closing, the remainder of the Cash Purchase
Price (or $481,500,000), subject to reduction as provided in Section 3.2(b)
and this Section 3.2(c)(ii).  Immediately
following the Closing, the Buyer shall wire to the Sellers Escrow Account (or
in accordance with such instructions) the amount by which the Purchase Price is
increased pursuant to the preliminary adjustments to the Purchase Price
contained in Section 3.3, Section 3.4(a) and (if applicable) Section 7.13(d)
and the Buyer shall transfer and assign the Transferred Assets as provided in Section 2.2.  If the Purchase Price is decreased pursuant
to such adjustments, the payment by the Buyer at the Closing to the Sellers
Escrow Account (or in accordance with such instructions) shall be reduced by
the amount of the adjustments.  Release
of funds from the Sellers Escrow Account may only be made as provided by (x)
written agreement of both Century and ML Media, or (y) Order of the
Bankruptcy Court.  The Buyer Group shall
have no right to limit distributions from the Sellers Escrow Account.

 

(d)                                 The
Buyer shall pay the Deferred Purchase Price, together with interest on the
unpaid portion of the Deferred Purchase Price at the rate of 3.5% per year, as
follows:

 

(i)                                     the
amount set forth opposite each item listed on Schedule 3.2(d)(i)  (pertaining to Certificates of Debt) shall be
paid to the Sellers when that item is fully paid or settled, provided that the
Sellers shall provide evidence satisfactory to the Buyer for such payment or
settlement, including receipts, confirmation letter of similar documents issued
by the respective Taxing Authority.

 

(ii)                                  the
amount set forth on Schedule 3.2(d)(ii) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the completion of the pending tax examination by the Puerto Rico Treasury
Department with respect to the taxable year ended December 31, 2000 and
the receipt of written documentation from such Treasury Department providing
that the examination with respect to the taxable year in question is closed, or
(B) the expiration of the Puerto Rico four-year tax statute of limitations with
respect to the taxable year ended December 31, 2000.  Notwithstanding the foregoing, the payment shall
be reduced in amount by the total of then outstanding (or previously paid)
claims asserted by the Buyer under the procedures set forth in Section 11.3(g)
of this Agreement for indemnification payments with respect to any taxable year
or period under Section 11.2(b)(v) of this Agreement (pertaining to any
Indemnified Tax Liability).  The amount
set forth on Schedule 3.2(d)(ii) (or any lesser amount, to the extent reduced
as described in this Section 3.2(d)(ii)) shall be then paid to the Sellers.

 

(iii)                               the
amount set forth on Schedule 3.2(d)(iii) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the completion of the pending tax examination by the Puerto Rico Treasury
Department with respect to the taxable year ended December 31, 2001 and
the receipt of written documentation from such Treasury Department providing
that the examination with respect to the taxable year in question is closed, and
(B) the expiration of the Puerto Rico four-year tax statute of limitations with
respect to the taxable year ended December 31, 2001.  Notwithstanding the foregoing, the payment
shall be reduced in amount by the total of then outstanding (or previously
paid) claims

 

22

 

asserted by
the Buyer under the procedures set forth in Section 11.3(g) of this
Agreement for indemnification payments with respect to any taxable year or
period under Section 11.2(b)(v) of this Agreement (pertaining to any
Indemnified Tax Liability).  The amount
set forth on Schedule 3.2(d)(iii) (or any lesser amount, to the extent
reduced as described in this Section 3.2(d)(iii)) shall be then paid to
the Sellers.

 

(iv)                              the
amount set forth on Schedule 3.2(d)(iv) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the completion of the pending tax examination by the Puerto Rico Department of
Treasury with respect to the taxable year ended December 31, 2002 and the
receipt of written documentation from such Treasury Department providing that
the examination with respect to the taxable year in question is closed, and (B)
the expiration of the Puerto Rico four-year tax statute of limitations with
respect to the taxable year ended December 31, 2002.  Notwithstanding the foregoing, the payment
shall be reduced in amount by the total of then outstanding (or previously
paid) claims asserted by the Buyer under the procedures set forth in Section 11.3(g)
of this Agreement for indemnification payments with respect to any taxable year
or period under Section 11.2(b)(v) of this Agreement (pertaining to any
Indemnified Tax Liability).  The amount
set forth on Schedule 3.2(d)(iv) (or any lesser amount, to the extent reduced
as described in this Section 3.2(d)(iv)) shall be then paid to the Sellers.

 

(v)                                 the
amount set forth on Schedule 3.2(d)(v) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the commencement and completion of a Puerto Rico tax examination with respect
to the taxable year ended December 31, 2003 and the receipt of written
documentation from such Treasury Department providing that the examination with
respect to the taxable year in question is closed, and (B) the expiration of
the Puerto Rico four-year tax statute of limitations with respect to that
taxable year.  Notwithstanding the foregoing,
the payment shall be reduced in amount by the total of then outstanding (or
previously paid) claims asserted by the Buyer under the procedures set forth in
Section 11.3(g) of this Agreement for indemnification payments with
respect to any taxable year or period under Section 11.2(b)(v) of this
Agreement (pertaining to any Indemnified Tax Liability).  The amount set forth on Schedule 3.2(d)(v)
(or any lesser amount, to the extent reduced as described in this Section 3.2(d)(v))
shall be then paid to the Sellers.

 

(vi)                              the
amount set forth on Schedule 3.2(d)(vi) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the commencement and completion of a Puerto Rico tax examination with respect
to the taxable year ended December 31, 2004 and the receipt of written
documentation from such Treasury Department providing that the examination with
respect to the taxable year in question is closed, and (B) the expiration of
the Puerto Rico four-year tax statute of limitations with respect to that
taxable year.  Notwithstanding the
foregoing, the payment shall be reduced in amount by the total of then
outstanding (or previously paid) claims asserted by the Buyer under the
procedures set forth in Section 11.3(g) of this Agreement for
indemnification payments with respect to any taxable year or period under Section 11.2(b)(v)
of this Agreement (pertaining to any Indemnified Tax Liability).  The amount set forth on Schedule 3.2(d)(vi)
(or any lesser amount, to the extent reduced as described in this Section 3.2(d)(vi))
shall be then paid to the Sellers.

 

23

 

(vii)                           the
amount set forth on Schedule 3.2(d)(vii) shall be paid to the Sellers in
installments as set forth on Schedule 3.2(d)(vii) within 10 Business Days
after the earlier of (A) the commencement and completion of a tax examination
by the IRS for the specified year, or (B) the expiration of the U.S. three-year
statute of limitations for the specified year. 
Notwithstanding the foregoing, the payment shall be reduced in amount if
and to the extent that the U.S. Internal Revenue Service asserts a claim or
proposed adjustment in Taxes owed in connection with such tax examination for
the year in question, and such claim or proposed adjustment shall then be
subject to the procedures set forth in Section 11.3(g) of this Agreement.

 

(viii)                        any and
all amounts by which the above payments in Section 3.2(d)(ii)-(vii)
(pertaining to years ended on or before December 31, 2004) have been
reduced shall be paid (i) to the Buyer, as indemnity payments for the tax
losses suffered by the Buyer, only after a final determination of a claim
asserted by a Taxing Authority (as provided in Section 11.3(g) of this
Agreement) or agreement between the Buyer and the Sellers, subject to the
principles and procedures set forth in Section 11 of this Agreement, or
(ii) to the Sellers, if and to the extent there is a final determination of a
claim asserted by the Taxing Authority favorable to the taxpayer, upon the
expiration of the applicable statute of limitations, or upon agreement between
the Buyer and the Sellers.

 

(e)                                  The
Deferred Purchase Price shall be guaranteed by the Investors pursuant to a
Guaranty in the form of Exhibit K (the “Investor Guaranty”).

 

(f)                                    Each
payment of the Deferred Purchase Price shall be made together with accrued
interest on the amount paid.

 

3.3                                 Purchase
Price Adjustments.

 

(a)                                  The
Purchase Price shall be (i) increased on a dollar-for-dollar basis by the
amount that the Closing Date Working Capital exceeds the Working Capital Target
or decreased on a dollar-for-dollar basis by the amount that the Closing Date
Working Capital is less than the Working Capital Target, (ii) decreased on
a dollar-for-dollar basis by the amount of any outstanding Funded Debt (to the
extent such Funded Debt is not included as a Closing Date Current Liability or
discharged under the Plan) and (iii) reduced pursuant to Section 7.15(e)
(if applicable).

 

(b)                                 Except
as provided in Section 3.3(d), and subject to the Sellers’ termination
right in Section 12.1(l), if the number of Equivalent Subscribers as of
the Closing Date is less than the Subscriber Target as set forth below, then
the Purchase Price shall be reduced by an amount equal to the Per Subscriber
Price as set forth below multiplied by the shortfall.

 

24

 

	
  Closing
  Date

  	
   

  	
  Subscriber

  Target

  	
   

  	
  Per Subscriber

  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  On or before September 30, 2005

  	
   

  	
  136,797

  	
   

  	
  $

  	
  3,801

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From October 1, 2005 to and including
  October 31, 2005

  	
   

  	
  136,947

  	
   

  	
  3,797

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From November 1, 2005 to and including
  November 30, 2005

  	
   

  	
  137,097

  	
   

  	
  3,793

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From and after December 1, 2005

  	
   

  	
  137,247

  	
   

  	
  3,789

  	
   

  
							

 

(c)                                  Except
as provided in Section 3.3(d), and subject to the Sellers’ termination
right in Section 12.1(l), if the Operating Cash Flow for the 12-month
period ending on the Calculation Date is less than the Operating Cash Flow
Target as set forth below, then the Purchase Price shall be reduced by an amount
equal to the product of the Multiple as set forth below and the shortfall:

 

	
  Closing
  Date

  	
   

  	
  Operating Cash

  Flow Target

  	
   

  	
  Multiple

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  On or before August 31, 2005

  	
   

  	
  $

  	
  52,000,000

  	
   

  	
  10.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From September 1, 2005 to and
  including October 31, 2005

  	
   

  	
  $

  	
  52,500,000

  	
   

  	
  9.90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From November 1, 2005 to and including
  November 30, 2005

  	
   

  	
  $

  	
  52,750,000

  	
   

  	
  9.86

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From and after November 30, 2005

  	
   

  	
  $

  	
  53,000,000

  	
   

  	
  9.81

  	
   

  

 

Notwithstanding
the foregoing, if all of the conditions to Closing set forth in
Sections 8, 9 and 10, other than Section 9.9 and other than those
conditions which by their terms can only be satisfied on the Closing Date, have
been satisfied by October 26, 2005, the Operating Cash Flow Target shall
not increase on or after November 1, 2005.

 

(d)                                 Notwithstanding
anything to the contrary in Section 3.3(b) or Section 3.3(c), if
there otherwise would be reductions in the Purchase Price pursuant to both Section 3.3(b)
and Section 3.3(c), then the Purchase Price shall be reduced only by the
greater of the reduction pursuant to Section 3.3(b) and the reduction
pursuant to Section 3.3(c).

 

25

 

3.4                                 Determination
of Purchase Price Adjustments

 

(a)                                  Closing
Date Estimated Adjustments.  In order
to adjust the Purchase Price payable at the Closing on a preliminary basis
(subject to the final adjustments to be made pursuant to Section 3.4(b))
to reflect the Purchase Price adjustments set forth in Section 3.3, at
least five (5) Business Days prior to the Closing Date, the Cable Venture shall
deliver to the Buyer a certificate setting forth in reasonable detail the Cable
Venture’s good faith estimates of the adjustments pursuant to Section 3.3
as well as of the Unpaid Cost to Complete the Rebuild (if any), including
(i) the estimated Closing Date Working Capital, (ii) the estimated
outstanding Funded Debt (if any) as of the Closing Date, (iii) the
estimated number of Equivalent Subscribers as of the Calculation Date (and, if
the Calculation Date is not the Closing Date, the estimated number of
Equivalent Subscribers as of the Closing Date) and (iv) the Operating Cash
Flow for the 12-month period ending on the Previous Month End (the “Estimated
Adjustment Certificate”), together with an estimated Closing Date balance
sheet (the “Estimated Closing Date Balance Sheet”) and supporting
documentation in reasonable detail.  The
Estimated Adjustment Certificate shall be prepared from the Companies’ books
and records in accordance with GAAP, consistently applied with and subject to
the accounting principles set forth in Section 3.4(d), except as otherwise
expressly provided herein, and shall reflect the good faith, reasonable
estimates of the Companies and the Sellers and shall be accompanied by a
certificate of the Companies specifying that all actual and estimated amounts
comply and were prepared in accordance with the terms of Sections 3.3 and 3.4
and, to the Companies’ Knowledge, are true and complete in all material
respects.  If the Buyer disagrees with
the Cable Venture’s estimate of any of the adjustments to the Purchase Price or
with the Cable Venture’s estimate of the Unpaid Cost to Complete the Rebuild,
the Buyer and the Cable Venture shall endeavor in good faith to agree on the
amount thereof prior to the Closing.  If
the Buyer and the Cable Venture are unable to agree on the adjustments to the
Purchase Price or the Unpaid Cost to Complete the Rebuild, the Purchase Price
payable at the Closing shall reflect, in the case of each disputed amount, 50%
of the difference between the Cable Venture’s estimate of such disputed amount
and the Buyer’s good faith estimate thereof (in each case reflecting any
changes to original estimates that have been agreed to by the parties during
their attempts to resolve all differences), and the remaining 50% shall be
deposited into a separate account pursuant to the Escrow Agreement; provided,
however, that the foregoing shall not affect any dispute between the
Buyer and the Sellers concerning the satisfaction of a closing condition set
forth in Section 9.  The Estimated
Adjustment Certificate shall be amended to reflect any such compromises.

 

(b)                                 Post-Closing
Determination of Adjustments.

 

(i)                                     The
Sellers shall deliver to the Buyer, not later than ninety (90) days following
the Closing Date, a certificate setting forth a good faith determination of the
adjustments to the Purchase Price (the “Sellers’ Adjustment Certificate”),
together with a consolidated balance sheet of the Companies as of the day
preceding the Closing Date (the “Closing Date Balance Sheet”) and a
statement of Operating Cash Flow for the 12-month period ending on the
Calculation Date (the “Operating Cash Flow Statement”) and such other
supporting documentation in reasonable detail as the Buyer may request.  The Sellers’ Adjustment Certificate, the
Closing Date Balance Sheet and the Operating Cash Flow Statement shall be
prepared from the Companies’ books and records in accordance with and subject
to the accounting principles set forth in Section 3.4(d).

 

26

 

(ii)                                  If
the Buyer disagrees with the Sellers’ calculation of the adjustments to the
Purchase Price, the Buyer shall promptly, but in no event later than sixty (60)
days following receipt of the Sellers’ Adjustment Certificate, deliver to the
Sellers written notice (the “Objection Notice”) describing in reasonable
detail its dispute by specifying those items or amounts as to which it
disagrees, together with its determination of such disputed amounts; provided,
that the Buyer shall be deemed to have agreed with all items and amounts that
are not disputed.  If the dispute is not
resolved by the parties within thirty (30) days following the date of the
Sellers’ receipt of the Objection Notice, the parties shall engage an
independent accounting firm reasonably acceptable to the Buyer and the Sellers
(the “Independent Accountant”), which shall resolve the dispute within
thirty (30) days following such engagement. 
The Independent Accountant shall act as an expert and not as an
arbitrator to determine, based solely on the written submissions of the
Sellers, on the one hand, and the Buyer, on the other hand, and not by
independent investigation, only the specific items under dispute by the
parties.  The Independent Accountant shall
render a written report as to the resolution of the dispute and the resulting
computations.  The Independent Accountant’s
determination of the disputed items or amounts shall, absent manifest error, be
final and binding on the parties and will be applied in determining the
adjustments to the Purchase Price set forth in Section 3.3.  In resolving any disputed item, the
Independent Accountant (i) shall be bound by the provisions of this
Agreement including, without limitation, Section 3.4(b) and Section 3.4(d)
and (ii) may not assign a value to any item greater than the greatest
value for such item claimed by either party in the Sellers’ Adjustment
Certificate or the Objection Notice, as applicable, or less than the smallest
value for such item claimed by either party in the Sellers’ Adjustment
Certificate or the Objection Notice, as applicable.  The Buyer, on the one hand, or the Sellers
(from the Sellers Escrow Account), on the other hand, shall make appropriate
payment to the other of any additional amounts determined to be payable by them
in respect of the Purchase Price within five (5) Business Days following either
the resolution of the dispute by the parties or the receipt of the Independent
Accountant’s final determination, as the case may be; provided, that to
the extent the amount reflected in the Sellers’ Adjustment Certificate is not
in dispute such amount shall be paid before resolution of the dispute by the
parties or receipt of the Independent Accountant’s final determination.  All fees and costs of the Independent
Accountant shall be borne by and allocated between the Sellers (from the
Sellers Escrow Account), on the one hand, and the Buyer, on the other hand, on
a pro  rata basis based on the differences between the Independent
Accountant’s determination of the disputed amounts to the net adjustments to
the Purchase Price (as finally determined by the Independent Accountant or the
parties) and each of the Sellers’ and the Buyer’s respective determinations of
such disputed amounts.  If the Buyer does
not raise any objections to the Sellers’ Adjustment Certificate within the
periods described herein, the Sellers’ Adjustment Certificate will become final
and binding upon all parties.  Any
payments required to be made by the Sellers pursuant to this Section 3.4(b)(ii)
shall be limited to amounts included in, and made solely from, the Sellers
Escrow Account and any payments required to be made by the Buyer shall be made
to the Sellers Escrow Account and shall be made first from the escrow
established pursuant to Section 3.4(a) but shall not be limited by such
amount.

 

(c)                                  During
the preparation of the Estimated Adjustment Certificate, the Sellers’
Adjustment Certificate, the Closing Date Balance Sheet and the Operating Cash
Flow Statement and the period of review or dispute as set forth in Section 3.4(b)(ii)
above, the Sellers (and the Companies prior to the Closing), on the one hand,
and the Buyer, on the other hand, shall (i) provide each other and each
other’s authorized representatives with full access at all

 

27

 

reasonable
times, and in a manner so as not to interfere with the normal business
operations of the Sellers, the Buyer or the Companies, in each case,
respectively, to all relevant books, records, work papers, information and
employees and auditors of such Persons, and (ii) cooperate fully with each
other and each other’s authorized representatives, in each of clauses (i) and
(ii), as necessary or useful for the preparation, calculation and review of the
Estimated Adjustment Certificate, the Sellers’ Adjustment Certificate, the
Closing Date Balance Sheet and the Operating Cash Flow Statement or for the
resolution of any dispute between the Sellers and the Buyer relating thereto.

 

(d)                                 Except
as otherwise expressly provided in the definitions of Closing Date Current
Assets, Closing Date Current Liabilities and Operating Cash Flow, each
accounting term used in this Section 3.4 shall have the meaning that is
applied thereto in accordance with GAAP and each account included in the
Estimated Adjustment Certificate, the Sellers’ Adjustment Certificate, the
Closing Date Balance Sheet and the Operating Cash Flow Statement shall be
calculated in accordance with GAAP (for purposes of both the adjustments contemplated
by this Section 3.4 and determining satisfaction with the Operating Cash
Flow closing condition in Section 9.6), consistently applied with and
subject to the Reference Accounting Principles; provided, that reference to
GAAP in the definitions of defined terms used in this Section 3.4 also
shall be deemed to mean GAAP consistently applied with and subject to these
same Reference Accounting Principles. The Reference Accounting Principles also
have been used in preparing the illustrative calculation of Closing Date
Working Capital set forth on Exhibit H and the illustrative calculation
of Operating Cash Flow set forth on Exhibit J and no change in
accounting principles shall be made from those utilized in preparing such
illustrative calculations, including, with respect to the nature or
classification of accounts (including any reclassification of any assets,
contra liabilities or liabilities from short term to long term), closing
proceedings, valuations of inventory, levels of reserves or levels of accruals
or Allocations other than as a result of objective changes in the underlying
business that occur prior to the Closing Date. 
For purposes of the preceding sentence, “changes in accounting
principles” means all changes in accounting principles, policies and
methodologies with respect to the determination of the accounts set forth on Exhibit
H or Exhibit J, as applicable, their classification or their display.

 

4.                                      REPRESENTATION
AND WARRANTIES REGARDING THE COMPANIES

 

The Companies hereby, jointly and severally, represent and warrant to
the Buyer as follows, except as set forth in the Schedules attached hereto, it
being understood that any matter disclosed on any Schedule referred to
herein shall be deemed to have been disclosed on any other Schedule for
which it is readily apparent such disclosure applies.

 

4.1                                 Existence;
Good Standing and Power; Capitalization.

 

(a)                                  (i)                                     Except
as set forth on Schedule 4.1, the Cable Venture is a general
partnership duly organized, validly existing and in good standing under the
laws of the State of New York, and the Cable Venture is duly qualified or
licensed to conduct business and is in good standing in every jurisdiction
where the nature of the business conducted by it or the properties owned or
leased by it requires qualification. 
Subject to applicable bankruptcy law, the Cable

 

28

 

Venture has all of the requisite general partnership power and
authority to own, operate or lease its assets and properties, to own and
operate the Levittown System, to own all of the outstanding capital stock of
Cable Corp., and to conduct its business as currently conducted, and subject to
the Bankruptcy Court’s entry of the Confirmation Order, to execute, deliver and
perform this Agreement and all Related Agreements to which it is a party.

 

(ii)           Except as set forth on Schedule 5.2(d),
all of the joint venture interests in the Cable Venture are owned beneficially
and of record by the Sellers free and clear of any Liens.  As of the Closing Date and subject to the
occurrence of the transactions contemplated to occur on the Closing Date under
this Agreement and the Plan, the Acquired Interests will constitute all of the
outstanding joint venture interests of the Cable Venture.

 

(b)           (i)            Except
as set forth on Schedule 4.1, Cable Corp. is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.  Cable Corp. has all of the
requisite corporate power and authority to own, operate or lease all of its
assets and properties, to own and operate the San Juan System and to conduct
its business as currently conducted, and to execute, deliver and perform this
Agreement and all Related Agreements to which it is a party.  Cable Corp. is duly qualified or licensed to
conduct business and is in good standing in every jurisdiction where the nature
of the business conducted by it or the properties owned or leased by it
requires qualification.

 

(ii)           The authorized capital
stock of Cable Corp. consists of one thousand (1,000) shares of common stock,
par value $0.01 per share, of which one hundred (100) shares have been issued
and are outstanding.  All of the issued
and outstanding shares of capital stock of Cable Corp. have been duly and
validly authorized and issued and are fully paid and nonassessable and the
Cable Venture owns beneficially and of record 100% of the issued and outstanding
capital stock of Cable Corp., free and clear of any Liens.  No shares of capital stock of Cable Corp. are
held as treasury stock.  Except as set
forth on Schedule 4.1, there is no outstanding or authorized
option, warrant, call, commitment, stock purchase plan or other contract or
agreement to which Cable Corp. or the Cable Venture is a party requiring, and
there are no convertible securities of Cable Corp. outstanding or authorized
which upon conversion could require, the issuance, sale, transfer or other
disposition of any additional shares of capital stock or other equity interests
of Cable Corp. or other securities convertible into shares of capital stock or
other equity interests of Cable Corp. 
There are no outstanding or authorized stock appreciation,
phantom stock, profit participation or similar rights with respect to Cable
Corp.  Except as set forth on Schedule 4.1,
none of the Sellers, the Cable Venture or Cable Corp. is a party to any voting
trust, proxy or other voting agreement or understanding with respect to any of
the capital stock of Cable Corp. or to any agreement relating to the issuance,
sale, redemption, repurchase, retiring, transfer or other disposition or
registration of the capital stock of Cable Corp.

 

(c)           Upon entry of the
Confirmation Order and the consummation of the acquisition of the Acquired
Interests pursuant to Section 2.1 hereof and pursuant to the terms of the
Plan, the Buyer shall own 100% of the equity interests of the Cable Venture,
and the Cable Venture shall own 100% of the equity interests of Cable Corp.,
free and clear of all Liens (other than Liens created by the Buyer) and no
Person other than the Buyer shall have any right to acquire any interest (other
than those granted by the Buyer) in the Cable Venture or Cable Corp.

 

29

 

(whether such right shall take the form of options, warrants,
commitments, agreements, preemptive rights, rights of first refusal, put or
call rights, purchase rights or obligations or anti dilution rights with
respect to the issuance, sale or redemption of the joint venture interests in
Cable Venture, capital stock of Cable Corp. or otherwise), nor shall there be
outstanding or authorized any securities of the Cable Venture or Cable Corp.
which upon conversion or exchange could require the issuance, sale, transfer or
other disposition of any additional equity securities of the Cable Venture or
Cable Corp., as applicable.

 

4.2           Authorization,
Company Required Consents.

 

(a)           This Agreement and the
Related Agreements (i) constitute (or, in the case of any Related
Agreements to which it is a party, when executed and delivered will constitute)
the legal, valid and binding obligation of Cable Corp. and (ii) upon the
Bankruptcy Court’s entry of the Confirmation Order (and, in the case of any
Related Agreements to which it is a party, when executed and delivered) will
constitute the legal, valid and binding obligation of the Cable Venture,
enforceable against each Company in accordance with their respective
terms.  Provided that the Company
Required Consents are obtained, the execution, delivery and performance of this
Agreement and the Related Agreements and the consummation of the Transactions
in accordance with, and subject to the conditions precedent in, this Agreement
do not and will not:  (i) violate
any Legal Requirement applicable to the Companies, their assets or properties
or the Systems; (ii) conflict with, violate or result in a breach of any
of the provisions of the JV Agreement or Cable Corp.’s certificate of
incorporation or bylaws; or (iii) conflict with, result in a breach of or
constitute a default (or an event which, with notice or lapse of time or both,
could constitute a default), result in the acceleration of, create in any party
the right to accelerate, terminate, suspend, modify or cancel, give rise to the
creation of any Lien upon any of the assets or properties of the Companies
(other than the Transferred Assets) or require any notice under, any of the
terms, conditions or provisions under any Material Contract or Governmental
Authorization.

 

(b)           Schedule 4.2(b)
contains a true and complete list of any and all Company Required Consents.

 

4.3           Financial
Statements; Indebtedness; Budget; Absence of Changes.

 

(a)           Unaudited Financials.  The Companies have made available to the
Buyer true and complete copies of (x) unaudited consolidated balance
sheets, statements of operations and statements of cash flows as of and for
each of the two fiscal years ended December 31, 2002 and 2003 (the “Unaudited
Historical Financials”) and (y) an unaudited consolidated balance
sheet and statement of operations as of and for the 12 months ended
December 31, 2004, without footnotes (which are attached to this Agreement
as Exhibit G) (the “Unaudited 2004 Financials” and, together with
the Unaudited Historical Financials, the “Unaudited Financials”).  No representation or warranty is made with
respect to the Unaudited Financials, but that shall not limit the Buyer’s right
not to close if the condition set forth in Section 9.6 is not satisfied.

 

(b)           Audited Financials.  The audited consolidated balance sheet,
statement of operations and statement of cash flows as of and for each of the
three fiscal years ended December 31, 2002, 2003 and 2004 (collectively,
the “Audited Financials”), including the notes

 

30

 

thereto, to be provided to the Buyer prior to the Closing pursuant to
Section 7.17(b), shall present fairly the financial condition of the
Companies as of such dates and the results of operations and cash flows of the
Companies for such periods therein referred to, in conformity with GAAP applied
consistently throughout the periods covered thereby except as otherwise
permitted by the definition of Reference Accounting Principles.

 

(c)           Interim Financials.  The unaudited consolidated balance sheet,
statement of operations and statement of cash flows as of and for the quarterly
periods in 2005 for which interim financial statements are required pursuant to
Section 7.17(b) and, if applicable, Section 7.17(e) and the
corresponding periods for 2004, including the notes thereto, to be provided to
the Buyer prior to the Closing pursuant to Section 7.17(b) and, if
applicable, Section 7.17(e) (the “Interim Financials”), shall
present fairly the financial condition of the Companies as of such dates and
the results of operations and cash flows of the Companies for such periods
therein referred to, in conformity with GAAP applied consistently throughout
the periods covered thereby except as otherwise permitted by the definition of
Reference Accounting Principles, and subject only to year-end adjustments
(which will not be material individually or in the aggregate).

 

(d)           Funded Debt.  The Companies have no outstanding Funded
Debt.

 

(e)           Budgets.  The Companies have provided the Buyer with a
true and complete copy of the consolidated operating and capital budget for the
Companies for fiscal year 2005, as prepared by management and approved by the
board of managers of the Cable Venture (the “2005 Budget”) and attached
hereto as Exhibit E.  No
representation or warranty is made with respect to the 2005 Budget other than
that the Companies have provided the Buyer with a true and complete copy of the
2005 Budget as approved by the management board of the Cable Venture.

 

(f)            Certain Changes.  Since January 1, 2004, and through the date
of this Agreement except as set forth in Schedule 4.3(f) (and provided
that no representation or warranty is made with respect to the Transferred Assets
or the Excluded Liabilities), neither Company has:

 

(i)            issued, sold or
otherwise disposed of any of its capital stock or equivalent equity interest,
or granted any options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any of its capital stock or
equivalent equity interest;

 

(ii)           made any sale,
purchase, assignment, lease, license, abandonment, transfer or other
disposition of any material portion of its respective assets or properties,
including any Company Intellectual Property, other than sales of Inventory in
the ordinary course of business consistent with past practice or as required by
the Rebuild of the San Juan System, or taken any action that would reasonably
be expected to result in the loss, lapse or abandonment of any Company
Intellectual Property other than in the ordinary course of business consistent
with past practice (unless, in either case, such assets were unnecessary or
obsolete or comparable replacements were made therefor), or permitted any of
such assets or properties to be subjected to any Lien of any kind other than
Permitted Liens;

 

31

 

(iii)          made or promised any
bonus or material increase in the salary or other compensation payable or to
become payable to any manager, director, officer, employee or consultant of the
Companies, other than annual salary increases and annual bonuses made in the
ordinary course consistent with past practice or required by the terms of a
Material Contract (and, if committed to prior to the Closing Date (by contract
or otherwise) and then payable but not paid, fully accrued on the Closing Date
Balance Sheet and included as part of the Closing Date Current Liabilities);

 

(iv)          accelerated
the receipt or recognition of any item of income or offered any discount for
sales of advertising or services, other than in the ordinary course of business
consistent with past practice;

 

(v)           written
down the value of any work in progress, or written off as uncollectible any
notes or accounts receivable, except in the ordinary course of business
consistent with past practice;

 

(vi)          other than cash
dividends, distributions and payments to ML Media or Century or their
respective Affiliates, made any dividend, distribution or other payment to any
Seller or their respective Affiliates;

 

(vii)         received any notice of
any new labor union organizing activity, any actual or threatened employee
strikes, work stoppages, slowdowns or lockouts, or any material adverse change
in the aggregate in its relations with its employees, agents, customers,
suppliers or consultants;

 

(viii)        entered
into, amended in any material respect or terminated any employment agreement
that (initially or as amended) is a Material Contract or Collective Bargaining
Agreement, whether written or oral, other than in the ordinary course of
business consistent with past practice;

 

(ix)           implemented any layoff
of employees that could implicate the Worker Adjustment and Retraining
Notification Act of 1988, as amended, or any similar foreign, state,
Commonwealth or local law, regulation or ordinance (jointly, the “WARN Act”);

 

(x)            made
or suffered any change in or amendment to its organizational documents;

 

(xi)           cancelled,
compromised, waived or released any material right or claim (or series of
related rights and claims) other than by order of the Bankruptcy Court;

 

(xii)          entered into,
terminated, modified, amended, renewed or made any other change in any Material
Contract (including, without limitation, any contract for the purchase of
goods, equipment or services of amounts in excess of $100,000 or any contract
for the merger or consolidation with, or the acquisition of any material assets
of, any other Person) other than in the ordinary course of business consistent
with past practice;

 

32

 

(xiii)         discharged or satisfied
any obligation or Liability or made any settlement or compromise of any
litigation, other than in the ordinary course of business consistent with past
practice, by order of the Bankruptcy Court or pursuant to the Plan;

 

(xiv)        incurred any indebtedness
or issued, assumed or guaranteed any debt or other Liability of any third party
other than indebtedness incurred, or debt or Liabilities guaranteed, in an amount
(individually or in the aggregate) less than $100,000;

 

(xv)         engaged
in any transaction that, individually or in the aggregate, has caused or would
reasonably be expected to cause a Material Adverse Effect;

 

(xvi)        since January 1, 2005,
committed to make any capital expenditure (or series of related capital
expenditures), other than any capital expenditure to be made in connection with
the Rebuild of the San Juan System, that will not be fully paid prior to the
Closing Date and either involves more than $100,000 in any single case or
$250,000 in the aggregate or is outside the ordinary course of business unless
such commitment is reflected in the 2005 Budget;

 

(xvii)       adopted, amended, modified,
or terminated any bonus, profit sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee Benefit
Plan) except in the ordinary course of business consistent with past practice; or

 

(xviii)      made
a commitment, whether or not in writing, to do any of the foregoing.

 

(g)           Neither of the
Companies has any material Liability, except (i) as disclosed, reflected
or reserved against on the face of the balance sheet as of December 31, 2004 included
in the Audited 2004 Financials (or in any notes thereto), (ii) Liabilities
under Material Contracts and other leases and agreements entered into in the
ordinary course of business, to the extent not required by GAAP to be reflected
or reserved against on the face of a balance sheet, (iii) Liabilities
incurred after December 31, 2004 in the ordinary course of business (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of a Material Contract or Governmental Authorization,
tort, infringement, or violation of law or would reasonably be expected to have
a Material Adverse Effect), (iv) Excluded Liabilities,
(v) Liabilities set forth on Schedule 4.3(g), and (vi) other
Liabilities, whether or not material, not required by GAAP to be reflected or
reserved against on the face of a balance sheet and that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect.

 

4.4           Cable
Venture and Cable Corp. Assets.

 

(a)           The Companies have
good, valid and marketable title to all of the assets and properties shown on
the balance sheet as of December 31, 2004 included in the Unaudited 2004
Financials or acquired after December 31, 2004, free and clear of all
Liens other than Permitted Liens, except for properties and assets disposed of
in the ordinary course of business since December 31, 2004, which disposed
assets are not, individually or in the aggregate, material to the Companies and
except for the Transferred Assets.

 

33

 

(b)           Except as set forth on
Schedule 4.4(b), such assets and properties of the Companies (including
the additions and subtractions thereto contemplated by the preceding sentence)
constitute all of the assets, properties, rights, interests and claims used in
or held for use in the business as presently conducted by the Companies (other
than the Transferred Assets and the assets utilized to provide the services to
be provided under the Transition Services Agreement) and (together with the
Transferred Assets and the services to be provided under the Transition
Services Agreement) would be sufficient and in such operating condition in the
aggregate as would allow the Buyer to continue the business of the Companies as
presently conducted and operated and in compliance in all material respects
with all applicable Legal Requirements and Material Contracts from and
immediately after the Closing Date without interruption and in the ordinary
course of business consistent with past practice.

 

4.5           The
Systems.

 

(a)           Schedule 4.5(a)
sets forth a true and accurate statement, as of the date(s) set forth in said
Schedule, of the following information with respect to each System:
(i) the megahertz capacity of such System, the approximate miles of plant
operating at the applicable megahertz capacity of such System and the
approximate number of aerial and underground miles of plant served by such
System; (ii) the approximate number of total basic subscribers, including
EBUs, subscribers residing or located in multiple dwelling units, Promotional
Subscribers, subscribers to Basic Cable Service, Expanded Basic Cable Service,
Digital Cable Service, Premium Service and Data Service served by such System
and the average revenue per subscriber for certain subscriber categories as set
forth in the Schedule, each as of March 31, 2005; and (iii) the
approximate number of dwelling units and commercial establishments passed by
such System.  Schedule 4.5(e) sets forth
a true and accurate statement as of the date(s) set forth in said Schedule of
certain additional operating specifications for the Systems (other than the
portion of the San Juan System being rebuilt). 
The Cable Venture has made available to the Buyer the true and correct
channel lineup for each System as of January 1, 2005.

 

(b)           (i)            Except
as set forth on Schedule 4.5(b), the Companies have operated the
Systems in compliance in all material respects with: (A) the
Communications Act of 1934, as amended (the “Communications Act”);
(B) the Cable Communications Policy Act of 1984; (C) the Cable
Television Consumer Protection and Competition Act of 1992 (the “1992 Act”);
(D) the Telecommunications Act of 1996; (E) the Copyright Act of
1976, as amended (the “Copyright Act”); (F) all rules and regulations
of the FCC and the Copyright Office; (G) Act No. 213 of September 12,
1996, as amended (the “Puerto Rico Telecommunications Act”), and
Regulation 5761 of February 28, 1998, as amended, Regulation for Cable
Companies, enacted by the Puerto Rico Board under the Puerto Rico
Telecommunications Act; and (H) all other applicable Legal Requirements
relating to the construction, maintenance, ownership and operation of the
Systems; provided, however, that notwithstanding anything to the
contrary in this Agreement, no representation or warranty is made with respect
to compliance with Legal Requirements pertaining to utility poles, including,
without limitation, pole make ready and grounding and bonding of cable
television systems, or with respect to compliance with the Pole Attachment
Agreements except that as of the date hereof the Companies have received no
written notice asserting any non-compliance by the Companies with Legal
Requirements or the terms of the Pole Attachment Agreements.  Without limiting the generality of the
foregoing, each of the communities served by the Systems has been registered
with the FCC, and except as set

 

34

 

forth on Schedule 4.5(b), the
Systems are currently in compliance in all material respects with the technical
standards set forth in the FCC rules and regulations, including the applicable
signal leakage requirements.  The Cable
Venture has made available to the Buyer copies of the most recent FCC Forms 320
filed with the FCC (Basic Signal Leakage Performance Report) with respect to
the Systems.

 

(ii)           Schedule 4.5(b)
sets forth as of the date hereof the rate card, describing the services
available from the Systems, and the rates charged by the Companies therefor,
including all rates, tariffs, and other charges for cable television or other
services provided by the Systems, and the line up of the stations and signals
carried by the Systems and the channel position of each such signal and
station.  The rates charged by the
Companies for basic CATV service are not currently subject to regulation by the
FCC or by any other Governmental Authority in accordance with the applicable
FCC rules and regulations as in effect as of the date hereof; and none of the
Companies has received any correspondence indicating that this may change in
the future.  The Companies have not made
any election with respect to any cost of service proceeding conducted in
accordance with Part 76.922 of Title 47 of the Code of Federal Regulations or
any similar proceeding with respect to either of the Systems.

 

(iii)          Except as disclosed on Schedule 4.5(b),
each System is in compliance in all material respects with the provisions of
the Communications Act as such provisions relate to the rates and other charges
of the Systems, and at any times that the rates charged by the System were
subject to regulation by any Governmental Authority the Companies used
reasonable good faith efforts to establish rates charged to subscribers that
were allowable under the Communications Act and any authoritative
interpretation thereof then in effect for each System to the extent such rates
(on any tier) as of the date such rates were implemented were subject to
regulation by any Governmental Authority.

 

(iv)          Each
Company holds all material Licenses necessary in connection with the operation
of its respective System.  Each such
material License is listed on Schedule 4.5(b), is in full force and
effect and has been validly issued or assigned to the Cable Venture or Cable
Corp., as the case may be.  True and
correct copies of such Licenses set forth on Schedule 4.5(b) have
been made available to the Buyer.  All
licensed facilities owned or operated by the Companies are being operated in
all material respects in accordance with the terms and conditions of each such
License, and none of the Companies, or, to the Companies’ Knowledge, any third
party, is in default in any material respect thereunder.  There is no legal action or governmental
proceeding pending or, to the Companies’ Knowledge, any investigation or
proceeding threatened, for the purpose of modifying, revoking, terminating,
suspending, canceling or reforming any of the Licenses set forth on Schedule 4.5(b)
or that has or would be reasonably expected to cause a Material Adverse Effect or
cause a material disruption to the operation of the Systems, other than matters
affecting the cable television industry generally.

 

(v)           All broadcast
television signals carried on the Systems are being carried in compliance in
all material respects with the requirements of the Communications Act and the
FCC regulations promulgated thereunder.  Schedule 4.5(b)
sets forth each must carry and retransmission consent election received by the
Companies with respect to the Systems that is currently in effect.

 

35

 

(vi)          The
Companies have obtained all required FCC clearances for the operation of the
Systems in all aeronautical and navigational frequency bands in which the
Systems operate.

 

(c)           Except as set forth on Schedule 4.5(c),
appropriate registration of each System has been made with the Copyright
Office, and the Systems are in compliance in all material respects with all
notice, filing, payment and other requirements contained in Section 111 of
the Copyright Act and the regulations of the Copyright Office.  The copyright fees shown to be due on all
Statements of Account (as amended by any required filings and/or any other
corrective supplements) filed with respect to the Systems for each of the six
(6) reporting periods prior to the date hereof for which the Companies have
filed Statements of Account have been calculated in accordance with the
regulations of the Copyright Office promulgated pursuant to the Copyright
Act.  Neither Company nor any Seller
Person has received any notice from the Copyright Office claiming that it has
any additional obligation with respect to any previously submitted copyright
filings relating to the Systems. 
Complete and correct copies of all current reports and filings for the
last two reporting periods, made or filed pursuant to the Copyright Act and the
rules and regulations of the Copyright Office with respect to conduct of the
business or the operation of the Systems, have been provided or made available
to the Buyer.

 

(d)           The Systems are being
operated in compliance, in all material respects, with the rules and
regulations of the FAA.  Schedule 4.5(d)
lists all of the existing towers of the Systems and all leases of space on any
such towers to any third party.

 

4.6           Franchises.

 

(a)           Schedule 4.6
sets forth: (i) each existing Franchise with respect to the Systems;
(ii) the Franchising Authority with respect thereto; (iii) the
expiration date thereof; (iv) the county, city, town or other general
geographic area covered by such Franchise; (v) the franchise fee payable
thereunder; and (vi) whether any consent is required thereunder to
transfer such Franchise or control thereof to the Buyer.

 

(b)           Except as set forth on Schedule 4.6
or as otherwise disclosed in writing to the Buyer:

 

(i)            each of the Franchises
is (or, in the case of the Cable Venture, upon entry of the Confirmation Order,
will be) a valid and binding, legally enforceable obligation of the Cable
Venture or Cable Corp., enforceable against the Cable Venture or Cable Corp., as
the case may be, in accordance with its respective terms;

 

(ii)           each Company is
operating its respective System in compliance in all material respects with the
applicable provisions of each applicable Franchise set forth on Schedule 4.6;
and, to the Companies’ Knowledge, neither Company has done or performed any act
that is reasonably likely to invalidate or impair in any material respect its
rights under, or give to the applicable Franchising Authority the right to
terminate, suspend or modify in any material respect, any of such Franchises;

 

36

 

(iii)          none of the Companies,
the Sellers nor any other Seller Person has received notice that any of the
Companies’ operations pursuant to any Franchise are being improperly conducted
or maintained in any material respect; and

 

(iv)          each of the Franchises
is in full force and effect and, subject to the consent of the applicable
Franchising Authority, after giving effect to the Transactions shall be in full
force and effect and, except as set forth on Schedule 4.6, each
Company is in compliance in all material respects with all rules and
regulations promulgated by the FCC and the Puerto Rico Board with respect to
the procedures for seeking franchise renewals.

 

(c)           True and correct copies
of the Franchises set forth on Schedule 4.6 have been made
available to the Buyer.  The Franchises
set forth on Schedule 4.6 constitute the entire agreement of the
Companies and the Sellers with the applicable Governmental Authority with
respect to the subject matter thereof.

 

(d)           No Person upon whose
property is located any portion of the Systems has informed any of the
Companies or any Seller Person of any intent to challenge the continued
location, maintenance, installation or operation of such portion of the Systems
where such challenge (or all such challenges in the aggregate, if more than
one) reasonably would be expected to result in a material Liability.

 

(e)           Schedule 4.6(e)
sets forth a list of all Franchise, construction, fidelity, performance and
other bonds, guaranties in lieu of bonds and letters of credit posted by the
Companies in connection with the operation of the Systems as of the date
hereof, which Schedule 4.6(e) shall specify the remaining term and
amount of any such letters of credit and surety bonds.

 

4.7           Pole
Attachment Agreements.  Schedule 4.7
lists each of the contracts, agreements, easements, servitudes, rights-of-way,
rights of access, ordinances, resolutions, licenses, permits and other rights
or interests authorizing the Companies to use (or to construct, install,
maintain, repair, replace and operate any cables and other equipment, fixtures
and improvements associated with the Systems on or in) (i) any poles,
ducts, conduits or trenches or similar equipment, fixtures or improvements
located on real property of any Person other than the Companies or
(ii) any easements, servitudes, rights-of-way, rights of access and other
rights and interests to, in or with respect to such real property associated
with (A) such poles, ducts, conduits, trenches, equipment, fixtures or
improvements or (B) any cables or other equipment, fixtures and
improvements associated with the Systems otherwise on, over or under real
property of any Person other than the Companies (each, excluding any Franchise,
individually, a “Pole Attachment Agreement”).  Except as set forth on Schedule 4.7,
each of the Pole Attachment Agreements is (or, in the case of the Cable
Venture, upon entry of the Confirmation Order will be) a valid and binding obligation
of the Cable Venture or Cable Corp., as the case may be, and, to the Companies’
Knowledge, any other party to such Pole Attachment Agreement (except, with
respect to such other parties, insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors rights generally, or by principles governing the
availability of equitable remedies), enforceable against the Cable Venture or
Cable Corp., as the case may be, and, to the Companies’ Knowledge, any such
other party in accordance with its respective terms.  Except as specified on Schedule 4.2(b),
the

 

37

 

consummation of the transactions contemplated in this Agreement and the
Related Agreements does not require the consent of any other party to any Pole
Attachment Agreement, will not result in a breach of, or default under, any
Pole Attachment Agreement, or otherwise cause any Pole Attachment Agreement to
cease to be legal, valid, binding and enforceable and in full force and effect
on identical terms following the Closing. 
True and correct copies of the Pole Attachment Agreements have been made
available to the Buyer.  Notwithstanding
anything to the contrary in this Agreement, no other representation or warranty
is made with respect to any of the Pole Attachment Agreements, the Companies’
compliance with the terms of, or the Companies’ obligations under, any of the
Pole Attachment Agreements, or the Companies’ compliance with Legal Requirements
relating to the Pole Attachment Agreements.

 

4.8           Real
Property.

 

(a)           Schedule 4.8(a)
sets forth the address and/or location and the use within the System of each
parcel of Owned Real Property.  The Cable
Venture or Cable Corp., as the case may be, (i) has good, marketable and
insurable fee simple title to each such parcel of Owned Real Property and all
buildings, structures and other improvements thereon, in each case free and
clear of all Liens other than Permitted Liens, and (ii) has not leased or
otherwise granted to any Person the right to use or occupy such Owned Real
Property (other than Permitted Liens), and there are no outstanding options,
rights of first offer or rights of first refusal to purchase such Owned Real
Property.

 

(b)           All leases, subleases,
licenses and other agreements (written or oral) under which either Company
holds any Leased Real Property (“Leases”) as of the date of this
Agreement (or the date otherwise set forth in such Schedule) are set forth on Schedule 4.8(b).  True and correct copies of each such Lease,
including all effective amendments thereto, have been made available to the
Buyer.  Each Company is in compliance
with the terms and conditions of such Leases to which it is a party, except for
any failure of compliance that has not caused and would not reasonably be
expected to cause a Material Adverse Effect. 
With respect to each of the Leases: except as set forth on Schedule 4.8(b),
(i) such Lease is (or, in the case of the Cable Venture, upon entry of the
Confirmation Order will be) legal, valid, binding, enforceable and in full
force and effect; (ii) after giving effect to the Confirmation Order, the
Transactions do not require the consent of any other party to such Lease, will
not result in a breach of or default under such Lease, or otherwise cause such
Lease to cease to be legal, valid, binding, enforceable and in full force and
effect following the Closing; (iii) neither of the Companies and, to the
Companies’ Knowledge, no other party to the Lease, is in breach or default in
any material respect under such Lease, and to the Companies’ Knowledge, no
event has occurred or circumstance exists which, with the delivery of notice,
the passage of time or both, would constitute such a breach or default, or
permit the termination or modification of such Lease or acceleration of rent
under such Lease; (iv) no security deposit or portion thereof deposited
with respect to such Lease has been applied in respect of a breach or default
under such Lease which has not been redeposited in full; (v) upon entry of
the Confirmation Order neither of the Companies will owe any brokerage
commissions or finder’s fees with respect to such Lease; (vi) the
Companies have not subleased, licensed or otherwise granted any Person the
right to use or occupy such Leased Real Property or any portion thereof, other
than Permitted Liens ; (vii) the Companies have not collaterally assigned
or granted any other security interest

 

38

 

in such Lease or any interest therein; and
(viii) upon entry of the Confirmation Order there will be no Liens on the
estate or interest created by such Lease, other than Permitted Liens.

 

(c)           All Real Property
for Systems.  The Companies have the
valid and enforceable right to use, and to construct, install, maintain,
repair, replace and operate the Systems on, all real property on which the
assets of the Systems or any of the Companies’ other assets are located, except
for any failure to hold any such right that has not caused and would not
reasonably be expected to cause a Material Adverse Effect.

 

(d)           Condemnation.  There is no condemnation, expropriation or
other proceeding in eminent domain pending or, to the Companies’ Knowledge,
threatened, affecting all or any portion of any Real Property or any interest
in Real Property.

 

(e)           Legal Compliance.  The Real Property, and the current use and
occupancy of the Real Property, is in material compliance with all Legal
Requirements.  The classification of each
parcel of Real Property under applicable zoning and other land use laws,
ordinances and regulations permits the current use and occupancy of such parcel
and permits the building, fixtures and other improvements located on such
parcel as currently constructed, used and occupied, except for violations that
are not material, individually or in the aggregate.

 

(f)            Compliance with
Liens.  To the Companies’ Knowledge,
the current use and occupancy of the Real Property does not violate the terms
or conditions of any material Lien.  Neither
Company has received any notice of violation of any material Lien.

 

4.9           Material
Contracts.

 

(a)           Schedule 4.9
sets forth as of the date hereof each Other Material Contract, excluding any
Other Material Contract that is a Transferred Asset.

 

(b)           Except for the Other
Material Contracts listed on Schedule 4.9, neither of the Companies
is a party to or is bound by any:

 

(i)            as
of the date hereof, Programming Agreements;

 

(ii)           partnership
or joint venture agreements;

 

(iii)          contracts
with another Person materially limiting or restricting the ability of the
Companies to (A) enter into or engage in any market or line of business or
(B) disclose confidential information;

 

(iv)          contracts
under which the Companies have created, incurred, assumed or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation;

 

(v)           material
settlement, conciliation or similar contracts or agreements other than those
entered into subsequent to the date hereof in compliance with
Section 7.12;

 

39

 

(vi)          contracts or agreements
containing provisions that provide to any Person a first refusal, first offer
or similar preferential right to purchase or acquire any properties or assets
of, or equity interests in, the Companies;

 

(vii)         powers
of attorney or other similar agreements or grants of agency;

 

(viii)        agreement for the
employment of any individual on a full-time, part-time, consulting, or other
basis providing annual compensation in excess of $50,000 or providing severance
benefits in excess of the Companies’ policies or practices for severance pay
set forth on Schedule 4.10, other than those entered into
subsequent to the date hereof in compliance with Section 7.12;

 

(ix)           agreement
under which it has advanced or loaned any amount to any of its directors,
officers, and employees outside the ordinary course of business;

 

(x)            other contracts,
agreements, commitments, understandings or instruments involving the purchase
or sale of goods or materials or the performance or receipt of services, in
each case involving payments in excess of $100,000 annually;

 

(xi)           any
lease, sublease, license or other agreement under which the Companies hold any
Leased Real Property (other than the Leases set forth on Schedule 4.8(b));
or

 

(xii)          any
additional Other Material Contract other than those entered into subsequent to
the date hereof in compliance with Section 7.12.

 

(c)           Each of the Other
Material Contracts is (or, in the case of the Cable Venture, upon entry of the
Confirmation Order will be) a valid and binding obligation of the Cable Venture
or Cable Corp., enforceable against the Cable Venture or Cable Corp., as the
case may be, in accordance with its terms. 
Neither Company, nor to the Companies’ Knowledge, any other party thereto,
is in breach or default in any material respect under any of the Other Material
Contracts to which it is a party nor in receipt of any written claim of breach
or default under such Other Material Contracts. 
Neither of the Companies nor any Seller Person has received any written
notice from any parties to any of the Other Material Contracts of such parties’
intent to not renew, cancel or terminate any of the Other Material Contracts
(except in the ordinary course of business with respect to subscriber, multiple
dwelling, bulk billing or commercial service agreements).  The Retained Programming Agreements have
been, or prior to the Closing will be, validly assigned, in accordance with
their terms, to the Cable Venture or to Cable Corp.

 

(d)           The Cable Venture has
made available to the Buyer true, correct and complete copies of all of the
written Material Contracts and a written summary setting forth the material
terms and conditions of each oral Material Contract.

 

4.10         Employees.

 

(a)           The Cable Venture has
made available to the Buyer a list of the names and positions of all employees
of the Companies and their current hourly wages or monthly salaries as of
January 1, 2005.  To the Companies’
Knowledge, no employee, officer, partner or Affiliate

 

40

 

of the Cable Venture, ML Media or Century
has any material financial interest, direct or indirect, in any supplier or
other outside business that is a party to significant transactions with either
of the Companies or the Systems.

 

(b)           All relationships
between the Companies and their respective contractors, subcontractors,
personnel supplied by temporary staffing agencies and similar arrangements are
independent contractor relationships and do not give rise to any employer-employee
relationship with respect to either of the Companies nor do such relationships
create a partnership, agency, joint venture, joint employer, co-employer or
employer-employee relationship between the parties.

 

(c)           Except as set forth on Schedule 4.10(c),
each Company is in compliance in all material respects with all Legal
Requirements relating to the employment of labor, including without limitation
those relating to wages, salary withholding, employee health and safety,
statutory bonus, vacation, working hours, collective bargaining and benefits
for employees and former employees, unemployment compensation, disability
compensation, worker’s compensation, equal employment opportunity and
discrimination (including age, maternity, marriage, veteran status, disability
and any other discrimination), immigration control, terminations and the
payment and withholding of social security and other Taxes or obligations.  To the Companies’ Knowledge, neither Company
has any material Liability for any arrearages of wages, commissions and
benefits for employees, Taxes or penalties or other sums for failure to comply
with any of the foregoing that are not reflected in the Unaudited 2004
Financials.

 

(d)           Except as set forth on Schedule 4.10(d),
as of the date hereof there is no material employment-related charge,
complaint, grievance, investigation, inquiry or obligation of any kind, pending
or, to the Companies’ Knowledge, threatened in any forum, relating to an
alleged violation or breach by either Company (or their officers or directors)
of any Legal Requirement or Material Contract relating to the employment of
labor.

 

(e)           Except as set forth on Schedule 4.10(e),
with respect to the Companies: (i) there is no collective bargaining
agreement or relationship with any labor organization (a “Collective
Bargaining Agreement”); (ii) there is no obligation to recognize or
agreement to recognize any union or other collective bargaining unit;
(iii) since January 1, 2003 no labor organization or group of
employees has filed any representation petition or made any written or oral
demand for recognition; (iv) to the Companies’ Knowledge, no union
organizing or decertification efforts are underway or threatened; (v) no
strike, work stoppage, slowdown, material grievance, collective bargaining
dispute, claim of unfair labor practice or other material labor dispute has
occurred since January 1, 2003 and none is underway or, to the Companies’
Knowledge, threatened; (vi) there is no workman’s compensation liability,
experience or matter that could reasonably be expected to have a Material
Adverse Effect; and (vii) there is no written employment agreement or
arrangement (including, without limitation, so-called “golden parachute” or
severance agreements) that would require either Company to continue the
employment of any Person after the Closing Date or that limit the Companies’
rights to terminate such Person, except as provided in Puerto Rico Act 80 of
May 30, 1976, as amended, and as set forth in its personnel policies and manuals,
subject to the liabilities provided in said Act.

 

41

 

(f)            The Sellers maintain
one or more insurance policies in full force and effect with the Puerto Rico
State Insurance Fund; and the Companies have paid all premiums on said policy,
and have no outstanding debts with respect thereto.  Since January 1, 2003, except as disclosed on
Schedule 4.10(f), no work-related accidents have been reported to
the Puerto Rico State Insurance Fund nor, to the Companies’ knowledge, has any
work-related accident occurred for which either of the Companies is or may be
classified as an uninsured employer.

 

(g)           Schedule 4.10(g)
lists each Employee Benefit Plan.  Except
as disclosed on Schedule 4.10(g), each Employee Benefit Plan
(including any Multiemployer Plan) has been maintained, funded and administered
in compliance in all material respects with its terms, the terms of any
collective bargaining agreement or collective labor agreement, and the
requirements of ERISA, the Code, and any other applicable Legal
Requirements.  None of the Companies or
any ERISA Affiliate maintains, contributes to, has any obligation to contribute
to, or has any actual or potential Liability with respect to any Employee
Pension Benefit Plan (including Multiemployer Plans) that is a defined benefit
plan (as defined in Section 3(35) of ERISA) and none of the Companies or
any ERISA Affiliate has any Liability or potential Liability under
Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code.  Neither Company maintains or contributes to,
or is required to contribute to or has any Liability with respect to, any
Employee Welfare Benefit Plan or any other arrangement providing medical,
health or life insurance or other welfare type benefits for current or future
retired or terminated employees other than under Section 4980B of the Code
or similar statute.  The Companies have
complied in all material respects with the “continuation coverage requirements”
of “group health plans” as set forth in Section 4980B of the Code, Part 6
of Subtitle B of Title I of ERISA and any other legal requirements with respect
to any Employee Welfare Benefit Plan maintained by the Companies.  All contributions (including employer
contributions, employee salary reduction contributions, and premium payments)
that are due have been made within the time periods prescribed by ERISA and the
Code to each Employee Benefit Plan and all contributions for any period ending
on or before the Closing Date that are not yet due have been properly
accrued.  There have been no prohibited
transactions (as defined in Section 406 of ERISA or Section 4975 of
the Code) with respect to any such Employee Benefit Plan that would reasonably
be expected to result in a material tax or penalty to the Companies.  No fiduciary (as defined in
Section 3(21) of ERISA) has any Liability for breach of fiduciary duty, or
any other failure to act or comply, in connection with the administration or
investment of the assets of any Employee Benefit Plan, and no action, suit,
proceeding, hearing or investigation with respect to any Employee Benefit Plan
is pending or, to the Companies’ Knowledge, threatened.

 

(h)           No asset of either
Company is subject to any Lien under ERISA or the Code relating to an Employee
Benefit Plan.

 

(i)            All required reports
and descriptions (including Form 5500 annual reports, Form 480.70 annual
return, summary annual reports, and summary plan descriptions) have been timely
filed and distributed in accordance with the applicable requirements of ERISA
and the Code with respect to each Employee Benefit Plan.

 

(j)            Except as set forth on
Schedule 4.10(j), each Employee Benefit Plan that is intended to
meet the requirements of a qualified plan under Code Section 401(a) or any
equivalent provision of the PR Tax Code has received a determination from the
Internal Revenue

 

42

 

Service (the “IRS”) or the Puerto Rico Department of the
Treasury that the Employee Benefit Plan is so qualified.

 

(k)           The Companies have
delivered or made available to the Buyer correct and complete copies of all
available plan documents and summary plan descriptions, the most recent
determination letter received from Governmental Authorities, the most recent
annual reports (Form 5500 and Form 480.70, with all applicable attachments),
and all related trust agreements, insurance contracts, and other funding
arrangements that implement each Employee Benefit Plan.

 

(l)            With respect to this
transaction, any notice required under any law or collective bargaining
agreement has been given, and all bargaining obligations with any employee
representative have been, or prior to the Closing will be, satisfied.  Within the past three years, neither Company
has implemented any plant closing or layoff of employees that could implicate
the WARN Act, and no such action will be implemented without advance
notification to the Buyer.

 

(m)          Neither of the Companies
is a member of any ERISA Group involving any entity other than the Companies,
and neither of the Companies has any ERISA Affiliate.

 

4.11         Litigation
and Judgments.  Except for
claims described in Schedule 4.11 and claims asserted by
subscribers or other users of the Systems in the ordinary course of business,
there is no claim, charge, action, suit, complaint, grievance, arbitration or
proceeding, at law or in equity, or by, in or before any court, tribunal,
commission, agency or other Governmental Authority, pending or, to the
Companies’ Knowledge, threatened, against the Companies, their respective
assets or properties or the Systems or that could prevent, limit, impair, delay
or otherwise interfere with the Cable Venture’s right or ability to consummate
the Transactions, except as has not resulted, and would not reasonably be
expected to result, solely in a monetary award against the Companies of more
than $200,000 in any individual case, or $750,000 in the aggregate.  Other than any order in Bankruptcy Court, the
Companies are not subject to any judgment, order or decree entered in any
lawsuit, proceeding or arbitration that materially impairs the ability of the
Companies to conduct their business as presently conducted.

