Exhibit 10.39

 

Execution Copy

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT, dated as of July 18, 2003, between Cablevision
Systems Corporation, a Delaware corporation (the “Company”), on the one hand,
and MGM Networks U.S. Inc., a Delaware corporation (the “Stockholder”), on the
other hand.

 

WHEREAS, pursuant to the Note (the “Note”), dated as of the date hereof, by the
Company and issued to the Stockholder, the Company may issue shares (the
“Settlement Shares”) of the Company’s Cablevision NY Group Class A Common Stock,
par value $.01 per share (the “Common Stock”) as payment of the principal amount
of the Note on the maturity date therefore;

 

WHEREAS, pursuant to the Note, the Company may only issue the Settlement Shares
if such Settlement Shares are Registrable Securities hereunder for which a
Registration Statement (as defined herein) has been declared and remains
effective on the Final Maturity Date (as defined in the Note) and under which
such shares may be resold without restriction under the Securities Act (as
defined herein); and

 

WHEREAS, the Stockholder desires to have the Settlement Shares 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
that the New York Stock Exchange (or, if different, the principal exchange on
which shares of the Common Stock 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.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time.

 

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“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 the Settlement Shares.  As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (x) 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, (y) they
shall have been distributed to the public pursuant to Rule 144 or Rule 145 (or
any successor provision) under the Securities Act 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, all 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, including the fees and
disbursements of one firm of outside counsel for the Stockholder; provided that
Registration Expenses shall not include the fees and disbursements of
underwriters, any underwriting discounts and commissions.

 

“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) that is filed by the Company with the
Commission in accordance with Section 3 below and that permits a delayed or
continuous offering pursuant to Rule 415 under the Securities Act.  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.

 

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(B)                                 CAPITALIZED TERMS USED HEREIN BUT NOT
OTHERWISE DEFINED HEREIN SHALL HAVE THE SAME MEANING AS IN THE PURCHASE
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 FOR UNDERWRITTEN OFFERING.  THE
STOCKHOLDER SHALL HAVE THE RIGHT UPON WRITTEN REQUEST, AT ANY TIME AFTER
DELIVERY OF THE SETTLEMENT SHARES, TO REQUEST THAT THE COMPANY EFFECT ONE SHELF
TAKEDOWN FROM THE REGISTRATION STATEMENT BY MEANS OF A FIRM COMMITMENT
UNDERWRITTEN PUBLIC OFFERING FOR CASH (AN “UNDERWRITTEN OFFERING”) AND THE
COMPANY SHALL HAVE THE RIGHT, AT ANY TIME AFTER DELIVERY OF THE SETTLEMENT
SHARES, TO CAUSE THE COMPLETION OF A SHELF TAKEDOWN FROM THE REGISTRATION
STATEMENT BY MEANS OF AN UNDERWRITTEN OFFERING ON BEHALF OF THE STOCKHOLDER.

 

(B)                                 PIGGY-BACK REGISTRATION; CUTBACK RIGHTS. 
THE COMPANY MAY INCLUDE IN THE REGISTRATION STATEMENT FILED PURSUANT HERETO
OTHER SECURITIES FOR SALE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANY OTHER
PERSON.  NOTWITHSTANDING THE FOREGOING, IF THE COMPANY OR ANOTHER PERSON
EXERCISES A RIGHT TO HAVE OTHER SECURITIES INCLUDED ON THE REGISTRATION
STATEMENT INCLUDED IN THE SHELF TAKEDOWN DEMANDED BY THE STOCKHOLDER PURSUANT TO
SECTION 2(A), IF THE MANAGING OR LEAD UNDERWRITER OR UNDERWRITERS THEREOF SHALL
DETERMINE IN ITS OR THEIR REASONABLE GOOD FAITH JUDGMENT THAT IT CANNOT SELL, OR
THAT IT WOULD NOT BE ADVISABLE TO SELL, ALL THE SECURITIES DESIRED TO BE SOLD,
THEN THE NUMBER OF SECURITIES THAT THE COMPANY MAY HAVE INCLUDED, IF ANY, SHALL
BE REDUCED FIRST AND, IF SUCH REDUCTION OF THE COMPANY SECURITIES IS
INSUFFICIENT, THE NUMBER OF SECURITIES WHICH THE STOCKHOLDER AND ANY OTHER
PERSONS MAY HAVE INCLUDED SHALL BE REDUCED PRO RATA IN PROPORTION TO THE TOTAL
NUMBER OF SECURITIES SOUGHT TO BE INCLUDED BY EACH SUCH PERSON, SUBJECT, IN ALL
CASES, TO THE COMPANY’S CONTRACTUAL OBLIGATIONS PURSUANT TO THE REGISTRATION
RIGHTS AGREEMENTS, EACH DATED AS OF JANUARY 27, 1986, AS AMENDED, BETWEEN THE
COMPANY AND CABLEVISION SYSTEMS COMPANY, IN THE FIRST CASE, AND THE COMPANY AND
CSC HOLDINGS COMPANY, IN THE SECOND, UNTIL THE MANAGING OR LEAD UNDERWRITER OR
UNDERWRITERS SHALL BELIEVE THAT THE REMAINING SECURITIES CAN BE SOLD AND IT
WOULD NOT BE INADVISABLE TO SELL SUCH NUMBER OF SECURITIES.

