PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is made and entered into as
of June 27, 2003, by and among Rainbow Media Holdings, Inc., a Delaware
corporation ("RMHI"), American Movie Classics III Holding Corporation, a
Delaware corporation ("AMC3HC"), American Movie Classics IV Holding Corporation,
a Delaware corporation ("AMC4HC"), IFC II Holding Corporation, a Delaware
corporation ("IFC2HC"), IFC III Holding Corporation, a Delaware corporation
("IFC3HC" and, together with AMC3HC, AMC4HC and IFC2HC, the "Rainbow Buyers"),
Metro-Xxxxxxx-Xxxxx Inc., a Delaware corporation ("MGM Parent"), MGM Networks
U.S. Inc., a Delaware corporation ("MGM Seller"), and, solely for purposes of
Sections 2.02(b), 2.02(c), 5.01, 10.05, 10.08 and 10.11 hereof, Cablevision
Systems Corporation, a Delaware corporation ("Cablevision").
R E C I T A L S
WHEREAS, American Movie Classics Holding Corporation, a Delaware
corporation ("AMCHC"), and AMC II Holding Corporation, a Delaware corporation
("AMC2HC") own, in the aggregate, an 80% partnership interest in American Movie
Classics Company, a New York general partnership ("AMCC"), which is the owner of
the programming channels American Movie Classics ("AMC") and WE: Women's
Entertainment ("WE");
WHEREAS, IFC Holding Corporation, a Delaware corporation, owns an 80%
membership interest in The Independent Film Channel LLC, a Delaware limited
liability company ("IFC LLC"), which is the owner of the programming channel The
Independent Film Channel ("IFC");
WHEREAS, pursuant to (i) the Agreement Between MGM and RMHI to Acquire
Twenty-Percent Interest in the Rainbow Networks (AMC, Bravo, IFC, WE: Women's
Entertainment and Digital Suites), dated as of January 31, 2001 (the "2001
Agreement") and (ii) the Agreement dated as of November 4, 2002 (the "2002
Agreement"), among Cablevision, RMHI, AMCHC, AMC2HC, Bravo Holding Corporation,
Bravo II Holding Corporation, MGM Parent and MGM Seller, MGM Seller, an indirect
wholly-owned subsidiary of MGM Parent, owns a 20% partnership interest in AMCC
(the "MGM AMC Interest") and a 20% membership interest in IFC LLC (the "MGM IFC
Interest" and, together with the MGM AMC Interest, the "MGM Interests");
WHEREAS, upon the terms and subject to the conditions set forth
herein, the Rainbow Buyers desire to purchase the MGM Interests from MGM Seller
and MGM Seller is willing to sell the MGM Interests to the Rainbow Buyers (the
"Transaction");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows, each intending to be
legally bound as and to the extent herein provided.
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. For purposes of this Agreement the following
terms shall have the meanings set forth below:
Affiliate of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this Agreement, "control" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
Agreement means this Purchase Agreement and the Exhibits attached
hereto.
AMC has the meaning set forth in the Recitals to this Agreement.
AMCC has the meaning set forth in the Recitals to this Agreement.
AMCHC has the meaning set forth in the Recitals to this Agreement.
AMC2HC has the meaning set forth in the Recitals to this Agreement.
AMC3HC has the meaning set forth in the Preamble to this Agreement.
AMC4HC has the meaning set forth in the Preamble to this Agreement.
Xxxx of Sale has the meaning set forth in Section 6.02(a).
Business Day means any day other than a Saturday, Sunday or a day on
which banks in New York are authorized or obligated by law or executive order to
close.
Cablevision has the meaning set forth in the Preamble to this
Agreement.
Cablevision Note means the promissory note of Cablevision in the
initial principal amount of $250,000,000 in the form of Exhibit D hereto and
delivered pursuant to Section 6.01(b) hereof.
Cablevision Release and Indemnity means the release and indemnity in
the form attached hereto as Exhibit A.
Cablevision Shares means the shares of Cablevision NY Group Class A
common stock, par value $0.01 per share, delivered to MGM Seller in accordance
with Section 2.02(b) hereof.
Cablevision Share Sale Net Proceeds has the meaning set forth in
Section 2.02(b).
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Closing means the meeting for the purpose of concluding the
transactions contemplated by this Agreement held at the place and on the date
fixed in accordance with Section 9.01.
Closing Date means the date fixed for the Closing in accordance with
Section 9.01.
Contract means any written contract, mortgage, deed of trust, bond,
indenture, lease, sublease, license, note, certificate, option, warrant, right,
or other instrument, document, agreement or arrangement.
CSC Holdings means CSC Holdings, Inc., a Delaware corporation.
DOJ has the meaning set forth in Section 5.05.
Encumbrance means any Lien or any lease, license, servient easement,
adverse claim, reversion, reverter, preferential arrangement, restrictive
covenant or restriction of any kind, including, without limitation, any
restriction on the use, voting, transfer, receipt of income or other exercise of
any attributes of ownership.
Fair Market Value Balance Sheet has the meaning set forth in Section
2.04(a).
Film Rights Agreement means collectively, the Film Rights Agreement,
the Retrofit Agreement and the Retrofit Side Letter, each in the form attached
hereto as Exhibit E.
Final Maturity Date shall have the meaning assigned to such term in
the Cablevision Note.
Final Maturity Date Amount means the outstanding principal amount of
the Cablevision Note on the Final Maturity Date.
FTC has the meaning set forth in Section 5.05.
Governmental Authority means any United States federal, state, county,
municipal or local, or any non-U.S. or supranational governmental, regulatory or
administrative authority, agency, commission or other body or entity.
HSR Act and Rules means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976 and the rules and regulations promulgated thereunder, as from time
to time in effect prior to the Closing.
IFC has the meaning set forth in the Recitals to this Agreement.
IFC2HC has the meaning set forth in the Preamble to this Agreement.
IFC3HC has the meaning set forth in the Preamble to this Agreement.
IFC LLC has the meaning set forth in the Recitals to this Agreement.
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Judgment means any judgment, writ, order, injunction, award,
stipulation or decree of or by any court, or judge, justice or magistrate,
including any bankruptcy court or judge, or any Governmental Authority.
Law means the common law and any statute, ordinance, code or other
law, rule, regulation, order, technical or other standard, requirement or
procedure enacted, adopted, promulgated, applied or followed by any Governmental
Authority or court.
LIBOR Component means the sum of the daily amounts, from (and
including) the Final Maturity Date to (but excluding) the date upon which the
Proceeds Excess or the Proceeds Shortfall is determined in accordance with
Section 2.02(b), determined by multiplying (x) the Final Maturity Date Amount
less the aggregate amount of all Monthly Post-Maturity Payments made on or
before such date (other than any Monthly Post-Maturity Payment made on the Final
Maturity Date and which reduces the Final Maturity Date Amount) by (y) the
Applicable Rate (as defined in the Cablevision Note).
Liens means any security interest, pledge, hypothecation, mortgage,
lien (including, without limitation, environmental and tax liens but not
including liens for taxes not yet due and payable), charge or encumbrance.
MGM AMC Interest Allocable Portion has the meaning set forth in
Section 2.02(b).
MGM AMC Interest has the meaning set forth in the Recitals to this
Agreement.
MGM IFC Interest Allocable Portion has the meaning set forth in
Section 2.02(b).
MGM IFC Interest has the meaning set forth in the Recitals to this
Agreement.
MGM Interests has the meaning set forth in the Recitals to this
Agreement.
MGM Material Adverse Effect has the meaning set forth in Section
3.02(b).
MGM Parent has the meaning set forth in the Preamble to this
Agreement.
MGM Release and Indemnity means the Release and Indemnity in the form
attached hereto as Exhibit C.
MGM Seller has the meaning set forth in the Preamble to this
Agreement.
Monthly Post-Maturity Payment means a payment of $2,500,000 payable on
the last Business Day of each month beginning on the month in which the Final
Maturity Date falls and ending on the last Business Day of the month prior to
the month the Proceeds Excess or the Proceeds Shortfall is determined in
accordance with Section 2.02(b).
Outside Date has the meaning set forth in Section 9.02.
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Person means any natural person, Governmental Authority, corporation,
general or limited partner, partnership, joint venture, limited liability
company, trust, association, or unincorporated entity of any kind.
Proceeds Excess shall have the meaning set forth in Section 2.02(b).
Proceeds Shortfall shall have the meaning set forth in Section
2.02(b).
Purchase Price has the meaning set forth in Section 2.02(a).
Rainbow Buyers has the meaning set forth in the Preamble to this
Agreement.
Rainbow Material Adverse Effect has the meaning set forth in Section
4.02(b).
Registration Rights Agreement shall mean the Registration Rights
Agreement by and between Cablevision and MGM Seller substantially in the form
attached hereto as Exhibit F.
Regulations has the meaning set forth in Section 2.04(b).
Related Party Contract has the meaning set forth in Section 3.06.
Releases and Indemnities means, collectively, the MGM Release and
Indemnity and the Cablevision Release and Indemnity.
Requisite Number means the quotient obtained by dividing (i) the
outstanding principal amount of the Cablevision Note upon the Final Maturity
Date by (ii) the closing price of Cablevision NY Group Class A common stock on
the New York Stock Exchange or, if not then listed, on the principal national
securities exchange on which such class of stock is listed or admitted to
trading, on the trading day immediately preceding the Final Maturity Date.
RMHI has the meaning set forth in the Preamble to this Agreement.
Securities Act means the Securities Act of 1933, as amended.
Surviving Provisions has the meaning set forth in Section 10.05.
Target Amount means (i) the Final Maturity Date Amount plus (ii) the
LIBOR Component minus (iii) the aggregate amount of all Monthly Post-Maturity
Payments made prior to the determination of the Proceeds Excess or the Proceeds
Shortfall (other than any Monthly Post-Maturity Payment made on the Final
Maturity Date and which reduces the Final Maturity Date Amount).
Tax Basis Balance Sheet has the meaning set forth in Section 2.04(a).
Transaction has the meaning set forth in the Preamble to this
Agreement.
WE has the meaning set forth in the Recitals to this Agreement.
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SECTION 1.02 Interpretation and Rules of Construction. In this
Agreement, except to the extent that the context otherwise requires:
(a) when a reference is made in this Agreement to an Article, Section,
Exhibit or Schedule, such reference is to an Article or Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated;
(b) the table of contents and headings for this Agreement are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement;
(c) whenever the words "include," "includes," or "including" are used
in this Agreement, they are deemed to be followed by the words "without
limitation";
(d) reference to any gender means both genders;
(e) the words "hereof," "herein" and "hereunder" and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not
to any particular provision of this Agreement;
(f) the definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms;
(g) unless expressly provided otherwise, any Law defined or referred
to herein or in any agreement or instrument that is referred to herein means
such Law as from time to time amended, modified or supplemented;
(h) references to a Person are also to its permitted successors and
assigns; and
(i) references to currency, monetary values and dollars shall mean
United States (U.S.) dollars and all payments hereunder shall be made in United
States dollars.