 

4.12         Tax
Returns and Payments of Taxes. 
Except as set forth on Schedule 4.12:

 

(a)           Each Company has filed
or caused to be filed all Tax Returns it is or has been required to file on or
prior to the date hereof by any jurisdiction to which it is or has been
subject.  All such Tax Returns are true,
complete and correct in all respects, except that for those Tax Returns that
are listed on Schedule 4.12 as Returns that will be amended before the
Closing Date (or prepared as amended Tax Returns prior to the Closing Date and
provided to the Buyer for review) those Tax Returns will be true, complete and
correct in all respects when amended. 
There are no Tax audits pending or, to the Companies’ Knowledge,
threatened or any outstanding agreements or waivers extending the statutory
period of limitations applicable to any Tax Return filed by or on behalf of
either Company for any period.  To the
Companies’ Knowledge, no Tax deficiencies have been determined and no proposed
Tax assessments have been charged against either Company that have not been resolved. 
The Companies have delivered to the Buyer correct and complete copies of
Tax Returns filed and all examination

 

43

 

reports and statements of deficiencies, if
any, assessed against or agreed to by any of the Companies with respect to
taxable periods of the Companies ended on or after December 31, 2000.  For purposes of this Agreement “Tax”
or “Taxes” shall mean: (i) any United States federal, Commonwealth,
state or local or any other non-United States, net or gross income, gross
receipts, municipal license, net proceeds, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the Code), customs, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or other
taxes, assessments, duties, fees, levies or other governmental charges of any
kind whatever, whether disputed or not, including any interest, penalty or
addition thereto; (ii) any Liability for or in respect of the payment of
any amount of a type described in clause (i) of this definition as a
result of being a member of an affiliated, combined, consolidated, unitary or
other group for Tax purposes; and (iii) any Liability for or in respect of
the payment of any amount described in clauses (i) or (ii) of this
definition as a transferee or successor, by contract or otherwise; “Tax
Return” shall mean any return, declaration, report, claim for refund,
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof; “Taxing Authority”
shall mean any Governmental Authority having or purporting to exercise
jurisdiction with respect to any Tax; and “Treasury Regulations” shall
mean the regulations promulgated or proposed by the United States Treasury
Department under the Code.  A reference
to the Code or Treasury Regulation for purposes of this Section 4.12 shall
be deemed to be a reference also made to any equivalent provision of the PR Tax
Code and the PR Treasury Regulations.

 

(b)           All Taxes owed by
either of the Companies (to the extent shown on any Tax Return) have been
timely paid.  None of the Companies
currently is the beneficiary of any extension of time within which to file any
Tax Return.  No claim or dispute has ever
been made by a Taxing Authority in a jurisdiction where any of the Companies
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction.  There is no dispute or
claim concerning any Tax liability of the Companies claimed or raised by any
Taxing Authority in writing or to the Companies’ Knowledge claimed or raised
other than in writing.  There are no
Liens on any of the assets of any of the Companies that arose in connection
with any failure (or alleged failure) to pay any Tax.  Each of the Companies has withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, former employee, partner, independent
contractor, creditor, stockholder, Affiliate, customer, supplier or other third
party.

 

(c)           None of the Companies
is a party to any Tax allocation, Tax sharing or other similar agreement; Tax
indemnity obligation or other similar agreement; or arrangement with respect to
Taxes (including any advance pricing agreement, closing agreement, gain
recognition agreement or other material agreement relating to Taxes with any
Taxing Authority).

 

(d)           None of the Companies
has made any payments, is obligated to make any payments, or is a party to any
agreement that under certain circumstances could obligate it to make any
payments, that will not be fully deductible under Section 280G of the Code
(or any similar provision of state, local or non-United States law).  Cable Corp. has never been a United States
real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code, and the Cable

 

44

 

Venture has never owned a U.S. real property interest within the
meaning of Section 897(c) of the Code. 
Except as disclosed in Schedule 4.12(d), no Company owns an
interest in an entity that is treated as a partnership or the separate
existence of which is disregarded for United States federal income tax
purposes.  None of the Companies is a
party to any understanding or arrangement described in Section 6111(d) or
Section 6662(d)(2)(C)(iii) of the Code, or has “participated” in a
“potentially abusive tax shelter” within the meaning of Treasury Regulation
section 1.6011-4, any of which was required to be disclosed under this Treasury
Regulation or any predecessor regulation.

 

(e)           The Companies have proper
receipts, within the meaning of Treasury Regulation Section 1.905-2, for
any non-United States Tax that has been or in the future may be claimed as a
foreign tax credit for United States federal income tax purposes.  The Companies, in determining the depreciation
deduction claimed in their Puerto Rico Tax Returns, have used the straight line
method of depreciation and have not used any method of accelerated depreciation
allowed under the PR Tax Code.  Schedule 4.12(e)
provides a breakdown of the remaining tax basis of such assets by categories
based on their respective remaining recovery periods for Puerto Rico income tax
purposes as of December 31, 2004.  The
Companies do not have any “non-recaptured net Section 1231 losses” within
the meaning of Section 1231(c)(2) of the Code.
The Companies will not be required: 
(i) as a result of a change in method of accounting that has been
made for any taxable period or portion thereof ending on or before the Closing
Date (a “Pre-Closing Period”), to include any adjustment under
Section 481 of the Code or other similar adjustment in income for any
taxable period or portion thereof beginning after the Closing Date (a “Post-Closing
Period”); (ii) as a result of any closing agreement (or other
comparable agreement) that has been entered into under Section 7121 of the
Code (or other comparable agreement), to include any item of income in, or to
exclude any item of deduction from, any Post-Closing Period; (iii) as a
result of any sale occurring during the Pre-Closing Period and reported on the
installment method, to include any item of income in any Post-Closing Period;
or (iv) as a result of any prepaid amount received during the Pre-Closing
Period (other than amounts prepaid in the ordinary course of business consistent
with past custom and practice), to include any item of income in, or exclude
any item of deduction from, taxable income for any Post-Closing Period.

 

(f)            As of the end of the
day preceding the Closing Date, the unpaid Taxes of the Companies for all
Pre-Closing Periods, being current Taxes not yet due and payable, will not
exceed the reserve for Tax Liability in the Closing Date Current Liabilities
(rather than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set out on the face of the Estimated
Adjustment Certificate (rather than in any notes thereto) as finally determined
pursuant to Section 3.4(b).

 

(g)           The total remaining
undepreciated tax basis of all depreciable assets of the Companies for Puerto
Rico tax purposes shall be least $85,000,000 as of the Closing Date (including
any additional basis created by the Completion of the Rebuild of the San Juan
System after the Closing Date).

 

4.13         Compliance
with Laws.  Except (a) as
set forth on Schedule 4.13 or (b) as otherwise expressly
provided in Sections 4.5, 4.6, 4.8, 4.10 and 4.15, each Company is and the
Systems and the assets and properties of the Companies have been operated and
maintained in all

 

45

 

material respects in compliance with all Legal Requirements applicable
to the Companies or their respective Systems or their assets or properties, and
neither Company nor any Seller Person has received, or has any knowledge of the
pending issuance of, any notice of any violation with respect to either
Company, their assets and properties or the Systems of any Legal Requirement
from any Governmental Authority or any other Person that reasonably would be
expected to result in a significant Liability.

 

4.14         Insurance.  Schedule 4.14 sets forth a true
and correct summary of the insurance policies covering any of the Companies’
assets and properties or the Systems, including the underwriter of such
policies and the amount of coverage thereunder. 
Neither Company has received any notice of cancellation with respect to
any of such coverage.  Since January 1,
2003, no application by the Companies for insurance with respect to any of
their material assets has been denied for any reason.

 

4.15         Environmental
Matters.  Except as set forth
in Section 7.15(a), each Company is, and has been since January 1, 2003, in
compliance in all material respects with all applicable Environmental
Laws.  Neither of the Companies nor any
Seller Person nor, to the Companies’ Knowledge, any other Person for whose
conduct the Company is or may be held to be responsible under applicable Legal
Requirements has received any written notice that remains unresolved of
(1) any claim, administrative proceeding, judgment, declaration, order,
complaint or investigation relating to any violation of Environmental Laws, or
(2) any material Liabilities arising under Environmental Laws, relating to
allegations of injury or damages to Persons, property or natural resources from
the presence of environmental contamination or the release or threat of release
of Hazardous Substances, including any in connection with, or arising from, the
presence of Hazardous Substances on, in, under, or from any of the real
property now or previously owned or leased by either Company or any structure
thereon.  To the Companies’ Knowledge, no
Hazardous Substances have been dumped, buried, discharged or disposed of on,
in, under or from any of the real property now or previously owned or operated
by either Company in material violation of applicable Environmental Law, or in
a manner that will give rise to material Liabilities under Environmental Law,
and neither Company has exposed any Person, property or natural resources to
any Hazardous Substances, in either case so as to give rise to any current or
future material Liabilities of either Company under Environmental Laws.  The Cable Venture has made available to the
Buyer copies of any environmental assessments, reports or surveys, or other
documents materially bearing on environmental Liabilities, with respect to the
Systems or any of the past or current assets of the Cable Venture or Cable
Corp. that are in the possession or control of the Companies or any Seller
Person.  Notwithstanding any other
provision of this Agreement, this Section 4.15 sets forth the Companies’
sole and exclusive representations and warranties with respect to Hazardous
Substances, Environmental Laws and other environmental matters.

 

4.16         Affiliate
Transactions.  Except as set
forth on Schedule 4.16 and payments and arrangements pursuant to
the JV Agreement (all of which shall be satisfied pursuant to
Section 7.19), neither Seller nor any other securityholders, directors,
managers, officers or employees of the Companies, nor any of their respective
family members or Affiliates is party to any (written or oral) contract with,
or is involved in any other business arrangement or relationship with, either
of the Companies, or has, since January 1, 2004, received any distributions or
payments of any kind from the Companies or any of their respective Affiliates

 

46

 

(other than cash distributions or payments) and neither Seller nor any
other securityholders, directors, managers, officers or employees of the
Companies nor any of their respective family members or Affiliates owns any
property or right, tangible or intangible, which is used in the operation of
the Systems and business conducted or proposed to be conducted by the
Companies.

 

4.17         Intellectual
Property.  Except to the
extent related to the Retained Marks:

 

(a)           Schedule 4.17(a)
sets forth a complete and accurate list of all U.S. and foreign:
(i) patents and patent applications; (ii) trademark registrations and
trademark applications, material unregistered trademarks and Internet domain
names; (iii) copyright registrations and applications; and
(iv) computer software (other than readily available, “off-the-shelf”
commercial software programs having an acquisition price of less than $25,000)
which are owned or licensed by either Company.

 

(b)           Schedule 4.17(b)
sets forth a complete and accurate list of all material agreements (whether
oral or written, and whether between the Companies and ML Media and/or Century
or third parties) to which either Company is a party or otherwise bound
(i) granting any rights to third parties under any Intellectual Property
owned by either Company or (ii) obtaining any rights from third parties
under any Intellectual Property (other than licenses for readily available,
“off-the-shelf” commercial software programs having an acquisition price of
less than $25,000) (collectively, “IP Licenses”).  Each of the IP Licenses is a valid and
binding obligation of the Companies and, to the Companies’ Knowledge, the other
parties thereto, enforceable in accordance with its terms and, to the
Companies’ Knowledge, no event has occurred which with the giving of notice or
lapse of time or both would reasonably be expected to constitute a material
breach or default by either of the Companies or, to the Companies’ Knowledge,
by any other party, or otherwise give rise to a right of termination under any
such IP License.  Neither of the
Companies nor the Sellers has received any written notice from any parties to
any of the IP Licenses of such parties’ intent to non-renew, cancel or
terminate any of the IP Licenses.  No
royalties are payable by either of the Companies to any third parties for the
use of, or the right to use, any Intellectual Property except pursuant to the IP
Licenses and no indemnification payments are owed by either of the Companies to
any third parties as a result of any interference, infringement,
misappropriation or other conflict with respect to the Intellectual Property
owned or used by either of the Companies.

 

(c)           The Companies own, free
and clear of all Liens, or have a valid right to use pursuant to an IP License,
all of the Intellectual Property necessary or used for the operation of the
Systems (the “Company Intellectual Property”), provided that the
Company Intellectual Property will exclude Intellectual Property provided by
Century or its Affiliates to perform services pursuant to the JV
Agreement.  The Company Intellectual
Property, together with the Intellectual Property to be utilized by Century to
provide services to the Buyer pursuant to the Transition Services Agreement,
constitute all of the Intellectual Property necessary for the Companies’
operation of the Systems.

 

(d)           To the Companies’
Knowledge, the operation of the Systems by the Companies does not infringe upon
or misappropriate any Intellectual Property of any third party.  There is no claim, suit, arbitration or other
adversarial proceeding before any court, tribunal, commission, agency or other
Governmental Authority pending or, to the Companies’

 

47

 

Knowledge, threatened, against either Company contesting the validity,
use, ownership or enforceability of any Company Intellectual Property.  There are no settlements, covenants not to
sue, consents or judgments which restrict either Company’s right to use any
Company Intellectual Property.

 

(e)           To the Companies’
Knowledge, except as does not and would not reasonably be expected to
constitute a Material Adverse Effect, no third party is infringing or
misappropriating any Company Intellectual Property and no claims, suits,
arbitrations or other adversarial proceedings alleging such infringement or
misappropriation have been brought or threatened against any third party by
either Company.

 

(f)            The consummation of
the Transactions will not result in the loss or impairment of the right of the
Companies to own or use any Company Intellectual Property.  Immediately subsequent to the Closing, the
Company Intellectual Property will be owned by or available for use by the
Buyer on terms and conditions substantially similar to those under which the
Companies owned or used the Company Intellectual Property immediately prior to
the Closing.

 

(g)           The Companies have
taken all necessary action to maintain and protect all of the Company Intellectual
Property and will continue to do so prior to the Closing so as not to adversely
affect the validity or enforceability thereof.

 

(h)           The Companies have
collected, used, imported, exported and protected all personally identifiable
information, and other information relating to individuals, in accordance with
the privacy policies of the Companies and in accordance with any applicable
Legal Requirements including by entering into agreements, where applicable,
governing the flow of such information across national borders, except where
non-compliance, individually or in the aggregate, would not reasonably be
expected to constitute a Material Adverse Effect.

 

4.18         Brokers’
Fees.  Except as set forth on Schedule 4.18,
neither Company has any Liability to pay any fees or commissions to any broker,
finder, or agent with respect to the Transactions.

 

5.                                      REPRESENTATIONS OF ML MEDIA AND CENTURY

 

5.1           Representations
and Warranties of ML Media. 
ML Media represents and warrants to the Buyer as follows (except as
disclosed in the Schedules attached hereto):

 

(a)           ML Media is a limited
partnership duly formed, validly existing and in good standing under the laws
of the State of Delaware and has all of the requisite partnership power and
authority to own, operate or lease its assets and properties, to conduct its
business as currently conducted and to enter into and perform the terms to be
performed by it of this Agreement and each of the Related Agreements to which
it is a party.

 

(b)           ML Media has taken all
partnership action necessary to authorize and approve its execution, delivery
and performance of this Agreement, the Related Agreements and the
Transactions.  Subject to the due
execution and delivery by the other parties, this Agreement

 

48

 

will constitute the legal, valid and
binding obligation to the extent provided herein of ML Media, enforceable
against ML Media in accordance with its terms.

 

(c)           ML Media’s execution
and delivery of this Agreement and its performance of the terms of this
Agreement and each of the Related Agreements to which ML Media is a party to be
performed by it do not and will not: 
(i) conflict with or violate any Legal Requirement applicable to ML
Media; (ii) conflict with, violate or result in a breach of any of the
provisions of ML Media’s Limited Partnership Agreement; or (iii) require
notice or consent under, conflict with, result in a breach of or constitute a
default under any material agreement or instrument to which ML Media is a party
or by which it is bound.

 

(d)           ML Media owns of record
and beneficially 50% of the joint venture interests in the Cable Venture free
and clear of any Liens.

 

(e)           There is no litigation
at law or in equity or any claim, dispute, action, suit, complaint, arbitration
or proceeding before any court, commission, agency or other Governmental
Authority or tribunal pending or, to the knowledge of ML Media, threatened
against ML Media that could prevent, limit, impair, delay or otherwise
interfere with the right or ability of ML Media to consummate the Transactions.

 

(f)            Except as set forth on
Schedule 5.1(f), ML Media has no Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the Transactions.

 

5.2           Representations
and Warranties of Century. 
Century represents and warrants to the Buyer as follows (except as
disclosed in the Schedules attached hereto):

 

(a)           Century is a
corporation duly formed, validly existing and in good standing under the laws
of the State of Texas and subject to the approval of the Bankruptcy Court has
all of the requisite corporate power and authority to own, operate or lease its
assets and properties, to conduct its business as currently conducted and to
enter into and perform the terms to be performed by it of this Agreement and
each of the Related Agreements to which it is a party.

 

(b)           Subject to receipt of
the Confirmation Order and approval of the court covering Century’s Chapter 11
case, Century has taken all corporate action necessary to authorize and approve
its execution, delivery and performance of this Agreement, the Related
Agreements and the Transactions.  Subject
to the due execution and delivery by the other parties hereto and upon approval
by the Bankruptcy Court, this Agreement will constitute the legal, valid and
binding obligation to the extent provided herein of Century, enforceable
against Century in accordance with its terms.

 

(c)           Except as set forth on Schedule 5.2(c),
upon approval by the Bankruptcy Court, Century’s execution and delivery of this
Agreement and its performance of the terms of this Agreement and each of the
Related Agreements to which Century is a party to be performed by it do not and
will not:  (i) conflict with or
violate any Legal Requirement applicable to Century; (ii) conflict with,
violate or result in a breach of any of the provisions of Century’s certificate
of incorporation or by-laws; or (iii) require notice or consent under,
conflict with,

 

49

 

result in a breach of or constitute a
default under any material agreement or instrument to which Century is a party
or by which it is bound.

 

(d)           Century owns of record
and beneficially 50% of the joint venture interests in the Cable Venture free
and clear of any Liens, except as set forth on Schedule 5.2(d).

 

(e)           Except as set forth on Schedule 5.2(e),
there is no litigation at law or in equity or any proceeding before any court,
commission or other Governmental Authority or tribunal pending or, to the
knowledge of Century, threatened against Century that would reasonably be
expected to prevent, limit, impair, delay or otherwise interfere with the right
or ability of Century to consummate the Transactions.

 

(f)            Except as set forth on
Schedule 5.2(f), Century has no Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the Transactions.

 

6.                                      REPRESENTATIONS AND WARRANTIES OF BUYER

 

The Buyer
hereby represents and warrants to ML Media, Century and the Cable Venture as
follows:

 

6.1           Existence.  The Buyer is a limited liability company duly
formed, validly existing and in good standing under the laws of the
Commonwealth of Puerto Rico and has all of the requisite organizational power
and authority to own, operate or lease its assets and properties, to conduct
its business as currently conducted and to enter into and perform the terms to
be performed by it of this Agreement and each of the Related Agreements to
which it is a party.  The sole member of
the Buyer is a Puerto Rico limited liability company, the sole member of that
entity is a Delaware limited liability company that has elected to be taxed as
a corporation for Federal income tax purposes and the sole member of that
entity is a Delaware limited liability company to be owned by the Investors as
of the Closing.

 

6.2           Authorization;
No Conflicts.

 

(a)           The Buyer has taken all
organizational action necessary to authorize and approve its execution,
delivery and performance of this Agreement, the Related Agreements, and the
Transactions to which it is a party, and this Agreement constitutes the legal,
valid and binding obligation of the Buyer.

 

(b)           The Buyer’s execution,
delivery and performance of this Agreement and each of the Related Agreements
to which it is a party do not and will not: (i) conflict with or violate
any Legal Requirement applicable to the Buyer; (ii) conflict with, violate
or result in a breach of any of the provisions of the organizational documents
of the Buyer or any member of the Buyer Group; or (iii) require notice or
consent under, conflict with, result in a breach of or constitute a default
under any material agreement or instrument to which the Buyer is a party or by
which it is bound.

 

6.3           Litigation.  There is no litigation at law or in equity or
any claim, dispute, action, suit, complaint, arbitration or proceeding before
any court, commission, agency or other Governmental Authority or tribunal
pending or, to the knowledge of the Buyer, threatened

 

50

 

against the Buyer that could prevent,
limit, impair, delay or otherwise interfere with the right or ability of the
Buyer to consummate the Transactions.

 

6.4           Financing.  The Buyer has delivered to the Sellers true
and complete copies of a commitment letter from JPMorgan Chase Bank, N.A. and
others to lend to the Buyer an aggregate amount up to $350,000,000 on the terms
set forth in the commitment letter (the “Debt Commitment Letter”), and
commitment letters from the Investors and the sole member of the Buyer to
provide equity in an amount which, together with the debt financing
commitments, is sufficient to pay the aggregate Purchase Price set forth in
this Agreement and to satisfy all of the Buyer’s other obligations in
connection with the purchase of the Acquired Interests and the other
Transactions (such commitment letters collectively, the “Commitment Letters”).  The Buyer has no reason to believe that, if
the conditions to the Buyer’s obligation to consummate the Transactions are met
(other than the financing condition in Section 9.9), financing in the
amount required to consummate the purchase of the Acquired Interests and the
other Transactions will not be available to the Buyer, pursuant to the
Commitment Letters or otherwise, on terms no less favorable to the Buyer than
as set forth in the Commitment Letters.

 

7.                                      ADDITIONAL
COVENANTS

 

7.1           Confidentiality.

 

(a)           Buyer’
Confidentiality Obligations.

 

(i)            Subject to
Section 7.1(a)(ii), from and after the date hereof, except with the Cable
Venture’s prior written consent or, with respect to the Seller Group
Confidential Information, the Sellers’ prior written consent, the Buyer shall,
and shall cause the members of the Buyer Group to, maintain the confidentiality
of the Seller Confidential Information, except (A) to other members of the
Buyer Group for the purposes of evaluating the Transactions, (B) to the
extent required by applicable law, (C) as necessary in connection with
filings, approvals and rulings to be obtained from any governmental agency or
authority, including, but not limited to, the FTC, the DOJ, the SEC, the Puerto
Rico Board, the IRS and the Bankruptcy Court (it being understood that any such
filing may include the filing of a copy of this Agreement), (D) to the
Buyer’s equity and financing sources and their respective directors, officers,
employees or representatives who are informed by the Buyer of the confidential
nature of the Seller Confidential Information and have a confidentiality
obligation to the Buyer, (E) as necessary to obtain consents to the
transfer of any Franchise or License or any other Required Consent or otherwise
necessary for the consummation of the Transactions, (F) upon reasonable
advance notice to Century, to any official committee and its professionals
appointed in the bankruptcy case of Century or its Affiliates and (G) as
otherwise permitted by the remainder of this Section 7.1(a).  In the event any member of the Buyer Group,
or any other Person to whom the Buyer transmits Seller Confidential Information
pursuant to this Agreement, becomes legally compelled to disclose any of the
Seller Confidential Information, the Buyer shall promptly notify the Cable
Venture or, as applicable, the applicable Seller thereof so that the Sellers or
the Cable Venture may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this Section 7.1(a), or both.  In the event that such protective order or
other remedy is not obtained, or that the Cable Venture or the applicable
Seller waives compliance with the provisions of this Section 7.1(a), the
Buyer shall, or shall cause the applicable member of the

 

51

 

Buyer Group to, furnish only that portion of the Seller Confidential
Information that is legally required.

 

(ii)           Notwithstanding anything
herein to the contrary, the obligations of the Buyer under Section 7.1(a)(i) shall terminate, with respect to the Company
Confidential Information only, upon the Closing.  For the avoidance of doubt, the obligations
of the Buyer under Section 7.1(a)(i) with respect
to the Seller Group Confidential Information shall survive the Closing and/or
the termination of this Agreement.

 

(b)           Sellers’
Confidentiality Obligations.

 

(i)            Subject to
Section 7.1(b)(ii), from and after the date hereof, except with the Buyer’s
prior written consent, the Companies and each of the Sellers, as applicable,
shall, and each of the Sellers shall cause the members of the Seller Group that
are its Affiliates to, maintain the confidentiality of the Buyer Confidential
Information, except (A) to the extent required by applicable law,
(B) as necessary in connection with filings, approvals and rulings to be
obtained from any governmental agency or authority, including, but not limited
to, the FTC, the DOJ, the SEC, the Puerto Rico Board, the IRS and the
Bankruptcy Court (it being understood that any such filing may include the
filing of a copy of this Agreement), (C) as necessary to obtain consents
to the transfer of any Franchise or License or any other Required Consent or
otherwise necessary for the consummation of the Transactions, (D) to any
official committee and its professionals appointed in the bankruptcy case of
Century or its Affiliates, (E) with respect to the Company Confidential
Information only, as otherwise permitted by Section 7.11(c)(ii) and
(F) as otherwise permitted by the remainder of this
Section 7.1(b)(i).  In the event any
member of the Seller Group, or any other Person to whom the Sellers transmit
Buyer Confidential Information pursuant to this Agreement, becomes legally
compelled to disclose any of the Buyer Confidential Information, the applicable
Seller shall promptly notify the Buyer thereof so that the Buyer may seek a
protective order or other appropriate remedy or waive compliance with the
provisions of this Section 7.1(b)(i), or
both.  In the event that such protective
order or other remedy is not obtained, or that the Buyer waives compliance with
the provisions of this Section 7.1(b)(i), the
applicable Seller shall, or shall cause the applicable member of the Seller
Group that is its Affiliate to, furnish only that portion of the Buyer
Confidential Information that is legally required.

 

(ii)           Notwithstanding
anything herein to the contrary, the obligations of the Companies and the
Sellers under Section 7.1(b)(i) shall only
commence with respect to the Company Confidential Information upon the
Closing.  For the avoidance of doubt, the
obligations of the Companies and the Sellers under Section 7.1(b)(i) with respect to the Buyer Group Confidential
Information shall survive the Closing and/or the termination of this Agreement.

 

7.2           Notification.  The Companies or the Sellers, on the one
hand, and the Buyer, on the other hand, shall promptly notify the other of any
action, suit, proceeding or investigation that is instituted or threatened
against such party or any of its Affiliates to restrain, prohibit or otherwise
challenge the legality or propriety of the Transactions.  The Companies or the Sellers, on the one
hand, and the Buyer, on the other hand, shall notify the other of any facts,
events, actions or circumstances as to which it obtains knowledge that causes
any of its (or, in the case

 

52

 

of the Sellers, the Cable Venture’s or Cable Corp.’s) representations
and warranties made in this Agreement, or any matters required to be set forth
in the Schedules hereto, not to be correct and complete in any material respect
as of the date hereof or as of any other date on or prior to the Closing Date.  The communication of any such information
shall not limit or qualify in any way any representations or warranties made by
the disclosing party or any obligations or liabilities for breach thereof.  Any failure to provide timely notification
pursuant to the second sentence of this Section 7.2 shall, for all
purposes of this Agreement, be deemed to be a breach
of a representation and warranty and not a failure to perform a covenant
hereunder.

 

7.3           HSR
Act Compliance.  Not later
than 30 days following the date hereof, the Buyer and the Companies shall file
or cause to be filed with the FTC and DOJ such Notification and Report Forms
relating to the Transactions as are required by the pre-merger notification
rules promulgated under the HSR Act.  The
Buyer, on the one hand, and the Companies and the Sellers, on the other hand,
shall, and shall cause their respective Affiliates to:  (i) cooperate in the preparation and
filling of such Notification and Report Forms to the extent reasonably necessary;
(ii) promptly supply each other with any information provided in response
to any requests for additional information made by either of such agencies; and
(iii) use all reasonable efforts to cause the waiting period under the HSR
Act to terminate or expire at the earliest possible date.  The Buyer and the Companies shall each bear
50% of any filing fees in connection with the HSR Act.

 

7.4           Required
Consents.

 

(a)           The Companies and the
Sellers shall, and shall cause their respective Affiliates to, use commercially
reasonable efforts to expeditiously obtain all Company Required Consents and
any other consents to the Transactions required under any other agreement to
which either of the Companies is a party. 
The Buyer, on the one hand, and the Companies and the Sellers, on the
other hand, shall prepare and deliver to one another all information regarding
such Persons and their respective Affiliates that is required to be provided in
any such form or application in sufficient time to enable the party charged
hereunder with filing such forms or applications to file such forms and
applications within the time period set forth herein or by any other applicable
deadline.  Except as set forth in this
Section 7.4, nothing herein shall require the expenditure or payment of
any funds (other than in respect of normal and usual attorneys’ fees, filing
fees or other normal costs of doing business) or the giving of any other
consideration by the Companies in connection with obtaining any of the Company
Required Consents; provided, that the Companies shall, except as
otherwise set forth herein, be liable for and timely perform and satisfy all
obligations or liabilities under each Governmental Authorization or Material
Contract of the Companies during the period prior to the Closing Date.

 

(b)           As promptly as practicable
after the date hereof, the Sellers, with the Buyer’s cooperation and consent
(not to be unreasonably withheld), shall prepare and file, or cause to be
prepared and filed, all applications (including FCC Forms 394 or other
appropriate forms) required to be filed with the FCC, the Puerto Rico Board
and/or any other Governmental Authority that are necessary in connection with
the consummation of the Transactions. 
The Cable Venture shall apply to the Puerto Rico Board for (x) an
extension of each of the Franchises for a term of ten (10) years commencing on
the Closing Date, such that the Franchises as acquired by the Buyer shall have
a full ten-year term (collectively, the “Franchise Extensions”)

 

53

 

and (y) if necessary, an extension of
the current deadline for the Completion of the Rebuild of the San Juan System
(June 30, 2005) to a date mutually agreed by the Sellers and the Buyer
(the “Rebuild Extension Date”).

 

(c)           The Buyer, each of the
Sellers and the Companies shall promptly furnish to any Person from whom a
Company Required Consent is requested such accurate and complete information
regarding, as applicable, the Buyer, such Seller, the Companies and their
respective Affiliates, including (on the part of the Buyer) financial
information relating to any other cable and other media operations of the Buyer
and its Affiliates, as such Person may reasonably require in connection with
obtaining any Company Required Consent.

 

(d)           In connection with the
efforts referenced in Sections 7.3, 7.4(a) and 7.4(c) to obtain all requisite
approvals and authorizations for the Transactions under the HSR Act or any
other Regulatory Law, each of the Companies, each of the Sellers and the Buyer,
shall, and shall cause its respective Affiliates to: (i) use its
commercially reasonable efforts to cooperate in all respects with each other in
connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party; (ii) promptly inform the other parties of any communication
received by such party from, or given by such party to, the FCC, the Puerto
Rico Board, the DOJ, the FTC or any other Governmental Authority and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the Transactions; and
(iii) consult with each other in advance of any meeting or conference with
the FCC, the Puerto Rico Board, the DOJ, the FTC or any such other Governmental
Authority or, in connection with any proceeding by a private party, with any
other Person, and to the extent permitted by the FCC, the Puerto Rico Board,
the DOJ, the FTC or such other applicable Governmental Authority, give the
other party the opportunity to attend and participate in such meetings and
conferences, except where a party reasonably determines in good faith that it
is best for the other party not to attend. 
Each party shall have the right to review and approve in advance drafts
of all petitions, applications and other filings made or prepared by the other
party in connection with obtaining the requisite approvals and authorizations
from the appropriate Governmental Authorities for the Transactions, which
approval shall not be unreasonably withheld or delayed.  In furtherance of and not in limitation of
the foregoing, the parties agree to file all necessary applications for
Material Consents with the FCC or the Puerto Rico Board jointly.

 

(e)           In furtherance and not
in limitation of the covenants of the parties contained in Section 7.3 and
this Section 7.4, if any administrative or judicial action or proceeding,
including any proceeding by a private party, is instituted (or threatened to be
instituted) challenging any transaction contemplated by this Agreement as
violative of any Regulatory Law, each of the Companies, each of the Sellers and
the Buyer shall cooperate in all respects with each other and use their
respective commercially reasonable efforts to contest and resist any such
action or proceeding and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Transactions.

 

(f)            (i)            Except
as the parties may otherwise agree in writing, neither the Cable Venture nor
Cable Corp. shall agree, without the Buyer’s prior written consent, (1) to
any adverse change to the material terms of any Governmental Authorization or
(2) to the imposition

 

54

 

of any adverse condition to the assignment
of any such Governmental Authorization to the Buyer as a condition to obtaining
any Required Consent with respect to any such Governmental Authorization, and,
in each case, the Buyer shall not be required to accept any such amendment or
condition.

 

(ii)           Notwithstanding
anything in Section 7.4(f) to the contrary, except as the parties may
otherwise agree in writing, solely in connection with the requests for
Franchise Extensions described in Section 7.4(b), the Buyer shall accept,
and agree that the Companies may accept, changes to such Franchise(s) required
by the applicable Governmental Authorities as a condition of granting the
Franchise Extensions that do not increase the obligations of the Buyer in any
material respect, or reduce the rights of the Buyer in any material respect,
under the applicable Franchise(s) to which they relate.

 

7.5           Tax
Matters.

 

(a)           (i)            The
Sellers shall prepare or cause to be prepared and file or cause to be filed all
Tax Returns for the Companies for all periods ending on or prior to the Closing
Date that are filed after the Closing Date. 
The Sellers shall also prepare all amended Tax Returns which are
intended to be filed for periods ending prior to the Closing Date (“Amended
Tax Returns for Prior Periods”) and shall present such draft amended tax
returns along with all supporting work papers to the Buyer no later than seven
(7) calendar days prior to the Closing Date. 
In addition, the Sellers shall permit the Buyer to review and comment,
at least seven (7) calendar days prior to its filing, on each Tax Return to be
filed between the date of execution of this Agreement and the Closing Date (“2004
Tax Returns”).  The Sellers shall
permit the Buyer to review and comment on each and every Tax Return described
above in every preceding sentence of this Section 7.5(a) prior to the filing of
such Tax Return.  If the Buyer and the
Sellers are unable to agree on whether a Tax Return described in this
Section 7.5(a) complies with the second sentence of Section 4.12(a) or the
requirements of Section 7.5(e) (which shall be the sole bases for objecting to
such Tax Returns), they shall refer the dispute to the Independent Accountants,
whose determination in accordance with the procedures set forth in
Section 3.4(b)(ii) in respect of the adjustments to the Purchase Price
shall, absent manifest error, be final and binding on all parties.  Notwithstanding the foregoing, with respect
to any Amended Tax Returns for Prior Periods or any 2004 Tax Return, in the
event that the Sellers and the Buyer are unable to agree on any matter relating
to such Tax Return prior to the Closing Date (or the date such Tax Return is
due, if earlier), then the filing of such Tax Return shall be deferred (except
when a deferral would cause a Tax Return to be filed after its due date) and
the parties shall refer the dispute to the Independent Accountants, whose
determination in accordance with the procedures set forth in Section 3.4(b)(ii)
in respect of the matters in dispute with respect to such Tax Return shall,
absent manifest error, be final and binding on all parties.  With respect to any Tax Return described in
this Section 7.5 concerning which the Sellers and the Buyer are unable to
agree, and which is filed before the Independent Accountant is able to resolve
such dispute (because the deferral of such filing would have caused the Tax
Return to be filed after its due date), then if and to the extent that the
Independent Accountant subsequently determines that the Tax Return actually
filed by the Sellers understated the amount of Taxes that would properly be
required to be reflected on such Tax Return, then such amount of understatement
shall be paid to Buyer as an indemnity payment from the Deferred Purchase Price
under Section 3.2(d) pursuant to the provisions of Article 11 herein and Buyer
shall file an amended Tax Return

 

55

 

correcting the understatement in question.  The Buyer agrees that it will cooperate and
take any reasonable steps necessary to enable the filing of any Tax Returns
prepared by the Sellers pursuant to this Section 7.5(a)(i) that are to be filed
on or after the Closing Date.

 

(ii)           After the Closing, the
Buyer shall prepare or cause to be prepared and file or cause to be filed, on a
timely basis, Tax Returns of the Companies for all Tax periods that begin
before the Closing Date and end after the Closing Date.  The Buyer shall permit the Sellers to review
and comment on each such Tax Return described in the preceding sentence prior
to filing.  For purposes of this
Agreement, in the case of any Taxes that are imposed on a periodic basis and
are payable for a taxable period that includes or ends on the Closing Date
(including the last Tax Returns filed for the Companies ending on the Closing
Date), the portion of such Tax that relates to the portion of such taxable
period ending on the day immediately prior to the Closing Date (the “Pre-Closing
Tax Straddle Period”) shall (A) in the case of any Taxes other than
Taxes based upon or related to income or receipts, be deemed to be the amount
of such Tax for the entire taxable period multiplied by a fraction, the
numerator of which is the number of days in the portion of taxable period
ending on the day immediately preceding the Closing Date, and the denominator
of which is the number of days in the entire taxable period, and (B) in
the case of any Tax based upon or related to income or receipts, be deemed
equal to the amount that would be payable if the relevant taxable period ended
at the end of the day immediately preceding the Closing Date.  Any credits relating to a taxable period that
begins before and ends after the Closing Date shall be taken into account as
though the relevant taxable period ended on the day immediately preceding the
Closing Date.  If the Buyer and the
Sellers are unable to agree on any matter relating to a Tax Return described in
this Section 7.5(a)(ii), they shall refer the
dispute to the Independent Accountant, whose determination in accordance with
the procedures set forth in Section 3.4(b)(ii) in respect of the
adjustments to the Purchase Price shall, absent manifest error, be final and
binding on all parties.  Notwithstanding
anything to the contrary in this Agreement or otherwise, any and all Taxes
arising from, pertaining to, or incurred by virtue of the termination,
assignment, assumption, transfer, cancellation, forgiveness, payment or
exchange of all Transferred Assets, Excluded Liabilities and any intercompany
amounts payable by the Companies to the Sellers, shall be borne by the Sellers
(it being understood that liability for such Taxes shall not be accrued on the
Closing Date Balance Sheet or included in Closing Date Current Liabilities and
it being further understood that liability for such Taxes shall be treated as
Excluded Liabilities for purposes of this Agreement).  Furthermore, notwithstanding anything to the
contrary in this Agreement, any U.S. or Puerto Rico Taxes of the Companies
relating to the purchase of the Acquired Interests by the Buyer from the
Sellers and the merger immediately thereafter of Cable Corp. with and into the
Buyer shall be (i) borne by the Sellers if such Taxes arise from, pertain to or
are incurred by virtue of the purchase of the Acquired Interests by the Buyer,
and (ii) borne by the Buyer if such Taxes arise from, pertain to or are
incurred by virtue of the merger of the Cable Corp. into the Buyer.

 

(iii)          Any Tax refunds that are
received by the Buyer, Cable Corp. or the Cable Venture and any amounts
credited against Taxes to which the Buyer, Cable Corp. or the Cable Venture
becomes entitled, that relate to Tax periods or portions thereof ending on or
before the Closing Date, shall be for the account of the Sellers except that
the portion of the refund or credit allocable to the Closing Date itself shall
be for the account of the Buyer (unless the particular refund or credit in
question allocable to the Closing Date pertains to a Tax liability of the
Sellers under this Agreement in which case it shall be for the account of the
Sellers).  The

 

56

 

Buyer, Cable Corp. or the Cable Venture shall pay over to the Sellers
Escrow Account (or as designated by the Sellers following the closure of such
Sellers Escrow Account) any such refund within ten (10) Business Days following
the Companies’ receipt thereof.  The
Buyer shall use commercially reasonable efforts to have the applicable
Governmental Authority that issues any credits that it receives with respect to
Taxes relating to tax periods or portions thereof ending on or prior to the
Closing to, in lieu of such credits, issue a refund.  If after using such commercially reasonable
efforts, the Buyer is unable to obtain a refund, then the Buyer shall pay to
the Sellers Escrow Account the amount of such credits as such credits are
utilized to offset the Buyer’s Tax liability. 
The Sellers shall reimburse the Buyer all reasonable out of pocket
expenses to obtain such refunds or credits. 
The Buyer and the Sellers shall cooperate in all reasonable respects in
connection with such refunds.

 

(b)           (i)            After
the Closing, the Buyer and the Sellers shall cooperate fully, as and to the
extent reasonably requested by the other such parties, in connection with the
filing of Tax Returns pursuant to this Section 7.5 and in connection with
any audit, litigation or other proceeding with respect to Taxes; provided
that the Sellers shall reimburse the Buyer and its Affiliates for their
reasonable out-of-pocket costs incurred (including the costs incurred in the
form of fees from outside professionals such as accountants and lawyers)
relating to an audit, litigation or other proceeding with respect to the
Pre-Closing Period and the Buyer shall reimburse the Sellers for reasonable
out-of-pocket expenses relating to an audit, litigation or other proceeding
with respect to the Post-Closing Period. 
Such cooperation shall include the retention and (upon any such other
party’s request) the provision of records and information that is reasonably
relevant to any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. 
The Sellers and the Buyer agree, and agree to cause the Companies to
(A) retain all books and records with respect to Tax matters pertinent to
the Companies relating to any taxable period beginning before the Closing Date
until the expiration of the applicable statute of limitations (and, to the
extent notified by the Buyer or the Sellers, any extensions thereof), and to
abide by all record retention agreements entered into with any Taxing
Authority, and (B) give such other parties reasonable written notice prior
to transferring, destroying or discarding any such books and records and, if
any other party reasonably so requests, the Sellers or the Buyer, as the case
may be, shall allow any such other party to take possession of such books and records.  The Sellers and the Buyer further agree, upon
request, to provide the other party with all information reasonably available
to it that either party may be required to report pursuant to Section 6043
of the Code and all Treasury Regulations promulgated thereunder (including any
equivalent provisions of the PR Tax Code and the PR Treasury Regulations).

 

(ii)           Following the Closing,
subject to Section 11.3, the Buyer shall: (A) promptly notify the
Sellers of any audit, examination, litigation or other judicial, administrative
or other proceeding of which the Buyer receives notice or otherwise obtains
knowledge regarding any Tax or Tax return of the Buyer or either of the
Companies that relates to any period prior to the Closing; and (B) permit
the Sellers (and their attorneys, accountants and other representatives) to
participate in any such audit, examination, litigation or other
proceeding.  Without prior written
approval from the Sellers, in accordance with the provisions in
Section 11.3, the Buyer shall not agree or consent to, approve, permit or
otherwise acquiesce in the extension of any statute of limitations applicable
to the assessment of any deficiency with

 

57

 

respect to any Tax paid, payable or alleged
to be payable by the Buyer or the Companies that relates to any period prior to
the Closing.

 

(iii)          The Buyer and the
Sellers further agree, upon request of the other, to use commercially
reasonable efforts to obtain any certificate or other document from any
Governmental Authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the Transactions).

 

(c)           Provided that the
Confirmation Order includes the finding set forth in clause (J) of
Section 7.11(b)(ii) in accordance with Section 1146(c) of the
Bankruptcy Code, the making or delivery of any instrument of transfer,
including the filing of any deed or other document of transfer to evidence,
effectuate or perfect the rights, transfers and interest contemplated by this
Agreement, shall be in contemplation of a plan or plans of reorganization to be
confirmed by the Bankruptcy Court, and such shall be free and clear of any and
all transfer tax, stamp tax or similar Taxes. 
Such instruments, orders and agreements transferring the Acquired
Interests to the Buyer shall contain the following endorsement:

 

“Because this [instrument] has been authorized pursuant
to an order of the United States Bankruptcy Court for the Southern District of
New York, in contemplation of a plan of reorganization of the Cable Venture, it
is exempt from transfer taxes, stamp taxes or similar taxes pursuant to 11
U.S.C. § 1146(c).”

 

If such
transfer, stamp or similar Taxes are ultimately payable, notwithstanding
Section 1146(c) of the Bankruptcy Code or for any other reason, the
Sellers, on the one hand (from the Sellers Escrow Account), and the Buyer, on
the other hand, shall each pay 50% of such transfer, stamp or similar Taxes
which may be payable by reason of the Transactions and any and all claims,
charges, interest or penalties assessed, imposed or asserted in relation to any
such Taxes.

 

(d)           With respect to the
Cable Venture, the Buyer and the Sellers agree to utilize, or cause their
respective Affiliates to utilize, to the extent available, the alternative
procedure set forth in Revenue Procedure 96-60 with respect to wage reporting.

 

(e)           Except as set forth on Schedule 7.5
or in connection with the reconstruction of the Companies’ books and records
and reaudit of its financial statements, or with the written consent of the
Buyer (not to be unreasonably withheld), since January 1, 2004, none of the
Companies (i) has made (or will make) any Tax election, (ii) adopted
or changed (or will adopt or change) any accounting period or method for Tax
purposes, (iii) consented to or entered into (or will consent to or enter
into) any closing agreement or similar agreement with any Taxing Authority,
(iv) consented to or settled or compromised (or will consent to, settle or
compromise) any Tax claim or assessment if such settlement or compromise
involves other than the payment of money, or (v) has taken (or will take)
any position inconsistent with any past practice on any Tax Return, or (vi) has
taken (or will take) any action (other than in the ordinary course of business
consistent with past practice) that would have the effect of increasing the Tax
liability of the Companies on the Closing Date or for any period ending after
the Closing Date or would decrease any attribute of the Companies existing on
the Closing Date.  Notwithstanding

 

58

 

anything to the contrary herein, even though the effect of the
following activities may result in income or gains, or decreased deductions,
that would increase the Tax Liabilities of the Companies on the Closing Date or
for any period ending after the Closing Date or would decrease any attribute of
the Companies existing on the Closing Date, (A) clause (vi) of this subsection
(e) shall not require the Company to disclose on Schedule 7.5 or obtain the
prior written consent of the Buyer for any activities conducted in the ordinary
course of business consistent with past practice, and (B) this subsection (e)
shall not require the Company to disclose on Schedule 7.5 or obtain the
prior written consent of the Buyer for items in amended Tax Returns that are
(i) based on a change of capitalization or depreciation policy reflected in
amended financial statements (without altering or eliminating the Sellers’
representation on basis set forth in Section 4.12(g)) or (ii) otherwise
consistent with the Audited Financials or Interim Financials included in the
S-1 Financial Statements, provided, with respect to both clauses (i) and (ii)
of this sentence, that under the governing tax authorities it is permitted for
the Companies to correct, change or amend Tax Returns (including methods of
accounting in such returns) on account of or in response to the amended
financial statements.

 

7.6           Non-Solicitation.  Prior to the Closing, and if the Transactions
are not consummated for a period of two years after termination of this
Agreement, the Buyer shall not, directly or indirectly, solicit for employment
or consulting, on its behalf or on behalf of any other person, any employee of
the Companies as of the date of this Agreement, or seek to induce or persuade
any such employee to terminate his or her employment with the Companies; provided,
that nothing herein shall prohibit the Buyer (i) from hiring any past or
present employee of the Companies if such Person has responded only to general
employment solicitations or advertisements of the Buyer or (ii) from
soliciting for post-Closing employment by or consulting with the Buyer (with
such employment or consulting arrangement to occur only upon consummation of
the Transactions) any of the persons listed on Schedule 7.6 (the “Key
Personnel”), and the Sellers and the Companies shall allow the Buyer and
its representatives full access to such Key Personnel at all reasonable times,
and in a manner so as not to interfere with the normal business operations of
the Sellers or the Companies, for the purpose of discussing such employment or
consulting arrangements; provided, further, that the Buyer shall
provide the Sellers and the Companies with notice of and a reasonable
opportunity to be present during any such discussions, and the Sellers and the
Companies hereby agree and acknowledge that the content of any such discussions
shall constitute Buyer Confidential Information.

 

7.7           Further
Assurances; Satisfaction of Covenants, etc.  The Companies and the Sellers, on the one
hand, and the Buyer, on the other hand, shall each execute such documents and
other papers and take or cause to be taken such further action as may be
reasonably required to carry out the provisions of this Agreement and to
consummate and make effective the Transactions. 
The Cable Venture and the Sellers, on the one hand, and the Buyer, on
the other hand, shall each in good faith seek to satisfy each of its covenants
and obligations under this Agreement and to satisfy each condition to Closing
it is required to satisfy hereunder (and, in the case of the conditions set
forth in Section 8, to cooperate with each other in seeking the satisfaction
of these conditions).  After the Closing,
each of the Sellers, on the one hand, and the Buyer, on the other hand, shall
provide each other and each other’s authorized representatives with full access
at all reasonable times, and in a manner so as not to interfere with the normal
business operations of the applicable Seller or to unduly interfere with the
performance by the Companies’ employees of their duties to the Companies, or
the Buyer, in each case, respectively,

 

59

 

to all relevant books, records, work papers, information and employees
and auditors of such Persons, to the extent necessary in connection with the
preparation of any Tax Return or any Tax audit, the Excluded Liabilities, any
third party claim for indemnification, any dispute between ML Media and Century
or Adelphia or any other reasonable purpose; provided, however,
that the Sellers shall reimburse the Buyer for the cost of the time (based only
on an allocation of direct salary costs) of any employees of the Companies and
the party requesting the access shall reimburse the party providing such access
for any out-of-pocket third party expenses incurred in providing such access.

 

7.8           Change
of Business Name.  The Buyer
agrees that within 180 days following the Closing Date it will change any trade
or fictitious names previously used by the Companies such that neither the
Buyer’s nor any of its Affiliates’ joint venture, partnership, limited
liability company, corporate, trade or fictitious names will contain the terms
“Century,” “Adelphia” “ML,” or any other term
incorporating or confusingly similar with such terms.  The Buyer agrees that, except as set forth on
Schedule 7.8, from and after such 180th day neither the Buyer nor
any of its Affiliates will use or conduct business using any of such names,
other than to notify Persons of their name changes in connection with the
transfer of control of the Companies to the Buyer.  The Sellers hereby grant the Buyer a
non-exclusive, royalty-free license to use the Retained Marks in connection
with the operation of the Systems for 180 days following the Closing Date (or,
as applicable, for such longer period as set forth on Schedule 7.8).  Notwithstanding the foregoing, the Buyer will
not be required to remove or discontinue using any Retained Marks that are
affixed to converters, remotes and other items used in customer homes or
properties, or that are used in similar fashion making such removal or
discontinuation impracticable.  The right
of the Buyer to use the Retained Marks during the period referred to in this
Section is subject to the following conditions:  (i) the Buyer will comply with the
Sellers’ quality control standards with respect to use of the Retained Marks
and will submit to the Sellers, before use, any materials created by the Buyer
after the Closing Date, including, without limitation, advertising materials,
on which the Retained Marks appear for the Sellers’ approval, not to be
unreasonably withheld or delayed; (ii) the Buyer acknowledges that the
Retained Marks shall remain the property of the Sellers and/or such of their
Affiliates that have rights in the Retained Marks (collectively, the “Mark
Owner”), and that all use of the Retained Marks by the Buyer shall inure to
the benefit of the Mark Owner; (iii) the Buyer shall not use the Retained
Marks in any way that would jeopardize their strength or validity or diminish
their value; and (iv) the Buyer shall promptly inform the Sellers of any
infringement of the Retained Marks by any third party of which it becomes
aware.

 

7.9           Insurance.  Each Company shall maintain in full force and
effect until Closing all existing insurance policies or comparable
replacements, including without limitation any such policies relating to
environmental, health or safety liabilities, to cover and protect the assets of
the Companies against loss, damage or destruction.

 

7.10         Full
Access.  Each Company and each
Seller shall, and shall cause its Affiliates to, afford the members of the
Buyer Group, upon reasonable advance notice and during normal business hours,
such access to the properties, plants, personnel, equipment, facilities, books
and records of the Companies as shall be reasonably necessary to enable the
Buyer and its agents and representatives (a) to investigate the business
affairs or environmental compliance or liability status (but shall not do any
intrusive testing, without approval of the Cable Venture, such

 

60

 

approval not to be unreasonably withheld,
delayed or conditioned) of the Companies for purposes of the Transactions and
(b) to make orderly arrangements for the consummation of the Transactions.

 

7.11         Bankruptcy
Process.

 

(a)           Motions, Orders,
etc.  The Cable Venture shall prepare
and file with the Bankruptcy Court, not later than three (3) days from the date
hereof, a motion to approve the Expense Reimbursement and Break-Up Fee.  The Cable Venture and the Sellers shall
promptly prepare and file with the Bankruptcy Court: (i) the Plan in form
and substance acceptable to the Buyer in its reasonable judgment, (ii) a
Disclosure Statement with respect to the Plan meeting the requirements of
section 1125(b) of the Bankruptcy Code (the “Disclosure Statement”); and
(iii) a motion to approve the Disclosure Statement.  The Plan, any and all attachments and
exhibits to the Plan, the Disclosure Statement and any approval motions and the
orders approving the foregoing (including the order confirming the Plan) shall
be acceptable in form and substance to the Buyer in its reasonable judgment and
shall include all of the items set forth in Section 7.11(b) of this
Agreement (the “Confirmation Order”). 
The Sellers and/or the Cable Venture shall serve a copy of the Plan and
Disclosure Statement on all Taxing Authorities having jurisdiction over the
assets of the Companies, all governmental agencies having jurisdiction over the
assets of the Companies with respect to Environmental Laws and on the attorneys
general for the Commonwealth.  The Cable
Venture shall add the Buyer, and the Buyer’s counsel, to the Cable Venture’s
so-called “Rule 2002 notice list” and otherwise provide notice to the Buyer of
all matters that are required to be served on the Cable Venture’s creditors
pursuant to the Bankruptcy Code and Rules. 
The Sellers and the Cable Venture shall provide the Buyer with copies of
all material pleadings, motions, orders and notices prepared by or on behalf of
the Cable Venture at least three (3) Business Days to the extent practicable
(or one (1) Business Day if not practicable) prior to the filing thereof
in the Chapter 11 Case so as to allow the Buyer to provide comments on the same
(in all cases subject to their fiduciary duties and as emergencies may
otherwise require).

 

(b)           Confirmation Order.

 

(i)            The Cable Venture
shall use its commercially reasonable efforts to obtain approval of the
Confirmation Order and any other Order of the Bankruptcy Court necessary to
authorize and consummate the Transactions as promptly as practicable.

 

(ii)           The Cable Venture shall
use its commercially reasonable efforts to cause the Confirmation Order to
provide, among other things:

 

(A)          provide
that the Plan has been proposed in good faith and not by any means forbidden by
law;

 

(B)           provide that the Buyer,
and its Affiliates, members, equity holders, partners and professionals, are
released from any claim of any party related to the Sellers, the business of
the Companies or the Chapter 11 Case, except as otherwise set forth in this
Agreement;

 

61

 

(C)           approve the sale of the
Acquired Interests on the terms and conditions set forth in this Agreement and
authorize the Cable Venture and Century to proceed with this transaction and
the Cable Venture and Century to comply with their respective obligations under
this Agreement;

 

(D)          provide for the payment
by the Buyer of ordinary course of business post-petition trade payables and
accrued expenses incurred by the Cable Venture according to the normal and
customary terms applicable to such payments and expenses;

 

(E)           state
that any objections timely filed with respect to the Plan, which have not been
withdrawn, are overruled or the interests of such objections have been
otherwise satisfied or adequately provided for by the Bankruptcy Court;

 

(F)           find
that the Purchase Price represents fair value for the Acquired Interests;

 

(G)           find
that the Plan is in the best interests of the Cable Venture’s estates and
creditors;

 

(H)          provide
that the Bankruptcy Court shall retain jurisdiction for the purpose of
enforcing the provisions of this Agreement, the Confirmation Order and the
Plan;

 

(I)            authorize the Cable
Venture and Century to execute, deliver, perform under, consummate and
implement this Agreement, together with all additional instruments and
documents that may be reasonably necessary or desirable to implement the
foregoing;

 

(J)            find that, pursuant to
Section 1146(c) of the Bankruptcy Code, the within transaction is “in
contemplation of a plan or plans of reorganization to be confirmed by the
Bankruptcy Court,” and as such shall be free and clear of any and all transfer
tax, stamp tax or similar Taxes;

 

(K)          provide
that all equity or equity-based compensation, and any documents and agreements
relating thereto, and all other Interests (as defined in the Bankruptcy Code)
in the Cable Venture will be canceled, and all obligations of the Cable Venture
and any Affiliates of the Cable Venture under or in respect of them will be
terminated;

 

(L)           find
that the Buyer is a “good faith” purchaser entitled to the protection afforded
thereby under section 363(m) of the Bankruptcy Code;

 

(M)         provide that Adelphia,
its Affiliates, and any official committee and its professionals appointed in
the bankruptcy cases of Adelphia or any of its Affiliates shall be bound by the
obligations of the Sellers set forth in Section 7.1(b) and
Section 7.16; and

 

(N)          find
that the Buyer has not acted in violation of Section 363(n) of the
Bankruptcy Code.

 

62

 

(iii)          The
Confirmation Order shall approve and authorize the assumption of the Assumed
Executory Contracts.

 

(c)           Competing
Transactions.

 

(i)            From
the date of this Agreement, neither the Sellers nor the Companies shall, and
they shall not authorize or permit their respective Affiliates or their
respective members, professionals, advisors, officers, directors, employees,
representatives, other agents or other related parties to, directly or
indirectly, (x) solicit, initiate or encourage the submission of any
Acquisition Proposal, (y) participate in any discussions or negotiations
regarding, or furnish to any Person any non-public information with respect to
the Companies, or take any other action to facilitate, any Acquisition Proposal
or any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal or (z) enter
into any agreement with respect to an Acquisition Proposal.

 

(ii)           Fiduciary
Exception.

 

(A)          Notwithstanding
the provisions of Section 7.11(c)(i), Century shall not be prohibited from
furnishing information to, or entering into discussions or negotiations with,
any Person that makes an unsolicited bona fide written Acquisition Proposal if,
and only to the extent that, (1) such action is taken prior to the
issuance of the Confirmation Order, (2) Century’s board of directors (its “Board”),
after consultation with independent legal counsel, determines in good faith
that such action is required for the Board to comply with its fiduciary obligations
to Century’s stakeholders under applicable Legal Requirements, (3) such
Acquisition Proposal is an all-cash offer, with all third-party financing (if
any) being evidenced by bona fide signed commitments from reputable financial
institutions that do not include conditions to such financing less favorable
than the conditions set forth in the Commitment Letters, to acquire 100% of
Century’s joint venture interests in the Cable Venture, and (4) the Board
determines in good faith that such Acquisition Proposal, if accepted, is likely
to be consummated, taking into account all legal, financial, regulatory and
other aspects of the proposal and the Person making the proposal, and believes
in good faith, after consultation with and based upon the written opinion (in
customary form and subject to customary conditions) of an independent,
nationally recognized financial advisor, that the Acquisition Proposal would,
if consummated, result in a transaction superior to Century’s stakeholders from
a financial point of view than the Transactions (any such materially more
favorable Acquisition Proposal being referred to herein as a “Superior
Proposal”).  Prior to taking any
action pursuant to this Section 7.11(c)(ii) with respect to an
Acquisition Proposal, Century shall provide prior written notice to the Buyer
to the effect that it is proposing to take such action and provide the
additional information required by Section 7.11(c)(ii)(B) (to the
extent not previously provided to the Buyer).

 

(B)           The
Sellers and the Cable Venture shall notify the Buyer of any Acquisition
Proposal or request for nonpublic information from any Person who is
considering making an Acquisition Proposal (including, without limitation, all
material terms and conditions thereof and the identity of the Person making it)
as promptly as practicable (but in no case later than 24 hours) after its
receipt thereof, and shall provide the Buyer with a copy of any written
Acquisition Proposal or amendments or supplements thereto (or, if such action
is 

 

63

 

prohibited, a
written summary of the material terms of the foregoing, including the identity
of any Person submitting an Acquisition Proposal), and, if Century has become
authorized pursuant to Section 7.11(c)(ii)(A) to enter into
discussions concerning such Acquisition Proposal, Century shall thereafter
inform the Buyer on a current basis of the status of any inquiries, discussions
or negotiations with such Person, and any material changes to the terms and
conditions of such Acquisition Proposal, and shall promptly give the Buyer a
copy of any information related to the Companies delivered to such Person that
has not previously been provided to the Buyer.

 

(C)           Century
shall not enter into any final and definitive agreements relating to any such
Acquisition Proposal (“Alternate Agreements”) unless it shall have first
afforded the Buyer the opportunity to match or improve upon the terms and
conditions of such Acquisition Proposal (the Buyer’s “Matching Right”).  Not less than three (3) Business Days
prior to the execution of any Alternate Agreements, Century shall deliver to
the Buyer (1) copies of such Alternate Agreements, together with (2) a
notice to the Buyer stating that the Buyer shall have three (3) Business
Days from receipt of such notice to exercise its Matching Right.  If the Buyer elects to exercise its Matching
Right, Century shall not enter into any such Alternate Agreements or seek an
Order of the Bankruptcy Court confirming a plan of reorganization or otherwise
approving and authorizing the transactions contemplated by such Alternate
Agreements on the terms set forth therein unless Century and the Cable Venture
also submit the Plan (as modified by the Buyer in the exercise of its Matching
Right) for consideration and approval by the Bankruptcy Court.  If the Buyer declines to exercise its
Matching Right with respect to the Alternate Agreements, the provisions of this
Section 7.11(c)(ii)(C) shall thereafter apply to any proposed
material amendment or modification of such Alternate Agreements.  The exercise or non-exercise by the Buyer of
its Matching Right shall not alter or affect its rights to terminate this
Agreement or to receive the Expense Reimbursement or the Break-Up Fee in
accordance with the applicable provisions of this Agreement.

