[Execution Copy]
AGREEMENT AND PLAN OF MERGER AND EXCHANGE
AS OF NOVEMBER 4, 2002
TABLE OF CONTENTS
Page
1. Definitions...............................................................2
1.01 Certain Definitions..............................................2
1.02 Interpretation and Rules of Construction........................15
2. The Merger and the Exchanges.............................................16
2.01 The Merger......................................................16
2.02 The RMHI Exchange...............................................18
2.03 The Cablevision Exchange........................................19
2.04 Working Capital Adjustment......................................19
2.05 Adjustment for Payments under Affiliation Agreements
and Capital Expenditures........................................22
2.06 Adjustments to Prevent Dilution.................................22
2.07 Possible Restructuring..........................................23
3. Representations and Warranties of Cablevision............................24
3.01 Organization and Authority......................................24
3.02 Legal Capacity; Approvals and Consents..........................25
3.03 Interests; Subsidiaries.........................................26
3.04 Financial Statements............................................27
3.05 Accounts Receivable.............................................29
3.06 Properties; Owned Tangible Personal Property....................29
3.07 Compliance with Law; Licenses...................................30
3.08 Intellectual Property...........................................31
3.09 Contracts.......................................................32
3.10 Labor Contracts and Actions.....................................34
3.11 Employee Benefit Plans..........................................35
3.12 Legal and Governmental Proceedings and Judgments................37
3.13 Finders and Brokers.............................................37
3.14 Environmental Matters...........................................37
3.15 Absence of Certain Changes......................................38
3.16 Insurance.......................................................39
3.17 Assets; Sufficiency of Assets...................................39
3.18 Affiliate Transactions..........................................39
3.19 Affiliation Agreements..........................................40
3.20 Advertisers.....................................................40
3.21 Film Exhibition Agreement.......................................41
3.22 Investment Purpose..............................................41
3.23 Media Expenditures..............................................41
4. Representations and Warranties of GE Merger Sub, NBC Holdings and NBC....42
4.01 Organization and Authority......................................42
4.02 Legal Capacity: Approvals and Consents..........................42
4.03 Ownership of Cablevision Shares.................................44
4.04 Legal and Governmental Proceedings and Judgments................44
4.05 GE Shares.......................................................44
4.06 GE SEC Reports..................................................44
4.07 GE Financial Statements; Absence of Certain Changes.............44
4.08 BHC Convertible Preferred Stock.................................45
4.09 Finders and Brokers.............................................45
5. Covenants Pending Closing................................................45
5.01 Conduct of Cablevision..........................................45
5.02 Access to Information...........................................48
5.03 Covenants of NBC Holdings and NBC...............................48
5.04 Notice of Developments..........................................49
5.05 Termination of Intercompany Arrangements........................50
5.06 Required Consents...............................................50
5.07 Separation of IFC Business from Bravo...........................50
6. Deliveries at Closing....................................................51
6.01 Deliveries by Cablevision.......................................51
6.02 Deliveries by NBC Holdings and NBC..............................51
6.03 Deliveries by GE Merger Sub.....................................52
7. Conditions to the Obligations of NBC Holdings, NBC and GE Merger Sub.....52
7.01 Receipt of Consents.............................................53
7.02 Performance by Cablevision......................................53
7.03 Absence of Breach of Representations and Warranties.............53
7.04 Absence of Breach of Tax Matters Agreement Representations
and Warranties..................................................53
7.05 Absence of Proceedings..........................................53
7.06 Reorganization Transactions.....................................53
7.07 Release of Liens................................................54
7.08 MGM Closing.....................................................54
7.09 Related Agreements..............................................54
8. Conditions to the Obligations of Cablevision.............................54
8.01 Receipt of Consents.............................................54
8.02 Performance by NBC Holdings and NBC.............................54
8.03 Absence of Breach of Representations and Warranties.............54
8.04 Absence of Breach of Tax Matters Agreement Representations
and Warranties..................................................54
8.05 Absence of Proceedings..........................................55
8.06 Reorganization Transactions.....................................55
8.07 Registration Rights Agreement...................................55
8.08 Listing of GE Stock.............................................55
8.09 MGM Closing.....................................................55
8.10 Related Agreements..............................................55
9. Covenants................................................................55
9.01 Compliance with Conditions......................................55
9.02 Compliance with HSR Act and Rules; Foreign Antitrust Laws.......55
9.03 Records and Related Matters.....................................57
9.04 Use of Bravo Marks..............................................58
9.05 Xxxxx.xxx.......................................................58
9.06 Benefit of Contracts............................................59
9.07 Confidentiality.................................................60
9.08 Insurance.......................................................62
9.09 Termination of Agreements.......................................62
9.10 Xxxxx Contract..................................................62
9.11 BHC Convertible Preferred Stock.................................63
10. Survival of Representations, Warranties, Covenants and Other Agreements;
Indemnification..........................................................63
10.01 Survival of Representations, Warranties, Covenants and Other
Agreements......................................................63
10.02 Indemnification by Cablevision..................................63
10.03 Indemnification by NBC Holdings, NBC and GE Merger Sub..........65
10.04 Third Party Claims..............................................66
11. Further Assurances.......................................................68
12. Closing..................................................................68
12.01 Closing.........................................................68
12.02 Termination.....................................................68
13. Miscellaneous............................................................69
13.01 Amendments; Waivers.............................................69
13.02 Entire Agreement................................................69
13.03 Binding Effect; Assignment......................................69
13.04 Construction; Counterparts......................................69
13.05 Notices.........................................................70
13.06 Expenses of the Parties.........................................71
13.07 Non-Recourse....................................................71
13.08 Third Party Beneficiary.........................................71
13.09 Governing Law; Choice of Forum; Waiver of Jury Trial............71
13.10 Press Releases..................................................72
13.11 Severability....................................................72
EXHIBITS
Exhibit A - 0 Xxxx Xxxxxx Lease Assignment
Exhibit B - GE Registration Rights Agreement
Exhibit C - Film Exhibition Agreement
Exhibit D - Reorganization Transactions
Exhibit E - Transition Services Agreement
Exhibit F - NBC Holdings Release
Exhibit G - Cablevision Release
Exhibit H - Amended RNC Letter Agreement
Exhibit I - Transponder Lease Assignment
Exhibit J - IFC Agreements
Exhibit K - Cablevision Affiliation Agreement Amendment
SCHEDULES
Schedule 1.01 - Knowledge of Cablevision/Knowledge of NBC
Schedule 1.02 - Related Agreements
Schedule 1.03 - Certain IFC Assets
Schedule 2.04 - Working Capital
Schedule 2.04(f) - Preferred Stock Expense Amount
Schedule 3.02 - Consents and Approvals
Schedule 3.03 - Interests in Bravo Companies and Subsidiaries
Schedule 3.04 - Pro Forma Financial Statements
Schedule 3.06 - Leased Real Property
Schedule 3.07 - Noncompliance with Laws; Licenses
Schedule 3.08 - Intellectual Property
Schedule 3.09 - Listed Contracts
Schedule 3.11 - Company Benefit Plans
Schedule 3.12 - Legal Proceedings; Governmental Orders
Schedule 3.14 - Environmental Matters
Schedule 3.15 - Conduct out of Ordinary Course; Certain Changes
Schedule 3.16 - Insurance Policies
Schedule 3.17 - No Rights to Assets
Schedule 3.18 - Affiliate Transactions
Schedule 3.20 - Advertisers
Schedule 3.21 - Programming Agreements
Schedule 3.23 - Media Expenditures
Schedule 4.02 - NBC Consents
Schedule 5.01 - Non-ordinary Course Actions
Schedule 5.05 - Continuing Inter-company Contracts
Schedule 9.06 - Consents
AGREEMENT AND PLAN OF MERGER AND EXCHANGE
This Agreement and Plan of Merger and Exchange is made and entered into as
of November 4, 2002, by and between Cablevision Systems Corporation, a Delaware
corporation ("Cablevision"), Bravo Holding Corporation, a Delaware corporation
("BHC"), Bravo II Holding Corporation, a Delaware corporation ("B2HC"), Rainbow
Media Group, LLC, a Delaware limited liability company ("RMG LLC"), National
Broadcasting Company, Inc., a Delaware corporation ("NBC"), NBC-Rainbow Holding,
Inc., a California corporation ("NBC Holdings"), and Applause Acquisition
Corporation, a Delaware corporation ("GE Merger Sub") and a direct wholly-owned
Subsidiary of General Electric Company, a New York corporation ("GE").
R E C I T A L S
WHEREAS, BHC and B2HC, each of which is an indirect wholly-owned Subsidiary
of Cablevision, own, in the aggregate, an 80% partnership interest (the
"Cablevision Bravo Interest") in Bravo Company ("Bravo"), a general partnership
organized under New York law;
WHEREAS, MGM Networks U.S. Inc., a Delaware corporation ("MGM Holdings")
and a wholly-owned Subsidiary of Metro-Xxxxxxx-Xxxxx Inc. ("MGM"), owns a 20%
partnership interest in Bravo (the "MGM Bravo Interest");
WHEREAS, NBC Holdings owns 21,816,226 shares of Class A common stock (the
"Cablevision Shares") of Cablevision and 1,562.25 shares of Class A common stock
(the "RMHI Shares") of Rainbow Media Holdings, Inc. ("RMHI");
WHEREAS, Cablevision, MGM Holdings, NBC and NBC Holdings wish to effect,
and to have effected, the Reorganization Transactions (as hereinafter defined);
WHEREAS, as part of the Reorganization Transactions, GE Merger Sub will be
merged (the "B2HC Merger") with and into B2HC in a transaction in which the
shareholder of B2HC receives shares of common stock, par value $.06 per share,
of GE ("GE Common Stock");
WHEREAS, at the time of the B2HC Merger, B2HC will own a partnership
interest in Bravo (the "B2HC Bravo Interest");
WHEREAS, as part of the Reorganization Transactions, Cablevision will cause
RMHI to distribute to NBC Holdings all of the BHC Class B Stock in exchange for
all of the RMHI Shares and BHC will, at the time of such transfer, own a
partnership interest in Bravo (the "BHC Bravo Interest").
WHEREAS, as part of the Reorganization Transactions, Cablevision will
distribute to NBC Holdings all of the BHC Class A Stock in exchange for the
Cablevision Shares and BHC will, at the time of such transfer, own directly the
BHC Bravo Interest;
WHEREAS, Cablevision, RMHI, CSC Holdings, Inc., a Delaware corporation
("CSC Holdings"), RMG LLC, NBC Holdings, NBC and GE Merger Sub are entering into
a Tax Matters Agreement (the "Tax Matters Agreement") simultaneously upon the
execution of this Agreement; and
WHEREAS, NBC Holdings, NBC, MGM Holdings and MGM have entered into a
Purchase Agreement, dated as of the date hereof (the "MGM Agreement"), pursuant
to which NBC Holdings will acquire the MGM Bravo Interest and MGM, MGM Holdings
and Cablevision have entered into an Agreement dated as of the date hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows, each intending to be legally
bound as and to the extent herein provided.
1. Definitions.
1.01 Certain Definitions. For the purposes of this Agreement, the following
terms shall have the meanings set forth below:
0 Xxxx Xxxxxx Lease means the Lease, dated August 7, 2000, for the property
at 0 Xxxx Xxxxxx, Xxx Xxxx, XX between Two Park Company, as landlord, and
Sterling Digital LLC, as tenant.
0 Xxxx Xxxxxx Lease Assignment means the lease assignment pursuant to which
the 0 Xxxx Xxxxxx Lease will be assigned by Sterling Digital LLC to NBC,
effective as of the Closing, substantially in the form attached hereto as
Exhibit A.
Action means any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court or Governmental Authority.
Additional GE Shares means the shares of GE Common Stock, if any, issued
pursuant to Sections 2.04 and 2.05.
Adjusted Statement of Working Capital has the meaning set forth in Section
2.04(b)(ii).
Adjustment Amount has the meaning set forth in Section 2.05(a).
Adjustment Payment has the meaning set forth in Section 2.04(c).
Advertising Inventory has the meaning set forth in Section 9.05.
Affiliate of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For
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purposes of this Agreement, "control" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without limitation, the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person. For all purposes hereof, none of the Cablevision Companies or the
Companies shall be deemed to be an Affiliate of GE, NBC or NBC Holdings.
Affiliation Agreements has the meaning set forth in Section 3.09(a)(iv).
After-Tax Basis means that, in determining the amount of the payment
necessary to indemnify a Cablevision Indemnified Party or an NBC Holdings
Indemnified Party, as the case may be, against, or reimburse any such
indemnified party for, Losses, the amount of such Losses shall be determined net
of any reduction in Tax derived by the indemnified party as the result of
incurring such Losses, and the amount of such indemnification payment shall be
increased (i.e., "grossed up") by the amount necessary to satisfy any income or
franchise Tax liabilities actually incurred by the indemnified party as a result
of its receipt of, or right to receive, such indemnification payment (as so
increased), whether such income or franchise Tax liabilities are incurred for
the Tax year of receipt of (or right to receive) the indemnification payment or
for a subsequent tax year for which a net operating loss carryover would
otherwise have been available, so that the indemnified party is put in the same
net after-Tax economic position as if it had not incurred such Losses; provided,
however, that no indemnification payment shall be increased (i.e. "grossed up")
by reason of the failure of any of the Reorganization Transactions to obtain the
intended tax treatment (as described in Section 11(c) of the Tax Matters
Agreement) as a result of the receipt of, or right to receive, any
indemnification payment.
Agreement means this Agreement and Plan of Merger and Exchange and the
Exhibits and Schedules attached hereto.
Aggregate Cablevision Share Value has the meaning set forth in Section
2.01(c).
Aggregate GE Stock Consideration has the meaning set forth in Section
2.01(c).
Aggregate RMHI Share Value has the meaning set forth in Section 2.01(c).
Amended RNC Letter Agreement means the Letter Agreement, to be effective as
of the Closing, between Rainbow Network Communications and Bravo amending the
letter agreement, dated as of December 20, 2000, between Rainbow Network
Communications and Bravo, substantially in the form attached hereto as Exhibit
H.
Asserted Claim has the meaning set forth in Section 10.04.
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Assets means all real, personal and mixed assets, both tangible and
intangible, of every kind, nature and description owned by any of the Companies,
including, without limitation, the Owned Intellectual Property.
Average Cablevision Share Price has the meaning set forth in Section
2.01(c).
Average GE Share Price has the meaning set forth in Section 2.01(c).
Benefit Plans means all "employee benefit plans" within the meaning of
Section 3(3) of ERISA, and all bonus, equity, incentive, deferred compensation,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other contracts or
agreements.
BHC has the meaning set forth in the Preamble to this Agreement.
BHC Bravo Interest has the meaning set forth in the Preamble to this
Agreement.
BHC Class A Stock means, after completion of step 3 of the Reorganization
Transactions, all of the issued and outstanding Class A common stock, $0.01 par
value per share, of BHC.
BHC Class B Stock means, after completion of step 3 of the Reorganization
Transactions, all of the issued and outstanding Class B common stock, $0.01 par
value per share, of BHC.
BHC Convertible Preferred Stock means, after completion of step 3 of the
Reorganization Transactions, all of the Convertible Preferred Stock, $0.01 par
value per share, of BHC.
BHC Percentage means the percentage that (i) the BHC Bravo Interest
(expressed as a percentage partnership interest in Bravo) as of the time of
computation constitutes of (ii) 80%.
BHC Shares means the BHC Class A Stock, BHC Class B Stock and BHC
Convertible Preferred Stock.
Bravo has the meaning set forth in the Preamble to this Agreement.
Bravo Balance Sheets has the meaning set forth in Section 3.04(a).
Bravo Financial Statements has the meaning set forth in Section 3.04(a).
Bravo Income Statements has the meaning set forth in Section 3.04(a).
Bravo Intercompany Indebtedness means the Indebtedness owing from any of
the Companies to any of the Cablevision Companies.
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Bravo Interim Financial Statements has the meaning set forth in Section
3.04(a).
Bravo Marks has the meaning set forth in Section 9.04.
B2HC has the meaning set forth in the Preamble to this Agreement.
B2HC Bravo Interest has the meaning set forth in the Preamble to this
Agreement.
B2HC Merger has the meaning set forth in the Preamble to this Agreement.
B2HC Percentage means the percentage that (i) the B2HC Bravo Interest
(expressed as a percentage partnership interest in Bravo) as of the time of
computation constitutes of (ii) 80%.
Business means the business of providing the Bravo program service,
including, without limitation, producing or acquiring content, advertising sales
and distribution, in each case as conducted as of the date hereof. The
advertising sales agency function conducted by Rainbow Advertising Sales
Corporation is not part of the Business.
Business Day means any day other than a Saturday, Sunday or a day on which
banks in New York City are authorized or obligated by law or executive order to
close.
Cablevision has the meaning set forth in the Preamble to this Agreement.
Cablevision Affiliation Agreement Amendment means the amendment to the
affiliation agreement between Bravo and Cablevision, to be entered into as of
the Closing, substantially in the form attached as Exhibit K.
Cablevision Agreement Amount has the meaning set forth in Section 2.08(a).
Cablevision Bravo Interest has the meaning set forth in the Preamble to
this Agreement.
Cablevision Common Stock means shares of Class A common stock, par value
$0.01 per share, of Cablevision.
Cablevision Companies means Cablevision and each of its Subsidiaries (other
than the Companies).
Cablevision Payment has the meaning set forth in Section 2.04(c)
Cablevision Proprietary Information has the meaning set forth in Section
9.07(c).
Cablevision SEC Reports means all forms, reports, statements, schedules and
other documents filed with the SEC by Cablevision pursuant to the Exchange Act
since December 31, 2001.
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Cablevision Shares has the meaning set forth in the Preamble to this
Agreement or such other number or kind of securities as may result from (i) any
of the events described in Section 2.06(b), or (ii) any exchanges not prohibited
by the proviso to Section 5.03(b).
Cablevision Valuation Period has the meaning set forth in Section 2.01(c).
CERCLA means the Comprehensive Environmental Response, Compensation and
Liability Act, as amended.
Certificate of Merger has the meaning set forth in Section 2.01(a)(ii).
Claim has the meaning set forth in Section 5.01(j).
Closing means the meeting for the purpose of concluding the transactions
contemplated by this Agreement held at the place and on the date fixed in
accordance with Section 12.01.
Closing Balance Sheet has the meaning set forth in Section 2.04(a).
Closing Date means the date fixed for the Closing in accordance with
Section 12.01.
Closing Statement of Working Capital has the meaning set forth in Section
2.04(a).
Code means the Internal Revenue Code of 1986, as amended.
Communications Act means the Communications Act of 1934, as amended, and
the rules, regulations and written policies promulgated thereunder by the FCC,
as in effect from time to time.
Companies means BHC (and, after the Closing, the Surviving Corporation),
B2HC and Bravo and each of their Subsidiaries (other than IFC and its
Subsidiaries), and Company means any one of the Companies or a specified
Company, as the case may be.
Company Benefit Plans has the meaning set forth in Section 3.11(a).
Company Material Adverse Effect means any change in, or effect on, any of
the Companies that is materially adverse to the assets, liabilities, properties,
business, financial condition or operations of the Companies, taken as a whole,
other than any such change or effect resulting from changes in general economic
or political conditions or legal, governmental or regulatory factors affecting
Persons engaged in the cable television programming business generally, provided
in each case that the Companies are not materially disproportionately affected
as compared to other Persons engaged in the cable television programming
business, by such changes or effects.
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Competitively Sensitive Bravo Information has the meaning set forth in
Section 9.07(b).
Confidentiality Agreement means the Confidentiality Agreement dated
September 5, 2002 between Cablevision and NBC.
Contract means any written contract, mortgage, deed of trust, bond,
indenture, lease, sublease, license, note, certificate, option, warrant, right,
or other instrument, document, agreement or arrangement.
CSC Holdings has the meaning set forth in the Preamble to this Agreement.
DGCL means the General Corporation Law of the State of Delaware.
DOJ means the United States Department of Justice.
Effective Time has the meaning set forth in Section 2.01(a)(ii).
Employees means (i) all current active employees of any of the Companies,
(ii) all employees of Cablevision and its Affiliates substantially all of whose
time is dedicated to the Companies or the Business and (iii) all Transferred
Employees.
Encumbrances means any Lien or any lease, license, servient easement,
adverse claim, reversion, reverter, preferential arrangement, restrictive
covenant or restriction of any kind, including, without limitation, any
restriction on the use, voting, transfer, receipt of income or other exercise of
any attributes of ownership.
Environment means surface waters, groundwaters, soil, subsurface strata and
ambient air.
Environmental Laws means all Laws relating to the protection of the
Environment, and any binding judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment
thereunder, including, without limitation, CERCLA; the Resource Conservation and
Recovery Act, 42 U.S.C.ss.ss.6901 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C.ss.ss.6901 et seq.; the Clean Water Act, 33
U.S.C.ss.ss.1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.ss.ss.2601
et seq.; the Clean Air Act, 42 U.S.C.ss.ss.7401 et seq.; the Safe Drinking Water
Act, 42 U.S.C.ss.ss.300f et seq.; the Atomic Energy Act, 42 U.S.C.ss.ss.2011 et
seq.; and the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C.ss.ss.136 et seq.
Environmental Permits has the meaning set forth in Section 3.14(a).
ERISA means the Employee Retirement Income Security Act of 1974, as the
same has been and may be amended from time to time.
ERISA Affiliate has the meaning set forth in Section 3.11(c).
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Exchanges means the exchanges provided for in Sections 2.02 and 2.03.
Exchange Act means the United States Securities Exchange Act of 1934, as
amended.
FCC means the Federal Communications Commission or any successor entity.
Film Exhibition Agreement means the agreement among Bravo, RMHI, IFC,
American Movie Classics Company and WE: Women's Entertainment LLC, in the form
of Exhibit C attached hereto, except for filling in blanks currently contained
therein.
Foreign Antitrust Law means any Law of a Governmental Authority outside the
United States, its territories or possessions designed to prohibit, restrict or
regulate actions for the purpose or with the effect of monopolization or
restraint of trade.
FTC means the Federal Trade Commission.
GAAP means U.S. generally accepted accounting principles applied on a basis
consistent with past practice.
GE has the meaning set forth in the Preamble to this Agreement.
GE Common Stock has the meaning set forth in the Preamble to this
Agreement.
GE Material Adverse Effect means any change in, or effect on, GE and its
Subsidiaries that is materially adverse to the assets, liabilities, properties,
business, financial condition or operations of GE and its consolidated
Subsidiaries, taken as a whole, other than any such change or effect resulting
from changes in general economic or political conditions or legal, governmental
or regulatory factors affecting Persons engaged in businesses similar to GE's
business generally, provided in each case that GE and its consolidated
Subsidiaries are not materially disproportionately affected as compared to other
Persons engaged in businesses similar to GE's business, by such changes or
effects.
GE Merger Sub has the meaning set forth in the Preamble to this Agreement.
GE Registration Rights Agreement means the Registration Rights Agreement
between Cablevision and GE, to be entered into at Closing, substantially in the
form attached hereto as Exhibit B.
GE SEC Reports means all forms, reports, statements, schedules and other
documents filed with the SEC by GE pursuant to the Exchange Act since December
31, 2001.
GE Shares has the meaning set forth in Section 2.01(b)(i).
GE Valuation Period has the meaning set forth in Section 2.01(c).
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Governmental Authority means any United States federal, state, county,
municipal, local or any non-U.S. or supranational government, regulatory or
administrative authority, agency or commission.
Hazardous Materials means (a) petroleum and petroleum products, radioactive
materials, asbestos-containing materials, urea formaldehyde foam insulation,
polychlorinated biphenyls and radon gas, (b) any other chemicals, materials or
substances defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous wastes",
"restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar import, under any applicable
Environmental Law, and (c) any other chemical, material or substance which is
regulated by any Environmental Law.
HSR Act and Rules means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 and the rules and regulations promulgated thereunder, as from time to time
in effect prior to the Closing.
HSR Report means the Notification and Report Form for certain mergers and
acquisitions mandated by the HSR Act and Rules.
IFC means The Independent Film Channel LLC, a Delaware limited liability
company.
IFC Agreements means (i) the Letter Agreement among IFC Films LLC, IFC and
Bravo, (ii) the Letter Agreement among IFC Productions I, LLC, IFC and Bravo,
(iii) the Letter Agreement among IFC Entertainment LLC, IFC and Bravo, (iv) the
Letter Agreement between IFC and Bravo (Gotham Awards), (v) the Letter Agreement
between IFC and Bravo (Independent Spirit Awards), (vi) the Letter Agreement
between IFC and Bravo (2003 Cannes Film Festival), (vii) the Agreement between
Rainbow Film Holdings LLC and Bravo, in each case subject to and effective as of
the Closing, and (viii) the Letter License Agreement between IFC Entertainment
LLC and IFC, substantially in the forms of Exhibit J-1 through J-8 attached
hereto.
IFC Assets means all assets owned or held on the date hereof by any of the
Companies, including Contracts to which any of the Companies is a party, that
are not used in the conduct of the Business and are used exclusively in the
conduct of the business of IFC. IFC Assets shall include the $2.2 million
receivable described in Schedule 1.03.
IFC Liabilities means all Liabilities existing on, or arising after, the
date hereof to the extent relating to, arising out of or resulting from any IFC
Asset, and that portion of any Liabilities existing on, or arising after, the
date hereof to the extent relating to, arising out of or resulting from the
business and operations of IFC or, prior to the formation of IFC, The
Independent Film Channel division of Bravo, including those arising out of any
Contract to which any of the Companies is, or has at any time been, a party and
the
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obligations under which have not been fully discharged, including the
matters described in paragraph (c) of Schedule 3.12.
Indebtedness means, with respect to any Person, (a) all indebtedness of
such Person for (i) borrowed money or (ii) the deferred purchase price of
property, (b) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (c) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (d) all obligations of such Person as
lessee under leases that have been or should be, in accordance with GAAP,
recorded as capital leases, (e) all obligations, contingent or otherwise, of
such Person under acceptance, letter of credit or similar facilities, (f) all
Indebtedness of others referred to in clauses (a) through (e) above guaranteed
by such Person, and (g) all Indebtedness of other Persons referred to in clauses
(a) through (e) above secured by any Lien on property owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness. Notwithstanding the preceding sentence, "Indebtedness" under
clause (a)(ii) of this definition is intended to cover arrangements that would
be treated as debt for financial statement purposes because the counterparty to
the arrangement is, in effect, providing the financing to allow the Person to
have immediate access to, or use of, the property that is the subject of the
Contract (for example, purchase money financing for tangible property or
indebtedness owed to a seller in connection with the purchase of a business). It
is not intended to encompass the remaining obligations (financial or otherwise)
under Contracts or other commercial arrangements where payments are required to
be made by the Person over time and the benefits to the Person under the
Contract continue to flow to such Person (such as license, programming and
affiliation agreements). In addition, notwithstanding the foregoing, for all
purposes of this Agreement, "Indebtedness" shall not include the transponder
lease identified on Schedule 3.09(a)(vi).
Indemnitee has the meaning set forth in Section 10.04.
Indemnitor has the meaning set forth in Section 10.04.
Intellectual Property means (i) patents, patent applications and statutory
invention registrations, (ii) trademarks, service marks, Internet domain names,
trade dress, logos, trade names, and other distinctive source identifiers,
including registrations and applications for registration thereof, (iii)
copyrights, including registrations and applications for registration thereof,
and (iv) other similar types of proprietary intellectual property.
Interests has the meaning set forth in Section 3.03(a).
IRS means the Internal Revenue Service.
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Judgment means any judgment, writ, order, injunction, award, stipulation or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any Governmental Authority.
