Exhibit 10.41

 

EXECUTION COPY

 

AGREEMENT AND PLAN OF MERGER

 

 

AS OF MARCH 6, 2000

 

 

BY AND BETWEEN

 

CABLEVISION OF MICHIGAN, INC.

 

CSC HOLDINGS, INC.

 

AND

 

CHARTER COMMUNICATIONS, INC.

 

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TABLE OF CONTENTS

 

Section

1.

Definitions

 

 

1.01

Certain Definitions

 

 

1.02

Other Definitional Provisions

 

 

 

 

 

Section

2.

The Merger

 

 

2.01

The Merger

 

 

2.02

Issuance of Common Stock

 

 

2.03

Estimated Adjustment Statement; Basic Subscriber Estimate

 

 

2.04

Post Closing Adjustment

 

 

2.05

Sales and Transfer Taxes

 

 

2.06

Directors of Michigan

 

 

2.07

Officers of Michigan

 

 

2.08

Surrender and Payment

 

 

2.09

Charter of CCI

 

 

2.10

By-laws of CCI

 

 

2.11

Directors and Officers of CCI

 

 

 

 

 

Section

3.

Representations and Warranties of Holdings and Michigan

 

 

3.01

Organization and Authority

 

 

3.02

Legal Capacity; Approvals and Consents

 

 

3.03

Financial Statements

 

 

3.04

Changes in Operation

 

 

3.05

Taxes

 

 

3.06

Acquired Assets

 

 

3.07

The CATV Business

 

 

3.08

Labor Contracts and Actions

 

 

3.09

Employee Benefit Plans

 

 

3.10

Contracts

 

 

3.11

Legal and Governmental Proceedings and Judgments

 

 

3.12

Finders and Brokers

 

 

3.13

Intangible Property

 

 

3.14

Insurance

 

 

3.15

Inventory

 

 

3.16

Overbuilds

 

 

3.17

Rebuild

 

 

3.18

Acquisition of Right

 

 

3.19

Securities Laws Matters

 

 

3.20

Basis of the Acquired Assets

 

 

3.21

Title to Capital Stock

 

 

 

 

 

Section

4.

Representations and Warranties of CCI

 

 

4.01

Organization; Authority.

 

 

4.02

Authorization and Binding Obligation.

 

 

4.03

No Conflict; Required Consents.

 

 

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4.04

Finders and Brokers.

 

 

4.05

Private Offering.

 

 

4.06

Investment Company.

 

 

4.07

Claims and Litigation.

 

 

4.08

Absence of Certain Changes.

 

 

4.09

Compliance with Laws and Court Orders.

 

 

4.10

CCI Capital Stock.

 

 

4.11

No Vote Required.

 

 

4.12

SEC Filings; Financial Information.

 

 

4.13

Existing Registration Rights Agreements

 

 

4.14

Transfers of New LLC

 

 

 

 

 

Section

5.

Covenants Pending Closing

 

 

5.01

Business of Transferor

 

 

5.02

Access to Information

 

 

5.03

Monthly Financial Statements

 

 

5.04

Notification of Certain Matters

 

 

5.05

Environmental Reports

 

 

5.06

Modifications to Rebuild

 

 

5.07

Lien Searches

 

 

5.08

Covenants of CCI.

 

 

5.09

Listing of  Equity Consideration

 

 

5.10

Certificate of Merger

 

 

5.11

Excluded Assets and Excluded Liabilities

 

 

5.12

Transfer of Acquired Assets to New LLC

 

 

5.13

Formation of New LLC

 

 

5.14

Franchise Renewal

 

 

5.15

Retransmission Consent Agreements

 

 

 

 

 

Section

6.

Deliveries at Closing

 

 

6.01

Deliveries by Holdings

 

 

6.02

Deliveries by CCI

 

 

 

 

 

Section

7.

Conditions to the Obligations of CCI

 

 

7.01

Receipt of Consents

 

 

7.02

Holdings’ and Michigan’s Authority

 

 

7.03

Performance by Holdings and Michigan

 

 

7.04

Absence of Breach of Warranties and Representations

 

 

7.05

Absence of Proceedings

 

 

7.06

No Transferor Material Adverse Effect

 

 

 

 

 

Section

8.

Conditions to the Obligations of Holdings and Michigan

 

 

8.01

Receipt of Consents

 

 

8.02

CCI’s Authority

 

 

8.03

Performance by CCI

 

 

8.04

Absence of Breach of Representations and Warranties

 

 

8.05

Absence of Proceedings

 

 

8.06

No CCI Material Adverse Effect

 

 

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8.07

Listing of Equity Consideration

 

 

 

 

 

Section

9.

Covenants

 

 

9.01

Compliance with Conditions

 

 

9.02

Compliance with HSR Act and Rules

 

 

9.03

Applications for Assignment of Contracts or CATV Instruments

 

 

9.04

Records, Taxes and Related Matters

 

 

9.05

Continuation Billing Services

 

 

9.06

Non-Competition

 

 

9.07

Retained Franchises

 

 

 

 

 

Section

10.

Survival of Representations, Warranties, Covenants and Other Agreements;
Indemnification.

 

 

10.01

Survival of Representations, Warranties, Covenants and Other Agreements

 

 

10.02

Indemnification by Holdings

 

 

10.03

Indemnification by CCI

 

 

10.04

Third Party Claims

 

 

10.05

Remaining Liabilities

 

 

10.06

Method of Payment

 

 

10.07

Tax Matters

 

 

 

 

 

Section

11.

Further Assurances

 

 

 

 

 

Section

12.

Closing

 

 

12.01

Closing

 

 

12.02

Termination

 

 

 

 

 

Section

13.

Miscellaneous

 

 

13.01

Amendments; Waivers

 

 

13.02

Entire Agreement

 

 

13.03

Cablevision Name.

 

 

13.04

Binding Effect; Assignment

 

 

13.05

Construction; Counterparts

 

 

13.06

Notices

 

 

13.07

Expenses of the Parties

 

 

13.08

Non-Recourse

 

 

13.09

Third Party Beneficiary

 

 

13.10

Governing Law

 

 

13.11

Press Releases

 

 

13.12

Severability

 

 

13.13

Specific Performance

 

 

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EXHIBIT A

 

-

 

Service Territory

 

 

 

 

 

EXHIBIT B

 

-

 

Form of Opinion of Holdings’ Counsel

 

 

 

 

 

EXHIBIT C

 

-

 

Form of Opinion of Holdings’ FCC Counsel

 

 

 

 

 

EXHIBIT D

 

-

 

Form of Opinion of CCI’s Counsel

 

 

 

 

 

EXHIBIT E

 

-

 

Form of Registration Rights Agreement

 

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Schedule 1.01(a)

 

-

 

CATV Licenses

 

 

 

 

 

Schedule 1.01(b)

 

-

 

Current Assets

 

 

 

 

 

Schedule 1.01(c)

 

-

 

Current Liabilities

 

 

 

 

 

Schedule 1.01(d)

 

-

 

Excluded Assets

 

 

 

 

 

Schedule 1.01(e)

 

-

 

Excluded Liabilities

 

 

 

 

 

Schedule 1.01(f)

 

-

 

Permitted Encumbrances

 

 

 

 

 

Schedule 1.01(g)

 

-

 

Rebuild Expenditure

 

 

 

 

 

Schedule 3.02

 

-

 

Consents and Approvals

 

 

 

 

 

Schedule 3.05

 

-

 

Tax Notices and Assessments

 

 

 

 

 

Schedule 3.06(b)

 

-

 

Real Property

 

 

 

 

 

Schedule 3.06(d)

 

-

 

Environmental Matters

 

 

 

 

 

Schedule 3.06(g)

 

-

 

Other Commitments

 

 

 

 

 

Schedule 3.07(b)

 

-

 

Material Contracts

 

 

 

 

 

Schedule 3.07(c)

 

-

 

Notice of Claims or Purported Defaults in CATV Instruments

 

 

 

 

 

Schedule 3.07(d)

 

 

 

Compliance with laws, regulations and other requirements; Documents not filed
with the FCC

 

 

 

 

 

Schedule 3.07(e)

 

-

 

Copyrights

 

 

 

 

 

Schedule 3.07(f)

 

-

 

Head-ends

 

 

 

 

 

Schedule 3.09(a)

 

-

 

Employee Benefit Plans

 

 

 

 

 

Schedule 3.10

 

-

 

Contracts in Default

 

 

 

 

 

Schedule 3.11

 

-

 

Legal Proceedings

 

 

 

 

 

Schedule 3.13

 

-

 

Intangible Property

 

 

 

 

 

Schedule 3.14

 

-

 

Insurance

 

 

 

 

 

Schedule 3.16

 

-

 

Overbuilds

 

 

 

 

 

Schedule 4.10

 

-

 

Capital Stock

 

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AGREEMENT AND PLAN OF MERGER

 

This Agreement and Plan of Merger is made and entered into as of March 6, 2000,
by and between Cablevision of Michigan, Inc., a Michigan corporation
(“Michigan”), CSC Holdings, Inc., a Delaware corporation (“Holdings”), and
Charter Communications, Inc., a Delaware corporation (“CCI”).

 

R E C I T A L S

 

WHEREAS, Michigan owns and operates a cable television system serving the
communities described in Exhibit A (the “CATV System”).

 

WHEREAS, Holdings desires to transfer to CCI, and CCI desires to acquire from
Holdings, the CATV Business and the Acquired Assets (each as defined in Article
1 below) in accordance with the terms and conditions contained herein.

 

WHEREAS, the respective boards of directors of Holdings, Michigan and CCI have
approved, and deem it advisable and in the best interests of their respective
shareholders to consummate, the merger of Michigan with and into CCI on the
terms and conditions set forth herein.

 

WHEREAS, it is intended that, for federal income tax purposes, the merger of
Michigan with and into CCI, on the terms contemplated by this Agreement, qualify
as a “reorganization” under the provisions of  Section 368(a) of the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder.

 

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.

 

1.1           Certain Definitions.  For the purposes of this Agreement, the
following terms shall have the meanings set forth below:

 

Acquired Assets means  all of the properties, assets, privileges, rights,
interests, accounts receivable, claims and goodwill, real and personal, tangible
and intangible, of every type and description, including Transferor’s leasehold
interests or rights to possession, whether owned or leased or otherwise
possessed, primarily used by Transferor in connection with the CATV Business,
now in existence or hereafter acquired by Transferor prior to the Closing,
including, without limitation, the CATV Instruments, the Equipment, the Real
Property, the Contracts, the Inventory and the Intangible Property; provided
that Acquired Assets shall exclude the Excluded Assets and any assets disposed
of prior to the Closing in the usual and ordinary course of business and not in
violation of this Agreement.

 

Acquisition Value means  the aggregate of One Hundred Seventy-Two Million Five
Hundred Thousand dollars ($172,500,000), plus, if a positive number, or minus,
if a negative number, the

 

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Estimated Adjustment Amount determined in accordance with Section 2.03, less the
Subscriber Adjustment, if any, based on the Basic Subscriber Estimate.

 

Agreement means this Agreement and Plan of Merger and the Exhibits and Schedules
attached hereto.

 

Asserted Claim has the meaning set forth in Section 10.04.

 

Basic Subscriber means as at any date of determination thereof, the sum of (a)
the total number of households (exclusive of “second connection,” as such term
is commonly understood in the cable television industry, and exclusive of
customers billed on a bulk-billing or commercial-account basis) subscribing on
such date to at least the most basic tier of service offered by the CATV
Business and paying the monthly service fees and charges imposed in respect of
such service (other than disputed items), and who are not, as of the Closing
Date, 65 days or more in arrears in payment for service, as measured from the
date that payment due became a receivable and (b) the total number of Equivalent
Subscribers on such date; provided, however, that Basic Subscriber shall not
include any customer (i) whose account has an outstanding balance (other than an
amount of $10.00 or less) more than 65 days past due (with an account being past
due one day after the payment due became a receivable) or who has a disconnect
pending, (ii) who has been obtained by offers made, promotions conducted or
discounts given during the 60 days immediately preceding the Closing which were
outside the ordinary course of business, or (iii) who qualifies as a Basic
Subscriber only because the related account (or any part thereof) has been
compromised or written off other than in the ordinary course of business
consistent with Transferor’s past practice.

 

Basic Subscriber Amount has the meaning set forth in Section 2.04(b)(i).

 

Basic Subscriber Estimate has the meaning set forth in Section 2.03(b).

 

Benefit Plans means (i) all “employee benefit plans” (as such term is defined in
Section 3(3) of ERISA), of which the Transferor or any of its ERISA Affiliates
is or ever was a sponsor or participating employer or as to which the Transferor
or any of its ERISA Affiliates makes contributions or is required to make
contributions and (ii) any similar employment, severance or other arrangement or
policy of the Transferor or any of its ERISA Affiliates (whether written or
oral) providing for insurance coverage (including self-insured arrangements),
workers’ compensation, disability benefits, supplemental unemployment benefits,
vacation benefits or retirement benefits, or for profit sharing, deferred
compensation, bonuses, stock options, stock appreciation or other forms of
incentive compensation or post-retirement insurance, compensation or benefits.

