Amendment No. 1 to Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EFIelqJadc5NvF6YBd1RbI7ogDzlKzFeKbxqG+B1QQSMDX553nebtFW4VtUCeewM VSD4Rd3teCzKCw/pW6D2gA== 0001193125-05-152256.txt : 20050729 0001193125-05-152256.hdr.sgml : 20050729 20050729105012 ACCESSION NUMBER: 0001193125-05-152256 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20050729 DATE AS OF CHANGE: 20050729 GROUP MEMBERS: ANDREW G. KNAFEL GROUP MEMBERS: JAMES S. MARCUS GROUP MEMBERS: JOSHUA RUBENSTEIN GROUP MEMBERS: MICHAEL S. WILLNER GROUP MEMBERS: THOMAS L. KEMPNER GROUP MEMBERS: WILLIAM L. SCHERLIS FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KNAFEL SIDNEY R CENTRAL INDEX KEY: 0000924039 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: 2123712266 MAIL ADDRESS: STREET 1: 126 EAST 56 STREET CITY: NEW YORK STATE: NY ZIP: 10022 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INSIGHT COMMUNICATIONS CO INC CENTRAL INDEX KEY: 0001084421 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 134053502 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-58331 FILM NUMBER: 05983152 BUSINESS ADDRESS: STREET 1: 126 EAST 56TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2123712266 MAIL ADDRESS: STREET 1: INSIGHT COMMUNICATIONS CO INC STREET 2: 126 EAST 56TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 dsc13da.htm AMENDMENT NO. 1 TO SCHEDULE 13D Amendment No. 1 to Schedule 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

(Amendment No. 1)

Information to be included in statements filed pursuant to Rule 13d-1(a) and amendments thereto

filed pursuant to Rule 13d-2(a)

Under the Securities Exchange Act of 1934

INSIGHT COMMUNICATIONS COMPANY, INC.

(Name of Issuer)

Class A Common Stock, $0.01 par value

(Title of Class of Securities)

45768V108

(CUSIP Number)

J. Kevin Mills

Thomas D. Twedt

Dow, Lohnes & Albertson, PLLC

1200 New Hampshire Avenue, N.W.

Washington, D.C. 20036 (202) 776-2000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

July 28, 2005

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. x

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D/A


CUSIP No. 45768V108		Page 2 of 24 Pages


1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Sidney R. Knafel
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7 SOLE VOTING POWER

3,961,152*

8 SHARED VOTING POWER

9 SOLE DISPOSITIVE POWER

3,961,152*

10 SHARED DISPOSITIVE POWER


11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,961,152*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES Not Applicable
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 7.2%**
14		TYPE OF REPORTING PERSON IN

Includes 3,853,132 shares of Class B Common Stock of Insight Communications Company, Inc. (“Insight”), par value $0.01 per share (the “Class B Common Stock”). Of the shares deemed to be beneficially owned by Mr. Knafel, 50,000 shares of Class A Common Stock of Insight, par value $0.01 per share (the “Class A Common Stock,” and together with the Class B Common Stock, the “Common Stock”), and 3,427,177 shares of Class B Common Stock are held by a foundation and a corporation, respectively, controlled by Mr. Knafel, 425,955 shares of Class B Common Stock are held by the estate of Mr. Knafel’s deceased wife for which Mr. Knafel serves as executor and 1,770 shares of Class A Common Stock are held in his 401(k) account. Also includes 56,250 shares issuable upon the exercise of options.

The denominator is based on: (i) 50,830,270 shares of Class A Common Stock outstanding as of April 20, 2005, as stated on the facing page of Insight’s Form 10-Q for the quarter ended March 31, 2005; (ii) 3,853,132 shares of Class A Common Stock into which the Class B Common Stock beneficially owned by Mr. Knafel may be converted; and (iii) 56,250 shares issuable upon the exercise of options exercisable within 60 days. Each share of Class B Common Stock is convertible at any time into one share of Class A Common Stock. Holders of Class A Common Stock are entitled to one vote per share, and holders of Class B Common Stock are entitled to ten votes per share. Holders of both classes of Common Stock vote together as a single class on all matters presented for a vote, except as otherwise required by law. The shares deemed to be beneficially owned by Mr. Knafel represent approximately 28.4% of the total outstanding votes of the Common Stock as a single class.

SCHEDULE 13D/A


CUSIP No. 45768V108		Page 3 of 24 Pages


1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Andrew G. Knafel, Joshua Rubenstein and William L. Scherlis, as trustees (the “Trustees”) under Trusts F/B/O Knafel children (the “Trusts”)
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION New York

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7 SOLE VOTING POWER

3,397,027*

8 SHARED VOTING POWER

9 SOLE DISPOSITIVE POWER

3,397,027*

10 SHARED DISPOSITIVE POWER


11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,397,027*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES Not Applicable
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 6.3%**
14		TYPE OF REPORTING PERSON OO

Represents 3,397,027 shares of Class B Common Stock beneficially owned by the Trusts, including 386,413 shares held individually by Andrew G. Knafel. Sidney Knafel expressly disclaims beneficial ownership of all of the reported shares, and the Trustees disclaim any economic interest in or beneficial ownership of any of the Class A Common Stock or Class B Common Stock held by the Trusts.

SCHEDULE 13D/A


CUSIP No. 45768V108		Page 4 of 24 Pages


1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Michael S. Willner
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7 SOLE VOTING POWER

1,292,599*

8 SHARED VOTING POWER

9 SOLE DISPOSITIVE POWER

1,292,599*

10 SHARED DISPOSITIVE POWER


11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,292,599*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES Not Applicable
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 2.5%**
14		TYPE OF REPORTING PERSON IN

Includes 1,106,516 shares of Class B Common Stock, including 6,448 shares held in trust for the benefit of Mr. Willner’s minor children. Also includes 184,372 shares of Class A Common Stock issuable upon the exercise of stock options and 1,708 shares of Class A Common Stock held in Mr. Willner’s 401(k) account.

SCHEDULE 13D/A


CUSIP No. 45768V108		Page 5 of 24 Pages


1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) James S. Marcus
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7 SOLE VOTING POWER

152,984*

8 SHARED VOTING POWER

9 SOLE DISPOSITIVE POWER

152,984*

10 SHARED DISPOSITIVE POWER


11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 152,984*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES Not Applicable
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 0.3%**
14		TYPE OF REPORTING PERSON IN

*	Includes 132,779 shares of Class B Common Stock. Also includes 20,205 shares of Class A Common Stock issuable upon the exercise of independent director retainer stock options.

SCHEDULE 13D/A


CUSIP No. 45768V108		Page 6 of 24 Pages


1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Thomas L. Kempner
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ¨ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7 SOLE VOTING POWER

518,366*

8 SHARED VOTING POWER

9 SOLE DISPOSITIVE POWER

518,366*

10 SHARED DISPOSITIVE POWER


11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 518,366*
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES Not Applicable
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 1.0%**
14		TYPE OF REPORTING PERSON IN

Includes 60,668 shares of Class A Common Stock held personally by Mr. Kempner, 160 shares of Class A Common Stock held by a corporation that he controls and 20,205 shares of Class A Common Stock issuable upon the exercise of independent director retainer stock options. Also includes 31,051 shares of Class A Common Stock held by the estate of Mr. Kempner’s deceased wife for which Mr. Kempner serves as executor and 406,282 shares of Class A Common Stock held by trusts for which he serves as trustee, for which he disclaims beneficial ownership.

The denominator is based on: (i) 50,830,270 shares of Class A Common Stock outstanding as of April 20, 2005, as stated on the facing page of Insight’s Form 10-Q for the quarter ended March 31, 2005; and (ii) 20,205 shares of Class A Common Stock issuable upon the exercise of his independent director retainer stock options. The shares deemed to be beneficially owned by Mr. Kempner represent approximately 0.4% of the total outstanding votes of the Common Stock as a single class.


Schedule 13D/A		Page 7 of 24 Pages
Insight Communications Company, Inc.

Item 1. Security and Issuer

The class of equity securities to which this Amendment No. 1 to Schedule 13D (this “Amendment”) relates is the Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), of Insight Communications Company, Inc., a Delaware corporation (“Insight”). The principal executive offices of Insight are located at 810 7th Avenue, New York, New York 10019.

Item 2. Identity and Background

This Amendment is being filed by Sidney R. Knafel; Andrew G. Knafel, Joshua Rubenstein and William L. Scherlis, as trustees (the “Trustees”) under Trusts F/B/O Knafel children (the “Trusts”); Michael S. Willner; James S. Marcus; Thomas L. Kempner; and Andrew G. Knafel individually (collectively, the “Reporting Persons”). The Reporting Persons are filing this Amendment because they may be deemed to be a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the transaction described in Item 4 of this Amendment. Except as expressly set forth in this Amendment, each Reporting Person disclaims beneficial ownership of the shares of Class A Common Stock or Class B Common Stock of Insight, par value $0.01 per share (the “Class B Common Stock,” and together with the Class A Common Stock, the “Common Stock”), beneficially owned by any other Reporting Person.

This Amendment amends the Schedule 13D (the “Original 13D”) filed with the Securities and Exchange Commission (the “Commission”) on March 7, 2005. Except as modified herein, the Original 13D is unmodified.

The name, business address and present principal occupation or employment of each Reporting Person is set forth on Appendix A hereto, which Appendix A is incorporated by reference herein.

During the last five years, none of the Reporting Persons has been convicted in any criminal proceedings (excluding traffic violations or similar misdemeanors).

During the last five years, none of the Reporting Persons has been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction as the result of which he or it was or is subject to any judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

To the best knowledge of the persons filing this Amendment, each Reporting Person is a citizen of the United States of America.


Schedule 13D/A		Page 8 of 24 Pages
Insight Communications Company, Inc.

Item 3. Source and Amount of Funds or Other Consideration

Item 3 is hereby amended and restated in its entirety to read as follows:

The shares of Class A Common Stock reported as beneficially owned by the Reporting Persons were acquired in the initial public offering of Insight, through open market purchases using personal funds, by means of gift, inheritance or other gratuitous transfer, or through their service as an officer, director or employee of Insight.

With respect to the transaction described in Item 4 of this Amendment (which Item 4 is incorporated herein by reference), the Reporting Persons estimate that the amount of funds that would be required to purchase all of the shares of outstanding Class A Common Stock and Class B Common Stock to be converted in the Merger (as defined in Item 4) into the right to receive the Merger Consideration (as defined in Item 4), to settle outstanding, in-the-money options and to pay estimated fees and expenses is approximately $660 million. The funds required to pay the aggregate cash Merger Consideration (as defined in Item 4) will be provided by one or more affiliates of The Carlyle Group (the “Sponsor”), through its cash investment in Insight Acquisition Corp. (“Parent”), as further described in Item 4, provided that such amount shall not exceed $606,305,000. The Reporting Persons and the Sponsor currently expect that all other costs, expenses and liabilities of Insight arising out of or relating to the transaction shall be paid by Insight from cash available to Insight immediately prior to the consummation of the Merger.

Item 4. Purpose of Transaction

Item 4 is hereby amended and restated in its entirety to read as follows:

On March 6, 2005, certain of the Reporting Persons and the Sponsor submitted to Insight’s Board of Directors (the “Board of Directors”) a proposal to acquire all of the outstanding, publicly-held shares of Class A Common Stock (the “Proposal”). On March 8, 2005, Insight announced that the Board of Directors had formed a special committee of independent directors (the “Special Committee”) consisting of David C. Lee and Geraldine B. Laybourne to consider the terms and conditions of the Proposal and to recommend to the Board of Directors whether to approve the Proposal. On July 28, 2005, the Special Committee unanimously recommended to Insight’s full Board of Directors an Agreement and Plan of Merger (the “Merger Agreement”) between Parent and Insight, and on July 28, 2005, the full Board of Directors of Insight unanimously approved the Merger Agreement. On July 28, 2005, Parent and Insight entered into the Merger Agreement pursuant to which Parent will be merged with and into Insight with Insight as the surviving corporation (the “Merger”).

Concurrently with the execution of the Merger Agreement, Insight, Parent and the Reporting Persons entered into an Exchange Agreement. Pursuant to the Exchange Agreement,


Schedule 13D/A		Page 9 of 24 Pages
Insight Communications Company, Inc.

immediately prior to the closing under the Merger Agreement, (1) Mr. Knafel, Mr. Willner and the Trusts will subscribe for shares of a new series of preferred stock issued by Insight; (2) the Sponsor will contribute cash to Parent in exchange for shares of Class D Preferred Stock of Parent; (3) certain Reporting Persons, including Mr. Knafel and Mr. Willner, will convert their shares of Class B Common Stock into an equivalent number of shares of Class A Common Stock; and (4) the Reporting Persons (after giving effect to such conversion) will contribute to Parent some or all of their shares of Class A Common Stock in exchange for an equivalent number of shares of Class C Preferred Stock of Parent. The parties to the Exchange Agreement currently contemplate that additional Insight management personnel and certain related party stockholders (collectively, the “Additional Rollover Investors”) will become parties to the Exchange Agreement prior to the closing and will agree to contribute some of their shares of Class A Common Stock in exchange for an equivalent number of shares of Class C Preferred Stock of Parent.

The Merger requires the approval of Insight’s stockholders. The Reporting Persons collectively beneficially own approximately 63% of the total outstanding votes of the Common Stock entitled to vote on the Merger as a single class. Pursuant to the Voting Agreement described in Item 6, Mr. Knafel, Mr. Willner, the Trusts and Mr. Andrew Knafel (who collectively beneficially own approximately 62% of the total outstanding votes of the Common Stock entitled to vote on the Merger as a single class) are required to vote for the Merger and are prohibited from voting in favor of another transaction involving their stake in Insight until the Merger Agreement is terminated. Consummation of the Merger will also require (1) the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock entitled to vote thereon not held by (a) Parent, the Reporting Persons (or any member of the immediate families thereof) or the Sponsor or any affiliates thereof, or (b) any officers or directors of Insight (or any member of the immediate families thereof); and (2) the satisfaction or waiver of certain customary conditions by each of Parent and Insight. In connection with their approval of the Merger, Insight’s stockholders will also be asked to approve an amendment to Insight’s certificate of incorporation to make Section 5.6 inapplicable to the Merger (the “Charter Amendment”), which Section requires that upon a merger of Insight in which the Common Stock is converted to cash, holders of each class of Insight’s Common Stock must receive equal per share payments or distributions. Upon the consummation of the Merger, Insight’s certificate of incorporation will be amended and restated to create the new series of Insight stock that the Reporting Persons and the Sponsor will receive in the Merger, the material rights and privileges of which are summarized below.

Following stockholder approval of the Merger and the Charter Amendment and satisfaction of the other conditions to the Merger, pursuant to the Merger Agreement, Parent will merge with and into Insight, with Insight as the surviving corporation. In the Merger, (1) all outstanding shares of Class A Common Stock other than those held by Insight or Parent will be converted into the right to receive a cash payment equal to $11.75 per share (the “Merger Consideration”); (2) shares of Insight’s newly issued preferred stock held by Mr. Knafel, Mr. Willner and the Trusts will be converted into Series A Voting Preferred Stock of the surviving corporation; (3) shares of Parent’s Class B Preferred Stock


Schedule 13D/A		Page 10 of 24 Pages
Insight Communications Company, Inc.

held by the Sponsor will be converted into shares of Series B Voting Preferred Stock of the surviving corporation; (4) shares of Parent’s Class C Preferred Stock will be converted into shares of Series C Non-Voting Preferred Stock of the surviving corporation; and (5) shares of Parent’s Class D Preferred Stock will be converted into shares of Series D Non-Voting Preferred Stock of the surviving corporation.

Pursuant to the amended and restated certificate of incorporation to be effective upon the consummation of the Merger, the form of which is attached hereto as Exhibit 7.05, Insight will be recapitalized with the following series of stock having the following material rights and privileges:

•

The Series A Voting Preferred Stock will be held by Mr. Knafel, Mr. Willner and the Trusts. The Series A Voting Preferred Stock will vote as one class with the Series B Voting Preferred Stock on all matters submitted to a vote of Insight’s stockholders, other than the election of the directors of Insight or as otherwise required by Delaware law. The Series A Voting Preferred Stock, voting separately as a class, will be entitled to elect five directors of Insight. The Series A Voting Preferred Stock will represent approximately 62% of the total voting power of Insight after the Merger.

•

The Series B Voting Preferred Stock will be held by the Sponsor and will vote as one class with the Series A Voting Preferred Stock on all matters submitted to a vote of Insight’s stockholders, other than the election of the directors of Insight or as otherwise required by Delaware law. The Series B Voting Preferred Stock, voting separately as a class, will be entitled to elect four directors of Insight. In addition, consent of the holders of a majority in interest of the Series B Voting Preferred Stock will be required to approve certain specified significant actions including, without limitation and subject to certain exceptions, material changes in Insight’s business, amendments to Insight’s certificate of incorporation or its bylaws, changes to the composition of the Board of Directors or its committees, related party transactions, changing Insight’s public accountants, the liquidation or dissolution of Insight, the incurrence of material indebtedness, a material disposition of Insight’s assets or equity, the declaration or payment of a dividend, effecting any amendments to the partnership agreement of Insight Midwest, L.P., triggering the split-up of Insight Midwest, L.P., entering into strategic relationships outside the ordinary course of business, the selection of a new general partner for any subsidiary of Insight and the selection of replacements for certain members of Insight’s senior management. The Series B Voting Preferred Stock will represent approximately 38% of the total voting power of Insight after the Merger.


Schedule 13D/A		Page 11 of 24 Pages
Insight Communications Company, Inc.

•

The Series C Non-Voting Preferred Stock will be held by the Reporting Persons and the Additional Rollover Investors and will be entitled to vote only on any amendment to Insight’s certificate of incorporation that materially and adversely affects the rights of holders of the Series C Non-Voting Preferred Stock and as may otherwise be required by Delaware law.

•

The Series D Non-Voting Preferred Stock will be held by the Sponsor and will be entitled to vote only on any amendment to Insight’s certificate of incorporation that materially and adversely affects the rights of holders of the Series D Non-Voting Preferred Stock and as may otherwise be required by Delaware law.

•

The Series E Non-Voting Common Stock will be issued to current employees and directors of Insight who hold options to acquire Class A Common Stock, which options will be cancelled upon the closing of the Merger, in consideration for future services to be provided by such employees and directors. The Series E Non-Voting Common Stock will be entitled to vote only on any amendment to Insight’s certificate of incorporation that materially and adversely affects the rights of holders of the Series E Non-Voting Common Stock and as may otherwise be required by Delaware law.

•

The Series F Non-Voting Common Stock will be issued to designated management employees of Insight. The Series F Non-Voting Common Stock will be entitled to vote only on any amendment to Insight’s certificate of incorporation that materially and adversely affects the rights of holders of the Series F Non-Voting Common Stock and as may otherwise be required by Delaware law.

Upon a liquidation of Insight, the cash and other assets of Insight available for distribution will be distributed to Insight’s stockholders as follows:

•

First, assets will be distributed to holders of the Series A Voting Preferred Stock and the Series B Voting Preferred Stock on a pro rata basis until each share of the Series A Voting Preferred Stock and each share of the Series B Voting Preferred Stock shall have received an aggregate amount (including any amounts distributed on such shares prior to liquidation) equal to $0.01.

•

Second, remaining assets will be distributed to holders of the Series C Non-Voting Preferred Stock and the Series D Non-Voting Preferred Stock on a pro rata basis until each share of the Series C Non-Voting Preferred Stock and the Series D Non-Voting Preferred Stock shall have received an aggregate amount (including any amounts distributed on such shares prior to liquidation) equal to $11.75.


Schedule 13D/A		Page 12 of 24 Pages
Insight Communications Company, Inc.

•

Third, remaining assets will be distributed to holders of the Series C Non-Voting Preferred Stock and the Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach certain levels that cause participation levels for particular shares of the Series E Non-Voting Common Stock to be achieved, to holders of such shares of the Series E Non-Voting Common Stock for which participation levels have been achieved, in proportion to the number of such shares held by each holder, until the Series D Non-Voting Preferred Stock has received an internal rate of return on capital invested therein equal to 10% per annum, compounded annually.

•

Fourth, 95% of the remaining assets will be distributed to holders of the Series C Non-Voting Preferred Stock and the Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach certain levels that cause participation levels for particular shares of the Series E Non-Voting Common Stock to be achieved, to holders of such shares of the Series E Non-Voting Common Stock for which participation levels have been achieved, in proportion to the number of such shares held by each holder, and 5% to holders of the Series F Non-Voting Common Stock in proportion to the number of such shares held by each holder, until the Series D Non-Voting Preferred Stock has received an internal rate of return on capital invested therein equal to 15% per annum, compounded annually.

•

Fifth, 90% of the remaining assets will be distributed to holders of the Series C Non-Voting Preferred Stock and the Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach certain levels that cause participation levels for particular shares of the Series E Non-Voting Common Stock to be achieved, to holders of such shares of the Series E Non-Voting Common Stock for which participation levels have been achieved, in proportion to the number of such shares held by each holder, and 10% to holders of the Series F Non-Voting Common Stock, until the Series D Non-Voting Preferred Stock has received an internal rate of return on capital invested therein equal to 20% per annum, compounded annually.

•

Sixth, 85% of the remaining assets will be distributed to holders of the Series C Non-Voting Preferred Stock and the Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach certain levels that cause participation levels for particular shares of the Series E Non-Voting Common Stock to be achieved, to holders of such shares of the Series E Non-Voting Common Stock for which participation levels have been achieved, in proportion to the number of such


Schedule 13D/A		Page 13 of 24 Pages
Insight Communications Company, Inc.

shares held by each holder, and 15% to holders of the Series F Non-Voting Common Stock, until the Series D Non-Voting Preferred Stock has received an internal rate of return on capital invested therein equal to 25% per annum, compounded annually.

•

Thereafter, 75% of the remaining assets will be distributed to holders of the Series C Non-Voting Preferred Stock and the Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach certain levels that cause participation levels for particular shares of the Series E Non-Voting Common Stock to be achieved, to holders of such shares of the Series E Non-Voting Common Stock for which participation levels have been achieved, in proportion to the number of such shares held by each holder, and 25% to holders of the Series F Non-Voting Common Stock.

Each of Insight’s post-Merger series of capital stock will have the other rights and preferences assigned to such series in the amended and restated certificate of incorporation to be effective upon consummation of the Merger.

It is currently contemplated that Insight’s bylaws will be amended concurrently with the closing of the Merger to conform, as appropriate, to the corporate governance provisions contained in Insight’s amended and restated certificate of incorporation.

Insight has agreed to pay a $10 million termination fee (inclusive of expenses) if the Merger Agreement is terminated under certain circumstances described in Section 7.01 of the Merger Agreement. The termination fee, if paid, would be reduced by Insight’s $4 million expense reimbursement payment.

Pursuant to a Principals’ Agreement among Mr. Knafel, Mr. Willner and the Sponsor executed concurrently with the Merger Agreement to facilitate the transactions contemplated by the Merger Agreement, Mr. Knafel, Mr. Willner and the Sponsor have agreed, among other things, to use all reasonable efforts to cause Parent to perform its obligations under the Merger Agreement. In addition, the parties to the Principals’ Agreement have agreed that Parent will act under the Merger Agreement, the Exchange Agreement and the related agreements only upon the unanimous approval of the parties, with certain exceptions. The Principals’ Agreement also sets forth (i) the parties’ agreement with respect to certain fees to be received by the Sponsor, (ii) the parties’ agreement with respect to the issuance of Series E Non-Voting Common Stock and Series F Non-Voting Common Stock to certain employees and the directors of Insight after the Merger, and (iii) the allocation of any termination fee to be paid by Insight or any damages payment to be paid by Messrs. Knafel and Willner and the Sponsor under the Merger Agreement.


Schedule 13D/A		Page 14 of 24 Pages
Insight Communications Company, Inc.

Following consummation of the Merger, the Class A Common Stock will be delisted from the Nasdaq National Market and deregistered under the Exchange Act. The Board of Directors will be increased to nine directors. Mr. Knafel, Mr. Willner and the Trusts, as the holders of Insight’s new Series A Voting Preferred Stock, will have the right to designate five directors, two of whom must be independent. The Sponsor, as the holder of Insight’s new Series B Voting Preferred Stock, will have the right to designate four directors, one of whom must be independent. Replacements for directors will be designated only by the holders of the series of capital stock originally entitled to designate the director being replaced. The directors will be divided into three classes, and the terms for the directors will be staggered. The affirmative vote of seven directors will be required to amend, alter or repeal Insight’s amended and restated certificate of incorporation and bylaws.

Additionally, following the consummation of the Merger, the Sponsor, the Reporting Persons and Insight expect to execute a Securityholders Agreement. The Securityholders Agreement would:

•

restrict the transferability of Insight’s stock, except pursuant to certain specified permitted transfers;

•

provide for certain tag-along and drag-along rights in the event that one or more of Insight’s stockholders desires to sell its Insight stock;

•

provide for certain demand and piggyback registration rights; and

•

provide for certain rights to certain stockholders to trigger an initial public offering of Insight stock, a sale of Insight or another specified liquidity event.

The foregoing is a summary of the Merger and certain related transactions and should not be construed as a solicitation of a proxy or an offer to purchase shares of Class A Common Stock. Stockholders should read Insight’s proxy statement and other relevant documents regarding the Merger filed with the Commission when they become available because they will contain important information relevant to the decision to approve the Merger. Stockholders will be able to receive these documents (when they become available), as well as other documents filed by the Reporting Persons or Parent or its affiliates with respect to the Merger, free of charge at the Commission’s web site, www.sec.gov.

In the event the Merger is consummated, any holders of Class A Common Stock at the effective time of the Merger who did not vote in favor of the Merger and who comply with the applicable statutory procedures have certain rights under Delaware law to dissent and to demand appraisal of the fair value of their shares. Under Delaware law, such dissenting stockholders will be entitled to receive a judicial determination by the Delaware Chancery Court of the fair value of their Class A Common Stock (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash, together with a fair rate of interest, if any.


Schedule 13D/A		Page 15 of 24 Pages
Insight Communications Company, Inc.

The Reporting Persons cannot make any representation as to the outcome of an appraisal of fair value as determined by the Delaware Chancery Court, and stockholders should recognize that such an appraisal could result in a determination of a value higher than, lower than, or equivalent to, the price per share paid pursuant to the Merger. Moreover, the Reporting Persons may argue in an appraisal proceeding that, for purposes of such proceeding, the fair value of the Class A Common Stock is less than the Merger Consideration. In determining the fair value of the Class A Common Stock, the court is required to take into account all relevant factors. Therefore, such determination could be based upon considerations other than, or in addition to, the Merger Consideration, the market price of the Class A Common Stock, asset values and the earning capacity of Insight. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other things, that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered in an appraisal proceeding. In addition, in Weinberger and in Rabkin v. Philip A. Hunt Chemical Corp., the Delaware Supreme Court stated that, while ordinarily the only monetary remedy available to a stockholder who dissents to a merger would be an appraisal, such a remedy may not be adequate “in certain cases, particularly where fraud, misrepresentation, self-dealing, deliberate waste of corporate assets, or gross and palpable over-reaching are involved,” and that in such cases the Delaware Chancery Court will be free to fashion any form of appropriate relief.

The Merger also may be found to be subject to judicial scrutiny as to whether the transaction satisfies certain standards of “fairness.” Several decisions by the Delaware courts have held that a controlling stockholder of a company involved in a merger has a fiduciary duty to the other stockholders which requires that the merger be fair to such other stockholders. In determining whether a merger is fair to minority stockholders, the Delaware courts have considered, among other things, the type and amount of consideration to be received by the stockholders and whether there was fair dealing among the parties. The Weinberger decision provides that in most cases the remedy available in a merger is the right to an appraisal described above. However, as discussed above, any other form of appropriate relief, including damages, may be available in certain cases.

The Commission has adopted Rule 13e-3 under the Exchange Act which is applicable to certain “going private” transactions, including the Merger. Rule 13e-3 requires among other things, that certain financial information concerning Insight, and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders in such transaction, be filed with the Commission and disclosed to minority stockholders prior to meeting at which Insight stockholders will be asked to vote to approve the Merger. The Reporting Persons intend to file the information required by Rule 13e-3 with the Commission and to provide appropriate disclosure in the proxy statement, including the required Rule 13e-3 information, to holders of Class A Common Stock.


Schedule 13D/A		Page 16 of 24 Pages
Insight Communications Company, Inc.

Other than as set forth in the Exchange Agreement, the Voting Agreement, the Principals’ Agreement and the Merger Agreement, the Reporting Persons have no plans or proposals that relate to or would result in any of the events set forth in Items 4(a) through (j) of Schedule 13D. However, if the Merger is not consummated for any reason, the Reporting Persons intend to review continuously Insight’s business affairs, capital needs and general industry and economic conditions, and, based on such review, the Reporting Persons may, from time to time, determine to increase their ownership of Common Stock, approve an extraordinary corporate transaction with regard to Insight or engage in any of the events set forth in Items 4(a) through (j) of Schedule 13D, except that the Reporting Persons currently have no intention of selling any shares of Common Stock.

The foregoing is qualified in its entirety by reference to the Merger Agreement, the Exchange Agreement, the form of amended and restated certificate of incorporation and the Principals’ Agreement, which are attached hereto as Exhibits 7.02, 7.03, 7.04 and 7.05, respectively, and incorporated herein by this reference.

Item 5. Interest in Securities of the Issuer

Item 5 is hereby amended and restated in its entirety to read as follows:

(a) See Items 7 and 9 of the cover pages to this Amendment, which Items are incorporated herein by reference, for the aggregate number of shares and percentage of Class A Common Stock beneficially owned by each of the Reporting Persons.

(b) See Items 8 and 10 of the cover pages to this Amendment, which Items are incorporated herein by reference, for the aggregate number of shares of Class A Common Stock beneficially owned by each of the Reporting Persons as to which there is shared power to vote or direct the vote or shared power to dispose or to direct the disposition of such shares of Class A Common Stock.

The percentage of the Class A Common Stock set forth for each Reporting Person in this Item 5 was calculated based upon (i) 50,830,270 shares of Class A Common Stock outstanding as of April 20, 2005, as stated on the facing page of Insight’s Form 10-Q for the quarter ended March 31, 2005; (ii) the number of shares of Class A Common Stock issuable upon the conversion of the Class B Common Stock, if any, beneficially owned by such Reporting Person; and (iii) the number of shares of Class A Common Stock issuable upon the exercise of options to purchase Class A Common Stock held by such Reporting Person that are exercisable within 60 days, if any. The percentage of the total outstanding votes of the Common Stock as a single class set forth for each Reporting Person in this Item 5 was calculated based on the outstanding shares of Class A Common Stock set forth in clause (i) above and 8,489,454 shares of Class B Common Stock outstanding as of as of April 20, 2005, as stated


Schedule 13D/A		Page 17 of 24 Pages
Insight Communications Company, Inc.

on the facing page of Insight’s Form 10-Q for the quarter ended March 31, 2005. Holders of Class A Common Stock are entitled to one vote per share, and holders of Class B Common Stock are entitled to ten votes per share.

Except as otherwise provided in this Item 5, each of the Reporting Persons has the sole power to vote or to direct the vote, and the sole power to dispose or to direct the disposition of, the shares of Class A Common Stock deemed to be beneficially owned by them.

(d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Class A Common Stock referred to in paragraphs (a) and (b) above.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Item 6 is hereby amended and restated in its entirety to read as follows:

Items 3 and 4 of this Amendment are incorporated herein by reference. The Reporting Persons have entered into a Joint Filing Agreement dated as of March 7, 2005 (the “Joint Filing Agreement”), a copy of which was filed as Exhibit 7.01 to the Original 13D.

Mr. Sidney Knafel, Mr. Andrew Knafel, Mr. Willner and the Trusts have entered into a Voting Agreement with Parent pursuant to which Mr. Sidney Knafel, Mr. Andrew Knafel, Mr. Willner and the Trusts have agreed (1) to vote in favor of the Merger; (2) to vote against any competing merger, sale or Takeover Proposal (as defined in the Merger Agreement); (3) not to transfer their Insight stock other than in accordance with the Voting Agreement, the Exchange Agreement or the Merger Agreement; and (4) not to solicit or facilitate the making of a competing Takeover Proposal. The Voting Agreement will terminate upon the first to occur of (i) the effective time of the Merger or (ii) the date of termination of the Merger Agreement. Mr. Sidney Knafel, Mr. Andrew Knafel, Mr. Willner and the Trusts have also agreed to pay a specified amount to Parent should they solicit or support an alternative transaction to the Merger within a specified time after the termination of the Merger Agreement. The foregoing is qualified in its entirety by reference to the Voting Agreement attached hereto as Exhibit 7.06 and incorporated herein by this reference.


Schedule 13D/A		Page 18 of 24 Pages
Insight Communications Company, Inc.

The Reporting Persons and the Sponsor intend to solicit consent from the holders of Insight’s 12¹/4% Senior Discount Notes due 2011 (the “2011 Notes”) and Insight Midwest, L.P. and Insight Capital, Inc.’s 9³/4% Senior Notes due 2009 (the “2009 Notes”) and 10¹/2% Senior Notes due 2010 (the “2010 Notes” and collectively with the 2011 Notes and the 2009 Notes, the “Notes”) regarding certain matters under the indentures governing the Notes. Should the requisite number of holders of the Notes fail to grant such consent, the Reporting Persons and the Sponsor intend to cause Insight to make a purchase offer that would comply with Section 4.15 of each of the indentures governing the Notes, as contemplated in Section 7 of the Principals’ Agreement.

Item 7. Material to be Filed as Exhibits


Exhibit 7.01		Joint Filing Agreement, dated as of March 7, 2005 (incorporated by reference to Exhibit 7.01 to the Original 13D).

Exhibit 7.02		Agreement and Plan of Merger, dated as of July 28, 2005, by and between Insight Acquisition Corp. and Insight.

Exhibit 7.03		Exchange Agreement, dated as of July 28, 2005, by and among Insight Acquisition Corp., Insight, Sidney R. Knafel, Michael S. Willner, Carlyle Partners III Telecommunications, L.P., Carlyle Partners IV Telecommunications, L.P., CP III Coinvestment, L.P. and CP IV Coinvestment, L.P. and certain Insight stockholders named therein.

Exhibit 7.04		Form of Amended and Restated Certificate of Incorporation of Insight.

Exhibit 7.05		Principals’ Agreement, dated as of July 28, 2005, by and among Sidney R. Knafel, Michael S. Willner, Carlyle Partners III Telecommunications, L.P., Carlyle Partners IV Telecommunications, L.P., CP III Coinvestment, L.P. and CP IV Coinvestment, L.P.

Exhibit 7.06		Voting Agreement, dated as of July 28, 2005, by and between Insight Acquisition Corp. and the Insight stockholders named therein.

Exhibit 7.07		Press release, dated July 29, 2005.


Schedule 13D/A		Page 19 of 24 Pages
Insight Communications Company, Inc.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

July 28, 2005

Date

By:

/s/ Sidney R. Knafel

Sidney R. Knafel


Schedule 13D/A		Page 20 of 24 Pages
Insight Communications Company, Inc.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.


July 28, 2005 Date	By:	/s/ Andrew G. Knafel
July 28, 2005 Date		Andrew G. Knafel, as Trustee under
		Trust F/B/O Andrew G. Knafel dated September 13, 1978, Trust F/B/O Douglas R. Knafel dated September 13, 1978, Trust F/B/O Andrew G. & Douglas R. Knafel dated July 16, 1976, Trust F/B/O Douglas R. Knafel dated November 6, 1983

July 28, 2005 Date	By:	/s/ Andrew G. Knafel
July 28, 2005 Date		Andrew G. Knafel


Schedule 13D/A		Page 21 of 24 Pages
Insight Communications Company, Inc.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

July 28, 2005

Date

By:

/s/ Michael S. Willner

Michael S. Willner


Schedule 13D/A		Page 22 of 24 Pages
Insight Communications Company, Inc.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

July 28, 2005

Date

By:

/s/ James S. Marcus

James S. Marcus


Schedule 13D/A		Page 23 of 24 Pages
Insight Communications Company, Inc.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

July 28, 2005

Date

By:

/s/ Thomas L. Kempner

Thomas L. Kempner

Appendix A

Reporting Persons


Name	Business Address	Principal Occupation	Employed
Sidney R. Knafel*	SRK Management Co. 810 7th Avenue New York, New York 10019	Managing Partner SRK Management Co.	SRK Management Co. 810 7th Avenue New York, New York 10019

Andrew G. Knafel, Joshua Rubenstein and William L. Scherlis, as trustees under Trusts F/B/O Knafel children	c/o Insight Communications Company, Inc. 810 7th Avenue New York, New York 10019	N/A	N/A

Michael S. Willner*	Insight Communications Company, Inc. 810 7th Avenue New York, New York 10019	Vice Chairman, President and Chief Executive Officer, Insight Communications Company, Inc.	Insight Communications Company, Inc. 810 7th Avenue New York, New York 10019

James S. Marcus*	c/o Insight Communications Company, Inc. 810 7th Avenue New York, New York 10019	Retired	N/A

Thomas L. Kempner*	Loeb Partners Corporation 61 Broadway New York, New York 10006	Chairman and Chief Executive Officer, Loeb Partners Corporation	Loeb Partners Corporation 61 Broadway New York, New York 10006

Andrew G. Knafel	Clear Brook Farm 123 Dexter Road Shaftsbury, Vermont 05262	Farmer	Clear Brook Farm 123 Dexter Road Shaftsbury, Vermont 05262

*	Director of Insight Communications Company, Inc.

EX-7.02 2 dex702.htm AGREEMENT AND PLAN OF MERGER, DATED AS OF JULY 28, 2005 Agreement and Plan of Merger, dated as of July 28, 2005

Exhibit 7.02

AGREEMENT AND PLAN OF MERGER

BY AND BETWEEN

INSIGHT ACQUISITION CORP.

AND

INSIGHT COMMUNICATIONS COMPANY, INC.

