Exhibit 2(a)
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PARTNERSHIP INTEREST TRANSFER AGREEMENT
Dated as of April 15, 1997
among
ITT CORPORATION,
ITT EDEN CORPORATION,
ITT MSG INC.,
CABLEVISION SYSTEMS CORPORATION,
RAINBOW MEDIA HOLDINGS, INC.
RAINBOW GARDEN CORP.,
GARDEN L.P. HOLDING CORP.,
MSG EDEN CORPORATION
and
MADISON SQUARE GARDEN, L.P.
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TABLE OF CONTENTS
ARTICLE I
Definitions Page
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SECTION 1.01. General....................................................... 2
ARTICLE II
Transfers
SECTION 2.01. Initial Transfer.............................................. 18
SECTION 2.02. Initial Closing............................................... 19
SECTION 2.03. First Put Option.............................................. 19
SECTION 2.04. Second Put Option............................................. 21
SECTION 2.05. Payment of Cash Upon Exercise of Put Option................... 23
SECTION 2.06. Issuance of Shares of Cablevision Common Stock Upon
Exercise of Put Option...................................... 24
SECTION 2.07. ITT MSG's Right to Profits.................................... 28
SECTION 2.08. Cablevision's Change of Control Call Right.................... 31
SECTION 2.09. Cablevision's Third-Year Call Right........................... 33
SECTION 2.10. Accelerated Put Right......................................... 34
SECTION 2.11. Adjustment of Purchase Prices ................................ 34
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of ITTE and ITT MSG ........... 35
SECTION 3.02. Representations and Warranties of Cablevision, RGC and GHC.... 38
SECTION 3.03. Representations and Warranties of MSG......................... 41
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SECTION 3.04. No Representations or Warranties as to Business............... 42
ARTICLE IV
Registration Rights
SECTION 4.01. Registration Rights........................................... 42
SECTION 4.02. Registration Procedures....................................... 44
ARTICLE V
Indemnification
SECTION 5.01. Indemnification by Cablevision ............................... 51
SECTION 5.02. Indemnification by Rainbow.................................... 51
SECTION 5.03. Indemnification by RGC........................................ 51
SECTION 5.04. Indemnification by GHC........................................ 51
SECTION 5.05. Indemnification by MSG........................................ 52
SECTION 5.06. Indemnification by ITTE....................................... 52
SECTION 5.07. Indemnification by ITT MSG.................................... 52
SECTION 5.08. Indemnification by ITT........................................ 53
SECTION 5.09. Procedures for Indemnification................................ 53
SECTION 5.10. Indemnification Payments...................................... 55
SECTION 5.11. Contribution.................................................. 55
SECTION 5.12. Survival of Obligations....................................... 56
ARTICLE VI
Covenants
SECTION 6.01. Cooperation; Further Assurances............................... 56
SECTION 6.02. Antitrust Notification........................................ 58
SECTION 6.03. League Approvals.............................................. 58
SECTION 6.04. Publicity..................................................... 59
SECTION 6.05. Governance of MSG............................................. 60
SECTION 6.06. Existing Agreements; Contribution of
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SportsChannel New York...................................... 60
SECTION 6.07. Compliance by Affiliates...................................... 62
SECTION 6.08. Other Agreements.............................................. 62
SECTION 6.09. Tax Matters................................................... 63
ARTICLE VII
Closing Conditions
SECTION 7.01. Conditions to Closings........................................ 64
SECTION 7.02. Frustration of Closing Conditions............................. 68
ARTICLE VIII
Miscellaneous
SECTION 8.01. Assignment.................................................... 69
SECTION 8.02. Successors and Assigns; No Third-party Beneficiaries.......... 70
SECTION 8.03. Termination................................................... 70
SECTION 8.04. Survival of Representations................................... 72
SECTION 8.05. Expenses...................................................... 72
SECTION 8.06. Attorney Fees................................................. 72
SECTION 8.07. Amendments.................................................... 72
SECTION 8.08. Notices....................................................... 72
SECTION 8.09. Interpretation; Exhibits and Schedules........................ 73
SECTION 8.10. Counterparts.................................................. 74
SECTION 8.11. Entire Agreement.............................................. 74
SECTION 8.12. Brokers' or Finders' Fees..................................... 74
SECTION 8.13. Severability.................................................. 74
SECTION 8.14. Specific Performance.......................................... 74
SECTION 8.15. Consent to Jurisdiction....................................... 75
SECTION 8.16. Governing Law................................................. 76
Exhibit A Form of ▇▇▇▇ of Sale and Assignment of
Partnership Interest
Exhibit B SportsChannel Contribution Agreement
Exhibit C Aircraft Contribution Agreement
PARTNERSHIP INTEREST TRANSFER AGREEMENT dated as
of April 15, 1997, among ITT CORPORATION, a Nevada
corporation ("ITT"), ITT Eden Corporation, a Delaware
corporation ("ITTE"), ITT MSG Inc., a Delaware
corporation ("ITT MSG"), Cablevision Systems
Corporation, a Delaware corporation ("Cablevision"),
Rainbow Garden Corp., a Delaware corporation and a
subsidiary of Cablevision ("RGC"), Garden L.P. Holding
Corp., a Delaware corporation and a subsidiary of
Cablevision ("GHC"), MSG Eden Corporation, a Delaware
corporation ("MSGE"), and Madison Square Garden, L.P., a
Delaware limited partnership ("MSG").
WHEREAS ITTE and RGC together own all of the issued and outstanding
shares of capital stock of MSGE;
WHEREAS MSGE is the general partner and owner of a 1% general
partnership interest in MSG;
WHEREAS ITT MSG and GHC each own a 49.5% limited partnership
interest in MSG;
WHEREAS MSGE, ITT MSG and GHC are entering into an amended and
restated agreement of limited partnership, dated the date hereof (the
"Partnership Agreement"), to set forth, among other things, each partner's
rights and obligations with respect to MSG and provide for the operation of the
business of MSG, in each case from and after the Initial Closing (as defined
herein);
WHEREAS ITTE desires to sell or otherwise transfer, and RGC desires
to purchase or cause to be redeemed, all of ITTE's interest in MSGE, ITT MSG
desires to sell or otherwise transfer, and GHC desires to purchase or otherwise
cause to be redeemed, a portion of ITT MSG's
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interest in MSG and ITT MSG and Cablevision, RGC and GHC desire to set forth
certain rights with respect to the transfer of ITT MSG's remaining interest in
MSG, in each case, upon the terms and subject to the conditions set forth in
this Agreement;
WHEREAS certain Affiliates of Cablevision and certain Affiliates of
ITT MSG are entering into contribution agreements dated the date hereof, to set
forth certain rights and obligations of the parties thereto with respect to a
contribution to MSG of (i) SportsChannel Associates, a New York general
partnership, all of the general partner interests in which are owned by
Affiliates of Cablevision and (ii) an aircraft which is owned by an Affiliate of
ITT MSG; and
WHEREAS the parties desire to set forth certain other agreements
relating to their interests in MSG.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. General. (a) As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Acceleration Event" shall mean any event resulting in
(a) any indebtedness of Cablevision or MSG in an amount equal to or
greater than $20 million being not paid within any applicable grace period after
final maturity or
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being accelerated by the holders thereof because of a default or other similar
condition or event;
(b) Cablevision or MSG, pursuant to or within the meaning of ▇▇▇▇▇
▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar Federal or state law for the relief of
debtors (a "Bankruptcy Law"),
(i) commencing a voluntary case;
(ii) consenting to the entry of an order for relief against it in an
involuntary case;
(iii) consenting to the appointment of a custodian of it or for any
substantial part of its property; or
(iv) making a general assignment for the benefit of its creditors;
or taking any comparable action under any foreign laws relating to
insolvency;
(c) a court of competent jurisdiction entering an order or decree
under any Bankruptcy Law that:
(i) is for relief against Cablevision or MSG in an involuntary case;
(ii) appoints a custodian of Cablevision or MSG or for any
substantial part of its property; or
(iii) orders the winding up or liquidation of Cablevision or MSG;
or any similar relief is granted under any foreign laws
and the order or decree remains unstayed and in effect
for 60 days; or
(d) the dissolution of MSG pursuant to Section 7.1 of the
Partnership Agreement (other than in connection with a change in the
organizational form of MSG
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to a corporation or other business entity after which the ITT MSG Interest
represents an ownership interest in such corporation or other business entity).
"Action" shall mean any action, suit, arbitration, inquiry,
investigation or any other proceeding by or before any Governmental Entity,
private arbitral tribunal, the Leagues or any other private regulatory body with
oversight over MSG or the transactions contemplated hereby.
"Acquisition Debt" shall mean the indebtedness incurred by MSG at
the Initial Closing to fund the cost of the redemption by MSG of the Initial
Transferred Interest.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indi rectly through one or more
intermediaries, controls or is controlled by or is under common control with the
person specified; provided that after the Initial Closing none of MSG and its
Subsidiaries shall be considered an Affiliate of ITT, ITTE, ITT MSG or any of
their other Affiliates.
"Agent Bank" shall have the meaning set forth in the definition of
Commitment Letter.
"Aircraft" shall have the meaning set forth in the Aircraft
Contribution Agreement.
"Aircraft Contribution Agreement" shall mean the Aircraft
Contribution Agreement, dated as of the date hereof, in the form of Exhibit C
hereto.
"Ancillary Agreements" shall mean the Aircraft Contribution
Agreement, the SportsChannel New York Contribution Agreement and the Sports
League Approval Agreements.
"Applicable Percentage" initially shall mean the Profit Percentage
(as defined in the Partnership Agreement) that ITT Partner (as defined in the
Partnership Agreement) will have immediately following the Initial Closing
giving effect to any transactions under the SportsChannel
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Contribution Agreement that occur simultaneously with the Initial Closing,
determined in accordance with the Partnership Agreement, and thereafter shall be
adjusted from time to time to remain equal to such Profit Percentage of ITT
Partner.
"Appraiser" shall have the meaning set forth in Section 2.09(a).
"Arena" shall mean all of MSG's right, title and interest in and to
the land, improvements, fixtures (including leaseholds) and all related tangible
property constituting Madison Square Garden (including the arena and any theater
located therein); provided that the Arena shall not include any assets included
in the Knicks, the Rangers or the Network.
"Arm's-length basis" shall mean, as to any transaction, agreement or
other arrangement, being on terms that would be reached by unrelated parties not
under any compulsion to contract.
"Asset Remittance Amount" shall have the meaning set forth in
Section 2.07(b).
"Asset Subject Sale" shall have the meaning set forth in Section
2.07(b).
"Bank Credit Agreement" shall mean the credit agreement (and related
agreements) to be entered into by MSG at or prior to the Initial Closing Date as
contemplated by the Commitment Letter and any refinancing thereof or successor
credit agreement.
"Bid Agreement" shall mean the Agreement dated as of August 15,
1994, between ITT, Cablevision and Rainbow relating to the formation of MSG and
the submission of a proposal to acquire the business of Madison Square Garden
Corporation (the "MSG Acquisition"), as such agreement has been modified,
amended or supplemented to date.
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"Cablevision" shall mean Cablevision Systems Corporation, a Delaware
corporation, and its successors and permitted assigns.
"Cablevision Common Stock" shall mean the Class A Common Stock, par
value $.01 per share, of Cablevision.
"Cablevision Indemnitees" shall mean Cablevision, each Affiliate of
Cablevision, each of their respective directors, officers, employees and agents
and each of the heirs, executors, successors and assigns of any of the fore
going.
"Cablevision Shares" shall have the meaning set forth in Section
2.06(a).
"Change of Control" shall mean, at the relevant time, (i) any event
resulting in any "person" or "group" (within the meaning of Sections 13(d) and
14(d) of the Exchange Act) becoming the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than
35% of the total voting power of all classes of capital stock of the ultimate
parent, at the relevant time, of ITT MSG then outstanding and entitled to vote
generally in elections of directors ("Voting Stock") and such beneficial
ownership was acquired within a period of two years following a tender offer by
such person (or any of its Affiliates) for shares of Voting Stock of such parent
of ITT MSG or a solicitation of proxies with respect to Voting Stock of such
parent of ITT MSG by such person, if, in either case, such tender offer or
solicitation of proxies was not approved by a majority of the Board of Directors
of such parent of ITT MSG in office at the time such tender offer or proxy
solicitation was commenced, or (ii) a majority of the Board of Directors of the
ultimate parent, at the relevant time, of ITT MSG being constituted of
individuals who were elected pursuant to a solicitation of proxies with respect
to Voting Stock of such parent of ITT MSG, if such solicitation of proxies was
not approved by a majority of the Board of Directors of such parent of ITT MSG
in office at the time such solicitation of proxies was commenced.
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"Change of Control Call Closing" shall have the meaning set forth in
Section 2.08(c).
"Change of Control Call Closing Date" shall have the meaning set
forth in Section 2.08(c).
"Change of Control Call Price" shall have the meaning set forth in
Section 2.08(a).
"Change of Control Call Right" shall have the meaning set forth in
Section 2.08(a).
"Closing" shall mean any of the Initial Closing, the First Put Cash
Closing, the Second Put Cash Closing, the First Put Stock Closing, the Second
Put Stock Closing, the Change of Control Call Closing or the Third-Year Call
Closing.
"Closing Date" shall mean any of the Initial Closing Date, the First
Put Cash Closing Date, the Second Put Cash Closing Date, the First Put Stock
Closing Date, the Second Put Stock Closing Date, the Change of Control Call
Closing Date or the Third-Year Call Closing Date.
"Commitment Letter" shall mean the commitment letter dated as of
April 4, 1997, from The Chase Manhattan Bank (the "Agent Bank") committing to
provide funds to MSG.
"Consideration" shall mean, with respect to the Transfer of any
asset, property or interest, the amount of consideration therefor received by
the transferee and any of its Affiliates, including existing indebtedness
assumed by the transferee and any of its Affiliates or to which such Transferred
asset, property or interest is subject and, without duplication, the value to
the transferee or its Affiliates of any rights, options, contracts or other
arrangements received by such transferee and any of its Affiliates in
consideration of such Transfer.
"Contribution Right" shall have the meaning set forth in Section
6.06(a).
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"Debt Securities" shall have the meaning set forth in Section
2.08(c).
"DOJ" shall have the meaning set forth in Section 6.02.
"Equity Remittance Amount" shall have the meaning set forth in
Section 2.07(a).
"Equity Subject Sale" shall have the meaning set forth in Section
2.07(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, as to any property, business or
other asset, the price at which a willing seller would sell and a willing buyer
would buy such property, business or other asset having full knowledge of the
facts, and assuming each party acts on an Arm's-length basis with the
expectation of concluding the purchase or sale within a reasonable time but
neither of which is under undue pressure or compulsion to complete the
transaction. Any determination of Fair Market Value shall reflect any
outstanding indebtedness secured by or relating to such property, business or
other asset.
"Fair Market Value of MSG" shall mean the Fair Market Value of MSG
as a whole on the date of determination, based on prevailing general economic,
market and financial conditions and the business, prospects and financial
condition of MSG on such date of determination, as determined in writing by a
Selected Investment Banking Firm.
"First Put Cash Closing" shall have the meaning set forth in Section
2.05(a).
"First Put Cash Closing Date" shall have the meaning set forth in
Section 2.05(a).
"First Put Option" shall have the meaning set forth in Section
2.03(a).
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"First Put Purchase Price" shall have the meaning set forth in
Section 2.03(a).
"First Put Stock Closing" shall have the meaning set forth in
Section 2.06(b).
"First Put Stock Closing Date" shall have the meaning set forth in
Section 2.06(b).
"Flight" shall have the meaning set forth in Section 6.08(b).
"Floor Price" shall have the meaning set forth in Section 2.09(a).
"FTC" shall have the meaning set forth in Section 6.02.
"GHC" shall mean Garden L.P. Holding Corp., a Delaware corporation,
which is an indirect Subsidiary of Cablevision on the date of this Agreement,
and its successors and permitted assigns.
"Governmental Entity" shall have the meaning set forth in Section
3.01(b).
"HSR Act" shall have the meaning set forth in Section 3.01(b).
"indebtedness" of any person shall mean, without duplication, all
indebtedness for borrowed money of such person, including guarantees by such
person of indebtedness for borrowed money of any other person, letter of credit
obligations of such person, capital lease obligations of such person, Swap
Agreement obligations of such person and deferred purchase price obligations of
such person.
"Indemnifiable Losses" shall mean any and all losses, liabilities,
claims, damages, demands, payments, costs or expenses (including attorneys' fees
and any and all out-of-pocket expenses) whatsoever, including all losses,
liabilities, claims, damages, demands, costs or expenses
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reasonably incurred in investigating, preparing for or defending against or as a
result of any Actions or potential Actions.
"Indemnifying Party" shall have the meaning as defined in Section
5.09.
"Indemnitee" shall have the meaning as defined in Section 5.09.
"Initial Arena Value" shall have the meaning agreed between the
parties.
"Initial Asset Value" shall mean any of the Initial Knicks Value,
the Initial Rangers Value, the Initial Arena Value and the Initial Network
Value.
"Initial Closing" shall have the meaning set forth in Section 2.02.
"Initial Closing Date" shall have the meaning set forth in Section
2.02.
"Initial Implied Value" shall mean an amount equal to $1,555,000,000
plus indebtedness of MSG as of immediately prior to the Initial Closing (other
than indebtedness under the MSG Acquisition Financing Agreements), which sum
shall be increased at a rate equal to 12% per annum calculated on the basis of
the actual number of days elapsed since the Initial Closing Date to the date of
determination over a year of 365 days.
"Initial Knicks Value" shall have the meaning agreed between the
parties.
"Initial Network Value" shall have the meaning agreed between the
parties.
"Initial Rangers Value" shall have the meaning agreed between the
parties.
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"Initial Transferred Interest" shall have the meaning set forth in
Section 2.01.
"Initial Transferred Interest Purchase Price" shall have the meaning
set forth in Section 2.01.
"ITT" shall mean ITT Corporation, a Nevada corporation, and its
successors and permitted assigns.
"ITTE" shall mean ITT Eden Corporation, a Delaware corporation,
which is an indirect subsidiary of ITT on the date of this Agreement, and its
successors and permitted assigns.
"ITT MSG" shall mean ITT MSG Inc., a Delaware corporation, which is
an indirect subsidiary of ITT on the date of this Agreement, and any Permitted
Transferee to which ITT MSG shall assign its rights and obligations hereunder
pursuant to Section 8.01.
"ITT MSG Indemnitees" shall mean ITT MSG, ITT and ITTSC, each of
their respective Affiliates, each of their respective directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing.
"ITT MSG Interest" at any time shall mean all MSG Interests owned,
directly or indirectly, at such time by ITT or any of its Affiliates, and any
property received (i) in respect of such MSG Interests by ITT or any of its
Affiliates upon a dissolution of MSG or (ii) in exchange for the ITT MSG
Interest in connection with a change in the organizational form of MSG to a
corporation or other business entity (pursuant to a merger, consolidation, any
other business combination or any other transaction).
"ITTSC" shall mean ITT Sheraton Corporation, a Delaware corporation,
which is a direct subsidiary of ITT on the date of this Agreement, and its
successors.
"Knicks" shall mean the New York Knickerbockers Basketball Club and
all of MSG's assets, property, business
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and rights relating to the New York Knickerbockers Basketball Club, including
rights to conduct all exhibition, regular season and playoff basketball games
participated in by the New York Knickerbockers Basketball Club; provided that
the Knicks shall not include any assets included in the Arena, the Rangers or
the Network.