 

Blue Sky Law has the meaning set forth in Section 3.19(a).

 

Capital Stock of any Person means any and all shares, interests, participations
or other equivalents (however designated) of corporate stock or other equity
participations or interests, including partnership interests, whether general or
limited, and membership interests, whether managing or non-managing of such
Person.

 

CATV means cable television, which term also includes satellite master antenna
television not yet converted to cable television service.

 

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CATV Business means the CATV business presently owned and operated by
Transferor, which consists of the transmission, distribution and local
origination of audio and video signals over the system used by the CATV business
located in the Service Territory.  CATV Business includes any Retained
Franchises.

 

CATV Instruments means (a) all franchises or ordinances or agreements, granted
to Transferor by, or entered into by Transferor with, any Governmental
Authority; (b) permits for wire crossings over or under highways, railroads, and
other property; (c) construction permits and certificates of occupancy; (d) pole
attachment and other Contracts with utilities; (e) state, county and municipal
permits, orders, variances, exemptions, approvals, consents, licenses and other
authorizations; (f) agreements for the purchase, sale, receipt or distribution
of news, data and microwave relay signals, or for satellite services; and
(g) all other approvals, consents and authorizations used or held for use in the
CATV Business, including without limitation, all CATV Licenses.

 

CATV Licenses means the licenses issued by the FCC used in the CATV Business as
presently conducted by Transferor, all of which are listed in Schedule 1.01(a).

 

CATV System has the meaning set forth in the recitals to this Agreement.

 

CCI has the meaning set forth in the preamble to this Agreement.

 

CCI Class B Common Stock has the meaning set forth in Section 4.10 of this
Agreement.

 

CCI Indemnified Party has the meaning set forth in Section 10.03(a).

 

CCI Material Adverse Effect means a material adverse effect on the assets,
financial condition, or results of operations of CCI and its subsidiaries, taken
as a whole, other than any such effect resulting from changes in conditions
(including economic, competitive, regulatory and other federal or state
governmental actions, proposed or enacted legislation or proposed or enacted
regulations) that are applicable to the economy or CATV system operators
generally or in the states in which CCI engages in the CATV business.

 

CCI Preferred Stock has the meaning set forth in Section 4.10(a).

 

CCI SEC Documents has the meaning set forth in Section 4.12(a).

 

CCI Securities has the meaning set forth in Section 4.10(c).

 

CCI’s Adjustment Amount Objection has the meaning set forth in Section
2.04(a)(iii).

 

CCI’s Counsel means Irell & Manella LLP.

 

CCI’s Designee means a Person to whom CCI, following the consummation of the
Merger, assigns its rights under this Agreement consistent with Section 13.04.

 

CCI’s Subscriber Objection has the meaning set forth in Section 2.04(b)(iii).

 

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Certificate of Merger has the meaning set forth in Section 2.01(b).

 

Charter Holdco has the meaning set forth in Section 2.02.

 

Closing means a 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 Date means the date fixed for the Closing in accordance with Section
12.01.

 

Code means the Internal Revenue Code of 1986, as amended.

 

Common Stock means Class A common stock, par value $.0001, of CCI or, in the
event of a Reorganization of CCI, the Capital Stock of the resulting or
surviving entity designated as the successor to the Class A common stock of CCI.

 

Communications Act has the meaning set forth in Section 3.07(d).

 

Competitive Business has the meaning set forth in Section 9.06.

 

Contract means any contract, mortgage, deed of trust, bond, indenture, lease,
license, note, certificate, option, warrant, right, or other instrument,
document or written agreement relating to the CATV Business to which Transferor
is a party or by which Transferor or the assets of Transferor included within
the CATV Business is bound, excluding any CATV Instrument.

 

Copyright Act has the meaning set forth in Section 3.07(e).

 

CPA Firm has the meaning set forth in Section 2.04(a)(iii).

 

Current Assets means petty cash, 100% of active subscriber and other accounts
receivable that are 65 days or less past due (measured from the date the
accounts became receivable), 100% of advertising receivables that are less than
90 days past due all deposits with utilities, under leases or related to guides,
billing service, postage, the pro rata portion of any prepaid taxes (as of the
Closing Date), all prepaid expenses to the extent CCI (or a subsidiary thereof)
will receive a benefit therefor after Closing, including in respect of pole
rental or equipment maintenance agreements that are Liabilities, and in respect
of rent, postage, promotional expenditures, guides, security service or two-way
radio, and other current assets, each as determined in accordance with GAAP
(unless otherwise specified herein) and consistent with Schedule 1.01(b) hereto,
which Schedule sets forth the type and amounts of Current Assets as of September
30, 1999, but in each case excluding any assets which are Excluded Assets (such
as listed on Schedule 1.01(d)).

 

Current Liabilities means accounts payable, accrued expenses and other current
liabilities of Transferor determined in accordance with GAAP, except that the
current portion of any indebtedness for borrowed money and Excluded Liabilities
shall not be included, and consistent with Schedule 1.01(c) hereto, which
Schedule sets forth the type and amounts of Current Liabilities as of September
30, 1999.  For purposes hereof, Current Liabilities shall be deemed to include,
without duplication:

 

4

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(1)           all prepayments, credit balances and deposits held by Transferor
as of the Closing Date relating to the CATV Business which are not included in
Current Assets, including without limitation advance payments and deposits by
subscribers served by the CATV System for converters, encoders, decoders, cable
television service and related sales, all interest, if any, required to be paid
thereon through the Closing Date;

 

(2)           all accrued and unpaid real property and personal property taxes
relating to the CATV Business incurred prior to Closing Date;

 

(3)           all accrued and unpaid expenses relating to the CATV Business
incurred prior to Closing Date, including without limitation accrued and unpaid
franchise fees; and

 

(4)           the cost of all vacation time and sick time that at the Closing
becomes the obligation of CCI to Employees that are retained by CCI.

 

Deferred Acquisition Value has the meaning set forth in Section 9.07(b).

 

Deferred Equity Consideration means the Common Stock to be issued to Holdings
(or an affiliate of Holdings) pursuant to one or more Subsequent Transfers
pursuant to Section 9.07(d) hereof in a number of shares of Common Stock,
rounded upward to the nearest whole number, having a Fair Market Value on the
Closing Date equal to the Deferred Acquisition Value.

 

DGCL has the meaning set forth in Section 2.01(b).

 

DOJ means the United States Department of Justice.

 

Effective Time has the meaning set forth in Section 2.01(b).

 

Employees means all current active employees of Transferor.

 

Encumbrances means liens, charges, encumbrances, security interests, options,
restrictions or any other similar third party rights other than liens for taxes
not yet due and payable.

 

Environmental Firm has the meaning set forth in Section 5.05.

 

Environmental Law means any law or regulation governing the protection of the
environment (including air, water, soil and natural resources) or the presence,
use, storage, handling, release, treatment, transport or disposal of any
hazardous or toxic substance.

 

Environmental Reports has the meaning set forth in Section 5.05.

 

Equipment means all tangible personalty; electronic devices; towers; trunk and
distribution cable; decoders and spare decoders for scrambled satellite signals;
amplifiers; power supplies; conduit; vaults and pedestals; grounding and pole
hardware; installed subscriber’s devices (including, without limitation, drop
lines, converters, encoders, transformers behind television sets and fittings);
“head-ends” and “Hubs” (origination, transmission and distribution system)
hardware; tools; inventory; spare parts; maps and engineering data; vehicles;
supplies, tests and closed circuit devices;  furniture and

 

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furnishings; and all other tangible personal property and facilities owned by
Transferor and used in the CATV Business.

 

Equity Consideration means the Common Stock to be issued to Holdings (or an
affiliate of Holdings) pursuant to Article 2 and Section 9.07 hereof.

 

Equivalent Subscriber means equivalent bona fide non-delinquent CATV customers
of the CATV System that are commercial establishments and multi-dwelling units
(e.g., bars, taverns, apartment buildings, dormitories, hospitals, etc.) that
are billed on a bulk basis for basic (or expanded basic) service, which have
paid in full the charges for at least one monthly billing period.  The number of
Equivalent Subscribers shall be deemed to be equal to the quotient that is
derived from dividing:  (a) the gross basic (or, if applicable, expanded basic)
billings to all such commercial establishments, multi-dwelling units, or other
customers that are billed on a bulk basis for basic (or expanded basic) service
(but excluding billings from à la carte tiers or premium services, installation
or other non-recurring charges, converter rental, any fees or charges for any
outlet or connection other than the first outlet or connection in any single
family household or (with respect to a bulk account, in any residential unit,
e.g., an individual apartment or rental unit), pass-through charges for sales
taxes, line-itemized franchise fees, fees charged by the FCC and the like)
attributable to such commercial establishment, multi-dwelling unit or other
customer during the most recent monthly billing period ended prior to the date
of calculation (but excluding billings in excess of a single monthly billing
period’s charge) by (b) the rate charged by the CATV System to individual homes
as of December 31, 1999, for basic service (or, (i) if the respective commercial
establishment, multi-dwelling unit or other customer also takes expanded basic
service, then by the rate charged by the CATV System to individual homes as of
December 31, 1998, for basic and expanded basic service and (ii) if the
respective commercial establishment, multi-dwelling unit or other customer takes
services which are neither expanded basic or basic services, then by a rate
which is an equivalent retail rate for such service), exclusive of any charges
for the additional services, franchise fees, taxes, etc. which are excluded from
the calculation of gross basic (or, if applicable, expanded basic) billings set
forth in clause (a) above, such rate to be not less than the respective CATV
System’s standard rate for such service.

 

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 means any member of the same controlled group of corporations or
business with Transferor under Sections 414(b) or (c) of the Code or
Section 4001(a)(14) of ERISA.

 

Estimated Adjustment Amount means (a) if Working Capital plus any Rebuild
Modification Amount less any Rebuild Shortfall as reflected on the Estimated
Adjustment Statement is less than zero, such negative amount, or (b) if Working
Capital plus any Rebuild Modification Amount less any Rebuild Shortfall as
reflected on the Estimated Adjustment Statement is more than zero, such positive
amount.

 

Estimated Adjustment Statement has the meaning set forth in Section 2.03(a).

 

Exchange Act means the Securities Exchange Act of 1934, as amended.

 

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Excluded Assets means the (a) assets and properties of Transferor listed on
Schedule 1.01(d); (b) programming Contracts (including cable guide Contracts)
and retransmission consent Contracts; (c) insurance policies and rights and
claims thereunder up to Transferor’s self-insured retention or deductible;
(d) Contracts relating to national advertising sales representation; (e) bonds,
letters of credit, surety instruments and other similar items of Transferor;
(f) trademarks, tradenames, service marks, service names, logos and similar
proprietary rights; (g) all rights under any Contracts between Transferor and
any subsidiary or affiliate of Cablevision Systems Corporation; (h) all
receivables not included in the definition of Current Assets; and (i) any
Retained Franchises that are transferred by Transferor to an affiliate of
Holdings prior to Closing.  For the avoidance of doubt, Schedule 1.01 (d) does
not purport to identify the amounts in respect of the Excluded Assets as of the
Closing.

 

Excluded Liabilities means (i) all obligations of Transferor for borrowed money,
(ii) all liabilities of Transferor under the contract listed on Schedule 3.10 ,
(iii) all obligations of Transferor under any Contracts between Transferor and
Cablevision Systems Corporation or any subsidiary or affiliate thereof, (iv) all
of the liabilities, obligations and commitments of Transferor identified on
Schedule 1.01(e) and (v) any liability, obligation or commitment of the
Transferor in any way arising out of or related to any Benefit Plan.  For the
avoidance of doubt, (i) Schedule 1.01 (e) does not purport to identify the
amounts in respect of the Excluded Liabilities as of the Closing and
(ii) Current Liabilities that resulted in a reduction of the Acquisition Value
are not Excluded Liabilities.

 

Fair Market Value of a share of Common Stock as of any date is the average of
the reported per share prices at which transactions in the Common Stock are
executed on the Nasdaq National Market (or any successor system) on which the
Common Stock is listed or admitted for trading, during each Trading Day for the
twenty full Trading Days preceding such date, as determined by Bear, Stearns &
Co., Inc. and Merrill Lynch & Co., Inc.

 

For purposes of determining the “Fair Market Value” of the Common Stock, if
prior to such date of determination CCI splits or combines the Common Stock or
pays a stock dividend or other stock distribution in Common Stock or otherwise
effects any transaction or announces its intention to do any of the foregoing
that changes the Common Stock into any other securities or makes any other
dividend or distribution on the Common Stock, and the record date applicable to
such event occurs during the twenty (20) full Trading Day period used to
determine Fair Market Value or after such period and prior to the date of
issuance of such Common Stock, the number of shares of Common Stock to be issued
shall be adjusted equitably to eliminate the effects of such event.