DATED AS OF JULY 28, 2005

Table of Contents


		Page
ARTICLE I	THE MERGER	2

Section 1.01	The Merger	2
Section 1.02	Effective Time; Closing	3
Section 1.03	Effects of the Merger	3
Section 1.04	Certificate of Incorporation and Bylaws	3
Section 1.05	Directors	3
Section 1.06	Officers	3
Section 1.07	Conversion of Shares	3
Section 1.08	Treatment of Company Restricted Shares, Company Deferred Shares and Company Options.	5
Section 1.09	Stockholders’ Meeting; Proxy Material.	6

ARTICLE II	DISSENTING SHARES; PAYMENT FOR SHARES	8

Section 2.01	Dissenting Shares	8
Section 2.02	Exchange of Certificates and Cash.	8
Section 2.03	Stock Transfer Books	10
Section 2.04	Further Assurances	10
Section 2.05	Adjustments to Prevent Dilution	11

ARTICLE III	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	11

Section 3.01	Corporate Organization	11
Section 3.02	Capitalization.	12
Section 3.03	Authority Relative to this Agreement.	13
Section 3.04	No Conflict; Required Filings and Consents.	14
Section 3.05	SEC Filings and Financial Statements	15
Section 3.06	Absence of Certain Changes or Events	15
Section 3.07	Proxy Statement	15
Section 3.08	Litigation	16
Section 3.09	Compliance with Laws.	16
Section 3.10	Taxes.	17
Section 3.11	Real Estate; Assets.	18
Section 3.12	Employee Benefit Plans and Related Matters; ERISA.	19
Section 3.13	Employees, Labor Matters	20
Section 3.14	Intellectual Property Rights.	21
Section 3.15	Material Contracts.	22
Section 3.16	Environmental Laws and Regulations.	22
Section 3.17	Insurance Coverage	23
Section 3.18	Related Party Transactions	24
Section 3.19	Franchise Renewal Rights	24
Section 3.20	Absence of Undisclosed Liabilities	24


Section 3.21	Subscribers	25
Section 3.22	Programming Suppliers	25
Section 3.23	Opinion of Financial Advisor	25
Section 3.24	Brokers	25
Section 3.25	Parent Representations and Warranties	25

ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF PARENT	26

Section 4.01	Organization	26
Section 4.02	Authority Relative to this Agreement	26
Section 4.03	No Conflict; Required Filings and Consents.	26
Section 4.04	Proxy Statement	27
Section 4.05	Brokers	27
Section 4.06	Financing	27
Section 4.07	Formation	27
Section 4.08	Certain Arrangements.	28
Section 4.09	Company Representations and Warranties	28

ARTICLE V	COVENANTS AND OTHER AGREEMENTS	28

Section 5.01	Conduct of Business of the Company	28
Section 5.02	Notification of Certain Matters	32
Section 5.03	Indemnification; Directors’ and Officers’ Insurance.	32
Section 5.04	Access and Information	34
Section 5.05	Publicity	34
Section 5.06	All Reasonable Efforts	35
Section 5.07	No Solicitation.	35
Section 5.08	Third Party Consents	39
Section 5.09	Stockholder Litigation	39
Section 5.10	Management of Partnership Exit Process	39
Section 5.11	Charter Amendment	39
Section 5.12	Consent Solicitation; Back-Stop Facility.	40

ARTICLE VI	CONDITIONS	41

Section 6.01	Conditions to Obligation of Each Party to Effect the Merger	41
Section 6.02	Conditions to Obligation of Parent	41
Section 6.03	Conditions to Obligation of the Company	43

ARTICLE VII	TERMINATION, AMENDMENT AND WAIVER	43

Section 7.01	Termination	43
Section 7.02	Effect of Termination	44
Section 7.03	Fees and Expenses.	45
Section 7.04	Amendment	46
Section 7.05	Extension and Waiver	46


ARTICLE VIII	MISCELLANEOUS	47

Section 8.01	Non-Survival of Representations, Warranties and Agreements	47
Section 8.02	Fees and Expenses	47
Section 8.03	Notices	47
Section 8.04	Governing Law	49
Section 8.05	Entire Agreement; Assignment	50
Section 8.06	Severability	50
Section 8.07	Headings	50
Section 8.08	Parties in Interest	50
Section 8.09	Remedies.	50
Section 8.10	Counterparts	51
Section 8.11	Waiver of Jury Trial	52
Section 8.12	Definitions	52

iii

Exhibits:

A	Form of Exchange Agreement (see Exhibit 7.03 to this Amendment No. 1 to Schedule 13D)

B	Form of Voting Agreement (see Exhibit 7.06 to this Amendment No. 1 to Schedule 13D)

C	Form of Guarantee

D	Form of Certificate of Incorporation of the Surviving Corporation (see Exhibit 7.04 to this Amendment No. 1 to Schedule 13D)

E	Charter Amendment

Schedules:

The Schedules referenced in this Agreement and Plan of Merger have been omitted pursuant to 601(b)(2) of Regulation S-K. Copies of the omitted schedules will be provided to the Securities and Exchange Commission upon its request.

Index


2004 Financial Statements		15
2005 Budget		52
Affiliate		52
Agreement		1
Applicable Franchises		24
Back-Stop Facility		52
beneficial ownership		52
beneficially own		52
Board of Directors		52
Business		52
Business Combination Transaction		38
Business Day		53
cap		34
Certificate		4
Certificate of Merger		3
Change in the Company Recommendation		7
Charter Amendment		53
Class A Stock		1
Class B Stock		1
Closing		3
Code		10
Comcast		53
Company		1
Company Benefit Plan		53
Company Contracts		22
Company Deferred Shares		5
Company Disclosure Letter		11
Company Employee		6
Company Fee Property		18
Company Financial Statements		53
Company Intellectual Property		53
Company Leased Property		18
Company Liability Cap		51
Company Material Adverse Effect		53
Company Option		5
Company Preferred Stock		1
Company Real Property		18
Company Recommendation		7
Company Restricted Share		54
Company Stock		1
Company Stockholder Approval		14
Company Stockholders Meeting		6
Company Subsidiaries		11
Company Subsidiary		11


Confidentiality Agreement		54
Consent Solicitation		40
Constituent Documents		54
Credit Facility		54
DGCL		54
Dissenting Shares		8
Effective Time		3
Environmental Law		54
Environmental Permit		54
ERISA		54
Exchange Act		54
Exchange Agreement		1
Excluded Shares		55
Exit Notice		55
Exit Process		55
Expense Amount		46
Expenses		47
Franchise		55
GAAP		15
Governmental Approvals		15
Governmental Entity		14
Guarantee		2
Hazardous Substances		55
HSR Act		55
Incentive Plan		5
Indebtedness		55
Indemnified Person		33
Indenture Consents		40
Insurance Policies		23
Intellectual Property		56
Intervening Event		38
IRS		56
Knafel Stock		1
knowledge		56
known		56
Law		56
Laws		56
Leased Real Property		56
Leases		56
Liens		56
Management Stockholders		56
material weakness		17
Merger		1
Merger Consideration		1
Merger Fund		8
Notes		56


Order		56
Parent		1
Parent Class B Preferred Stock		56
Parent Class C Preferred Stock		2
Parent Class D Preferred Stock		2
Parent Held Shares		4
Parent Liability Cap		51
Parent Material Adverse Effect		56
parties		1
Partnership		57
Partnership Agreement		57
Paying Agent		8
Paying Agent Agreement		8
Permitted Liens		57
Person		57
Principals’ Agreement		2
Proceeding		31
Property Restrictions		18
Proxy Statement		7
Related Person		57
Release		57
reportable condition		17
Representatives		57
Sarbanes-Oxley Act		16
Schedule 13E-3		7
SEC		57
SEC Reports		15
Securities Act		57
Securityholders’ Agreement		57
Senior Officer		58
Software		58
Special Committee		1
Subsidiary		58
Superior Proposal		39
Surviving Corporation		2
Takeover Proposal		38
Tax		58
Tax Return		58
Taxes		58
Taxing Authority		58
Termination Date		43
Termination Fee		45
Third Party		38
Trade Secrets		58
Transmittal Documents		9
Treasury Shares		4
Voting Agreement		2

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of July 28, 2005, is entered into by and between INSIGHT ACQUISITION CORP., a Delaware corporation (“Parent”), and INSIGHT COMMUNICATIONS COMPANY, INC., a Delaware corporation (the “Company” and, collectively with Parent, the “Parties”).

RECITALS

WHEREAS, Sidney Knafel, together with certain related parties, beneficially owns 51,770 shares of the Class A common stock, par value $.01 per share, of the Company (the “Class A Stock”) and 7,250,159 shares of the Class B common stock, par value $.01 per share, of the Company (the “Class B Stock”, and together with the Class A Stock, the “Company Stock”) (the “Knafel Stock”), and Michael Willner beneficially owns 1,708 shares of Class A Stock and 1,106,516 shares of Class B Stock;

WHEREAS, the Board of Directors of the Company, based on the unanimous recommendation of a special committee thereof consisting solely of disinterested directors of the Company (the “Special Committee”), has (i) determined that the merger of Parent with and into the Company (the “Merger”), with the Company remaining as the surviving corporation, whereby shares of the Class A Stock and Class B Stock (other than Excluded Shares) will, upon the terms and subject to the conditions set forth herein, be converted into the right to receive cash in an amount equal to $11.75 per share (the “Merger Consideration”), is fair to, and in the best interests of, holders of such shares of the Class A Stock, (ii) approved and adopted this Agreement, the Charter Amendment and the transactions contemplated hereby, and declared their advisability, (iii) recommended the adoption by the stockholders of the Company, subject to the terms and conditions set forth herein, of this Agreement and the Charter Amendment, and (iv) approved the Merger and this Agreement, the Exchange Agreement, the Voting Agreement, the Principals’ Agreement and the transactions contemplated hereby and thereby for purposes of Section 203 of the DGCL;

WHEREAS, the Management Stockholders have entered into an agreement with Parent, Carlyle Partners III Telecommunications, L.P., CP III CoInvestment, L.P., Carlyle Partners IV Telecommunications, L.P., CP IV CoInvestment, L.P. and the Company, substantially in the form of Exhibit A (the “Exchange Agreement”), pursuant to which, subject to the terms and conditions thereof, certain transactions will take place prior to the Effective Time, in the sequence set forth in the Exchange Agreement, including the following transactions, all as more specifically described in the Exchange Agreement: (i) Sidney Knafel, together with certain related parties, and Michael Willner shall subscribe for shares of preferred stock, par value $0.01 per share, of the Company (the “Company Preferred Stock”), (ii) each Management Shareholder shall exchange certain shares of Company Stock held by such person for shares of Class C Preferred

Stock, par value $0.01 per share, of Parent (the “Parent Class C Preferred Stock”) and (iii) Carlyle Partners III Telecommunications, L.P., CP III CoInvestment, L.P., Carlyle Partners IV Telecommunications, L.P. and CP IV CoInvestment, L.P. shall make a cash contribution to Parent and subscribe for shares of Class D Preferred Stock, par value $0.01 per share, of Parent (the “Parent Class D Preferred Stock”);

WHEREAS, concurrently with the execution and delivery of this Agreement, certain of the Management Stockholders are entering into a voting agreement with Parent, substantially in the form of Exhibit B (the “Voting Agreement”), pursuant to which, among other things, each of them has agreed to vote the shares of Company Stock owned by such Management Shareholder for approval of the transactions contemplated hereby;

WHEREAS, concurrently with the execution and delivery of this Agreement, certain of the Management Stockholders, Carlyle Partners III Telecommunications, L.P., CP III CoInvestment, L.P., Carlyle Partners IV Telecommunications, L.P. and CP IV CoInvestment, L.P. are entering into a principals’ agreement (the “Principals’ Agreement”), with regard to certain other arrangements among them in connection with the transactions contemplated hereby; and

WHEREAS, concurrently with the execution and delivery of this Agreement, Carlyle Partners III Telecommunications, L.P. and Carlyle Partners IV Telecommunications, L.P. and entering into a guarantee, substantially in the form of Exhibit C (the “Guarantee”), pursuant to which Carlyle Partners III Telecommunications, L.P. and Carlyle Partners IV Telecommunications, L.P. have agreed, subject to the terms and conditions set forth therein, to guarantee the prompt and complete payment and performance of Parent’s obligations to the Company hereunder in an aggregate amount not to exceed $10 million;

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, Parent and the Company hereby agree as follows:

ARTICLE I

THE MERGER

Section 1.01 The Merger. Subject to the terms and conditions of this Agreement, and in accordance with the DGCL, at the Effective Time, (i) Parent shall be merged with and into the Company and the separate corporate existence of Parent shall thereupon cease, (ii) the Company shall be the successor or surviving corporation in the Merger (with respect to all post-closing periods, the “Surviving Corporation”) and shall continue to be governed by the laws of the State of Delaware, and (iii) the separate corporate

existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger.

Section 1.02 Effective Time; Closing. The closing of the Merger (the “Closing”) shall take place as soon as practicable, and in any event no later than the fifteenth Business Day, after all of the conditions set forth in Article VI have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing), unless this Agreement has been theretofore terminated pursuant to its terms or unless another time or date is agreed to in writing by the Parties. The Closing shall be held at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York, at 9:00 a.m., New York City time, or at such other place and time as the Parties shall agree in writing. Immediately following the Closing, the Parties shall file a certificate of merger (the “Certificate of Merger”) with the Secretary of State of the State of Delaware, and the Merger shall become effective upon such filing or at such later time as is agreed to by the Parties and is specified in the Certificate of Merger (the “Effective Time”).

Section 1.03 Effects of the Merger. From and after the Effective Time, the Merger shall have the effects set forth in the DGCL (including, without limitation, Sections 259, 260 and 261 thereof).

Section 1.04 Certificate of Incorporation and Bylaws. At the Effective Time, (i) the certificate of incorporation of the Company will be amended in its entirety to read as set forth in Exhibit D, and as so amended shall be the certificate of incorporation of the Surviving Corporation, until thereafter amended in accordance with its terms and the DGCL and (ii) the bylaws of the Company will be amended in their entirety to be the same as the bylaws of Parent immediately prior to the Effective Time, and as so amended shall be the bylaws of the Surviving Corporation, until thereafter amended in accordance with their terms and the DGCL.

Section 1.05 Directors. The directors of the Company immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation until their respective successors are duly elected or appointed and qualified in the manner provided in the certificate of incorporation and bylaws of the Surviving Corporation, or until their earlier death, resignation or removal, or otherwise as provided by law. The Company shall use all reasonable efforts to obtain and deliver to Parent the valid resignations, effective immediately prior to the Effective Time, of each director of the Company other than those designated by Parent prior to the Effective Time and those to be elected as contemplated under Section 6.02(e).

Section 1.06 Officers. The officers of the Company immediately prior to the Effective Time shall from and after the Effective Time, be the initial officers of the Surviving Corporation until their respective successors are duly elected or appointed and qualified in the manner provided in the certificate of incorporation and bylaws of the Surviving Corporation, or until their earlier death, resignation or removal, or otherwise as provided by law.

Section 1.07 Conversion of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of the Parties hereto or any holder of Company Stock:

(a) Each share of Class A Stock and Class B Stock, if any, issued and outstanding immediately prior to the Effective Time (other than Excluded Shares) shall be converted into the right to receive the Merger Consideration. As of the Effective Time, all such shares of Company Stock shall no longer remain outstanding and shall automatically be cancelled and shall cease to exist, and each holder of a certificate that immediately prior to the Effective Time represented such share of Company Stock (a “Certificate”) shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration to be paid in consideration therefor upon surrender of such Certificate in accordance with Section 2.02(b), without interest.

(b) Each share of Company Preferred Stock issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive one share of Series A Voting Preferred Stock, par value $0.01 per share, of the Surviving Corporation, having the terms substantially as set forth in Exhibit D hereto.

(c) Each share of Company Stock that is owned by the Company or by any direct or indirect wholly-owned subsidiary of the Company (the “Treasury Shares”), and each share of Company Stock that is owned by Parent immediately prior to the Effective Time (the “Parent Held Shares”) shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and no consideration shall be paid or delivered in exchange therefor.

(d) (i) Each share of Parent Class B Preferred Stock outstanding immediately prior to the Effective Time shall be converted into and become one share of Series B Voting Preferred Stock, par value $0.01 per share, of the Surviving Corporation, having the terms substantially as set forth in Exhibit D hereto.

(ii) Each share of Parent Class C Preferred Stock outstanding immediately prior to the Effective Time shall be converted into and become one share of Series C Non-Voting Preferred Stock, par value $0.01 per share, of the Surviving Corporation, having the terms substantially as set forth in Exhibit D hereto.

(iii) Each share of Parent Class D Preferred Stock outstanding immediately prior to the Effective Time shall be converted into and become one share of Series D Non-Voting Preferred Stock, par value $0.01 per share, of the Surviving Corporation, having the terms substantially as set forth in Exhibit D hereto.

Section 1.08 Treatment of Company Restricted Shares, Company Deferred Shares and Company Options.

(a) Restricted Shares. Pursuant to the Company’s 1999 Equity Incentive Plan, as amended (the “Incentive Plan“) and the applicable agreement evidencing the grant of any Company Restricted Shares, (i) immediately prior to the consummation of the transactions contemplated by the Exchange Agreement the Company shall waive the transferability restrictions contained therein, such that the Company Restricted Shares subject to such Exchange Agreement shall be transferred solely to the Parent in accordance with such Exchange Agreement, and (ii) at the Effective Time, the Company shall, to the extent necessary, waive any transferability restrictions and/or vesting conditions applicable to any Company Restricted Shares. Except as provided in the Exchange Agreement, all Company Restricted Shares that vest at the Effective Time pursuant to clause (ii) of the immediately preceding sentence or pursuant to an applicable agreement evidencing the grant of any such Company Restricted Shares shall be entitled to receive payment of the Merger Consideration (less applicable taxes) for each such Company Restricted Share, unless such share is an Excluded Share, and shall be treated the same as other shares of Company Stock for purposes of this Agreement.

(b) Deferred Shares. Pursuant to the Incentive Plan and the applicable agreement evidencing the grant of the right to receive Company Stock at the end of a specified deferral period (“Company Deferred Shares”), at the Effective Time, the Company shall adjust each Company Deferred Share such that, upon delivery, the holder of each Company Deferred Share shall be entitled to receive one share of Series C Non-Voting Preferred Stock of the Surviving Corporation for each share of Class A Stock of the Company that such holder otherwise would have been entitled to receive prior to such adjustment. The Company shall also amend the applicable agreement evidencing the grant of any Company Deferred Shares (and, to the extent necessary, obtain the consent of any holder thereof) to provide that the deferral period in respect of any vested Company Deferred Shares shall continue in full force and effect with respect to the Surviving Corporation until the earlier of (i) the occurrence of a “change in control” of the Surviving Corporation within the meaning of Section 409A of the Code and the regulations promulgated thereunder or (ii) the termination of employment of the holder thereof; provided that any distribution of Series C Non-Voting Preferred Stock of the Surviving Corporation in settlement of Company Deferred Shares prior to a change of control of the Surviving Corporation shall be subject to the terms and conditions of the Securityholders Agreement to the extent applicable to the Series C Non-Voting Preferred Stock of the Surviving Corporation). For the avoidance of doubt, any Company Deferred Shares that remain unvested at the Effective Time shall continue to vest according to the schedule set forth in the applicable agreement evidencing the grant of such Company Deferred Shares.

(c) Company Options. Pursuant to the Incentive Plan and the applicable agreement evidencing the grant of any option to purchase shares of Company Stock (each, a “Company Option”), as of the Effective Time, the Company shall cause each Company Option (whether vested or unvested) outstanding immediately prior to the Effective Time to be cancelled and to cease to exist in exchange for the right to receive a cash payment (less applicable taxes) equal to the product of (A) the excess, if any, of

(i) the Merger Consideration, over (ii) the per share exercise price of such Company Option, multiplied by (B) the number of shares of Company Stock covered by such Company Option. The Company shall pay any such cash payment as soon as practicable but in no event later than 15 Business Days after the Effective Time. As of the Effective Time, each holder of any Company Option shall cease to have any rights in respect thereof, or under the Incentive Plan or applicable agreement evidencing the grant of any such Company Option except as described in this Section 1.08(c).

(d) New Equity Awards. As soon as reasonably practicable after the Effective Time, but in no event later than 45 Business Days after the Effective Time, the Surviving Corporation shall grant to each individual of the Surviving Corporation who is employed by the Company or any of the Company Subsidiaries immediately prior to the Effective Time, including each employee who is not actively at work on account of illness, disability, vacation or leave of absence (each, a “Company Employee“), who holds Company Options immediately prior to the Effective Time, shares of Series E Common Stock of the Surviving Corporation in consideration for the future services to be provided by such Company Employee to the Surviving Corporation or any of its Subsidiaries after the Effective Time on such terms and conditions as the Surviving Corporation shall determine; provided that such Company Employee remains employed by the Surviving Corporation or any of its Subsidiaries through the time of such grant. Such shares of Series E Common Stock of the Surviving Corporation may be subject to vesting, distribution floors and such other terms and conditions as provided for in Exhibit D hereto, and in the award agreement, which may provide for different terms and conditions for different Company Employees receiving an issuance of shares of Series E Common Stock of the Surviving Corporation and for the same Company Employee for each issuance of shares of Series E Common Stock of the Surviving Corporation such Company Employee may receive.

Section 1.09 Stockholders’ Meeting; Proxy Material.

(a) The Company shall (i) duly take all lawful action to call, give notice of, convene and hold a meeting of its stockholders on a date as soon as reasonably practicable after the Proxy Statement is cleared by the SEC (the “Company Stockholders Meeting”) for the purpose of obtaining the Company Stockholder Approval with respect to the adoption of this Agreement and the Charter Amendment and (ii) shall use all reasonable efforts to solicit the adoption of this Agreement and the Charter Amendment by the Company Stockholder Approval; provided, that in the event of a Change in the Company Recommendation pursuant to Section 5.07(c), notwithstanding clause (ii) of this Section 1.09(a), (x) the Company may disclose the fact of such Change in the Company Recommendation in any solicitation made by the Company to its stockholders and (y) the Company shall use all reasonable efforts to solicit the votes of the stockholders of the Company in respect of the matters to be brought before such meeting, but shall not be required to solicit in favor of the Company Stockholder Approval. The Board of Directors of the Company shall recommend adoption of the Charter Amendment and this Agreement by the stockholders of the Company to the effect as set forth in Section 3.03(b) (the “Company Recommendation”), and shall not withdraw, modify or qualify (or propose to withdraw, modify or qualify) in any manner adverse to

Parent such recommendation or take any action or make any statement in connection with the Company Stockholders Meeting inconsistent with such recommendation including, without limitation, approving or recommending or proposing to approve or recommend a third party Takeover Proposal with respect to the Company or failing to recommend the adoption of this Agreement (collectively, a “Change in the Company Recommendation”); provided that the Board of Directors of the Company and/or the Special Committee may make a Change in the Company Recommendation pursuant to Section 5.07(c) hereof; and provided, further, that the provision of factual information by the Company to its stockholders shall not be deemed to constitute a Change in the Company Recommendation so long as the disclosure through which such factual information is conveyed, taken as a whole, is not inconsistent with the Company Recommendation.

(b) As promptly as practicable following the date of this Agreement, the Company shall prepare a proxy statement relating to the approval of the Merger by the Company’s stockholders (as amended or supplemented, the “Proxy Statement”), and the Parties shall prepare a Schedule 13E-3 filing (as amended or supplemented, the “Schedule 13E-3”). Parent and the Company shall cooperate with each other in connection with the preparation of the foregoing documents. The Company will use all reasonable efforts to have the Proxy Statement, and the Parties will use all reasonable efforts to have the Schedule 13E-3, cleared by the SEC as promptly as practicable after such filing.

(c) The Company will use all reasonable efforts to cause the Proxy Statement to be mailed to the Company’s stockholders as promptly as practicable after the Proxy Statement is cleared by the SEC. The Company shall as promptly as practicable notify Parent of the receipt of any oral or written comments from the SEC relating to the Proxy Statement. The Company shall cooperate and provide Parent with a reasonable opportunity to review and comment on the draft of the Proxy Statement (including each amendment or supplement thereto), and the Parties hereto shall cooperate and provide each other with a reasonable opportunity to review and comment on the draft Schedule 13E-3 (including each amendment or supplement thereto) and all responses to requests for additional information by and replies to comments of the SEC, prior to filing such with or sending such to the SEC, and the Parties hereto will provide each other with copies of all such filings made and correspondence with the SEC. If at any time prior to the Effective Time, any information should be discovered by any Party which should be set forth in an amendment or supplement to the Proxy Statement or the Schedule 13E-3 so that the Proxy Statement or the Schedule 13E-3 would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Party which discovers such information shall promptly notify the other Parties hereto and, to the extent required by applicable Law, an appropriate amendment or supplement describing such information shall be promptly filed by the Company with the SEC and disseminated by the Company to the stockholders of the Company.

ARTICLE II

DISSENTING SHARES; PAYMENT FOR SHARES

Section 2.01 Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, shares of Company Stock outstanding immediately prior to the Effective Time that are held by stockholders (i) who shall have neither voted for approval and adoption of this Agreement and the Merger nor consented thereto in writing and (ii) who shall be entitled to and shall have demanded properly in writing appraisal for such Shares in accordance with Section 262 of the DGCL (“Dissenting Shares”), shall not be converted into the right to receive the Merger Consideration at or after the Effective Time unless and until the holder of such shares of Company Stock fails to perfect, withdraws or otherwise loses such holder’s right to appraisal. If a holder of Dissenting Shares shall withdraw (in accordance with Section 262(k) of the DGCL) his or her demand for such appraisal or shall become ineligible for such appraisal, then, as of the Effective Time or the occurrence of such event, whichever last occurs, such holder’s Dissenting Shares shall cease to be Dissenting Shares and shall be converted into the right to receive the Merger Consideration, without interest thereon in the manner provided in Section 1.07 hereof. The Company or the Surviving Corporation, as the case may be, shall give Parent prompt notice of any written demands for appraisal, withdrawals of demands for appraisal and any other instruments served pursuant to Section 262 of the DGCL and received by the Company. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

Section 2.02 Exchange of Certificates and Cash.

(a) Paying Agent. As soon as practicable after the execution of this Agreement, Parent, and the Company shall enter into an agreement, subject to the Special Committee’s approval (not to be unreasonably withheld), which agreement shall not be amended without the Special Committee’s approval (not to be unreasonably withheld), providing for the matters set forth in this Section 2.02 (the “Paying Agent Agreement” with a bank or trust company selected by Parent, subject to the Special Committee’s approval (not to be unreasonably withheld) (the “Paying Agent”), authorizing such Paying Agent to act as Paying Agent in connection with the Merger. Prior to the Effective Time, Parent shall deposit or shall cause to be deposited with or for the account of the Paying Agent, for the benefit of the holders of shares of Company Stock, funds in an amount necessary for payment of the Merger Consideration upon surrender of the Certificates, pursuant to Section 1.07. Cash deposited with the Paying Agent shall hereinafter be referred to as the “Merger Fund”.

(b) Exchange Procedures. As soon as reasonably practicable, and in any event within five Business Days after the Effective Time, the Surviving Corporation will instruct the Paying Agent to mail to each holder of record of a Certificate or Certificates that immediately prior to the Effective Time evidenced outstanding shares (other than Excluded Shares) of Company Stock, (i) a form letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only

upon proper delivery of the Certificates to the Paying Agent and shall be in such form and have such other provisions as the Surviving Corporation may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration pursuant to Section 1.07. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by the Surviving Corporation, together with a letter of transmittal, duly executed, and such other customary documents as may be required pursuant to such instructions (collectively, the “Transmittal Documents”), the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration for each share of Company Stock formerly represented by such Certificate, without any interest thereon, less any required withholding of taxes, and the Certificate so surrendered shall thereupon be canceled. In the event of a transfer of ownership of Company Stock that is not registered in the transfer records of the Company, the Merger Consideration may be issued and paid in accordance with this Article II to the transferee of such shares if the Certificate evidencing such shares is presented to the Paying Agent and is properly endorsed or otherwise in proper form for transfer. In such event, the signature on the Certificate or any related stock power must be properly guaranteed and the Person requesting payment of the Merger Consideration must either pay any transfer or other taxes required by reason of the payment to a Person other than the registered holder of the Certificate so surrendered or establish to the Surviving Corporation that such tax has been paid or is not applicable. The Merger Consideration will be delivered by the Paying Agent as promptly as practicable following surrender of a Certificate and the related Transmittal Documents. Cash payments may be made by check unless otherwise required by a depositary institution in connection with the book-entry delivery of securities. No interest will be payable on such Merger Consideration. Until surrendered in accordance with this Section 2.02, each Certificate shall be deemed at any time after the Effective Time to evidence only the right to receive, upon such surrender, the Merger Consideration for each share of Company Stock (other than Excluded Shares) formerly represented by such Certificate. The Merger Fund shall not be used for any purpose other than as set forth in this Article II. Any interest, dividends or other income earned on the investment of cash held in the Merger Fund shall be for the account of the Surviving Corporation. The Merger Consideration delivered upon surrender of the Certificates in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares.

(c) Termination of Merger Fund. Any portion of the Merger Fund (including the proceeds of any investments thereof) which remains undistributed to the holders of Company Stock for one year following the Effective Time shall be delivered by the Paying Agent to the Surviving Corporation. Any holders of Company Stock who have not theretofore complied with this Article II shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration.

(d) No Liability. None of the Surviving Corporation, Parent, the Company or the Paying Agent shall be liable to any Person for any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

(e) Investment of the Merger Fund. The Paying Agent shall invest any cash included in the Merger Fund as directed by the Surviving Corporation on a daily basis; provided that no such gain or loss thereon shall affect the amounts payable to the stockholders of the Company pursuant to Article I or this Article II. Any interest and other income resulting from such investments shall promptly be paid to the Surviving Corporation. If for any reason (including as a result of losses) the cash in the Merger Fund shall be insufficient to fully satisfy all of the payment obligations to be made in cash by the Paying Agent hereunder, the Surviving Corporation shall promptly deposit cash into the Merger Fund in an amount which is equal to the deficiency in the amount of cash required to fully satisfy such cash payment obligations.

(f) Withholding Rights. Each of the Surviving Corporation, the Parent and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Company Stock such amounts as it is required to deduct and withhold with respect to the making of such payment under the United States Internal Revenue Code of 1986, as amended (the “Code”), or any provision of state, local or foreign tax law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Stock in respect of which such deduction and withholding was made.

(g) Lost, Stolen or Destroyed Certificates. In the event any Certificates shall have been lost, stolen or destroyed, the holder of such lost, stolen or destroyed Certificate(s) shall execute an affidavit of that fact upon request. The holder of any such lost, stolen or destroyed Certificate(s) shall also deliver a reasonable indemnity against any claim that may be made against Parent, the Surviving Corporation or the Paying Agent with respect to the Certificate(s) alleged to have been lost, stolen or destroyed. The affidavit and any indemnity which may be required hereunder shall be delivered to the Paying Agent, who shall be responsible for making payment for such lost, stolen or destroyed Certificates(s) pursuant to the terms hereof.

Section 2.03 Stock Transfer Books. At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers of Company Stock thereafter on the records of the Company. From and after the Effective Time, the holders of Certificates representing Company Stock shall cease to have any rights with respect to such shares, except as provided in this Agreement or by applicable Law. Any Certificates presented to the Paying Agent or the Surviving Corporation for any reason at or after the Effective Time shall be canceled and exchanged for the Merger Consideration pursuant to the terms in this Article II.

Section 2.04 Further Assurances. After the Effective Time, the officers and directors of the Surviving Corporation will be authorized to execute and deliver, in the name and on behalf of the Company or Parent, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or Parent, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

Section 2.05 Adjustments to Prevent Dilution. In the event that prior to the Effective Time, solely as a result of a reclassification, stock split (including a reverse stock split), stock dividend or stock distribution which in any such event is made on a pro rata basis to all holders of Company Stock, there is a change in the number of shares of Company Stock outstanding or issuable upon the conversion, exchange or exercise of securities or rights convertible or exchangeable or exercisable for shares of Company Stock, then the Merger Consideration shall be equitably adjusted to eliminate the effects of such event.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as disclosed to Parent in a letter (the “Company Disclosure Letter”) delivered to it by the Company prior to the execution of this Agreement (with reference to the section numbers of the representations and warranties in this Article III to which the information in such letter relates, unless it is reasonably apparent from a reading of such disclosure that the disclosure is applicable to other representations and warranties), or as provided in SEC Reports filed prior to the date hereof, the Company hereby represents and warrants to Parent as follows:

Section 3.01 Corporate Organization. The Company and each Company Subsidiary is a corporation, partnership or other legal entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has the requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where such failures to be so organized, existing and in good standing or to have such power and authority, individually or in the aggregate, have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect. The Company and each Company Subsidiary is duly qualified or licensed and in good standing to do business in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except where the failure to be so qualified or licensed, individually or in the aggregate, has not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect. Pursuant to the Partnership Agreement, Insight Communications Company, L.P., a Delaware limited partnership, is the general partner of Insight Midwest, L.P., a Delaware limited partnership. Section 3.01 of the Company Disclosure Letter sets forth the name of each Subsidiary of the Company (individually, a “Company Subsidiary” and collectively, the “Company Subsidiaries”), its capitalization, and the state of jurisdiction of its organization.

Section 3.02 Capitalization.

(a) As of the date of this Agreement, the authorized capital stock of the Company consists of 300,000,000 shares of Class A Stock, 100,000,000 shares of Class B Stock, and 100,000,000 shares of Company Preferred Stock. As of the date of this Agreement, (i) 51,783,591 shares of Class A Stock were issued and outstanding, (ii) no shares of Class A Stock were held in treasury by the Company, (iii) 8,489,454 shares of Class B Stock were issued and outstanding, and (iv) no shares of Class B Stock were held in treasury by the Company. As of the date of this Agreement, no shares of Company Preferred Stock were issued and outstanding.

(b) Section 3.02(b) of the Company Disclosure Letter contains a schedule as of the date of this Agreement setting forth (as applicable) the number of, exercise or reference price, vesting date (or dates) and expiration date (or delivery date) of each outstanding Company Restricted Share, Company Deferred Share and Company Option. Except as set forth in Section 3.02(b) of the Company Disclosure Letter, at the close of business on July 27, 2005, no shares of capital stock of the Company were issued, reserved for issuance or outstanding. All issued and outstanding shares of Company Stock are duly authorized, validly issued, fully paid and nonassessable.

(c) There are no preemptive or similar rights on the part of any holder of any class of securities of the Company or any Company Subsidiary. Neither the Company nor any Company Subsidiary has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company or any Company Subsidiary on any matter submitted to shareholders or a separate class of holders of capital stock. Except as set forth in Section 3.02(b) of the Company Disclosure Letter, as of the date of this Agreement, there are no options, warrants, calls, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver, sell or transfer or repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold or transferred or repurchased, redeemed or otherwise acquired, any shares of the capital stock of, or other equity interests in, the Company or any Company Subsidiary, any additional shares of capital stock of, or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of, or other equity interest in, the Company or any Company Subsidiary, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, contract, arrangement or undertaking or (iii) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of capital stock of, or other equity interests in, the Company or any Company Subsidiary. As of the date of this Agreement, there are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity interests in, the Company or any Company Subsidiary.

(d) Except for this Agreement and the transactions contemplated hereby, there are not now, and at the Effective Time there will not be, any voting trusts or other agreements or understandings to which the Company is a party or is bound with respect to the voting of capital stock of the Company.

Section 3.03 Authority Relative to this Agreement.

(a) The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and subject to receipt of the Company Stockholder Approval, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the Exchange Agreement by the Company and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company are necessary to authorize the execution, delivery and performance by the Company of this Agreement or the Exchange Agreement or the consummation by the Company of the transactions contemplated hereby or thereby (other than the Company Stockholder Approval and the filing of the Certificate of Merger and the Charter Amendment as required by the DGCL). This Agreement and the Exchange Agreement have been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by each other party thereto, constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.

(b) The Special Committee, at a meeting duly called and held, has by unanimous vote of all its members approved and declared this Agreement and the transactions contemplated hereby advisable and has determined that the Merger is fair to, and in the best interests of, holders of the shares of the Class A Stock. The Board of Directors of the Company, based on the unanimous recommendation of the Special Committee, has (i) determined that the Merger, upon the terms and subject to the conditions set forth herein, is fair to, and in the best interests of, holders of the shares of the Class A Stock, (ii) approved and adopted this Agreement, the Charter Amendment and the transactions contemplated hereby, and declared their advisability, (iii) recommended the adoption of this Agreement and the Charter Amendment by the stockholders of the Company, subject to the terms and conditions set forth herein, and (iv) approved the Merger and this Agreement, the Exchange Agreement, the Voting Agreement, the Principals’ Agreement and the transactions contemplated hereby and thereby for purposes of Section 203 of the DGCL (provided such approval is premised on the accuracy of the representation set forth in Section 4.08(c)).

(c) Under applicable Law and this Agreement, (i) with respect to the Merger, the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Company Stock entitled to vote thereon, voting together as a single class, (ii) with respect to the Merger, the affirmative vote of the holders of a majority of the outstanding shares of Class A Stock entitled to vote thereon not held by (x) Parent, the Management Stockholders (or any member of the immediate families thereof) or TC Group, L.L.C. or any Affiliates thereof, or (y) any officers or directors of the Company (or any member of the immediate families thereof) and (iii) with respect to the Charter

Amendment, the affirmative vote of the holders, voting separately as a class, of (A) a majority of the outstanding shares of Class A Stock entitled to vote thereon and (B) a majority of the outstanding shares of Class B Stock entitled to vote thereon, in each case, outstanding on the record date established by the Board of Directors of the Company in accordance with the bylaws of the Company, applicable Law and this Agreement, at the Company Stockholders Meeting, are the only votes of the Company’s stockholders required to approve this Agreement and the transactions contemplated hereby, including the Merger and Charter Amendment (collectively, the “Company Stockholder Approval”).

Section 3.04 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement and the Exchange Agreement by the Company do not, and the performance of this Agreement and the Exchange Agreement and the consummation of the transactions contemplated hereby and thereby will not, (i) assuming the effectiveness of the Charter Amendment, conflict with or violate the Company’s Constituent Documents, or the certificate of incorporation, bylaws or other equivalent organizational documents of any of the Company Subsidiaries, (ii) assuming the receipt of the approvals referred to in clause (i), (ii) and (iii) of Section 3.04(b), conflict with or violate any federal, state or local statute, law, rule, regulation, ordinance, code, order, judgment, decree or any other requirement or rule of law applicable to the Company or any of the Company Subsidiaries or by which any property or asset of the Company or any of the Company Subsidiaries is bound or affected, or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, result in the loss of a material benefit under or give to others any right of termination, amendment, acceleration, payment or cancellation of, or result in the creation of a lien or other encumbrance on any property or under any contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which the Company or any of the Company Subsidiaries or any of their properties or assets is bound or affected, except in the case of clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which, individually or in the aggregate, have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect or prevent or materially delay the performance by the Company of any of its obligations under this Agreement or the Exchange Agreement or the consummation of any of the transactions contemplated hereby or thereby.

(b) The execution and delivery of this Agreement and the Exchange Agreement by the Company do not, and the performance of this Agreement and the Exchange Agreement and the consummation of the Merger and the other transactions contemplated hereby and thereby by the Company will not, require any material consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign (each a “Governmental Entity”), except for (i) any applicable requirements of the Exchange Act or the Securities Act, (ii) the filing of appropriate documents as required by the DGCL in connection with the Merger, the Charter Amendment and the transactions contemplated hereby, (iii) the approvals from

other regulatory agencies set forth in Section 3.04(b) of the Company Disclosure Letter (the “Governmental Approvals”), and (iv) such other items as may be required solely by reason of the business or identity of Parent or its owners.

Section 3.05 SEC Filings and Financial Statements. The Company has heretofore filed all forms, reports, statements, schedules and other materials with the SEC required to be filed pursuant to the Exchange Act or other federal securities laws since January 1, 2002 (the “SEC Reports”). As of their respective dates, or, if applicable, the dates such SEC Reports were amended prior to the date hereof, the SEC Reports (including, without limitation, all financial statements included therein, exhibits and schedules thereto and documents incorporated by reference therein) complied in all material respects with all applicable requirements of the Exchange Act and other federal securities laws as of the applicable date and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading; provided, however, that no representation is made as to the accuracy of any financial projections or forward looking statements, or the completeness of any information, furnished by the Company to the SEC solely for purposes of complying with Regulation FD promulgated by the SEC under the Exchange Act. The financial statements of the Company (the “2004 Financial Statements”) included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (including the related notes thereto) and the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2005 (including the related notes thereto) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, comply in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto as of the applicable date, have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto and subject, in the case of unaudited interim financial statements, to normal year-end adjustments) and fairly present in all material respects the consolidated financial position and the consolidated results of operations and cash flows of the Company and the consolidated Company Subsidiaries as at the dates thereof or for the periods presented therein.

Section 3.06 Absence of Certain Changes or Events. Other than in connection with or arising out of this Agreement, and the transactions and other agreements contemplated hereby, since December 31, 2004 and until the date hereof, the Company and the Company Subsidiaries have conducted their Business only in the ordinary course consistent with past practice, and there has not been a Company Material Adverse Effect.