ARTICLE II
THE PURCHASE AND SALE AND OTHER PAYMENTS
SECTION 2.01 Purchase and Sale. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing MGM Parent shall cause
MGM Seller to, and MGM Seller shall, sell, assign, transfer, convey and deliver
to the Rainbow Buyers, and RMHI shall cause the Rainbow Buyers to, and the
Rainbow Buyers shall, purchase, acquire and accept, valid title to the MGM
Interests free and clear of all Encumbrances.
SECTION 2.02 Purchase Price.
(a) Purchase Price. The aggregate purchase price for the MGM Interests
shall be $500,000,000 (the "Purchase Price"), which shall be payable by the
Rainbow Buyers to MGM Seller as follows:
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(i) $107,500,000 of the Purchase Price shall be paid in cash by
AMC3HC;
(ii) $107,500,000 of the Purchase Price shall be paid in cash by
AMC4HC;
(iii) the Cablevision Note in the initial principal amount of
$250,000,000 shall be issued to MGM Seller;
(iv) $17,500,000 of the Purchase Price shall be paid in cash by
IFC2HC in consideration for one-half (1/2) of the MGM IFC Interest;
and
(v) $17,500,000 of the Purchase Price shall be paid in cash by
IFC3HC in consideration for one-half (1/2) of the MGM IFC Interest.
The cash payments identified in clauses (i), (ii), (iv) and (v) above shall
be made at Closing by wire transfer in immediately available funds denominated
in United States dollars to a bank account designated by MGM Seller at least two
(2) Business Days prior to the Closing.
The cash paid by AMC3HC and one-half of the Cablevision Note identified in
clauses (i) and (iii) above shall be in consideration for one-half (1/2) of the
MGM AMC Interest, and the cash paid by AMC4HC and one-half of the Cablevision
Note identified in clauses (ii) and (iii) above shall be in consideration for
one-half (1/2) of the MGM AMC Interest.
The parties hereto and their respective Affiliates and successors agree to
file all tax returns and reports consistent with such allocation of the Purchase
Price and shall not take any action or position that is inconsistent therewith.
(b) Payment of Proceeds Shortfall or Proceeds Excess. If Cablevision
elects to repay the Final Maturity Date Amount through the issuance and delivery
to MGM Seller on the Final Maturity Date of the Requisite Number of Cablevision
Shares, MGM Seller shall, as soon as practicable after the Final Maturity Date,
sell such Cablevision Shares in (i) a widely distributed underwritten public
offering for cash pursuant to the terms of the Registration Rights Agreement or
(ii) such other manner as approved by Cablevision (which approval Cablevision
shall not unreasonably withhold if MGM Seller has previously been cutback twice
under the Registration Rights Agreement). As promptly as practicable following
the closing of such sale, MGM Seller shall provide to Cablevision a written
statement setting for the amount of the gross proceeds of such sale, the amount
of underwriting fees, discounts and commissions paid or otherwise incurred by
MGM Seller in connection with such sale, the amount of out-of-pocket offering
expenses incurred by MGM Seller in connection with such sale, the amount of any
taxes and other governmental charges (other than income taxes) paid or payable
by MGM Seller in connection with such sale and, after deducting all such
amounts, the net proceeds to MGM from such sale (the total aggregate amount of
such net proceeds from the sale of all Cablevision Shares, the "Cablevision
Share Sale Net Proceeds"). If the Cablevision Share Sale Net Proceeds
is less than the Target Amount (the "Proceeds Shortfall"), then Cablevision
shall, within five Business Days of receipt from MGM Seller of written notice of
the existence and amount of the Proceeds Shortfall, pay to MGM Seller the amount
of the Proceeds Shortfall in cash by wire transfer in immediately available
funds denominated in United States dollars to a bank account
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designated by MGM Seller at least two Business Days prior to such payment date.
If the amount of the Cablevision Share Sale Net Proceeds is greater than the
Target Amount (the "Proceeds Excess"), then MGM Seller shall, within five
Business Days of receipt from Cablevision of written notice of the existence and
amount of the Proceeds Excess, pay to Cablevision the amount of the Proceeds
Excess in cash by wire transfer in immediately available funds denominated in
United States Dollars to a bank account designated by Cablevision at least two
Business Days prior to such payment date.
(c) On the last Business Day of each month beginning on the month in
which the Final Maturity Date falls and ending on the last Business Day of the
month prior to the month the Proceeds Excess or the Proceeds Shortfall is
determined, Cablevision shall pay to MGM Seller the Monthly Post-Maturity
Payment by wire transfer in immediately available funds denominated in United
States dollars to a bank account designated by MGM Seller at least two Business
Days prior to each such payment.
SECTION 2.03 No Right to Proceeds or Profits from Subsequent Sales of
Partnership and/or Membership Interests. MGM Parent and MGM Seller acknowledge
that they have been informed by the Rainbow Buyers that the Rainbow Buyers and
their Affiliates are considering entering into one or more transactions
concerning their interests in AMCC and IFC LLC. MGM Parent and MGM Seller hereby
expressly agree that they shall have no right or claim to share in any proceeds
or profits from any post-Closing sale, assignment, transfer, pledge or other
disposition, direct or indirect, of all or a part of the MGM Interests, whether
individually or as part of a sale, assignment, transfer, pledge or other
disposition, direct or indirect, of all or a part of AMCC or IFC LLC or any of
all of the respective assets of AMCC or IFC LLC, including AMC, WE or IFC.
SECTION 2.04 Tax Treatment. The parties to this Agreement agree as
follows:
(a) As promptly as practicable and in no event more than 100 days
after the Closing Date, the applicable Rainbow Buyer shall prepare or cause to
be prepared, and shall submit to MGM Seller, (i) a balance sheet of AMCC or IFC
LLC, as applicable, as of the Closing Date, that sets out the tax basis of the
assets owned by AMCC or IFC LLC, as applicable, on the Closing Date and the
amount of the liabilities of AMCC or IFC LLC, as applicable, on the Closing Date
(the "Tax Basis Balance Sheet") and (ii) a balance sheet of AMCC or IFC LLC, as
applicable, as of the Closing Date, that sets out the fair market value of the
assets owned by AMCC or IFC LLC, as applicable, on the Closing Date and the
amount of the liabilities of AMCC or IFC LLC, as applicable, on the Closing Date
(the "Fair Market Value Balance Sheet"). The Tax Basis Balance Sheet and the
Fair Market Value Balance Sheet shall be prepared in good faith by the
applicable Rainbow Buyer and shall be reasonably acceptable to the MGM Seller.
The applicable Rainbow Buyer shall use reasonable commercial efforts to resolve
any objections raised by the MGM Seller with respect to the Tax Basis Balance
Sheet and the Fair Market Value Balance Sheet. The Fair Market Value Balance
Sheet (1) shall be prepared in a manner consistent with the Purchase Price
allocation set forth in Section 2.02 hereof and (2) shall contain sufficient
detail to permit AMCC or IFC LLC, as applicable, and the parties to make the
computations and adjustments required under Section 743(b), Section 751 and
Section 755 of the Internal Revenue Code of 1986, as amended. The applicable
Rainbow
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Buyer and MGM Seller shall, and the applicable Rainbow Buyer shall cause AMCC or
IFC LLC, as applicable, to, report the tax consequences of the transactions
contemplated by this Agreement in a manner consistent with the Tax Basis Balance
Sheet and the Fair Market Value Balance Sheet (as finally determined pursuant to
Section 2.04(a)) and shall not take any action or position that is inconsistent
therewith.
(b) As promptly as practicable and in no event more than 100 days
after the Closing Date, AMCC and IFC LLC shall prepare and deliver to MGM Seller
(A) the statement of adjustment described in Section 1.743-1(k)(1) of the U.S.
Treasury Regulations (the "Regulations"), (B) the notice described in Section
1.743-1(k)(2) of the Regulations and (C) the statement described in Section
1.751-1(a)(3) of the Regulations, in each case prepared in a manner that is
consistent with the Tax Basis Balance Sheet and the Fair Market Value Balance
Sheet (as finally determined pursuant to Section 2.04(a)).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MGM PARENT AND MGM SELLER
To induce RMHI and the Rainbow Buyers to enter into this Agreement,
MGM Parent and MGM Seller jointly and severally represent and warrant to RMHI
and the Rainbow Buyers as follows:
SECTION 3.01 Organization and Authority. Each of MGM Parent and MGM
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
SECTION 3.02 Legal Capacity; Approvals and Consents.
(a) Authority and Binding Effect. Each of MGM Parent and MGM Seller
has all requisite corporate power and authority to (i) execute, deliver and
perform this Agreement, the Releases and Indemnities (to the extent a party
thereto) and the Xxxx of Sale, (ii) approve, adopt and consummate the
transactions contemplated hereby and thereby, and (iii) perform its obligations
hereunder and thereunder. This Agreement has been, and upon their execution the
Releases and Indemnities and the Xxxx of Sale will be, duly executed and
delivered by MGM Parent and MGM Seller, to the extent a party thereto, and this
Agreement is and, upon their execution, the Releases and Indemnities (to the
extent a party thereto) and the Xxxx of Sale will be valid and binding
obligations of MGM Parent and MGM Seller enforceable against them in accordance
with their respective terms, except as such enforceability may be affected by
Laws of bankruptcy, insolvency, reorganization and creditors' rights generally
and by the availability of equitable remedies. Without limiting the foregoing,
any and all actions of the directors and stockholders of MGM Parent and MGM
Seller required to approve and adopt this Agreement, the Releases and
Indemnities and the Xxxx of Sale have been duly taken and no further action of
the directors or stockholders of MGM Parent or MGM Seller is required in order
to permit the consummation of the transactions contemplated hereby or thereby or
to permit MGM Parent and MGM Seller to perform their respective obligations
hereunder or thereunder.
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(a) No Breach or Violation. The execution, delivery and performance of this
Agreement, the Releases and Indemnities (to the extent a party thereto) and the
Xxxx of Sale do not, and will not, (i) conflict with, violate or result in the
breach of any provision of the certificate of incorporation or by-laws of MGM
Parent or MGM Seller, (ii) conflict with or violate any Law or Judgment
applicable to MGM Parent or MGM Seller or the MGM Interests, (iii) conflict
with, result in any breach of, constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a default) under, or
require any consent under or pursuant to, any Contract to which MGM Parent or
MGM Seller is a party or by which they are otherwise bound, or (iv) result in
the creation of any Encumbrance on the MGM Interests, except, in the case of
clauses (ii) and (iii), any conflict, violation, breach or default, or where the
failure to obtain a consent, would not, individually or in the aggregate, have a
material adverse effect upon MGM Parent and MGM Seller and their subsidiaries
taken as a whole (an "MGM Material Adverse Effect") or on the ability of MGM
Parent or MGM Seller to consummate the transactions contemplated hereby and by
the Releases and Indemnities and the Xxxx of Sale.