"League Rules" shall have the meaning set forth in Section 3.01(b).
"Maximum Offering Size" shall have the meaning set forth in Section
4.01(a).
"MSG" shall mean Madison Square Garden, L.P., a Delaware limited
partnership, and its successors and permitted assigns.
"MSG Acquisition" shall have the meaning set forth in the definition
of Bid Agreement.
"MSG Acquisition Agreements" shall mean (a) the Agreement dated June
28, 1994, between Cablevision and ITT relating to bidding arrangements for
Madison Square Garden Corporation, (b) the Bid Agreement, (c) the Amendment
Agreement dated as of September 12, 1994, to the Bid Agreement, (d) the
Agreement and Plan of Merger (the "Merger Agreement") dated as of August 27,
1994, among Viacom Inc., Paramount Communications Realty Corporation, ITT, RGC
and MSG, (e) Amendment No. 1, dated as of March 10, 1995, to the Merger
Agreement, (f) Amendment No. 2, dated as of March 10, 1995, to the Merger
Agreement, (g) the MSG Acquisition Financing Agreements, (h) the NBA Consent
Agreements and (i) the NHL Consent Agreements.
"MSG Acquisition Financing Agreements" shall mean (a) the Credit
Agreement dated as of January 20, 1995 among MSG, the lenders party thereto and
Chemical Bank, as agent, (b) the Guarantee dated as of March 10, 1995, made by
1863 Corporation, (c) the Credit Party Pledge Agreement dated as of March 10,
1995, made by MSG and 1863 Corporation in favor of Chemical Bank, (d) the NBA
Team Pledge Agreement dated as of March 10, 1995, made by MSG in favor of
Chemical Bank,
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(e) the NHL Team Pledge Agreement dated as of March 10, 1995, made by MSG in
favor of Chemical Bank, (f) the Credit Party Security Agreement dated as of
March 10, 1995, among MSG, 1863 Corporation and Chemical Bank, (g) the NBA Team
Security Agreement dated March 10, 1995, between MSG and Chemical Bank, (h) the
NHL Team Security Agreement dated March, 10, 1995, between MSG and Chemical
Bank, (i) the Assignment of Security Interest in United States Copyrights dated
March 10, 1995, made by MSG in favor of Chemical Bank, (j) the Assignment of
Security Interest in United States Copyrights (NHL) dated March 10, 1995, made
by MSG in favor of Chemical Bank, (k) the Collateral Assignment of Security
Interest in United States Trademarks dated March 10, 1995, made by MSG in favor
of Chemical Bank, (l) the Assignment of Security Interest in United States
Trademarks (NBA) dated March 10, 1995, made by MSG in favor of Chemical Bank,
(m) the Assignment of Security Interest in United States Trademarks (NHL) dated
March 10, 1995, made by MSG in favor of Chemical Bank, (n) the Letter Agreement
dated March 10, 1995, among the NBA, NBA Properties, Inc., the NBA Market
Extension Partnership, Chemical Bank and MSG with respect to the financing, (o)
the Letter dated March 10, 1995, from the NBA Market Extension Partnership to
Chemical Bank and MSG, (p) the Partnership Notice dated March 10, 1995, from MSG
to the NBA Market Extension Partnership, (q) the Letter Agreement dated March
10, 1995, among the NHL, Chemical Bank and MSG, and (r) the Mortgage, Security
Agreement, Assignment of Leases, Rents and Profits, Financing Statement and
Fixture Filing dated March 10, 1995, made by MSG in favor of Chemical Bank, as
any of such agreements may have been modified, amended or supplemented to date.
"MSG Implied Value" shall mean in connection with (a) any Transfer
of any direct ownership interest in a Partner, the Partner Percentage, expressed
as a decimal, for such Partner multiplied by the Consideration for the Transfer
of such interest divided by the Percentage Sold, expressed as a decimal,
associated with such Transfer and (b) any Transfer of any MSG Interest, the
Consideration for the Transfer of such interest divided by the Percentage Sold,
expressed as a decimal, associated with such Transfer, and, in the case of each
of the foregoing clauses (a) and
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(b), (i) if the Initial Closing is accomplished through a redemption by MSG of
the Initial Transferred Interest, plus the Percentage Sold multiplied by $500
million (reduced by the amount of any Acquisition Debt that was included in the
computation of the Consideration for the Transfer), (ii) plus the amount of any
cash and the Fair Market Value of any business or other assets distributed (as
of the time of such distribution) by MSG or any of its Affiliates to Cablevision
or ITT or any of their respective Affiliates (other than MSG and its
Subsidiaries) from the Initial Closing Date to the date of the Subject Sale
(other than as payment of an Asset Remittance Amount), (iii) minus the amount of
any cash and the Fair Market Value of any business or other assets that have
been contributed to MSG (as of the date of such contribution) on and from the
Initial Closing Date to the date of the Subject Sale (the Fair Market Value of
SportsChannel New York shall be the value assigned to such contribution in the
SportsChannel Contribution Agreement), (iv) for any transaction or series of
related transactions between (A) Cablevision, Rainbow or any of their respective
Affiliates (other than MSG and its Subsidiaries), on the one hand, and MSG or
any of its Subsidiaries, on the other hand, pursuant to an agreement entered
into between the Initial Closing Date and the date of the Subject Sale and (B)
Cablevision, Rainbow or any of their respective Affiliates (other than MSG and
its Subsidiaries), on the one hand, and SportsChannel New York, on the other
hand, pursuant to an agreement entered into between December 31, 1996 and the
date of the Subject Sale (other than any agreement identified in the SCNY
Disclosure Schedule to the SportsChannel Contribution Agreement) and, in each
case, involving aggregate payments or other Consideration in excess of $1.0
million (an "MSG Affiliate Transaction"), plus the amount by which the benefit
to MSG or SportsChannel New York would have been greater or the costs to MSG or
SportsChannel New York would have been less and minus the amount by which the
benefit to MSG or SportsChannel New York would have been less or the costs to
MSG or SportsChannel New York would have been greater, in each case, if such MSG
Affiliate Transaction were negotiated on an Arm's-length basis between MSG or
such Subsidiary or SportsChannel New York and a third party that is not
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Cablevision, Rainbow or an Affiliate of Cablevision or Rainbow. Clause (iv) of
the preceding sentence shall not apply to the contribution of SportsChannel New
York pursuant to the SportsChannel Contribution Agreement.
"MSG Interest" shall mean any direct interest in MSG, including all
partnership interests, all other equity or ownership interests and all other
rights to share in profits, losses and distributions of MSG.
"NBA" shall have the meaning set forth in Section 3.01(b).
"NBA Consent Agreement" shall mean the Agreement and Undertaking
dated March 10, 1995 from MSG, MSGE, Cablevision, Rainbow, RGC, GHC, ITT, ITTE
and ITT MSG in favor of the NBA, NBA Properties Inc., NBA Market Extension
Partnership and Planet Insurance, Ltd.
"Network" shall mean Madison Square Garden Network, a division of
MSG, and all the assets, property, businesses and rights used primarily in the
business of Madison Square Garden Network, as conducted on the date hereof;
provided that the Network shall not include any assets included in the Arena,
the Knicks or the Rangers.
"NHL" shall have the meaning set forth in Section 3.01(b).
"NHL Consent Agreements" shall mean (a) the Rangers Consent
Agreement and (b) the letter dated March 10, 1995 from the NHL to Cablevision,
Rainbow, RGC and GHC regarding the security interest in the Rangers under the
MSG Acquisition Financing Agreements.
"Partner" shall mean any person directly owning an MSG Interest and
any other person, 67% or more of whose Fair Market Value consists, directly or
indirectly, of such person's Partner Interest Fair Market Value. Solely for the
purposes of calculating Fair Market Value as used in this definition,
SportsChannel New York shall be treated as if it had never been contributed to
the Partnership.
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"Partner Interest Fair Market Value" of any person shall mean such
person's, direct or indirect, percentage interest in MSG multiplied by the Fair
Market Value of MSG. Solely for the purposes of calculating Fair Market Value as
used in this definition, SportsChannel New York shall be treated as if it had
never been contributed to the Partnership.
"Partner Percentage" shall mean the percentage of the Fair Market
Value of any person that consists of that person's Partner Interest Fair Market
Value. Solely for the purposes of calculating Fair Market Value as used in this
definition, SportsChannel New York shall be treated as if it had never been
contributed to the Partnership.
"Partnership Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Percentage Sold" shall be determined as of the date of the relevant
Subject Sale and shall mean (a) for any Transfer of an interest in a Partner,
the Fair Market Value of such Partner, multiplied by the Partner Percentage of
such Partner, expressed as a decimal, multiplied by the percentage of the total
equity interest in such Partner represented by the interest so Transferred,
divided by the Fair Market Value of MSG and (b) for any direct Transfer of any
MSG Interest, the percentage of the total MSG Interests represented by the
amount so Transferred.
"Permitted Transferee" shall have the meaning set forth in Section
8.01.
"person" shall mean any natural person, corpora tion, business
trust, joint venture, association, company, partnership or government, or any
agency or political sub division thereof.
"Prospectus" shall mean the prospectus included in any Registration
Statement, with respect to the terms of the offering of any Cablevision Shares
or equity securities of MSG pursuant to this Agreement covered by such
Registration Statement, as amended or supplemented by any amendments and
17
supplements to such prospectus and all material incorporated by reference in
such prospectus.
"Put Obligation Breach" shall mean (a) if ITT MSG shall have
exercised the First Put Option, all the conditions to the First Put Cash Closing
or the First Put Stock Closing are satisfied and Cablevision or MSG, as the case
may be, does not consummate such Closing at or prior to the time specified
therefor in Article II or (b) if ITT MSG shall have exercised the Second Put
Option, all the conditions to the Second Put Cash Closing or the Second Put
Stock Closing are satisfied and Cablevision or MSG, as the case may be, does not
consummate such Closing at or prior to the time specified therefor in Article
II.
"Put Obligation Failure" shall mean (a) if ITT MSG shall have
exercised the First Put Option, the failure of the First Put Cash Closing or the
First Put Stock Closing to occur within 45 days following the first anniversary
of the Initial Closing Date or (b) if ITT MSG shall have exercised the Second
Put Option, the failure of the Second Put Cash Closing or the Second Put Stock
Closing to occur within 45 days following the second anniversary of the Initial
Closing Date (in each case, other than due to a breach by ITT MSG or its
Affiliates).
"Put Option" shall have the meaning set forth in Section 2.04(a).
"Put Purchase Price" shall have the meaning set forth in Section
2.04(a).
"Rainbow" shall mean Rainbow Media Holdings, Inc. (formerly, Rainbow
Programming Holdings, Inc.), a Delaware corporation, which is a direct
Subsidiary of Cablevision on the date of this Agreement, and its successors.
"Rangers" shall mean the New York Rangers Hockey Club and all of
MSG's assets, property, and business and rights relating to the New York Rangers
Hockey Club, including rights to conduct all exhibition, regular season and
playoff hockey games participated in by the New York
18
Rangers Hockey Club; provided that the Rangers shall not include any assets
included in the Arena, the Knicks or the Network.
"Rangers Consent Agreement" shall have the meaning set forth in
Section 6.06(c).
"Registrable Securities" shall have the meaning set forth in Section
4.01(a).
"Registrant" shall have the meaning set forth in Section 4.02(a).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by Cablevision with Section 2.06 (relating to
issuance and registration of Cablevision Shares) or MSG with Article IV
(relating to registration rights of ITT MSG and registration procedures) of this
Agreement, including (i) all SEC and securities exchange registration and filing
fees (including all expenses incident to any filing with the National
Association of Securities Dealers, Inc.), (ii) all fees and expenses of
complying with securities or blue sky laws, (iii) all printing and related
messenger and delivery expenses, (iv) all fees and expenses incurred in
connection with the listing of Cablevision Shares or equity securities of MSG on
any securities exchange and (v) the fees and disbursements of counsel and
independent public accountants for Cablevision in the case of a registration of
Purchaser Shares and MSG in the case of a registration of Registrable
Securities.
"Registration Statement" shall mean any registration statement which
covers Cablevision Shares pursuant to the provisions of Section 2.06 or equity
securities of MSG pursuant to Article IV of this Agreement, including the
Prospectus, all amendments and supplements to such registration statement or
such Prospectus, including post-effective amendments, and all exhibits and all
material incorporated by reference in such Registration Statement.
19
"Remittance Amount" shall have the meaning set forth in Section
2.07(b).
"RGC" shall mean Rainbow Garden Corp., a Delaware corporation, which
is an indirect Subsidiary of Cablevision on the date of this Agreement, and its
successors and permitted assigns.
"SEC" shall mean the Securities and Exchange Commission.
"Second Put Cash Closing" shall have the meaning set forth in
Section 2.05(b).
"Second Put Cash Closing Date" shall have the meaning set forth in
Section 2.05(b).
"Second Put Option" shall have the meaning set forth in Section
2.04(a).
"Second Put Purchase Price" shall have the meaning set forth in
Section 2.04(a).
"Second Put Stock Closing" shall have the meaning set forth in
Section 2.06(c).
"Second Put Stock Closing Date" shall have the meaning set forth in
Section 2.06(c).
"Second Transferred Interest" shall have the meaning set forth in
Section 2.03(a).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selected Investment Banking Firm" shall mean an investment banking
firm chosen by ITT MSG from a list of three investment banking firms chosen by
Cablevision from the following: Lazard Freres & Co. LLC, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Bear ▇▇▇▇▇▇▇ & Co., Inc., Salomon Brothers
Inc and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or, in each case, their respective successors.
20
"Shares" shall mean all the issued and outstanding shares of the
capital stock of MSGE beneficially owned by ITTE or any of its Affiliates.
"Shares Purchase Price" shall have the meaning set forth in Section
2.01.
"Significant Asset" shall mean any of the Arena, the Knicks, the
Rangers or the Network.
"SportsChannel Contribution Agreement" shall mean the SportsChannel
Contribution Agreement, dated as of the date hereof, in the form set forth as
Exhibit B hereto.
"SportsChannel New York" shall mean SportsChannel Associates, a New
York general partnership, and its successors and assigns.
"Sports League Approval Agreements" shall mean all agreements
required to be entered into by Cablevision, ITT or MSG or any of their
respective Subsidiaries and Affiliates in order to obtain the approvals of the
NBA and the NHL and any other sports league to the transactions contemplated
hereby.
"Subject Sale" shall have the meaning set forth in Section 2.07(b).
"Subsidiary" shall mean any corporation, partnership or other entity
of which another entity (i) owns, directly or indirectly, ownership interests
sufficient to elect a majority of the Board of Directors (or persons performing
similar functions) irrespective of whether at the time any other class or
classes of ownership interests of such corporation, partnership or other entity
shall or might have such voting power upon the occurrence of any contingency) or
(ii) is a general partner or an entity performing similar functions (e.g., a
trustee).
"Suspension Notice" shall have the meaning set forth in Section
4.02(a)(xv).
21
"Swap Agreement" shall mean (a) an agreement (including terms and
conditions incorporated by reference therein) which is a rate swap agreement,
basis swap, forward rate agreement, commodity swap, interest rate option,
foreign exchange agreement, rate cap agreement, rate floor agreement, rate
collar agreement, currency swap agreement, cross-currency rate swap agreement,
currency option, any other similar agreement (including any option to enter into
any of the foregoing); (b) any combination of the foregoing; or (c) a master
agreement for any of the foregoing together with all supplements.
"Third Party Claim" shall have the meaning as defined in Section
5.09.
"Third Party Transfer" shall have the meaning set forth in Section
2.11.
"Third Transferred Interest" shall have the meaning set forth in
Section 2.04(a).
"Third-Year Call Closing" shall have the meaning set forth in
Section 2.09(b).
"Third-Year Call Closing Date" shall have the meaning set forth in
Section 2.09(b).
"Third-Year Call Price" shall have the meaning set forth in Section
2.09(a).
"Third-Year Call Right" shall have the meaning set forth in Section
2.09(a).
"Transfer" shall mean any direct or indirect sale, lease, transfer,
delegation, exchange, assignment, hypothecation, pledge, encumbrance, creation
of an option or right to purchase or other disposition of any kind (voluntarily,
involuntarily or by operation of law) and a correlative meaning when used as a
verb.
22
(b) For all purposes of this Agreement:
(i) "including" and "include" shall be deemed to be followed by ",
without limitation,"; and
(ii) "knowledge" of any party means the knowledge, after due
inquiry, of the executive officers of such party.
ARTICLE II
Transfers
SECTION 2.01. Initial Transfer. Upon the terms and subject to the
conditions set forth in this Agreement, (a) ITTE shall sell, transfer and
deliver to RGC, or at RGC's election, to MSGE, and RGC shall purchase, or the
parties, at the election of RGC, shall cause MSGE to redeem from ITTE, the
Shares for an aggregate purchase price of $6.5 million (the "Shares Purchase
Price") and (b) ITT MSG shall sell, transfer and deliver to GHC, or at GHC's
election, to MSG, and GHC shall purchase, or the parties shall, at the election
of GHC, cause MSG to redeem from ITT a portion of the ITT MSG Interest such that
immediately following such purchase or redemption, the ITT MSG Interest
represents the Applicable Percentage of the entire MSG Interest (the ITT MSG
Interest so purchased or redeemed hereunder is referred to as the "Initial
Transferred Interest") for an aggregate purchase price of $493.5 million (the
"Initial Transferred Interest Purchase Price"). The Shares Purchase Price and
the Initial Transferred Interest Purchase Price shall be payable as set forth in
Section 2.02. If RGC elects to effect the purchases of the Shares and the
Initial Transferred Interest as redemptions by MSGE and MSG, respectively, the
parties agree that at the Initial Closing, MSG shall distribute to MSGE $6.5
million in redemption of one-half of MSGE's interest in MSG.
SECTION 2.02. Initial Closing. The closing (the "Initial Closing")
of the purchase and sale of the Shares and the Initial Transferred Interest
shall be held at the
23
offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00
a.m. on a date that is no later than five business days after the date on which
the conditions to the Initial Closing set forth in Section 7.01 shall have been
satisfied or waived. The date on which the Initial Closing shall occur is
hereinafter referred to as the "Initial Closing Date". At the Initial Closing,
(a)(i) RGC shall deliver, or the parties, at the election of RGC, shall cause
MSGE to deliver, to ITTE, by wire transfer to a bank account designated by ITTE
at least two business days prior to the Initial Closing Date, immediately
available funds in an amount equal to the Shares Purchase Price and (ii) ITTE
shall deliver to RGC or MSGE, as the case may be, certificates representing the
Shares, duly endorsed in blank or accompanied by stock powers duly endorsed in
blank in proper form for transfer, with appropriate transfer stamps, if any,
affixed and (b)(i) GHC shall deliver, or the parties shall, if GHC shall have
elected for MSG to redeem the Initial Transferred Interest, cause MSG to
deliver, to ITT MSG, by wire transfer to a bank account designated by ITT MSG at
least two business days prior to the Initial Closing Date, immediately available
funds in an amount equal to the Initial Transferred Interest Purchase Price and
(ii) ITT MSG shall deliver to GHC or MSG, as the case may be, a ▇▇▇▇ of Sale and
Assignment of Partnership Interest in the form of Exhibit A to effect delivery
of title to the Initial Transferred Interest.