Key Affiliation Agreement Terms shall mean the following terms of an
Affiliation Agreement: (A) rates and other payment terms, (B) channel position,
(C) marketing support, (D) delete rights, (E) MFNs, (F) MFNs on MFNs, (G)
program definitions, (H) advertising buys, (I) after-acquired systems, and (J)
divested systems, and other matters that are material to the underlying
Contract.
Knowledge of Cablevision or Cablevision's knowledge means the actual
knowledge of any of the Persons who are listed on Schedule 1.01(a).
Knowledge of NBC or NBC Holdings or Known to NBC or NBC Holdings means the
actual knowledge of any of the Persons who are listed on Schedule 1.01(b).
Law means the common law and any statute, ordinance, code or other law,
rule, regulation, order, technical or other standard, requirement or procedure
enacted, adopted, promulgated, applied or followed by any Governmental Authority
or court.
Leased Real Property means all Real Property leased by a Company, as
tenant, from any Person that is not an Affiliate, and the Real Property leased
pursuant to the 0 Xxxx Xxxxxx Lease.
Liabilities means any and all debts, liabilities to pay money and
obligations to pay money, whether accrued or fixed, absolute or contingent,
matured or unmatured or determined or determinable, including, without
limitation, those arising under any Law (including, without limitation, any
Environmental Law), Action or Judgment and those arising under any contract,
agreement, arrangement, commitment or undertaking. For the avoidance of doubt,
the term Liabilities is not intended to include obligations of a Person to
perform under or comply with any Law, Action, Judgment or Contract (in each
case, other than an obligation to pay money) but would include such obligations
if there has been a default or failure to perform or comply by such Person with
any such obligation if such default or failure would, with the giving of notice
or passage of time or both, reasonably be expected to result in a monetary
obligation.
Licensed Intellectual Property means all Intellectual Property rights
licensed to any of the Companies.
Licenses has the meaning set forth in Section 3.07(b).
Liens means any security interest, pledge, hypothecation, mortgage, lien
(including, without limitation, environmental and tax liens but not including
liens for taxes not yet due and payable), charge or encumbrance.
Listed Contract has the meaning set forth in Section 3.09(a).
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Losses has the meaning set forth in Section 10.02(a).
Xxxxx has the meaning set forth in Section 9.10.
Xxxxx Agreement has the meaning set forth in Section 9.10.
Xxxxx Rights has the meaning set forth in Section 9.10.
Media Plan has the meaning set forth in Section 3.23.
MFN means for purposes of this Agreement a provision in an Affiliation
Agreement (the "Subject Affiliation Agreement") which provides that if one or
more Persons not a party to the Subject Affiliation Agreement are party to an
Affiliation Agreement under which such Person or Persons have any other more
favorable Key Affiliation Agreement Terms than are contained in such Subject
Affiliation Agreement, then one or more of the Key Affiliation Agreement Terms
of the Subject Affiliation Agreement will be replaced with or modified to
reflect the more favorable terms or conditions in such Affiliation Agreement, as
applicable.
MGM has the meaning set forth in the Preamble to this Agreement.
MGM Agreement has the meaning set forth in the Preamble to this Agreement.
MGM Bravo Interest has the meaning set forth in the Preamble to this
Agreement.
MGM Holdings has the meaning set forth in the Preamble to this Agreement.
MVPDs has the meaning set forth in Section 3.09(a)(iv).
NBC has the meaning set forth in the Preamble to this Agreement.
NBC Holdings has the meaning set forth in the Preamble to this Agreement.
NBC Holdings Indemnified Party has the meaning set forth in Section
10.03(a).
NBC Material Adverse Effect means any material adverse effect on NBC
Holdings' or NBC's ability to consummate any of the transactions contemplated
hereby, including the Reorganization Transactions to which it or its Affiliates
is a party.
NBC Registration Rights Agreement has the meaning set forth in Section
9.09.
Noted Listed Contracts has the meaning set forth in Section 3.09(b).
NYSE means the New York Stock Exchange.
Objection has the meaning set forth in Section 2.04(b)(ii).
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Outside Date has the meaning set forth in Section 12.01.
Owned Intellectual Property means all Intellectual Property owned by any of
the Companies. For the avoidance of doubt, Owned Intellectual Property excludes
Licensed Intellectual Property.
Owned Tangible Personal Property means the tangible personal property set
forth on Schedule 3.06.
Permitted Encumbrances means those Encumbrances, if any, which do not
materially detract from the value of the tangible property subject thereto and
which do not materially interfere with the present and continued use of such
property in the operation of the Companies' business, and which do not, in the
aggregate, have a Company Material Adverse Effect.
Person means any natural person, Governmental Authority, corporation,
general or limited partner, partnership, joint venture, limited liability
company, trust, association, or unincorporated entity of any kind.
Programming Agreements has the meaning set forth in Section 3.09(a)(i).
Real Property means all parcels and tracts of land and all buildings,
structures, fixtures and improvements located on such land, including those
under construction and all privileges, rights, easements, hereditaments and
appurtenances belonging to or for the benefit of such land.
Related Agreements means, collectively, each of the agreements listed on
Schedule 1.02.
Release means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying, seeping, placing and the like
into or upon any land or water or air or otherwise entering into the
Environment.
Reorganization Transactions means the transactions set forth in Exhibit D
to this Agreement.
Representatives has the meaning given to it in Section 9.07(b).
RMG LLC has the meaning set forth in the Preamble to this Agreement.
RMHI has the meaning set forth in the Preamble to this Agreement.
RMHI Common Stock means shares of Class A common stock, par value $0.01 per
share, of XXXX.
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XXXX Shares has the meaning set forth in the Preamble to this Agreement or
such other number or kind of securities as may result from (i) any of the events
described in Section 2.06(c), or (ii) any exchanges not prohibited by the
proviso to Section 5.03(b).
Xxxxx.xxx Stock Purchase Agreement has the meaning set forth in Section
9.05.
SEC means the Securities and Exchange Commission.
Securities Act means the United States Securities Act of 1933, as amended.
Settled Carriage Payments means payments made by Bravo after the date
hereof and prior to the Closing with respect to subscriber launches after the
date hereof and prior to the Closing relating to "cash-for-carriage offers"
outstanding on the date hereof which give rise to an asset or a reduction in a
liability that, in each case, would not have been reflected on a balance sheet
of Bravo as of the date hereof. For avoidance of doubt, only "cash-for-carriage"
payments shall be included in the Settled Carriage Payments and other forms of
marketing support shall be excluded therefrom.
Software means computer software, computer programs and electronic
databases, including Internet web sites of the Business (as such items have been
updated, corrected, enhanced, replaced and modified), and all documentation
related thereto.
Stockholders' Agreement has the meaning set forth in Section 9.09.
Subject Affiliation Agreement has the meaning given to it in the definition
of MFN.
Subleased Real Property means the Real Property leased or owned by any
Cablevision Company, a portion of which is leased, subleased, shared or
otherwise allocated to the Business, as tenant.
Subsidiary of any Person means (i) a corporation more than 50% of the
combined voting power of the outstanding voting stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof, (ii) a
partnership of which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, is the general partner and has the power to direct the policies,
management and affairs of the partnership, (iii) a limited liability company of
which such Person or one or more Subsidiaries of such Person or such Person and
one or more Subsidiaries of such Person, directly or indirectly, is the managing
member and has the power to direct the policies, management and affairs of the
company, or (iv) any other Person (other than a corporation, partnership or
limited liability company) in which such Person, or one or more other
Subsidiaries of such Person or such Person and one or more other Subsidiaries
thereof, directly or indirectly, has at least a majority ownership and power to
direct the policies, management and affairs thereof.
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Surviving Corporation means B2HC as the surviving corporation in the B2HC
Merger.
Tax shall have the meaning ascribed to it in the Tax Matters Agreement.
Tax Matters Agreement has the meaning set forth in the Preamble to this
Agreement.
Time Warner Affiliation Agreement means the Affiliation Agreement between
Cablevision and Time Warner Cable, a division of Time Warner Entertainment
Company, LP, dated as of December 22, 1994, as amended December 19, 2000 and
April 27, 2001.
Trading Price has the meaning set forth in Section 2.01(c).
Transaction Value means $1,000,000,000.
Transferred Employees has the meaning assigned thereto in a separate
writing entered into between the parties on the date hereof expressly referring
to Section 13.02.
Transition Services Agreement means the Transition Services Agreement
between Cablevision and Bravo, substantially in the form attached hereto as
Exhibit E.
Transponder Lease Assignment means the Assignment and Assumption Agreement,
to be effective as of the Closing, between Rainbow Network Communications and
Bravo, assigning an Agreement dated July 31, 1991, as amended, between GE
Americom Communications, Inc. and Rainbow Network Communications, substantially
in the form attached hereto as Exhibit I.
Working Capital means, with respect to the Companies, calculated in each
case on a pro forma basis to exclude IFC and its Subsidiaries (including the IFC
Assets and the IFC Liabilities), the balance of the following items as reflected
on the Closing Statement of Working Capital or the Adjusted Statement of Working
Capital: the sum of all current assets (other than cash) reduced by the sum of
all current liabilities. The guidelines to be followed in the computation of
Working Capital are set forth on Schedule 2.04.
1.02 Interpretation and Rules of Construction. In this Agreement, except to
the extent that the context otherwise requires:
(a) when a reference is made in this Agreement to an Article,
Section, Exhibit or Schedule, such reference is to an Article or Section
of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated;
(b) the table of contents and headings for this Agreement are for
reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement;
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(c) whenever the words "include," "includes" or "including" are used
in this Agreement, they are deemed to be followed by the words "without
limitation;"
(d) reference to a gender includes the other gender;
(e) the words "hereof," "herein" and "hereunder" and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and
not to any particular provision of this Agreement;
(f) the definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms;
(g) any Law defined or referred to herein or in any agreement or
instrument that is referred to herein means such Law as from time to time
amended, modified or supplemented;
(h) references to a Person are also to its permitted successors and
assigns;
(i) the use of "or" is not intended to be exclusive unless expressly
indicated otherwise; and
(j) references to currency, monetary values and dollars shall mean
United States (U.S.) dollars and all payments hereunder shall be made in
United States dollars.
2. The Merger and the Exchanges.
2.01 The Merger.
(a) The B2HC Merger.
(i) Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time, GE Merger Sub shall be merged
with and into B2HC with B2HC surviving, and the separate corporate
existence of GE Merger Sub shall thereupon cease.
(ii) Simultaneous with the Closing, the parties shall cause a
Certificate of Merger with respect to the B2HC Merger (the
"Certificate of Merger") to be executed, acknowledged and filed with
the Secretary of State of the State of Delaware as provided in Section
251 of the DGCL. The B2HC Merger shall become effective at the time
when the Certificate of Merger has been duly filed with the Secretary
of State of the State of Delaware or such other time as shall be
agreed upon by the parties and set forth in the Certificate of Merger
in accordance with the DGCL (the
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"Effective Time"). From and after the Effective Time, B2HC shall
possess all the rights, powers, privileges and franchises and be
subject to all of the obligations, liabilities, restrictions and
disabilities of B2HC and of GE Merger Sub, all as provided under the
DGCL.
(b) GE Shares. At the Effective Time, as a result of the B2HC Merger
and without any action on the part of any holder of capital stock of GE Sub
or B2HC:
(i) all of the issued and outstanding capital stock of B2HC
immediately prior to the Effective Time will be converted into and
exchanged for that number of shares (the "GE Shares") of GE Common
Stock equal to the quotient (rounded up to the nearest whole number)
of (A) the Aggregate GE Stock Consideration and (B) the Average GE
Share Price; and
(ii) all of the capital stock of GE Merger Sub issued and
outstanding immediately prior to the Effective Time will be converted
into one share of capital stock of B2HC and B2HC will become a wholly
owned subsidiary of GE.
(c) For purposes of this Agreement:
Aggregate Cablevision Share Value means the number of Cablevision Shares
exchanged by NBC pursuant to Section 2.03 hereof multiplied by the Average
Cablevision Share Price.
Aggregate GE Stock Consideration means an amount equal to the Transaction
Value minus the sum of (i) the Aggregate Cablevision Share Value and (ii) the
Aggregate RMHI Share Value.
Aggregate RMHI Share Value means the Average Cablevision Share Price
multiplied by the product of (A) the number of RMHI Shares exchanged by NBC
pursuant to Section 2.02 hereof and (B) 20,088.60724.
Average Cablevision Share Price means the arithmetic average of the Trading
Prices of shares of Cablevision Common Stock during the Cablevision Valuation
Period; provided, however, that, notwithstanding the actual average of the
Trading Prices of shares of Cablevision Common Stock as calculated in the manner
described above, the Average Cablevision Share Price shall not be less than
$8.43 or exceed $12.64.
Average GE Share Price means the arithmetic average of the Trading Prices
of shares of GE Common Stock during the GE Valuation Period.
Cablevision Valuation Period means the twenty (20) consecutive trading days
on the NYSE through and including the date ending two (2) trading days prior to
the Closing
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Date (e.g., if the Closing Date is December 20, the Average Cablevision Share
Price would be calculated by determining the average of the Trading Prices of
shares of Cablevision Common Stock for the twenty (20) consecutive trading days
ending on December 18, assuming that the NYSE is open for trading on each day
from and including December 18 through December 20).
GE Valuation Period means the ten (10) consecutive trading days on the NYSE
through and including the date ending two (2) trading days prior to the Closing
Date (e.g., if the Closing Date is December 20, the Average GE Share Price would
be calculated by determining the average of the Trading Prices of shares of GE
Common Stock for the ten (10) consecutive trading days ending on December 18,
assuming that the NYSE is open for trading on each day from and including
December 18 through December 20).
Trading Price on any trading day shall mean the volume weighted average of
the reported per share prices at which transactions in GE Common Stock or
Cablevision Common Stock, as the case may be, are executed on the NYSE during
such trading day (weighted based on the number of shares of GE Common Stock
traded or the number of shares of Cablevision Common Stock traded, as the case
may be), as such weighted average price appears on the Bloomberg screen "Volume
at Price" page for GE Common Stock or Cablevision Common Stock, as the case may
be.
(d) Directors and Officers of Surviving Corporation. At the Effective
Time, the directors and officers of GE Merger Sub shall be the directors
and officers of the Surviving Corporation.
(e) Surrender and Payment. Upon surrender for cancellation at the
Closing of certificates formerly representing capital stock of B2HC, GE
will deliver to RMG LLC or its nominees the GE Shares referred to in
Section 2.01(b) registered in such names and denominations as RMG LLC shall
reasonably request. After the Effective Time and until so surrendered, the
capital stock of B2HC shall represent for all purposes only the right to
receive the GE Shares.
(f) Charter of Surviving Corporation. The certificate of
incorporation of GE Merger Sub in effect at the Effective Time, will, from
and after the Effective Time, be the certificate of incorporation of B2HC
until amended in accordance with its terms and the DGCL.
(g) By-laws of Surviving Corporation. The by-laws of GE Merger Sub in
effect at the Effective Time will, from and after the Effective Time, be
the by-laws of B2HC, until amended in accordance with their terms and the
DGCL.
2.02 The RMHI Exchange. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing, and as part of the Reorganization
Transactions, Cablevision shall cause RMHI to distribute to NBC Holdings all of
the BHC Class B Stock and NBC Holdings shall deliver or cause to be delivered to
RMHI in exchange the
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RMHI Shares (less any RMHI Shares that have been exchanged for Cablevision
Shares prior to the Closing), in each case free and clear of any Encumbrances.
2.03 The Cablevision Exchange. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, and as part of the Reorganization
Transactions, Cablevision shall distribute to NBC Holdings all of the BHC Class
A Stock and NBC Holdings shall deliver or cause to be delivered to Cablevision
in exchange the Cablevision Shares (plus any Cablevision Shares that have been
received in exchange for RMHI Shares prior to the Closing), in each case free
and clear of any Encumbrances.
2.04 Working Capital Adjustment. (a) As promptly as practicable, but in any
event within 90 calendar days following the Closing Date, Cablevision shall
prepare, cause to be audited by KPMG LLP and deliver to NBC Holdings (i) a
combined consolidated balance sheet (the "Closing Balance Sheet") of the
Companies as of the Closing Date (after giving effect to the Reorganization
Transactions described in Part I of Exhibit D), and (ii) a statement derived
from the Closing Balance Sheet setting forth the calculation of the combined
consolidated Working Capital of the Companies (giving effect to the common
control of Bravo by BHC and B2HC) as of the Closing Date (after giving effect to
the Reorganization Transactions described in Part I of Exhibit D) (the "Closing
Statement of Working Capital") accompanied by an audit report of KPMG LLP. The
Closing Balance Sheet shall (i) fairly present in all material respects the
combined consolidated financial position of the Companies as of the Closing Date
(after giving effect to the Reorganization Transactions described in Part I of
Exhibit D), (ii) include line items substantially consistent with the Bravo
Interim Financial Statements, and (iii) be prepared in accordance with GAAP. The
Closing Statement of Working Capital shall be derived from the Closing Balance
Sheet and shall be prepared in accordance with the guidelines set forth on
Schedule 2.04.
(b) (i) Subject to clause (ii) of this Section 2.04(b), the Closing
Balance Sheet and the Closing Statement of Working Capital delivered by
Cablevision to NBC Holdings shall be deemed to be and shall be final,
binding and conclusive on the parties hereto.
(ii) NBC may dispute any amounts reflected on the Closing Balance
Sheet and the Closing Statement of Working Capital, but only on the
basis that the amounts reflected on the Closing Balance Sheet or the
Closing Statement of Working Capital, as the case may be, were not
arrived at in a manner consistent with Section 2.04(a); provided,
however, that NBC shall have notified Cablevision in writing of each
disputed item, specifying the estimated amount thereof in dispute and
setting forth, in reasonable detail, the basis for such dispute (the
"Objection") within 30 Business Days of receipt of the Closing Balance
Sheet and the Closing Statement of Working Capital from Cablevision;
provided, further, however, that any items not disputed within such 30
Business Day period shall be final and binding on the parties. In the
event of such a dispute,
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NBC and Cablevision shall attempt to reconcile their disagreements,
and any resolution by them as to any disputed amounts shall be final,
binding and conclusive on the parties. If NBC and Cablevision are
unable to resolve all of their disagreements with respect to the
Closing Balance Sheet or the Closing Statement of Working Capital, as
the case may be, within 30 Business Days following Cablevision's
receipt of the Objection, the parties shall submit the items remaining
in dispute for resolution to an audit partner at KPMG LLP who is
jointly selected by the Cablevision audit partner at KPMG LLP and the
GE audit partner at KPMG LLP, which jointly-selected KPMG LLP audit
partner shall, within 30 Business Days after such submission, report
to NBC and Cablevision as to whether the Closing Balance Sheet and the
Closing Statement of Working Capital should be adjusted or revised in
light of the Objection, and such written report shall be final,
binding and conclusive on NBC and Cablevision. The fees and
disbursements of KPMG LLP (i) incurred in connection with the audit of
the Closing Balance Sheet and the Closing Statement of Working Capital
shall be borne 50% each by Cablevision and NBC; and (ii) incurred in
connection with the resolution of any dispute thereof shall be
allocated between Cablevision and NBC in the same proportion that the
aggregate amount of any disputed items submitted to the independent
audit partner of KPMG LLP that are unsuccessfully disputed (as finally
determined by KPMG LLP) bears to the total amount of any disputed
items so submitted. The "Adjusted Statement of Working Capital" shall
be (A) the Closing Statement of Working Capital in the event that (x)
no Objection is delivered to Cablevision during the 30 Business Day
period specified above or (y) NBC and Cablevision so agree during such
30 Business Day period; (B) the Closing Statement of Working Capital
as adjusted in accordance with the Objection, in the event that the
Objection is timely delivered to Cablevision and (x) Cablevision does
not respond to the Objection within the 30 Business Day period
following receipt by Cablevision of the Objection or (y) NBC and
Cablevision so agree during such 30 Business Day period; or (C) the
Closing Statement of Working Capital, as adjusted by either (x) the
agreement of NBC and Cablevision or (y) the independent audit partner
of KPMG LLP.
(c) If the Working Capital amount on the Adjusted Statement of Working
Capital is less than $15.2 million, then Cablevision shall pay an amount
equal to 80% of the difference between $15.2 million and such Working
Capital Amount to BHC or B2HC in accordance with Section 2.04(d) (the
amount equal to 80% of such difference is hereinafter referred to as the
"Cablevision Payment"). If the Working Capital amount on the Adjusted
Statement of Working Capital is greater than $25.2 million, then an amount
equal to 80% of the difference between such Working Capital Amount and
$25.2 million shall be paid to Cablevision in accordance with Section
2.04(d) (the amount equal to 80% of such difference is hereinafter referred
to as the "Adjustment Payment"). If the
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Working Capital Amount on the Adjusted Statement of Working Capital is
equal to or greater than $15.2 million and equal to or less than $25.2
million, no payment shall be made under Section 2.04(d).
(d) Within 10 Business Days following the final determination of the
Adjusted Statement of Working Capital pursuant to Section 2.04(b), the
Adjustment Payment, if any, or the Cablevision Payment, if any, payable
pursuant to Section 2.04(c) shall be paid as follows:
(i) as to B2HC:
(A) any Adjustment Payment shall be made by NBC causing the
Surviving Corporation to deliver or cause to be delivered to RMG
LLC, at the election of Cablevision, as specified in a notice
delivered by Cablevision to NBC not later than the close of
business on the third Business Day prior to the payment date, (1)
cash in an amount equal to the B2HC Percentage multiplied by the
Adjustment Payment, or (2) that number of shares of GE Common
Stock equal to the quotient (rounded to the nearest whole number)
of (y) the B2HC Percentage multiplied by the Adjustment Payment
and (z) the Trading Price of the GE Common Stock on the second
Business Day prior to the payment date, or (3) any combination of
such cash and such shares of GE Common Stock.
(B) Any Cablevision Payment shall be made by Cablevision
making, or causing to be made, a payment in cash to, or as
directed by, the Surviving Corporation in an amount equal to the
B2HC Percentage multiplied by the Cablevision Payment.
(ii) as to BHC:
(A) any Adjustment Payment shall be made by NBC causing BHC
to deliver to RMG LLC cash in an amount equal to the BHC
Percentage multiplied by the Adjustment Payment.
(B) Any Cablevision Payment shall be made by Cablevision
making, or causing to be made, a payment in cash to, or as
directed by, BHC in an amount equal to the BHC Percentage
multiplied by the Cablevision Payment.
(e) Cablevision and NBC Holdings agree that, following the Closing
Date, they each will cooperate with and make available to the other and
KPMG LLP, during normal business hours, all books and records, information
and employees (without substantial disruption of employment) that are
necessary or
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useful in connection with the preparation and final determination of the
Objection, the Closing Balance Sheet or the Adjusted Statement of Working
Capital.
(f) At Closing, Cablevision shall pay to BHC an amount in cash equal
to the "Preferred Stock Expense Amount" described in Schedule 2.04(f) and
BHC shall record such amount as a contribution to capital.
2.05 Adjustment for Payments under Affiliation Agreements.
(a) Not less than two Business Days prior to Closing, Cablevision
shall deliver to NBC Holdings a report setting forth, and there shall be
paid as provided in Section 2.05(b) an amount equal to, the Settled
Carriage Payments. The amount paid, if any, by BHC and the Surviving
Corporation shall be subject to Objection and adjusted as part of the
procedures by which the Adjusted Statement of Working Capital is finally
determined. If the resolution of an Objection results in a reduction of the
Settled Carriage Payments from the amount paid at Closing, Cablevision
shall make cash payments to BHC and B2HC equaling, in the aggregate, the
amount of such difference. BHC and B2HC shall record such amount as a
contribution to capital. The payment shall be made within 10 Business Days
following resolution of the Objection.
(b) On the Closing Date, an amount equal to the amount set forth on
the report delivered pursuant to Section 2.05(a), if any, shall be paid by
BHC and B2HC as follows:
(i) As to B2HC, by NBC causing the Surviving Corporation to
deliver or cause to be delivered to RMG LLC, at the election of
Cablevision as specified in a notice delivered by Cablevision to B2HC,
BHC and NBC not later than the close of business on the third Business
Day prior to the Closing Date, (A) cash in an amount equal to the B2HC
Percentage multiplied by 80% of the Settled Carriage Payments, or (B)
that number of shares of GE Common Stock equal to the quotient
(rounded to the nearest whole number) of (y) the B2HC Percentage
multiplied by 80% of the Settled Carriage Payments and (z) the Average
GE Share Price, or (C) any combination of such cash and such shares of
GE Common Stock.
(ii) As to BHC, by NBC causing BHC to deliver or cause to be
delivered to RMG LLC cash in an amount equal to the BHC Percentage
multiplied by 80% of the Settled Carriage Payments.
2.06 Adjustments to Prevent Dilution.
(a) If GE should split or combine the GE Common Stock or pay a stock
dividend or other stock distribution in GE Common Stock or otherwise effect
any transaction or announce its intention to do any of the foregoing that
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changes the GE Common Stock into any other securities or make any other
dividend or distribution on the GE Common Stock (other than normal
quarterly cash dividends as the same may be adjusted from time to time in
the ordinary course consistent with past practice), and the record date
applicable to such event occurs during the GE Valuation Period or after the
GE Valuation Period and prior to the Closing Date or date of delivery, as
applicable, then the Average GE Share Price will be appropriately adjusted
to reflect such split, combination, transaction, dividend or other
distribution.
(b) If Cablevision should split or combine the Cablevision Common
Stock or pay a stock dividend or other stock distribution in Cablevision
Common Stock or otherwise effect any transaction or announce its intention
to do any of the foregoing that changes the Cablevision Common Stock into
any other securities or make any other dividend or distribution on the
Cablevision Common Stock, and the record date applicable to such event
occurs after the date hereof and prior to the Closing, then the Average
Cablevision Share Price (including the dollar amounts described therein)
will be appropriately adjusted to reflect such split, combination,
transaction, dividend or other distribution.
(c) If RMHI should split or combine the RMHI Common Stock or pay a
stock dividend or other stock distribution in RMHI Common Stock or
otherwise effect any transaction or announce its intention to do any of the
foregoing that changes the RMHI Common Stock into any other securities or
make any other dividend or distribution on the RMHI Common Stock, and the
record date applicable to such event occurs after the date hereof and prior
to the Closing, then clause (B) of the definition of the Aggregate RMHI
Share Value will be appropriately adjusted to reflect such split,
combination, transaction, dividend or other distribution.
2.07 Possible Restructuring; Payment in GE Shares.
(a) If in completing Step 7 of the Reorganization Transactions it is
determined that clause (b) of Step 7 applies and that the value of the
demand promissory notes and the B2HC Bravo Interest, if any, to be
distributed to RMG LLC represents more than 10% of the value of B2HC, then
the parties shall work to restructure the transactions contemplated under
Section 2.01 to be exempt under Section 368(a)(1)(B) of the Code.
(b) To the extent that the parties agree that any Adjustment Payment,
Adjustment Amount, Cablevision Agreement Amount or indemnification payment
hereunder paid by NBC, NBC Holdings, GE Merger Sub, BHC or the Surviving
Corporation would, if paid in cash, cause the acquisition of B2HC to fail
to qualify as a reorganization under Section 368(a) of the Code, such
payment shall be made instead in the form of GE Shares valued at the
Trading Price of the GE Common Stock on the second Business Day prior to
the payment date.
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2.08 Payment to Cablevision.
(a) In consideration of the execution and delivery by Cablevision of
the Cablevision Affiliation Agreement, NBC shall cause to be paid to
Cablevision $20.2 million (the "Cablevision Agreement Amount") on the
Closing Date:
(b) The amount payable pursuant to this Section 2.08 shall be paid by
BHC and B2HC as follows:
(i) As to B2HC, by NBC causing to be delivered to Cablevision,
at the election of Cablevision as specified in a notice delivered by
Cablevision to B2HC and NBC not later than the close of business on
the third Business Day prior to the Closing Date, (A) cash in an
amount equal to the B2HC Percentage multiplied by the Cablevision
Agreement Amount, or (B) that number of shares of GE Common Stock
equal to the quotient (rounded to the nearest whole number) of (y) the
B2HC Percentage multiplied by the Cablevision Agreement Amount and (z)
the Average GE Share Price, or (C) any combination of such cash and
such shares of GE Common Stock.