Section 3.07 Proxy Statement. None of the information contained in the Proxy Statement will at the time of the mailing of the Proxy Statement to the stockholders of the Company, at the time of the Company Stockholders Meeting, and at the time of any amendments thereof or supplements thereto, and none of the information supplied or to be supplied by the Company for inclusion or incorporation by reference in the Schedule 13E-3 to be filed with the SEC concurrently with the filing of the Proxy Statement, will, at the time of its filing with the SEC, contain any untrue statement of a

material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, that no representation is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by Parent. The Proxy Statement and the Schedule 13E-3 will comply as to form in all material respects with the Exchange Act, except that no representation is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by Parent.

Section 3.08 Litigation. As of the date of this Agreement, there is no suit, action, proceeding, claim, review or investigation (whether at law or in equity, before or by any Governmental Entity or before any arbitrator) pending or, to the knowledge of the Company, threatened against the Company or any of the Company Subsidiaries, which would, individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole, if adversely determined. There is no order of any Governmental Entity or arbitrator outstanding against the Company or any Company Subsidiary which is material to the Company and the Company Subsidiaries, taken as a whole.

Section 3.09 Compliance with Laws.

(a) Each of the Company and the Company Subsidiaries has, since January 1, 2002, been in compliance in all material respects with all applicable Laws (including Section 404 of the Sarbanes-Oxley Act of 2002 (together with the rules and regulations promulgated under such Act, the “Sarbanes-Oxley Act”)) and, to the knowledge of the Company, is not under investigation with respect to, and has not been threatened to be charged with or given notice of, any material violation of any Law.

(b) Except as permitted by the Exchange Act, including Sections 13(k)(2) and (3), since the enactment of the Sarbanes-Oxley Act, neither the Company nor any of its Affiliates has directly or indirectly extended or maintained credit, arranged for the extension of credit, renewed an extension of credit or materially modified an extension of credit in the form of personal loans to any executive officer or director (or equivalent thereof) of the Company or any Company Subsidiaries.

(c) The Company has (i) implemented disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to the Company is made known to the management of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation, to the Company’s outside auditors and the audit committee of the Board of Directors of the Company (A) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial data and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. A summary of such disclosures made at or prior to the date of this Agreement by management to the Company’s outside auditors and audit committee is set forth in Section 3.09(c) of the Company Disclosure Letter.

(d) The Company has delivered to Parent copies of any written notifications it has received since January 1, 2004, of a (i) “reportable condition” or (ii) “material weakness” in the Company’s internal controls. For purposes of this Agreement, the terms “reportable condition” and “material weakness” shall have the meanings assigned to them in the Statements of Auditing Standards No. 60, as in effect on the date hereof.

Section 3.10 Taxes.

(a) The Company and each Company Subsidiary has (i) duly and timely filed, or had filed on its behalf, with the appropriate Taxing Authorities all Tax Returns required to be filed by it in respect of any Taxes, which Tax Returns were true, correct and complete in all material respects, (ii) duly and timely paid in full all Taxes shown due on such Tax Returns, and all other material Taxes due and payable by it (iii) established reserves in accordance with GAAP that are adequate for the payment of all Taxes not yet due and payable with respect to the results of operations of the Company and each Company Subsidiary through the date of this Agreement and (iv) complied in all material respects with all laws applicable to the payment and withholding of Taxes and has timely withheld and paid over to the respective proper Taxing Authorities all amounts required to be so withheld and paid over.

(b) There (i) is no deficiency, claim, audit, suit, proceeding, request for information or investigation now pending, outstanding or asserted in writing against or with respect to the Company or any Company Subsidiary by any Taxing Authority in respect of any Taxes or Tax Returns, and (ii) are no requests for rulings or determinations in respect of any Taxes or Tax Returns pending between the Company or any Company Subsidiary and any Taxing Authority.

(c) The federal income Tax Returns of the Company and the Company Subsidiaries have been examined by the Internal Revenue Service (or the applicable statutes of limitation for the assessment of federal income Taxes have expired) for all periods through and including December 31, 2000, and no material deficiencies were asserted as a result of such examinations that have not been resolved and, to the extent that such resolution results in a deficiency, fully paid. Neither the Company nor any of the Company Subsidiaries has granted any requests, agreements, consents or waivers to extend the statutory period of limitations applicable to the assessment of any Taxes with respect to any Tax Returns of the Company or any of the Company Subsidiaries.

(d) Except as provided in the Partnership Agreement, neither the Company nor any Company Subsidiary is a party to any material tax sharing, tax indemnity or other similar agreement or arrangement regarding Taxes with any entity not included in the most recent Company Financial Statements.

(e) None of the Company or any of the Company Subsidiaries has been a member of any affiliated group within the meaning of Section 1504(a) of the Code, or

any similar affiliated or consolidated group for tax purposes under state, local or foreign law (other than a group the common parent of which is the Company), or has any liability for the Taxes of any Person (other than the Company and the Company Subsidiaries) under Treasury Regulations Section 1.1502-6 or any similar provision of state, local or foreign law, as a transferee or successor, by contract or otherwise.

(f) Each of Insight Midwest, L.P. and each of its Subsidiaries as of the date hereof (i) is (and at all times since its formation has been) treated as a partnership or disregarded entity for federal, state and local income tax purposes and (ii) is not (nor has ever been) treated as a “publicly traded partnership” or otherwise taxable as a corporation for any federal, state or local income tax purposes.

Section 3.11 Real Estate; Assets.

(a) The Company or one of the Company Subsidiaries has good, valid and marketable title to each parcel of real property owned in fee by the Company or any Company Subsidiary (the “Company Fee Property”) and a good and valid leasehold interest in each parcel of real property leased by the Company or any Company Subsidiary (the “Company Leased Property” and together with the Company Fee Property, the “Company Real Property”), except for any failure which, individually or in the aggregate, has not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect. To the knowledge of the Company, (i) the Company or one of the Company Subsidiaries has the right to use and occupy the Company Leased Property for the full term of the Company Lease relating thereto, except for any failure which, individually or in the aggregate, has not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect, and (ii) each lease to Company Leased Property is a legal, valid and binding agreement, enforceable in accordance with its terms, of the parties thereto and there is no, nor has the Company or any of the Company Subsidiaries received notice of any, default (or any condition or event, which, after notice or a lapse of time or both, would constitute a default thereunder) which, individually or in the aggregate, constitutes or would reasonably be expected to constitute or result in a Company Material Adverse Effect.

(b) The Company Real Property is not subject to any Liens (collectively, “Property Restrictions”), except for: (i) any such Property Restrictions for taxes, assessments and other governmental charges not yet due and payable, or, if due, not delinquent or being contested in good faith by appropriate proceedings during which collection or enforcement against the Company Real Property is stayed, (ii) Property Restrictions imposed or promulgated by law or any Governmental Entity with respect to real property, including zoning, building, environmental or similar restrictions, (iii) easements, licenses, covenants, conditions, minor title defects, mechanic’s liens, rights-of-way and other similar restrictions and encumbrances, including any other agreements, restrictions or encumbrances which would be shown on a current title report or survey or similar report or listing and any other matters of record, provided the same would not, in the aggregate, constitute or reasonably be expected to constitute or result in a Company Material Adverse Effect, (iv) Liens pursuant to, or permitted under, the Credit Facility, or (v) where the existence of any such Property Restrictions, individually

or in the aggregate, have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect.

Section 3.12 Employee Benefit Plans and Related Matters; ERISA.

(a) Section 3.12(a) of the Company Disclosure Letter contains a true and complete list of all of the Company Benefit Plans. With respect to each such Company Benefit Plan, the Company has previously delivered or made available to Parent a complete and correct copy of such Company Benefit Plan, if written, or a description of such Company Benefit Plan if not written, and to the extent applicable, (i) all trust agreements, insurance contracts or other funding arrangements, (ii) the two most recent actuarial and trust reports for both ERISA funding and financial statement purposes, (iii) the two most recent Forms 5500 with all attachments required to have been filed with the IRS or the Department of Labor, (iv) the most recent IRS determination letter, (v) all current summary plan descriptions, (vi) all material communications received from or sent to the IRS, the Pension Benefit Guaranty Corporation or the Department of Labor (including a written description of any oral communication), (vii) current employee handbooks and manuals and (viii) all amendments and modifications to any such Company Benefit Plan or related document. No Company Benefit Plan is (i) maintained for the benefit of employees whose employment is outside the United States, (ii) a “multiple employer plan” for purposes of Sections 4063 or 4064 ERISA, (iii) a “multi-employer plan” within the meaning of Section 4001(a)(3) of ERISA, or (iv) subject to section 412 of the Code or Section 302 or Title IV of ERISA.

(b) Qualification. Each Company Benefit Plan intended to be qualified under section 401(a) of the Code, and the trust (if any) forming a part thereof, has received a favorable determination letter from the IRS as to its qualification under the Code and to the effect that each such trust is exempt from taxation under Section 501(a) of the Code, and, to the knowledge of the Company, nothing has occurred since the date of such determination letter that will adversely affect such qualification or tax-exempt status. All amendments and actions required to bring each Company Benefit Plan into material conformity with the applicable provisions of ERISA, the Code and other applicable Law have been made or taken, except to the extent such amendments or actions are not required by law to be made or taken until after the Closing Date. Each Company Benefit Plan has been operated in all material respects in accordance with applicable Law.

(c) Liability; Compliance. There has been no event or circumstance that has resulted in any material liability (other than for the payment of benefits in the ordinary course) either directly or indirectly as a result of any indemnification obligation to the Company or any Related Person under or pursuant to Title I or IV of ERISA, the penalty, excise Tax or joint and several liability provisions of the Code relating to any Company Benefit Plan. To the knowledge of the Company there has not been any event or circumstance that would reasonably be expected to result in any such material liability (other than for the payment of benefits in the ordinary course) in respect of the Company Benefit Plans. All contributions and premiums required to have been paid by the Company and each Related Person to any “employee benefit plan” (within the meaning of section 3(3) of ERISA) under the terms of any such plan or its related trust, insurance

contract or other funding arrangement, or pursuant to any applicable Law or collective bargaining agreement have been paid or have been reflected on the balance sheets of the Company. There are no material pending or, to the knowledge of the Company, threatened audits, actions, suits or claims by or on behalf of any Company Benefit Plan, any current or former employee, officer, director, shareholder or contract worker or otherwise involving any such Company Benefit Plan or the assets of any Company Benefit Plan (other than routine claims for benefits, all of which have been adequately reserved for on the regularly prepared balance sheets of the Company to the extent required).

(d) Acceleration or Increases in Compensation. There is no contract, agreement, plan or arrangement to which the Company or any of the Company Subsidiaries is a party covering any employee, former employee, officer, director, shareholder or contract worker of the Company or any of the Company Subsidiaries, which, individually or collectively, would (either alone or in combination with other events) give rise to the payment of any amount, including by way of accelerated vesting, that would not be deductible pursuant to Section 280G of the Code as a result of or in connection with the entering into, or the consummation of the transactions contemplated by, this Agreement. Except as provided in Section 1.08 of this Agreement, the entering into, or the consummation of the transactions contemplated by, this Agreement will not result in any material increase in the amount of compensation or benefits or the acceleration of the vesting or timing of payment of any compensation or benefits payable to or in respect of any current or former employee, officer or director of the Company or any of the Company Subsidiaries.

(e) Independent Contractors. The Company and each of the Company Subsidiaries has properly classified all individuals (including but not limited to independent contractors and leased employees) under applicable Law, except where failure to properly classify such Person would not result in material employment or benefit liability to the Company or the Company Subsidiaries.

(f) Retirement Benefits. No current or former employee or officer of the Company or of any of the Company Subsidiaries is or will become entitled to post-employment benefits of any kind by reason of employment with the Company, including death or medical benefits (whether or not insured), other than (i) coverage mandated by Section 4980B of the Code, or (ii) retirement benefits payable under any Company Benefit Plan qualified under section 401(a) of the Code.

Section 3.13 Employees, Labor Matters. Neither the Company nor any of the Company Subsidiaries is a party to, or is, as of the date hereof, in negotiation to become party to, any collective bargaining agreement. As of the Closing Date, any and all notices to, or filings or registrations with, any labor organizations, works counsel or any similar entity, counsel or organization, required to be made prior to the Effective Time by the Company Subsidiaries in connection with the execution of this Agreement will have been timely given or made. Since January 1, 2003 there has not occurred nor, to the knowledge of the Company has there been threatened any material strike, slowdown, picketing, work stoppage, concerted refusal to work overtime or other similar labor

activity or organizing campaign with respect to any employees of the Company or any of the Company Subsidiaries. There are no labor disputes currently subject to any grievance procedure, arbitration or litigation and there is no representation petition pending or, to the knowledge of the Company, threatened with respect to any current or former employee, officer, director or contract worker of the Company or any of the Company Subsidiaries, except for such disputes or petitions which, individually or in the aggregate, have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect. The Company and each of the Company Subsidiaries have complied with all Laws pertaining to the employment or termination of employment of their respective employees, including all such laws relating to labor relations, equal employment, fair employment practices, prohibited discrimination or distinction and other similar employment practices or acts, except for any failures so to comply which, individually or in the aggregate, have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect.

Section 3.14 Intellectual Property Rights.

(a) Neither the Company nor any of the Company Subsidiaries owns or licenses any material Intellectual Property.

(b) The conduct of the Business does not infringe or otherwise conflict with the rights of any Person in respect of any Intellectual Property, provided that such infringements or conflicts, individually and in the aggregate, have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect or affect the Business in any material respect. To the knowledge of the Company, none of the Company Intellectual Property is being infringed or otherwise used or being made available for use by any Person without a license or permission from the Company, except for such infringements or uses, individually and in the aggregate, as have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect. None of the Company Intellectual Property is subject to any outstanding order by or with any court, tribunal, arbitrator or other Governmental Entity.

(c) Each of the Company and each Company Subsidiary has taken all actions reasonably necessary to maintain the secrecy of all non-public Company Intellectual Property, including Trade Secrets, used in the Business, except for those actions, the failure of which to take have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect.

Section 3.15 Material Contracts.

(a) All contracts and agreements to which the Company or any Company Subsidiary is a party as of the date hereof or to which any of their respective properties or assets is subject as of the date hereof that are required pursuant to Item 601 of Regulation S-K under the Exchange Act to be filed as an exhibit to any SEC Reports have been filed as an exhibit to such SEC Reports (such filed contracts and agreements, the “Company Contracts”). All the Company Contracts are valid and in full force and effect, except as set forth in the SEC Reports, except to the extent they have previously expired or

terminated in accordance with their terms and except for any invalidity or failure to be in effect that, individually or in the aggregate, has not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect. None of the Company or any Company Subsidiary is in violation of or default under, and none of the Company, any Company Subsidiary or, to the knowledge of the Company, any other party thereto is in default or breach under the terms of, or has provided any notice of intention to terminate, any of the Company Contracts, and to the knowledge of the Company, no event or circumstance has occurred or will occur by reason of this Agreement or the consummation of any of the transactions contemplated hereby, that with notice or lapse of time or both, would constitute any event of default thereunder or would result in a termination thereof, except as set forth in the SEC Reports and except for such violations, defaults, notices or terminations that, individually or in the aggregate, have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect.

(b) True, correct and complete copies of each such Company Contract (including all modifications and amendments thereto and waivers thereunder) have been made available to Parent.

Section 3.16 Environmental Laws and Regulations.

Except as disclosed in the SEC Reports:

(a) The Company and each Company Subsidiary has complied and is in compliance with all applicable Environmental Laws and has obtained and is in compliance with all Environmental Permits, except where such non-compliance, individually or in the aggregate, has not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect.

(b) No material notice of violation, notification of liability, demand, request for information, citation, summons or order has been received by the Company or any Company Subsidiary, no material complaint has been filed, no material penalty or fine has been assessed, and no material investigation, action, claim, suit or proceeding is pending or, to the knowledge of the Company, threatened by any Person involving the Company or any Company Subsidiary relating to or arising out of any Environmental Law.

(c) No Hazardous Substances are located and no disposal or Releases of Hazardous Substances have occurred at, on, above, under or from any properties currently or formerly owned, leased, operated or used by the Company, any Company Subsidiary or any predecessors in interest that has resulted in or would reasonably be expected to result in any material cost, liability, investigation or remediation obligation of the Company or any Company Subsidiary under any Environmental Law.

(d) Neither the Company nor any Company Subsidiary, nor, to the knowledge of the Company, any other Person, has caused or taken any action that could reasonably be expected to result in any material liability, investigation or remediation obligation relating to (i) the environmental conditions at, on, above, under, or about any properties or assets currently or formerly owned, leased, operated or used by the Company or any Company Subsidiary or any of their respective predecessors in interest, or (ii) the past or present use, management, handling, transport, treatment, generation, storage, disposal, Release or threatened Release of Hazardous Substances.

(e) The Company has provided to Parent all material environmental site assessments, audits, investigations and studies in the possession, custody or control of the Company or any of the Company’s Subsidiaries relating to properties or assets currently or formerly owned, leased, operated or used by the Company or any Company Subsidiary.

(f) Neither the Company nor any Company Subsidiary has been in businesses other than those related to the provision of telecommunication services that could present environmental issues of a different scope or magnitude than those presented in the provision of telecommunication services. In particular, but not by way of limitation, neither the Company nor any Company Subsidiary has operated or currently operates: (i) any manufacturing facilities; (ii) any facilities that are or have been permitted under the Resource Conservation and Recovery Act; or (iii) any business that manages the hazardous wastes of any unrelated party.

Section 3.17 Insurance Coverage. All insurance policies carried by or covering the Company and the Company Subsidiaries with respect to their business, assets and properties (the “Insurance Policies” are in full force and effect, and, as of the date of this Agreement, no notice of cancellation has been received by the Company or any of the Company Subsidiaries with respect to any material Insurance Policy which has not been cured by the payment of premiums that are due. All premiums due on the Insurance Policies have been paid in a timely manner and the Company and the Company Subsidiaries have complied in all material respects with the terms and provisions of the Insurance Policies. The insurance coverage provided by the Insurance Policies (including, without limitation, as to deductibles and self-insured retentions) is reasonable in light of the business engaged in by the Company.

Section 3.18 Related Party Transactions. There are no contracts (other than expired contracts or contracts terminated in accordance with their terms), commitments, agreements, arrangements or other transactions entered into other than in the ordinary course of business between the Company or any Company Subsidiary, on the one hand, and any (i) present or former officer or director of the Company or any Company Subsidiary or any of their immediate family members (including their spouses), (ii) record or beneficial owner of five percent or more of the voting securities of the Company or (iii) affiliate of any such officer, director, family member or beneficial owner, on the other hand, except, in the case of each of clauses (i), (ii) and (iii) for such

contracts, commitments, agreements, arrangements or other transactions involving less than $100,000. The representation and warranty set forth in the preceding sentence is made to the knowledge of the Company (excluding the knowledge of Sidney Knafel and Michael Willner) with respect to any such contracts, commitments, agreements, arrangements or other transactions involving Sidney Knafel or Michael Willner.

Section 3.19 Franchise Renewal Rights. The Company and the Company Subsidiaries have timely filed valid requests for renewal under Section 626 of the Cable Act with the proper Governmental Entity with respect to all Franchises that are expired or that will expire within thirty (30) months after any date between the date of this Agreement and the Closing Date (the “Applicable Franchises”). As of the date of this Agreement, neither the Company nor any Company Subsidiary has received notice from any Person that any Franchise will not be renewed or that the applicable Governmental Entity has challenged or raised any objection to or otherwise questioned the Company’s request for renewal under Section 626 of the Cable Act. After the date hereof, neither the Company nor any Company Subsidiary has received any notice having a valid basis therefor from any Person that any Franchise will not be renewed or that the applicable Governmental Entity has challenged or raised any objection to the Company’s request for renewal under Section 626 of the Cable Act. The Company and the Company Subsidiaries have duly and timely complied with any and all inquiries and demands by any and all Governmental Entities made with respect to such requests for renewal.

Section 3.20 Absence of Undisclosed Liabilities. Since December 31, 2004, the Company and the Company Subsidiaries do not have any liabilities or obligations that are required to be reflected on the consolidated balance sheets of the Company and the Company Subsidiaries in accordance with GAAP, except (i) liabilities and obligations in the respective amounts reflected on or reserved against in the consolidated balance sheet of the Company and the Company Subsidiaries included in the Company Financial Statements, (ii) liabilities and obligations incurred in the ordinary course of business consistent with past practice, since December 31, 2004, that would not be prohibited by this Agreement and that, in the aggregate, would not reasonably be expected to be materially adverse to the Company and the Company Subsidiaries, taken as a whole, and (iii) other liabilities and obligations that, individually or in the aggregate, would not reasonably be expected to materially adversely affect the ability of the Company to perform its obligations under this Agreement.

Section 3.21 Subscribers. Section 3.21 of the Company Disclosure Letter contains a schedule setting forth, as of the last day of the calendar month immediately preceding the date hereof, the number of (i) basic customers, (ii) homes passed, (iii) digital subscribers, (iv) high speed Internet customers and (v) telephone customers, in each case, of the Company and the Company Subsidiaries. Each of the foregoing was determined using the same reporting system used in the audited financial statements for the Company for the period ending December 31, 2004.

Section 3.22 Programming Suppliers. The programming cost estimates presented in the 2005 Budget were reasonably prepared by management based on assumptions reflecting the best available estimates and judgments of management. Neither the

Company nor any of the Company Subsidiaries has received any notice, nor does any of them have any reason to believe, that, as a result of the announcement or consummation of the transactions contemplated by this Agreement or otherwise, any such supplier or intermediary has changed or intends to change the programming provided, sold or resold to the Company or the Company Subsidiaries by such supplier or intermediary, or the price, terms or conditions at or under which such programming is provided, sold or resold to the Company or the Company Subsidiaries (including but not limited to any potential changes in the Company’s and the Company Subsidiaries’ ability to acquire programming on preferential terms from any supplier or intermediary), in each case as compared to the quantity, quality, price, terms and conditions used in current sales or resales to the Company and the Company Subsidiaries, except for any exceptions to the foregoing which, individually or in the aggregate, have not constituted and would not reasonably be expected to constitute or result in a Company Material Adverse Effect.

Section 3.23 Opinion of Financial Advisor. The Special Committee has received the written opinions of Evercore Partners and Citigroup, dated the date hereof, to the effect that, as of such date, the Merger Consideration is fair from a financial point of view to the stockholders of the Company (other than Management Stockholders), signed copies of which have been delivered to Parent.

Section 3.24 Brokers. No broker, finder or investment banker (other than Evercore Partners and Citigroup) is entitled to any brokerage, finder’s or other fee or commission in connection with this Agreement, the Merger and the other transactions contemplated hereby based upon arrangements made by or on behalf of the Company. The Company has heretofore furnished to Parent a complete and correct copy of all agreements between the Company and Evercore Partners and Citigroup pursuant to which such firm would be entitled to any payment relating to the transactions contemplated hereby.

Section 3.25 Parent Representations and Warranties. The Company agrees that except for the representations and warranties contained in Article IV of this Agreement, neither Parent nor any other Person on behalf of Parent makes any other express or implied representation or warranty with respect to Parent or any other information provided to the Company by or on behalf of Parent.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF PARENT

Parent hereby represents and warrants to the Company as follows:

Section 4.01 Organization. Parent is duly organized, validly existing and in good standing under the laws of the State of Delaware.

Section 4.02 Authority Relative to this Agreement. Parent has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the Exchange Agreement by Parent and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of Parent, and in the case of the Merger Agreement, the stockholders of Parent, and no other corporate proceedings on the part of Parent are necessary to authorize the execution, delivery and performance of this Agreement and the Exchange Agreement by Parent or the consummation by Parent of the transactions contemplated hereby or thereby (other than the filing of the Certificate of Merger as required by the DGCL). This Agreement and the Exchange Agreement have been duly and validly executed and delivered by Parent and, assuming the due authorization, execution and delivery by the other parties thereto, constitute valid and binding obligations of Parent, enforceable against Parent in accordance with their terms.

Section 4.03 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement and the Exchange Agreement by Parent do not, and the performance of this Agreement and the consummation of the transactions contemplated hereby and thereby will not, (i) conflict with or violate the certificate of incorporation or bylaws of Parent, (ii) conflict with or violate any federal, state or local statute, law, rule, regulation, ordinance, code, order, judgment, decree or any other requirement or rule of law applicable to Parent or by which any of its properties or assets are bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice, lapse of time or both, would become a default) under, result in the loss of a material benefit under or give to others any right of termination, amendment, acceleration, payment or cancellation of, or result in the creation of a lien or other encumbrance on any property or under any contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Parent is a party or by which Parent or any of its properties or assets is bound or affected, except in the case of clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not, or would not reasonably be expected to, individually or in the aggregate, prevent or materially delay the performance by Parent of any of its obligations under this Agreement or the Exchange Agreement or the consummation of any of the transactions contemplated hereby or thereby.

(b) The execution and delivery of this Agreement and the Exchange Agreement by Parent do not, and the performance of this Agreement and the Exchange Agreement and the consummation of the Merger and the other transactions contemplated hereby and thereby by Parent will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, except (i) for (A) any applicable requirements, if any, of the Exchange Act or the Securities Act, (B) the filing of appropriate merger and similar documents as required by the DGCL in connection with the Merger and the transactions contemplated hereby, and (C) the Governmental Approvals and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, constitute or reasonably be expected to constitute a Parent Material Adverse Effect.

Section 4.04 Proxy Statement. None of the information supplied or to be supplied by Parent for inclusion or incorporation by reference in the Proxy Statement will at the time of the mailing of the Proxy Statement to the stockholders of the Company, at the time of the Company Stockholders Meeting, and at the time of any amendments thereof or supplements thereto, and none of the information contained in the Schedule 13E-3 to be filed with the SEC concurrently with the filing of the Proxy Statement, will, at the time of its filing with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Proxy Statement and the Schedule 13E-3 will comply as to form in all material respects with the Exchange Act, except that no representation is made by Parent with respect to statements, made or incorporated by reference therein based on information supplied by the Company.

Section 4.05 Brokers. No broker, finder or investment banker (other than Morgan Stanley & Co. Incorporated and Stephens, Inc.) is entitled to any brokerage, finder’s or other fee or commission in connection with this Agreement, the Merger and the other transactions contemplated hereby based upon arrangements made by or on behalf of Parent.

Section 4.06 Financing. Parent will have funds sufficient to pay (i) at the Effective Time, (x) the aggregate Merger Consideration, the payments provided for under Section 1.08(c) and its Expenses and (y) any amounts that may be due to the holders of the Notes in connection with any Consent Solicitation and (ii) if the Consent Solicitation has not been successfully consummated, any amounts that would be due, at such time as such amounts are due, to the holders of the Notes in connection with any change of control offer if the Company elected to undertake such an offer in connection with the Merger; provided, in the case of clauses (i)(y) and (ii), that the Company shall have complied with its obligations under Section 5.12.

Section 4.07 Formation. Parent was formed specifically for the transactions contemplated by this Agreement and has conducted no operations and incurred no obligations other than in connection with the transactions contemplated by this Agreement.

Section 4.08 Certain Arrangements.

(a) Parent has provided the Special Committee with true, correct and complete copies of the Voting Agreement, the Exchange Agreement, the Principals’ Agreement and the certificate of incorporation of the Surviving Corporation, and with a current draft of the Securityholders’ Agreement, and such agreements and organizational documents set forth the entirety of agreements and understandings between the Parent and/or Carlyle Partners III Telecommunications, L.P., CP III CoInvestment, L.P., Carlyle Partners IV Telecommunications, L.P. and CP IV CoInvestment, L.P., on the one hand, and the Management Stockholders, on the other hand.

(b) The agreements referred to in clause (a) of this Section 4.08 have not been amended or modified in a manner that would materially alter the financial arrangements applicable to Sidney Knafel and Michael Willner, taken as a whole, without the prior consent of the Special Committee, which consent shall not be withheld unless the Company reasonably concludes that such amendment or modification would adversely affect the fairness or propriety of the Merger from the perspective of the stockholders of the Company other than the Management Stockholders (it being understood that it is the expectation of the Parties that Michael Willner shall continue in his present position after the Effective Time and shall receive compensation and other benefits substantially similar to his compensation and benefits as of the date hereof).

(c) Neither Parent nor the Management Stockholders, alone or together with any other person, has taken any action that would cause Section 203 of the DGCL to be applicable to this Agreement, the Merger, or any transactions contemplated by this Agreement or the Voting Agreement irrespective of any approval of the Board of Directors of the Company for purposes of Section 203 of the DGCL.

Section 4.09 Company Representations and Warranties. Parent agrees that except for the representations and warranties contained in Article III of this Agreement, neither the Company nor any other Person on behalf of the Company makes any other express or implied representation or warranty with respect to the Company or any other information provided to Parent by or on behalf of the Company.

ARTICLE V

COVENANTS AND OTHER AGREEMENTS

Section 5.01 Conduct of Business of the Company. From the date of this Agreement until the Effective Time, unless Parent shall otherwise consent in writing or except as set forth in Section 5.01 of the Company Disclosure Letter or as otherwise expressly provided for in this Agreement, the Company shall, and shall cause each of the Company Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and relationships with customers, suppliers and others having business dealings with it and to keep available the services of its current officers and key employees on terms and conditions substantially comparable to those currently in effect and maintain its current rights and franchises, in each case, consistent with past practice. In addition to and without limiting the generality of the foregoing, except as expressly set forth in Section 5.01 of the Company Disclosure Letter or as otherwise expressly provided for in this Agreement or the Exchange Agreement, from the date hereof until the Effective Time, without the prior written consent of Parent, not to be unreasonably withheld or delayed, the Company shall not and shall not permit any Company Subsidiary to:

(a) adopt or propose any change in its certificate of incorporation or bylaws or other comparable organizational documents;

(b) (i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property) in respect of any of its capital stock (other than dividends or distributions declared, set aside, made or paid by any Subsidiary wholly-owned by the Company or another Subsidiary to the Company or such other Subsidiary), (ii) split, combine or reclassify any of its capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants or any similar security exercisable for, or convertible into, such other security) in respect of, in lieu of, or in substitution for, shares of its capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or any Company Subsidiary, or any other equity interests or any rights, warrants or options to acquire any such shares or interests, provided that nothing in this Section 5.01(b) shall prevent the Partnership from making or paying any dividend or distribution required to be made or paid pursuant to Section 4.1(a) of the Partnership Agreement;

(c) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities (including any options, warrants or any similar security exercisable for or convertible into such capital stock or similar security) other than (i) pursuant to the exercise of existing grants of options under the Incentive Plan in accordance with their present terms, (ii) issuances by a wholly owned Company Subsidiary of capital stock to such Company Subsidiary’s parent or another wholly-owned Company Subsidiary, (iii) delivery of capital stock upon the vesting of any Company Restricted Shares or Company Deferred Shares or (iv) matching grants under the Company’s 401(k) plan in accordance with past practice;

(d) merge or consolidate with any other Person or acquire an amount of assets or equity of any other Person in excess of $5,000,000;

(e) sell, lease, license, subject to a Lien, other than a Permitted Lien, encumber or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) except (i) pursuant to existing written contracts or commitments (the terms of which have been disclosed in writing to Parent prior to the date hereof), (ii) sales of network capacity in the ordinary course, consistent with past practice, (iii) sales of assets listed in Section 5.01(e) of the Company Disclosure Letter or (iv) in an amount not in excess of $5,000,000 in the aggregate;

(f) (i) make any loans, advances or capital contributions to, or investments in, any other Person other than (x) by the Company or any Company Subsidiary to or in the Company or any Company Subsidiary or (y) advances to employees in the ordinary course of business consistent with past practice, not to exceed $10,000 in each individual case, (ii) create, incur, guarantee or assume any Indebtedness, issuances of debt securities, guarantees, loans or advances, other

than any of the foregoing created, incurred, guaranteed or assumed in an aggregate amount not exceeding the amount outstanding as of December 31, 2004 as reflected in the Company Financial Statements (and excluding any such Indebtedness incurred in the ordinary course of business consistent with past practice for working capital and cash management purposes under any revolving credit agreement in existence as of the date hereof), or (iii) make any capital expenditure other than (x) (together with capital expenditures made to date in fiscal year 2005) in an aggregate amount not to exceed $220 million through December 31, 2005 or (y) from and after January 1, 2006, in accordance with the budget of the Company and the Company Subsidiaries for such fiscal year, and in any event no more than $200 million in the aggregate for such fiscal year, and no more than $40 million in any calendar month and no more than $75 million in any calendar quarter;

(g) materially amend or otherwise materially modify benefits under any Company Benefit Plan, materially accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Benefit Plan as currently in effect on the date hereof, fail to make any required contribution to any Company Benefit Plan, merge or transfer any Company Benefit Plan or the assets or liabilities of any Company Benefit Plan, change the sponsor of any Company Benefit Plan, or terminate or establish any Company Benefit Plan, in each case except as required by an existing agreement, plan or applicable Law;

(h) grant any increase in the compensation or benefits of directors, officers, employees, consultants, representatives or agents of the Company or any Company Subsidiary other than as required by any plan or arrangement in effect on the date hereof and payments and increases in the ordinary course of business consistent with past practice (other than to directors and Senior Officers);

(i) enter into or amend or modify any change of control, severance, consulting, retention or employment agreement with any Senior Officer, or any change of control, severance, consulting, retention or employment plan, program or arrangement;

(j) hire or terminate the employment or contractual relationship of any officer or employee of the Company or any Company Subsidiary, as the case may be, other than hirings or terminations in the ordinary course of business consistent with past practice or that, individually and in the aggregate, would not result in (i) a material increase in the number of persons providing services to the Company and the Company Subsidiaries in all such capacities, (ii) in the case of hirings, a material increase in the aggregate payroll and other benefits costs to the Company or such Company Subsidiary (such increase to be determined, in the case of a hiring to replace an employee or other service provider in a pre-existing position based solely on the costs in excess of the costs associated with the replaced service provider), and (iii) in the case of terminations, material liability to the Company or any of its Subsidiaries in excess of the costs savings, if any, directly derived from such terminations;

(k) other than in the ordinary course of business consistent with past practice, settle or compromise any action, suit, claim, litigation, proceeding, arbitration, investigation, audit or controversy involving claims, liabilities or obligations in excess of $3 million or otherwise material to the Company and the Company Subsidiaries taken as a whole (each, a “Proceeding”), or enter into any consent, decree, injunction or similar restraint or form of equitable relief in settlement of any material Proceeding other than such settlements and compromises that relate to Taxes (which are the subject of Section 5.01(k)) or that, individually or in the aggregate, are not material to the Business or the Company and the Company Subsidiaries, taken as a whole;

(l) other than in the ordinary course of business, and except as are not, individually or in the aggregate, material to the Business or the Company and the Company Subsidiaries, taken as a whole, (i) make or rescind any material election relating to Taxes, (ii) settle or compromise any Proceeding relating to Taxes, (iii) make a request for a written ruling of a Taxing Authority relating to Taxes, other than any request for a determination concerning qualified status of any Company Benefit Plan intended to be qualified under Code Section 401(a), (iv) enter into a material written and legally binding agreement with a Taxing Authority relating to Taxes, or (v) except as required by Law, change any of its material methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of its federal income tax returns for the taxable year ending December 31, 2003;

(m) other than in the ordinary course of business consistent with past practice, (i) modify, amend or terminate any Company Contract, (ii) enter into any successor agreement to an expiring Company Contract that changes the terms of the expiring Company Contract in a way that is materially adverse to the Company or any Company Subsidiary, or (iii) modify, amend or enter into any new agreement that would have been considered a Company Contract if it were entered into at or prior to the date hereof;

(n) enter into or renew or extend any agreements or arrangements that limit or otherwise restrict the Company or any of the Company Subsidiaries or any of their respective Affiliates or any successor thereto, or that could, after the Effective Time, limit or restrict the Surviving Corporation or any of its Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area, which agreements or arrangements, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Business or the Company and the Company Subsidiaries, taken as a whole, after giving effect to the Merger;

(o) change any method of accounting or accounting principles or practices by the Company or any Company Subsidiary, except for any such change required by a change in GAAP;

(p) terminate, cancel, amend or modify any material insurance policies maintained by it covering the Company or the Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;

(q) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of the Company Subsidiaries;

(r) take any actions or omit to take any actions that would or would be reasonably likely to (i) result in any of the conditions to the consummation of the Merger set forth in Article VI not being satisfied or (ii) materially impair the ability of the Company or Parent to consummate the Merger in accordance with the terms hereof or materially delay such consummation;

(s) take any action that would be reasonably be expected to result in a material modification of the Company’s (and the Company Subsidiaries’) rights under the Partnership Agreement; or

(t) agree or commit to do any of the foregoing.

Section 5.02 Notification of Certain Matters. The Company shall give prompt notice to Parent, and Parent shall give prompt notice to the Company, of the occurrence, or failure to occur, of any event which occurrence or failure to occur would cause (a) any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect, or (b) any material failure of the Company, on the one hand, or Parent, on the other hand, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification shall affect the representations or warranties of the Parties or the conditions to the performance by the Parties hereunder. Each Party shall give prompt notice to the other of any correspondence or oral communication between the Company (or Parent, as the case may be) and Comcast or their respective Affiliates or Representatives relating to the Company’s and the Company Subsidiaries’ rights and obligations under the Partnership Agreement or the structure of the Partnership.

Section 5.03 Indemnification; Directors’ and Officers’ Insurance.

(a) Parent and the Company agree that all rights to indemnification, advancement of expenses and exculpation now existing in favor of each individual who, as of the Effective Time, is a present or former director or officer of the Company or any of the Company Subsidiaries (each, an “Indemnified Person”) as provided in the Company’s Constituent Documents, or in the certificate or articles of incorporation, bylaws or similar documents of any of such subsidiaries, in effect as of the date hereof,

shall, with respect to matters occurring prior to the Effective Time, survive the Merger and continue in full force and effect after the Effective Time. Until the sixth anniversary of the Effective Date, the certificate of incorporation and bylaws of the Surviving Corporation and the certificate or articles of incorporation, bylaws or similar documents of its subsidiaries shall, with respect to matters occurring prior to the Effective Time, contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of the Indemnified Persons than are set forth in the Company’s Constituent Documents or in the certificate or articles of incorporation, bylaws or similar documents of the Surviving Corporation’s subsidiaries in effect as of the date of execution of this Agreement, and such provisions shall not be amended, repealed or otherwise modified prior to the sixth anniversary of the Effective Time in any manner that would materially adversely affect the rights thereunder, as of the Effective Time, of any Indemnified Person, with respect to matters occurring prior to the Effective Time. Parent and the Company further agree that all rights to indemnification or advancement of expenses now existing in favor of Indemnified Persons in any indemnification agreement between such person and the Company or any such subsidiary, as the case may be, or under the resolution approved by the Board of Directors on March 7, 2005 or under Law shall survive the Merger and continue in full force and effect in accordance with the terms of such agreement or Law.

(b) Without limiting the generality of Section 5.03(a), from and after the Effective Time, the Surviving Corporation shall, to the fullest extent permitted by applicable Law and the Company’s Constituent Documents, defend and hold harmless each Indemnified Person against any costs or expenses (including reasonable attorneys’ fees and expenses), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of, relating to or in connection with the negotiation, adoption and approval of this Agreement, the Merger or the other transactions contemplated by this Agreement or arising out of or pertaining to the transactions contemplated by this Agreement. Any determination required to be made with respect to whether such Indemnified Person’s conduct complies with the standards set forth in the DGCL and any applicable provisions of the Company’s Constituent Documents shall be made by a majority of the independent directors of board of the Surviving Corporation.

(c) The Surviving Corporation shall obtain and maintain directors and officers liability insurance policies for the Indemnified Persons with respect to matters occurring prior to the Effective Time for a period of six years from the Effective Time on terms with respect to coverage and amount no less favorable than those of the applicable policies in effect on the date hereof; provided, however, that in no event shall the Surviving Corporation be obligated to expend in order to obtain or maintain insurance coverage pursuant to this Section 5.03(c) any amount per annum in excess of 250% of the aggregate premiums currently paid or payable by the Company in 2005 (on an annualized basis) for such purpose (the “cap”), which the Company represents to be $729,750; and provided further, that if equivalent coverage cannot be obtained, or can be obtained only by paying an annual premium in excess of the cap, the Surviving Company shall only be required to obtain as much coverage as can be obtained by paying an annual premium equal to the cap.

(d) In the event the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or any substantial portion of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of the Surviving Corporation (or their respective successors or assigns) jointly and severally assume the obligations of the Surviving Corporation (or their respective successors or assigns) as contemplated by this Section 5.03. The Surviving Corporation shall pay all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Indemnified Person in enforcing the indemnity and other obligations provided in this Section 5.03. The provisions of this Section 5.03 shall survive the consummation of the Merger and expressly are intended to benefit each of the Indemnified Persons. Notwithstanding anything to the contrary, it is agreed that the rights of an Indemnified Person under this Section 5.03 shall be in addition to, and not a limitation of any other rights such Indemnified Person may have under the Company’s Constituent Documents, any other indemnification arrangements, the DGCL or otherwise and nothing in this Section 5.03 shall have the effect of, or be construed as having the effect of, reducing the benefits to the Indemnified Persons under the Company’s Constituent Documents, any other indemnification arrangements, the DGCL or otherwise with respect to matters occurring prior to the Effective Time.

Section 5.04 Access and Information. The Company shall afford to Parent and its representatives such access during normal business hours throughout the period prior to the Effective Time to the Company’s books, records (including, without limitation, tax returns and work papers of the Company’s independent auditors), facilities, personnel, management reports and to such other information as Parent shall reasonably request, subject to any existing confidentiality obligations of the Company and applicable Law or unless the disclosure of any information would jeopardize attorney-client privilege or the attorney-client work product doctrine. All information obtained by Parent pursuant to this Section 5.04 shall continue to be governed by the Confidentiality Agreement.

Section 5.05 Publicity. Parent and the Special Committee have agreed upon the text of a press release to be issued with respect to this Agreement and the transactions contemplated hereby. None of the Parties shall issue or cause the publication of any other press release or other public announcement with respect to this Agreement, the Merger or the other transactions contemplated hereby without prior consultation with the other Parties, except as may be required by law or any listing agreement with a national securities exchange to which the Company is a party.

Section 5.06 All Reasonable Efforts. Subject to the terms and conditions hereof, each of the Parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by the Merger and this Agreement, and to cooperate with each other in connection with

the foregoing, including using all reasonable efforts to (a) obtain all necessary waivers, consents and approvals from other parties to material agreements, leases and other contracts, provided that the Company shall not be required to make any payments or provide any economic benefits to third parties prior to the Effective Time in order to obtain any waivers, consents or approvals from any third parties hereunder, (b) obtain all necessary consents, approvals and authorizations as are required to be obtained under any federal, state or foreign law or regulation, (c) lift or rescind any injunction or restraining order or other order adversely affecting the ability of the Parties to consummate the transactions contemplated hereby, (d) effect any necessary registrations and filings and submissions of information requested by governmental authorities, and (e) fulfill all conditions to this Agreement; provided that the Company shall not be required to take, and shall not take, any action under clauses (a), (b) or (d) of this Section 5.06 unless requested by Parent, other than the filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby, which shall be filed as promptly as practicable after the date hereof. In furtherance of and not in limitation of the foregoing, the Company shall permit Parent to reasonably participate in the defense and settlement of any claim, suit or cause of action relating to any Takeover Proposal, the Merger, this Agreement or the other transactions contemplated hereby, and the Company shall not settle or compromise any such claim, suit or cause of action without Parent’s prior written consent, which consent shall not be unreasonably withheld.

Section 5.07 No Solicitation.

(a) The Company shall not, nor shall it authorize or permit any of the Company Subsidiaries, nor it shall it authorize any of its or the Company Subsidiaries’ respective Representatives to (and shall use all reasonable efforts to cause such Persons not to), directly or indirectly (i) initiate, solicit, facilitate or knowingly encourage any inquiry or the making of any proposal that constitutes or would reasonably be expected to lead to a Takeover Proposal (ii) enter into any letter of intent, memorandum of understanding, merger agreement or other agreement, arrangement or understanding relating to, or that would reasonably be expected to lead to, any Takeover Proposal, or (iii) continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person any information or data with respect to the Company, or otherwise cooperate with or take any other action to facilitate any proposal that (A) constitutes, or would reasonably be expected to lead to, any Takeover Proposal or (B) requires the Company to abandon, terminate or fail to consummate the Merger or any other transactions contemplated by this Agreement. Notwithstanding the foregoing, prior to the receipt of the Company Stockholder Approval, the Company may, in response to a bona fide written Takeover Proposal that did not result from a breach of this Section 5.07(a), and subject to compliance with Section 5.07(c):

(x) furnish information or data with respect to the Company and the Company Subsidiaries to the Person making such Takeover Proposal and its Representatives pursuant to and in accordance with a confidentiality agreement containing terms and conditions not materially less restrictive than those contained in the Confidentiality Agreement, provided that (i) the foregoing shall not require that any such confidentiality agreement contains a “standstill” or

similar provision unless the Company so elects and (ii) such confidentiality agreement shall not contain any provisions that would prevent the Company from complying with its obligation to provide the required disclosure to Parent pursuant to Section 5.07(b); and provided further that all such information provided to such Person has previously been provided to Parent or is provided to Parent prior to or concurrently with the time it is provided to such Person; and

(y) participate in discussions or negotiations with such Person or its Representatives regarding such Takeover Proposal;

provided, in each case, that the Special Committee determines in good faith, by resolution duly adopted after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation, that (i) the failure to furnish such information or participate in such discussions or negotiations would present a material risk of being inconsistent with the fulfillment of its fiduciary duties under applicable Law and (ii) such Takeover Proposal constitutes or would reasonably be expected to lead to a Superior Proposal. The Company shall (A) immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Persons or their Representatives conducted prior to the date of this Agreement with respect to any Takeover Proposal and will request the prompt return of any confidential information previously furnished to such Persons in connection therewith, and (B) promptly inform its Representatives of the obligations undertaken in this Section 5.07. Without limiting the foregoing, any violation of the restrictions set forth in this Section 5.07 by any Representative of the Company or any of the Company Subsidiaries, whether or not such Person is purporting to act on behalf of the Company or any of the Company Subsidiaries, shall be deemed to be a breach of this Section 5.07 by the Company; provided that notwithstanding anything to the contrary set forth in this Section 5.07, in no event shall any action taken by, or at the direction of, Sidney Knafel or Michael Willner (and not at the direction or with the concurrence of the Board of Directors of the Company (acting with the concurrence of the Special Committee) or the Special Committee) constitute a violation by the Company of this Section 5.07. Nothing contained in this Section 5.07 shall prohibit the Company from responding to any unsolicited proposal or inquiry solely by advising the Person making such proposal or inquiry of the terms of this Section 5.07.

(b) As promptly as practicable after the receipt by the Company of any Takeover Proposal or any inquiry with respect to, or that would reasonably be expected to lead to, any Takeover Proposal, and in any case within one Business Day after the receipt thereof, the Company shall provide oral and written notice to Parent of (i) such Takeover Proposal or inquiry, (ii) the identity of the Person making any such Takeover Proposal or inquiry, and (iii) the material terms and conditions of any such Takeover Proposal or inquiry (including any amendments or modifications thereto). The Company shall keep Parent informed on a current basis of the status of any such Takeover Proposal, including, without limitation, any changes to the price or other material terms and conditions thereof, and promptly provide Parent with copies of all written or e-mail correspondence or other communications and other written materials sent or provided to or by the Company and its Representatives in connection with any Takeover Proposal that relate to the price or other material terms and conditions thereof. Notwithstanding

the foregoing, if any Takeover Proposal or inquiry is made, or any other information with respect to such Takeover Proposal or inquiry is provided, solely to Sidney Knafel or Michael Willner, the Company shall have no obligations to Parent under this Section 5.07(b) with respect to such Takeover Proposal, inquiry or other information until such time as any member of the Special Committee is made aware of such Takeover Proposal, inquiry or other information.

(c) Neither the Board of Directors of the Company nor any committee thereof (including the Special Committee) shall, directly or indirectly, (i) effect a Change in the Company Recommendation or (ii) approve any letter of intent, memorandum of understanding, merger agreement or other agreement, arrangement or understanding relating to, or that may reasonably be expected to lead to, any Takeover Proposal. Notwithstanding the foregoing, at any time prior to the Company Stockholder Approval, the Board of Directors of the Company and/or the Special Committee may in response to a Superior Proposal or an Intervening Event effect a Change in the Company Recommendation, provided that the Special Committee determines in good faith, by resolution duly adopted after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation, that the failure to do so would present a material risk of being inconsistent with the fulfillment of its fiduciary duties under applicable Law, and provided, further, that the Board of Directors and/or the Special Committee may not effect such a Change in the Company Recommendation unless (i) the Special Committee shall have first provided prior written notice to Parent that it is prepared to effect a Change in the Company Recommendation in response to a Superior Proposal or an Intervening Event, which notice shall, in the case of a Superior Proposal, attach the most current version of any written agreement relating to the transaction that constitutes such Superior Proposal and, in the case of an Intervening Event, attach information describing such Intervening Event in reasonable detail, and (ii) Parent does not make, within five Business Days after the receipt of such notice, a proposal that the Special Committee determines in good faith, after consultation with a financial advisor of nationally recognized reputation, is at least as favorable to the stockholders of the Company (other than the Management Stockholders) as such Superior Proposal or obviates the need for a Change in the Company Recommendation as a result of the Intervening Event, as the case may be. The Company agrees that, during the five Business Day period prior to its effecting a Change in the Company Recommendation, the Company (as directed by the Special Committee) and its Representatives shall negotiate in good faith with Parent and its Representatives regarding any revisions to the terms of the transaction contemplated by this Agreement proposed by Parent. Notwithstanding any Change in the Company Recommendation, this Agreement shall be submitted to the stockholders of the Company at the Company Stockholders Meeting for the purpose of adopting this Agreement and approving the Merger, provided that this Agreement shall not be required to be submitted to the Stockholders of the Company at the Company Stockholders Meeting if this Agreement has been terminated pursuant to Article VII.

(d) The Company agrees that it will deliver to Parent a new written notice of Takeover Proposal with respect to each Takeover Proposal that has been materially revised or modified prior to taking any action to recommend or agreeing to recommend

such Takeover Proposal to the stockholders of the Company and that a new period shall commence for purposes of this Section 5.07 with respect to each such materially revised or modified Takeover Proposal from the time Parent receives the written notice of the Takeover Proposal with respect thereto; provided that such new period shall expire on the later of five Business Days after notice of the original Takeover Proposal or three Business Days after notice of such revised or modified Takeover Proposal.

(e) Nothing contained in this Section 5.07 shall prohibit the Company from complying with the Exchange Act in respect of any Takeover Proposal or making any disclosure to the stockholders of the Company if the Special Committee or Board of Directors determines in good faith, by resolution duly adopted after consultation with its outside counsel, that the failure to make such disclosure would breach its fiduciary duties to the stockholders of the Company under applicable Law, provided, however that neither the Board of Directors of the Company nor any committee thereof shall, except as expressly permitted by Section 5.07(c), effect a Change in the Company Recommendation or approve or recommend, or publicly propose to approve or recommend, a Takeover Proposal.

(f) For purposes of this Agreement:

“Intervening Event” means an event, development, circumstance or state of affairs, unknown to the Special Committee of the Company as of the date hereof, which becomes known prior to the Company Stockholder Approval.

“Takeover Proposal” means any proposal or offer in respect of (i) a tender or exchange offer, merger, consolidation, business combination, share exchange, reorganization, recapitalization, liquidation, dissolution, or similar transaction involving the Company or any of the Company Subsidiaries (any of the foregoing, a “Business Combination Transaction”) with any Person other than Parent or any Affiliate thereof (a “Third Party”) pursuant to which such Third Party would acquire more than 20% of the outstanding capital stock of the Company, (ii) the Company’s acquisition of any Third Party in a Business Combination Transaction in which the shareholders of the Third Party immediately prior to consummation of such Business Combination Transaction will own more than 20% of the Company’s outstanding capital stock immediately following such Business Combination Transaction, including the issuance by the Company of more than 20% of its outstanding capital stock as consideration for assets or securities of a Third Party, or (iii) any direct or indirect acquisition by any Third Party of 20% or more of the outstanding capital stock of the Company or of 20% or more of the consolidated assets of the Company and the Company Subsidiaries, in a single transaction or a series of related transactions. Whenever the term “Takeover Proposal” is used in Section 7.03, each reference in this definition to 20% shall be deemed to be 40%.

“Superior Proposal” means any bona fide written proposal or offer made by a Third Party in respect of a Business Combination Transaction involving, or any purchase

or acquisition of, (i) at least 75% of the Company’s outstanding capital stock, (ii) at least 75% of the voting power of the Company’s capital stock or (iii) at least 75% of the consolidated assets of the Company and the Company Subsidiaries, which the Special Committee determines in good faith, by resolution duly adopted after consultation with its outside counsel and a financial advisor of nationally recognized reputation, would result in a transaction that if consummated would be more favorable to the stockholders of the Company (other than the Management Stockholders) than the Merger, taking into account all of the terms and conditions of such proposal and of this Agreement (including any proposal by Parent to amend the terms of this Agreement), and (y) is reasonably capable of being consummated on the terms so proposed taking into account all financial, regulatory, legal and other aspects of such proposal.

Section 5.08 Third Party Consents. Between the date hereof and the Effective Time, the Company shall use all reasonable efforts to obtain the third party consents set forth in Section 5.08 of the Company Disclosure Schedule; provided, however, no payments or any economic benefits shall be provided to third parties from whom such consent is sought prior to the Effective Time to secure any such consents.

Section 5.09 Stockholder Litigation. The Company shall give Parent the opportunity to participate in the defense or settlement of any stockholder litigation against the Company and/or its directors relating to the transactions contemplated by this Agreement, whether commenced prior to or after the execution and delivery of this Agreement. The Company agrees that it shall not settle or offer to settle any litigation commenced prior to or after the date hereof against the Company or any of its directors or executive officers by any stockholder of the Company relating to this Agreement, the Merger, any other transaction contemplated hereby or otherwise, without the prior written consent of Parent, which consent shall not be unreasonably withheld.

Section 5.10 Management of Partnership Exit Process. From the date of this Agreement until the Effective Time, unless Parent shall otherwise consent in writing, (i) the Company shall not deliver any Exit Notice pursuant to Section 9.1 of the Partnership Agreement and (ii) if Comcast delivers an Exit Notice to the Company pursuant to Section 9.1 of the Partnership Agreement, the Company shall elect pursuant to Section 9.2 of the Partnership Agreement to postpone for a period of six months the first date on which either Comcast or the Company may commence the Exit Process, which election shall be made on the last date that such an election may be validly made under the Partnership Agreement.

Section 5.11 Charter Amendment. The Company shall file the Charter Amendment with the Secretary of State of the State of Delaware immediately prior to the Exchange Closing (as defined in the Exchange Agreement).

Section 5.12 Consent Solicitation; Back-Stop Facility.

(a) At such time as requested by Parent, the Company shall solicit (the “Consent Solicitation”) the consent of the holders of the Notes regarding certain matters under the indentures governing such notes (the “Indenture Consents”) and the Company

shall use all reasonable efforts to facilitate the Consent Solicitation and to implement the Indenture Consents, including (i) executing and delivering any supplemental indentures or other definitive financing documents as may be reasonably requested by Parent, (ii) directing its independent accountants and counsel to provide reasonable assistance to Parent in connection with the Indenture Consents and (iii) soliciting and using all reasonable efforts to cause to be delivered such certificates, affidavits and instruments, legal opinions and other documents, in each case, as may be reasonably requested by Parent or reasonably required by any trustee or note holder. Such consent solicitation shall be made in accordance with the reasonable written terms and conditions provided, from time to time, by Parent to the Company and applicable Law; provided, that, in any event, the Parties agree that the Indenture Consents shall not become operative, and no payment or liability shall be incurred by the Company, before the Effective Time of the Merger. The Company shall not, without Parent’s prior consent, waive any condition to the Consent Solicitation described in the written terms and conditions provided by Parent to the Company from time to time.

(b) The Company agrees to provide, and shall cause the Company Subsidiaries to provide, and will use all reasonable efforts to cause its and their Representatives to provide, all cooperation reasonably requested by Parent in connection with the arrangement of, and the negotiation of agreements with respect to, the Back-Stop Facility (and any substitutions, replacements or refinancing thereof), including using all reasonable efforts to (i) cause appropriate officers and employees to be available, upon reasonable notice, to meet with prospective lenders and investors in presentations, meetings, road shows and due diligence sessions, (ii) assist with the preparation of disclosure and marketing documents in connection therewith, (iii) execute and deliver any credit agreements, indentures, guarantees or other definitive financing documents as may be reasonably requested by Parent (provided that no payments or liabilities shall be incurred by the Company thereunder prior to the Effective Time), (iv) direct (x) its independent accountants and counsel to provide reasonable assistance to Parent, including requesting that such accountants provide consent to Parent to use their audit reports and SAS 100 reviews relating to the Company and the Company Subsidiaries and, at the expense of Parent, to provide any necessary “comfort letters” in connection with the Back-Stop Facility and (y) appropriate officers to sign any customary management representation letters to its independent accountants and (v) solicit and cause to be delivered such certificates, affidavits and instruments (including solvency certificates), legal opinions and other documents, in each case, as may be reasonably requested by Parent or reasonably required by any lender. If Parent causes to be delivered, in connection with obtaining the Back-Stop Facility, an opinion or report of a third party or a certificate of an officer of the Company with respect to the solvency of Parent, the Company or the Company Subsidiaries, then Parent shall cause such opinion, report or certificate (A) to be delivered to the Company and (B) to contain a statement that the Board of Directors of the Company and the Special Committee may rely on such opinion, report or certificate as though such opinion, report or certificate had been addressed to the Board of Directors of the Company and the Special Committee.

ARTICLE VI

CONDITIONS

Section 6.01 Conditions to Obligation of Each Party to Effect the Merger. The respective obligations of Parent and the Company to consummate the Merger are subject to the satisfaction or waiver (by mutual written consent of the Company and Parent) on or prior to the Closing Date of each of the following conditions:

(a) Stockholder Approval; Charter Amendment. The Company shall have (i) obtained the Company Stockholder Approval and (ii) filed the Charter Amendment with the Secretary of State of the State of Delaware.

(b) Regulatory Approval. The waiting period (and any extension thereof) applicable to the Merger under the HSR Act shall have been terminated or shall have expired.

(c) No Order. No court of competent jurisdiction or United States federal or state Governmental Entity shall have issued an order, decree, ruling or taken any other action restraining, enjoining or otherwise prohibiting the consummation of the Merger or the other transactions contemplated by this Agreement; provided, however, that the Parties shall use all reasonable efforts to cause any such decree, judgment, injunction or other order to be vacated or lifted.

Section 6.02 Conditions to Obligation of Parent. The obligation of Parent to effect the Merger is subject to the satisfaction or waiver by Parent, on or prior to the Closing Date of the following additional conditions:

(a) Representations and Warranties. Each of the representations and warranties of the Company set forth in this Agreement, in each case, made as if none of such representations and warranties contained any qualifications or limitations as to “materiality” or Company Material Adverse Effect, shall be true and correct, in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent in either case that such representations and warranties speak as of another date), except where the failure of such representations and warranties to be true and correct as so made, individually or in the aggregate, would not reasonably be expected to have or constitute a Company Material Adverse Effect, provided that the representations and warranties of the Company in Sections 3.02 and 3.03 shall be true in all material respects. Parent shall have received a certificate of the chief executive officer or the chief financial officer of the Company to such effect.

(b) Performance of Obligations of the Company. The Company shall have performed or complied in all material respects with all agreements and covenants required to be performed by it under this Agreement and the Exchange Agreement at or prior to the Closing Date and Parent shall have received a certificate of the chief executive officer or the chief financial officer of the Company to such effect.

(c) No Material Adverse Change. From the period beginning on the date of this Agreement, there shall not have occurred any event, change or development (or, with respect to events, changes or developments existing prior to the date hereof, any worsening thereof) that, individually or in the aggregate, constituted or would reasonably be expected to constitute a Company Material Adverse Effect.

(d) No Litigation. There shall not be pending any suit, action or proceeding by any Governmental Entity or other Person (other than stockholders or Note holders of the Company), in each case that has a reasonable likelihood of success, (i) challenging the acquisition by Parent of any Company Stock, seeking to restrain or prohibit the consummation of the Merger or any other transaction contemplated hereby or seeking to obtain from the Company or Parent any damages that are material in relation to the Company and the Company Subsidiaries taken as a whole, (ii) seeking to prohibit or limit the ownership or operation by the Company, Parent or any of their respective Subsidiaries or the stockholders of Parent of any material portion of the business or assets of the Company or the Company Subsidiaries, (iii) seeking to prohibit or prevent the stockholders of Parent or the holders of shares of Company Preferred Stock from effectively controlling in any material respect the business or operations of the Company and the Company Subsidiaries or (iv) which otherwise is likely to constitute a Company Material Adverse Effect.

(e) Directors. The Company shall have received, and delivered copies to Parent of, the director resignations contemplated by Section 1.05, which shall be valid and effective immediately prior to the Effective Time. The Board of Directors of the Company, as it is constituted immediately prior to the Company Stockholders Meeting, subject to any death or resignation, shall have elected to the Board of Directors of the Company the Persons designated by Parent prior to the Effective Time, such election to have taken effect not later than the resignations of the existing directors described in Section 1.05, and such directors shall not have been removed.

(f) Tax Certification. Parent shall have received a certification from the Company in the form prescribed by Treasury regulations under Section 1445 of the Code to the effect that the Company is not (and was not at any time during the five-year period ending on the Closing date) a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code.

Section 6.03 Conditions to Obligation of the Company. The obligation of the Company to effect the Merger is subject to the satisfaction or waiver by the Company on or prior to the Closing Date of the following additional conditions:

(a) Representations and Warranties. Each of the representations and warranties of Parent set forth in this Agreement, in each case, made as if none of such representations and warranties contained any qualifications or limitations as to “materiality” or Parent Material Adverse Effect, shall be true and correct, in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent in either case that such representations and warranties speak as of another date), except where the failure of such representations and warranties to be true and correct as so made, individually or in the aggregate, would not reasonably be expected to have or constitute a Parent Material Adverse Effect, provided that the representations and warranties of Parent in Section 4.02, Section 4.06 and Section 4.08(b) shall be true in all material respects. The Company shall have received a certificate of the president or the secretary of Parent to such effect.

(b) Performance of Obligations of Parent. Parent shall have performed or complied in all material respects with all agreements and covenants required to be performed by it under this Agreement at or prior to the Closing Date and the Company shall have received a certificate of the chief executive officer or the chief financial officer of the Parent to such effect.

Article VII

TERMINATION, AMENDMENT AND WAIVER

Section 7.01 Termination. This Agreement may be terminated and the Merger contemplated hereby may be abandoned at any time prior to the Effective Time, whether prior to or after receipt of the Company Stockholder Approval:

(a) by mutual written consent of Parent and the Company (acting at the direction of the Special Committee);

(b) by either Parent or the Company (with the prior approval of the Special Committee), if:

(i) the Merger shall not have been consummated by February 15, 2006 (such date, the “Termination Date”), provided, that the right to terminate the Agreement pursuant to this Section 7.01(b)(i) shall not be available to any party whose failure to perform any of its obligations under this Agreement has been the primary cause of the failure of the Merger to be consummated by such time;

(ii) any Governmental Entity of competent jurisdiction issues an order, judgment, decision, opinion, decree or ruling or takes any other action (which the party seeking to terminate this Agreement shall have used its reasonable efforts to resist, resolve, annul, quash or lift, as applicable) permanently restraining, enjoining or otherwise prohibiting the Merger and such order, judgment, decision, opinion, decree or ruling or other action shall have become final and non-appealable; or

(iii) the Company Stockholder Approval shall not have been obtained at the Company Stockholders Meeting or any adjournment or postponement thereof; provided that the right to terminate the Agreement pursuant to this Section 7.01(b)(iii) shall not be available to the Company if it has materially breached its obligations under Section 5.07;

(i) the Company shall have breached or failed to perform in any material respect any of its representations, warranties or covenants contained in this Agreement, which breach or failure to perform (A) is incapable of being cured by the Company prior to the Termination Date or is not cured by the Termination Date, and (B) would result in a failure of any condition set forth in Sections 6.02(a) or (b);

(ii) (x) the Company shall have breached or be deemed (pursuant to Section 5.07(a), as a result of the actions of a Representative of the Company or a Company Subsidiary) to have breached in any material respect its obligations under Section 5.07(a), (y) the Company shall have breached in any material respect its obligations under Section 1.09(b) or the first sentence of Section 1.09(c), or (z) the Company shall have failed to convene and hold the Company Stockholder Meeting within 60 days of the date that the Proxy Statement is cleared by the SEC in breach of Section 1.09(a); or

(iii) a Change in the Company Recommendation shall have occurred; provided Parent shall have right to terminate this Agreement pursuant to this Section 7.01(c)(iii) only within the first five Business Days following any such Change in the Company Recommendation;

(d) by the Company if Parent shall have breached or failed to perform in any material respect any of its representations, warranties or covenants contained in this Agreement, which breach or failure to perform (A) is incapable of being cured by Parent prior to the Termination Date or is not cured by the Termination Date and (B) would result in a failure of any condition set forth in Sections 6.03(a) or (b).

Section 7.02 Effect of Termination. In the event of the termination of this Agreement as provided in Section 7.01, except as provided in Section 8.01, this Agreement shall forthwith become void and have no effect, and there shall be no liability on the part of Parent or the Company, except for the provisions of this Section 7.02, Section 7.03 and Section 8.02, each of which shall remain in full force and effect; provided, however, that no Party shall be relieved or released from any liability or damages arising from a willful and material breach of any provision of this Agreement.

Section 7.03 Fees and Expenses.

(a) If this Agreement is terminated pursuant to Section 7.01(b)(iii) and prior to the Company Stockholders Meeting a Takeover Proposal had become publicly known but no Change in the Company Recommendation had occurred, and, within twelve months after the date of such termination, (i) the Company enters into a definitive agreement with respect to, or consummates, a transaction relating to a Takeover Proposal that had been communicated to the Special Committee or become publicly known prior to the Company Stockholders Meeting or (ii) the Company enters into a definitive agreement with respect to, or consummates, a transaction relating to any Takeover Proposal pursuant to which the holders of Class A Stock would receive consideration having a fair market value per share in excess of the Merger Consideration, then the Company shall pay to Parent a fee equal to $10 million (the “Termination Fee”) less the Expense Amount theretofore paid under Section 7.03(e).

(b) If this Agreement is terminated pursuant to Section 7.01(b)(iii) and prior to the Company Stockholders Meeting a Change in the Company Recommendation had occurred, and, within twelve months after the date of such termination, the Company enters into a definitive agreement with respect to, or consummates, a transaction relating to any Takeover Proposal, then the Company shall pay to Parent a fee equal to the Termination Fee less the Expense Amount theretofore paid under Section 7.03(e).

(c) If this Agreement is terminated pursuant to Section 7.01(c)(ii) or Section 7.01(c)(iii), and, within twelve months after the date of such termination, the Company enters into a definitive agreement with respect to, or consummates, a transaction relating to any Takeover Proposal, then the Company shall pay to Parent the Termination Fee less the Expense Amount theretofore paid under Section 7.03(e).

(d) If the Company is required to pay Parent a Termination Fee pursuant to Section 7.03(a), Section 7.03(b) or Section 7.03(c), such Termination Fee shall be payable prior to the earlier of the Company entering into a definitive agreement to consummate, or consummating, the applicable triggering transaction. The Termination Fee shall be payable by wire transfer of immediately available funds to an account designated by Parent.

(e) If this Agreement is terminated under circumstances in which a Termination Fee would be payable under Section 7.03(a), Section 7.03(b) or Section 7.03(c) upon the satisfaction of the applicable subsequent condition or conditions therein set forth, the Company will pay to Parent within one Business Day of such Termination an amount equal to $4 million (the “Expense Amount”).

(f) Notwithstanding any contrary provision of this Agreement, the Parties agree that in no event shall any portion of the Termination Fee or Expense Amount paid by the Company hereunder be subsequently paid over or shared with any Management Stockholder (other than any portion of the Termination Fee or Expense Amount in an amount not to exceed such Management Stockholder’s out-of-pocket expenses incurred in connection with the transactions contemplated hereby and the related agreements).

(g) The Parties each agree that the agreements contained in this Section 7.03 are an integral part of the transaction contemplated by this Agreement, and that, without these agreements, Parent would not enter into this Agreement; accordingly, if the Company fails promptly to pay any amounts due under this Section 7.03 and, in order to obtain such payment, Parent commences a suit that results in a judgment against the Company for such amounts, the Company shall pay interest on such amounts from the date payment of such amounts were due to the date of actual payment at the prime rate of Citibank, N.A. in effect on the date such payment was due, together with the costs and expenses of Parent (including reasonable legal fees and expenses) in connection with such suit.

Section 7.04 Amendment. This Agreement may not be amended and no waiver, consent or approval by or on behalf of the Company (or Special Committee, if applicable) may be granted except pursuant to an instrument in writing signed by or on behalf of the Company (or Special Committee, if applicable) following approval of such action by the Special Committee and signed by Parent; provided, however, that (i) prior to the Effective Time, Parent may make such changes to the certificate of incorporation of the Surviving Corporation as it deems appropriate, without the consent of the Company, so long as such changes would not (x) individually or in the aggregate, adversely affect the stockholders of the Company other than the Management Stockholders or (y) change in any manner Section 8.2 of such certificate of incorporation if any such changes would, individually or in the aggregate, adversely affect persons serving as directors of the Company as of the date hereof and (ii) following the Company Stockholder Approval at the Company Stockholders Meeting, if applicable, no amendment may be made without the further approval of the stockholders of the Company which would: (x) decrease the Merger Consideration; or (y) change any other terms and conditions in this Agreement if any of the changes would, individually or in the aggregate, adversely affect the stockholders of the Company other than the Management Stockholders.

Section 7.05 Extension and Waiver. At any time prior to the Effective Time, whether before or after receipt of the Company Stockholder Approval at the Company Stockholders Meeting, if applicable:

(a) The Special Committee on behalf of the Company may (a) extend the time for the performance of any of the obligations or other acts of Parent, (b) waive any inaccuracies in the representations and warranties contained herein or in any document, certificate or writing delivered by Parent pursuant hereto, or (c) waive compliance by Parent with any of the agreements or with any conditions to the Company’s obligations.

(b) Parent may (a) extend the time for the performance of any of the obligations or other acts of the Company, (b) waive any inaccuracies in the representations and warranties contained herein or in any document, certificate or writing delivered by the Company pursuant hereto, or (c) waive compliance by the Company with any of the agreements or with any conditions to Parent’s obligations.

(c) Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party by a duly authorized officer.

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Non-Survival of Representations, Warranties and Agreements. The representations, warranties and agreements in this Agreement shall terminate at the Effective Time or the termination of this Agreement pursuant to Section 7.01 hereof, as the case may be, except that the agreements set forth in Section 7.02, 7.03 and Section 8.02 hereof shall survive termination and this Section 8.01 shall not limit any covenant or agreement of the Parties hereto which by its terms contemplates performance after the Effective Time.

Section 8.02 Fees and Expenses. Subject to Section 7.03, whether or not the Merger is consummated, all Expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such Expenses. As used in this Agreement, “Expenses” includes all out-of-pocket expenses (including, without limitation, all fees and expenses of counsel, accountants, investment bankers, experts and consultants to a party hereto and its Affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the transactions contemplated hereby, including the preparation, printing, filing and mailing, as the case may be, of the Proxy Statement and any amendments or supplements thereto, and the solicitation of stockholder approvals and all other matters related to the transactions contemplated hereby.

Section 8.03 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or sent by telecopy or telex, overnight courier service or by registered or certified mail (postage prepaid, return receipt requested), to the respective Parties at the following addresses or at such addresses as shall be specified by the Parties by like notice:

(a)

If to Parent:

Insight Acquisition Corp.

c/o

The Carlyle Group

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington, D.C. 20004

Telecopier: (202) 347-1692

Attention: William E. Kennard

with a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Telecopier: (212) 909-6836

Attention: Jeffrey J. Rosen

Andrew L. Bab

and

Dow, Lohnes & Albertson, PLLC

1200 New Hampshire Avenue, NW

Suite 800

Washington, D.C. 20036

Telecopier: (202) 776-2222

Attention: Leonard J. Baxt

J. Kevin Mills

(b) If to the Company:

Insight Communications Company, Inc.

810 7th Avenue, 41st Floor

New York, New York 10019

Telecopier: (917) 286-2301

Attention: Elliot Brecher

with a copy to:

Special Committee of the Board of Directors of Insight Communications

Company, Inc.

c/o

D.B. Zwirn & Co.

745 Fifth Avenue, 18^th Floor

New York, New York 10151

Telecopier: (646) 720-9077

Attention: David C. Lee

and

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Telecopier: (917) 777-3542

Attention: Stephen F. Arcano

Lou R. Kling

and

Sonnenschein Nath & Rosenthal LLP

1221 Avenue of the Americas

New York, New York 10020

Telecopier: (212) 768-6800

Attention: Robert L. Winikoff

Section 8.04 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent that mandatory provisions of federal law apply. Each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of Delaware and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the Parties hereby irrevocably and unconditionally (a) agrees not to commence any such action except in such court, (b) agrees that any claim in respect of any such action or proceeding may be heard and determined in such Delaware state court, (c) waives, to the fullest extent it may legally and effectively do so any objection which it may now or hereafter have to venue of any such action or proceeding in any such Delaware state court, and (d) waives, to the fullest extent permitted by law, the defense of any inconvenient forum to the maintenance of such action or proceeding in any such Delaware state court. Each of the Parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the Parties to this Agreement irrevocably consents to service of process in any such action or proceeding in the manner provided for notices in Section 8.03 of this Agreement; provided, however, that nothing in this Agreement shall affect the right of any Party to this Agreement to serve process in any other manner permitted by law.

Section 8.05 Entire Agreement; Assignment. This Agreement (together with the annexes hereto and the Disclosure Letters), the Confidentiality Agreement and the Exchange Agreement contain the entire agreement among Parent and the Company with respect to the Merger and the transactions contemplated hereby and supersedes all prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to these matters. Each Party hereto has participated in the drafting of this Agreement, which each Party acknowledges is the result of extensive negotiations between the Parties. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties, in whole or in part (whether by operation of law or otherwise), without the prior written consent of the other Parties, and any attempt to make any such assignment without such consent shall be null and void, except that Parent may assign, in its sole

discretion, any or all of its rights, interests and obligations under this Agreement to any direct wholly owned Subsidiary of Parent without the consent of the Company, but no such assignment shall relieve Parent of any of its obligations under this Agreement. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

Section 8.06 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any terms or provisions of this Agreement in any other jurisdiction so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

Section 8.07 Headings. Headings are used for reference purposes only and do not affect the meaning or interpretation of this Agreement.

Section 8.08 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and their respective successors, legal representatives and permitted assigns, and, except for the provisions of Section 5.03 hereof, which shall be enforceable by the beneficiaries contemplated thereby, nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

Section 8.09 Remedies.

(a) The Parties hereto agree that irreparable harm would occur in the event any of the provisions of this Agreement were not to be performed in accordance with the terms hereof and that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms hereof in addition to any other remedies to which they are entitled at law or in equity.

(b) The Parties hereto further agree that the current, former and prospective stockholders of Parent and their respective Affiliates (other than Parent) are not Parties to this Agreement and (i) the Company shall not have any right to cause any monies to be contributed to Parent by any current, former or prospective stockholder of Parent or any of their respective Affiliates and (ii) except to the extent provided in the Guarantee, the Company may not otherwise pursue any claim or seek any legal or equitable remedy in connection with this Agreement (including, for avoidance of doubt, monetary damages and specific performance) against any current, former or prospective stockholder of Parent or any Affiliate thereof (other than Parent). Parent shall have no liability to the

Company in respect of any claims for monetary damages that the Company may bring against Parent pursuant to or in connection with this Agreement that are in an aggregate amount, including all other such claims that have been brought by the Company against Parent, in excess of $10 million (the “Parent Liability Cap”). Notwithstanding any other provision of this Agreement, if the payment to the Company of any judgment for monetary damages would cause the Parent Liability Cap to be exceeded, such judgment shall be paid only in such portion as would not cause the Parent Liability Cap to be exceeded.

(c) The Company shall have no liability to Parent in respect of any claims for monetary damages that Parent may bring against the Company pursuant to or in connection with this Agreement that are in an aggregate amount, including all other such claims that have been brought by Parent against the Company, in excess of $10 million (the “Company Liability Cap”). The Company Liability Cap shall be inclusive of the Expense Amount, the Termination Fee and any other monetary damages that Parent may seek to obtain from the Company under this Agreement. Notwithstanding any other provision of this Agreement, if the payment to Parent of the Expense Amount, the Termination Fee or any judgment for monetary damages would cause the Company Liability Cap to be exceeded, such Expense Amount, Termination Fee or judgment shall be paid only in such portion as would not cause the Company Liability Cap to be exceeded.

(d) Neither Party may bring any claim for monetary damages against the other Party to this Agreement for breach of any representation and warranty made herein unless such breach was material and willful.

Section 8.10 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

Section 8.11 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS CONTAINED IN THIS SECTION 8.11.

Section 8.12 Definitions. As used in this Agreement:

“2005 Budget” means the budget of the Company and the Company Subsidiaries for fiscal year 2005 described in Section 8.12 of the Company Disclosure Letter.

An “Affiliate” of any Person means another Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract, as trustee or executor or otherwise;

“Back-Stop Facility” means (i) the senior unsecured credit facility to be provided to the Company in an aggregate principal amount of up to $353.5 million and (ii) the senior unsecured credit facility to be provided to the Partnership and Insight Capital, Inc. in an aggregate principal amount of up to $1,025.15 million, described in the Commitment Letter, dated as of July 28, 2005, from J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. to Parent;

“beneficial ownership” or “beneficially own” has the meaning under Section 13(d) of the Exchange Act and the rules and regulations thereunder.

“Board of Directors” means the Board of Directors of any specified Person and any committees thereof.

“Business” means the business and operations of the Company and the Company Subsidiaries as currently conducted.

“Business Day” means any day on which banks are not required or authorized to close in the City of New York.

“Charter Amendment” means the amendment to the certificate of incorporation of the Company, substantially in the form of Exhibit E, to be filed with the Secretary of State of the State of Delaware pursuant to Section 5.11.

“Comcast” means Comcast Corporation and its Affiliates, including, without limitation, TCI of Indiana Holdings, LLC.

“Company Benefit Plan” means each “employee benefit plan”, as such term is defined in section 3(3) of ERISA, and each employment, consulting, bonus, incentive or deferred compensation, severance, termination, retention, change of control, stock option, stock appreciation, stock purchase, restricted stock, deferred stock, phantom stock or other equity-based, performance or other employee or retiree benefit or compensation plan, program, arrangement, agreement or policy, whether written or unwritten, that provides or may provide benefits or compensation in respect of any current or former officer, director or employee of the Company or the beneficiaries or dependents of any such person that is or has been maintained or established by the Company or any other Related Persons, or to which the Company or any Related Person contributes or is or has been obligated or required to contribute.

“Company Financial Statements” means the consolidated financial statements of the Company and the Company Subsidiaries included in the Company SEC Reports together, in the case of year-end statements, with reports thereon by the independent auditors of the Company, including in each case a consolidated balance sheet, a consolidated statement of income, a consolidated statement of shareholders’ equity and a consolidated statement of cash flows, and accompanying notes.

“Company Intellectual Property” means all Intellectual Property owned by or used by the Company or any of the Company Subsidiaries in the Business.

“Company Material Adverse Effect” means any event, change or development having an effect that individually or in the aggregate is or would reasonably be expected to be materially adverse to the business, assets, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole or would materially impair its ability to perform its obligations under this Agreement; provided, however, that none of the following shall be deemed either alone or in combination to constitute, and none of the following shall be taken into account in determining whether there has been or would be, a Company Material Adverse Effect: (A) any adverse effect that results from general economic, business, financial or market conditions; (B) any adverse effect arising from any action taken by the Company to comply with its obligations under this Agreement; (C) any adverse effect generally affecting the industry or industry sectors in which the Company or any of the Company Subsidiaries operates that does not disproportionately affect the Company and the Company Subsidiaries relative to the other participants in the industry or industry sectors in which the Company or any of the Company Subsidiaries operates, (D) any adverse effect arising from or otherwise relating to the dissolution of or announcement of any intent to dissolve the Partnership and (E) any adverse effect relating to (i) any decision by the Federal Communications Commission that the consummation of the transactions contemplated by this Agreement requires its prior approval or (ii) any failure to obtain the consent of a Governmental Entity that may be required pursuant to any Franchise in connection with the consummation of the transactions contemplated by this Agreement.

“Company Restricted Share” shall mean each share of Company Stock granted and awarded pursuant to the Incentive Plan and that is unvested immediately prior to the date hereof.

“Confidentiality Agreement” means the Confidentiality Agreement, dated October 12, 2004, between the Company and TC Group, L.L.C.

“Constituent Documents” means with respect to any entity, the certificate or articles of incorporation, the bylaws of such entity, the minute books, or any similar charter or other organizations documents of such entity.

“Credit Facility” means the Amended and Restated Credit Agreement, dated as of August 26, 2003, among Insight Midwest Holdings, LLC, as borrower, and the banks parties thereto, as amended from time to time, or any successor thereto.

“DGCL” means the General Corporation Law of the State of Delaware.

“Environmental Law” means any foreign, federal, state or local law, treaty, statute, rule, regulation, order, ordinance, decree, injunction, judgment, governmental restriction or any other requirement of law (including common law) regulating or relating to the protection of human health, safety (as it relates to Releases of Hazardous Substances), natural resources or the environment, including, without limitation, laws relating to wetlands, pollution, contamination or the use, generation, management, handling, transport, treatment, disposal, storage, Release or threatened Release of Hazardous Substances.

“Environmental Permit” means any permit, license, authorization or consent required pursuant to applicable Environmental Laws.

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

“Exchange Act” means the Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Shares” means the Treasury Shares, Dissenting Shares and the Parent Held Shares.

“Exit Notice” has the meaning given in the Partnership Agreement.

“Exit Process” has the meaning given in the Partnership Agreement.

“Franchise” means all franchise agreements and similar governing agreements, instruments and resolutions and franchise related statutes and ordinances or written acknowledgements of a Governmental Entity that are necessary or required to operate cable television services.

“Hazardous Substances” means any substance that: (i) is or contains asbestos, urea formaldehyde insulation, polychlorinated biphenyls, petroleum, petroleum products or petroleum-derived substances or wastes, radon gas, microbial or microbiological contamination or related materials, (ii) requires investigation or remedial action pursuant to any Environmental Law, or is defined, listed or identified as a “hazardous waste,” “hazardous substance,” “toxic substance” or words of similar import thereunder, or (iii) is regulated under any Environmental Law.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder.

“Indebtedness” means, with respect to any Person, without duplication, (i) all obligations of such Person for borrowed money, or with respect to deposits or advances of any kind, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person upon which interest charges are customarily paid (other than trade payables incurred in the ordinary course of business consistent with past practices), (iv) all obligations of such Person under conditional sale or other title retention agreements relating to any property purchased by such Person, (v) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding obligations of such Person to creditors for raw materials, inventory, services and supplies incurred in the ordinary course of business consistent with past practices), (vi) all lease obligations of such Person capitalized on the books and records of such Person, (vii) all obligations of others secured by a Lien on property or assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (viii) all obligations of such Person under interest rate, currency or commodity derivatives or hedging transactions, (ix) all letters of credit or performance bonds issued for the account of such Person (excluding (a) letters of credit issued for the benefit of local franchising authorities, or suppliers to support accounts payable to suppliers incurred in the ordinary course of business consistent with past practices, (b) standby letters of credit relating to workers’ compensation insurance and surety bonds and (c) surety bonds and customs bonds) and (x) all guarantees and arrangements having the economic effect of a guarantee of such Person of any Indebtedness of any other Person.

“Intellectual Property” means all trademarks, service marks, trade names, trade dress, including all goodwill associated with the foregoing, domain names, copyrights,

Software, Internet Web sites, mask works and other semiconductor chip rights, moral rights, and similar rights, and registrations and applications to register or renew the registration of any of the foregoing, patents and patent applications, Trade Secrets, and all other intellectual property rights.

“IRS” means the U.S. Internal Revenue Service.

“known” or “knowledge” means, with respect to any party, the knowledge of such party’s executive officers.

“Law” (and with the correlative meaning “Laws”) means rule, regulation, statutes, orders, ordinance, guideline, code, or other legally enforceable requirement, including but not limited to common law, state and federal laws or securities laws and laws of foreign jurisdictions.

“Leased Real Property” means all interests leased pursuant to the Leases.

“Leases” means leases, subleases, licenses and occupancy agreements.

“Liens” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), other charge or security interest; or any preference, priority or other agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, or any capital lease having substantially the same economic effect as any of the foregoing).

“Management Stockholders” has the meaning given in the Exchange Agreement.

“Notes” means (i) the Company’s 12 ¹/4% Senior Discount Notes due 2011, (ii) the Partnership’s and Insight Capital, Inc.’s 10¹/2 % Senior Notes due 2010 and (iii) the Partnership’s and Insight Capital, Inc.’s 9 ³/4% Senior Notes due 2009.

“Order” means any charge, order, writ, injunction, judgment, decree, ruling, determination, directive, award or settlement, whether civil, criminal or administrative and whether formal or informal, applicable to the Company or any Company Subsidiary.

“Parent Class B Preferred Stock” means the Class B Preferred Stock, par value $0.01 per share, of Parent.

“Parent Material Adverse Effect” means any event, change or development having an effect that would prevent or materially delay the performance by Parent of any of its obligations under this Agreement.

“Partnership” means Insight Midwest, L.P., a Delaware limited partnership.

“Partnership Agreement” means the Amended and Restated Limited Partnership Agreement of Insight Midwest, L.P., dated as of January 5, 2001 and as amended from time to time.

“Permitted Liens” means (i) any liens for taxes not yet due or which are being contested in good faith by appropriate proceedings, (ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar liens, (iii) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation, and (iv) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not in any case materially impair the use in the business of the property subject thereto consistent with past practice.

“Person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, other entity or group (as defined in the Exchange Act).

“Related Person” means any trade or business, whether or not incorporated, which, together with the Company, is or would have been at any date of determination occurring within the preceding six years, treated as a single employer under Section 414 of the Code.

“Release” means any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping, dispersal, migration, transporting, placing and the like, including without limitation, the moving of any materials through, into or upon, any land, soil, surface water, groundwater or air, or otherwise entering into the indoor or outdoor environment.

“Representatives” of a Person means the officers, directors, employees, accountants, counsel, financial advisors, consultants, financing sources and other advisors or representatives of such Person.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Securityholders’ Agreement” means the Securityholders’ Agreement to be entered into at the Closing among Carlyle Partners III Telecommunications, L.P., CP III CoInvestment, L.P., Carlyle Partners IV Telecommunications, L.P., CP IV CoInvestment, L.P., the Company, the Management Stockholders and certain other parties.

“Senior Officer” means, in any fiscal year, any officer of the Company with a base salary in such fiscal year equal to or in excess of $250,000.

“Software” means any and all computer software, including application software, system software and firmware, including all source code and object code versions thereof, in any and all forms and media, and all related documentation.

“Subsidiary” when used with respect to any party means any corporation or other organization, whether incorporated or unincorporated, (i) of which such party or any other Subsidiary of such party is a general partner (excluding partnerships, the general partnership interests of which held by such party or any Subsidiary of such party do not have a majority of the voting interests in such partnership) or (ii) at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries. Without limiting any of the foregoing, Subsidiaries of the Company shall be deemed to include Insight Midwest, L.P. and its Subsidiaries.

“Tax” (and with the correlative meaning “Taxes”) shall mean all federal, state, local or foreign net income, franchise, gross income, sales, use, ad valorem, property, gross receipts, license, capital stock, payroll, withholding, excise, severance, transfer, employment, alternative or add-on minimum, stamp, occupation, premium, environmental or windfall profits taxes, and other taxes, charges, fees, levies, imposts, customs, duties, licenses or other assessments, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority.

“Tax Return” means all federal, state, local and foreign tax returns, estimates, information statements and reports relating to Taxes.

“Taxing Authority” means, with respect to any Tax, the Governmental Entity that imposes such Tax, and the agency (if any) charged with the collection of such Tax for such Governmental Entity.

“Trade Secrets” means all inventions (whether or not patentable), discoveries, processes, procedures, designs, formulae, trade secrets, know-how, Software, ideas, methods, research and development, data, databases, confidential information and other proprietary or non-public information and data.

[Signatures on the following page]

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.


INSIGHT ACQUISITION CORP.

By:		/S/ WILLIAM E. KENNARD
		Name: William E. Kennard
		Title: President


INSIGHT COMMUNICATIONS COMPANY, INC.

By:		/S/ SIDNEY R. KNAFEL
		Name: Sidney R. Knafel
		Title: Chairman

Exhibit C

Guaranty

GUARANTY

This GUARANTY (this “Guaranty”), dated as of July 28, 2005, is entered into by and among Insight Communications Company, Inc., a Delaware corporation (the “Company”), and Carlyle Partners III Telecommunications, L.P., a Delaware limited partnership, and Carlyle Partners IV Telecommunications, L.P., a Delaware limited partnership (each, a “Guarantor” and together, the “Guarantors”). Capitalized terms used herein without definition have the meanings given to them in the Merger Agreement (as defined below).

RECITALS

WHEREAS, concurrently with the execution and delivery of this Guaranty, the Company and Insight Acquisition Corp., a Delaware corporation (“Parent”), are entering into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), providing for the Merger of Parent with and into the Company upon the terms and subject to the conditions set forth therein;

WHEREAS, Parent is an Affiliate of the Guarantors; and

WHEREAS, in order to induce the Company to enter into the Merger Agreement, the Guarantors have agreed to enter into this Guaranty;

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Guarantors hereby agree as follows:

Article I Guaranty. The Guarantors hereby irrevocably and unconditionally guarantee to the Company, jointly and severally, the prompt and complete payment and performance of Parent’s obligations to the Company arising under the Merger Agreement (the “Guaranteed Obligations”); provided, however, that the maximum aggregate liability of the Guarantors hereunder shall not exceed $10,000,000 (the “Maximum Amount”). The Company hereby agrees that in no event shall the Guarantors, collectively, be required to pay to any Person under, in respect of, or in connection with this Guaranty more than the Maximum Amount, and that neither Guarantor shall have any obligation or liability to any Person relating to, arising out of or in connection with this Guaranty other than as expressly set forth herein.

Article II Terms of Guaranty.

Section 2.01 This Guaranty is one of payment, not collection, and a separate action or actions may be brought and prosecuted against each of the Guarantors to enforce this Guaranty, irrespective of whether any action is brought against Parent or the other Guarantor or whether Parent or the other Guarantor is joined in any such action or actions.

Section 2.02 Notwithstanding any other provision of this Guaranty, the Company hereby agrees that (i) each of the Guarantors may assert, as a defense to any payment or performance by such Guarantor under this Guaranty, any claim, set-off, deduction or defense that Parent could assert against the Company under the terms of the Merger Agreement or that could otherwise be asserted by Parent against the Company in any action by the Company against Parent and (ii) any failure by the Company to comply with the terms of the Merger Agreement, including, without limitation, any breach by the Company of the representations and warranties contained therein or in any of the agreements, certificates and other documents required to be delivered by the Company pursuant to the terms of the Merger Agreement (whether such breach results from fraud, intentional misrepresentation or otherwise), that would relieve Parent of its obligations under the Merger Agreement shall likewise relieve the Guarantors of their obligations under this Guaranty.

Article III Sole Remedy.

Section 3.01 The Company hereby acknowledges and agrees that Parent has no assets as of the date hereof, and that the Company shall not have any right to cause any monies to be contributed to Parent by any current, former or prospective stockholder, officer, member, director, agent, employee, Affiliate or assignee of the Guarantors.

Section 3.02 The Company hereby agrees that no Person other than the Guarantors shall have any obligation or liability arising out of, in connection with or relating to this Guaranty and that neither the Company nor any other Person shall have any remedy, recourse or right of recovery against any current, former or prospective stockholder, member, general or limited partner, officer, director, agent, employee, Affiliate or assignee of the Guarantor, or against any current, former or prospective stockholder, member, general or limited partner, officer, director, agent, employee, Affiliate or assignee of any of the foregoing, whether through a Guarantor or otherwise, by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of Parent against a Guarantor or against any current, former or prospective stockholder, member, general or limited partner, officer, director, agent, employee, Affiliate or assignee of a Guarantor, Parent or any of their respective Affiliates, or otherwise.

Section 3.03 Recourse by the Company against the Guarantors under this Guaranty shall be the sole and exclusive remedy of the Company against the Guarantors or any of their Affiliates (other than Parent) in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby. The Company hereby covenants and agrees that it shall not institute, and shall cause its Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against either Guarantor or any of its Affiliates (other than Parent), except for claims by the Company against the Guarantors under this Guaranty. Nothing set forth in this Guaranty shall affect or be construed to affect any liability of Parent to the Company or shall confer or give, or shall be construed to confer or give, to any Person other than the Company (including any Person acting in a representative capacity) any rights or remedies against any Person in respect of or relating to any obligation or liability of the Guarantors arising out of, in connection with or relating to this Guaranty.

Section 3.04 Notwithstanding any provision hereof or otherwise, including by applicable Law, no obligation or liability contained in, arising out of, in connection with or relating to this Guaranty shall be enforceable by way of specific performance.

Article IV Termination. This Guaranty shall terminate at the Effective Time. In the event that the Company or any of its Affiliates asserts in any litigation relating to this Guaranty that the provisions of Section 1 hereof limiting the maximum aggregate liability of the Guarantors to the Maximum Amount or the provisions of Section 3 hereof are illegal, invalid or unenforceable in whole or in part, the obligations of the Guarantors under this Guaranty shall terminate forthwith and shall thereupon be null and void.

Article V Continuing Guaranty. Unless terminated pursuant to the provisions of Section 4 hereof, this Guaranty is a continuing one and shall remain in full force and effect until the indefeasible payment and satisfaction in full of the Guaranteed Obligations, and shall be binding upon, inure to the benefit of and be enforceable by, the parties hereto and their respective successors and permitted transferees and assigns.

Article VI Entire Agreement. This Guaranty constitutes the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, between the Guarantors or any of their Affiliates on the one hand, and the Company or any of its Affiliates on the other hand.

Article VII Amendments and Waivers. No amendment or waiver of any provision of this Guaranty shall be valid and binding unless it is in writing and signed, in the case of an amendment, by each of the Guarantors and the Company, or in the case of waiver, by the party against whom the waiver is sought to be enforced. No waiver by a party of any breach or violation of, or default under, this Guaranty shall be deemed to extend to any prior or subsequent breach, violation or default hereunder or to affect in any way any rights arising by virtue of any such prior or subsequent occurrence. No delay or omission by any party in exercising any right, power or remedy under this Guaranty shall operate as a waiver thereof.

Article VIII Counterparts. This Guaranty may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. This Guaranty shall become effective when duly executed by each party hereto.

Article IX Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or sent by telecopy or telex, overnight courier service or by registered or certified mail (postage prepaid, return receipt requested), to the respective parties at the following addresses or at such addresses as shall be specified by the parties by like notice:

Section 9.01 If to the Guarantors:

The Carlyle Group

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington, D.C. 20004

Telecopier: (202) 347-1692

Attention: William E. Kennard

with a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Telecopier: (212) 909-6836

Attention: Jeffrey J. Rosen

Andrew L. Bab

and

Dow, Lohnes & Albertson, PLLC

1200 New Hampshire Avenue, NW

Suite 800

Washington, D.C. 20036

Telecopier: (202) 776-2222

Attention: Leonard J. Baxt

J. Kevin Mills

Section 9.02 If to the Company:

Insight Communications Company, Inc.

810 7th Avenue, 41st Floor

New York, NY 10019

Telecopier: (917) 286-2301

Attention: Elliot Brecher

with a copy to:

Special Committee of the Board of Directors of

Insight Communications Company, Inc.

c/o

D.B. Zwirn & Co.

745 Fifth Avenue, 18^th Floor

New York, New York 10151

Telecopier: (646) 720-9077

Attention: David C. Lee

and

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Telecopier: (917) 777-3542

Attention:

Lou R. Kling

Stephen F. Arcano

and

Sonnenschein Nath & Rosenthal LLP

1221 Avenue of the Americas

New York, New York 10020

Telecopier: (212) 768-6800

Attention: Robert L. Winikoff

Article X Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof, except to the extent that mandatory provisions of federal law apply.

Article XI Jurisdiction and Venue; Service of Process. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of Delaware and any appellate court thereof, in any action or proceeding arising out of or relating to this Guaranty or any of the transactions contemplated hereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereby irrevocably and unconditionally (a) agrees not to commence any such action except in such court, (b) agrees that any claim in

respect of any such action or proceeding may be heard and determined in such Delaware state court, (c) waives, to the fullest extent it may legally and effectively do so any objection which it may now or hereafter have to venue of any such action or proceeding in any such Delaware state court, and (d) waives, to the fullest extent permitted by law, the defense of any inconvenient forum to the maintenance of such action or proceeding in any such Delaware state court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto irrevocably consents to service of process in any such action or proceeding in the manner provided for notices in Section 9 of this Guaranty; provided, however, that nothing in this Guaranty shall affect the right of any party hereto to serve process in any other manner permitted by law.

ARTICLE XII Waiver of Jury Trial. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS GUARANTY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY AND ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.

ARTICLE XIII Severability. Any term or provision of this Guaranty that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Guaranty or affecting the validity or enforceability of any terms or provisions of this Guaranty in any other jurisdiction so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party; provided, however, that this Guaranty may not be enforced without giving effect to the limitation of the amount payable hereunder to the Maximum Amount provided in Section 1 hereof and to the

provisions of Sections 3 and 4 hereof. No party hereto shall assert, and each party shall cause its respective Affiliates not to assert, that this Guaranty or any part hereof is invalid, illegal or unenforceable.

Article XIV Headings. Headings are used for reference purposes only and do not affect the meaning or interpretation of this Guaranty.

Article XV Parties in Interest. This Guaranty shall be binding upon and inure solely to the benefit of each party hereto and their respective successors and permitted assigns, and nothing in this Guaranty, express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Guaranty.

[Signatures follow on next page]

IN WITNESS WHEREOF, the undersigned have executed and delivered his Guaranty as of the date first above written.

CARLYLE PARTNERS III

TELECOMMUNICATIONS, L.P.

By: TC Group III, L.P., its General Partner

By: TC Group III, L.L.C., its General Partner

By: TC Group, L.L.C., its Managing Member

By: __________________________________

Name: William E. Kennard

Title: Managing Director

CARLYLE PARTNERS IV

TELECOMMUNICATIONS, L.P.

By: TC Group IV, L.P., its General Partner

By: TC Group IV, L.L.C., its General Partner

By: TC Group, L.L.C., its Managing Member

By: __________________________________

Name: William E. Kennard

Title: Managing Director

INSIGHT COMMUNICATIONS COMPANY,

INC.

By:___________________________________

Name:

Title:

Exhibit E

Charter Amendment

CERTIFICATE OF AMENDMENT

TO THE

RESTATED CERTIFICATE OF INCORPORATION

INSIGHT COMMUNICATIONS COMPANY, INC.

Insight Communications Company, Inc., a corporation organized and existing under the Delaware General Corporation Law (the “Corporation”), does hereby certify:

FIRST: Section 5.6 of Article Five of the Corporation’s Restated Certificate of Incorporation is hereby amended to read in its entirety as set forth below:

5.6 Merger. Upon the merger or consolidation of the Corporation, holders of each class of Common Stock will be entitled to receive equal per share payments or distributions, except that in any transaction in which shares of capital stock are distributed, such shares may differ to the extent that the Class A Common Stock and the Class B Common Stock differ as provided in this Restated Certificate of Incorporation; provided, however, that this Section 5.6 shall not apply in any respect to the transactions contemplated by the Agreement and Plan of Merger, dated as of July 28, 2005, by and between Insight Acquisition Corp. and the Corporation.

SECOND: The foregoing amendment was duly adopted in accordance with Sections 228 and 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this certificate to be duly executed in its corporate name this day of , 2005.


INSIGHT COMMUNICATIONS COMPANY, INC.

By:

Name:
Title:

EX-7.03 3 dex703.htm EXCHANGE AGREEMENT, DATED AS OF JULY 28, 2005 Exchange Agreement, dated as of July 28, 2005

Exhibit 7.03

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (this “Agreement”) is made and entered into as of July 28, 2005, by and among INSIGHT COMMUNICATIONS COMPANY, INC., a Delaware corporation (the “Company”), INSIGHT ACQUISITION CORP., a Delaware corporation (“Parent”), SIDNEY R. KNAFEL (“Knafel”), MICHAEL S. WILLNER (“Willner”), the other shareholders of the Company listed on Exhibit A attached hereto who have executed and delivered a counterpart signature page to this Agreement (collectively, with Knafel and Willner, the “Management Shareholders”), and CARLYLE PARTNERS III TELECOMMUNICATIONS, L.P., CARLYLE PARTNERS IV TELECOMMUNICATIONS, L.P., CP III COINVESTMENT, L.P. and CP IV COINVESTMENT, L.P., each a Delaware limited partnership (each, individually, and collectively, “Carlyle”) (the Company, Parent, the Management Shareholders and Carlyle are each sometimes referred to herein individually as a “Party” and, collectively, as the “Parties”).

RECITALS

A. Concurrently with the execution and delivery of this Agreement, Parent and the Company are entering into an Agreement and Plan of Merger (as the same may from time to time be amended, modified, supplemented or restated, the “Merger Agreement”) providing for the merger of Parent with and into the Company (the “Merger”) upon the terms and subject to the conditions set forth therein.

B. The Board of Directors of the Company, based on the unanimous recommendation of a special committee thereof consisting solely of disinterested directors of the Company (the “Special Committee”), has approved and adopted this Agreement and the transactions contemplated hereby for purposes of Section 203 of the Delaware General Corporation Law.

C. The Parties desire to enter into this Agreement in conjunction with the Merger Agreement in order to provide for certain transactions to be consummated immediately prior to the Effective Time of the Merger in the order set forth below.

D. Capitalized terms used in this Agreement that are not otherwise defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual agreements and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1. Pre-Merger Transactions. The transactions contemplated in this Section 1 shall be consummated substantially concurrently with each other immediately prior to the Effective Time of the Merger but in the following sequential order: the transactions contemplated by Section 1.1, then Section 1.2, then Section 1.3 and then Section 1.4.

1.1 Issuance of New Preferred Stock to Knafel and Willner. Knafel shall subscribe for, and the Company shall issue to Knafel, the number of shares of preferred stock, par value $0.01 per share, of the Company (“Company Preferred Stock”), specified next to the name of Knafel in Exhibit A hereto, by paying to the Company an amount equal to $0.01 in cash per share (the “Per Share Preferred Price”) multiplied by such number of shares in Exhibit A. The Knafel Children Trusts (as defined in Exhibit A) shall subscribe for, and the Company shall issue to the Knafel Children Trusts, the number of shares of Company Preferred Stock specified next to the name of the Knafel Children Trusts in Exhibit A, by paying to the Company an amount equal to the Per Share Preferred Price in cash per share multiplied by such number of shares in Exhibit A. Willner shall subscribe for, and the Company shall issue to Willner, the number of shares of Company Preferred Stock specified next to the name of Willner in Exhibit A, by paying to the Company an amount equal to the Per Share Preferred Price in cash per share multiplied by such number of shares in Exhibit A. The Company Preferred Stock shall have the voting powers, designations, preferences, rights and other terms prescribed in the Certificate of Designations substantially in the form of Exhibit B hereto. The shares of Company Preferred Stock to be issued by the Company pursuant to this Section 1.1 shall be validly issued, fully paid and non-assessable upon issuance in accordance with this Section 1.1.

1.2 Cash Investment by Carlyle; Payment of Transaction Expenses. Carlyle shall make a cash contribution to Parent in an amount equal to Carlyle’s reasonable estimate, after good faith consultation with Knafel and Willner, of the amount of cash that will be needed by the Company, after the Effective Time, in order to pay the Merger Consideration due in respect of shares of Class A Stock and Class B Stock to be converted into a right to receive cash pursuant to Section 1.07(a) of the Merger Agreement; provided that the amount of such contribution shall not in any event exceed $606,305,000. In consideration for the foregoing contribution, Parent shall issue to Carlyle, and Carlyle shall receive, in the aggregate, a number of validly issued, fully paid and non-assessable shares of Class D Preferred Stock, par value $0.01 per share, of Parent (the “Class D Preferred Stock”), having the voting powers, designations, preferences, rights and other terms prescribed in the certificate of incorporation of Parent (the “Parent Charter”), equal to the amount of such cash contribution divided by the Merger Consideration. It is the expectation of the Parties that all costs, expenses and liabilities of the Company arising out of or relating to the Merger, other than those costs in respect of which Carlyle will make a contribution pursuant to the first sentence of this Section 1.2, shall be paid by the Company from cash available to the Company immediately prior to the consummation of the transactions contemplated by this Section 1.

1.3 Conversion of Class B Common Stock by Management Shareholders. Each Management Shareholder identified on Exhibit A as an owner of shares of Class B common stock, par value $0.01 per share, of the Company (the “Class B Common Stock”), shall convert all of such Management Shareholder’s shares of Class B Common Stock into a corresponding number of validly issued, fully paid and non-assessable shares of Class A common stock, par value $0.01 per share, of the Company (the “Class A Common Stock,” and together with the Class B Common Stock, the “Common Stock”) pursuant to Section 5.4(a) of the Restated Certificate of Incorporation of the Company.

1.4 Exchange of Class A Common Stock by Management Shareholders. Each Management Shareholder identified on Exhibit A as an owner of shares of Class A Common

Stock (after giving effect to the conversion pursuant to Section 1.3) shall contribute to Parent at least the number of shares of Class A Common Stock specified next to the name of such Management Shareholder in Exhibit A. Each such Management Shareholder shall receive, in exchange for the foregoing contribution, a corresponding number of validly issued, fully paid and non-assessable shares of Class C Preferred Stock, par value $0.01 per share, of Parent (the “Class C Preferred Stock”), having the voting powers, designations, preferences, rights and other terms prescribed in the Parent Charter. For the avoidance of doubt, shares of Class A Common Stock held in a Management Shareholder’s 401(k) account shall not be contributed to Parent but shall be converted into the right to receive the Merger Consideration in accordance with the terms of the Merger Agreement, subject to the terms of the Company’s 401(k) Plan’s trust. The Parties agree that the fair market value of each share of Class A Common Stock contributed to Parent by the Management Shareholders shall equal the amount of the Merger Consideration.

2. Closing of Pre-Merger Transactions.

2.1 Exchange Closing. The respective obligations of the Parties to consummate the transactions contemplated by this Agreement shall be subject to the determination by Knafel, Willner and Carlyle, in each such Party’s sole discretion, that all of the conditions to the consummation of the Merger, as set forth in the Merger Agreement, have been satisfied or waived by the necessary party to the Merger Agreement. Subject to the preceding sentence and the first sentence of Section 1 of this Agreement, the closing of the transactions contemplated in Section 1 (the “Exchange Closing”) shall be held at the place and immediately prior to the time of the Closing under the Merger Agreement.

2.2 Exchange Closing Deliveries. At the Exchange Closing:

(a) Each of Knafel, the Knafel Children Trusts and Willner shall deliver to the Company the amount in cash specified for such Party in Section 1.1 hereof by wire transfer of immediately available funds. The Company shall deliver to Knafel, the Knafel Children Trusts and Willner duly executed certificates registered in the names of Knafel, the Knafel Children Trusts and Willner representing the shares of Company Preferred Stock issued to them by the Company pursuant to Section 1.1 hereof, respectively.

(b) Carlyle shall deliver to Parent the payment required by Section 1.2 by wire transfer of immediately available funds. Parent shall deliver to each Carlyle entity a duly executed certificate or certificates registered in the name of such Carlyle entity representing a portion of the aggregate number of shares of Class D Preferred Stock to be issued to Carlyle pursuant to Section 1.2 hereof, which portions shall be determined by Carlyle prior to the Exchange Closing.

(c) Each Management Shareholder identified on Exhibit A as an owner of shares of Class B Common Stock shall deliver to the Company the certificate or certificates representing the shares of Class B Common Stock held by such Management Shareholder and to be converted pursuant to Section 1.3 hereof, accompanied by instruments of transfer, in form satisfactory to the Company and its transfer agent, duly executed by such Management Shareholder, and accompanied by the notice of conversion required under Section 5.4(a) of the Restated Certificate of Incorporation of the Company, against delivery by the Company to each

such Management Shareholder of a duly executed certificate or certificates registered in the name of such Management Shareholder representing the shares of Class A Common Stock into which such shares of Class B Common Stock are converted.

(d) Each Management Shareholder identified on Exhibit A as an owner of shares of Class A Common Stock (after giving effect to the conversion pursuant to Section 1.3) shall deliver to Parent the certificate or certificates or book-entry notation representing at least the number of shares of Class A Common Stock to be exchanged pursuant to Section 1.4 hereof, accompanied by instruments of transfer, in form satisfactory to Parent, duly executed by such Management Shareholder, and accompanied by written notice specifying the number of shares of Class A Common Stock to be exchanged pursuant to Section 1.4 hereof. Parent shall deliver to each such Management Shareholder a duly executed certificate or certificates registered in the name of such Management Shareholder (or its designee) representing the shares of Class C Preferred Stock to be issued to such Management Shareholder pursuant to Section 1.4 hereof. If less than all of the shares of Class A Common Stock represented by the certificate or certificates delivered by such Management Shareholder pursuant to the first sentence of this Section 2.2(d) are exchanged pursuant to Section 1.4 hereof, the Company shall deliver to each such Management Shareholder a certificate or certificates representing the number of such shares of Class A Common Stock that are not exchanged.

(e) The Company, Carlyle and each Management Shareholder shall execute and deliver, at the time of the Closing of the Merger, a Securityholders Agreement in a form to be agreed to by Carlyle, Knafel and Willner, which agreement will include certain transfer restrictions and registration rights with respect to the capital stock of the Surviving Corporation.

3. Termination. This Agreement shall automatically be terminated and forthwith become wholly void and of no further force and effect, and there shall be no liability on the part of any of the Parties arising out of this Agreement, if the Merger Agreement shall have been terminated in accordance with its terms at any time prior to the Exchange Closing. Except as and to the extent provided in Section 5.2, this Agreement may not otherwise be terminated except upon the written agreement of the Company, Carlyle, Parent, Knafel and Willner. Notwithstanding any provision to the contrary in this Section 3, the termination of this Agreement shall not relieve or release a Party from any liability or damages arising from a willful breach by such Party of any provision of this Agreement occurring prior to such termination.

4. Representations and Warranties.

4.1 Representations and Warranties of the Management Shareholders. Each Management Shareholder, severally and not jointly, represents and warrants to each other Party as follows:

(a) Authority. Such Management Shareholder has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by such Management Shareholder and constitutes a valid and binding obligation of such Management Shareholder enforceable in accordance with its terms. If such Management Shareholder is married and the Common Stock of such Management Shareholder constitutes community property or otherwise

needs spousal or other approval for this Agreement to be legal, valid and binding with respect to such Common Stock, this Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of, such Management Shareholder’s spouse, enforceable against such spouse in accordance with its terms. If such Management Shareholder is a trust, no consent of any beneficiary is required for the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

(b) No Conflicts. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby nor compliance with the terms hereof will violate, conflict with or result in a breach of, or constitute a default (with or without notice or lapse of time or both) under any provision of, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to such Management Shareholder or to such Management Shareholder’s property or assets.

(c) Ownership of Common Stock. Such Management Shareholder is the record (or the controlling Person of the record) and beneficial owner of, or is trustee or executor of a trust or estate that is the record holder of and whose beneficiaries are the beneficial owners of, and has good and marketable title to, the shares of Common Stock set forth opposite such Management Shareholder’s name on Exhibit A, free and clear of any mortgage, lien, pledge, charge, encumbrance, security interest or other adverse claim. Such Management Shareholder does not own, of record or beneficially, any shares of capital stock of the Company other than the shares of Common Stock set forth opposite such Management Shareholder’s name on Exhibit A. Subject to the terms of this Agreement and the Insight Voting Agreement, dated as of the date hereof, by and among Parent, Knafel, Willner, Andrew G. Knafel and the Knafel Children Trusts (as the same may from time to time be amended, modified, supplemented or restated, the “Voting Agreement”), as applicable, such Management Shareholder has the sole right to vote, or to dispose of, such shares of Common Stock, and none of such shares is subject to any agreement, arrangement or restriction with respect to the voting of such shares, except as contemplated by this Agreement or the Voting Agreement. Except for this Agreement, and, if such Management Shareholder is a trust, in accordance with the terms of such trust, (i) there are no agreements or arrangements of any kind, contingent or otherwise, obligating such Management Shareholder to sell, transfer, assign, grant a participation interest in or option with respect to, pledge, hypothecate or otherwise dispose or encumber, whether directly or indirectly (by merger, sale of stock of a holding company or otherwise) (each, a “Transfer”), or cause to be Transferred, any of the shares of Common Stock held by such Management Shareholder, and (ii) no Person has any contractual or other right or obligation to purchase or otherwise acquire any of such shares.

(d) Investment Representations.

(i) Such Management Shareholder is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended and including any rules and regulations promulgated thereunder (the “Securities Act”) or is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in securities presenting an investment decision like that

involved in the acquisition of the Company Preferred Stock (as applicable) and the Class C Preferred Stock, including investments in securities issued by the Company or Parent, and is capable of evaluating the merits and risks of such investments. Such Management Shareholder has requested, received, reviewed and considered all information that such Management Shareholder deems relevant in making an informed decision to purchase the Company Preferred Stock (as applicable) and the Class C Preferred Stock. Such Management Shareholder further represents that it has had an opportunity to ask questions and receive answers from the Company and Parent regarding the terms and conditions of the purchase of the Company Preferred Stock described in Section 1.1 and the exchange of Class A Common Stock for Class C Preferred Stock described in Section 1.4 and the businesses, properties, prospects and financial condition of the Company and Parent.

(ii) Such Management Shareholder is purchasing the Company Preferred Stock (as applicable) and the Class C Preferred Stock for its own account for investment only, and, except as contemplated in this Agreement or the Merger Agreement, such Management Shareholder has no present intention of distributing the Company Preferred Stock or the Class C Preferred Stock and there is no arrangement or understanding between such Management Shareholder and any other persons regarding the distribution of the Company Preferred Stock or the Class C Preferred Stock in violation of any applicable federal or state securities laws.

(iii) Except as contemplated by this Agreement or the Merger Agreement, such Management Shareholder shall not, directly or indirectly, offer to Transfer or Transfer (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the shares of Company Preferred Stock or Class C Preferred Stock purchased by it hereunder except in compliance with the Securities Act, applicable “blue sky” laws and the rules and regulations promulgated thereunder. Such Management Shareholder also understands that there is no assurance that any exemption from registration under the Securities Act and applicable blue sky laws will ever be available and that, even if available, such exemption may not allow such Management Shareholder to Transfer all or any portion of its shares of Company Preferred Stock or Class C Preferred Stock under the circumstances, in the amounts or at the times that such Management Shareholder might propose.

(iv) Such Management Shareholder is able to bear the economic risk of holding the shares of Company Preferred Stock and/or Class C Preferred Stock to be issued to it hereunder for an indefinite period, including the loss of such Management Shareholder’s entire investment. The Company Preferred Stock (as applicable) and Class C Preferred Stock was not offered or sold to such Management Shareholder by any form of general solicitation or advertising. To the extent such Management Shareholder is an entity, such Management Shareholder also represents that it has not been organized for the purpose of acquiring shares of Company Preferred Stock or Class C Preferred Stock.

4.2 Effect on the Company’s and Parent’s Representations and Warranties. The representations and warranties of the Management Shareholders in this Section 4 do not limit or modify in any respect the Company’s or Parent’s representations and warranties in this Section 4 or the right of the Management Shareholders to rely on the Company’s and Parent’s representations and warranties in this Section 4.

4.3 Representations and Warranties of the Company, Parent and Carlyle. Each of the Company, Parent and Carlyle (including each Carlyle entity), severally and not jointly, represents and warrants to each other Party as follows: Such Party has all requisite corporate or limited partnership power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by such Party, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate or limited partnership action on the part of such Party, as applicable. This Agreement has been duly executed and delivered by such Party and constitutes a valid and binding obligation of such Party enforceable in accordance with its terms. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby nor compliance with the terms hereof will violate, conflict with or result in a breach of, or constitute a default (with or without notice or lapse of time or both) under any provision of, the certificate of incorporation, bylaws, limited partnership agreement or certificate of limited partnership of such Party, as applicable, or any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to such Party or to such Party’s property or assets.

4.4 Additional Representations and Warranties of the Company. The Company hereby further represents and warrants to each other Party as follows: Exhibit A specifies the total number of issued and outstanding shares of Class B Common Stock before giving effect to the transactions contemplated by this Agreement. The Company has no, and immediately prior to the Exchange Closing, shall not have any, shares of any class or series of preferred stock issued and outstanding. The Class A Common Stock to be issued in connection with the conversion of the Class B Common Stock pursuant to Section 1.3 and the Company Preferred Stock to be issued pursuant to Section 1.1 has been duly authorized for issuance and sale pursuant to such sections, respectively, and when issued and delivered by the Company against payment therefor in accordance with the terms of this Agreement, will be duly and validly issued and fully paid and non-assessable, issued in compliance with all applicable federal and state securities laws and regulations, and issued free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest. Upon issuance of the Company Preferred Stock to Knafel, the Knafel Children Trusts and Willner and the conversion of the Class B Common Stock pursuant to Section 1.3, the votes attributable to the Company Preferred Stock shall represent at least a majority of the total voting power of the Company attributable to all of the issued and outstanding capital stock of the Company.

4.5 Additional Representations and Warranties of Parent. Parent hereby further represents and warrants to each other Party that:

(a) As of the date hereof and immediately prior to the Exchange Closing, (i) the authorized capital stock of Parent consists and shall consist only of 10,000,000 shares of Class B Preferred Stock, par value $0.01 per share, of Parent (the “Class B Preferred Stock”), having the voting powers, designations, preferences, rights and other terms prescribed in the Parent Charter, 10,000,000 shares of Class C Preferred Stock, and 60,000,000 shares of Class D Preferred Stock, and (ii) no shares of capital stock of Parent are or shall be issued and outstanding other than 517,836 shares of Class B Preferred Stock issued to Carlyle prior to the date hereof;

(b) The shares of Class B Preferred Stock issued by Parent to Carlyle were duly authorized and validly issued and are fully paid and non-assessable, were issued in compliance with all applicable federal and state securities laws and regulations and were issued free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest; and

(c) The Class C Preferred Stock and the Class D Preferred Stock to be issued pursuant to Sections 1.4 and 1.2, respectively, has been duly authorized for issuance and sale pursuant to such sections, respectively, and when issued and delivered by Parent against payment therefor in accordance with the terms of this Agreement, will be duly and validly issued and fully paid and non-assessable, issued in compliance with all applicable federal and state securities laws and regulations, and issued free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest.

4.6 Additional Representations and Warranties of Carlyle. Each Carlyle entity hereby further represents and warrants to each other Party as follows:

(a) Such Party is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act or is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in securities presenting an investment decision like that involved in the acquisition of the Class D Preferred Stock, including investments in securities issued by Parent, and is capable of evaluating the merits and risks of such investment. Such Party has requested, received, reviewed and considered all information that such Party deems relevant in making an informed decision to purchase the Class D Preferred Stock. Such Party further represents that it has had an opportunity to ask questions and receive answers from Parent regarding the purchase of the Class D Preferred Stock described in Section 1.2 and the business, properties, prospects and financial condition of Parent.

(b) Such Party is purchasing the Class D Preferred Stock for its own account for investment only, and, except as contemplated in this Agreement or the Merger Agreement, such Party has no present intention of distributing the Class D Preferred Stock, and there is no arrangement or understanding with any other persons regarding the distribution of the Class D Preferred Stock in violation of any applicable federal or state securities laws.

(c) Except as contemplated by this Agreement or the Merger Agreement, such Party shall not, directly or indirectly, offer to Transfer or Transfer (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the shares of Class D Preferred Stock purchased by it hereunder except in compliance with the Securities Act, applicable blue sky laws and the rules and regulations promulgated thereunder. Such Party also understands that there is no assurance that any exemption from registration under the Securities Act and applicable blue sky laws will ever be available and that, even if available, such exemption may not allow such Party to Transfer all or any portion of its shares of Class D Preferred Stock under the circumstances, in the amounts or at the times that such Party might propose.

(d) Such Party is able to bear the economic risk of holding the shares of Class D Preferred Stock to be issued to it hereunder for an indefinite period, including the loss of such Party’s entire investment. The Class D Preferred Stock was not offered or sold to such Party by any form of general solicitation or advertising. Such Party also represents that it has not been organized for the purpose of acquiring shares of Class D Preferred Stock.

5. Miscellaneous Provisions.

5.1 Agreement to Cooperate; Further Assurances. Each Party shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, and to carry out the intent and purposes of this Agreement, including, without limitation, providing information and using reasonable efforts to obtain all necessary or appropriate waivers, consents and approvals, and effecting all necessary registrations and filings.

5.2 Covenant Not to Transfer. Except as otherwise provided in this Agreement, the Voting Agreement or the Merger Agreement, as applicable, or as consented to by Carlyle, each Management Shareholder agrees not to, directly or indirectly, (i) Transfer or enter into any agreement, option or other arrangement (including any profit sharing arrangement) with respect to the Transfer of, any shares of Common Stock held by such Management Shareholder to any Person, (ii) grant any proxies, deposit any such shares into any voting trust or enter into any voting arrangement, whether by proxy, voting agreement or otherwise, with respect to such shares, or (iii) convert (or cause or permit to be converted) any of such shares consisting of Class B Common Stock into Class A Common Stock. Subject to this Agreement, the Voting Agreement or the Merger Agreement, as applicable, each Management Shareholder further agrees not to commit or agree to take any of the foregoing actions. This Section 5.2 shall terminate and be of no further force and effect as of the Closing under the Merger Agreement.

5.3 Notification of Certain Matters. Each Party shall give prompt notice to the other Parties (provided that for purposes of this Section 5.3, any Party required to give notice hereunder shall not be required to give notice to any Management Shareholder other than Knafel and Willner) of the occurrence, or failure to occur, of any event which occurrence or failure to occur would cause (a) any representation or warranty of such Party contained in this Agreement to be untrue or inaccurate in any material respect, or (b) any material failure of such Party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification shall affect the representations or warranties of the Parties or the conditions to the performance by the Parties hereunder.

5.4 Public Statements. None of the Parties shall issue or cause the publication of any press release or other public announcement with respect to this Agreement, the Merger or the other transactions contemplated hereby or thereby without prior consultation with and approval by the Company, Parent, Carlyle, Knafel and Willner, except as permitted in accordance with the Merger Agreement.

5.5 Amendments; Waivers. Neither this Agreement nor any term hereof may be amended or otherwise modified other than by an instrument in writing signed by the Company, Parent, Carlyle, Knafel and Willner; provided that any amendment or modification of this

Agreement that has the effect of increasing the number of shares of Class A Common Stock that a Management Shareholder is required to contribute to Parent pursuant to Section 1.4 or that has the effect of treating a Management Shareholder differently from Knafel and Willner in a materially adverse manner (as compared to their relative treatment under the original terms of this Agreement) shall require the written consent of such Management Shareholder. No provision of this Agreement may be waived, discharged or terminated other than by an instrument in writing signed by the Party against whom the enforcement of such waiver, discharge or termination is sought; provided that Knafel and Willner may, on behalf of any or all of the Management Shareholders, waive any provision of this Agreement applicable to any or all of the Management Shareholders without regard to whether any other Management Shareholder has executed such an instrument, and such waiver shall be effective as against any or all such Management Shareholders, unless such waiver has the effect of treating a Management Shareholder differently from Knafel and Willner in a materially adverse manner (as compared to their relative treatment under the original terms of this Agreement), in which case a written instrument signed by such Management Shareholder shall be required for the waiver with respect to such Management Shareholder to be effective.

5.6 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or sent by telecopy or telex, overnight courier service or by registered or certified mail (postage prepaid, return receipt requested), to the respective Parties at the following addresses or at such addresses as shall be specified by the Parties by like notice:

(A)

if to the Company to:

Insight Communications Company, Inc.

810 7th Avenue, 41st Floor

New York, New York 10019

Attn: Elliot Brecher

Telecopy: (917) 286-2301

with a copy to:

Skadden, Arps, Slate Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attn: Stephen F. Arcano

Telecopy: (917) 777-3542

(B)

if to Parent/Carlyle to:

c/o The Carlyle Group

1001 Pennsylvania Avenue, N.W.

Suite 220 South

Washington, D.C. 20004-2505

Attn: William E. Kennard

Telecopy: (202) 347-1692

with a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Attn.: Jeffrey J. Rosen

Andrew L. Bab

Telecopy: (212) 909-6281

(C)

if to any Management Shareholder to:

Sidney R. Knafel

c/o Insight Communications Company, Inc.

810 Seventh Avenue

New York, New York 10019

Telecopy: (917) 286-2301

with a copy to:

Dow, Lohnes & Albertson, PLLC

1200 New Hampshire Avenue, N.W.

Suite 800

Washington, D.C. 20036-6802

Attn.: Leonard J. Baxt

J. Kevin Mills

Telecopy: (202) 776-2222

5.7 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof, except to the extent that mandatory provisions of federal law apply. Each of the Parties hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of Delaware and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the Parties irrevocably and unconditionally (a) agrees not to commence any such action except in such court, (b) agrees that any claim in respect of any such action or proceeding may be heard and determined in such Delaware state court, (c) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to venue of any such action or proceeding in any such Delaware state court, and (d) waives, to the fullest extent permitted by law, the defense of any inconvenient forum to the maintenance of such action or proceeding in any such Delaware state court. Each of the Parties agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the Parties irrevocably consents to service of process in any such action or proceeding in the manner provided for notices in Section 5.6 of this Agreement; provided, however, that nothing in this Agreement shall affect the right of any party to this Agreement to serve process in any other manner permitted by law.

5.8 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS CONTAINED IN THIS SECTION 5.8.

5.9 Remedies. Each Party acknowledges and agrees that (i) the covenants, obligations and agreements of such Party contained in this Agreement relate to special, unique and extraordinary matters, (ii) each other Party is and will be relying on such covenants, obligations and agreements in connection with entering into this Agreement, the performance of its obligations under this Agreement and the exchange of shares pursuant to this Agreement, and (iii) a violation of any of the terms of such covenants, obligations or agreements will cause the other Parties irreparable injury for which adequate remedies are not available at law. Therefore, each Party agrees that any other Party shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain such first-named Party from committing any violation of such covenants, obligations or agreements. These injunctive remedies are cumulative and in addition to any other rights and remedies that a Party may have. The rights and remedies provided herein shall be cumulative and not exclusive of any other rights or remedies provided by law or in equity. Notwithstanding the foregoing, the Parties hereto further agree that: (i) except as provided in and pursuant to the Merger Agreement and the Guarantee referenced therein, the Company may not pursue any claim or seek any legal or equitable remedy in connection with this Agreement (including, for the avoidance of doubt, monetary damages and specific performance) against any of Parent, the Management Shareholders or Carlyle or any affiliate thereof; (ii) the Management Shareholders (other than Knafel and Willner) may not pursue any claim or seek any legal or equitable remedy in connection with this Agreement (including, for the avoidance of doubt, monetary damages and specific performance) against any of Parent, any other Management Shareholder or Carlyle or any affiliate thereof; and (iii) except as provided in the Principals’ Agreement (as defined in the Merger Agreement), none of Parent, Knafel, Willner or Carlyle may pursue any claim or seek any legal or equitable remedy in connection with this Agreement (including, for the avoidance of doubt, monetary damages and specific performance) against any of Parent, Knafel, Willner or Carlyle or any affiliate thereof.

5.10 Waiver. No failure or delay by any Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

5.11 Assignment; No Third Party Beneficiaries. This Agreement shall not be assignable or otherwise transferable by a Party without the prior written consent of the Company, Parent, Carlyle, Knafel and Willner, and any attempt to so assign or otherwise transfer this Agreement without such consent shall be void and of no effect; provided that Parent may assign or transfer its rights, interests and obligations under this Agreement to a Person to which Parent assigns or transfers its rights, interests and obligations under the Merger Agreement in accordance with the Merger Agreement. This Agreement shall be binding upon the respective heirs, successors, legal representatives and permitted assigns of the Parties. Nothing in this Agreement shall be construed as giving any Person, other than the Parties and their heirs, successors, legal representatives and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof.

5.12 Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties hereto to the maximum extent possible. In any event, the invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

5.13 Integration. This Agreement, including the Exhibits hereto, the Merger Agreement and the Voting Agreement constitute the full and entire understanding and agreement of the Parties with respect to the subject matter hereof and supersede any and all prior understandings or agreements relating to the subject matter hereof.

5.14 Section Headings. The article and section headings of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

5.15 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Facsimile signatures of the Parties shall be deemed to be their original signatures for all purposes.

5.16 Proxies.

(a) Knafel hereby grants, effective as of the Triggering Time (as defined below), to Willner an irrevocable proxy pursuant to the provisions of Section 212 of the Delaware General Corporation Law to vote or to execute and deliver written consents with respect to any and all shares of Common Stock, Company Preferred Stock or Series A Voting Preferred Stock, as applicable, that are owned by Knafel or any Person controlled by him as of the Triggering Time (including any shares of Common Stock, Company Preferred Stock or Series A Voting Preferred Stock that may be issued in respect of such shares after the Triggering Time, the “Knafel Shares”), to the same extent and with the same effect as Knafel might or could

do under any applicable laws, rules or regulations terms. The proxy granted by Knafel herein is coupled with an interest and shall be irrevocable, and such proxy shall be exercisable only after the occurrence of the Triggering Time and shall automatically terminate upon the earlier of the termination of the Merger Agreement or the Closing of the Merger, in each case, whether or not the Triggering Time has previously occurred. Knafel agrees that no subsequent proxies will be given with respect to the Knafel Shares if such proxies would conflict with the operation of the proxy granted pursuant to this Section 5.16(a) from and after the Triggering Time. SUBJECT TO THE TERMS OF THIS SECTION 5.16(a), THIS PROXY SHALL SURVIVE THE DEATH OF KNAFEL AND SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE KNAFEL SHARES.

(b) Willner hereby grants, effective as of the Triggering Time, to Knafel an irrevocable proxy pursuant to the provisions of Section 212 of the Delaware General Corporation Law to vote or to execute and deliver written consents with respect to any and all shares of Common Stock, Company Preferred Stock or Series A Voting Preferred Stock, as applicable, that are owned by Willner or any Person controlled by him as of the Triggering Time (including any shares of Common Stock, Company Preferred Stock or Series A Voting Preferred Stock that may be issued in respect of such shares after the Triggering Time, the “Willner Shares”), to the same extent and with the same effect as Willner might or could do under any applicable laws, rules or regulations. The proxy granted by Willner herein is coupled with an interest and shall be irrevocable, and such proxy shall be exercisable only after the occurrence of the Triggering Time and shall automatically terminate upon the earlier of the termination of the Merger Agreement or the Closing of the Merger, in each case, whether or not the Triggering Time has previously occurred. Willner agrees that no subsequent proxies will be given with respect to the Willner Shares if such proxies would conflict with the operation of the proxy granted pursuant to this Section 5.16(b) from and after the Triggering Time. SUBJECT TO THE TERMS OF THIS SECTION 5.16(b), THIS PROXY SHALL SURVIVE THE DEATH OF WILLNER AND SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE WILLNER SHARES.

(c) As used in this Section 5.16, the term “Triggering Time” shall mean (i) with respect to Section 5.16(a), the death of Knafel, or, (ii) with respect to Section 5.16(b), the death of Willner.

(d) Notwithstanding any provision of this Section 5.16 to the contrary, the proxies granted pursuant to this Section 5.16 relate solely to the transfer of the voting rights of the Knafel Shares and the Willner Shares as specified herein, and nothing in this Section 5.16 shall limit or otherwise affect in any respect the economic rights (including, without limitation, the right to transfer the economic rights) of the holders of the Knafel Shares or the Willner Shares.

5.17 Shareholder Capacity. No Person executing this Agreement who is or becomes during the term hereof a director or officer of the Company shall be deemed to make any agreement or understanding in this Agreement in such Person’s capacity as a director or officer. Each Management Shareholder is entering into this Agreement solely in its capacity as the record holder or beneficial owner of, or the trustee of a trust whose beneficiaries are the beneficial

owners of, capital stock of the Company (including any shares of capital stock acquired after the date hereof, including pursuant to this Agreement) and nothing herein shall limit or affect any actions taken, or to be taken, by a Management Shareholder in its capacity as a director or officer of the Company.

5.18 Joinder. In order for any Management Shareholder who does not execute this Agreement on the date hereof to become a party to this Agreement, such Management Shareholder must execute a counterpart signature page hereto and duly executed copies thereof must be delivered to the other Parties to this Agreement.

[Signature Pages Follow.]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.


INSIGHT COMMUNICATIONS COMPANY, INC.

By:		/s/ Sidney R. Knafel
Name:		Sidney R. Knafel
Title:		Chairman

INSIGHT ACQUISITION CORP.

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		President

CARLYLE PARTNERS III TELECOMMUNICATIONS, L.P.
By:		TC Group III, L.P., its General Partner
By:		TC Group III, L.L.C., its General Partner
By:		TC Group, L.L.C., its Managing Member

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		Managing Director

CP III COINVESTMENT, L.P.
By:		TC Group III, L.P., its General Partner
By:		TC Group III, L.L.C., its General Partner
By:		TC Group, L.L.C., its Managing Member
By:		TCG Holdings, L.L.C., its Managing Member

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		Managing Director

Exchange Agreement


CARLYLE PARTNERS IV TELECOMMUNICATIONS, L.P.
By:		TC Group IV, L.P., its General Partner
By:		TC Group IV, L.L.C., its General Partner
By:		TC Group, L.L.C., its Managing Member

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		Managing Director

CP IV COINVESTMENT, L.P.
By:		TC Group IV, L.P., its General Partner
By:		TC Group IV, L.L.C., its General Partner
By:		TC Group, L.L.C., its Managing Member
By:		TCG Holdings, L.L.C., its Managing Member

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		Managing Director

/s/ Sidney R. Knafel
SIDNEY R. KNAFEL

/s/ Michael S. Willner
MICHAEL S. WILLNER

/s/ Andrew G. Knafel
Andrew G. Knafel, as Trustee under
Trust F/B/O Andrew G. Knafel dated September 13, 1978
Trust F/B/O Douglas R. Knafel dated September 13, 1978
Trust F/B/O Andrew G. & Douglas R. Knafel dated July 16, 1976
Trust F/B/O Douglas R. Knafel dated November 6, 1983

/s/ James S. Marcus
JAMES S. MARCUS

/s/ Thomas L. Kempner
THOMAS L. KEMPNER

/s/ Andrew G. Knafel
ANDREW G. KNAFEL

Exchange Agreement

EXHIBIT A

MANAGEMENT SHAREHOLDERS


Name of Management Shareholder	Number of Shares of Class B Common Stock Owned	Number of Shares of Class A Common Stock Owned*	Minimum Number of Shares of Class A Common Stock to be Exchanged Per Section 1.4	Number of Shares of Company Preferred Stock to be Received Per Section 1.1
Sidney R. Knafel	3,853,132	3,903,132	3,903,132	398,591	¹
Andrew G. Knafel, Joshua Rubenstein and William L. Scherlis, as trustees, under Trusts F/B/O Knafel Children (the “Knafel Children Trusts”)	3,010,614	3,010,614	3,010,614	339,702	²
Michael S. Willner	1,106,516	1,106,516	737,677	110,652
James S. Marcus	132,779	132,779	88,519
Thomas L. Kempner		498,161	332,107
Andrew G. Knafel	386,413	386,413	386,413
Dinni Jain³
John Abbot		9,000	6,000
Elliot Brecher		1,000	667
Pamela Euler Halling		218,862	72,954
Mary Rhodes		47,159	15,720
Elizabeth Grier		95,579	31,860
Charles E. Dietz		112,187	37,396
Daniel Mannino		117,716	39,239
Heather Wright		31,860	10,620
[Other rollover investors]

Total	8,489,454	9,670,978	8,672,918	848,945

Includes shares of Class A Common Stock received upon conversion of the shares of Class B Common Stock pursuant to Section 1.3 and the “Loan Program Exchange Shares” approved by the Company’s compensation committee on December 7, 2004, and approved by the stockholders of the Company on April 26, 2005, but does not include Company Deferred Shares, Company Options or shares held in such Management Shareholder’s 401(k) account.

¹	Based on 3,853,132 shares of Class B Common Stock owned by Knafel and 132,779 shares of Class B Common Stock owned by James S. Marcus.

²	Based on 3,010,614 shares of Class B Common Stock owned by the Knafel Children Trusts and 386,413 shares of Class B Common Stock owned individually by Andrew Knafel.

³	Jain’s shares are all held in his 401(k) account.

EXHIBIT B

CERTIFICATE OF DESIGNATIONS

SERIES A PREFERRED STOCK

INSIGHT COMMUNICATIONS COMPANY, INC.

Pursuant to Section 151(g) of the

General Corporation Law of the State of Delaware

Elliot Brecher, being the Secretary of Insight Communications Company, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that pursuant to the authority contained in Article Six of the Restated Certificate of Incorporation of the Company and in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, the Board of Directors of the Company has duly approved and adopted the following resolution, which resolution remains in full force and effect on the date hereof:

RESOLVED, that pursuant to the authority vested in the Board of Directors by the Corporation’s Restated Certificate of Incorporation, a series of Preferred Stock of the Corporation be, and it hereby is, created, and that the designations, number, powers, preferences and relative, participating, optional and other special rights and qualifications, limitations, restrictions and other characteristics of such series of Preferred Stock are fixed as follows:

6. Designation and Authorized Number. This series of preferred stock of the Company shall be designated as “Series A Preferred Stock,” with a par value of $0.01 per share (the “Series A Preferred Stock”). The authorized number of shares constituting the Series A Preferred Stock shall be 848,945.

7. Ranking. The Series A Preferred Stock shall rank senior to the Common Stock with respect to rights on liquidation, winding up and dissolution of the Company.

8. Dividends. Unless otherwise declared by the Board of Directors, the Holders will not be entitled to any dividends, whether payable in cash, securities or other property.

9. Voting Rights.

9.1 General. Except as otherwise provided in Section 4.2 or as may be required under the DGCL, the Holders shall vote together with the holders of Common Stock as a single class on all matters submitted to a vote of the Company’s stockholders. Each share of Series A Preferred Stock shall entitle the Holder thereof to ninety (90) votes per share on all matters submitted to a vote of the Company’s stockholders.

9.2 Protective Provisions. Until the time that no shares of Series A Preferred Stock remain outstanding, the Company shall not, directly or indirectly, without first obtaining the written approval of the Majority Holders, (i) alter or modify the terms, rights, preferences or privileges of the Series A Preferred Stock, (ii) redeem or repurchase shares of Series A Preferred Stock, (iii) increase or decrease the authorized number of shares of Series A Preferred Stock or authorize the issuance of, issue or sell any additional shares of Series A Preferred Stock not authorized in this Certificate of Designations, or (iv) amend, modify or supplement this Certificate of Designations.

10. Liquidation Rights.

(a) Upon the occurrence of any Liquidation Event, each Holder shall be entitled to payment, subject to the rights of the Company’s creditors but before any payment shall be made to the holders of Junior Securities, out of the assets of the Company available for distribution to its stockholders, of an amount equal to the Liquidation Preference for each share of such Holder’s Series A Preferred Stock. If the Company has insufficient assets to permit payment of the Liquidation Preference in full to all Holders of Series A Preferred Stock, the assets of the Company shall be distributed pro rata to such Holders in proportion to the aggregate Liquidation Preference owed to each such Holder.

(b) To the extent applicable, after the aggregate Liquidation Preference on all outstanding shares of Series A Preferred Stock has been paid, any remaining funds and assets of the Company legally available for distribution to stockholders shall be distributed in accordance with the Certificate of Incorporation.

11. Conversion. The Series A Preferred Stock shall not have any conversion rights.

12. Reissuance. Series A Preferred Stock acquired or retired by the Company shall assume the status of authorized but unissued preferred stock and may thereafter be reissued in the same manner as the other authorized but unissued preferred stock, but not as Series A Preferred Stock.

13. Preemptive Rights. The Holders shall not be entitled to any preemptive rights in respect of any securities of the Company.

14. Redemption. The Series A Preferred Stock is not redeemable by the Company.

15. Headings of Subdivisions. The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

16. Severability of Provisions. If any powers, preferences and relative, participating, optional and other special rights of the Series A Preferred Stock, and the qualifications, limitations and restrictions thereof, set forth in this Certificate of Designations (as it may be amended from time to time) are held by a court of competent jurisdiction to be invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other powers, preferences and relative, participating, optional and other special rights of the Series A Preferred Stock, and the qualifications, limitations and restrictions thereof, set forth in this Certificate of

Designations that can be given effect without the invalid, unlawful or unenforceable powers, preferences and relative, participating, optional and other special rights of the Series A Preferred Stock, and the qualifications, limitations and restrictions thereof, shall, nevertheless, remain in full force and effect, and no powers, preferences and relative, participating, optional or other special rights of the Series A Preferred Stock, and the qualifications, limitations and restrictions thereof, set forth herein shall be deemed dependent upon any other such powers, preferences and relative, participating, optional or other special rights of Series A Preferred Stock, and qualifications, limitations and restrictions thereof, unless so expressed herein.

17. Available Remedies. Any Holder may proceed to protect and enforce its rights and the rights of any other Holder with such legal and equitable relief, including injunctive and rescissory relief, as any court of competent jurisdiction deems appropriate to specifically enforce any terms or provisions hereof, all to the extent not inconsistent with the DGCL.

18. Amendment and Waiver. The provisions of this Certificate of Designations may be amended only if the Company and the Majority Holders consent in writing thereto, and may be waived only if such waiver is in writing and signed by the Person against whom or which the waiver is to be effective.

19. Certain Definitions. The terms defined in this Section 14 shall have, for all purposes of this Certificate of Designations, the meanings herein specified (with terms defined in the singular having comparable meanings when used in the plural). Unless the context otherwise requires, references to a section or sections contained in this Certificate of Designations refers to the referenced section or sections hereof.

“Board of Directors” means the Board of Directors of the Company.

“Capital Stock” means, with respect to any Person that is a corporation, any and all shares, interests or equivalents in capital stock (whether voting or nonvoting, and whether common or preferred) of such corporation.

“Capital Stock Equivalents” means any and all warrants, rights, options or other securities providing the right to purchase Capital Stock (by conversion or otherwise).

“Certificate of Designations” means this certificate to be filed with the office of the Secretary of State of Delaware setting forth the resolution of the Board of Directors with respect to the Series A Preferred Stock and the other matters set forth herein.

“Certificate of Incorporation” means the Restated Certificate of Incorporation of the Company, as it may be amended from time to time.

“Class A Common Stock” means the Class A Common Stock, par value $0.01 per share, of the Company.

“Class B Common Stock” means the Class B Common Stock, par value $0.01 per share, of the Company.

“Common Stock” means the capital stock of the Company, however designated, that is not limited as to the amount of dividends, or that is not limited as to the amount of distributions upon liquidation or dissolution of the Company, including, but not limited to, the Class A Common Stock and the Class B Common Stock.

“Company” means Insight Communications Company, Inc.

“DGCL” means the General Corporation Law of the State of Delaware.

“Holder” means a Person in whose name any share of Series A Preferred Stock is registered.

“Junior Securities” means, with respect to the Company, any Capital Stock or Capital Stock Equivalents of the Company ranking junior to the Series A Preferred Stock as to rights upon liquidation, dissolution or winding up of the affairs of the Company, including, without limitation, the Common Stock.

“Liquidation Event” means any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

“Liquidation Preference” means, with respect to any share of Series A Preferred Stock, $0.01.

“Majority Holders” means the holders of more than 50% of the then outstanding shares of Series A Preferred Stock.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

“Series A Preferred Stock” has the meaning given to it in Section 1.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Certificate of Designations to be duly executed this day of , 2005.


INSIGHT COMMUNICATIONS COMPANY, INC.

By:
Name:
Title:

EX-7.04 4 dex704.htm FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF INSIGHT Form of Amended and Restated Certificate of Incorporation of Insight

Exhibit 7.04

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

INSIGHT COMMUNICATIONS COMPANY, INC.

Insight Communications Company, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:

1. The name of the Corporation is Insight Communications Company, Inc.

2. The Corporation’s original certificate of incorporation was filed on March 9, 1999 with the Secretary of State of the State of Delaware under the name of Insight Communications Companies, Inc.

3. This Amended and Restated Certificate of Incorporation (this “Certificate of Incorporation”) has been duly adopted by the board of directors of the Corporation (the “Board”) by [unanimous written consent] as of [date], and by the consent of the stockholders of the Corporation entitled to vote thereon as of [date] at a meeting of the stockholders of the Corporation on [date], in accordance with Sections 242, 245 and 251 of the DGCL.

4. The Restated Certificate of Incorporation of the Corporation is hereby amended and restated so as to read in its entirety as follows:

ARTICLE ONE

NAME

The name of the Corporation is INSIGHT COMMUNICATIONS COMPANY, INC.

ARTICLE TWO

REGISTERED OFFICE

The address, including street, number, city and county, of the registered office of the Corporation in the State of Delaware is 30 Old Rudnick Lane, Suite 100, Dover, Delaware 19901, County of Kent; and the name of the registered agent of the Corporation in the State of Delaware at such address is LEXIS Document Services Inc.

ARTICLE THREE

PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be incorporated under the DGCL.

ARTICLE FOUR

CAPITAL STRUCTURE

4.1 Authorized Shares. The total number of shares of capital stock which the Corporation shall have the authority to issue is [ ] shares, of which [ ] shares shall be preferred stock having a par value of $0.01 per share and [ ] shares shall be common stock having a par value of $0.01 per share. Initially, the capital stock shall consist of the following seven series:

(a) [ ] shares of Series A Voting Preferred Stock, par value $0.01 per share (“Series A Voting Preferred Stock”);

(b) [ ] shares of Series B Voting Preferred Stock, par value $0.01 per share (“Series B Voting Preferred Stock”, and together with Series A Voting Preferred Stock, “Voting Preferred Stock”);

(c) [ ] shares of Series C Non-Voting Preferred Stock, par value $0.01 per share (“Series C Non-Voting Preferred Stock”);

(d) [ ] shares of Series D Non-Voting Preferred Stock, par value $0.01 per share (“Series D Non-Voting Preferred Stock”, and together with Series A Voting Preferred Stock, Series B Voting Preferred Stock and Series C Non-Voting Preferred Stock, “Preferred Stock”);

(e) [ ] shares of Series E Non-Voting Common Stock, par value $0.01 per share (“Series E Non-Voting Common Stock”), which shares of Series E Non-Voting Common Stock shall be issued pursuant to subscription or like documentation specifying, for each share or group of such shares issued, the amount of cash and other assets that must previously have been distributed in respect of each share of Series C Non-Voting Preferred Stock and of Series D Non-Voting Preferred Stock before such share or group of shares is entitled to participate in distributions (each such level a “Participation Level”) ;

(f) [ ] shares of Series F Non-Voting Common Stock, par value $0.01 per share (“Series F Non-Voting Common Stock”, and together with Series E Non-Voting Common Stock, “Non-Voting Common Stock”); and

(g) [ ] shares of Series G Voting Common Stock, par value $0.01 per share (“Final Reclassification Common Stock”, and together with Non-Voting Common Stock, “Common Stock”).

4.2 Issuance of Additional Equity Securities. The Board is hereby authorized to cause the Corporation from time to time to issue to Holders of Equity Securities or other Persons additional Equity Securities in the Corporation in one or more series, with such designations, preferences and relative, participating, optional or other special rights, including voting rights, and such powers and duties, all as shall be determined by the Board in the resolution or resolutions providing for the establishment of such additional Equity Securities, and no Holder of any Equity Securities shall have consent rights whatsoever with respect to the terms or issuance of any such additional Equity Securities; provided that the affirmative vote of at least seven directors of the Board (or eight directors if the number of directors constituting the Board has been increased to ten pursuant to Section 8.1(a)) shall be required to change or modify the Equity Securities of the Corporation, including, without limitation, to designate or issue any new series of preferred stock or common stock of the Corporation pursuant to this Section 4.2.

ARTICLE FIVE

PREFERRED STOCK

5.1 Rights and Restrictions.

(a) Voting Rights. Holders of shares of Preferred Stock shall have no voting rights, except as set forth below or as expressly required by applicable law.

(i) Except as otherwise expressly specified in this Certificate of Incorporation, Holders of Series A Voting Preferred Stock and Holders of Series B Voting Preferred Stock shall vote as a single class on all matters submitted to a vote of the stockholders of the Corporation.

(ii) Holders of Series A Voting Preferred Stock, voting as a separate class, shall have the exclusive right to nominate and elect five directors (the “Series A Directors”), to be elected at any meeting of the stockholders of the Corporation at which Series A Directors are permitted to be elected, or as otherwise permitted under the by-laws of the Corporation. At least two of the Series A Directors must be Independent Directors. Notwithstanding the foregoing, in the event that the number of directors permitted to serve on the Board is increased to ten pursuant to Section 8.1(a), Holders of Series A Voting Preferred Stock shall be entitled to elect seven directors, one of whom must be the replacement CEO and three of whom must be Independent Directors. In the event of any vacancy created by the departure of a Series A Director for any reason, any replacement for such departing Series A Director shall be designated and elected by Holders of Series A Voting Preferred Stock. In the event of any vacancy created by the departure of a Series A Director who is also an Independent Director, any replacement for such departing Series A Director shall be an Independent Director.

(iii) Holders of Series B Voting Preferred Stock, voting as a separate class, shall have the exclusive right to nominate and elect four directors (the “Series B Directors”), to be elected at any meeting of the stockholders of the Corporation at which Series B Directors are permitted to be elected, or as otherwise permitted under the by-laws of the Corporation. At least one of the Series B Directors must be an Independent Director. Notwithstanding the foregoing, in the event that the number of directors permitted to serve on the Board is increased to ten pursuant to Section 8.1(a), Holders of Series B Voting

Preferred Stock shall be entitled to elect three directors, none of whom shall be required to be an Independent Director. In the event of any vacancy created by the departure of a Series B Director for any reason, any replacement for such departing Series B Director shall be designated and elected by Holders of Series B Voting Preferred Stock. In the event of any vacancy created by the departure of a Series B Director who is also an Independent Director, any replacement for such departing Series B Director shall be an Independent Director.

(iv) In exercising any vote permitted by the foregoing, each outstanding share of Series A Voting Preferred Stock and Series B Voting Preferred Stock permitted to vote shall be entitled to one vote.

(v) Holders of Series C Non-Voting Preferred Stock shall be entitled to vote as a class on, and the affirmative vote of a majority in interest of such Holders voting as a class shall be required for, the adoption of any amendment to this Certificate of Incorporation which would materially and adversely affect the rights, privileges or preferences of the Series C Non-Voting Preferred Stock set forth in this Certificate of Incorporation. For the avoidance of doubt, the voting right of Holders of the Series C Non-Voting Preferred Stock is solely limited to a right to vote on any such amendment to the Certificate of Incorporation and such Holders shall have no other voting or consent rights of any nature whatsoever other than as may be required under the DGCL.

(vi) Holders of Series D Non-Voting Preferred Stock shall be entitled to vote as a class on, and the affirmative vote of a majority in interest of such Holders voting as a class shall be required for, the adoption of any amendment to this Certificate of Incorporation which would materially and adversely affect the rights, privileges or preferences of the Series D Non-Voting Preferred Stock set forth in this Certificate of Incorporation. For the avoidance of doubt, the voting right of Holders of the Series D Non-Voting Preferred Stock is solely limited to a right to vote on any such amendment to the Certificate of Incorporation and such Holders shall have no other voting or consent rights of any nature whatsoever other than as may be required under the DGCL.

(b) Legend. Each certificate representing a share of Preferred Stock shall be endorsed with the legend set forth in Section 12(e) of the Securityholders Agreement and any other legends required by applicable securities laws. At such time, if ever, as any of the restrictions on transfer of any certificate representing shares of Preferred Stock referred to in the legend on such certificate shall become inapplicable, upon surrender by the Holder of its legended certificate representing shares of Preferred Stock, the Corporation shall cause to be delivered, to each such Holder, a certificate for its shares of Preferred Stock which does not bear the restrictive legend.

ARTICLE SIX

COMMON STOCK

6.1 Rights and Restrictions.

(a) Voting Rights. Holders of shares of Common Stock shall have no voting rights, except as set forth below or as expressly required by applicable law.

(i) Holders of Series E Non-Voting Common Stock shall be entitled to vote as a class on, and the affirmative vote of a majority in interest of such Holders voting as a class shall be required for, the adoption of any amendment to this Certificate of Incorporation which would materially and adversely affect the rights, privileges or preferences of the Series E Non-Voting Common Stock set forth in this Certificate of Incorporation. For the avoidance of doubt, the voting right of Holders of the Series E Non-Voting Common Stock is solely limited to a right to vote on any such amendment to the Certificate of Incorporation and such Holders shall have no other voting or consent rights of any nature whatsoever other than as may be required under the DGCL.

(ii) Holders of Series F Non-Voting Common Stock shall be entitled to vote as a class on, and the affirmative vote of a majority in interest of such Holders voting as a class shall be required for, the adoption of any amendment to this Certificate of Incorporation which would materially and adversely affect the rights, privileges or preferences of the Series F Non-Voting Common Stock set forth in this Certificate of Incorporation. For the avoidance of doubt, the voting right of Holders of the Series F Non-Voting Common Stock is solely limited to a right to vote on any such amendment to the Certificate of Incorporation and such Holders shall have no other voting or consent rights of any nature whatsoever other than as may be required under the DGCL.

(iii) At any time when there are shares of Voting Preferred Stock outstanding, Holders of Final Reclassification Common Stock shall vote as a single class with the Holders of Voting Preferred Stock on all matters submitted to a vote of the stockholders of the Corporation, and in any such vote each share

of Final Reclassification Common Stock shall be entitled to cast [1/1,000,000^th of a vote]. In addition, at any such time Holders of Final Reclassification Common Stock shall be entitled to vote as a class on, and the affirmative vote of a majority in interest of such Holders voting as a class shall be required for, the adoption of any amendment to this Certificate of Incorporation which would materially and adversely affect the rights, privileges or preferences of the Final Reclassification Common Stock set forth in this Certificate of Incorporation.

(iv) At any time when there are no shares of Voting Preferred Stock outstanding, Holders of Final Reclassification Common Stock shall vote as a single class on all matters submitted to a vote of the stockholders of the Corporation, and in any such vote each share of Final Reclassification Common Stock shall be entitled to cast one vote.

(b) Legend. Each certificate representing a share of Common Stock shall be endorsed with the legend set forth in Section 12(e) of the Securityholders Agreement and any other legends required by applicable securities laws. At such time, if ever, as any of the restrictions on transfer of any certificate representing shares of Common Stock referred to in the legend on such certificate shall become inapplicable, upon surrender by the Holder of its legended certificate representing shares of Common Stock, the Corporation shall cause to be delivered, to each such Holder, a certificate for its shares of Preferred Stock which does not bear the restrictive legend.

ARTICLE SEVEN

DISTRIBUTIONS IN LIQUIDATION; OTHER DISTRIBUTIONS

7.1 Distributions in Liquidation. Cash and other assets available for distribution to the stockholders of the Corporation upon a liquidation of the Corporation shall be distributed as follows and in the following order of priority:

(i) First, such cash and other assets shall be distributed 100% to Holders of Series A Voting Preferred Stock and Series B Voting Preferred Stock, pro rata in proportion to the number of such shares held, until there shall have been distributed under this Section 7.1 and under Section 7.2 an aggregate amount in respect of each share of Series A Voting Preferred Stock and Series B Voting Preferred Stock equal to $0.01;

(ii) Second, such cash and other assets shall be distributed 100% to Holders of Series C Non-Voting Preferred Stock and Series D Non-Voting Preferred Stock, pro rata in proportion to the number of such shares held, until there shall have been distributed under this Section 7.1 and under Section 7.2 an aggregate amount in respect of each share of Series D Non-Voting Preferred Stock equal to $11.75;

(iii) Third, such cash and other assets shall be distributed 100% to Holders of Series C Non-Voting Preferred Stock and Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach levels that cause Participation Levels for particular shares of Series E Non-Voting Common Stock to be achieved, to the Holders of such shares of Series E Non-Voting Common Stock for which Participation Levels have been achieved, pro rata in proportion to the number of such shares held by each Holder, until there shall have been distributed under this Section 7.1 and under Section 7.2 an aggregate amount in respect of each share of Series D Non-Voting Preferred Stock sufficient to generate an internal rate of return on the capital invested in Series D Non-Voting Preferred Stock equal to 10% per annum, compounded annually (computed from the dates that the capital was initially invested in the Corporation until the dates distributions are made pursuant to this Section 7.1 and Section 7.2);

(iv) Fourth, such cash and other assets shall be distributed (x) 95% to Holders of Series C Non-Voting Preferred Stock and Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach levels that cause Participation Levels for particular shares of Series E Non-Voting Common Stock to be achieved, to the Holders of such shares of Series E Non-Voting Common Stock for which Participation Levels have been achieved, pro rata in proportion to the number of such shares held by each Holder, and (y) 5% to Holders of Series F Non-Voting Common Stock pro rata in proportion to the number of such shares held by each Holder, until there shall have been distributed under this Section 7.1 and under Section 7.2 an aggregate amount in respect of each share of Series D Non-Voting Preferred Stock sufficient to generate an internal rate of return on the capital invested in Series D Non-Voting Preferred Stock equal to 15% per annum, compounded annually (computed from the dates that the capital was initially invested in the Corporation until the dates distributions are made pursuant to this Section 7.1 and Section 7.2);

(v) Fifth, such cash and other assets shall be distributed (x) 90% to Holders of Series C Non-Voting Preferred Stock and Series D Non-Voting

Preferred Stock and, as of and following such time as such distributions reach levels that cause Participation Levels for particular shares of Series E Non-Voting Common Stock to be achieved, to the Holders of such shares of Series E Non-Voting Common Stock for which Participation Levels have been achieved, pro rata in proportion to the number of such shares held by each Holder, and (y) 10% to Holders of Series F Non-Voting Common Stock pro rata in proportion to the number of such shares held by each Holder, until there shall have been distributed under this Section 7.1 and under Section 7.2 an aggregate amount in respect of each share of Series D Non-Voting Preferred Stock sufficient to generate an internal rate of return on the capital invested in Series D Non-Voting Preferred Stock equal to 20% per annum, compounded annually (computed from the dates that the capital was initially invested in the Corporation until the dates distributions are made pursuant to this Section 7.1 and Section 7.2);

(vi) Sixth, such cash and other assets shall be distributed (x) 85% to Holders of Series C Non-Voting Preferred Stock and Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach levels that cause Participation Levels for particular shares of Series E Non-Voting Common Stock to be achieved, to the Holders of such shares of Series E Non-Voting Common Stock for which Participation Levels have been achieved, pro rata in proportion to the number of such shares held by each Holder, and (y) 15% to Holders of Series F Non-Voting Common Stock pro rata in proportion to the number of such shares held by each Holder, until there shall have been distributed under this Section 7.1 and under Section 7.2 an aggregate amount in respect of each share of Series D Non-Voting Preferred Stock sufficient to generate an internal rate of return on the capital invested in Series D Non-Voting Preferred Stock equal to 25% per annum, compounded annually (computed from the dates that the capital was initially invested in the Corporation until the dates distributions are made pursuant to this Section 7.1 and Section 7.2); and

(vii) Thereafter, such cash and other assets shall be distributed (x) 75% to Holders of Series C Non-Voting Preferred Stock and Series D Non-Voting Preferred Stock and, as of and following such time as such distributions reach levels that cause Participation Levels for particular shares of Series E Non-Voting Common Stock to be achieved, to the Holders of such shares of Series E Non-Voting Common Stock for which Participation Levels have been achieved, pro rata in proportion to the number of such shares held by each Holder, and (y) 25% to Holders of Series F Non-Voting Common Stock pro rata in proportion to the number of such shares held by each Holder.

7.2 Other Distributions. Cash and other assets available for distribution to the stockholders of the Corporation other than in liquidation of the Corporation shall be distributed in the order of priority specified in Section 7.1(i), (ii) and (iii), except that no such cash or other assets shall be distributed in excess of the amount that would complete the distributions contemplated by Sections 7.1(i), (ii) and (iii) without the consent of a majority in interest of the Holders of the Series F Non-Voting Common Stock. If such consent is granted, any such distributions shall continue to be made as specified in Section 7.1(iii) notwithstanding the fact that such distributions would increase the internal rate of return beyond 10%. In the event that any such excess distributions under Section 7.1(iii) are made under this Section, distributions made thereafter in liquidation of the Corporation shall be adjusted to cause the aggregate distributions made by the Corporation (taking into account all distributions previously made) to conform to the order of priority set forth in Section 7.1.

7.3 Certain Matters Relating to Distributions.

(a) Notwithstanding any provision to the contrary contained in this Certificate of Incorporation, the Corporation shall not make any distribution that would violate any provision of the DGCL or other applicable law.

(b) In the event of a distribution of property, the amount distributed shall be deemed to be the fair market value of such property for all purposes of the calculations under Sections 7.1 and 7.2.

(c) Notwithstanding anything herein to the contrary, following the conversion of all capital stock of the Corporation into Final Reclassification Common Stock, all distributions shall be made among the Holders of Final Reclassification Common Stock in proportion to the number of such shares held by each Holder.

ARTICLE EIGHT

BOARD OF DIRECTORS

8.1 Generally. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by this Certificate of Incorporation directed or required to be exercised or done by the stockholders.

(a) Number of Directors. The number of directors constituting the Board shall initially equal nine, comprised of five Series A Directors and four Series B Directors; provided that if the Chief Executive Officer of the Corporation (the “CEO”) serving in such capacity on the date this Certificate of Incorporation is filed with the Secretary of State of the State of Delaware ceases to serve in such capacity and is replaced by a replacement CEO, at the option of a majority in interest of the Holders of the Series A Voting Preferred Stock, either (i) the replacement CEO will become a Series A Director, replacing one of the Series A Directors who is not an Independent Director, or (ii) the number of directors constituting the Board shall be increased to ten, the replacement CEO will be elected as a fourth Series A Director who is not an Independent Director and will be assigned to Class , and upon the resignation or expiration of the term of the Series B Director who is an Independent Director such director will be replaced by an Independent Director elected by the Holders of the Series A Voting Preferred Stock in accordance with Section 5.1(a)(ii)-(iii), and thereafter all of the Class III directors will be elected by the holders of the Series A Voting Preferred Stock.

(b) Classification. The directors of the Corporation shall be divided into three classes: Class I, Class II and Class III. Membership in such classes shall be as nearly equal in number as possible and, subject to Section 8.1(a), each class shall have at least one Series A Director and one Series B director. Class I shall initially be comprised of , and ; Class II shall be initially comprised of , and and Class III shall be initially comprised of the remaining directors. The term of office of the initial Class I directors shall expire at the annual election of directors by Holders of Voting Preferred Stock in 2006; the term of office of the initial Class II directors shall expire at the annual election of directors by Holders of Voting Preferred Stock in 2007; the term of office of the initial Class III directors shall expire at the annual election of directors by Holders of Voting Preferred Stock in 2008, or, in each case, thereafter when their respective successors are elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office. At each succeeding annual election of directors by Holders of Voting Preferred Stock beginning in 2006, the directors chosen to succeed those whose terms then expire shall be identified as being of the same class as the directors they succeed and shall be elected for a term expiring at the third succeeding annual election of directors by Holders of Voting Preferred Stock, or thereafter when their respective successors in each case are elected and qualified. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.

(c) Resignations. Any director may resign at any time by submitting an electronic transmission or by delivering a written notice of resignation, signed by such director, to the CEO or the secretary of the Corporation. Unless otherwise specified therein, such resignation shall take effect upon delivery. The process for designating a replacement to fill such vacancy in the Board shall be governed by the provisions set forth in Section 5.1(a)(ii)-(iii), and any replacement director of any class elected to fill a vacancy resulting from resignation of a director of such class shall hold office for a term that shall coincide with the remaining term of that class.

(d) Removal of Directors. Any non-Independent Director may be removed at any time, either for or without cause, upon the affirmative vote of a majority in interest of the Holders of the shares of Voting Preferred Stock entitled to vote for the election of such director. Any Independent Director may be removed only for cause, upon the affirmative vote of a majority in interest of the Holders of the shares of Voting Preferred Stock entitled to vote for the election of such director; provided, that failure to continue to meet the independence requirements set forth in the definition of “Independent Director” in Article Twelve shall be deemed to establish cause for removal. The process for designating a replacement to fill any vacancy caused by a removal shall be governed by the provisions set forth in Section 5.1(a)(ii)-(iii), and any replacement director of any class elected to fill a vacancy resulting from removal of a director of such class shall hold office for a term that shall coincide with the remaining term of that class.

(e) Liability. No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a director, provided that nothing contained in this Certificate of Incorporation shall eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended after the filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. Any repeal or modification of this paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing in respect of any act or omission occurring prior to the time of such repeal or modification.

(f) Budget Approval. The affirmative vote of two thirds of the members of the Board shall be required to approve and adopt the Annual Operating Budget of the Corporation.

8.2 Indemnification

(a) Indemnification of Directors and Officers.

(i) The Corporation shall indemnify and hold harmless to the fullest extent authorized by the DGCL as the same exists or may hereafter be amended (but in the case of any such amendment only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said DGCL permitted the Corporation to provide prior to such amendment) any person who was or is a party or is threatened to be made a party to, or is otherwise involved in, any actual, threatened, pending or completed claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he/she is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys’ fees), liabilities or losses, including judgments, fines and amounts paid or to be paid in settlement actually and reasonably incurred or suffered by him/her in connection with such claim, action, suit, proceeding or investigation if he/she acted in good faith and in a manner he/she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his/her conduct was unlawful. The termination of any claim, action, suit, proceeding or investigation by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he/she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his/her conduct was unlawful.

(ii) The Corporation shall indemnify and hold harmless to the fullest extent authorized by the DGCL as the same exists or may hereafter be amended (but in the case of any such amendment only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said DGCL permitted the Corporation to provide prior to such amendment) any person who was or is a party or is threatened to be made a party to any actual, threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he/she is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise against all expenses (including attorneys’ fees) actually and reasonably incurred by him/her in connection with the defense or settlement of such action or suit, if he/she acted in good faith and in a manner he/she reasonably believed to be in or not opposed to the best interests of the Corporation except that no such

indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

(iii) To the extent that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit, proceeding or investigation referred to in subparagraphs (i) and (ii) of this Section 8.2(a), or in defense of any claim, issue or matter therein, he/she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him/her in connection therewith.

(iv) Any indemnification under subparagraphs (i) and (ii) of this Section 8.2(a) (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he/she has met the applicable standard of conduct set forth in subparagraphs (i) and (ii) of this Section 8.2(a). Such determination shall be made (1) by the Board by a majority vote of a quorum consisting of directors who were not parties to such claim, action, suit, proceeding or investigation, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by Holders of Series A Voting Preferred Stock and Series B Voting Preferred Stock.

(v) No amendment, modification or repeal of this Section 8.2 shall apply to or have any effect on the liability or alleged liability of any director or officer of the Corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment, modification or repeal. No amendment, modification or repeal shall adversely affect any right or protection existing at the time of such amendment, modification or repeal of any director or officer of the Corporation.

(b) Advancement of Expenses. Expenses (including attorney’s fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative claim, action, suit, proceeding or investigation shall be paid by the Corporation in advance of the final disposition of such claim, action, suit, proceeding or investigation upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined by final judicial decision from which there is no right to appeal that he/she is not entitled to be indemnified by the Corporation as

authorized in this Section 8.2. Such expenses (including attorney’s fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board deems appropriate.

(c) Non-Exclusivity of Rights. The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 8.2 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any statute, By-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his/her official capacity and as to action in another capacity while holding such office.

(d) Insurance. The Board may authorize, by a vote of a majority of a quorum of the Board, the Corporation to purchase and maintain insurance, at its expense, on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss asserted against him/her and incurred by him/her in any such capacity, or arising out of his/her status as such, whether or not the Corporation would have the power to indemnify him/her against such expense, liability or loss under the provisions of the DGCL or this Section 8.2.

(e) Merger; Consolidation. For the purposes of this Section 8.2, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section 8.2 with respect to the resulting or surviving corporation as he/she would have with respect to such constituent corporation if its separate existence had continued.

(f) References. For purposes of this Section 8.2, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good

faith and in a manner he/she reasonably believed to be in the best interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Section 8.2.

(g) Continuation of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 8.2 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

(h) Indemnification of Employees and Agents. The Corporation may, at its option, indemnify and hold harmless to the fullest extent authorized by the DGCL as the same exists or may hereafter be amended (but in the case of any such amendment only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said DGCL permitted the Corporation to provide prior to such amendment) any person who was or is a party or is threatened to be made a party to, or is otherwise involved in, any actual, threatened, pending or completed claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, by reason of the fact that he/she is or was an employee or agent of the Corporation or, while an employee or agent of the Corporation, is or was serving at the request of the Corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), liabilities or losses, including judgments, fines and amounts paid or to be paid in settlement actually and reasonably incurred or suffered by him/her in connection with such claim, action, suit, proceeding or investigation, to the extent permitted by Section 145 of the DGCL.

8.3 Committees. Except as may otherwise be required by applicable law:

(a) Audit Committee. The Board shall have an audit committee (the “Audit Committee”) consisting of three directors, including two Independent Directors and one Series B Director (who need not be an Independent Director), provided that, if applicable law requires that the Audit Committee be comprised only of independent directors, the Audit Committee shall consist of two Independent Directors. The powers and functions of the Audit Committee shall be as set forth in the Audit Committee Charter adopted by the Board as of [date].

(b) Compensation Committee. The Board shall have a compensation committee (the “Compensation Committee”), consisting of three directors,

including two Independent Directors and one Series B Director (who need not be an Independent Director). The powers and functions of the Compensation Committee shall be as set forth in the Compensation Committee Charter adopted by the Board as of [date].

(c) Governance Committee. The Board shall have a governance committee (the “Governance Committee”), consisting of three directors, including two Independent Directors and one non-independent Series B Director. Except as provided in subparagraph (d) below, the powers and functions of the Governance Committee shall be as set forth in the Governance Committee Charter adopted by the Board as of [date].

(d) Change in Charter and Function of Governance Committee. Following the occurrence of a Material Credit Default and delivery by a majority in interest of the Holders of the Series B Voting Preferred Stock to the Corporation of a notice setting forth an election to cause to be effective the provisions of this subparagraph (d), the Governance Committee’s functions and charter shall be expanded to include all the functions that may be delegated to an executive committee of a Delaware corporation and the Board shall not thereafter take any actions to narrow, limit or curtail such expanded functions. Following the delivery of such an election notice, a representative of the Holders of the Series A Voting Preferred Stock shall be entitled to attend all meetings of the Governance Committee and shall be provided with the same notice of such meetings and the same financial and other information that is provided to members of such Committee in connection with such meetings; provided that (i) such representative shall have no rights to participate in such meetings, and (ii) such representative may be excluded from any meeting at which, in the judgment of a majority of the members of such Committee, there will be discussed matters that pose a conflict of interest with respect to such representative.

(e) Additional Committees. The Board may, by resolution approved by not fewer than seven directors (or eight directors if the number of directors constituting the Board has been increased to ten pursuant to Section 8.1(a)), designate one or more additional committees.

ARTICLE NINE

AMENDMENTS

The affirmative vote of at least seven directors of the Board (or eight directors if the number of directors constituting the Board has been increased to ten pursuant to Section 8.1(a)) shall be required to amend, alter, change or repeal this Certificate of Incorporation, the By-laws of the Corporation or the charter of any committee of the Board, or to adopt any provision as part of this Certificate of Incorporation, the By-laws of the Corporation or the charter of any committee of the Board.

ARTICLE TEN

CORPORATE GOVERNANCE

10.1 Additional Powers. The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation and for the further definition of the powers of the Corporation and its directors and stockholders:

(a) Elections of directors need not be by written ballot unless the By-laws of the Corporation so provide.

(b) Special meetings of stockholders may be called by the Board, the Chairman of the Board, the CEO, Holders of Series A Voting Preferred Stock or Holders of Series B Voting Preferred Stock and may not be called by any other Person.

10.2 Actions Requiring Consent of Holders of Series B Voting Preferred Stock. Except as otherwise expressly required by the DGCL, the Corporation may not and may not cause or permit any of its Subsidiaries to take any of the following actions without the consent of a majority in interest of the Holders of the Series B Voting Preferred Stock:

(a) effecting any material change in its or their business;

(b) amending or otherwise changing its or their governing documents, including its Certificate of Incorporation or By-laws;

(c) except as provided in Section 8.1(a), changing the composition of the Board or the composition of committees of the Board, including, but not limited to, size, allocation of seats, and independence requirements, or the entity form or tax classification of the Partnership or any Corporation Subsidiary;

(d) undertaking any transaction with a related party, including, but not limited to, approving management compensation plans; provided, however, that such consent will not be required for (i) awards of Series F Non-Voting Common Stock, (ii) transactions expressly authorized by and consummated in conformity with all the provisions of Section 4 of the Securityholders Agreement, (iii) payments contemplated under the Employment Agreements or (iv) awards of the management bonus pool authorized by and made in conformity with Section 8 of the Securityholders Agreement.

(e) changing its or their public accountants;

(f) liquidating, dissolving, filing a petition in bankruptcy or entering into an arrangement for the benefit of creditors;

(g) incurring any material indebtedness other than in the ordinary course of business and in an aggregate amount less than [$ ], effecting any material amendment of any agreement governing material indebtedness, or issuing any equity, preferred stock, convertible debt, options or warrants or authorizing the sale of additional Partnership Interests (as defined in the Partnership Agreement) (other than awards of Series F Non-Voting Common Stock and the issuance of stock in respect of deferred stock awards previously issued as of , 2005), calls for capital contributions by the Partnership and any indebtedness pursuant to a commitment letter obtained in connection with a change of control offer;

(h) effecting any acquisition, disposition or exchange of material assets or equity interests, including equity interests of any Subsidiary, sale or merger of the Corporation, initial public offering by the Corporation of common stock or other recapitalization, or other forms of reorganization or entering into any material joint ventures; provided, however, that such consent will not be required for any transactions expressly authorized by and consummated in conformity with all the provisions of Section 4 of the Securityholders Agreement;

(i) declaring or paying any distribution or dividends on, or repurchasing or redeeming, the equity interests of the Corporation, provided, that nothing in this Section 10.2(i) shall prevent the Partnership from making or paying any dividend or distribution required to be made or paid pursuant to Section 4.1(a) of the Partnership Agreement, and provided further, that no such consent shall be required to the extent that the requirement of such consent violates Section 7.10 of the Midwest Credit Agreement;

(j) effecting any amendments, modifications, supplements or other changes to the Partnership Agreement;

(k) commencing a Partnership Split-Up (as defined in the Securityholders Agreement); provided, however, that such consent will not be required for a commencement of such Partnership Split-Up expressly authorized by and consummated in conformity with all the provisions of Section 4 of the Securityholders Agreement;

(l) entering into contracts or Strategic Relationships outside the ordinary course of business that are material to the Corporation as a whole;

(m) settling any material claim or lawsuit;

(n) selecting a new general partner for any Corporation Subsidiary or admission of any new partners or members to any Corporation Subsidiary; and

(o) selecting any replacement CEO, President, Chief Operating Officer or Chief Financial Officer of the Corporation.

ARTICLE ELEVEN

SECTION 203 OPT-OUT

The Corporation expressly elects not to be bound or governed by, or otherwise subject to, Section 203 of the DGCL, “Business Combinations With Interested Stockholders”, as from time to time in effect or any successor provision thereto.

ARTICLE TWELVE

DEFINITIONS

As used herein, the following terms have the meanings set forth below:

“Annual Operating Budget” means the annual operating budget of the Corporation proposed by Management for a given year beginning in fiscal 2006.

“Back-Stop Facility” means (i) the senior unsecured credit facility to be provided to the Corporation in an aggregate principal amount of up to $353.5 million and (ii) the senior unsecured credit facility to be provided to the Partnership and Insight Capital, Inc. in an aggregate principal amount of up to $1,025.15 million, described in the commitment letter, dated as of July [ ], 2005, from J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. to Insight Acquisition Corp.

“Carlyle” means [ , a Delaware limited partnership (including any successor entity)].

“Employment Agreements” means the several employment agreements dated as of [ ], 2005 between the Corporation and each of Michael S. Willner, Dinni Jain and John Abbott and any replacement agreements duly authorized and entered into by the Corporation.

“Equity Securities” means the Common Stock and the Preferred Stock and any other common stock or preferred stock of the Corporation.

“Holder” means the Person in whose name any Equity Securities are registered in the books and records of the Corporation.

“Independent Director” means a director (x) who a majority of the Independent Directors determines has no material relationship with the Corporation and has no current or prior relationship with Management, the Corporation or Holders of Series A Voting Preferred Stock or Series B Voting Preferred Stock that might cause such director to act other than entirely independently with respect to all issues that come before the Board; and (y) who satisfies the independence requirements under Rule 303A.02 of the Listed Company Manual of the New York Stock Exchange; provided, that if, at any time, no

member of the Board is an Independent Director, an “Independent Director” shall mean a director who the majority of the Board determines satisfies the independence test set forth in (x) and (y) hereof; provided further, that , , and shall be deemed to be Independent Directors as of , 2005; and provided further, that no Independent Director shall be permitted to participate in a vote to determine whether his replacement director satisfies the independence test set forth in (x) and (y) hereof.

“Management” means [to come].

“Material Credit Default” means (i) any default under any of Section 7.12, 7.13 or 7.14 of the Midwest Credit Agreement as in effect on the date hereof and regardless of whether such credit agreement has been terminated, replaced or amended, or (ii) any payment default under any debt instrument at the Corporation or Subsidiary levels (subject to a cure period equal to the lesser of three days or the applicable cure period contained in such debt instrument). The foregoing notwithstanding, if the Corporation is required to consummate a transaction pursuant to Section 4 of the Securityholders Agreement or to consummate the financing transactions pursuant to the Back-Stop Facility and the consummation of such transaction causes an immediate Material Credit Default, such event shall not be deemed to be a Material Credit Default.

“Midwest Credit Agreement” means the Amended and Restated Credit Agreement, dated as of August 26, 2003, by and among Insight Midwest Holdings, LLC, the lenders party thereto and The Bank of New York, as agent.

“Partnership” means Insight Midwest, L.P., a Delaware limited partnership.

“Partnership Agreement” means the Amended and Restated Limited Partnership Agreement of the Partnership, dated as of January 5, 2001.

“Person” means any natural person, firm, individual, partnership, joint venture, business trust, trust, association, corporation, company or unincorporated entity.

“Securityholders Agreement” means the Securityholders Agreement dated as of [ ], 2005, by and among Carlyle, the Corporation, those individuals identified as “Management Securityholders” on the signature pages thereof and each other Person who becomes a party to such agreement, as amended.

“Strategic Relationships” means any material strategic relationship or alliance in which the Corporation agrees to share profits, pay royalties, or grant exclusive rights of any nature to any material assets of the Corporation to any third party.

“Subsidiary” means, when used with respect to any party, any corporation or other organization, whether incorporated or unincorporated, (i) of which such party or any other Subsidiary of such party is a general partner (excluding partnerships, the general partnership interests of which held by such party or any Subsidiary of such party do not have a majority of the voting interests in such partnership), or (ii) at least a majority of the securities or other interests of which having, by their terms, ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries. Without limiting any of the foregoing, Subsidiaries of the Corporation shall be deemed to include the Partnership and its Subsidiaries.

IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation, which restates and amends the provisions of the Restated Certificate of Incorporation of the Corporation, and which has been duly adopted in accordance with Sections 242, 245 and 251 of the General Corporation Law, has been executed by its duly authorized officer this day of [ ], 2005.


INSIGHT COMMUNICATIONS COMPANY, INC.

By:
Name:
Title:

EX-7.05 5 dex705.htm PRINCIPALS' AGREEMENT, DATED AS OF JULY 28, 2005 Principals' Agreement, dated as of July 28, 2005

Exhibit 7.05

PRINCIPALS’ AGREEMENT

This PRINCIPALS’ AGREEMENT (this “Agreement”) is made and entered into as of July 28, 2005, by and among SIDNEY R. KNAFEL (“Knafel”), MICHAEL S. WILLNER (“Willner”), and CARLYLE PARTNERS III TELECOMMUNICATIONS, L.P., CARLYLE PARTNERS IV TELECOMMUNICATIONS, L.P., CP III COINVESTMENT, L.P. and CP IV COINVESTMENT, L.P., each a Delaware limited partnership (each, individually, and collectively, “Carlyle”) (Knafel, Willner and Carlyle are each sometimes referred to herein individually as a “Party” and collectively as the “Parties”).

RECITALS

A. Concurrently with the execution and delivery of this Agreement, Insight Acquisition Corp. (“Parent”) and Insight Communications Company, Inc. (the “Company”) are entering into an Agreement and Plan of Merger (as the same may from time to time be amended, modified, supplemented or restated, the “Merger Agreement”) providing for the merger of Parent with and into the Company (the “Merger”) upon the terms and subject to the conditions set forth therein.

B. Concurrently with the execution and delivery of this Agreement, in conjunction with the Merger Agreement, the Parties are entering into an Exchange Agreement with Parent, the Company and certain other shareholders of the Company (as the same may from time to time be amended, modified, supplemented or restated, the “Exchange Agreement”) in order to provide for certain transactions to be consummated immediately prior to the Effective Time of the Merger in the sequential order set forth therein.

C. Concurrently with the execution and delivery of this Agreement, in conjunction with the Merger Agreement, Knafel and Willner and certain related parties are entering into a Voting Agreement in favor of Parent (as the same may from time to time be amended, modified, supplemented or restated, the “Voting Agreement”), pursuant to which, among other things, each of them is agreeing to vote the shares of stock of the Company owned by such shareholder for approval of the Merger Agreement and the transactions contemplated thereby.

D. The Parties desire to enter into this Agreement in conjunction with the Merger Agreement, the Exchange Agreement and the Voting Agreement (each being sometimes referred to herein individually as a “Transaction Agreement” and collectively as the “Transaction Agreements”) in order to facilitate the consummation of the transactions contemplated thereby.

E. The Board of Directors of the Company, based on the unanimous recommendation of a special committee thereof consisting solely of disinterested directors of the Company, has approved this Agreement and the transactions contemplated hereby for purposes of Section 203 for the Delaware General Corporation Law.

F. Capitalized terms used in this Agreement that are not otherwise defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement or Exchange Agreement, as applicable.

1. Agreement to Cooperate; Consummation of Transactions.

1.1 Generally. Without limiting the agreements and covenants of the Parties set forth in the Transaction Agreements, and subject to the terms and conditions thereof, (i) each Party shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things reasonably necessary, proper or advisable to cause Parent to perform and comply with all agreements and covenants required to be performed by Parent under the Transaction Agreements and to cause Parent to consummate the Merger and other transactions contemplated by the Transaction Agreements, and (ii) none of the Parties shall take any action that results in a breach or violation by Parent of the Transaction Agreements. The foregoing shall not require any Party to waive on its own behalf or on behalf of Parent any right or condition set forth in the Transaction Agreements, to agree or consent to any amendment or modification of the Transaction Agreements or any exhibits thereto, or to refrain from asserting or causing Parent to assert any right that such party determines in good faith at the time is available under any Transaction Agreement without breaching or violating such agreement, but subject to the other provisions of this Agreement. Each Party shall notify the other Parties promptly with respect to all notices and communications received by it on behalf of Parent under the Transaction Agreements.

1.2 Securityholders Agreement. Attached hereto as Exhibit 1.2 is the current draft of the Securityholders Agreement. The Parties believe that such draft substantially reflects the substance of their understanding with respect to the material aspects of the subject matter of such agreement, but acknowledge that they have identified certain specific provisions (including those identified by brackets) requiring further discussion and that certain other conforming revisions and technical changes may still be required. The Parties agree to negotiate in good faith to reach agreement on a final Securityholders Agreement that is mutually satisfactory to the Parties and that would be entered into by the Parties and the other Management Shareholders at the Closing under the Merger Agreement.

1.3 Employment Agreements. The Parties agree to negotiate in good faith to reach agreement on a final employment agreement (3 year term) for each of Willner, Dinni Jain and John Abbot that is mutually satisfactory to the Parties and the applicable executive and that would be entered into by the Surviving Corporation and the applicable executive at or immediately after the Closing under the Merger Agreement.

1.4 Consulting Agreement. The Parties agree to negotiate in good faith to reach agreement on a final Consulting Agreement that is mutually satisfactory to the Parties and that would be entered into by the Surviving Corporation and TC Group L.L.C. or a designated Affiliate thereof at or immediately after the Closing under the Merger Agreement. The Parties agree that the compensation payable under such agreement shall be the amount heretofore agreed in the Summary of Prospective Terms, dated as of March 6, 2005, prepared by the Parties and filed with the SEC (the “Term Sheet”).

1.5 Other Agreements and Arrangements of the Parties. The Parties agree to cooperate in good faith to negotiate and finalize all of the other agreements and arrangements among the Parties required to be finalized prior to the Exchange Closing and the Closing under the Merger Agreement.

2. Authority to Act under Merger Agreement and Exchange Agreement. Each Party agrees that acting alone it shall not cause or permit Parent to take any action under or pertaining to the Merger Agreement or the Exchange Agreement or the transactions contemplated thereby (including, but not limited to, proposing or entering into any amendment or modification to the terms of the Merger Agreement or the Exchange Agreement or any exhibits thereto, granting any waiver or consent thereunder, determining that closing conditions have been satisfied, making any assignment thereunder, delivering any agreement, certificate or instrument thereunder, failing to assert any right thereunder and defending or settling any lawsuit filed by shareholders of the Company in connection therewith) unless such action has been previously authorized and approved by each of the Parties in its good faith discretion; provided, however, that (A) in furtherance of Section 1.1 of this Agreement, no Party shall unreasonably withhold or delay its authorization and approval to the extent Parent is either (I) required to take an action to perform and comply with its agreements and covenants under the Merger Agreement and Exchange Agreement or (II) is not permitted to unreasonably withhold or delay its consent and approval under the Merger Agreement or Exchange Agreement, and (B) any of the Parties may cause Parent to exercise its termination rights under and in accordance with Sections 7.01(b) and 7.01(c) of the Merger Agreement as permitted thereunder and exercise its remedies under and in accordance with Sections 7.03 and 8.09 of the Merger Agreement as permitted thereunder, even if the other Parties disagree with such course of action. Carlyle agrees that Knafel and Willner shall be appointed as executive officers of Parent promptly after the date hereof, but the authority of Knafel and Willner in such capacities shall be limited to the authority to cause Parent to take actions in accordance with this Agreement, the Merger Agreement and the Exchange Agreement and other actions consistent with Knafel’s and Willner’s rights under this Agreement. The Parties acknowledge that William Kennard has been appointed President of Parent and that Michael Connelly has been appointed Secretary of Parent.

3. Authority to Act under Voting Agreement. Carlyle shall have exclusive authority and full discretion to cause Parent to act in accordance with and enforce its rights under the Voting Agreement.

4. Other Activities of Parent Pending Closing. From the date hereof until the Effective Time of the Merger, without the prior authorization and approval of each of the Parties, Parent shall not, and none of the Parties shall permit Parent to, engage in any activity, incur any liability or obligation or enter into any agreement or arrangement not directly related to the Transaction Agreements and the transactions contemplated thereby. Without limiting the generality of the foregoing, from the date hereof until the Effective Time of the Merger, except as expressly provided for in the Transaction Agreements, without the prior authorization and approval of each of the Parties, Parent shall not, and none of the Parties shall permit Parent to, (i) adopt any change in its certificate of incorporation or bylaws or board resolutions, (ii) make any change to the composition of its board, directors or officers, or (iii) make any change to its capital structure, including issuing any capital stock or other securities. Notwithstanding the foregoing, Carlyle may appoint replacement directors and officers of Parent in the event of vacancies on the board or in such offices without the consent of the other Parties hereto. Carlyle represents and warrants to the other Parties that Parent, from its original formation as a limited liability company to the date hereof, did not engage in any activity, incur any liability or obligation or enter into any agreement or arrangement not directly related to the transactions contemplated by the Transaction Agreements and that no such liabilities or obligations (other than liabilities in respect of fees to bankers and professionals) so incurred are material. In the event Parent assigns any of its rights, interests or obligations under the Transaction Agreements to an assignee, the provisions of this Agreement applicable to Parent shall also be applicable to such assignee and all references herein to “Parent” shall automatically be deemed to include such assignee as well. Notwithstanding any provision of this Agreement to the contrary, each of the Carlyle entities may transfer all or part of its Parent stock to any other Carlyle entity specified herein, but may not directly or indirectly transfer its Parent stock to any other Person. Carlyle shall notify Knafel and Willner as to the initial allocation of the Parent stock among the Carlyle entities and as to any transfers of such stock by and among them.

5. Pro Forma Capitalization; Fees and Other Payments.

5.1 Pro Forma Capitalization. Schedule 5.1 attached hereto represents the Parties’ good faith estimate as of the date hereof, based on the assumptions and qualifications set forth therein, of the capitalization of the Company immediately following the Effective Time.

5.2 Carlyle Fee and Contribution. At or immediately following the Effective Time, the Surviving Corporation shall pay to Carlyle its sponsor fee equal to 3% of the cash amount contributed to Parent pursuant to Section 1.2 of the Exchange Agreement. In connection with the Exchange Closing, Carlyle shall make the cash contribution to Parent required by Section 1.2 of the Exchange Agreement. Each of the Carlyle entities hereby represents and warrants that Carlyle will have sufficient funds to make the foregoing contribution to Parent at the Exchange Closing and to perform all of its obligations under this Agreement.

5.3 Advisors’ Fees. At or immediately following the Effective Time, the Surviving Corporation shall reimburse the Parties for, or pay on behalf of the Parties, all of their out-of-pocket expenses, including fees and expenses of financial advisors, outside legal counsel and accountants, incurred at or prior to the Effective Time by the Parties in connection with the transactions contemplated by the Transaction Agreements.

5.4 Break-Up Fee. In the event the Company is required to pay a Termination Fee to Parent under Section 7.03 of the Merger Agreement, 85% of the total fee amount (excluding the Expense Amount, which is addressed below) shall be for the benefit of and payable to Carlyle and 15% of the total fee amount (excluding the Expense Amount) shall be for the benefit of and payable to Knafel and Willner (but in no event shall the portion of the fee amount paid to Knafel and Willner, when added to the portion of the Expense Amount paid to Knafel and Willner, exceed their out-of-pocket expenses incurred in connection with the transactions contemplated hereby for which they are responsible in accordance with this Section 5.4), provided that if the Company is sold to an entity not affiliated with Carlyle in an alternative transaction within twelve months following the date of the termination of the Merger Agreement or pursuant to an agreement signed by the Company within twelve months following the date of the termination of the Merger Agreement, Knafel and Willner will remit to Carlyle the portion of the Termination Fee (excluding the Expense Amount) paid to them, if any. In the event the Company is required to pay Parent the Expense Amount under Section 7.03 of the Merger Agreement, Parent shall reimburse the Parties for, or pay on behalf of the Parties, all of the out-of-pocket expenses incurred by the Parties in connection with the transactions contemplated by the Transaction Agreements. The Parties agree that if the Merger Agreement is terminated and the Expense Amount is not payable or is insufficient to pay all of the out-of-pocket expenses of the Parties, then the Parties shall be jointly responsible (Carlyle for 50%, on the one hand, and Knafel and Willner for 50%, on the other hand) for their out-of-pocket expenses other than for their principal outside legal counsel (Debevoise and Dow Lohnes), for which they shall be individually responsible (Carlyle for Debevoise, on the one hand, and Knafel and Willner for Dow Lohnes, on the other hand). Any portion of the Expense Amount that is paid by the Company and not used to pay the joint expenses shall be split equally between Carlyle, on the one hand, and Knafel and Willner, on the other hand. The Parties shall cooperate in good faith in connection with the payment of expenses. This Section 5.4 is subject to the provisions of Section 9 hereof.

5.5 Excess Value Payment. In the event Parent receives an “Excess Value” payment pursuant to Section 6 of the Voting Agreement, the entire payment shall be for the benefit of and payable to Carlyle. Carlyle agrees that it shall not be entitled to any “Excess Value” payment (and shall remit any payment previously received back to the Voting Agreement party who paid it) if it breaches its obligations under this Agreement in bad faith.

6. Company Options; New Equity Awards.

6.1 In furtherance of Section 1.08(d) of the Merger Agreement, the Parties agree that the Surviving Corporation shall issue to the Company Employees and the then current directors shares of Series E Common Stock as follows: (i) to each holder of Company Options that are “in the money” (i.e., has a per share exercise price less than or equal to the Merger Consideration), one share of Series E Common Stock for each such Company Option with a Participation Level (as defined in the certificate of incorporation of the Company to be adopted in connection with the Merger and attached to the Merger Agreement as Exhibit D) equal to the Merger Consideration; and (ii) to each holder of Company Options that is “underwater” (i.e., has a per share exercise price greater than the Merger Consideration), one share of Series E Common Stock for each such Company Option, each with a Participation Level equal to the current exercise price of the corresponding Company Option. Schedule 6 represents the Parties’ good faith estimate as of the date hereof, based on the assumptions and qualifications set forth therein, of the aggregate

number of shares of Series E Common Stock to be issued to the recipient employees and directors at each applicable Participation Level. Schedule 6 also sets forth the vesting schedule and related terms applicable to the Series E Common Stock

6.2 The Parties acknowledge and agree that, as reflected in Exhibit D to the Merger Agreement, a specified number of shares of Series F Common Stock, par value $0.01 per share, of the Surviving Corporation (“Series F Common Stock”) shall be authorized for issuance to the Company’s employees and directors. As soon as reasonably practicable after the Effective Time of the Merger, the Surviving Corporation shall issue 90% of the total number of authorized shares of Series F Common Stock in accordance with an allocation schedule to be mutually agreed to by the Parties in good faith. The Parties agree that the individual allocation to each of Knafel and Willner will not exceed 25% of the initial total allocation. Any future issuances of the remaining 10% authorized shares of Series F Common Stock (or any previously issued Series F Common Stock that has reverted to the Company) shall be made in accordance with the Term Sheet. Schedule 6 sets forth the vesting schedule and related terms applicable to the Series F Common Stock.

6.3 As a condition to receiving shares of Series E Common Stock and Series F Common Stock, the prospective employee or director recipient shall execute and deliver an individual Subscription Agreement in a form to be mutually agreed to by the Parties in good faith prior to the Closing under the Merger Agreement.

7. Consent Solicitation; Change of Control Offer. The terms and conditions of any Consent Solicitation (including, without limitation, the amount of any consent fee to be paid in connection therewith) shall be consistent with the applicable terms set forth in the Commitment Letter, Engagement Letter and Fee Letter executed by J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. in connection with the Back-Stop Facility or as otherwise mutually agreed by the Parties. If, for any reason, the requisite consents of the holders of Notes under any Indenture have not been obtained pursuant to the Consent Solicitation prior to the Closing of the Merger, the Parties shall cooperate in good faith to cause the Issuer(s) under such Indenture to make a Change of Control Offer under and in accordance with the terms of such Indenture within ten days following the Closing Date under the Merger Agreement.

8. Postponement of Exit Process. The Parties agree that Parent shall not grant any consent with respect to the matters under Section 5.10 of the Merger Agreement without also obtaining Carlyle’s authorization and approval.

9. Damages Payment; Expense Reimbursement; Exclusive Remedies.

9.1 Damages Payment. In the event that Parent is required to make any monetary damages payment to the Company in connection with the Merger Agreement, Carlyle shall contribute to Parent 85% of the total amount payable by Parent, and Knafel and Willner shall collectively contribute to Parent 15% of the total amount payable by Parent (not to exceed $10 million in the aggregate). Notwithstanding the foregoing, if Carlyle, on the one hand, and Knafel and Willner, on the other hand, are not in agreement on a chosen course of action when it is taken (and such disagreement is reasonably evidenced by the Party that disagrees with the chosen

course of action in a written communication that is delivered to the other Party contemporaneously with the taking of such course of action or promptly after learning thereof) and it is later determined that the course of action taken resulted in a breach or violation of the Merger Agreement or the Exchange Agreement by Parent, then the Party that proposed the course of action taken (the “At-Fault Party”) shall contribute 100% of the total amount payable by Parent (not to exceed $10 million in the aggregate). If, pursuant to the Guarantee, Carlyle pays any amount on behalf of Parent that is the responsibility of Knafel and Willner as provided above, then Knafel and Willner shall promptly reimburse Carlyle.

9.2 Expense Reimbursement.

(a) Under circumstances where Carlyle is an At-Fault Party, (i) Carlyle shall reimburse Knafel and Willner for all of their out-of-pocket expenses, including fees and expenses of financial advisors, outside legal counsel and accountants, incurred by Knafel and Willner in connection with the transactions contemplated by the Transaction Agreements and in connection with enforcing their claims and remedies against Carlyle hereunder; and (ii) Carlyle shall indemnify and hold harmless Knafel and Willner against all costs and expenses, judgments, damages, liabilities and amounts required to be paid in connection with the Company’s claims against Parent (or Carlyle under the Guarantee) in connection with the Merger Agreement and the defense thereof.

(b) Under circumstances where Knafel and Willner are an At-Fault Party, (i) Knafel and Willner shall reimburse Carlyle for all of its out-of-pocket expenses, including fees and expenses of financial advisors, outside legal counsel and accountants, incurred by Carlyle in connection with the transactions contemplated by the Transaction Agreements and in connection with enforcing its claims and remedies against Knafel and Willner hereunder; and (ii) Knafel and Willner shall indemnify and hold harmless Carlyle against all costs and expenses, judgments, damages, liabilities and amounts required to be paid in connection with the Company’s claims against Parent (or Carlyle under the Guarantee) in connection with the Merger Agreement and the defense thereof.

9.3 Exclusive Remedies. The Parties agree that other than as set forth in this Section 9, the Parties may not otherwise pursue any claim or seek any legal or equitable remedy in connection with this Agreement or the Transaction Agreements (including, for the avoidance of doubt, monetary damages and specific performance or remedies for anticipatory breach) against the other Parties or any affiliate thereof if the Closing under the Merger Agreement does not occur.

10. Termination. This Agreement shall automatically be terminated and forthwith become wholly void and of no further force and effect, and there shall be no liability on the part of any of the Parties arising out of this Agreement, if the Merger Agreement shall have been terminated in accordance with its terms at any time prior to the Closing. This Agreement may not otherwise be terminated except upon the written agreement of the Parties. The termination of this Agreement shall not relieve or release any Party from any liability or obligation under Section 9 hereof.

11. Representations and Warranties. Each Party, severally and not jointly, represents and warrants to each other Party as follows: If such Party is a limited liability company, such Party

has all requisite limited liability company power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, and the execution and delivery of this Agreement by such Party, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary limited liability company action on the part of such Party. This Agreement has been duly executed and delivered by such Party and constitutes a valid and binding obligation of such Party enforceable in accordance with its terms. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby or compliance with the terms hereof will violate, conflict with or result in a breach of, or constitute a default (with or without notice or lapse of time or both) under any provision of, the limited liability company agreement or certificate of formation of such Party, as applicable, or any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to such Party or to such Party’s property or assets.

12. Miscellaneous Provisions.

12.1 Public Statements. None of the Parties, individually or on behalf of Parent, shall issue or cause the publication of any press release or other public announcement with respect to this Agreement, the Transaction Agreements, the Merger or the other transactions contemplated hereby or thereby without prior consultation with and approval by all of the Parties.

12.2 Further Assurances. Each Party shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to carry out the intent and purposes of this Agreement.

12.3 Shareholder Capacity. Neither Knafel nor Willner shall be deemed to make any agreement or understanding in this Agreement in his capacity as a director or officer of the Company. Each of Knafel and Willner are entering into this Agreement solely in his individual capacity, and nothing herein shall limit or affect any actions taken by him in his capacity as a director or officer of the Company.

12.4 Amendments; Waivers. Neither this Agreement nor any term hereof may be amended or otherwise modified other than by an instrument in writing signed by all of the Parties. No provision of this Agreement may be waived, discharged or terminated other than by an instrument in writing signed by the Party against whom the enforcement of such waiver, discharge or termination is sought. No failure or delay by any Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

12.5 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflict of laws thereof, except to the extent that mandatory provisions of federal law apply. In any dispute among the Parties concerning this Agreement, the prevailing party shall be entitled to recover from the non-

prevailing party the prevailing party’s (and its affiliates) reasonable attorneys’ fees and costs. Each of the Parties hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of New York and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the Parties irrevocably and unconditionally (a) agrees not to commence any such action except in such court, (b) agrees that any claim in respect of any such action or proceeding may be heard and determined in such New York state court, (c) waives, to the fullest extent it may legally and effectively do so any objection which it may now or hereafter have to venue of any such action or proceeding in any such New York state court, and (d) waives, to the fullest extent permitted by law, the defense of any inconvenient forum to the maintenance of such action or proceeding in any such New York state court. Each of the Parties agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

12.6 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.6.

12.7 Assignment; No Third Party Beneficiaries. This Agreement shall not be assignable or otherwise transferable by a Party without the prior written consent of each of the other Parties and any attempt to so assign or otherwise transfer this Agreement without such consent shall be void and of no effect. This Agreement shall be binding upon the respective heirs, successors, legal representatives and permitted assigns of the Parties. Nothing in this Agreement shall be construed as giving any Person, other than the Parties and their heirs, successors, legal representatives and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof.

12.8 Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties hereto to the maximum extent possible. In any event, the invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

12.9 Integration. This Agreement and the Transaction Agreements constitute the full and entire understanding and agreement of the Parties with respect to the subject matter hereof and supersede any and all prior understandings or agreements relating to the subject matter hereof.

12.10 Section Headings. The article and section headings of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

12.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Facsimile signatures of the parties shall be deemed to be their original signatures for all purposes.

[Signature Pages Follow.]

IN WITNESS WHEREOF, the parties hereto have executed this Principals’ Agreement as of the date first written above.


/s/ Sidney R. Knafel
SIDNEY R. KNAFEL

/s/ Michael S. Willner
MICHAEL S. WILLNER

CARLYLE PARTNERS III TELECOMMUNICATIONS, L.P.
By:		TC Group III, L.P., its General Partner
By:		TC Group III, L.L.C., its General Partner
By:		TC Group, L.L.C., its Managing Member

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		Managing Director

CP III COINVESTMENT, L.P.
By:		TC Group III, L.P., its General Partner
By:		TC Group III, L.L.C., its General Partner
By:		TC Group, L.L.C., its Managing Member
By:		TCG Holdings, L.L.C., its Managing Member

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		Managing Director

CARLYLE PARTNERS IV TELECOMMUNICATIONS, L.P.
By:		TC Group IV, L.P., its General Partner
By:		TC Group IV, L.L.C., its General Partner
By:		TC Group, L.L.C., its Managing Member

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		Managing Director


CP IV COINVESTMENT, L.P.
By:		TC Group IV, L.P., its General Partner
By:		TC Group IV, L.L.C., its General Partner
By:		TC Group, L.L.C., its Managing Member
By:		TCG Holdings, L.L.C., its Managing Member

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		Managing Director

EXHIBIT 1.2

Securityholders Agreement

[Omitted and will be provided to the Commission upon request]

SCHEDULE 5.1

Pro Forma Capitalization¹


Stockholder	Series A Voting Preferred Stock	Series B Voting Preferred Stock	Series C Non- Voting Preferred Stock	Series D Non- Voting Preferred Stock	Series E Non- Voting Common Stock²
Carlyle		517,836		51,600,127
Sidney R. Knafel	398,591³		3,903,132		281,250
Knafel Children Trusts	339,702⁴		3,010,614
Andrew G. Knafel			386,413
Michael S. Willner	110,652		737,677		621,875
Other			635,082		2,867,469

Total Shares	848,945⁵	517,836⁶	8,672,918	51,600,127⁷	3,770,594

Assumes the minimum two-thirds rollover by the Management Shareholders listed on Exhibit A to the Exchange Agreement and one-third rollover by the Loan Program Exchange Share holders listed on Exhibit A to the Exchange Agreement. The number of Series C Non-Voting Preferred shares above would be higher if such Management Shareholders and Loan Program Exchange Shareholders decide to roll over more shares. In addition, some shareholders not presently listed on Exhibit A to the Exchange Agreement may agree to roll over shares following the date hereof, further increasing the number of Series C Non-Voting Preferred shares to be issued.

²	Based on data regarding Company Options provided by the Company as of July 28, 2005.

³	Based on 3,853,132 shares of Company Class B Common Stock beneficially owned by Knafel and 132,779 shares of Company Class B Common Stock beneficially owned by James S. Marcus.

⁴	Based on 3,010,614 shares of Company Class B Common Stock beneficially owned by the Knafel Children Trusts and 386,413 shares of Company Class B Common Stock beneficially owned individually by Andrew Knafel.

⁵	Represents 62.1% of the pro forma voting power of the Company immediately following the Merger.

⁶	Represents 37.9% of the pro forma voting power of the Company immediately following the Merger.

⁷	Assumes rollover amounts described in footnote 1, an investment by Carlyle of approximately $606,305,000 and Merger Consideration of $11.75 per share.

SCHEDULE 6

Series E Common Stock and Series F Common Stock

Series E Common Stock. The attached spreadsheet includes a good faith estimate, as of the date hereof, of the aggregate number of shares of Series E Common Stock to be issued by the Surviving Corporation at each applicable Participation Level, based on the number of options outstanding and held by the relevant holders as of July 28, 2005.

2.	Vesting Schedule and Related Terms

Series E Common Stock (with Participation Level equal to Merger Consideration) and Series F Common Stock

•

Vesting Schedule – as described in the Term Sheet in the last paragraph under “Performance Based Incentive,” except references to “Class P units” will mean Series E Common Stock and Series F Common Stock, as the case may be.

•

Acceleration of Vesting and Forfeiture — as described in the Term Sheet under “Acceleration of Vesting and Forfeiture,” except references to “LLC units” will mean Series C Non-Voting Preferred Stock, Series E Common Stock and Series F Common Stock, and references to “Class A units,” “Class B units” and “Class P units” will mean Series C Non-Voting Preferred Stock, Series E Common Stock and Series F Common Stock, respectively.

Series E Common Stock (with Participation Level greater than Merger Consideration)

•

Vesting Schedule – Will continue to vest in accordance with the schedule that governs the corresponding Company Options.

•

Acceleration of Vesting and Forfeiture – Same as above.


Insight Going-Private Transaction
Series E Shares To Be Distributed To Option Holders

	Participation	Series E
	Level	Shares
	$11.75	3,581,826
	$12.38	26,708
	$12.99	4,000
	$13.00	5,000
	$13.25	30,000
	$13.43	15,000
	$13.94	15,000
	$13.99	20,000
	$14.05	10,000
	$14.15	8,536
	$14.94	5,000
	$15.69	1,000
	$16.51	5,000
	$16.65	6,764
	$18.40	15,000
	$18.99	618
	$20.90	3,000
	$23.50	8,310
	$24.16	5,658
	$27.03	4,174
		3,770,594

EX-7.06 6 dex706.htm VOTING AGREEMENT, DATED AS OF JULY 28, 2005 Voting Agreement, dated as of July 28, 2005

Exhibit 7.06

INSIGHT VOTING AGREEMENT

INSIGHT VOTING AGREEMENT dated as of July 28, 2005 (this “Agreement”), between Insight Acquisition Corp., a Delaware corporation (“Parent”), and the other Persons listed on the signature pages hereof (each, an “Insight Shareholder” and, collectively, the “Insight Shareholders”).

RECITALS

A. Insight Communications Company Inc. is a company organized under the laws of the State of Delaware (the “Company”). Each Insight Shareholder owns the number of shares of Class A Common Stock, par value $0.01 per share, of the Company (the “Class A Common Stock”) and of Class B Common Stock, par value $0.01 per share, of the Company (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) set forth opposite such Insight Shareholder’s name on Schedule A hereto (such shares of Common Stock, together with any other shares of capital stock of the Company acquired by any Insight Shareholder after the date hereof and during the term of this Agreement, being collectively referred to herein as the “Subject Shares”).

B. Concurrently with the execution and delivery of this Agreement, Parent and the Company are entering into an Agreement and Plan of Merger (as the same may from time to time be amended, modified, supplemented or restated, the “Merger Agreement”) providing for the merger of Parent with and into the Company (the “Merger”) upon the terms and subject to the conditions set forth therein. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement.

C. Concurrently with the execution and delivery of this Agreement, Parent, the Company and certain shareholders of the Company, including the Insight Shareholders, are entering into an Exchange Agreement (as the same may from time to time be amended, modified, supplemented or restated, the “Exchange Agreement”), providing, among other things, for the exchange, immediately prior to the effective time of the Merger (the “Effective Time”), of certain of the Subject Shares for shares of Parent and for the issuance of shares of preferred stock of the Company.

D. The Board of Directors of the Company, based on the unanimous recommendation of the Special Committee, has (i) determined that the Merger is fair to, and in the best interests of, holders of shares of the Class A Common Stock, (ii) approved and adopted the Merger Agreement, the Charter Amendment and the transactions contemplated thereby, and declared their advisability, (iii) recommended the adoption by the stockholders of the Company, subject to the terms and conditions set forth in the Merger Agreement, of the Merger Agreement and the Charter Amendment, (iv) approved the Merger and the Merger Agreement, the Exchange Agreement, this Agreement and the Principals’ Agreement and the transactions contemplated hereby and thereby for purposes of Section 203 of the DGCL.

E. As a condition to entering into the Merger Agreement and the Exchange Agreement, Parent has required that the Insight Shareholders enter into this Agreement, and the Insight Shareholders desire to enter into this Agreement to induce Parent to enter into the Merger Agreement and the Exchange Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

1. Representations and Warranties of Each Insight Shareholder. Each Insight Shareholder, severally and not jointly, represents and warrants to Parent as follows:

(a) Authority. Such Insight Shareholder has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by such Insight Shareholder and constitutes a valid and binding obligation of such Insight Shareholder enforceable in accordance with its terms. If such Insight Shareholder is married and the Subject Shares of such Insight Shareholder constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding with respect to such Subject Shares, this Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of, such Insight Shareholder’s spouse, enforceable against such spouse in accordance with its terms. If such Insight Shareholder is a trust, no consent of any beneficiary is required for the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

(b) No Conflicts. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance with the terms hereof will violate, conflict with or result in a breach of, or constitute a default (with or without notice or lapse of time or both) under any provision of, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to such Insight Shareholder or to such Insight Shareholder’s property or assets.

(c) The Subject Shares. Such Insight Shareholder is the record (or the controlling Person of the record) and beneficial owner of, or is trustee or executor of a trust or estate that is the record holder of and whose beneficiaries are the beneficial owners of, and has good and marketable title to, the Subject Shares set forth opposite such Insight Shareholder’s name on Schedule A hereto, free and clear of any mortgage, lien, pledge, charge, encumbrance, security interest or other adverse claim. Subject to the terms of the Exchange Agreement, such Insight Shareholder does not own, of record or beneficially, any shares of capital stock of the Company other than the Subject Shares set forth opposite such Insight Shareholder’s name on Schedule A hereto and the Company Deferred Shares, Company Options and shares held in such Insight Shareholder’s 401K account as set forth in the footnote to Schedule A (“Other Company Securities”). Subject to

the terms of the Exchange Agreement, such Insight Shareholder has the sole right to vote, or to dispose of, such Subject Shares, and none of such Subject Shares is subject to any agreement, arrangement or restriction with respect to the voting of such Subject Shares, except as contemplated by this Agreement or agreed to in writing by Parent. Except for the Exchange Agreement, and, if such Insight Shareholder is a trustee of a trust, in accordance with the terms of such trust, (i) there are no agreements or arrangements of any kind, contingent or otherwise, obligating such Insight Shareholder to sell, transfer, assign, grant a participation interest in or option with respect to, pledge, hypothecate or otherwise dispose or encumber (each, a “Transfer”), or cause to be Transferred, any of the Subject Shares or the Other Company Securities, and (ii) no Person has any contractual or other right or obligation to purchase or otherwise acquire any of the Subject Shares or the Other Company Securities.

(d) Reliance by Parent. Such Insight Shareholder understands and acknowledges that Parent is entering into the Merger Agreement and the Exchange Agreement in reliance upon such Insight Shareholder’s execution and delivery of this Agreement.

(e) Litigation. To the knowledge of such Insight Shareholder, there is no action, proceeding or investigation pending or threatened against such Insight Shareholder that questions the validity of this Agreement or any action taken or to be taken by such Insight Shareholder in connection with this Agreement, other than the lawsuits filed by certain stockholders of the Company in connection with the Merger that are pending or threatened as of the date hereof and are set forth in the Company Disclosure Letter.

2. Representations and Warranties of Parent. Parent hereby represents and warrants to each Insight Shareholder that Parent has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of Parent. This Agreement has been duly executed and delivered by Parent and constitutes a valid and binding obligation of Parent enforceable in accordance with its terms. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance with the terms hereof will violate, conflict with or result in a breach of, or constitute a default (with or without notice or lapse of time or both) under any provision of, the certificate of incorporation or by-laws of Parent, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, notice, decree, statute, law, ordinance, rule or regulation applicable to Parent or to Parent’s property or assets.

3. Covenants of Each Insight Shareholder. Until the termination of this Agreement in accordance with Section 5, each Insight Shareholder, severally and not jointly, agrees as follows:

(a) At any meeting of shareholders of the Company called to vote upon the Merger, the Merger Agreement and/or the Charter Amendment or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval (including by written consent) with respect to the Merger, the Merger Agreement and/or the Charter Amendment is sought, each Insight Shareholder shall vote (or cause to be voted) the Subject Shares (and each class thereof) in favor of the adoption of the Merger Agreement and the Charter Amendment and the approval of each of the transactions contemplated thereby.

(b) At any meeting of shareholders of the Company or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval of all or some of the shareholders of the Company is sought, each Insight Shareholder shall vote (or cause to be voted) its Subject Shares (and each class thereof) against (i) any merger agreement or merger (other than the Merger Agreement and the Merger), consolidation, combination, sale or transfer of a material amount of assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company or any Takeover Proposal, and (ii) any amendment of the Company’s certificate of incorporation or by-laws or other proposal or transaction involving the Company or any of its subsidiaries (other than the Charter Amendment and the amendments of the Company’s certificate of incorporation and by-laws resulting from the Merger or contemplated by the Exchange Agreement), which amendment or other proposal or transaction would in any manner delay, impede, frustrate, prevent or nullify the Merger, the Merger Agreement or any of the other transactions contemplated by the Merger Agreement or change in any manner the voting rights of each class of Common Stock. Subject to Section 4, each Insight Shareholder further agrees not to commit or agree to take any action inconsistent with the foregoing.

(c) Each Insight Shareholder agrees not to, directly or indirectly, (i) Transfer or enter into any agreement, option or other arrangement (including any profit sharing arrangement) with respect to the Transfer of, any Subject Shares to any Person (a “Subject Share Transfer”), other than in accordance with the Merger Agreement or the Exchange Agreement, (ii) grant any proxies, deposit any Subject Shares into any voting trust or enter into any voting arrangement, whether by proxy, voting agreement or otherwise, with respect to the Subject Shares, other than pursuant to this Agreement or the Exchange Agreement, or (iii) except pursuant to the Exchange Agreement, convert (or cause or permit to be converted) any of the Subject Shares consisting of Class B Common Stock into Class A Common Stock. Subject to the Exchange Agreement and Section 4, each Insight Shareholder further agrees not to commit or agree to take any of the foregoing actions. Notwithstanding the foregoing, a Transfer of any Insight Shareholder’s Subject Shares solely in connection with the settlement of a divorce proceeding or to such Insight Shareholder’s estate, heirs or legatees will not be deemed to be a Subject Share Transfer, provided, that the transferee agrees in writing in a form reasonably satisfactory to Parent to be bound by this Agreement as an Insight Shareholder.

(d) Subject to the terms of Section 4, no Insight Shareholder shall, nor shall any Insight Shareholder authorize or permit any of their respective Representatives to (and shall use all reasonable efforts to cause such Persons not to), directly or indirectly, initiate, solicit, facilitate or knowingly encourage any inquiry or the making of any proposal that constitutes or would reasonably be expected to lead to a Takeover Proposal, or continue or otherwise participate in any discussions or negotiations regarding, furnish to any Person any information or data with respect to, or otherwise cooperate with or take any other action to facilitate any proposal that constitutes, or would reasonably be expected to lead to, any Takeover Proposal, or requires the Company to abandon, terminate or fail to consummate the Merger or any other transaction contemplated by the Merger Agreement. No Insight Shareholder shall, alone or together with any other Person, make a Takeover Proposal. If any Insight Shareholder receives any inquiry or proposal regarding any Takeover Proposal, solely in his or her capacity as a shareholder of the Company, such Insight Shareholder shall promptly inform Parent of such inquiry or proposal and the details thereof. Notwithstanding the foregoing, if the Board of Directors of the Company determines pursuant to and in accordance with Section 5.07 of the Merger Agreement to enter into discussions with a third party or any of its Representatives (the “New Bidder”) with respect to a Takeover Proposal, the Insight Shareholders may also enter into discussions or negotiations with such New Bidder with respect to such Takeover Proposal, provided that the restrictions set forth in this Section 3(d) will continue to apply with respect to any other Person that makes an inquiry or proposal that constitutes or would reasonably be expected to lead to a Takeover Proposal, and will apply with respect to the New Bidder as soon as the Company ceases its discussions and negotiations with such New Bidder. Nothing contained in this Section 3(d) shall prohibit any Insight Shareholder from responding to any unsolicited proposal or inquiry solely by advising the Person making such proposal or inquiry of the terms of this Section 3(d).

(e) Each Insight Shareholder shall use all reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to carry out the intent and purposes of this Agreement.

4. Shareholder Capacity. No Person executing this Agreement who is or becomes during the term hereof a director or officer of the Company shall be deemed to make any agreement or understanding in this Agreement in such Person’s capacity as a director or officer. Each Insight Shareholder is entering into this Agreement solely in its capacity as the record holder or beneficial owner of, or the trustee of a trust whose beneficiaries are the beneficial owners of, Subject Shares and nothing herein shall limit or affect any actions taken by an Insight Shareholder in its capacity as a director or officer of the Company.

5. Termination. This Agreement shall terminate upon the earlier of (A) the Effective Time and (B) the date of the termination of the Merger Agreement. No party hereto shall be relieved from any liability for breach of this Agreement by reason of any

such termination. Notwithstanding the foregoing, Sections 6 through 16 of this Agreement shall survive any termination of this Agreement pursuant to clause (B) of this Section 5.

6. Additional Covenants of the Insight Shareholders.

(a) If (i) this Agreement is terminated pursuant to Section 5(B) of this Agreement, (ii) within six months following such termination an Insight Shareholder takes or omits to take any action and the taking or omission of such action would have constituted a violation of any covenant contained in Section 3(b), (c) or (d) of this Agreement if the taking or omission of such action had occurred prior to the termination of this Agreement, and (iii) within twelve months following such termination, either (A) such Insight Shareholder makes a Subject Share Transfer and the transferee of any such Transfer is a Person with whom the transferor engaged in conduct that was or related to the actions or omissions otherwise covered by Section 6(a)(ii) or (B) the Company has entered or enters into a definitive agreement to consummate, or consummates, the transactions contemplated by a Takeover Proposal (together with the definitive agreement entered into in respect of any such Subject Share Transfer referenced in clause (A), a “New Agreement”), such Insight Shareholder shall pay the applicable Excess Value (as defined below) to Parent. Notwithstanding the foregoing, a Transfer of any Insight Shareholder’s Subject Shares solely for estate planning purposes or in connection with the settlement of a divorce proceeding (provided, that the transferee agrees in writing in a form reasonably satisfactory to Parent to be bound by this Agreement as an Insight Shareholder) or that does not exceed 5% of such Insight Shareholder’s Subject Shares as of the date of termination of this Agreement will not be deemed to be a Subject Share Transfer for purposes of Section 6(a)(ii). Notwithstanding the foregoing, for purposes of calculating the Excess Value below, the number of such Insight Shareholder’s Subject Shares shall include any Subject Shares that were included in a Subject Share Transfer in anticipation of the execution or consummation of a New Agreement if such Insight Shareholder had as a principal purpose the avoidance of any payment that would otherwise become due under this Section 6.

(b) For purposes of this Section 6, the “Excess Value” payable by any such Insight Shareholder shall equal 50% of the product of (i) the number of such Insight Shareholder’s Subject Shares and (ii) the positive difference, if any, between the price per share payable pursuant to the New Agreement described in Section 6(a) and the Merger Consideration (in effect immediately prior to the termination of the Merger Agreement), valuing any noncash consideration at its fair market value on the date of the execution and delivery of the New Agreement (including any residual interest in the Company, which shall be valued based on the price per share payable pursuant to the New Agreement); provided, that in the case of a Subject Share Transfer, the number of shares used for purposes of clause (i) above at the time of such Subject Share Transfer shall be the number of shares so Transferred, and the remainder of such Insight Shareholder’s Subject Shares shall be used for purposes of clause (i) above at the time of any subsequent transaction covered by Section 6(a)(iii).

(x)

securities listed on a national securities exchange or traded on the Nasdaq National Market shall be equal to the average closing price per share of such security as reported on such exchange or Nasdaq National Market for the twenty trading days prior to the date of determination; and

(y)

consideration which is other than cash or securities of the form specified in clause (x) of this Section 6(c) shall be determined by a nationally recognized independent investment banking firm mutually agreed upon by the parties within 10 business days of the event requiring selection of such banking firm; provided, however, that if the parties are unable to agree within two business days after the date of such event as to the investment banking firm, then the parties shall each select one firm, and those firms shall select a third investment banking firm, which third firm shall make such determination, provided further, that the fees and expenses of such investment banking firm shall be borne by Parent. The determination of the investment banking firm shall be binding upon the parties.

(d) Any payment of Excess Value under this Section 6 shall be paid in cash by wire transfer of same day funds to an account designated by Parent, within two business days of the final determination of Excess Value (including, without limitation, in respect of any Subject Share Transfer or any other transaction covered by Section 6(a)(iii)).

7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to any principles or rules of conflict of laws thereof.

8. Jurisdiction; Waiver of Jury Trial. (a) Each of the parties hereto irrevocably and unconditionally (i) agrees that any legal suit, action or proceeding brought by any party hereto arising out of or based upon this Agreement or the transactions contemplated hereby may be brought in the Courts of Delaware or the United States District Court for the District of Delaware (each, a “Delaware Court”), (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in any Delaware Court, and any claim that any such action or proceeding brought in any Delaware Court has been brought in an inconvenient forum, and (iii) submits to the non-exclusive jurisdiction of Delaware Courts in any such suit, action or proceeding. Each of the parties agrees that a judgment in any suit, action or proceeding brought in a Delaware Court shall be conclusive and binding upon it and may be enforced in any other courts to whose jurisdiction it is or may be subject, by suit upon such judgment.

(b) Each of the parties agrees and acknowledges that any controversy that may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each such party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any litigation directly or indirectly arising out of or relating to this Agreement, or the breach, termination or validity of this Agreement.

9. Specific Performance. Each Insight Shareholder acknowledges and agrees that (a) the covenants, obligations and agreements of such Insight Shareholder contained in this Agreement relate to special, unique and extraordinary matters, (b) Parent is and will be relying on such covenants in connection with entering into the Merger Agreement and the Exchange Agreement, the performance of its obligations under the Merger Agreement and the exchange of shares pursuant to the Exchange Agreement, and (c) a violation of any of the terms of such covenants, obligations or agreements will cause Parent irreparable injury for which adequate remedies are not available at law. Therefore, each Insight Shareholder agrees that Parent shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain such Insight Shareholder from committing any violation of such covenants, obligations or agreements. These injunctive remedies are cumulative and in addition to any other rights and remedies Parent may have.

10. Amendment, Waivers, etc. Neither this Agreement nor any term hereof may be amended or otherwise modified other than by an instrument in writing signed by Parent and each of the Insight Shareholders and approved by the Company. No provision of this Agreement may be waived, discharged or terminated other than by an instrument in writing signed by the party against whom the enforcement of such waiver, discharge or termination is sought.

11. Assignment; No Third Party Beneficiaries. This Agreement shall not be assignable or otherwise transferable by a party without the prior written consent of the other parties, and any attempt to so assign or otherwise transfer this Agreement without such consent shall be void and of no effect; provided that Parent may assign or transfer its rights, interests and obligations under this Agreement to any Person to which Parent assigns or transfers its rights, interests and obligations under the Merger Agreement in accordance with the Merger Agreement. This Agreement shall be binding upon the respective heirs, successors, legal representatives and permitted assigns of the parties hereto. Nothing in this Agreement shall be construed as giving any Person, other than the parties hereto and their heirs, successors, legal representatives and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof; provided that the Company shall be a third party beneficiary under this Agreement for purposes of Section 10 hereof.

12. Notices. All notices, consents, requests, instructions, approvals and other communications provided for in this Agreement shall be in writing and shall be deemed validly given upon personal delivery or one day after being sent by overnight courier

service or by telecopy (so long as for notices or other communications sent by telecopy, the transmitting telecopy machine records electronic confirmation of the due transmission of the notice), at the following address or telecopy number, or at such other address or telecopy number as a party may designate to the other parties:

(A)

if to Parent to:

c/o The Carlyle Group

1001 Pennsylvania Avenue, N.W.

Suite 220 South

Washington, D.C. 20004-2505

Attn: William E. Kennard

Telecopy: (202) 347-1692

with a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Attn.: Jeffrey J. Rosen

Andrew L. Bab

Telecopy: (212) 909-6836;

(B)

if to any Insight Shareholder to:

Sidney R. Knafel

c/o Insight Communications Company, Inc.

810 Seventh Avenue

New York, New York 10019

Telecopy: (917) 286-2301

with a copy to:

Dow, Lohnes & Albertson, PLLC

1200 New Hampshire Avenue, N.W.

Suite 800

Washington, D.C. 20036-6802

Attn.: Leonard J. Baxt

J. Kevin Mills

Telecopy: (202) 776-2222

13. Remedies. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided herein shall be cumulative and not exclusive of any rights or remedies provided by law or in equity.

14. Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the parties hereto to the maximum extent possible. In any event, the invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

15. Integration. This Agreement, including the Schedules hereto, the Merger Agreement and the Exchange Agreement constitute the full and entire understanding and agreement of the parties with respect to the subject matter hereof and thereof and supersede any and all prior understandings or agreements relating to the subject matter hereof and thereof.

16. Section Headings. The article and section headings of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Facsimile signatures of the parties shall be deemed to be their original signatures for all purposes.

18. Shareholder Representative. Each Insight Shareholder hereby designates and appoints William E. Kennard (the “Shareholder Representative”), acting jointly or individually, as its attorney-in-fact with full power of substitution, to serve as the representative of such Insight Shareholder to perform all such acts as are required, authorized or contemplated by this Agreement to be performed by such Insight Shareholder (including the voting of the Subject Shares in accordance with Sections 3(a) and (b)), and hereby acknowledges that the Shareholder Representative shall be authorized to take any action so required, authorized or contemplated by this Agreement. Each such Insight Shareholder further acknowledges that the foregoing appointment and designation shall be deemed to be coupled with an interest and shall survive the death or incapacity of such Insight Shareholder. Parent is and will be entitled to rely on any action taken or any notice given by the Shareholder Representative consistent with this Section 18. A successor to the Shareholder Representative may be chosen by the Shareholder Representative’s current employer (“Carlyle”), provided that such successor is an employee of Carlyle or one of its Affiliates and that notice thereof is given by the new Shareholder Representative to Parent.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and date first above written.


Insight Acquisition Corp.

By:		/s/ William E. Kennard
Name:		William E. Kennard
Title:		President

VOTING AGREEMENT

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and date first above written.

/s/ Sidney R. Knafel

Sidney R. Knafel

/s/ Michael S. Willner

Michael S. Willner

/s/ Andrew G. Knafel

Andrew G. Knafel, as trustee under:

Trust F/BO Andrew G. Knafel,

dated September 13, 1978

Trust F/B/O Douglas R. Knafel,

dated September 13, 1978

Trust F/B/O Andrew G. & Douglas

R. Knafel, dated July 16, 1976

Trust F/B/O Douglas R. Knafel,

dated November 6, 1983

/s/ Andrew G. Knafel

Andrew G. Knafel

VOTING AGREEMENT

SCHEDULE A

INSIGHT SHAREHOLDERS


Name of Insight Shareholder	Number of Shares of Class A Common Stock Owned*	Number of Shares of Class B Common Stock Owned
Sidney R. Knafel	50,000	3,853,132
Michael S. Willner		1,106,516
Andrew G. Knafel, Joshua Rubenstein and William L. Scherlis, as trustees, under Trusts F/B/O Knafel Children		3,010,614
Andrew G. Knafel		386,413

Certain Insight Shareholders also own Company Deferred Shares, Company Options and/or shares held in such Insight Shareholder’s 401(k) account that cannot be voted, as follows: (i) Sidney R. Knafel owns 68,000 Company Deferred Shares, 281,250 Company Options and 1,770 shares of Class A Common Stock in his 401(k) account; (ii) Michael S. Willner owns 170,000 Company Deferred Shares, 621,875 Company Options and 1,708 shares of Class A Common Stock in his 401(k) account.

EX-7.07 7 dex707.htm PRESS RELEASE, DATED JULY 29, 2005 Press Release, dated July 29, 2005

Exhibit 7.07

LOGO

FOR IMMEDIATE RELEASE

INSIGHT COMMUNICATIONS AND INSIGHT ACQUISITION CORP. ENTER INTO DEFINITIVE MERGER AGREEMENT

NEW YORK – July 29, 2005 – Insight Communications Company, Inc. (NASDAQ: ICCI) and Insight Acquisition Corp. today announced that they have entered into a definitive merger agreement providing for Insight Acquisition Corp. to acquire all of the publicly held shares of Insight Communications. Under the terms of the agreement, which was unanimously approved by the board of directors of Insight Communications, public shareholders of Insight Communications would receive $11.75 per share in cash.

Insight Acquisition Corp., the acquiring entity, is led by Insight Communications co-founders Sidney R. Knafel and Michael S. Willner and affiliates of The Carlyle Group. Mr. Knafel, Mr. Willner and their related parties collectively own shares of Insight Communications representing approximately 14% of the equity and 62% of the aggregate voting power.

The board of directors of Insight Communications acted upon the unanimous recommendation of a special committee of independent directors and has recommended that shareholders of Insight Communications vote to approve the acquisition. After careful consideration and a thorough review with its independent advisors, the special committee determined that the transaction is in the best interests of the Class A shareholders. The special committee’s independent financial advisors have delivered written opinions to the effect that as of July 28, 2005, the merger consideration is fair from a financial point of view to the shareholders of Insight Communications (other than the buyer group). This determination by the special committee’s financial advisors was based on, and subject to, assumptions and limitations set forth in these written opinions.

Consummation of the transaction is subject to certain conditions, including (i) approval of the merger agreement and merger by holders of a majority of the outstanding shares of Insight Communications’ Class A common stock not held by Insight Acquisition Corp., its affiliates or the officers and directors of Insight Communications and (ii) termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction is not subject to any financing conditions.

The $11.75 per share price represents a 21.4% premium over the closing price ($9.68) of Insight Communications’ stock on Friday, March 4, 2005, the last day of trading before the announcement of Insight Acquisition Corp.’s original

-more-

INSIGHT COMMUNICATIONS AND INSIGHT ACQUISITION CORP. ENTER INTO DEFINITIVE MERGER AGREEMENT (PAGE 2 OF 3)

proposal on March 7, 2005, and a 28.7% premium over the six-month average closing price ($9.13) before the original proposal was announced. The terms of the agreement value the total equity of Insight Communications at approximately $710 million and implies an enterprise value of approximately $2.1 billion (based on Insight Communications’ attributable share of indebtedness).

Mr. Knafel, chairman of Insight Communications, stated, “We are pleased that we have reached an agreement that will provide substantial benefits to our shareholders, customers and employees.”

Mr. Willner, president and chief executive officer of Insight Communications, added, “Our current management team looks forward to continuing to lead this great business in the future, while building on our tradition of providing outstanding service and innovative solutions to our customers.”

Michael J. Connelly, Carlyle managing director, said, “We are pleased to have the opportunity to support Insight Communications’ management team and employees and to invest in the U.S. cable television business.”

The parties also announced an agreement in principle to settle pending shareholder litigation challenging the transaction.

Morgan Stanley and Stephens are serving as Insight Acquisition Corp.’s financial advisors in the transaction, and Dow, Lohnes & Albertson PLLC and Debevoise & Plimpton LLP are providing legal counsel to Insight Acquisition Corp.

Citigroup Global Markets, Inc. and Evercore Partners are serving as financial advisors to the special committee, and Skadden, Arps, Slate, Meagher & Flom LLP is providing legal counsel to the special committee.

Sonnenschein Nath & Rosenthal LLP is providing legal counsel to Insight Communications.

About Insight Communications

Insight Communications, through a 50/50 partnership with Comcast, is the 9th largest cable operator in the United States, managing approximately 1.26 million basic customers (of whom half are attributable to Insight’s equity) in the four contiguous states of Illinois, Indiana, Ohio, and Kentucky. Insight specializes in offering bundled, state-of-the-art

-more-

services in mid-sized communities, delivering analog and digital video, high-speed Internet, and voice telephony in selected markets to its customers.

INSIGHT COMMUNICATIONS AND INSIGHT ACQUISITION CORP. ENTER INTO DEFINITIVE MERGER AGREEMENT (PAGE 3 OF 3)

About The Carlyle Group

The Carlyle Group is a global private equity firm with nearly $30 billion under management. Carlyle invests in buyouts, venture capital, real estate and leveraged finance in North America, Europe and Asia, focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, healthcare, industrial, technology & business services and telecommunications & media. Since 1987, the firm has invested $13.4 billion of equity in 396 transactions. The Carlyle Group employs more than 560 people in 14 countries.

This press release is not a solicitation of a proxy, an offer to purchase shares of Insight Communications or a solicitation of an offer to sell shares of Insight Communications, and it is not a substitute for any proxy statement or other filings that will be made with the Securities and Exchange Commission (“SEC”). When a proxy statement or any other material related to the transaction is filed with the SEC, investors are urged to thoroughly review and consider such filings because they will contain important information. Any such documents, once filed, will be available free of charge at the SEC’s website (www.sec.gov) and from Insight Communications.

Statements in this release represent the parties’ current intentions, plans, expectations and beliefs and involve risks and uncertainties that could cause actual events to differ materially from the events described in this release, including risks or uncertainties related to securing the requisite shareholder approval and satisfaction of the other condition in the merger agreement, as well as changes in general economic conditions, stock market trading conditions, tax law requirements or government regulation, and changes in the broadband communications industry or the business or prospects of Insight. The reader is cautioned that these factors, as well as other factors described or to be described in SEC filings with respect to the transaction, are among the factors that could cause actual events or results to differ materially from the current expectations described herein.

# # #

CONTACTS:

Insight Communications:

Sandy Colony

917-286-2300

Insight Acquisition Corp.:

Joele Frank / Steve Silva

Joele Frank, Wilkinson Brimmer Katcher

(212) 355-4449

The Carlyle Group:

Chris Ullman

(202) 729-5450

-more-