(b) Required Consents. Other than (i) the notification requirements of the
HSR Act and Rules, if any, (ii) the release of the MGM Interests from any Liens
arising under any MGM credit agreement or security or collateral agreements,
and/or (iii) any waivers or consents required to be obtained from any bank or
other lender of MGM Parent, MGM Seller or any other Affiliate of MGM Parent in
connection with the sale of the MGM Interests, there is no Person whose approval
or consent, or with whom the filing of any certificate, notice, application,
report or other document, is legally or contractually required or is otherwise
necessary in connection with the execution, delivery or performance by MGM
Parent and MGM Seller of this Agreement, the Releases and Indemnities or the
Xxxx of Sale and the consummation of the transactions contemplated hereby and
thereby, except where failure to obtain such consent or approval or failure to
make such filing would not, individually or in the aggregate, reasonably be
expected to have a MGM Material Adverse Effect.
SECTION 3.03 MGM Interests. MGM Seller owns and has, and immediately prior
to the Closing will own and will have, good and valid title to the MGM Interests
free and clear of all Encumbrances and, upon delivery to the Rainbow Buyers
hereunder, good and valid title to the MGM Interests, free and clear of all
Encumbrances other than Encumbrances created by the Rainbow Buyers and their
Affiliates, will pass to the Rainbow Buyers.
SECTION 3.04 Legal and Governmental Proceedings and Judgments. There are
(i) no actions or proceedings by or against MGM Parent or MGM Seller pending or,
to the knowledge of MGM Parent or MGM Seller, threatened, by any Person, (ii) no
Judgments outstanding against MGM Parent or MGM Seller or to or by which the MGM
Interests are subject or bound, and (iii) no outstanding consent decrees,
settlements, injunctions or rulings imposed by any court, in each case which
could reasonably be expected to adversely affect the ability of MGM Parent or
MGM Seller to consummate any of the transactions contemplated hereby or by the
Releases and Indemnities or the Xxxx of Sale.
SECTION 3.05 Preemptive and Similar Rights. Other than any rights of the
Rainbow Buyers pursuant to the 2001 Agreement and the 2002 Agreement, there are
no preemptive rights, rights of first refusal or similar rights with respect to
the MGM Interests and
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no such rights arise by virtue of or in connection with the transactions
contemplated hereby. There are no other voting or similar contracts or
agreements with respect to the MGM Interests other than the 2001 Agreement and
the 2002 Agreement.
SECTION 3.06 Affiliate Transactions. Neither MGM Seller nor MGM Parents has
on behalf of either AMCC or IFC LLC entered into any Contract or understanding
between AMCC or IFC LLC, on the one hand, and (i) MGM Parent or any Affiliate of
MGM Parent or (ii) any other party, on the other hand.
SECTION 3.07 Securities Law Matters. MGM Seller represents that it is an
"accredited investor" as that term is defined in Regulation D under the
Securities Act and that it has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
acquisition of the Cablevision Note and of making an informed investment
decision with respect thereto. MGM Seller is taking the Cablevision Note solely
for investment purposes, and has no present intention to sell or otherwise
transfer the Cablevision Note. MGM Seller is aware that the Cablevision Note is
not and will not be registered under the Securities Act or under any state
securities laws. MGM Seller agrees not to offer, sell, or otherwise dispose of
the Cablevision Note except as permitted therein. MGM Seller understands that it
may be required to bear the economic risk of the investment represented by the
Cablevision Note for an indefinite period. MGM Seller acknowledges that the
Cablevision Note shall bear the following legend:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THIS NOTE IS NOT NEGOTIABLE AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.
EXCEPT AS PROVIDED IN THIS NOTE, THE TRANSFER OF THIS NOTE IS PROHIBITED.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RMHI AND THE RAINBOW BUYERS
To induce MGM Parent and MGM Seller to enter into this Agreement, RMHI and
the Rainbow Buyers jointly and severally represent and warrant to MGM Parent and
MGM Seller as follows:
SECTION 4.01 Organization and Authority. Each of RMHI and each Rainbow
Buyer is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware.
SECTION 4.02 Legal Capacity: Approvals and Consents.
(a) Authority; Binding Effect. Each of RMHI and each Rainbow Buyer has all
requisite corporate power and authority to (i) execute, deliver and perform this
Agreement
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and the Releases and Indemnities (to the extent a party thereto), (ii) approve,
adopt and consummate the transactions contemplated hereby and thereby, and (iii)
perform its obligations hereunder and thereunder. This Agreement has been, and
upon their execution the Releases and Indemnities will be, duly executed and
delivered by each of RMHI and each Rainbow Buyer, to the extent a party thereto,
and this Agreement is and, upon their execution, the Releases and Indemnities
(to the extent a party thereto) will be valid and binding obligations of each of
RMHI and each Rainbow Buyer, enforceable against them in accordance with its
terms, except as such enforceability may be affected by Laws of bankruptcy,
insolvency, reorganization and creditors rights generally and by the
availability of equitable remedies. Without limiting the foregoing, any actions
of the directors and stockholders of RMHI and each Rainbow Buyer required to
approve and adopt this Agreement and the Releases and Indemnities have been duly
taken and no further action of the directors and stockholders of RMHI or any
Rainbow Buyer is required in order to permit the consummation of the
transactions contemplated hereby and by the Releases and Indemnities or to
permit RMHI and each Rainbow Buyer to perform its respective obligations
hereunder and thereunder.
(b) No Breach or Violation. The execution, delivery and performance of this
Agreement and the Releases and Indemnities (to the extent a party thereto) do
and will not: (i) conflict with, violate or result in the breach of any
provision of the certificate of incorporation or bylaws of RMHI or any Rainbow
Buyer, (ii) conflict with or violate any Law or Judgment applicable to RMHI or
any Rainbow Buyer or (iii) conflict with, result in any breach of, constitute a
default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, or require any consent under or pursuant to, any
Contract to which RMHI or any Rainbow Buyer is a party or by which they are
otherwise bound, except, in the case of clauses (ii) and (iii), any conflict,
violation, breach or default, or where the failure to obtain a consent, would
not, individually or in the aggregate, have a material adverse effect upon RMHI
and its subsidiaries taken as a whole (a "Rainbow Material Adverse Effect") or
on the ability of RMHI and the Rainbow Buyers to consummate the transactions
contemplated hereby and by the Releases and Indemnities.
(c) Required Consents. Other than (i) the notification requirements of the
HSR Act and Rules and/or (ii) any waivers or consents required to be obtained
from any bank or other lender of RMHI, any Rainbow Buyer or any Affiliate of
RMHI or a Rainbow Buyer in connection with the purchase of the MGM Interests,
there is no Person whose approval or consent, or with whom the filing of any
certificate, notice, application, report or other document, is legally or
contractually required or otherwise is necessary in connection with the
execution, delivery or performance by RMHI and the Rainbow Buyers of this
Agreement and the Releases and Indemnities and the consummation of the
transactions contemplated hereby and thereby, except where failure to obtain
such, consent or approval or failure to make such filing would not, individually
or in the aggregate, reasonably be expected to have a Rainbow Material Adverse
Effect.
SECTION 4.03 Legal and Governmental Proceedings and Judgments. There are
(i) no actions or proceedings by or against RMHI or any Rainbow Buyer pending
or, to the knowledge of RMHI or any Rainbow Buyer threatened by any Person, (ii)
no Judgments outstanding against RMHI or the Rainbow Buyers and (iii) no
outstanding consent decrees, settlements, injunctions or rulings imposed by any
court, in each case which could reasonably be
12
expected to adversely affect the ability of RMHI or the Rainbow Buyers to
consummate any of the transactions contemplated hereby or by the Releases and
Indemnities.
ARTICLE V
COVENANTS AND AGREEMENTS
SECTION 5.01 Certain Actions. No party hereto nor its Affiliates shall take
any action that would or would reasonably be expected to prevent or materially
delay the ability of any party to consummate the transactions contemplated by
this Agreement, the Releases and Indemnities, the Cablevision Note, the
Registration Rights Agreement or the Xxxx of Sale. The parties hereto shall
proceed as promptly as practicable and in good faith and shall each use
reasonable best efforts to obtain each consent or approval required to be
obtained prior to the consummation of the transactions contemplated hereby. Each
party will advise the other parties in writing promptly of the written assertion
or commencement of any claim, litigation, proceeding or investigation of which
such party becomes aware that could reasonably be expected to delay or prevent
the consummation of the transactions contemplated hereby or that otherwise
relates to the transactions contemplated hereby.
SECTION 5.02 Satisfaction of Conditions. Each of the parties hereto
covenants and agrees with the others to exercise reasonable best efforts to
perform, comply with and otherwise satisfy each and every one of the conditions
to be satisfied by such party hereunder, and each party shall use reasonable
best efforts to notify promptly the others if it shall learn that any conditions
to performance of any party will not be fulfilled.
SECTION 5.03 Further Assurances. From time to time after the Closing, each
party will execute and deliver such other instruments of conveyance and
transfer, fully cooperate with the other parties and take such other actions as
the other parties reasonably may request to effect the purposes and intent of
this Agreement.
SECTION 5.04 Releases and Indemnities. RMHI and the Rainbow Buyers shall
execute and deliver, and shall cause Cablevision to execute and deliver to MGM
Seller the Cablevision Release and Indemnity at the Closing. MGM Parent and MGM
Seller shall execute and deliver, to RMHI and the Rainbow Buyers the MGM Release
and Indemnity at the Closing.
SECTION 5.05 HSR Filing; Required Consents. Within five Business Days after
the date of execution of this Agreement, RMHI shall, and shall cause its
Affiliates to, make the applicable filings under the HSR Act and Rules with the
U.S. Federal Trade Commission (the "FTC") and the Antitrust Division of the U.S
Department of Justice (the "DOJ"). Thereafter, the parties hereto shall, and
shall cause their Affiliates to, proceed as promptly as practicable in good
faith and shall use reasonable commercial efforts to (i) obtain the early
termination of any applicable waiting periods under the HSR Act and Rules and
any other required consents or approvals by or from any antitrust authorities
and (ii) comply with any additional request for documents or information made by
the FTC, the DOJ or a court or other governmental authority. The parties hereto
shall, and shall cause their Affiliates to, proceed as
promptly as practicable in good faith and shall use reasonable commercial
efforts to obtain any waivers or consents required to be obtained from any bank
or other lender in connection with
13
such parties' performance of their obligations hereunder and the transactions
contemplated hereby, including obtaining releases of all Liens, if any, on the
MGM Interests arising under any MGM Parent or MGM Seller credit agreement or
security or collateral agreements or otherwise.
SECTION 5.06 No Distributions. The parties hereto agree that neither AMCC
nor IFC LLC shall make, or be obligated in any way to make, any distributions
between the date hereof and the earlier of (i) the Closing or (ii) the date that
this Agreement is terminated in accordance with its terms.
SECTION 5.07 Tax. The parties hereto agree that upon the Closing each of
AMCC and IFC LLC will adopt the "closing of the books" method of income
allocation as prescribed in Treasury Regulation Section 1.706-1(c)(2) for
purposes of allocating income, gain, loss, deductions and credits between the
partners in AMCC and the members in IFC LLC for the year of sale, determined in
a manner consistent with the provisions of Sections 2.04 and 10.05 and
reasonably acceptable to MGM Seller.