SECTION 2.03. First Put Option. (a) Upon the terms and subject to
the conditions set forth in this Agreement, ITT MSG shall have the option (the
"First Put Option") to require Cablevision to purchase 50% of the remaining ITT
MSG Interest, or, at the election of Cablevision, to require Cablevision to
cause MSG to redeem a portion of the ITT MSG Interest so that following such
redemption the ITT MSG Interest is one-half of what it was immediately prior to
such redemption, (the ITT MSG Interest so transferred or redeemed hereunder is
referred to as the "Second Transferred Interest") on the first anniversary of
the Initial Closing Date for a purchase price of $94 million or, if the Aircraft
shall not have been contributed to MSG at the time of payment, $75 million (in
either case, as such
24
amount may be increased pursuant to Section 2.07) (the "First Put Purchase
Price"). If ITT MSG exercises the First Put Option, Cablevision shall purchase,
or, at the election of Cablevision, cause MSG to redeem, the Second Transferred
Interest pursuant to the terms of this Agreement. At the election of
Cablevision, the First Put Purchase Price may be paid entirely in cash as set
forth in Section 2.05 below, entirely in shares of Cablevision Common Stock as
set forth in Section 2.06 below or in any combination thereof. In the event that
Cablevision shall not be able to purchase, or cause MSG to redeem, the Second
Transferred Interest because of a failure of any condition to the closing of
such purchase or redemption set forth in Section 7.01(a)(iii), (iv), (v) or (vi)
(other than as a result of a breach by Cablevision or any of its Affiliates),
Cablevision shall have the right during the 45-day period following the first
anniversary of the Initial Closing Date to cause a third party designated by
Cablevision to purchase the Second Transferred Interest for a price payable in
cash equal to the First Put Purchase Price.
(b) Manner of Exercise of First Put Option. If ITT MSG desires to
exercise the First Put Option pursuant to Section 2.03(a), it shall deliver to
Cablevision a written notice of its exercise of the First Put Option at least
100 days prior to the first anniversary of the Initial Closing Date and such
notice shall be revocable by ITT MSG until such date that is 100 days prior to
the first anniversary of the Initial Closing Date. If ITT MSG shall have
delivered and not revoked such notice, no later than 60 days prior to the first
anniversary of the Initial Closing Date, Cablevision shall deliver to ITT MSG a
non-binding written notice stating whether the First Put Purchase Price will be
paid in cash or by issuing Cablevision Common Stock or a combination thereof. If
ITT MSG fails to deliver a notice stating its exercise of the First Put Option
at least 100 days prior to the first anniversary of the Initial Closing Date,
ITT MSG shall be deemed to have elected not to exercise the First Put Option. If
ITT MSG shall elect to exercise the First Put Option by delivering the written
notice provided for by this Section 2.03(b) and Cablevision shall fail to
deliver a
25
notice specifying its chosen manner of paying the First Put Purchase Price
within 40 days of receipt of ITT MSG's notice, Cablevision shall be deemed to
have elected to have the First Put Purchase Price paid entirely in cash and
Section 2.05(a) shall apply. If Cablevision shall initially indicate its
intention to pay the First Put Purchase Price by delivery of shares of
Cablevision Common Stock, but ultimately pays such price (or causes such price
to be paid) in cash, Cablevision shall reimburse ITT MSG and its Affiliates for
all reasonable, out-of-pocket expenses (including fees and expenses of counsel)
incurred by ITT MSG or such Affiliates in preparation for receiving and
reselling such shares of Cablevision Common Stock.
(c) Cablevision Obligation. Cablevision acknowledges and agrees that
the obligation to pay the First Put Purchase Price upon the exercise by ITT MSG
of the First Put Option is and shall remain an obligation of Cablevision,
whether or not Cablevision elects to have MSG pay such First Put Purchase Price,
has the ability to control MSG or elects to designate a third party to purchase
the Second Transferred Interest pursuant to the last sentence of Section
2.03(a). In the event of a Put Obligation Breach with respect to the First Put
Option, without limiting any other remedies available to ITT MSG or any of its
Affiliates, the First Put Purchase Price shall be increased at a rate per annum
equal to twice the interest rate then payable by MSG under the term loan
facility of the Bank Credit Agreement or any successor facility, calculated on
the basis of the actual number of days elapsed since the date on which the Put
Obligation Breach occurred to the date of payment over a year of 365 days.
SECTION 2.04. Second Put Option. (a) In addition to the First Put
Option and upon the terms and subject to the conditions set forth in this
Agreement, ITT MSG shall have the option (the "Second Put Option"; each of the
First Put Option and Second Put Option may be hereinafter referred to as a "Put
Option") to require Cablevision to purchase, or, at the election of Cablevision,
MSG to redeem (i) if ITT MSG has exercised the First Put Option and Cablevision
has purchased, or caused MSG to
26
redeem, the Second Transferred Interest, the balance of the remaining ITT MSG
Interest such that immediately following such transfer or redemption, ITT MSG
does not beneficially own an ITT MSG Interest (the ITT MSG Interest so
transferred or redeemed hereunder is referred to as the "Third Transferred
Interest"), on the second anniversary of the Initial Closing Date for a purchase
price of $94 million or, if the Aircraft shall not have been contributed to MSG
at the time of payment, $75 million or (ii) if ITT MSG has not exercised the
First Put Option, at ITT MSG's election, (A) the Second Transferred Interest for
a purchase price of $94 million or, if the Aircraft shall not have been
contributed to MSG at the time of payment, $75 million or (B) the Second
Transferred Interest and the Third Transferred Interest for a purchase price of
$188 million or, if the Aircraft shall not have been contributed to MSG at the
time of payment, $150 million (as any of such amounts may be increased pursuant
to Section 2.07) (any of such purchase prices, the "Second Put Purchase Price";
each of the First Put Purchase Price and the Second Put Purchase Price may be
hereinafter referred to as a "Put Purchase Price"). If ITT MSG exercises the
Second Put Option, Cablevision shall purchase, or, at the election of
Cablevision, cause MSG to redeem, the Second Transferred Interest or the Third
Transferred Interest or both the Second Transferred Interest and the Third
Transferred Interest, as the case may be, pursuant to the terms of this
Agreement. At the election of Cablevision, the Second Put Purchase Price may be
paid entirely in cash as set forth in Section 2.05 below, entirely in shares of
Cablevision Common Stock as set forth in Section 2.06 below or in any
combination thereof. In the event that Cablevision shall not be able to
purchase, or cause MSG to redeem, the Second Transferred Interest or the Third
Transferred Interest or both, as the case may be, because of a failure of any
condition to the closing of such purchase or redemption set forth in Section
7.01(a)(iii), (iv), (v) or (vi) (other than as a result of a breach by
Cablevision or any of its Affiliates), Cablevision shall have the right during
the 45-day period following the second anniversary of the Initial Closing Date
to cause a third party designated by Cablevision to purchase the Second
Transferred Interest or
27
the Third Transferred Interest or both, as the case may be, for a price in cash
equal to the Second Put Purchase Price.
(b) Manner of Exercise of the Second Put Option. If ITT MSG desires
to exercise the Second Put Option pursuant to Section 2.04(a), it shall deliver
to Cablevision a written notice of its exercise of the Second Put Option at
least 100 days prior to the second anniversary of the Initial Closing Date
specifying, if ITT MSG has not exercised the First Put Option, whether it is
exercising the Second Put Option with respect to only the Second Transferred
Interest or with respect to both the Second Transferred Interest and the Third
Transferred Interest and such notice shall be revocable by ITT MSG until such
date that is 100 days prior to the second anniversary of the Initial Closing
Date. If ITT MSG shall have delivered and not revoked such notice, no later than
60 days prior to the second anniversary of the Initial Closing Date, Cablevision
shall deliver to ITT MSG a non-binding written notice stating whether the Second
Put Purchase Price will be paid in cash or by issuing Cablevision Common Stock
or a combination thereof. If ITT MSG fails to deliver a notice stating its
exercise of the Second Put Option at least 100 days prior to the second
anniversary of the Initial Closing Date, ITT MSG shall be deemed to have elected
not to exercise the Second Put Option. If ITT MSG shall elect to exercise the
Second Put Option by delivering the written notice provided for by this Section
2.04(b) and Cablevision shall fail to deliver a notice specifying its chosen
manner of paying the Second Put Purchase Price within 40 days of receipt of ITT
MSG's notice, Cablevision shall be deemed to have elected to have the Second Put
Purchase Price paid entirely in cash and Section 2.05(b) shall apply. If
Cablevision shall initially indicate its intention to pay the Second Put
Purchase Price by delivery of shares of Cablevision Common Stock, but ultimately
pays such price (or causes such price to be paid) in cash, Cablevision shall
reimburse ITT MSG and its Affiliates for all reasonable, out-of-pocket expenses
(including fees and expenses of counsel) incurred by ITT MSG or such Affiliates
in preparation for receiving and reselling such shares of Cablevision Common
Stock.
28
(c) Cablevision Obligation. Cablevision acknowledges and agrees that
the obligation to pay the Second Put Purchase Price upon the exercise by ITT MSG
of the Second Put Option is and shall remain an obligation of Cablevision,
whether or not Cablevision elects to have MSG pay such Second Put Purchase
Price, has the ability to control MSG or elects to designate a third party to
purchase the Second Transferred Interest or the Third Transferred Interest or
both, as the case may be, pursuant to the last sentence of Section 2.04(a). In
the event of a Put Obligation Breach with respect to the Second Put Option,
without limiting any other remedies that may be available to ITT MSG or any of
its Affiliates, the Second Put Purchase Price shall be increased at a rate per
annum equal to twice the interest rate then payable by MSG under the term loan
facility of the Bank Credit Agreement or any successor facility, calculated on
the basis of the actual number of days elapsed since the date on which the Put
Obligation Breach occurred to the date of payment over a year of 365 days.
SECTION 2.05. Payment of Cash Upon Exercise of Put Option. (a) In
the event ITT MSG exercises the First Put Option and Cablevision elects to have
the First Put Purchase Price paid entirely in cash, the closing of the First Put
Option (the "First Put Cash Closing"), shall be held at the offices of ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m., New York City
time, on the first anniversary of the Initial Closing Date, or, if the
conditions to the First Put Cash Closing set forth in Section 7.01 shall not
have been satisfied or waived by such first anniversary date, as soon as
practicable after such conditions shall have been satisfied or waived. The date
on which the First Put Cash Closing shall occur is hereinafter referred to as
the "First Put Cash Closing Date". At the First Put Cash Closing (i) Cablevision
shall deliver, or cause to be delivered by MSG, to ITT MSG, by wire transfer to
a bank account designated by ITT MSG at least two business days prior to the
First Put Cash Closing Date, immediately available funds in an amount equal to
the First Put Purchase Price and (ii) ITT MSG shall deliver to Cablevision or
MSG, as the
29
case may be, a ▇▇▇▇ of Sale and Assignment of Partnership Interest in the form
of Exhibit A to effect delivery of title to the Second Transferred Interest.
(b) In the event ITT MSG exercises the Second Put Option and
Cablevision elects to have the Second Put Purchase Price paid entirely in cash,
the closing of the Second Put Option (the "Second Put Cash Closing"), shall be
held at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
at 10:00 a.m., New York City time, on the second anniversary of the Initial
Closing Date, or, if the conditions to the Second Put Cash Closing set forth in
Section 7.01 shall not have been satisfied or waived by such second anniversary
date, as soon as practicable after such conditions shall have been satisfied or
waived. The date on which the Second Put Cash Closing shall occur is hereinafter
referred to as the "Second Put Cash Closing Date". At the Second Put Cash
Closing (i) Cablevision shall deliver, or cause to be delivered by MSG, to ITT
MSG, by wire transfer to a bank account designated by ITT MSG at least two
business days prior to the Second Put Cash Closing Date, immediately available
funds in an amount equal to the Second Put Purchase Price and (ii) ITT MSG shall
deliver to Cablevision or MSG, as the case may be, a ▇▇▇▇ of Sale and Assignment
of Partnership Interest in the form of Exhibit A to effect delivery of title to
the Second Transferred Interest, the Third Transferred Interest or both the
Second Transferred Interest and the Third Transferred Interest, as the case may
be.
SECTION 2.06. Issuance of Shares of Cablevision Common Stock Upon
Exercise of Put Option. (a) In the event ITT MSG exercises a Put Option pursuant
to Section 2.03(a) or 2.04(a) and Cablevision elects to pay the Put Purchase
Price associated therewith in whole or in part in shares of Cablevision Common
Stock pursuant to Section 2.03(b) or 2.04(b), then Cablevision shall have the
right in compliance with this Section 2.06 to pay such Put Purchase Price by
delivery to ITT MSG of a number of validly issued, fully paid and nonassessable
shares of Cablevision Common Stock that shall result in cash proceeds to ITT MSG
from the underwritten public offering contemplated by this
30
Section 2.06, net of all discounts and commissions and all other expenses, at
least equal to the portion of such Put Purchase Price that Cablevision has
elected to pay in shares of Cablevision Common Stock (the "Cablevision Shares").
Notwithstanding anything to the contrary contained in this Agreement,
Cablevision shall only have the right to deliver Cablevision Shares at a Closing
if the closing of an underwritten public offering of such Cablevision Shares as
contemplated by this Section 2.06 and Section 4.02 occurs simultaneously with
such Closing. The resale by ITT MSG in an underwritten public offering of all
Cablevision Shares delivered hereunder shall be (i) registered under the
Securities Act on a Registration Statement declared effective by the SEC at
least three business days prior to the First Put Stock Closing Date or the
Second Put Stock Closing Date (each, as defined below), as the case may be, in
accordance with this Section 2.06 and Section 4.02 and (ii) consummated by
delivery of the Cablevision Shares, on behalf of ITT MSG, to the underwriters,
and payment in cash therefor by the underwriters, on such First Put Stock
Closing Date or Second Put Stock Closing Date, as the case may be, pursuant to
an underwriting agreement meeting the requirements of this Section 2.06.
(b) In the event ITT MSG exercises the First Put Option and
Cablevision elects to pay the First Put Purchase Price by the delivery of
Cablevision Shares, the closing of the First Put Option (the "First Put Stock
Closing") shall be held at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m., New York City time, on the first anniversary
of the Initial Closing Date, or, if the conditions to the First Put Stock
Closing set forth in Section 7.01 shall not have been satisfied or waived by
such date, as soon as practicable after such conditions shall have been
satisfied or waived; provided, however, that if the First Put Stock Closing
shall not have occurred by a date that is three business days after the first
anniversary of the Initial Closing Date due to a failure of the conditions set
forth in Section 7.01(b)(vii) or (viii) to be satisfied by such date,
Cablevision shall pay the First Put Purchase Price in cash on the fifth business
day following the first anniversary of the Initial
31
Closing Date. The date on which the First Put Stock Closing shall occur is
hereinafter referred to as the "First Put Stock Closing Date". At the First Put
Stock Closing, (i) ITT MSG shall deliver to Cablevision a ▇▇▇▇ of Sale and
Assignment of Partnership Interest in the form of Exhibit A to effect delivery
of title to the Second Transferred Interest and (ii) Cablevision shall deliver
to ITT MSG (A)(1) duly authorized and executed stock certificates representing
the number of Cablevision Shares determined pursuant to Section 2.06(a) for
immediate delivery to the managing underwriter or underwriters of the
underwritten public offering required by this Section 2.06 for the accounts of
the underwriters and (2) cash, by wire transfer to a bank account designated by
ITT MSG at least two business days prior to the First Put Stock Closing Date of
immediately available funds in an amount equal to the portion of the First Put
Purchase Price that Cablevision elects to have paid in cash or (B) if required
by the proviso to the first sentence of this subsection, cash by wire transfer
to a bank account designated by ITT MSG of immediately available funds in an
amount equal to the First Put Purchase Price.
(c) In the event ITT MSG exercises the Second Put Option and
Cablevision elects to pay the Second Put Purchase Price by the delivery of
Cablevision Shares, the closing of the Second Put Option (the "Second Put Stock
Closing") shall be held at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m., New York City time, on the second anniversary
of the Initial Closing Date, or, if the conditions to the Second Put Stock
Closing set forth in Section 7.01 shall not have been satisfied or waived by
such date, as soon as practicable after such conditions shall have been
satisfied or waived; provided, however, that if the Second Put Stock Closing
shall not have occurred by a date that is three business days after the second
anniversary of the Initial Closing Date due to a failure of the conditions set
forth in Section 7.01(b)(vii) or (viii) to be satisfied by such date,
Cablevision shall pay the Second Put Purchase Price in cash on the fifth
business day following the second anniversary of the Initial Closing Date. The
date on which the Second Put Stock
32
Closing shall occur is hereinafter referred to as the "Second Put Stock Closing
Date". At the Second Put Stock Closing, (i) ITT MSG shall deliver to Cablevision
a ▇▇▇▇ of Sale and Assignment of Partnership Interest in the Form of Exhibit A
to effect delivery of title to the Second Transferred Interest or the Third
Transferred Interest or both the Second Transferred Interest and the Third
Transferred Interest, as the case may be, and (ii) Cablevision shall deliver to
ITT MSG (A)(1) duly authorized and executed stock certificates representing the
number of Cablevision Shares determined pursuant to Section 2.06(a) for
immediate delivery to the managing underwriter or underwriters of the
underwritten public offering required by this Section 2.06 for the accounts of
the underwriters and (2) cash, by wire transfer to a bank account specified by
ITT MSG at least two business days prior to the Second Put Stock Closing Date of
immediately available funds in an amount equal to the portion of the First Put
Purchase Price that Cablevision elects to have paid in cash or (B) if required
by the proviso to the first sentence of this subsection, cash by wire transfer
to a bank account designated by ITT MSG at least two business days prior to the
fifth business day following the second anniversary of the Initial Closing Date
of immediately available funds in an amount equal to the Second Put Purchase
Price.
(d) In connection with the delivery of Cablevision Shares upon the
exercise of any Put Option, if (x) the aggregate of the amount of cash paid by
Cablevision or MSG, as the case may be, toward the Put Purchase of a Put Option
and the net cash proceeds to ITT MSG of the resale of Cablevision Shares
delivered pursuant to this Section 2.06, as certified in writing by the managing
underwriter or underwriters for such resale, less all out-of-pocket expenses
actually incurred by ITT MSG or any of its Affiliates in connection with such
resale (which shall include all legal and accounting fees), and not paid
directly by Cablevision pursuant to Section 2.06(f) is less than (y) the Put
Purchase Price due from Cablevision upon the exercise of such Put Option,
Cablevision shall deliver such difference to ITT MSG in cash on the first
business day
33
following the First Put Stock Closing Date or the Second Put Stock Closing Date,
as the case may be, by wire transfer of immediately available funds to a bank
account designated by ITT MSG.
(e) In connection with any underwritten public offering of
Cablevision Shares pursuant to this Section 2.06, Cablevision shall have the
right to select the managing underwriter or underwriters therefor; provided that
such managing underwriter or underwriters are reasonably acceptable to ITT MSG.