(ii) As to BHC, by NBC causing BHC to deliver or cause to be
delivered to Cablevision cash in an amount equal to the BHC Percentage
multiplied by the Cablevision Agreement Amount.
3. Representations and Warranties of Cablevision.
To induce GE Merger Sub, NBC and NBC Holdings to enter into this Agreement,
Cablevision represents and warrants to GE Merger Sub, NBC and NBC Holdings as
follows:
3.01 Organization and Authority.
(a) Cablevision is a corporation duly organized, validly existing
and in good standing under the DGCL. Cablevision is duly licensed or
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the properties owned or leased by it or the
operation of its business makes such licensing or qualification necessary
except to the extent that the failure to be so licensed or qualified or in
good standing would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. Cablevision has
heretofore delivered or made available to NBC Holdings true and complete
copies of the certificate of incorporation and by-laws of Cablevision, as
in effect at all times relevant to the Agreement.
(b) Each of the Companies is duly organized, validly existing and, in
the case of each of the Companies that are corporations, is in good
standing under the DGCL and has all power and authority necessary to carry
on its business as
-24-
now conducted. Each of the Companies is duly licensed or qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction where the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary except to the
extent that the failure to be so licensed or qualified or in good standing
would not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect. True and correct copies of the
organizational documents of each of the Companies, each as in effect on the
date hereof, have been delivered or made available to NBC Holdings.
3.02 Legal Capacity; Approvals and Consents.
(a) Authority and Binding Effect. Subject to Section 9.02 hereof and
the consents and approvals set forth on Schedule 3.02, each of the
Cablevision Companies and the Companies has all requisite power and
authority to execute, deliver and perform this Agreement and the Related
Agreements to which it is a party, to approve, adopt and consummate the
transactions contemplated hereby and thereby, including the Reorganization
Transactions to which it is a party and to perform its obligations
hereunder and thereunder. Cablevision has duly taken all corporate and
shareholder actions necessary to authorize the execution, delivery and
performance of this Agreement, the Reorganization Transactions to which it
is a party and the Related Agreements to which it is a party. Each of the
Cablevision Companies (other than Cablevision) and each of the Companies,
prior to the Closing Date, will duly take all corporate and shareholder
actions necessary to authorize the execution, delivery and performance of
the Related Agreements and the Reorganization Transactions to which it is a
party. Without limiting the foregoing, any and all actions of the directors
and stockholders of Cablevision required to approve and adopt this
Agreement and the Related Agreements to which Cablevision is a party have
been duly taken in accordance with the requirements of the DGCL and no
further action of the directors or stockholders of Cablevision is required
in order to permit (x) the consummation of the transactions contemplated
hereby and thereby, including the Reorganization Transactions to which it
or any of its Affiliates is a party, or (y) Cablevision to perform its
other obligations hereunder or thereunder. This Agreement has been, and
upon their execution each of the Related Agreements will be, duly executed
and delivered by each of the Cablevision Companies and the Companies, to
the extent that each such Person is a party hereto or thereto and, except
as noted on Schedule 3.02, this Agreement is, and each of the Related
Agreements to which a Cablevision Company or a Company is a party will be,
the valid and binding obligation of such Person enforceable against it in
accordance with its terms, except as such enforceability may be affected by
Laws of bankruptcy, insolvency, reorganization and creditors' rights
generally and by the availability of equitable remedies.
-25-
(b) No Breach or Violation. Subject only to obtaining the consents
and approvals set forth on Schedule 3.02, the execution, delivery and
performance of this Agreement and the Related Agreements to which any
Cablevision Company or Company is a party do not, and will not, (i)
conflict with, violate or result in the breach of any provision of the
certificate of incorporation or by-laws or similar organizational documents
of any Cablevision Company or Company that is a party to this Agreement or
such a Related Agreement, (ii) conflict with or violate any Law or Judgment
applicable to any Cablevision Company or Company that is a party to this
Agreement or such a Related Agreement or any of their respective businesses
or the Assets, or (iii) conflict with, result in any breach of, constitute
a default (or event which with the giving of notice or lapse of time, or
both, would become a default) under, require any consent under, give to
others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, or result in the creation of any Encumbrance
on the BHC Shares or any Lien on the Assets pursuant to, any Contract
(including, for purposes of this Section 3.02(b), Contracts that are not
evidenced by a writing) to which any Cablevision Company or Company is a
party or by which any of their respective assets are bound or affected,
except, in the case of clauses (ii) or (iii), to the extent that such
conflicts, breaches, defaults or other matters would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(c) Required Consents. Other than the notification requirements of
the HSR Act and Rules, the filing of the Certificate of Merger with the
Secretary of State of Delaware and except for the Persons, or the parties
to Contracts, listed in Schedule 3.02, there is no Person whose approval or
consent, or with whom the filing of any certificate, notice, application,
report or other document, is legally or contractually required or otherwise
is necessary in connection with the execution, delivery or performance by
any Cablevision Company or any Company of this Agreement and the Related
Agreements to which such Person is a party or the consummation by them of
the transactions contemplated hereby and thereby, except where failure to
obtain such consent or approval or failure to make such filing would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
3.03 Interests; Subsidiaries.
(a) Schedule 3.03 hereto sets forth a list of all of the equity
interests in each of the Companies (the "Interests") before and after
giving effect to the Reorganization Transactions. Except as set forth on
Schedule 3.03, there are no voting trusts, proxies or other agreements or
understandings with respect to the voting or transfer of the Interests.
There is outstanding no subscription, option, warrant, conversion right,
preemptive right, call or other agreement or commitment of any character
relating to the capital stock or equity interests of any of the Companies
or obligating any of the Companies or any of the
-26-
Cablevision Companies to issue, deliver or sell, or cause to be issued,
delivered or sold, any additional Interests, or any securities exchangeable
for or convertible into Interests, or obligating any Cablevision Company or
any of the Companies to grant, extend or enter into any such agreement or
commitment. None of the issued and outstanding Interests was issued in
violation of any preemptive rights of any third party. All of the
outstanding Interests in each Company that is a corporation are validly
issued, fully paid and nonassessable. Except as set forth on Schedule 3.03,
there are no outstanding obligations of Cablevision or its Affiliates to
repurchase, redeem or otherwise acquire any of the Interests and there are
no outstanding obligations of the Companies to make any investment (in the
form of a loan (other than extensions of trade credit and advances to
employees in the ordinary course of business), capital contribution or
purchase of equity securities) in any other Person (other than another
Company). Except as set forth in Schedule 3.03, the Interests constitute
all of the issued and outstanding interests in the Companies and are owned
of record and beneficially by a Cablevision Company or a Company free and
clear of all Encumbrances.
(b) Immediately prior to the Closing, RMHI will have good and valid
title to the B2HC Shares and the BHC Class B Stock free and clear of all
Encumbrances and Cablevision will have good and valid title to the BHC
Class A Stock free and clear of all Encumbrances and, upon delivery to NBC
Holdings in the Exchanges, good and valid title to the BHC Shares,
respectively, free and clear of all Encumbrances, will pass to NBC
Holdings.
(c) Immediately prior to the Exchanges, BHC will have good and valid
title to the BHC Bravo Interest and immediately prior to the B2HC Merger,
B2HC will have good and valid title to the B2HC Bravo Interest, in each
case free and clear of all Encumbrances.
(d) Schedule 3.03 lists for each of the Companies: the number and par
value of the shares of capital stock, or the nature and amount of any
outstanding partnership or equity interests in, each of the Companies; the
current ownership of the issued and outstanding shares or other partnership
or equity interests of each Company; and the jurisdiction of incorporation
or organization of each Company. Other than as set forth in Schedule 3.03,
there are no other corporations, partnerships, joint ventures, associations
or other entities in which the Companies own, of record or beneficially,
any direct or indirect equity interest or any right or obligation
(contingent or otherwise) to acquire the same.
3.04 Financial Statements.
(a) Attached on Schedule 3.04 are true and complete copies of the pro
forma consolidated statements of income of Bravo for the years ending
December 31, 2001, 2000 and 1999 (the "Bravo Income Statements") and pro
forma balance sheets of Bravo as of each such date (the "Bravo Balance
Sheets"
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and, together with the Bravo Income Statements, the "Bravo Financial
Statements"). The Bravo Financial Statements (x) were prepared in
accordance with GAAP consistently applied except for certain items set
forth on Schedule 3.04 that would require reclassification and certain
expenses as described in the footnotes to the Bravo Financial Statements or
in Schedule 3.04 and (y) present fairly in all material respects the
results of its operations for the periods then ended and its financial
condition as of each such date, as applicable. Cablevision has also
provided to NBC Holdings a pro forma balance sheet of Bravo as of June 30,
2002 and a pro forma income statement of Bravo for the six months ended
June 30, 2002 (the "Bravo Interim Financial Statements"). The Bravo Interim
Financial Statements were prepared in accordance with GAAP consistently
applied in all material respects with the Bravo Financial Statements,
subject to normal year-end adjustments (which are not expected to be
material in amount) and present fairly in all material respects the
financial position and results of operations of Bravo as at the dates and
for the period indicated.
(b) None of the Companies has any Liabilities required to be recorded
on a financial statement prepared in accordance with GAAP (including in the
notes thereto), other than Liabilities (i) reflected or reserved on the
June 30, 2002 balance sheet forming part of the Bravo Interim Financial
Statements, (ii) set forth in Schedule 3.04 or (iii) incurred since June
30, 2002 in the ordinary course of business, consistent with past practice,
of the Companies and which, either individually or in the aggregate, do not
and would not reasonably be expected to have a Company Material Adverse
Effect. To the extent required by GAAP, reserves are reflected on the June
30, 2002 balance sheet forming part of the Bravo Interim Financial
Statements against the Liabilities of the Companies in amounts established
on a basis consistent with the past practices of the Companies and in
accordance with GAAP.
(c) Any description of Bravo in (i) the Cablevision SEC Reports did
not, at the time they were filed, or, if amended, as of the date of such
amendment, contain any untrue statement of a material fact or omit a
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading, and (ii) each of the consolidated financial
statements (including, in each case, any notes thereto) contained in the
Cablevision SEC Reports was prepared in accordance with GAAP applied on a
consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC), and each fairly presented the
consolidated financial position, results of operations and cash flows of
Cablevision and its consolidated Subsidiaries as at the respective dates
thereof and for the respective periods indicated therein in accordance with
GAAP applied on a consistent basis (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments).
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(d) Except as set forth on Schedule 3.04, all accounts payable and
accounts receivable between any of the Companies, on the one hand, and any
one or more of the Cablevision Companies, on the other hand, will have been
collected or paid prior to the Closing.
(e) As of the Closing and after giving effect to the Reorganization
Transactions and other contemporaneous transactions occurring on the
Closing Date, (i) BHC and B2HC will have no Liabilities other than (x)
contingent Liabilities that arise as a result of Liabilities of Bravo for
which BHC or B2HC have liability by virtue of their status as general
partners of Bravo, (y) contingent Liabilities arising under this Agreement
or the Related Agreements, if applicable, and (z) Liabilities in respect of
accrued but not currently payable franchise taxes; (ii) BHC and B2HC will
have no assets except for the Cablevision Bravo Interest and their rights
under this Agreement and the Related Agreements; and (iii) the Companies
will have no Indebtedness.
3.05 Accounts Receivable. All of the accounts receivable of Bravo reflected
on the balance sheet included in the Bravo Interim Financial Statements were
properly recorded in accordance with GAAP (subject to related reserves and
allowances on a basis consistent with past practice). This representation does
not constitute an assurance as to the collectibility of any account receivable
of Bravo.
3.06 Properties; Owned Tangible Personal Property.
(a) The Companies do not own any Real Property.
(b) Schedule 3.06 sets forth a true and complete list of all leases
relating to Leased Real Property. Except as disclosed on Schedule 3.06 and
except as would not reasonably be expected to have a Company Material
Adverse Effect, each such lease is legal, valid, binding and enforceable
and in full force and effect, and will not cease to be legal, valid,
binding and enforceable and in full force and effect as a result of the
consummation of the transactions contemplated by this Agreement, nor,
assuming notification of the landlord by the appropriate Company or
Sterling Digital LLC, as applicable, will the consummation of the
transactions contemplated by this Agreement or any of the Related
Agreements constitute a breach or default under such lease or otherwise
give the landlord a right to terminate such lease. Neither any Company nor
Sterling Digital LLC, nor, to Cablevision's knowledge, any other party to
any such lease is in breach or default thereunder to the extent that such
breach or default would reasonably be expected to have a Company Material
Adverse Effect. None of the Companies nor Sterling Digital LLC has assigned
its interest under any lease listed in Schedule 3.06.
(c) Schedule 3.06 sets forth a true and complete list of all leases
relating to Subleased Real Property. Except as disclosed on Schedule 3.06
and except as would not reasonably be expected to have a Company Material
Adverse
-29-
Effect, each such lease is legal, valid, binding and enforceable and in
full force and effect, and will not cease to be legal, valid, binding and
enforceable and in full force and effect as a result of the consummation of
the transactions contemplated by this Agreement, nor, assuming notification
of the landlord by the appropriate Company or Cablevision Company, will the
consummation of the transactions contemplated by this Agreement or any of
the Related Agreements constitute a breach or default under such lease or
otherwise give the landlord a right to terminate such lease. No Cablevision
Company or any Company and, to Cablevision's knowledge, no other party to
any such lease is in breach or default thereunder to the extent that such
breach or default would reasonably be expected to have a Company Material
Adverse Effect. None of the Companies has assigned its interest under any
lease listed in Schedule 3.06. Schedule 3.06 sets forth the square footage
covered by each such lease included in the Subleased Real Property and the
percentage of the leased premises that is allocated to Bravo. The amount
charged to the Companies for leasing the Subleased Real Property reflects
(in all material respects) the Companies' proportionately allocated share
of the costs thereof.
(d) Schedule 3.06 sets forth the Owned Tangible Personal Property.
Except as set forth on Schedule 3.06, at the Closing, the Companies will
have good title to all of the Owned Tangible Personal Property except for
defects in title which would not reasonably be expected to interfere with
the use and enjoyment of such Owned Tangible Personal Property other than
in respects that are immaterial to such Owned Tangible Personal Property,
taken as a whole. The Owned Tangible Personal Property is in good operating
condition and repair in all material respects, normal wear and tear
excepted.
3.07 Compliance with Law; Licenses. Except as would not reasonably be
expected to have a Company Material Adverse Effect:
(a) Except as set forth in Schedule 3.07, each of the Cablevision
Companies and the Companies has conducted the Business in compliance with
all Laws and Judgments applicable to it or any of its properties or assets,
and none of the Cablevision Companies (with respect to matters that are
directly related to the Business) or the Companies is in violation of any
such Law or Judgment.
(b) Except as set forth on Schedule 3.07, the Companies have, or as of
the Closing will have, all material permits, waivers, certificates,
approvals, orders, licenses, consents, authorizations, franchises, and
amendments thereto from Governmental Authorities (including those required
under the Communications Act) (collectively, the "Licenses") necessary for
the ownership, lease and operation of the Assets and the conduct of the
Business as conducted as of the date hereof and as of the Closing Date. The
Licenses in effect as of the date hereof are set forth in Schedule 3.07
(which is accurate in all material respects). The Licenses are in full
force and effect, the Companies are and have been during
-30-
the three years prior to the date hereof in compliance with all
requirements of such Licenses and a Company has filed all reports,
notifications and filings with, and has paid all regulatory fees to, the
applicable Governmental Authority necessary to maintain all Licenses in
full force and effect.
3.08 Intellectual Property.
(a) Schedule 3.08 contains a complete and accurate list of (i) all
patents, trademarks, service marks, trade names, logos, internet domain
names, corporate names and copyrights owned by each Company, in each case
to the extent registered, (ii) all pending applications for registrations
of patents, trademarks, service marks, trade names, logos and copyrights
owned by each Company and filed by each Company and (iii) all licenses,
conveyances, encumbrances or assignments of any kind relating to the items
described in clauses (i) or (ii) hereof, in either case, other than those
entered into or made in accordance with the ordinary course operations of
the Business.
(b) (i) To the Knowledge of Cablevision, the operation of the
Business as currently conducted, and the use of the Owned Intellectual
Property and the Licensed Intellectual Property in connection therewith, do
not conflict with, infringe, dilute, misappropriate or otherwise violate
the Intellectual Property of any third party, and (ii) no Claim is pending
or, to the Knowledge of Cablevision, threatened in writing against any
Company alleging any of the foregoing.
(c) To the Knowledge of Cablevision, no Person is engaging in any
activity or using any Intellectual Property in the United States that
infringes, dilutes, misappropriates or otherwise violates or conflicts with
the Owned Intellectual Property, and no Person has challenged the right of
Cablevision to use the Licensed Intellectual Property.
(d) The Owned Intellectual Property has not been adjudged invalid or
unenforceable in whole or in part.
(e) No Intellectual Property is used in the Business other than Owned
Intellectual Property, Licensed Intellectual Property, Software,
Intellectual Property subject to the Transition Services Agreement, and
Intellectual Property the failure of which to own or to have valid rights
to use would not result in a Company Material Adverse Effect.
(f) Schedule 3.08 contains a complete and accurate list of all of the
Software used in the Business. Except as set forth where noted by an
asterisk on Schedule 3.08, none of the Software used in the Business was
internally developed by, or is proprietary to, any of the Cablevision
Companies.
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3.09 Contracts. (a) Schedule 3.09 contains a complete and accurate list of
each of the following Contracts to which (w) any of the Companies is a party or
by which any of the Assets are bound or otherwise subject or (x) any of the
Cablevision Companies is a party or by which any of their respective assets are
bound or otherwise subject and of which the benefits and obligations arising
thereunder are shared with or otherwise allocated to any of the Companies:
(i) each Contract for the licensing or acquisition of programming
by or for the benefit of Bravo which (A) involves consideration of
more than $250,000, in the aggregate, over the remaining term of such
Contract, (B) contains options for additional runs that are of
material importance to the Companies, or (C) involves original
first-run programming that is material to the Companies (collectively,
"Programming Agreements");
(ii) each talent Contract which involves consideration of more
than $250,000, in the aggregate, over the remaining term of such
Contract;
(iii) each production or co-production Contract which involves
consideration of more than $250,000, in the aggregate, over the
remaining term of such Contract;
(iv) each affiliation, distribution or similar Contract for the
distribution of the Bravo programming service as well as each Contract
with a multichannel video programming distributor in the United States
for the distribution of the Bravo programming service including, but
not limited to, cable systems, SMATV, open video systems, MMDS, MDS
and DBS systems (hereinafter "MVPDs") and all related agreements and
letter agreements (to the extent such related agreements and letter
agreements result in any change to the rates and other payment terms,
MFNs, or MFNs on MFNs of the underlying Contract or any material
changes to any other Key Affiliation Agreement Terms of the underlying
Contract) ("Affiliation Agreements");
(v) each infomercial or similar paid programming Contract
granting any Person the right to program any block of time on Bravo
which is likely to involve consideration of more than $250,000, in the
aggregate, over the remaining term of such Contract;
(vi) all Contracts for the acquisition, lease or servicing of
satellite transponders and other uplink and downlink and terrestrial
transmission (including fiber optic) arrangements relating to the
distribution of Bravo;
(vii) all Contracts giving a Person the right to manage any of
the Companies or all or a significant portion of the Business
(excluding
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Contracts for employment) and Contracts with other consultants,
including any Contracts involving the payment of royalties or other
amounts calculated based upon the revenues or income of any of the
Companies or income or revenues related to any product of any of the
Companies, and which is likely to involve consideration of more than
$250,000 in the aggregate over the remaining term of such Contract
(this clause (vii) shall not apply to consultants retained by a
Cablevision Company for services (for example, information technology
or benefits) not primarily for the benefit of the Companies);
(viii) all Contracts evidencing Indebtedness of the Companies;
(ix) all Contracts with any Governmental Authority relating to
the Companies;
(x) all Contracts that: (A) limit, or purport to limit, the
ability of any of the Companies to compete in any line of business or
with any Person or in any geographic area or during any period of time
(other than Contracts that only apply to a Company as a result of its
being an Affiliate of one or more of the Cablevision Companies and
which will cease to apply to such Company at the Closing), or (B)
operate to impose limitations on Bravo's programming, commercials,
sponsorships or promotions (other than programming Contracts that
impose restrictions with respect to the programming covered by that
Contract but not on Bravo programming generally (for example, a
Contract which prohibits Bravo from carrying any advertising would be
covered by this clause (B) but a Contract prohibiting Bravo from
inserting advertising into the specific programming covered by that
programming Contract would not));
(xi) all Contracts and constituent documents relating to
partnerships, joint ventures, associations or other entities in which
the Companies own, of record or beneficially, any direct or indirect
equity interest or any right or obligation (contingent or otherwise)
to acquire the same;
(xii) all Contracts between any of the Companies, on the one
hand, and any of the Cablevision Companies, on the other hand,
including any tax-sharing Contracts;
(xiii) all employment, termination, severance or similar
arrangements with individual Transferred Employees that are materially
different from those in Cablevision's employee policies; and
(xiv) all Contracts material to the Business not listed elsewhere
on Schedule 3.09.
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(all such Contracts required to be listed on Schedule 3.09, collectively,
the "Listed Contracts"). The inclusion of a Contract on Schedule 3.09 is
not intended to create an implication that it is material to the Company.
For purposes of this Section 3.09(a), (y) reference to "consideration"
means the amount paid or to be paid to or by (or allocated to) the Company,
and (z) the remaining term of a Contract shall be deemed to end on the
stated termination date or such earlier date on which a Company or a
Cablevision Company may terminate the Contract without the payment of any
penalty or the forfeiture of any deposit.
(b) Except as set forth on Schedule 3.09 and except as would not
reasonably be expected to have a Company Material Adverse Effect, all
Listed Contracts are in full force and effect and valid, binding and
enforceable against the Companies and, to the Knowledge of Cablevision, the
other party or parties thereto, except as such enforceability may be
affected by Laws of bankruptcy, insolvency, moratorium or other Laws
relating to or affecting creditors' rights generally and by the
availability of equitable remedies. Except as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse
Effect, none of the Cablevision Companies or the Companies and, to the
Knowledge of Cablevision, none of the other parties to any Listed Contract
is in breach or violation thereof, or default thereunder, in circumstances
that would give rise to a claim for money damages or a termination right in
favor of any third party. Schedule 3.09 notes the Listed Contracts which
have not been reduced to signed written agreements (the "Noted Listed
Contracts").
(c) True and complete (subject to certain redactions) copies of each
Listed Contract, other than the Noted Listed Contracts, including any
material amendments, extensions or modifications thereof, have been made
available to NBC Holdings and true and complete copies thereof (subject to
redactions of pricing and other competitively sensitive information
relating to services other than Bravo) will be delivered at or prior to the
Closing.
(d) The Companies are not party to any agreement that is not
evidenced by any written documentation that is binding on the Companies and
which is material to the Business, other than for any such agreements known
to NBC or NBC Holdings prior to the date hereof.
(e) To the Knowledge of Cablevision, the films and payment amounts in
each Programming Agreement that is not evidenced by an executed written
agreement but for which a term sheet, draft agreement, or other writing
exists (and is designated as such on Schedule 3.09), are not materially
different from the films and payment amounts set forth in the writings
referred to on Schedule 3.09.
3.10 Labor Contracts and Actions. None of the Companies or the Cablevision
Companies is a party to any collective bargaining or other Contract with any
labor organization in respect of the Employees, and no such Contract is being
negotiated by
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any Company or any Cablevision Company in respect of the Employees. None of the
Companies or the Cablevision Companies has agreed to recognize any union or
other collective bargaining unit in respect of the Employees, nor has any union
or other collective bargaining unit been certified as representing any of the
Employees, in either case with respect to the operation of the Business. As of
the date of this Agreement, there are no pending or, to the Knowledge of
Cablevision, threatened strikes, work stoppages, slowdowns or unfair labor
practices disputes between any Company or any Cablevision Company, on the one
hand, and the Employees, on the other hand. As of the date of this Agreement, to
the Knowledge of Cablevision, none of the Companies or the Cablevision Companies
has committed any unfair labor practices in connection with the operation of the
Businesses, and there is no charge or complaint against any Company by the
National Labor Relations Board or any comparable state or foreign agency pending
or, to the Knowledge of Cablevision, threatened with respect to matters that are
directly related to the Business or the Employees. Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, the Companies have withheld and paid to the appropriate
Governmental Authority or are holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from Employees and
are not liable for any arrears of wages, taxes, penalties or other sums for
failure to comply with any of the foregoing. There is no Action relating to
discrimination in employment or employment practices, for any reason, against
any of the Companies, including, without limitation, age, gender, race, religion
or other legally protected category, which has been asserted or is now pending
or, to the Knowledge of Cablevision, threatened before the United States Equal
Employment Opportunity Commission, or any other Governmental Authority in any
jurisdiction in which any of the Companies has employed or currently employs any
Person.
3.11 Employee Benefit Plans.
(a) Schedule 3.11(a) lists all Benefit Plans to which the Companies
are a signatory, with respect to which the Companies have any obligation,
which are maintained, contributed to or sponsored by any of the Companies,
the Cablevision Companies or their respective Affiliates, for the benefit
of any current or former Employee, or with respect to which the Companies
could incur liability under Title IV of ERISA, other than a "multiemployer
plan" as defined in Section 3(37) of ERISA (collectively, the "Company
Benefit Plans"). None of the Company Benefit Plans are sponsored or
maintained by the Companies and the Companies are not a signatory to any
Company Benefit Plan.
(b) Each Company Benefit Plan is and has been operated in all
material respects in accordance with its terms and the requirements of all
applicable Laws, including, without limitation, ERISA and the Code. The
Companies and the Cablevision Companies have performed all obligations
required to be performed by them under, are not in any respect in default
under or in violation of, and, to the Knowledge of Cablevision, there is no
default or violation by any party to, any Company Benefit Plan that would
reasonably be
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expected to result in any material liabilities for the Companies, and to
the Knowledge of Cablevision, no fact or event exists that would reasonably
be expected to give rise to any such action, claim or proceeding that would
reasonably be expected to result in any material liabilities for the
Companies. None of the Cablevision Companies or the Companies has engaged
in a transaction with respect to any Company Benefit Plan that, assuming
the taxable period of such transaction expired as of the date hereof, could
subject any Company to a tax or penalty imposed by either Section 4975 of
the Code or Section 502(i) of ERISA in an amount which would be material.
(c) No liability under Title IV of ERISA has been incurred by the
Companies or the Cablevision Companies with respect to any ongoing, frozen
or terminated "single employer plan" within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by it, or the single
employer plan of any entity which is considered one employer with
Cablevision or any Company under Section 4001 of ERISA or Section 414 of
the Code (an "ERISA Affiliate") and, to the Knowledge of Cablevision, no
condition exists that presents a risk to Cablevision, the Companies or any
ERISA Affiliate of incurring any such liabilities. There does not now exist
any material liability nor do any circumstances exist that could reasonably
be expected to, now or in the future, result in any material liability to
the Companies under Title IV of ERISA, including with respect to a
"multiemployer plan" as defined in Section 3(37) of ERISA. No notice of a
"reportable event" within the meaning of Section 4043 of ERISA for which
the 30 day reporting requirement has not been waived, has been required to
be filed by Cablevision, the Companies or any ERISA Affiliate within the 12
month period ending on the date hereof. There is no pending or threatened
action by the PBGC to assess or terminate any Company Benefit Plan or, to
the Knowledge of Cablevision, any Benefit Plan maintained by an ERISA
Affiliate and neither Cablevision nor any Company has reason to believe the
PBGC will assess or take action to terminate any Company Benefit Plan or
any Benefit Plan maintained by an ERISA Affiliate solely or partially as a
result of the transactions contemplated by this Agreement or otherwise.