SECTION 5.08 Financial Statements. RMHI shall, or shall cause each of AMCC
and IFC LLC to, prepare and deliver to MGM Seller (i) financial statements of
each of AMCC and IFC LLC for the fiscal year ending December 31, 2003 no later
than March 31, 2004 and (ii) financial statements of each of AMCC and IFC LLC
for each fiscal quarter in 2003 ending after the date of execution hereof during
any portion of which MGM Seller was a partner in AMCC or a member of IFC LLC no
more than 45 days after the last day of such fiscal quarter; provided that RMHI
shall not be required to deliver, or cause the delivery of, any financial
statements to MGM Seller if (1) neither it nor any of its subsidiaries owns a
majority of the partnership interests of AMCC or ownership interests of IFC LLC,
as applicable, on the last day of the applicable annual or quarterly period and
(2) it has not been able, despite of its commercial reasonable efforts, to
require the owner of a majority of the partnership interests of AMCC or
ownership interests of IFC LLC, as applicable, to deliver, or cause the delivery
of, such financial statements to MGM Seller.
SECTION 5.09 Prior Distributions. RMHI and MGM Parent hereby acknowledge
and agree, on behalf of themselves and their Affiliates, that the last
distribution made by or in respect of AMCC, AMC, IFC LLC, IFC or WE was a
distribution in the amount of $50,000,000 made on February 4, 2003, $10,000,000
of which was distributed to MGM Seller on such date.
SECTION 5.10 Repayment of the Cablevision Note. RMHI shall use reasonable
commercial efforts to obtain additional RMHI financing necessary to permit
Cablevision to repay the Cablevision Note at the earliest practicable time.
SECTION 5.11 Waivers of Piggy-Back Registration Rights. The parties hereto
acknowledge that certain holders of shares of Cablevision NY Group Class A
common stock have piggy-back registration rights pursuant to the Registration
Rights Agreements, each dated as of January 27, 1986, as amended, between the
Company and Cablevision Systems Company, in the first case, and the Company and
CSC Holdings Company, in the second case, which entitle such holders to
participate on a "piggy-back" basis on the registration statement relating to
the Cablevision Shares to be filed pursuant to the Registration Rights
Agreement.
14
RMHI shall use commercial reasonable efforts to obtain waivers of such
piggy-back registration rights from such holders prior to the delivery of the
Cablevision Shares.
ARTICLE VI
DELIVERIES AT CLOSING
SECTION 6.01 Deliveries by the Rainbow Buyers. At the Closing, RMHI and the
Rainbow Buyers will deliver or cause to be delivered to MGM Seller:
(a) payment of the cash portion of the Purchase Price for the MGM Interests
as provided in Section 2.02;
(b) the Cablevision Note in the form attached hereto as Exhibit D;
(c) the certificate required to be delivered pursuant to Section 7.02;
(d) the Releases and Indemnities in the form attached hereto as Exhibits A
and C;
(e) the Film License Agreement in the form attached hereto as Exhibit E;
and
(f) the Registration Rights Agreement substantially in the form of Exhibit
F.
SECTION 6.02 Deliveries by MGM. At the Closing, MGM Parent and MGM Seller
will deliver or cause to be delivered to the Rainbow Buyers:
(a) the Xxxx of Sale and Assignment of the MGM Interests (the "Xxxx of
Sale") in the form attached hereto as Exhibit B;
(b) all certificates, if any, representing the MGM Interests in proper form
for transfer;
(c) the certificate required to be delivered pursuant to Section 8.02;
(d) evidence that the Liens on the MGM Interests arising under any MGM
Parent or MGM Seller credit agreement or security or collateral agreements or
otherwise have been fully released;
(e) the Releases and Indemnities in the form attached hereto as Exhibits A
and C;
(f) the Film License Agreement in the form attached hereto as Exhibit E;
and
(g) the Registration Rights Agreement substantially in the form of Exhibit
15
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF MGM PARENT AND MGM SELLER
The obligations of MGM Parent and MGM Seller to complete the
transactions provided for herein are subject to the fulfillment of all of the
following conditions, any of which may be waived in writing by MGM Parent or MGM
Seller:
SECTION 7.01 Performance by RMHI and the Rainbow Buyers. Each
of RMHI and each Rainbow Buyer and their Affiliates shall have performed in all
material respects their respective agreements and covenants to be performed by
each of them hereunder to the extent such are required to be performed at or
prior to the Closing, including with respect to its closing deliveries in
Section 6.01.
SECTION 7.02 Absence of Breach of Representations and
Warranties. The representations and warranties of RMHI and each Rainbow Buyer
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as if then made,
and MGM Parent and MGM Seller shall have received a certificate from each of
RMHI and each Rainbow Buyer to such effect signed by a duly authorized officer
thereof.
SECTION 7.03 Absence of Proceedings. No Judgment shall have
been issued, and no action or proceeding shall have been instituted by any
Governmental Authority, enjoining or preventing, or seeking to enjoin or
prevent, the consummation of the transactions contemplated hereby.
SECTION 7.04 Compliance with HSR Act. Any and all waiting
periods under the HSR Act shall have expired or been terminated.
SECTION 7.05 Cablevision Release and Indemnity. Each of RMHI,
each Rainbow Buyer and Cablevision shall have duly executed and delivered the
Cablevision Release and Indemnity.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF RMHI AND
THE RAINBOW BUYERS
The obligations of RMHI and each Rainbow Buyer to complete the
transactions provided for herein are subject to the fulfillment of all of the
following conditions, any of which may be waived in writing by RMHI or the
Rainbow Buyers.
SECTION 8.01 Performance by MGM Parent and MGM Seller. MGM
Parent, MGM Seller and their Affiliates shall have performed in all material
respects their respective agreements and covenants to be performed by each of
them hereunder to the extent such are required to be performed at or prior to
the Closing, including with respect to its closing deliveries in Section 6.02.
16
SECTION 8.02 Absence of Breach of Representations and
Warranties. The representations and warranties of MGM Parent and MGM Seller
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as if then made.
RMHI and the Rainbow Buyers shall have received a certificate from each of MGM
Parent and MGM Seller to such effect signed by a duly authorized officer
thereof.
SECTION 8.03 Absence of Proceedings. No Judgment shall have
been issued, and no action or proceeding shall have been instituted by any
Governmental Authority, enjoining or preventing, or seeking to enjoin or
prevent, the consummation of the transactions contemplated hereby.
SECTION 8.04 Release of Liens. MGM Parent and MGM Seller shall
have obtained the release of all Liens on the MGM Interests arising under any
MGM Parent or MGM Seller credit agreement or security or collateral agreements
or otherwise.
SECTION 8.05 Compliance with HSR Act. Any and all applicable
waiting periods under the HSR Act shall have expired or been terminated.
SECTION 8.06 MGM Release and Indemnity. Each of MGM Parent and
MGM Seller shall have duly executed and delivered the MGM Release and Indemnity.
ARTICLE IX
CLOSING
SECTION 9.01 Closing. The Closing shall take place at the offices
of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00
a.m., local time, on the third Business Day after the later of the expiration or
early termination of the waiting period under the HSR Act or the satisfaction or
waiver of the conditions to Closing set forth in Sections 7 and 8 of this
Agreement (the "Closing Date").
SECTION 9.02 Termination. (a) This Agreement may be terminated
and the transactions contemplated hereby may be abandoned:
(i) at any time, by the mutual written agreement of the
parties; or
(ii) by any party (other than a party whose material breach
or default of its obligations under this Agreement has caused the
Closing not to occur on or prior to September 1, 2003 (the
"Outside Date")) if the Closing shall not have occurred prior to
the Outside Date; provided, that if all the conditions to the
parties' obligations to close the transactions provided for
herein have been satisfied or waived on or prior to September 1,
2003 other than the conditions set forth in Sections 7.04 and
8.05, the Outside Date shall be automatically extended until
November 30, 2003; or
17
(iii) by MGM Parent or MGM Seller, upon a breach of or
failure to perform in any material respect any representation,
warranty, covenant or agreement on the part of RMHI or the
Rainbow Buyers set forth in this Agreement, such that the
conditions set forth in Section 7 of this Agreement cannot be
satisfied on or prior to the Outside Date; or
(iv) by RMHI or any Rainbow Buyer, upon a breach of or
failure to perform in any material respect any representation,
warranty, covenant or agreement on the part of MGM Parent or MGM
Seller set forth in this Agreement, such that the conditions set
forth in Section 8 of this Agreement cannot be satisfied on or
prior to the Outside Date; or
(v) by either RMHI and the Rainbow Buyers, on the one
hand, or MGM Parent and MGM Seller, on the other hand, in the
event that any Judgment restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement shall
have become final and nonappealable.
(b) In the event of the termination of this Agreement as
provided in this Section 9.02, this Agreement shall forthwith become void and
there shall be no liability on the part of any party hereto, except (i) that the
provisions of Article X shall survive a termination of this Agreement, and (ii)
nothing shall relieve any party from liability for any breach of this Agreement,
including any failure to deliver the documents required by Section 6.01 or 6.02,
respectively.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Survival of Representations and Warranties. Each
of the representations and warranties of RMHI, the Rainbow Buyers, MGM Parent
and MGM Seller contained in this Agreement shall survive the Closing for a
period of eighteen (18) months following the Closing Date; provided, however,
that the representations and warranties contained in Section 3.03 shall survive
the Closing indefinitely.
SECTION 10.02 Indemnification.
(a) MGM Parent and MGM Seller, on the one hand, and RMHI and the
Rainbow Buyers, on the other hand (each, an "Indemnifying Party"), shall
indemnify the others and their respective officers, members and Affiliates
(each, an "Indemnified Party") from and against any and all losses, damages,
liabilities, claims, charges, actions, proceedings, demands, judgments,
deficiencies, settlement costs and expenses of any nature whatsoever (including,
without limitation, reasonable attorneys fees and expenses in connection with
such indemnification claim by such Indemnified Party) (collectively, "Losses")
directly or indirectly incurred by an Indemnified Party and resulting from (i)
the inaccuracy, in any material respect, of any representation or warranty of an
Indemnifying Party or Cablevision or (ii) any breach of or failure to perform by
an Indemnifying Party or Cablevision any agreement, covenant or obligation
contained in or made pursuant to this Agreement, the Registration Rights
Agreement
18
or the Cablevision Note and all claims, charges, actions or proceedings incident
to or arising out of the foregoing.