Cablevision and ITT MSG agree to execute an underwriting agreement with such
managing underwriter or underwriters containing customary terms and provisions
(including provisions as to indemnification) and such other terms as such
managing underwriter or underwriters shall reasonably request to effectuate the
underwritten public offering of Cablevision Shares as contemplated by this
Agreement. Any such underwriting agreement shall be reasonably satisfactory in
form and substance to ITT MSG and Cablevision. Subject to its obligations
contained in Section 4.02, Cablevision shall prepare and file promptly following
the delivery of its notice pursuant to Section 2.03(b) or 2.04(b), and use all
reasonable efforts to cause to be declared effective, a Registration Statement
on any appropriate form under the Securities Act which shall cover a resale
pursuant to an underwritten public offering of all Cablevision Shares to be
issued to ITT MSG pursuant to this Section 2.06. Cablevision agrees that it and
the underwriters may not use any Registration Statement covering a resale of
Cablevision Shares unless ITT MSG shall have consented to such use (which
consent shall not be unreasonably withheld) and shall be reasonably satisfied
with the content and form of such Registration Statement. Cablevision may
require ITT MSG to furnish Cablevision with such information regarding ITT MSG
and pertinent to the disclosure requirements relating to the registration and
the distribution of Cablevision Shares as Cablevision may from time to time
reasonably request in writing.
(f) Cablevision will pay all Registration Expenses in connection
with all registrations of Cablevision
34
Shares pursuant to this Section 2.06 and all expenses otherwise incurred by it
or its Affiliates relating to the sale or disposition of Cablevision Shares
issued to ITT MSG pursuant to this Section 2.06 and, subject to reimbursement
under Section 2.06(d), ITT MSG shall only be responsible for its own expenses
(other than Registration Expenses and underwriting commissions and discounts,
which shall be paid by Cablevision).
SECTION 2.07. ITT MSG's Right to Profits. (a) In the event
Cablevision, RGC, GHC or any of their respective Affiliates (other than MSG and
its Subsidiaries) consummate any Transfer, or enters into one or more signed
written agreements or signed written agreements in principle (whether or not
binding) to Transfer, in one or a series of related transactions, to one or more
third parties who are not Affiliates of Cablevision, RGC, GHC or MSG, or files
with the SEC a registration statement relating to a secondary public offering of
(i) any MSG Interest or (ii) any direct ownership interest in any Partner or
there is a public announcement relating to any such Transfer (or such agreement
or such agreement in principle related thereto) by any party thereto, at any
time during the one-year period beginning on the Initial Closing Date (an
"Equity Subject Sale"), and such Equity Subject Sale indicates an MSG Implied
Value that is greater than the Initial Implied Value (determined as of the date
of such Subject Sale), Cablevision shall remit to ITT MSG an amount equal to
0.385 multiplied by the amount by which (x) the Percentage Sold, expressed as a
decimal, multiplied by the MSG Implied Value exceeds (y) the Percentage Sold,
expressed as a decimal, multiplied by the Initial Implied Value (the "Equity
Remittance Amount").
(b) In the event MSG or any of its Subsidiaries consummates any
Transfer, or enters into one or more signed written agreements or signed written
agreements in principle (whether or not binding) to Transfer, in one or a series
of related transactions, to one or more third parties who are not Affiliates of
Cablevision, RGC, GHC or MSG, or files with the SEC a registration statement
relating to a secondary public offering of, a majority or greater direct
35
interest in, or all or substantially all of the assets of, any Significant
Asset, or there is a public announcement relating to any such Transfer (or such
agreement or such agreement in principle related thereto) by any party thereto,
at any time during the one-year period beginning on the Initial Closing Date (an
"Asset Subject Sale" and, together with an Equity Subject Sale, a "Subject
Sale"), if the aggregate Consideration received by MSG and its Subsidiaries and
Cablevision, Rainbow, RGC or GHC and their respective Affiliates for the
interest or assets Transferred exceeds the Initial Asset Value for the
Significant Asset subject to such Subject Sale multiplied by a fraction, the
numerator of which is the Fair Market Value of the interests or assets of the
Significant Asset so Transferred and the denominator of which is the Fair Market
Value of the Significant Asset, MSG shall remit to ITT MSG an amount equal to
0.385 multiplied by such excess (the "Asset Remittance Amount" and, together
with the Equity Remittance Amount, the "Remittance Amount"). In the event that
MSG has Transferred assets of, or interests in, a Significant Asset to
Cablevision, Rainbow, RGC, GHC or any of their respective Affiliates and
Cablevision, Rainbow, RGC, GHC or any of their respective Affiliates takes any
action with respect to such interests or assets during the one-year period
described above that would be an Asset Subject Sale if such action were taken by
MSG, then the provisions of this clause (b) shall apply to such subsequent
resale and the Remittance Amount payable as a result thereof, if any, shall be
payable by Cablevision.
(c) The Remittance Amount payable in connection with any Subject
Sale shall be paid in cash within five business days following the consummation
of the Subject Sale by wire transfer of immediately available funds to a bank
account designated by ITT MSG; provided that if the Subject Sale is a Transfer
by MSG of assets or interests in assets and the payment by MSG of the Remittance
Amount is expressly not permitted by the terms of the Bank Credit Agreement, the
Remittance Amount will bear interest at a rate per annum equal to the interest
rate then payable under the term loan facility of the Bank Credit Agreement and
the Remittance Amount and the amount of such interest will be added to the
36
Put Purchase Price for the next Put Option to be exercised by ITT MSG, the Floor
Price in respect of such Third-Year Call Price, the Change of Control Call
Price, the Third-Year Call Price or the price payable by MSG pursuant to the
right of first refusal set forth in Section 6.5 of the Partnership Agreement, as
applicable; provided that ITT MSG's right to receive the Remittance Amount and
such interest from MSG shall remain until the Remittance Amount and such
interest is paid by MSG or pursuant to the foregoing. Any adjustment to the
Third-Year Call Price or the price payable on a right of first refusal under the
Partnership Agreement shall take account of any value reflected in such price
prior to such adjustment as a result of the retention of the Remittance Amount
by MSG including, if applicable, the reduction in interest expense of MSG as a
result of the application of the proceeds to reduce MSG borrowings.
(d) Cablevision shall deliver in writing to ITT MSG its three
choices of firms to act as the Selected Investment Banking Firm prior to or
within two business days following the earlier to occur of such Subject Sale or
the first public announcement of such Subject Sale by a party thereto. If
Cablevision fails to so deliver such choices to ITT MSG, ITT MSG shall be
entitled to select the Selected Investment Banking Firm from the list of firms
set forth in the definition thereof. The Remittance Amount (and all component
parts thereof) shall be determined by the Selected Investment Banking Firm and
the results of and methodologies used in such determination shall be in writing
and delivered to Cablevision and ITT MSG. Each of Cablevision, RGC, GHC and ITT
MSG agrees to, and to cause its Affiliates to, cooperate with the Selected
Investment Banking Firm in its determination of MSG Implied Value and the
Remittance Amount and provide reasonable access to information requested by the
Selected Investment Banking Firm. ITT MSG and Cablevision shall each pay
one-half of the fees and expenses of the Selected Investment Banking Firm
(including fees and expenses of counsel) related to its services pursuant to
this Section 2.07. The Remittance Amount shall be payable promptly after the
determination thereof and shall bear interest from the date of consummation of
the Subject Sale at a rate per annum equal to the interest rate then payable
37
by MSG under the term loan facility of the Bank Credit Agreement or any
successor facility, calculated on the basis of the actual number of days elapsed
since the consummation of the Subject Sale over a year of 365 days.
(e) This Section 2.07 shall not apply to any Transfer to an
unaffiliated third-party lender that is any bona fide assignment, hypothecation,
pledge, encumbrance or bona fide sale-leaseback transaction, in each case,
whereby operating control of the asset Transferred remains with the Transferee
and which is a financing transaction for the benefit of the Transferee or its
Affiliates and which does not have the primary purpose of avoiding or reducing
any payments that would otherwise be payable to ITT MSG pursuant to this Section
2.07.
SECTION 2.08. Cablevision's Change of Control Call Right. (a)
General. Upon the terms and subject to the conditions set forth in this
Agreement, Cablevision shall have the right at any time after the Initial
Closing Date, upon a Change of Control, to require that ITT MSG sell to
Cablevision, or, at Cablevision's election, to require MSG to redeem, all (but
not less than all) the balance of the remaining ITT MSG Interest upon the terms
set forth in this Section 2.08 (the "Change of Control Call Right"). If at the
time of such Change of Control, ITT MSG shall have previously exercised a Put
Option by delivering and not revoking the notice required by Section 2.03(b) or
Section 2.04(b), then the ITT MSG Interest subject to such Put Option shall be
Transferred to Cablevision or MSG, as the case may be, pursuant to such Put
Option and not pursuant to this Section 2.08. If at the time of such Change of
Control, (i) ITT MSG shall have exercised and not revoked a Put Option with
respect to only the Second Transferred Interest, then Cablevision shall have the
right to purchase, or cause MSG to redeem, the balance of the remaining ITT MSG
Interest for an aggregate purchase price of $94 million or, if the Aircraft
shall not have been contributed to MSG, $75 million, payable as set forth in
Section 2.08(c) below, or (ii) ITT MSG shall not have exercised a Put Option,
then Cablevision shall have the right to purchase, or cause MSG to redeem, the
balance of
38
the remaining ITT MSG Interest for an aggregate purchase price of $188 million
or, if the Aircraft shall not have been contributed to MSG, $150 million,
payable as set forth in Section 2.08(c) below. Either of such purchase prices
may be hereinafter referred to as a "Change of Control Call Price".
(b) Manner of Exercise of Change of Control Call Right. Within 10
days following a Change of Control, ITT MSG shall deliver to Cablevision a
written notice stating:
(i) that a Change of Control has occurred and that Cablevision has
the right to purchase, or cause MSG to redeem, the balance of the
remaining ITT MSG Interest upon the terms of this Section 2.08; and
(ii) the circumstances and relevant facts regarding such Change of
Control (including the identity of the person acquiring control in the
Change of Control transaction).
If Cablevision desires to exercise its Change of Control Call Right pursuant to
this Section 2.08, it shall deliver to ITT MSG, within 60 days following receipt
of notice from ITT MSG, a notice stating that it intends to purchase, or cause
MSG to redeem, as the case may be, the balance of the remaining ITT MSG Interest
pursuant to this Section 2.08 and the method of payment of the Change of Control
Call Price and, in the event Cablevision elects to pay the Change of Control
Call Price in Debt Securities, its three selections of investment banking firms
to act as the Selected Investment Banking Firm. If Cablevision shall fail to
deliver such notice within 60 days following receipt of ITT MSG's notice of a
Change of Control, Cablevision shall be deemed to have elected not to exercise
its Change of Control Call Right pursuant to this Section 2.08. Within 10
business days following receipt of Cablevision's notice ITT MSG shall select the
Selected Investment Banking Firm from the list of three investment banking firms
furnished by Cablevision.
39
(c) Payment of Change of Control Call Price. If Cablevision elects
to exercise its Change of Control Call Right pursuant to this Section 2.08, it
shall have the right to pay the Change of Control Call Price associated
therewith (i) in cash or (ii) by delivery to ITT MSG of notes or debentures
having a maturity of 30 years or less of one of Cablevision, RGC or GHC having a
Fair Market Value as determined by a Selected Investment Banking Firm equal to
such Change of Control Call Price ("Debt Securities"). The Debt Securities shall
contain terms specified by Cablevision, RGC or GHC, as the case may be, and
shall be issued pursuant to an agreement between Cablevision, RGC or GHC on the
one hand and ITT MSG on the other that shall contain appropriate representations
and warranties relating to due organization and good standing, due authorization
execution and delivery, validity and binding effect, enforceability, consents,
conflicts, liens, transferability, violations or defaults and any other
reasonably appropriate matters considering the circumstances. ITT MSG shall pay
a percentage of the fees and expenses of the Selected Investment Banking Firm
(including fees and expenses of counsel) related to the services provided by it
pursuant to this Section 2.08 equal to its Profit Percentage (as defined in the
Partnership Agreement) at such time and Cablevision, RGC or GHC shall pay the
balance of such fees and expenses. The closing of such purchase (or redemption)
and sale (the "Change of Control Call Closing") shall be held at the offices of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ as soon as is
reasonably practicable following the satisfaction or waiver of all the
conditions to the Change of Control Call Closing set forth in Section 7.01 (the
date of such closing, the "Change of Control Call Closing Date"). At such
closing (x) Cablevision shall deliver to ITT MSG, (i) if Cablevision shall elect
to have the Change of Control Call Price paid in cash, by wire transfer to a
bank account designated by ITT MSG, immediately available funds in an amount
equal to such Change of Control Call Price or (ii) if Cablevision shall elect to
have the Change of Control Call Price paid in Debt Securities, Cablevision
shall, or shall cause RGC or GHC, as the case may be, to deliver the Debt
Securities duly executed and notarized and registered in the name of ITT MSG or
its designee and (y) ITT MSG shall
40
deliver to Cablevision a ▇▇▇▇ of Sale and Assignment of Partnership Interest in
the form of Exhibit A to effect delivery of title to the ITT MSG Interest
transferred pursuant to this Section 2.08.
SECTION 2.09. Cablevision's Third-Year Call Right. (a) Upon the
terms and subject to the conditions set forth in this Agreement, Cablevision
shall have the right to require ITT MSG to sell to Cablevision, or, at the
election of Cablevision, cause MSG to redeem on the third anniversary of the
Initial Closing Date the balance of the remaining ITT MSG Interest upon the
terms set forth in this Section 2.09 (the "Third-Year Call Right") and for a
purchase price equal to the percentage of the total existing MSG Interest
represented by such balance of the remaining ITT MSG Interest multiplied by the
Fair Market Value of MSG (the "Third-Year Call Price") as determined by an
investment banking firm selected by Cablevision from a list of three investment
banking firms selected by ITT MSG from the list of six investment banking firms
(or their successors) set forth in the definition of Selected Investment Banking
Firm (the "Appraiser"); provided that if at the time of Cablevision's delivery
of the notice required by Section 2.09(b) for the exercise of the Third-Year
Call Right (i) ITT MSG shall have previously exercised the First Put Option,
then the Third-Year Call Price shall not be less than $94 million or, if the
Aircraft shall not have been contributed to MSG, $75 million and (ii) ITT MSG
shall not have previously exercised a Put Option, then the Third-Year Call Price
shall not be less than $188 million or, if the Aircraft shall not have been
contributed to MSG, $150 million (each of such minimum prices, a "Floor Price").
The Appraiser shall determine the Third-Year Call Price in accordance with this
Agreement and shall present the methodology used in and results of such
determination in writing to Cablevision and ITT MSG. All fees and expenses of
the Appraiser (including fees and expenses of counsel) related to the services
provided by it pursuant to this Section 2.09 shall be paid by Cablevision.
(b) Manner of Exercise of Third-Year Call Right. If Cablevision
desires to exercise the Third-Year Call Right
41
pursuant to Section 2.09(a), it shall deliver to ITT MSG a written notice of its
intention to exercise the Third-Year Call Right at least 60 days prior to the
third anniversary of the Initial Closing Date. If Cablevision fails to deliver a
notice stating its intention to exercise the Third-Year Call Right at least 60
days prior to the third anniversary of the Initial Closing Date, Cablevision
shall be deemed to have elected not to exercise the Third-Year Call Right.
Within 10 business days following receipt of Cablevision's notice ITT MSG shall
deliver a notice setting forth its three selections of investment banking firms
to act as Appraiser from the list of six investment banking firms (or their
successors) set forth in the definition of Selected Investment Banking Firm. The
closing of the purchase and sale contemplated by this Section 2.09 (the
"Third-Year Call Closing") shall occur as soon as is reasonably practicable
following delivery to Cablevision and ITT MSG of the Appraiser's written
determination and the satisfaction or waiver of all the conditions to the
Third-Year Call Closing set forth in Section 7.01 (the date of such closing, the
"Third-Year Call Closing Date"). At such closing (i) Cablevision shall deliver
to ITT MSG, by wire transfer to a bank account designated by ITT MSG,
immediately available funds in an amount equal to the Third-Year Call Price and
(ii) ITT MSG shall deliver to Cablevision a ▇▇▇▇ of Sale and Assignment of
Partnership Interest in the form of Exhibit A to effect delivery of title to the
ITT MSG Interest transferred pursuant to this Section 2.09.
SECTION 2.10. Accelerated Put Right. In the event any Acceleration
Event shall occur, ITT MSG immediately shall have the right during the
continuance of such Acceleration Event to exercise the First Put Option and the
Second Put Option by delivery of written notice thereof to Cablevision and, upon
such exercise in accordance with this Section 2.10, the First Put Purchase Price
and the Second Put Purchase Price immediately shall become due and payable
entirely in cash; provided that if the relevant Acceleration Event arises under
clause (d) of the definition of Acceleration Event, ITT MSG must exercise its
rights under this Section 2.10 within 10 days following its receipt
42
of the statement on liquidation pursuant to Section 7.3 of the Partnership
Agreement and the First Put Purchase Price and the Second Put Purchase Price
shall become due and payable 10 days from receipt by Cablevision of ITT MSG's
notice of its exercise of its acceleration rights pursuant
to the following sentence.
SECTION 2.11 Adjustment of Purchase Prices. In the event ITT MSG
shall Transfer (other than pursuant to Article II of this Agreement) any ITT MSG
Interest to any third party that is not a Permitted Transferee, including
pursuant to a registered public offering (a "Third Party Transfer"), (a) upon
the exercise of a Put Option, the purchase price payable by Cablevision or MSG,
as the case may be, for the Second Transferred Interest and the Third
Transferred Interest, respectively, each shall be reduced by one-half of the
amount of the proceeds to ITT MSG from such Third Party Transfer and (b) each of
the Change of Control Call Price payable upon the exercise of the Change of
Control Call Right and the Floor Price in respect of a Third-Year Call Price
payable upon the exercise of the Third-Year Call Right shall be reduced by the
amount of such proceeds. Cablevision and ITT MSG agree that this provision is
intended to equitably adjust amounts to be paid to ITT MSG by Cablevision or its
Affiliates for ITT MSG Interests pursuant to this Agreement to account for any
Third Party Transfers.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of ITTE and ITT MSG.
Each of ITTE and ITT MSG hereby represents and warrants to Cablevision, RGC and
GHC as follows:
(a) Authority. Each of ITTE and ITT MSG is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of ITTE and ITT MSG has all requisite
43
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
All corporate acts and other proceedings required to be taken by ITTE or ITT MSG
to authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and properly
taken. This Agreement has been duly executed and delivered by ITTE and ITT MSG
and constitutes a legal, valid and binding obligation of ITTE and ITT MSG,
enforceable against ITTE and ITT MSG in accordance with its terms.