(d) Except as set forth on Schedule 3.11(d), none of the Company
Benefit Plans obligates the Companies to pay separation, severance,
termination or similar type benefits or provides that any Transferred
Employee will become entitled to any enhanced or accelerated benefit or
forfeit any benefit solely or partially as a result of any transactions
contemplated by this Agreement or as a result of a "change in control",
within the meaning of such term under Section 280G of the Code. Except as
set forth on Schedule 3.11(d), none of the Company Benefit Plans provides
for or promises retiree medical, disability or life insurance benefits to
any current or former Employee, officer or director of the Companies. Each
of the Company Benefit Plans is subject only to the laws of the United
States or a political subdivision thereof.
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(e) Each Company Benefit Plan that is intended to be qualified under
Section 401(a) of the Code or Section 401(k) of the Code has received or
timely requested a favorable determination letter from the IRS that the
Company Benefit Plan is so qualified and, to the Knowledge of Cablevision,
no fact or event has occurred since the date of such determination letter
or request which would cause the loss of such qualification.
(f) All contributions, premiums or payments required to be made by the
Companies with respect to any Company Benefit Plan have been made on or
before their due dates or accrued on the Bravo Financial Statements. No
Company Benefit Plan has incurred an "accumulated funding deficiency"
(within the meaning of Section 302 of ERISA or Section 412 of the Code)
whether or not waived and, to the Knowledge of Cablevision, there are no
facts or circumstances that would materially change the funded status of
any Company Benefit Plan that is a "defined benefit" plan (as defined in
Section 3(35) of ERISA) since the date of the most recent actuarial report
for such plan.
3.12 Legal and Governmental Proceedings and Judgments. Except as set forth
on Schedule 3.12 (which, with respect to each Action set forth therein, sets
forth the parties, the nature of the proceeding, date commenced and amount of
charges or other relief sought) and except as would not be reasonably likely to
have a Company Material Adverse Effect, there are (a) no Actions pending or, to
the Knowledge of Cablevision, threatened against any of the Companies or the
Cablevision Companies (with respect to matters that are directly related to the
Business), (b) no investigations by any Governmental Authority pending or, to
the Knowledge of Cablevision, threatened against any of the Companies or the
Cablevision Companies (with respect to matters that are directly related to the
Business), (c) no Judgments outstanding against any of the Companies or to or by
which any of the Companies or any of the Assets is subject or bound, and (d) no
outstanding consent decrees, settlements, injunctions or rulings imposed by any
court restricting or otherwise impairing the operation of the Business.
3.13 Finders and Brokers. Neither Cablevision nor any Company has entered
into any Contract with any Person, nor is either aware of any claim or basis for
any claim based upon any act or omission of Cablevision, any Company or any of
their Affiliates, which may result in the obligation of GE, GE Merger Sub, the
Surviving Corporation, NBC or NBC Holdings or any of the Companies to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby.
3.14 Environmental Matters. Except as set forth in Schedule 3.14 and except
as would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect:
(a) A Cablevision Company or a Company has obtained all Licenses
required under Environmental Laws with respect to the operation of the
Business
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as currently or previously (in the three years prior to the date hereof)
conducted (hereinafter "Environmental Permits"), and is and has been in
compliance with all requirements of such Environmental Permits and all
Environmental Laws;
(b) There has been no Release of any Hazardous Material from any Real
Property leased or operated by the Companies or from the Real Property
which is the subject of the 0 Xxxx Xxxxxx Lease that could reasonably be
expected to form the basis of any assertion of any Claim under
Environmental Law against the Business;
(c) None of the Companies has entered into or agreed to any consent
decree or order pursuant to any Environmental Law in respect of the
Business, any of the Assets or the Real Property which is the subject of
the 0 Xxxx Xxxxxx Lease, and the Business is not subject to any court order
relating to compliance with, or addressing the presence of Hazardous
Materials under, any Environmental Law;
(d) No Hazardous Materials are present on any of the properties used
in connection with the Business or on the Real Property which is the
subject of the 0 Xxxx Xxxxxx Lease except in compliance with Environmental
Laws and specifically, no underground storage tanks, asbestos-containing
materials or polychlorinated biphenyls are present on any such Real
Property in violation of any Environmental Law; and
(e) There has not been any request, Claim or requirement seeking
payment for, response to, or remediation of, Hazardous Materials at or
arising from any of the current or past properties or operations of the
Business or on the Real Property which is the subject of the 0 Xxxx Xxxxxx
Lease.
Notwithstanding any other representations and warranties in this Article III,
the representations and warranties in this Section 3.14 constitute the only
representations of Cablevision with respect to any Environmental Law or
Hazardous Material.
3.15 Absence of Certain Changes. Since June 30, 2002, except as set forth
in Schedule 3.15 or as expressly provided for in this Agreement, the Business
has been conducted in all material respects in the ordinary course and
consistent with past practice. Except as set forth in Schedule 3.15, since June
30, 2002, none of the Cablevision Companies (with respect to matters that are
directly related to the Business) or the Companies has taken any action which,
if taken after the date hereof, but prior to the Closing, would have required
the consent of NBC Holdings under Section 5.01 or has:
(i) made any change in any method of accounting or accounting
practice or policy other than such changes required by GAAP and set
forth in Schedule 3.15;
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(ii) merged with, entered into a consolidation with or acquired
an equity interest in any Person or acquired a substantial portion of
the assets or business of any Person or any division or line of
business thereof;
(iii) leased, subleased or occupied any new Real Property (with
respect to the Companies only);
(iv) purchased any tangible personal property for cash
consideration in excess of $250,000, except for Owned Tangible
Personal Property listed on Schedule 3.06;
(v) suffered any Company Material Adverse Effect; or
(vi) agreed, whether in writing or otherwise, to take any of the
actions specified in this Section 3.15.
3.16 Insurance. All material Assets and risks of the Companies have been,
for the past five years, covered by valid insurance policies or binders of
insurance (including, without limitation, general liability insurance, property
insurance, workers' compensation insurance and broadcast liability insurance)
issued in favor of the Companies or their Affiliates in each case with
responsible insurance companies, in such types and amounts and covering such
risks as are consistent with customary practices and standards of companies
engaged in businesses and operations similar to the Business. Schedule 3.16
contains a true and accurate list of all existing insurance policies or similar
arrangements against which the Companies would, subject to Section 9.08, be
entitled to make a claim as an insured after the Closing.
3.17 Assets; Sufficiency of Assets.
(a) Except as set forth in Schedule 3.17, at the Closing, the
Companies will have good title to all of the Assets (other than the
Contract rights), except for defects in title which would not reasonably be
expected to interfere with the use and enjoyment of the Assets other than
in respects that are immaterial to such Assets, taken as a whole, and, with
respect to Contract rights, will be a party to Contracts conferring, or
otherwise enjoy the right to, the benefits of all Contracts to which the
Companies are a party.
(b) Except as set forth in Schedule 3.17, the Assets, together with
the services to be provided under the Transition Services Agreement,
constitute all of the properties, assets and rights as are necessary in the
conduct of the Business.
3.18 Affiliate Transactions. Except as disclosed in Schedule 3.18 and for
matters arising out of any Contract listed on Schedule 3.09, (i) there are on
the date of this Agreement and will be at the Closing no Liabilities between any
of the Companies, on the one hand, and any Cablevision Company, on the other
hand, (ii) no director, officer or employee of any of the Companies provides, or
causes to be provided, any
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goods or services to any of the Companies, except in each such person's capacity
as a director, officer or employee of a Company or a Cablevision Company, and
(iii) none of the Companies provides or causes to be provided material goods or
services to any director, officer or employee of any of the Companies.
3.19 Affiliation Agreements.
(a) All payments required to be made by the Companies on or prior to
the date hereof pursuant to the Time Warner Affiliation Agreement have been
made in full.
(b) Based solely on information provided to Cablevision by parties to
Contracts listed on Schedule 3.09 and other Persons, on September 30, 2002,
Bravo had not less than 57 million full-time viewing subscribers and not
more than 1 million part-time viewing subscribers (i.e., subscribers who
receive the Bravo service less than 24 hours a day, seven days a week).
(c) No Affiliation Agreement (or portion thereof) that has not been
made available to NBC Holdings prior to the date hereof and no redacted
portion of any Affiliation Agreement that has been made available to NBC
Holdings prior to the date hereof contains an MFN applicable to Bravo or an
MFN on MFNs applicable to Bravo. For the avoidance of any dispute, the
parties have annexed to Schedule 3.09 a binder containing copies of the
Affiliation Agreements (or portions thereof), as redacted if applicable,
that the parties agree were made available to NBC Holdings prior to the
date of this Agreement.
3.20 Advertisers.
(a) Schedule 3.20 sets forth a list that is accurate in all material
respects of the top fifty advertisers on Bravo, as determined by annual
advertising revenue, by year for each of fiscal year 2001 and 2002 to date,
including total advertising spent per year.
(b) Cablevision has made available to NBC a list, dated as of October
28, 2002, which is true and accurate in all material respects, of
advertising purchase commitments obtained by or on behalf of the Companies
during the 2002/2003 broadcast "upfront" period. Such commitments were
obtained in the ordinary course and through processes consistent in all
material respects with past practices. Except as set forth on Schedule
3.20, to the Knowledge of Cablevision, prior to the date hereof, none of
the Companies has received written notice from any Person that made a
commitment to purchase during the 2002/2003 broadcast "upfront" period
stating that such Person has definitively determined to purchase less than
the full amount of its "upfront" advertising commitment on the Bravo
programming service during the 2002/2003 broadcast "upfront" period.
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3.21 Film Exhibition Agreement.
(a) Schedule 3.21 sets forth historical programming schedules for the
Bravo programming services for the period of January 1, 2001 through
September 30, 2002.
(b) The schedules to the Film Exhibition Agreement set forth for each
film title, the number of exhibitions and the exhibition windows expected
to be remaining after December 31, 2002, and the number of such remaining
permitted exhibitions (x) allocated to, or retained by, Bravo thereunder,
and (y) allocated to, or retained by, any other programming services of
RMHI thereunder. Such schedules are derived from the Programming Agreements
and, taken as a whole, accurately reflect, in all material respects, the
rights of the licensees thereunder.
(c) Except as set forth on Schedule 3.21, the film titles allocated
to Bravo under the Film Exhibition Agreement include all film titles for
which Bravo has (i) presold advertising during the 2002/2003 broadcast
"upfront" period, or (ii) otherwise committed to broadcast as part of the
2002/2003 broadcast season schedule.
3.22 Investment Purpose. RMG LLC is acquiring, and Cablevision intends that
RMG LLC acquire, the GE Shares and the Additional GE Shares solely for
investment and not with a view to, or for offer or sale in connection with, any
distribution thereof; provided that, in each case, Cablevision or an Affiliate
of Cablevision may sell all or part of the GE Shares and the Additional GE
Shares pursuant to an effective registration statement or an exemption from
registration under the Securities Act or may enter into transactions that have
the effect of "monetizing" or hedging its ownership of the GE Shares and the
Additional GE Shares pursuant to an effective registration statement or an
exemption from registration under the Securities Act. The term "solely for
investment" used in this Section 3.22 has the meaning given to that term for
purposes of determining the availability of an exemption from registration under
Section 4(2) of the Securities Act. GE understands that Cablevision and its
Affiliates may, and nothing in this Section 3.22 shall restrict in any way
Cablevision's or its Affiliates' ability to, issue securities that may be
convertible into or exchangeable for all or a portion of the GE Shares and the
Additional GE Shares. Cablevision acknowledges that any sale by it of the GE
Shares or the Additional GE Shares shall be in accordance with applicable
securities laws and the certificates evidencing the GE Shares and the Additional
GE Shares will contain a customary legend reflecting the foregoing restrictions.
3.23 Media Expenditures. Schedule 3.23 sets forth all commitments of the
Companies relating to consumer and affiliate advertising and promotion of the
Bravo programming service as of the date hereof (the "Media Plan") for the
fourth quarter of 2002 and for 2003.
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4. Representations and Warranties of GE Merger Sub, NBC Holdings and NBC.
To induce Xxxxxxxxxxx, XXX, X0XX and RMG LLC to enter into this Agreement,
each of NBC Holdings and NBC jointly and severally represents and warrants to
Xxxxxxxxxxx, XXX, X0XX and RMG LLC as follows:
4.01 Organization and Authority.
(a) Each of GE, GE Merger Sub, NBC Holdings and NBC is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and authority
necessary to carry on its business as now conducted. Each of GE, GE Merger
Sub, NBC Holdings and NBC is duly licensed or qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
properties owned or leased by it or the operation of its business makes
such licensing or qualification necessary except to the extent that the
failure to be so licensed or qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have an NBC
Material Adverse Effect or a GE Material Adverse Effect. Each of GE, GE
Merger Sub, NBC and NBC Holdings has heretofore delivered or made available
to Cablevision true and complete copies of the certificate of incorporation
and by-laws of GE Merger Sub, NBC and NBC Holdings, respectively, as in
effect at all times relevant to this Agreement.
4.02 Legal Capacity; Approvals and Consents.
(a) Authority and Binding Effect. Subject to Section 9.02 hereof and
the consents and approvals set forth on Schedule 4.02, each of GE, GE
Merger Sub, NBC Holdings and NBC has all requisite corporate power and
authority to execute, deliver and perform this Agreement and the Related
Agreements to which it is a party, to approve, adopt and consummate the
transactions contemplated hereby and thereby, including the Reorganization
Transactions to which it is a party and to perform its obligations
hereunder and thereunder. Each of GE, GE Merger Sub, NBC and NBC Holdings
has duly taken all corporate and shareholder actions necessary to authorize
the execution, delivery and performance of this Agreement, the
Reorganization Transactions to which it is a party and the Related
Agreements to which it is a party. Each Affiliate of NBC Holdings and GE
Merger Sub (other than NBC and GE), prior to the Closing Date, will duly
take all corporate and shareholder actions necessary to authorize the
execution, delivery and performance of the Related Agreements and the
Reorganization Transactions to which it is a party. Without limiting the
foregoing, any and all actions of the directors and stockholders of NBC
Holdings or NBC required to approve and adopt this Agreement and the
Related Agreements to which NBC or NBC Holdings is a party have been duly
taken in accordance with the requirements of the DGCL and no further action
of the
-42-
directors or stockholders of NBC Holdings or NBC is required in order to
permit (x) the consummation of the transactions contemplated hereby and
thereby, including the Reorganization Transactions to which it or any of
its Affiliates is a party or (y) NBC Holdings and NBC to perform their
other obligations hereunder or thereunder. This Agreement has been, and,
upon their execution, the Related Agreements will be, duly executed and
delivered by each of NBC Holdings, NBC and their respective Affiliates, to
the extent that each such Person is a party hereto or thereto and except as
noted on Schedule 4.02 this Agreement is, and each of the Related
Agreements to which NBC Holdings, NBC or any of their respective Affiliates
is a party will be, the valid and binding obligation of such Person
enforceable against it in accordance with its terms, except as such
enforceability may be affected by Laws of bankruptcy, insolvency,
reorganization and creditors' rights generally and by the availability of
equitable remedies.
(b) No Breach or Violation. The execution, delivery and performance
of this Agreement and the Related Agreements to which any of GE, GE Merger
Sub, NBC, NBC Holdings or their respective Affiliates is a party do not,
and will not, (i) conflict with, violate or result in the breach of any
provision of the certificate of incorporation or by-laws of GE, GE Merger
Sub, NBC or NBC Holdings or any of their respective Affiliates that is a
party to a Related Agreement, (ii) conflict with or violate any Law or
Judgment applicable to GE, GE Merger Sub, NBC Holdings or NBC or any of
their respective Affiliates that is a party to a Related Agreement or any
of their respective businesses or assets, or (iii) conflict with, result in
any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under, require
any consent under or result in the creation of any Encumbrance on the GE
Shares or the Additional GE Shares pursuant to any Contract to which GE, GE
Merger Sub, NBC or NBC Holdings is a party or by which any of their
respective assets are bound or affected, except, in the case of clauses
(ii) or (iii), to the extent that such conflicts, breaches, defaults or
other matters would not, individually or in the aggregate, reasonably be
expected to have an NBC Material Adverse Effect or a GE Material Adverse
Effect.
(c) Required Consents. Other than the notification requirements of
the HSR Act and Rules, the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and except for the Persons
listed on Schedule 4.02, there is no Person whose approval or consent, or
with whom the filing of any certificate, notice, application, report or
other document, is legally or contractually required or otherwise is
necessary in connection with the execution, delivery or performance by any
of GE, GE Merger Sub, NBC, NBC Holdings or their respective Affiliates of
this Agreement and the Related Agreements to which such Person is a party
or the consummation by them of the transactions contemplated hereby and
thereby, except where failure to obtain such consent or approval or failure
to make such filing would not, individually or in the aggregate,
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reasonably be expected to have an NBC Material Adverse Effect or a GE
Material Adverse Effect.
4.03 Ownership of Cablevision Shares. NBC Holdings has, and immediately
prior to the Closing it will have, good and valid title to the Cablevision
Shares and the RMHI Shares, free and clear of all Encumbrances and, upon
delivery to Cablevision in the Exchanges, good and valid title to the
Cablevision Shares and the RMHI Shares, free and clear of all Encumbrances, will
pass to Cablevision.
4.04 Legal and Governmental Proceedings and Judgments. There are (a) no
Actions pending or, so far as is known to GE, NBC Holdings or NBC, threatened
against GE, GE Merger Sub, NBC Holdings or NBC, (b) no investigations by any
Governmental Authority pending or, so far as is known to GE, NBC Holdings or
NBC, threatened against GE, GE Merger Sub, NBC Holdings or NBC, and (c) no
Judgments outstanding against GE, GE Merger Sub, NBC Holdings or NBC or to or by
which GE, GE Merger Sub, NBC Holdings or NBC or any of their assets is subject
or bound, which in the case of paragraphs (a), (b) or (c) materially adversely
affects the ability of GE, GE Merger Sub, NBC Holdings or NBC to consummate any
of the transactions contemplated hereby.
4.05 GE Shares. The GE Shares and the Additional GE Shares have been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and
nonassessable and the issuance thereof is not subject to any preemptive or other
similar right.
4.06 GE SEC Reports. Each GE SEC Report filed pursuant to the Exchange Act
did not, at the time it was filed, or, if amended, as of the date of such
amendment, contain any untrue statement of a material fact or omit a material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
4.07 GE Financial Statements; Absence of Certain Changes.
(a) Financial Statements. Each of the consolidated financial
statements (including, in each case, any notes thereto) contained in the GE
SEC Reports was prepared in accordance with GAAP applied on a consistent
basis throughout the periods indicated (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by Form
10-Q of the SEC), and each fairly presented the consolidated financial
position, results of operations and cash flows of GE and its consolidated
Subsidiaries as at the respective dates thereof and for the respective
periods indicated therein in accordance with GAAP applied on a consistent
basis (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments).
(b) Absence of Certain Changes. Since June 30, 2002, there has not
been any GE Material Adverse Effect.
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4.08 BHC Convertible Preferred Stock. As of the date of this Agreement and
as of the Closing Date, none of GE, NBC, NBC Holdings or any of their respective
Affiliates have any plan or intention to repurchase any of the BHC Convertible
Preferred Stock to be issued in step 14 of the Reorganization Transactions.
4.09 Finders and Brokers. Neither NBC Holdings nor NBC has entered into any
Contract with any Person, and neither NBC Holdings nor NBC is aware of any claim
or basis for any claim based upon any act or omission of NBC Holdings or any of
its Affiliates, which may result in the obligation of Cablevision or any of its
Affiliates to pay any finder's fees, brokerage or agent's commissions or other
like payments in connection with the negotiations leading to this Agreement or
the consummation of the transactions contemplated hereby.
5. Covenants Pending Closing.
5.01 Conduct of Cablevision. Cablevision covenants and agrees that, after
the date hereof and prior to the Closing Date, except (i) as contemplated in
connection with the Reorganization Transactions or as otherwise expressly
provided in this Agreement, (ii) as set forth in Schedule 5.01, or (iii) as may
be consented to or agreed to in writing by NBC or NBC Holdings (which consent or
agreement shall not be unreasonably withheld):
(a) Ordinary Course. The Business shall be conducted in the ordinary
course consistent with past practice, and Cablevision shall, and it shall
cause each of the Cablevision Companies (with respect to matters that are
directly related to the Business) and each of the Companies to, use its
commercially reasonable efforts to preserve the Business intact, keep
available the services of the current officers and employees of the
Business and maintain the existing relations with customers, suppliers,
advertisers, distributors, business partners and others having business
dealings with the Cablevision Companies (with respect to matters that are
directly related to the Business) and the Companies.
(b) Organizational Documents. Cablevision shall cause each of the
Companies not to (i) amend its certificate of incorporation, by-laws, or
other organizational documents; (ii) issue, sell, transfer, pledge, dispose
of or encumber any class or series of its equity interests or voting
rights, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any class or
series of its equity interests or any voting rights; (iii) split, combine
or reclassify any equity interests; (iv) redeem, purchase or otherwise
acquire directly or indirectly any equity interests, or any instrument or
security which consists of or includes a right to acquire such equity
interests; or (v) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its equity interests.
(c) Contracts. Except in the ordinary course of business and
consistent with past practice, Cablevision shall not, and it shall cause
each of the Cablevision Companies (with respect to matters that are
directly related to the
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Business) and each of the Companies not to, waive, release or assign any
material right or claim under any Listed Contract. Cablevision shall not,
and it shall cause each of the Cablevision Companies (with respect to
matters that are directly related to the Business) and each of the
Companies not to, modify, amend or terminate any Listed Contract if such
modification, amendment or termination would involve the payment by Bravo
of additional cash or non-cash consideration under such Listed Contract of
more than $175,000 or would reduce the value to Bravo of such Listed
Contract by more than $175,000. Cablevision shall not, and it shall cause
each of the Cablevision Companies (with respect to matters that are
directly related to the Business) and each of the Companies not to, enter
into any Affiliation Agreements or modify or amend in any respect the rates
and other payment terms, MFNs, or MFNs on MFNs of any Affiliation Agreement
or modify or amend in any material respect any other Key Affiliation
Agreement Terms in any Affiliation Agreement. Cablevision shall not, and it
shall cause each of the Cablevision Companies (with respect to matters that
are directly related to the Business) and each of the Companies not to,
enter into any Contract (including, only for purposes of this Section 5.01,
contracts that are not evidenced by a writing) for the licensing or
acquisition of programming by or for the benefit of Bravo which involves
consideration of more than $250,000, in the aggregate, over the term of
such Contract.
(d) Capital Expenditures. Cablevision shall not, and it shall cause
each of the Cablevision Companies (with respect to matters that are
directly related to the Business) and the Companies not to, make any
capital expenditure on behalf of the Business pursuant to a commitment
entered into after the date hereof, except that the Cablevision Companies
or the Companies shall have the right, but not the obligation, to make such
capital expenditures in an amount not exceeding $175,000 individually or
$1,000,000 in any calendar quarter in the aggregate. Cablevision shall not,
and it shall cause each of the Cablevision Companies (with respect to
matters that are directly related to the Business) and each of the
Companies not to, make any commitments to make any capital expenditure on
behalf of the Business which is to be paid after June 30, 2003.
(e) Media Expenditures. Cablevision shall not, and it shall cause
each of the Cablevision Companies (with respect to matters that are
directly related to the Business) and each of the Companies not to, make
any expenditure for advertising and promotion of the Bravo programming
service pursuant to a commitment entered into after the date hereof other
than in accordance with the Media Plan, except that the Cablevision
Companies or the Companies shall have the right, but not the obligation, to
make such expenditures in an amount not exceeding $175,000 individually or
$2,500,000 in any calendar quarter in the aggregate. Cablevision shall not,
and it shall cause each of the Cablevision Companies (with respect to
matters that are directly related to the Business) and the Companies not
to, make any commitments for expenditures for advertising
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and promotion of the Bravo programming service which is to be paid after
June 30, 2003.
(f) Assets. Other than in the ordinary course of business,
Cablevision shall not, and it shall cause each of the Cablevision Companies
(with respect to matters that are directly related to the Business) and
each of the Companies not to, transfer, sell, dispose of, lease, license,
mortgage, pledge or encumber (except for Permitted Encumbrances) any
material Real Property or any material Asset, other than transfers, sales
or dispositions of tangible personal property (other than the Owned
Tangible Personal Property) or dispose of or permit to lapse any rights to
any material Licensed Intellectual Property or material Owned Intellectual
Property.
(g) Paid Programming Agreements. Except in the ordinary course of
business consistent with past practice, unless terminable without penalty
at the discretion of a Cablevision Company or a Company upon not more than
30 days' notice, Cablevision shall not (with respect to matters that are
directly related to the Business) and it shall cause each Cablevision
Company (with respect to matters that are directly related to the Business)
and each Company not to, enter into any infomercial or similar paid
programming agreement granting any Person the right to program any block of
time on Bravo.
(h) Leases or Subleases of Real Property. Cablevision shall cause the
Companies not to enter into any leases or subleases of Real Property.
(i) Liquidation/Merger. Cablevision shall not, and shall cause each
of the Companies not to, adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of any of the Companies.
(j) Litigation. Cablevision shall not (with respect to matters that
are directly related to the Business), and it shall cause each of the
Companies and the Cablevision Companies (with respect to matters that are
directly related to the Business) not to, commence or settle any Action (i)
to which any Cablevision Company or any Company is a party, (ii) by which
the Business may be adversely affected and (iii) which would reasonably be
expected to have a Company Material Adverse Effect or which prevents the
consummation of the transactions contemplated hereby (each, a "Claim"), and
Cablevision shall advise NBC Holdings in writing promptly of the assertion
or commencement of any Claim.
(k) Reorganization Transactions. Cablevision shall use its reasonable
best efforts to cause the Reorganization Transactions to which it or any of
its Affiliates is a party to be consummated on or prior to the Closing.
(l) Certain Actions. Cablevision shall not take, and it shall cause
each Company not to take, any action that would or would reasonably be
expected to
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prevent or materially delay the ability of any party to consummate the
transactions contemplated by this Agreement.
(m) No Agreement. Cablevision shall not, and it shall cause each of
the Cablevision Companies and the Companies not to, enter into any
agreement, contract, commitment or arrangement to do any of the foregoing
except to the extent permitted above.
5.02 Access to Information. Between the date of this Agreement and the
Closing, Cablevision shall provide NBC, NBC Holdings and their respective
agents, representatives, advisors and employees reasonable access during normal
business hours to all of the properties, books, reports, records, and Contracts
of the Companies and the Cablevision Companies (with respect to matters that are
directly related to the Business), and each of the Companies shall furnish NBC
Holdings with all information it may reasonably request; provided that no
investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made by Cablevision.
5.03 Covenants of NBC Holdings and NBC.
(a) Except as otherwise set forth in this Agreement, from and after
the date hereof through the Closing Date, neither NBC Holdings nor NBC
shall, nor shall either of them permit any of their Affiliates to:
(i) take any action that would or would reasonably be expected to
prevent or materially delay the ability of any party to consummate the
transactions contemplated by this Agreement, including any disposition
of RMHI Shares (other than as permitted by the proviso to Section
5.03(b) or to a wholly-owned Subsidiary of GE) or of Cablevision
Shares (other than to a wholly-owned Subsidiary of GE);
(ii) terminate the MGM Agreement unless (x) this Agreement has
already been terminated or (y) the conditions to closing thereunder
are not capable of being satisfied (other than as a result of a breach
by NBC); or
(iii) agree or commit to do any of the foregoing.