(b) Each Indemnified Party shall give notice as promptly as
reasonably practicable to each Indemnifying Party from which it is entitled to
seek indemnity under Section 10.02 of any action commenced against it in respect
of which indemnity may be sought hereunder, but failure to so notify an
Indemnifying Party shall not relieve such Indemnifying Party from any liability
that it may have on account of this indemnity agreement or otherwise so long as
such failure shall not have materially prejudiced the position of the
Indemnifying Party. Upon such notification, the Indemnifying Party shall assume
the defense of such action and after such assumption the Indemnified Party shall
not be entitled to reimbursement of any expenses incurred by it in connection
with such action except as described below. In any such action, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
applicable Indemnifying Party and the Indemnified Party shall have mutually
agreed to the contrary or (ii) the named parties in any such action (including
any impleaded parties) include both the applicable Indemnifying Party and the
Indemnified Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. An
Indemnifying Party shall not, without the written consent of each Indemnified
Party, settle or compromise any action, suit or proceeding or consent to the
entry of any judgment that (i) involves any injunction or equitable relief
beyond money damages or other money payments or (ii) does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnified Person of a written release from all liability in respect of the
indemnified portion of any such action or proceeding. The Indemnifying Party
shall not be liable for any settlement of any proceeding effected without its
written consent (which shall not be unreasonably withheld or delayed by such
Indemnifying Party), but if settled with such consent or if there be final
judgment for the plaintiff, the Indemnifying Party shall indemnify the
applicable Indemnified Party from and against any loss, damage or liability by
reason of such settlement or judgment. To the extent permitted by law,
indemnification payments shall be treated as adjustments to the appropriate
Purchase Price for all tax purposes.
(c) In the event that an Indemnifying Party shall be obligated to
indemnify an Indemnified Party pursuant to this Section 10.02, the Indemnifying
Party shall upon payment of such indemnity in full, be subrogated to all rights
of the applicable Indemnified Party with respect to the claims for which such
indemnification relates.
SECTION 10.03 Amendments; Waivers. This Agreement cannot be
changed or terminated orally and no waiver of compliance with any provision or
condition hereof and no consent provided for herein shall be effective unless
evidenced by an instrument in writing duly executed by the parties hereto sought
to be charged with such waiver or consent. No waiver of any term or provision
hereof shall be construed as a further or continuing waiver of such term or
provision or any other term or provision. Any condition to the performance by
any party hereto which may legally be waived at or prior to the Closing may be
waived in writing at any time by the party or parties entitled to the benefit
thereof.
SECTION 10.04 Entire Agreement. This Agreement sets forth the
entire understanding and agreement of the parties and supersedes any and all
prior agreements,
19
memoranda, arrangements and understandings relating to the subject matter hereof
other than the Releases and Indemnities, the Cablevision Note, the Xxxx of Sale
and any other writing signed by the parties, dated on or prior to the date of
this Agreement and which expressly refers to this Section 10.04. No
representation, warranty, promise, inducement or statement of intention has been
made by any party which is not contained in this Agreement, the Releases and
Indemnities, the Cablevision Note, the Registration Rights Agreement, the Xxxx
of Sale or any such writing, and no party shall be bound by, or be liable for,
any alleged representation, promise, inducement or statement of intention not
contained herein or therein and each party expressly agrees that it has not
relied upon any such representation, promise, inducement or statement of intent.
SECTION 10.05 Existing Agreements. The 2001 Agreement and the
2002 Agreement shall terminate in their entirety upon the Closing and none of
the parties thereto shall have any further liability thereunder for any actions,
circumstances or events occurring before or after such termination, except that
(1) Sections 2.01 through 2.05, 2.07, 8.01 through 8.09 and 8.11 of the 2002
Agreement and the confidentiality provisions in Section 9 of the 2001 Agreement
(the "Surviving Provisions") and the Releases delivered in connection with the
2002 Agreement shall survive in accordance with their respective terms and (2)
Cablevision and its Affiliates shall comply with the terms of the 2001 Agreement
and the 2002 Agreement (including Section 3(b)(f) of the 2002 Agreement) in
preparing all tax returns, and in taking any other tax position, with respect to
any period (or portion thereof) during which MGM Seller held a partnership
interest in AMCC or an ownership interest in IFC LLC. If the Closing shall not
occur, the 2001 Agreement and the 2002 Agreement shall remain in full force and
effect in accordance with their respective terms.
SECTION 10.06 Binding Effect; Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns. This Agreement may not be assigned by any
party without the prior written consent of the other parties hereto, except that
the Rainbow Buyers may assign any of their rights hereunder, including the right
to purchase the MGM Interests, to any Affiliate of CSC Holdings.
SECTION 10.07 Construction; Counterparts. The Article and
Section headings of this Agreement are for convenience of reference only and do
not form a part hereof and do not in any way modify, interpret or construe the
intentions of the parties. This Agreement may be executed in one or more
counterparts, and all such counterparts shall constitute one and the same
instrument.
SECTION 10.08 Notices. All notices and communications hereunder
shall be in writing and shall be deemed to have been duly given to and received
by a party when delivered in person, faxed or e-mailed (with confirmation of
transmission by the transmitting equipment) or three Business Days after such
notice is enclosed in a properly sealed envelope, certified or registered, and
deposited (postage and certification or registration prepaid) in a post office
or collection facility regularly maintained by the United States Postal Service,
or one Business Day after delivery to a nationally recognized overnight courier
service, and addressed as follows:
20
(a) if to Cablevision, RMHI or any Rainbow Buyer:
Rainbow Media Holdings, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
(b) If to MGM Parent or MGM Seller:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxx & Xxxxx
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx
Any party may change its address for the purpose of notice by
giving notice in accordance with the provisions of this Section 10.08.
SECTION 10.09 Expenses of the Parties. All expenses incurred by
or on behalf of the parties hereto in connection with the authorization,
preparation and consummation of this Agreement, including, without limitation,
all fees and expenses of agents, representatives, counsel and accountants
employed by the parties hereto in connection with the authorization,
preparation, execution and consummation of this Agreement shall be borne solely
by the party who shall have incurred the same.
21
SECTION 10.10 Third-Party Beneficiary. This Agreement is entered
into only for the benefit of the parties and their respective successors and
assigns, and nothing hereunder shall be deemed to constitute any person a
third-party beneficiary to this Agreement.
SECTION 10.11 Governing Law Choice of Forum; Waiver of Jury
Trial; Set-off.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) All actions and proceedings arising out of or relating to this
Agreement, the Xxxx of Sale, the Cablevision Note, the Registration Rights
Agreement or the Releases and Indemnities shall be heard and determined
exclusively in any New York state or federal court sitting in the Borough of
Manhattan of The City of New York. The parties hereto hereby (i) submit to the
exclusive jurisdiction of any state or federal court sitting in the Borough of
Manhattan of The City of New York for the purpose of any action or proceeding
arising out of or relating to this Agreement, the Xxxx of Sale, the Cablevision
Note, the Registration Rights Agreement or the Releases and Indemnities brought
by any party hereto, and (ii) irrevocably waive, and agree not to assert by way
of motion, defense, or otherwise, in any such action or proceeding, any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that the
action or proceeding is brought in an inconvenient forum, that the venue of the
action or proceeding is improper, or that this Agreement, the Xxxx of Sale, the
Cablevision Note, the Registration Rights Agreement or the Releases and
Indemnities or the transactions contemplated hereby or thereby may not be
enforced in or by any of the above-named courts. No party hereby waives any
right to remove or seek to remove any action brought in any state court sitting
in the Borough of Manhattan of The City of New York to any federal court sitting
in the Borough of Manhattan of The City of New York.
(c) Each of the parties hereto hereby waives to the fullest extent
permitted by applicable Law any right it may have to a trial by jury with
respect to any litigation directly or indirectly arising out of, under or in
connection with this Agreement, the Xxxx of Sale, the Cablevision Note, the
Registration Rights Agreement or the Releases and Indemnities or the
transactions contemplated hereby or thereby. Each of the parties hereto (i)
certifies that 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 that foregoing waiver and (ii) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement, the Xxxx of Sale, the Cablevision Note, the Registration Rights
Agreement and the Releases and Indemnities and the transactions contemplated
hereby and thereby, as applicable, by, among other things, the mutual waivers
and certifications in this Section 10.11.
SECTION 10.12 Press Releases. No press release or other public
information relating to the transactions contemplated by this Agreement shall be
made or disclosed by any party hereto without the prior written consent of the
other parties, provided, however, that any party may disclose such information
if reasonably deemed by legal counsel for such party to be required by Law or
the rules of any stock exchange on which such party's
22
common stock is listed; provided further that such party shall notify the other
parties as soon as reasonably practicable prior to the issuance of such press
release.
SECTION 10.13 Severability. If any provision of this Agreement
is finally determined to be illegal, void or unenforceable, such determination
shall not, of itself, nullify this Agreement, which shall continue in full force
and effect subject to the conditions and provisions hereof.
(SIGNATURE PAGE FOLLOWS)
23
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
RAINBOW MEDIA HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice Chairman
AMERICAN MOVIE CLASSICS III
HOLDING CORPORATION
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice Chairman
AMERICAN MOVIE CLASSICS IV
HOLDING CORPORATION
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice Chairman
IFC II HOLDING CORPORATION
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice Chairman
IFC III HOLDING CORPORATION
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice Chairman
CABLEVISION SYSTEMS
CORPORATION (solely for purposes of
Sections 2.02(b), 2.02(c), 5.01, 10.05, 10.08
and 10.11)
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice Chairman
METRO-XXXXXXX-XXXXX INC.
By: /s/ Xxx Xxxxx
-------------------------------------------
Name: Xxx Xxxxx
Title: General Counsel
MGM NETWORKS U.S., INC.
By: /s/ Xxx Xxxxx
-------------------------------------------
Name: Xxx Xxxxx
Title: General Counsel
EXHIBIT A
RELEASE AND INDEMNITY
This Release and Indemnity (this "Release and Indemnity") is made
and entered into as of ______ __, 2003, by and among Cablevision Systems
Corporation ("Cablevision"), Rainbow Media Holdings, Inc. ("RMHI"), American
Movie Classics III Holding Corporation ("AMC3HC"), American Movie Classics IV
Holding Corporation ("AMC4HC"), IFC II Holding Corporation ("IFC2HC"), and IFC
III Holding Corporation ("IFC3HC"), and Metro-Xxxxxxx-Xxxxx Inc., a Delaware
corporation ("MGM Parent").