 

If, as a result of the cutback rights set forth in this Section 2(b), less than
all Registrable Securities sought to be sold by the Stockholder would be
included in a shelf takedown under Section 2(a), the Stockholder’s demand for a
shelf takedown will not be deemed to have been made and the Stockholder shall be
permitted to request a shelf takedown upon the expiration of any lock-up period
under Section 4(b)(i); provided, that in the calendar year after its receipt of
the Settlement Shares, the Stockholder shall not be subject to black-out rights
or lock-up periods for more than ninety (90) days in the aggregate.

 

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(C)                                  EXPENSES.  THE REGISTRATION EXPENSES IN
CONNECTION WITH THE REGISTRATION STATEMENT AND ANY SHELF TAKEDOWN FOR THE
STOCKHOLDER THEREUNDER REQUESTED UNDER THIS SECTION 2 SHALL BE BORNE BY THE
COMPANY, EXCEPT THAT ANOTHER HOLDER PIGGY-BACKING ON THE STOCKHOLDER’S
REGISTRATION STATEMENT PURSUANT TO SECTION 2(B) SHALL PAY (OR SHALL REQUIRE THE
COMPANY TO PAY) ITS PRO RATA SHARE OF THE REGISTRATION EXPENSES.

 

(D)                                 SELECTION OF UNDERWRITERS.  ONE CO-LEAD
MANAGING UNDERWRITER FOR ANY UNDERWRITTEN OFFERING PURSUANT TO SECTION 2(A)
SHALL BE SELECTED BY THE COMPANY AND, PROVIDED THAT THE COMPANY IS NOT INCLUDING
SECURITIES FOR SALE FOR ITS OWN ACCOUNT IN SUCH UNDERWRITTEN OFFERING, SHALL BE
REASONABLY ACCEPTABLE TO THE STOCKHOLDER, AND THE OTHER CO-LEAD MANAGING
UNDERWRITER FOR SUCH UNDERWRITTEN OFFERING SHALL BE SELECTED BY THE STOCKHOLDER
AND SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THE CO-LEAD MANAGING
UNDERWRITER SELECTED BY THE COMPANY SHALL ESTABLISH THE PRICING OF THE COMMON
STOCK IN THE UNDERWRITTEN OFFERING.

 

3.                                       REGISTRATION PROCEDURES.  IF THE
COMPANY IS DELIVERING SETTLEMENT SHARES TO THE STOCKHOLDER UNDER THE NOTE, THE
COMPANY WILL:

 

(I)                                     PREPARE AND FILE WITH THE COMMISSION THE
REQUISITE REGISTRATION STATEMENT TO EFFECT THE REGISTRATION THEREOF AND CAUSE
SUCH REGISTRATION STATEMENT TO BECOME EFFECTIVE PRIOR TO THE FINAL MATURITY
DATE, PROVIDED THAT BEFORE FILING SUCH REGISTRATION STATEMENT OR ANY AMENDMENTS
THERETO, THE COMPANY WILL FURNISH TO THE COUNSEL SELECTED BY THE STOCKHOLDER
COPIES OF ALL SUCH DOCUMENTS PROPOSED TO BE FILED, AND AFFORD SUCH COUNSEL A
REASONABLE PERIOD OF TIME TO REVIEW SUCH FILING BEFORE ANY SUCH FILING IS MADE,
AND THE COMPANY WILL COMPLY WITH ANY REASONABLE AND TIMELY 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 EARLIER OF (A) SUCH TIME AS ALL OF SUCH SECURITIES HAVE BEEN
DISPOSED OF AND (B) THE DATE WHICH IS ONE YEAR AFTER THE DATE OF DELIVERY OF THE
SETTLEMENT SHARES TO THE STOCKHOLDER;