(b) Each of NBC Holdings and NBC shall cause BHC to issue at least
$20 million of the BHC Convertible Preferred Stock having the terms set
forth in Exhibit D-4 to an unrelated third party in an arm's length
transaction simultaneously with the Closing as required by step 14 of the
Reorganization Transactions, subject to the satisfaction of the condition
to the commitment of the initial purchaser of the BHC Convertible
Preferred, pursuant to the letter, dated the date hereof, among
Cablevision, RMHI, NBC and the initial purchaser of the BHC Convertible
Preferred Stock named therein, that there has been no material adverse
change in the financial markets or the financial condition or prospects of
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BHC, Bravo or GE. Each of NBC Holdings and NBC shall use its reasonable
best efforts to cause the Reorganization Transactions to which it or any of
its Affiliates is a party to be consummated on or prior to the Closing;
provided, that NBC Holdings shall not be prohibited from exchanging RMHI
Shares for Cablevision Shares pursuant to the Stockholders' Agreement.
(c) NBC, NBC Holdings and GE Merger Sub shall cause GE to take such
actions as are necessary to consummate the B2HC Merger including, without
limitation, the execution, delivery and filing of the Certificate of Merger
and the delivery, as provided herein, of the GE Shares issuable in the B2HC
Merger.
(d) Each of NBC Holdings and NBC will advise Cablevision in writing
promptly of the written assertion or commencement of any claim, litigation,
proceeding or investigation in which GE or any of its Affiliates is a party
and which could reasonably be expected to have an NBC Holdings Material
Adverse Affect, a GE Material Adverse Effect or which seeks to prevent the
consummation of the transactions contemplated hereby.
5.04 Notice of Developments.
(a) Prior to the Closing, Cablevision shall promptly notify NBC in
writing upon becoming aware of (i) any event, circumstance, fact or
occurrence arising subsequent to the date of this Agreement that would be
reasonably expected to result in any breach of a representation or warranty
or covenant of Cablevision in this Agreement or that would be reasonably
expected to have the effect of making any representation or warranty of
Cablevision in this Agreement untrue or incorrect in any material respect
as of the Closing and (ii) any Action in which any Cablevision Company
(with respect to matters that are directly related to the Business) or any
of the Companies is a party and which would reasonably be expected to have
a Company Material Adverse Effect or which seeks to prevent the
consummation of the transactions contemplated hereby.
(b) Prior to the Closing, NBC shall promptly notify Cablevision in
writing upon becoming aware of (i) any event, circumstance, fact or
occurrence arising subsequent to the date of this Agreement that would
reasonably be expected to result in any breach of a representation or
warranty or covenant of NBC or NBC Holdings in this Agreement or that would
reasonably be expected to have the effect of making any representation or
warranty of NBC or NBC Holdings in this Agreement untrue or incorrect in
any material respect as of the Closing and (ii) any Action in which GE, GE
Merger Sub, NBC or NBC Holdings is a party and which would reasonably be
expected to have an NBC Material Adverse Effect, a GE Material Adverse
Effect or which seeks to prevent the consummation of the transactions
contemplated hereby.
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5.05 Termination of Intercompany Arrangements.
(a) On or prior to the Closing, Cablevision shall cause any Contract
(including, for purposes of this Section 5.05, Contracts that are not
evidenced by a writing) or other agreement or arrangement between one or
more of the Cablevision Companies, on the one hand, and one or more of the
Companies, on the other hand (including any such arrangement relating to
the Subleased Real Property), other than those Contracts set forth in
Schedule 5.05, to be terminated or amended to exclude the Companies as a
party thereto without any Liability thereunder of or to any of the
Companies (other than as specifically set forth in the Transition Services
Agreement).
(b) Subject to the provisions of this Agreement, on or prior to the
Closing, Cablevision shall, and shall cause the Companies and the
Cablevision Companies to, and NBC shall, and shall cause each of its
Affiliates to, execute and deliver and make effective as of the Closing the
following agreements: the Transition Services Agreement, the Amended RNC
Letter Agreement, the Transponder Lease Assignment, the IFC Agreements, the
Film Exhibition Agreement and the 0 Xxxx Xxxxxx Lease Assignment.
5.06 Required Consents.
(a) Within three Business Days after the execution of this Agreement,
Cablevision, NBC and GE shall notify the National Basketball Association
and the National Hockey League of the transactions contemplated by this
Agreement. Thereafter, the parties hereto shall proceed as promptly as
practicable and in good faith and shall each use reasonable commercial
efforts to obtain each consent or approval required to be obtained prior to
the consummation of the transactions contemplated hereby, including
providing such releases and indemnifications as the National Basketball
Association or the National Hockey League may request.
(b) Each of Cablevision and NBC agrees to use commercially reasonable
efforts to (i) obtain the consent of the landlord under the 0 Xxxx Xxxxxx
Lease to the assignment of the 0 Xxxx Xxxxxx Lease to NBC pursuant to the 0
Xxxx Xxxxxx Lease Assignment and (ii) cause such landlord to release
Sterling Digital LLC from its obligations as the tenant under such lease
and CSC Holdings, Inc. from its guarantee of the obligations of the tenant
under such lease, on or before the effectiveness of the 0 Xxxx Xxxxxx Lease
Assignment.
5.07 Separation of IFC Business from Bravo. Prior to the Closing,
Cablevision shall cause the Companies to assign, transfer, convey and deliver to
IFC or another Person all of the Companies' right, title and interest in and to
the IFC Assets and the IFC Liabilities. Prior to the Closing, IFC or such Person
and the Companies shall each execute and deliver such deeds, bills of sale,
subleases, assignments and other documents as are necessary or appropriate to
assign and transfer the IFC Assets. Prior to the Closing, IFC or such Person
shall execute and deliver an assumption agreement and other
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documents as are necessary or appropriate to assume the IFC Liabilities. To the
extent reasonably practicable, Cablevision shall secure the release of the
Companies from the IFC Liabilities. The parties acknowledge that the IFC Assets
are assets of IFC and the IFC Liabilities are obligations of IFC, and neither
NBC nor NBC Holdings is assuming any of, or has any obligations with respect to,
the IFC Liabilities.
6. Deliveries at Closing.
6.01 Deliveries by Cablevision. At the Closing, Cablevision will deliver or
cause to be delivered to NBC Holdings:
(a) A certificate, dated as of the Closing, signed by a principal
officer of Cablevision, representing and certifying to NBC Holdings as to
the matters set forth in Sections 7.02 and 7.03.
(b) Evidence, reasonably satisfactory to NBC Holdings, of the
consummation of the Reorganization Transactions referred to in Part I of
Exhibit D.
(c) Stock certificates representing the BHC Shares, duly endorsed in
blank, or accompanied by stock powers duly endorsed in blank in proper form
for transfer to NBC Holdings.
(d) A release, in the form attached hereto as Exhibit F, releasing
NBC and NBC Holdings and their respective directors, officers and
Affiliates with respect to the matters referred to therein.
(e) Evidence, reasonably satisfactory to NBC Holdings, that all
corporate and other actions necessary to authorize (i) the execution and
delivery of this Agreement by Xxxxxxxxxxx, XXX, X0XX and RMG LLC and the
performance by Xxxxxxxxxxx, XXX, X0XX and RMG LLC of their respective
obligations hereunder and (ii) the consummation of the transactions
contemplated hereby, shall have been duly and validly taken by Cablevision
and its Affiliates and shall be in full force and effect on the Closing
Date.
(f) Each of the Related Agreements that are required to be executed
and delivered by any Cablevision Company or any Company at or prior to the
Closing and which has not previously been executed and delivered by the
parties, duly executed by such Cablevision Company or Company.
6.02 Deliveries by NBC Holdings and NBC. At the Closing, NBC Holdings and
NBC will deliver or cause to be delivered to Cablevision:
(a) Certificates, dated as of the Closing, signed by a principal
officer of each of NBC Holdings and NBC, dated as of the Closing,
representing and certifying to Cablevision as to the matters set forth in
Sections 8.02 and 8.03.
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(b) Evidence that the waiting period under the HSR Act and Rules, if
applicable, has expired.
(c) A stock certificate representing all of the Cablevision Shares,
duly endorsed in blank, and accompanied by stock powers duly endorsed in
blank in proper form for transfer.
(d) A stock certificate representing all of the RMHI Shares, duly
endorsed in blank, and accompanied by stock powers duly endorsed in blank
in proper form for transfer.
(e) A release, in the form attached hereto as Exhibit G, releasing
Cablevision and all of its directors, officers and Affiliates with respect
to the matters referred to therein.
(f) Evidence, reasonably satisfactory to Cablevision, that all
corporate and other actions necessary to authorize (i) the execution and
delivery of this Agreement by NBC Holdings and NBC and the performance by
NBC Holdings and NBC of their respective obligations hereunder and (ii) the
consummation of the transactions contemplated hereby, shall have been duly
and validly taken by NBC Holdings and NBC and shall be in full force and
effect on the Closing Date.
(g) Each of the Related Agreements that are required to be executed
and delivered by GE or any of its Affiliates at or prior to the Closing and
which has not previously been executed and delivered by the parties, duly
executed by GE or such Affiliate.
6.03 Deliveries by GE Merger Sub. At the Closing, GE Merger Sub will
deliver or cause to be delivered to Cablevision:
(a) Evidence, reasonably satisfactory to Cablevision, that all
corporate and other actions necessary to authorize (i) the execution and
delivery of this Agreement by GE Merger Sub and the performance by GE
Merger Sub of its obligations hereunder and (ii) the consummation of the
transactions contemplated hereby, shall have been duly and validly taken by
GE Merger Sub and its Affiliates and shall be in full force and effect on
the Closing Date.
(b) A stock certificate or certificates representing the GE Shares
registered in the name of Cablevision or its nominees.
7. Conditions to the Obligations of NBC Holdings, NBC and GE Merger Sub.
The obligations of NBC Holdings, NBC and GE Merger Sub to complete the
transactions provided for herein are subject to the fulfillment of all of the
following conditions any of which may be waived in writing by NBC Holdings:
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7.01 Receipt of Consents. The conditions specified in Section 9.02(a)
through (e) shall have been satisfied and all of the approvals and consents
described in Schedule 3.02 and Schedule 4.02 required as conditions to the
Closing shall have been obtained and shall be in full force and effect.
7.02 Performance by Cablevision. Cablevision and its Affiliates shall have
performed in all material respects their respective agreements and covenants to
be performed by each of them hereunder and under any of the Related Agreements
to which each of them is a party to the extent such are required to be performed
at or prior to the Closing.
7.03 Absence of Breach of Representations and Warranties. The
representations and warranties of Cablevision contained in this Agreement shall
be true and correct without giving effect to any qualifications or limitations
as to "materiality" or "Company Material Adverse Effect" on and as of the
Closing Date with the same force and effect as if then made, except (i) to the
extent that such representations and warranties describe a condition at a
specified time or date, in which case such representations and warranties shall
be true and correct in all respects at such time or on such date without giving
effect to any qualifications or limitations as to "materiality" or "Company
Material Adverse Effect," (ii) that "materiality" shall not be read out (A) for
purposes of Section 3.09(d) or Section 3.09(e), (B) for purposes of determining
whether any matter is required to be listed on Schedule 3.09 pursuant to Section
3.09(a) or Schedule 3.20 pursuant to Section 3.20(a), (C) for purposes of
determining whether there has been a breach of a representation or warranty
requiring one or more items to be made available to NBC Holdings pursuant to
Section 3.09(c), or (D) for purposes of determining whether there has been a
breach of a representation or warranty requiring that information set forth on a
schedule pursuant to Section 3.07(b) or Section 3.20(b) be accurate in all
material respects, or (iii) where the failure of such representations and
warranties to be so true and correct, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect.
7.04 Absence of Breach of Tax Matters Agreement Representations and
Warranties. The representations and warranties of Cablevision, CSC Holdings and
RMG LLC in the Tax Matters Agreement shall be true and correct on and as of the
Closing Date with the same force and effect as if then made, except to the
extent that such representations and warranties describe a condition at a
specified time or date, in which case such representations and warranties shall
be true and correct as of such time or date.
7.05 Absence of Proceedings. No Judgment shall have been issued, and no
action or proceeding shall have been instituted by any Governmental Authority,
enjoining or preventing, or seeking to enjoin or prevent, the consummation of
the transactions contemplated hereby.
7.06 Reorganization Transactions. Each of the Reorganization Transactions
shall have been, or shall contemporaneously be, consummated.
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7.07 Release of Liens. Bravo shall have been released from all Liens, other
than Permitted Encumbrances, and shall have no Indebtedness.
7.08 MGM Closing. The closing under the NBC-MGM Agreement shall have
occurred simultaneously with the Closing.
7.09 Related Agreements. Each of the Related Agreements shall have been
executed and delivered by the parties thereto, other than NBC and its
Affiliates, and shall be in full force and effect as at the Closing.
8. Conditions to the Obligations of Cablevision.
The obligations of Cablevision to complete the transactions provided for
herein are subject to the fulfillment of all of the following conditions, any of
which may be waived in writing by Cablevision.
8.01 Receipt of Consents. The conditions specified in Section 9.02 shall
have been satisfied and all of the approvals and consents described in Schedule
3.02 required as conditions to the Closing shall have been obtained and shall be
in full force and effect.
8.02 Performance by NBC Holdings and NBC. NBC Holdings, NBC and their
Affiliates shall have performed in all material respects all covenants and
agreements to be performed by them hereunder and under any of the Related
Agreements to which it is a party to the extent such are required to be
performed at or prior to the Closing.
8.03 Absence of Breach of Representations and Warranties. The
representations and warranties of NBC Holdings and NBC contained in this
Agreement shall be true and correct in all respects without giving any effect to
any qualifications or limitations as to "materiality", "NBC Material Adverse
Effect" or "GE Material Adverse Effect" on and as of the Closing Date with the
same force and effect as if then made, except (i) to the extent that such
representations and warranties describe a condition at a specified time or date,
in which case such representations and warranties shall be true and correct in
all respects at such time or as of such date without giving effect to any
qualifications or limitations as to "materiality", "NBC Material Adverse Effect"
or "GE Material Adverse Effect," or (ii) where the failure of such
representations and warranties to be so true and correct, individually or in the
aggregate, would not reasonably be expected to have a NBC Material Adverse
Effect or a GE Material Adverse Effect.
8.04 Absence of Breach of Tax Matters Agreement Representations and
Warranties. The representations and warranties of NBC and NBC Holdings in the
Tax Matters Agreement shall be true and correct on and as of the Closing Date
with the same force and effect as if then made, except to the extent that such
representations and warranties describe a condition at a specified time or date,
in which case such representations and warranties shall be true and correct as
of such time or date.
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8.05 Absence of Proceedings. No Judgment shall have been issued, and no
action or proceeding shall have been instituted by any Governmental Authority,
enjoining or preventing, or seeking to enjoin or prevent, the consummation of
the transactions contemplated hereby.
8.06 Reorganization Transactions. Each of the Reorganization Transactions
shall have been, or shall contemporaneously be, consummated.
8.07 Registration Rights Agreement. Cablevision and GE shall have entered
into the Registration Rights Agreement.
8.08 Listing of GE Stock. The GE Shares shall have been listed, subject to
notice of issuance, on the NYSE.
8.09 MGM Closing. The closing under the NBC-MGM Agreement shall have
occurred simultaneously with the Closing.
8.10 Related Agreements. Each of the Related Agreements shall have been
executed and delivered by the parties thereto, other than Cablevision and its
Affiliates, and shall be in full force and effect as at the Closing.
9. Covenants.
9.01 Compliance with Conditions. Each of the parties hereto covenants and
agrees with the others to exercise, and to cause its Affiliates to exercise,
reasonable commercial efforts to perform, comply with and otherwise satisfy each
and every one of the conditions to be satisfied by such party hereunder. Without
changing the parties' obligations under this Section 9.01, it is the mutual
intention of the parties hereto that the Closing hereunder occur on or prior to
December 31, 2002; provided that the failure of the Closing to occur prior to
December 31, 2002 shall not in and of itself (i) constitute a breach by any
party hereto in any respect or (ii) relieve any party of its obligations
hereunder. Each party shall use reasonable commercial efforts to notify promptly
the others if it shall learn that any conditions to performance of any party
will not be fulfilled.
9.02 Compliance with HSR Act and Rules; Foreign Antitrust Laws.
(a) The performance of the obligations of all parties under this
Agreement is subject to the condition that, if the HSR Act and Rules and
any Foreign Antitrust Laws set forth in Schedule 4.02 which require
notification to or approval by the relevant Governmental Authority prior to
Closing are applicable to the transactions contemplated hereby, the waiting
period or notification specified therein, as the same may be extended,
shall have expired without action taken to prevent the consummation of the
transactions contemplated hereby and any required approvals shall have been
obtained.
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(b) Each of the parties hereto will use its reasonable commercial
efforts to comply promptly with any applicable requirements under the HSR
Act and Rules relating to filing and furnishing of information to the FTC
and the Antitrust Division of the DOJ, the parties' actions to include,
without limitation, (i) filing or causing to be filed the HSR Report
required to be filed by them, or by any other Person that is part of the
same "person" (as defined in the HSR Act and Rules) or any of them, and
taking all other action required by the HSR Act or Rules; (ii) coordinating
the filing of such HSR Reports (and exchanging mutual information required
to be disclosed therein) so as to present both HSR Reports to the FTC and
the DOJ at the time selected by the mutual agreement of Cablevision and NBC
Holdings, and to avoid substantial errors or inconsistencies between the
two in the description of the transaction; and (iii) using their reasonable
commercial efforts to comply with any additional request for documents or
information made by the FTC or the DOJ or by a court and assisting the
other parties to so comply.
(c) Notwithstanding anything herein to the contrary, in the event
that the consummation of the transactions contemplated hereby is challenged
by the FTC or the DOJ by an action to stay or enjoin such consummation,
then either Cablevision or NBC Holdings shall have the right to terminate
this Agreement unless the other of such parties, at its sole cost and
expense, elects to contest such action, in which case the noncontesting
party shall cooperate with the contesting party and assist the contesting
party, as reasonably requested, to contest such action until such time as
either party terminates this Agreement under this Section or Article 12. In
the event that such a stay or injunction is granted (preliminary or
otherwise), then either NBC Holdings or Cablevision may terminate this
Agreement by prompt written notice to the other. If any other form of
equitable relief affecting any party is granted to the FTC, the DOJ or
other such agency or instrumentality, then such party may terminate this
Agreement by prompt written notice to the other party.
(d) Each of the parties hereto will use its reasonable commercial
efforts to comply promptly with any applicable requirements under any
applicable Foreign Antitrust Laws relating to the filing or furnishing of
information to any Governmental Authority with jurisdiction over such
Foreign Antitrust Laws, the parties' actions to include, without
limitation, (i) filing or causing to be filed any reports or other
materials under any applicable Foreign Antitrust Laws required to be filed
by them, or by any other Person that is part of the same "person" (as
defined in such Foreign Antitrust Laws) or any of them, and taking all
other action required by such Foreign Antitrust Laws; (ii) coordinating the
filing of such reports or other materials under applicable Foreign
Antitrust Laws (and exchanging mutual information required to be disclosed
therein) so as to present such reports at the time selected by the mutual
agreement of Cablevision and NBC Holdings, and to avoid substantial errors
or inconsistencies between the two in the description of the transaction;
and (iii) using their reasonable commercial
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efforts to comply with any additional request for documents or information
made by any Governmental Authority with jurisdiction over such Foreign
Antitrust Laws or by a court and assisting the other parties to so comply.
(e) To effectuate the intent of the foregoing provisions of this
Section 9.02, the parties agree to exchange requested or required
information in making the filings and in complying as above provided, and
the parties agree to take all necessary steps to preserve the
confidentiality of the information set forth in any filings including,
without limitation, limiting disclosure of exchanged information to counsel
for the nondisclosing party. Without limiting the generality of the
foregoing, each party shall promptly notify the other party of any written
communication to that party from any of the foregoing Governmental
Authorities, in each case, concerning the filings and other requirements of
this Section 9.02.
(f) To the extent that following the Closing there are any approvals
or filings required under Foreign Antitrust Laws in connection with the
Reorganization Transactions, Cablevision and its Affiliates will cooperate
with NBC and its Affiliates in making such filings and providing
information and testimony in connection therewith, and all reasonable
out-of-pocket expenses incurred by Cablevision or such Affiliate after the
Closing in connection therewith shall be promptly reimbursed by NBC.
9.03 Records and Related Matters.
(a) After the Closing, Cablevision agrees to provide reasonable
access, during normal business hours for reasonable business purposes for
matters relating to the Companies, at the expense of NBC Holdings, to its
independent public accountants. All information obtained by NBC Holdings
and its Affiliates pursuant to this Agreement and in connection with the
negotiation hereof shall be kept in strict confidence by NBC Holdings and
its Affiliates in accordance with the terms of the Confidentiality
Agreement and Section 9.07.
(b) Cablevision and NBC Holdings and their Affiliates shall each make
their respective books and records (including work papers in the possession
of their respective accountants) available for inspection by the other
party, or by its duly authorized representatives, for reasonable business
purposes at all reasonable times during normal business hours, for a seven
year period after the Closing Date with respect to all transactions of the
Companies occurring prior to or relating to the Closing, and the historical
financial condition, assets, liabilities, results of operations and cash
flows of the business of the Companies for any period prior to the Closing.
In the case of records owned by Cablevision and its Affiliates, such
records shall be made available at Cablevision's executive office, and in
the case of records owned by NBC Holdings and its Affiliates, such records
shall be made available at the office at which such records are maintained.
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As used in this Section 9.03, the right of inspection includes the right to
make copies for reasonable business purposes.
(c) Outside counsel to NBC will have the right to review the redacted
portions of the Listed Contracts referred to in Section 3.09(c) solely for
the purpose of confirming that the redacted information is pricing and
other competitively sensitive information relating to services other than
Bravo.
9.04 Use of Bravo Marks. From and after the Closing, except as provided in
this Section 9.04, none of Cablevision nor any of its Affiliates shall have any
rights in the name "Bravo" and all derivatives thereof (all of such names,
trademarks, service marks and logos being the "Bravo Marks") and that from and
after the Closing, none of Cablevision nor any of its Affiliates will contest
the ownership or validity of any rights of NBC, NBC Holdings, Bravo or any other
Company in or to the Bravo Marks or the Owned Intellectual Property.
Notwithstanding the foregoing, for a period not exceeding 90 days after the
Closing, Cablevision and its Affiliates shall have the right to continue to use
the Bravo Marks when used in conjunction with any names, marks and logos of
Cablevision and its Subsidiaries as they are currently being used (i) on
letterhead, business cards, marketing materials, pre-recorded telephone
announcements and internet web sites of Cablevision and its Subsidiaries, (ii)
on marquees and walls of Cablevision and its Subsidiaries, including posters and
other posted marketing materials, (iii) in The Wiz stores and in Clearview
Cinemas Theatres, and (iv) in videos and presentations for employees of
Cablevision and its Subsidiaries, including training videos and presentations.
The grant of a right to use the Bravo Marks pursuant to the previous sentence
shall constitute a non-exclusive, royalty-free license to use such Bravo Marks
during such 90-day period. During such 90-day period, in order to preserve the
inherent value of the Bravo Marks, each of Cablevision and its Affiliates shall
ensure that each use by it of the Bravo Marks shall be consistent with the use
thereof, and at least equal to the quality standards prevailing, in the
operation of the Business prior to the Closing.
9.05 Xxxxx.xxx. From and after the Closing Date, subject to the limitations
set forth in the third sentence of this Section 9.05, NBC shall cause Bravo to
make available at least 60% of the then remaining aggregate value of advertising
and/or promotional inventory ("Advertising Inventory") to be delivered by or on
behalf of RMHI pursuant to the Stock Purchase Agreement (the "Xxxxx.xxx Stock
Purchase Agreement"), dated as of December 3, 1999, between Xxxxx.xxx and RMHI,
which Advertising Inventory shall be so delivered by Bravo in accordance with
the provisions of the Xxxxx.xxx Stock Purchase Agreement. Following the Closing,
NBC shall cause Bravo to provide at least $600,000 in Advertising Inventory
during each calendar year (or a proportionate amount for each partial year) of
the remainder of the promotional period under the Xxxxx.xxx Stock Purchase
Agreement; provided that up to $300,000 of such Advertising Inventory in any
calendar year may be deferred by Bravo for delivery in the next calendar year
during such promotional period. Notwithstanding the foregoing, the aggregate
obligation of NBC to cause Bravo to provide Advertising Inventory during the
promotional period hereunder shall not exceed $5,100,000. From and after the
Closing Date, NBC shall
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cause Bravo to consult with RMHI on an annual basis to coordinate the creation
of an annual advertising plan consistent with the foregoing to be submitted to
Xxxxx.xxx by RMHI pursuant to the Xxxxx.xxx Stock Purchase Agreement, and shall
cause Bravo to deliver Bravo's share of such Advertising Inventory in accordance
with each such plan (as such annual plan may be revised with Bravo's consent,
which shall not be unreasonably withheld, to any revision that affects Bravo).
NBC shall also cause Bravo to deliver to RMHI within 10 days after the end of
each calendar quarter, during the remainder of the promotional period a
statement setting forth the Advertising Inventory so delivered by Bravo during
the preceding calendar quarter containing the information relating thereto
specified in the Xxxxx.xxx Stock Purchase Agreement, for inclusion by RMHI in
its quarterly report to Xxxxx.xxx of aggregate Advertising Inventory delivered
during such quarter. In sole consideration of such commitment by NBC, at or as
promptly as practicable following the Closing, RMHI shall transfer to the
Surviving Corporation or BHC (as requested by NBC) 675,000 shares of common
stock of Xxxxx.xxx (as adjusted to reflect any stock split, combination,
transaction, dividend, or other distribution which may have occurred subsequent
to the date of the Xxxxx.xxx Stock Purchase Agreement). Prior to the Closing,
Cablevision shall cause Bravo to continue delivering Advertising Inventory in
the manner set forth in Bravo's 2002 media plan submitted to Xxxxx.xxx by Bravo
and thereafter in a manner consistent with past practice.
9.06 Benefit of Contracts.
(a) Cablevision and NBC Holdings agree that, except for contracts
relating to the licensing or acquisition of programming, in the event that
any consent, approval or authorization necessary to preserve for the
Business, Bravo or any other Company any right or benefit under any
Contract to which Cablevision or one of its Affiliates, Bravo or any other
Company is a party is not obtained prior to the Closing, Cablevision will,
subsequent to the Closing, cooperate with NBC Holdings, Bravo or any such
other Company in attempting to obtain such consent, approval or
authorization as promptly thereafter as practicable. If such consent,
approval or authorization cannot be obtained, Cablevision shall use its
reasonable commercial efforts (which shall not require Cablevision to incur
out-of-pocket expenses or assume additional Liabilities or to forego any
rights or modify any right or benefit in any manner adverse to Cablevision)
to provide NBC Holdings, Bravo or such other Company, as the case may be,
with the rights and benefits of the affected Contract for the term of such
Contract, and, if Cablevision provides such rights and benefits, NBC
Holdings, Bravo or such other Company, as the case may be, shall assume the
obligations and burdens in connection therewith.
(b) (i) On or prior to the Closing Date, Cablevision shall, and shall
cause the Companies to cause the assignment to Cablevision (or one or more
of the Cablevision Companies) of the Programming Agreements listed on
Schedule 9.06(b)(i).