 

FCC means the Federal Communications Commission.

 

Final Adjustment Amount means the final adjustment amount as reflected on the
Final Adjustment Statement.

 

Final Adjustment Statement has the meaning set forth in Section 2.04(a)(iv).

 

Final Basic Subscriber Statement has the meaning set forth in Section
2.04(b)(iv).

 

FTC means the United States Federal Trade Commission.

 

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GAAP means U.S. generally accepted accounting principles as in effect from time
to time and consistently applied.

 

Governmental Authority means the Federal Government, any state, county,
municipal, local or foreign government and any governmental agency, bureau,
commission, authority or body.

 

Hazardous Substance means any substance, material or compound listed, defined,
designated or classified as hazardous, toxic or radioactive, or otherwise
regulated under any applicable Environmental Law, including, without limitation,
petroleum products.

 

Holdings has the meaning set forth in the preamble to this Agreement.

 

Holdings Indemnified Party has the meaning set forth in Section 10.02(a).

 

HSR Act and Rules means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, 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.

 

Income Statement has the meaning set forth in Section 3.03.

 

Indemnitee has the meaning set forth in Section 10.04.

 

Indemnitor has the meaning set forth in Section 10.04.

 

Intangible Property means the copyrights, patents, trademarks, service marks and
trade names used in the CATV Business excluding the right to use the names
“Cablevision,” “Cablevision Systems,” “Optimum,” “Optimum Cable,” “Optimum TV,”
or any and all derivatives thereof or any name which may include any of such
terms, and all applications for, or licenses or other rights to use any thereof,
and the value associated therewith, which are owned by Transferor and used in
the CATV Business.

 

Interim Financial Statements has the meaning set forth in Section 3.03.

 

Inventory means all inventory as defined under GAAP, plus, without limitation,
all supplies, all maintenance equipment, all converters, all cables and all
amplifiers owned by Transferor on the Closing Date as determined by Transferor’s
inventory control system and used in the CATV Business.

 

Judgment means judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
and any order of or by any Governmental Authority.

 

Law means the common law and any statute, ordinance, code or other law, rule,
regulation, order, technical or other standard, requirement or procedure
enacted, adopted, promulgated, applied or followed by any Governmental Authority
or court.

 

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Leased Property means the leaseholds of real property included among the
Acquired Assets and described as Leased Property on Schedule 3.06(b).

 

Losses has the meaning set forth in Section 10.02(a).

 

Merger has the meaning set forth in Section 2.01(a).

 

Michigan has the meaning set forth in the preamble to this Agreement, except
when referred to as the State of Michigan.

 

Minimum Subscriber Threshold shall equal (a) 47,600 if the Closing occurs in
June 2000, (b) 47,000 if the Closing occurs in July 2000 or in August 2000 and
(c) 48,500 if the Closing occurs in any month after August 2000.

 

MMDS has the meaning set forth in Section 9.06.

 

New LLC means a Delaware limited liability company to be organized by or on
behalf of Michigan prior to the Merger that is wholly-owned by Michigan.

 

Operating Agreements has the meaning set forth in Section 9.07(c).

 

Other Real Property Interests means the easements and rights of access (other
than those relating to multiple dwelling units) and other interests in real
property held by the Transferor in connection with the Acquired Assets, but not
including Leased Property or Owned Property.

 

Outside Date has the meaning set forth in Section 12.01.

 

Owned Property means the fee interests in the real property included among the
Acquired Assets and described as Owned Property on Schedule 3.06(b).

 

Permitted Encumbrances means those Encumbrances set forth in Schedule 1.01(f)
hereto and all other Encumbrances (excluding Encumbrances for borrowed money),
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 CATV Business.

 

Person means any natural person, Governmental Authority, corporation, general or
limited partner, partnership, member, limited liability company, joint venture,
trust, association, or unincorporated entity of any kind.

 

Preliminary Adjustment Statement has the meaning set forth in Section
2.04(a)(i).

 

Preliminary Basic Subscriber Statement has the meaning set forth in Section
2.04(b)(i).

 

Real Property means Owned Real Property, Leased Real Property and Other Real
Property Interests.

 

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Rebuild Expenditure means the budgeted rebuild expenditures of the CATV System
in the amount set forth on Schedule 1.01(g).

 

Rebuild Modification Amount has the meaning set forth in Section 5.06.

 

Rebuild Shortfall means the amount, if any, by which the Rebuild Expenditure
exceeds the actual amount expended by Transferor as of the Closing Date toward
completion of the rebuild of the CATV System set forth on Schedule 1.01(g).

 

Registration Rights Agreement means the registration rights agreement, dated the
Closing Date, in the form of Exhibit E hereto.

 

Relevant Group has the meaning set forth in Section 3.05(a).

 

Remaining Liabilities means all liabilities, obligations and commitments
(whether direct or indirect, matured or unmatured, known or unknown, absolute,
accrued, contingent or otherwise) relating solely to or arising solely from the
CATV Business or the condition of the Acquired Assets and the Retained
Franchises, that:

 

(a)           are included within the Acquired Assets or the Retained Franchises
and relate to the period from and after Closing;

 

(b)           relate to CCI’s operation, directly or indirectly, of the CATV
Systems from and after the Closing Date; or

 

(c)           that are included in Current Liabilities or that otherwise result
in a reduction of the Acquisition Value, including pursuant to Section 2.04(c).

 

Reorganization means any merger, consolidation, share exchange, business
combination, reorganization, recapitalization or other similar transaction in
which CCI is not the surviving or resulting entity.

 

Required Consent means the consents and approvals designated as such on Schedule
3.02 by an asterisk.

 

Retained Franchise has the meaning set forth in Section 9.07(a).

 

Retained Percentage has the meaning set forth in Section 9.07(b).

 

SEC means the U.S. Securities and Exchange Commission.

 

Securities Act means the Securities Act of 1933, as amended.

 

Service Territory means the geographical area as described in Exhibit A hereto.

 

SMATV has the meaning set forth in Section 9.06.

 

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Subscriber Adjustment means an amount equal to $3,557 multiplied by the
difference, if any,  between (a) the Minimum Subscriber Threshold and (b) the
number of Basic Subscribers of the CATV Business on the Closing Date; provided,
that if the product obtained in the foregoing clause is negative, the Subscriber
Adjustment shall be zero.

 

Subsequent Transfer has the meaning set forth in Section 9.07(d).

 

Tax means any income, sales, use, ad valorem, business license, withholding,
payroll, employment, excise, stamp, transfer, recording, occupation, premium,
property, value added, custom duty, severance, windfall profit or license tax,
governmental fee or other similar assessment or charge, together with any
interest and any penalty, addition to tax or additional amount imposed by any
Governmental Authority responsible for the imposition of any such tax (domestic
or foreign).

 

Tax Returns means, with respect to any Person, all material federal, state,
local and foreign income, information, franchise, sales, use, value added,
property, excise, payroll and employment and other tax returns or reports of
such Person.

 

Trading Day means any day on which the Common Stock is listed, admitted for
trading or quoted on a national securities exchange, the Nasdaq National Market,
the Nasdaq Stock Market, or the domestic over-the-counter market as reported by
the National Quotation Bureau, Incorporated, or any similar successor
organization, as the case may be, and the exchange or system on which the Common
Stock is listed, admitted for trading or quoted, as the case may be, is open for
trading on such day.

 

Transferor means Michigan and, as of the Closing, New LLC.

 

Transferor Material Adverse Effect means a material adverse effect on the
assets, financial condition or results of operations of  the CATV Business taken
as a whole, other than any such effect resulting from changes in conditions
(including economic, competitive, regulatory and other federal or state
governmental actions, proposed or enacted legislation or proposed or enacted
regulations) that are applicable to the economy or CATV system operators
generally or in the State of Michigan.

 

Voting Stock of any Person means Capital Stock of such Person which ordinarily
has voting power for the election of directors (or persons performing similar
functions) of such Person, whether at all times or only so long as no senior
class of securities has such voting power by reason of any contingency.

 

Working Capital means Current Assets minus Current Liabilities.

 

1.02         Other Definitional Provisions.  Terms defined in the singular shall
have a comparable meaning when used in plural, and vice versa.

 

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20           The Merger.

 

2.1           The Merger.

 

(a)           Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time, Michigan shall be merged with and into CCI
(the “Merger”), with CCI surviving, and the separate corporate existence of
Michigan shall thereupon cease.

 

(b)           As part of a simultaneous transaction occurring at the Closing,
Michigan and CCI will cause a Certificate of 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 Delaware General
Corporation Law, as amended (“DGCL”).  The Merger shall become effective at the
time when the Certificate of Merger has been duly filed with the Secretary 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
“Effective Time”).  From and after the Effective Time, CCI will possess all the
rights, powers, privileges and franchises and be subject to all of the
obligations, liabilities, restrictions and disabilities of Michigan and CCI, all
as provided under the DGCL.

 

2.2           Issuance of Common Stock. At the Effective Time, as a result of
the Merger and without any action on the part of any holder of Capital Stock of
Michigan, all of the issued and outstanding Capital Stock of Michigan
immediately prior to the Effective Time will be converted into and exchanged for
that number of shares of Common Stock, rounded upward to the nearest whole
number, having a Fair Market Value on the Closing Date equal to the difference
between (a) the Acquisition Value and (b) the Deferred Acquisition Value,
registered in the name of Holdings or its nominees.  Holdings acknowledges that
immediately after the Merger, CCI will contribute 100% of its interest in New
LLC to Charter Communications Holding Company, LLC, a Delaware limited liability
company (“Charter Holdco”), in exchange for a number of common units in Charter
Holdco equal to the number of shares of Common Stock issued by CCI to Holdings
pursuant to this Section 2.02 (or the number of common units having an
equivalent value to such shares of Common Stock).  Charter Holdco may then
contribute its 100% interest in New LLC to any of its direct or indirect
wholly-owned limited liability company subsidiaries.

 

2.3           Estimated Adjustment Statement; Basic Subscriber Estimate.

 

(1)           At least five business days prior to the Closing Date, Holdings
shall deliver to CCI a statement of Holdings as of the Closing Date, which
statement shall set forth Holdings’ good faith estimate of the Current Assets
and Current Liabilities of the CATV Business,  the Rebuild Shortfall, the
Rebuild Modification Amount and the Estimated Adjustment Amount as of the
Closing Date as determined in accordance with GAAP, in a manner consistent with
the preparation of the Interim Financial Statements, except as otherwise
required by this Agreement (the “Estimated Adjustment Statement”).

 

(2)           On the date that Holdings delivers the Estimated Adjustment
Statement, Holdings shall also deliver to CCI an estimate of the number of Basic
Subscribers of the CATV Business as of the Closing Date (the “Basic Subscriber
Estimate”).  The number of Basic Subscribers set forth in the Basic Subscriber
Estimate shall be used on the Closing Date for computing the Subscriber
Adjustment, if any.  Basic Subscribers of the CATV Business shall be deemed to
include all Basic Subscribers of the CATV Business, including the number of
Basic Subscribers in any Retained Franchise.

 

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2.4           Post Closing Adjustment.

 

(1)                                  Preliminary Adjustment; Final Adjustment.

 

(1)           Within 90 days after the Closing Date, Holdings shall prepare, or
cause to be prepared, and deliver to CCI a statement of the CATV Business as of
the Closing Date, which statement shall be prepared in accordance with GAAP and
in a manner consistent with the preparation of the Interim Financial Statements,
except as otherwise required by this Agreement, and shall set forth the Current
Assets and Current Liabilities of Transferor, the Rebuild Shortfall, the Rebuild
Modification Amount and the Estimated Adjustment Amount, each as of the Closing
Date (the “Preliminary Adjustment Statement”).  CCI shall cooperate in providing
to Holdings access, upon reasonable notice, to all relevant books, records and
personnel of the CATV Business in order to facilitate the preparation of the
Preliminary Adjustment Statement.

 

(2)           During the succeeding 30-day period, CCI shall have (x) the right
to examine the Preliminary Adjustment Statement and all records used to prepare
the Preliminary Adjustment Statement and (y) access to copies of all other
books, records and accounts of Holdings and such other information as CCI
reasonably requests to allow CCI to examine the accuracy of the Preliminary
Adjustment Statement.