(b) No Conflicts; Consents. The execution and delivery of this
Agreement by ITTE and ITT MSG do not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof shall not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation, or result in the creation of any lien, claim,
encumbrance, security interest, option, charge or restriction of any kind upon
any of the properties or assets of ITTE or ITT MSG or any of their respective
Subsidiaries under, any provision of (i) the certificate of incorporation or
by-laws of ITTE or ITT MSG or the comparable governing instruments of any such
Subsidiary, (ii) (assuming the consents required under clause (ii) of the next
sentence are obtained) any material note, bond, mortgage, indenture, deed of
trust, license, lease, contract, commitment, agreement or arrangement to which
ITTE, ITT MSG or any such Subsidiary is a party or by which any of their
respective properties or assets are bound, or (iii) (assuming the consents
required under clauses (i), (ii) and (iii) of the next sentence are obtained)
any judgment, order or decree, or statute, law, ordinance, rule or regulation
applicable to ITTE, ITT MSG or any such Subsidiary or their respective
properties or assets, other than, in the case of clauses (ii) and (iii) above,
any such items that, individually or in the aggregate, would not have a material
adverse effect on the ability of ITTE, ITT MSG, MSG or MSGE to consummate the
transactions contemplated hereby. No consent, approval, license, permit, order
or authorization of, or registration,
44
declaration or filing with, any Federal, state, local or foreign government or
any court of competent jurisdiction, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity") or other nongovernmental third party is required to be
obtained or made by or with respect to ITTE or ITT MSG or any of their
respective Subsidiaries or their respective Affiliates in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, other than (i) compliance with and filings
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"),
if applicable, (ii) filings, approvals or agreements required by the National
Basketball Association (the "NBA") and the National Hockey League (the "NHL") in
accordance with applicable rules, regulations or agreements of the NBA and the
NHL (collectively, the "League Rules"), (iii) compliance with and filings under
the Securities Act and the Exchange Act, (iv) those that may be required solely
by reason of Cablevision's and its Affiliates, (as opposed to any other third
party's) participation in the transactions contemplated hereby and (v) any
consents, approvals, licenses, permits, orders or authorizations, that, if not
obtained or made, would not, individually or in the aggregate, have a material
adverse effect on the ability of ITTE, ITT MSG, MSG or MSGE to consummate or
cause to be consummated the transactions contemplated hereby.
(c) The Shares and the ITT MSG Interest. ITTE owns the Shares and
ITT MSG owns the ITT MSG Interest, in each case, free and clear of any pledges,
liens, claims, encumbrances, security interests, options, charges and
restrictions of any kind, other than those imposed by virtue of the League
Rules. Assuming RGC has the requisite power and authority to be the lawful owner
of the Shares and GHC and Cablevision have the requisite power and authority to
own the ITT MSG Interest, MSGE has the requisite power and authority to redeem
the Shares, and MSG has the requisite power and authority to redeem the ITT MSG
Interest, upon delivery to RGC or MSGE, as the case may be, of certificates
representing the Shares, duly endorsed by ITTE for transfer, and the delivery to
Cablevision, GHC or MSG, as the case may
45
be, of a ▇▇▇▇ of Sale and Assignment of Partnership Interest in the form of
Exhibit A representing the Initial Transferred Interest, the Second Transferred
Interest, the Third Transferred Interest or the ITT MSG Interest to be
transferred at the Change of Control Call Closing or the Third-Year Call
Closing, as the case may be, and upon ITTE's receipt in accordance with this
Agreement of the Shares Purchase Price and ITT MSG's receipt in accordance with
this Agreement of the Initial Transferred Interest Purchase Price, the First Put
Purchase Price, the Second Put Purchase Price, the Change of Control Call Price
or the Third-Year Call Price, as the case may be, good and valid title to the
Shares and the Initial Transferred Interest, the Second Transferred Interest,
the Third Transferred Interest or the ITT MSG Interest to be transferred at the
Change of Control Call Closing on the Third-Year Call Closing, as the case may
be, will pass to RGC, GHC, MSGE, Cablevision or MSG, as the case may be, free
and clear of any pledges, liens, claims, encumbrances, security interests,
options, charges and restrictions of any kind, other than those arising from
acts of or agreements relating to Cablevision, RGC, GHC, MSGE, MSG or their
respective Affiliates, other than those imposed by virtue of the League Rules.
Other than this Agreement, the Partnership Agreement, the Bid Agreement, the NBA
Consent Agreement, the NHL Consent Agreements, the League Rules and the MSG
Acquisition Financing Agreements, the Shares and the ITT MSG Interest are not
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, including any such agreement, arrangement,
commitment or understanding restricting or otherwise relating to the voting,
dividend rights or disposition of the Shares or the ITT MSG Interest.
(d) Registration Statements. The information supplied by ITT MSG in
writing specifically for inclusion in any Registration Statement, will not, at
the time such Registration Statement becomes effective, at the relevant Closing
Date or at the closing of any sale registered on such Registration Statement, as
such Registration Statement is then amended or supplemented, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to
46
make the statements therein, in light of the circumstances under which they were
made, not misleading. Any such Registration Statement will comply as to form in
all material respects with the provisions of the Securities Act and the rules
and regulations thereunder.
(e) Actions and Proceedings, etc. Except as described in filings on
Schedule 14D-9 by ITT with the SEC, there are no (i) outstanding judgments,
orders, injunctions or decrees of any Governmental Entity or arbitration
tribunal against ITTE or ITT MSG or any of their respective Affiliates or (ii)
investigations or Actions which are pending or, to the knowledge of ITTE or ITT
MSG, threatened against ITTE or ITT MSG or any of their respective Affiliates,
which, in each case, could have a material adverse effect on the ability of
ITTE, ITT MSG, MSG or MSGE to consummate the transactions contemplated hereby.
SECTION 3.02. Representations and Warranties of Cablevision, RGC and
GHC. Cablevision, RGC and GHC hereby represent and warrant to ITTE and ITT MSG
as follows:
(a) Authority. Each of Cablevision, RGC and GHC is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Each of Cablevision, RGC and GHC has all requisite corporate
power and authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. All corporate
acts and other pro ceedings required to be taken by Cablevision, RGC or GHC to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and properly
taken. This Agreement has been duly executed and delivered by Cablevision, RGC
and GHC and constitutes a legal, valid and binding obligation of Cablevision,
RGC and GHC, enforceable against Cablevision, RGC and GHC in accordance with its
terms.
(b) No Conflicts; Consents. The execution and delivery of this
Agreement by Cablevision, RGC and GHC do not, and the consummation of the
transactions contemplated
47
hereby and compliance with the terms hereof shall not, conflict with, or result
in any violation of or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation, or result in the creation of any lien, claim,
encumbrance, security interest, option, charge or restriction of any kind upon
any of the properties or assets of Cablevision, RGC or GHC or any of their
respective Subsidiaries under, any provision of (i) the Amended and Restated
Certificate of Incorporation or By-laws of Cablevision or the comparable
governing instruments of RGC or GHC or any such Subsidiary, (ii) (assuming the
consents required under clauses (ii), (iv) and (vi) of the next sentence are
obtained) any material note, bond, mortgage, indenture, deed of trust, license,
lease, contract, commitment, agreement or arrangement to which Cablevision, RGC
or GHC or any such Subsidiary is a party or by which any of their respective
properties or assets are bound, or (iii) (assuming the consents required under
clauses (i), (ii) and (iii) of the next sentence are obtained) any judgment,
order or decree, or statute, law, ordinance, rule or regulation applicable to
Cablevision, RGC or GHC or any such Subsidiary or their respective properties or
assets, other than, in the case of clauses (ii) and (iii) above, any such items
that, individually or in the aggregate, would not have a material adverse effect
on the ability of Cablevision, RGC or GHC to consummate or cause to be
consummated the transactions contemplated hereby. No consent, approval, license,
permit, order or authorization of, or registration, declaration or filing with,
any Governmental Entity or other nongovernmental third party is required to be
obtained or made by or with respect to Cablevision, RGC, GHC, MSG or any of
their respective Subsidiaries or their respective Affiliates in connection with
the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby, other than (i) compliance with and filings
under the HSR Act, if applicable, (ii) filings, approvals or agreements required
by the NBA or the NHL in accordance with League Rules, (iii) compliance with and
filings under the Securities Act and the Exchange Act, (iv) approval of the
issuance of shares of Cablevision
48
Common Stock at the First Put Stock Closing or the Second Put Stock Closing by
the shareholders of Cablevision, (v) those that may be required solely by reason
of ITTE's or ITT MSG's (as opposed to any other third party's) participation in
the transactions contemplated hereby, (vi) approvals of the indemnities set
forth in Sections 5.02, 5.03 and 5.04 by the lenders under Rainbow's senior
credit facility and (vii) any consents, approvals, licenses, permits, orders or
authorizations, that, if not obtained or made, would not, individually or in the
aggregate, have a material adverse effect on the ability of Cablevision, RGC or
GHC to consummate or cause to be consummated the transactions contemplated
hereby.
(c) Purchase Intent. The Shares and the ITT MSG Interest to be
acquired by Cablevision, RGC, MSGE, GHC or MSG from time to time pursuant to
this Agreement are being acquired for investment only and not with a view to any
public distribution thereof, and none of them or their respective Affiliates
shall offer to sell or otherwise dispose of all or any portion of the Shares or
the ITT MSG Interest so acquired by it in violation of any of the registration
requirements of the Securities Act.
(d) Cablevision Shares. All Cablevision Shares which may be issued
pursuant to this Agreement will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to any preemptive rights.
(e) Registration Statements. The information included or
incorporated by reference in any Registration Statement covering Cablevision
Shares (other than the information supplied by ITT MSG in writing specifically
for inclusion in such Registration Statement), will not, at the time such
Registration Statement becomes effective, at the relevant Closing Date or at the
closing of any sale registered on such Registration Statement, as such
Registration Statement is then amended or supplemented, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not mis-
49
leading. Any such Registration Statement will comply as to form in all material
respects with the provisions of the Securities Act and the rules and regulations
thereunder.
(f) Actions and Proceedings, etc. There are no (i) outstanding
judgments, orders, injunctions or decrees of any Governmental Entity or
arbitration tribunal against Cablevision, RGC or GHC or any of their respective
Affiliates or (ii) investigations or Actions which are pending or, to the
knowledge of Cablevision, RGC or GHC, threatened against Cablevision, RGC, GHC
or any of their respective Affiliates, which, in each case, could have a
material adverse effect on the ability of Cablevision, RGC, GHC, MSGE or MSG to
consummate or cause to be consummated the transactions contemplated hereby.
(g) Solvency. Each of Cablevision, RGC, GHC and MSGE on the date
hereof is not, and after giving effect to the transactions contemplated to occur
at each Closing will not be, insolvent or unable to meet its debts as they come
due.
SECTION 3.03. Representations and Warranties of MSG. MSG represents
and warrants to ITT MSG as of any Closing Date other than the Initial Closing
Date (except for Section 3.03(e), which shall be as of the Initial Closing Date
and any other Closing Date) as follows:
(a) Authority. MSG is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware. MSG has
all requisite partnership power and authority to enter into this Agree ment, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. All partnership acts and other proceedings required to be
taken by MSG to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and properly taken. This Agreement has been duly executed and delivered by
MSG and constitutes a legal, valid and binding obligation of MSG, enforceable
against MSG in accordance with its terms.
50
(b) No Conflicts. The execution and delivery of this Agreement by
MSG do not, and the consummation of the transactions contemplated hereby and
compliance with the terms hereof shall not, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termina tion, cancelation or acceleration of
any obligation, or result in the creation of any lien, claim, encumbrance,
security interest, option, charge or restriction of any kind upon any of the
properties or assets of MSG or any Subsidiary of MSG under, any provision of (A)
the Partnership Agreement or the charter and by-laws or comparable governing
instruments of any Subsidiary of MSG, (B) any material note, bond, mortgage,
indenture, deed of trust, license, lease, contract, commitment, agreement or
arrangement to MSG or any Subsidiary of MSG is a party or by which any of their
respective properties or assets are bound, or (C) any judgment, order, or
decree, or statute, law, ordinance, rule or regulation applicable to MSG or any
Subsidiary of MSG or their respective properties or assets, other than, in the
case of clauses (B) and (C) above, any such items that, individually or in the
aggregate, would not have a material adverse effect on the ability of MSG to
consummate the transactions contemplated hereby.
(c) Registration Statements. The information included or
incorporated by reference in any Registration Statement relating to equity
securities of MSG (other than the information supplied by ITT MSG in writing
specifically for inclusion in such Registration Statement), will not, at the
time such Registration Statement becomes effective or at the closing of any sale
registered on such Registration Statement, as such Registration Statement is
then amended or supplemented, contain any untrue statement of a material fact,
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any such Registration Statement will comply as
to form in all material respects with the provisions of the Securities Act and
the rules and regulations thereunder.
51
(d) Actions and Proceedings, etc. There are no (i) outstanding
judgments, orders, injunctions or decrees of any Governmental Entity or
arbitration tribunal against MSG or any of its Affiliates or (ii) investigations
or Actions which are pending or, to the knowledge of MSG, threatened against MSG
or any of its Affiliates, which, in each case, could have a material adverse
effect on the ability of MSG to consummate the transactions contemplated hereby.
(e) Solvency. After giving effect to the transactions contemplated
to occur at each Closing in which MSG is redeeming an ITT MSG Interest, MSG will
not be insolvent or unable to meet its debts as they come due.
SECTION 3.04. No Representations or Warranties as to Business. Each
of the parties hereto understands and agrees that, except as expressly set forth
in this Article III, no party hereto is, in this Agreement or any document
contemplated by this Agreement expressly or impliedly, making any representation
or warranty whatsoever as to the business, assets, condition (financial or
otherwise), results of operations, financial statements, assets, properties,
contracts and agreements of MSG.
ARTICLE IV
Registration Rights
SECTION 4.01. Registration Rights. (a) If MSG shall at any time
after the date hereof, and for so long as ITT MSG or any of its Affiliates
beneficially owns any MSG Interest, propose to file a Registration Statement
under the Securities Act with respect to an underwritten public offering by MSG
or Cablevision or any Affiliate of Cablevision of any partnership interests in
or equity securities of MSG, on each such occasion MSG shall promptly furnish
ITT MSG with prior written notice thereof. After receipt of such notice by ITT
MSG, at the written request of ITT MSG given within 10 days after the receipt of
such notice to register any of ITT MSG's partnership interest in or equity
securities of MSG (the "Registrable Securities"),
52
MSG shall include in such Registration Statement such Registrable Securities for
which registration shall have been requested in an amount so as to permit the
sale or other disposition by ITT MSG as part of such underwritten public
offering of all such Registrable Securities as are requested by ITT MSG to be
included; provided, however, that if the managing underwriter of such offering
shall advise MSG in writing that, in its opinion, the number of securities
requested and otherwise proposed to be included in such offering exceeds the
number which can be sold without adversely affecting the marketability of the
offering (the "Maximum Offering Size"), MSG shall include in such registration
to the extent of the number which MSG is so advised can be sold in such
offering, (i) for the five-year period commencing on the Initial Closing Date,
first, the securities MSG proposes to sell for its own account in such
registration, second, all Registrable Securities requested to be included in
such registration by ITT MSG pursuant to this Section 4.01, and third, all other
securities proposed to be included in such Registration Statement by Cablevision
or any other holders and (ii) after such five-year period, first, the securities
MSG proposes to sell for its own account in such registration and second, all
Registrable Securities requested to be included in such registration by ITT MSG
pursuant to this Section 4.01 and all other securities proposed to be included
in such Registration Statement by Cablevision or any other holders pro rata
based on the number of securities requested to be included by each. In
connection with any registration in which ITT MSG includes Registrable
Securities pursuant to this Section 4.01, ITT MSG shall execute a normal and
customary underwriting agreement in form and substance reasonably satisfactory
to ITT MSG. Nothing in this Section 4.01 shall create any liability (other than
pursuant to Section 4.01(b)) on the part of MSG to ITT MSG if MSG in its sole
discretion should decide not to file a Registration Statement proposed to be
filed pursuant to this Section 4.01 or to withdraw such Registration Statement
subsequent to its filing.
(b) Expenses. The parties hereto acknowledge and agree that, as
between MSG and ITT MSG, all Registration
53
Expenses incurred by MSG and ITT MSG hereto in complying with the provisions of
this Section 4.01 shall be borne by MSG and ITT MSG in proportion to the amount
of securities sold by such person in any offering in relation to the total
amount of securities included in such offering; provided that each of MSG and
ITT MSG shall be responsible for underwriting commissions and discounts and
transfer taxes with respect to the securities included in any Registration
Statement pursuant to this Section 4.01 by such person and shall be responsible
for all other fees and expenses directly incurred by such person.