 

(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 REASONABLE BEST 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

 

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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 REASONABLE BEST 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)                              IN CONNECTION WITH AN UNDERWRITTEN OFFERING
PURSUANT TO SECTION 2(A), FURNISH TO THE STOCKHOLDER A SIGNED COUNTERPART,
ADDRESSED TO THE STOCKHOLDER (AND THE UNDERWRITERS), OF (X) AN OPINION OF
COUNSEL FOR THE COMPANY, DATED THE DATE OF THE CLOSING UNDER THE UNDERWRITING
AGREEMENT, AND (Y) A “COMFORT LETTER” DATED THE EFFECTIVE DATE OF SUCH
REGISTRATION STATEMENT (AND A SUPPLEMENT TO SUCH “COMFORT LETTER” DATED THE DATE
OF THE CLOSING UNDER THE UNDERWRITING AGREEMENT), SIGNED BY THE INDEPENDENT
PUBLIC ACCOUNTANTS WHO HAVE CERTIFIED THE COMPANY’S FINANCIAL STATEMENTS
INCLUDED IN SUCH REGISTRATION STATEMENT, COVERING SUBSTANTIALLY THE SAME MATTERS
WITH RESPECT TO SUCH REGISTRATION STATEMENT (AND THE PROSPECTUS INCLUDED
THEREIN) AND, IN THE CASE OF THE ACCOUNTANTS’ LETTER, WITH RESPECT TO EVENTS
SUBSEQUENT TO THE DATE OF SUCH FINANCIAL STATEMENTS, AS ARE CUSTOMARILY COVERED
IN OPINIONS OF ISSUER’S COUNSEL AND IN ACCOUNTANTS’ LETTERS DELIVERED TO THE
UNDERWRITERS IN UNDERWRITTEN PUBLIC OFFERINGS OF SECURITIES AND, IN THE CASE OF
THE ACCOUNTANTS’ LETTER, SUCH OTHER FINANCIAL MATTERS, AS THE STOCKHOLDER (OR
THE UNDERWRITERS, IF ANY) MAY REASONABLY REQUEST;

 

(VII)                           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)(II)) 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;

 

(VIII)                        OTHERWISE USE REASONABLE BEST EFFORTS TO COMPLY
WITH THE SECURITIES ACT AND THE EXCHANGE ACT AND WITH ALL APPLICABLE RULES AND
REGULATIONS OF THE COMMISSION, AND MAKE AVAILABLE TO ITS SECURITY HOLDERS, AS
SOON AS REASONABLY PRACTICABLE, AN EARNINGS STATEMENT COVERING THE PERIOD OF AT
LEAST TWELVE MONTHS, BUT NOT MORE THAN EIGHTEEN MONTHS, BEGINNING WITH THE FIRST
FULL CALENDAR MONTH AFTER THE EFFECTIVE DATE OF SUCH

 

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REGISTRATION STATEMENT, WHICH EARNINGS STATEMENT SHALL SATISFY THE PROVISIONS OF
SECTION 11(A) OF THE SECURITIES ACT, AND NOT FILE ANY AMENDMENT OR SUPPLEMENT TO
SUCH REGISTRATION STATEMENT OR PROSPECTUS TO WHICH THE STOCKHOLDER SHALL HAVE
REASONABLY OBJECTED ON THE GROUNDS THAT SUCH AMENDMENT OR SUPPLEMENT DOES NOT
COMPLY IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE SECURITIES ACT;

 

(IX)                                PROVIDE A TRANSFER AGENT AND REGISTRAR FOR
ALL REGISTRABLE SECURITIES COVERED BY SUCH REGISTRATION STATEMENT NOT LATER THAN
THE EFFECTIVE DATE OF SUCH REGISTRATION STATEMENT;