 

(3)           In the event CCI determines that the Preliminary Adjustment
Statement has not been prepared on the basis set forth in Section 2.04(a)(i)
hereof, CCI shall so inform Holdings in writing (“CCI’s Adjustment Amount
Objection”), setting forth a reasonably specific description of the basis of the
CCI’s Adjustment Amount Objection on or before the last day of the 30-day period
referred to in Section 2.04(a)(ii) hereof; provided, however, that such 30 day
period shall not commence until Holdings has complied with its obligations under
paragraph 2.04(a)(ii) above.  In the event of CCI’s Adjustment Amount Objection,
CCI and Holdings shall attempt to resolve the differences underlying CCI’s
Adjustment Amount Objection within 30 days of CCI’s receipt thereof.  If
Holdings and CCI are unable to resolve all their differences within such 30-day
period, they shall refer their remaining differences to KPMG LLP, certified
public accountants, or such other nationally recognized firm of independent
public accountants as to which CCI and Holdings may mutually agree (the “CPA
Firm”), who shall, acting as experts and not as arbitrators, determine on the
basis of the standard set forth in Section 2.04(a)(i) hereof and only with
respect to the remaining differences so submitted, whether and to what extent,
if any, the Preliminary Adjustment Statement requires adjustment.  The CPA Firm
will base its determination only on evidence brought to it by the parties and
shall not conduct an audit. The CPA Firm shall deliver its written determination
to CCI and Holdings no later than the 30th business day after the remaining
differences underlying  CCI’s Adjustment Amount Objection are referred to the
CPA Firm.  The CPA Firm’s determination shall be conclusive and binding upon the
parties.  The fees and disbursements of the CPA Firm shall be allocated between
CCI and Holdings in the same proportion that the aggregate amount of any
disputed items submitted to the CPA Firm that are unsuccessfully disputed by
each (as finally determined by the CPA Firm) bears to the total amount of any
disputed items so submitted.  CCI and Holdings shall make readily available to
the CPA Firm all relevant books and records and any work papers relating to the
Preliminary Adjustment Statement and all other items reasonably requested by the
CPA Firm.

 

(4)           The “Final Adjustment Statement” shall be (1) the Preliminary
Adjustment Statement in the event that (x) CCI’s Adjustment Amount Objection is
not delivered to Holdings in the period set forth in Section 2.04(a)(ii) hereof;
or (y) Holdings and CCI so agree; or (2) the

 

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Preliminary Adjustment Statement, as adjusted by either (x) the agreement of
Holdings and CCI or (y) the CPA Firm.

 

(5)           If the Final Adjustment Amount exceeds the Estimated Adjustment
Amount, then CCI shall pay to Holdings an amount equal to such excess by wire
transfer of immediately available funds.  If the Estimated Adjustment Amount
exceeds the Final Adjustment Amount, then Holdings shall pay to CCI an amount
equal to such excess by wire transfer of immediately available funds.  Any such
payment of immediately available funds shall be made within ten (10) business
days following the determination of the Final Adjustment Statement pursuant to
Section 2.04(a)(iii) hereof.

 

(2)                                  Subscriber Adjustment.

 

(1)           Within ninety (90) days after the Closing Date, Holdings shall
prepare, or cause to be prepared, and deliver to CCI a statement setting forth
the number of Basic Subscribers of the CATV Business as of the Closing Date
(such number, the “Basic Subscriber Amount”), which statement (the “Preliminary
Basic Subscriber Statement”) shall be prepared in conformity with the definition
of Basic Subscriber contained herein.  CCI shall cooperate in providing to
Holdings access, upon reasonable notice, to all relevant books, records and
personnel of the CATV Business in order to facilitate the preparation of the
Preliminary Basic Subscriber Statement.

 

(2)           During the 30-day period following the delivery of the Preliminary
Basic Subscriber Statement to CCI, CCI shall have (x) the right to examine the
Preliminary Basic Subscriber Statement and all records used to prepare the
Preliminary Basic Subscriber Statement and (y) access to copies of all other
books, records and accounts of Holdings and such other information as CCI
reasonably requests to allow CCI to examine the accuracy of the Preliminary
Basic Subscriber Statement.

 

(3)           In the event CCI determines that the Preliminary Basic Subscriber
Statement has not been prepared on the basis set forth in Section 2.04(b)(i)
hereof, CCI shall so inform Transferor in writing (“CCI’s Subscriber
Objection”), setting forth a reasonably specific description of the basis of
CCI’s Subscriber Objection on or before the last day of the thirty (30) day
period referred to in Section 2.04(b)(ii) hereof; provided, however, that such
30 day period shall not commence until Holdings has complied with its obligation
under Section 2.04(b)(ii) hereof.  If CCI delivers a CCI’s Subscriber Objection,
CCI and Holdings shall attempt to resolve the differences underlying CCI’s
Subscriber Objection within 30 days of the Holding’s receipt thereof.  If
Holdings and CCI are unable to resolve all their differences within such 30-day
period, they shall refer their remaining differences to the CPA Firm, who shall
determine on the basis of the standard set forth in Section 2.04(b)(i) hereof
and only with respect to the remaining differences so submitted, whether and to
what extent, if any, the Preliminary Basic Subscriber Statement requires
adjustment.  The CPA Firm will base its determination only on evidence brought
to it by the parties and shall not conduct an audit. The CPA Firm shall deliver
its written determination to CCI and Holdings no later than the 30th business
day after the remaining differences underlying CCI’s Subscriber Objection are
referred to the CPA Firm.  The CPA Firm’s determination shall be conclusive and
binding upon the parties.  The fees and disbursements of the CPA Firm shall be
allocated between CCI and Holdings in the same proportion that the aggregate
number of any disputed Basic Subscribers submitted to the CPA Firm that is
unsuccessfully disputed by each (as finally determined by the CPA Firm) bears to
the total amount of any Basic Subscribers so submitted.  CCI and Holdings shall
make readily available to the CPA Firm

 

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all relevant invoices, books and records and any work papers relating to the
Preliminary Basic Subscriber Statement and all other items reasonably requested
by the CPA Firm.

 

(4)           The “Final Basic Subscriber Statement” shall be (1) the
Preliminary Basic Subscriber Statement in the event that (x) CCI’s Subscriber
Objection is not delivered to Holdings in the period set forth in Section
2.04(b)(ii) hereof; or (y) Holdings and CCI so agree; or (2) the Preliminary
Basic Subscriber Statement, as adjusted by either (x) the agreement of Holdings
and CCI or (y) the CPA Firm.

 

(5)           If the number of Basic Subscribers included in the Final Basic
Subscriber Statement is less than the number of Basic Subscribers in the Minimum
Subscriber Threshold and less than the number of Basic Subscribers included in
the Basic Subscriber Estimate, then the Holdings shall pay to CCI an amount
equal to the product of $3,557 and the difference between (1) the number of
Basic Subscribers included in the Basic Subscriber Estimate (but not above the
number of Basic Subscribers in the Minimum Subscriber Threshold) and (2) the
number of Basic Subscribers included in the Final Basic Subscriber Statement by
wire transfer of immediately available funds.  If the number of  Basic
Subscribers included in the Final Basic Subscriber Statement is more than the
number of Basic Subscribers included in the Basic Subscriber Estimate and the
number of Basic Subscribers in the Basic Subscriber Estimate was less than the
number of Basic Subscribers in the Minimum Subscriber Threshold, then CCI shall
pay to Holdings an amount equal to the product of $3,557 and the difference
between (1) the number of Basic Subscribers included in the Final Basic
Subscriber Statement (but not above the number of Basic Subscribers in the
Minimum Subscriber Threshold) and (2) the number of Basic Subscribers included
in the Basic Subscriber Estimate by wire transfer of immediately available
funds.  Any such payment of immediately available funds shall be made within ten
(10) business days following the determination of the applicable amount.

 

(3)           Payment.  The payment by wire transfer of immediately available
funds pursuant to this Section 2.04 shall result in an increase or decrease to
the Acquisition Value, as applicable, equal to the amount of such payment.

 

2.5           Sales and Transfer Taxes.  CCI and Holdings shall equally be
responsible for all sales and use taxes, transfer taxes and FCC filing fees, if
any, arising from the Merger and for all filing fees payable with respect to
filings by CCI and Holdings under the HSR Act and Rules.

 

2.6           Directors of Michigan.  At the Effective Time, the directors of
Michigan shall resign from their positions as such.

 

2.7           Officers of Michigan.  At the Effective Time, the officers of
Michigan shall resign from their positions as such.

 

2.8           Surrender and Payment.  Upon surrender by Holdings for
cancellation of a certificate formerly representing Capital Stock of Michigan,
CCI will deliver to Holdings the portion of the Equity Consideration to be
delivered on the Closing Date registered in such names and denominations as
Holdings shall reasonably request.  After the Effective Time and until so
surrendered, the Capital Stock of Michigan shall represent for all purposes only
the right to receive the portion of the Equity Consideration to be delivered on
the Closing Date.

 

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2.9           Charter of CCI.  The certificate of incorporation of CCI in effect
at the Effective Time will, from and after the Effective Time, be the
certificate of incorporation of CCI unless and until amended in accordance with
its terms and the DGCL.

 

2.10         By-laws of CCI.   The by-laws of CCI in effect at the Effective
Time will, from and after the Effective Time, be the by-laws of CCI unless and
until amended in accordance with their terms and the DGCL.

 

2.11         Directors and Officers of CCI.   The directors and officers of CCI
in office at the Effective Time will, from and after the Effective Time,
continue as the directors and officers of CCI in accordance with the terms of
the organizational documents of CCI and the DGCL.

 

30           Representations and Warranties of Holdings and Michigan.

 

To induce CCI to enter into this Agreement and the Registration Rights
Agreement, Holdings and Michigan represent and warrant to CCI as follows:

 

3.1           Organization and Authority.  Holdings is a corporation duly
organized, validly existing and in good standing, under the laws of the state of
Delaware, and is duly qualified to conduct business and in good standing in the
jurisdiction where the nature of its business requires such qualification. 
Michigan is a corporation duly organized, validly existing and in good standing,
under the laws of the state of Delaware, and is duly qualified to conduct
business and in good standing in the jurisdiction where the nature of its
business requires such qualification. As of the Closing Date, New LLC will be a
limited liability company, duly organized and validly existing and in good
standing under the laws of the State of Michigan, and will be duly qualified and
in good standing in the jurisdictions where the nature of its business requires
such qualification.

 

3.2           Legal Capacity; Approvals and Consents.

 

(1)           Authority and Binding Effect.  Subject to Section 9.02 hereof and
the consents and approvals set forth on Schedule 3.02, Holdings and Michigan
have duly taken all requisite corporate power and authority to execute, deliver
and perform this Agreement and the Registration Rights Agreement and to approve,
adopt and consummate the Merger.  Holdings and Michigan have duly taken all
corporate and shareholder actions necessary to authorize the execution, delivery
and performance of this Agreement and the Registration Rights Agreement. 
Without limiting the foregoing, any actions of the directors and stockholders of
Holdings and Michigan required to approve and adopt this Agreement have been
duly taken in accordance with the requirements of the DGCL and no further action
of the directors or stockholders of Holdings or Michigan is required in order to
consummate the Merger.  This Agreement has been duly executed and delivered by
Holdings and Michigan and is the valid and binding obligation of Holdings and
Michigan enforceable against Holdings and Michigan 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.  The Registration Rights Agreement, when executed and
delivered, will be duly executed and delivered and will be the valid and binding
obligation of Holdings enforceable 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.

 

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(2)           No Breach.  Subject only to obtaining the consents and approvals
set forth on Schedule 3.02, the execution, delivery and performance of this
Agreement and the Registration Rights Agreement, does not, and will not,
contravene the relevant organizational documents of Holdings or Transferor, and
does not, and will not: (i) conflict with or result in a breach or violation by
Transferor of, constitute a default by Transferor under, or result in the
termination, suspension, modification or impairment of any CATV Instrument, Law,
Judgment, or Contract that is material to the CATV Business with respect to
which Transferor is a party or by which Transferor, the CATV Business or any of
the Acquired Assets is subject or bound or may be affected; or (ii) create or
impose any Encumbrance upon any of the Acquired Assets that is material to the
CATV Business other than a Permitted Encumbrance.

 

(3)           Required Consents.  Except for the parties listed on Schedule
3.02, there is no  approval or consent of Governmental Authorities or, to
Holdings’ or Michigan’s knowledge, of other third parties, that is legally or
contractually required or otherwise is necessary in connection with the
execution, delivery or performance by Holdings and Michigan of this Agreement
and by Holdings of the Registration Rights Agreement except where failure to
obtain such consent or approval or the failure to make such filing would not
reasonably be expected to materially adversely affect the CATV Business.

 

3.3           Financial Statements.  Holdings has delivered to CCI true and
complete copies of the statements of income of Transferor for the year ending
December 31, 1998 (the “Income Statement”).  The Income Statement was prepared
in accordance with GAAP except for certain items that would require
reclassification and certain expenses as described in the Income Statement and
presents fairly in all material respects the results of its operations for the
period then ended.  Holdings has also provided to CCI a balance sheet and income
statement as of September 30, 1999 (the “Interim Financial Statements”), which
Interim Financial Statements were prepared in accordance with the practices
customarily followed by Transferor in preparing its interim statements and,
subject to normal year-end adjustments and the procedures followed in interim
statements, present fairly in all material respects the financial position and
results of operation of Transferor as at the dates and for the period indicated
and in the case of the income statement, are stated on a basis generally
consistent with the Income Statement.