 

(iii)          Upon
the execution and delivery of this Agreement, the Sellers and the Companies
will, and will cause their respective Affiliates, and their respective members,
officers, directors, employees, professional advisors, representatives and
other agents to, cease and terminate any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any possible
Acquisition Proposal.

 

(iv)          Expense
Reimbursement; Break-Up Fee.

 

(A)          If
this Agreement is terminated pursuant to Section 12.1(b) (but only if
(x) the Buyer has satisfied all conditions to Closing requiring
performance by the Buyer and (y) the failure of the Closing to occur on or
before the Termination Date is the result of a willful breach by either of the
Sellers or the Companies), Section 12.1(d) or Section 12.1(e) (but
in each case only if (x) the Buyer is not in material breach of any
obligation under this Agreement and (y) the breach or breaches giving rise
to the Buyer’s right to terminate is a willful breach by either of the Sellers
or the Companies and, in the case of a breach of covenant where satisfaction of
the covenant is solely within the control of the Sellers and the Companies,
does not involve obtaining a third party consent, and can be satisfied using
reasonable commercial efforts, any breach shall be deemed willful), Section 12.1(f),
Section 12.1(g), Section 12.1(h), Section 12.1(i), Section 12.1(j),
Section 12.1(k), Section 12.1(l) or Section 12.1(o) (but only if

 

64

 

the basis of
such termination is the issuance by the Bankruptcy Court of a Final Order
rejecting the Plan), then, provided that the Expense Reimbursement and Break-Up
Fee were previously approved by the Bankruptcy Court, the Companies shall
reimburse the Buyer Group for all of its reasonable out-of-pocket expenses
incurred in connection with this Agreement (including expenses or other amounts
the Buyer pays pursuant to the terms of this Agreement, such as all or any
portion of any filing fee), up to a total amount of six million dollars
($6,000,000) (the “Expense Reimbursement”) in same-day funds, at the
time of such termination.  For the
avoidance of doubt, the parties agree that if this Agreement is terminated
pursuant to Section 12.1(f), the Buyer Group’s right to reimbursement of
its expenses by the Companies shall be governed by that certain Expense
Reimbursement Agreement, dated as of January 19, 2005, by and between the
Cable Venture and MidOcean Partners LP, as the same shall have been amended
through the date of such termination (the “Expense Reimbursement Agreement”).

 

(B)           If
this Agreement is terminated pursuant to Section 12.1(b) (but only if
(x) the Buyer has satisfied all conditions to Closing requiring
performance by the Buyer and (y) the failure of the Closing to occur on or
before the Termination Date is the result of a willful breach by either Seller
or by either of the Companies), Section 12.1(d) or Section 12.1(e) (but
in each case only if (x) the Buyer is not in material breach of any
obligation under this Agreement and (y) the breach or breaches giving rise
to the Buyer’s right to terminate is a willful breach by either of the Sellers
or the Companies and, in the case of a breach of covenant where satisfaction of
the covenant is solely within the control of Sellers and the Companies, does
not involve obtaining a third party consent and can be satisfied using
reasonable commercial efforts, any breach shall be deemed willful), Section 12.1(g) or
Section 12.1(o) (but only if the Bankruptcy Court shall have issued a
Final Order rejecting the Plan) then, in addition to the Expense Reimbursement,
if within 12 months of such termination the Sellers or the Companies consummate
the transactions contemplated by any Acquisition Proposal (or, if the Chapter
11 Case has not been finally concluded within such 12-month period, obtain an
Order of the Bankruptcy Court approving and authorizing the transactions
contemplated by any Acquisition Proposal), the Companies shall pay the Buyer a
termination fee in an amount equal to $15,600,000 less the amount of the
Expense Reimbursement (the “Break-Up Fee”), in same-day funds, on the
day of such transactions are consummated or the day of entry of such Order, as
applicable.

 

(C)           If
this Agreement is terminated pursuant to Section 12.1(h) or (i),
then, in addition to the Expense Reimbursement (x) Century shall pay the
Buyer 50% of the Break-Up Fee, in same-day funds, on the day the transactions
contemplated by the applicable Alternative Agreement are consummated, and (y) if,
within 12 months of such termination, ML Media sells its joint venture interest
in the Cable Venture to a Person (other than the Buyer or its Affiliates) at a
price greater than or equal to the price at which Century sold its joint
venture interest pursuant to the applicable Alternative Agreement, ML Media
shall pay the Buyer 50% of the Break-Up Fee, in same-day funds, on the day it
consummates such sale.

 

(d)           Other Bankruptcy
Covenants.  The Cable Venture shall
use its commercially reasonable efforts to make any filings, take all actions,
and obtain any and all other approvals and orders necessary or appropriate for
consummation of the Transactions, subject to its obligations to comply with any
order of the Bankruptcy Court.  The Cable
Venture shall provide appropriate notice of the hearing on the Plan as is
required by the Bankruptcy Code 

 

65

 

Rules, Local Rules and
orders of the Bankruptcy Court to all parties entitled to notice including, but
not limited to, all parties to the Assumed Executory Contracts.  The Assumed Executory Contracts shall be
identified in the Disclosure Statement by the date of the Assumed Executory
Contract(s), the other party to the contract or lease and the address of such
party.  The Disclosure Statement shall
set forth the amounts (if any) necessary to cure defaults under each of such
Assumed Executory Contracts as determined by the Cable Venture based on the
books and records of the Cable Venture. 
The Cable Venture shall be responsible for payment of any and all cure
amounts associated with the assumption of the Assumed Executory Contracts.  Neither the Cable Venture nor the Sellers
shall amend, modify or supplement the Plan, Disclosure Statement or
Confirmation Order in any material respect adverse to the Buyer without the
Buyer’s written consent, which consent shall not be unreasonably withheld or
delayed.  In the event an appeal is
taken, or a stay pending appeal is requested, from any of the foregoing orders
of the Bankruptcy Court, the Cable Venture shall immediately notify the Buyer
of such appeal or stay request and, upon the Buyer’s request, shall provide to
the Buyer within two (2) days after the Cable Venture’s receipt thereof a
copy of the related notice of appeal or order of stay.  The Cable Venture shall also provide the
Buyer with written notice of any motion, application, brief or other pleading
filed in connection with any appeal from any of such orders.  The Buyer shall cooperate with the Sellers
and the Cable Venture in all reasonable respects in connection with the
proceedings in the Bankruptcy Court, including, without limitation, delivery of
any information relating to the Buyer required in connection with such filings
or proceedings.

 

(e)           Certain
Claims in Bankruptcy.  Claim
#838001770 ($1,242,744.00) and #838001780 ($10,343.00) of Secretario De
Hacienda in the Chapter 11 Case shall be satisfied or discharged prior to the
Closing.

 

7.12         Continuity
and Maintenance of Operations. 
From the date of this Agreement until the Closing, unless otherwise
agreed to in writing by the Buyer, with respect to the assets and properties of
the Companies and the Systems (other than the Transferred Assets):

 

(a)           Except
as described in Schedule 7.12(a):

 

(i)            the
Companies shall, and the Sellers shall cause the Companies to, continue to
operate the Systems in the usual, regular and ordinary course consistent with
past practice and make ordinary marketing, advertising, capital, promotional
and other expenditures and implement ordinary pricing and promotional
strategies consistent with past practice and, to the extent consistent with
such conduct and operation, use commercially reasonable efforts to (a) preserve
the current business intact in all material respects, including preserving
existing relationships with franchising authorities, suppliers, customers and
others having business dealings with the Companies and the Systems, (b) continue
the Rebuild of the San Juan System in accordance with specifications set forth
on Schedule 1.1(w), (c) complete line extensions, placing
conduit or cable in new developments and fulfill installation requests in the
ordinary course of business and (d) exercise all of the Companies’ rights
to maintain existing “must carry” and retransmission agreements (including
delivery of timely notices required in connection with extensions or renewals);
provided, however, the Companies shall not institute any promotions longer than
six months, other than a Dish-Win-Back promotion, without the consent of the
Buyer.

 

66

 

(ii)           the
Companies shall continue to operate the Systems in material compliance with all
Legal Requirements;

 

(iii)          without
limiting the generality of the foregoing, each Company shall maintain its
assets and properties consistent with past practice, maintain the Real Property
in substantially the same condition as exists as of the date of this Agreement,
ordinary wear and tear excepted, maintain commercially reasonable Inventory
levels in its ordinary course of business (which shall include sufficient
quantities of amplifiers, line extenders, installation materials and converters
to operate and maintain the Systems in the ordinary course of business),
maintain insurance as in effect on the date of this Agreement and keep all of
its business books, records and files in the ordinary course of business;

 

(iv)          except
in the ordinary course of business consistent with past practice, neither
Company shall itself, or will permit any of its officers, managers, directors,
shareholders, members, partners, agents or employees to, pay or forgive any
Subscriber Accounts Receivable (other than for their own residences) prior to
the Closing Date;

 

(v)           each
Company shall continue to implement its procedures for disconnection and
discontinuance of service to subscribers whose accounts are delinquent in
accordance with those in effect on the date of this Agreement or consistent
with past practice; and

 

(vi)          the
Companies shall make capital expenditures during the period from January 1,
2005 through the Closing Date in an aggregate amount equal to 100% of the
amount of capital expenditures budgeted in the 2005 Budget for the period from January 1,
2005 through the Previous Month End (allocating any capital expenditures
budgeted for the last quarterly period in that period on a pro rata basis to
the three months in the quarter), including all capital expenditures at the
head-end site required to launch HDTV-DVR service.

 

(b)           Except
as described in Schedule 7.12(b), neither Company shall, except in
the ordinary course of business consistent with past practice, as contemplated
by the 2005 Budget, as contemplated by this Agreement, or with the prior
written consent of the Buyer:

 

(i)            modify,
amend, extend, terminate, renew, suspend, abrogate or enter into any Franchise,
Governmental Authorization or Material Contract relating to the assets or
properties of the Companies or the Systems (other than Material Contracts relating
principally to the Rebuild of the San Juan System), provided, that the
Buyer’s consent thereto will not be unreasonably withheld;

 

(ii)           change
the rate charged for any subscriber service or establish a rate for DVR or HDTV
service;

 

(iii)          sell,
transfer or assign any of the Companies’ assets or properties to any Affiliate
or any other third party, except for Transferred Assets, other than sales,
transfers or assignments of inventory in the ordinary course of business and of
obsolete or worn-out equipment; provided that the Companies shall not
sell any digital converters currently used by the Systems without the prior
consent of the Buyer;

 

67

 

(iv)          enter
into any contract or commitment or incur any indebtedness or other Liability or
obligation of any kind relating to the Systems;

 

(v)           enter
into any agreement with a billing service with respect to the Systems;

 

(vi)          take
any action that would result in the loss, lapse or abandonment of any Company
Intellectual Property (except with respect to actions permitted with respect to
Transferred Assets);

 

(vii)         with
respect to the Systems, engage in any marketing, subscriber installation,
collection or disconnection practices or offer discounts pursuant to selling or
marketing campaigns, other than those described on Schedule 7.12(b);

 

(viii)        make
any capital expenditure or series of capital expenditures that would require
payment in whole or in part post-Closing (to the extent that such post-Closing
Liability would not be included in the calculation of Closing Date Working
Capital); or

 

(ix)           take
or commit to take any other action which, if taken prior to the date of this
Agreement, would be required to be disclosed on Schedule 4.3(f).  

 

The Cable
Venture shall periodically deliver to the Buyer a true, correct and complete
copy of each Material Contract, Governmental Authorization or other agreement
that is entered into after the date of this Agreement and that, if it were in
effect on the date of this Agreement, would be required to be listed on Schedules
4.5, 4.6, 4.7, 4.8, 4.9, 4.10 or 4.17
(and shall deliver all such copies not less than two (2) days prior to the
Closing Date).

 

(c)           Notwithstanding
anything in Section 7.12(b) to the contrary, except as otherwise provided
in this Agreement, neither Company shall, without the prior written consent of
the Buyer, modify, amend, extend, terminate, renew, suspend, abrogate or enter
into any Pole Attachment Agreement or any Retained Programming Agreement.

 

(d)           The
Cable Venture shall deliver to the Buyer correct and complete copies of (i) all
rate regulation documents prepared or filed at any time between the date of
this Agreement and the Closing, and (ii) all non-routine correspondence,
filings and submissions with or to any Governmental Authority made between the
date of this Agreement and the Closing within two (2) days of the filing,
submission or receipt thereof.  The Cable
Venture shall deliver to the Buyer, as soon as practicable and in any event not
later than the delivery of the Estimated Adjustment Certificate, the rate card
as of the Calculation Date, describing the services available from the Systems,
and the rates charged by the Companies therefor, including all rates, tariffs,
and other charges for cable television or other services provided by the
Systems, and the line up of the stations and signals carried by the Systems and
the channel position of each such signal and station.  In addition, within 30 days after the last
day of each calendar month, the Cable Venture shall deliver to the Buyer a
report setting forth the number of Equivalent Subscribers of the Systems as of
the last day of such month, listed by the subscriber categories described in Section 4.5(a).

 

68

 

(e)           Neither
Company shall, with respect to any of its employees, except as required to
comply with applicable law or as required to comply with existing contracts or
plans that are disclosed on Schedule 4.9 or Schedule 4.10:
(i) increase or decrease in any manner the compensation or fringe benefits
of any employee (except for increases in the ordinary course of business
consistent with past practice in connection with normal salary reviews); (ii) voluntarily
recognize any union as collective bargaining representative of any of its
employees; (iii) enter into a collective bargaining agreement governing
the terms or condition of employment of any of its employees; (iv) enter
into any government contract giving rise to affirmative action obligations
relating to any of its employees; or (v) agree to do any of the
foregoing.  The Cable Venture shall also
notify the Buyer if, to the Companies’ Knowledge, there is any union organizing
involving, or directed towards, any group of employees of the Companies, and consult
with the Buyer concerning the Companies’ response to such organizing, and
permit the Buyer to attend any collective bargaining discussions that may occur
with any union representing any of the employees of the Companies for
collective bargaining purposes or, at the Buyer’s option, notify the Buyer of
the progress of such discussions.

 

7.13         Completion
of the Rebuild of the San Juan System.

 

(a)           From
the date hereof until the Completion of the Rebuild of the San Juan System (or
until the Closing Date if the Buyer elects to accept a reduction in the
Purchase Price pursuant to Section 3.2(b)(ii)), the Cable Venture (and
from and after the Closing Date, the Sellers) shall deliver to the Buyer
monthly progress reports regarding the status of the Rebuild of the San Juan
System, which shall include the Companies’ and the Sellers’ expenditures to
date in connection with the Rebuild of the San Juan System.  In addition, the Cable Venture shall permit
the Buyer to conduct independent progress reviews of the status of the Rebuild
of the San Juan System not less than sixty (60) days and thirty (30) days prior
to the earlier of (i) the date on which the Sellers have determined (by
written notice to the Buyer) that the Completion of the Rebuild of the San Juan
System will have occurred and (ii) the Closing Date, respectively, which
progress reviews shall include the right of the Buyer to inspect the San Juan System’s
compliance with the Rebuild specifications set forth on Schedule 1.1(w)
and their compliance in all material respects with the construction specifications
on Schedule 7.13(d).

 

(b)           In
order to minimize disruptions to the System or to the services to customers
provided thereby, from and after the Closing Date until the Completion of the
Rebuild of the San Juan System (unless the Buyer has elected to accept a
reduction in the Purchase Price pursuant Section 3.2(b)(ii)), the Sellers
shall not cause or permit a “cut-over” of service on any section of the
System to the rebuilt portion thereof unless the Sellers shall have first
delivered to the Buyer written notice of such intended “cut-over” not less than
five (5) Business Days prior to the intended date of transfer of service.

 

(c)           Except
as set forth on Schedule 7.13, the work, and all activities of the
Sellers, the Companies and/or their contractors in connection with, in
furtherance of, or in any way related to the Rebuild of the San Juan System
shall be performed in compliance in all material respects with relevant and
applicable laws, ordinances, rules and regulations (including occupational
safety and health standards) of any Governmental Authority having jurisdiction
over any aspect thereof, including, without limitation: (i) rules,
regulations and requirements of the FCC, the Puerto Rico Board, the Environmental
Protection Agency, the United States 

 

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Department of
Transportation and the FAA; (ii) the Cable Communications Policy Act of
1984, as amended; (iii) the Telecommunications Act of 1996; (iv) the
Puerto Rico Telecommunications Act; and (v) requirements of any
Governmental Authorization covering the area in which the work is to be
performed.

 

(d)           Upon
the Sellers’ determination that the Completion of the Rebuild of the San Juan
System has occurred, the Sellers shall promptly notify the Buyer in
writing.  Upon receipt of such notice,
the Buyer will have 30 days thereafter to conduct an independent inspection and
verification of the Completion of the Rebuild of the San Juan System, which
inspection and verification shall include the right of the Buyer to inspect the
Systems’ compliance with the Rebuild specifications set forth on Schedule 1.1(w)
and their compliance in all material respects with the construction specifications
on Schedule 7.13(d), and deliver a report specifying any such non-compliance,
to be corrected at the Sellers’ expense. 
In the event that after the Buyer’s independent inspection and
verification of the Completion of the Rebuild of the San Juan System, the Buyer
disputes that the Completion of the Rebuild of the San Juan System has occurred
or the Sellers disagree with a report delivered by the Buyer pursuant to the
preceding sentence, the Buyer and the Sellers shall engage a neutral third
party engineer to resolve the dispute as soon as practicable (the “Independent
Engineer”).  The Independent Engineer’s
resolution of the dispute shall be final and binding, absent manifest
error.  The Buyer and the Sellers shall
share equally in the fees and expenses of the Independent Engineer; provided
that (i) if the Independent Engineer’s determination is completed prior to
the Closing Date, the Buyer shall deduct the Sellers’ share of such fees and
expenses from the amount payable to the Sellers at the Closing (which deduction
shall not be deemed a reduction of the Purchase Price) and (ii) if the
Independent Engineer’s determination is completed after the Closing Date, the
Sellers’ share of such fees and expenses shall be paid from the Sellers Escrow
Account.  If the Completion of the
Rebuild of the San Juan System is finally determined to have occurred (pursuant
to the determination provisions set forth in this Section 7.13(d)) after
the Closing Date, then, if the Buyer has not elected to accept a reduction in
the Purchase Price pursuant Section 3.2(b)(ii), any remaining amount in
the Rebuild Escrow Account (after payment of Sellers’ share of the fees and
expenses of the Independent Engineer, if any) shall be paid to the Sellers
Escrow Account.

 

(e)           In
the event that (i) the Completion of the Rebuild of the San Juan System
has not occurred prior to the Closing and (ii) the Buyer has not elected
to accept a reduction in the Purchase Price pursuant Section 3.2(b)(ii):

 

(i)            The
process of the Completion of the Rebuild of the San Juan System (and payment
for the Rebuild of the San Juan System) shall continue to be supervised by
employees of Century in the same manner as currently conducted, pursuant to the
Transition Services Agreement, with any remaining costs of the Rebuild of the San
Juan System paid from the Rebuild Escrow Account and, if the actual cost for
the Completion of the Rebuild of the San Juan System (including, without
limitation, any fines, fees, penalties or assessments for the failure to comply
with any Governmental Authorizations or Material Contracts associated
therewith) exceeds the amount in the Rebuild Escrow Account (such excess
amount, the “Rebuild Cost Overrun”), from the Sellers Escrow Account;
provided that the Sellers acknowledge and agree that the Sellers shall remain
liable for the full amount of any Rebuild

 

70

 

Cost Overrun,
notwithstanding the release of any funds from the Sellers Escrow Account prior
to the Completion of the Rebuild of the San Juan System.

 

(ii)           In
addition to the “as-built” maps of the portion of the San Juan System being rebuilt
to be delivered to the Buyer pursuant to Section 7.15(f), upon the
Completion of the Rebuild of the San Juan System, the Sellers shall deliver to
the Buyer supplemental “as-built” maps of all of the Systems reflecting the
post-Closing Rebuild of the San Juan System as built, which maps may be in
electronic form.

 

7.14         Risk
of Loss.  The risk of any loss
or damage to the Systems and the assets and properties of the Companies
resulting from fire, theft, hurricane or other casualty (except reasonable wear
and tear) will be borne by the Companies and the Sellers prior to the
Closing.  If there is a hurricane that
involves material, long-lasting or permanent damage to or destruction or degradation
of the Companies’ assets or their functionality or any other loss or damage
that is sufficiently substantial so as to preclude and prevent resumption of
normal operations of any material portion of the Systems, the Cable Venture
shall promptly notify the Buyer in writing of that fact and whether the Cable
Venture intends to repair, replace and restore the lost or damaged property to
its former condition (or, if such lost or damaged property had not yet been
replaced or upgraded in connection with the Rebuild of the San Juan System, to
the condition of such property contemplated by the Rebuild of the San Juan
System) as soon as practicable at its sole expense.  If the Cable Venture indicates it will not so
repair, replace and restore the lost or damaged property, then the Buyer shall
have the right to terminate this Agreement by giving written notice thereof to
the Cable Venture within thirty (30) days after receipt of such notice from the
Cable Venture.  If the Cable Venture
agrees to so repair, replace and restore the lost or damaged property, then
this Agreement shall continue in full force and effect and the Cable Venture
shall be obligated to effect such repair, replacement and restoration as soon
as reasonably practicable; provided, however, that if such
repair, replacement or restoration cannot reasonably be completed in all
material respects prior to the Closing, then (i) the Closing shall be
delayed until such completion in all material respects occurs, and (ii) at
the Buyer’s or the Sellers’ option the Termination Date shall be extended to
allow the Cable Venture to complete such repair, replacement or restoration,
but in no event shall the Termination Date be extended by more than one month.

 

7.15         Additional
Covenants Regarding the Companies.

 

(a)           Covenants
Relating to Facilities and Environmental Matters.  Prior to the Closing:

 

(i)            the
Companies shall have taken the remedial steps set forth on Schedule 7.15(a)(i);

 

(ii)           the
Companies shall have used reasonable efforts to obtain all material permits and
certificates required under applicable law for the use and operation of each of
the Owned Real Properties and Leased Real Properties as currently used and
operated by the Companies, including, without limitation, (1) use permits
from the Regulations and Permits Administration, (2) sanitary licenses
from the Department of Health, (3) certificates of inspection from the
applicable Fire Department, and (4) for those sites for which such permits
and

 

71

 

authorizations
are required, air emissions source permits and underground injection control
permits from the Environmental Quality Board; for those sites where
asbestos-containing materials (“ACM”) are present in good condition, the
Company shall use reasonable efforts to prepare and implement an ACM operations
and maintenance (O&M) plan in accordance with Environmental Quality Board
requirements;

 

(iii)          the
Companies shall have prepared Spill Prevention Control and Countermeasures
Plans or Emergency Plans as required under applicable law with respect to the
Owned Real Properties and the Leased Real Properties; and

 

(iv)          the
Companies shall have taken the remedial steps set forth on Schedule 7.15(a)(iv).

 

(b)           Covenants
Relating to Employee Benefits Plans Matters.  Prior to the Closing the Companies shall use
reasonable commercial efforts to:

 

(i)            take
all steps necessary to ensure that formal plan documentation for each Employee
Benefit Plan has been prepared and properly executed, that appropriate trustees
have been appointed for each plan, and that the 401(k) Plan for La Union
Insular de Trabajadores y Construcciones Electricas Inc. has been submitted for
and receive a favorable determination letter from the Puerto Rico Treasury;

 

(ii)           file
all outstanding annual reports and prepare and distribute summary plan
descriptions and summary annual reports as required by applicable Legal
Requirements;

 

(iii)          complete
all discrimination and operational testing that is required for each Employee
Benefit Plan and complete all corrections relating to any testing failures and
late contributions to any Employee Benefit Plan; and

 

(iv)          formally
adopt all relevant Employee Benefit Plans.

 

(c)           Covenants
Relating to Software, Intellectual Property and Programming Agreement Matters.  Prior to the Closing:

 

(i)            the
Companies shall have replaced the Companies’ existing TERAYON system, in its
entirety, with Motorola replacement equipment that in the aggregate is equivalent
to or better than the TERAYON system being replaced;

 

(ii)           the
Companies shall have completed their implementation of and transition to the
Great Plains accounting system (or, if not completed by the Closing Date,
Century shall provide to the Companies pursuant to the Transition Services
Agreement the accounting software currently provided to the Companies);

 

(iii)          Century
shall have transferred to the Companies, and shall have caused its Affiliates
(including, without limitation, Adelphia) to have transferred to the Companies,
the Retained Programming Agreements listed on Schedule 1.1(llll)
and shall transfer

 

72

 

or use
reasonable efforts to transfer to the Companies the other Retained Programming
Agreements to which such Person is a party as specified on Schedule 7.15(c)(iii);
and

 

(iv)          Century
shall have, and shall have caused each of its Affiliates (including, without
limitation, Adelphia) to have, transferred or otherwise conveyed to the
Companies (x) all of such Person’s rights and interest in the NEMOS and
Powertools software that are assignable by it without cost and shall have taken
the action set forth on Schedule 7.15(c)(iv), and (y) all of
such Person’s right, title and interest in and to the name POWERLINK.

 

(d)           Covenants
Relating to Other Operational Matters. 
Prior to the Closing:

 

(i)            the
Companies shall have taken all steps necessary to cause each of them to be in
good standing in its state of organization and in the Commonwealth of Puerto
Rico;

 

(ii)           if
the Rebuild is completed by the Closing Date, the Sellers shall have assigned
to the Companies, and shall have caused each of their respective Affiliates to
have assigned to the Companies, all rights of any such Person (including,
without limitation, rights to enforce performance and to seek damages or indemnity
for breach of warranty) under any contract to which such Person is a party
relating to the Rebuild of the San Juan System (and, if not, the Sellers shall
do so promptly after completion of the Rebuild); and

 

(iii)          Century
shall have transferred to the Companies all of the books and records relating
to the historic operations of the Companies in the possession of Century (or
Adelphia) in Century’s capacity as manager of the Systems and, to the extent
such books and records are held in electronic form, they shall be transferred
in electronic form to the Companies; provided, however, that
Century shall be entitled to keep copies of such books and records.

 

(e)           At
the Closing, the Companies shall have in stock for use (i) not less than
3,000 cable modems, (ii) not less than 2,000 HDTV/DVR boxes, and (iii) 3,000
digital converters that shall not be damaged and awaiting repair (or, if the total
number of digital converters is at least 3,000 but the number of undamaged
converters is less than 3,000, the Cash Purchase Price shall be reduced by an
amount equal to $60 for each converter required to be repaired so that the
number of undamaged converters is 3,000).

 

(f)            Within
30 days after the Closing Date, the Companies shall deliver to the Buyer a
complete set of “as-built” maps of the portion of the San Juan System that has
been rebuilt as of the Closing Date, which “as-built” maps may be in electronic
form; provided that, if the Completion of the Rebuild of the San Juan
System has occurred more than 30 days prior to the Closing Date, the Companies
shall deliver such “as-built” maps on the Closing Date.

 

7.16         Non-Solicitation;
No Competitive Use of Confidential Information.  To accord to the Buyer the full value of its
purchase, neither of the Sellers shall, and each of the Sellers shall cause
their respective Affiliates not to, (i) for a period of two years after
the Closing Date (the “Non-Solicitation Period”), directly or
indirectly, employ or solicit for employment or consulting, on its own behalf
or on behalf of any other Person, any individual who has been an employee of
the Companies or, after the Closing, the Buyer at any time during the period 

 

73

 

(x) commencing on the date which is one year prior to the date of
this Agreement and (y) ending on the final day of the Non-Solicitation
Period, or (ii) use in competition with the Systems any Company
Confidential Information.  The Sellers
acknowledge that the remedy at law for breach of the provisions of this Section 7.16
will be inadequate and that, in addition to any other remedy the Buyer may
have, it shall be entitled to an injunction restraining any such breach or
threatened breach, without any bond or other security being required; if any
court construes the covenant in this Section 7.16, or any part thereof, to
be unenforceable because of its duration or the area covered thereby, the court
shall reduce the duration or area to the extent necessary so that the
provision, as reduced, shall then be enforceable.

 

7.17         Further
Action Regarding Financial Statements.

 

(a)           From
the date hereof through the Closing, the Cable Venture shall deliver to the
Buyer, within 45 business days after the end of each month, (i) monthly
unaudited consolidated balance sheets and statements of income for the
Companies, and (ii) a monthly reporting package including any management
discussion and analysis of the financial condition and results of operations of
the Companies that is prepared for the board of managers of the Cable Venture,
the board of directors of Cable Corp. and/or the Sellers.  In addition, the Companies and the Sellers
shall deliver the Draft 2004 Financials as promptly as practicable, but in any
event not later than 60 days after the date hereof.

 

(b)           The
Companies and the Sellers shall use commercially reasonable efforts to deliver
to the Buyer, as promptly as practicable, but in any event not later than August 31,
2005 for the Audited Financials or September 15, 2005 for the Interim
Financials, (1) the Audited Financials and (2) the Interim Financials
through the second quarter of 2005 (together with the comparable prior periods,
as required), in each case meeting the requirements (in form and substance) of
Regulation S-X under the Securities Act of 1933, as amended (the “Securities
Act”) in order to be included in a registration statement on Form S-1,
assuming such registration statement is to be filed with the SEC under the
Securities Act on the Closing Date (collectively, the “S-1 Financial
Statements”), prepared on a basis consistent with the Audited Financials
and, in the case of the audited financial statements, accompanied by the report
thereon of PWC, the Companies’ independent certified public accountants, which
report shall be unqualified except with respect to the bankruptcy of the Cable
Venture.  In addition, the Companies and
the Sellers shall deliver to the Buyer drafts of the Interim Financials for the
first and the second quarters of 2005 by August 31, 2005.

 

(c)           The
Companies and the Sellers shall use commercially reasonable efforts to deliver
to the Buyer, as promptly as practicable but in any event not later than September 15,
2005, management’s discussion and analysis of the financial condition and
results of operations of the Companies as required by Item 303 of Regulation
S-K under the Securities Act and selected financial data as required by Item
301 of Regulation S-K, for inclusion in the Form S-1 registration
statement (which the Companies and the Sellers shall use commercially
reasonable efforts to update by November 22, 2005 to cover the
Supplemental Interim Financials, if the Closing does not occur on or before November 15,
2005).  The Companies and the Sellers
shall use commercially reasonable efforts to assist the Buyer in preparing
other information relating to the Companies required to be included in any bank
information memorandum, offering memorandum or other similar document (“Offering
Documents”) and shall provide all 

 

74

 

cooperation
reasonably necessary in connection with the arrangement of the Buyer’s
financing of the Cash Purchase Price, in each case including participation in
meetings (including with potential bank lenders), due diligence sessions,
rating agency presentations, road shows, the drafting of the Offering Documents
and similar documents, and the drafting of related documentation (including
collateral documents) and certificates (provided, however, that
counsel for the Sellers shall not be required to deliver any legal opinions in
connection with the Offering Documents and the Companies shall not be required
to execute any agreements connected to the Buyer’s financing that would be
effective as to the Companies before the Closing).

 

(d)           The
Companies and the Sellers shall use commercially reasonable efforts to cause
PWC to perform a SAS 100 review of any unaudited financial statements (through
the second quarter of 2005) included in the S-1 Financial Statements as soon as
practicable but in any event not later than September 15, 2005 and to take
such other actions as the Buyer may reasonably request in connection with Buyer’s
financing of the Cash Purchase Price, including, but not limited to: (i) delivering
a “comfort letter” in a form meeting the requirements of SAS 72; (ii) consenting
to the use of its report(s) on the audited financial statements included in the
S-1 Financial Statements; and (iii) participating, at the Buyer’s request,
in the preparation of any registration statement, prospectus or offering
memorandum that includes, or incorporates by reference, the S-1 Financial
Statements.

 

(e)           Notwithstanding
the foregoing, in the event that the Closing does not occur on or before November 15,
2005, then: (i) the Companies and the Sellers shall deliver to the Buyer,
as promptly as practicable but in any event not later than November 22, 2005,
the Interim Financials through the third quarter of 2005 (together with the
comparable prior periods) (the “Supplemental Interim Financials”),
meeting the requirements (in form and substance) of Regulation S-X under the
Securities Act in order to be included in a registration statement on Form S-1,
assuming such registration statement is to be filed with the SEC under the
Securities Act on the Closing Date; (ii) the Supplemental Interim Financials
shall be included for all purposes of this Agreement in the S-1 Financial
Statements; (iii) the Companies and the Sellers shall use reasonable
efforts to cause PWC to perform a SAS 100 review of the Supplemental Interim
Financials as soon as practicable but in any event not later than November 22,
2005; and (iv) the other obligations and covenants of the Companies and the
Sellers set forth in Sections 7.17(b) through 7.17(d) shall
continue with respect to such updated S-1 Financial Statements.

 

(f)            If,
following the Closing, the Buyer shall be required to deliver to the SEC
additional financial statements (other than the financial statements specified
in Section 7.17(b) and, if required to be delivered pursuant to Section 7.17(e),
the Supplemental Interim Financials) relating in whole or in part to any period
prior to the Closing, the Sellers shall use their reasonable efforts to assist
the Buyer in the preparation of such supplemental financial statements,
including without limitation providing the Buyer’s authorized representatives
with full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Sellers, to all relevant
books, records, work papers, information and employees and auditors of such
Persons, to the extent necessary in connection with the preparation of any such
supplemental financial statements.

 

75

 

(g)           The
Sellers and the Companies agree to record in the audited financial statements
deliverable pursuant to this Agreement all adjustments proposed by PWC as part
of PWC’s audits of the financial statements of the Companies for the fiscal
years ended December 31, 2002, December 31, 2003 and December 31,
2004, respectively, regardless of the materiality of such adjustments (either
individually or in the aggregate).

 

7.18         Financing.  The Buyer shall diligently and in good faith
seek to obtain debt financing in the amount required to consummate the
Transactions including, but not limited to, timely performing all covenants and
agreements of the Buyer in the Commitment Letters.  The Buyer shall keep the Sellers fully
informed of any significant developments relating to the proposed debt
financing and shall furnish to the Sellers, promptly after receipt, copies of
all final documents and shall notify the Sellers if the Buyer in good faith
reasonably believes that financing in the amount required to consummate the
Transactions will not be available to the Buyer, pursuant to the Commitment Letters
or otherwise.  Any financing commitment
or agreement shall not be subject to a due diligence condition, and any
conditions to the closing of the financing that relate to the number of
Equivalent Subscribers or Operating Cash Flow of the Systems shall be no more
stringent than the conditions set forth in Section 9.8.

 

7.19         Intercompany
Liabilities.  At the Closing, the
Sellers and the Companies shall assign to the Sellers Escrow Account or another
entity or otherwise satisfy from the Sellers Escrow Account or pursuant to the
Plan all liabilities of the Companies to the Sellers and their respective
Affiliates (other than the Companies) (“Affiliate Liabilities”), such
that from and after the Closing the Buyer shall not have any Affiliate
Liabilities owed to either Seller or their respective Affiliates.

 

7.20         Sale
of ML Media’s Joint Venture Interests.  Unless and until this Agreement is terminated
in accordance with the terms hereof, ML Media shall not sell, assign or
otherwise transfer or dispose of, directly or indirectly, (a) its joint
venture interests in the Cable Venture (the “ML JV Interests”) or (b) any
right to exercise any vote with respect to or in respect of the ML JV Interests
to any Person other than the Buyer.

 

7.21         Release
of Obligations Under Letters of Credit.  No less than 30 days prior to the reasonably
anticipated date of the Closing, the Companies shall deliver to the Buyer a
revised version of Schedule 4.6(e) (the “Revised Schedule 4.6(e)”),
listing the Companies’ open letters of credit and surety bonds as of the
Closing Date and specifying the remaining term and amount of such letters of
credit or surety bonds; provided that the Revised Schedule 4.6(e) shall
not reflect an increase in the aggregate amount due under all such letters of
credit and surety bonds of more than $100,000 over the aggregate amount due
reflected on Schedule 4.6(e). 
Subject to the foregoing, at Closing, the Buyer shall cause to be
delivered to the issuing institution under such letters of credit or surety
bonds, letters of credit or surety bonds with terms and availability equivalent
to the letters of credit or surety bonds outstanding on the Closing Date.

 

7.22         Stand-Alone.  The Companies shall use reasonable commercial
efforts to take the actions set forth on Schedule 7.22 to enable
the Companies to operate as stand-alone entities (without requiring any
products or services from Adelphia or Century) as of the Closing Date or as
soon as practicable after the Closing Date (a “Stand-Alone”).  The Companies shall consult with the Buyer,
and the Companies and the Buyer shall cooperate, to effect the Stand-Alone on a

 

76

 

timely, cost-efficient basis. 
Any individual expenditure by the Companies to effect the Stand-Alone in
excess of $50,000 or aggregate expenses to effect the Stand-Alone in excess of
$1,500,000 shall require the approval of the Buyer, such approval not to be
unreasonably withheld, and if the Buyer fails to approve any such expenditure,
the Companies shall not be required to make such expenditure or provide the
Stand-Alone capability of that expenditure. 
Any one-time expenses incurred by the Companies to effect the Stand-Alone
that require the approval of the Buyer, but for which approval was not
obtained, shall, if otherwise deducted in calculating Operating Cash Flow, be
added back to Operating Cash Flow but shall not be added back in calculating
Closing Date Working Capital.  Any
on-going expenses incurred by the Companies in operating as a Stand-Alone that require
the approval of the Buyer, but for which approval was not obtained, shall not
be added back in calculating Operating Cash Flow.

 

7.23         Publicity.  No party shall make any public announcement
regarding the Transactions without the consent of the others, except as a party
determines is required by applicable laws. 
If a party determines it is required to make a public announcement, that
party shall give the others as much prior notice as is reasonably practicable
and shall consult with the others about the text of such announcement.

 

7.24         Recordation of Leases.  The Buyer and the Companies shall jointly
determine which, if any, of the Companies’ real property leases should be
recorded, and the Companies shall use reasonable commercial efforts to record any
such lease prior to the Closing.

 

8.             CONDITIONS
PRECEDENT TO THE PARTIES’ OBLIGATIONS

 

The
obligations of the parties hereto to consummate the Transactions are subject to
the satisfaction or waiver, at or prior to the Closing Date, of the following
conditions:

 

8.1           Consents
from Governmental Authorities.  All
necessary notification filings required under the HSR Act shall have been made
with the FTC and DOJ, the prescribed waiting periods (and any extensions
thereof) shall have expired or been terminated.

 

8.2           Judgments.  There shall be no injunction or court order
restraining consummation of any of the Transactions and there shall not have
been adopted any law or regulation making all or any portion of such
transactions illegal.

 

8.3           Confirmation
Order.  The Confirmation Order
shall have been entered on the docket of the Bankruptcy Court and shall have
become a Final Order.

 

9.             CONDITIONS
PRECEDENT TO BUYER’S OBLIGATIONS

 

The
obligations of the Buyer to consummate the Transactions are subject to the satisfaction
or waiver, at or prior to the Closing Date, of the following conditions:

 

9.1           Representations
and Warranties of Companies and Sellers. 
The representations and warranties of the Companies and the Sellers set
forth in this Agreement shall be true and correct in all respects on and as of
the date hereof and as of the Closing Date as if made on and as of such date
or, if made as of a specific date, as of such date; provided, that for
purposes of this Section 9.1, such representations and warranties shall be
deemed true and correct in all

 

77

 

respects to the extent that, after removing concepts of Material
Adverse Effect or materiality from all such individual representations and
warranties, the aggregate effect of any inaccuracies in all such
representations and warranties as of the applicable times does not and would
not reasonably be expected to be material to the Companies taken as a whole;
but provided, further, that the foregoing proviso shall not apply
to the representations and warranties relating to the capitalization of the
Companies set forth in Section 4.1.

 

9.2           Covenants.  The Sellers and the Companies shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by them
prior to or at the Closing.

 

9.3           Material
Consents.  The Material
Consents and the consent set forth on Schedule 5.2(c) shall
have been obtained without any material condition adverse to the Buyer, except
as the parties may otherwise agree, and in the case of Material Consents from
the FCC and the Puerto Rico Board by final resolution of the FCC and the Puerto
Rico Board; provided, however, that the Buyer may waive the
requirement that Puerto Rico Board authority be given by final resolution
following approval of this transaction by the FCC.

 

9.4           Delivery
of Certificates and Documents.  The Cable Venture shall have delivered or
caused to be delivered to the Buyer (or such other Person as applicable) the
following:

 

(a)           a
certificate of an officer of the Cable Venture certifying that the conditions
set forth in Sections 9.1, 9.2, 9.3, 9.7 and 9.8 have been met;

 

(b)           a
copy of the Confirmation Order referred to in Section 7.11(b)(ii) and
of any other Order required for the Transactions to be consummated;

 

(c)           a
fully-executed copy of the Transition Services Agreement by and among Parent,
the Buyer and Century;

 

(d)           evidence
of the payment of all retention and sale bonuses payable by the Companies as of
the Closing Date;

 

(e)           an
affidavit, under penalties of perjury, stating that Cable Corp. is not and has
not been a United States real property holding corporation, dated as of the
Closing Date and in form and substance required under Treasury Regulation § 1.897-2(h) so
that the Buyer is exempt from withholding any portion of the Purchase Price
thereunder; and

 

(f)            such
other documents, certificates or agreements as the Buyer may reasonably
request.

 

9.5           Escrow
Agreement.  The Escrow
Agreement shall have been executed by the Escrow Agent and the Sellers.

 

9.6           Financial
Statements

 

(a)           Schedule 9.6(a) shall
have set forth, for the fiscal year ended December 31, 2004, a list of
expenses (by categories and amounts) that have been allocated to

 

78

 

the Companies
by Century or ML Media or any of their respective Affiliates (including,
without limitation, the Management Fee and expenses arising under the
Programming Agreements) (the “Allocations”) for such fiscal year (the “Allocation
Schedule”), as reflected in the Unaudited Financials.  The Companies shall provide notice to the
Buyer if there is any change in the methods of determining the Allocations or
the products or services included within the Allocation from that set forth on Schedule 9.6(a).

 

(b)           The
unaudited consolidated balance sheet, statement of operations and statement of
cash flows as of and for the year ended December 31, 2004, including the
notes thereto, to be provided to the Buyer prior to the Closing pursuant to Section 7.17(a) (the
“Draft 2004 Financials”), shall have presented fairly the financial
condition of the Companies as of such date and the results of operations and
cash flows of the Companies for the periods therein referred to, in conformity
with GAAP applied consistently throughout the periods covered thereby, and the
accounting principles used in preparing the Draft 2004 Financials shall have
been the same as the Reference Accounting Principles, and the methodology for
the Allocations to the Companies for the fiscal year ended December 31,
2004 shall not have differed in any material respect from the methodology for
the Allocations set forth on the applicable Allocation Schedule.

 

(c)           The
Cable Venture shall have furnished the Buyer with the Audited Financials for
the fiscal years ended December 31, 2002 and December 31, 2003 conforming
to the requirements of Section 4.3(b), together with the report thereon of
PWC, the Companies’ independent certified public accountants, which report
shall be unqualified except with respect to the bankruptcy of the Cable
Venture, not later than August 31, 2005. 
Taking into account both the line items reflected on the face of the
financial statements and the information disclosed in the footnotes to the
financial statements, the Audited Financials for the fiscal year ended December 31,
2003, as compared to the Unaudited Historical Financials for the same fiscal
year, shall not reflect (i) any material reduction in Current Assets (excluding
cash) or Total Assets (excluding cash), or any material increase in Current
Liabilities or Total Liabilities (other than Transferred Assets or Excluded
Liabilities), in each case as set forth on the corresponding balance sheet as
of December 31, 2003, (ii) any material reduction in Net Revenues,
Net Income, or Operating Cash Flow (in the case of “Operating Cash Flow” as
such term is defined in this Agreement and is derived from the Audited
Financials and the Unaudited Historical Financials, as applicable, in accordance
with such definition), in each case individually (and not on an aggregated
basis) as reflected in the corresponding statement of operations for the fiscal
year ended December 31, 2003, or (iii) any change or changes to the
line items reflected on the face of the financial statements or the information
disclosed in the footnotes to such financial statements (including, without
limitation, any changes to any of the specific items identified in clauses (i) or
(ii)), which, individually or in the aggregate, result in any material, adverse
change in the amount, composition or terms of debt financing made available to
the Buyer by its lenders (as compared to the amount, composition and terms set
forth in the Commitment Letters).

 

(d)           The
Cable Venture shall have furnished the Buyer with the Draft 2004 Financials as
promptly as practicable, but in any event not later than 60 days after the date
hereof.  Taking into account both the
line items reflected on the face of the financial statements and the
information disclosed in the footnotes to the financial statements, the Draft
2004 Financials, as compared to the Unaudited 2004 Financials, shall not
reflect (i) any material

 

79

 

reduction in
Current Assets (excluding cash) or Total Assets (excluding cash), or any
material increase in Current Liabilities or Total Liabilities (other than
Transferred Assets or Excluded Liabilities), in each case as set forth on the
corresponding balance sheet as of December 31, 2004, (ii) any
material reduction in Net Revenues, Net Income or Operating Cash Flow (in the
case of “Operating Cash Flow” as such term is defined in this Agreement and is
derived from the Draft 2004 Financials and the Unaudited 2004 Financials, as
applicable, in accordance with such definition), in each case individually (and
not on an aggregated basis) as reflected in the corresponding statement of
operations for the fiscal year ended December 31, 2004, or (iii) any
change or changes to the line items reflected on the face of the financial
statements or the information disclosed in the footnotes to such financial
statements (including, without limitation, any changes to any of the specific
items identified in clauses (i) or (ii)), which, individually or in the
aggregate, result in any material, adverse change in the amount, composition or
terms of debt financing made available to the Buyer by its lenders (as compared
to the amount, composition and terms set forth in the Commitment Letters).

 

(e)           The
Cable Venture shall have furnished the Buyer with audited financials as of and
for the year ended December 31, 2004 (the “Audited 2004 Financials”),
conforming to the requirements of Section 4.3(b), together with the report
thereon of PWC, the Companies’ independent certified public accountants, which
report shall be unqualified except with respect to the bankruptcy of the Cable
Venture, not later than August 31, 2005. 
Taking into account both the line items reflected on the face of the
financial statements and the information disclosed in the footnotes to the
financial statements, the Audited 2004 Financials, as compared to (x) Unaudited
2004 Financials and (y) the Draft 2004 Financials, shall not reflect (i) any
material reduction in Current Assets (excluding cash) or Total Assets (excluding
cash) or any material increase in Current Liabilities or Total Liabilities
(other than Transferred Assets or Excluded Liabilities), in each case as set
forth on the corresponding balance sheet as of December 31, 2004, (ii) any
material reduction in Net Revenues, Net Income or Operating Cash Flow (in the
case of “Operating Cash Flow” as such term is defined in this Agreement and is
derived from the Audited 2004 Financials and the Draft 2004 Financials, as
applicable, in accordance with such definition), in each case individually (and
not on an aggregated basis) as reflected in the corresponding statement of
operations for the fiscal year ended December 31, 2004 or (iii) any
change or changes to the line items reflected on the face of the financial
statements or the information disclosed in the footnotes to such financial
statements (including, without limitation, any changes to any of the specific
items identified in clauses (i) or (ii), which, individually or in the
aggregate, result in any material, adverse change in the amount, composition or
terms of debt financing made available to the Buyer by its lenders (as compared
to the amount, composition and terms set forth in the Commitment Letters).

 

(f)            All
financial statements delivered pursuant to this Section 9.6 that are
referred to in Section 7.17 shall have complied with all requirements of Section 7.17.

 

(g)           The
increase in the percentage Management Fee payable to Century accrued during the
period January 1, 2002 through May 31, 2003 shall be disregarded in
making all determinations pursuant to Section 7.17(b), (c), (d) and
(e).

 

80

 

(h)           The
Buyer may only assert the condition contained in this Section 9.6 or the
corresponding termination right in Section 12.1(j)(3) if the Buyer
provides the Sellers a written notice (i) within 60 days after the receipt
of the Draft 2004 Financials, if the Draft 2004 Financials fail to comply with Section 7.17
or this Section 9.6, or (ii) within 60 days after the receipt of all
of the Audited Financials, if any of the Audited Financials fail to comply with
Section 7.17 or this Section 9.6, indicating in either case with
specificity the basis on which it intends to assert the failure of this
condition.

 

9.7           Material
Adverse Change.  Since the
date of this Agreement, there shall not have occurred any fact, change or event
that, individually or in the aggregate, has had or reasonably would be expected
to have a Material Adverse Effect.

 

9.8           Subscribers;
Operating Cash Flow.  Neither
the number of Equivalent Subscribers as of the Previous Month End nor the
estimated number of Equivalent Subscribers as of the Closing Date shall be less
than 129,482 and the Operating Cash Flow of the Systems as of the Previous
Month End shall not be less than $50,000,000.

 

9.9           Financing.  The Buyer shall have received (or shall have
the right to receive) proceeds of debt financing of at least $350,000,000 (less
the amount, if any, of any reduction in the Purchase Price pursuant to Section 3.3(c)),
on terms and conditions reasonably satisfactory to the Buyer (the Buyer
agreeing that terms and conditions not materially less favorable to the Buyer
than those set forth in the Debt Commitment Letter shall be deemed reasonably
satisfactory to the Buyer).

 

9.10         Confirmation
Order.  The Confirmation Order shall
conform to the requirements of Section 7.11(b) of this
Agreement.  The Assumed Executory
Contracts shall have been assumed by the Cable Venture such that the Assumed
Executory Contracts will be in full force and effect from and after the Closing
with all cure costs paid by the Cable Venture and all non-debtor parties being
barred and enjoined from asserting against the Buyer, among other things,
defaults, breaches or Claims of pecuniary losses existing as of the Closing or
by reason of the Closing.

 

9.11         Payment
Motion.  An Order granting
that certain Motion of Debtor for an Order Pursuant to Bankruptcy Code §105
Authorizing Payment of Agreed Pre-Petition Claims of Non-Inside Creditors, dated
January 11, 2005, shall have been entered on the docket of the Bankruptcy
Court and shall have become a Final Order. 
The Cable Venture shall have made full, final and indefeasible payment
of all claims contemplated to be paid pursuant to the terms of such motion.

 

9.12         Extension
of Rebuild Deadline.  The Puerto Rico
Board shall have extended the deadline for Completion of the Rebuild of the San
Juan System to a date not earlier than the Rebuild Extension Date.

 

9.13         Franchise
Extensions.  The Puerto Rico Board
shall have granted the Franchise Extensions with no changes to the terms of the
Franchises except as contemplated by Section 7.4(f).

 

81

 

10.          CONDITIONS
PRECEDENT TO COMPANIES’
AND SELLERS’ OBLIGATIONS

 

The
obligations of the Companies and the Sellers to consummate the Transactions are
subject to the satisfaction or waiver, at or prior to the Closing Date, of the
following conditions:

 

10.1         Representations
and Warranties of Buyer.  The
representations and warranties of the Buyer set forth in this Agreement that
are qualified as to materiality shall be true and correct, and those that are
not so qualified shall be true and correct in all material respects, on and as
of the date hereof and as of the Closing Date as if made on and as of each such
date or, if made only as of a specific date, as of such date.

 

10.2         Covenants.  The Buyer shall have performed and complied
in all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by them prior to or at the Closing.

 

10.3         Material
Consents.  The Material Consents from
the FCC and the Puerto Rico Board and the consent set forth on Schedule 5.2(c) shall
have been obtained without any material condition adverse to the Sellers,
except as the parties may otherwise agree.

 

10.4         Delivery
of Certificates and Documents.  The
Buyer shall have delivered or caused to be delivered to the Cable Venture (or
to such other Person as applicable) the following:

 

(a)           a
certificate of an officer of the Buyer as to (i) the organizational
documents of the Buyer, (ii) all actions taken by and on behalf of the
Buyer to authorize the execution, delivery and performance of this Agreement
and the Related Agreements and (iii) the incumbency of officers signing
this Agreement and any Related Agreement on behalf of the Buyer;

 

(b)           a
certificate of an officer of each Buyer certifying that the conditions set
forth in Sections 10.1 and 10.2 have been met;

 

(c)           the
payments pursuant to Section 3.2(c)(i) and pursuant to Section 3.2(c)(ii);
and

 

(d)           the
Investor Guaranty.

 

10.5         Escrow
Agreement.  The Escrow Agreement
shall have been executed by the Escrow Agent and the Buyer.

 

11.          SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION

 

11.1         Survival
of Representations, Warranties and Covenants.  The representations, warranties and
certifications of the parties contained in this Agreement or in any certificate
delivered pursuant to Sections 9.4(a) or 10.3(b) and any claim with
respect to any failure to perform any covenant shall survive the Closing for a
period ending on December 31, 2006. 
No 

 

82

 

claim for indemnification for breach of a representation or warranty or
any covenant, agreement or obligation may be asserted after the expiration of
the applicable survival period for such representation, warranty or covenant; provided,
that the written assertion of any claim by a party against another party
hereunder with respect to the breach or alleged breach of any representation,
warranty or any covenant, agreement or obligation or of a series of facts which
would support such breach, which claim shall include specific assertions as to
the underlying facts supporting the claim as opposed to general assertions of a
breach, shall extend the applicable survival period through the date such claim
is conclusively resolved.  None of the
foregoing shall be deemed to affect the obligations of the parties to perform
their respective obligations under Sections 7.1, 7.5, 7.6, 7.7, 7.8, 7.13, 7.16
and 7.17 that are required to be performed after the Closing Date.

 

11.2         Indemnification.

 

(a)           Indemnification
by the Buyer.  Subject to the
limitations in this Section 11, the Buyer agrees to indemnify, defend and
hold harmless the Companies (and after the Closing, the Sellers) from and
against any and all loss, Liability, damage or expense, but excluding any
consequential or exemplary damages, (collectively, “Losses”) to the
extent such Losses are based upon, arise out of or are related to:

 

(i)            a
breach of any representation or warranty of the Buyer contained in this
Agreement;

 

(ii)           any
failure of the Buyer to perform or comply with any of the covenants, agreements
or obligations of the Buyer set forth in this Agreement or in any Related
Agreement; or

 

(iii)          any
Liability to any broker or finder retained or alleged to have been retained by
the Buyer in connection with this Agreement or the Transactions.

 

(b)           Indemnification
by the Sellers.  Subject to the limitations
in this Section 11, the Sellers jointly and severally agree to indemnify,
defend and hold harmless the Buyer Group from and against any and all Losses to
the extent such Losses are based upon, arise out of or are related to:

 

(i)            a
breach of any representation or warranty (after giving effect to any
materiality or Material Adverse Effect qualification) of the Sellers or the
Companies contained in this Agreement; provided that, for purposes of
this Section 11.2(b), if there is a breach of any representation or
warranty (after giving effect to any materiality or Material Adverse Effect qualification)
then the determination of the Losses upon such breach of any representation or
warranty shall be made without regard to any materiality or Material Adverse
Effect qualification contained therein; and provided  further
that, for purposes of the foregoing proviso only, any Material Adverse Effect
qualification contained in any representation or warranty in Section 4.8(b),
Section 4.8(c) and Section 4.17(e) only shall not be given
effect, but instead such representation or warranty shall instead be
interpreted as though it contained a materiality qualification;

 

83

 

(ii)           any
failure of the Sellers or the Companies to perform or comply with any of the
covenants, agreements or obligations of the Sellers or the Companies contained
in this Agreement or in any Related Agreement (other than Section 7.15(b),
which is covered by clause (vi) below);

 

(iii)          any
Excluded Liabilities;

 

(iv)          any
Liability to any broker or finder retained or alleged to have been retained by
the Companies (except as reflected as a Closing Date Current Liability in the
final determination of Closing Date Working Capital) or either of the Sellers
in connection with this Agreement or the Transactions;

 

(v)           any
Indemnified Tax Liability; or

 

(vi)          the
failure to obtain a favorable determination letter from the Puerto Rico
Treasury for La Union Insular de Trabajadores Industriales y Construcciones Electricas
Inc. 401(k) Plan or to successfully complete prior to the Closing Date any of
the other actions set forth in Section 7.15(b).

 

11.3         Assertion
of Claims; Notice of and Right to Defend Third Party Claims.

 

(a)           If
any third party notifies any party (the “Indemnitee”) with respect to
any matter (a “Third-Party Claim”) that may give rise to a claim for
indemnification against any other party (the “Indemnitor”) under Section 11.2,
then the Indemnitee shall promptly notify the Indemnitor thereof in writing; provided,
however, that no delay on the part of the Indemnitee in notifying the
Indemnitor shall relieve the Indemnitor from any obligation hereunder unless
(and then solely to the extent) the Indemnitor is thereby prejudiced.

 

(b)           Any
Indemnitor will have the right to defend the Indemnitee against the Third-Party
Claim with counsel of his, her, or its choice reasonably satisfactory to the
Indemnitee so long as (i) the Indemnitor assumes such defense on a timely
basis, (ii) the Indemnitor provides the Indemnitee with evidence
reasonably acceptable to the Indemnitee that the Indemnitor will have the
financial resources to defend against the Third-Party Claim and fulfill its
indemnification obligations hereunder, (iii) the Third-Party Claim
involves money damages only and does not seek an injunction, and (iv) the
Indemnitor conducts the defense of the Third-Party Claim actively and
diligently.

 

(c)           So
long as the Indemnitor is conducting the defense of the Third-Party Claim in
accordance with Section 11.3(b) above, (i) the Indemnitee may
retain separate co-counsel at his, her, or its sole cost and expense and
participate in the defense of the Third-Party Claim, provided that if
the defendants in any Third Party Claim include both the Indemnitor and the
Indemnitee, and the Indemnitee shall have reasonably concluded that there may
be legal defenses available to it that are different from, inconsistent with or
in addition to those defenses available to the Indemnitor, or if there is a
conflict of interest that would prevent counsel for the Indemnitor from also
representing the Indemnitee, then the Indemnitee shall have the right to engage
a single separate counsel at the cost and expense of the Indemnitor, (ii) the
Indemnitee will not consent to the entry of any judgment on or enter into any
settlement with respect to the Third-Party Claim without the prior written
consent of the Indemnitor (not to be unreasonably

 

84

 

withheld), and
(iii) the Indemnitor will not consent to the entry of any judgment on or
enter into any settlement with respect to the Third-Party Claim without the
prior written consent of the Indemnitee (not to be unreasonably withheld)
unless such settlement involves only the payment of money damages by the
Indemnitor and does not impose an injunction or other equitable relief upon the
Indemnitee.  If the Indemnitor does not
timely assume and conduct the defense of the Third-Party Claim, or at any time
ceases to do so, then the Indemnitee may thereafter assume the defense of the
Third-Party Claim with a single counsel of his, her or its choice at the cost
and expense of the Indemnitor.

 

(d)           Notwithstanding
anything to the contrary in the foregoing provisions of this Section 11.3,
with respect to a Third Party Claim in respect of Taxes, including any audit or
examination by a Taxing Authority, the Sellers, on the one hand, and the Buyer,
on the other hand, shall not, unless with the prior written consent of the
other party: (i) agree or consent to, approve, permit or otherwise
acquiesce in the extension of any statute of limitations applicable to the
assessment of any deficiency with respect to any Tax paid, payable or alleged
to be payable by the Companies or the Buyer that relates to any period prior to
the Closing; and (ii) agree to adjust an item of any of the Companies for
any Tax period (or portion thereof) ending on the Closing Date or any
Pre-Closing Tax Straddle Period to the extent such adjustment would require an
adjustment to an item of any of the Companies or the Buyer that could
reasonably be expected to result in an increase in the Tax Liability of the
other party or its Affiliates for such Tax period or any Tax period beginning
on or following the Closing Date.

 

(e)           Any
claim by an Indemnitee on account of a Loss that does not result from a
Third-Party Claim will be asserted by giving the Indemnitor reasonably prompt
written notice thereof, describing such claim with reasonable particularity and
containing a reference to the provision(s) of this Agreement under which such
claim has arisen; provided, that the failure of an Indemnitee to so
notify promptly any Indemnitor shall not relieve such Indemnitor from any
Liability which it may have to the Indemnitee in connection therewith, unless
(and then solely to the extent) such Indemnitor actually has been prejudiced by
such failure to give notice.  The
Indemnitor will have a period of 60 days following its receipt of such notice
within which to respond in writing to such claim.  If the Indemnitor does not so respond within
such 60 day period, the Indemnitor 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
Agreement.

 

(f)            Where
the indemnification is provided from the Indemnity Escrow Account, all rights
of the Indemnitor shall be exercised by the Sellers.