 

(X)                                   USE REASONABLE BEST EFFORTS TO LIST ALL
COMMON STOCK COVERED BY SUCH REGISTRATION STATEMENT ON ANY SECURITIES EXCHANGE
ON WHICH ANY SHARES OF THE COMMON STOCK ARE THEN LISTED; AND

 

(XI)                                UPON THE REASONABLE REQUEST OF THE
STOCKHOLDER, OTHERWISE USE REASONABLE BEST EFFORTS TO EFFECT THE REGISTRATION OF
REGISTRABLE SECURITIES UNDER THE SECURITIES ACT AS PROVIDED IN SECTION 2.

 

In the case of any Underwritten Offering, the Company shall participate in
customary “roadshow” presentations and customary analysts’ meetings as
reasonably requested by the co-lead managing underwriters.

 

If requested by the underwriters for any Underwritten Offering, the Company will
enter into its customary underwriting agreement with such underwriters for such
offering, to contain such representations and warranties by the Company and such
other terms as are customarily contained in agreements of this type, including,
without limitation, indemnities to the effect and to the extent provided in
Section 6.  The Stockholder shall be a party to such underwriting agreement and
may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
the Stockholder and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of the Stockholder as well.

 

4.                                       STOCKHOLDER’S OBLIGATIONS.  (A) 
FURNISHING INFORMATION.  THE STOCKHOLDER SHALL FURNISH TO THE COMPANY SUCH
INFORMATION REGARDING ITSELF 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

 

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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)                                 HOLDBACK AGREEMENT; POSTPONEMENT.  (I)  THE
STOCKHOLDER AGREES BY ACQUISITION OF THE REGISTRABLE SECURITIES NOT TO ENGAGE IN
TRANSACTIONS INVOLVING THE COMPANY’S EQUITY SECURITIES, INCLUDING BY COMMENCING
ANY PUBLIC OFFERING OF THE COMPANY’S EQUITY SECURITIES, BY ENTERING INTO
TRANSACTIONS THAT RESULT IN ANOTHER PARTY SELLING THE COMPANY’S EQUITY
SECURITIES OR BY CAUSING A SHELF TAKEDOWN, DURING THE SEVEN DAYS PRIOR TO AND
THE 90 DAYS AFTER THE PRICING OF ANY OFFERING OF THE COMPANY’S EQUITY SECURITIES
(OTHER THAN UNDER FORM S-4 OR FORM S-8) (EITHER FOR ITS OWN ACCOUNT OR FOR THE
BENEFIT OF THE HOLDERS OF ANY SECURITIES OF THE COMPANY) PURSUANT TO A
REGISTRATION STATEMENT; PROVIDED, THAT THE COMPANY SHALL GIVE THE STOCKHOLDER
NOTICE AS SOON AS REASONABLY PRACTICABLE OF THE DATE UPON WHICH THE PRICING OF
SUCH OFFERING IS EXPECTED TO OCCUR AND, IN ANY EVENT THE STOCKHOLDER’S HOLDBACK
RESTRICTION FOR THE SEVEN DAY PERIOD PRIOR TO SUCH EXPECTED DATE OF PRICING
SHALL NOT COMMENCE UNTIL THE SEVENTH CALENDAR DAY AFTER SUCH NOTICE IS GIVEN.

 

(II)                                  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(VII) IF THE COMPANY’S OUTSIDE
COUNSEL HAS ADVISED IT IN WRITING THAT UNDER APPLICABLE SECURITIES LAWS THE USE
OF SUCH REGISTRATION STATEMENT 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.  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.

 

(III)                               NOTWITHSTANDING THE BLACK-OUT RIGHTS AND THE
LOCK-UP PERIODS SET FORTH ABOVE IN SECTIONS 4(B)(I) AND 4(B)(II), IN THE 365
CALENDAR DAY PERIOD COMMENCING ON THE FIRST DAY AFTER ITS RECEIPT OF THE
SETTLEMENT SHARES, THE STOCKHOLDER SHALL NOT BE SUBJECT TO BLACK-OUT RIGHTS OR
LOCK-UP PERIODS FOR MORE THAN NINETY (90) DAYS IN THE AGGREGATE.