 

3.4           Changes in Operation.  Except for conditions affecting the cable
television industry as a whole or in the State of Michigan and except for the
transfer by Michigan to New LLC of the CATV Business or the transfer by Michigan
of a Retained Franchise in accordance with Section 9.07(a), (i) since
November 30, 1999, Transferor has operated the CATV Business only in the
ordinary course of business in all material respects consistent with past
practices, and no material assets previously used therein have been disposed of
except in the ordinary course of business, and (ii) since the date of the
Interim Financial Statements there has been no material adverse change in the
business, financial condition or results of operations of the Transferor.

 

3.5           Taxes.  Except as disclosed on Schedule 3.05:

 

(1)   (i)     all Tax Returns required to have been filed by or with respect to
Transferor or any affiliated, consolidated, combined, unitary or similar group
of which Transferor is or was a member (a “Relevant Group”) have been duly and
timely filed (including any extensions), and each such Tax Return correctly and
completely in all material respects reflects the Tax

 

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liability and all other information required to be reported thereon; (ii) all
Taxes due and payable by Transferor or claimed to be due by any Governmental
Authority, have been paid or accrued on the balance sheet included in the
Interim Financial Statements; and (iii) all such Tax Returns are true, complete
and correct in all material respects.

 

(2)           Transferor has not incurred any material liability for Taxes other
than as reflected on the balance sheet included in the Interim Financial
Statements.  The unpaid Taxes of Transferor (i) did not, as of the most recent
fiscal month end, exceed by any material amount the reserve for liability for
income Tax (other than the reserve for deferred taxes established to reflect
timing differences between book and tax income) set forth on the face of
Transferor’s balance sheet included in the Interim Financial Statements and
(ii) will not exceed by any material amount that reserve as adjusted for
operations and transactions through the Closing Date.

 

(3)           Neither Transferor nor any Relevant Group has requested an
extension of the time within which to file any Tax Return.  No claim has ever
been made by a Governmental Authority of any jurisdiction in which the
Transferor or any member of any Relevant Group does not file Tax Returns that
Transferor or such member is or may be subject to taxation by that jurisdiction.

 

(4)           Transferor and each member of any Relevant Group have withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, creditor or independent contractor.

 

(5)           Holdings does not have knowledge of any actions by any
Governmental  Authority in connection with assessing additional Taxes against or
in respect of Transferor or any Relevant Group for any past period.  To the
knowledge of Holdings and Transferor, there is no dispute or claim concerning
any Tax liability of Transferor (i) either  threatened, claimed or raised by any
Governmental Authority or (ii) of which Holdings is otherwise aware.  There are
no Encumbrances for Taxes upon the Acquired Assets other than Encumbrances for
Taxes not yet due.  Schedule 3.05 indicates those Tax Returns, if any, of
Transferor or of any Relevant Group that have been audited or examined by
Governmental Authorities, and indicates those Tax Returns of Transferor or of
any Relevant Group that currently are the subject of audit or examination.

 

(6)           There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any Tax Returns required to be
filed by, or which include or are treated as including, Transferor or with
respect to any Tax assessment or deficiency affecting Transferor or any Relevant
Group.

 

(7)           Neither Transferor nor any Relevant Group has (i) received any
written ruling related to Taxes that would have an impact on Transferor or (ii)
entered into any agreement with a Governmental Authority relating to Taxes.

 

(8)           Transferor has no liability for the Taxes of any Person other than
Transferor (i) under Section 1.1502-6 of the Treasury regulations (or any
similar provision of state, local or foreign Law), (ii) as a transferee or
successor, (iii) by contract or (iv) otherwise.  Transferor

 

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(i) has neither agreed to make nor is required to make any adjustment under
Section 481 of the Code by reason of a change in accounting method and (ii) is
not a “consenting corporation” within the meaning of Section 341(f)(1) of the
Code.

 

(9)           Transferor is not a party to or bound by any obligations under any
tax sharing, tax allocation, tax indemnity or similar agreement or arrangement. 
Transferor is not involved in, subject to, or a party to any joint venture,
partnership, contract or other arrangement that is treated as a partnership for
federal, state, local or foreign income Tax purposes.

 

(10)         Transferor was not included in, and is not includible in, the Tax
Return of any Relevant Group with any corporation other than such a return of
which Cablevision Systems Corporation is the common parent corporation.

 

(11)         Transferor has not made any payments, is not obligated to make any
payments, nor is a party to any contract that under certain circumstances could
require it to make any payments that are not deductible as a result of the
provisions set forth in Section 280G of the Code or the treasury regulations
thereunder or would result in an excise tax to the recipient of any such payment
under Section 4999 of the Code.

 

(12)         There is currently no limitation on the utilization of the net
operating losses, built-in losses, capital losses, tax credits or other similar
items (collectively, “Tax Attributes”) of, or allocable to, Transferor under
Sections 382, 383, 384 and 1502 of the Code and Treasury regulations promulgated
thereunder.  Schedule 3.05 lists the amounts and expiration dates of all Tax
Attributes of (or allocable to) Transferor as of January 1, 2000.

 

(13)         All material elections with respect to income Taxes affecting
Transferor are set forth in Schedule 3.05.

 

(14)         Transferor is not nor, has it ever been, a United States real
property holding corporation within the meaning of Section 897(c)(1)(A)(ii) of
the Code.

 

3.6           Acquired Assets.  With respect to the Acquired Assets, Holdings
and Michigan make the following warranties and representations:

 

(1)           Title; Encumbrances.  Except for Permitted Encumbrances,
Transferor has, or will have at Closing:  (i) good and marketable title to all
of the Acquired Assets constituting material tangible personal property and (ii)
the right and authority (subject to the required consents specified herein) to
transfer to CCI all of Transferor’s right, title and interest in and to the
other material personal property or rights included in the Acquired Assets.

 

(2)           Real Property.  Schedule 3.06(b) (i) sets forth, as of the date
thereon, a list of all Owned Property and Leased Property owned or leased by
Transferor in connection with the operation of the CATV Business as conducted as
of such date, including a description of the use thereof, (ii) identifies such
property as Owned Property or Leased Property, and (iii) is correct in all
material respects as of the date set forth thereon. Except for ordinary wear and
tear and routine repairs, all of the material improvements, leasehold
improvements and the

 

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premises of the Real Property are in good condition and repair and are suitable
in all material respects for the purposes used by Transferor.  Each parcel of
Real Property (1) has a means of  ingress and egress, (2) except as set forth on
Schedule 3.06(b), conforms in all material respects in its current use and
occupancy to all material zoning requirements, (3) conforms in all material
respects in its current use to all restrictive covenants, if any, or other
Encumbrances affecting all or part of such parcel, and (4) is available for
immediate use in the conduct of the business or operations of the CATV System. 
There are not pending any condemnation, expropriation, eminent domain or similar
proceedings of which Transferor has received notice or has knowledge affecting,
in any material respect, all or any portion of the Real Property.  Except as set
forth in Schedule 3.06(b), Transferor has good and marketable title to each
material parcel of Real Property included in its Owned Property (or, in the case
of Leased Property, valid and enforceable leasehold interests in each such
parcel of real property), in each case free and clear of all Encumbrances except
for Permitted Encumbrances.  Transferor has made available to CCI copies of (i)
all deeds, leases and material easements under which Transferor obtained an
interest in Real Property and (ii) all title reports and commitments and surveys
with respect to Real Property, in each case, to the extent Transferor has such
in its possession.

 

(3)           Acquired Assets.  The Acquired Assets and the Excluded Assets
include all material assets used by Transferor to conduct the CATV Business as
it is presently being conducted.  For the avoidance of doubt, CCI agrees with
Holdings that Transferor shall be permitted to convey the Excluded Assets to
another Person prior to Closing without breaching any representation, warranty,
covenant or agreement in this Agreement.

 

(4)           Environmental Matters.  Except as disclosed on Schedule 3.06(d),
to Transferor’s knowledge:  (i) the Acquired Assets are in compliance in all
material respects with applicable Environmental Law; (ii) Transferor has not
received any written notice from any Governmental Authority alleging that the
Acquired Assets are in violation of any applicable Environmental Law; (iii) the
Acquired Assets are not the subject of any court order, administrative order or
decree arising under any Environmental Law; (iv) the Acquired Assets have not
been used by Transferor for the generation, storage, discharge or disposal of
any Hazardous Substances except as permitted under applicable Environmental Laws
; and (v) there has not been a release, discharge or escape of any Hazardous
Substance caused by Transferor, nor to Transferor’s knowledge is any Hazardous
Substance present, in the soil, ground water or any surface water at or about
the Acquired Assets.  Transferor has made available to CCI all environmental
assessments or environmental reports in its possession related to the Acquired
Assets or any Real Property included therein.

 

(5)           The material tangible personal property included within the
Acquired Assets is in good operating condition and repair, except for ordinary
wear and tear.

 

(6)           Schedule 1.01(a) contains a list, accurate and complete in all
material respects as of the date thereof, of all franchises and CATV Licenses,
together with the name of the issuing body or authority therefor, the date of
issuance and the expiration date of each such CATV Instrument and the territory
covered thereby. A true and complete copy of each franchise and CATV License
listed on Schedule 1.01(a) as in effect on the date hereof has

 

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been made available to CCI.  Except as set forth on Schedule 1.01(a), Transferor
is not providing cable service to any area except pursuant to a valid and
unexpired franchise.

 

(7)           Except as may otherwise be imposed pursuant to any Law which
applies to the cable television industry generally or in the State of Michigan
or as set forth on Schedule 3.06(g), to the knowledge of the Transferor (which
knowledge includes the knowledge of the system manager for the CATV System), the
CATV Instruments listed in Schedule 1.01(a) contain all of the material
commitments and obligations of Transferor to the applicable Governmental
Authorities with respect to the construction, development, ownership, lease and
operation of the CATV System. Transferor has not received any written notice of
any material dispute as to the interpretation of any material provision of any
CATV Instrument.

 

(8)           There is no legal action, governmental proceeding or investigation
pending, or to Transferor’s knowledge threatened, to terminate, suspend, modify
or refuse to renew any franchise included in the CATV Instruments.  Transferor
has not received any written notice that it is, or is alleged to be, in breach
or default in any material respect under, or that  there is, or is alleged to
be, any basis for the termination of, any franchise included in any CATV
Instrument.  The foregoing representation and warranty specifically excludes (i)
matters (including economic, competitive and regulatory) affecting the economy
or CATV system operators generally or in the State of Michigan and (ii) matters
undertaken or pending before Congress, the FCC, the Copyright Royalty Tribunal,
or any state governmental authority in Michigan that would have applicability to
CATV systems in general but to which the Transferor is not expressly a party.

 

3.7           The CATV Business.  With respect to the CATV Business, Holdings
and Michigan make the following warranties and representations:

 

(1)           As of December 31, 1999, the CATV Business included not less than
48,400 Basic Subscribers.

 

(2)           Schedule 3.07(b) contains a complete list of all material
contracts in effect on the date of this Agreement.  As used in this Section
3.07(b), the term “material contracts” means any Contract requiring in any
calendar year payments aggregating $100,000 or more and that cannot be
terminated on 30 days’ notice without liability.

 

(3)           Transferor holds, or will hold at Closing, all of the franchises
(other than, at the Closing, the Retained Franchises transferred pursuant to
Section 9.07), permits and licenses reasonably necessary to enable it to operate
the CATV Business as presently conducted in all material respects.  Transferor
is in material compliance with the terms and conditions of all such CATV
Instruments.  Except as disclosed in Schedule 3.07(c), Transferor has not
received any notice of any claimed or purported default in any CATV Instruments
and there are no proceedings pending, or, to the knowledge of Transferor,
threatened, to cancel, modify or change any such CATV Instruments.

 

(4)           Except as set forth in Schedule 3.07(d), the CATV Business is
conducted by Transferor in material compliance with all applicable laws,
regulations and other requirements of Governmental Authorities, CATV
Instruments, CATV Licenses and Contracts, including,

 

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but not limited to, compliance in all material respects with the Communications
Act of 1934, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Communications Act”).  Except as set forth in Schedule
3.07(d), Transferor has submitted to the FCC all filings, including, but not
limited to, cable television registration statements, annual reports and
aeronautical frequency usage notices, that are required under the rules and
regulations of the FCC and the CATV Business is in compliance with all signal
leakage criteria prescribed by the FCC for each relevant reporting period. 
Transferor has made available to CCI copies of all reports and filings for the
past year, made or filed pursuant to FCC rules and regulations.