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN KNOW THAT
Cablevision, RMHI, AMC3HC, AMC4HC, IFC2HC and IFC3HC, in each case, for itself
and for its predecessors, subsidiaries, departments, divisions and sections and
for their successors, Affiliates (including, for the avoidance of doubt, AMCC
and IFC LLC and their respective subsidiaries after the Closing), heirs,
assigns, executors, administrators, partners, officers, directors, employees,
attorneys and agents (individually, each a "Releasor" and collectively, the
"Releasors"), in consideration of the execution and delivery of the Purchase
Agreement, dated as of June 27, 2003, by and between RMHI, AMC3HC, AMC4HC,
IFC2HC, IFC3HC, MGM Parent and MGM Networks U.S., Inc. ("MGM Seller") (the
"Purchase Agreement") and the consummation thereof, and for other good and
valuable consideration, receipt and adequacy of which is hereby acknowledged,
release, waive and forever discharge each of MGM Parent and MGM Seller and their
respective predecessors, subsidiaries, departments, divisions, sections,
successors, Affiliates, heirs, assigns, executors, administrators, partners,
officers, directors, employees, attorneys and agents (individually, each a
"Releasee" and collectively, the "Releasees") from, and shall indemnify, defend
and hold harmless all such persons against and from, all actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, bonds, damages, judgments, executions, claims,
obligations, costs, expenses, losses, exposures, extents, liabilities, duties
and demands whatsoever, of every name and nature, in law or equity, known or
unknown (collectively "Claims"), which against any Releasee, a Releasor ever
had, now has or hereafter can, shall or may have by reason of any matter, act,
omission, conduct, transaction or occurrence from the beginning of the world up
to and including the date of this Release and Indemnity for, upon, by reason of,
asserted in or arising out of, or related to AMCC, AMC, WE, IFC LLC or IFC,
provided, however, that, notwithstanding the foregoing, this Release and
Indemnity shall not relate to (i) any Claims under, relating to or arising in
connection with the Purchase Agreement, the Releases and Indemnities, the
Cablevision Note, the Registration Rights Agreement or the Xxxx of Sale, (ii)
any Claims under, relating to or arising in connection with the Surviving
Provisions or the releases delivered in connection with the 2002 Agreement,
(iii) any Claims relating to or arising out of actions taken by MGM Parent or
any Affiliate thereof without the consent of RMHI, AMCHC or AMC2HC (with respect
to AMCC, AMC or WE) or RMHI, Bravo Holding Corporation (prior to the purchase of
Bravo Company by National Broadcasting Company, Inc.), Bravo II Holding
Corporation (prior to the purchase of Bravo Company by National Broadcasting
Company, Inc.) or IFC Holding Corporation (with respect to IFC LLC or IFC)
related to AMCC, AMC, WE, IFC LLC or IFC, or (iv) any contract or arrangement
pursuant to which MGM Parent or an Affiliate
A-1
of MGM Parent licenses or distributes motion pictures or other programming to or
from Cablevision or any of its Affiliates.
Cablevision hereby represents and warrants that it (i) is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware and (ii) has all requisite corporate power and
authority to (A) execute, deliver and perform this Release and Indemnity, (B)
approve, adopt and consummate the transactions contemplated hereby, and (C)
perform its obligations hereunder. This Release and Indemnity has been duly
executed and delivered by Cablevision and is a valid and binding obligation of
Cablevision enforceable against Cablevision in accordance with its terms, except
as such enforceability may be affected by Laws of bankruptcy, insolvency,
reorganization and creditors rights generally and by the availability of
equitable remedies. Without limiting the foregoing, any actions of the directors
and stockholders of Cablevision required to approve and adopt this Release and
Indemnity have been duly taken and no further action of the directors and
stockholders of Cablevision is required in order to permit the consummation of
the transactions contemplated hereby or to permit Cablevision to perform its
respective obligations hereunder.
RMHI hereby agrees to defend and hold harmless MGM Parent and its
Affiliates (each, an "Indemnified Party") from and against any and all Claims
incurred by any of them as a result of, relating to or arising in connection
with any Claim made by any third party against or involving an Indemnified Party
in respect of activities of AMCC, AMC, WE, IFC LLC or IFC prior to the Closing,
except for Claims that result from, relate to or arise in connection with any
action taken by an Indemnified Party unless such action was taken at the express
direction of or with the express consent of RMHI, AMCHC or AMC2HC (with respect
to AMCC, AMC or WE) or RMHI, Bravo Holding Corporation (prior to the purchase of
Bravo Company by National Broadcasting Company, Inc.), Bravo II Holding
Corporation (prior to the purchase of Bravo Company by National Broadcasting
Company, Inc.) or IFC Holding Corporation (with respect to IFC LLC or IFC).
Each Releasor hereby represents and warrants that it is the sole
and lawful owner of all right, title and interest in and to every Claim which
such Releasor hereby releases, and that such Releasor has not assigned or
transferred, or purported to assign or transfer to any person, any Claims
released herein. Each Releasor shall jointly and severally with the other
Releasors indemnify, defend and hold harmless the Releasees, and each of them,
from and against any claims based upon or arising in connection with any such
prior assignment or transfer. Each Releasor represents that it has not filed any
Claims in any jurisdiction against any Releasee regarding or relating to the
matters released through this Release and Indemnity.
Each Releasor expressly covenants and agrees never to institute,
or participate (other than as a passive member of a class or putative claim
prior to the expiration of the opt-out period) in, any claim, action, suit, or
proceeding against any Releasee, in any court or forum, directly or indirectly,
regarding or relating to the matters released through this Release and
Indemnity, and further covenants and agrees that this Release and Indemnity is a
bar to any such claim, action, suit, or proceeding. In the event that the
Releasors are unable to opt out of a class and become entitled to receive any
consideration in connection with such action, the Releasors assign their right
to receive any such consideration to MGM Parent and release, waive and forever
discharge the Releasees from any and all liability for such consideration. In
addition to
A-2
any other liability that shall accrue upon the breach of this covenant, each
Releasor agrees that it shall jointly and severally with the other Releasors
indemnify and hold harmless each Releasee from any such claim, action, suit or
proceeding, and shall be liable for all reasonable attorneys' fees and costs
incurred by each Releasee in defense of such claim, action, suit or proceeding,
provided, however, that this indemnification shall not cover a circumstance in
which a Releasor is a passive member of a class or putative claim prior to the
expiration of the opt-out period.
Capitalized terms used in this Release and Indemnity and not
otherwise defined herein shall have the meanings assigned thereto in the
Purchase Agreement.
This Release and Indemnity shall become effective contemporaneous
with the Closing and shall have no effect unless and until that Closing occurs.
This Release and Indemnity may be executed in one or more
counterparts, all of "which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
This Release and Indemnity may not be changed orally.
THIS RELEASE AND INDEMNITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE CONFLICTS OF LAWS, OF THE STATE
OF NEW YORK.
A-3
IN WITNESS WHEREOF, each of the Parties has caused this Release and
Indemnity to be duly executed by its authorized officer on the _____ day of
_______, 2003.
CABLEVISION SYSTEMS
CORPORATION
By:_______________________________
Name:
Title:
On _______ __, 2003, BEFORE ME personally came to me known, and known
to me to be the individual who executed the foregoing RELEASE AND INDEMNITY, and
duly acknowledged to me that he executed the same.
______________________________
RAINBOW MEDIA HOLDINGS, INC.
By:_______________________________
Name:
Title:
On ______ __, 2003, BEFORE ME personally came to me known, and known
to me to be the individual who executed the foregoing RELEASE AND INDEMNITY, and
duly acknowledged to me that he executed the same.
______________________________
A-4
AMERICAN MOVIE CLASSICS III
HOLDING CORPORATION
By:_______________________________
Name:
Title:
On _______ __, 2003, BEFORE ME personally came to me known, and known
to me to be the individual who executed the foregoing RELEASE AND INDEMNITY, and
duly acknowledged to me that he executed the same.
______________________________
AMERICAN MOVIE CLASSICS IV
HOLDING CORPORATION
By:_______________________________
Name:
Title:
On ______ __, 2003, BEFORE ME personally came to me known, and known
to me to be the individual who executed the foregoing RELEASE AND INDEMNITY, and
duly acknowledged to me that he executed the same.
______________________________
IFC II HOLDING CORPORATION
By:_______________________________
Name:
Title:
On ______ __, 2003, BEFORE ME personally came to me known, and known
to me to be the individual who executed the foregoing RELEASE AND INDEMNITY, and
duly acknowledged to me that he executed the same.
______________________________
A-5
IFC III HOLDING CORPORATION
By:_______________________________
Name:
Title:
On ______ __, 2003, BEFORE ME personally came to me known, and known
to me to be the individual who executed the foregoing RELEASE AND INDEMNITY, and
duly acknowledged to me that he executed the same.
______________________________
METRO-XXXXXXX-XXXXX INC.
By:_______________________________
Name:
Title:
On ______ __, 2003, BEFORE ME personally came to me known, and known
to me to be the individual who executed the foregoing RELEASE AND INDEMNITY, and
duly acknowledged to me that he executed the same.
______________________________
A-6
EXHIBIT B
XXXX OF SALE AND ASSIGNMENT OF THE MGM INTERESTS
THIS XXXX OF SALE AND ASSIGNMENT OF THE MGM INTERESTS is made as of
_____ __, 2003 by MGM Networks U.S, Inc., a Delaware corporation ("MGM Seller"),
and Metro-Xxxxxxx-Xxxxx Inc., a Delaware corporation ("MGM Parent"), and,
together with MGM Seller, "MGM"), in favor of American Movie Classics III
Holding Corporation, a Delaware corporation ("AMC3HC"), American Movie Classics
IV Holding Corporation, a Delaware corporation ("AMC4HC"), IFC II Holding
Corporation, a Delaware corporation ("IFC2HC") and IFC III Holding Corporation,
a Delaware corporation ("IFC3HC" and collectively with AMC3HC, AMC4HC and
IFC2HC, the "Transferees").
WHEREAS, MGM Parent, MGM Seller, RMHI, AMC3HC, AMC4HC, IFC2HC and
IFC3HC have entered into a Purchase Agreement dated as of June 27, 2003 (the
"Purchase Agreement") (all capitalized terms used but not defined herein shall
have the meanings assigned to them in the Purchase Agreement), pursuant to
which, among other things, MGM Parent has agreed to cause MGM Seller, and MGM
Seller has agreed, to transfer its partnership interest, free and clear of all
Encumbrances, in American Movie Classics Company ("AMCC"), a New York general
partnership, and its membership interest, free and clear of all Encumbrances, in
The Independent Film Channel LLC, a Delaware limited liability company ("IFC
LLC"), to the Transferees, in accordance with and subject to the terms and
conditions set forth in the Purchase Agreement;
NOW, THEREFORE, for and in consideration of the payment to MGM Seller
of the Purchase Price provided for in Section 2.02 of the Purchase Agreement, in
exchange for the transfer of the entire interest of MGM Seller in AMCC and IFC
LLC, including all partnership interests, membership interests, all other equity
or ownership interests and all other rights to
share in profits, losses and distributions of AMCC and IFC LLC beneficially
owned by MGM Seller or its Affiliates (the "AMCC Transferred Interest" and the
"IFC Transferred Interest," respectively and collectively, the "Transferred
Interest") pursuant to the Purchase Agreement, the receipt and sufficiency of
which consideration is hereby acknowledged, and in further consideration of the
mutual covenants and agreements contained in the Purchase Agreement, and
pursuant to the terms of the Purchase Agreement, MGM Seller does hereby assign,
transfer, convey and deliver to Transferees, their respective successors and
assigns all of MGM Seller's right, title and interest in and to, free of any and
all Encumbrances, the Transferred Interest as follows:
(a) One-half (1/2) of the AMCC Transferred Interest to AMC3HC;
(b) One-half (1/2) of the AMCC Transferred Interest to AMC4HC;
(c) One-half (1/2) of the IFC LLC Transferred Interest to IFC2HC; and
(d) One-half (1/2) of the IFC LLC Transferred Interest to IFC3HC.
Each Transferee hereby accepts the assignment, transfer and conveyance
to it of all of MGM Seller's right, title and interest in and to the Transferred
Interest assigned, transferred and conveyed to it in the preceding paragraph.
Each of MGM and MGM Seller does hereby agree, from and after the date
hereof upon the request of any Transferee, to execute such other documents as
such Transferee may reasonably require in order to obtain the full benefit of
this Xxxx of Sale and Assignment of the MGM Interests and MGM's and MGM Seller's
obligations hereunder and under the Purchase Agreement.