 

(g)           A
claim for indemnification for any Indemnified Tax Liability against the
Deferred Purchase Price may be asserted by the Buyer only if a Taxing Authority
has asserted a claim for Tax, or if the Buyer has reasonably determined in good
faith that there is a significant risk of a material Tax Liability.  A claim for indemnification shall be payable
to the Buyer only upon (i) final determination by a Taxing Authority, (ii) agreement
between the Buyer and the Sellers or (iii) the determination by the
Independent Accountant with respect to a Tax Return in question as described in
Section 7.5(a) and the filing by the Buyer of the amended Tax Return
as described therein.  Any claim for
Indemnified Tax Liability asserted by the Buyer may include deficiencies in
previously asserted claims.  All Tax claims
shall be deemed finally determined by 

 

85

 

a Taxing
Authority upon final assessment (no longer subject to review or appeal),
closing agreement or similar document with the Taxing Authority.  If the Sellers dispute that there is a significant
risk of material Tax Liability, the parties shall refer the dispute in question
to the Independent Accountants who shall, in accordance with the procedures set
forth in Section 3.4(b)(ii), determine whether or not the Buyer’s claim
corresponds to a significant risk of a material Tax Liability as required
herein.  In the event that the
Independent Accountants determine that the Buyer’s claim does not correspond to
a significant risk of a material Tax Liability, then the claim shall be treated
under this Agreement as if it had not been made by the Buyer, although, for the
avoidance of doubt, if the claim is later asserted by a Taxing Authority then
this treatment shall cease to apply.  Any
claim for Indemnified Tax Liability asserted by the Buyer with which the
Sellers agree or as determined by the Independent Accountants shall permit the
Buyer to holdback from the Deferred Purchase Price the amount associated with
such claim but shall not be payable to the Buyer until (i) the final
determination by a Taxing Authority, (ii) agreement between the Buyer and
the Sellers, or (iii) determination by the Independent Accountant with
respect to a Tax Return in question as described in Section 7.5(a).

 

11.4         Limitations
on Liability.

 

(a)           Basket.  No party shall be required to indemnify any
other party pursuant to Section 11.2(a)(i) or Section 11.2(b)(i) with
respect to Losses arising from a breach of any representation or warranty,
unless the aggregate amount of all such Losses in respect of such party’s
breaches of representations and warranties exceeds an amount equal to $2,600,000)
(the “Basket”), in which event the indemnifying party shall be liable
for the Losses above the Basket; provided that, to the extent that any
claim for indemnification by the Sellers pursuant to Section 11.2(a)(iii) (Broker’s
Fees) or by the Buyer pursuant to Section 11.2(b)(iii) (Excluded
Liabilities), Section 11.2(b)(iv) (Brokers’ Fees), Section 11.2(b)(v) (Indemnified
Tax Liabilities) or Section 11.2(b)(vi) (Section 7.15(b) Covenants)
may also be construed as a claim under Section 11.2(a)(i) or Section 11.2(b)(i),
as applicable, the parties hereto acknowledge and agree that such claim shall
be deemed for all purposes to be a claim pursuant to Section 11.2(a)(iii),
Section 11.2(b)(iii), Section 11.2(b)(iv), Section 11.2(b)(v) or
Section 11.2(b)(vi), as applicable, and the Basket shall not apply thereto
and provided, further, that the Basket shall not apply to a
breach of the representation in Section 4.12(g).  No party shall be entitled to indemnity to
the extent the Loss has been reflected in the computation of the Closing Date
Working Capital or the other adjustments to the Purchase Price.

 

(b)           Cap.  The liability of the Sellers for breaches of
any representations and warranties and covenants, agreements and obligations under
this Agreement or any other indemnifiable claim under this Agreement shall be
limited to Losses not exceeding the aggregate amount in the Indemnity Escrow
Account (originally $25,000,000 and reduced as provided in the Escrow
Agreement) and, in the case of Indemnified Tax Liabilities, set off against the
Deferred Purchase Price and shall be satisfied solely from the funds held in
the Indemnity Escrow Account (or such set-off), and the Buyer shall have no
other recourse against ML Media or Century or any of their respective partners,
officers, directors or shareholders with respect to such indemnity obligations
or otherwise arising under this Agreement, except as provided in Section 11.6(b);
provided that the Sellers acknowledge and agree that the limitation on
liability set forth in this Section 11.4(b) shall not apply with
respect to claims of the Buyer pursuant to Section 11.2(b)(iii).

 

86

 

(c)           To
the extent that the indemnified party recognizes Tax Benefits (as defined
below) with respect to any taxable year as a result of any claim, the
indemnified party shall pay the amount of such Tax Benefits (but not in excess
of the indemnification payment or payments actually received from the
indemnifying party with respect to such claim) to the indemnifying party as
such Tax Benefits are actually recognized by the indemnified party.  For this purpose, an indemnified party shall
be deemed to recognize a tax benefit (“Tax Benefit”) with respect to a
taxable year if, and to the extent that, the indemnified party’s liability for
Taxes for such taxable year, calculated by excluding any Tax items attributable
to the claim, exceeds the indemnified party’s actual liability for Taxes for
such taxable year, calculated by taking into account any Tax items attributable
to the claim (to the extent permitted by relevant Tax law and treating such Tax
items as the last items claimed for any taxable year).

 

(d)           None
of the Cable Venture, Cable Corp., ML Media or Century shall have any Liability
to the Buyer under this Agreement or otherwise if the Bankruptcy Court does not
enter the Confirmation Order, except for (i) the obligation to pay the
Expense Reimbursement and/or the Break-Up Fee, as set forth in Section 7.11(c)(iv) and
(ii) as applicable, the obligations of the Cable Venture to reimburse the
Buyer’s expenses under (and subject to the conditions contained in) the Expense
Reimbursement Agreement.

 

(e)           Any
payment pursuant to this Section 11 shall be treated as an adjustment to
the Purchase Price.

 

11.5         Indemnified
Tax Liabilities.  Any liability of
the Sellers pursuant to Section 11.2(b)(v) of this Agreement shall
first be satisfied by an offset against the Deferred Purchase Price and then
from the Indemnity Escrow Account.

 

11.6         Exclusive
Remedy.  After the Closing, the
parties agree that the indemnification provisions of this Section 11 and
the amount in the Indemnity Escrow Account and the Buyer’s offset right against
the Deferred Purchase Price (which amounts do not limit claims of the Buyer
pursuant to Section 11.2(b)(iii)) shall constitute the parties’ sole and
exclusive remedies in respect of any breach or breaches of any representation,
warranty, covenant, agreement or obligation set forth in this Agreement; provided,
that (a) this Section 11.6 shall not be deemed a waiver by any party
of any right to specific performance or injunctive relief (including, without
limitation, the right of the Buyer to seek injunctive relief pursuant to the
terms of Section 7.16) and (b) nothing in this Agreement shall
prohibit or limit any remedy available at law or in equity for any fraud
committed or made by any party in connection with the Transactions.

 

11.7         No Third
Party Beneficiaries.  Neither this Section 11
nor any other provision of this Agreement is intended to confer any third party
beneficiary rights, including but not limited to any extension of any statute
of limitations pertaining to suits, actions or proceedings brought by third
parties.

 

12.          TERMINATION

 

12.1         Termination.  This Agreement may be terminated prior to the
Closing only in accordance with the following:

 

(a)           at
any time by agreement of the Sellers and the Buyer;

 

87

 

(b)           by
either of the Sellers or the Buyer if the Closing hereunder has not taken place
on or before the Termination Date other than by reason of a material breach or
default of any of the covenants or agreements contained in this Agreement (i) by
either of the Sellers or either of the Companies, if a Seller is seeking to
terminate or (ii) by the Buyer if the Buyer is seeking to terminate;

 

(c)           by
either of the Sellers, at any time, if the Buyer is in material breach or
material default of its covenants, agreements or obligations under this
Agreement, or if any of its representations or warranties are not true in all
material respects, and the Buyer does not cure such breach or default within
thirty (30) days following its receipt of notice of such material breach or
default from the Cable Venture, provided that neither the Sellers nor the
Companies are also in material breach or material default of any of their
covenants, agreements, representations or warranties hereunder;

 

(d)           by
the Buyer, at any time, if the representations and warranties of the Companies
and the Sellers are not true and correct in all respects at and as of such time
and the Sellers or the Companies, as applicable, do not cure such failure to be
true and correct within thirty (30) days following its or their receipt of
notice of such failure, provided that the Buyer is not then in material default
of any of its covenants, agreements, representations or warranties hereunder; provided
that for purposes of this Section 12.1(d), such representations and
warranties shall be deemed true and correct in all respects to the extent that,
after removing concepts of Material Adverse Effect or materiality from all such
individual representations and warranties, the aggregate effect of any
inaccuracies in all such representations and warranties as of the applicable
times does not and would not reasonably be expected to be material to the
Companies taken as a whole); but provided, further, that the
foregoing proviso shall not apply to the representations and warranties
relating to the capitalization of the Companies set forth in Section 4.1;

 

(e)           by
the Buyer, at any time, if the Sellers or the Companies are in material breach
or default of any of their respective covenants, agreements or obligations
under this Agreement and the Sellers or the Companies, as applicable, do not
cure such breach or default within thirty (30) days following its or their
receipt of notice of such breach or default from the Buyer, provided
that the Buyer is not then also in material breach or default of any of its
covenants, agreements, representations or warranties hereunder;

 

(f)            by
the Buyer on any day on or after 30 days from the date of this Agreement if an
Order has not been entered by the Bankruptcy Court approving the Break-Up Fee
and Expense Reimbursement;

 

(g)           by
the Buyer or either of the Sellers if the Confirmation Order (which shall
contain all of the items set forth in Section 7.11(b)) is not entered by September 9,
2005 (or by September 30, 2005 if there are objections to the Confirmation
Order);

 

(h)           by
the Buyer if (i) the Cable Venture or Century notifies the Buyer of its
intention to exercise its rights under Section 7.11(c)(ii) with
respect to an Acquisition Proposal and (ii) the Cable Venture or Century,
as applicable, has not notified the Buyer within 20 days of 

 

88

 

the delivery
of such notice that it has determined not to pursue, and has ceased all
discussions and negotiations concerning, such Acquisition Proposal;

 

(i)            by
the Sellers or the Buyer, if the Cable Venture and Century obtain an Order of
the Bankruptcy Court approving any Alternate Agreement;

 

(j)            by
the Buyer if (1) either of the conditions set forth in Section 9.8
with respect to the minimum number of Equivalent Subscribers or the minimum
Operating Cash Flow is not satisfied or (2) the Sellers and the Companies
have not delivered the financial statements, management’s discussion and
analysis and “comfort letter” required to be delivered to the Buyer pursuant to
Sections 7.17(b), 7.17(c), 7.17(d); and 7.17(e) by August 31, 2005
(in the case of the Audited Financials) and September 15, 2005 (in the
case of the Interim Financials and the “comfort letter”) and November 22,
2005 (in the case of the Supplemental Interim Financials, if required by Section 7.17(e))
or (3) any of the conditions set forth in Section 9.6 with respect to
the Audited Financials or the Draft 2004 Financials is not satisfied; provided
that, for the avoidance of doubt, the parties agree that if any of the
conditions set forth in Section 9.6 with respect to the Audited Financials
or the Draft 2004 Financials is not satisfied and, as a consequence thereof,
the Buyer is unable to obtain debt financing on terms no less favorable than
those set forth in the Commitment Letters, Buyer’s termination of this
Agreement shall be deemed a termination for failure of the closing conditions
set forth in Section 9.6, not a termination for failure of the closing
condition set forth in Section 9.9;

 

(k)           by
the Sellers, if (i) a hurricane or other force majeure event occurs after
the date of this Agreement, (ii) the actual expense to the Companies to
repair the damage to the Systems caused by such hurricane or other force
majeure event exceeds $500,000 and (iii) the Buyer and/or the Buyer’s
lenders do not consent to an adjustment to Operating Cash Flow in the full
amount of such expenses;

 

(l)            by
the Sellers, if (i) the adjustments to the Purchase Price on the Closing
Date set forth in Sections 3.3(b)-(d) result in a reduction of the
Purchase Price (as calculated pursuant to Section 3.3(d)) in excess of
$20,000,000 (the “Maximum Permissible Reduction”) and (ii) the
Buyer has not agreed to limit the reduction of the Purchase Price to the
Maximum Permissible Reduction;

 

(m)          by
the Buyer as set forth in Section 7.14;

 

(n)           by
the Buyer or either of the Sellers as set forth in Section 18; or

 

(o)           by
the Buyer or the Sellers, if any Governmental Authority that must grant a Material
Consent has denied approval of the Transactions and such denial has become
final and nonappealable or any Governmental Authority of competent jurisdiction
shall have entered a final and nonappealable order permanently enjoining or
otherwise prohibiting the consummations of the Transactions.

 

12.2         Surviving
Obligations.  In the event of termination
of this Agreement by either the Buyer, on the one hand, or either or both of
the Sellers, on the other hand, pursuant to this Section 12, (i) prompt
written notice thereof shall be given to the other parties, and this Agreement
shall terminate, without further action by any of the parties hereto, and (ii) all

 

89

 

obligations of the parties hereunder shall terminate, except for the
obligations set forth in Sections 7.1, 7.11(c)(iv), 12.2, 13, 16 and 21, provided
that nothing contained in this Section 12.2 shall relieve any party from
liability for any willful and material breach of any representation, warranty
or covenant contained in this Agreement. 
For avoidance of doubt and without limiting the generality of the
foregoing, if Sellers fail to deliver any financial statements or otherwise
fail to comply with their obligations under Section 7.17, or if for any
reason the condition set forth in Section 9.6 is not satisfied, the Buyer’s
sole remedy shall be to terminate this Agreement and to receive the Expense
Reimbursement, and if the failure was the result of the Sellers’ willful
breach, the Break-Up Fee, if payable pursuant to Section 7.11(c)(iv)(B).

 

13.          FEES
AND EXPENSES

 

Except as
expressly set forth in this Agreement and the Schedules (including pursuant to Section 7.4,
Section 7.11(c)(iv) and Section 12.2), each of (i) the
Buyer, (ii) each of the Sellers and (iii) each of the Companies,
shall be responsible for, and shall pay, its own fees and expenses incurred in
connection with the authorization, preparation, execution and performance of
this Agreement, including all fees and expenses of counsel, accountants, agents
and other representatives; provided, that (i) expenses of the
Companies that remain unpaid as of the Closing Date shall be included as a
Closing Date Current Liability in the calculation of the Closing Date Working
Capital (and shall be paid by the Buyer) and (ii) upon the Closing, the
Buyer shall be responsible for all expenses incurred by the Buyer in connection
with the foregoing (but such amount shall not be included in the calculation of
Closing Date Working Capital).

 

14.          ENTIRE
AGREEMENT

 

The Buyer and
the Sellers and the Companies agree that this Agreement, including the Schedules
and all Exhibits hereto, and any Related Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior understandings, agreements, writings and deliveries with respect thereto. 
None of the Sellers or the Companies has made, and the Buyer has not
relied upon, and the Sellers and the Companies hereby disclaim, any
express or implied representation, warranty, inducement, promise, understanding
or condition not set forth in any of this Agreement, the Schedules and the
Exhibits hereto and/or any Related Agreement.

 

15.          PARTIES
OBLIGATED AND BENEFITED

 

Subject to the
limitations set forth below, this Agreement will be binding upon the parties
and their respective assigns and successors in interest and will inure solely
to the benefit of the parties and their respective assigns and successors in
interest, and except as expressly provided in this Agreement, no other Person
will be entitled to any of the benefits conferred by this Agreement.  Without the prior written consent of the
other parties, no party will assign any of its rights under this Agreement or
delegate any of its duties under this Agreement, except that the Buyer shall
have the right to (a) assign its rights and obligations under this
Agreement to any Affiliate without the prior consent of the Sellers, the Cable
Venture or Cable Corp., so long as the Buyer remains fully liable hereunder as
if it was a party hereto and (b) collaterally assign this 

 

90

 

Agreement to any sources of financing solely to secure the Buyer’s
obligation in connection with the Transactions.

 

16.          NOTICES

 

All notices,
requests, consents, and other communications under this Agreement shall be in
writing and shall be delivered in person or mailed by first class certified or
registered mail, return receipt requested, postage prepaid, by reputable
overnight mail or courier or by telecopier, in either case, with receipt
confirmed, addressed as follows:

 

	
  If to the Companies:

  	
   

  	
  to each of ML Media and Century as provided below

  
	
   

  	
   

  	
   

  
	
  With a copy (which shall not constitute notice) to:

  	
   

  	
  Morgan Lewis & Bockius

  101 Park Avenue

  New York, New York 10178

  Telephone:   (212) 309 6000

  Telecopy:     (212) 309 6273

  Attention:     Richard
  Toder, Esq.

  
	
   

  	
   

  	
   

  
	
  If to ML Media:

  	
   

  	
  ML Media Partners, L.P.

  c/o RP Companies, Inc.

  444 Madison Avenue, Suite 703

  New York, New York 10022

  Telephone:   (212) 980 7110

  Telecopy:     (212) 980 8374

  Attention:     Elizabeth
  McNey Yates

  
	
   

  	
   

  	
   

  
	
  With a copy (which shall not constitute notice) to:

  	
   

  	
  Proskauer Rose LLP

  1585 Broadway

  New York, New York 10036

  Telephone:   (212) 969 3205

  Telecopy:     (212) 969 2900

  Attention:     Bertram A. Abrams, Esq.

  
	
   

  	
   

  	
   

  
	
  If to Century, to:

  	
   

  	
  Century Communications Corporation

  c/o Adelphia Communications Corporation

  5619 DTC Parkway – 8th Floor

  Greenwood Village, Colorado 80111

  Telephone:   (303) 268 6458

  Telecopy:     (303) 268 6662

  Attention:     General Counsel

  
	
   

  	
   

  	
   

  
	
  With a copy (which shall not constitute notice) to

  	
   

  	
  Willkie Farr & Gallagher LLP

  787 Seventh Avenue

  New York, New York 10019

  Telephone:   (212) 728 8000

  Telecopy:     (212) 728 8111

  Attention:     Marc Abrams, Esq.

  

 

91

 

	
   

  	
   

  	
             and

  
	
   

  	
   

  	
   

  
	
  If to Buyer:

  	
   

  	
  San Juan Cable, LLC

  c/o MidOcean Partners, LP

  320 Park Avenue, 17th Floor

  New York, New York 10022

  Telephone:   (212) 497-1400

  Telecopy:     (212) 497-1375

  Attention:     Tyler Zachem

  
	
   

  	
   

  	
   

  
	
  With a copy (which shall not constitute notice) to:

  	
   

  	
  Kirkland & Ellis LLP

  655 Fifteenth Street, N.W.

  Washington, D.C. 20005

  Telephone:   (202) 879-5000

  Telecopy:     (202) 879-5200 

  Attention:     George P. Stamas, Esq. 

  Mark D. Director, Esq.

  

 

or at such
other address or addresses as may have been furnished in writing by any party
to the others in accordance with the provisions of this Section 16.  Notices and other communications provided in
accordance with this Section 16 shall be deemed delivered upon
receipt.  The furnishing of any notice or
communication required hereunder may be waived in writing by the party entitled
to receive such notice.  Failure or delay
in delivering copies of any notice to persons designated above to receive
copies shall in no way adversely affect the effectiveness of such notice or
communication.

 

17.          AMENDMENTS
AND WAIVERS

 

Except as
otherwise expressly set forth in this Agreement, any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of the Sellers and the Buyer.  Any amendment or waiver effected in
accordance with this Section 17 shall be binding upon all parties
hereto.  No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.

 

18.          SEVERABILITY

 

If any
provision of this Agreement shall be determined by a court or other tribunal of
competent jurisdiction to be invalid, inoperative or unenforceable because of
the conflict of such provision with any constitution, statute, common law
principle, rule of public policy or for any other reason, such
circumstance shall have no effect or render any other provision or provisions
contained herein invalid, inoperative or unenforceable, but this Agreement
shall be 

 

92

 

reformed and construed as if such invalid, inoperative or unenforceable
provision had never been contained herein and such provision reformed so that
it would be valid, operative and enforceable to the maximum extent permitted; provided,
that if as a result of any of the foregoing, the Cable Venture and Cable Corp.
cannot consummate the acquisition of the Acquired Interests in accordance with
the terms of this Agreement, either the Buyer or either of the Sellers may
terminate this Agreement, and it shall be of no further force and effect,
unless all parties agree in writing to the contrary.

 

19.          SECTION HEADINGS
AND TERMS

 

The section headings
in this Agreement are for convenience and reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.

 

20.          COUNTERPARTS

 

This Agreement
may be executed in two or more counterparts (including by facsimile or
electronic mail), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and shall become
effective when counterparts that together contain the signatures of each party
hereto shall have been delivered to the Sellers and the Buyer.

 

21.          GOVERNING
LAW; CONSENT TO JURISDICTION

 

All disputes
arising out of or related to this Agreement, including, without limitation, any
dispute relating to the interpretation, meaning or effect of any provision
hereof, will be resolved in the Bankruptcy Court and the parties hereto will
each submit to the exclusive jurisdiction of the Bankruptcy Court for the
purposes of adjudicating any such dispute, to the extent the jurisdiction of
the Bankruptcy Court is applicable.  If
the jurisdiction of the Bankruptcy Court is not applicable, any legal action,
suit or proceeding arising out of or relating to this Agreement, each and every
agreement and instrument contemplated hereby or the transactions contemplated
hereby and thereby shall be instituted in the U.S. District Court for Southern
District of New York.  This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York (i.e., without regard to any contrary result required under
applicable conflict of law rules).

 

22.          SPECIFIC
PERFORMANCE

 

The parties
hereto acknowledge that money damages may not be an adequate remedy for
violations of this Agreement and that any party may, in its sole discretion,
apply to a court of competent jurisdiction for specific performance or
injunctive or other relief as such court may deem just and proper in order to
enforce this Agreement or prevent any violation hereof by any of the parties
hereto and, to the extent permitted by applicable Legal Requirements, each
party hereof waives any objection to the imposition of such relief.  Any such specific or equitable relief granted
shall not be exclusive and an Indemnitee shall also be entitled to seek
indemnification to the extent permitted by Section 11.

 

93

 

23.          FURTHER
ASSURANCES

 

Each party
hereto shall execute, acknowledge and deliver any further assurance, documents
and instruments reasonably requested by any other party hereto for the purpose
of giving effect to the Transactions or the intentions of the parties with
respect thereto.

 

24.          CONSTRUCTION

 

In the
interpretation and construction of this Agreement, the parties acknowledge that
the terms hereof reflect extensive negotiations between the parties and that
this Agreement shall not be deemed, for the purpose of construction and
interpretation, drafted by any party hereto.

 

94

 

IN WITNESS WHEREOF,
the parties hereto have caused this Interest Acquisition Agreement to be
executed by their duly authorized representatives on the day and year first
above written.

 

	
   

  	
  ML MEDIA PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Media Management Partners,

  	
   

  
	
   

  	
   

  	
    its general partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth McNey Yates

  	
   

  
	
   

  	
  Name: Elizabeth McNey Yates

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  CENTURY COMMUNICATIONS

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa Wittman

  	
   

  
	
   

  	
  Name: Vanessa Wittman

  
	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  
	
   

  	
  CENTURY-ML CABLE VENTURE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  ML Media Partners, L.P.

  
	
   

  	
  By:

  	
  Media Management Partners,

  
	
   

  	
   

  	
       its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth McNey Yates

  	
   

  
	
   

  	
  Name: Elizabeth McNey Yates

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Century Communications Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa Wittman

  	
   

  
	
   

  	
  Name: Vanessa Wittman

  
	
   

  	
  Title: Executive Vice President

  
								

 

95

 

	
   

  	
  CENTURY ML CABLE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Lawton

  	
   

  
	
   

  	
  Name: Jeffrey Lawton

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth McNey Yates

  	
   

  
	
   

  	
  Name: Elizabeth McNey Yates

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SAN JUAN CABLE, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tyler Zachem

  	
   

  
	
   

  	
  Name: Tyler Zachem

  
	
   

  	
  Title:   Secretary

  

 

96Exhibit 10.1

 

INTEREST
ACQUISITION AGREEMENT

 

BY
AND AMONG

 

ML
MEDIA PARTNERS, L.P.,

 

CENTURY
COMMUNICATIONS CORPORATION,

 

CENTURY
ML CABLE VENTURE,

 

CENTURY
ML CABLE CORP.

 

 

AND

 

 

SAN
JUAN CABLE, LLC,

AS
BUYER

 

 

 

Dated
as of

 

 

June 3,
2005

 

 

TABLE
OF CONTENTS

 

	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
  1.1

  	
  Certain Definitions

  	
   

  
	
   

  	
  1.2

  	
  Additional Defined Terms

  	
   

  
	
  2.

  	
  PURCHASE AND SALE OF ACQUIRED INTERESTS

  	
   

  
	
   

  	
  2.1

  	
  Transfer of
  Acquired Interests

  	
   

  
	
   

  	
  2.2

  	
  Transferred
  Assets

  	
   

  
	
   

  	
  2.3

  	
  Excluded
  Liabilities

  	
   

  
	
  3.

  	
  CLOSING; PURCHASE PRICE; ADJUSTMENTS

  	
   

  
	
   

  	
  3.1

  	
  Closing
  Date and Location

  	
   

  
	
   

  	
  3.2

  	
  Purchase
  Price; Payment of the Purchase Price

  	
   

  
	
   

  	
  3.3

  	
  Purchase
  Price Adjustments.

  	
   

  
	
   

  	
  3.4

  	
  Determination
  of Purchase Price Adjustments

  	
   

  
	
  4.

  	
  REPRESENTATION AND WARRANTIES REGARDING THE COMPANIES

  	
   

  
	
   

  	
  4.1

  	
  Existence;
  Good Standing and Power; Capitalization.

  	
   

  
	
   

  	
  4.2

  	
  Authorization, Company Required Consents.

  	
   

  
	
   

  	
  4.3

  	
  Financial Statements; Indebtedness; Budget;
  Absence of Changes.

  	
   

  
	
   

  	
  4.4

  	
  Cable Venture and Cable Corp. Assets

  	
   

  
	
   

  	
  4.5

  	
  The
  Systems.

  	
   

  
	
   

  	
  4.6

  	
  Franchises.

  	
   

  
	
   

  	
  4.7

  	
  Pole Attachment Agreements

  	
   

  
	
   

  	
  4.8

  	
  Real Property.

  	
   

  
	
   

  	
  4.9

  	
  Material Contracts

  	
   

  
	
   

  	
  4.10

  	
  Employees.

  	
   

  
	
   

  	
  4.11

  	
  Litigation and Judgments

  	
   

  
	
   

  	
  4.12

  	
  Tax Returns and Payments of Taxes

  	
   

  
	
   

  	
  4.13

  	
  Compliance with Laws

  	
   

  
	
   

  	
  4.14

  	
  Insurance

  	
   

  
	
   

  	
  4.15

  	
  Environmental Matters

  	
   

  
	
   

  	
  4.16

  	
  Affiliate Transactions

  	
   

  
	
   

  	
  4.17

  	
  Intellectual Property

  	
   

  
	
   

  	
  4.18

  	
  Brokers’ Fees

  	
   

  
	
  5.

  	
  REPRESENTATIONS OF ML MEDIA AND CENTURY

  	
   

  
	
   

  	
  5.1

  	
  Representations and Warranties of ML Media

  	
   

  
	
   

  	
  5.2

  	
  Representations and Warranties of Century

  	
   

  
	
  6.

  	
  REPRESENTATIONS AND WARRANTIES OF BUYER

  	
   

  
	
   

  	
  6.1

  	
  Existence

  	
   

  
	
   

  	
  6.2

  	
  Authorization; No Conflicts

  	
   

  
	
   

  	
  6.3

  	
  Litigation

  	
   

  
	
   

  	
  6.4

  	
  Financing

  	
   

  
	
  7.

  	
  ADDITIONAL COVENANTS

  	
   

  
	
   

  	
  7.1

  	
  Confidentiality.

  	
   

  
	
   

  	
  7.2

  	
  Notification

  	
   

  
	
   

  	
  7.3

  	
  HSR Act Compliance

  	
   

  

 

i

 

	
   

  	
  7.4

  	
  Required Consents.

  	
   

  
	
   

  	
  7.5

  	
  Tax
  Matters.

  	
   

  
	
   

  	
  7.6

  	
  Non-Solicitation

  	
   

  
	
   

  	
  7.7

  	
  Further Assurances; Satisfaction of
  Covenants, etc.

  	
   

  
	
   

  	
  7.8

  	
  Change of Business Name

  	
   

  
	
   

  	
  7.9

  	
  Insurance

  	
   

  
	
   

  	
  7.10

  	
  Full
  Access

  	
   

  
	
   

  	
  7.11

  	
  Bankruptcy Process.

  	
   

  
	
   

  	
  7.12

  	
  Continuity and Maintenance of Operations

  	
   

  
	
   

  	
  7.13

  	
  Completion of the Rebuild of the San Juan
  System.

  	
   

  
	
   

  	
  7.14

  	
  Risk of Loss

  	
   

  
	
   

  	
  7.15

  	
  Additional
  Covenants Regarding the Companies

  	
   

  
	
   

  	
  7.16

  	
  Non-Solicitation; No Competitive Use of Confidential Information

  	
   

  
	
   

  	
  7.17

  	
  Further Action Regarding Financial Statements

  	
   

  
	
   

  	
  7.18

  	
  Financing

  	
   

  
	
   

  	
  7.19

  	
  Intercompany
  Liabilities

  	
   

  
	
   

  	
  7.20

  	
  Sale of ML Media’s Joint Venture Interests

  	
   

  
	
   

  	
  7.21

  	
  Release of Obligations Under Letters of Credit

  	
   

  
	
   

  	
  7.22

  	
  Stand-Alone

  	
   

  
	
   

  	
  7.23

  	
  Publicity

  	
   

  
	
  8.

  	
  CONDITIONS PRECEDENT TO THE PARTIES’
  OBLIGATIONS

  	
   

  
	
   

  	
  8.1

  	
  Consents
  from Governmental Authorities

  	
   

  
	
   

  	
  8.2

  	
  Judgments

  	
   

  
	
   

  	
  8.3

  	
  Confirmation Order

  	
   

  
	
  9.

  	
  CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS

  	
   

  
	
   

  	
  9.1

  	
  Representations and Warranties of Companies and Sellers

  	
   

  
	
   

  	
  9.2

  	
  Covenants

  	
   

  
	
   

  	
  9.3

  	
  Material Consents

  	
   

  
	
   

  	
  9.4

  	
  Delivery of Certificates and Documents

  	
   

  
	
   

  	
  9.5

  	
  Escrow Agreement

  	
   

  
	
   

  	
  9.6

  	
  Financial Statements

  	
   

  
	
   

  	
  9.7

  	
  Material Adverse Change

  	
   

  
	
   

  	
  9.8

  	
  Subscribers; Operating Cash Flow

  	
   

  
	
   

  	
  9.9

  	
  Financing

  	
   

  
	
   

  	
  9.10

  	
  Confirmation
  Order

  	
   

  
	
   

  	
  9.11

  	
  Payment Motion

  	
   

  
	
   

  	
  9.12

  	
  Extension
  of Rebuild Deadline

  	
   

  
	
   

  	
  9.13

  	
  Franchise
  Extensions

  	
   

  
	
  10.

  	
  CONDITIONS
  PRECEDENT TO COMPANIES’ AND SELLERS’ OBLIGATIONS

  	
   

  
	
   

  	
  10.1

  	
  Representations and Warranties of Buyer

  	
   

  
	
   

  	
  10.2

  	
  Covenants

  	
   

  
	
   

  	
  10.3

  	
  Material
  Consents

  	
   

  
	
   

  	
  10.4

  	
  Delivery
  of Certificates and Documents

  	
   

  

 

ii

 

	
   

  	
  10.5

  	
  Escrow Agreement

  	
   

  
	
  11.

  	
  SURVIVAL
  OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION

  	
   

  
	
   

  	
  11.1

  	
  Survival
  of Representations, Warranties and Covenants

  	
   

  
	
   

  	
  11.2

  	
  Indemnification.

  	
   

  
	
   

  	
  11.3

  	
  Assertion
  of Claims; Notice of and Right to Defend Third Party Claims

  	
   

  
	
   

  	
  11.4

  	
  Limitations
  on Liability.

  	
   

  
	
   

  	
  11.5

  	
  Excluded
  Tax Liabilities

  	
   

  
	
   

  	
  11.6

  	
  Exclusive
  Remedy

  	
   

  
	
   

  	
  11.7

  	
  No
  Third Party Beneficiaries

  	
   

  
	
  12.

  	
  TERMINATION

  	
   

  
	
   

  	
  12.1

  	
  Termination

  	
   

  
	
   

  	
  12.2

  	
  Surviving
  Obligations

  	
   

  
	
  13.

  	
  FEES AND EXPENSES

  	
   

  
	
  14.

  	
  ENTIRE AGREEMENT

  	
   

  
	
  15.

  	
  PARTIES OBLIGATED AND BENEFITED

  	
   

  
	
  16.

  	
  NOTICES

  	
   

  
	
  17.

  	
  AMENDMENTS AND WAIVERS

  	
   

  
	
  18.

  	
  SEVERABILITY

  	
   

  
	
  19.

  	
  SECTION HEADINGS AND TERMS

  	
   

  
	
  20.

  	
  COUNTERPARTS

  	
   

  
	
  21.

  	
  GOVERNING LAW; CONSENT TO JURISDICTION

  	
   

  
	
  22.

  	
  SPECIFIC PERFORMANCE

  	
   

  
	
  23.

  	
  FURTHER ASSURANCES.

  	
   

  
	
  24.

  	
  CONSTRUCTION

  	
   

  

 

iii

 

INDEX OF SCHEDULES AND EXHIBITS

 

Schedules

 

	
  Schedule 1.1(p)

  	
  Management, Retention and Sale Bonuses;
  Other Closing Date Current Liabilities

  
	
  Schedule 1.1(q)

  	
  Closing Date Working Capital

  
	
  Schedule 1.1(w)

  	
  Rebuild

  
	
  Schedule 1.1(y)

  	
  Deferred Revenue

  
	
  Schedule 1.1(ee)

  	
  Discounts and Promotions

  
	
  Schedule 1.1(jj)

  	
  Additional Excluded Liabilities

  
	
  Schedule 1.1(lll)

  	
  Material Consents

  
	
  Schedule 1.1(ppp)(1)

  	
  Operating Cash Flow Adjustments — Force
  Majeure Events

  
	
  Schedule 1.1(ppp)(2)

  	
  Operating Cash Flow Adjustments — Other
  Adjustments

  
	
  Schedule 1.1(gggg)

  	
  Reference Accounting Principles

  
	
  Schedule 1.1(llll)

  	
  Retained Programming Agreements

  
	
  Schedule 2.2(e)

  	
  Retained Intellectual Property Rights

  
	
  Schedule 2.2(i)

  	
  Transferred Assets

  
	
  Schedule 3.2(d)

  	
  Tax Matters

  
	
  Schedule 4.1

  	
  Joint Venture Existence

  
	
  Schedule 4.2(b)

  	
  Company Required Consents

  
	
  Schedule 4.3(f)

  	
  Certain Changes

  
	
  Schedule 4.3(g)

  	
  Certain Liabilities

  
	
  Schedule 4.4(b)

  	
  Sufficiency of Assets

  
	
  Schedule 4.5(a)

  	
  System Information

  
	
  Schedule 4.5(b)

  	
  Rates and FCC Compliance

  
	
  Schedule 4.5(c)

  	
  Copyright Registrations

  
	
  Schedule 4.5(d)

  	
  Towers and Tower Leases

  
	
  Schedule 4.6

  	
  Franchises and Other Governmental
  Authorizations

  
	
  Schedule 4.7

  	
  Pole Attachment and Utility Agreement

  
	
  Schedule 4.8(a)

  	
  Owned Real Property

  
	
  Schedule 4.8(b)

  	
  Leases

  
	
  Schedule 4.9

  	
  Other Material Contracts

  
	
  Schedule 4.10

  	
  Employee Matters

  
	
  Schedule 4.11

  	
  Litigation

  
	
  Schedule 4.12

  	
  Taxes

  
	
  Schedule 4.13

  	
  Compliance with Laws

  
	
  Schedule 4.14

  	
  Insurance

  
	
  Schedule 4.16

  	
  Affiliate Transactions

  
	
  Schedule 4.17

  	
  Intellectual Property

  
	
  Schedule 4.18

  	
  Brokers’ Fees

  
	
  Schedule 5.2(c)

  	
  Consents

  
	
  Schedule 5.1(f)

  	
  Brokers’ Fees

  
	
  Schedule 5.2(d)

  	
  Century Liens

  
	
  Schedule 5.2(e)

  	
  Century Litigation

  
	
  Schedule 5.2(f)

  	
  Brokers’ Fees

  

 

iv

 

	
  Schedule 7.5

  	
  Tax Matters

  
	
  Schedule 7.6

  	
  Certain Employees of Sellers and Sellers’
  Affiliates

  
	
  Schedule 7.8

  	
  Change of Business Name

  
	
  Schedule 7.12

  	
  Continuity of Operations

  
	
  Schedule 7.13

  	
  Rebuild

  
	
  Schedule 7.15(c)(iii)

  	
  Additional Programming Agreements

  
	
  Schedule 7.22

  	
  Stand-Alone Conversion

  
	
  Schedule 9.6(a)

  	
  Allocations

  
	
   

  	
   

  
	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Intentionally Omitted

  
	
  Exhibit B

  	
  Intentionally Omitted

  
	
  Exhibit C

  	
  Transition Services Schedule of
  Services

  
	
  Exhibit D

  	
  Intentionally Omitted

  
	
  Exhibit E

  	
  2005 Budget

  
	
  Exhibit F

  	
  2003 Unaudited Historical Financials

  
	
  Exhibit G

  	
  Unaudited 2004 Financials

  
	
  Exhibit H

  	
  Example of Closing Date Working Capital
  Calculation

  
	
  Exhibit I

  	
  Example of Equivalent Subscribers
  Calculation

  
	
  Exhibit J

  	
  Example of Operating Cash Flow Calculation

  
	
  Exhibit K

  	
  Form of Investor Guaranty of Deferred
  Purchase Price

  

 

v

 

INTEREST ACQUISITION AGREEMENT

 

THIS INTEREST
ACQUISITION AGREEMENT (“Agreement”) is made as of this 3rd day of
June, 2005, by and among ML MEDIA PARTNERS, L.P., a Delaware limited
partnership (“ML Media”), CENTURY COMMUNICATIONS CORPORATION, a Texas
corporation (“Century”) and a debtor in possession under Chapter 11 of
Title 11 of the United States Bankruptcy Code (the “Bankruptcy Code”);
ML Media and Century being referred to herein together as “Sellers”, and
each being referred to herein individually as a “Seller”, CENTURY-ML
CABLE VENTURE (the “Cable Venture”), a New York general partnership and
a debtor in possession under Chapter 11 of the Bankruptcy Code, consisting of
ML Media and Century, CENTURY ML CABLE CORP., a Delaware corporation d/b/a
Cable TV of Greater San Juan (“Cable Corp.”, and together with the Cable
Venture, the “Companies”), and San Juan Cable, LLC, a Puerto Rico
limited liability company (the “Buyer”).

 

W I  T  N  E  S  S
E  T  H:

 

WHEREAS, the Cable Venture owns and operates the community antenna
television (“CATV”) system and the activities and operations ancillary
thereto serving the community of Levittown, located in the Municipality of Toa
Baja, Puerto Rico and the Municipalities of Toa Alta and Catano, Puerto Rico
(the “Levittown System”) and, through its wholly owned subsidiary Cable
Corp., owns and operates the CATV system and the activities and operations
ancillary thereto serving the Municipality of San Juan, Puerto Rico and the
Municipalities of Bayamon, Carolina, Guaynabo and Trujillo Alto, Puerto Rico
(the “San Juan System”; the Levittown System and the San Juan System are
referred to herein together as the “Systems” and each individually as a “System”);

 

WHEREAS, on September 30, 2002, Century commenced a case for the
Cable Venture under Chapter 11 of the Bankruptcy Code (the “Chapter 11
Case”) in the U.S. Bankruptcy Court for the Southern District of New York
(the “Bankruptcy Court”);

 

WHEREAS, the Sellers hold all right, title and interest in and to 100%
of the outstanding joint venture interests in the Cable Venture;

 

WHEREAS, the Buyer desires to purchase from the Sellers, and the
Sellers wish to sell to the Buyer, 100% of the outstanding joint venture
interests in the Cable Venture pursuant to this Agreement and the Plan (as
defined below);

 

WHEREAS, the Cable Venture will file a Plan of Reorganization (the “Plan”)
in the Chapter 11 Case for the Cable Venture that implements the foregoing; and

 

WHEREAS, the Sellers and the Cable Venture will seek entry by the
Bankruptcy Court of an Order or Orders approving this Agreement on behalf of
the Cable Venture and approving the transactions contemplated hereby pursuant
to the Plan, and, in the case of Century, authorizing Century to consummate and
perform under the terms of this Agreement and the Plan.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth and for other good and valuable consideration, the receipt and
sufficiency of 

 

 

which are hereby acknowledged, the parties
hereto, intending to be legally bound, do represent, warrant, covenant and
agree as follows:

 

1.                                      DEFINITIONS

 

1.1                                 Certain Definitions.  The following capitalized terms, when used in
this Agreement, shall have the meaning set forth below:

 

(a)                                  “Accounts
Receivable” shall mean the accounts receivable of the Companies arising
prior to the Closing Date, including those arising from advertising sales and
tower rentals, as well as Subscriber Accounts Receivable and all other accounts
receivable, and for which the balances are unpaid as of such date, reflected
net of an allowance for doubtful accounts and other required reserves, all determined
in accordance with GAAP and with the Reference Accounting Principles.

 

(b)                                 “Acquisition
Proposal” shall mean a proposal (other than by the Buyer or its Affiliates)
relating to any merger, consolidation, business combination, sale or other
disposition of 10% or more of the Companies’ assets pursuant to one or more
transactions, the sale of 10% or more of the outstanding shares of capital
stock or equity interests of the Cable Venture or Cable Corp. (including,
without limitation, by way of a tender offer, foreclosure, plan of
reorganization or liquidation or the sale or other disposition of Claims
against the Cable Venture held by any Seller or its Affiliates) or a similar
transaction or business combination involving one or more third parties (other
than the Buyer or its Affiliates) and the Cable Venture, Cable Corp. or any
Seller, as the case may be; provided, however, that a proposed
transaction involving interests in or assets of Adelphia or its subsidiaries,
other than its interests in or assets of the Cable Venture, shall not be deemed
an Acquisition Proposal.

 

(c)                                  “Adelphia”
shall mean Adelphia Communications Corporation, a Delaware corporation.

 

(d)                                 “Affiliate”
shall mean, with respect to any Person, any other Person controlling,
controlled by or under common control with such Person, with “control” for such
purpose meaning the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities or voting interests, by contract or
otherwise; provided that (i) for purposes hereof Century and ML
Media shall be deemed to be Affiliates of the Cable Venture; (ii) under no
circumstances shall creditors of the Cable Venture or Century be considered
Affiliates of the Cable Venture solely by virtue of their ownership of creditor
claims against the Cable Venture or Century; and (iii) Merrill Lynch &
Co., Inc. and its subsidiaries and affiliates (other than ML Media and the
general partner of ML Media) shall not be considered Affiliates of ML Media,
the Cable Venture or Cable Corp.

 

(e)                                  “Assumed
Executory Contracts” shall mean all of the executory contracts, unexpired
leases, agreements, commitments, or other binding arrangements or
understandings, whether written or oral, of the Cable Venture, excluding any
Transferred Assets.

 

(f)                                    “Bankruptcy
Rules” shall mean the Federal Rules of Bankruptcy Procedure.

 

2

 

(g)                                 “Business
Day” shall mean any day other than a Saturday, a Sunday or a day on which
banking institutions in New York, New York are required or authorized to be
closed.

 

(h)                                 “Buyer
Confidential Information” shall mean, collectively, the Buyer Group
Confidential Information and, after the Closing, the Company Confidential
Information.

 

(i)                                     “Buyer
Group” shall mean, collectively, (i) the Buyer, (ii) the Parent,
(iii) San Juan Cable Ventures, LLC, (iv) MCNA Cable Holdings LLC, (v) the
Investors, (vi) each of their respective Affiliates and (vii) the respective
members, officers, directors, employees, professional advisors, representatives
and other agents of all of the foregoing.

 

(j)                                     “Buyer
Group Confidential Information” shall mean, collectively, all information
relating to the business and affairs of the Buyer Group and their respective
Affiliates (including, without limitation, all nonpublic information concerning
the terms of the Transactions) other than information that is as of the date
hereof or subsequently becomes generally available to the public through no
fault of, or breach of any confidentiality obligation by, the Sellers, the
Companies or any of their respective Affiliates, agents or representatives.

 

(k)                                  “Calculation
Date” shall mean the Previous Month End unless the Closing shall
occur on the last Business Day of a month, in which case the Calculation Date
shall be the last day of the month.

 

(l)                                     “CapEx
Cash” shall mean an amount of cash equal to the CapEx Surplus.

 

(m)                               “CapEx
Surplus” shall mean the excess, if any, of (i) the amount of capital
expenditures required to be made by the Companies between January 1, 2005 and
the Previous Month End pursuant to Section 7.12(a)(vi) over (ii) the
actual amount of capital expenditures made by the Companies between January 1,
2005 and the Closing Date.

 

(n)                                 “Claim”
and “Claims” shall have the meaning set forth in Section 101(5) of the
Bankruptcy Code.

 

(o)                                 “Closing
Date Current Assets” shall mean the following, calculated as of the close
of business on the day preceding the Closing Date in accordance with GAAP, to
the extent GAAP would require such amounts to be set forth in a regularly
prepared balance sheet (except as otherwise provided herein): the Companies’
cash on hand and in bank accounts (net of any non-cancelled uncashed checks
issued by the Companies and less an amount equal to the Unpaid Cost to Complete
the Rebuild (if any), which shall be deposited into the Rebuild Escrow Account
pursuant to Section 3.2(b)(i) or paid to the Buyer pursuant to Section 3.2(b)(ii)),
cash equivalents, Accounts Receivable, notes receivable, deposits properly
characterized as current assets arising in connection with the Companies’
operation of the Systems, prepaid expenses of the Companies, Inventory and
other current assets of the Companies; provided, that Closing Date
Current Assets shall be calculated net of all reserves for obsolete,
slow-moving, damaged or defective Inventory, which reserves shall be calculated
in accordance with GAAP and on a basis that is consistent with the Reference
Accounting Principles and will not include (i) any Transferred Assets (as
hereinafter defined), (ii) any prepaid expenses or deposits, to the extent
that for contractual or other reasons, such prepaid expenses or deposits will
not be available to

 

3

 

the Companies
after the Closing Date, (iii) any deferred Tax assets or any receivable or
other accrued amount representing any Tax refund to be received, (iv) the
CapEx Cash (if any) or (v) any Rebuild Inventory.

 

(p)                                 “Closing
Date Current Liabilities” shall mean the following, calculated as of the
close of business on the day preceding the Closing Date in accordance with
GAAP, to the extent GAAP would require such amounts to be set forth in a
regularly prepared balance sheet (except as otherwise provided herein): all
subscriber prepayments and deposits with respect to services to be provided by
the Companies, all of the Companies’ trade payables and all accounts payable
relating to the Rebuild of the San Juan System and all accrued expenses of the
Companies (including, without limitation, (i) franchise and copyright
fees, utility charges, Taxes, and assessments levied against the Companies’
assets, property and equipment rentals and similar items, (ii) any
management bonuses and any retention or sale bonuses payable in connection with
the Transactions and set forth on Schedule 1.1(p) (to the extent
not paid prior to the Closing), (iii) accrued expenses relating to the
Rebuild of the San Juan System, and (iv) any Liability of the Companies
for fees or commissions to any broker, finder or agent with respect to the
Transactions (to the extent not paid prior to the Closing)); provided
that Closing Date Current Liabilities will not include (i) any
pre-petition liabilities of the Cable Venture, which if not satisfied prior to
the Closing shall be satisfied pursuant to the Plan from the Sellers Escrow
Account (as hereinafter defined) or otherwise discharged without liability of
the Buyer or the Companies, (ii) any Affiliate Liabilities, all of which
shall be satisfied pursuant to Section 7.19, (iii) any Deferred
Revenues or deferred Tax liabilities, (iv) any Excluded Liabilities; (v) any
Indemnified Tax Liabilities of the Companies other than accruals, in accordance
with GAAP, for Taxes incurred in the ordinary course of operations consistent
with past practice for any tax period or portion of any tax period ending on or
prior to the day preceding the Closing Date; (vi) any withholding tax payable
with respect to pre-petition programming payment obligations of the Companies,
(vii) any accrual of payments with respect to the Pole Attachment
Agreements in excess of the actual amount payable by the Companies under the
current terms of the Pole Attachment Agreements, or (viii) any rejection
damage claim relating to an executory contract that the Buyer has requested be
rejected by the Cable Venture.

 

(q)                                 “Closing
Date Working Capital” shall mean the sum of (i) the amount of the Closing
Date Current Assets, less (ii) the amount of Closing Date Current Liabilities,
plus (iii) except as otherwise provided in Section 7.22, any one-time
amounts spent by the Companies after the date of this Agreement to implement
the Companies’ ability to operate as a Stand-Alone as provided in Section 7.22,
plus (iv) the amount set forth on Schedule 1.1(q).  As the Closing Date Working Capital is
calculated as of the close of business on the day preceding the Closing Date,
the operations of the Systems on the Closing Date are for the account of the
Buyer.  An example of how the Closing
Date Working Capital would have been calculated if the Closing had been held on
January 1, 2005 is attached as Exhibit H.

 

(r)                                    “Code”
shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder as in effect from time to time.

 

(s)                                  “Commonwealth”
shall mean the Commonwealth of Puerto Rico.

 

4

 

(t)                                    “Companies’
Knowledge”, or words to similar effect, shall mean the actual knowledge
after due inquiry of (i) the current members of the management board of
the Cable Venture and the board of directors of the Company (I. Martin
Pompadur, Elizabeth McNey Yates, Jeffrey Lawton and Joseph Bagan), (ii) each
other person who serves as a member of the management board of the Cable
Venture or the board of directors of Cable Corp. after the date of this
Agreement, and (iii) each of the following persons: David Beyth, Mark
Chambers (with respect to tax matters only), Bob DeLucia (with respect to
accounting matters only), Keith Hayes (with respect to engineering matters
only), Jean Simmons, Mayra Torres (with respect to local accounting matters
only) and Mark Spiecker.

 

(u)                                 “Company
Confidential Information” shall mean all information relating to the
business and affairs of the Cable Venture or Cable Corp. other than information
that is as of the date hereof or subsequently becomes generally available to
the public through no fault of, or breach of any confidentiality obligation by,
the Buyer or any of its Affiliates, agents or representatives.

 

(v)                                 “Company
Required Consents” shall mean the Required Consents set forth on Schedule 4.2(b).

 

(w)                               “Completion
of the Rebuild of the San Juan System” shall mean the completion of the
Rebuild of the San Juan System to the specifications set forth on Schedule 1.1(w).

 

(x)                                   “Copyright
Office” shall mean the United States Copyright Office.

 

(y)                                 “Deferred
Revenues” shall mean all deferred revenue of the types set forth on Schedule 1.1(y)
calculated in accordance with GAAP consistently applied in accordance with the
Reference Accounting Principles resulting from (i) liabilities related to
the receipt of cash prior to the delivery of service to customers, (ii) deferred
revenue recognized in connection with the Centennial Lease, and (iii) liabilities
resulting from the receipt of cash in connection with Launch Incentives and/or
repositioning incentives which have been amortized into revenue in subsequent
periods.

 

(z)                                   “DOJ”
shall mean the Antitrust Division of the United States Department of Justice.

 

(aa)                            “Employee
Benefit Plan” shall mean each: (a) Employee Pension Benefit Plan
(including any Multiemployer Plan); (b) Employee Welfare Benefit Plan; and
(c) any other employee benefit plan, program or arrangement that is
maintained, sponsored, contributed or required to be contributed to by either
Company or with respect to which either Company has any actual or potential
Liability.

 

(bb)                          “Employee
Pension Benefit Plan” shall have the meaning set forth in Section 3(2)
of ERISA.

 

(cc)                            “Employee
Welfare Benefit Plan” shall have the meaning set forth in Section 3(1)
of ERISA.

 

5

 

(dd)                          “Environmental
Law” shall mean any Legal Requirement (including, without limitation, all
common law) relating to or concerning pollution or the protection of the
environment, including those relating to emissions, discharges, releases or
threatened releases of Hazardous Substances into the environment and natural
resources (including ambient air, surface water, ground water or land), or
otherwise relating to the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of, or exposure
of persons to, Hazardous Substances, including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. §§ 9601 et seq.) (“CERCLA”); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. §§ 2601 et seq.); the Clean Air Act (42
U.S.C. §§ 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C. §§ 1251 et seq.); the Safe Drinking Water Act (42 U.S.C. §§ 300(f)
et seq.); the Wildlife Act of 1999 (12 L.P.R.A. §§ 107 et seq.); the Act
to Protect the Purity of Drinking Water of Puerto Rico (12 L.P.R.A. §§ 405
et seq.); the Law of Waters of 1903 (12 L.P.R.A. §§ 501 et seq.); the Law
of Waters of 1976 (12 L.P.R.A. §§ 1115 et seq.); the Puerto Rico Public
Policy Environmental Act (12 L.P.R.A. §§ 1121 et seq.); and the
Environmental Emergencies Fund Act (12 L.P.R.A. §§ 1271 et seq.), each as
from time to time amended, and any and all regulations promulgated thereunder,
and all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.

 

(ee)                            “Equivalent
Subscriber” shall mean, as of any date of determination, the sum of (1) the
number of first outlet residential customers of the Systems who subscribe for
basic CATV or high-speed data service only at the normal applicable monthly
rate (or at a discount rate resulting from the discounts and promotions set
forth on Schedule 1.1(ee) or other discounts or promotions in the
ordinary course of business and not materially different from those set forth
on Schedule 1.1(ee)) for basic CATV or high-speed data service then
in effect in the relevant System (except as provided below), and whose accounts
(other than amounts (including Non-Recurring Charges, disputed amounts and
other amounts) collectively not in excess of $10.00) are not outstanding more
than eighty-nine (89) days from the original invoice date; plus (2) the
result obtained by dividing (a) the aggregate of the gross monthly
billings during the most recent one-month billing period prior to the date of
calculation for basic and expanded basic CATV service (but excluding (i) billings
in excess of a single month’s charge and (ii) billings for a la carte
tiers or premium services, installation or other Non-Recurring Charges,
converter rental or new product tiers, any outlet or connection other than such
customer’s first, or from any pass through charges for sales taxes, line-itemized
franchise fees, fees charged by the FCC and the like) from non-standard bulk
billed and commercial subscribers who subscribe for basic CATV service whose
accounts (other than amounts (including Non-Recurring Charges, disputed amounts
and other amounts) collectively not in excess of $10.00) are not outstanding
more than eighty-nine (89) days from the original invoice date, by (b) the
Franchise Area prevailing monthly service charge in effect during such period
for a first outlet residential connection for basic and expanded basic CATV
service (but excluding billings for a la carte tiers or premium services,
installation or other Non-Recurring Charges, converter rental or new product
tiers, any outlet or connection other than such customer’s first, or from any
pass through charges for sales taxes, line-itemized franchise fees, fees
charged by the FCC and the like); provided, that for purposes of this
Agreement, a subscriber does not include (i) any person, commercial
establishment or multi-unit dwelling that has requested that basic CATV or, in
the case of high

 

6

 

speed data
only subscribers, high-speed data service be terminated (other than any person
requesting such termination who has re-located within the area covered by the
Franchises and has requested CATV or high-speed data service in the new
location) and (ii) any Promotional Subscriber in excess of 13,000
Promotional Subscribers.  An example of
how Equivalent Subscribers would have been calculated if the Closing had been
held on March 31, 2005 is attached as Exhibit I.  A “Promotional Subscriber” is either
(i) a residential subscriber who pays less than the normal applicable
monthly rate for a first outlet residential connection for basic CATV service
or (ii) a residential subscriber who subscribes only for high-speed data
and who pays less than the normal applicable monthly rate for high-speed data
service.

 

(ff)                                “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

(gg)                          “ERISA
Affiliate” shall mean any entity treated as a single employer with the
Companies for purposes of Section 414 of the Code.

 

(hh)                          “Escrow
Agent” shall mean the Escrow Agent under the Escrow Agreement.

 

(ii)                                  “Escrow
Agreement” shall mean an escrow agreement in form and substance reasonably
acceptable to the Buyer and the Sellers and consistent with the terms of this
Agreement among the Escrow Agent, the Sellers and the Buyer to be dated as of
the Closing Date, pursuant to which funds shall be deposited into the Indemnity
Escrow Account and, to the extent necessary hereunder, the Rebuild Escrow
Account as set forth in this Agreement. 
The Escrow Agreement shall provide that on June 30, 2006 an amount
equal to $12,500,000 (less any claims previously asserted by the Buyer and paid
to the Buyer or then pending) shall be released, any amount held past June 30,
2006 pending resolution of a claim previously asserted by the Buyer shall be
released upon resolution of that claim (except to the extent payable to the
Buyer), and the remainder shall be released on December 31, 2006 (less any
then pending claims asserted by the Buyer).

 

(jj)                                  “Excluded
Liabilities” shall mean: (i) all Liabilities of the Companies in
connection with the Chapter 11 Case including, without limitation, any cure
amounts associated with the assumption of the Assumed Executory Contracts, but
excluding any rejection damage claims relating to executory contracts that the
Buyer has requested be rejected by the Cable Venture; (ii) all Affiliate
Liabilities; (iii) all Liabilities of the Companies to Highland Holdings,
any member of the Rigas family or their respective Affiliates (including,
without limitation, claims arising out of or in respect of the Leveraged
Recapitalization Agreement); (iv) all Liabilities of the Companies arising
from or relating to any matter set forth on Schedule 1.1(jj);
(v) all Liabilities of the Companies with respect to management retention,
change of control or sale bonuses, accelerated incentive obligations or severance
payments, if any, to the extent such Liabilities arise as a result of the
Transactions and are not reflected as a Closing Date Current Liability; (vi) all
Liabilities which arise, whether before, on or after the Closing, out of or in
connection with the Transferred Assets (other than any costs incurred by the
Buyer or the Companies in replacing any Transferred Assets), including any Tax
liability with respect to the transfer of the Transferred Assets or any Liabilities
under Environmental Laws with respect to the Transferred Assets; (vii) all
Rebuild Cost Overruns (but only if the Buyer has not elected to

 

7

 

accept a
reduction of the Purchase Price in respect of the Rebuild of the San Juan
System pursuant to Section 3.2(b)(ii)); (viii) all Liabilities
(including any contractual or statutory severance payments or benefits) arising
from the discharge of any employees working exclusively on the Rebuild of the
San Juan System upon the Completion of the Rebuild of the San Juan System (but
only if the Buyer has not elected to accept a reduction of the Purchase Price
in respect of the Rebuild of the San Juan System pursuant to Section 3.2(b)(ii));
(ix) all Liabilities of the Companies arising under ERISA to the extent
that such Liabilities (a) arise (1) under an Employee Benefit Plan
covering both employees of the Companies and employees of a member of the
Seller Group or (2) as a result of either of the Companies’ being an ERISA
Affiliate of any other member of the Seller Group or (b) arise from or
relate to pre-Closing actions or inactions of the Sellers, their Affiliates, or
the Companies, including, without limitation, the costs of any corrective
actions taken post-Closing, and regardless of whether such costs and
liabilities relate to items that have been listed on the Schedules attached
hereto; (x) all Liabilities for amounts payable or allowed to
professionals retained by the Sellers or the Companies in respect of the
Chapter 11 Case or the bankruptcy of Century (whether pursuant to sections 327
or 105 of the Bankruptcy Code or otherwise); and (xi) all withholding tax
payable with respect to pre-petition programming payment obligations of the
Companies.

 

(kk)                            “FAA”
shall mean the Federal Aviation Administration.

 

(ll)                                  “FCC”
shall mean the Federal Communications Commission.

 

(mm)                      “Final
Order” shall mean an Order with respect to the subject matter (a) that
has not been reversed, stayed, modified, or amended and as to which (i) any
right to appeal or to seek certiorari, review, reargument, stay, or rehearing
has been waived or (ii) the time to appeal or to seek certiorari, review,
reargument, stay or rehearing has expired and no appeal or petition for
certiorari, review, reargument, stay, or rehearing is pending, or (b) as
to which an appeal has been taken or petition for certiorari, review,
reargument, stay, or rehearing has been filed and (i) such appeal or
petition for certiorari, review, reargument, stay, or rehearing has been
resolved by the highest court to which the order or judgment was appealed or
from which certiorari, review, reargument, stay, or rehearing was sought or
(ii) the time to appeal further or seek certiorari, further review,
reargument, stay, or rehearing has expired and no such further appeal or
petition for certiorari, further review, reargument, stay, or rehearing is
pending, provided, however, that the possibility that a motion
under Rule 59 or 60 of the Federal Rules of Civil Procedure or an analogous
rule under the Federal Rules of Bankruptcy Procedure may be filed shall not
cause such order not to be a Final Order.

 

(nn)                          “Franchise”
shall mean all franchise agreements and similar governing agreements,
instruments and resolutions and franchise related statutes and ordinances or
written acknowledgements of a Governmental Authority authorizing the
construction, upgrade, maintenance and operation of any part of the Systems and
provision of cable television, data services and communication and information
services in San Juan, Puerto Rico and the municipalities comprised within the
San Juan System and in Levittown and the municipalities comprised within the
Levittown System.