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(ii) From the date hereof and through the period ending six
months following the Closing, Cablevision shall, and shall cause the
Companies to, (A) use their commercially reasonable efforts to obtain
all consents from third parties necessary to cause the assignment to
Cablevision (or one or more of the Cablevision Companies) of the
Programming Contracts listed on Schedule 9.06(b)(ii)(A), in each case
subject to the Closing and effective as of the later of the Closing
and the date of such assignment; (B) use their commercially reasonable
efforts to obtain all consents from third parties necessary to permit
the Companies to exhibit the films under the Programming Contracts
listed on Schedule 9.06(b)(ii)(B) from and after Closing; and (C) use
their commercially reasonable efforts to obtain all consents from
third parties necessary to permit the Cablevision Companies to exhibit
the films under the Programming Contracts listed on Schedule
9.06(b)(ii)(C) from and after the Closing. For purposes of this
Section 9.06(b), the use of commercially reasonable efforts shall not
require any Person to incur out-of-pocket expenses or assume
additional Liabilities or to forego any rights or modify any right or
benefit in any manner adverse to such Person.
9.07 Confidentiality.
(a) The terms of the Confidentiality Agreement are incorporated
herein by reference and shall continue in full force and effect until the
Closing, at which time such Confidentiality Agreement and the obligations
of the parties under this Section 9.07(a) shall terminate. If this
Agreement is, for any reason, terminated prior to the Closing, the
Confidentiality Agreement shall continue in full force and effect.
(b) From and after the Closing and except as required by Law,
Cablevision agrees to, and shall cause its agents, representatives,
Affiliates, employees, officers and directors ("Representatives") to treat
and hold as confidential all Competitively Sensitive Bravo Information. In
the event that Cablevision or any such Representative becomes legally
compelled to disclose any Competitively Sensitive Bravo Information,
Cablevision or such Representative shall provide NBC Holdings with prompt
written notice of such requirement so that NBC Holdings may seek a
protective order or other remedy or waive compliance with this Section 9.07
and, in the event that such protective order or other remedy or waiver is
not obtained, Cablevision or such Representative shall furnish only that
portion of such Competitively Sensitive Bravo Information which is legally
required to be provided and exercise reasonable commercial efforts to
obtain assurances that confidential treatment will be accorded such
Competitively Sensitive Bravo Information. Notwithstanding the foregoing
restriction in this Section 9.07(b), Cablevision and its Representatives
may disclose Competitively Sensitive Bravo Information to prospective banks
or other lenders, underwriters, investors, partners, members, or
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purchasers of all or a portion of the businesses of Cablevision or its
Subsidiaries so long as (i) such Persons agree to maintain the
confidentiality thereof on customary terms and (ii) Cablevision redacts, to
the greatest extent feasible, Competitively Sensitive Bravo Information in
any documents made available to such Persons. The term "Competitively
Sensitive Bravo Information" means the following non-public information
relating exclusively to the Business or the Companies: (i) the economic and
other business terms of Affiliation Agreements; (ii) pricing information
with respect to advertising sales, and (iii) salary and other personal
information concerning Transferred Employees. Competitively Sensitive Bravo
Information does not include information which (x) is or becomes generally
available to the public other than as a result of a disclosure by
Cablevision or its Representatives or (y) becomes available to Cablevision
on a non-confidential basis from a source other than NBC Holdings or any of
its Representatives, provided that such source is not known by Cablevision
to be bound by a confidentiality agreement or other contractual, legal or
fiduciary obligation of confidentiality to NBC Holdings or any other party
with respect to such information or (z) commencing on the date that is 12
months after the Closing, information referred to in clause (ii) of the
definition of Competitively Sensitive Bravo Information.
(c) From and after the Closing, NBC Holdings agrees to, and shall
cause its Representatives to, (i) treat and hold as confidential all
proprietary information concerning the Cablevision Companies, the Companies
or their respective assets, business, financial condition and operations
(other than any of such information exclusively relating to the Business
and the Companies) furnished to NBC Holdings or its Representatives in
connection with this Agreement, including pursuant to Sections 5.02,
9.03(a) and 9.03(b), and the transactions contemplated hereby (the
"Cablevision Proprietary Information"), (ii) in the event that NBC Holdings
or any such Representative becomes legally compelled to disclose any such
Cablevision Proprietary Information, provide Cablevision with prompt
written notice of such requirement so that Cablevision may seek a
protective order or other remedy or waive compliance with this Section
9.07, (iii) in the event that such protective order or other remedy or
waiver is not obtained, furnish only that portion of such Cablevision
Proprietary Information which is legally required to be provided and
exercise reasonable commercial efforts to obtain assurances that
confidential treatment will be accorded such Cablevision Proprietary
Information. The term Cablevision Proprietary Information does not include
information which (x) is or becomes generally available to the public other
than as a result of a disclosure by NBC Holdings or its Representatives,
(y) was within the possession of NBC Holdings prior to its being furnished
to NBC Holdings by or on behalf of Cablevision pursuant hereto, provided
that the source of such information was not known by NBC Holdings to be
bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to Cablevision or any other party
with respect to such information or (z) becomes available to NBC
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Holdings on a non-confidential basis from a source other than Cablevision
or any of its Representatives, provided that such source is not known by
NBC Holdings to be bound by a confidentiality agreement or other
contractual, legal or fiduciary obligation of confidentiality to
Cablevision or any other party with respect to such information.
9.08 Insurance. Following the Closing, the Companies shall be entitled to
the benefit of any occurrence-based insurance policies maintained by Cablevision
or its Affiliates for the benefit of the Companies or the Business prior to the
Closing Date set forth on Schedule 3.16, including but not limited to any and
all rights of indemnity and the right to be defended by or at the expense of the
insurer, covering any loss, liability, damage or claim relating to any of the
Companies or the Business arising out of occurrences on or prior to the Closing
Date (including, without limitation, those current claims set forth on Schedule
3.12). Cablevision will cooperate with the Companies in submitting claims (and
pursuing claims previously made), will use its commercially reasonable efforts
to obtain recoveries for the Companies with respect to claims pursuant to
property insurance policies and will remit to the Companies any recovery
obtained by it pursuant to such claims.
9.09 Termination of Agreements. Upon the Closing hereunder, the
Stockholders' Agreement, dated as of October 6, 2000, by and among Cablevision,
CSC Holdings, NBC and NBC Holdings (the "Stockholders' Agreement") and the
Registration Rights Agreement, dated as of October 6, 2000, between Cablevision
and NBC Holdings (the "NBC Registration Rights Agreement") and all of the rights
and obligations of the parties thereunder shall be terminated without any
further action by any party hereto or thereto.
9.10 Xxxxx Contract. From the Closing until the earlier of June 30, 2003 or
the termination of the Xxxxx Agreement (provided that such termination is not
earlier than the termination of the Transition Services Agreement), Cablevision
shall cause RMHI to make available to Bravo all rights (including, without
limitation, the use of all services and facilities) under the Agreement between
RMHI and Xxxxx Sound, Inc. ("Xxxxx"), dated as of January 1, 2000, as modified
and extended under a Modification and Extension Agreement, dated as of December
31, 2001, between RMHI and Xxxxx (the "Xxxxx Agreement"), in all material
respects in accordance with past practices (the "Xxxxx Rights"). NBC shall cause
Bravo to pay to RMHI $18,292 per month (pro rated for any partial month) as
consideration for the Xxxxx Rights, such payment to be made on the last Business
Day of each month during such period; provided, that if RMHI is unable to
provide all of the Xxxxx Rights to Bravo due to RMHI's failure to obtain any
required consent to such arrangement, then Bravo shall have no payment
obligation to RMHI and RMHI shall have no obligation to make the Xxxxx Rights
available to Bravo. In the event of an early termination of the Xxxxx Agreement,
Bravo's payment obligation hereunder shall terminate. Neither NBC nor Bravo
shall have any payment obligation in connection with the termination of the
Xxxxx Agreement other than payments owing as specified herein in respect of the
Xxxxx Rights.
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9.11 BHC Convertible Preferred Stock. NBC and NBC Holdings shall not, and
NBC and NBC Holdings shall cause their respective Affiliates not to, solicit any
repurchase of any of the BHC Convertible Preferred Stock to be issued in step 14
of the Reorganization Transactions prior to the fifth (5th) anniversary of the
Closing Date.
10. Survival of Representations, Warranties, Covenants and Other Agreements;
Indemnification.
10.01 Survival of Representations, Warranties, Covenants and Other
Agreements.
(a) Each of the representations and warranties of Cablevision, NBC
and NBC Holdings contained in this Agreement and the covenants and
agreements of the parties hereto set forth in Sections 5.01, 5.05 and 5.07
shall survive the Closing for a period of eighteen months following the
Closing Date; provided, however, that (i) the representations and
warranties contained in Sections 3.03(b), 3.03(c) and 4.03 shall survive
the Closing indefinitely, (ii) the representations and warranties contained
in Section 3.11 shall survive the Closing for the applicable statute of
limitations (including any extensions thereof), (iii) the representations
and warranties contained in Section 3.19(c) shall survive the Closing for a
period of 36 months following the Closing Date, and (iv) the
representations and warranties in Section 4.08 shall survive until the date
which is six months after the date of expiration of the applicable statute
of limitations (including any extensions thereof). If written notice of a
claim has been given prior to the expiration of the applicable
representations, warranties or covenants, then the relevant
representations, warranties or covenants shall survive as to such claim,
until such claim has been finally resolved.
(b) The covenants and agreements of the parties hereto set forth in
Sections 5.02, 5.03, 5.04, 5.06, 9.01 and 9.02(a), (b), (c), (d) and (e)
shall terminate on the Closing and each of the other covenants and
agreements of the parties hereto other than those specifically referred to
in Section 10.01(a) or this Section 10.01(b) shall survive the Closing
until such covenant or agreement is fully complied with.
10.02 Indemnification by Cablevision.
(a) Indemnity. Subject to Sections 10.01, 10.02(b) and 10.02(c),
Cablevision agrees to indemnify, defend and hold harmless GE Merger Sub,
NBC, NBC Holdings, their respective Affiliates (including, for the
avoidance of doubt, Bravo, BHC and B2HC after the Closing) and their
respective shareholders, directors, officers, partners, employees, agents,
successors and assigns, on an After-Tax Basis, from and against all losses,
damages, liabilities, deficiencies or obligations, including, without
limitation, all claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses (including
settlement costs and reasonable legal fees) (collectively,
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"Losses") to which they may become subject as a result of (i) any and all
breaches of a representation or warranty of Cablevision in this Agreement
(other than Sections 3.03(b), 3.03(c), 3.04(e)(iii) and 3.19(c)), (ii) any
and all breaches of a representation or warranty of Cablevision in Sections
3.03(b), 3.03(c), 3.04(e)(iii) or 3.19(c) of this Agreement, (iii) the
nonperformance or breach of any covenants or agreements of Cablevision in
Section 5.01 of this Agreement, (iv) the nonperformance or breach of any
covenants or agreements of Cablevision in this Agreement (other than
Section 5.01), (v) the Actions described in paragraph (d) of Schedule 3.12
and any similar Actions commenced by present or former shareholders of
Cablevision (other than Actions in which GE or any of its Affiliates is a
party other than as a passive member of a class or putative class prior to
the expiration of the opt-out period), (vi) any IFC Liabilities, or (vii)
any of the matters disclosed on Schedule 3.14.
(b) For the purposes of seeking indemnity pursuant to Section
10.02(a)(i) and (ii), the representations and warranties of Cablevision
will be interpreted without giving effect to any qualifications or
limitations as to "materiality" or "Company Material Adverse Effect",
except that "materiality" shall not be read out (i) for purposes of Section
3.09(d) or Section 3.09(e), (ii) for purposes of determining whether any
matter is required to be listed on Schedule 3.09 pursuant to Section
3.09(a) or Schedule 3.20 pursuant to Section 3.20(a), (iii) for purposes of
determining whether there has been a breach of a representation or warranty
requiring one or more items to be made available to NBC Holdings pursuant
to Section 3.09(c), or (iv) for purposes of determining whether there has
been a breach of a representation or warranty requiring that information
set forth on a schedule pursuant to Section 3.07(b) or Section 3.20(b) be
accurate in all material respects. For the avoidance of doubt, if a matter
was required to be listed on one of the foregoing schedules because it
meets the materiality standard (and any other requirements) for disclosure
on such schedule and such matter was not listed, then a breach of such
representation will have occurred. On the other hand, if a matter was not
required to be listed on one of the foregoing schedules because it did not
meet the materiality standard for disclosure on such schedule, such
representation will not be deemed to have been breached by virtue of such
matter not being listed on the schedule for that reason.
(c) Payment. Any obligations of Cablevision under the provisions of
this Article 10 shall be paid in cash promptly to the Cablevision
Indemnified Party by Cablevision (except that any payment after the Closing
with respect to a Loss of NBC Holdings shall be paid to BHC and the
Surviving Corporation in proportion to the BHC Percentage and the B2HC
Percentage) and, if paid after the Closing, shall represent (i) a
retroactive adjustment to the Exchanges if paid to a party other than BHC
or the Surviving Corporation or (ii) a retroactive contribution to capital
if paid to BHC or the Surviving Corporation. The amount of such payment
(and adjustment) shall be equal, on an After-Tax Basis, to the amount of
the Loss incurred by the Cablevision Indemnified Party on account of
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the matter for which indemnification is required hereunder less the amount
of any payments actually received by such Cablevision Indemnified Party
pursuant to any third-party insurance policy or similar arrangement after
giving effect to any retroactive premium adjustments or similar costs
payable to third parties. Notwithstanding anything contained herein to the
contrary, the right of a Cablevision Indemnified Party to be indemnified
pursuant to Section 10.02(a)(i) and 10.02(a)(iii) shall be limited as
follows: (i) a Cablevision Indemnified Party shall only be entitled to
indemnification to the extent that, and shall not be entitled to any
indemnification until, the aggregate of all amounts subject to
indemnification exceeds $25,000,000 (and then only for the amount by which
such Losses exceed that amount), (ii) as to any particular indemnity claim
or series of indemnity claims arising out of the same or related facts,
events or circumstances, a Cablevision Indemnified Party shall be entitled
to seek indemnity for such claim or claims only if such indemnity claim or
series of related indemnity claims equals or exceeds $100,000, in which
case the Cablevision Indemnified Party shall be entitled to seek indemnity
for the full amount of such claim or claims, and (iii) the maximum amount
that Cablevision will be required to pay in respect of all claims by all
parties is $250,000,000. For the avoidance of doubt, the monetary
limitations set forth in the preceding sentence shall not apply to any
claim for indemnification pursuant to Section 10.02(a)(ii), 10.02(a)(iv),
10.02(a)(v), 10.02(a)(vi) or 10.02(a)(vii).
10.03 Indemnification by NBC Holdings, NBC and GE Merger Sub.
(a) Indemnity. Subject to Sections 10.01, 10.03(b) and 10.03(c), NBC
Holdings, NBC and GE Merger Sub agree, jointly and severally, to indemnify,
defend and hold harmless or, after the Closing, to cause BHC and the
Surviving Corporation in proportion to the BHC Percentage and the B2HC
Percentage to indemnify, defend and hold harmless, Cablevision, its
Affiliates and their respective shareholders, partners, directors,
officers, employees, agents, successors and assigns (an "NBC Holdings
Indemnified Party"), on an After-Tax Basis, from and against all Losses to
which they may become subject as a result of (i) any and all breaches of a
representation or warranty by NBC or NBC Holdings in this Agreement (other
than Sections 4.03, 4.05 and 4.08), (ii) any and all breaches of a
representation or warranty by NBC or NBC Holdings in Section 4.03, 4.05 or
4.08 in this Agreement, or (iii) the nonperformance or breach of any
covenant or agreement of NBC Holdings or NBC contained herein.
(b) For the purposes of seeking indemnity pursuant to Section
10.03(a)(i) and (ii), the representations and warranties of NBC and NBC
Holdings will be interpreted without giving effect to any qualifications or
limitations as to "materiality", "NBC Material Adverse Effect" or "GE
Material Adverse Effect".
(c) Payment. Any obligations of NBC Holdings, NBC and GE Merger Sub
under the provisions of this Article shall be paid in cash promptly to the
NBC
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Holdings Indemnified Party by NBC Holdings, NBC and GE Merger Sub or,
subject to Section 2.07(b), in the case of a post-Closing payment, by NBC
Holdings, NBC and GE Merger Sub causing BHC and the Surviving Corporation
to make such prompt payment in cash and shall represent a retroactive
adjustment to the Exchanges. The amount of such payment (and adjustment)
shall be equal, on an After-Tax Basis, to the amount of the Loss incurred
by the NBC Holdings Indemnified Party on account of the matter for which
indemnification is required hereunder less the amount of any payments
actually received by such NBC Holdings Indemnified Party pursuant to any
third-party insurance policy or similar arrangement after giving effect to
any retroactive premium adjustments or similar costs payable to third
parties. Notwithstanding anything contained herein to the contrary, the
right of an NBC Holdings Indemnified Party to be indemnified pursuant to
Section 10.03(a)(i) shall be limited as follows: (i) a NBC Holdings
Indemnified Party shall only be entitled to indemnification to the extent
that, and shall not be entitled to any indemnification until, the aggregate
of all amounts subject to indemnification exceeds $25,000,000 (and then
only for the amount by which such Losses exceed that amount), (ii) as to
any particular indemnity claim or series of indemnity claims arising out of
the same or related facts, events or circumstances, an NBC Holdings
Indemnified Party shall be entitled to seek indemnity for such claim or
claims only if such indemnity claim or series of related indemnity claims
equals or exceeds $100,000, in which case the NBC Holdings Indemnified
Party shall be entitled to seek indemnity for the full amount of such claim
or claims, and (iii) the maximum amount that NBC and NBC Holdings will be
required to pay in respect of all claims by all parties is $250,000,000.
For the avoidance of doubt, the monetary limitations set forth in the
preceding sentence shall not apply to a claim for indemnification pursuant
to Section 10.03(a)(ii) or 10.03(a)(iii).
10.04 Third Party Claims, Etc. If any claim ("Asserted Claim") covered by
the foregoing indemnities is asserted against any indemnified party
("Indemnitee") by a third party, it shall be a condition to the obligations
under this Article that the Indemnitee shall promptly give the indemnifying
party ("Indemnitor") notice thereof in accordance with Section 13.05; provided,
however, that the failure to so notify the Indemnitor shall not affect the
rights to indemnification hereunder with respect thereto so long as written
notice of a claim is given prior to the expiration of the applicable
representations, warranties or covenants except to the extent that the
Indemnitor is actually prejudiced by such failure. The Indemnitee shall give
Indemnitor an opportunity to control negotiations toward resolution of such
claim without the necessity of litigation, and, if litigation ensues, to defend
the same with counsel reasonably acceptable to Indemnitee, at Indemnitor's
expense, and Indemnitee shall extend reasonable cooperation in connection with
such defense. If the Indemnitor fails to assume control of the negotiations
prior to litigation or the defense of such action within a reasonable time,
Indemnitee shall be entitled, but not obligated, to assume control of such
negotiations or defense of such action, and Indemnitor shall be liable to the
Indemnitee for its expenses reasonably incurred in connection therewith which
Indemnitor shall promptly pay. If the Indemnitor
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has reasonably concluded, based on the written advice of counsel, that there
exists or is reasonably likely to exist a conflict of interest that would make
it inappropriate for the same counsel to represent both the Indemnitee and the
Indemnitor, then the Indemnitee shall be entitled to retain one separate firm of
counsel reasonably acceptable to the Indemnitor, in which case the reasonable
fees, disbursements and charges of such counsel will be at the expense of the
Indemnitor. If the Indemnitor has assumed control of the negotiations or defense
and has not notified the Indemnitee that it has concluded that there exists a
conflict of interest contemplated by the prior sentence, an Indemnitee may
deliver a written request to Indemnitor for confirmation that the Asserted Claim
is covered by the Indemnitor's indemnification obligation under this Article 10.
If the Indemnitor denies that the Asserted Claim is so covered or fails to
respond to such request by the twentieth day following the later of the date of
delivery of the written request or the date of commencement of the action in
respect thereof, then the Indemnitee shall be entitled to retain one separate
firm of counsel reasonably acceptable to Indemnitor to be kept informed of, and
consulted with respect to, developments relating to the legal proceedings
relating to the Asserted Claim and the reasonable fees, disbursements and
charges of such counsel to Indemnitee will initially be at the expense of
Indemnitee but with the understanding that (i) if it is subsequently determined
that the Asserted Claim was covered by Indemnitor's indemnification obligation
under this Article 10 or (ii) Indemnitor effects a settlement with the Person
pursuing the Asserted Claim, Indemnitor shall be obligated to repay Indemnitee
for all such fees, disbursements and charges. If Indemnitor is responsible for
repayment pursuant to clause (i) of the immediately preceding sentence, then the
repayment shall include interest on the repaid amounts at 6% per annum from the
date of incurrence to the date of payment. Neither Indemnitor nor Indemnitee
shall settle, compromise, or make any other disposition of any Asserted Claims,
which would or might result in any liability to Indemnitee or Indemnitor,
respectively, under this Article 10 without the written consent of Indemnitee or
Indemnitor, respectively, which shall not be unreasonably withheld. If an
Indemnitee asserts a claim for indemnification hereunder in respect of an
Asserted Claim as to which an action has been brought against the Indemnitee,
the Indemnitee shall upon the written request of the Indemnitor, promptly
implead, commence an action over or take such other comparable procedural step
as may be available to the Indemnitee to make the Indemnitor party to such
action.
Notwithstanding the foregoing, the Indemnitor shall not be entitled to
assume the defense of any Asserted Claim (and shall be liable for the fees and
expenses of counsel reasonably acceptable to Indemnitor incurred by the
Indemnitee in defending such Asserted Claim) if the Asserted Claim seeks an
order, injunction or other equitable relief against the Indemnitee that would
materially adversely affect the Business and that is the only claim made or that
cannot be separated from any related claim for money damages. The Indemnitor
shall also be entitled to participate in the defense of such claim at its own
expense. If such claim for an order, injunction or other equitable relief can be
so separated from that for money damages, the Indemnitor shall be entitled to
assume the defense of the portion relating to money damages.
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If the Closing occurs, the indemnification provided for in this Article 10
shall be the exclusive remedy of any party in respect of inaccuracy in any
representations and warranties contained herein.
11. Further Assurances.
From time to time after the Closing, each party will execute and deliver
such other instruments of conveyance and transfer, fully cooperate with the
other parties and take such other actions as the other parties reasonably may
request to effect the purposes and intent of this Agreement. This Article 11 is
not intended to extend the period for performance of Cablevisions's obligations
pursuant to Section 9.06(b)(ii).
12. Closing.
12.01 Closing. The Closing shall take place at the offices of Xxxxxxxx &
Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., local time,
on the fifth Business Day after all consents required as conditions to the sale
as provided in Sections 7.01 and 8.01 have been received (the "Closing Date");
provided, however, that if the Closing shall not have occurred prior to March
31, 2003 (the "Outside Date"), then any party (other than a party whose material
breach or default of its obligations under this Agreement has caused the Closing
not to occur by such Outside Date) may terminate this Agreement upon and
effective as of the date of written notice to the other parties. At the Closing,
the parties hereto shall execute and deliver all instruments and documents as
shall be necessary in the reasonable opinion of counsel for the respective
parties to effect the Exchanges of securities and the delivery of securities in
the B2HC Merger.
12.02 Termination. (a) In addition to the termination provided for in
Section 12.01, this Agreement may be terminated prior to Closing and the
transactions contemplated hereby may be abandoned:
(i) At any time, by the mutual written agreement of NBC Holdings
and Cablevision;
(ii) by NBC or NBC Holdings, upon a breach of or failure to
perform in any material respect any representation, warranty, covenant
or agreement on the part of Cablevision set forth in this Agreement,
such that the conditions set forth in Section 7 of this Agreement
cannot be satisfied on or prior to the Outside Date;
(iii) by Cablevision, upon a breach of or failure to perform in
any material respect any representation, warranty, covenant or
agreement on the part of NBC or NBC Holdings set forth in this
Agreement, such that the conditions set forth in Section 8 of this
Agreement cannot be satisfied on or prior to the Outside Date;
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(iv) By Cablevision or NBC Holdings, upon and effective as of the
date of written notice to the other, pursuant to the termination
provisions of Section 9.02.
(b) In the event of the termination of this Agreement as provided in
this Section 12.02 or pursuant to Section 12.01, this Agreement shall
forthwith become void and there shall be no liability on the part of either
party hereto, except (i) that the provisions of Section 13 shall survive a
termination of this Agreement, and (ii) nothing shall relieve either party
from liability for any breach or default hereunder.
13. Miscellaneous.
13.01 Amendments; Waivers. This Agreement cannot be changed or terminated
orally and no waiver of compliance with any provision or condition hereof and no
consent provided for herein shall be effective unless evidenced by an instrument
in writing duly executed by the party hereto sought to be charged with such
waiver or consent. No waiver of any term or provision hereof shall be construed
as a further or continuing waiver of such term or provision or any other term or
provision. Any condition to the performance of any party hereto which may
legally be waived at or prior to the Closing may be waived in writing at any
time by the party or parties entitled to the benefit thereof.
13.02 Entire Agreement. This Agreement sets forth the entire understanding
and agreement of the parties and supersedes any and all prior agreements,
memoranda, arrangements and understandings relating to the subject matter hereof
other than the Confidentiality Agreement, the Related Agreements and other than
any writing signed by a party, dated on or prior to the date of this Agreement
and which expressly refers to this Section 13.02. No representation, warranty,
promise, inducement or statement of intention has been made by any party which
is not contained in this Agreement, such Confidentiality Agreement, such Related
Agreements or any such writing, and no party shall be bound by, or be liable
for, any alleged representation, promise, inducement or statement of intention
not contained herein or therein and each party expressly agrees that it has not
relied upon any such representation, promise, inducement or statement of intent.
13.03 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement shall not be assigned other than (a) by
operation of Law, (b) with the written consent of the other parties, such
consent not to be unreasonably withheld, or (c) to a Person that acquires all or
substantially all of a party's assets and assumes all of the party's obligations
hereunder.
13.04 Construction; Counterparts. The Article and Section headings of this
Agreement are for convenience of reference only and do not form a part hereof
and do not in any way modify, interpret or construe the intentions of the
parties. This
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Agreement may be executed in one or more counterparts, and all such counterparts
shall constitute one and the same instrument.
13.05 Notices. All notices and communications hereunder shall be in writing
and shall be deemed to have been duly given to and received by a party when
delivered in person, faxed (with confirmation of transmission by the
transmitting equipment) or three Business Days after such notice is enclosed in
a properly sealed envelope, certified or registered, and deposited (postage and
certification or registration prepaid) in a post office or collection facility
regularly maintained by the United States Postal Service, or one Business Day
after delivery to a nationally recognized overnight courier service, and
addressed as follows:
If to Cablevision
or its Affiliates: Cablevision Systems Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
copies to: Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
If to NBC Holdings
or its Affiliates: NBC-Rainbow Holding, Inc.
c/o National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: EVP - Business Development
copies to: National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Vice President - Corporate &
Transactions Law
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copies to: Shearman & Sterling
000 Xxxxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Xx.
Any party may change its address for the purpose of notice by giving notice
in accordance with the provisions of this Section 13.05.
13.06 Expenses of the Parties. Except as otherwise provided herein, all
expenses incurred by or on behalf of the parties hereto in connection with the
authorization, preparation and consummation of this Agreement, including,
without limitation, all fees and expenses of agents, representatives, counsel
and accountants employed by the parties hereto in connection with the
authorization, preparation, execution and consummation of this Agreement shall
be borne solely by the party who shall have incurred the same.
13.07 Non-Recourse. No partner, officer, director, shareholder or other
holder of an ownership interest of or in any party to this Agreement shall have
any personal liability in respect of any such party's obligations under this
Agreement by reason of his or its status as such partner, officer, director,
shareholder or other holder.
13.08 Third Party Beneficiary. Except with respect to Indemnified Parties
under Article 10, this Agreement is entered into only for the benefit of the
parties and their respective successors and assigns, and nothing hereunder shall
be deemed to constitute any person a third party beneficiary to this Agreement.