 

5.                                       REGISTRATION STATEMENT.  IN CONNECTION
WITH THE PREPARATION AND FILING OF THE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, THE COMPANY WILL GIVE THE STOCKHOLDER, ITS UNDERWRITERS, IF ANY,
AND THEIR RESPECTIVE 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.  SUCH
OPPORTUNITY TO PARTICIPATE SHALL INCLUDE REASONABLE ACCESS FOR PURPOSES OF 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

 

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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 Settlement Shares, and the Company shall otherwise have no indemnity
obligations with respect to other 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)

 

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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 a 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.

 

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,
STATING (A) THE COMPANY’S NAME, ADDRESS AND TELEPHONE NUMBER (INCLUDING AREA
CODE), (B) THE COMPANY’S INTERNAL REVENUE

 

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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.                                       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 the Company;

 

 

 

 

 

Cablevision Systems Corporation

 

1111 Stewart Avenue

 

Bethpage, New York 11714

 

Telephone:

(516) 803-2300

 

Facsimile:

(516) 803-2577

 

Attention:

General Counsel

 

 

 

with a copy to:

 

 

 

 

 

Sullivan & Cromwell LLP

 

125 Broad Street

 

New York, New York 10004

 

Telephone:

(212) 558-4000

 

Facsimile:

(212) 558-3588

 

Attention:

Robert W. Downes, Esq.

 

 

 

If to the Stockholder:

 

 

 

 

 

Metro-Goldwyn-Mayer Inc.

 

2500 Broadway Street

 

Santa Monica, California 90404

 

Telephone:

(310) 449-3000

 

Facsimile:

(310) 586-8193

 

Attention:

General Counsel

 

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with a copy to:

 

 

 

 

 

Kirkland & Ellis

 

Citigroup Center

 

153 East 53rd Street

 

New York, New York 10022

 

Telephone:

(212) 446-4800

 

Facsimile:

(212) 446-4900

 

Attention:

Thomas W. Christopher

 

or to such other address as such party shall have designated by notice so given
to each other party.

 

9.                                       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.  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.

 

10.                                 ENTIRE AGREEMENT.  THIS AGREEMENT, THE
CABLEVISION NOTE AND THE PURCHASE AGREEMENT EMBODY 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.

 

11.                                 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.

 

12.                                 SUCCESSORS AND ASSIGNS.  THIS AGREEMENT
SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR
SUCCESSORS AND ASSIGNS; PROVIDED THAT WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMPANY, THE REGISTRATION RIGHTS GRANTED TO THE STOCKHOLDER PURSUANT TO THIS
AGREEMENT MAY BE TRANSFERRED IN WHOLE OR IN PART, EXCEPT TO ANY OTHER SUBSIDIARY
OF METRO-GOLDWYN-MAYER INC. TO WHICH THE NOTE HAS BEEN TRANSFERRED.

 

13.                                 GOVERNING LAW.  THIS AGREEMENT  SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
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 (I) SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT
SITTING IN THE BOROUGH OF MANHATTAN OF THE CITY OF NEW YORK FOR THE PURPOSE OF
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT BROUGHT BY
ANY PARTY HERETO, AND (II) IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT BY WAY OF
MOTION, DEFENSE, OR OTHERWISE, IN ANY SUCH ACTION OR PROCEEDING, ANY CLAIM THAT
IT IS NOT

 

11

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subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the action or
proceeding is brought in an inconvenient forum, that the venue of the action or
proceeding is improper, or that this Agreement or the transactions contemplated
hereby may not be enforced in or by any of the above-named courts.  No party
hereby waives any right to remove or seek to remove any action brought in any
state court sitting in the Borough of Manhattan of The City of New York to any
federal court sitting in the Borough of Manhattan of The City of New York.  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 hereby.  Each of the parties
hereto (i) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce that foregoing waiver and (ii)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement and the transactions contemplated hereby by, among other
things, the mutual waivers and certifications in this Section 13.

 

14.                                 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.

 

15.                                 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.

 

12

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

 

 

 

CABLEVISION SYSTEMS CORPORATION

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:  Hank J. Ratner

 

 

Title:  Vice Chairman

 

 

MGM NETWORKS U.S. INC.

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:  Jay Rakow

 

 

Title:  Vice Chairman

 

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