 

8

 

(oo)                          “Franchise
Area” shall mean, with respect to a Franchise, the geographic area in which
the Cable Venture or Cable Corp. is authorized to operate any part of a System
pursuant to such Franchise.

 

(pp)                          “Franchising
Authority” shall mean, with respect to a Franchise, the Governmental
Authority granting such Franchise.

 

(qq)                          “FTC”
shall mean the Federal Trade Commission.

 

(rr)                                “Funded
Debt” of the Companies shall mean, without duplication, all obligations
under indebtedness for borrowed money (including, without limitation,
principal, interest, overdrafts, penalties, premiums, fees, expenses,
indemnities and breakage costs), all obligations under leases required to be
capitalized under GAAP, notes payable, guaranties, drafts accepted representing
extensions of credit.

 

(ss)                            “GAAP”
shall mean generally accepted accounting principles as in effect from time to
time in the United States of America.

 

(tt)                                “Governmental
Authority” shall mean the government of the United States of America and
the Commonwealth, any state, commonwealth, territory or possession thereof and
any political subdivision or quasi-governmental authority of any of the same,
including, but not limited to, courts, tribunals, departments, commissions,
bureaus, agencies, boards, counties, municipalities, provinces, parishes and
other instrumentalities.

 

(uu)                          “Governmental
Authorizations” shall mean, collectively, all Franchises and other
authorizations, agreements, Licenses, permits, approvals, easements,
registrations, qualifications, leases, variances and similar rights for and
with respect to the installation, construction, ownership or operation of the
Systems obtained from any Governmental Authority or pursuant to any Legal
Requirements.

 

(vv)                          “Hazardous
Substance” shall mean any hazardous material, pollutant, contaminant,
waste, toxic substance, hazardous substance or nuisance substance which is
regulated by or forms the basis of liability now or hereafter under any
Environmental Laws, including without limitation, (i) petroleum or any
refined product or fraction or derivative thereof, (ii) asbestos,
(iii) polychlorinated biphenyls (PCBs) and (iv) radioactive
substances.

 

(ww)                      “HSR Act”
shall mean the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder as in effect from
time to time.

 

(xx)                              “Indemnified
Tax Liabilities” shall mean all Liabilities for Taxes of the Companies or
the Sellers for taxable periods ending on, or prior to, the day immediately
preceding the Closing Date and the portion of Liabilities for Taxes relating to
the Pre-Closing Tax Straddle Period as determined pursuant to Section 7.5(a)(ii),
other than Liabilities for Taxes to the extent accrued for on the Closing Date
Balance Sheet and included in Closing Date Current Liabilities.

 

9

 

(yy)                          “Intellectual
Property” shall mean trademarks, trade names, service marks, service names,
fictitious names, logos and Internet domain names, together with all goodwill,
registrations and applications related to the foregoing; patents and industrial
designs (including any continuations, divisionals, continuations-in-part,
renewals, reissues, and applications for any of the foregoing); copyrights
(including any registrations and applications for any of the foregoing);
computer software and related documentation; mask works and registrations and
applications for registrations thereof; trade secrets and confidential business
information (including research and development, know-how, data, databases,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals); and all other intellectual property and
proprietary rights.

 

(zz)                              “Inventory”
shall mean, without limitation, all amplifiers, active electronics, passive
electronics, processor/receivers, coaxial cable/fiber cable, connectors,
installation materials, parts, packaging materials and other accessories and
inventories related thereto which are held at, or are in transit from or to, or
located at any of the Companies’ facilities, which are used or held for use by
the Companies in the operation and maintenance of the Systems, determined in
accordance with GAAP; provided, however, that Inventory shall not
include Rebuild Inventory.

 

(aaa)                      “JV
Agreement” shall mean the Amended and Restated Management Agreement and Joint
Venture Agreement of Century/ML Cable Venture dated January 1, 1994.

 

(bbb)                   “Launch
Incentives” shall mean cash payments or other launch fee incentives
received by the Companies or their Affiliates in respect of programming
launches, or other changes in programming, by the Companies.

 

(ccc)                      “Leased
Real Property” shall mean all leasehold or subleasehold estates and other
rights to use or occupy any land, buildings, structures, improvements, fixtures
or other interest in real property held by the Companies other than (a) Owned
Real Property, (b) rights pursuant to Pole Attachment Agreements, and (c) rights
pursuant to easements, licenses and similar instruments.

 

(ddd)                   “Legal
Requirements” shall mean any statute, ordinance, code, law, rule,
regulation, permit or permit condition, administrative or judicial decree,
order or other requirement, standard or procedure enacted or adopted by any
Governmental Authority, including judicial decisions applying or interpreting
common law or statutory law.

 

(eee)                      “Leveraged
Recapitalization Agreement” shall mean the Leveraged Recapitalization
Agreement dated December 13, 2001, among Century, ML Media, the Cable
Venture, Adelphia and Highland Holdings.

 

(fff)                            “Liability”
shall mean any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due and
regardless of when or by whom asserted), including, without limitation, any
liability for Taxes.

 

(ggg)                   “Licenses”
shall mean any license, permit or other authorization (other than a Franchise)
issued by a Governmental Authority, including, but not limited to, the FCC,

 

10

 

used in the
construction, operation or maintenance of the Systems (including, but not
limited to, TV translator station licenses and microwave licenses (including,
but not limited to, Cable Television Relay Services “CARS” and Television
Receive Only “TVRO” earth station registrations)).

 

(hhh)                   “Lien”
shall mean any mortgage, lien (statutory or otherwise), security interest,
security agreement, conditional sale or other title retention agreement,
pledge, option, charge, assessment, restrictive agreement, restriction, encumbrance,
adverse interest, adverse claim, voting agreement, restriction on transfer or
any exception to or defect in title or other ownership interest.

 

(iii)                               [Intentionally
Omitted]

 

(jjj)                               “Management
Fee” shall mean, collectively, (i) the management fee payable to
Century pursuant to Section 7.3(b) of the JV Agreement and (ii) any
reimbursement to Century for out-of-pocket expenses incurred in connection with
its management of the Systems payable to Century pursuant to Section 7.3(c)
of the JV Agreement.

 

(kkk)                      “Material
Adverse Effect” shall mean a material adverse effect on the assets,
business, operations, condition (financial or otherwise) or results of
operations of the Cable Venture, Cable Corp. and the Systems taken as a whole; provided,
however, that a Material Adverse Effect shall not include any event,
change or effect relating to or caused by (i) the Transactions, (ii) a
general economic downturn or any other change in the Puerto Rican economy
generally, including, but not limited to, an increase in interest rates (provided
that such general economic downturn or change does not disproportionately
adversely affect the Companies or the Systems), or (iii) changes affecting
the CATV or communications industry generally (provided that such
changes do not disproportionately adversely affect the Companies or the
Systems); provided, however, for purposes of Section 9.1,
Material Adverse Effect shall not include any event, change, or effect relating
to or caused by acts of war or terrorism.

 

(lll)                               “Material
Consents” shall mean the Required Consents set forth on Part B of Schedule 4.2(b).

 

(mmm)             “Material Contract”
shall mean (i) the Pole Attachment Agreements, (ii) the Leases,
(iii) the Collective Bargaining Agreements, (iv) the IP Licenses and
(v) each other contract, agreement, lease, permit, license, fiber lease,
microwave agreement or commitment, whether written or oral, to which the Cable
Venture or Cable Corp. is a party and that is material to the operation of its
respective System (other than the Programming Agreements), including each
material underground conduit agreement, crossing agreement, retransmission
consent agreement and multiple dwelling, bulk billing or commercial service
agreement.

 

(nnn)                   “Multiemployer
Plan” shall have the meaning set forth in Section 3(37) of ERISA.

 

(ooo)                   “Non-Recurring
Charges” shall mean late charges, disconnect fees, amounts that are the
subject of a bona fide dispute and any other similar non-recurring charges.

 

11

 

(ppp)                   “Operating
Cash Flow” shall mean, for any 12-month period, an amount, calculated for
the Cable Venture and Cable Corp. on a consolidated basis in accordance with
GAAP (without duplication), equal to the consolidated net income of the Cable
Venture and Cable Corp., adjusted by:

 

(i)                                     excluding
(to the extent taken into account in calculating such consolidated net income,
and without duplication), (1) audit expenses with respect to any fiscal
year in excess of $102,000, (2) costs and expenses payable to non-Affiliate
third parties of the Chapter 11 Case including, but not limited to,
non-recurring third party professional expenses directly relating to the
bankruptcy or the reconstruction and restatement of the Companies’ books and
records (exclusive of financial statement audit expenses payable to
non-Affiliate third parties included in clause (1) above), (3) reorganization
expenses due to the bankruptcy, impairments, and write-offs of fixed assets and
intangible assets, (4) costs and expenses relating to the proposed sale of
the Acquired Interests, including negotiation, preparation and closing under
this Agreement and the Related Agreements and the Transactions and any
additional expenses payable to non-Affiliated third parties in connection with
the review by PWC of the Interim Financials in accordance with Section 7.17
or otherwise relating to the Buyer’s financing, and any retention bonuses
payable upon consummation of the Transactions (exclusive of financial statement
audit expenses payable to non-Affiliated third parties included in clause (1)
above), (5) the historical non-recurring amounts resulting from hurricanes
and other force majeure events, all as set forth specifically on Schedule 1.1(ppp)(1),
(6) the items set forth on Schedule 1.1(ppp)(2); or (7) other
items that are requested by Sellers to be included as adjustments (including,
without limitation, adjustments intended to “normalize” expenses that are paid
within a particular period but that reflect (in whole or in part) costs that
are attributable to past or future periods), but only as and to the extent such
amounts in this clause (7) are agreed to by the Buyer and are accepted as
Permitted Add-Backs by the lenders who are parties to the Commitment Letters
for debt financing (or such other lenders as may provide debt financing to the
Buyer); provided, that if after the date of this Agreement there is a
hurricane or other force majeure event that has a non-recurring effect on the
Systems, the Buyer shall accept as additional exclusions from the calculation
of Operating Cash Flow for the applicable period an amount equal to the lesser
of (x) the actual non-recurring amounts attributable to such hurricane or
other force majeure event that were deducted in calculating the consolidated
net income of the Companies in such period and (y) $500,000 (with any
amount over $500,000 being subject to the agreement of the Buyer and the
acceptance by the Buyer’s lenders, as contemplated by clause (6) above);

 

(ii)                                  adding
back (in each case to the extent deducted in calculating such consolidated net
income, and without duplication) (1) income tax expense, (2) interest
expense (whether paid or accrued), (3) depreciation and amortization
expense, (4) any accrual of expenses to the extent related to a period
other than such 12-month period, (5) the Management Fee (whether paid or
accrued) and (6) any loss on sale of assets;

 

(iii)                               subtracting
(in each case to the extent included in calculating such consolidated net
income, and without duplication) (1) interest income, (2) any gain on
sale of assets, (3) any accrual of revenue or income to the extent related
to a period other than such 12-month period and (4) any non-recurring
credits or reductions of expenses (including, without

 

12

 

limitation,
credits or reductions of expenses resulting from settlement or rejection of
obligations by the Bankruptcy Court);

 

(iv)                              adding
back any expenses to non-Affiliated third parties incurred in complying with
the covenants in Sections 7.15(a)(i) and (iv), (b)(i), (c)(i), (ii) and (iv)
and (d)(i); and

 

(v)                                 except
as otherwise provided in Section 7.22, adding back (i) any one-time
expenses incurred in converting the Companies to a Stand-Alone as required by Section 7.22,
(ii) any incremental expenses incurred in operating as a Stand-Alone
(measured by comparison to the ongoing expenses that were incurred for the
comparable service(s) replaced by the Stand-Alone service(s)), and
(iii) any expenses incurred in recording any lease pursuant to Section 7.24.

 

For purposes of calculating Operating Cash Flow, any increase or
decrease in expenses resulting from a change in the methods of determining the
Allocations or the products or services included within the Allocations from
that set forth on Schedule 9.6(a) shall be excluded.

 

An example of how Operating
Cash Flow would have been calculated if the Closing had
been held on December 31, 2004 is attached as Exhibit J.

 

(qqq)                   “Order”
shall mean an order or judgment of the Bankruptcy Court or other court of
competent jurisdiction.

 

(rrr)                            “Other
Material Contracts” shall mean Material Contracts other than (i) the
Pole Attachment Agreements, (ii) the Leases, (iii) the Collective
Bargaining Agreements and (iv) the IP Licenses.

 

(sss)                      “Owned
Real Property” shall mean all land, together with all buildings,
structures, improvements and fixtures located thereon, and all easements and
other rights and interests appurtenant thereto owned by the Companies (other
than any interests in real property granted or created under the Pole
Attachment Agreements).

 

(ttt)                            “Parent”
shall mean San Juan Cable Holdings LLC, a limited liability company organized
under the laws of Puerto Rico, and “Investors” shall mean, collectively, (i) MidOcean
Partners, LP, (ii) MidOcean Partners II, LP, (iii) Crestview Capital
Partners, LP, (iv) AlpInvest Partners CS Investments 2005 C.V., (v) AlpInvest
Partners Later Stage 

Co-Investments Custodian II B.V., (vi) AlpInvest Partners Later Stage
Co-Investments Custodian IIA B.V. and (vii) The Northwestern Mutual Life
Insurance Company.

 

(uuu)                   “Permitted
Add-Back” shall mean any amount that the lenders who are parties to the
Commitment Letters for debt financing (or such other lenders as may provide
debt financing to the Buyer) allow to be counted as an add-back to or an
exclusion from the calculation of EBITDA (or any comparable metric used by the
lenders) that has the effect of increasing EBITDA, but only if, as a result of
such allowance, the lenders do not alter the terms or the pricing of the debt
financing in any manner that is adverse to the Buyer.

 

13

 

(vvv)                   “Permitted
Liens” shall mean the following: (i) statutory landlord’s liens and
liens for current Taxes, assessments and governmental charges not yet due and
payable (or being contested in good faith by appropriate proceedings for which
there is an adequate reserve determined in accordance with GAAP); (ii) zoning
and other land use laws, regulations and ordinances and similar Legal
Requirements regulating the construction, use or occupancy of Real Property
which are not violated by the current use or occupancy of such Real Property or
the operation of the business associated with the Systems thereon; (iii) as
to interests in real property, any easements, rights of way, servitudes,
permits, restrictions and minor imperfections or irregularities in title that
are reflected in the public records or that do not individually or in the
aggregate materially interfere with the right or ability to own, use, occupy,
lease or operate the real property as presently utilized or the right or
ability to construct, install, maintain, use or operate any part of the
Systems; (iv) Liens that will be released or terminated at or before the
Closing and (v) other Liens that do not, individually or in the aggregate,
materially interfere with Buyer’s right to own the interest in the property to
which they relate or operate the Systems.

 

(www)             “Person” shall
mean any natural person, corporation, partnership, trust, unincorporated
organization, association, limited liability company, Governmental Authority or
other entity.

 

(xxx)                         “PR
Tax Code” shall mean the Puerto Rico Internal Revenue Code of 1994, as
amended.

 

(yyy)                   “PR Treasury
Regulations” shall mean the regulations and pronouncements issued by the
Puerto Rico Department of the Treasury that interpret the provisions of the PR
Tax Code.

 

(zzz)                         “Previous
Month End” shall mean the last day of the month preceding the month in
which the Closing occurs.

 

(aaaa)                “Programming Agreements”
shall mean all satellite-delivered programming agreements and other agreements
under which the Systems obtain CATV and broadcast programming to which either
of the Companies, the Sellers or their respective Affiliates is a party.

 

(bbbb)            “Puerto Rico Board”
shall mean the Puerto Rico Telecommunications Regulatory Board.

 

(cccc)                “PWC” shall
mean PriceWaterhouseCoopers LLP.

 

(dddd)            “Real Property”
shall mean the Leased Real Property and the Owned Real Property.

 

(eeee)                “Rebuild
Inventory” shall mean stocks of parts, equipment and materials inventories
maintained by the Companies required for the purpose of completing the Rebuild
of the San Juan System, but shall not include any stocks in excess of the
amounts required to complete the Rebuild.

 

14

 

(ffff)                        “Rebuild
of the San Juan System” or “Rebuild” shall mean the rebuild and/or
upgrade of the portion of the San Juan System described in Schedule 1.1(w)
to achieve the specifications set forth on Schedule 1.1(w).

 

(gggg)            “Reference
Accounting Principles” shall mean the accounting principles, policies and
methodologies of the Companies, which are in accordance with GAAP, that were
employed in the preparation of the unaudited financial statements as of and for
the year ended December 31, 2003 (which are attached to this Agreement as Exhibit
F) and are reflected in the footnotes to such financial statements,
including without limitation the principles, policies and methodologies
employed with respect to Allocations and capitalization of labor, as modified
by Schedule 1.1(gggg); provided, however, that if (i) the
accounting principles used in preparing the 2004 Audited Financials differ from
the Reference Accounting Principles and (ii) the Buyer has consented to any
such differences, the term “Reference Accounting Principles” with respect to
the 2004 Audited Financials and the interim financials for 2005 and for
purposes of Section 3.4 shall be deemed to incorporate any such changes
accepted by the Buyer.

 

(hhhh)            “Regulatory Law”
shall mean the HSR Act, the Federal Trade Commission Act, as amended, the
Communications Act of 1934, as amended, the Puerto Rico Telecommunications Act
of 1996, as amended, and all other Legal Requirements that are designed or
intended to (x) prohibit, restrict or regulate actions having the purpose
or effect of monopolization or restraint of trade or lessening of competition
through merger or acquisition or (y) regulate the provision of cable
television, telecommunications or other services by the Companies.

 

(iiii)                            “Related
Agreement” shall mean each of (i) the Transition Services Agreement, (ii) the
Escrow Agreement, (iii) the Investor Guaranty, (iv) the Expense Reimbursement Letter
dated April 29, 2005 by and among MidOcean Partners, L.P., the Sellers and
the Companies and (v) any other written agreement or certificate, other than
this Agreement, that is executed and delivered by the Buyer, the Sellers, the
Cable Venture or Cable Corp. pursuant to or contemporaneously with this
Agreement.

 

(jjjj)                            “Required
Consent” shall mean any approval, consent, authorization or act of, or any
declaration, notice, filing, application, registration or other action with or
to, any Governmental Authority or other Person under any Governmental
Authorization, Material Contract, agreement or other instrument or otherwise
that is necessary to be obtained in connection with the consummation or
effectiveness of the Transactions in accordance with the terms of this
Agreement and the Related Agreements.

 

(kkkk)                “Restricted
Cash” shall mean (i) subscriber prepayments and deposits with respect
to services to be provided by the Companies and (ii) Launch Incentives
received by the Companies since January 1, 2005 to the extent that such
Launch Incentives relate to post-Closing programming obligations of the
Companies.

 

(llll)                            “Retained
Programming Agreements” shall mean the Programming Agreements set forth on Schedule 1.1(llll).

 

15

 

(mmmm)    “SEC” shall mean the
United States Securities and Exchange Commission.

 

(nnnn)            “Seller
Confidential Information” shall mean, collectively, the Seller Group
Confidential Information and the Company Confidential Information.

 

(oooo)            “Seller Group”
shall mean, collectively, (i) the Sellers, (ii) the Companies, and
(iii) their respective members, officers, directors, employees,
professional advisors, representatives and other agents.

 

(pppp)            “Seller Group
Confidential Information” shall mean all information relating to the
business and affairs of ML Media or Century or their respective Affiliates
other than information that is as of the date hereof or subsequently becomes
generally available to the public through no fault of, or breach of any
confidentiality obligation by, the Buyer or any of its Affiliates, agents or
representatives.

 

(qqqq)            “Seller Person”
shall mean any Seller or any Affiliate of any Seller.

 

(rrrr)                        “Subscriber
Accounts Receivable” shall mean accounts receivable of the Companies
resulting from the provision of cable television and/or data service (excluding
receivables from the sale of advertising and tower rental) prior to the Closing
Date.

 

(ssss)                “Termination
Date” shall mean December 31, 2005, except that if Sellers fail to
deliver the Audited Financials by August 31, 2005 or the Interim
Financials by September 15, 2005 to meet the conditions in Section 9.6
then Buyer may, by notice to the Sellers given by November 15, 2005,
extend the Termination Date to January 31, 2006.

 

(tttt)                        “Transactions”
shall mean, collectively, (i) the purchase of the Acquired Interests,
(ii) the merger immediately thereafter of Cable Corp. with and into the
Buyer, and (iii) the other transactions contemplated by this Agreement and
the Related Agreements.

 

(uuuu)            “Transition
Services Schedule of Services” shall mean those services to be
provided by Century to the Buyer after the Closing Date and the costs for those
services as set forth on Exhibit C pursuant to a transition services
agreement (the “Transition Services Agreement”) to be negotiated in good faith
by Century and the Buyer reflecting such services and costs.  Century shall only be required to provide the
transition services until the earlier of (a) June 30, 2006, or (b) the
closing of the sale of Adelphia.

 

(vvvv)            “Unpaid Cost to
Complete the Rebuild” shall mean the estimated unpaid cost to complete the
Rebuild of the San Juan System as of the Closing Date, as determined by the
Cable Venture in good faith based on costs previously incurred by the Cable
Venture in connection with the Rebuild of the San Juan System (with amounts
spent to purchase Rebuild Inventory and accounts payable or accrued expenses
relating to the Rebuild of the San Juan System included as Closing Date Current
Liabilities deemed for all purposes of this Agreement as amounts paid prior to
the Closing Date).

 

(wwww)    “Working Capital Target”
shall mean $0.

 

16

 

1.2                                 Additional Defined Terms.  The following terms are defined in the
respective Sections set forth below:

 

	
  Term

  	
   

  	
  Section

  
	
  1992 Act

  	
   

  	
  4.5(b)

  
	
  2005 Budget

  	
   

  	
  4.3(e)

  
	
  ACM

  	
   

  	
  7.15(a)(iv)

  
	
  Acquired Interests

  	
   

  	
  2.1

  
	
  Affiliate Liabilities

  	
   

  	
  7.19

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Allocation Schedule

  	
   

  	
  9.6(a)

  
	
  Allocations

  	
   

  	
  9.6(a)

  
	
  Alternate Agreements

  	
   

  	
  7.11(c)(ii)(C)

  
	
  Audited 2004 Financials

  	
   

  	
  9.6(c)

  
	
  Audited Financials

  	
   

  	
  4.3(c)

  
	
  Bankruptcy Code

  	
   

  	
  Recitals

  
	
  Bankruptcy Court

  	
   

  	
  Recitals

  
	
  Basket

  	
   

  	
  11.4(a)

  
	
  Board

  	
   

  	
  7.11(c)(ii)(A)

  
	
  Break-Up Fee

  	
   

  	
  7.11(c)(iv)(B)

  
	
  Buyer

  	
   

  	
  Recitals

  
	
  Cable Corp.

  	
   

  	
  Recitals

  
	
  Cable Venture

  	
   

  	
  Recitals

  
	
  Cash Purchase Price

  	
   

  	
  3.2 (a)

  
	
  CATV

  	
   

  	
  Recitals

  
	
  Century

  	
   

  	
  Recitals

  
	
  Chapter 11 Case

  	
   

  	
  Recitals

  
	
  Closing

  	
   

  	
  3.1

  
	
  Closing Date

  	
   

  	
  3.1

  
	
  Closing Date Balance Sheet

  	
   

  	
  3.4(b)(i)

  
	
  Collective Bargaining Agreement

  	
   

  	
  4.10(e)

  
	
  Commitment Letters

  	
   

  	
  6.4

  
	
  Communications Act

  	
   

  	
  4.5(b)

  
	
  Companies

  	
   

  	
  Recitals

  
	
  Company Intellectual Property

  	
   

  	
  4.17(c)

  
	
  Confirmation Order

  	
   

  	
  7.11(a)

  
	
  Copyright Act

  	
   

  	
  4.5(b)

  
	
  Debt Commitment Letter

  	
   

  	
  6.4

  
	
  Deferred Purchase Price

  	
   

  	
  3.2 (a)

  
	
  Disclosure Statement

  	
   

  	
  7.11(a)

  
	
  Draft 2004 Financials

  	
   

  	
  9.6(b)

  
	
  Estimated Adjustment Certificate

  	
   

  	
  3.4(a)

  
	
  Estimated Closing Date Balance Sheet

  	
   

  	
  3.4(a)

  
	
  Expense Reimbursement

  	
   

  	
  7.11(c)(iv)(A)

  
	
  Expense Reimbursement Agreement

  	
   

  	
  7.11(c)(iv)(A)

  
	
  Franchise Extensions

  	
   

  	
  7.4(b)

  
	
  Indemnitee

  	
   

  	
  11.3

  

 

17

 

	
  Term

  	
   

  	
  Section

  
	
  Indemnitor

  	
   

  	
  11.3

  
	
  Indemnity Escrow Account

  	
   

  	
  3.2(c)(i)

  
	
  Independent Accountant

  	
   

  	
  3.4(b)(ii)

  
	
  Independent Engineer

  	
   

  	
  7.13(d)

  
	
  Interim Financials

  	
   

  	
  4.3(c)

  
	
  Investor Guaranty

  	
   

  	
  3.2(e)

  
	
  Investors

  	
   

  	
  1.1(ttt)

  
	
  IP Licenses

  	
   

  	
  4.17(b)

  
	
  IRS

  	
   

  	
  4.10(j)

  
	
  Key Personnel

  	
   

  	
  7.6

  
	
  Leases

  	
   

  	
  4.8(b)

  
	
  Levittown System

  	
   

  	
  Recitals

  
	
  Losses

  	
   

  	
  11.2(a)

  
	
  Mark Owner

  	
   

  	
  7.8

  
	
  Matching Right

  	
   

  	
  7.11(c)(ii)(C)

  
	
  Maximum Permissible Reduction

  	
   

  	
  12.1(l)

  
	
  ML JV Interests

  	
   

  	
  7.20

  
	
  ML Media

  	
   

  	
  Recitals

  
	
  Non-Solicitation Period

  	
   

  	
  7.16

  
	
  Objection Notice

  	
   

  	
  3.4(b)(ii)

  
	
  Offering Documents

  	
   

  	
  7.17(c)

  
	
  Operating Cash Flow Statement

  	
   

  	
  3.4(b)(i)

  
	
  Plan

  	
   

  	
  Recitals

  
	
  Pole Attachment Agreement

  	
   

  	
  4.7

  
	
  Post-Closing Period

  	
   

  	
  4.12(e)

  
	
  Pre-Closing Period

  	
   

  	
  4.12(e)

  
	
  Pre-Closing Tax Straddle Period

  	
   

  	
  7.5(a)(ii)

  
	
  Puerto Rico Telecommunications Act

  	
   

  	
  4.5(b)

  
	
  Purchase Price

  	
   

  	
  3.2(a)

  
	
  Rebuild Cost Overrun

  	
   

  	
  7.13(e)

  
	
  Rebuild Employees

  	
   

  	
  4.10(m)

  
	
  Rebuild Escrow Account

  	
   

  	
  3.2(b)

  
	
  Rebuild Escrow Amount

  	
   

  	
  3.2(b)

  
	
  Rebuild Extension Date

  	
   

  	
  7.4(b)

  
	
  Remaining Unpaid Cost

  	
   

  	
  3.2(b)

  
	
  Retained Marks

  	
   

  	
  2.2(e)

  
	
  Revised Schedule 4.6(e)

  	
   

  	
  7.21

  
	
  S-1 Financial Statements7.17(b)

  	
   

  	
  7.17(b)

  
	
  San Juan System

  	
   

  	
  Recitals

  
	
  Securities Act

  	
   

  	
  7.17(b)

  
	
  Sellers

  	
   

  	
  Recitals

  
	
  Sellers’ Adjustment Certificate

  	
   

  	
  3.4(b)(i)

  
	
  Sellers Escrow Account

  	
   

  	
  3.2(c)(iii)

  
	
  Shortfall

  	
   

  	
  11.6

  
	
  Stand-Alone

  	
   

  	
  7.22

  

 

18

 

	
  Term

  	
   

  	
  Section

  
	
  Superior Proposal

  	
   

  	
  7.11(c)(ii)(A)

  
	
  Supplemental Interim Financials

  	
   

  	
  7.17(e)

  
	
  System

  	
   

  	
  Recitals

  
	
  Tax

  	
   

  	
  4.12(a)

  
	
  Tax Benefit

  	
   

  	
  11.4(c)

  
	
  Tax Return

  	
   

  	
  4.12(a)

  
	
  Taxing Authority

  	
   

  	
  4.12(a)

  
	
  Third-Party Claim11.3

  	
   

  	
  11.3

  
	
  Transferred Assets

  	
   

  	
  2.2(i)

  
	
  Transferred Programming Agreements

  	
   

  	
  2.2(a)

  
	
  Treasury Regulations

  	
   

  	
  4.12(a)

  
	
  Unaudited 2004 Financials

  	
   

  	
  4.3(a)

  
	
  Unaudited Financials

  	
   

  	
  4.3(a)

  
	
  Unaudited Historical Financials

  	
   

  	
  4.3(a)

  
	
  WARN Act

  	
   

  	
  4.3(h)(ix)

  

 

2.                                      PURCHASE AND SALE OF ACQUIRED
INTERESTS

 

2.1                                 Transfer
of Acquired Interests.  Subject to
the terms, provisions and conditions contained in this Agreement, on the
Closing Date, in consideration for payment by the Buyer of the Purchase Price
pursuant to Section 3.2, the Sellers shall sell to the Buyer, and the
Buyer shall purchase from the Sellers, all of the Sellers’ joint venture
interests in the Cable Venture (the “Acquired Interests”) pursuant to
the terms of the Plan and, as a result of such sale and purchase, the Cable
Venture shall, by operation of law, be liquidated into the Buyer.  Immediately thereafter, the Buyer shall cause
Cable Corp. to be merged with and into the Buyer, and the Buyer shall be the
surviving entity in such merger.

 

2.2                                 Transferred
Assets.  Notwithstanding anything in
this Agreement to the contrary, the Buyer expressly agrees and acknowledges
that, immediately following the merger of Cable Corp. with and into the Buyer, the
following rights and assets will be terminated or will be assumed and assigned
to Century or its designee (in the case of items (a), (b), (c), (e), (f) and
(i)), to ML Media (in the case of item (g)) and to the Sellers Escrow Account
(in all other cases) (or as Century and ML Media may otherwise agree in writing
or as otherwise provided in the Plan) and that neither the Buyer nor the
Companies otherwise will have any right, title or interest with respect to such
rights and assets from and after the Closing:

 

(a)                                  all
Programming Agreements other than the Retained Programming Agreements (collectively,
the “Transferred Programming Agreements”), all of which Transferred
Programming Agreements will be terminated with respect to the Systems on the
Closing Date;

 

(b)                                 except
as provided in Section 2.2(d), insurance policies, surety instruments and
bonds held by the Companies or in respect of any of the Companies’ assets, and
all rights and claims of the Companies thereunder, but only to the extent
indicated on Schedule 4.14;

 

19

 

(c)                                  except
as provided in Section 7.15(c)(iv), licenses for billing and customer
service software used by the Companies and any rights to receive billing
services or management services;

 

(d)                                 all
claims, rights and interests of the Companies in and to any refunds or credits
in respect of federal, state, Commonwealth or local Taxes to the extent such
refunds are for the account of the Sellers pursuant to Section 7.5(a)(iii)
and any refunds of fees for periods prior to and including the Closing Date,
including, without limitation, excise taxes and copyright fees and any refunds
of pre-paid insurance premiums or other pre-paid expenses relating to the
insurance policies transferred pursuant to Section 2.2(b);

 

(e)                                  the
trademarks, trade names, service marks, service names, fictitious names and
logos set forth on Schedule 2.2(e) (collectively, the “Retained
Marks”);

 

(f)                                    all
claims, rights and interests of the Cable Venture or Cable Corp. against ML
Media and its Affiliates;

 

(g)                                 all
claims, rights and interests of the Cable Venture or Cable Corp. against
Century and its Affiliates or against any member of the Rigas family or any of
their Affiliates (subject to a 50% interest in the net recovery received from
any member of the Rigas family or their Affiliates in favor of Century);

 

(h)                                 any
preference, fraudulent transfer and/or avoidance claims asserted by the Cable
Venture against any Affiliate (other than ML Media or Century) prior to the
Closing and pending as of the Closing Date; and

 

(i)                                     the
other rights and assets set forth on Schedule 2.2(i) (all of the
foregoing in clauses (a) through (i), collectively, the “Transferred Assets”).

 

2.3                                 Excluded
Liabilities.  Notwithstanding
anything in this Agreement to the contrary, the Sellers and the Companies
expressly agree and acknowledge that the Buyer shall have no liability for any
Excluded Liability, and that at the Closing all Excluded Liabilities shall be
assumed and assigned from the Cable Venture or Cable Corp., as the case may be,
to the Sellers or the Seller Escrow Account and the Buyer shall not thereafter
bear any obligation or liability of any kind with respect to such Excluded
Liabilities.

 

3.                                      CLOSING;
PURCHASE PRICE; ADJUSTMENTS

 

3.1                                 Closing
Date and Location.  The consummation
of the sale and delivery of the Acquired Interests to the Buyer and the receipt
of the consideration therefor by payment as provided in Section 3.2 shall
constitute the “Closing.”  Unless
otherwise agreed by the parties or if this Agreement shall be terminated
pursuant to the terms hereof, the Closing shall take place at 10:00 a.m., local
time, at the offices of Proskauer Rose LLP, 1585 Broadway, New York, New York
10036 and shall occur on the date that is three (3) Business Days following
satisfaction or waiver of all of the conditions to Closing set forth in
Sections 8, 9 and 10, other than those conditions which by their terms can only
be satisfied on the Closing Date; provided that if such third Business
Day shall fall on or after the 20th day of any month, then the Closing shall
occur on the last Business Day of such month. 
The date on which the Closing actually occurs shall

 

20

 

constitute the “Closing Date.” 
Notwithstanding the foregoing, this Agreement may be terminated pursuant
to Section 12.1(b) hereof if the Closing has not occurred by the
Termination Date.  The parties hereto
agree to use their respective commercially reasonable efforts to cause the
Closing to occur on or before October 31, 2005.

 

3.2                                 Purchase
Price; Payment of the Purchase Price.

 

(a)                                  The
purchase price for the Acquired Interests shall be the aggregate amount of Five
Hundred Twenty Million Dollars ($520,000,000) in cash (the “Purchase Price”),
subject to adjustment in accordance with Sections 3.3 and 3.4, plus the
transfer of the Transferred Assets pursuant to Section 2.2.  The Purchase Price payable in cash shall be
payable as follows:  $506,500,000 (the “Cash
Purchase Price”), subject to adjustment in accordance with Sections 3.3
and 3.4, shall be payable at the Closing as provided in Section 3.3(c),
and $13,500,000 (the “Deferred Purchase Price”) shall be payable as
provided in Section 3.3(d).

 

(b)                                 On
the Closing Date, if the Completion of the Rebuild of the San Juan System has
not occurred (as finally determined pursuant to Section 7.13(d)), the
Companies shall, at the Buyer’s option, either (i) deposit in cash, by
wire transfer of immediately available funds, an amount equal to the Unpaid
Cost to Complete the Rebuild to the Escrow Agent, to be held in a separate
interest bearing rebuild escrow account (the “Rebuild Escrow Account”)
pursuant to the Escrow Agreement, which funds (the “Rebuild Escrow Amount”)
shall be applied to pay any remaining costs to complete the Rebuild of the San
Juan System in accordance with Section 7.13, or (ii) pay that amount,
in cash, by wire transfer of immediately available funds, to the Buyer as a
reduction of the Purchase Price, in which case the Sellers shall no have no
further obligations with respect to the Rebuild pursuant to Section 7.13
or otherwise. If (x) the Buyer elects to cause the Companies to deposit an
amount equal to the Unpaid Cost to Complete the Rebuild in the Rebuild Escrow
Account and (y) the Companies have insufficient cash on the Closing Date
to make such deposit, then the Buyer shall remedy any such deficiency (the “Remaining
Unpaid Cost”) by depositing an amount equal to the Remaining Unpaid Cost in
the Rebuild Escrow Account and reducing the amount payable to the Sellers at
the Closing pursuant to Section 3.2(c)(ii) by an equal amount.

 

(c)                                  On
the Closing Date, the Buyer shall pay, by wire transfers of immediately
available funds, an aggregate amount equal to the Cash Purchase Price, as
preliminarily adjusted in accordance with Sections 3.3 and 3.4(a), as follows:

 

(i)                                     The
Buyer shall deliver or cause to be delivered to the Escrow Agent an amount
equal to $25,000,000, to be held by the Escrow Agent in a separate interest
bearing account (the “Indemnity Escrow Account”) pursuant to the Escrow
Agreement, which funds (together with interest thereon) shall be paid in whole
or in part in accordance with the terms of the Escrow Agreement to (1) the
Buyer if and to the extent it is determined that the Buyer is entitled to
indemnification payments under Section 11.2(b) of this Agreement (other
than pursuant to Section 11.2(b)(v) except as permitted by Section 11.5),
or (2) the Sellers Escrow Account (as defined below) (or in accordance
with any other written instructions given by both of the Sellers to Buyer and
the Escrow Agent prior to the payment) to the extent the Buyer is not
determined to be entitled to any such payments referred to in clause (1).

 

21

 

(ii)                                  The
Buyer shall deliver or cause to be delivered to a separate interest bearing
escrow account for the benefit of the Sellers (the “Sellers Escrow Account”)
or in accordance with any other written instructions jointly given by the
Sellers to the Buyer prior to the Closing, the remainder of the Cash Purchase
Price (or $481,500,000), subject to reduction as provided in Section 3.2(b)
and this Section 3.2(c)(ii).  Immediately
following the Closing, the Buyer shall wire to the Sellers Escrow Account (or
in accordance with such instructions) the amount by which the Purchase Price is
increased pursuant to the preliminary adjustments to the Purchase Price
contained in Section 3.3, Section 3.4(a) and (if applicable) Section 7.13(d)
and the Buyer shall transfer and assign the Transferred Assets as provided in Section 2.2.  If the Purchase Price is decreased pursuant
to such adjustments, the payment by the Buyer at the Closing to the Sellers
Escrow Account (or in accordance with such instructions) shall be reduced by
the amount of the adjustments.  Release
of funds from the Sellers Escrow Account may only be made as provided by (x)
written agreement of both Century and ML Media, or (y) Order of the
Bankruptcy Court.  The Buyer Group shall
have no right to limit distributions from the Sellers Escrow Account.

 

(d)                                 The
Buyer shall pay the Deferred Purchase Price, together with interest on the
unpaid portion of the Deferred Purchase Price at the rate of 3.5% per year, as
follows:

 

(i)                                     the
amount set forth opposite each item listed on Schedule 3.2(d)(i)  (pertaining to Certificates of Debt) shall be
paid to the Sellers when that item is fully paid or settled, provided that the
Sellers shall provide evidence satisfactory to the Buyer for such payment or
settlement, including receipts, confirmation letter of similar documents issued
by the respective Taxing Authority.

 

(ii)                                  the
amount set forth on Schedule 3.2(d)(ii) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the completion of the pending tax examination by the Puerto Rico Treasury
Department with respect to the taxable year ended December 31, 2000 and
the receipt of written documentation from such Treasury Department providing
that the examination with respect to the taxable year in question is closed, or
(B) the expiration of the Puerto Rico four-year tax statute of limitations with
respect to the taxable year ended December 31, 2000.  Notwithstanding the foregoing, the payment shall
be reduced in amount by the total of then outstanding (or previously paid)
claims asserted by the Buyer under the procedures set forth in Section 11.3(g)
of this Agreement for indemnification payments with respect to any taxable year
or period under Section 11.2(b)(v) of this Agreement (pertaining to any
Indemnified Tax Liability).  The amount
set forth on Schedule 3.2(d)(ii) (or any lesser amount, to the extent reduced
as described in this Section 3.2(d)(ii)) shall be then paid to the Sellers.

 

(iii)                               the
amount set forth on Schedule 3.2(d)(iii) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the completion of the pending tax examination by the Puerto Rico Treasury
Department with respect to the taxable year ended December 31, 2001 and
the receipt of written documentation from such Treasury Department providing
that the examination with respect to the taxable year in question is closed, and
(B) the expiration of the Puerto Rico four-year tax statute of limitations with
respect to the taxable year ended December 31, 2001.  Notwithstanding the foregoing, the payment
shall be reduced in amount by the total of then outstanding (or previously
paid) claims

 

22

 

asserted by
the Buyer under the procedures set forth in Section 11.3(g) of this
Agreement for indemnification payments with respect to any taxable year or
period under Section 11.2(b)(v) of this Agreement (pertaining to any
Indemnified Tax Liability).  The amount
set forth on Schedule 3.2(d)(iii) (or any lesser amount, to the extent
reduced as described in this Section 3.2(d)(iii)) shall be then paid to
the Sellers.

 

(iv)                              the
amount set forth on Schedule 3.2(d)(iv) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the completion of the pending tax examination by the Puerto Rico Department of
Treasury with respect to the taxable year ended December 31, 2002 and the
receipt of written documentation from such Treasury Department providing that
the examination with respect to the taxable year in question is closed, and (B)
the expiration of the Puerto Rico four-year tax statute of limitations with
respect to the taxable year ended December 31, 2002.  Notwithstanding the foregoing, the payment
shall be reduced in amount by the total of then outstanding (or previously
paid) claims asserted by the Buyer under the procedures set forth in Section 11.3(g)
of this Agreement for indemnification payments with respect to any taxable year
or period under Section 11.2(b)(v) of this Agreement (pertaining to any
Indemnified Tax Liability).  The amount
set forth on Schedule 3.2(d)(iv) (or any lesser amount, to the extent reduced
as described in this Section 3.2(d)(iv)) shall be then paid to the Sellers.

 

(v)                                 the
amount set forth on Schedule 3.2(d)(v) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the commencement and completion of a Puerto Rico tax examination with respect
to the taxable year ended December 31, 2003 and the receipt of written
documentation from such Treasury Department providing that the examination with
respect to the taxable year in question is closed, and (B) the expiration of
the Puerto Rico four-year tax statute of limitations with respect to that
taxable year.  Notwithstanding the foregoing,
the payment shall be reduced in amount by the total of then outstanding (or
previously paid) claims asserted by the Buyer under the procedures set forth in
Section 11.3(g) of this Agreement for indemnification payments with
respect to any taxable year or period under Section 11.2(b)(v) of this
Agreement (pertaining to any Indemnified Tax Liability).  The amount set forth on Schedule 3.2(d)(v)
(or any lesser amount, to the extent reduced as described in this Section 3.2(d)(v))
shall be then paid to the Sellers.

 

(vi)                              the
amount set forth on Schedule 3.2(d)(vi) (subject to possible reduction as
set forth below) shall be paid within 10 Business Days after the earlier of (A)
the commencement and completion of a Puerto Rico tax examination with respect
to the taxable year ended December 31, 2004 and the receipt of written
documentation from such Treasury Department providing that the examination with
respect to the taxable year in question is closed, and (B) the expiration of
the Puerto Rico four-year tax statute of limitations with respect to that
taxable year.  Notwithstanding the
foregoing, the payment shall be reduced in amount by the total of then
outstanding (or previously paid) claims asserted by the Buyer under the
procedures set forth in Section 11.3(g) of this Agreement for
indemnification payments with respect to any taxable year or period under Section 11.2(b)(v)
of this Agreement (pertaining to any Indemnified Tax Liability).  The amount set forth on Schedule 3.2(d)(vi)
(or any lesser amount, to the extent reduced as described in this Section 3.2(d)(vi))
shall be then paid to the Sellers.

 

23

 

(vii)                           the
amount set forth on Schedule 3.2(d)(vii) shall be paid to the Sellers in
installments as set forth on Schedule 3.2(d)(vii) within 10 Business Days
after the earlier of (A) the commencement and completion of a tax examination
by the IRS for the specified year, or (B) the expiration of the U.S. three-year
statute of limitations for the specified year. 
Notwithstanding the foregoing, the payment shall be reduced in amount if
and to the extent that the U.S. Internal Revenue Service asserts a claim or
proposed adjustment in Taxes owed in connection with such tax examination for
the year in question, and such claim or proposed adjustment shall then be
subject to the procedures set forth in Section 11.3(g) of this Agreement.

 

(viii)                        any and
all amounts by which the above payments in Section 3.2(d)(ii)-(vii)
(pertaining to years ended on or before December 31, 2004) have been
reduced shall be paid (i) to the Buyer, as indemnity payments for the tax
losses suffered by the Buyer, only after a final determination of a claim
asserted by a Taxing Authority (as provided in Section 11.3(g) of this
Agreement) or agreement between the Buyer and the Sellers, subject to the
principles and procedures set forth in Section 11 of this Agreement, or
(ii) to the Sellers, if and to the extent there is a final determination of a
claim asserted by the Taxing Authority favorable to the taxpayer, upon the
expiration of the applicable statute of limitations, or upon agreement between
the Buyer and the Sellers.

 

(e)                                  The
Deferred Purchase Price shall be guaranteed by the Investors pursuant to a
Guaranty in the form of Exhibit K (the “Investor Guaranty”).

 

(f)                                    Each
payment of the Deferred Purchase Price shall be made together with accrued
interest on the amount paid.

 

3.3                                 Purchase
Price Adjustments.

 

(a)                                  The
Purchase Price shall be (i) increased on a dollar-for-dollar basis by the
amount that the Closing Date Working Capital exceeds the Working Capital Target
or decreased on a dollar-for-dollar basis by the amount that the Closing Date
Working Capital is less than the Working Capital Target, (ii) decreased on
a dollar-for-dollar basis by the amount of any outstanding Funded Debt (to the
extent such Funded Debt is not included as a Closing Date Current Liability or
discharged under the Plan) and (iii) reduced pursuant to Section 7.15(e)
(if applicable).

 

(b)                                 Except
as provided in Section 3.3(d), and subject to the Sellers’ termination
right in Section 12.1(l), if the number of Equivalent Subscribers as of
the Closing Date is less than the Subscriber Target as set forth below, then
the Purchase Price shall be reduced by an amount equal to the Per Subscriber
Price as set forth below multiplied by the shortfall.

 

24

 

	
  Closing
  Date

  	
   

  	
  Subscriber

  Target

  	
   

  	
  Per Subscriber

  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  On or before September 30, 2005

  	
   

  	
  136,797

  	
   

  	
  $

  	
  3,801

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From October 1, 2005 to and including
  October 31, 2005

  	
   

  	
  136,947

  	
   

  	
  3,797

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From November 1, 2005 to and including
  November 30, 2005

  	
   

  	
  137,097

  	
   

  	
  3,793

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From and after December 1, 2005

  	
   

  	
  137,247

  	
   

  	
  3,789

  	
   

  
							

 

(c)                                  Except
as provided in Section 3.3(d), and subject to the Sellers’ termination
right in Section 12.1(l), if the Operating Cash Flow for the 12-month
period ending on the Calculation Date is less than the Operating Cash Flow
Target as set forth below, then the Purchase Price shall be reduced by an amount
equal to the product of the Multiple as set forth below and the shortfall:

 

	
  Closing
  Date

  	
   

  	
  Operating Cash

  Flow Target

  	
   

  	
  Multiple

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  On or before August 31, 2005

  	
   

  	
  $

  	
  52,000,000

  	
   

  	
  10.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From September 1, 2005 to and
  including October 31, 2005

  	
   

  	
  $

  	
  52,500,000

  	
   

  	
  9.90

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From November 1, 2005 to and including
  November 30, 2005

  	
   

  	
  $

  	
  52,750,000

  	
   

  	
  9.86

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  From and after November 30, 2005

  	
   

  	
  $

  	
  53,000,000

  	
   

  	
  9.81

  	
   

  

 

Notwithstanding
the foregoing, if all of the conditions to Closing set forth in
Sections 8, 9 and 10, other than Section 9.9 and other than those
conditions which by their terms can only be satisfied on the Closing Date, have
been satisfied by October 26, 2005, the Operating Cash Flow Target shall
not increase on or after November 1, 2005.

 

(d)                                 Notwithstanding
anything to the contrary in Section 3.3(b) or Section 3.3(c), if
there otherwise would be reductions in the Purchase Price pursuant to both Section 3.3(b)
and Section 3.3(c), then the Purchase Price shall be reduced only by the
greater of the reduction pursuant to Section 3.3(b) and the reduction
pursuant to Section 3.3(c).

 

25

 

3.4                                 Determination
of Purchase Price Adjustments

 

(a)                                  Closing
Date Estimated Adjustments.  In order
to adjust the Purchase Price payable at the Closing on a preliminary basis
(subject to the final adjustments to be made pursuant to Section 3.4(b))
to reflect the Purchase Price adjustments set forth in Section 3.3, at
least five (5) Business Days prior to the Closing Date, the Cable Venture shall
deliver to the Buyer a certificate setting forth in reasonable detail the Cable
Venture’s good faith estimates of the adjustments pursuant to Section 3.3
as well as of the Unpaid Cost to Complete the Rebuild (if any), including
(i) the estimated Closing Date Working Capital, (ii) the estimated
outstanding Funded Debt (if any) as of the Closing Date, (iii) the
estimated number of Equivalent Subscribers as of the Calculation Date (and, if
the Calculation Date is not the Closing Date, the estimated number of
Equivalent Subscribers as of the Closing Date) and (iv) the Operating Cash
Flow for the 12-month period ending on the Previous Month End (the “Estimated
Adjustment Certificate”), together with an estimated Closing Date balance
sheet (the “Estimated Closing Date Balance Sheet”) and supporting
documentation in reasonable detail.  The
Estimated Adjustment Certificate shall be prepared from the Companies’ books
and records in accordance with GAAP, consistently applied with and subject to
the accounting principles set forth in Section 3.4(d), except as otherwise
expressly provided herein, and shall reflect the good faith, reasonable
estimates of the Companies and the Sellers and shall be accompanied by a
certificate of the Companies specifying that all actual and estimated amounts
comply and were prepared in accordance with the terms of Sections 3.3 and 3.4
and, to the Companies’ Knowledge, are true and complete in all material
respects.  If the Buyer disagrees with
the Cable Venture’s estimate of any of the adjustments to the Purchase Price or
with the Cable Venture’s estimate of the Unpaid Cost to Complete the Rebuild,
the Buyer and the Cable Venture shall endeavor in good faith to agree on the
amount thereof prior to the Closing.  If
the Buyer and the Cable Venture are unable to agree on the adjustments to the
Purchase Price or the Unpaid Cost to Complete the Rebuild, the Purchase Price
payable at the Closing shall reflect, in the case of each disputed amount, 50%
of the difference between the Cable Venture’s estimate of such disputed amount
and the Buyer’s good faith estimate thereof (in each case reflecting any
changes to original estimates that have been agreed to by the parties during
their attempts to resolve all differences), and the remaining 50% shall be
deposited into a separate account pursuant to the Escrow Agreement; provided,
however, that the foregoing shall not affect any dispute between the
Buyer and the Sellers concerning the satisfaction of a closing condition set
forth in Section 9.  The Estimated
Adjustment Certificate shall be amended to reflect any such compromises.

 

(b)                                 Post-Closing
Determination of Adjustments.

 

(i)                                     The
Sellers shall deliver to the Buyer, not later than ninety (90) days following
the Closing Date, a certificate setting forth a good faith determination of the
adjustments to the Purchase Price (the “Sellers’ Adjustment Certificate”),
together with a consolidated balance sheet of the Companies as of the day
preceding the Closing Date (the “Closing Date Balance Sheet”) and a
statement of Operating Cash Flow for the 12-month period ending on the
Calculation Date (the “Operating Cash Flow Statement”) and such other
supporting documentation in reasonable detail as the Buyer may request.  The Sellers’ Adjustment Certificate, the
Closing Date Balance Sheet and the Operating Cash Flow Statement shall be
prepared from the Companies’ books and records in accordance with and subject
to the accounting principles set forth in Section 3.4(d).

 

26

 

(ii)                                  If
the Buyer disagrees with the Sellers’ calculation of the adjustments to the
Purchase Price, the Buyer shall promptly, but in no event later than sixty (60)
days following receipt of the Sellers’ Adjustment Certificate, deliver to the
Sellers written notice (the “Objection Notice”) describing in reasonable
detail its dispute by specifying those items or amounts as to which it
disagrees, together with its determination of such disputed amounts; provided,
that the Buyer shall be deemed to have agreed with all items and amounts that
are not disputed.  If the dispute is not
resolved by the parties within thirty (30) days following the date of the
Sellers’ receipt of the Objection Notice, the parties shall engage an
independent accounting firm reasonably acceptable to the Buyer and the Sellers
(the “Independent Accountant”), which shall resolve the dispute within
thirty (30) days following such engagement. 
The Independent Accountant shall act as an expert and not as an
arbitrator to determine, based solely on the written submissions of the
Sellers, on the one hand, and the Buyer, on the other hand, and not by
independent investigation, only the specific items under dispute by the
parties.  The Independent Accountant shall
render a written report as to the resolution of the dispute and the resulting
computations.  The Independent Accountant’s
determination of the disputed items or amounts shall, absent manifest error, be
final and binding on the parties and will be applied in determining the
adjustments to the Purchase Price set forth in Section 3.3.  In resolving any disputed item, the
Independent Accountant (i) shall be bound by the provisions of this
Agreement including, without limitation, Section 3.4(b) and Section 3.4(d)
and (ii) may not assign a value to any item greater than the greatest
value for such item claimed by either party in the Sellers’ Adjustment
Certificate or the Objection Notice, as applicable, or less than the smallest
value for such item claimed by either party in the Sellers’ Adjustment
Certificate or the Objection Notice, as applicable.  The Buyer, on the one hand, or the Sellers
(from the Sellers Escrow Account), on the other hand, shall make appropriate
payment to the other of any additional amounts determined to be payable by them
in respect of the Purchase Price within five (5) Business Days following either
the resolution of the dispute by the parties or the receipt of the Independent
Accountant’s final determination, as the case may be; provided, that to
the extent the amount reflected in the Sellers’ Adjustment Certificate is not
in dispute such amount shall be paid before resolution of the dispute by the
parties or receipt of the Independent Accountant’s final determination.  All fees and costs of the Independent
Accountant shall be borne by and allocated between the Sellers (from the
Sellers Escrow Account), on the one hand, and the Buyer, on the other hand, on
a pro  rata basis based on the differences between the Independent
Accountant’s determination of the disputed amounts to the net adjustments to
the Purchase Price (as finally determined by the Independent Accountant or the
parties) and each of the Sellers’ and the Buyer’s respective determinations of
such disputed amounts.  If the Buyer does
not raise any objections to the Sellers’ Adjustment Certificate within the
periods described herein, the Sellers’ Adjustment Certificate will become final
and binding upon all parties.  Any
payments required to be made by the Sellers pursuant to this Section 3.4(b)(ii)
shall be limited to amounts included in, and made solely from, the Sellers
Escrow Account and any payments required to be made by the Buyer shall be made
to the Sellers Escrow Account and shall be made first from the escrow
established pursuant to Section 3.4(a) but shall not be limited by such
amount.

 

(c)                                  During
the preparation of the Estimated Adjustment Certificate, the Sellers’
Adjustment Certificate, the Closing Date Balance Sheet and the Operating Cash
Flow Statement and the period of review or dispute as set forth in Section 3.4(b)(ii)
above, the Sellers (and the Companies prior to the Closing), on the one hand,
and the Buyer, on the other hand, shall (i) provide each other and each
other’s authorized representatives with full access at all

 

27

 

reasonable
times, and in a manner so as not to interfere with the normal business
operations of the Sellers, the Buyer or the Companies, in each case,
respectively, to all relevant books, records, work papers, information and
employees and auditors of such Persons, and (ii) cooperate fully with each
other and each other’s authorized representatives, in each of clauses (i) and
(ii), as necessary or useful for the preparation, calculation and review of the
Estimated Adjustment Certificate, the Sellers’ Adjustment Certificate, the
Closing Date Balance Sheet and the Operating Cash Flow Statement or for the
resolution of any dispute between the Sellers and the Buyer relating thereto.

 

(d)                                 Except
as otherwise expressly provided in the definitions of Closing Date Current
Assets, Closing Date Current Liabilities and Operating Cash Flow, each
accounting term used in this Section 3.4 shall have the meaning that is
applied thereto in accordance with GAAP and each account included in the
Estimated Adjustment Certificate, the Sellers’ Adjustment Certificate, the
Closing Date Balance Sheet and the Operating Cash Flow Statement shall be
calculated in accordance with GAAP (for purposes of both the adjustments contemplated
by this Section 3.4 and determining satisfaction with the Operating Cash
Flow closing condition in Section 9.6), consistently applied with and
subject to the Reference Accounting Principles; provided, that reference to
GAAP in the definitions of defined terms used in this Section 3.4 also
shall be deemed to mean GAAP consistently applied with and subject to these
same Reference Accounting Principles. The Reference Accounting Principles also
have been used in preparing the illustrative calculation of Closing Date
Working Capital set forth on Exhibit H and the illustrative calculation
of Operating Cash Flow set forth on Exhibit J and no change in
accounting principles shall be made from those utilized in preparing such
illustrative calculations, including, with respect to the nature or
classification of accounts (including any reclassification of any assets,
contra liabilities or liabilities from short term to long term), closing
proceedings, valuations of inventory, levels of reserves or levels of accruals
or Allocations other than as a result of objective changes in the underlying
business that occur prior to the Closing Date. 
For purposes of the preceding sentence, “changes in accounting
principles” means all changes in accounting principles, policies and
methodologies with respect to the determination of the accounts set forth on Exhibit
H or Exhibit J, as applicable, their classification or their display.

 

4.                                      REPRESENTATION
AND WARRANTIES REGARDING THE COMPANIES

 

The Companies hereby, jointly and severally, represent and warrant to
the Buyer as follows, except as set forth in the Schedules attached hereto, it
being understood that any matter disclosed on any Schedule referred to
herein shall be deemed to have been disclosed on any other Schedule for
which it is readily apparent such disclosure applies.

 

4.1                                 Existence;
Good Standing and Power; Capitalization.

 

(a)                                  (i)                                     Except
as set forth on Schedule 4.1, the Cable Venture is a general
partnership duly organized, validly existing and in good standing under the
laws of the State of New York, and the Cable Venture is duly qualified or
licensed to conduct business and is in good standing in every jurisdiction
where the nature of the business conducted by it or the properties owned or
leased by it requires qualification. 
Subject to applicable bankruptcy law, the Cable

 

28

 

Venture has all of the requisite general partnership power and
authority to own, operate or lease its assets and properties, to own and
operate the Levittown System, to own all of the outstanding capital stock of
Cable Corp., and to conduct its business as currently conducted, and subject to
the Bankruptcy Court’s entry of the Confirmation Order, to execute, deliver and
perform this Agreement and all Related Agreements to which it is a party.

 

(ii)           Except as set forth on Schedule 5.2(d),
all of the joint venture interests in the Cable Venture are owned beneficially
and of record by the Sellers free and clear of any Liens.  As of the Closing Date and subject to the
occurrence of the transactions contemplated to occur on the Closing Date under
this Agreement and the Plan, the Acquired Interests will constitute all of the
outstanding joint venture interests of the Cable Venture.

 

(b)           (i)            Except
as set forth on Schedule 4.1, Cable Corp. is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.  Cable Corp. has all of the
requisite corporate power and authority to own, operate or lease all of its
assets and properties, to own and operate the San Juan System and to conduct
its business as currently conducted, and to execute, deliver and perform this
Agreement and all Related Agreements to which it is a party.  Cable Corp. is duly qualified or licensed to
conduct business and is in good standing in every jurisdiction where the nature
of the business conducted by it or the properties owned or leased by it
requires qualification.

 

(ii)           The authorized capital
stock of Cable Corp. consists of one thousand (1,000) shares of common stock,
par value $0.01 per share, of which one hundred (100) shares have been issued
and are outstanding.  All of the issued
and outstanding shares of capital stock of Cable Corp. have been duly and
validly authorized and issued and are fully paid and nonassessable and the
Cable Venture owns beneficially and of record 100% of the issued and outstanding
capital stock of Cable Corp., free and clear of any Liens.  No shares of capital stock of Cable Corp. are
held as treasury stock.  Except as set
forth on Schedule 4.1, there is no outstanding or authorized
option, warrant, call, commitment, stock purchase plan or other contract or
agreement to which Cable Corp. or the Cable Venture is a party requiring, and
there are no convertible securities of Cable Corp. outstanding or authorized
which upon conversion could require, the issuance, sale, transfer or other
disposition of any additional shares of capital stock or other equity interests
of Cable Corp. or other securities convertible into shares of capital stock or
other equity interests of Cable Corp. 
There are no outstanding or authorized stock appreciation,
phantom stock, profit participation or similar rights with respect to Cable
Corp.  Except as set forth on Schedule 4.1,
none of the Sellers, the Cable Venture or Cable Corp. is a party to any voting
trust, proxy or other voting agreement or understanding with respect to any of
the capital stock of Cable Corp. or to any agreement relating to the issuance,
sale, redemption, repurchase, retiring, transfer or other disposition or
registration of the capital stock of Cable Corp.