13.09 Governing Law; Choice of Forum; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF NEW
YORK.
(b) All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined exclusively in any New York state
or federal court sitting in the Borough of Manhattan of The City of New
York. The parties hereto hereby (a) submit to the exclusive jurisdiction of
any state or federal court sitting in the Borough of Manhattan of The City
of New York for the purpose of any Action arising out of or relating to
this Agreement brought by any party hereto, and (b) irrevocably waive, and
agree not to assert by way of motion, defense, or otherwise, in any such
Action, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from
attachment or execution, that the action or proceeding is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be
enforced in or by any of the above-named courts.
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(c) Each of the parties hereto hereby waives to the fullest extent
permitted by applicable Law any right it may have to a trial by jury with
respect to any litigation directly or indirectly arising out of, under or
in connection with this Agreement or the transactions contemplated by this
Agreement. Each of the parties hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or
otherwise, that such other party would not, in the event of litigation,
seek to enforce that foregoing waiver and (b) acknowledges that it and the
other party hereto have been induced to enter into this Agreement and the
transactions contemplated by this Agreement, as applicable, by, among other
things, the mutual waivers and certifications in this Section 13.09.
13.10 Press Releases. No press release or other public information relating
to the transactions contemplated in this Agreement shall be made or disclosed by
any party hereto without the prior written consent of the other parties;
provided, however, that any party may disclose such information if reasonably
deemed by legal counsel for such party to be required by Law or the rules of any
stock exchange on which such party's common stock is listed; provided further
that such party shall notify the other parties as soon as reasonably practicable
prior to the issuance of such press release.
13.11 Severability. If any provision of this Agreement is finally
determined to be illegal, void or unenforceable, such determination shall not,
of itself, nullify this Agreement which shall continue in full force and effect
subject to the conditions and provisions hereof.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CABLEVISION SYSTEMS CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
BRAVO HOLDING CORPORATION
By: /s/ Xxxx Xxxxxx
----------------------------
BRAVO II HOLDING CORPORATION
By: /s/ Xxxx Xxxxxx
----------------------------
RAINBOW MEDIA GROUP, LLC
By: /s/ Xxxx Xxxxxx
----------------------------
NATIONAL BROADCASTING COMPANY, INC.
By: /s/ Xxxxxxxx X. Tu
----------------------------
NBC-RAINBOW HOLDING, INC.
By: /s/ Xxxxxxxx X. Tu
----------------------------
APPLAUSE ACQUISITION CORPORATION
By: /s/ Xxxxxxxx X. Tu
----------------------------
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EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT, dated as of [CLOSING DATE], between
Cablevision Systems Corporation, a Delaware corporation (the "Cablevision"), on
the one hand, and General Electric Company, a New York corporation (the
"Company"), on the other hand.
WHEREAS, Cablevision currently owns and may in the future receive
additional shares (the "Shares") of common stock, par value $0.06 per share, of
the Company (the "Common Stock") issued or to be issued to it pursuant to the
Agreement and Plan of Merger and Exchange dated as of November 4, 2002 (the
"Exchange Agreement") by and among Cablevision, Bravo Holding Corporation, a
Delaware corporation, Bravo II Holding Corporation, a Delaware corporation,
Rainbow Media Group, LLC, a Delaware limited liability company, National
Broadcasting Company, Inc., a Delaware corporation and a wholly owned subsidiary
of the Company ("NBC"), NBC-Rainbow Holding, Inc., a California corporation and
a wholly owned subsidiary of NBC, and Applause Acquisition Corporation, a
Delaware corporation and a wholly owned subsidiary of the Company;
WHEREAS, the Company and Cablevision desire to have the Shares
received by Cablevision pursuant to the Exchange Agreement be subject to the
rights described herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:
1. Definitions. (a) As used herein, the following terms shall
have the following meanings:
"Agreement" shall mean this Registration Rights Agreement, as amended,
supplemented or otherwise modified from time to time.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day which the New York Stock Exchange (or, if different, the principal
exchange on which the Shares are traded) is not open for trading.
"Commission" shall mean the Securities and Exchange Commission.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Cablevision" shall have the meaning set forth in the preamble and
shall also include Cablevision's successors.
"Derivative Securities" shall mean any derivative or hedging security
or instrument including, without limitation, any rights, warrants, convertible
or
exchangeable securities or other securities issued by a Derivative Securities
Issuer, that are offered with, convertible into, or exchangeable or exercisable
for or payable with, Common Stock or prepaid forward or similar contracts
entered into by a Stockholder with respect to Common Stock.
"Derivative Securities Issuer" shall mean (a) a Stockholder, (b) any
of affiliate of a Stockholder, or (c) any financial institution issuing
Derivative Securities for the benefit of a Stockholder or any of its affiliates
in a transaction in which the net proceeds or economic benefit of such
Derivative Securities will be received by a Stockholder or an affiliate of a
Stockholder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Permitted Transferee" shall mean any Subsidiary of Cablevision
Systems Corporation.
"Person" means any individual, corporation, partnership, limited
partnership, limited liability partnership, limited liability company, trust,
association, organization or other entity.
"Prospectus" shall mean the prospectus included in the Registration
Statement, including any preliminary prospectus, and any such prospectus as
supplemented by any prospectus supplement with respect to the terms of the
offering of any of the Registrable Securities, and by all other amendments and
supplements to such prospectus, and in each case including all documents
incorporated by reference therein.
"Register", "Registered" and "Registration" refer to a registration of
Registrable Securities effected by preparing and filing a Registration Statement
in compliance with the Securities Act and the declaration or ordering of the
effectiveness of such Registration Statement.
"Registrable Securities" shall mean (i) the Shares received by the
Stockholder pursuant to the Exchange Agreement and (ii) any securities of the
Company issued or issuable with respect to any Shares referred to in clause (i)
by way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (w) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement, (x) they shall have been distributed to the
public pursuant to Rule 144 or Rule 145 (or any successor provision) under the
Securities Act, (y) such securities may be resold pursuant to Rule 144 or Rule
145 under the Securities Act (or any successor provision) without any limitation
(including, without limitation, without the necessity of any filing thereunder)
and without qualification under any state securities or "blue sky" law then in
effect, or the use of an applicable exemption therefrom and, in each case, the
Company has notified the transfer agent of the Common
Stock that any restrictive legend on such shares of Common Stock may be removed
in connection with a transfer thereof; or (z) they shall have ceased to be
outstanding.
"Registration Expenses" shall mean all expenses incident to the
performance of or compliance with this Agreement by any party, including,
without limitation, all Registration, filing and National Association of
Securities Dealers, Inc. fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits or "comfort" letters required by or incident to
such performance and compliance, premiums and other costs of policies of
insurance obtained by the Company against liabilities arising out of the public
offering of Registrable Securities being registered, any fees and disbursements
of underwriters, all underwriting discounts and commissions and transfer taxes,
if any, relating to Registrable Securities and any other registration expenses
incident to the registration of the Registrable Securities issued to the
Stockholder.
"Registration Statement" shall mean the registration statement of the
Company on Form S-3 (or, if the Company is not then eligible for Form S-3, such
other form for which the Company then qualifies) which is filed by the Company
with the Commission in accordance with Section 2 below. The term "Registration
Statement" shall also include all exhibits and financial statements and
schedules and documents incorporated by reference in such Registration Statement
when it becomes effective under the Securities Act, and in the case of
references to the Registration Statement as of a date subsequent to the
effective date, as amended or supplemented as of such date.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Stockholder" means Cablevision and, except where the context clearly
indicates otherwise, includes any other Person:
(i) to whom any Registrable Securities or any rights to acquire any
Registrable Securities are transferred by any Person that was, immediately prior
to such transfer, a Stockholder;
(ii) who continues to hold such Registrable Securities or the right to
acquire such Registrable Securities;
(iii) to whom the transferring Stockholder has assigned any of its
rights under this Agreement, in whole or in part, in accordance with the
provisions of Section 13 of this Agreement with respect to such Registrable
Securities; and
(iv) who has executed a counterpart hereof in connection with the
transfer of such Registrable Securities.
(b) Capitalized terms used herein but not otherwise defined
herein shall have the same meaning as in the Exchange
Agreement. Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa. All matters of an
accounting nature in connection with this Agreement and the
transactions contemplated hereby shall be determined in accordance
with generally accepted accounting principles as in effect from time
to time. As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the
neuter and feminine, where the context so permits. The words "hereof,"
"herein" and "hereunder", and words of similar import, when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section, subsection,
paragraph, schedule and exhibit references are to this Agreement
unless otherwise specified.
2. Registration Rights.
(a) Demand Registration. Upon receipt from Cablevision of a
request for Registration hereunder delivered at any time prior to the
first anniversary of this Agreement, the Company shall, subject to the
terms and conditions of this Agreement, prepare and file with the
Commission, and use commercially reasonable efforts to have declared
effective a Registration Statement under the Securities Act relating
to the offer and sale by the Stockholder(s) specified in such request
through such method or methods of distribution as specified in such
request and otherwise in accordance with this Agreement, of the
Registrable Securities specified in such request; provided, that
Cablevision shall only be permitted to make one request for
Registration hereunder and the Company shall not be required to
prepare and file more than one Registration Statement pursuant to this
Agreement.
(b) Expenses. The Registration Expenses in connection with
the registration effected pursuant to this Section 2 shall be borne by
Cablevision, or if different, the requesting Stockholder.
3. Registration Procedures. If the Company is required to file
a Registration Statement to Register Registrable Securities under the Securities
Act as provided in Section 2, the Company will:
(i) prepare and within 60 days of the receipt of a request for
Registration file with the Commission the Registration Statement required
pursuant to Section 2, and use commercially reasonable efforts to cause
such Registration Statement to become effective as promptly as practicable
thereafter. Prior to filing such Registration Statement or any amendments
thereto with the Commission, the Company shall furnish to the counsel
selected by Cablevision copies of all such documents proposed to be filed,
which documents will be subject to the review of such counsel before any
such filing is made, and the Company will comply with any reasonable
request made by such counsel to make
changes in any information contained in such documents relating to the
Stockholder;
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to maintain the effectiveness of
such registration and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement until the earliest of (A) the termination of this
Agreement pursuant to Section 17 and (B) such time as all of such
securities have been disposed of;
(iii) furnish to the Stockholder such number of conformed copies of
such Registration Statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
Prospectus contained in such Registration Statement and any supplements
thereto and any other Prospectus filed under Rule 424 under the Securities
Act, in conformity with the requirements of the Securities Act, and such
other documents, including documents incorporated by reference, as the
Stockholder may reasonably request;
(iv) use all reasonable efforts to register or qualify all Registrable
Securities registered pursuant to such Registration Statement under such
other securities or blue sky laws of such jurisdictions as the Stockholder
shall reasonably request, to keep such registration or qualification in
effect for so long as such Registration Statement remains in effect, and
take any other action which may be reasonably necessary or advisable to
enable the Stockholder to consummate the disposition in such jurisdictions
of the securities owned by the Stockholder, except that the Company shall
not for any such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction wherein it would not but for the
requirements of this clause (iv) be obligated to be so qualified, to be
subject to taxation or to consent to general service of process in any such
jurisdiction;
(v) use all reasonable efforts to cause all Registrable Securities
covered by such Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the Stockholder to consummate the disposition of such Registrable
Securities;
(vi) promptly notify the Stockholder at any time when the Company
becomes aware that a Prospectus relating to Registrable Securities is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the Prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and, at the request of the
Stockholder and subject to Section 4(b)(i) and Section 8 hereof, promptly
prepare and furnish to the Stockholder a reasonable number of copies of a
supplement to or an amendment of such Prospectus as may be necessary so
that,
as thereafter delivered to the purchasers of such securities, such
Prospectus shall not include 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 not misleading in the light of the circumstances
under which they were made;
(vii) otherwise use all reasonable efforts to comply with the
Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission, and consider any suggestions of the
Stockholder with respect to such Registration Statement or Prospectus to
ensure such compliance;
(viii) provide a transfer agent and registrar for all Registrable
Securities covered by the Registration Statement not later than the
effective date of the Registration Statement;
(ix) use all reasonable efforts to list all Shares covered by such
Registration Statement on any securities exchange on which the Common Stock
is then listed; and
(x) upon the reasonable request of the Stockholder, otherwise use all
reasonable efforts to effect the registration of Registrable Securities
under the Securities Act as provided in Section 2.
4. Stockholder's Obligations.
(a) Furnishing Information. The Stockholder shall furnish to
the Company such information regarding the Stockholder and the
distribution proposed by it as the Company may reasonably request,
including, without limitation, providing the Company with
questionnaires as are customary for similar transactions, and which
the Company may reasonably request or as may be required by applicable
securities laws and regulations, and as shall be required in
connection with any registration, qualification or compliance referred
to in this Agreement. The Stockholder agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information
previously furnished to the Company 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
the Stockholder or the distribution of such Registrable Securities or
omits to state any material fact regarding the Stockholder or the
distribution of such Registrable Securities 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 the Company promptly any additional information required to
correct and update any previously furnished information or required
such that such Prospectus shall not contain, with respect to the
Stockholder or the distribution of such Registrable Securities, 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.
(b) Blackouts.
(i) The Company may, by written notice to the Stockholder, postpone
any registration which is requested pursuant to Section 2 or delivery of a
Prospectus pursuant to Section 3(iv), suspend sales under the Registration
Statement filed hereunder or defer the updating of such filed Registration
Statement if (A) the Company reasonably believes that the use or updating
of such Registration Statement or such sale, as the case may be, would
require disclosure of a material corporate development not otherwise
required to be disclosed that the Company has a valid business purpose for
not disclosing, (B) the Company is in the process of making, or preparing
to make, a registered offering of securities and the Company reasonably
deems it advisable to temporarily discontinue disposition of securities, or
(C) the Company reasonably believes that disposition of securities at such
time would materially interfere with the business activities or plans of
the Company. In the event the Company makes any such election, the
Stockholder agrees to keep confidential the fact of such election and any
information provided by the Company in connection therewith.
(ii) Notwithstanding the blackout rights set forth above in Section
4(b)(i), (A) the Stockholder shall in any event be entitled to 180 days in
each calendar year that are not subject to any black-out and (B) the
Company may not exercise any blackout rights for a period of ten days
commencing on the effective date of the Registration Statement..
5. Registration Statement. In connection with the preparation and
filing of the Registration Statement under the Securities Act, the Company
shall:
(a) give the Stockholder and its counsel the opportunity to
participate in the preparation of such Registration Statement, each Prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto; and
(b) provide to a Stockholder or any other Person who participates as
an underwriter in connection with the offering and sale of Registrable
Securities reasonable and customary due diligence, subject to the execution and
delivery of appropriate confidentiality agreements.
6. Indemnification.
(a) Indemnification By The Company. In the event of any
registration of any Registrable Securities of the Company under the
Securities Act, the Company will, and hereby does, indemnify and hold
harmless the Stockholder, each other Person who participates as an
underwriter in the offering or sale of such Registrable Securities and
each other Person who controls any such underwriter within the meaning
of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Stockholder or any such
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement under which such Registrable
Securities were registered under the Securities Act, any Prospectus
contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and the Company will reimburse the Stockholder and each
such underwriter and controlling person for any legal or any other
expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability, action or proceedings;
provided that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based
upon (i) an untrue statement or alleged untrue statement or omission
or alleged omission made in such Registration Statement, any such
Prospectus or amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by the
Stockholder for use in the preparation thereof, (ii) the use of any
Prospectus after such time as the obligation of the Company to keep
the same effective and current has expired, or (iii) the use of any
Prospectus after such time as the Company has advised the Stockholder
that the filing of a post-effective amendment or supplement thereto is
required, except such Prospectus as so amended or supplemented, and
provided further that the Company shall not be liable to any Person
who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter within the meaning of the Securities Act in any such case
to the extent that any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense arises out of the matters
described in (i), (ii) or (iii) above or such Person's failure to send
or give a copy of the final Prospectus or supplement to the Persons
asserting an untrue statement or alleged untrue statement or omission
or alleged omission at or prior to the written confirmation of the
sale of Registrable Securities to such Person if such statement or
omission was corrected in such final Prospectus or supplement. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Stockholder or any such
underwriter or controlling person and shall survive the transfer of
such securities by the Stockholder. The Company's indemnity hereunder
shall relate only to the Shares, and the Company
shall otherwise have no indemnity obligations with respect to the
securities issued by the Stockholder or the registration thereof.
(b) Indemnification By The Stockholder. The Stockholder
will, and hereby does, indemnify and hold harmless (in the same manner
and to the same extent as set forth in subdivision (a) of this Section
6) the Company, each director and officer of the Company, and each
other Person, if any, who controls the Company within the meaning of
the Securities Act, with respect to any untrue statement or alleged
untrue statement of a material fact in or omission or alleged omission
to state a material fact from such Registration Statement, any
Prospectus contained therein, or any amendment or supplement thereto,
if such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by the Stockholder for
use in the preparation of such Registration Statement, Prospectus, or
amendment or supplement thereto; provided, -------- however, that the
Stockholder shall not be liable to the extent that the losses,
liabilities ------- or expenses arise out of or are based upon (i) the
use by the Company of any Prospectus after such time as the obligation
of the Company to keep the same effective and current has expired or
(ii) the use by the Company of any Prospectus after such time as the
Stockholder has advised the Company that the filing of a
post-effective amendment or supplement thereto is required with
respect to any information contained in such Prospectus concerning the
Stockholder, except such Prospectus as so amended or supplemented.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company, or any such
director, officer, or controlling person and shall survive the
transfer of such securities by the Stockholder.
(c) Notices Of Claims, Etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding subdivisions
of this Section 6, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action; provided that
the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 6, except to the extent that
the indemnifying party is actually prejudiced by such failure to give
notice. In case any such action is brought against an indemnified
party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties
may exist in respect of such claim, the indemnifying party shall be
entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent
that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified
party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party for
any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation.
(d) Contribution. If for any reason the foregoing indemnity
is unavailable, or is insufficient to hold harmless an indemnified
party, then the indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of the expense, loss,
damage or liability, (i) in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand
and the indemnified party on the other (determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or omission relates to information supplied by the
indemnifying party or the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission), or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law or
provides a lesser sum to the indemnified party than the amount
hereinafter calculated, in the proportion as is appropriate to reflect
not only the relative fault of the indemnifying party and the
indemnified party, but also the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the
other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such
fraudulent misrepresentation.
(e) Additional Indemnification By The Stockholder. In the
case of any registration of securities other than the Shares, it shall
be a condition to the Company's obligation to proceed under this
Agreement that the Stockholder shall provide, in a manner reasonably
satisfactory to the Company, indemnification, contribution and other
rights in favor of the Company, each director and officer of the
Company and each other Person, if any, who controls the Company within
the meaning of the Securities Act with respect to the securities
issued by the Stockholder and the registration thereof, in the same
manner and to the same extent as applicable to the Stockholder in the
case of registrations of Registrable Securities hereunder. In
addition, to the extent applicable, the Company shall furnish to the
Stockholder indemnification, contribution and other rights in favor of
the Stockholder, each director and officer of the Stockholder and each
other Person, if any, who controls the Stockholder within the meaning
of the Securities Act with respect to the written information, if any,
furnished to the Stockholder by the Company for use in the preparation
of the registration statement related to the registration of such
other securities, in the same manner and to the same
extent as applicable to the Stockholder in the case of registrations
of Registrable Securities under Section 6(b).
7. Covenants Relating To Rule 144/145. The Company will prepare
and file in a timely manner, information, documents and reports in compliance
with the Exchange Act so as to comply with the requirements of such Act and the
rules and regulations thereunder and will, at its expense, forthwith upon the
request of the Stockholder, deliver to the Stockholder a certificate, signed by
the Company's principal financial officer or his designee, stating (a) the
Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's
Commission file number, (d) the number of shares of Common Stock outstanding as
shown by the most recent report or statement published by the Company, and (e)
whether the Company has filed the reports required to be filed under the
Exchange Act for a period of at least 90 days prior to the date of such
certificate and in addition has filed the most recent annual report required to
be filed thereunder. If at any time the Company is not required to file reports
in compliance with either Section 13 or Section 15(d) of the Exchange Act, the
Company at its expense will forthwith, upon the written request of the
Stockholder, make available adequate current public information with respect to
the Company within the meaning of paragraph (c)(2) of Rule 144 of the General
Rules and Regulations promulgated under the Securities Act.
8. Limitation Of Registration Rights. Notwithstanding anything in
this Agreement to the contrary, without the consent of the Company, the
Stockholder shall not be entitled to have any Registrable Securities registered
under the Securities Act, and the Company shall not be required to keep a
Registration Statement filed pursuant to Section 2 hereof in effect, if the
Registrable Securities which the Stockholder expects to sell pursuant to such
registration can at such time be disposed of immediately by it as permitted by
Rule 144.
9. Notices, Etc. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered by
telecopy if receipt is confirmed by return telecopy, or five days after being
mailed by registered or certified mail, return receipt requested, in each case
to the applicable addresses set forth below:
If to Cablevision:
Cablevision Systems Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Facsimile: (000) 000-0000
If to the Company:
General Electric Company
0000 Xxxxxx Xxxxxxxx, X0
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Healing
Xxxxx Xxxxxx
Facsimile: [________]
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Xx. Esq.
Facsimile: 212-848-7179
or to such other address as such party shall have designated by notice
so given to each other party.
10. Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by the party against whom enforcement is sought or
as expressly provided in Section 17. The failure of any party to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
11. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties relating to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.
12. Severability. If any term of this Agreement or the
application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such term to the other parties or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by applicable law.
13. Successors And Assigns. This Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the parties and their
respective successors and assigns; provided that neither the rights nor the
obligations of
any party may be assigned or delegated without the prior written consent of the
other parties. Notwithstanding the preceding sentence, the rights of Cablevision
under this Agreement may be transferred or assigned without the consent of the
Company to (i) Permitted Transferees and (ii) no more than three Persons that
are a trust or financial institution to whom Cablevision or a Permitted
Transferee enters into a Derivative Security; provided, however, that if a
Permitted Transferee shall cease to be a Subsidiary of Cablevision after any
transfer of rights in accordance with this Section 13, such Permitted Transferee
shall immediately transfer such rights back to Cablevision and shall cease to be
deemed a "Permitted Transferee" for purposes of this Agreement.
14. Governing Law. This Agreement and all disputes hereunder
shall be governed by and construed and enforced in accordance with the laws of
the state of New York.
15. Name, Captions. The name assigned this Agreement and the
section captions used herein are for convenience of reference only and shall not
affect the interpretation or construction hereof.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
17. Effectiveness; Termination. This Agreement shall not be
effective until such time as the Stockholder beneficially owns any Registrable
Securities and no provision hereof shall have any force and effect until such
time. This Agreement shall terminate and be of no further force and effect upon
the earlier of (x) the disposition of all securities covered by the Registration
Statement and (y) the first anniversary hereof; provided, however, that,
notwithstanding this Section 17, the provisions of Section 6 shall survive the
termination of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
CABLEVISION SYSTEMS CORPORATION
By: ______________________________
Name:
Title:
GENERAL ELECTRIC COMPANY
By: ______________________________
Name:
Title:
EXHIBIT C
FILM EXHIBITION AGREEMENT
This Film Exhibition Agreement (this "Agreement") is made and entered
into as of [CLOSING DATE], by and among Bravo Company, a general partnership
organized under the laws of New York ("Bravo"), Rainbow Media Holdings, Inc., a
Delaware corporation ("RMHI"), The Independent Film Channel LLC, a Delaware
limited liability company ("IFC"), American Movie Classics Company, a general
partnership organized under the laws of New York ("AMC") and WE: Women's
Entertainment LLC, a Delaware limited liability company ("WE", and together with
IFC and AMC, the "Rainbow Companies", and together with RMHI, the "Rainbow
Parties").
RECITALS
WHEREAS, Bravo is the licensee under certain license agreements set
forth on Annex A hereto (the "Bravo License Agreements") that contemplate, among
other things, the exhibition of the film product set forth on Annex A on one or
more of the Independent Film Channel programming service (the "IFC Service"),
the American Movie Classics programming service (the "AMC Service") and WE:
Women's Entertainment programming service (the "WE Service, and together with
the IFC Service and the AMC Service, the "Rainbow Services");
WHEREAS, AMC is the licensee under certain license agreements set forth
on Annex B hereto (the "AMC License Agreements") that contemplate, among other
things, the exhibition of the film product set forth on Annex B on the Bravo
programming service (the "Bravo Service", and together with the Rainbow
Services, the "Services") in addition to one or more of the Rainbow Services;
WHEREAS, IFC is the licensee under certain license agreements set forth
on Annex B hereto (the "IFC License Agreements") that contemplate, among other
things, the exhibition of the film product set forth on Annex B on the Bravo
Service in addition to one or more of the Rainbow Services;
WHEREAS, RMHI is the licensee under certain license agreements set
forth on Annex B hereto (the "RMHI License Agreements", and together with the
AMC License Agreements and the IFC License Agreements, the "Rainbow License
Agreements", and together with the Bravo License Agreements, the "License
Agreements") that contemplate, among other things, the exhibition of the film
product set forth on Annex B on the Bravo Service and on one or more of the
Rainbow Services;
WHEREAS, the parties wish to reflect their mutual understanding
relating to the arrangements by which the film product set forth on Annexes A
and B (the "Titles") shall be exhibited, respectively, on one or more of the
Services and the corresponding calendar periods during which such Titles may be
exhibited (each, an "Exhibition Window") and the number of exhibitions ("Runs")
and exhibition days ("Exhibition Days") that are available with respect to each
Title.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties agree as follows, each intending
to be legally bound as and to the extent herein provided:
SECTION 1. Term; Defined Terms. (a) This Agreement shall become
effective on the date hereof and end on the latest expiry date of the License
Agreements.
(b) For the purposes of this Agreement, the following terms shall have
the meanings set forth below:
Affiliate of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this Agreement, "control" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
Business Day means any day other than a Saturday, Sunday or a day on
which banks in New York City are authorized or obligated by law or executive
order to close.
Losses means all losses, damages, liabilities, deficiencies or
obligations, including, without limitation, all claims, actions, suits,
proceedings, demands, judgments, assessments, fines, interest, penalties, costs
and expenses (including settlement costs and reasonable legal fees).
Person means any natural person, United States federal, state, county,
municipal, local or any non-U.S. or supranational government, regulatory or
administrative authority, agency or commission, corporation, general or limited
partner, partnership, joint venture, limited liability company, trust,
association, or unincorporated entity of any kind.
SECTION 2. Directions as to Exhibition Windows. (a) Bravo hereby
directs each of the Rainbow Companies to effect the exhibition, distribution,
transmission, display, exploitation and projection (collectively, the
"Exhibition" or to "Exhibit", as the context requires) of the Titles subject to
the Bravo License Agreements (the "Bravo Titles") to be Exhibited on and over
their respective Rainbow Service within the Exhibition Windows and for up to the
number of Exhibition Days and Runs designated for each such party set forth
opposite each such Bravo Title on Annex A (the "Rainbow Services Exhibitions").
(b) AMC hereby directs Bravo to effect the Exhibition of the Titles
subject to the AMC License Agreements (the "AMC Titles") to be Exhibited on and
over the Bravo Service within the Exhibition Windows and for up to the number of
Exhibition Days and Runs designated for Bravo set forth opposite each such AMC
Title on Annex B (the "Bravo-AMC Exhibitions").
(c) IFC hereby directs Bravo to effect the Exhibition of the Titles
subject to the IFC License Agreements (the "IFC Titles") to be Exhibited on and
over the Bravo Service
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within the Exhibition Windows and for up to the number of Exhibition Days and
Runs designated for Bravo set forth opposite each such IFC Title on Annex B (the
"Bravo-IFC Exhibitions").