SECTION 4.02. Registration Procedures. (a) For purposes of this
Section 4.02, "Registrant" shall mean, with respect to a registration of
Cablevision Shares pursuant to Section 2.06, Cablevision and, with respect to a
registration of Registrable Securities pursuant to Section 4.01, MSG. In
connection with any registration pursuant to Section 2.06 or Section 4.01:
(i) Registrant shall furnish to ITT MSG, sufficiently prior to the
filing thereof with the SEC to allow ITT MSG to review and comment on,
copies of the Registration Statement and each amendment thereof and each
supplement, if any, to the Prospectus included therein and Registrant
shall use all reasonable efforts to reflect in each such document, when so
filed with the SEC, such comments as ITT MSG reasonably may propose;
(ii) Registrant shall advise ITT MSG and, if requested by ITT MSG,
confirm such advice in writing (which advice pursuant to paragraphs (B)
through (E) hereof shall be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made):
(A) when the Registration Statement and any amendment thereto
has been filed with the SEC and when the Registration Statement or
any post effective amendment thereto has become effective;
54
(B) of any request by the SEC for amendments or supplements to
the Registration Statement or the Prospectus included therein or for
additional information;
(C) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation of
any actions or proceedings for that purpose;
(D) of the receipt by Registrant of any notification with
respect to the suspension of the qualification or exemption from
qualification of the Cablevision Shares or Registrable Securities,
as the case may be, for sale in any jurisdiction or the initiation
or threatening of any action or proceeding for such purpose; and
(E) of the happening of any event that requires the making of
any changes in the Registration Statement or the Prospectus so that,
as of such date, the statements therein are not misleading and do
not contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) Upon the occurrence of any event contemplated by paragraphs
(B) through (E) of Section 4.02(a)(ii) during the period for which
Registrant is required to maintain an effective Registration Statement and
subject to paragraph (xv) of this Section 4.02(a), Registrant shall
promptly prepare a post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Cablevision
Shares or Registrable Securities, as the case may be, the Prospectus will
not include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
55
(iv) Registrant shall comply with all applicable rules and
regulations of the SEC and will make generally available to its security
holders as soon as practicable but in any event not later than 18 months
after the effective date of the Registration Statement an earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act;
(v) Registrant shall enter into such customary agreements and take
all such other customary action, if any, as ITT MSG or the managing
underwriter or underwriters shall reasonably request in order to
facilitate the disposition of Cablevision Shares or Registrable
Securities, as the case may be, pursuant to any Registration Statement;
(vi) Registrant shall (A) make reasonably available upon reasonable
notice and during reasonable business hours for inspection by
representatives of, and counsel for, ITT MSG and any underwriter
participating in any disposition of Cablevision Shares or Registrable
Securities, as the case may be, pursuant to a Registration Statement, all
relevant financial and other records, pertinent corporate documents and
properties of Registrant and each Subsidiary of Registrant and (B) cause
each of Registrant's (and each of Registrant's Subsidiary's) officers,
directors, employees, accountants and auditors to supply all relevant
information reasonably requested by such representative, counsel or any
such underwriter in connection with any such Registration Statement, in
each case, as shall be reasonably necessary, in the judgment of counsel
for ITT MSG or such underwriters, to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; provided, however,
that each such representative or counsel shall be acceptable to Registrant
in its judgment reasonably exercised and each such person inspecting or
being supplied with records, documents or information pursuant to this
clause (vi) shall agree (and, in the case of representatives other than
counsel, in writing) to maintain in confidence and not disclose to any
other
56
person any such records, documents or information that is not then
publicly available, until such time as (A) such information becomes a
matter of public record (whether by virtue of its inclusion in such
Registration Statement or otherwise), (B) such person shall be required to
disclose such information pursuant to a subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter
(subject to the requirements of such order, and only after such person
shall have given Registrant prompt prior written notice of such
requirement) or (C) such information is required to be set forth in such
Registration Statement or the Prospectus included therein in order that
such Registration Statement or Prospectus does not contain an untrue
statement of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(vii) Registrant shall cause (A) its counsel to deliver an opinion
relating to the Registration Statement and the Cablevision Shares or the
Registrable Securities, as the case may be, in customary form addressed to
the managing underwriter or underwriters and, if customary, ITT MSG and
dated the effective date of such Registration Statement (it being agreed
that the matters to be covered by such opinion shall include the due
organization and good standing of Registrant and its material
Subsidiaries; the qualification of Registrant and its material
Subsidiaries to transact business as foreign organizations; the due
authorization, execution and delivery of the underwriting agreement and
any other relevant agreements; the status of the Cablevision Shares or the
Registrable Securities, as the case may be, as duly authorized and
executed, validly issued, fully paid and nonassessable; the absence of
material legal or governmental proceedings involving Registrant; the
governmental approvals required to be obtained in connection with the
Registration Statement and the offering and sale of the Cablevision Shares
or the
57
Registrable Securities, as the case may be; the compliance as to form in
all material respects of such Registration Statement with the requirements
of the Securities Act; and, as of the date of the opinion and of the
Registration Statement or most recent post-effective amendment thereto, as
the case may be, the absence from such Registration Statement and the
Prospectus included therein, as then amended or supplemented, of an untrue
statement of a material fact or the omission to state therein a material
fact necessary to make the statements therein not misleading other than
with respect to information supplied by parties other than Registrant and
Affiliates of Registrant (in the case of such documents, in light of the
circumstances existing at the time such documents were filed with the SEC
under the Exchange Act)); (B) its officers to execute and deliver all
customary documents and certificates requested by the managing underwriter
or underwriters and, in the case of a registration of Cablevision Shares,
ITT MSG and (C) its independent public accountants to provide a comfort
letter in customary form addressed to ITT MSG and the managing
underwriters, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards
No. 72;
(viii) Registrant shall furnish to ITT MSG such number of copies of
such Registration Statement and of each amendment and post-effective
amendment thereto (in each case including all exhibits), the Prospectus
and any Prospectus supplement, as applicable, and such other documents as
ITT MSG may reasonably request in order to facilitate the disposition of
the Cablevision Shares or the Registrable Securities, as the case may be,
by ITT MSG (Registrant hereby consents to the use of the Prospectus or any
amendment or supplement thereto in connection with such disposition);
(ix) Registrant shall furnish to ITT MSG at least one manually
signed copy of any Registration Statement (including exhibits, financial
statements and schedules) and all amendments thereto;
58
(x) Registrant shall use all reasonable efforts to register or
qualify the Cablevision Shares or Registrable Securities, as the case may
be, covered by such Registration Statement under such state securities or
blue sky laws of such jurisdictions as ITT MSG shall reasonably request in
writing by the time the Registration Statement is declared effective, and
do any and all other acts and things which may be reasonably necessary or
advisable to enable ITT MSG to consummate the disposition in such
jurisdictions of such Cablevision Shares or Registrable Securities, as the
case may be, except that Registrant shall not for any such purpose be
required to (A) qualify generally to do business as a foreign corporation
or as a broker-dealer in any jurisdiction where it would not otherwise be
required to qualify but for this Section 4.02, (B) consent to general
service of process in any such jurisdiction or (C) subject itself to
taxation in any such jurisdiction;
(xi) In the case of a registration of Cablevision Shares pursuant to
Section 2.06, Cablevision shall cause all such Cablevision Shares to be
listed on any securities exchange on which the Cablevision Common Stock is
then listed, or approved for trading through the Nasdaq Stock Market or
any other inter-dealer quotation system through which the Cablevision
Common Stock is then traded, provide a transfer agent and registrar for
such Cablevision Shares covered by such Registration Statement no later
than the effective date of such Registration Statement and, if securities
of the same class as the Cablevision Shares are then certificated, provide
certificates for Cablevision Shares covered by a Registration Statement
without any restrictive legends;
(xii) In the case of a registration of Registrable Securities
pursuant to Section 4.01, MSG shall cause all Registrable Securities
registered on a Registration Statement to be listed on any securities
exchange on which partnership interests or equity securities of MSG are
then listed, or approved for trading through the
59
Nasdaq Stock Market or any other inter-dealer quotation system through
which such interests or securities are then traded, provide a transfer
agent and registrar for such Registrable Securities covered by such
Registration Statement no later than the effective date of such
Registration Statement and provide certificates for Registrable Securities
covered by a Registration Statement without any restrictive legends;
(xiii) Without limiting any of the foregoing, Registrant shall
permit ITT MSG and its counsel to be involved in the preparation of any
Registration Statement being prepared pursuant to this Agreement, shall
permit ITT MSG and its counsel to review and comment on any filing
(including of the Registration Statement) required to be made by
Registrant hereunder or correspondence with the SEC and to deliver to ITT
MSG all material correspondence from the SEC promptly following receipt
thereof by Registrant;
(xiv) Each party hereto agrees not to engage in any actions which
could reasonably be expected to cause the Registrant to be in violation of
any Federal or state securities law or regulation in complying with this
Article IV;
(xv) ITT MSG agrees that, upon receipt of any (i) notice from
Registrant of the happening of any event of the kind described in
paragraphs (B) through (E) of Section 4.02(a)(ii) or (ii) notice from
Registrant that Registrant is in possession of material information that
has not been disclosed to the public and would be required to be disclosed
in the Registration Statement and Registrant reasonably deems it to be
advisable not to disclose such information in a Registration Statement (in
each case, such notice being hereinafter referred to as a "Suspension
Notice"), ITT MSG shall (A) forthwith discontinue disposition of the
Cablevision Shares or Registrable Securities, as the case may be, pursuant
to any Registration Statement and (B) shall not be entitled to the
benefits provided under Article V hereof with
60
respect to liabilities arising from the subject matter of the notice
received by ITT MSG pursuant to the foregoing clause (i) or (ii) in
connection with any sales made by it in contravention of this paragraph,
in each case, until ITT MSG's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4.02(a)(iii) or a notice that
any order suspending the effectiveness of the Registration Statement has
been withdrawn, or, until further notice from Registrant that disposition
of Cablevision Shares or Registrable Securities may resume, provided that
such further notice will be given within 90 days of the Suspension Notice
in the case of (ii) above, and provided further in the case of clause (ii)
above that any Suspension Notice must be based upon a good faith
determination of the Board of Directors of Registrant that such Suspension
Notice is necessary; and, if so directed by Registrant, ITT MSG will
deliver to Registrant (at the expense of Registrant) all copies in its
possession, other than permanent file copies then in ITT MSG's possession,
of the Prospectus covering such Cablevision Shares or Registrable
Securities current at the time of receipt of such notice; and
(xvi) ITT MSG will furnish to Registrant such information regarding
ITT MSG and its Affiliates as Registrant may from time to time reasonably
request in writing, but only to the extent that such information is
required in order to comply with the Securities Act or any relevant state
securities or Blue Sky law or obligation. ITT MSG agrees to notify
Registrant as promptly as practicable of any inaccuracy or change in
information previously furnished by ITT MSG to Registrant or of the
happening of any event, in either case as a result of which any Prospectus
relating to such registration contains an untrue statement of a material
fact regarding ITT MSG or omits to state any material fact regarding ITT
MSG required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and to furnish to Registrant promptly any additional
information required to correct
61
and update any previously furnished information or required such that such
prospectus shall not contain, with respect to ITT MSG, an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In connection
with a registration of Registrable Securities, ITT MSG shall cause its
counsel to deliver an opinion in customary form to the managing
underwriters or underwriters dated the effective date of such Registration
Statement with respect to matters customarily covered by an opinion of
counsel to a selling shareholder. ITT MSG agrees to provide reasonable
cooperation to the Registrant in connection with a registration of
Cablevision Shares or Registrable Securities.
ARTICLE V
Indemnification
SECTION 5.01. Indemnification by Cablevision. Cablevision agrees to
indemnify, defend and hold harmless the ITT MSG Indemnitees from and against,
and pay or reimburse the ITT MSG Indemnitees for, any and all Indemnifiable
Losses arising out of, by reason of or other wise related to (i) any untrue or
alleged untrue statement of material fact contained or incorporated in a
Registration Statement covering Cablevision Common Stock, any Prospectus or
preliminary Prospectus relating to Cablevision Common Stock, or any amendment or
supplement to any of the fore going, (ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of a Registration Statement, Prospectus or a
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading, except, in the case of the fore going clauses (i) or (ii),
insofar as the same arise out of or are based upon, any such untrue statement or
omission made in reliance on and in conformity with information with
62
respect to ITT MSG and its Affiliates furnished in writing to Cablevision by ITT
MSG expressly for use therein or (iii) any breach by Cablevision of its
obligations under this Agreement, the Partnership Agreement or any Ancillary
Agreement.
SECTION 5.02. Indemnification by Rainbow. Rainbow agrees to
indemnify, defend and hold harmless the ITT MSG Indemnitees from and against,
and pay or reimburse the ITT MSG Indemnitees for, any and all Indemnifiable
Losses arising out of, by reason of or otherwise related to any obligation of
ITT or any of its Affiliates contemplated to be discharged and released pursuant
to Section 6.06(c).
SECTION 5.03. Indemnification by RGC. RGC agrees to indemnify,
defend and hold harmless the ITT MSG Indemnitees from and against, and pay or
reimburse the ITT MSG Indemnitees for, any and all Indemnifiable Losses arising
out of, by reason of or otherwise related to (i) any obligation of ITT or any of
its Affiliates contemplated to be discharged and released pursuant to Section
6.06(c) or (ii) any breach by RGC, GHC or MSG of their respective obligations
under this Agreement, the Partnership Agreement or any Ancillary Agreement.
SECTION 5.04. Indemnification by GHC. GHC agrees to indemnify,
defend and hold harmless the ITT MSG Indemnitees from and against, and pay or
reimburse the ITT MSG Indemnitees for, any and all Indemnifiable Losses arising
out of, by reason of or otherwise related to (i) any obligation of ITT or any of
its Affiliates contemplated to be discharged and released pursuant to Section
6.06(c) or (ii) any breach by GHC or RGC of their respective obligations under
this Agreement, the Partnership Agreement or any Ancillary Agreement.
SECTION 5.05. Indemnification by MSG. MSG agrees to indemnify,
defend and hold harmless the ITT MSG Indemnitees from and against, and pay or
reimburse the ITT MSG Indemnitees for, any and all Indemnifiable Losses arising
out of, by reason of or otherwise related to (i) any untrue or alleged untrue
statement of material fact
63
contained or incorporated in a Registration Statement covering securities of
MSG, any Prospectus or preliminary Prospectus relating to securities of MSG, or
any amendment or supplement to any of the foregoing, (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a Registration
Statement, Prospectus or a preliminary Prospectus, in light of the circumstances
under which they were made) not misleading, except, in the case of the foregoing
clauses (i) or (ii), insofar as the same arise out of or are based upon, any
such untrue statement or omission made in reliance on and in conformity with
information with respect to ITT MSG or its Affiliates furnished in writing to
MSG by ITT MSG expressly for use therein or (iii) any breach by MSG of its
obligations under this Agreement, the Partnership Agreement or any Ancillary
Agreement.
SECTION 5.06. Indemnification by ITTE. ITTE agrees to indemnify,
defend and hold harmless the Cablevision Indemnitees from and against, and pay
or reimburse the Cablevision Indemnitees for, any and all Indemnifiable Losses
arising out of, by reason of or other wise related to any breach by ITTE of its
obligations under this Agreement, the Partnership Agreement or any Ancillary
Agreement.
SECTION 5.07. Indemnification by ITT MSG. ITT MSG agrees to
indemnify, defend and hold harmless the Cablevision Indemnitees from and
against, and pay or reimburse the Cablevision Indemnitees for, any and all
Indemnifiable Losses arising out of, by reason of or other wise related to (i)
any untrue or alleged untrue statement of material fact contained in a
Registration Statement covering Cablevision Shares or Registrable Securities, as
the case may be, any Prospectus or preliminary Prospectus relating to such
Cablevision Shares or Registrable Securities, or any amendment or supplement to
any of the foregoing, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a Prospectus or a preliminary Prospectus, in light of
the
64
circumstances under which they were made) not misleading, but only, in the case
of the foregoing clauses (i) and (ii), to the extent that any such untrue
statement or omission is made in reliance on and in conformity with information
with respect to ITT MSG furnished in writing to the Registrant by ITT MSG and
its Affiliates specifically for inclusion therein or (iii) any breach by ITT MSG
of its obligations under this Agreement, the Partnership Agreement or any
Ancillary Agreement.
SECTION 5.08. Indemnification by ITT. ITT agrees to indemnify,
defend and hold harmless the Cablevision Indemnitees from and against, and pay
or reimburse the Cablevision Indemnitees for, any and all Indemnifiable Losses
arising out of, by reason of or otherwise related to the Actions described in
ITT's filings on Schedule 14D-9 with the SEC, to the extent Cablevision or any
of its Affiliates is made a party thereto or is required to answer to any
subpoena or similar process in connection therewith.
SECTION 5.09. Procedures for Indemnification. If a claim or demand
is made against any person who is entitled to indemnification hereunder (an
"Indemnitee") by any person who is not a party, or an Affiliate of a party, to
this Agreement (a "Third Party Claim") as to which such Indemnitee is entitled
to indemnification pursuant to this Agreement, such Indemnitee shall notify the
party obligated hereunder to indemnify such Indemnitee (the "Indemnifying
Party") in writing, and in reasonable detail, of the Third Party Claim promptly
(and in any event within 15 business days) after receipt by such Indemnitee of
written notice of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure (except that the Indemnifying Party shall not be liable
for any expenses incurred during the period in which the Indemnitee failed to
give such notice). There after, the Indemnitee shall deliver to the Indemnifying
Party, promptly after the Indemnitee's receipt thereof, copies of all notices
and documents (including court papers)
65
received by the Indemnitee relating to the Third Party Claim.
If a Third Party Claim is made against an Indem ▇▇▇▇▇, the
Indemnifying Party shall be entitled to partici ▇▇▇▇ in the defense thereof and,
if it so chooses and acknowledges in writing its obligation to indemnify the
Indemnitee therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
the Indemni tee. Should the Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnitee for legal or other expenses subsequently incurred by the Indemnitee
in connection with the defense thereof; provided that if there exists or is
reasonably likely to exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the Indemnitee for the same counsel
to represent both the Indemnitee and the Indemnifying Party, then the Indemnitee
shall be entitled to retain its own counsel, at the expense of the Indemnifying
Party. If the Indemnifying Party assumes such defense, the Indemnitee shall have
the right to participate in the defense thereof and to employ counsel, at its
own expense, separate from the counsel employed by the Indemnifying Party, it
being understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnitee for any period during which the Indemnifying Party has failed
to assume the defense thereof (other than during the period prior to the time
the Indemnitee shall have given notice of the Third Party Claim as provided
above). If the Indemnifying Party so elects to assume the defense of any Third
Party Claim, all of the Indemnitees shall cooperate with the Indemnifying Party
in the defense or prosecution thereof.
If the Indemnifying Party acknowledges in writing liability for a
Third Party Claim, then in no event will the Indemnitee admit any liability with
respect to, or settle, compromise or discharge, any Third Party Claim without
the Indemnifying Party's prior written consent; provided, how ever, that the
Indemnitee shall have the right to settle,
66
compromise or discharge such Third Party Claim without the consent of the
Indemnifying Party if the Indemnitee releases in writing the Indemnifying Party
from its indemnification obligation hereunder with respect to such Third Party
Claim and such settlement, compromise or discharge would not otherwise adversely
affect the Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for a Third Party Claim, the Indemnitee will agree to any settle ment,
compromise or discharge of a Third Party Claim that the Indemnifying Party may
recommend and that by its terms obligates the Indemnifying Party to pay the full
amount of the liability in connection with such Third Party Claim and releases
the Indemnitee completely in connection with such Third Party Claim and that
would not otherwise adversely affect the Indemnitee; provided, however, that all
of the Indemnitees that are subject to the Third Party Claims that are to be
settled, compromised or discharged may unanimously refuse to agree to any such
settlement, compromise or dis charge if each Indemnitee agrees that the
Indemnifying Party's indemnification obligation with respect to such Third Party
Claim shall not exceed the amount that would be required to be paid by or on
behalf of the Indemnifying Party in connection with such settlement, compromise
or discharge.
Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any Third Party Claim (and shall be liable for
the fees and expenses of counsel incurred by the Indemnitee in defending such
Third Party Claim) if the Third Party Claim seeks an order, injunction or other
equitable relief or relief for other than money damages against the Indemnitee
which the Indemnitee reasonably determines, after conferring with its counsel,
cannot be separated from any related claim for money damages. If such equitable
relief or other relief portion of the Third Party Claim can be so separated from
that for money damages, the Indemnifying Party shall be entitled to assume the
defense of the portion relating to money damages.
SECTION 5.10. Indemnification Payments. Indemnification required by
this Article V shall be made by
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periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or loss, liability, claim, damage or
expense is incurred.
SECTION 5.11. Contribution. (a) If the indemnification from the
Indemnifying Party provided for in Section 5.01(i) or (ii), Section 5.05(i) or
(ii) or Section 5.07(i) or (ii) is unavailable to an Indemnitee hereunder in
respect of any Indemnifiable Losses for which it is entitled to indemnification
hereunder, then the Indemnifying Party, in lieu of indemnifying such Indemnitee,
shall contribute to the amount paid or payable by such Indemnitee as a result of
such Indemnifiable Losses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnitee in connection with the
Action which resulted in such Indemnifiable Losses, as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnitee shall be determined by reference to, among other things, whether
any action in question, including in respect of any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such Indemnifying
Party or Indemnitee, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action and the terms of
this Agreement. The amount paid or payable by a party as a result of
Indemnifiable Losses shall be deemed to include, subject to the limitations set
forth in Section 5.09, any legal and other fees and expenses reasonably incurred
by such Indemnitee in connection with any Action.
(b) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5.11 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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(c) If indemnification is available under this Article V, the
Indemnifying parties shall indemnify each Indemnitee to the full extent provided
in this Article V, without regard to the relative fault of said Indemnifying
parties or Indemnitee or any other equitable consideration provided for in this
Section 5.11.
(d) The provisions of this Section 5.11 shall be applicable in
respect of each registration pursuant to this Agreement and shall be in addition
to any liability which any party may have to any other party.
SECTION 5.12. Survival of Obligations. The obligations of the
parties under this Article V shall survive the consummation of the transactions
contemplated hereby or any termination of this Agreement
ARTICLE VI
Covenants
SECTION 6.01. Cooperation; Further Assurances. (a) Without limiting
any other provision of this Agreement, each of the parties hereto shall, and
shall cause their respective Affiliates to, proceed expeditiously and cooperate
fully in making application for all necessary regulatory approvals, in the
procurement of any other consents and approvals, and in the taking of any other
action and the satisfaction of all other requirements pre scribed by law or
otherwise, necessary for consummation of the transactions contemplated hereby on
the terms provided herein. Each of the parties hereto shall, and shall cause
their respective Affiliates to, use all reasonable efforts (i) to take, or cause
to be taken, all actions necessary to comply promptly with all legal
requirements which may be imposed on such party with respect to the transactions
contemplated hereby and (ii) to promptly obtain (and to cooperate with the other
party to obtain) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity or any other public or private third party
(including the NBA and the NHL) which is required to
69
be obtained or made by such party in connection with the transactions
contemplated hereby. Each of the parties hereto shall not, and shall not permit
any of their respective Subsidiaries or Affiliates to, take any action that
would, or that could reasonably be expected to, result in (i) any of the
representations and warranties of such party set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of such representa
tions and warranties that are not so qualified becoming untrue in any material
respect or (iii) any of the conditions to any of the Closings set forth in
Section 7.01 not being satisfied.