 

(c)           Upon entry of the
Confirmation Order and the consummation of the acquisition of the Acquired
Interests pursuant to Section 2.1 hereof and pursuant to the terms of the
Plan, the Buyer shall own 100% of the equity interests of the Cable Venture,
and the Cable Venture shall own 100% of the equity interests of Cable Corp.,
free and clear of all Liens (other than Liens created by the Buyer) and no
Person other than the Buyer shall have any right to acquire any interest (other
than those granted by the Buyer) in the Cable Venture or Cable Corp.

 

29

 

(whether such right shall take the form of options, warrants,
commitments, agreements, preemptive rights, rights of first refusal, put or
call rights, purchase rights or obligations or anti dilution rights with
respect to the issuance, sale or redemption of the joint venture interests in
Cable Venture, capital stock of Cable Corp. or otherwise), nor shall there be
outstanding or authorized any securities of the Cable Venture or Cable Corp.
which upon conversion or exchange could require the issuance, sale, transfer or
other disposition of any additional equity securities of the Cable Venture or
Cable Corp., as applicable.

 

4.2           Authorization,
Company Required Consents.

 

(a)           This Agreement and the
Related Agreements (i) constitute (or, in the case of any Related
Agreements to which it is a party, when executed and delivered will constitute)
the legal, valid and binding obligation of Cable Corp. and (ii) upon the
Bankruptcy Court’s entry of the Confirmation Order (and, in the case of any
Related Agreements to which it is a party, when executed and delivered) will
constitute the legal, valid and binding obligation of the Cable Venture,
enforceable against each Company in accordance with their respective
terms.  Provided that the Company
Required Consents are obtained, the execution, delivery and performance of this
Agreement and the Related Agreements and the consummation of the Transactions
in accordance with, and subject to the conditions precedent in, this Agreement
do not and will not:  (i) violate
any Legal Requirement applicable to the Companies, their assets or properties
or the Systems; (ii) conflict with, violate or result in a breach of any
of the provisions of the JV Agreement or Cable Corp.’s certificate of
incorporation or bylaws; or (iii) conflict with, result in a breach of or
constitute a default (or an event which, with notice or lapse of time or both,
could constitute a default), result in the acceleration of, create in any party
the right to accelerate, terminate, suspend, modify or cancel, give rise to the
creation of any Lien upon any of the assets or properties of the Companies
(other than the Transferred Assets) or require any notice under, any of the
terms, conditions or provisions under any Material Contract or Governmental
Authorization.

 

(b)           Schedule 4.2(b)
contains a true and complete list of any and all Company Required Consents.

 

4.3           Financial
Statements; Indebtedness; Budget; Absence of Changes.

 

(a)           Unaudited Financials.  The Companies have made available to the
Buyer true and complete copies of (x) unaudited consolidated balance
sheets, statements of operations and statements of cash flows as of and for
each of the two fiscal years ended December 31, 2002 and 2003 (the “Unaudited
Historical Financials”) and (y) an unaudited consolidated balance
sheet and statement of operations as of and for the 12 months ended
December 31, 2004, without footnotes (which are attached to this Agreement
as Exhibit G) (the “Unaudited 2004 Financials” and, together with
the Unaudited Historical Financials, the “Unaudited Financials”).  No representation or warranty is made with
respect to the Unaudited Financials, but that shall not limit the Buyer’s right
not to close if the condition set forth in Section 9.6 is not satisfied.

 

(b)           Audited Financials.  The audited consolidated balance sheet,
statement of operations and statement of cash flows as of and for each of the
three fiscal years ended December 31, 2002, 2003 and 2004 (collectively,
the “Audited Financials”), including the notes

 

30

 

thereto, to be provided to the Buyer prior to the Closing pursuant to
Section 7.17(b), shall present fairly the financial condition of the
Companies as of such dates and the results of operations and cash flows of the
Companies for such periods therein referred to, in conformity with GAAP applied
consistently throughout the periods covered thereby except as otherwise
permitted by the definition of Reference Accounting Principles.

 

(c)           Interim Financials.  The unaudited consolidated balance sheet,
statement of operations and statement of cash flows as of and for the quarterly
periods in 2005 for which interim financial statements are required pursuant to
Section 7.17(b) and, if applicable, Section 7.17(e) and the
corresponding periods for 2004, including the notes thereto, to be provided to
the Buyer prior to the Closing pursuant to Section 7.17(b) and, if
applicable, Section 7.17(e) (the “Interim Financials”), shall
present fairly the financial condition of the Companies as of such dates and
the results of operations and cash flows of the Companies for such periods
therein referred to, in conformity with GAAP applied consistently throughout
the periods covered thereby except as otherwise permitted by the definition of
Reference Accounting Principles, and subject only to year-end adjustments
(which will not be material individually or in the aggregate).

 

(d)           Funded Debt.  The Companies have no outstanding Funded
Debt.

 

(e)           Budgets.  The Companies have provided the Buyer with a
true and complete copy of the consolidated operating and capital budget for the
Companies for fiscal year 2005, as prepared by management and approved by the
board of managers of the Cable Venture (the “2005 Budget”) and attached
hereto as Exhibit E.  No
representation or warranty is made with respect to the 2005 Budget other than
that the Companies have provided the Buyer with a true and complete copy of the
2005 Budget as approved by the management board of the Cable Venture.

 

(f)            Certain Changes.  Since January 1, 2004, and through the date
of this Agreement except as set forth in Schedule 4.3(f) (and provided
that no representation or warranty is made with respect to the Transferred Assets
or the Excluded Liabilities), neither Company has:

 

(i)            issued, sold or
otherwise disposed of any of its capital stock or equivalent equity interest,
or granted any options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any of its capital stock or
equivalent equity interest;

 

(ii)           made any sale,
purchase, assignment, lease, license, abandonment, transfer or other
disposition of any material portion of its respective assets or properties,
including any Company Intellectual Property, other than sales of Inventory in
the ordinary course of business consistent with past practice or as required by
the Rebuild of the San Juan System, or taken any action that would reasonably
be expected to result in the loss, lapse or abandonment of any Company
Intellectual Property other than in the ordinary course of business consistent
with past practice (unless, in either case, such assets were unnecessary or
obsolete or comparable replacements were made therefor), or permitted any of
such assets or properties to be subjected to any Lien of any kind other than
Permitted Liens;

 

31

 

(iii)          made or promised any
bonus or material increase in the salary or other compensation payable or to
become payable to any manager, director, officer, employee or consultant of the
Companies, other than annual salary increases and annual bonuses made in the
ordinary course consistent with past practice or required by the terms of a
Material Contract (and, if committed to prior to the Closing Date (by contract
or otherwise) and then payable but not paid, fully accrued on the Closing Date
Balance Sheet and included as part of the Closing Date Current Liabilities);

 

(iv)          accelerated
the receipt or recognition of any item of income or offered any discount for
sales of advertising or services, other than in the ordinary course of business
consistent with past practice;

 

(v)           written
down the value of any work in progress, or written off as uncollectible any
notes or accounts receivable, except in the ordinary course of business
consistent with past practice;

 

(vi)          other than cash
dividends, distributions and payments to ML Media or Century or their
respective Affiliates, made any dividend, distribution or other payment to any
Seller or their respective Affiliates;

 

(vii)         received any notice of
any new labor union organizing activity, any actual or threatened employee
strikes, work stoppages, slowdowns or lockouts, or any material adverse change
in the aggregate in its relations with its employees, agents, customers,
suppliers or consultants;

 

(viii)        entered
into, amended in any material respect or terminated any employment agreement
that (initially or as amended) is a Material Contract or Collective Bargaining
Agreement, whether written or oral, other than in the ordinary course of
business consistent with past practice;

 

(ix)           implemented any layoff
of employees that could implicate the Worker Adjustment and Retraining
Notification Act of 1988, as amended, or any similar foreign, state,
Commonwealth or local law, regulation or ordinance (jointly, the “WARN Act”);

 

(x)            made
or suffered any change in or amendment to its organizational documents;

 

(xi)           cancelled,
compromised, waived or released any material right or claim (or series of
related rights and claims) other than by order of the Bankruptcy Court;

 

(xii)          entered into,
terminated, modified, amended, renewed or made any other change in any Material
Contract (including, without limitation, any contract for the purchase of
goods, equipment or services of amounts in excess of $100,000 or any contract
for the merger or consolidation with, or the acquisition of any material assets
of, any other Person) other than in the ordinary course of business consistent
with past practice;

 

32

 

(xiii)         discharged or satisfied
any obligation or Liability or made any settlement or compromise of any
litigation, other than in the ordinary course of business consistent with past
practice, by order of the Bankruptcy Court or pursuant to the Plan;

 

(xiv)        incurred any indebtedness
or issued, assumed or guaranteed any debt or other Liability of any third party
other than indebtedness incurred, or debt or Liabilities guaranteed, in an amount
(individually or in the aggregate) less than $100,000;

 

(xv)         engaged
in any transaction that, individually or in the aggregate, has caused or would
reasonably be expected to cause a Material Adverse Effect;

 

(xvi)        since January 1, 2005,
committed to make any capital expenditure (or series of related capital
expenditures), other than any capital expenditure to be made in connection with
the Rebuild of the San Juan System, that will not be fully paid prior to the
Closing Date and either involves more than $100,000 in any single case or
$250,000 in the aggregate or is outside the ordinary course of business unless
such commitment is reflected in the 2005 Budget;

 

(xvii)       adopted, amended, modified,
or terminated any bonus, profit sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee Benefit
Plan) except in the ordinary course of business consistent with past practice; or

 

(xviii)      made
a commitment, whether or not in writing, to do any of the foregoing.

 

(g)           Neither of the
Companies has any material Liability, except (i) as disclosed, reflected
or reserved against on the face of the balance sheet as of December 31, 2004 included
in the Audited 2004 Financials (or in any notes thereto), (ii) Liabilities
under Material Contracts and other leases and agreements entered into in the
ordinary course of business, to the extent not required by GAAP to be reflected
or reserved against on the face of a balance sheet, (iii) Liabilities
incurred after December 31, 2004 in the ordinary course of business (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of a Material Contract or Governmental Authorization,
tort, infringement, or violation of law or would reasonably be expected to have
a Material Adverse Effect), (iv) Excluded Liabilities,
(v) Liabilities set forth on Schedule 4.3(g), and (vi) other
Liabilities, whether or not material, not required by GAAP to be reflected or
reserved against on the face of a balance sheet and that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect.

 

4.4           Cable
Venture and Cable Corp. Assets.

 

(a)           The Companies have
good, valid and marketable title to all of the assets and properties shown on
the balance sheet as of December 31, 2004 included in the Unaudited 2004
Financials or acquired after December 31, 2004, free and clear of all
Liens other than Permitted Liens, except for properties and assets disposed of
in the ordinary course of business since December 31, 2004, which disposed
assets are not, individually or in the aggregate, material to the Companies and
except for the Transferred Assets.

 

33

 

(b)           Except as set forth on
Schedule 4.4(b), such assets and properties of the Companies (including
the additions and subtractions thereto contemplated by the preceding sentence)
constitute all of the assets, properties, rights, interests and claims used in
or held for use in the business as presently conducted by the Companies (other
than the Transferred Assets and the assets utilized to provide the services to
be provided under the Transition Services Agreement) and (together with the
Transferred Assets and the services to be provided under the Transition
Services Agreement) would be sufficient and in such operating condition in the
aggregate as would allow the Buyer to continue the business of the Companies as
presently conducted and operated and in compliance in all material respects
with all applicable Legal Requirements and Material Contracts from and
immediately after the Closing Date without interruption and in the ordinary
course of business consistent with past practice.

 

4.5           The
Systems.

 

(a)           Schedule 4.5(a)
sets forth a true and accurate statement, as of the date(s) set forth in said
Schedule, of the following information with respect to each System:
(i) the megahertz capacity of such System, the approximate miles of plant
operating at the applicable megahertz capacity of such System and the
approximate number of aerial and underground miles of plant served by such
System; (ii) the approximate number of total basic subscribers, including
EBUs, subscribers residing or located in multiple dwelling units, Promotional
Subscribers, subscribers to Basic Cable Service, Expanded Basic Cable Service,
Digital Cable Service, Premium Service and Data Service served by such System
and the average revenue per subscriber for certain subscriber categories as set
forth in the Schedule, each as of March 31, 2005; and (iii) the
approximate number of dwelling units and commercial establishments passed by
such System.  Schedule 4.5(e) sets forth
a true and accurate statement as of the date(s) set forth in said Schedule of
certain additional operating specifications for the Systems (other than the
portion of the San Juan System being rebuilt). 
The Cable Venture has made available to the Buyer the true and correct
channel lineup for each System as of January 1, 2005.

 

(b)           (i)            Except
as set forth on Schedule 4.5(b), the Companies have operated the
Systems in compliance in all material respects with: (A) the
Communications Act of 1934, as amended (the “Communications Act”);
(B) the Cable Communications Policy Act of 1984; (C) the Cable
Television Consumer Protection and Competition Act of 1992 (the “1992 Act”);
(D) the Telecommunications Act of 1996; (E) the Copyright Act of
1976, as amended (the “Copyright Act”); (F) all rules and regulations
of the FCC and the Copyright Office; (G) Act No. 213 of September 12,
1996, as amended (the “Puerto Rico Telecommunications Act”), and
Regulation 5761 of February 28, 1998, as amended, Regulation for Cable
Companies, enacted by the Puerto Rico Board under the Puerto Rico
Telecommunications Act; and (H) all other applicable Legal Requirements
relating to the construction, maintenance, ownership and operation of the
Systems; provided, however, that notwithstanding anything to the
contrary in this Agreement, no representation or warranty is made with respect
to compliance with Legal Requirements pertaining to utility poles, including,
without limitation, pole make ready and grounding and bonding of cable
television systems, or with respect to compliance with the Pole Attachment
Agreements except that as of the date hereof the Companies have received no
written notice asserting any non-compliance by the Companies with Legal
Requirements or the terms of the Pole Attachment Agreements.  Without limiting the generality of the
foregoing, each of the communities served by the Systems has been registered
with the FCC, and except as set

 

34

 

forth on Schedule 4.5(b), the
Systems are currently in compliance in all material respects with the technical
standards set forth in the FCC rules and regulations, including the applicable
signal leakage requirements.  The Cable
Venture has made available to the Buyer copies of the most recent FCC Forms 320
filed with the FCC (Basic Signal Leakage Performance Report) with respect to
the Systems.

 

(ii)           Schedule 4.5(b)
sets forth as of the date hereof the rate card, describing the services
available from the Systems, and the rates charged by the Companies therefor,
including all rates, tariffs, and other charges for cable television or other
services provided by the Systems, and the line up of the stations and signals
carried by the Systems and the channel position of each such signal and
station.  The rates charged by the
Companies for basic CATV service are not currently subject to regulation by the
FCC or by any other Governmental Authority in accordance with the applicable
FCC rules and regulations as in effect as of the date hereof; and none of the
Companies has received any correspondence indicating that this may change in
the future.  The Companies have not made
any election with respect to any cost of service proceeding conducted in
accordance with Part 76.922 of Title 47 of the Code of Federal Regulations or
any similar proceeding with respect to either of the Systems.

 

(iii)          Except as disclosed on Schedule 4.5(b),
each System is in compliance in all material respects with the provisions of
the Communications Act as such provisions relate to the rates and other charges
of the Systems, and at any times that the rates charged by the System were
subject to regulation by any Governmental Authority the Companies used
reasonable good faith efforts to establish rates charged to subscribers that
were allowable under the Communications Act and any authoritative
interpretation thereof then in effect for each System to the extent such rates
(on any tier) as of the date such rates were implemented were subject to
regulation by any Governmental Authority.

 

(iv)          Each
Company holds all material Licenses necessary in connection with the operation
of its respective System.  Each such
material License is listed on Schedule 4.5(b), is in full force and
effect and has been validly issued or assigned to the Cable Venture or Cable
Corp., as the case may be.  True and
correct copies of such Licenses set forth on Schedule 4.5(b) have
been made available to the Buyer.  All
licensed facilities owned or operated by the Companies are being operated in
all material respects in accordance with the terms and conditions of each such
License, and none of the Companies, or, to the Companies’ Knowledge, any third
party, is in default in any material respect thereunder.  There is no legal action or governmental
proceeding pending or, to the Companies’ Knowledge, any investigation or
proceeding threatened, for the purpose of modifying, revoking, terminating,
suspending, canceling or reforming any of the Licenses set forth on Schedule 4.5(b)
or that has or would be reasonably expected to cause a Material Adverse Effect or
cause a material disruption to the operation of the Systems, other than matters
affecting the cable television industry generally.

 

(v)           All broadcast
television signals carried on the Systems are being carried in compliance in
all material respects with the requirements of the Communications Act and the
FCC regulations promulgated thereunder.  Schedule 4.5(b)
sets forth each must carry and retransmission consent election received by the
Companies with respect to the Systems that is currently in effect.

 

35

 

(vi)          The
Companies have obtained all required FCC clearances for the operation of the
Systems in all aeronautical and navigational frequency bands in which the
Systems operate.

 

(c)           Except as set forth on Schedule 4.5(c),
appropriate registration of each System has been made with the Copyright
Office, and the Systems are in compliance in all material respects with all
notice, filing, payment and other requirements contained in Section 111 of
the Copyright Act and the regulations of the Copyright Office.  The copyright fees shown to be due on all
Statements of Account (as amended by any required filings and/or any other
corrective supplements) filed with respect to the Systems for each of the six
(6) reporting periods prior to the date hereof for which the Companies have
filed Statements of Account have been calculated in accordance with the
regulations of the Copyright Office promulgated pursuant to the Copyright
Act.  Neither Company nor any Seller
Person has received any notice from the Copyright Office claiming that it has
any additional obligation with respect to any previously submitted copyright
filings relating to the Systems. 
Complete and correct copies of all current reports and filings for the
last two reporting periods, made or filed pursuant to the Copyright Act and the
rules and regulations of the Copyright Office with respect to conduct of the
business or the operation of the Systems, have been provided or made available
to the Buyer.

 

(d)           The Systems are being
operated in compliance, in all material respects, with the rules and
regulations of the FAA.  Schedule 4.5(d)
lists all of the existing towers of the Systems and all leases of space on any
such towers to any third party.

 

4.6           Franchises.

 

(a)           Schedule 4.6
sets forth: (i) each existing Franchise with respect to the Systems;
(ii) the Franchising Authority with respect thereto; (iii) the
expiration date thereof; (iv) the county, city, town or other general
geographic area covered by such Franchise; (v) the franchise fee payable
thereunder; and (vi) whether any consent is required thereunder to
transfer such Franchise or control thereof to the Buyer.

 

(b)           Except as set forth on Schedule 4.6
or as otherwise disclosed in writing to the Buyer:

 

(i)            each of the Franchises
is (or, in the case of the Cable Venture, upon entry of the Confirmation Order,
will be) a valid and binding, legally enforceable obligation of the Cable
Venture or Cable Corp., enforceable against the Cable Venture or Cable Corp., as
the case may be, in accordance with its respective terms;

 

(ii)           each Company is
operating its respective System in compliance in all material respects with the
applicable provisions of each applicable Franchise set forth on Schedule 4.6;
and, to the Companies’ Knowledge, neither Company has done or performed any act
that is reasonably likely to invalidate or impair in any material respect its
rights under, or give to the applicable Franchising Authority the right to
terminate, suspend or modify in any material respect, any of such Franchises;

 

36

 

(iii)          none of the Companies,
the Sellers nor any other Seller Person has received notice that any of the
Companies’ operations pursuant to any Franchise are being improperly conducted
or maintained in any material respect; and

 

(iv)          each of the Franchises
is in full force and effect and, subject to the consent of the applicable
Franchising Authority, after giving effect to the Transactions shall be in full
force and effect and, except as set forth on Schedule 4.6, each
Company is in compliance in all material respects with all rules and
regulations promulgated by the FCC and the Puerto Rico Board with respect to
the procedures for seeking franchise renewals.

 

(c)           True and correct copies
of the Franchises set forth on Schedule 4.6 have been made
available to the Buyer.  The Franchises
set forth on Schedule 4.6 constitute the entire agreement of the
Companies and the Sellers with the applicable Governmental Authority with
respect to the subject matter thereof.

 

(d)           No Person upon whose
property is located any portion of the Systems has informed any of the
Companies or any Seller Person of any intent to challenge the continued
location, maintenance, installation or operation of such portion of the Systems
where such challenge (or all such challenges in the aggregate, if more than
one) reasonably would be expected to result in a material Liability.

 

(e)           Schedule 4.6(e)
sets forth a list of all Franchise, construction, fidelity, performance and
other bonds, guaranties in lieu of bonds and letters of credit posted by the
Companies in connection with the operation of the Systems as of the date
hereof, which Schedule 4.6(e) shall specify the remaining term and
amount of any such letters of credit and surety bonds.

 

4.7           Pole
Attachment Agreements.  Schedule 4.7
lists each of the contracts, agreements, easements, servitudes, rights-of-way,
rights of access, ordinances, resolutions, licenses, permits and other rights
or interests authorizing the Companies to use (or to construct, install,
maintain, repair, replace and operate any cables and other equipment, fixtures
and improvements associated with the Systems on or in) (i) any poles,
ducts, conduits or trenches or similar equipment, fixtures or improvements
located on real property of any Person other than the Companies or
(ii) any easements, servitudes, rights-of-way, rights of access and other
rights and interests to, in or with respect to such real property associated
with (A) such poles, ducts, conduits, trenches, equipment, fixtures or
improvements or (B) any cables or other equipment, fixtures and
improvements associated with the Systems otherwise on, over or under real
property of any Person other than the Companies (each, excluding any Franchise,
individually, a “Pole Attachment Agreement”).  Except as set forth on Schedule 4.7,
each of the Pole Attachment Agreements is (or, in the case of the Cable
Venture, upon entry of the Confirmation Order will be) a valid and binding obligation
of the Cable Venture or Cable Corp., as the case may be, and, to the Companies’
Knowledge, any other party to such Pole Attachment Agreement (except, with
respect to such other parties, insofar as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors rights generally, or by principles governing the
availability of equitable remedies), enforceable against the Cable Venture or
Cable Corp., as the case may be, and, to the Companies’ Knowledge, any such
other party in accordance with its respective terms.  Except as specified on Schedule 4.2(b),
the

 

37

 

consummation of the transactions contemplated in this Agreement and the
Related Agreements does not require the consent of any other party to any Pole
Attachment Agreement, will not result in a breach of, or default under, any
Pole Attachment Agreement, or otherwise cause any Pole Attachment Agreement to
cease to be legal, valid, binding and enforceable and in full force and effect
on identical terms following the Closing. 
True and correct copies of the Pole Attachment Agreements have been made
available to the Buyer.  Notwithstanding
anything to the contrary in this Agreement, no other representation or warranty
is made with respect to any of the Pole Attachment Agreements, the Companies’
compliance with the terms of, or the Companies’ obligations under, any of the
Pole Attachment Agreements, or the Companies’ compliance with Legal Requirements
relating to the Pole Attachment Agreements.

 

4.8           Real
Property.

 

(a)           Schedule 4.8(a)
sets forth the address and/or location and the use within the System of each
parcel of Owned Real Property.  The Cable
Venture or Cable Corp., as the case may be, (i) has good, marketable and
insurable fee simple title to each such parcel of Owned Real Property and all
buildings, structures and other improvements thereon, in each case free and
clear of all Liens other than Permitted Liens, and (ii) has not leased or
otherwise granted to any Person the right to use or occupy such Owned Real
Property (other than Permitted Liens), and there are no outstanding options,
rights of first offer or rights of first refusal to purchase such Owned Real
Property.

 

(b)           All leases, subleases,
licenses and other agreements (written or oral) under which either Company
holds any Leased Real Property (“Leases”) as of the date of this
Agreement (or the date otherwise set forth in such Schedule) are set forth on Schedule 4.8(b).  True and correct copies of each such Lease,
including all effective amendments thereto, have been made available to the
Buyer.  Each Company is in compliance
with the terms and conditions of such Leases to which it is a party, except for
any failure of compliance that has not caused and would not reasonably be
expected to cause a Material Adverse Effect. 
With respect to each of the Leases: except as set forth on Schedule 4.8(b),
(i) such Lease is (or, in the case of the Cable Venture, upon entry of the
Confirmation Order will be) legal, valid, binding, enforceable and in full
force and effect; (ii) after giving effect to the Confirmation Order, the
Transactions do not require the consent of any other party to such Lease, will
not result in a breach of or default under such Lease, or otherwise cause such
Lease to cease to be legal, valid, binding, enforceable and in full force and
effect following the Closing; (iii) neither of the Companies and, to the
Companies’ Knowledge, no other party to the Lease, is in breach or default in
any material respect under such Lease, and to the Companies’ Knowledge, no
event has occurred or circumstance exists which, with the delivery of notice,
the passage of time or both, would constitute such a breach or default, or
permit the termination or modification of such Lease or acceleration of rent
under such Lease; (iv) no security deposit or portion thereof deposited
with respect to such Lease has been applied in respect of a breach or default
under such Lease which has not been redeposited in full; (v) upon entry of
the Confirmation Order neither of the Companies will owe any brokerage
commissions or finder’s fees with respect to such Lease; (vi) the
Companies have not subleased, licensed or otherwise granted any Person the
right to use or occupy such Leased Real Property or any portion thereof, other
than Permitted Liens ; (vii) the Companies have not collaterally assigned
or granted any other security interest

 

38

 

in such Lease or any interest therein; and
(viii) upon entry of the Confirmation Order there will be no Liens on the
estate or interest created by such Lease, other than Permitted Liens.

 

(c)           All Real Property
for Systems.  The Companies have the
valid and enforceable right to use, and to construct, install, maintain,
repair, replace and operate the Systems on, all real property on which the
assets of the Systems or any of the Companies’ other assets are located, except
for any failure to hold any such right that has not caused and would not
reasonably be expected to cause a Material Adverse Effect.

 

(d)           Condemnation.  There is no condemnation, expropriation or
other proceeding in eminent domain pending or, to the Companies’ Knowledge,
threatened, affecting all or any portion of any Real Property or any interest
in Real Property.

 

(e)           Legal Compliance.  The Real Property, and the current use and
occupancy of the Real Property, is in material compliance with all Legal
Requirements.  The classification of each
parcel of Real Property under applicable zoning and other land use laws,
ordinances and regulations permits the current use and occupancy of such parcel
and permits the building, fixtures and other improvements located on such
parcel as currently constructed, used and occupied, except for violations that
are not material, individually or in the aggregate.

 

(f)            Compliance with
Liens.  To the Companies’ Knowledge,
the current use and occupancy of the Real Property does not violate the terms
or conditions of any material Lien.  Neither
Company has received any notice of violation of any material Lien.

 

4.9           Material
Contracts.

 

(a)           Schedule 4.9
sets forth as of the date hereof each Other Material Contract, excluding any
Other Material Contract that is a Transferred Asset.

 

(b)           Except for the Other
Material Contracts listed on Schedule 4.9, neither of the Companies
is a party to or is bound by any:

 

(i)            as
of the date hereof, Programming Agreements;

 

(ii)           partnership
or joint venture agreements;

 

(iii)          contracts
with another Person materially limiting or restricting the ability of the
Companies to (A) enter into or engage in any market or line of business or
(B) disclose confidential information;

 

(iv)          contracts
under which the Companies have created, incurred, assumed or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation;

 

(v)           material
settlement, conciliation or similar contracts or agreements other than those
entered into subsequent to the date hereof in compliance with
Section 7.12;

 

39

 

(vi)          contracts or agreements
containing provisions that provide to any Person a first refusal, first offer
or similar preferential right to purchase or acquire any properties or assets
of, or equity interests in, the Companies;

 

(vii)         powers
of attorney or other similar agreements or grants of agency;

 

(viii)        agreement for the
employment of any individual on a full-time, part-time, consulting, or other
basis providing annual compensation in excess of $50,000 or providing severance
benefits in excess of the Companies’ policies or practices for severance pay
set forth on Schedule 4.10, other than those entered into
subsequent to the date hereof in compliance with Section 7.12;

 

(ix)           agreement
under which it has advanced or loaned any amount to any of its directors,
officers, and employees outside the ordinary course of business;

 

(x)            other contracts,
agreements, commitments, understandings or instruments involving the purchase
or sale of goods or materials or the performance or receipt of services, in
each case involving payments in excess of $100,000 annually;

 

(xi)           any
lease, sublease, license or other agreement under which the Companies hold any
Leased Real Property (other than the Leases set forth on Schedule 4.8(b));
or

 

(xii)          any
additional Other Material Contract other than those entered into subsequent to
the date hereof in compliance with Section 7.12.

 

(c)           Each of the Other
Material Contracts is (or, in the case of the Cable Venture, upon entry of the
Confirmation Order will be) a valid and binding obligation of the Cable Venture
or Cable Corp., enforceable against the Cable Venture or Cable Corp., as the
case may be, in accordance with its terms. 
Neither Company, nor to the Companies’ Knowledge, any other party thereto,
is in breach or default in any material respect under any of the Other Material
Contracts to which it is a party nor in receipt of any written claim of breach
or default under such Other Material Contracts. 
Neither of the Companies nor any Seller Person has received any written
notice from any parties to any of the Other Material Contracts of such parties’
intent to not renew, cancel or terminate any of the Other Material Contracts
(except in the ordinary course of business with respect to subscriber, multiple
dwelling, bulk billing or commercial service agreements).  The Retained Programming Agreements have
been, or prior to the Closing will be, validly assigned, in accordance with
their terms, to the Cable Venture or to Cable Corp.

 

(d)           The Cable Venture has
made available to the Buyer true, correct and complete copies of all of the
written Material Contracts and a written summary setting forth the material
terms and conditions of each oral Material Contract.

 

4.10         Employees.

 

(a)           The Cable Venture has
made available to the Buyer a list of the names and positions of all employees
of the Companies and their current hourly wages or monthly salaries as of
January 1, 2005.  To the Companies’
Knowledge, no employee, officer, partner or Affiliate

 

40

 

of the Cable Venture, ML Media or Century
has any material financial interest, direct or indirect, in any supplier or
other outside business that is a party to significant transactions with either
of the Companies or the Systems.

 

(b)           All relationships
between the Companies and their respective contractors, subcontractors,
personnel supplied by temporary staffing agencies and similar arrangements are
independent contractor relationships and do not give rise to any employer-employee
relationship with respect to either of the Companies nor do such relationships
create a partnership, agency, joint venture, joint employer, co-employer or
employer-employee relationship between the parties.

 

(c)           Except as set forth on Schedule 4.10(c),
each Company is in compliance in all material respects with all Legal
Requirements relating to the employment of labor, including without limitation
those relating to wages, salary withholding, employee health and safety,
statutory bonus, vacation, working hours, collective bargaining and benefits
for employees and former employees, unemployment compensation, disability
compensation, worker’s compensation, equal employment opportunity and
discrimination (including age, maternity, marriage, veteran status, disability
and any other discrimination), immigration control, terminations and the
payment and withholding of social security and other Taxes or obligations.  To the Companies’ Knowledge, neither Company
has any material Liability for any arrearages of wages, commissions and
benefits for employees, Taxes or penalties or other sums for failure to comply
with any of the foregoing that are not reflected in the Unaudited 2004
Financials.

 

(d)           Except as set forth on Schedule 4.10(d),
as of the date hereof there is no material employment-related charge,
complaint, grievance, investigation, inquiry or obligation of any kind, pending
or, to the Companies’ Knowledge, threatened in any forum, relating to an
alleged violation or breach by either Company (or their officers or directors)
of any Legal Requirement or Material Contract relating to the employment of
labor.

 

(e)           Except as set forth on Schedule 4.10(e),
with respect to the Companies: (i) there is no collective bargaining
agreement or relationship with any labor organization (a “Collective
Bargaining Agreement”); (ii) there is no obligation to recognize or
agreement to recognize any union or other collective bargaining unit;
(iii) since January 1, 2003 no labor organization or group of
employees has filed any representation petition or made any written or oral
demand for recognition; (iv) to the Companies’ Knowledge, no union
organizing or decertification efforts are underway or threatened; (v) no
strike, work stoppage, slowdown, material grievance, collective bargaining
dispute, claim of unfair labor practice or other material labor dispute has
occurred since January 1, 2003 and none is underway or, to the Companies’
Knowledge, threatened; (vi) there is no workman’s compensation liability,
experience or matter that could reasonably be expected to have a Material
Adverse Effect; and (vii) there is no written employment agreement or
arrangement (including, without limitation, so-called “golden parachute” or
severance agreements) that would require either Company to continue the
employment of any Person after the Closing Date or that limit the Companies’
rights to terminate such Person, except as provided in Puerto Rico Act 80 of
May 30, 1976, as amended, and as set forth in its personnel policies and manuals,
subject to the liabilities provided in said Act.

 

41

 

(f)            The Sellers maintain
one or more insurance policies in full force and effect with the Puerto Rico
State Insurance Fund; and the Companies have paid all premiums on said policy,
and have no outstanding debts with respect thereto.  Since January 1, 2003, except as disclosed on
Schedule 4.10(f), no work-related accidents have been reported to
the Puerto Rico State Insurance Fund nor, to the Companies’ knowledge, has any
work-related accident occurred for which either of the Companies is or may be
classified as an uninsured employer.

 

(g)           Schedule 4.10(g)
lists each Employee Benefit Plan.  Except
as disclosed on Schedule 4.10(g), each Employee Benefit Plan
(including any Multiemployer Plan) has been maintained, funded and administered
in compliance in all material respects with its terms, the terms of any
collective bargaining agreement or collective labor agreement, and the
requirements of ERISA, the Code, and any other applicable Legal
Requirements.  None of the Companies or
any ERISA Affiliate maintains, contributes to, has any obligation to contribute
to, or has any actual or potential Liability with respect to any Employee
Pension Benefit Plan (including Multiemployer Plans) that is a defined benefit
plan (as defined in Section 3(35) of ERISA) and none of the Companies or
any ERISA Affiliate has any Liability or potential Liability under
Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code.  Neither Company maintains or contributes to,
or is required to contribute to or has any Liability with respect to, any
Employee Welfare Benefit Plan or any other arrangement providing medical,
health or life insurance or other welfare type benefits for current or future
retired or terminated employees other than under Section 4980B of the Code
or similar statute.  The Companies have
complied in all material respects with the “continuation coverage requirements”
of “group health plans” as set forth in Section 4980B of the Code, Part 6
of Subtitle B of Title I of ERISA and any other legal requirements with respect
to any Employee Welfare Benefit Plan maintained by the Companies.  All contributions (including employer
contributions, employee salary reduction contributions, and premium payments)
that are due have been made within the time periods prescribed by ERISA and the
Code to each Employee Benefit Plan and all contributions for any period ending
on or before the Closing Date that are not yet due have been properly
accrued.  There have been no prohibited
transactions (as defined in Section 406 of ERISA or Section 4975 of
the Code) with respect to any such Employee Benefit Plan that would reasonably
be expected to result in a material tax or penalty to the Companies.  No fiduciary (as defined in
Section 3(21) of ERISA) has any Liability for breach of fiduciary duty, or
any other failure to act or comply, in connection with the administration or
investment of the assets of any Employee Benefit Plan, and no action, suit,
proceeding, hearing or investigation with respect to any Employee Benefit Plan
is pending or, to the Companies’ Knowledge, threatened.

 

(h)           No asset of either
Company is subject to any Lien under ERISA or the Code relating to an Employee
Benefit Plan.

 

(i)            All required reports
and descriptions (including Form 5500 annual reports, Form 480.70 annual
return, summary annual reports, and summary plan descriptions) have been timely
filed and distributed in accordance with the applicable requirements of ERISA
and the Code with respect to each Employee Benefit Plan.

 

(j)            Except as set forth on
Schedule 4.10(j), each Employee Benefit Plan that is intended to
meet the requirements of a qualified plan under Code Section 401(a) or any
equivalent provision of the PR Tax Code has received a determination from the
Internal Revenue

 

42

 

Service (the “IRS”) or the Puerto Rico Department of the
Treasury that the Employee Benefit Plan is so qualified.

 

(k)           The Companies have
delivered or made available to the Buyer correct and complete copies of all
available plan documents and summary plan descriptions, the most recent
determination letter received from Governmental Authorities, the most recent
annual reports (Form 5500 and Form 480.70, with all applicable attachments),
and all related trust agreements, insurance contracts, and other funding
arrangements that implement each Employee Benefit Plan.

 

(l)            With respect to this
transaction, any notice required under any law or collective bargaining
agreement has been given, and all bargaining obligations with any employee
representative have been, or prior to the Closing will be, satisfied.  Within the past three years, neither Company
has implemented any plant closing or layoff of employees that could implicate
the WARN Act, and no such action will be implemented without advance
notification to the Buyer.

 

(m)          Neither of the Companies
is a member of any ERISA Group involving any entity other than the Companies,
and neither of the Companies has any ERISA Affiliate.

 

4.11         Litigation
and Judgments.  Except for
claims described in Schedule 4.11 and claims asserted by
subscribers or other users of the Systems in the ordinary course of business,
there is no claim, charge, action, suit, complaint, grievance, arbitration or
proceeding, at law or in equity, or by, in or before any court, tribunal,
commission, agency or other Governmental Authority, pending or, to the
Companies’ Knowledge, threatened, against the Companies, their respective
assets or properties or the Systems or that could prevent, limit, impair, delay
or otherwise interfere with the Cable Venture’s right or ability to consummate
the Transactions, except as has not resulted, and would not reasonably be
expected to result, solely in a monetary award against the Companies of more
than $200,000 in any individual case, or $750,000 in the aggregate.  Other than any order in Bankruptcy Court, the
Companies are not subject to any judgment, order or decree entered in any
lawsuit, proceeding or arbitration that materially impairs the ability of the
Companies to conduct their business as presently conducted.

 

4.12         Tax
Returns and Payments of Taxes. 
Except as set forth on Schedule 4.12:

 

(a)           Each Company has filed
or caused to be filed all Tax Returns it is or has been required to file on or
prior to the date hereof by any jurisdiction to which it is or has been
subject.  All such Tax Returns are true,
complete and correct in all respects, except that for those Tax Returns that
are listed on Schedule 4.12 as Returns that will be amended before the
Closing Date (or prepared as amended Tax Returns prior to the Closing Date and
provided to the Buyer for review) those Tax Returns will be true, complete and
correct in all respects when amended. 
There are no Tax audits pending or, to the Companies’ Knowledge,
threatened or any outstanding agreements or waivers extending the statutory
period of limitations applicable to any Tax Return filed by or on behalf of
either Company for any period.  To the
Companies’ Knowledge, no Tax deficiencies have been determined and no proposed
Tax assessments have been charged against either Company that have not been resolved. 
The Companies have delivered to the Buyer correct and complete copies of
Tax Returns filed and all examination

 

43

 

reports and statements of deficiencies, if
any, assessed against or agreed to by any of the Companies with respect to
taxable periods of the Companies ended on or after December 31, 2000.  For purposes of this Agreement “Tax”
or “Taxes” shall mean: (i) any United States federal, Commonwealth,
state or local or any other non-United States, net or gross income, gross
receipts, municipal license, net proceeds, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the Code), customs, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or other
taxes, assessments, duties, fees, levies or other governmental charges of any
kind whatever, whether disputed or not, including any interest, penalty or
addition thereto; (ii) any Liability for or in respect of the payment of
any amount of a type described in clause (i) of this definition as a
result of being a member of an affiliated, combined, consolidated, unitary or
other group for Tax purposes; and (iii) any Liability for or in respect of
the payment of any amount described in clauses (i) or (ii) of this
definition as a transferee or successor, by contract or otherwise; “Tax
Return” shall mean any return, declaration, report, claim for refund,
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof; “Taxing Authority”
shall mean any Governmental Authority having or purporting to exercise
jurisdiction with respect to any Tax; and “Treasury Regulations” shall
mean the regulations promulgated or proposed by the United States Treasury
Department under the Code.  A reference
to the Code or Treasury Regulation for purposes of this Section 4.12 shall
be deemed to be a reference also made to any equivalent provision of the PR Tax
Code and the PR Treasury Regulations.

 

(b)           All Taxes owed by
either of the Companies (to the extent shown on any Tax Return) have been
timely paid.  None of the Companies
currently is the beneficiary of any extension of time within which to file any
Tax Return.  No claim or dispute has ever
been made by a Taxing Authority in a jurisdiction where any of the Companies
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction.  There is no dispute or
claim concerning any Tax liability of the Companies claimed or raised by any
Taxing Authority in writing or to the Companies’ Knowledge claimed or raised
other than in writing.  There are no
Liens on any of the assets of any of the Companies that arose in connection
with any failure (or alleged failure) to pay any Tax.  Each of the Companies has withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, former employee, partner, independent
contractor, creditor, stockholder, Affiliate, customer, supplier or other third
party.

 

(c)           None of the Companies
is a party to any Tax allocation, Tax sharing or other similar agreement; Tax
indemnity obligation or other similar agreement; or arrangement with respect to
Taxes (including any advance pricing agreement, closing agreement, gain
recognition agreement or other material agreement relating to Taxes with any
Taxing Authority).

 

(d)           None of the Companies
has made any payments, is obligated to make any payments, or is a party to any
agreement that under certain circumstances could obligate it to make any
payments, that will not be fully deductible under Section 280G of the Code
(or any similar provision of state, local or non-United States law).  Cable Corp. has never been a United States
real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code, and the Cable

 

44

 

Venture has never owned a U.S. real property interest within the
meaning of Section 897(c) of the Code. 
Except as disclosed in Schedule 4.12(d), no Company owns an
interest in an entity that is treated as a partnership or the separate
existence of which is disregarded for United States federal income tax
purposes.  None of the Companies is a
party to any understanding or arrangement described in Section 6111(d) or
Section 6662(d)(2)(C)(iii) of the Code, or has “participated” in a
“potentially abusive tax shelter” within the meaning of Treasury Regulation
section 1.6011-4, any of which was required to be disclosed under this Treasury
Regulation or any predecessor regulation.

 

(e)           The Companies have proper
receipts, within the meaning of Treasury Regulation Section 1.905-2, for
any non-United States Tax that has been or in the future may be claimed as a
foreign tax credit for United States federal income tax purposes.  The Companies, in determining the depreciation
deduction claimed in their Puerto Rico Tax Returns, have used the straight line
method of depreciation and have not used any method of accelerated depreciation
allowed under the PR Tax Code.  Schedule 4.12(e)
provides a breakdown of the remaining tax basis of such assets by categories
based on their respective remaining recovery periods for Puerto Rico income tax
purposes as of December 31, 2004.  The
Companies do not have any “non-recaptured net Section 1231 losses” within
the meaning of Section 1231(c)(2) of the Code.
The Companies will not be required: 
(i) as a result of a change in method of accounting that has been
made for any taxable period or portion thereof ending on or before the Closing
Date (a “Pre-Closing Period”), to include any adjustment under
Section 481 of the Code or other similar adjustment in income for any
taxable period or portion thereof beginning after the Closing Date (a “Post-Closing
Period”); (ii) as a result of any closing agreement (or other
comparable agreement) that has been entered into under Section 7121 of the
Code (or other comparable agreement), to include any item of income in, or to
exclude any item of deduction from, any Post-Closing Period; (iii) as a
result of any sale occurring during the Pre-Closing Period and reported on the
installment method, to include any item of income in any Post-Closing Period;
or (iv) as a result of any prepaid amount received during the Pre-Closing
Period (other than amounts prepaid in the ordinary course of business consistent
with past custom and practice), to include any item of income in, or exclude
any item of deduction from, taxable income for any Post-Closing Period.

 

(f)            As of the end of the
day preceding the Closing Date, the unpaid Taxes of the Companies for all
Pre-Closing Periods, being current Taxes not yet due and payable, will not
exceed the reserve for Tax Liability in the Closing Date Current Liabilities
(rather than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set out on the face of the Estimated
Adjustment Certificate (rather than in any notes thereto) as finally determined
pursuant to Section 3.4(b).

 

(g)           The total remaining
undepreciated tax basis of all depreciable assets of the Companies for Puerto
Rico tax purposes shall be least $85,000,000 as of the Closing Date (including
any additional basis created by the Completion of the Rebuild of the San Juan
System after the Closing Date).

 

4.13         Compliance
with Laws.  Except (a) as
set forth on Schedule 4.13 or (b) as otherwise expressly
provided in Sections 4.5, 4.6, 4.8, 4.10 and 4.15, each Company is and the
Systems and the assets and properties of the Companies have been operated and
maintained in all

 

45

 

material respects in compliance with all Legal Requirements applicable
to the Companies or their respective Systems or their assets or properties, and
neither Company nor any Seller Person has received, or has any knowledge of the
pending issuance of, any notice of any violation with respect to either
Company, their assets and properties or the Systems of any Legal Requirement
from any Governmental Authority or any other Person that reasonably would be
expected to result in a significant Liability.

 

4.14         Insurance.  Schedule 4.14 sets forth a true
and correct summary of the insurance policies covering any of the Companies’
assets and properties or the Systems, including the underwriter of such
policies and the amount of coverage thereunder. 
Neither Company has received any notice of cancellation with respect to
any of such coverage.  Since January 1,
2003, no application by the Companies for insurance with respect to any of
their material assets has been denied for any reason.

 

4.15         Environmental
Matters.  Except as set forth
in Section 7.15(a), each Company is, and has been since January 1, 2003, in
compliance in all material respects with all applicable Environmental
Laws.  Neither of the Companies nor any
Seller Person nor, to the Companies’ Knowledge, any other Person for whose
conduct the Company is or may be held to be responsible under applicable Legal
Requirements has received any written notice that remains unresolved of
(1) any claim, administrative proceeding, judgment, declaration, order,
complaint or investigation relating to any violation of Environmental Laws, or
(2) any material Liabilities arising under Environmental Laws, relating to
allegations of injury or damages to Persons, property or natural resources from
the presence of environmental contamination or the release or threat of release
of Hazardous Substances, including any in connection with, or arising from, the
presence of Hazardous Substances on, in, under, or from any of the real
property now or previously owned or leased by either Company or any structure
thereon.  To the Companies’ Knowledge, no
Hazardous Substances have been dumped, buried, discharged or disposed of on,
in, under or from any of the real property now or previously owned or operated
by either Company in material violation of applicable Environmental Law, or in
a manner that will give rise to material Liabilities under Environmental Law,
and neither Company has exposed any Person, property or natural resources to
any Hazardous Substances, in either case so as to give rise to any current or
future material Liabilities of either Company under Environmental Laws.  The Cable Venture has made available to the
Buyer copies of any environmental assessments, reports or surveys, or other
documents materially bearing on environmental Liabilities, with respect to the
Systems or any of the past or current assets of the Cable Venture or Cable
Corp. that are in the possession or control of the Companies or any Seller
Person.  Notwithstanding any other
provision of this Agreement, this Section 4.15 sets forth the Companies’
sole and exclusive representations and warranties with respect to Hazardous
Substances, Environmental Laws and other environmental matters.

 

4.16         Affiliate
Transactions.  Except as set
forth on Schedule 4.16 and payments and arrangements pursuant to
the JV Agreement (all of which shall be satisfied pursuant to
Section 7.19), neither Seller nor any other securityholders, directors,
managers, officers or employees of the Companies, nor any of their respective
family members or Affiliates is party to any (written or oral) contract with,
or is involved in any other business arrangement or relationship with, either
of the Companies, or has, since January 1, 2004, received any distributions or
payments of any kind from the Companies or any of their respective Affiliates

 

46

 

(other than cash distributions or payments) and neither Seller nor any
other securityholders, directors, managers, officers or employees of the
Companies nor any of their respective family members or Affiliates owns any
property or right, tangible or intangible, which is used in the operation of
the Systems and business conducted or proposed to be conducted by the
Companies.

 

4.17         Intellectual
Property.  Except to the
extent related to the Retained Marks:

 

(a)           Schedule 4.17(a)
sets forth a complete and accurate list of all U.S. and foreign:
(i) patents and patent applications; (ii) trademark registrations and
trademark applications, material unregistered trademarks and Internet domain
names; (iii) copyright registrations and applications; and
(iv) computer software (other than readily available, “off-the-shelf”
commercial software programs having an acquisition price of less than $25,000)
which are owned or licensed by either Company.

 

(b)           Schedule 4.17(b)
sets forth a complete and accurate list of all material agreements (whether
oral or written, and whether between the Companies and ML Media and/or Century
or third parties) to which either Company is a party or otherwise bound
(i) granting any rights to third parties under any Intellectual Property
owned by either Company or (ii) obtaining any rights from third parties
under any Intellectual Property (other than licenses for readily available,
“off-the-shelf” commercial software programs having an acquisition price of
less than $25,000) (collectively, “IP Licenses”).  Each of the IP Licenses is a valid and
binding obligation of the Companies and, to the Companies’ Knowledge, the other
parties thereto, enforceable in accordance with its terms and, to the
Companies’ Knowledge, no event has occurred which with the giving of notice or
lapse of time or both would reasonably be expected to constitute a material
breach or default by either of the Companies or, to the Companies’ Knowledge,
by any other party, or otherwise give rise to a right of termination under any
such IP License.  Neither of the
Companies nor the Sellers has received any written notice from any parties to
any of the IP Licenses of such parties’ intent to non-renew, cancel or
terminate any of the IP Licenses.  No
royalties are payable by either of the Companies to any third parties for the
use of, or the right to use, any Intellectual Property except pursuant to the IP
Licenses and no indemnification payments are owed by either of the Companies to
any third parties as a result of any interference, infringement,
misappropriation or other conflict with respect to the Intellectual Property
owned or used by either of the Companies.

 

(c)           The Companies own, free
and clear of all Liens, or have a valid right to use pursuant to an IP License,
all of the Intellectual Property necessary or used for the operation of the
Systems (the “Company Intellectual Property”), provided that the
Company Intellectual Property will exclude Intellectual Property provided by
Century or its Affiliates to perform services pursuant to the JV
Agreement.  The Company Intellectual
Property, together with the Intellectual Property to be utilized by Century to
provide services to the Buyer pursuant to the Transition Services Agreement,
constitute all of the Intellectual Property necessary for the Companies’
operation of the Systems.

 

(d)           To the Companies’
Knowledge, the operation of the Systems by the Companies does not infringe upon
or misappropriate any Intellectual Property of any third party.  There is no claim, suit, arbitration or other
adversarial proceeding before any court, tribunal, commission, agency or other
Governmental Authority pending or, to the Companies’

 

47

 

Knowledge, threatened, against either Company contesting the validity,
use, ownership or enforceability of any Company Intellectual Property.  There are no settlements, covenants not to
sue, consents or judgments which restrict either Company’s right to use any
Company Intellectual Property.

 

(e)           To the Companies’
Knowledge, except as does not and would not reasonably be expected to
constitute a Material Adverse Effect, no third party is infringing or
misappropriating any Company Intellectual Property and no claims, suits,
arbitrations or other adversarial proceedings alleging such infringement or
misappropriation have been brought or threatened against any third party by
either Company.

 

(f)            The consummation of
the Transactions will not result in the loss or impairment of the right of the
Companies to own or use any Company Intellectual Property.  Immediately subsequent to the Closing, the
Company Intellectual Property will be owned by or available for use by the
Buyer on terms and conditions substantially similar to those under which the
Companies owned or used the Company Intellectual Property immediately prior to
the Closing.

 

(g)           The Companies have
taken all necessary action to maintain and protect all of the Company Intellectual
Property and will continue to do so prior to the Closing so as not to adversely
affect the validity or enforceability thereof.

 

(h)           The Companies have
collected, used, imported, exported and protected all personally identifiable
information, and other information relating to individuals, in accordance with
the privacy policies of the Companies and in accordance with any applicable
Legal Requirements including by entering into agreements, where applicable,
governing the flow of such information across national borders, except where
non-compliance, individually or in the aggregate, would not reasonably be
expected to constitute a Material Adverse Effect.

 

4.18         Brokers’
Fees.  Except as set forth on Schedule 4.18,
neither Company has any Liability to pay any fees or commissions to any broker,
finder, or agent with respect to the Transactions.

 

5.                                      REPRESENTATIONS OF ML MEDIA AND CENTURY

 

5.1           Representations
and Warranties of ML Media. 
ML Media represents and warrants to the Buyer as follows (except as
disclosed in the Schedules attached hereto):

 

(a)           ML Media is a limited
partnership duly formed, validly existing and in good standing under the laws
of the State of Delaware and has all of the requisite partnership power and
authority to own, operate or lease its assets and properties, to conduct its
business as currently conducted and to enter into and perform the terms to be
performed by it of this Agreement and each of the Related Agreements to which
it is a party.

 

(b)           ML Media has taken all
partnership action necessary to authorize and approve its execution, delivery
and performance of this Agreement, the Related Agreements and the
Transactions.  Subject to the due
execution and delivery by the other parties, this Agreement

 

48

 

will constitute the legal, valid and
binding obligation to the extent provided herein of ML Media, enforceable
against ML Media in accordance with its terms.

 

(c)           ML Media’s execution
and delivery of this Agreement and its performance of the terms of this
Agreement and each of the Related Agreements to which ML Media is a party to be
performed by it do not and will not: 
(i) conflict with or violate any Legal Requirement applicable to ML
Media; (ii) conflict with, violate or result in a breach of any of the
provisions of ML Media’s Limited Partnership Agreement; or (iii) require
notice or consent under, conflict with, result in a breach of or constitute a
default under any material agreement or instrument to which ML Media is a party
or by which it is bound.

 

(d)           ML Media owns of record
and beneficially 50% of the joint venture interests in the Cable Venture free
and clear of any Liens.

 

(e)           There is no litigation
at law or in equity or any claim, dispute, action, suit, complaint, arbitration
or proceeding before any court, commission, agency or other Governmental
Authority or tribunal pending or, to the knowledge of ML Media, threatened
against ML Media that could prevent, limit, impair, delay or otherwise
interfere with the right or ability of ML Media to consummate the Transactions.

 

(f)            Except as set forth on
Schedule 5.1(f), ML Media has no Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the Transactions.

 

5.2           Representations
and Warranties of Century. 
Century represents and warrants to the Buyer as follows (except as
disclosed in the Schedules attached hereto):

 

(a)           Century is a
corporation duly formed, validly existing and in good standing under the laws
of the State of Texas and subject to the approval of the Bankruptcy Court has
all of the requisite corporate power and authority to own, operate or lease its
assets and properties, to conduct its business as currently conducted and to
enter into and perform the terms to be performed by it of this Agreement and
each of the Related Agreements to which it is a party.

 

(b)           Subject to receipt of
the Confirmation Order and approval of the court covering Century’s Chapter 11
case, Century has taken all corporate action necessary to authorize and approve
its execution, delivery and performance of this Agreement, the Related
Agreements and the Transactions.  Subject
to the due execution and delivery by the other parties hereto and upon approval
by the Bankruptcy Court, this Agreement will constitute the legal, valid and
binding obligation to the extent provided herein of Century, enforceable
against Century in accordance with its terms.

 

(c)           Except as set forth on Schedule 5.2(c),
upon approval by the Bankruptcy Court, Century’s execution and delivery of this
Agreement and its performance of the terms of this Agreement and each of the
Related Agreements to which Century is a party to be performed by it do not and
will not:  (i) conflict with or
violate any Legal Requirement applicable to Century; (ii) conflict with,
violate or result in a breach of any of the provisions of Century’s certificate
of incorporation or by-laws; or (iii) require notice or consent under,
conflict with,

 

49

 

result in a breach of or constitute a
default under any material agreement or instrument to which Century is a party
or by which it is bound.

 

(d)           Century owns of record
and beneficially 50% of the joint venture interests in the Cable Venture free
and clear of any Liens, except as set forth on Schedule 5.2(d).

 

(e)           Except as set forth on Schedule 5.2(e),
there is no litigation at law or in equity or any proceeding before any court,
commission or other Governmental Authority or tribunal pending or, to the
knowledge of Century, threatened against Century that would reasonably be
expected to prevent, limit, impair, delay or otherwise interfere with the right
or ability of Century to consummate the Transactions.

 

(f)            Except as set forth on
Schedule 5.2(f), Century has no Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the Transactions.

 

6.                                      REPRESENTATIONS AND WARRANTIES OF BUYER

 

The Buyer
hereby represents and warrants to ML Media, Century and the Cable Venture as
follows:

 

6.1           Existence.  The Buyer is a limited liability company duly
formed, validly existing and in good standing under the laws of the
Commonwealth of Puerto Rico and has all of the requisite organizational power
and authority to own, operate or lease its assets and properties, to conduct
its business as currently conducted and to enter into and perform the terms to
be performed by it of this Agreement and each of the Related Agreements to
which it is a party.  The sole member of
the Buyer is a Puerto Rico limited liability company, the sole member of that
entity is a Delaware limited liability company that has elected to be taxed as
a corporation for Federal income tax purposes and the sole member of that
entity is a Delaware limited liability company to be owned by the Investors as
of the Closing.

 

6.2           Authorization;
No Conflicts.

 

(a)           The Buyer has taken all
organizational action necessary to authorize and approve its execution,
delivery and performance of this Agreement, the Related Agreements, and the
Transactions to which it is a party, and this Agreement constitutes the legal,
valid and binding obligation of the Buyer.

 

(b)           The Buyer’s execution,
delivery and performance of this Agreement and each of the Related Agreements
to which it is a party do not and will not: (i) conflict with or violate
any Legal Requirement applicable to the Buyer; (ii) conflict with, violate
or result in a breach of any of the provisions of the organizational documents
of the Buyer or any member of the Buyer Group; or (iii) require notice or
consent under, conflict with, result in a breach of or constitute a default
under any material agreement or instrument to which the Buyer is a party or by
which it is bound.

 

6.3           Litigation.  There is no litigation at law or in equity or
any claim, dispute, action, suit, complaint, arbitration or proceeding before
any court, commission, agency or other Governmental Authority or tribunal
pending or, to the knowledge of the Buyer, threatened

 

50

 

against the Buyer that could prevent,
limit, impair, delay or otherwise interfere with the right or ability of the
Buyer to consummate the Transactions.

 

6.4           Financing.  The Buyer has delivered to the Sellers true
and complete copies of a commitment letter from JPMorgan Chase Bank, N.A. and
others to lend to the Buyer an aggregate amount up to $350,000,000 on the terms
set forth in the commitment letter (the “Debt Commitment Letter”), and
commitment letters from the Investors and the sole member of the Buyer to
provide equity in an amount which, together with the debt financing
commitments, is sufficient to pay the aggregate Purchase Price set forth in
this Agreement and to satisfy all of the Buyer’s other obligations in
connection with the purchase of the Acquired Interests and the other
Transactions (such commitment letters collectively, the “Commitment Letters”).  The Buyer has no reason to believe that, if
the conditions to the Buyer’s obligation to consummate the Transactions are met
(other than the financing condition in Section 9.9), financing in the
amount required to consummate the purchase of the Acquired Interests and the
other Transactions will not be available to the Buyer, pursuant to the
Commitment Letters or otherwise, on terms no less favorable to the Buyer than
as set forth in the Commitment Letters.

 

7.                                      ADDITIONAL
COVENANTS

 

7.1           Confidentiality.

 

(a)           Buyer’
Confidentiality Obligations.

 

(i)            Subject to
Section 7.1(a)(ii), from and after the date hereof, except with the Cable
Venture’s prior written consent or, with respect to the Seller Group
Confidential Information, the Sellers’ prior written consent, the Buyer shall,
and shall cause the members of the Buyer Group to, maintain the confidentiality
of the Seller Confidential Information, except (A) to other members of the
Buyer Group for the purposes of evaluating the Transactions, (B) to the
extent required by applicable law, (C) as necessary in connection with
filings, approvals and rulings to be obtained from any governmental agency or
authority, including, but not limited to, the FTC, the DOJ, the SEC, the Puerto
Rico Board, the IRS and the Bankruptcy Court (it being understood that any such
filing may include the filing of a copy of this Agreement), (D) to the
Buyer’s equity and financing sources and their respective directors, officers,
employees or representatives who are informed by the Buyer of the confidential
nature of the Seller Confidential Information and have a confidentiality
obligation to the Buyer, (E) as necessary to obtain consents to the
transfer of any Franchise or License or any other Required Consent or otherwise
necessary for the consummation of the Transactions, (F) upon reasonable
advance notice to Century, to any official committee and its professionals
appointed in the bankruptcy case of Century or its Affiliates and (G) as
otherwise permitted by the remainder of this Section 7.1(a).  In the event any member of the Buyer Group,
or any other Person to whom the Buyer transmits Seller Confidential Information
pursuant to this Agreement, becomes legally compelled to disclose any of the
Seller Confidential Information, the Buyer shall promptly notify the Cable
Venture or, as applicable, the applicable Seller thereof so that the Sellers or
the Cable Venture may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this Section 7.1(a), or both.  In the event that such protective order or
other remedy is not obtained, or that the Cable Venture or the applicable
Seller waives compliance with the provisions of this Section 7.1(a), the
Buyer shall, or shall cause the applicable member of the

 

51

 

Buyer Group to, furnish only that portion of the Seller Confidential
Information that is legally required.

 

(ii)           Notwithstanding anything
herein to the contrary, the obligations of the Buyer under Section 7.1(a)(i) shall terminate, with respect to the Company
Confidential Information only, upon the Closing.  For the avoidance of doubt, the obligations
of the Buyer under Section 7.1(a)(i) with respect
to the Seller Group Confidential Information shall survive the Closing and/or
the termination of this Agreement.