 

(5)           Except as set forth in Schedule 3.07(e), Transferor has filed all
semi-annual statements of account and paid all compulsory licensing fees
required by Section 111 of the Copyright Act of 1976, and the rules, regulations
and orders of the Copyright Office of the Library of Congress promulgated
thereunder (collectively, the “Copyright Act”), with respect to the CATV
Business, for the three years preceding the date of the Agreement.

 

(6)           Schedule 3.07(f) sets forth with respect to the CATV Business the
approximate number of plant miles (aerial and underground) for each head-end,
the approximate bandwidth capability of each head-end, the stations and signals
carried by each head-end and the channel position of each such signal and
station, which information is true and correct in all material respects, in each
case as of the applicable dates specified therein and subject to any
qualifications set forth therein.

 

3.8           Labor Contracts and Actions.

 

(1)           Transferor is not a party to any Contract with any labor
organization, nor has Transferor agreed to recognize any union or other
collective bargaining unit, nor has any union or other collective bargaining
unit been certified as representing any of the employees of Transferor with
respect to the operation of the CATV Business.

 

(2)           As of the date of this Agreement, Transferor is not experiencing
any strikes, work stoppages, significant grievance proceedings or, to the
knowledge of Transferor, claims of unfair labor practices filed with respect to
the operation of the CATV Business.

 

3.9           Employee Benefit Plans.  There are no liens against the Acquired
Assets under Section 412(n) of the Code or Sections 302(f) or 4068 of ERISA.  At
the Closing, neither CCI nor any of its ERISA Affiliates will have any
obligation to contribute to, or any liability in respect of any Benefit Plans. 
With respect to any plan subject to Title IV of ERISA, to which Transferor or
any of its ERISA Affiliates is or ever was obligated to contribute during the
preceding three years, (a) there has been no material “reportable event”
described in Sections 4043(c) of ERISA, for which the 30-day reporting
requirement has not been waived, (b) no “accumulated funding deficiency” (as
defined in Section 302 of ERISA) has occurred, or exists or and is continuing
with respect to any such plan, (c) no such plan has been terminated other than
in accordance with ERISA or at a time when such plan was not sufficiently
funded, and (d) there has been no (i) withdrawal by Transferor or any of its
ERISA Affiliates that is a substantial employer from a single-employer plan and
that has two or more contributing sponsors at least two of whom are not under
common control, as referred to in Section 4063(b) of ERISA, or (ii) cessation by
Transferor or any of its ERISA Affiliates of operations

 

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at a facility causing more than 20% of plan participants to be separated from
employment, as referred to in Section 4062(e) of ERISA.  Neither Transferor nor
any ERISA Affiliate has incurred any withdrawal liability under Subtitle E of
Title IV of ERISA with respect to a “Multiemployer Plan” as defined in
Section 4001(a)(3) of ERISA.  With respect to any plan maintained, sponsored by,
or contributed to by Transferor, which is intended to comply with the provisions
of Section 401(k) of the Code, and from which any qualified plan maintained or
sponsored by CCI or any of its ERISA Affiliates accepts a plan-to-plan transfer
under Section 414(1) of the Code, (i) such plan has received a favorable
determination letter from the Internal Revenue Service, and Transferor does not
have any knowledge of any fact which could adversely affect the qualified status
of such plan, and (ii) such plan has been administered and maintained in
compliance in all material respects with ERISA, the Code and all other Laws.

 

3.10         Contracts.  Except as set forth in Schedule 3.10, there are no
defaults by Transferor under the material contracts (as defined in
Section 3.07(b)) (nor has Transferor received written notice of a threatened
default or notice of default), and Transferor knows of no material default by
any other party to such contracts.

 

3.11         Legal and Governmental Proceedings and Judgments.  Except as set
forth on Schedule 3.11, there is no legal action or proceeding, pending or, so
far as is known to Transferor, any investigation pending or threatened against
Transferor, the CATV Business or the Acquired Assets, nor is there any Judgment
outstanding against Transferor or to or by which Transferor, any of the Acquired
Assets or the CATV Business is subject or bound, which results in, or would
reasonably be expected to result in, any material modification, termination,
suspension, impairment or reformation of any CATV Instrument or material
contract (as defined in Section 3.07(c)) or any material right or privilege
thereunder.  The foregoing representation and warranty specifically excludes (i)
matters (including economic, competitive and regulatory) affecting the economy
or CATV system operators generally or in the State of Michigan and (ii) matters
undertaken or pending before Congress, the FCC, the Copyright Royalty Tribunal,
or any state governmental authority in the State of Michigan that would have
applicability to CATV systems in general but to which the Transferor is not
expressly a party.

 

3.12         Finders and Brokers.  Holdings has employed Waller Capital
Corporation as its broker in the sale provided herein and will pay and discharge
the claim thereof for commission or expense reimbursement in connection
therewith.  Neither Holdings nor Michigan has entered into any other contract,
arrangement or understanding with any Person or firm, nor is either of them
aware of any claim or basis for any claim based upon any act or omission of
Holdings or any of its affiliates, which may result in the obligation of CCI 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.

 

3.13         Intangible Property. Except as set forth on Schedule 3.13,
(a) Transferor owns or possesses licenses or other rights to use all material
Intangible Property reasonably necessary to the operation of the CATV Business
as presently conducted without any material conflict with, or infringement of,
the rights of others, and (b) there is no claim pending or, to the Transferor’s
knowledge, threatened with respect to any such Intangible Property.

 

3.14         Insurance.  Schedule 3.14 is a list, accurate and complete in all
material respects, of insurance policies in full force and effect with respect
to Transferor as of December 31, 1999, and

 

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Transferor has not received any notice of non-renewal or cancellation of such
insurance policies.  Except as Transferor may determine, in the exercise of its
business judgment, Transferor will maintain such insurance policies in full
force and effect up to and including the Closing Date.

 

3.15         Inventory.  As of September 30, 1999, Inventory was at a level
consistent with past practises.

 

3.16         Overbuilds.  As of the date hereof, except as set forth on Schedule
3.16, there are no material competing activated wired cable television services
offered by other cable television operators, or, to the knowledge of Transferor,
any local competing “wireless cable” system or “open video” system, in the areas
actually served by the CATV System.  To Transferor’s knowledge as of the date
hereof, except as set forth on Schedule 3.16, no competing franchises have been
issued to other persons to operate cable television systems in the areas served
by the CATV Systems and to Transferor’s knowledge no formal applications to
obtain such competing franchises are pending.

 

3.17         Rebuild.  The Rebuild, which is described in Schedule 1.01(g) with
respect to the time frame therefor and the costs associated therewith, complies
in all material respects with all material provisions applicable thereto
contained in any franchise.

 

3.18         Acquisition of Right.  Holdings and Transferor are not aware of,
and have no reason to believe there is, any reason relating to Transferor that
any Governmental Authority or other party whose consent is required or
contemplated hereunder, would refuse to consent to the transfer of CATV
Instruments or any rights to CCI hereunder or would condition granting of any
such consent on the performance by Holdings, Transferor or CCI of any material
obligation not expressly set forth herein.

 

3.19         Securities Laws Matters.

 

(10           Holdings (i) understands that the Equity Consideration has not
been registered under the Securities Act or under any state securities law or
blue sky law of any jurisdiction (“Blue Sky Law”) and that the Equity
Consideration is being offered and sold in reliance upon federal and state
exemptions for transactions not involving a public offering; (ii) is an
“accredited investor” as that term is defined under Rule 501 promulgated under
the Securities Act; (iii) has received the CCI SEC Documents and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and risks inherent in holding the Equity Consideration; (iv) is able to
bear the economic risk of holding the Equity Consideration; and (v) is acquiring
the Equity Consideration solely for investment and not with a view to the
distribution or resale thereof; provided that, in each case, Holdings may sell
the Common Stock pursuant to an effective registration statement, may sell all
or any part of the Equity Consideration pursuant to an exemption from
registration under the Securities Act or may enter into transactions which have
the effect of “monetizing” or hedging its ownership of the Equity Consideration
(provided any such sale or transfer of the Equity Consideration is exempt from
registration under the Securities Act or, if not exempt, would be registered
under the terms of the Registration Rights Agreement).  The term “solely for
investment” used in this Section 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.

 

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(20           CCI understands that Holdings and its affiliates intend, and
nothing in this Section 3.19 shall restrict in any way the ability of Holdings
or its affiliates, to issue securities which may be convertible into or
exchangeable for all or a portion of the Common Stock (provided any such sale or
transfer of the Equity Consideration is exempt from registration under the
Securities Act or, if not exempt, would be registered under the terms of the
Registration Rights Agreement).

 

3.20         Basis of the Acquired Assets.  The basis for U.S. federal and state
income tax purposes of the Acquired Assets is, and at the Closing will be, not
less than $7,000,000, less the basis for such purposes of any Retained
Franchises.

 

3.21         Title to Capital Stock.  Holdings has good and valid title to the
Capital Stock of Michigan, free and clear of all Encumbrances.  As of Closing,
Michigan will have good and valid title to the Capital Stock of New LLC, free
and clear of all Encumbrances.

 

4.             Representations and Warranties of CCI.

 

To induce Holdings and Michigan to enter into this Agreement and the other
Transaction Documents, CCI represents and warrants to Holdings and Michigan as
follows:

 

4.1           Organization; Authority.  CCI is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware. 
CCI has the requisite power and authority to conduct its activities as such
activities are currently conducted and to execute, deliver and perform this
Agreement and the Registration Rights Agreement.  CCI is duly qualified to do
business as a foreign corporation and is in good standing in all jurisdictions
in which such qualification is necessary.

 

4.2           Authorization and Binding Obligation.  (1) The execution,
delivery, and performance by CCI of this Agreement and the Registration Rights
Agreement and the consummation of the Merger have been duly authorized by all
necessary corporate, stockholder and other action on the part of CCI.  Without
limiting the foregoing, any actions of the directors and stockholders of CCI
required to approve and adopt this Agreement have been duly taken in accordance
with the requirements of the DGCL and no further action of the directors or
stockholders of CCI is required in order to approve, adopt or consummate the
Merger.  This Agreement has been duly executed and delivered by CCI and
constitutes the legal, valid, and binding obligation of CCI, enforceable against
CCI in accordance with its terms, except as the enforceability of this Agreement
may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting creditors’ rights generally or by judicial
discretion in the enforcement of equitable remedies.  The Registration Rights
Agreement, when executed and delivered at Closing, will be duly executed and
delivered and will constitute the legal, valid, and binding obligation of CCI,
enforceable against CCI in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws affecting creditors’ rights
generally or by judicial discretion in the enforcement of equitable remedies.

 

4.3           No Conflict; Required Consents.  Except for approval under the HSR
Act and Rules, and except for any Required Consents of Transferor whether or not
set forth on Schedule 3.02, the execution and delivery by CCI of,  the
performance by CCI under, and the consummation of the transactions contemplated
by, this Agreement and the Registration Rights Agreement do not and will not: 
(i) contravene, conflict with, or result in any violation or breach of any
provision of the certificate

 

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of incorporation or by-laws of CCI; (ii) contravene, conflict with or result in
a breach or violation by CCI of, or constitute a default by CCI under any Law,
Judgment, Contract, arrangement, agreement, instrument, obligation or
understanding to which CCI is a party or by which CCI is subject or bound or may
be affected; (iii) result in the creation or imposition of any Encumbrance on
any asset of CCI; or (iv) cause or permit the termination, cancellation,
acceleration, triggering or other change of any right or obligation or the loss
of any benefit to which CCI is entitled under (1) any provision of any contract,
arrangement, agreement or instrument binding upon CCI or (2) any license,
franchise, permit, certificate, approval or other similar authorization held by,
affecting, or relating in any way to the assets or business of CCI.

 

4.4           Finders and Brokers.   Neither CCI nor any Person acting on behalf
of CCI has employed any financial advisors broker or finder or incurred any
liability for any financial advisory, brokerage, finder’s or similar fee or
commission in connection with the transactions contemplated by this Agreement,
except any of the foregoing that will be paid in full by CCI.

 

4.5           Private Offering.  The offer, issuance and delivery to Holdings of
the Equity Consideration is exempt from registration under the Securities Act.

 

4.6           Investment Company.  CCI is not, and upon consummation of the
transactions contemplated by this Agreement will not be, an “investment company”
required to register as such under the Investment Company Act of 1940, as
amended.

 

4.7           Claims and Litigation.  Except as set forth in the CCI SEC
Documents, there is no litigation pending or, to CCI’s knowledge, threatened
against CCI which would reasonably be expected to materially adversely affect
the business, financial condition or results of operations of CCI and the
subsidiaries of CCI, or materially adversely affect the ability of CCI to
perform its obligations under this Agreement or the Registration Rights
Agreement, nor is there outstanding any order, decree or judgment against CCI
that, if adversely determined, would reasonably be expected to materially impair
CCI’s ability to perform its obligations under this Agreement or the
Registration Rights Agreement.