(d) RMHI hereby directs Bravo to effect the Exhibition of the Titles
subject to the RMHI License Agreements (the "RMHI Titles", and together with the
AMC Titles and the IFC Titles, the "Rainbow Titles") to be Exhibited on and over
the Bravo Service within the Exhibition Windows and for up to the number of
Exhibition Days and Runs designated for Bravo set forth opposite each such RMHI
Title on Annex B (the "Bravo-RMHI Exhibitions").
(e) Any Bravo Title that Bravo has directed any of the Rainbow
Companies to Exhibit pursuant to this Section 2 may instead be Exhibited by any
other of the Rainbow Companies through their respective Rainbow Service (or any
other programming service owned by or Affiliated with RMHI), if the Bravo
License Agreement applicable to the Title that is the subject of the Run permits
such Exhibition.
(f) The parties shall not take any action with respect to the
Exhibition of Titles in a manner inconsistent with Annexes A and B. The
appearance of a Title on an Annex does not impose any obligation on any party to
Exhibit such Title.
SECTION 3. Related Activities. (a) Bravo hereby directs that each of
the Rainbow Companies undertake technical, promotional, scheduling and other
activities inherent in, incident to, or otherwise reasonably related to the
Exhibition of Titles, including, without limitation, the promotion of Titles,
the editing, cutting, changing, altering or modification of Titles, and the
language in which the Titles are Exhibited (collectively as concerns Titles, the
"Related Activities") concerning the Rainbow Services Exhibitions; provided,
however, that each Rainbow Company shall effect such Related Activities to the
extent Bravo is permitted to effect such Related Activities under the applicable
Bravo License Agreements. Unless a shorter period is specified in the relevant
Bravo License Agreement with respect to a Bravo Title, the Rainbow Companies
shall advertise and promote its Exhibition of a Bravo Title only within the
30-day period prior to the start of its Exhibition Window with respect to such
Bravo Title.
(b) AMC hereby directs that Bravo undertake the Related Activities
concerning the Bravo-AMC Exhibitions; provided, however, that Bravo shall effect
such Related Activities to the extent AMC is permitted to effect such Related
Activities under the applicable AMC License Agreements. Unless a shorter period
is specified in the relevant AMC License Agreement with respect to an AMC Title,
Bravo shall advertise and promote its Exhibition of an AMC Title only within the
30-day period prior to the start of its Exhibition Window with respect to such
AMC Title.
(c) IFC hereby directs that Bravo undertake Related Activities
concerning the Bravo-IFC Exhibitions; provided, however, that Bravo shall effect
such Related Activities to the extent IFC is permitted to effect such Related
Activities under the applicable IFC License Agreements. Unless a shorter period
is specified in the relevant IFC License Agreement with respect to an IFC Title,
Bravo shall advertise and promote its Exhibition of an IFC Title only within the
30-day period prior to the start of its Exhibition Window with respect to such
IFC Title.
-3-
(d) RMHI hereby directs that Bravo undertake Related Activities
concerning the Bravo-RMHI Exhibitions; provided, however, that Bravo shall
effect such Related Activities to the extent RMHI is permitted to effect such
Related Activities under the applicable RMHI License Agreements. Unless a
shorter period is specified in the relevant RMHI License Agreement with respect
to a RMHI Title, Bravo shall advertise and promote its Exhibition of a RMHI
Title only within the 30-day period prior to the start of its Exhibition Window
with respect to such RMHI Title.
SECTION 4. Delivery Requirements; Materials. (a) Bravo shall deliver to
each Rainbow Company a copy (if permitted by the applicable Bravo License
Agreement) of each Bravo Title designated for such Rainbow Company on Annex A,
and each Rainbow Company shall deliver to Bravo a copy (if permitted by the
applicable Rainbow License Agreement) of each Rainbow Title designated for Bravo
on Annex B, in the form and with the materials provided in the applicable
License Agreement to the address specified in Section 14 no later than 45 days
prior to the first day of the Exhibition Window of such party with respect to
such Title; provided, however, that each party shall only be required to deliver
such Title and related materials as soon as commercially practicable after its
receipt from the licensor under the applicable License Agreement.
(b) Subject to the applicable License Agreement, Bravo, with respect to
the Rainbow Titles, and the applicable Rainbow Company, with respect to the
Bravo Titles, shall be permitted to request additional copies from the other of
such Titles prior to delivery in accordance with Section 4(a) at the requesting
party's sole expense. If such copying is not permitted by the applicable License
Agreement, the parties shall use their respective commercially reasonable
efforts to gain the consent of the applicable licensor to make such copies.
(c) All materials with respect to a Title provided to a party pursuant
to this Section 4 shall remain in such party's sole possession or control
throughout the Exhibition Window relating to such Title. At the conclusion of
such Exhibition Window, Bravo, in the case of each Bravo Title, on the one hand,
and AMC, in the case of each AMC Title, IFC, in the case of each IFC Title, and
RMHI, in the case of each RMHI Title, on the other hand, shall notify the other
whether to return or destroy such materials. Any materials that are requested
for return shall be returned, subject to damage or loss, no later than five days
after such notification.
SECTION 5. Payments. (a) (i) Bravo shall pay to AMC the cash
amortization payment (and not the book amortization payment, which is included
for informational purposes only) due for each AMC Title designated for
Exhibition on the Bravo Service set forth opposite such AMC Title on Annex B
(which, in each case, represents a portion of the payments due under the
applicable AMC License Agreement applicable to such AMC Title) (collectively,
the "AMC Title Payments"), notwithstanding that Bravo might not Exhibit all such
AMC Titles for all of the Runs specified opposite such AMC Titles on Annex B.
The AMC Title Payments for each calendar year shall be aggregated and paid by
Bravo in four equal quarterly installments on the tenth Business Day prior to
the end of the calendar quarter of such year (each, a "Payment Date").
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(ii) AMC shall pay to Bravo the cash amortization payment (and not the
book amortization payment, which is included for informational purposes only)
due for each Bravo Title designated for Exhibition on the AMC Service or the WE
Service set forth opposite such Bravo Title on Annex A (which, in each case,
represents a portion of the payments due under the applicable Bravo License
Agreement applicable to such Bravo Title) (the "Bravo-AMC Title Payments"),
notwithstanding that AMC or WE, as the case may be, might not Exhibit all such
Bravo Titles for all of the Runs specified opposite such Bravo Titles on Annex
A. Such Bravo-AMC Title Payments for each calendar year shall be aggregated and
paid by AMC in four equal quarterly installments on each Payment Date.
(iii) On each Payment Date (A) (1) if the quarterly installment of
Bravo-AMC Title Payments (taking into account any arrears) exceeds (2) the
quarterly installment of AMC Title Payments (taking into account any arrears),
AMC shall pay to Bravo an amount equal to the difference between the amounts
referred to in clauses (A)(1) and (A)(2); or (B) (3) if the quarterly
installment of AMC Title Payments (taking into account any arrears) exceeds (4)
the quarterly installment of Bravo-AMC Title Payments (taking into account any
arrears), Bravo shall pay to AMC an amount equal to the difference between the
amounts referred to in clauses (B)(3) and (B)(4) (such amount under clauses (A)
or (B), as applicable, being the "AMC Amount").
(b) (i) Bravo shall pay to IFC (A) the cash amortization payment (and
not the book amortization payment, which is included for informational purposes
only) due for each IFC Title designated for Exhibition on the Bravo Service set
forth opposite such IFC Title on Annex B (which, in each case, represents a
portion of the payments due under the applicable IFC License Agreement
applicable to such IFC Title), notwithstanding that Bravo might not Exhibit all
such IFC Titles for all of the Runs specified opposite such IFC Titles on Annex
B, and (B) the amounts then currently payable by Bravo to any party under (1)
the Letter Agreement, dated as of [ ], 2002, among IFC Films LLC, IFC and Bravo,
(2) the Letter Agreement, dated as of [ ], 2002, among IFC Productions I, LLC,
IFC and Bravo, (3) the Letter Agreement, dated as of [ ], 2002, among IFC
Entertainment LLC, IFC and Bravo (collectively the "IFC Output Agreements"), and
(4) the Letter Agreement, dated as of [ ], 2002, among Rainbow Film Holdings LLC
and Bravo (the "Rainbow Agreement", and together with the IFC Output Agreements,
the "IFC Agreements") (the amounts set forth in clauses (A) and (B) collectively
being, the "IFC Title Payments"). Such IFC Title Payments for each calendar year
shall be aggregated and paid by Bravo in four equal quarterly installments on
each Payment Date.
(ii) IFC shall pay to Bravo the cash amortization payment (and not the
book amortization payment, which is included for informational purposes only)
due for each Bravo Title designated for Exhibition on the IFC Service set forth
opposite such Bravo Title on Annex A (which, in each case, represents a portion
of the payments due under the applicable Bravo License Agreement applicable to
such Bravo Title) (the "Bravo-IFC Title Payments"), notwithstanding that IFC
might not Exhibit all such Bravo Titles for all of the Runs specified opposite
such Bravo Titles on Annex A. Such Bravo-IFC Title Payments for each calendar
year shall be aggregated and paid by IFC in four equal quarterly installments on
each Payment Date.
(iii) On each Payment Date (A) (1) if the quarterly installment of
Bravo-IFC Title Payments (taking into account any arrears) exceeds (2) the
quarterly installment of IFC
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Title Payments (taking into account any arrears), IFC shall pay to Bravo an
amount equal to the difference between the amounts referred to in clauses (A)(1)
and (A)(2); and (B) (3) if the quarterly installment of IFC Title Payments
(taking into account any arrears) exceeds (4) the quarterly installment of
Bravo-IFC Title Payments (taking into account any arrears), Bravo shall pay to
IFC an amount equal to the difference between the amounts referred to in clauses
(B)(3) and (B)(4) (such amount under clauses (A) or (B), as applicable, being
the "IFC Amount").
(c) Bravo shall pay to RMHI the cash amortization payment (and not the
book amortization payment, which is included for informational purposes only)
due for each RMHI Title designated for Exhibition on the Bravo Service set forth
opposite such RMHI Title on Annex B (which, in each case, represents a portion
of the payments due under the applicable RMHI License Agreement applicable to
such RMHI Title) (the "Bravo-RMHI Title Payments"), notwithstanding that Bravo
might not Exhibit all such RMHI Titles for all of the Runs specified opposite
such RMHI Titles on Annex B. Such Bravo-RMHI Title Payments for each calendar
year shall be aggregated and paid by Bravo in four equal quarterly installments
on each Payment Date.
SECTION 6. Indemnification; Other Remedies. (a) In the event a party
breaches this Agreement or a License Agreement, the breaching party shall
indemnify, defend and hold harmless the non-breaching party, its Affiliates and
their respective shareholders, directors, officers, partners, employees, agents,
successors and assigns from and against all Losses to which they may become
subject as a result of such breach, including, without limitation, any such
Losses due to, arising out of, or relating to a termination of a License
Agreement.
(b) In the event a License Agreement is terminated by a licensor due
to, arising out of, or as a result of, a breach by any party of this Agreement
or such License Agreement, in addition to the remedies available to the
non-breaching party under Section 6(a), the breaching party shall be obligated
to offer to the non-breaching party (to the extent such non-breaching party was
the party initially listed on Annex A or B with respect to a Title and
corresponding Exhibition Window covered by such terminated License Agreement),
at a cost to the non-breaching party equal to the breaching party's cost,
comparable replacement programming as mutually agreed by the parties, from the
breaching party's (in the case of a Rainbow Party as the breaching party, the
Rainbow Companies') film products covered by the License Agreements
("Replacement Programming") for those Titles which were designated for the
non-breaching party on Annex A or B over the next 36 months.
(c) In the event a party breaches Section 2 by Exhibiting a Title for a
number of Runs in excess of those permitted in accordance with Section 2, and
such breach reduces the number of Runs available to the non-breaching party for
the same Title during the Exhibition Window set forth opposite such Title on
Annex A or B, in addition to the remedies available to the non-breaching party
under Section 6(a), the non-breaching party shall be released from its payment
obligations under Section 5 with respect to the reduction of such Runs and shall
either (A) be obligated to offer to the non-breaching party, at a cost to the
non-breaching party equal to the breaching party's cost, Replacement Programming
for such Runs, including, without limitation, an offer to the non-breaching
party to withhold a number of Runs, equal to the reduction of Runs caused by the
breach, of the same or another Title designated by the non-breaching party for
Exhibition by the breaching party on Annex A or B or (B) obtain the written
-6-
approval of the licensor under the applicable License Agreement to permit
additional Runs such that the non-breaching party shall be permitted to Exhibit
such Title for its allocated number of Runs in accordance with Section 2.
(d) In the event that IFC fails to make any payment to Bravo on a
Payment Date pursuant to Section 5(b), other than as a result of a bona fide
dispute between IFC and Bravo, Bravo shall have the right, in addition to any
other remedies it may have hereunder, in its sole discretion and upon not less
than five Business Days prior written notice to IFC, to terminate the IFC Output
Agreements; provided, however, that Bravo may not terminate such IFC Output
Agreements if IFC makes such payment in full to Bravo during the five Business
Day-period following its receipt from Bravo of such notice. Upon such
termination, the IFC Output Agreements shall become void and have no effect,
without any liability on the part of any party thereto.
(e) In the event that any third-party claim (other than a claim by a
licensor) is asserted against an Exhibitor that the Exhibition of a Title by
such Exhibitor is not authorized or otherwise a violation of the rights of such
third party, the licensee of such Title shall indemnify, defend and hold
harmless such Exhibitor against and reimburse such Exhibitor for all Losses that
such Exhibitor may at any time suffer or incur, or become subject to, as a
result of or in connection with any such claim. Upon receipt of any such claim,
such Exhibitor shall promptly notify such licensee of such claim and such
licensee shall promptly use its commercially reasonable efforts to seek
indemnification from the licensor pursuant to the provisions of the applicable
License Agreement. A licensee's indemnity obligations under this Section 6(d)
shall be limited to the amount of recovery such licensee actually receives from
the licensor on account of the Loss giving rise to such indemnity obligations.
(f) Except as otherwise provided in Section 5, any monetary obligations
of any party under this Agreement shall be paid in cash promptly to the other
party. Any amounts determined by the parties as payable pursuant to this Section
6 shall be included in the netting determination of amounts payable pursuant to
Section 5.
SECTION 7. License Agreements. (a) Bravo hereby acknowledges that it
has read and understands all of the terms and conditions of the Rainbow License
Agreements. Each of the Rainbow Companies hereby acknowledges that it has read
and understands all of the terms and conditions of the Bravo License Agreements.
(b) Bravo hereby agrees to comply with the terms and conditions of the
Rainbow License Agreements. Each Rainbow Company hereby agrees to comply with
the terms and conditions of the Bravo License Agreements. The provisions of this
Agreement shall be subject to the provisions of the License Agreements.
(c) To the extent either (i) Bravo assigns its rights as licensee under
a Bravo License Agreement to a Rainbow Party or (ii) a Rainbow Party assigns its
rights as licensee under a Rainbow License Agreement to Bravo or another Rainbow
Party, the parties shall amend Annexes A and B accordingly.
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(d) No party shall assign its rights as licensee under a License
Agreement to any Person not a party to this Agreement other than (a) by
operation of law, (b) with the written consent of the other parties, such
consent not to be unreasonably withheld, or (c) to a Person that acquires all or
substantially all of a party's assets and assumes all of the party's obligations
hereunder; provided, in each case, that such License Agreement permits such
assignment.
SECTION 8. Cooperation. (a) The Rainbow Companies and Bravo shall cause
their respective senior representatives to meet in person semi-annually during
the term of this Agreement and to conduct good faith discussions with respect to
the sharing of programming not contemplated by this Agreement. Bravo initially
designates [ ] and the Rainbow Companies initially designate [ ] to be their
respective representatives for the purposes contemplated in this Section 8(a).
(b) A party discovering an error in the information set forth in either
Annex A or B shall give prompt notice to the other parties of such error and the
parties shall promptly correct such error, including, without limitation, (i)
any errors pertaining to an incorrect Bravo Title Payment or Rainbow Title
Payment due to an inconsistency between such Payment and the corresponding
payment set forth in the applicable License Agreement, which License Agreement
shall prevail, or due to a disproportionate allocation of any such Payment among
the parties for a particular Title based on the sharing arrangement of an
Exhibition Window relating to such Title pursuant to Section 2 (a "Payment
Error") and (ii) any errors pertaining to an incorrect reference to the number
of available Runs remaining in an Exhibition Window such that a party is not
permitted to Exhibit a Title for the number of Runs specified in either Annex A
or B (a "Run Error"). Any overpayment by a party due to any Payment Error shall
be immediately reimbursed to such party by the other parties and any
underpayment by a party due to a Payment Error shall be credited for the account
of the other party until the next Payment Date. Remedies for Run Errors shall be
those set forth for non-breaching parties in Section 6(c).
SECTION 9. Relationship of the Parties. The parties hereby acknowledge
that the entering into of this Agreement is not indicative of an intention by
the parties to create any relationship beyond that which is contemplated in this
Agreement.
SECTION 10. Amendments; Waivers. This Agreement cannot be changed or
terminated orally and no waiver of compliance with any provision or condition
hereof and no consent provided for herein shall be effective unless evidenced by
an instrument in writing duly executed by the party hereto sought to be charged
with such waiver or consent. No waiver of any term or provision hereof shall be
construed as a further or continuing waiver of such term or provision or any
other term or provision.
SECTION 11. Entire Agreement. This Agreement and the IFC Agreements set
forth the entire understanding and agreement of the parties and supersedes any
and all prior agreements, memoranda, arrangements and understandings relating to
the subject matter hereof other than any writing signed by a party, dated on or
prior to the date of this Agreement and which expressly refers to this Section
11. No representation, warranty, promise, inducement or statement of intention
has been made by any party which is not contained in this Agreement or any such
writing, and no party shall be bound by, or be liable for, any alleged
representation, promise, inducement or statement of intention not contained
herein or therein and each party
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expressly agrees that it has not relied upon any such representation, promise,
inducement or statement of intent.
SECTION 12. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement shall not be assigned other than (a) by
operation of law, (b) with the written consent of the other parties, such
consent not to be unreasonably withheld, or (c) to a Person that acquires all or
substantially all of a party's assets and assumes all of the party's obligations
hereunder.
SECTION 13. Construction; Counterparts. The Section headings of this
Agreement are for convenience of reference only and do not form a part hereof
and do not in any way modify, interpret or construe the intentions of the
parties. This Agreement may be executed in one or more counterparts, and all
such counterparts shall constitute one and the same instrument.
SECTION 14. Notices. All notices and communications hereunder shall be
in writing and shall be deemed to have been duly given to and received by a
party when delivered in person, faxed (with confirmation of transmission by the
transmitting equipment) or three Business Days after such notice is enclosed in
a properly sealed envelope, certified or registered, and deposited (postage and
certification or registration prepaid) in a post office or collection facility
regularly maintained by the United States Postal Service, or one Business Day
after delivery to a nationally recognized overnight courier service, and
addressed as follows:
If to RMHI or a Rainbow Company: Rainbow Media Holdings Inc.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: General Counsel
copies to: Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
If to Bravo: Bravo Company
[c/o National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: EVP - Business Development]
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copies to: National Broadcasting Company, Inc.
00 Xxxxxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Vice President - Corporate &
Transactions Law
copies to: Shearman & Sterling
000 Xxxxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Xx.
Any party may change its address for the purpose of notice by giving
notice in accordance with the provisions of this Section 14.
SECTION 15. Expenses of the Parties. Except as otherwise provided
herein, all expenses incurred by or on behalf of the parties hereto in
connection with the authorization, preparation and consummation of this
Agreement, including, without limitation, all fees and expenses of agents,
representatives, counsel and accountants employed by the parties hereto in
connection with the authorization, preparation, execution and consummation of
this Agreement shall be borne solely by the party who shall have incurred the
same.
SECTION 16. Non-Recourse. No partner, officer, director, shareholder or
other holder of an ownership interest of or in any party hereof shall have any
personal liability in respect of any such party's obligations under this
Agreement by reason of his or its status as such partner, officer, director,
shareholder or other holder.
SECTION 17. Third Party Beneficiary. Except with respect to Persons
indemnified under Section 6, this Agreement is entered into only for the benefit
of the parties and their respective successors and assigns, and nothing
hereunder shall be deemed to constitute any person a third party beneficiary to
this Agreement.
SECTION 18. Territory. The parties may Exhibit the Titles in the
territories permitted under the applicable License Agreements.
SECTION 19. Force Majeure. If a party fails to comply with an
obligation set forth in this Agreement due to a force majeure event, the parties
shall discuss in good faith the appropriate remedies so that the License
Agreements are complied with and the parties are able to perform in accordance
with this Agreement.
SECTION 20. Independent Obligations. Each signatory hereto is obligated
hereunder only with respect to the obligations applicable to such signatory
hereunder, and not with respect to the obligations of any other signatory
hereto.
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SECTION 21. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws, and not the law of conflicts, of
the State of New York.
SECTION 22. Severability. If any provision of this Agreement is finally
determined to be illegal, void or unenforceable, such determination shall not,
of itself, nullify this Agreement which shall continue in full force and effect
subject to the conditions and provisions hereof
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BRAVO COMPANY
By: ________________________________
Name:
Title:
RAINBOW MEDIA HOLDINGS, INC.
By ________________________________
Name:
Title:
THE INDEPENDENT FILM CHANNEL LLC
By: ________________________________
Name:
Title:
AMERICAN MOVIE CLASSICS COMPANY
By ________________________________
Name:
Title:
WE: WOMEN'S ENTERTAINMENT LLC
By ________________________________
Name:
Title:
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EXHIBIT D
REORGANIZATION TRANSACTIONS
Part I: Preliminary Steps:
1. Rainbow MM Holdings Corporation ("RMMHC"), owner of a 99% general
partnership interest in MuchMusic U.S.A. Venture, a New York general partnership
("MuchMusic"), is liquidated or merged into a limited liability company directly
owned 100% by RMHI. Rainbow MM Holdings II Corporation ("R2MMHC"), owner of a 1%
general partnership in MuchMusic, is liquidated or merged into a limited
liability company directly owned 100% by RMHI.
2. Bravo adopts a limited liability company agreement of IFC to provide for
an 80% managing member and a 20% non-managing member. .
3. BHC recapitalizes its equity into Class A common stock (with greater
than 80% vote) and Class B common stock and authorized but unissued preferred
stock convertible into Class B common stock (with less than 20% vote). The form
of amended and restated certificate of incorporation of BHC is attached hereto
as Exhibit D-1. The aggregate value of the BHC Class A Stock would be based on
the value of the Cablevision Shares and the aggregate value of the BHC Class B
Stock would be based on the value of the RMHI Shares.
4. Bravo transfers the $2.2 million receivable from Adelphia Communications
Corporation, which is included in the IFC Assets, to IFC, as a contribution to
capital. Bravo distributes all of its cash-on-hand 20% to MGM Holdings and 80%
to BHC and B2HC, collectively.
5. Bravo distributes its 80% managing membership interest in IFC to B2HC in
partial redemption of B2HC's interest in Bravo. Bravo transfers its 20%
non-managing membership interest in IFC to MGM Holdings in partial redemption of
MGM Holdings' interest in Bravo. As a result of this Step 5, IFC is owned 80% by
B2HC and 20% by MGM Holdings and Bravo is owned 80% by BHC and B2HC,
collectively, and 20% by MGM Holdings.
6. B2HC contributes its 80% managing member interest in IFC to a
newly-formed wholly-owned subsidiary, IFC Holding Corporation ("IFC Holding") in
consideration of the issuance of 100% of IFC Holding's outstanding capital stock
to X0XX. X0XX thereafter distributes its interest in IFC Holding to Rainbow
Media Group, LLC ("RMG LLC").
7. Value Adjustments
(a) If after the Cablevision Valuation Period has concluded, the Share Value
exceeds the BHC Closing Xxxxx, X0XX shall distribute to RMG LLC, and RMG
LLC
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shall contribute to BHC, demand promissory notes of B2HC in an amount
sufficient to cause the BHC Closing Value to equal the Share Value;
provided, however, that the aggregate principal amount of the B2HC demand
promissory notes shall be capped at an amount that reduces RHMI's tax basis
in B2HC to zero. If the Share Value continues to exceed the BHC Closing
Value after giving effect to the demand promissory note distribution, then
B2HC shall distribute to RMG LLC, and RMG LLC shall contribute to BHC, a
portion of the B2HC Bravo Interest sufficient to cause the BHC Closing
Value to equal the Share Value. If the value of the demand promissory notes
and the B2HC Bravo Interest is greater than 10% of the value of B2HC,
Section 2.07 of the Agreement shall apply.
(b) If after the Cablevision Valuation Period has concluded, the Share Value is
less than the BHC Closing Value, BHC shall distribute to RMG LLC, and RMG
LLC shall contribute to B2HC, demand promissory notes of BHC in an amount
sufficient to cause the BHC Closing Value to equal the Share Value;
provided, however, that the aggregate principal amount of the demand
promissory notes shall be capped at an amount that reduces RMHI's basis in
BHC to zero. If the BHC Closing Value continues to exceed the Share Value
after giving effect to the demand promissory note distribution, then BHC
shall distribute to RMG LLC, and RMG LLC shall contribute to B2HC, a
portion of the BHC Bravo Interest sufficient to cause the BHC Closing Value
to equal the Share Value.
"Share Value" means the sum of (i) the Aggregate Cablevision Share Value
(determined solely for this purpose by computing the Average Cablevision Share
Price without regard to the proviso in the definition thereof), and (ii) the
Aggregate RMHI Share Value (determined solely for this purpose by computing the
Average Cablevision Share Price without regard to the proviso in the definition
thereof).
"BHC Closing Value" means the product of (i) the sum of (A) the Share Value and
(B) the Aggregate GE Stock Consideration, and (ii) the BHC Percentage as of the
time of such computation; and shall be increased by the value of any demand
promissory notes of B2HC held by BHC at the time of such computation and
decreased by the value of any outstanding BHC demand promissory notes.
Part II: Implementation Steps:
8. NBC purchases the MGM Bravo Interest for cash pursuant to the MGM
Agreement. Immediately thereafter, B2HC, BHC and NBC enter into an amended and
restated partnership agreement of Bravo. A copy of the amended and restated
partnership agreement is attached as Exhibit D-2.
9. GE Merger Sub is merged with and into B2HC, with B2HC being the
Surviving Corporation, as provided in Section 2.01 of the Agreement. A copy of
the Certificate of Merger is attached as Exhibit D-3. As a result of this step
the Surviving Corporation becomes a direct wholly owned Subsidiary of GE.
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10. RMG LLC distributes all classes of BHC Shares held by it to XXXX.
00. XXXX distributes all classes of BHC Shares held by it to its
shareholders, CSC Holdings and NBC Holdings. RMHI (i) transfers the BHC Class B
Stock (low vote) to NBC Holdings in exchange for the RMHI shares held by NBC
Holdings as provided in Section 2.02 of the Agreement and (ii) distributes the
BHC Class A Stock (high vote) to CSC Holdings.
12. CSC Holdings distributes the BHC Class A Stock to Cablevision.
13. Cablevision distributes the BHC Class A Stock to NBC Holdings in
exchange for the Cablevision Shares pursuant to Section 2.03 of the Agreement.
As a result of this step, NBC and NBC Holdings no longer hold any equity
interest in Cablevision or RHMI and GE Sub and NBC Holdings hold, through their
ownership of the Surviving Corporation and BHC, 100% of Bravo.
14. Simultaneously with the spin-off transaction, BHC issues at least $20
million of the BHC Convertible Preferred Stock to an unrelated third party in an
arm's length transaction. A copy of the term sheet for the BHC Convertible
Preferred Stock is attached as Exhibit D-4.
Capitalized terms which are not defined herein have the meaning assigned
thereto in the Agreement and Plan of Merger and Exchange to which this Exhibit D
relates.
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