(b) Each party shall use all reasonable efforts to cause the Initial
Closing to occur on or prior to June 1, 1997 or, if the Initial Closing does not
occur by that date, shall continue to use all reasonable efforts to cause the
Initial Closing to occur as soon thereafter as practicable (except that
Cablevision shall not be obligated to cause RGC and GHC to pay the Shares
Purchase Price or the Initial Transferred Interest Purchase Price, respectively,
at the Initial Closing and ITT shall not be obligated to cause ITTE or ITT MSG
to comply with their respective obligations to deliver the Shares and the
Initial Transferred Interest at the Initial Closing) and each other Closing to
occur on the applicable Closing Date. Each of ITT MSG and ITTE hereby agrees to
reasonably cooperate with Cablevision, RGC and GHC in connection with the taking
of any actions that are required to permit MSG to redeem any ITT MSG Interest
and MSGE to redeem the Shares pursuant to this Agreement.
(c) Each of the parties hereto shall provide to (i) any lending
institution that will finance the payment by Cablevision or MSG of the Initial
Transferred Interest Purchase Price in order to arrange such financing, (ii)
advisors to ITT required for preparation of fairness opinions or (iii) any
Selected Investment Banking Firm providing services pursuant to any provision of
this Agreement, and each of their respective accountants, counsel and other
designated representatives, reasonable access and duplicating rights during
normal business hours and upon reasonable advance notice, subject to appropriate
70
confidentiality provisions, to all information within the possession or control
of ITT MSG, Cablevision or MSG, as the case may be, reasonably requested by such
lending institution, advisors or Selected Investment Banking Firm.
SECTION 6.02. Antitrust Notification. Each of the parties hereto
shall, and shall cause their respective Affiliates, if necessary, with respect
to any transfer of an ITT MSG Interest to Cablevision or MSG or any of their
respective Affiliates or a transfer of the Shares to Cablevision, RGC or MSGE,
or any of their respective Affiliates, to file with the United States Federal
Trade Commission (the "FTC"), the United States Department of Justice (the
"DOJ") and any similar applicable state authority at least 60 days prior to the
Closing of such transfer the notification and report form required for such
transaction and any supplemental information requested in connection therewith
pursuant to the HSR Act or any applicable state law or regulation. Any such
notification and report form and supplemental information shall be in
substantial compliance with the requirements of the HSR Act or any applicable
state law or regulation. Each of the parties hereto shall, and shall cause their
respective Affiliates to, furnish to the other such necessary information and
reasonable assistance as the other may request in connection with its
preparation of any filing or submission which is necessary under the HSR Act or
any applicable state law or regulation. Each of the parties hereto shall, and
shall cause their respective Affiliates to, keep each other apprised of the
status of any communications with, and any inquiries or requests for additional
information from, the FTC and the DOJ and shall comply promptly with any such
inquiry or request. Each of the parties hereto shall, and shall cause their
respective Affiliates to, use all reasonable efforts to obtain any clearance
required under the HSR Act for the consummation of any transactions contemplated
hereby; provided that Cablevision shall be solely responsible for any filing
fees payable under the HSR Act.
SECTION 6.03. League Approvals. Each of the parties hereto shall,
and shall cause their respective
71
Affiliates, if necessary, to, as promptly as practicable, but in no event later
than 10 business days following the execution and delivery of this Agreement,
file with the NBA and the NHL notification of this Agreement, the Partnership
Agreement and the Ancillary Agreements, as necessary, and the transactions
contemplated hereby and thereby and a request for the consent of the NBA and the
NHL for all the transactions contemplated hereby and shall promptly file such
other supplemental information, certifications, declarations or filings as shall
be requested in connection therewith pursuant to the League Rules. Any such
notification and consent request shall be in compliance with the League Rules
and shall request, to the extent permitted by League Rules, the NBA and the NHL
to consent to all the transactions contemplated hereby in advance of the Initial
Closing so that no further notification or consent shall be required in
connection with any transaction contemplated hereby that is consummated after
the Initial Closing. In the event that such advance approval is not available,
the parties hereto agree to use all reasonable efforts to obtain the consent of
the NBA and the NHL to any transactions contemplated to occur at a Closing
sufficiently in advance of such Closing to permit such Closing to occur on the
applicable anniversary of the Initial Closing Date.
Each of the parties hereto shall, and shall cause their respective
Affiliates to, furnish each other such necessary information and reasonable
assistance as may be requested in connection with the preparation of any filing
or submission which is necessary under the League Rules. Each of the parties
hereto shall, and shall cause their respective Subsidiaries to, keep each other
apprised of the status of any communications with, and any inquiries or requests
for additional information from, the NBA and the NHL and shall comply promptly
with any such inquiry or request. Each of the parties hereto shall, and shall
cause their respective Affiliates to, use all reasonable efforts to obtain
consents required under the League Rules for the consummation of all the
transactions contemplated hereby (which efforts are intended to contemplate,
among other things, arrangements similar to those contemplated by the NBA
Consent Agreement and NHL Consent Agreements and other
72
efforts expended to obtain the consent of the NBA and the NHL to the MSG
Acquisition except that none of ITT nor any of its Affiliates shall be required
to agree to any terms similar to those set forth in Section 7(d) of the Rangers
Consent Agreement and except that the arrangements contemplated by this Section
6.03 shall reflect the expected relative ownership of MSG following the Initial
Closing); provided that MSG shall be solely responsible for any filing or
application fees payable to the NBA and the NHL.
SECTION 6.04. Publicity. ITT MSG and Cablevision agree that, from
the date hereof through the Second Put Closing Date, no public release or
announcement concerning the transactions contemplated hereby shall be issued by
either party or any of its Affiliates or MSG without the prior consent of the
other party (which consent shall not be unreasonably withheld), except as such
release or announce ment may be required by law or the rules or regulations of
any United States or foreign securities exchange, in which case the party
required to make the release or announcement shall allow the other party
reasonable time to review such release or announcement in advance of such
issuance.
SECTION 6.05. Governance of MSG. Each of the parties hereto agrees
that there will be no change in the composition of the Board of Directors of
MSGE prior to the Initial Closing (other than as permitted by the existing
governing documents of MSGE).
SECTION 6.06. Existing Agreements; Contribution of SportsChannel New
York. (a) All agreements, under standings and arrangements among the parties
hereto and their Affiliates relating to their interests in and the operation of
MSG shall remain in full force and effect until the Initial Closing (and, except
as otherwise expressly provided in this Agreement, nothing in this Agreement
shall have any effect whatsoever on the rights and obligations of the parties
hereto or their Affiliates under any such agreements, understandings or
arrangements or be given any effect in the interpretation of any such agreement,
under standing or arrangement); provided that, if all of the conditions to
consummation of the Initial Closing are
73
satisfied but RGC or GHC does not consummate the Initial Closing within five
business days following the satisfaction of all conditions to the Initial
Closing set forth in Section 7.01 (otherwise than by a breach by ITTE or ITT
MSG), without limiting any other remedies that may be available to ITTE or ITT
MSG or any of their respective Affiliates, (i) all restrictions on the Transfer
by ITT or any of its Affiliates of the Shares or the ITT MSG Interest pursuant
to any agreement, understanding or arrangement between the parties (including
the provisions of this Agreement, the restrictions on Transfer set forth in
Section 11 of the Bid Agreement and the right of first refusal set forth in
Section 12 of the Bid Agreement and the buy-sell arrangements set forth in
Section 13 of the Bid Agreement) immediately shall be null and void and of no
further force or effect and (ii) ITT MSG shall have the right, exercisable
immediately by delivery of written notice thereof to Cablevision, to cause to
occur, and upon such exercise Cablevision shall and shall cause its Affiliates
to effect, the Mandatory Contribution (as defined in the SportsChannel
Contribution Agreement) upon the terms set forth in and in compliance with the
SportsChannel Contribution Agreement (the "Contribution Right"); provided that,
if ITT MSG exercises its right to cause Cablevision to effect the Mandatory
Contribution, from and after the consummation of such Mandatory Contribution,
the right of first refusal provision set forth in Section 12 of the Bid
Agreement shall be reinstated and shall be deemed to apply to transfers of
interests in Partners as well as any direct transfer of any MSG Interest. If ITT
MSG exercises the Contribution Right, Cablevision agrees to cause its Affiliates
to consummate the Mandatory Contribution.
(b) Following the Initial Closing, all agreements, understandings
and arrangements among the parties hereto relating to their interests in and the
operation of MSG (other than this Agreement, the Partnership Agreement and the
Ancillary Agreements) shall terminate and be of no further force or effect and
this Agreement, the Partnership Agreement and the Ancillary Agreements shall
govern the relationship among the parties relating to their interests in and
operation of MSG; provided, however, that
74
if a Put Obligation Breach, a Put Obligation Failure or an Acceleration Event
occurs and is continuing, then from and after and during the continuance of such
event, without limiting any other remedies that may be available to ITT MSG or
its Affiliates, (i) all restrictions on the Transfer pursuant to any agreement,
understanding or arrangement among the parties hereto (including pursuant to
this Agreement or the Partnership Agreement) by ITT MSG or any of its Affiliates
of the ITT MSG Interest (other than those set forth in Sections 6.1(b), 6.1(c)
(other than clause (ii) thereof) and 6.1(d) of the Partnership Agreement)
immediately shall be inapplicable and of no force or effect and (ii) the right
of first refusal set forth in Section 6.6 of the Partnership Agreement shall be
effective.
(c) Each of the parties hereto shall, and shall cause their
respective Affiliates to, use all reasonable efforts to obtain the complete
discharge and release (i) at or prior to the Initial Closing, of all obligations
of ITT, ITTE, ITT MSG and each of their respective Affiliates under any of the
MSG Acquisition Agreements to the extent such obligations are not conditioned
upon ITT or its Affiliates continuing to own an ownership interest in an NBA or
NHL franchise (including (A) ITT's guarantee and other obligations pursuant to
Section 5.04(e) of the Merger Agreement of the obligations of Paramount
Communications Inc. under the Guaranty made as of November 22, 1988 to the New
York Yankees Limited Partnership and (B) ITT's obligations under Section 7 of
the Consent Agreement dated as of March 10, 1995 among the NHL, MSG, MSGE, ITTE,
ITT MSG, ITT, GHC, RGC, Rainbow and Cablevision (the "Rangers Consent
Agreement")) and (ii) at or prior to any Closing or the consummation of any
other transaction contemplated hereby following which ITT MSG and its Affiliates
shall cease to own any MSG Interest, of all obligations of ITT and its
Affiliates under any of the MSG Acquisition Agreements to the extent such
obligations are conditioned upon ITT or its Affiliates continuing to own an
ownership interest in an NBA or NHL franchise. In the event that ITT is not
released from its obligations pursuant to Section 7(d)(ii) of the Rangers
Consent Agreement and ITT is required to purchase the Rangers pursuant to
Section 7(d)(ii) of the Rangers
75
Consent Agreement, all rights, options, contracts or other arrangements of MSG
and any of its Affiliates relating to the Rangers that are on terms less
favorable to the Rangers than Arm's-length basis terms shall be automatically
revised to reflect then prevailing market conditions.
SECTION 6.07. Compliance by Affiliates. Each of the parties hereto
agrees to cause all their respective Affiliates to comply with the terms and
provisions of this Agreement, the Partnership Agreement and the Ancillary
Agreements and to take all action necessary to enable each of them to comply
with all their respective obligations under this Agreement, the Partnership
Agreement and the Ancillary Agreements (except that Cablevision shall not be
obligated to cause RGC and GHC to pay the Shares Purchase Price or the Initial
Transferred Interest Purchase Price, respectively, at the Initial Closing and
ITT shall not be obligated to cause ITTE or ITT MSG to comply with their
respective obligations to deliver the Shares and the Initial Transferred
Interest at the Initial Closing).
SECTION 6.08. Other Agreements. (a) Bank Credit Agreement. RGC and
GHC shall use all reasonable efforts to ensure that (i) the terms and provisions
of the Bank Credit Agreement shall be consistent in all material respects with,
and shall not contain any provisions that are likely to impair the timely
consummation of the transactions contemplated by this Agreement, in each case,
that are not contemplated by the Commitment Letter and (ii) in particular, the
conditions to obligations of the lenders under the Bank Credit Agreement to
provide funds relating to "material adverse" changes shall be substantially
identical to the conditions to a Closing set forth in Section 7.01(a)(vii).
(b) Aircraft Matters. ITT shall cause ITT Flight Operations, Inc., a
Pennsylvania corporation ("Flight"), to provide to MSG an option, exercisable
for a 45-day period
76
commencing on the date hereof, to provide aircraft services on the following
terms:
(i) MSG would "dry" lease the Aircraft on customary terms and
conditions to Flight for a period of two years, which shall be
automatically renewed for one year periods thereafter unless notice of
termination shall thereafter be given by either party within 90 days of
the expiration of the lease period.
(ii) Flight would manage, maintain, operate and store the Aircraft
for MSG and its Affiliates and, in exchange for such services, MSG and its
Affiliates would reimburse Flight for all direct operating expenses
relating to the Aircraft, including all insurance costs, and would pay
Flight a monthly management fee of $75,000, a monthly hangar rental fee of
$10,000 and monthly administrative fee in an amount equal to 10% of all
direct operating expenses relating to the Aircraft. MSG would have the
right to terminate such agreement on 90 days notice if it receives a
written offer to provide equivalent services that it concludes is more
advantageous to MSG than such agreement. The Flight Management Agreement
would also provide that all net income received by Flight as a result of
the use of the Aircraft by third parties shall be paid as follows: (1) in
the case of any use of the Aircraft obtained or booked by Flight, 85% to
MSG and the balance to Flight; and (2) in the case of any use of the
Aircraft obtained or booked by MSG or its Affiliates, 92.5% to MSG and the
balance to Flight.
(iii) Notwithstanding anything to the contrary contained in Sections
6.08(b)(i) and (ii), Flight shall be entitled to terminate all aircraft
services then being provided to MSG and its Affiliates, without any cost
and expense, upon 90 days prior notice to MSG.
SECTION 6.09. Tax Matters. (a) The tax returns of MSG for the tax
years ended December 31, 1996 and thereafter shall be prepared as soon as
practicable after the end of the taxable year by a firm of nationally
77
recognized accountants. Such firm shall be retained by MSGE with the agreement
of ITT and Cablevision, which agreement shall not be unreasonably withheld. Such
tax returns shall be prepared in a manner consistent with the tax returns for
the tax year ended December 31, 1995.
(b) In connection with the examination of the tax returns of MSG for
the tax year ended December 31, 1995 by the Internal Revenue Service or by any
state or local taxing authority, MSGE shall ▇▇▇▇▇ ▇▇▇▇▇▇ of attorney to
represent MSGE in its role as the "Tax Matters Partner" (pursuant to Section
6231 of the Code) to individuals designated by ITTE.
ARTICLE VII
Closing Conditions
SECTION 7.01. Conditions to Closings. (a) Conditions to the
Obligations of Cablevision, RGC and GHC. The obligations of each of Cablevision,
RGC or GHC to consummate the transactions contemplated to occur at any Closing
is subject to the satisfaction (or waiver by Cablevision, RGC or GHC, as the
case may be) as of the time of such Closing of the following conditions:
(i) The representations and warranties of each of ITTE and ITT MSG
made in this Agreement shall be true and correct, as of the date hereof
and as of the time of the applicable Closing as though made as of such
time, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and
warranties shall be true and correct on and as of such earlier date). ITTE
and ITT MSG shall have performed or complied in all material respects with
all obligations and covenants required by this Agreement to be performed
or complied with by each of them by the time of such Closing. ITT MSG
shall have delivered to Cablevision a certificate dated such Closing Date
and signed by an authorized officer of ITT MSG confirming the foregoing.
78
(ii) RGC or MSGE (dependent upon which purchases the Shares) and GHC
or MSG (dependent upon which purchases the Initial Transferred Interest),
at the Initial Closing, and Cablevision or MSG (dependent upon which
purchases the applicable ITT MSG Interest), at any subsequent Closing,
shall have received an opinion dated the applicable Closing Date of
Cravath, Swaine & ▇▇▇▇▇, counsel to ITTE and ITT MSG, in form and
substance reasonably satisfactory to Cablevision and an opinion dated such
Closing Date of the general counsel of ITT or an officer responsible for
legal affairs of the parent of ITTE or ITT MSG in form and substance
reasonably satisfactory to Cablevision.
(iii) The parties shall have received all authorizations, consents,
orders and approvals of all Governmental Entities required in order to
consummate the transactions contemplated to occur at the applicable
Closing. No statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order
enacted, entered, promulgated, enforced or issued by any Governmental
Entity or other legal restraint or prohibition shall be in force and have
the effect of (A) preventing the consummation of the transactions
contemplated to occur at such Closing, (B) prohibiting or materially
limiting the ownership or operation by Cablevision, RGC, GHC, MSGE or MSG
of, or compelling Cablevision, RGC, GHC, MSGE or MSG to dispose of or hold
separate any material portion of, the business or assets of MSG, in each
case as a result of the trans actions contemplated to occur at such
Closing or (C) imposing material limitations on the ability of
Cablevision, RGC or GHC to acquire or hold, or exercise full rights of
ownership of, the Shares or the ITT MSG Interest to be transferred at such
Closing.
(iv) There shall not be pending or threatened by any Governmental
Entity any Action (or by any other person any Action which has a
reasonable likelihood of success), (A) challenging or seeking to restrain
or prohibit consummation of the transactions contemplated
79
to occur at the applicable Closing or seeking to obtain from Cablevision
or any of its Affiliates in connection with such transactions any damages
that are material in relation to the investment to be made by Cablevision,
RGC or GHC in MSG, (B) seeking to prohibit or materially limit the
ownership or operation by Cablevision, RGC, GHC, MSGE or MSG or any of
their respective Affiliates of any material portion of the business or
assets of MSG, or to compel Cablevision, MSGE or MSG to dispose of or hold
separate any material portion of the business or assets of MSG, in each
case as a result of the transactions contemplated to occur at such
Closing, or (C) seeking to impose material limitations on the ability of
Cablevision (or, in respect of the Initial Closing, any person controlling
Cablevision), RGC or GHC to acquire or hold, or exercise full rights of
ownership of, the Shares or the ITT MSG Interest to be transferred at such
Closing, as the case may be; provided, however, that this condition shall
be deemed to be waived by Cablevision, RGC and GHC as to any Action
(except for any Action by any Governmental Entity) if the sole potential
impact of such Action would be a judgment for money damages and ITT
provides to Cablevision, RGC and GHC and their respective Affiliates
complete indemnification in form and substance reasonably satisfactory to
Cablevision with respect to any such Action.
(v) Any waiting period under the HSR Act applicable to the
transactions contemplated to occur at the applicable Closing shall have
expired or been terminated.