 

4.8           Absence of Certain Changes.  Except for conditions affecting the
cable television industry as a whole, or in the states in which CCI operates,
since September 30, 1999, there has not been any material adverse change in the
financial condition, properties, business or results of operations of CCI and
the subsidiaries of CCI or any material adverse event or development or
combination of events or developments that, individually or in the aggregate,
has had or would reasonably be expected to have a material adverse effect on the
business, financial condition or results of operations of CCI and the
subsidiaries of CCI or materially adversely effect the ability of CCI  to
perform its obligations under this Agreement or the Registration Rights
Agreement.

 

4.9           Compliance with Laws and Court Orders.  CCI is in compliance in
all material respects with all Laws applicable to it.  CCI has obtained all
material licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its properties or to the conduct of its business.

 

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4.10         CCI Capital Stock.

 

(10           The authorized Capital Stock of CCI consists of (i) 1.75 billion
shares of  Common Stock, (ii) 750 million shares of Class B common stock, par
value $.001 per share (“CCI Class B Common Stock”) and (iii) 250 million shares
of preferred stock (“CCI Preferred Stock”).  All outstanding shares of Capital
Stock of  CCI have been duly authorized and validly issued and are fully paid
and nonassessable.

 

(20           The Equity Consideration has 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.

 

(30           Except as set forth in this Section 4.10 or on Schedule 4.10, as
of March 1, 2000 (or, with respect to employee stock options, February 14, 2000)
, there are outstanding (i) no shares of Capital Stock or Voting Stock of CCI,
(ii) no securities of CCI convertible into or exchangeable for shares of Capital
Stock or Voting Stock of CCI and (iii) no options or other rights to acquire
from CCI, and no obligation of CCI to issue, any Capital Stock or securities
convertible into or exchangeable for Capital Stock of CCI.  The securities
described in clauses (a) and (c) of this Section 4.10 and the securities
referred to in CCI’s SEC Documents are referred to collectively as the “CCI
Securities”.  Except pursuant to the terms of the CCI Securities, there are no
outstanding obligations of CCI or any subsidiary of CCI to repurchase, redeem or
otherwise acquire any  CCI Securities.

 

4.11         No Vote Required.  No vote of the holders of any class or series of
Capital Stock of CCI is necessary to approve this Agreement or the Registration
Rights Agreement, or the transactions contemplated hereby or thereby.

 

4.12         SEC Filings; Financial Information.

 

(10           CCI has filed with the SEC (i) CCI’s quarterly report on Form 10-Q
for the quarter ended September 30, 1999, including all amendments thereto; and
(ii) all of its other reports, statements, schedules and registration statements
required to be filed with the SEC since September 30, 1999 (the documents
referred to in this Section 4.12(a), as amended, collectively, the “CCI SEC
Documents”).

 

(20           As of its filing date, each CCI SEC Document complied as to form
in all material respects with the applicable requirements of the Securities Act
or Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder, except as the same may have been corrected, updated or superceded by
means of a subsequent filing with the SEC prior to the date this representation
is made.

 

(30           As of its filing date, none of the CCI SEC Documents filed
pursuant to the Exchange Act contained any untrue statement of a material fact
or omitted to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading, except as the same may have been corrected, updated or superceded by
means of a subsequent filing with the SEC prior to the date this representation
is made.

 

(40           None of the CCI SEC Documents that is a registration statement, as
amended or supplemented, if applicable, filed pursuant to the Securities Act, as
of the date such registration statement or amendment became effective, contained
any untrue statement of a material fact or omitted

 

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to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, except as the same may have been
corrected, updated or superceded by means of a subsequent filing with the SEC
prior to the date this representation is made.

 

4.13         Existing Registration Rights Agreements.  CCI has delivered to
Holdings (or filed as exhibits to the CCI SEC Documents) copies of all
agreements existing as of the date hereof pursuant to which CCI may be required
to file a registration statement under the Securities Act on behalf of any
holders of CCI Securities.

 

4.14         Transfers of New LLC.  Each limited liability company subsidiary of
Charter Holdco to which Charter Holdco may contribute its 100% interest in New
LLC pursuant to Section 2.02 hereof will be treated for federal income tax
purposes as a disregarded entity with respect to Charter Holdco under Treasury
Regulations Section 301.7701-3(b)(1)(ii).

 

5.             Covenants Pending Closing.

 

5.1           Business of Transferor.  From the date hereof to the Closing Date,
and except as otherwise consented to or approved by CCI in writing (which
consent shall not be unreasonably withheld), Holdings covenants and agrees as
follows:

 

(10           Business in Ordinary Course.  Except as otherwise provided herein
(including, without limitation, the transfer of the Excluded Assets and the
transfer or termination of the Excluded Liabilities pursuant to Section 5.11),
Transferor shall conduct the CATV Business in the ordinary course (including,
without limitation, in accordance with the currently planned Rebuild
Expenditure), consistent with past practices and will not engage in any material
transaction, including, without limitation, entering into or amending in any
material respect any CATV Instrument or Contract, or making any material advance
or expenditure, other than in the ordinary course of business, or change in any
material respect its business policies or practices.  Except as otherwise
provided herein (including, without limitation, the transfer of the Excluded
Assets and the transfer or termination of the Excluded Liabilities pursuant to
Section 5.11) Transferor shall use its reasonable commercial efforts to preserve
the CATV Business intact (including the making of capital expenditures in the
ordinary course of business), to retain the services of its present employees
and agents, and to preserve its business relationships with, and the goodwill
of, its customers, suppliers and others.  Transferor shall pay before delinquent
all taxes and other charges upon or against Transferor or any of its properties
or income, file when due all tax returns and other reports required by
Governmental Authorities and pay when due all liabilities except those which it
chooses to contest in good faith and by appropriate proceedings.

 

(20           Books and Records.  Transferor shall maintain its books, accounts
and records in the usual, regular and ordinary manner.

 

(30           Litigation During Interim Period.  Transferor will advise CCI in
writing promptly of the assertion, commencement or threat of any claim,
litigation, labor dispute, proceeding or investigation in which Transferor is a
party or by which the Acquired Assets or

 

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CATV Business may be affected or which relates to the transactions contemplated
hereby and which would reasonably be expected to have a Transferor Material
Adverse Effect.

 

(40           Material Contracts.  Transferor shall deliver to CCI copies of all
material contracts (as defined in Section 3.07(b)) that are entered into prior
to the Closing.

 

5.2           Access to Information.

 

(10           Access by CCI.  Between the date of this Agreement and the Closing
Date, CCI and its agents shall have reasonable access during normal business
hours to all of the properties, books, reports, records, CATV Instruments and
Contracts of Transferor, and Transferor shall furnish CCI with all information
it may reasonably request.  Holdings will make available for inspection by CCI
prior to Closing during normal business hours and upon reasonable notice
complete and correct copies of all federal, state, local and foreign income Tax
Returns filed by, and all Tax examination reports and statements of deficiencies
assessed against or agreed to by, Transferor and any Relevant Group since the
fiscal year ended December 31, 1994.  All information obtained by CCI pursuant
to this Agreement and in connection with the negotiation hereof shall be used by
CCI solely for purposes related to this Agreement and the acquisition of the
Acquired Assets and, in the case of non-public information, shall, except as may
be required for the performance of this Agreement or by Law, be kept in strict
confidence by CCI in accordance with the terms of the Confidentiality Agreement
dated October 4, 1999 between CCI and Cablevision Systems Corporation.

 

(20           Access by Holdings.  Between the date of this Agreement and the
Closing, Holdings and its agents shall have reasonable access during normal
business hours to the records, business and accounts of CCI as Holdings may
reasonably deem necessary or desirable in connection with its investment in the
Equity Consideration.  Subsequent to the Closing, CCI shall preserve and give to
Holdings reasonable access during normal business hours to all of the books,
reports, records, CATV Instruments and Contracts from files and records
transferred to CCI at the time of Closing, for the purposes of the preparation
of financial statements, the preparation of tax returns, the preparation of the
Preliminary Adjustment Statement, Basic Subscriber Estimate, the defense of any
claims asserted or which may be asserted with respect to which Holdings is the
Indemnitor as contemplated by this Agreement, or other proper business purposes.

 

5.3           Monthly Financial Statements.  Between the date of execution and
delivery of this Agreement and the Closing Date, Transferor shall deliver to CCI
within forty (40) days after the end of the first full calendar month following
the date hereof, copies of monthly management reports on operations in the form
customarily prepared by Transferor with respect to the CATV Business. 
Transferor shall also deliver to CCI monthly reports of capital expenditures
made with respect to the CATV System, including information with respect to the
Rebuild Expenditure, in the form, to the extent and at such times as such
reports are customarily prepared by Transferor.

 

5.4           Notification of Certain Matters.  Each party will promptly notify
each other party of any fact, event, circumstance or action the existence or
occurrence of which would cause such party or any other party hereto to be
unable to satisfy a condition to Closing.

 

5.5           Environmental Reports.  Holdings agrees to permit CCI to perform,
at its option and at its own expense, Phase I environmental site assessments and
asbestos studies (the “Environmental

 

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Reports”) of the Real Property performed by one or more reputable environmental
firms designated by CCI and acceptable to Holdings (an “Environmental Firm”);
provided, however, that in the event that such Environmental Report indicates
that a condition may exist which, if it did exist, would reasonably be expected
to result in a condition to Closing not being satisfied, Holdings agrees to
permit an Environmental Firm to perform, at CCI’s expense, a Phase II
environmental site assessment.  CCI covenants (i) to provide copies of such
Environmental Reports within ten (10) days of its receipt of any such reports
and (ii) to notify Holdings of any adverse environmental conditions affecting
the Real Property of which it has knowledge prior to Closing.  Any environmental
conditions uncovered as a result of performing the Environmental Reports or a
Phase II environmental site assessment will not affect the Closing, unless as a
result thereof, a condition precedent to Closing cannot be satisfied.

 

5.6           Modifications to Rebuild.  Transferor agrees to consider
recommendations of CCI with respect to modifications of the rebuild of the CATV
System contemplated by Schedule 1.01(g) and to make such modifications as
Transferor shall determine in its discretion; provided, however, that (i) in no
event shall Transferor be required to make any change that would cause it to be
in violation or breach of any CATV Instrument or Contract or in violation of any
Law to which it is subject; (ii) in the event any such change results in an
increase in the amount expended by Transferor toward completing the rebuild
above the Rebuild Expenditure, CCI agrees to pay to Holdings an amount equal to
such excess,  and (iii) in the event that Transferor makes any changes to the
rebuild of the CATV System as are recommended by CCI and a Closing does not
occur, CCI agrees to reimburse the Transferor for such amount as is necessary to
restore the CATV System to the state in which it would have been had Transferor
not made the requested modifications (the sum of any amounts to be paid by CCI
under clauses (ii) and (iii), the “Rebuild Modification Amount”).   The Rebuild
Modification Amount, if any, shall be paid to Holdings at Closing as provided
for in Section 2.02; provided, however, that if for any reason this Agreement is
terminated and a Closing does not occur, CCI agrees to pay to Transferor, within
ten (10) days of such termination, the Rebuild Modification Amount by wire
transfer of immediately available funds.

 

5.7           Lien Searches.  Prior to the Closing, Transferor will obtain, at
its expense, the results of a lien search conducted by a professional search
company of records in the offices of the secretaries of state in each state and
county clerks in each county where there exist any of its Owned Property or
Equipment, and in the state and county where Transferor’s principal offices are
located, including copies of all financing statements or similar notices or
filings (and any continuation statements) discovered by such search company. 
Transferor will cooperate with CCI to remove any Encumbrance identified in such
search that is not a Permitted Encumbrance.

 

5.8           Covenants of CCI.  Except as otherwise set forth in this
Agreement, from and after the date hereof through the Closing Date, CCI shall
not, nor shall it permit any subsidiary of CCI to:

 

(10           amend CCI’s certificate of incorporation or by-laws in any manner
that is adverse to the rights of Holdings under this Agreement and
disproportionate to the rights of  holders of Common Stock;

 

(20           take any action that would or would reasonably be expected to
prevent, impair or materially delay the ability of Transferor, Holdings or CCI
to consummate the transactions contemplated by this Agreement;

 

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(30           consummate any Reorganization of CCI unless (a) Capital Stock of
such surviving or resulting entity is designated as the Common Stock for all
purposes hereof, (b) the common equity market capitalization of the Capital
Stock of the surviving or resulting entity designated as the Common Stock equals
or exceeds the common equity market capitalization of Common Stock immediately
prior to the consummation of such transaction, and (c) such surviving or
resulting entity agrees to assume all of the obligations of CCI under this
Agreement;

 

(40           take any action from and after the date hereof through the Closing
Date that would cause or that would reasonably be expected to cause the number
of shares of Common Stock to be delivered as the Equity Consideration to equal
or exceed 10% of the number of issued and outstanding shares of Common Stock as
of the Closing; or

 

(50           agree or commit to do any of the foregoing.