MGM, MGM Seller and the Transferees do hereby agree that this Xxxx of
Sale and Assignment of the MGM Interests shall be governed by and construed in
accordance with the substantive laws of the State of New York without regard to
conflicts of laws provisions.
B-2
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
duly executed as of the date first written above.
MGM NETWORKS U.S., INC. METRO-XXXXXXX-XXXXX INC.
By ______________________________ By ________________________________
Name: Name:
Title: Title:
B-3
EXHIBIT C
RELEASE AND INDEMNITY
This Release and Indemnity (this "Release and Indemnity") is made and
entered into as of ______ __, 2003, by and among Metro-Xxxxxxx-Xxxxx Inc. ("MGM
Parent"), MGM Networks U.S., Inc. ("MGM Seller"), and Rainbow Media Holdings,
Inc. ("RMHI").
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN KNOW THAT MGM
Parent and MGM Seller, in each case, for itself and for its predecessors,
subsidiaries, departments, divisions and sections and for their successors,
Affiliates, heirs, assigns, executors, administrators, partners, officers,
directors, employees, attorneys and agents (individually, each a "Releasor" and
collectively, the "Releasors"), in consideration of the execution and delivery
of the Purchase Agreement, dated as of June 27, 2003, by and between, Rainbow
Media Holdings, Inc. ("RMHI"), American Movie Classics III Holding Corporation
("AMC3HC"), American Movie Classics IV Holding Corporation ("AMC4HC"), IFC II
Holding Corporation ("IFC2HC") and IFC III Holding Corporation ("IFC3HC"), MGM
Parent and MGM Seller (the "Purchase Agreement") and the consummation thereof,
and for other good and valuable consideration, receipt and adequacy of which is
hereby acknowledged, release, waive and forever discharge each of RMHI, AMC3HC,
AMC4HC, IFC2HC and IFC3HC and their respective predecessors, subsidiaries,
departments, divisions, sections, successors, Affiliates, heirs, assigns,
executors, administrators, partners, officers, directors, employees, attorneys
and agents (individually, each a "Releasee" and collectively, the "Releasees")
from, and shall indemnify, defend and hold harmless all such persons against and
from, all actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, bonds, damages, judgments,
executions, claims, obligations, costs, expenses, losses, exposures, extents,
liabilities, duties and demands whatsoever, of every name and nature, in law or
equity, known or unknown (collectively "Claims"), which against any Releasee, a
Releasor ever had, now has or hereafter can, shall or may have by reason of any
matter, act, omission, conduct, transaction or occurrence from the beginning of
the world up to and including the date of this Release and Indemnity for, upon,
by reason of, asserted in or arising out of, or related to:
(a) the 2001 Agreement and the 2002 Agreement and the consummation of the
transactions contemplated thereby and any actions any Releasee may have taken
pursuant to or in contemplation of the negotiation, execution and performance
thereof, and all contemporaneous agreements and understandings, whether oral or
written, but only insofar as the 2001 Agreement and the 2002 Agreement relate to
AMCC and IFC LLC;
(b) any Claims that MGM Parent and MGM Seller (as a partner in AMCC) may
have against American Movie Classics Holding Corporation or AMC II Holding
Corporation (as a partner or managing partner in AMCC), including, without
limitation, any Claims based upon any breach or alleged breach of fiduciary
duties; and
(c) any Claims that MGM Parent and MGM Seller (as a member of IFC LLC) may
have against IFC Holding Corporation (as a member or managing member of IFC
LLC),
including, without limitation, any Claims based upon any breach or alleged
breach of fiduciary duties;
provided, however, that, notwithstanding the foregoing, this Release and
Indemnity shall not relate to (i) any Claims under, relating to or arising in
connection with the Purchase Agreement, the Releases and Indemnities, the
Cablevision Note, the Registration Rights Agreement or the Xxxx of Sale, (ii)
any Claims for indemnification or contribution with respect to claims that third
parties may make (including any actions instituted) in respect of the activities
of AMCC, AMC, WE, IFC LLC or IFC prior to the Closing of the Purchase Agreement,
(iii) any Claims under, relating to or arising in connection with the Surviving
Provisions or the releases delivered in connection with the 2002 Agreement, or
(iv) any contract or arrangement pursuant to which MGM Parent or an Affiliate of
MGM Parent licenses or distributes motion pictures or other programming to or
from Cablevision or any of its Affiliates.
MGM Parent hereby agrees to defend and hold harmless RMHI and its
Affiliates (each, an "Indemnified Party") from and against any and all Claims
incurred by any of them as a result of, relating to or arising in connection
with any Claim made by any third party against or involving an Indemnified Party
in respect of an action taken by MGM Parent, MGM Seller or any Affiliate of MGM
Parent or MGM Seller on behalf of AMCC, AMC, WE, IFC LLC or IFC prior to the
Closing, except for Claims that result from, relate to or arise in connection
with any action taken by MGM Parent, MGM Seller or any Affiliate of MGM Parent
or MGM Seller at the express direction of or with the express consent of RMHI,
AMCHC or AMC2HC (with respect to AMCC, AMC or WE) or RMHI, Bravo Holding
Corporation (prior to the purchase of Bravo Company by National Broadcasting
Company, Inc.), Bravo II Holding Corporation (prior to the purchase of Bravo
Company by National Broadcasting Company, Inc.) or IFC Holding Corporation (with
respect to IFC LLC or IFC).
Each Releasor hereby represents and warrants that it is the sole and lawful
owner of all right, title and interest in and to every Claim which such Releasor
hereby releases, and that such Releasor has not assigned or transferred, or
purported to assign or transfer to any person, any Claims released herein. Each
Releasor shall jointly and severally with the other Releasors indemnify, defend
and hold harmless the Releasees, and each of them, from and against any claims
based upon or arising in connection with any such prior assignment or transfer.
Each Releasor represents that it has not filed any Claims in any jurisdiction
against any Releasee regarding or relating to the matters released through this
Release and Indemnity.
Each Releasor expressly covenants and agrees never to institute, or
participate (other than as a passive member of a class or putative claim prior
to the expiration of the opt-out period) in, any claim, action, suit, or
proceeding against any Releasee, in any court or forum, directly or indirectly,
regarding or relating to the matters released through this Release and
Indemnity, and further covenants and agrees that this Release and Indemnity is a
bar to any such claim, action, suit, or proceeding. In the event that the
Releasors are unable to opt out of a class and become entitled to receive any
consideration in connection with such action, the Releasors assign their right
to receive any such consideration to RMHI and release, waive and forever
discharge the Releasees from any and all liability for such consideration. In
addition to any other liability that shall accrue upon the breach of this
covenant, each Releasor agrees that it shall jointly and severally with the
other Releasors indemnify and hold harmless each Releasee from
C-2
any such claim, action, suit or proceeding, and shall be liable for all
reasonable attorneys' fees and costs incurred by each Releasee in defense of
such claim, action, suit or proceeding, provided, however, that this
indemnification shall not cover a circumstance in which a Releasor is a passive
member of a class or putative claim prior to the expiration of the opt-out
period.
Capitalized terms used in this Release and Indemnity and not otherwise
defined herein shall have the meanings assigned thereto in the Purchase
Agreement.
This Release and Indemnity shall become effective contemporaneous with the
Closing and shall have no effect unless and until that Closing occurs.
This Release and Indemnity may be executed in one or more counterparts, all
of "which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to the other parties.
This Release and Indemnity may not be changed orally.
THIS RELEASE AND INDEMNITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS, AND NOT THE CONFLICTS OF LAWS, OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, each of the Parties has caused this Release and
Indemnity to be duly executed by its authorized officer on the ____ day of
________, 2003.
METRO-XXXXXXX-XXXXX INC.
By:
--------------------------------
Name:
Title:
On ______ __, 2003, BEFORE ME personally came to me known, and known to me
to be the individual who executed the foregoing RELEASE AND INDEMNITY, and duly
acknowledged to me that he executed the same.
______________________________
MGM NETWORKS U.S., INC.
By:
--------------------------------
Name:
Title:
C-3
On ______ __, 2003, BEFORE ME personally came to me known, and known to me
to be the individual who executed the foregoing RELEASE AND INDEMNITY, and duly
acknowledged to me that he executed the same.
______________________________
RAINBOW MEDIA HOLDINGS, INC.
By:
--------------------------------
Name:
Title:
On ______ __, 2003, BEFORE ME personally came to me known, and known to me
to be the individual who executed the foregoing RELEASE AND INDEMNITY, and duly
acknowledged to me that he executed the same.
______________________________
C-4
EXHIBIT D
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS NOTE IS NOT NEGOTIABLE AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. EXCEPT AS PROVIDED
IN THIS NOTE, THE TRANSFER OF THIS NOTE IS PROHIBITED.
No. R-1 $250,000,000
CABLEVISION SYSTEMS CORPORATION
Promissory Note Due _______ ___, 200_ [fill-in date five months from date of
issue]
________ __, 2003
CABLEVISION SYSTEMS CORPORATION, a corporation incorporated under the
laws of the State of Delaware (the "Issuer") for value received, hereby promises
to pay to MGM NETWORKS U.S. INC. (the "Holder"), on ________ ___, 200_ [fill-in
date five months from date of issue] (the "Final Maturity Date") in accordance
with the terms hereof, the principal sum of Two Hundred Fifty Million Dollars
($250,000,000), as such amount shall be reduced by payments of principal of this
Note in accordance with the terms hereof.
1. Terms. This Note is being issued as part of the consideration for
the purchase by subsidiaries of the Issuer of a twenty percent (20%) general
partnership interest in American Movie Classics Company, a New York general
partnership (the "Partnership"), pursuant to a Purchase Agreement (the "Purchase
Agreement"), dated as of June 27, 2003, by and among the Issuer, the Holder and
the other parties thereto. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned thereto in the Purchase
Agreement.
2. Interest.
(a) Payments; Applicable Rate. This Note shall bear interest, payable
on the Final Maturity Date from (and including) its date of issue until (but
excluding) the Final Maturity Date, on the principal balance from time to time
outstanding hereunder at a rate per annum (on the basis of a 360-day year) equal
to the LIBOR (as hereinafter defined) plus four percent (4%) per annum, adjusted
on the first Business Day of each month. Such rate of interest is herein
referred to as the "Applicable Rate". "LIBOR" shall mean the rate per annum
equal to the arithmetic mean of the interest rates per annum (rounded upward to
the nearest one-sixteenth of one percent (1/16%)) which appear on Telerate Page
3750 as of 11:00 a.m. (London time), or, if unavailable, the Reuters Screen LIBO
Page, two (2) Business Days before the first Business Day of each
month in an amount approximately equal to the principal amount of this Note and
for a term of one month.
(b) Default Rate. Any amount due hereunder that is not paid when due
(whether upon demand, by acceleration or otherwise) shall bear interest from the
day when due until such principal amount is paid in full, payable on demand, at
an interest rate per annum equal at all times to 2% per annum above the
Applicable Rate (the "Default Rate").
3. Principal.
(a) Mandatory Payments of Principal. The principal of this Note shall
be payable in consecutive monthly installments in the amount of $2,500,000
payable on the last day of each month, commencing on ______ __, 2003 [insert
last day of month of issuance] and ending on the last day of the month prior to
the month in which the Final Maturity Date falls, and the final payment of
principal on this Note shall be payable on the Final Maturity Date in an amount
equal to the amount of principal on this Note outstanding on such Final Maturity
Date.
(b) Optional Repayments of Principal. The Issuer may repay the
principal of this Note or any portion hereof at any time.
(c) Effect of Repayment. On and after the repayment of any principal
of this Note, interest shall cease to accrue on this Note or portion thereof
repaid. The Holder must surrender this Note to the Issuer to collect the payment
of principal hereunder due on the Final Maturity Date.
4. Method of Payment. The Issuer shall pay interest on and principal
of this Note provided for in paragraphs 2 and 3 above to the Holder. Except as
provided in paragraph 5 below with respect to payments of principal of this Note
in shares of Cablevision NY Group Class A Common Stock on the Final Maturity
Date, the Issuer shall pay principal and interest in money of the United States
that at the time of payment is legal tender for payment of public and private
debts by wire transfer in immediately available funds to an account designated
by the Holder.
5. Repayment of Principal on Final Maturity Date in Shares of
Cablevision NY Group Class A Common Stock.
(a) Repayment in Shares of Cablevision NY Group Class A Common Stock.
With respect to the payment of principal of this Note payable on the Final
Maturity Date, the Issuer may, at its option, satisfy its obligation to make
such payment by delivering to the Holder (or its designated nominee) the
Requisite Number of shares (the "Settlement Shares") of Cablevision NY Group
Class A common stock, par value $0.01 per share, of Cablevision Systems
Corporation or of such other class of capital stock of Cablevision Systems
Corporation into which such class shall have been
2
reclassified or for which such class shall have been exchanged ("Cablevision NY
Group Class A Common Stock").
(b) Covenant as to Cablevision NY Group Class A Common Stock. The
Issuer shall not be permitted to deliver the Settlement Shares on the Final
Maturity Date unless such Settlement Shares are (i) duly and validly authorized
and issued by Cablevision Systems Corporation and fully paid and non-assessable,
(ii) Registrable Securities under the Registration Rights Agreement for which a
Registration Statement (as defined in the Registration Rights Agreement) has
been declared and remains effective on the Final Maturity Date and under which
such shares may be resold without restriction under the Securities Act of 1933,
as amended, and (iii) accepted for listing on the New York Stock Exchange or, if
not then listed, on the principal national securities exchange on which such
class of stock is listed or admitted to trading, subject to official notice of
issuance. In addition, the Issuer shall not be permitted to deliver the
Settlement Shares on the Final Maturity Date unless Xxxxxxx X. Xxxxx and Xxxxx
X. Xxxxx, on behalf of themselves and any trusts over which they exercise
control, shall have waived or otherwise not exercised any rights to piggy-back
on any registration statement relating to the Settlement Shares.
6. Representations and Warranties. The Issuer represents and warrants
to the Holder as of the date hereof as follows:
(a) The Issuer is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware.
(b) The Issuer has the power and authority to execute and deliver this
Note and to perform its obligations hereunder, including the issuance of any
Settlement Shares.
(c) The Issuer has taken all necessary corporate action to authorize
the execution, delivery and performance of this Note.
(d) This Note has been duly executed and delivered by the Issuer and
constitutes a legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles, regardless of whether such enforceability is
considered in a proceeding at law or in equity.
(e) The execution and delivery by the Issuer of this Note and the
performance by the Issuer of its obligations hereunder, including the issuance
of any Settlement Shares, will not result in a default under (or give any other
party the right, with the giving of notice or the passage of time or both, to
declare default or accelerate any obligation under) or violate (i) its
certificate of incorporation or by-laws, or (ii) any contract to which the
Issuer is a party or by which its properties or assets are bound, or any
requirement of law applicable to it, or result in the creation or imposition of
any lien
3
upon any of its properties or assets in any case under this clause (ii) in any
respect that could have a material adverse effect on it or its ability to
execute and deliver this Note and perform its obligations hereunder.
(f) No consents, filings, authorizations or actions of any
governmental authority or regulatory body are required for the Issuer's
execution, delivery and performance of this Note other than any such consents,
filings, authorizations or actions that have been obtained or made prior to the
execution and delivery hereof.
(g) The Settlement Shares, when issued and delivered in accordance
with the terms of this Note, will have been duly authorized and validly issued,
fully paid and non-assessable, and such issuance will not be subject to any
preemptive or similar rights, and such delivery will pass title thereto free and
clear of any liens or encumbrances.
(h) The Issuer is not, and after giving effect to the issuance of this
Note and any Settlement Shares will not be, an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended.
(i) Assuming the accuracy of the Holder's representations as set forth
in the Purchase Agreement, the issuance to the Holder of this Note pursuant to
the Purchase Agreement does not require registration under the Securities Act of
1933, as amended.
7. Defaults and Remedies. An "Event of Default" with respect to this
Note occurs if:
(a) the Issuer defaults in the payment of any interest upon any of
this Note when it becomes due and payable and such default continues for a
period of five (5) days;
(b) the Issuer defaults in the payment of the principal of this Note
when the same becomes due and payable at maturity, upon acceleration, mandatory
repayment or otherwise;
(c) default or defaults under any mortgage, indenture or instrument
that secures or evidences any indebtedness for money borrowed by the Issuer or
CSC Holdings in an aggregate amount of $50,000,000 or more (but excluding any
indebtedness for the deferred purchase price of property or services owed to the
person providing such property or services as to which the Issuer or CSC
Holdings is contesting its obligation to pay the same in good faith and by
proper proceedings and for which the Issuer or CSC Holdings) which result from
the failure to pay such indebtedness at final maturity or which has resulted in
the acceleration of such indebtedness;
(d) the Issuer pursuant to or within the meaning of any Bankruptcy Law
(as defined below): (1) commences a voluntary case or proceeding, (2) consents
to
4
the entry of an order for relief against it in an involuntary case or
proceeding, (3) consents to the appointment of a receiver, trustee or similar
official of it or for all or substantially all of its property, (4) makes a
general assignment for the benefit of its creditors, or (5) admits that it
generally is unable to pay its debts as the same become due;
(e) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (1) is for relief against the Issuer in an involuntary
case or proceeding, (2) appoints a receiver, trustee or similar official of the
Issuer or for all or substantially all of its property, or (3) orders the
liquidation of the Issuer, and in each case the order or decree remains unstayed
and in effect for 60 days; or
(f) the validity or enforceability of this Note shall be contested by
the Issuer, or a proceeding shall be commenced by the Issuer seeking to
establish the invalidity or unenforceability hereof, or the Issuer shall deny
that it has any liability or obligation hereunder.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
If an Event of Default with respect to this Note occurs and is
continuing, the Holder may by written notice to the Issuer declare this Note to
be due and payable immediately, except that in the case of an Event of Default
arising under clause (d) or (e) above, this Note shall become due and payable
immediately without further action or notice.
8. Successors and Assigns. This Note shall be binding upon the Issuer
and its respective successors and permitted assigns, and shall inure to the
benefit of the Holder and its successors and permitted assigns; provided, that
neither the Issuer nor the Holder may assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of the
other, except that the Holder may assign or transfer this Note to any other
subsidiary of Metro-Xxxxxxx-Xxxxx Inc.
9. Miscellaneous.
(a) If interest on or principal of this Note becomes due and payable
on a Saturday, Sunday or public or other banking holiday under the laws of the
State of New York, the date for payment thereof shall be extended to the next
succeeding business day, and no interest shall be payable on such interest or
principal during such extension.
(b) The Issuer shall pay interest (including post-petition interest in
any proceeding under the Bankruptcy Code or any other applicable bankruptcy or
insolvency law to the extent that such interest is an allowed claim enforceable
against the debtor) on overdue principal at the Default Rate; the Issuer shall
pay interest (including post-petition interest in any proceeding under the
Bankruptcy Code or any other applicable bankruptcy or insolvency law to the
extent that such interest is an allowed claim enforceable against
5
the debtor) on overdue installments of interest at the Default Rate to the
extent legally permitted.
(c) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(d) All actions and proceedings arising out of or relating to this
Note shall be heard and determined exclusively in any New York state or federal
court sitting in the Borough of Manhattan of The City of New York. The Issuer
and the Holder (by its acceptance of this Note) hereby (i) submit to the
exclusive jurisdiction of any state or federal court sitting in the Borough of
Manhattan of The City of New York for the purpose of any action or proceeding
arising out of or relating to this Note brought by the Issuer or the Holder, and
(ii) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the action or proceeding is
brought in an inconvenient forum, that the venue of the action or proceeding is
improper, or that this Note or the transactions contemplated hereby may not be
enforced in or by any of the above-named courts. Neither the Issuer nor the
Holder waives any right to remove or seek to remove any action brought in any
state court sitting in the Borough of Manhattan of The City of New York to any
federal court sitting in the Borough of Manhattan of The City of New York.
(e) Each of the Issuer and the Holder (by its acceptance of this Note)
hereby waives to the fullest extent permitted by applicable law any right it may
have to a trial by jury with respect to any litigation directly or indirectly
arising out of, under or in connection with this Note or the transactions
contemplated hereby. Each of the Issuer and the Holder (by its acceptance of
this Note) (i) certifies that 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 that foregoing waiver and (ii)
acknowledges that it and the other have been induced to enter into this Note and
the transactions contemplated hereby, as applicable, by, among other things, the
mutual waivers and certifications in this paragraph.
(f) If the Holder institutes any action for the enforcement or
collection of this Note, the Issuer shall pay on demand all costs and expenses
of such action including reasonable legal fees.
(g) The Issuer expressly waives any presentment, demand, protest, or
other notice of any kind.
(h) The Issuer covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, or plead, or in any manner whatsoever
claim, and shall resist any and all efforts to be compelled to take the benefit
or advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Issuer
6
from paying all or any portion of the principal of or interest on this Note as
contemplated herein, wherever enacted, now or at any time hereafter in force,
and (to the extent that it may lawfully do so) the Issuer hereby expressly
waives all benefit or advantage of any such law and covenants that it shall
permit the execution of every power granted hereunder as though no such law had
been enacted.
(i) The Issuer and the Holder agree that all notices or other
communications provided for hereunder shall be in writing and shall be mailed,
facsimiled or delivered to the other party at the address of the other party set
forth in the Purchase Agreement, or at such other address as may hereafter be
specified to other party (at its address set forth herein) in writing. All
notices and communications shall be effective (i) if mailed, when received or
three days after mailing, whichever is earlier, (ii) if facsimiled, when
transmitted and confirmation is received and (iii) if delivered, upon delivery.
7
IN WITNESS WHEREOF, Cablevision Systems Corporation has caused this
Note to be executed in its limited liability company name as of the date first
written above.
CABLEVISION SYSTEMS CORPORATION
By: ________________________________
Name:
Title:
8