(vi) Cablevision, RGC, GHC and MSG shall have received all necessary
approvals from the NBA and the NHL in accordance with the League Rules to
enable them to consummate the transactions contemplated by this Agreement
to occur at such Closing and such approvals shall be in effect.
(vii) With respect to the Initial Closing only, the Agent Bank shall
not have exercised its right to refuse
80
to provide funds to MSG due to (A) there occurring after the date of the
Commitment Letter any material adverse change in or any event, development
or circumstance that has had or will with the passage of time have a
material adverse effect on, the business, assets, operations, property or
financial condition of MSG and its subsidiaries, taken as a whole, other
than changes relating to the economy in general or resulting from
industry-wide developments affecting companies in similar businesses, (B)
the Agent Bank's becoming aware after the date of the Commitment Letter
but prior to the execution and delivery of this Agreement of any
information or other matter affecting MSG, Cablevision, Rainbow or the
transactions contemplated by the Commitment Letter which is inconsistent
in a material and adverse manner with any such information or other matter
disclosed to the Agent Bank prior to the date of the Commitment Letter or
(C) there having occurred a material disruption of or material adverse
change in financial, banking or capital market conditions generally (in
contrast to market reception of the Facilities (as defined in the
Commitment Letter) in particular) that, in the Agent Bank's reasonable
judgment, materially impairs syndication of the credit facilities arranged
pursuant to the Commitment Letter; provided that the failure of any such
condition is not caused by any action by SportsChannel New York or any
action by Cablevision or any of its Affiliates under affiliation
agreements with MSG.
(viii) Each of the Ancillary Agreements and the Partnership
Agreement shall have been executed and delivered by each party thereto and
shall be in full force and effect in accordance with their terms.
(b) Conditions to the Obligations of ITTE and ITT MSG. The
obligations of each of ITTE or ITT MSG to consummate the transactions
contemplated to occur at any
81
Closing is subject to the satisfaction (or waiver by ITTE or ITT MSG) as of the
time of such Closing of the following conditions:
(i) The representations and warranties of Cablevision, RGC, GHC and
MSG made in this Agreement shall be true and correct, as of the date
hereof and as of the time of the applicable Closing as though made as of
such time, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations
and warranties shall be true and correct on and as of such earlier date).
Cablevision, RGC, GHC and MSG shall have performed or complied in all
material respects with all obligations and covenants required by this
Agreement to be performed or complied with by each of them by the time of
such Closing. Cablevision shall have delivered to ITT MSG a certificate
dated the applicable Closing Date and signed by an authorized officer of
Cablevision confirming the foregoing.
(ii) ITT MSG and, at the Initial Closing, ITTE shall have received
an opinion dated the applicable Closing Date of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to Cablevision, RGC and GHC, in form and substance reasonably
satisfactory to ITT MSG, an opinion dated such Closing Date of the general
counsel of Cablevision or an officer responsible for legal affairs of the
parent of RGC or GHC in form and substance reasonably satisfactory to ITT
MSG and, at a Closing at which MSG is to redeem an ITT MSG Interest, an
opinion dated such Closing Date of the general counsel of MSG, in form and
substance reasonably satisfactory to ITT MSG.
(iii) The parties shall have received all authorizations, consents,
orders and approvals of all Governmental Entities required in order to
consummate the transactions contemplated to occur at the applicable
Closing. No statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order
enacted, entered, promulgated, enforced or issued by
82
any Governmental Entity or other legal restraint or prohibition shall be
in force and have the effect of preventing the consummation of the
transactions contemplated to occur at such Closing.
(iv) There shall not be pending or threatened by any Governmental
Entity any Action (or by any other person any Action which has a
reasonable likelihood of success), challenging or seeking to restrain or
prohibit consummation of the transactions contemplated to occur at the
applicable Closing or seeking to obtain from ITT MSG or any of its
Subsidiaries or any of their respective Affiliates in connection with such
transactions any damages that are material in relation to the investment
that ITT MSG has in MSG immediately prior to such Closing.
(v) Any waiting period under the HSR Act applicable to the
transactions contemplated to occur at the applicable Closing shall have
expired or been terminated.
(vi) Cablevision, RGC, GHC and MSG shall have received all necessary
approvals from the NBA and the NHL in accordance with the League Rules to
enable them to consummate all the transactions contemplated by this
Agreement and such approvals shall be in effect.
(vii) (A) If Cablevision Shares are to be issued at the applicable
Closing, the Registration Statement covering the resale of such
Cablevision Shares and complying with the requirements of Sections 2.06
and 4.02 shall have become effective under the Securities Act and shall
not be the subject of any stop order or proceedings seeking a stop order,
(B) Cablevision and its Affiliates, as necessary, and ITT MSG and its
Affiliates, as necessary, shall have received all state securities or
"blue sky" authorizations necessary to sell such Cablevision Shares as
contemplated by this Agreement and (C) all actions, filings, documents and
other things necessary for the closing of the registered resale of
Cablevision Shares contemplated by
83
Section 2.06 to occur simultaneously with such Closing shall be completed,
prepared and in final order.
(viii) All Cablevision Shares to be issued at the applicable Closing
shall have been approved for listing on the American Stock Exchange, Inc.
or such other exchange or automated interdealer quotation system upon
which such Cablevision Shares are then listed, subject only to official
notice of issuance.
(ix) Each of the Ancillary Agreements and the Partnership Agreement
shall be executed and delivered by each party thereto and shall be in full
force and effect in accordance with their terms.
SECTION 7.02. Frustration of Closing Conditions. None of
Cablevision, RGC or GHC, on the one hand, and neither of ITTE or ITT MSG, on the
other hand, may rely on the failure of any condition set forth in Section
7.01(a) or 7.01(b), respectively, to be satisfied if such failure was caused by
its or its Affiliate's failure to act in good faith or to cooperate and use all
reasonable efforts to cause the applicable Closing to occur as required by
Section 6.01.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable by any of the parties hereto
(including by operation of law in connection with a merger, consolidation or
Transfer of substantially all the assets (or equivalent transaction)) without
the prior written consent of Cablevision and ITT MSG. Notwithstanding the
foregoing sentence, (a) each of ITTE and ITT MSG shall be entitled to assign all
its rights and obligations hereunder and under the Partnership Agreement to any
majority owned Subsidiary or Subsidiaries of ITT or of ITTSC, or any direct or
indirect parent of ITTE or ITT MSG (each a "Permitted Transferee"), if such
84
Subsidiary or Subsidiaries or such parent (i) directly or indirectly owns the
Shares and the ITT MSG Interest, to the extent not previously Transferred
pursuant to the terms of this Agreement or the Partnership Agreement, and (ii)
agrees in writing to be bound by all of the provisions of this Agreement as if
such Subsidiary or Subsidiaries or such parent were ITT MSG and upon such
assignment the assignor shall be forever discharged and released from any
liability or further obligation under this Agreement, except for liabilities
that accrued on or prior to such assignment, (b) Cablevision shall be entitled
to consolidate or merge with or into, or Transfer all or substantially all of
its assets to, any person without the consent of any party hereto, if (i) the
entity formed by such consolidation or merger (if other than Cablevision) or to
which such Transfer shall have been made agrees in writing to be bound by all
the provisions of this Agreement applicable to Cablevision as if such person
were Cablevision and (ii) immediately after such transaction, and after giving
effect thereto, the person formed by or surviving any such consolidation or
merger (if other than Cablevision), or to which such Transfer shall have been
made shall have a Cash Flow Ratio (as such term is defined in the Indenture,
dated as of November 1, 1995, between Cablevision and The Bank of New York, as
Trustee (without regard to whether such Indenture shall be in effect or have
been amended in any respect) not in excess of 9 to 1; provided, that,
notwithstanding the foregoing, if the conditions set forth in clauses (i) and
(ii) above are not met and ITT MSG withholds its consent to such consolidation,
merger or Transfer, Cablevision may consolidate or merge with or into, or
Transfer all or substantially all its assets to, any person, if immediately
prior to or simultaneously with such Transfer, Cablevision offers to purchase
(and if ITT MSG accepts such offer, purchases), or, at the election of
Cablevision, offers to cause MSG to redeem (and if ITT MSG accepts such offer,
MSG redeems), the Interests of ITT MSG for a price in cash equal to the
aggregate of the Put Purchase Prices, as reduced for the prior payments of the
First Put Purchase Price, if exercised and paid, and as adjusted pursuant to
Section 2.11; and provided further that, in any event, Cablevision or such
successor entity shall not be entitled
85
to pay a Put Purchase Price in shares of common stock unless, following such
transaction, the common stock of Cablevision or such successor entity is
registered under Section 12 of the Exchange Act and listed on a national
securities exchange or approved for trading through the Nasdaq Stock Market and
(c) Cablevision, RGC or GHC shall be permitted to assign, hypothecate, pledge
and encumber all of its rights (but none of its liabilities and obligations)
under this Agreement as required by the lenders under any bank credit facility
to which it is a party; provided that in connection therewith the assignor shall
not be released or discharged in any respect from any of their respective
obligations hereunder. Any attempted assignment in violation of this Section
8.01 shall be void.
SECTION 8.02. Successors and Assigns; No Third-Party Beneficiaries.
This Agreement shall be binding on the parties hereto and their respective
permitted successors and permitted assigns. Except as provided in Section 6.06
with respect to ITT, ITTSC or any of their Affiliates and Article V, this
Agreement is for the sole benefit of the parties hereto and their permitted
assigns and nothing herein expressed or implied shall give or be construed to
give to any person, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
SECTION 8.03. Termination. (a) Anything contained herein to the
contrary notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Initial Closing Date:
(i) by mutual written consent of ITT MSG and Cablevision;
(ii) by ITT MSG if any of the conditions set forth in Section
7.01(b) shall have become incapable of fulfillment prior to the Initial
Closing, and shall not have been waived by ITT MSG;
(iii) by Cablevision if any of the conditions set forth in Section
7.01(a) shall have become incapable of
86
fulfillment prior to the Initial Closing, and shall not have been waived
by Cablevision;
(iv) by ITT MSG or Cablevision at any time on or after August 1,
1997, if prior to August 1, 1997, the conditions to the Initial Closing
set forth in Sections 7.01(a)(vi) and 7.01(b)(vi) shall not have been
satisfied; or
(v) by ITT MSG or Cablevision at any time on or after December 15,
1997, if the Initial Closing shall not have occurred by such time;
provided, however, that the party seeking termination pursuant to clause (ii),
(iii), (iv) or (v) is not in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
(b) ITT MSG may terminate this Agreement and abandon any
transactions contemplated hereby and not yet consummated upon the occurrence and
during the continuation of an Acceleration Event.
(c) In the event of termination of this Agreement pursuant to this
Section 8.03, written notice thereof shall forthwith be given to the other
parties and the transactions contemplated by this Agreement shall be terminated,
without further action by either party.
(d) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 8.03, this
Agreement shall become void and of no further force or effect, except for the
provisions of Article V, Sections 6.04, 6.06, 8.01, 8.02, 8.03, 8.04, 8.05,
8.06, 8.07, 8.09, 8.11, 8.12, 8.13, 8.14, 8.15 and 8.16 and the provisions of
any Section relating to the payment of fees and expenses of a Selected
Investment Banking Firm or Appraiser (including fees and expenses of their
counsel) or other fees and expenses.
(e) Each Affiliate of Cablevision and ITT MSG, respectively, that is
a party to this Agreement shall be
87
deemed to agree with any action taken pursuant to this Section 8.03 by
Cablevision or ITT MSG, respectively.
SECTION 8.04. Survival of Representations. The representations and
warranties in this Agreement and in any certificate delivered pursuant hereto
shall survive the Closings.
SECTION 8.05. Expenses. Whether or not the transactions contemplated
hereby are consummated, and except as otherwise specifically provided in this
Agreement, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
costs or expenses.
SECTION 8.06. Attorney Fees. If Cablevision or any of its Affiliates
(other than MSG on or prior to the Initial Closing Date) or ITT MSG or any of
its Affiliates (other than MSG) (such party and its Affiliates, a "breaching
party") shall breach any provision of this Agreement, such breaching party
shall, on demand, indemnify and hold harmless the other party and its Affiliates
that are party to this Agreement for and against all reasonable out-of-pocket
expenses, including legal fees, incurred by such other party or such Affiliates
by reason of the enforcement and protection of its rights under this Agreement
in respect of such breach. The payment of such expenses is in addition to any
other relief to which such other party may be entitled.
SECTION 8.07. Amendments. No amendment, modification or waiver in
respect of this Agreement shall be effective unless it shall be in writing and
signed by the party against which it is enforced.
SECTION 8.08. Notices. All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given (i) on the date of delivery if delivered personally, or by
telecopy or telefacsimile, upon confirmation of receipt, (ii) on the second
business day following the date of dispatch if delivered by Federal Express or
other
88
nationally reputable next-day courier service or (iii) on the third business day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice, as follows:
(i) if to Cablevision, RGC or GHC,
Cablevision Systems Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.; and
(ii) if to ITTE or ITT MSG,
ITT Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
89
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
SECTION 8.09. Interpretation; Exhibits and Schedules. The headings
contained in this Agreement, in any Exhibit or Schedule hereto and in the table
of contents to this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. All Exhibits
and Schedules annexed hereto or referred to herein are hereby incorporated in
and made a part of this Agreement as if set forth in full herein. Any
capitalized terms used in any Exhibit but not otherwise defined therein, shall
have the meaning as defined in this Agreement. For all purposes of this
Agreement, references to the NHL and the NBA shall include references to the
women's professional basketball league and the arena football league.
SECTION 8.10. Counterparts. This Agreement 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.
SECTION 8.11. Entire Agreement. Following the Initial Closing, this
Agreement, the Partnership Agreement and the Ancillary Agreements shall contain
the entire agreement and understanding between the parties hereto with respect
to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter. Following the Initial Closing,
neither party shall be liable or bound to any other party in any manner by any
representations, warranties or covenants relating to such subject matter except
as specifically set forth herein or in
90
the Partnership Agreement or in any of the Ancillary Agreements.
SECTION 8.12. Brokers' or Finders' Fees. Each party hereto hereby
represents and warrants that no brokers or finders have acted for such party in
connection with this Agreement or the transactions contemplated hereby and that
no brokerage fee, finder's fee or commission is or will become payable in
respect thereof and agrees to indemnify the other parties against any claim for
any such fee or commission based on such party's actions or alleged actions.
SECTION 8.13. Severability. If any provision of this Agreement (or
any portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstances.
SECTION 8.14. Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, covenants, conditions and
provisions of this Agreement, the party or parties who are or are to be thereby
adversely affected, in addition to any and all other rights and remedies at law
or in equity, shall have the right of specific performance and injunctive relief
giving effect to its or their rights under this Agreement and all such rights
and remedies shall be cumulative. The parties agree that the remedies at law for
any breach or threatened breach, including monetary damages, are inadequate
compensation for any loss, that the adversely affected party or parties shall be
entitled to obtain specific performance and injunctive relief without the
necessity of proving irreparable injury or posting bond or other security, and
that any defense in any action for specific performance or injunctive relief
that a remedy at law would be adequate is waived.
SECTION 8.15. Consent to Jurisdiction. Each of the parties hereto
irrevocably submits to the exclusive
91
jurisdiction of (a) the Supreme Court of the State of New York, New York County,
and (b) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby. Each of the parties hereto
agrees to commence any action, suit or proceeding relating hereto either in the
United States District Court for the Southern District of New York or if such
suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each of the parties hereto further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction in this Section 8.15. Each of the parties hereto
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the Supreme Court of the State of New York, New York
County, or (ii) the United States District Court for the Southern District of
New York, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
92
SECTION 8.16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.
ITT EDEN CORPORATION,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
ITT MSG INC.,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
CABLEVISION SYSTEMS CORPORATION,
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice Chairman
RAINBOW GARDEN CORP.,
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice Chairman
93
GARDEN L.P. HOLDING CORP.,
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice Chairman
MSG EDEN CORPORATION,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice
President
MADISON SQUARE GARDEN, L.P.,
by MSG Eden Corporation, as
general partner,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice
President
Only as to Section 5.08 and
Article VIII:
ITT CORPORATION,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
94
Only as to Section 5.02 and
Article VIII:
RAINBOW MEDIA HOLDINGS, INC.,
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice Chairman
EXHIBIT A
▇▇▇▇ OF SALE AND ASSIGNMENT OF PARTNERSHIP INTEREST
THIS ▇▇▇▇ OF SALE AND PARTNERSHIP INTEREST ASSIGNMENT is made as of
_______, 199_ by ITT MSG Inc., a Delaware corporation ("ITT MSG") in favor of
[Cablevision Systems Corporation, a Delaware corporation ("CV")] [Madison Square
Garden, L.P., a Delaware limited partnership ("MSG")].
WHEREAS, ITT MSG and CV and certain of its subsidiaries and MSG have
entered into a Partnership Interest Transfer Agreement dated as of April 15,
1997 (the "Transfer Agreement") (all capitalized terms used but not defined
herein shall have the meanings assigned to them in the Transfer Agreement),
pursuant to which, among other things, ITT MSG has agreed to transfer certain
partnership interests in MSG to CV or, at CV's election, to MSG, in accordance
with and subject to the terms and conditions set forth in the Transfer
Agreement;
NOW, THEREFORE, for and in consideration of [the payment by [CV]
[MSG] of $_________] [the issuance by CV of ______ shares of Cablevision Common
Stock] (the "Purchase Price") to ITT MSG pursuant to and in accordance with the
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terms of the Transfer Agreement, in exchange for the transfer of [a portion]
[50%] [all] of the entire interest in MSG, including all partnership interests,
all other equity or ownership interest and all other rights to share in profits,
losses and distributions of MSG beneficially owned by ITT MSG as of the date
hereof [such that following such transfer ITT MSG shall own [the Applicable
Percentage] of MSG] (the "Transferred Interest") pursuant to the Transfer
Agreement, the receipt and sufficiency of which consideration is hereby
acknowledged and in further consideration of the mutual covenants and agreements
contained in the Transfer Agreement, and pursuant to the terms of the Transfer
Agreement, ITT MSG does hereby assign, transfer, convey and deliver to [CV]
[MSG], its successors and assigns, effective as of the date hereof, all of ITT
MSG's right, title and interest in and to the Transferred Interest. [CV] [MSG]
hereby accepts the assignment, transfer and conveyance to it of all of ITT MSG's
right, title and interest in and to the Transferred Interest.
ITT MSG does hereby agree, from and after the date hereof upon the
request of [CV] [MSG], to execute such other
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documents as [CV] [MSG] may reasonably require in order to obtain the full
benefit of this ▇▇▇▇ of Sale and Assignment of Partnership Interest and ITT
MSG's obligations hereunder and under the Transfer Agreement.
ITT MSG and [CV] [MSG] do hereby agree that this ▇▇▇▇ of Sale and
Assignment of Partnership Interest 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.
IN WITNESS WHEREOF the undersigned have caused this instrument to be
duly executed as of the date first written above.
ITT MSG INC., [CABLEVISION SYSTEMS CORPORATION],
[MADISON SQUARE GARDEN, L.P.],
by by
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Name: Name:
Title: Title:
Consent to Assignment:
The undersigned, as general
partner of Madison Square
Garden, L.P., hereby consents
to the foregoing assignment:
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MSG EDEN CORPORATION,
by
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Name:
Title: