Exhibit 17
March 8, 2005
AGREEMENT
This Agreement sets forth the terms upon which the business of Rainbow DBS
("Rainbow DBS") will be funded and conducted during the period March 1, 2005
through March 31, 2005.
The funding authorization for Rainbow DBS expired on February 28, 2005.
The Board of Directors (the "Board") of Cablevision Systems Corporation
("Cablevision") has authorized and directed the shutdown of Rainbow DBS.
The parties hereto agree as follows:
Agreement on Baseline Plan: Cablevision and Xxxxxxx X. Xxxxx ("Xxxxx") intend to
work together in an open and cooperative manner to
finalize the separation of Rainbow DBS from
Cablevision. Cablevision has begun the shutdown of
the business of Rainbow DBS. No new shutdown actions
will be undertaken. The business will continue to be
operated in accordance with the budget of Required
Costs for March agreed to by Cablevision and Xxxxx
(the "Baseline Plan"), subject to modification as
provided below. Cablevision and Xxxxx agree not to
take any actions, directly or indirectly, that are
inconsistent with the Baseline Plan, except that
Xxxxx may cause actions inconsistent with the
Baseline Plan to be taken as provided below under
"Expenditures" and "Commitments and Changes".
Expenditures: The Rainbow DBS business shall continue to make the
expenditures that would have been incurred under the
Baseline Plan. Expenditures above such amounts
("Additional Expenditures") shall be made only if
authorized by the Chief Financial Officer of
Cablevision or his designee (the "CFO"), which
authorization shall be provided if the CFO is
satisfied that cash or Funding Shares are on deposit
with Cablevision (excluding Segregated Shares)
with a Market Value adequate to pay such Additional
Expenditures. The CFO shall act reasonably and promptly.
Funding: Xxxxx shall fund the Additional Expenditures. On a
daily basis, Cablevision shall effect Xxxxx'x
funding of the Additional Expenditures by
withdrawing cash deposited with Cablevision by Xxxxx
in an amount equal to such Additional Expenditures
or withdrawing and canceling shares of Class A
Common Stock and Class B Common Stock deposited with
Cablevision by Xxxxx (the "Funding Shares") with a
Market Value equal to the amount of such Additional
Expenditures. The funding amount on any day shall
first come from any unsegregated cash on deposit,
then from any unsegregated shares of Class A Common
Stock, and then from any shares of unsegregated
Class B Common Stock.
Commitments and Changes: Rainbow DBS shall make no commitments or other
agreements and shall not alter the Baseline Plan or
reverse actions previously taken in accordance with
the Baseline Plan, in each case without the prior
written approval of the CFO. The CFO shall provide
the required written approval if the CFO is
satisfied that sufficient cash or Funding Shares are
on deposit to fully pay the costs of such action.
The CFO shall act reasonably and promptly. If such
an action is approved, the CFO shall segregate that
cash or those Funding Shares, which shall then be
unavailable for any other purpose ("Segregated Cash"
and "Segregated Shares"). The CFO shall use the
Segregated Cash and Segregated Shares to pay the
costs associated with the actions that gave rise to
the segregation.
Funding Shares: Xxxxx shall deliver to Cablevision by the close of
business on March 9, 2005 cash and/or shares of
Class A Common Stock or
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Class B Common Stock free and clear of any liens, claims and
encumbrances and together with a stock power duly endorsed to
Cablevision and having a Market Value of $10 million. Xxxxx
may substitute cash for unsegregated Funding Shares at any
time by depositing cash in an amount equal to the Market Value
of the Funding Shares to be withdrawn.
"Market Value" means the arithmetic
average of the closing price of the
Class A Common Stock on The New York
Stock Exchange over the 10 New York
Stock Exchange trading days
preceding the date of any
determination (or in the case of a
substitution of cash for Funding
Shares, the closing price on the day
prior to the date of substitution).
Corporate Controls: As with every subsidiary of Cablevision, Rainbow DBS
is and shall remain subject to the management and
internal controls of Cablevision. Cablevision shall
continue to have the right to contact and deal with
any employee, consultant, vendor, supplier or
customer of Rainbow DBS. Neither Xxxxx nor Xxx
Xxxxx shall, directly or indirectly, give any
instruction or take any action inconsistent
herewith. The actions of Cablevision under the
Baseline Plan shall be coordinated with Xxx Xxxxx
through advance notification of those actions.
Termination: This Agreement shall terminate at 5:00 P.M. New York
City time on March 31, 2005. Xxxxx shall have the
right to terminate this Agreement at any earlier
time. Upon any termination (i) any cash or Funding
Shares not previously cancelled, other than
Segregated Cash or Segregated Shares, shall be
returned to Xxxxx, and (ii) the shutdown of Rainbow
DBS shall be implemented immediately. Cablevision
may terminate this Agreement immediately upon the
occurrence of any breach of the terms
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hereof by Xxxxx or Xxx Xxxxx. Upon any termination, the
Segregated Cash and Segregated Shares shall be held as
security against claims arising out of the commitments or
actions that gave rise to their segregation.
CABLEVISION SYSTEMS CORPORATION
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Vice Chairman
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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