 

(b)           Sellers’
Confidentiality Obligations.

 

(i)            Subject to
Section 7.1(b)(ii), from and after the date hereof, except with the Buyer’s
prior written consent, the Companies and each of the Sellers, as applicable,
shall, and each of the Sellers shall cause the members of the Seller Group that
are its Affiliates to, maintain the confidentiality of the Buyer Confidential
Information, except (A) to the extent required by applicable law,
(B) as necessary in connection with filings, approvals and rulings to be
obtained from any governmental agency or authority, including, but not limited
to, the FTC, the DOJ, the SEC, the Puerto Rico Board, the IRS and the
Bankruptcy Court (it being understood that any such filing may include the
filing of a copy of this Agreement), (C) as necessary to obtain consents
to the transfer of any Franchise or License or any other Required Consent or
otherwise necessary for the consummation of the Transactions, (D) to any
official committee and its professionals appointed in the bankruptcy case of
Century or its Affiliates, (E) with respect to the Company Confidential
Information only, as otherwise permitted by Section 7.11(c)(ii) and
(F) as otherwise permitted by the remainder of this
Section 7.1(b)(i).  In the event any
member of the Seller Group, or any other Person to whom the Sellers transmit
Buyer Confidential Information pursuant to this Agreement, becomes legally
compelled to disclose any of the Buyer Confidential Information, the applicable
Seller shall promptly notify the Buyer thereof so that the Buyer may seek a
protective order or other appropriate remedy or waive compliance with the
provisions of this Section 7.1(b)(i), or
both.  In the event that such protective
order or other remedy is not obtained, or that the Buyer waives compliance with
the provisions of this Section 7.1(b)(i), the
applicable Seller shall, or shall cause the applicable member of the Seller
Group that is its Affiliate to, furnish only that portion of the Buyer
Confidential Information that is legally required.

 

(ii)           Notwithstanding
anything herein to the contrary, the obligations of the Companies and the
Sellers under Section 7.1(b)(i) shall only
commence with respect to the Company Confidential Information upon the
Closing.  For the avoidance of doubt, the
obligations of the Companies and the Sellers under Section 7.1(b)(i) with respect to the Buyer Group Confidential
Information shall survive the Closing and/or the termination of this Agreement.

 

7.2           Notification.  The Companies or the Sellers, on the one
hand, and the Buyer, on the other hand, shall promptly notify the other of any
action, suit, proceeding or investigation that is instituted or threatened
against such party or any of its Affiliates to restrain, prohibit or otherwise
challenge the legality or propriety of the Transactions.  The Companies or the Sellers, on the one
hand, and the Buyer, on the other hand, shall notify the other of any facts,
events, actions or circumstances as to which it obtains knowledge that causes
any of its (or, in the case

 

52

 

of the Sellers, the Cable Venture’s or Cable Corp.’s) representations
and warranties made in this Agreement, or any matters required to be set forth
in the Schedules hereto, not to be correct and complete in any material respect
as of the date hereof or as of any other date on or prior to the Closing Date.  The communication of any such information
shall not limit or qualify in any way any representations or warranties made by
the disclosing party or any obligations or liabilities for breach thereof.  Any failure to provide timely notification
pursuant to the second sentence of this Section 7.2 shall, for all
purposes of this Agreement, be deemed to be a breach
of a representation and warranty and not a failure to perform a covenant
hereunder.

 

7.3           HSR
Act Compliance.  Not later
than 30 days following the date hereof, the Buyer and the Companies shall file
or cause to be filed with the FTC and DOJ such Notification and Report Forms
relating to the Transactions as are required by the pre-merger notification
rules promulgated under the HSR Act.  The
Buyer, on the one hand, and the Companies and the Sellers, on the other hand,
shall, and shall cause their respective Affiliates to:  (i) cooperate in the preparation and
filling of such Notification and Report Forms to the extent reasonably necessary;
(ii) promptly supply each other with any information provided in response
to any requests for additional information made by either of such agencies; and
(iii) use all reasonable efforts to cause the waiting period under the HSR
Act to terminate or expire at the earliest possible date.  The Buyer and the Companies shall each bear
50% of any filing fees in connection with the HSR Act.

 

7.4           Required
Consents.

 

(a)           The Companies and the
Sellers shall, and shall cause their respective Affiliates to, use commercially
reasonable efforts to expeditiously obtain all Company Required Consents and
any other consents to the Transactions required under any other agreement to
which either of the Companies is a party. 
The Buyer, on the one hand, and the Companies and the Sellers, on the
other hand, shall prepare and deliver to one another all information regarding
such Persons and their respective Affiliates that is required to be provided in
any such form or application in sufficient time to enable the party charged
hereunder with filing such forms or applications to file such forms and
applications within the time period set forth herein or by any other applicable
deadline.  Except as set forth in this
Section 7.4, nothing herein shall require the expenditure or payment of
any funds (other than in respect of normal and usual attorneys’ fees, filing
fees or other normal costs of doing business) or the giving of any other
consideration by the Companies in connection with obtaining any of the Company
Required Consents; provided, that the Companies shall, except as
otherwise set forth herein, be liable for and timely perform and satisfy all
obligations or liabilities under each Governmental Authorization or Material
Contract of the Companies during the period prior to the Closing Date.

 

(b)           As promptly as practicable
after the date hereof, the Sellers, with the Buyer’s cooperation and consent
(not to be unreasonably withheld), shall prepare and file, or cause to be
prepared and filed, all applications (including FCC Forms 394 or other
appropriate forms) required to be filed with the FCC, the Puerto Rico Board
and/or any other Governmental Authority that are necessary in connection with
the consummation of the Transactions. 
The Cable Venture shall apply to the Puerto Rico Board for (x) an
extension of each of the Franchises for a term of ten (10) years commencing on
the Closing Date, such that the Franchises as acquired by the Buyer shall have
a full ten-year term (collectively, the “Franchise Extensions”)

 

53

 

and (y) if necessary, an extension of
the current deadline for the Completion of the Rebuild of the San Juan System
(June 30, 2005) to a date mutually agreed by the Sellers and the Buyer
(the “Rebuild Extension Date”).

 

(c)           The Buyer, each of the
Sellers and the Companies shall promptly furnish to any Person from whom a
Company Required Consent is requested such accurate and complete information
regarding, as applicable, the Buyer, such Seller, the Companies and their
respective Affiliates, including (on the part of the Buyer) financial
information relating to any other cable and other media operations of the Buyer
and its Affiliates, as such Person may reasonably require in connection with
obtaining any Company Required Consent.

 

(d)           In connection with the
efforts referenced in Sections 7.3, 7.4(a) and 7.4(c) to obtain all requisite
approvals and authorizations for the Transactions under the HSR Act or any
other Regulatory Law, each of the Companies, each of the Sellers and the Buyer,
shall, and shall cause its respective Affiliates to: (i) use its
commercially reasonable efforts to cooperate in all respects with each other in
connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a private
party; (ii) promptly inform the other parties of any communication
received by such party from, or given by such party to, the FCC, the Puerto
Rico Board, the DOJ, the FTC or any other Governmental Authority and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the Transactions; and
(iii) consult with each other in advance of any meeting or conference with
the FCC, the Puerto Rico Board, the DOJ, the FTC or any such other Governmental
Authority or, in connection with any proceeding by a private party, with any
other Person, and to the extent permitted by the FCC, the Puerto Rico Board,
the DOJ, the FTC or such other applicable Governmental Authority, give the
other party the opportunity to attend and participate in such meetings and
conferences, except where a party reasonably determines in good faith that it
is best for the other party not to attend. 
Each party shall have the right to review and approve in advance drafts
of all petitions, applications and other filings made or prepared by the other
party in connection with obtaining the requisite approvals and authorizations
from the appropriate Governmental Authorities for the Transactions, which
approval shall not be unreasonably withheld or delayed.  In furtherance of and not in limitation of
the foregoing, the parties agree to file all necessary applications for
Material Consents with the FCC or the Puerto Rico Board jointly.

 

(e)           In furtherance and not
in limitation of the covenants of the parties contained in Section 7.3 and
this Section 7.4, if any administrative or judicial action or proceeding,
including any proceeding by a private party, is instituted (or threatened to be
instituted) challenging any transaction contemplated by this Agreement as
violative of any Regulatory Law, each of the Companies, each of the Sellers and
the Buyer shall cooperate in all respects with each other and use their
respective commercially reasonable efforts to contest and resist any such
action or proceeding and to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Transactions.

 

(f)            (i)            Except
as the parties may otherwise agree in writing, neither the Cable Venture nor
Cable Corp. shall agree, without the Buyer’s prior written consent, (1) to
any adverse change to the material terms of any Governmental Authorization or
(2) to the imposition

 

54

 

of any adverse condition to the assignment
of any such Governmental Authorization to the Buyer as a condition to obtaining
any Required Consent with respect to any such Governmental Authorization, and,
in each case, the Buyer shall not be required to accept any such amendment or
condition.

 

(ii)           Notwithstanding
anything in Section 7.4(f) to the contrary, except as the parties may
otherwise agree in writing, solely in connection with the requests for
Franchise Extensions described in Section 7.4(b), the Buyer shall accept,
and agree that the Companies may accept, changes to such Franchise(s) required
by the applicable Governmental Authorities as a condition of granting the
Franchise Extensions that do not increase the obligations of the Buyer in any
material respect, or reduce the rights of the Buyer in any material respect,
under the applicable Franchise(s) to which they relate.

 

7.5           Tax
Matters.

 

(a)           (i)            The
Sellers shall prepare or cause to be prepared and file or cause to be filed all
Tax Returns for the Companies for all periods ending on or prior to the Closing
Date that are filed after the Closing Date. 
The Sellers shall also prepare all amended Tax Returns which are
intended to be filed for periods ending prior to the Closing Date (“Amended
Tax Returns for Prior Periods”) and shall present such draft amended tax
returns along with all supporting work papers to the Buyer no later than seven
(7) calendar days prior to the Closing Date. 
In addition, the Sellers shall permit the Buyer to review and comment,
at least seven (7) calendar days prior to its filing, on each Tax Return to be
filed between the date of execution of this Agreement and the Closing Date (“2004
Tax Returns”).  The Sellers shall
permit the Buyer to review and comment on each and every Tax Return described
above in every preceding sentence of this Section 7.5(a) prior to the filing of
such Tax Return.  If the Buyer and the
Sellers are unable to agree on whether a Tax Return described in this
Section 7.5(a) complies with the second sentence of Section 4.12(a) or the
requirements of Section 7.5(e) (which shall be the sole bases for objecting to
such Tax Returns), they shall refer the dispute to the Independent Accountants,
whose determination in accordance with the procedures set forth in
Section 3.4(b)(ii) in respect of the adjustments to the Purchase Price
shall, absent manifest error, be final and binding on all parties.  Notwithstanding the foregoing, with respect
to any Amended Tax Returns for Prior Periods or any 2004 Tax Return, in the
event that the Sellers and the Buyer are unable to agree on any matter relating
to such Tax Return prior to the Closing Date (or the date such Tax Return is
due, if earlier), then the filing of such Tax Return shall be deferred (except
when a deferral would cause a Tax Return to be filed after its due date) and
the parties shall refer the dispute to the Independent Accountants, whose
determination in accordance with the procedures set forth in Section 3.4(b)(ii)
in respect of the matters in dispute with respect to such Tax Return shall,
absent manifest error, be final and binding on all parties.  With respect to any Tax Return described in
this Section 7.5 concerning which the Sellers and the Buyer are unable to
agree, and which is filed before the Independent Accountant is able to resolve
such dispute (because the deferral of such filing would have caused the Tax
Return to be filed after its due date), then if and to the extent that the
Independent Accountant subsequently determines that the Tax Return actually
filed by the Sellers understated the amount of Taxes that would properly be
required to be reflected on such Tax Return, then such amount of understatement
shall be paid to Buyer as an indemnity payment from the Deferred Purchase Price
under Section 3.2(d) pursuant to the provisions of Article 11 herein and Buyer
shall file an amended Tax Return

 

55

 

correcting the understatement in question.  The Buyer agrees that it will cooperate and
take any reasonable steps necessary to enable the filing of any Tax Returns
prepared by the Sellers pursuant to this Section 7.5(a)(i) that are to be filed
on or after the Closing Date.

 

(ii)           After the Closing, the
Buyer shall prepare or cause to be prepared and file or cause to be filed, on a
timely basis, Tax Returns of the Companies for all Tax periods that begin
before the Closing Date and end after the Closing Date.  The Buyer shall permit the Sellers to review
and comment on each such Tax Return described in the preceding sentence prior
to filing.  For purposes of this
Agreement, in the case of any Taxes that are imposed on a periodic basis and
are payable for a taxable period that includes or ends on the Closing Date
(including the last Tax Returns filed for the Companies ending on the Closing
Date), the portion of such Tax that relates to the portion of such taxable
period ending on the day immediately prior to the Closing Date (the “Pre-Closing
Tax Straddle Period”) shall (A) in the case of any Taxes other than
Taxes based upon or related to income or receipts, be deemed to be the amount
of such Tax for the entire taxable period multiplied by a fraction, the
numerator of which is the number of days in the portion of taxable period
ending on the day immediately preceding the Closing Date, and the denominator
of which is the number of days in the entire taxable period, and (B) in
the case of any Tax based upon or related to income or receipts, be deemed
equal to the amount that would be payable if the relevant taxable period ended
at the end of the day immediately preceding the Closing Date.  Any credits relating to a taxable period that
begins before and ends after the Closing Date shall be taken into account as
though the relevant taxable period ended on the day immediately preceding the
Closing Date.  If the Buyer and the
Sellers are unable to agree on any matter relating to a Tax Return described in
this Section 7.5(a)(ii), they shall refer the
dispute to the Independent Accountant, whose determination in accordance with
the procedures set forth in Section 3.4(b)(ii) in respect of the
adjustments to the Purchase Price shall, absent manifest error, be final and
binding on all parties.  Notwithstanding
anything to the contrary in this Agreement or otherwise, any and all Taxes
arising from, pertaining to, or incurred by virtue of the termination,
assignment, assumption, transfer, cancellation, forgiveness, payment or
exchange of all Transferred Assets, Excluded Liabilities and any intercompany
amounts payable by the Companies to the Sellers, shall be borne by the Sellers
(it being understood that liability for such Taxes shall not be accrued on the
Closing Date Balance Sheet or included in Closing Date Current Liabilities and
it being further understood that liability for such Taxes shall be treated as
Excluded Liabilities for purposes of this Agreement).  Furthermore, notwithstanding anything to the
contrary in this Agreement, any U.S. or Puerto Rico Taxes of the Companies
relating to the purchase of the Acquired Interests by the Buyer from the
Sellers and the merger immediately thereafter of Cable Corp. with and into the
Buyer shall be (i) borne by the Sellers if such Taxes arise from, pertain to or
are incurred by virtue of the purchase of the Acquired Interests by the Buyer,
and (ii) borne by the Buyer if such Taxes arise from, pertain to or are
incurred by virtue of the merger of the Cable Corp. into the Buyer.

 

(iii)          Any Tax refunds that are
received by the Buyer, Cable Corp. or the Cable Venture and any amounts
credited against Taxes to which the Buyer, Cable Corp. or the Cable Venture
becomes entitled, that relate to Tax periods or portions thereof ending on or
before the Closing Date, shall be for the account of the Sellers except that
the portion of the refund or credit allocable to the Closing Date itself shall
be for the account of the Buyer (unless the particular refund or credit in
question allocable to the Closing Date pertains to a Tax liability of the
Sellers under this Agreement in which case it shall be for the account of the
Sellers).  The

 

56

 

Buyer, Cable Corp. or the Cable Venture shall pay over to the Sellers
Escrow Account (or as designated by the Sellers following the closure of such
Sellers Escrow Account) any such refund within ten (10) Business Days following
the Companies’ receipt thereof.  The
Buyer shall use commercially reasonable efforts to have the applicable
Governmental Authority that issues any credits that it receives with respect to
Taxes relating to tax periods or portions thereof ending on or prior to the
Closing to, in lieu of such credits, issue a refund.  If after using such commercially reasonable
efforts, the Buyer is unable to obtain a refund, then the Buyer shall pay to
the Sellers Escrow Account the amount of such credits as such credits are
utilized to offset the Buyer’s Tax liability. 
The Sellers shall reimburse the Buyer all reasonable out of pocket
expenses to obtain such refunds or credits. 
The Buyer and the Sellers shall cooperate in all reasonable respects in
connection with such refunds.

 

(b)           (i)            After
the Closing, the Buyer and the Sellers shall cooperate fully, as and to the
extent reasonably requested by the other such parties, in connection with the
filing of Tax Returns pursuant to this Section 7.5 and in connection with
any audit, litigation or other proceeding with respect to Taxes; provided
that the Sellers shall reimburse the Buyer and its Affiliates for their
reasonable out-of-pocket costs incurred (including the costs incurred in the
form of fees from outside professionals such as accountants and lawyers)
relating to an audit, litigation or other proceeding with respect to the
Pre-Closing Period and the Buyer shall reimburse the Sellers for reasonable
out-of-pocket expenses relating to an audit, litigation or other proceeding
with respect to the Post-Closing Period. 
Such cooperation shall include the retention and (upon any such other
party’s request) the provision of records and information that is reasonably
relevant to any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. 
The Sellers and the Buyer agree, and agree to cause the Companies to
(A) retain all books and records with respect to Tax matters pertinent to
the Companies relating to any taxable period beginning before the Closing Date
until the expiration of the applicable statute of limitations (and, to the
extent notified by the Buyer or the Sellers, any extensions thereof), and to
abide by all record retention agreements entered into with any Taxing
Authority, and (B) give such other parties reasonable written notice prior
to transferring, destroying or discarding any such books and records and, if
any other party reasonably so requests, the Sellers or the Buyer, as the case
may be, shall allow any such other party to take possession of such books and records.  The Sellers and the Buyer further agree, upon
request, to provide the other party with all information reasonably available
to it that either party may be required to report pursuant to Section 6043
of the Code and all Treasury Regulations promulgated thereunder (including any
equivalent provisions of the PR Tax Code and the PR Treasury Regulations).

 

(ii)           Following the Closing,
subject to Section 11.3, the Buyer shall: (A) promptly notify the
Sellers of any audit, examination, litigation or other judicial, administrative
or other proceeding of which the Buyer receives notice or otherwise obtains
knowledge regarding any Tax or Tax return of the Buyer or either of the
Companies that relates to any period prior to the Closing; and (B) permit
the Sellers (and their attorneys, accountants and other representatives) to
participate in any such audit, examination, litigation or other
proceeding.  Without prior written
approval from the Sellers, in accordance with the provisions in
Section 11.3, the Buyer shall not agree or consent to, approve, permit or
otherwise acquiesce in the extension of any statute of limitations applicable
to the assessment of any deficiency with

 

57

 

respect to any Tax paid, payable or alleged
to be payable by the Buyer or the Companies that relates to any period prior to
the Closing.

 

(iii)          The Buyer and the
Sellers further agree, upon request of the other, to use commercially
reasonable efforts to obtain any certificate or other document from any
Governmental Authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the Transactions).

 

(c)           Provided that the
Confirmation Order includes the finding set forth in clause (J) of
Section 7.11(b)(ii) in accordance with Section 1146(c) of the
Bankruptcy Code, the making or delivery of any instrument of transfer,
including the filing of any deed or other document of transfer to evidence,
effectuate or perfect the rights, transfers and interest contemplated by this
Agreement, shall be in contemplation of a plan or plans of reorganization to be
confirmed by the Bankruptcy Court, and such shall be free and clear of any and
all transfer tax, stamp tax or similar Taxes. 
Such instruments, orders and agreements transferring the Acquired
Interests to the Buyer shall contain the following endorsement:

 

“Because this [instrument] has been authorized pursuant
to an order of the United States Bankruptcy Court for the Southern District of
New York, in contemplation of a plan of reorganization of the Cable Venture, it
is exempt from transfer taxes, stamp taxes or similar taxes pursuant to 11
U.S.C. § 1146(c).”

 

If such
transfer, stamp or similar Taxes are ultimately payable, notwithstanding
Section 1146(c) of the Bankruptcy Code or for any other reason, the
Sellers, on the one hand (from the Sellers Escrow Account), and the Buyer, on
the other hand, shall each pay 50% of such transfer, stamp or similar Taxes
which may be payable by reason of the Transactions and any and all claims,
charges, interest or penalties assessed, imposed or asserted in relation to any
such Taxes.

 

(d)           With respect to the
Cable Venture, the Buyer and the Sellers agree to utilize, or cause their
respective Affiliates to utilize, to the extent available, the alternative
procedure set forth in Revenue Procedure 96-60 with respect to wage reporting.

 

(e)           Except as set forth on Schedule 7.5
or in connection with the reconstruction of the Companies’ books and records
and reaudit of its financial statements, or with the written consent of the
Buyer (not to be unreasonably withheld), since January 1, 2004, none of the
Companies (i) has made (or will make) any Tax election, (ii) adopted
or changed (or will adopt or change) any accounting period or method for Tax
purposes, (iii) consented to or entered into (or will consent to or enter
into) any closing agreement or similar agreement with any Taxing Authority,
(iv) consented to or settled or compromised (or will consent to, settle or
compromise) any Tax claim or assessment if such settlement or compromise
involves other than the payment of money, or (v) has taken (or will take)
any position inconsistent with any past practice on any Tax Return, or (vi) has
taken (or will take) any action (other than in the ordinary course of business
consistent with past practice) that would have the effect of increasing the Tax
liability of the Companies on the Closing Date or for any period ending after
the Closing Date or would decrease any attribute of the Companies existing on
the Closing Date.  Notwithstanding

 

58

 

anything to the contrary herein, even though the effect of the
following activities may result in income or gains, or decreased deductions,
that would increase the Tax Liabilities of the Companies on the Closing Date or
for any period ending after the Closing Date or would decrease any attribute of
the Companies existing on the Closing Date, (A) clause (vi) of this subsection
(e) shall not require the Company to disclose on Schedule 7.5 or obtain the
prior written consent of the Buyer for any activities conducted in the ordinary
course of business consistent with past practice, and (B) this subsection (e)
shall not require the Company to disclose on Schedule 7.5 or obtain the
prior written consent of the Buyer for items in amended Tax Returns that are
(i) based on a change of capitalization or depreciation policy reflected in
amended financial statements (without altering or eliminating the Sellers’
representation on basis set forth in Section 4.12(g)) or (ii) otherwise
consistent with the Audited Financials or Interim Financials included in the
S-1 Financial Statements, provided, with respect to both clauses (i) and (ii)
of this sentence, that under the governing tax authorities it is permitted for
the Companies to correct, change or amend Tax Returns (including methods of
accounting in such returns) on account of or in response to the amended
financial statements.

 

7.6           Non-Solicitation.  Prior to the Closing, and if the Transactions
are not consummated for a period of two years after termination of this
Agreement, the Buyer shall not, directly or indirectly, solicit for employment
or consulting, on its behalf or on behalf of any other person, any employee of
the Companies as of the date of this Agreement, or seek to induce or persuade
any such employee to terminate his or her employment with the Companies; provided,
that nothing herein shall prohibit the Buyer (i) from hiring any past or
present employee of the Companies if such Person has responded only to general
employment solicitations or advertisements of the Buyer or (ii) from
soliciting for post-Closing employment by or consulting with the Buyer (with
such employment or consulting arrangement to occur only upon consummation of
the Transactions) any of the persons listed on Schedule 7.6 (the “Key
Personnel”), and the Sellers and the Companies shall allow the Buyer and
its representatives full access to such Key Personnel at all reasonable times,
and in a manner so as not to interfere with the normal business operations of
the Sellers or the Companies, for the purpose of discussing such employment or
consulting arrangements; provided, further, that the Buyer shall
provide the Sellers and the Companies with notice of and a reasonable
opportunity to be present during any such discussions, and the Sellers and the
Companies hereby agree and acknowledge that the content of any such discussions
shall constitute Buyer Confidential Information.

 

7.7           Further
Assurances; Satisfaction of Covenants, etc.  The Companies and the Sellers, on the one
hand, and the Buyer, on the other hand, shall each execute such documents and
other papers and take or cause to be taken such further action as may be
reasonably required to carry out the provisions of this Agreement and to
consummate and make effective the Transactions. 
The Cable Venture and the Sellers, on the one hand, and the Buyer, on
the other hand, shall each in good faith seek to satisfy each of its covenants
and obligations under this Agreement and to satisfy each condition to Closing
it is required to satisfy hereunder (and, in the case of the conditions set
forth in Section 8, to cooperate with each other in seeking the satisfaction
of these conditions).  After the Closing,
each of the Sellers, on the one hand, and the Buyer, on the other hand, shall
provide each other and each other’s authorized representatives with full access
at all reasonable times, and in a manner so as not to interfere with the normal
business operations of the applicable Seller or to unduly interfere with the
performance by the Companies’ employees of their duties to the Companies, or
the Buyer, in each case, respectively,

 

59

 

to all relevant books, records, work papers, information and employees
and auditors of such Persons, to the extent necessary in connection with the
preparation of any Tax Return or any Tax audit, the Excluded Liabilities, any
third party claim for indemnification, any dispute between ML Media and Century
or Adelphia or any other reasonable purpose; provided, however,
that the Sellers shall reimburse the Buyer for the cost of the time (based only
on an allocation of direct salary costs) of any employees of the Companies and
the party requesting the access shall reimburse the party providing such access
for any out-of-pocket third party expenses incurred in providing such access.

 

7.8           Change
of Business Name.  The Buyer
agrees that within 180 days following the Closing Date it will change any trade
or fictitious names previously used by the Companies such that neither the
Buyer’s nor any of its Affiliates’ joint venture, partnership, limited
liability company, corporate, trade or fictitious names will contain the terms
“Century,” “Adelphia” “ML,” or any other term
incorporating or confusingly similar with such terms.  The Buyer agrees that, except as set forth on
Schedule 7.8, from and after such 180th day neither the Buyer nor
any of its Affiliates will use or conduct business using any of such names,
other than to notify Persons of their name changes in connection with the
transfer of control of the Companies to the Buyer.  The Sellers hereby grant the Buyer a
non-exclusive, royalty-free license to use the Retained Marks in connection
with the operation of the Systems for 180 days following the Closing Date (or,
as applicable, for such longer period as set forth on Schedule 7.8).  Notwithstanding the foregoing, the Buyer will
not be required to remove or discontinue using any Retained Marks that are
affixed to converters, remotes and other items used in customer homes or
properties, or that are used in similar fashion making such removal or
discontinuation impracticable.  The right
of the Buyer to use the Retained Marks during the period referred to in this
Section is subject to the following conditions:  (i) the Buyer will comply with the
Sellers’ quality control standards with respect to use of the Retained Marks
and will submit to the Sellers, before use, any materials created by the Buyer
after the Closing Date, including, without limitation, advertising materials,
on which the Retained Marks appear for the Sellers’ approval, not to be
unreasonably withheld or delayed; (ii) the Buyer acknowledges that the
Retained Marks shall remain the property of the Sellers and/or such of their
Affiliates that have rights in the Retained Marks (collectively, the “Mark
Owner”), and that all use of the Retained Marks by the Buyer shall inure to
the benefit of the Mark Owner; (iii) the Buyer shall not use the Retained
Marks in any way that would jeopardize their strength or validity or diminish
their value; and (iv) the Buyer shall promptly inform the Sellers of any
infringement of the Retained Marks by any third party of which it becomes
aware.

 

7.9           Insurance.  Each Company shall maintain in full force and
effect until Closing all existing insurance policies or comparable
replacements, including without limitation any such policies relating to
environmental, health or safety liabilities, to cover and protect the assets of
the Companies against loss, damage or destruction.

 

7.10         Full
Access.  Each Company and each
Seller shall, and shall cause its Affiliates to, afford the members of the
Buyer Group, upon reasonable advance notice and during normal business hours,
such access to the properties, plants, personnel, equipment, facilities, books
and records of the Companies as shall be reasonably necessary to enable the
Buyer and its agents and representatives (a) to investigate the business
affairs or environmental compliance or liability status (but shall not do any
intrusive testing, without approval of the Cable Venture, such

 

60

 

approval not to be unreasonably withheld,
delayed or conditioned) of the Companies for purposes of the Transactions and
(b) to make orderly arrangements for the consummation of the Transactions.

 

7.11         Bankruptcy
Process.

 

(a)           Motions, Orders,
etc.  The Cable Venture shall prepare
and file with the Bankruptcy Court, not later than three (3) days from the date
hereof, a motion to approve the Expense Reimbursement and Break-Up Fee.  The Cable Venture and the Sellers shall
promptly prepare and file with the Bankruptcy Court: (i) the Plan in form
and substance acceptable to the Buyer in its reasonable judgment, (ii) a
Disclosure Statement with respect to the Plan meeting the requirements of
section 1125(b) of the Bankruptcy Code (the “Disclosure Statement”); and
(iii) a motion to approve the Disclosure Statement.  The Plan, any and all attachments and
exhibits to the Plan, the Disclosure Statement and any approval motions and the
orders approving the foregoing (including the order confirming the Plan) shall
be acceptable in form and substance to the Buyer in its reasonable judgment and
shall include all of the items set forth in Section 7.11(b) of this
Agreement (the “Confirmation Order”). 
The Sellers and/or the Cable Venture shall serve a copy of the Plan and
Disclosure Statement on all Taxing Authorities having jurisdiction over the
assets of the Companies, all governmental agencies having jurisdiction over the
assets of the Companies with respect to Environmental Laws and on the attorneys
general for the Commonwealth.  The Cable
Venture shall add the Buyer, and the Buyer’s counsel, to the Cable Venture’s
so-called “Rule 2002 notice list” and otherwise provide notice to the Buyer of
all matters that are required to be served on the Cable Venture’s creditors
pursuant to the Bankruptcy Code and Rules. 
The Sellers and the Cable Venture shall provide the Buyer with copies of
all material pleadings, motions, orders and notices prepared by or on behalf of
the Cable Venture at least three (3) Business Days to the extent practicable
(or one (1) Business Day if not practicable) prior to the filing thereof
in the Chapter 11 Case so as to allow the Buyer to provide comments on the same
(in all cases subject to their fiduciary duties and as emergencies may
otherwise require).

 

(b)           Confirmation Order.

 

(i)            The Cable Venture
shall use its commercially reasonable efforts to obtain approval of the
Confirmation Order and any other Order of the Bankruptcy Court necessary to
authorize and consummate the Transactions as promptly as practicable.

 

(ii)           The Cable Venture shall
use its commercially reasonable efforts to cause the Confirmation Order to
provide, among other things:

 

(A)          provide
that the Plan has been proposed in good faith and not by any means forbidden by
law;

 

(B)           provide that the Buyer,
and its Affiliates, members, equity holders, partners and professionals, are
released from any claim of any party related to the Sellers, the business of
the Companies or the Chapter 11 Case, except as otherwise set forth in this
Agreement;

 

61

 

(C)           approve the sale of the
Acquired Interests on the terms and conditions set forth in this Agreement and
authorize the Cable Venture and Century to proceed with this transaction and
the Cable Venture and Century to comply with their respective obligations under
this Agreement;

 

(D)          provide for the payment
by the Buyer of ordinary course of business post-petition trade payables and
accrued expenses incurred by the Cable Venture according to the normal and
customary terms applicable to such payments and expenses;

 

(E)           state
that any objections timely filed with respect to the Plan, which have not been
withdrawn, are overruled or the interests of such objections have been
otherwise satisfied or adequately provided for by the Bankruptcy Court;

 

(F)           find
that the Purchase Price represents fair value for the Acquired Interests;

 

(G)           find
that the Plan is in the best interests of the Cable Venture’s estates and
creditors;

 

(H)          provide
that the Bankruptcy Court shall retain jurisdiction for the purpose of
enforcing the provisions of this Agreement, the Confirmation Order and the
Plan;

 

(I)            authorize the Cable
Venture and Century to execute, deliver, perform under, consummate and
implement this Agreement, together with all additional instruments and
documents that may be reasonably necessary or desirable to implement the
foregoing;

 

(J)            find that, pursuant to
Section 1146(c) of the Bankruptcy Code, the within transaction is “in
contemplation of a plan or plans of reorganization to be confirmed by the
Bankruptcy Court,” and as such shall be free and clear of any and all transfer
tax, stamp tax or similar Taxes;

 

(K)          provide
that all equity or equity-based compensation, and any documents and agreements
relating thereto, and all other Interests (as defined in the Bankruptcy Code)
in the Cable Venture will be canceled, and all obligations of the Cable Venture
and any Affiliates of the Cable Venture under or in respect of them will be
terminated;

 

(L)           find
that the Buyer is a “good faith” purchaser entitled to the protection afforded
thereby under section 363(m) of the Bankruptcy Code;

 

(M)         provide that Adelphia,
its Affiliates, and any official committee and its professionals appointed in
the bankruptcy cases of Adelphia or any of its Affiliates shall be bound by the
obligations of the Sellers set forth in Section 7.1(b) and
Section 7.16; and

 

(N)          find
that the Buyer has not acted in violation of Section 363(n) of the
Bankruptcy Code.

 

62

 

(iii)          The
Confirmation Order shall approve and authorize the assumption of the Assumed
Executory Contracts.

 

(c)           Competing
Transactions.

 

(i)            From
the date of this Agreement, neither the Sellers nor the Companies shall, and
they shall not authorize or permit their respective Affiliates or their
respective members, professionals, advisors, officers, directors, employees,
representatives, other agents or other related parties to, directly or
indirectly, (x) solicit, initiate or encourage the submission of any
Acquisition Proposal, (y) participate in any discussions or negotiations
regarding, or furnish to any Person any non-public information with respect to
the Companies, or take any other action to facilitate, any Acquisition Proposal
or any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal or (z) enter
into any agreement with respect to an Acquisition Proposal.

 

(ii)           Fiduciary
Exception.

 

(A)          Notwithstanding
the provisions of Section 7.11(c)(i), Century shall not be prohibited from
furnishing information to, or entering into discussions or negotiations with,
any Person that makes an unsolicited bona fide written Acquisition Proposal if,
and only to the extent that, (1) such action is taken prior to the
issuance of the Confirmation Order, (2) Century’s board of directors (its “Board”),
after consultation with independent legal counsel, determines in good faith
that such action is required for the Board to comply with its fiduciary obligations
to Century’s stakeholders under applicable Legal Requirements, (3) such
Acquisition Proposal is an all-cash offer, with all third-party financing (if
any) being evidenced by bona fide signed commitments from reputable financial
institutions that do not include conditions to such financing less favorable
than the conditions set forth in the Commitment Letters, to acquire 100% of
Century’s joint venture interests in the Cable Venture, and (4) the Board
determines in good faith that such Acquisition Proposal, if accepted, is likely
to be consummated, taking into account all legal, financial, regulatory and
other aspects of the proposal and the Person making the proposal, and believes
in good faith, after consultation with and based upon the written opinion (in
customary form and subject to customary conditions) of an independent,
nationally recognized financial advisor, that the Acquisition Proposal would,
if consummated, result in a transaction superior to Century’s stakeholders from
a financial point of view than the Transactions (any such materially more
favorable Acquisition Proposal being referred to herein as a “Superior
Proposal”).  Prior to taking any
action pursuant to this Section 7.11(c)(ii) with respect to an
Acquisition Proposal, Century shall provide prior written notice to the Buyer
to the effect that it is proposing to take such action and provide the
additional information required by Section 7.11(c)(ii)(B) (to the
extent not previously provided to the Buyer).

 

(B)           The
Sellers and the Cable Venture shall notify the Buyer of any Acquisition
Proposal or request for nonpublic information from any Person who is
considering making an Acquisition Proposal (including, without limitation, all
material terms and conditions thereof and the identity of the Person making it)
as promptly as practicable (but in no case later than 24 hours) after its
receipt thereof, and shall provide the Buyer with a copy of any written
Acquisition Proposal or amendments or supplements thereto (or, if such action
is 

 

63

 

prohibited, a
written summary of the material terms of the foregoing, including the identity
of any Person submitting an Acquisition Proposal), and, if Century has become
authorized pursuant to Section 7.11(c)(ii)(A) to enter into
discussions concerning such Acquisition Proposal, Century shall thereafter
inform the Buyer on a current basis of the status of any inquiries, discussions
or negotiations with such Person, and any material changes to the terms and
conditions of such Acquisition Proposal, and shall promptly give the Buyer a
copy of any information related to the Companies delivered to such Person that
has not previously been provided to the Buyer.

 

(C)           Century
shall not enter into any final and definitive agreements relating to any such
Acquisition Proposal (“Alternate Agreements”) unless it shall have first
afforded the Buyer the opportunity to match or improve upon the terms and
conditions of such Acquisition Proposal (the Buyer’s “Matching Right”).  Not less than three (3) Business Days
prior to the execution of any Alternate Agreements, Century shall deliver to
the Buyer (1) copies of such Alternate Agreements, together with (2) a
notice to the Buyer stating that the Buyer shall have three (3) Business
Days from receipt of such notice to exercise its Matching Right.  If the Buyer elects to exercise its Matching
Right, Century shall not enter into any such Alternate Agreements or seek an
Order of the Bankruptcy Court confirming a plan of reorganization or otherwise
approving and authorizing the transactions contemplated by such Alternate
Agreements on the terms set forth therein unless Century and the Cable Venture
also submit the Plan (as modified by the Buyer in the exercise of its Matching
Right) for consideration and approval by the Bankruptcy Court.  If the Buyer declines to exercise its
Matching Right with respect to the Alternate Agreements, the provisions of this
Section 7.11(c)(ii)(C) shall thereafter apply to any proposed
material amendment or modification of such Alternate Agreements.  The exercise or non-exercise by the Buyer of
its Matching Right shall not alter or affect its rights to terminate this
Agreement or to receive the Expense Reimbursement or the Break-Up Fee in
accordance with the applicable provisions of this Agreement.

 

(iii)          Upon
the execution and delivery of this Agreement, the Sellers and the Companies
will, and will cause their respective Affiliates, and their respective members,
officers, directors, employees, professional advisors, representatives and
other agents to, cease and terminate any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any possible
Acquisition Proposal.

 

(iv)          Expense
Reimbursement; Break-Up Fee.

 

(A)          If
this Agreement is terminated pursuant to Section 12.1(b) (but only if
(x) the Buyer has satisfied all conditions to Closing requiring
performance by the Buyer and (y) the failure of the Closing to occur on or
before the Termination Date is the result of a willful breach by either of the
Sellers or the Companies), Section 12.1(d) or Section 12.1(e) (but
in each case only if (x) the Buyer is not in material breach of any
obligation under this Agreement and (y) the breach or breaches giving rise
to the Buyer’s right to terminate is a willful breach by either of the Sellers
or the Companies and, in the case of a breach of covenant where satisfaction of
the covenant is solely within the control of the Sellers and the Companies,
does not involve obtaining a third party consent, and can be satisfied using
reasonable commercial efforts, any breach shall be deemed willful), Section 12.1(f),
Section 12.1(g), Section 12.1(h), Section 12.1(i), Section 12.1(j),
Section 12.1(k), Section 12.1(l) or Section 12.1(o) (but only if

 

64

 

the basis of
such termination is the issuance by the Bankruptcy Court of a Final Order
rejecting the Plan), then, provided that the Expense Reimbursement and Break-Up
Fee were previously approved by the Bankruptcy Court, the Companies shall
reimburse the Buyer Group for all of its reasonable out-of-pocket expenses
incurred in connection with this Agreement (including expenses or other amounts
the Buyer pays pursuant to the terms of this Agreement, such as all or any
portion of any filing fee), up to a total amount of six million dollars
($6,000,000) (the “Expense Reimbursement”) in same-day funds, at the
time of such termination.  For the
avoidance of doubt, the parties agree that if this Agreement is terminated
pursuant to Section 12.1(f), the Buyer Group’s right to reimbursement of
its expenses by the Companies shall be governed by that certain Expense
Reimbursement Agreement, dated as of January 19, 2005, by and between the
Cable Venture and MidOcean Partners LP, as the same shall have been amended
through the date of such termination (the “Expense Reimbursement Agreement”).

 

(B)           If
this Agreement is terminated pursuant to Section 12.1(b) (but only if
(x) the Buyer has satisfied all conditions to Closing requiring
performance by the Buyer and (y) the failure of the Closing to occur on or
before the Termination Date is the result of a willful breach by either Seller
or by either of the Companies), Section 12.1(d) or Section 12.1(e) (but
in each case only if (x) the Buyer is not in material breach of any
obligation under this Agreement and (y) the breach or breaches giving rise
to the Buyer’s right to terminate is a willful breach by either of the Sellers
or the Companies and, in the case of a breach of covenant where satisfaction of
the covenant is solely within the control of Sellers and the Companies, does
not involve obtaining a third party consent and can be satisfied using
reasonable commercial efforts, any breach shall be deemed willful), Section 12.1(g) or
Section 12.1(o) (but only if the Bankruptcy Court shall have issued a
Final Order rejecting the Plan) then, in addition to the Expense Reimbursement,
if within 12 months of such termination the Sellers or the Companies consummate
the transactions contemplated by any Acquisition Proposal (or, if the Chapter
11 Case has not been finally concluded within such 12-month period, obtain an
Order of the Bankruptcy Court approving and authorizing the transactions
contemplated by any Acquisition Proposal), the Companies shall pay the Buyer a
termination fee in an amount equal to $15,600,000 less the amount of the
Expense Reimbursement (the “Break-Up Fee”), in same-day funds, on the
day of such transactions are consummated or the day of entry of such Order, as
applicable.

 

(C)           If
this Agreement is terminated pursuant to Section 12.1(h) or (i),
then, in addition to the Expense Reimbursement (x) Century shall pay the
Buyer 50% of the Break-Up Fee, in same-day funds, on the day the transactions
contemplated by the applicable Alternative Agreement are consummated, and (y) if,
within 12 months of such termination, ML Media sells its joint venture interest
in the Cable Venture to a Person (other than the Buyer or its Affiliates) at a
price greater than or equal to the price at which Century sold its joint
venture interest pursuant to the applicable Alternative Agreement, ML Media
shall pay the Buyer 50% of the Break-Up Fee, in same-day funds, on the day it
consummates such sale.

 

(d)           Other Bankruptcy
Covenants.  The Cable Venture shall
use its commercially reasonable efforts to make any filings, take all actions,
and obtain any and all other approvals and orders necessary or appropriate for
consummation of the Transactions, subject to its obligations to comply with any
order of the Bankruptcy Court.  The Cable
Venture shall provide appropriate notice of the hearing on the Plan as is
required by the Bankruptcy Code 

 

65

 

Rules, Local Rules and
orders of the Bankruptcy Court to all parties entitled to notice including, but
not limited to, all parties to the Assumed Executory Contracts.  The Assumed Executory Contracts shall be
identified in the Disclosure Statement by the date of the Assumed Executory
Contract(s), the other party to the contract or lease and the address of such
party.  The Disclosure Statement shall
set forth the amounts (if any) necessary to cure defaults under each of such
Assumed Executory Contracts as determined by the Cable Venture based on the
books and records of the Cable Venture. 
The Cable Venture shall be responsible for payment of any and all cure
amounts associated with the assumption of the Assumed Executory Contracts.  Neither the Cable Venture nor the Sellers
shall amend, modify or supplement the Plan, Disclosure Statement or
Confirmation Order in any material respect adverse to the Buyer without the
Buyer’s written consent, which consent shall not be unreasonably withheld or
delayed.  In the event an appeal is
taken, or a stay pending appeal is requested, from any of the foregoing orders
of the Bankruptcy Court, the Cable Venture shall immediately notify the Buyer
of such appeal or stay request and, upon the Buyer’s request, shall provide to
the Buyer within two (2) days after the Cable Venture’s receipt thereof a
copy of the related notice of appeal or order of stay.  The Cable Venture shall also provide the
Buyer with written notice of any motion, application, brief or other pleading
filed in connection with any appeal from any of such orders.  The Buyer shall cooperate with the Sellers
and the Cable Venture in all reasonable respects in connection with the
proceedings in the Bankruptcy Court, including, without limitation, delivery of
any information relating to the Buyer required in connection with such filings
or proceedings.

 

(e)           Certain
Claims in Bankruptcy.  Claim
#838001770 ($1,242,744.00) and #838001780 ($10,343.00) of Secretario De
Hacienda in the Chapter 11 Case shall be satisfied or discharged prior to the
Closing.

 

7.12         Continuity
and Maintenance of Operations. 
From the date of this Agreement until the Closing, unless otherwise
agreed to in writing by the Buyer, with respect to the assets and properties of
the Companies and the Systems (other than the Transferred Assets):

 

(a)           Except
as described in Schedule 7.12(a):

 

(i)            the
Companies shall, and the Sellers shall cause the Companies to, continue to
operate the Systems in the usual, regular and ordinary course consistent with
past practice and make ordinary marketing, advertising, capital, promotional
and other expenditures and implement ordinary pricing and promotional
strategies consistent with past practice and, to the extent consistent with
such conduct and operation, use commercially reasonable efforts to (a) preserve
the current business intact in all material respects, including preserving
existing relationships with franchising authorities, suppliers, customers and
others having business dealings with the Companies and the Systems, (b) continue
the Rebuild of the San Juan System in accordance with specifications set forth
on Schedule 1.1(w), (c) complete line extensions, placing
conduit or cable in new developments and fulfill installation requests in the
ordinary course of business and (d) exercise all of the Companies’ rights
to maintain existing “must carry” and retransmission agreements (including
delivery of timely notices required in connection with extensions or renewals);
provided, however, the Companies shall not institute any promotions longer than
six months, other than a Dish-Win-Back promotion, without the consent of the
Buyer.

 

66

 

(ii)           the
Companies shall continue to operate the Systems in material compliance with all
Legal Requirements;

 

(iii)          without
limiting the generality of the foregoing, each Company shall maintain its
assets and properties consistent with past practice, maintain the Real Property
in substantially the same condition as exists as of the date of this Agreement,
ordinary wear and tear excepted, maintain commercially reasonable Inventory
levels in its ordinary course of business (which shall include sufficient
quantities of amplifiers, line extenders, installation materials and converters
to operate and maintain the Systems in the ordinary course of business),
maintain insurance as in effect on the date of this Agreement and keep all of
its business books, records and files in the ordinary course of business;

 

(iv)          except
in the ordinary course of business consistent with past practice, neither
Company shall itself, or will permit any of its officers, managers, directors,
shareholders, members, partners, agents or employees to, pay or forgive any
Subscriber Accounts Receivable (other than for their own residences) prior to
the Closing Date;

 

(v)           each
Company shall continue to implement its procedures for disconnection and
discontinuance of service to subscribers whose accounts are delinquent in
accordance with those in effect on the date of this Agreement or consistent
with past practice; and

 

(vi)          the
Companies shall make capital expenditures during the period from January 1,
2005 through the Closing Date in an aggregate amount equal to 100% of the
amount of capital expenditures budgeted in the 2005 Budget for the period from January 1,
2005 through the Previous Month End (allocating any capital expenditures
budgeted for the last quarterly period in that period on a pro rata basis to
the three months in the quarter), including all capital expenditures at the
head-end site required to launch HDTV-DVR service.

 

(b)           Except
as described in Schedule 7.12(b), neither Company shall, except in
the ordinary course of business consistent with past practice, as contemplated
by the 2005 Budget, as contemplated by this Agreement, or with the prior
written consent of the Buyer:

 

(i)            modify,
amend, extend, terminate, renew, suspend, abrogate or enter into any Franchise,
Governmental Authorization or Material Contract relating to the assets or
properties of the Companies or the Systems (other than Material Contracts relating
principally to the Rebuild of the San Juan System), provided, that the
Buyer’s consent thereto will not be unreasonably withheld;

 

(ii)           change
the rate charged for any subscriber service or establish a rate for DVR or HDTV
service;

 

(iii)          sell,
transfer or assign any of the Companies’ assets or properties to any Affiliate
or any other third party, except for Transferred Assets, other than sales,
transfers or assignments of inventory in the ordinary course of business and of
obsolete or worn-out equipment; provided that the Companies shall not
sell any digital converters currently used by the Systems without the prior
consent of the Buyer;

 

67

 

(iv)          enter
into any contract or commitment or incur any indebtedness or other Liability or
obligation of any kind relating to the Systems;

 

(v)           enter
into any agreement with a billing service with respect to the Systems;

 

(vi)          take
any action that would result in the loss, lapse or abandonment of any Company
Intellectual Property (except with respect to actions permitted with respect to
Transferred Assets);

 

(vii)         with
respect to the Systems, engage in any marketing, subscriber installation,
collection or disconnection practices or offer discounts pursuant to selling or
marketing campaigns, other than those described on Schedule 7.12(b);

 

(viii)        make
any capital expenditure or series of capital expenditures that would require
payment in whole or in part post-Closing (to the extent that such post-Closing
Liability would not be included in the calculation of Closing Date Working
Capital); or

 

(ix)           take
or commit to take any other action which, if taken prior to the date of this
Agreement, would be required to be disclosed on Schedule 4.3(f).  

 

The Cable
Venture shall periodically deliver to the Buyer a true, correct and complete
copy of each Material Contract, Governmental Authorization or other agreement
that is entered into after the date of this Agreement and that, if it were in
effect on the date of this Agreement, would be required to be listed on Schedules
4.5, 4.6, 4.7, 4.8, 4.9, 4.10 or 4.17
(and shall deliver all such copies not less than two (2) days prior to the
Closing Date).

 

(c)           Notwithstanding
anything in Section 7.12(b) to the contrary, except as otherwise provided
in this Agreement, neither Company shall, without the prior written consent of
the Buyer, modify, amend, extend, terminate, renew, suspend, abrogate or enter
into any Pole Attachment Agreement or any Retained Programming Agreement.

 

(d)           The
Cable Venture shall deliver to the Buyer correct and complete copies of (i) all
rate regulation documents prepared or filed at any time between the date of
this Agreement and the Closing, and (ii) all non-routine correspondence,
filings and submissions with or to any Governmental Authority made between the
date of this Agreement and the Closing within two (2) days of the filing,
submission or receipt thereof.  The Cable
Venture shall deliver to the Buyer, as soon as practicable and in any event not
later than the delivery of the Estimated Adjustment Certificate, the rate card
as of the Calculation Date, describing the services available from the Systems,
and the rates charged by the Companies therefor, including all rates, tariffs,
and other charges for cable television or other services provided by the
Systems, and the line up of the stations and signals carried by the Systems and
the channel position of each such signal and station.  In addition, within 30 days after the last
day of each calendar month, the Cable Venture shall deliver to the Buyer a
report setting forth the number of Equivalent Subscribers of the Systems as of
the last day of such month, listed by the subscriber categories described in Section 4.5(a).

 

68

 

(e)           Neither
Company shall, with respect to any of its employees, except as required to
comply with applicable law or as required to comply with existing contracts or
plans that are disclosed on Schedule 4.9 or Schedule 4.10:
(i) increase or decrease in any manner the compensation or fringe benefits
of any employee (except for increases in the ordinary course of business
consistent with past practice in connection with normal salary reviews); (ii) voluntarily
recognize any union as collective bargaining representative of any of its
employees; (iii) enter into a collective bargaining agreement governing
the terms or condition of employment of any of its employees; (iv) enter
into any government contract giving rise to affirmative action obligations
relating to any of its employees; or (v) agree to do any of the
foregoing.  The Cable Venture shall also
notify the Buyer if, to the Companies’ Knowledge, there is any union organizing
involving, or directed towards, any group of employees of the Companies, and consult
with the Buyer concerning the Companies’ response to such organizing, and
permit the Buyer to attend any collective bargaining discussions that may occur
with any union representing any of the employees of the Companies for
collective bargaining purposes or, at the Buyer’s option, notify the Buyer of
the progress of such discussions.

 

7.13         Completion
of the Rebuild of the San Juan System.

 

(a)           From
the date hereof until the Completion of the Rebuild of the San Juan System (or
until the Closing Date if the Buyer elects to accept a reduction in the
Purchase Price pursuant to Section 3.2(b)(ii)), the Cable Venture (and
from and after the Closing Date, the Sellers) shall deliver to the Buyer
monthly progress reports regarding the status of the Rebuild of the San Juan
System, which shall include the Companies’ and the Sellers’ expenditures to
date in connection with the Rebuild of the San Juan System.  In addition, the Cable Venture shall permit
the Buyer to conduct independent progress reviews of the status of the Rebuild
of the San Juan System not less than sixty (60) days and thirty (30) days prior
to the earlier of (i) the date on which the Sellers have determined (by
written notice to the Buyer) that the Completion of the Rebuild of the San Juan
System will have occurred and (ii) the Closing Date, respectively, which
progress reviews shall include the right of the Buyer to inspect the San Juan System’s
compliance with the Rebuild specifications set forth on Schedule 1.1(w)
and their compliance in all material respects with the construction specifications
on Schedule 7.13(d).

 

(b)           In
order to minimize disruptions to the System or to the services to customers
provided thereby, from and after the Closing Date until the Completion of the
Rebuild of the San Juan System (unless the Buyer has elected to accept a
reduction in the Purchase Price pursuant Section 3.2(b)(ii)), the Sellers
shall not cause or permit a “cut-over” of service on any section of the
System to the rebuilt portion thereof unless the Sellers shall have first
delivered to the Buyer written notice of such intended “cut-over” not less than
five (5) Business Days prior to the intended date of transfer of service.

 

(c)           Except
as set forth on Schedule 7.13, the work, and all activities of the
Sellers, the Companies and/or their contractors in connection with, in
furtherance of, or in any way related to the Rebuild of the San Juan System
shall be performed in compliance in all material respects with relevant and
applicable laws, ordinances, rules and regulations (including occupational
safety and health standards) of any Governmental Authority having jurisdiction
over any aspect thereof, including, without limitation: (i) rules,
regulations and requirements of the FCC, the Puerto Rico Board, the Environmental
Protection Agency, the United States 

 

69

 

Department of
Transportation and the FAA; (ii) the Cable Communications Policy Act of
1984, as amended; (iii) the Telecommunications Act of 1996; (iv) the
Puerto Rico Telecommunications Act; and (v) requirements of any
Governmental Authorization covering the area in which the work is to be
performed.

 

(d)           Upon
the Sellers’ determination that the Completion of the Rebuild of the San Juan
System has occurred, the Sellers shall promptly notify the Buyer in
writing.  Upon receipt of such notice,
the Buyer will have 30 days thereafter to conduct an independent inspection and
verification of the Completion of the Rebuild of the San Juan System, which
inspection and verification shall include the right of the Buyer to inspect the
Systems’ compliance with the Rebuild specifications set forth on Schedule 1.1(w)
and their compliance in all material respects with the construction specifications
on Schedule 7.13(d), and deliver a report specifying any such non-compliance,
to be corrected at the Sellers’ expense. 
In the event that after the Buyer’s independent inspection and
verification of the Completion of the Rebuild of the San Juan System, the Buyer
disputes that the Completion of the Rebuild of the San Juan System has occurred
or the Sellers disagree with a report delivered by the Buyer pursuant to the
preceding sentence, the Buyer and the Sellers shall engage a neutral third
party engineer to resolve the dispute as soon as practicable (the “Independent
Engineer”).  The Independent Engineer’s
resolution of the dispute shall be final and binding, absent manifest
error.  The Buyer and the Sellers shall
share equally in the fees and expenses of the Independent Engineer; provided
that (i) if the Independent Engineer’s determination is completed prior to
the Closing Date, the Buyer shall deduct the Sellers’ share of such fees and
expenses from the amount payable to the Sellers at the Closing (which deduction
shall not be deemed a reduction of the Purchase Price) and (ii) if the
Independent Engineer’s determination is completed after the Closing Date, the
Sellers’ share of such fees and expenses shall be paid from the Sellers Escrow
Account.  If the Completion of the
Rebuild of the San Juan System is finally determined to have occurred (pursuant
to the determination provisions set forth in this Section 7.13(d)) after
the Closing Date, then, if the Buyer has not elected to accept a reduction in
the Purchase Price pursuant Section 3.2(b)(ii), any remaining amount in
the Rebuild Escrow Account (after payment of Sellers’ share of the fees and
expenses of the Independent Engineer, if any) shall be paid to the Sellers
Escrow Account.

 

(e)           In
the event that (i) the Completion of the Rebuild of the San Juan System
has not occurred prior to the Closing and (ii) the Buyer has not elected
to accept a reduction in the Purchase Price pursuant Section 3.2(b)(ii):

 

(i)            The
process of the Completion of the Rebuild of the San Juan System (and payment
for the Rebuild of the San Juan System) shall continue to be supervised by
employees of Century in the same manner as currently conducted, pursuant to the
Transition Services Agreement, with any remaining costs of the Rebuild of the San
Juan System paid from the Rebuild Escrow Account and, if the actual cost for
the Completion of the Rebuild of the San Juan System (including, without
limitation, any fines, fees, penalties or assessments for the failure to comply
with any Governmental Authorizations or Material Contracts associated
therewith) exceeds the amount in the Rebuild Escrow Account (such excess
amount, the “Rebuild Cost Overrun”), from the Sellers Escrow Account;
provided that the Sellers acknowledge and agree that the Sellers shall remain
liable for the full amount of any Rebuild

 

70

 

Cost Overrun,
notwithstanding the release of any funds from the Sellers Escrow Account prior
to the Completion of the Rebuild of the San Juan System.

 

(ii)           In
addition to the “as-built” maps of the portion of the San Juan System being rebuilt
to be delivered to the Buyer pursuant to Section 7.15(f), upon the
Completion of the Rebuild of the San Juan System, the Sellers shall deliver to
the Buyer supplemental “as-built” maps of all of the Systems reflecting the
post-Closing Rebuild of the San Juan System as built, which maps may be in
electronic form.

 

7.14         Risk
of Loss.  The risk of any loss
or damage to the Systems and the assets and properties of the Companies
resulting from fire, theft, hurricane or other casualty (except reasonable wear
and tear) will be borne by the Companies and the Sellers prior to the
Closing.  If there is a hurricane that
involves material, long-lasting or permanent damage to or destruction or degradation
of the Companies’ assets or their functionality or any other loss or damage
that is sufficiently substantial so as to preclude and prevent resumption of
normal operations of any material portion of the Systems, the Cable Venture
shall promptly notify the Buyer in writing of that fact and whether the Cable
Venture intends to repair, replace and restore the lost or damaged property to
its former condition (or, if such lost or damaged property had not yet been
replaced or upgraded in connection with the Rebuild of the San Juan System, to
the condition of such property contemplated by the Rebuild of the San Juan
System) as soon as practicable at its sole expense.  If the Cable Venture indicates it will not so
repair, replace and restore the lost or damaged property, then the Buyer shall
have the right to terminate this Agreement by giving written notice thereof to
the Cable Venture within thirty (30) days after receipt of such notice from the
Cable Venture.  If the Cable Venture
agrees to so repair, replace and restore the lost or damaged property, then
this Agreement shall continue in full force and effect and the Cable Venture
shall be obligated to effect such repair, replacement and restoration as soon
as reasonably practicable; provided, however, that if such
repair, replacement or restoration cannot reasonably be completed in all
material respects prior to the Closing, then (i) the Closing shall be
delayed until such completion in all material respects occurs, and (ii) at
the Buyer’s or the Sellers’ option the Termination Date shall be extended to
allow the Cable Venture to complete such repair, replacement or restoration,
but in no event shall the Termination Date be extended by more than one month.

 

7.15         Additional
Covenants Regarding the Companies.

 

(a)           Covenants
Relating to Facilities and Environmental Matters.  Prior to the Closing:

 

(i)            the
Companies shall have taken the remedial steps set forth on Schedule 7.15(a)(i);

 

(ii)           the
Companies shall have used reasonable efforts to obtain all material permits and
certificates required under applicable law for the use and operation of each of
the Owned Real Properties and Leased Real Properties as currently used and
operated by the Companies, including, without limitation, (1) use permits
from the Regulations and Permits Administration, (2) sanitary licenses
from the Department of Health, (3) certificates of inspection from the
applicable Fire Department, and (4) for those sites for which such permits
and

 

71

 

authorizations
are required, air emissions source permits and underground injection control
permits from the Environmental Quality Board; for those sites where
asbestos-containing materials (“ACM”) are present in good condition, the
Company shall use reasonable efforts to prepare and implement an ACM operations
and maintenance (O&M) plan in accordance with Environmental Quality Board
requirements;

 

(iii)          the
Companies shall have prepared Spill Prevention Control and Countermeasures
Plans or Emergency Plans as required under applicable law with respect to the
Owned Real Properties and the Leased Real Properties; and

 

(iv)          the
Companies shall have taken the remedial steps set forth on Schedule 7.15(a)(iv).

 

(b)           Covenants
Relating to Employee Benefits Plans Matters.  Prior to the Closing the Companies shall use
reasonable commercial efforts to:

 

(i)            take
all steps necessary to ensure that formal plan documentation for each Employee
Benefit Plan has been prepared and properly executed, that appropriate trustees
have been appointed for each plan, and that the 401(k) Plan for La Union
Insular de Trabajadores y Construcciones Electricas Inc. has been submitted for
and receive a favorable determination letter from the Puerto Rico Treasury;

 

(ii)           file
all outstanding annual reports and prepare and distribute summary plan
descriptions and summary annual reports as required by applicable Legal
Requirements;

 

(iii)          complete
all discrimination and operational testing that is required for each Employee
Benefit Plan and complete all corrections relating to any testing failures and
late contributions to any Employee Benefit Plan; and

 

(iv)          formally
adopt all relevant Employee Benefit Plans.

 

(c)           Covenants
Relating to Software, Intellectual Property and Programming Agreement Matters.  Prior to the Closing:

 

(i)            the
Companies shall have replaced the Companies’ existing TERAYON system, in its
entirety, with Motorola replacement equipment that in the aggregate is equivalent
to or better than the TERAYON system being replaced;

 

(ii)           the
Companies shall have completed their implementation of and transition to the
Great Plains accounting system (or, if not completed by the Closing Date,
Century shall provide to the Companies pursuant to the Transition Services
Agreement the accounting software currently provided to the Companies);

 

(iii)          Century
shall have transferred to the Companies, and shall have caused its Affiliates
(including, without limitation, Adelphia) to have transferred to the Companies,
the Retained Programming Agreements listed on Schedule 1.1(llll)
and shall transfer

 

72

 

or use
reasonable efforts to transfer to the Companies the other Retained Programming
Agreements to which such Person is a party as specified on Schedule 7.15(c)(iii);
and

 

(iv)          Century
shall have, and shall have caused each of its Affiliates (including, without
limitation, Adelphia) to have, transferred or otherwise conveyed to the
Companies (x) all of such Person’s rights and interest in the NEMOS and
Powertools software that are assignable by it without cost and shall have taken
the action set forth on Schedule 7.15(c)(iv), and (y) all of
such Person’s right, title and interest in and to the name POWERLINK.

 

(d)           Covenants
Relating to Other Operational Matters. 
Prior to the Closing:

 

(i)            the
Companies shall have taken all steps necessary to cause each of them to be in
good standing in its state of organization and in the Commonwealth of Puerto
Rico;

 

(ii)           if
the Rebuild is completed by the Closing Date, the Sellers shall have assigned
to the Companies, and shall have caused each of their respective Affiliates to
have assigned to the Companies, all rights of any such Person (including,
without limitation, rights to enforce performance and to seek damages or indemnity
for breach of warranty) under any contract to which such Person is a party
relating to the Rebuild of the San Juan System (and, if not, the Sellers shall
do so promptly after completion of the Rebuild); and

 

(iii)          Century
shall have transferred to the Companies all of the books and records relating
to the historic operations of the Companies in the possession of Century (or
Adelphia) in Century’s capacity as manager of the Systems and, to the extent
such books and records are held in electronic form, they shall be transferred
in electronic form to the Companies; provided, however, that
Century shall be entitled to keep copies of such books and records.

 

(e)           At
the Closing, the Companies shall have in stock for use (i) not less than
3,000 cable modems, (ii) not less than 2,000 HDTV/DVR boxes, and (iii) 3,000
digital converters that shall not be damaged and awaiting repair (or, if the total
number of digital converters is at least 3,000 but the number of undamaged
converters is less than 3,000, the Cash Purchase Price shall be reduced by an
amount equal to $60 for each converter required to be repaired so that the
number of undamaged converters is 3,000).

 

(f)            Within
30 days after the Closing Date, the Companies shall deliver to the Buyer a
complete set of “as-built” maps of the portion of the San Juan System that has
been rebuilt as of the Closing Date, which “as-built” maps may be in electronic
form; provided that, if the Completion of the Rebuild of the San Juan
System has occurred more than 30 days prior to the Closing Date, the Companies
shall deliver such “as-built” maps on the Closing Date.

 

7.16         Non-Solicitation;
No Competitive Use of Confidential Information.  To accord to the Buyer the full value of its
purchase, neither of the Sellers shall, and each of the Sellers shall cause
their respective Affiliates not to, (i) for a period of two years after
the Closing Date (the “Non-Solicitation Period”), directly or
indirectly, employ or solicit for employment or consulting, on its own behalf
or on behalf of any other Person, any individual who has been an employee of
the Companies or, after the Closing, the Buyer at any time during the period 

 

73

 

(x) commencing on the date which is one year prior to the date of
this Agreement and (y) ending on the final day of the Non-Solicitation
Period, or (ii) use in competition with the Systems any Company
Confidential Information.  The Sellers
acknowledge that the remedy at law for breach of the provisions of this Section 7.16
will be inadequate and that, in addition to any other remedy the Buyer may
have, it shall be entitled to an injunction restraining any such breach or
threatened breach, without any bond or other security being required; if any
court construes the covenant in this Section 7.16, or any part thereof, to
be unenforceable because of its duration or the area covered thereby, the court
shall reduce the duration or area to the extent necessary so that the
provision, as reduced, shall then be enforceable.

 

7.17         Further
Action Regarding Financial Statements.

 

(a)           From
the date hereof through the Closing, the Cable Venture shall deliver to the
Buyer, within 45 business days after the end of each month, (i) monthly
unaudited consolidated balance sheets and statements of income for the
Companies, and (ii) a monthly reporting package including any management
discussion and analysis of the financial condition and results of operations of
the Companies that is prepared for the board of managers of the Cable Venture,
the board of directors of Cable Corp. and/or the Sellers.  In addition, the Companies and the Sellers
shall deliver the Draft 2004 Financials as promptly as practicable, but in any
event not later than 60 days after the date hereof.

 

(b)           The
Companies and the Sellers shall use commercially reasonable efforts to deliver
to the Buyer, as promptly as practicable, but in any event not later than August 31,
2005 for the Audited Financials or September 15, 2005 for the Interim
Financials, (1) the Audited Financials and (2) the Interim Financials
through the second quarter of 2005 (together with the comparable prior periods,
as required), in each case meeting the requirements (in form and substance) of
Regulation S-X under the Securities Act of 1933, as amended (the “Securities
Act”) in order to be included in a registration statement on Form S-1,
assuming such registration statement is to be filed with the SEC under the
Securities Act on the Closing Date (collectively, the “S-1 Financial
Statements”), prepared on a basis consistent with the Audited Financials
and, in the case of the audited financial statements, accompanied by the report
thereon of PWC, the Companies’ independent certified public accountants, which
report shall be unqualified except with respect to the bankruptcy of the Cable
Venture.  In addition, the Companies and
the Sellers shall deliver to the Buyer drafts of the Interim Financials for the
first and the second quarters of 2005 by August 31, 2005.

 

(c)           The
Companies and the Sellers shall use commercially reasonable efforts to deliver
to the Buyer, as promptly as practicable but in any event not later than September 15,
2005, management’s discussion and analysis of the financial condition and
results of operations of the Companies as required by Item 303 of Regulation
S-K under the Securities Act and selected financial data as required by Item
301 of Regulation S-K, for inclusion in the Form S-1 registration
statement (which the Companies and the Sellers shall use commercially
reasonable efforts to update by November 22, 2005 to cover the
Supplemental Interim Financials, if the Closing does not occur on or before November 15,
2005).  The Companies and the Sellers
shall use commercially reasonable efforts to assist the Buyer in preparing
other information relating to the Companies required to be included in any bank
information memorandum, offering memorandum or other similar document (“Offering
Documents”) and shall provide all 

 

74

 

cooperation
reasonably necessary in connection with the arrangement of the Buyer’s
financing of the Cash Purchase Price, in each case including participation in
meetings (including with potential bank lenders), due diligence sessions,
rating agency presentations, road shows, the drafting of the Offering Documents
and similar documents, and the drafting of related documentation (including
collateral documents) and certificates (provided, however, that
counsel for the Sellers shall not be required to deliver any legal opinions in
connection with the Offering Documents and the Companies shall not be required
to execute any agreements connected to the Buyer’s financing that would be
effective as to the Companies before the Closing).

 

(d)           The
Companies and the Sellers shall use commercially reasonable efforts to cause
PWC to perform a SAS 100 review of any unaudited financial statements (through
the second quarter of 2005) included in the S-1 Financial Statements as soon as
practicable but in any event not later than September 15, 2005 and to take
such other actions as the Buyer may reasonably request in connection with Buyer’s
financing of the Cash Purchase Price, including, but not limited to: (i) delivering
a “comfort letter” in a form meeting the requirements of SAS 72; (ii) consenting
to the use of its report(s) on the audited financial statements included in the
S-1 Financial Statements; and (iii) participating, at the Buyer’s request,
in the preparation of any registration statement, prospectus or offering
memorandum that includes, or incorporates by reference, the S-1 Financial
Statements.

 

(e)           Notwithstanding
the foregoing, in the event that the Closing does not occur on or before November 15,
2005, then: (i) the Companies and the Sellers shall deliver to the Buyer,
as promptly as practicable but in any event not later than November 22, 2005,
the Interim Financials through the third quarter of 2005 (together with the
comparable prior periods) (the “Supplemental Interim Financials”),
meeting the requirements (in form and substance) of Regulation S-X under the
Securities Act in order to be included in a registration statement on Form S-1,
assuming such registration statement is to be filed with the SEC under the
Securities Act on the Closing Date; (ii) the Supplemental Interim Financials
shall be included for all purposes of this Agreement in the S-1 Financial
Statements; (iii) the Companies and the Sellers shall use reasonable
efforts to cause PWC to perform a SAS 100 review of the Supplemental Interim
Financials as soon as practicable but in any event not later than November 22,
2005; and (iv) the other obligations and covenants of the Companies and the
Sellers set forth in Sections 7.17(b) through 7.17(d) shall
continue with respect to such updated S-1 Financial Statements.

 

(f)            If,
following the Closing, the Buyer shall be required to deliver to the SEC
additional financial statements (other than the financial statements specified
in Section 7.17(b) and, if required to be delivered pursuant to Section 7.17(e),
the Supplemental Interim Financials) relating in whole or in part to any period
prior to the Closing, the Sellers shall use their reasonable efforts to assist
the Buyer in the preparation of such supplemental financial statements,
including without limitation providing the Buyer’s authorized representatives
with full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Sellers, to all relevant
books, records, work papers, information and employees and auditors of such
Persons, to the extent necessary in connection with the preparation of any such
supplemental financial statements.

 

75

 

(g)           The
Sellers and the Companies agree to record in the audited financial statements
deliverable pursuant to this Agreement all adjustments proposed by PWC as part
of PWC’s audits of the financial statements of the Companies for the fiscal
years ended December 31, 2002, December 31, 2003 and December 31,
2004, respectively, regardless of the materiality of such adjustments (either
individually or in the aggregate).

 

7.18         Financing.  The Buyer shall diligently and in good faith
seek to obtain debt financing in the amount required to consummate the
Transactions including, but not limited to, timely performing all covenants and
agreements of the Buyer in the Commitment Letters.  The Buyer shall keep the Sellers fully
informed of any significant developments relating to the proposed debt
financing and shall furnish to the Sellers, promptly after receipt, copies of
all final documents and shall notify the Sellers if the Buyer in good faith
reasonably believes that financing in the amount required to consummate the
Transactions will not be available to the Buyer, pursuant to the Commitment Letters
or otherwise.  Any financing commitment
or agreement shall not be subject to a due diligence condition, and any
conditions to the closing of the financing that relate to the number of
Equivalent Subscribers or Operating Cash Flow of the Systems shall be no more
stringent than the conditions set forth in Section 9.8.

 

7.19         Intercompany
Liabilities.  At the Closing, the
Sellers and the Companies shall assign to the Sellers Escrow Account or another
entity or otherwise satisfy from the Sellers Escrow Account or pursuant to the
Plan all liabilities of the Companies to the Sellers and their respective
Affiliates (other than the Companies) (“Affiliate Liabilities”), such
that from and after the Closing the Buyer shall not have any Affiliate
Liabilities owed to either Seller or their respective Affiliates.

 

7.20         Sale
of ML Media’s Joint Venture Interests.  Unless and until this Agreement is terminated
in accordance with the terms hereof, ML Media shall not sell, assign or
otherwise transfer or dispose of, directly or indirectly, (a) its joint
venture interests in the Cable Venture (the “ML JV Interests”) or (b) any
right to exercise any vote with respect to or in respect of the ML JV Interests
to any Person other than the Buyer.

 

7.21         Release
of Obligations Under Letters of Credit.  No less than 30 days prior to the reasonably
anticipated date of the Closing, the Companies shall deliver to the Buyer a
revised version of Schedule 4.6(e) (the “Revised Schedule 4.6(e)”),
listing the Companies’ open letters of credit and surety bonds as of the
Closing Date and specifying the remaining term and amount of such letters of
credit or surety bonds; provided that the Revised Schedule 4.6(e) shall
not reflect an increase in the aggregate amount due under all such letters of
credit and surety bonds of more than $100,000 over the aggregate amount due
reflected on Schedule 4.6(e). 
Subject to the foregoing, at Closing, the Buyer shall cause to be
delivered to the issuing institution under such letters of credit or surety
bonds, letters of credit or surety bonds with terms and availability equivalent
to the letters of credit or surety bonds outstanding on the Closing Date.

 

7.22         Stand-Alone.  The Companies shall use reasonable commercial
efforts to take the actions set forth on Schedule 7.22 to enable
the Companies to operate as stand-alone entities (without requiring any
products or services from Adelphia or Century) as of the Closing Date or as
soon as practicable after the Closing Date (a “Stand-Alone”).  The Companies shall consult with the Buyer,
and the Companies and the Buyer shall cooperate, to effect the Stand-Alone on a

 

76

 

timely, cost-efficient basis. 
Any individual expenditure by the Companies to effect the Stand-Alone in
excess of $50,000 or aggregate expenses to effect the Stand-Alone in excess of
$1,500,000 shall require the approval of the Buyer, such approval not to be
unreasonably withheld, and if the Buyer fails to approve any such expenditure,
the Companies shall not be required to make such expenditure or provide the
Stand-Alone capability of that expenditure. 
Any one-time expenses incurred by the Companies to effect the Stand-Alone
that require the approval of the Buyer, but for which approval was not
obtained, shall, if otherwise deducted in calculating Operating Cash Flow, be
added back to Operating Cash Flow but shall not be added back in calculating
Closing Date Working Capital.  Any
on-going expenses incurred by the Companies in operating as a Stand-Alone that require
the approval of the Buyer, but for which approval was not obtained, shall not
be added back in calculating Operating Cash Flow.

 

7.23         Publicity.  No party shall make any public announcement
regarding the Transactions without the consent of the others, except as a party
determines is required by applicable laws. 
If a party determines it is required to make a public announcement, that
party shall give the others as much prior notice as is reasonably practicable
and shall consult with the others about the text of such announcement.

 

7.24         Recordation of Leases.  The Buyer and the Companies shall jointly
determine which, if any, of the Companies’ real property leases should be
recorded, and the Companies shall use reasonable commercial efforts to record any
such lease prior to the Closing.

 

8.             CONDITIONS
PRECEDENT TO THE PARTIES’ OBLIGATIONS

 

The
obligations of the parties hereto to consummate the Transactions are subject to
the satisfaction or waiver, at or prior to the Closing Date, of the following
conditions:

 

8.1           Consents
from Governmental Authorities.  All
necessary notification filings required under the HSR Act shall have been made
with the FTC and DOJ, the prescribed waiting periods (and any extensions
thereof) shall have expired or been terminated.

 

8.2           Judgments.  There shall be no injunction or court order
restraining consummation of any of the Transactions and there shall not have
been adopted any law or regulation making all or any portion of such
transactions illegal.

 

8.3           Confirmation
Order.  The Confirmation Order
shall have been entered on the docket of the Bankruptcy Court and shall have
become a Final Order.

 

9.             CONDITIONS
PRECEDENT TO BUYER’S OBLIGATIONS

 

The
obligations of the Buyer to consummate the Transactions are subject to the satisfaction
or waiver, at or prior to the Closing Date, of the following conditions:

 

9.1           Representations
and Warranties of Companies and Sellers. 
The representations and warranties of the Companies and the Sellers set
forth in this Agreement shall be true and correct in all respects on and as of
the date hereof and as of the Closing Date as if made on and as of such date
or, if made as of a specific date, as of such date; provided, that for
purposes of this Section 9.1, such representations and warranties shall be
deemed true and correct in all

 

77

 

respects to the extent that, after removing concepts of Material
Adverse Effect or materiality from all such individual representations and
warranties, the aggregate effect of any inaccuracies in all such
representations and warranties as of the applicable times does not and would
not reasonably be expected to be material to the Companies taken as a whole;
but provided, further, that the foregoing proviso shall not apply
to the representations and warranties relating to the capitalization of the
Companies set forth in Section 4.1.

 

9.2           Covenants.  The Sellers and the Companies shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by them
prior to or at the Closing.

 

9.3           Material
Consents.  The Material
Consents and the consent set forth on Schedule 5.2(c) shall
have been obtained without any material condition adverse to the Buyer, except
as the parties may otherwise agree, and in the case of Material Consents from
the FCC and the Puerto Rico Board by final resolution of the FCC and the Puerto
Rico Board; provided, however, that the Buyer may waive the
requirement that Puerto Rico Board authority be given by final resolution
following approval of this transaction by the FCC.

 

9.4           Delivery
of Certificates and Documents.  The Cable Venture shall have delivered or
caused to be delivered to the Buyer (or such other Person as applicable) the
following:

 

(a)           a
certificate of an officer of the Cable Venture certifying that the conditions
set forth in Sections 9.1, 9.2, 9.3, 9.7 and 9.8 have been met;

 

(b)           a
copy of the Confirmation Order referred to in Section 7.11(b)(ii) and
of any other Order required for the Transactions to be consummated;

 

(c)           a
fully-executed copy of the Transition Services Agreement by and among Parent,
the Buyer and Century;

 

(d)           evidence
of the payment of all retention and sale bonuses payable by the Companies as of
the Closing Date;

 

(e)           an
affidavit, under penalties of perjury, stating that Cable Corp. is not and has
not been a United States real property holding corporation, dated as of the
Closing Date and in form and substance required under Treasury Regulation § 1.897-2(h) so
that the Buyer is exempt from withholding any portion of the Purchase Price
thereunder; and

 

(f)            such
other documents, certificates or agreements as the Buyer may reasonably
request.

 

9.5           Escrow
Agreement.  The Escrow
Agreement shall have been executed by the Escrow Agent and the Sellers.

 

9.6           Financial
Statements

 

(a)           Schedule 9.6(a) shall
have set forth, for the fiscal year ended December 31, 2004, a list of
expenses (by categories and amounts) that have been allocated to

 

78

 

the Companies
by Century or ML Media or any of their respective Affiliates (including,
without limitation, the Management Fee and expenses arising under the
Programming Agreements) (the “Allocations”) for such fiscal year (the “Allocation
Schedule”), as reflected in the Unaudited Financials.  The Companies shall provide notice to the
Buyer if there is any change in the methods of determining the Allocations or
the products or services included within the Allocation from that set forth on Schedule 9.6(a).

 

(b)           The
unaudited consolidated balance sheet, statement of operations and statement of
cash flows as of and for the year ended December 31, 2004, including the
notes thereto, to be provided to the Buyer prior to the Closing pursuant to Section 7.17(a) (the
“Draft 2004 Financials”), shall have presented fairly the financial
condition of the Companies as of such date and the results of operations and
cash flows of the Companies for the periods therein referred to, in conformity
with GAAP applied consistently throughout the periods covered thereby, and the
accounting principles used in preparing the Draft 2004 Financials shall have
been the same as the Reference Accounting Principles, and the methodology for
the Allocations to the Companies for the fiscal year ended December 31,
2004 shall not have differed in any material respect from the methodology for
the Allocations set forth on the applicable Allocation Schedule.

 

(c)           The
Cable Venture shall have furnished the Buyer with the Audited Financials for
the fiscal years ended December 31, 2002 and December 31, 2003 conforming
to the requirements of Section 4.3(b), together with the report thereon of
PWC, the Companies’ independent certified public accountants, which report
shall be unqualified except with respect to the bankruptcy of the Cable
Venture, not later than August 31, 2005. 
Taking into account both the line items reflected on the face of the
financial statements and the information disclosed in the footnotes to the
financial statements, the Audited Financials for the fiscal year ended December 31,
2003, as compared to the Unaudited Historical Financials for the same fiscal
year, shall not reflect (i) any material reduction in Current Assets (excluding
cash) or Total Assets (excluding cash), or any material increase in Current
Liabilities or Total Liabilities (other than Transferred Assets or Excluded
Liabilities), in each case as set forth on the corresponding balance sheet as
of December 31, 2003, (ii) any material reduction in Net Revenues,
Net Income, or Operating Cash Flow (in the case of “Operating Cash Flow” as
such term is defined in this Agreement and is derived from the Audited
Financials and the Unaudited Historical Financials, as applicable, in accordance
with such definition), in each case individually (and not on an aggregated
basis) as reflected in the corresponding statement of operations for the fiscal
year ended December 31, 2003, or (iii) any change or changes to the
line items reflected on the face of the financial statements or the information
disclosed in the footnotes to such financial statements (including, without
limitation, any changes to any of the specific items identified in clauses (i) or
(ii)), which, individually or in the aggregate, result in any material, adverse
change in the amount, composition or terms of debt financing made available to
the Buyer by its lenders (as compared to the amount, composition and terms set
forth in the Commitment Letters).

 

(d)           The
Cable Venture shall have furnished the Buyer with the Draft 2004 Financials as
promptly as practicable, but in any event not later than 60 days after the date
hereof.  Taking into account both the
line items reflected on the face of the financial statements and the
information disclosed in the footnotes to the financial statements, the Draft
2004 Financials, as compared to the Unaudited 2004 Financials, shall not
reflect (i) any material

 

79

 

reduction in
Current Assets (excluding cash) or Total Assets (excluding cash), or any
material increase in Current Liabilities or Total Liabilities (other than
Transferred Assets or Excluded Liabilities), in each case as set forth on the
corresponding balance sheet as of December 31, 2004, (ii) any
material reduction in Net Revenues, Net Income or Operating Cash Flow (in the
case of “Operating Cash Flow” as such term is defined in this Agreement and is
derived from the Draft 2004 Financials and the Unaudited 2004 Financials, as
applicable, in accordance with such definition), in each case individually (and
not on an aggregated basis) as reflected in the corresponding statement of
operations for the fiscal year ended December 31, 2004, or (iii) any
change or changes to the line items reflected on the face of the financial
statements or the information disclosed in the footnotes to such financial
statements (including, without limitation, any changes to any of the specific
items identified in clauses (i) or (ii)), which, individually or in the
aggregate, result in any material, adverse change in the amount, composition or
terms of debt financing made available to the Buyer by its lenders (as compared
to the amount, composition and terms set forth in the Commitment Letters).

 

(e)           The
Cable Venture shall have furnished the Buyer with audited financials as of and
for the year ended December 31, 2004 (the “Audited 2004 Financials”),
conforming to the requirements of Section 4.3(b), together with the report
thereon of PWC, the Companies’ independent certified public accountants, which
report shall be unqualified except with respect to the bankruptcy of the Cable
Venture, not later than August 31, 2005. 
Taking into account both the line items reflected on the face of the
financial statements and the information disclosed in the footnotes to the
financial statements, the Audited 2004 Financials, as compared to (x) Unaudited
2004 Financials and (y) the Draft 2004 Financials, shall not reflect (i) any
material reduction in Current Assets (excluding cash) or Total Assets (excluding
cash) or any material increase in Current Liabilities or Total Liabilities
(other than Transferred Assets or Excluded Liabilities), in each case as set
forth on the corresponding balance sheet as of December 31, 2004, (ii) any
material reduction in Net Revenues, Net Income or Operating Cash Flow (in the
case of “Operating Cash Flow” as such term is defined in this Agreement and is
derived from the Audited 2004 Financials and the Draft 2004 Financials, as
applicable, in accordance with such definition), in each case individually (and
not on an aggregated basis) as reflected in the corresponding statement of
operations for the fiscal year ended December 31, 2004 or (iii) any
change or changes to the line items reflected on the face of the financial
statements or the information disclosed in the footnotes to such financial
statements (including, without limitation, any changes to any of the specific
items identified in clauses (i) or (ii), which, individually or in the
aggregate, result in any material, adverse change in the amount, composition or
terms of debt financing made available to the Buyer by its lenders (as compared
to the amount, composition and terms set forth in the Commitment Letters).

 

(f)            All
financial statements delivered pursuant to this Section 9.6 that are
referred to in Section 7.17 shall have complied with all requirements of Section 7.17.

 

(g)           The
increase in the percentage Management Fee payable to Century accrued during the
period January 1, 2002 through May 31, 2003 shall be disregarded in
making all determinations pursuant to Section 7.17(b), (c), (d) and
(e).

 

80

 

(h)           The
Buyer may only assert the condition contained in this Section 9.6 or the
corresponding termination right in Section 12.1(j)(3) if the Buyer
provides the Sellers a written notice (i) within 60 days after the receipt
of the Draft 2004 Financials, if the Draft 2004 Financials fail to comply with Section 7.17
or this Section 9.6, or (ii) within 60 days after the receipt of all
of the Audited Financials, if any of the Audited Financials fail to comply with
Section 7.17 or this Section 9.6, indicating in either case with
specificity the basis on which it intends to assert the failure of this
condition.

 

9.7           Material
Adverse Change.  Since the
date of this Agreement, there shall not have occurred any fact, change or event
that, individually or in the aggregate, has had or reasonably would be expected
to have a Material Adverse Effect.

 

9.8           Subscribers;
Operating Cash Flow.  Neither
the number of Equivalent Subscribers as of the Previous Month End nor the
estimated number of Equivalent Subscribers as of the Closing Date shall be less
than 129,482 and the Operating Cash Flow of the Systems as of the Previous
Month End shall not be less than $50,000,000.

 

9.9           Financing.  The Buyer shall have received (or shall have
the right to receive) proceeds of debt financing of at least $350,000,000 (less
the amount, if any, of any reduction in the Purchase Price pursuant to Section 3.3(c)),
on terms and conditions reasonably satisfactory to the Buyer (the Buyer
agreeing that terms and conditions not materially less favorable to the Buyer
than those set forth in the Debt Commitment Letter shall be deemed reasonably
satisfactory to the Buyer).

 

9.10         Confirmation
Order.  The Confirmation Order shall
conform to the requirements of Section 7.11(b) of this
Agreement.  The Assumed Executory
Contracts shall have been assumed by the Cable Venture such that the Assumed
Executory Contracts will be in full force and effect from and after the Closing
with all cure costs paid by the Cable Venture and all non-debtor parties being
barred and enjoined from asserting against the Buyer, among other things,
defaults, breaches or Claims of pecuniary losses existing as of the Closing or
by reason of the Closing.

 

9.11         Payment
Motion.  An Order granting
that certain Motion of Debtor for an Order Pursuant to Bankruptcy Code §105
Authorizing Payment of Agreed Pre-Petition Claims of Non-Inside Creditors, dated
January 11, 2005, shall have been entered on the docket of the Bankruptcy
Court and shall have become a Final Order. 
The Cable Venture shall have made full, final and indefeasible payment
of all claims contemplated to be paid pursuant to the terms of such motion.

 

9.12         Extension
of Rebuild Deadline.  The Puerto Rico
Board shall have extended the deadline for Completion of the Rebuild of the San
Juan System to a date not earlier than the Rebuild Extension Date.

 

9.13         Franchise
Extensions.  The Puerto Rico Board
shall have granted the Franchise Extensions with no changes to the terms of the
Franchises except as contemplated by Section 7.4(f).

 

81

 

10.          CONDITIONS
PRECEDENT TO COMPANIES’
AND SELLERS’ OBLIGATIONS

 

The
obligations of the Companies and the Sellers to consummate the Transactions are
subject to the satisfaction or waiver, at or prior to the Closing Date, of the
following conditions:

 

10.1         Representations
and Warranties of Buyer.  The
representations and warranties of the Buyer set forth in this Agreement that
are qualified as to materiality shall be true and correct, and those that are
not so qualified shall be true and correct in all material respects, on and as
of the date hereof and as of the Closing Date as if made on and as of each such
date or, if made only as of a specific date, as of such date.

 

10.2         Covenants.  The Buyer shall have performed and complied
in all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by them prior to or at the Closing.

 

10.3         Material
Consents.  The Material Consents from
the FCC and the Puerto Rico Board and the consent set forth on Schedule 5.2(c) shall
have been obtained without any material condition adverse to the Sellers,
except as the parties may otherwise agree.

 

10.4         Delivery
of Certificates and Documents.  The
Buyer shall have delivered or caused to be delivered to the Cable Venture (or
to such other Person as applicable) the following:

 

(a)           a
certificate of an officer of the Buyer as to (i) the organizational
documents of the Buyer, (ii) all actions taken by and on behalf of the
Buyer to authorize the execution, delivery and performance of this Agreement
and the Related Agreements and (iii) the incumbency of officers signing
this Agreement and any Related Agreement on behalf of the Buyer;

 

(b)           a
certificate of an officer of each Buyer certifying that the conditions set
forth in Sections 10.1 and 10.2 have been met;

 

(c)           the
payments pursuant to Section 3.2(c)(i) and pursuant to Section 3.2(c)(ii);
and

 

(d)           the
Investor Guaranty.

 

10.5         Escrow
Agreement.  The Escrow Agreement
shall have been executed by the Escrow Agent and the Buyer.

 

11.          SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION

 

11.1         Survival
of Representations, Warranties and Covenants.  The representations, warranties and
certifications of the parties contained in this Agreement or in any certificate
delivered pursuant to Sections 9.4(a) or 10.3(b) and any claim with
respect to any failure to perform any covenant shall survive the Closing for a
period ending on December 31, 2006. 
No 

 

82

 

claim for indemnification for breach of a representation or warranty or
any covenant, agreement or obligation may be asserted after the expiration of
the applicable survival period for such representation, warranty or covenant; provided,
that the written assertion of any claim by a party against another party
hereunder with respect to the breach or alleged breach of any representation,
warranty or any covenant, agreement or obligation or of a series of facts which
would support such breach, which claim shall include specific assertions as to
the underlying facts supporting the claim as opposed to general assertions of a
breach, shall extend the applicable survival period through the date such claim
is conclusively resolved.  None of the
foregoing shall be deemed to affect the obligations of the parties to perform
their respective obligations under Sections 7.1, 7.5, 7.6, 7.7, 7.8, 7.13, 7.16
and 7.17 that are required to be performed after the Closing Date.

 

11.2         Indemnification.

 

(a)           Indemnification
by the Buyer.  Subject to the
limitations in this Section 11, the Buyer agrees to indemnify, defend and
hold harmless the Companies (and after the Closing, the Sellers) from and
against any and all loss, Liability, damage or expense, but excluding any
consequential or exemplary damages, (collectively, “Losses”) to the
extent such Losses are based upon, arise out of or are related to:

 

(i)            a
breach of any representation or warranty of the Buyer contained in this
Agreement;

 

(ii)           any
failure of the Buyer to perform or comply with any of the covenants, agreements
or obligations of the Buyer set forth in this Agreement or in any Related
Agreement; or

 

(iii)          any
Liability to any broker or finder retained or alleged to have been retained by
the Buyer in connection with this Agreement or the Transactions.

 

(b)           Indemnification
by the Sellers.  Subject to the limitations
in this Section 11, the Sellers jointly and severally agree to indemnify,
defend and hold harmless the Buyer Group from and against any and all Losses to
the extent such Losses are based upon, arise out of or are related to:

 

(i)            a
breach of any representation or warranty (after giving effect to any
materiality or Material Adverse Effect qualification) of the Sellers or the
Companies contained in this Agreement; provided that, for purposes of
this Section 11.2(b), if there is a breach of any representation or
warranty (after giving effect to any materiality or Material Adverse Effect qualification)
then the determination of the Losses upon such breach of any representation or
warranty shall be made without regard to any materiality or Material Adverse
Effect qualification contained therein; and provided  further
that, for purposes of the foregoing proviso only, any Material Adverse Effect
qualification contained in any representation or warranty in Section 4.8(b),
Section 4.8(c) and Section 4.17(e) only shall not be given
effect, but instead such representation or warranty shall instead be
interpreted as though it contained a materiality qualification;

 

83

 

(ii)           any
failure of the Sellers or the Companies to perform or comply with any of the
covenants, agreements or obligations of the Sellers or the Companies contained
in this Agreement or in any Related Agreement (other than Section 7.15(b),
which is covered by clause (vi) below);

 

(iii)          any
Excluded Liabilities;

 

(iv)          any
Liability to any broker or finder retained or alleged to have been retained by
the Companies (except as reflected as a Closing Date Current Liability in the
final determination of Closing Date Working Capital) or either of the Sellers
in connection with this Agreement or the Transactions;

 

(v)           any
Indemnified Tax Liability; or

 

(vi)          the
failure to obtain a favorable determination letter from the Puerto Rico
Treasury for La Union Insular de Trabajadores Industriales y Construcciones Electricas
Inc. 401(k) Plan or to successfully complete prior to the Closing Date any of
the other actions set forth in Section 7.15(b).

 

11.3         Assertion
of Claims; Notice of and Right to Defend Third Party Claims.

 

(a)           If
any third party notifies any party (the “Indemnitee”) with respect to
any matter (a “Third-Party Claim”) that may give rise to a claim for
indemnification against any other party (the “Indemnitor”) under Section 11.2,
then the Indemnitee shall promptly notify the Indemnitor thereof in writing; provided,
however, that no delay on the part of the Indemnitee in notifying the
Indemnitor shall relieve the Indemnitor from any obligation hereunder unless
(and then solely to the extent) the Indemnitor is thereby prejudiced.

 

(b)           Any
Indemnitor will have the right to defend the Indemnitee against the Third-Party
Claim with counsel of his, her, or its choice reasonably satisfactory to the
Indemnitee so long as (i) the Indemnitor assumes such defense on a timely
basis, (ii) the Indemnitor provides the Indemnitee with evidence
reasonably acceptable to the Indemnitee that the Indemnitor will have the
financial resources to defend against the Third-Party Claim and fulfill its
indemnification obligations hereunder, (iii) the Third-Party Claim
involves money damages only and does not seek an injunction, and (iv) the
Indemnitor conducts the defense of the Third-Party Claim actively and
diligently.

 

(c)           So
long as the Indemnitor is conducting the defense of the Third-Party Claim in
accordance with Section 11.3(b) above, (i) the Indemnitee may
retain separate co-counsel at his, her, or its sole cost and expense and
participate in the defense of the Third-Party Claim, provided that if
the defendants in any Third Party Claim include both the Indemnitor and the
Indemnitee, and the Indemnitee shall have reasonably concluded that there may
be legal defenses available to it that are different from, inconsistent with or
in addition to those defenses available to the Indemnitor, or if there is a
conflict of interest that would prevent counsel for the Indemnitor from also
representing the Indemnitee, then the Indemnitee shall have the right to engage
a single separate counsel at the cost and expense of the Indemnitor, (ii) the
Indemnitee will not consent to the entry of any judgment on or enter into any
settlement with respect to the Third-Party Claim without the prior written
consent of the Indemnitor (not to be unreasonably

 

84

 

withheld), and
(iii) the Indemnitor will not consent to the entry of any judgment on or
enter into any settlement with respect to the Third-Party Claim without the
prior written consent of the Indemnitee (not to be unreasonably withheld)
unless such settlement involves only the payment of money damages by the
Indemnitor and does not impose an injunction or other equitable relief upon the
Indemnitee.  If the Indemnitor does not
timely assume and conduct the defense of the Third-Party Claim, or at any time
ceases to do so, then the Indemnitee may thereafter assume the defense of the
Third-Party Claim with a single counsel of his, her or its choice at the cost
and expense of the Indemnitor.

 

(d)           Notwithstanding
anything to the contrary in the foregoing provisions of this Section 11.3,
with respect to a Third Party Claim in respect of Taxes, including any audit or
examination by a Taxing Authority, the Sellers, on the one hand, and the Buyer,
on the other hand, shall not, unless with the prior written consent of the
other party: (i) agree or consent to, approve, permit or otherwise
acquiesce in the extension of any statute of limitations applicable to the
assessment of any deficiency with respect to any Tax paid, payable or alleged
to be payable by the Companies or the Buyer that relates to any period prior to
the Closing; and (ii) agree to adjust an item of any of the Companies for
any Tax period (or portion thereof) ending on the Closing Date or any
Pre-Closing Tax Straddle Period to the extent such adjustment would require an
adjustment to an item of any of the Companies or the Buyer that could
reasonably be expected to result in an increase in the Tax Liability of the
other party or its Affiliates for such Tax period or any Tax period beginning
on or following the Closing Date.

 

(e)           Any
claim by an Indemnitee on account of a Loss that does not result from a
Third-Party Claim will be asserted by giving the Indemnitor reasonably prompt
written notice thereof, describing such claim with reasonable particularity and
containing a reference to the provision(s) of this Agreement under which such
claim has arisen; provided, that the failure of an Indemnitee to so
notify promptly any Indemnitor shall not relieve such Indemnitor from any
Liability which it may have to the Indemnitee in connection therewith, unless
(and then solely to the extent) such Indemnitor actually has been prejudiced by
such failure to give notice.  The
Indemnitor will have a period of 60 days following its receipt of such notice
within which to respond in writing to such claim.  If the Indemnitor does not so respond within
such 60 day period, the Indemnitor 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
Agreement.

 

(f)            Where
the indemnification is provided from the Indemnity Escrow Account, all rights
of the Indemnitor shall be exercised by the Sellers.

 

(g)           A
claim for indemnification for any Indemnified Tax Liability against the
Deferred Purchase Price may be asserted by the Buyer only if a Taxing Authority
has asserted a claim for Tax, or if the Buyer has reasonably determined in good
faith that there is a significant risk of a material Tax Liability.  A claim for indemnification shall be payable
to the Buyer only upon (i) final determination by a Taxing Authority, (ii) agreement
between the Buyer and the Sellers or (iii) the determination by the
Independent Accountant with respect to a Tax Return in question as described in
Section 7.5(a) and the filing by the Buyer of the amended Tax Return
as described therein.  Any claim for
Indemnified Tax Liability asserted by the Buyer may include deficiencies in
previously asserted claims.  All Tax claims
shall be deemed finally determined by 

 

85

 

a Taxing
Authority upon final assessment (no longer subject to review or appeal),
closing agreement or similar document with the Taxing Authority.  If the Sellers dispute that there is a significant
risk of material Tax Liability, the parties shall refer the dispute in question
to the Independent Accountants who shall, in accordance with the procedures set
forth in Section 3.4(b)(ii), determine whether or not the Buyer’s claim
corresponds to a significant risk of a material Tax Liability as required
herein.  In the event that the
Independent Accountants determine that the Buyer’s claim does not correspond to
a significant risk of a material Tax Liability, then the claim shall be treated
under this Agreement as if it had not been made by the Buyer, although, for the
avoidance of doubt, if the claim is later asserted by a Taxing Authority then
this treatment shall cease to apply.  Any
claim for Indemnified Tax Liability asserted by the Buyer with which the
Sellers agree or as determined by the Independent Accountants shall permit the
Buyer to holdback from the Deferred Purchase Price the amount associated with
such claim but shall not be payable to the Buyer until (i) the final
determination by a Taxing Authority, (ii) agreement between the Buyer and
the Sellers, or (iii) determination by the Independent Accountant with
respect to a Tax Return in question as described in Section 7.5(a).

 

11.4         Limitations
on Liability.

 

(a)           Basket.  No party shall be required to indemnify any
other party pursuant to Section 11.2(a)(i) or Section 11.2(b)(i) with
respect to Losses arising from a breach of any representation or warranty,
unless the aggregate amount of all such Losses in respect of such party’s
breaches of representations and warranties exceeds an amount equal to $2,600,000)
(the “Basket”), in which event the indemnifying party shall be liable
for the Losses above the Basket; provided that, to the extent that any
claim for indemnification by the Sellers pursuant to Section 11.2(a)(iii) (Broker’s
Fees) or by the Buyer pursuant to Section 11.2(b)(iii) (Excluded
Liabilities), Section 11.2(b)(iv) (Brokers’ Fees), Section 11.2(b)(v) (Indemnified
Tax Liabilities) or Section 11.2(b)(vi) (Section 7.15(b) Covenants)
may also be construed as a claim under Section 11.2(a)(i) or Section 11.2(b)(i),
as applicable, the parties hereto acknowledge and agree that such claim shall
be deemed for all purposes to be a claim pursuant to Section 11.2(a)(iii),
Section 11.2(b)(iii), Section 11.2(b)(iv), Section 11.2(b)(v) or
Section 11.2(b)(vi), as applicable, and the Basket shall not apply thereto
and provided, further, that the Basket shall not apply to a
breach of the representation in Section 4.12(g).  No party shall be entitled to indemnity to
the extent the Loss has been reflected in the computation of the Closing Date
Working Capital or the other adjustments to the Purchase Price.

 

(b)           Cap.  The liability of the Sellers for breaches of
any representations and warranties and covenants, agreements and obligations under
this Agreement or any other indemnifiable claim under this Agreement shall be
limited to Losses not exceeding the aggregate amount in the Indemnity Escrow
Account (originally $25,000,000 and reduced as provided in the Escrow
Agreement) and, in the case of Indemnified Tax Liabilities, set off against the
Deferred Purchase Price and shall be satisfied solely from the funds held in
the Indemnity Escrow Account (or such set-off), and the Buyer shall have no
other recourse against ML Media or Century or any of their respective partners,
officers, directors or shareholders with respect to such indemnity obligations
or otherwise arising under this Agreement, except as provided in Section 11.6(b);
provided that the Sellers acknowledge and agree that the limitation on
liability set forth in this Section 11.4(b) shall not apply with
respect to claims of the Buyer pursuant to Section 11.2(b)(iii).

 

86

 

(c)           To
the extent that the indemnified party recognizes Tax Benefits (as defined
below) with respect to any taxable year as a result of any claim, the
indemnified party shall pay the amount of such Tax Benefits (but not in excess
of the indemnification payment or payments actually received from the
indemnifying party with respect to such claim) to the indemnifying party as
such Tax Benefits are actually recognized by the indemnified party.  For this purpose, an indemnified party shall
be deemed to recognize a tax benefit (“Tax Benefit”) with respect to a
taxable year if, and to the extent that, the indemnified party’s liability for
Taxes for such taxable year, calculated by excluding any Tax items attributable
to the claim, exceeds the indemnified party’s actual liability for Taxes for
such taxable year, calculated by taking into account any Tax items attributable
to the claim (to the extent permitted by relevant Tax law and treating such Tax
items as the last items claimed for any taxable year).

 

(d)           None
of the Cable Venture, Cable Corp., ML Media or Century shall have any Liability
to the Buyer under this Agreement or otherwise if the Bankruptcy Court does not
enter the Confirmation Order, except for (i) the obligation to pay the
Expense Reimbursement and/or the Break-Up Fee, as set forth in Section 7.11(c)(iv) and
(ii) as applicable, the obligations of the Cable Venture to reimburse the
Buyer’s expenses under (and subject to the conditions contained in) the Expense
Reimbursement Agreement.

 

(e)           Any
payment pursuant to this Section 11 shall be treated as an adjustment to
the Purchase Price.

 

11.5         Indemnified
Tax Liabilities.  Any liability of
the Sellers pursuant to Section 11.2(b)(v) of this Agreement shall
first be satisfied by an offset against the Deferred Purchase Price and then
from the Indemnity Escrow Account.

 

11.6         Exclusive
Remedy.  After the Closing, the
parties agree that the indemnification provisions of this Section 11 and
the amount in the Indemnity Escrow Account and the Buyer’s offset right against
the Deferred Purchase Price (which amounts do not limit claims of the Buyer
pursuant to Section 11.2(b)(iii)) shall constitute the parties’ sole and
exclusive remedies in respect of any breach or breaches of any representation,
warranty, covenant, agreement or obligation set forth in this Agreement; provided,
that (a) this Section 11.6 shall not be deemed a waiver by any party
of any right to specific performance or injunctive relief (including, without
limitation, the right of the Buyer to seek injunctive relief pursuant to the
terms of Section 7.16) and (b) nothing in this Agreement shall
prohibit or limit any remedy available at law or in equity for any fraud
committed or made by any party in connection with the Transactions.

 

11.7         No Third
Party Beneficiaries.  Neither this Section 11
nor any other provision of this Agreement is intended to confer any third party
beneficiary rights, including but not limited to any extension of any statute
of limitations pertaining to suits, actions or proceedings brought by third
parties.

 

12.          TERMINATION

 

12.1         Termination.  This Agreement may be terminated prior to the
Closing only in accordance with the following:

 

(a)           at
any time by agreement of the Sellers and the Buyer;

 

87

 

(b)           by
either of the Sellers or the Buyer if the Closing hereunder has not taken place
on or before the Termination Date other than by reason of a material breach or
default of any of the covenants or agreements contained in this Agreement (i) by
either of the Sellers or either of the Companies, if a Seller is seeking to
terminate or (ii) by the Buyer if the Buyer is seeking to terminate;

 

(c)           by
either of the Sellers, at any time, if the Buyer is in material breach or
material default of its covenants, agreements or obligations under this
Agreement, or if any of its representations or warranties are not true in all
material respects, and the Buyer does not cure such breach or default within
thirty (30) days following its receipt of notice of such material breach or
default from the Cable Venture, provided that neither the Sellers nor the
Companies are also in material breach or material default of any of their
covenants, agreements, representations or warranties hereunder;

 

(d)           by
the Buyer, at any time, if the representations and warranties of the Companies
and the Sellers are not true and correct in all respects at and as of such time
and the Sellers or the Companies, as applicable, do not cure such failure to be
true and correct within thirty (30) days following its or their receipt of
notice of such failure, provided that the Buyer is not then in material default
of any of its covenants, agreements, representations or warranties hereunder; provided
that for purposes of this Section 12.1(d), such representations and
warranties shall be deemed true and correct in all respects to the extent that,
after removing concepts of Material Adverse Effect or materiality from all such
individual representations and warranties, the aggregate effect of any
inaccuracies in all such representations and warranties as of the applicable
times does not and would not reasonably be expected to be material to the
Companies taken as a whole); but provided, further, that the
foregoing proviso shall not apply to the representations and warranties
relating to the capitalization of the Companies set forth in Section 4.1;

 

(e)           by
the Buyer, at any time, if the Sellers or the Companies are in material breach
or default of any of their respective covenants, agreements or obligations
under this Agreement and the Sellers or the Companies, as applicable, do not
cure such breach or default within thirty (30) days following its or their
receipt of notice of such breach or default from the Buyer, provided
that the Buyer is not then also in material breach or default of any of its
covenants, agreements, representations or warranties hereunder;

 

(f)            by
the Buyer on any day on or after 30 days from the date of this Agreement if an
Order has not been entered by the Bankruptcy Court approving the Break-Up Fee
and Expense Reimbursement;

 

(g)           by
the Buyer or either of the Sellers if the Confirmation Order (which shall
contain all of the items set forth in Section 7.11(b)) is not entered by September 9,
2005 (or by September 30, 2005 if there are objections to the Confirmation
Order);

 

(h)           by
the Buyer if (i) the Cable Venture or Century notifies the Buyer of its
intention to exercise its rights under Section 7.11(c)(ii) with
respect to an Acquisition Proposal and (ii) the Cable Venture or Century,
as applicable, has not notified the Buyer within 20 days of 

 

88

 

the delivery
of such notice that it has determined not to pursue, and has ceased all
discussions and negotiations concerning, such Acquisition Proposal;

 

(i)            by
the Sellers or the Buyer, if the Cable Venture and Century obtain an Order of
the Bankruptcy Court approving any Alternate Agreement;

 

(j)            by
the Buyer if (1) either of the conditions set forth in Section 9.8
with respect to the minimum number of Equivalent Subscribers or the minimum
Operating Cash Flow is not satisfied or (2) the Sellers and the Companies
have not delivered the financial statements, management’s discussion and
analysis and “comfort letter” required to be delivered to the Buyer pursuant to
Sections 7.17(b), 7.17(c), 7.17(d); and 7.17(e) by August 31, 2005
(in the case of the Audited Financials) and September 15, 2005 (in the
case of the Interim Financials and the “comfort letter”) and November 22,
2005 (in the case of the Supplemental Interim Financials, if required by Section 7.17(e))
or (3) any of the conditions set forth in Section 9.6 with respect to
the Audited Financials or the Draft 2004 Financials is not satisfied; provided
that, for the avoidance of doubt, the parties agree that if any of the
conditions set forth in Section 9.6 with respect to the Audited Financials
or the Draft 2004 Financials is not satisfied and, as a consequence thereof,
the Buyer is unable to obtain debt financing on terms no less favorable than
those set forth in the Commitment Letters, Buyer’s termination of this
Agreement shall be deemed a termination for failure of the closing conditions
set forth in Section 9.6, not a termination for failure of the closing
condition set forth in Section 9.9;

 

(k)           by
the Sellers, if (i) a hurricane or other force majeure event occurs after
the date of this Agreement, (ii) the actual expense to the Companies to
repair the damage to the Systems caused by such hurricane or other force
majeure event exceeds $500,000 and (iii) the Buyer and/or the Buyer’s
lenders do not consent to an adjustment to Operating Cash Flow in the full
amount of such expenses;

 

(l)            by
the Sellers, if (i) the adjustments to the Purchase Price on the Closing
Date set forth in Sections 3.3(b)-(d) result in a reduction of the
Purchase Price (as calculated pursuant to Section 3.3(d)) in excess of
$20,000,000 (the “Maximum Permissible Reduction”) and (ii) the
Buyer has not agreed to limit the reduction of the Purchase Price to the
Maximum Permissible Reduction;

 

(m)          by
the Buyer as set forth in Section 7.14;

 

(n)           by
the Buyer or either of the Sellers as set forth in Section 18; or

 

(o)           by
the Buyer or the Sellers, if any Governmental Authority that must grant a Material
Consent has denied approval of the Transactions and such denial has become
final and nonappealable or any Governmental Authority of competent jurisdiction
shall have entered a final and nonappealable order permanently enjoining or
otherwise prohibiting the consummations of the Transactions.

 

12.2         Surviving
Obligations.  In the event of termination
of this Agreement by either the Buyer, on the one hand, or either or both of
the Sellers, on the other hand, pursuant to this Section 12, (i) prompt
written notice thereof shall be given to the other parties, and this Agreement
shall terminate, without further action by any of the parties hereto, and (ii) all

 

89

 

obligations of the parties hereunder shall terminate, except for the
obligations set forth in Sections 7.1, 7.11(c)(iv), 12.2, 13, 16 and 21, provided
that nothing contained in this Section 12.2 shall relieve any party from
liability for any willful and material breach of any representation, warranty
or covenant contained in this Agreement. 
For avoidance of doubt and without limiting the generality of the
foregoing, if Sellers fail to deliver any financial statements or otherwise
fail to comply with their obligations under Section 7.17, or if for any
reason the condition set forth in Section 9.6 is not satisfied, the Buyer’s
sole remedy shall be to terminate this Agreement and to receive the Expense
Reimbursement, and if the failure was the result of the Sellers’ willful
breach, the Break-Up Fee, if payable pursuant to Section 7.11(c)(iv)(B).

 

13.          FEES
AND EXPENSES

 

Except as
expressly set forth in this Agreement and the Schedules (including pursuant to Section 7.4,
Section 7.11(c)(iv) and Section 12.2), each of (i) the
Buyer, (ii) each of the Sellers and (iii) each of the Companies,
shall be responsible for, and shall pay, its own fees and expenses incurred in
connection with the authorization, preparation, execution and performance of
this Agreement, including all fees and expenses of counsel, accountants, agents
and other representatives; provided, that (i) expenses of the
Companies that remain unpaid as of the Closing Date shall be included as a
Closing Date Current Liability in the calculation of the Closing Date Working
Capital (and shall be paid by the Buyer) and (ii) upon the Closing, the
Buyer shall be responsible for all expenses incurred by the Buyer in connection
with the foregoing (but such amount shall not be included in the calculation of
Closing Date Working Capital).

 

14.          ENTIRE
AGREEMENT

 

The Buyer and
the Sellers and the Companies agree that this Agreement, including the Schedules
and all Exhibits hereto, and any Related Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior understandings, agreements, writings and deliveries with respect thereto. 
None of the Sellers or the Companies has made, and the Buyer has not
relied upon, and the Sellers and the Companies hereby disclaim, any
express or implied representation, warranty, inducement, promise, understanding
or condition not set forth in any of this Agreement, the Schedules and the
Exhibits hereto and/or any Related Agreement.

 

15.          PARTIES
OBLIGATED AND BENEFITED

 

Subject to the
limitations set forth below, this Agreement will be binding upon the parties
and their respective assigns and successors in interest and will inure solely
to the benefit of the parties and their respective assigns and successors in
interest, and except as expressly provided in this Agreement, no other Person
will be entitled to any of the benefits conferred by this Agreement.  Without the prior written consent of the
other parties, no party will assign any of its rights under this Agreement or
delegate any of its duties under this Agreement, except that the Buyer shall
have the right to (a) assign its rights and obligations under this
Agreement to any Affiliate without the prior consent of the Sellers, the Cable
Venture or Cable Corp., so long as the Buyer remains fully liable hereunder as
if it was a party hereto and (b) collaterally assign this 

 

90

 

Agreement to any sources of financing solely to secure the Buyer’s
obligation in connection with the Transactions.

 

16.          NOTICES

 

All notices,
requests, consents, and other communications under this Agreement shall be in
writing and shall be delivered in person or mailed by first class certified or
registered mail, return receipt requested, postage prepaid, by reputable
overnight mail or courier or by telecopier, in either case, with receipt
confirmed, addressed as follows:

 

	
  If to the Companies:

  	
   

  	
  to each of ML Media and Century as provided below

  
	
   

  	
   

  	
   

  
	
  With a copy (which shall not constitute notice) to:

  	
   

  	
  Morgan Lewis & Bockius

  101 Park Avenue

  New York, New York 10178

  Telephone:   (212) 309 6000

  Telecopy:     (212) 309 6273

  Attention:     Richard
  Toder, Esq.

  
	
   

  	
   

  	
   

  
	
  If to ML Media:

  	
   

  	
  ML Media Partners, L.P.

  c/o RP Companies, Inc.

  444 Madison Avenue, Suite 703

  New York, New York 10022

  Telephone:   (212) 980 7110

  Telecopy:     (212) 980 8374

  Attention:     Elizabeth
  McNey Yates

  
	
   

  	
   

  	
   

  
	
  With a copy (which shall not constitute notice) to:

  	
   

  	
  Proskauer Rose LLP

  1585 Broadway

  New York, New York 10036

  Telephone:   (212) 969 3205

  Telecopy:     (212) 969 2900

  Attention:     Bertram A. Abrams, Esq.

  
	
   

  	
   

  	
   

  
	
  If to Century, to:

  	
   

  	
  Century Communications Corporation

  c/o Adelphia Communications Corporation

  5619 DTC Parkway – 8th Floor

  Greenwood Village, Colorado 80111

  Telephone:   (303) 268 6458

  Telecopy:     (303) 268 6662

  Attention:     General Counsel

  
	
   

  	
   

  	
   

  
	
  With a copy (which shall not constitute notice) to

  	
   

  	
  Willkie Farr & Gallagher LLP

  787 Seventh Avenue

  New York, New York 10019

  Telephone:   (212) 728 8000

  Telecopy:     (212) 728 8111

  Attention:     Marc Abrams, Esq.

  

 

91

 

	
   

  	
   

  	
             and

  
	
   

  	
   

  	
   

  
	
  If to Buyer:

  	
   

  	
  San Juan Cable, LLC

  c/o MidOcean Partners, LP

  320 Park Avenue, 17th Floor

  New York, New York 10022

  Telephone:   (212) 497-1400

  Telecopy:     (212) 497-1375

  Attention:     Tyler Zachem

  
	
   

  	
   

  	
   

  
	
  With a copy (which shall not constitute notice) to:

  	
   

  	
  Kirkland & Ellis LLP

  655 Fifteenth Street, N.W.

  Washington, D.C. 20005

  Telephone:   (202) 879-5000

  Telecopy:     (202) 879-5200 

  Attention:     George P. Stamas, Esq. 

  Mark D. Director, Esq.

  

 

or at such
other address or addresses as may have been furnished in writing by any party
to the others in accordance with the provisions of this Section 16.  Notices and other communications provided in
accordance with this Section 16 shall be deemed delivered upon
receipt.  The furnishing of any notice or
communication required hereunder may be waived in writing by the party entitled
to receive such notice.  Failure or delay
in delivering copies of any notice to persons designated above to receive
copies shall in no way adversely affect the effectiveness of such notice or
communication.

 

17.          AMENDMENTS
AND WAIVERS

 

Except as
otherwise expressly set forth in this Agreement, any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of the Sellers and the Buyer.  Any amendment or waiver effected in
accordance with this Section 17 shall be binding upon all parties
hereto.  No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.

 

18.          SEVERABILITY

 

If any
provision of this Agreement shall be determined by a court or other tribunal of
competent jurisdiction to be invalid, inoperative or unenforceable because of
the conflict of such provision with any constitution, statute, common law
principle, rule of public policy or for any other reason, such
circumstance shall have no effect or render any other provision or provisions
contained herein invalid, inoperative or unenforceable, but this Agreement
shall be 

 

92

 

reformed and construed as if such invalid, inoperative or unenforceable
provision had never been contained herein and such provision reformed so that
it would be valid, operative and enforceable to the maximum extent permitted; provided,
that if as a result of any of the foregoing, the Cable Venture and Cable Corp.
cannot consummate the acquisition of the Acquired Interests in accordance with
the terms of this Agreement, either the Buyer or either of the Sellers may
terminate this Agreement, and it shall be of no further force and effect,
unless all parties agree in writing to the contrary.

 

19.          SECTION HEADINGS
AND TERMS

 

The section headings
in this Agreement are for convenience and reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.

 

20.          COUNTERPARTS

 

This Agreement
may be executed in two or more counterparts (including by facsimile or
electronic mail), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and shall become
effective when counterparts that together contain the signatures of each party
hereto shall have been delivered to the Sellers and the Buyer.

 

21.          GOVERNING
LAW; CONSENT TO JURISDICTION

 

All disputes
arising out of or related to this Agreement, including, without limitation, any
dispute relating to the interpretation, meaning or effect of any provision
hereof, will be resolved in the Bankruptcy Court and the parties hereto will
each submit to the exclusive jurisdiction of the Bankruptcy Court for the
purposes of adjudicating any such dispute, to the extent the jurisdiction of
the Bankruptcy Court is applicable.  If
the jurisdiction of the Bankruptcy Court is not applicable, any legal action,
suit or proceeding arising out of or relating to this Agreement, each and every
agreement and instrument contemplated hereby or the transactions contemplated
hereby and thereby shall be instituted in the U.S. District Court for Southern
District of New York.  This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York (i.e., without regard to any contrary result required under
applicable conflict of law rules).

 

22.          SPECIFIC
PERFORMANCE

 

The parties
hereto acknowledge that money damages may not be an adequate remedy for
violations of this Agreement and that any party may, in its sole discretion,
apply to a court of competent jurisdiction for specific performance or
injunctive or other relief as such court may deem just and proper in order to
enforce this Agreement or prevent any violation hereof by any of the parties
hereto and, to the extent permitted by applicable Legal Requirements, each
party hereof waives any objection to the imposition of such relief.  Any such specific or equitable relief granted
shall not be exclusive and an Indemnitee shall also be entitled to seek
indemnification to the extent permitted by Section 11.

 

93

 

23.          FURTHER
ASSURANCES

 

Each party
hereto shall execute, acknowledge and deliver any further assurance, documents
and instruments reasonably requested by any other party hereto for the purpose
of giving effect to the Transactions or the intentions of the parties with
respect thereto.

 

24.          CONSTRUCTION

 

In the
interpretation and construction of this Agreement, the parties acknowledge that
the terms hereof reflect extensive negotiations between the parties and that
this Agreement shall not be deemed, for the purpose of construction and
interpretation, drafted by any party hereto.

 

94

 

IN WITNESS WHEREOF,
the parties hereto have caused this Interest Acquisition Agreement to be
executed by their duly authorized representatives on the day and year first
above written.

 

	
   

  	
  ML MEDIA PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Media Management Partners,

  	
   

  
	
   

  	
   

  	
    its general partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth McNey Yates

  	
   

  
	
   

  	
  Name: Elizabeth McNey Yates

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  CENTURY COMMUNICATIONS

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa Wittman

  	
   

  
	
   

  	
  Name: Vanessa Wittman

  
	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  
	
   

  	
  CENTURY-ML CABLE VENTURE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  ML Media Partners, L.P.

  
	
   

  	
  By:

  	
  Media Management Partners,

  
	
   

  	
   

  	
       its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth McNey Yates

  	
   

  
	
   

  	
  Name: Elizabeth McNey Yates

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Century Communications Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa Wittman

  	
   

  
	
   

  	
  Name: Vanessa Wittman

  
	
   

  	
  Title: Executive Vice President

  
								

 

95

 

	
   

  	
  CENTURY ML CABLE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Lawton

  	
   

  
	
   

  	
  Name: Jeffrey Lawton

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elizabeth McNey Yates

  	
   

  
	
   

  	
  Name: Elizabeth McNey Yates

  
	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SAN JUAN CABLE, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tyler Zachem

  	
   

  
	
   

  	
  Name: Tyler Zachem

  
	
   

  	
  Title:   Secretary

  

 

96

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