 

CCI  will advise Holdings in writing promptly of the assertion, commencement or
threat of any claim, litigation, labor dispute, proceeding or investigation in
which CCI or its subsidiaries is a party and which could reasonably be expected
to have a CCI Material Adverse Affect or which relates to the transactions
contemplated hereby.

 

5.9           Listing of  Equity Consideration.  CCI shall use its best efforts
to have the Equity Consideration approved for quotation on the Nasdaq National
Market on or prior to the Closing Date, subject only to official notice of
issuance.

 

5.10         Certificate of Merger.  Holdings, Michigan and CCI covenant and
agree to file or cause to be filed, the Certificate of Merger as provided in
Section 2.01(b).

 

5.11         Excluded Assets and Excluded Liabilities.  Prior to the Effective
Time, Transferor shall (a) sell, transfer, assign, distribute or otherwise
convey to another Person the Excluded Assets and (b) pay, transfer, extinguish
or otherwise relieve itself of its obligation to pay the Excluded Liabilities,
in each case in a manner that does not allow for any post-Closing liability (in
the case of Excluded Liabilities) or right (in the case of Excluded Assets) on
the part of CCI.  Holdings shall be responsible for, and shall indemnify CCI and
its affiliates with respect to, any Taxes arising from the transfers pursuant to
this Section 5.11 and Section 9.07(a).

 

5.12         Transfer of Acquired Assets to New LLC.  Immediately prior to
Closing, Michigan will contribute all of the Acquired Assets, to a newly formed
Delaware limited liability company, New LLC, and New LLC will assume the
Remaining Liabilities.  When formed, New LLC shall be a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware, and will be treated for federal income tax purposes as a
disregarded entity with respect to Michigan under Treasury Regulations Section
301.7701-3(b)(1)(ii) from the date of formation through the Closing Date.

 

5.13         Formation of New LLC.  Michigan shall form New LLC within 30 days
of the date hereof.

 

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5.14         Franchise Renewal.  Holdings shall use its reasonable best efforts
to obtain the renewal for a period of at least three years of any franchise
included in the CATV Instruments that on the date hereof does not have a
remaining term of at least three years on terms that are not substantially more
onerous than the terms of the Transferor’s other franchises.

 

5.15         Retransmission Consent Agreements.  Within 30 days of the date
hereof, Holdings shall prepare and deliver to CCI a list of retransmission
consent agreements with respect to the CATV Business.  In the event that CCI
notifies Holdings in writing that it would like to have any of such
retransmission consent agreements assigned to CCI,  Holdings agrees to use
reasonable efforts to cause such agreements to be assigned to CCI at Closing
that by their terms are assignable without the consent of any other party
thereto.

 

6.             Deliveries at Closing.

 

6.1           Deliveries by Holdings.  At the Closing, Holdings will deliver or
cause to be delivered to CCI:

 

(10           A certificate signed by a senior officer of Holdings, dated as of
the Closing, representing and certifying to CCI as to the matters set forth in
Sections 7.03 and 7.04.

 

(20           An opinion of Holdings’ senior internal counsel or of outside
counsel appointed by Holdings, substantially in the form of Exhibit B hereto.

 

(30           Evidence that the waiting period under the HSR Act and Rules, if
applicable, has expired or been terminated by appropriate order.

 

(40           Evidence in a form and substance reasonably satisfactory to CCI
that receipt of the consents and approvals listed on Schedule 3.02 as required
by Section 7.01 as conditions to the transactions contemplated hereunder have
been obtained.

 

(50           An opinion of Holdings’ FCC counsel, substantially in the form of
Exhibit C hereto.

 

(60           A certificate signed by the Secretary or Assistant Secretary of
Holdings, dated as of the Closing, certifying that attached to it are true and
correct copies of all corporate action taken by or on behalf of Holdings to
authorize Holdings’ execution, delivery and performance of this Agreement and
the Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby and authorizing the Merger.

 

(70           A certificate of good standing of Holdings issued by the Secretary
of State of the State of Delaware.

 

(80                          The Registration Rights Agreement, duly executed by
Holdings.

 

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(90           A certificate, dated the Closing Date, signed by the Secretary or
an Assistant Secretary of Michigan certifying (i) that attached thereto is a
true, complete and correct copy of Michigan’s certificate of incorporation and
by-laws and (ii) that attached thereto is a specimen of the stock certificate
for the Capital Stock of Michigan.

 

(100         The stock certificates and corporate records of Michigan.

 

6.2           Deliveries by CCI.  At the Closing, CCI will deliver or cause to
be delivered to Holdings:

 

(10           The Acquisition Value in the form of fully paid and non-assessable
shares of Common Stock as provided in Section 2.02.

 

(20           A certificate signed by a senior officer of CCI, dated as of
Closing, representing and certifying to Holdings to the matters with respect to
CCI set forth in Sections 8.03 and 8.04.

 

(30           An opinion of CCI’s Counsel, substantially in the form of
Exhibit D hereto.

 

(40           Evidence in a form and substance reasonably satisfactory to
Transferor that the consents and approvals referred to in Section 4.03 have been
obtained.

 

(50           Evidence that the waiting period under the HSR Act and Rules, if
applicable, has expired or been terminated by appropriate order.

 

(60           A certificate signed by the Secretary or Assistant Secretary of
CCI, dated as of the Closing, certifying that attached to it are true and
correct copies of all corporate action taken by or on behalf of CCI to authorize
CCI’s execution, delivery and performance of this Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated hereby
and thereby and authorizing the Merger.

 

(70           Certificate of good standing of CCI, CCI’s Designee, if any, and,
in the case of CCI, a long form good standing certificate, issued, in each case,
by the Secretary of State of the State of Delaware.

 

(80                          The Registration Rights Agreement, duly executed by
CCI.

 

7.             Conditions to the Obligations of CCI.

 

The obligations of CCI 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 CCI:

 

7.1           Receipt of Consents.  The conditions specified in Section 9.02
shall have been satisfied and all of the approvals and consents designated with
an asterisk on Schedule 3.02 shall have been obtained and shall be in full force
and effect;  provided that this condition, to the extent it relates to required
approvals and consents of Governmental Authorities for cable franchises included
within

 

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the CATV Instruments, will be deemed to be satisfied when, with respect to such
cable franchises which represent, in the aggregate, not less than 90% of the
Basic Subscribers (including Basic Subscribers in the Oshtemo Franchise in the
numerator only if the extension contemplated by Section 5.15 has been obtained
and the transfer thereof approved), such approvals and consents (A) have been
received or (B) are deemed to have been received in accordance with Section 617
of the Communications Act (47 U.S.C. Section 537), unless in the reasonable good
faith opinion of CCI the applicable waiting period (including extensions
thereof) has not expired with respect to the FCC Form 394 filed in connection
with the request for consent to the transfer of any cable franchises for which
required approvals and consents have not then been obtained, or (C) are not
required under the applicable CATV Instrument.

 

7.2           Holdings’ and Michigan’s Authority.  All actions under the
documents governing Holdings and Michigan necessary to authorize (i) the
execution and delivery of this Agreement by Holdings and Michigan and the
Registration Rights Agreement by Holdings and the performance by Holdings and
Michigan of their respective obligations under this Agreement by Holdings and
Michigan and the Registration Rights Agreement and (ii) the consummation of the
transactions contemplated hereby, shall have been duly and validly taken by
Holdings and Michigan and shall be in full force and effect on the Closing Date.

 

7.3           Performance by Holdings and Michigan.  Holdings and Michigan shall
have performed in all material respects their respective covenants and
agreements under this Agreement (including, without limitation, its covenants in
Article 5) to the extent such are required to be performed at or prior to the
Closing and are material to the CATV Business (excluding any Retained
Franchises) as a whole.

 

7.4           Absence of Breach of Warranties and Representations.  The
representations and warranties of Holdings and Michigan contained in this
Agreement shall be true and correct in all respects without regard to any
“materiality”, “material” or “Material Adverse Effect” qualifiers therein on and
as of the Closing Date with the same force and effect as if made on and as of
such date, except (a) to the extent that such representations and warranties
describe a condition on a specified time or date or are affected by the
conclusion of the transactions permitted or contemplated hereby or the conduct
of the CATV Business in accordance with Article 5 hereof between the date hereof
and the Closing Date,  (b) where the failure of such representations and
warranties to be true and correct, individually or in the aggregate, does not
have, has not had and would not reasonably be expected to have, a Transferor
Material Adverse Effect or a material adverse effect on Holdings’ or Michigan’s
ability to perform their respective obligations under this Agreement or the
Registration Rights Agreement or (c) where the failure of such representations
and warranties to be true and correct results from the fact that the Retained
Franchises are included in Excluded Assets.

 

7.5           Absence of Proceedings.  No Judgment shall have been issued by any
Governmental Authority, and no action or proceeding shall have been instituted
by the Federal Trade Commission or the U.S. Department of Justice, enjoining or
preventing the consummation of the transactions contemplated hereby.

 

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7.6           No Transferor Material Adverse Effect.  Since September 30, 1999,
no event or events or development shall have occurred which, individually or in
the aggregate, has had, or would reasonably be expected to result in, a
Transferor Material Adverse Effect.

 

8.             Conditions to the Obligations of Holdings and Michigan.

 

The obligations of Holdings and Michigan 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 Transferor.

 

8.1           Receipt of Consents.  The conditions specified in Section 9.02
shall have been satisfied and all of the approvals and consents designated with
an asterisk on Schedule 3.02 shall have been obtained and shall be in full force
and effect; provided that this condition, to the extent it relates to required
approvals and consents of Governmental Authorities for cable franchises included
within the CATV Instruments, will be deemed to be satisfied when, with respect
to such cable franchises which represent, in the aggregate, not less than 82% of
the Basic Subscribers (including Basic Subscribers in the Oshtemo franchise in
the numerator only if the extension contemplated by Section 5.15 has been
obtained and the transfer thereof approved), such approvals and consents
(A) have been received or (B) are deemed to have been received in accordance
with Section 617 of the Communications Act (47 U.S.C. Section 537), unless in
the reasonable good faith opinion of the Transferor the applicable waiting
period (including extensions thereof) has not expired with respect to the FCC
Form 394 filed in connection with the request for consent to the transfer of any
cable franchises for which required approvals and consents have not then been
obtained, or (C) are not required under the applicable CATV Instrument.

 

8.2           CCI’s Authority.  All corporate and other actions necessary to
authorize the execution, delivery and performance by CCI of this Agreement and
the Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby, shall have been duly and validly taken by CCI
and shall be in full force and effect on the Closing Date.

 

8.3           Performance by CCI.  CCI shall have performed in all material
respects all covenants and agreements to be performed by CCI, under this
Agreement, to the extent such are required to be performed at or prior to the
Closing.

 

8.4           Absence of Breach of Representations and Warranties.  The
representations and warranties of CCI contained in this Agreement shall be true
and correct in all respects without regard to any “materiality”, “material” or
“Material Adverse Effect” qualifiers therein on and as of the Closing Date with
the same force and effect as if made on and as of such date, except where the
failure of such representations and warranties to be true and correct,
individually or in the aggregate, does not have, has not had and would not
reasonably be expected to have, a CCI Material Adverse Effect or a material
adverse effect on CCI’s ability to consummate the transactions contemplated by
this Agreement and the Registration Rights Agreement.

 

8.5           Absence of Proceedings.  No Judgment shall have been issued by any
Governmental Authority, and no action or proceeding shall have been instituted
by the Federal Trade Commission or

 

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the U.S. Department of Justice, enjoining or preventing the consummation of the
transactions contemplated hereby.

 

8.6           No CCI Material Adverse Effect.  Since September 30, 1999, no
event or events or development shall have occurred which, individually or in the
aggregate, has had, or would reasonably be expected to result in, a CCI Material
Adverse Effect; provided, that a material decline in the Fair Market Value of a
share of Common Stock, taken alone, shall not result in a CCI Material Adverse
Effect (it being understood that one or more of the factors giving rise to such
decline could separately constitute a CCI Material Adverse Effect).

 

8.7           Listing of Equity Consideration.  The Equity Consideration shall
have been approved for listing on the Nasdaq National Market on or prior to the
Closing Date, subject only to official notice of issuance.

 

9.             Covenants.

 

9.1           Compliance with Conditions.  Each of the parties hereto covenants
and agrees with the other 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, and each party shall use reasonable
commercial efforts to notify promptly the other if it shall learn that any
conditions to performance of either party will not be fulfilled.

 

9.2           Compliance with HSR Act and Rules.

 

(10           The performance of the obligations of all parties under this
Agreement is subject to the condition that, if the HSR Act and Rules are
applicable to the transactions contemplated hereby, the waiting period specified
therein, as the same may be extended, shall have expired without action taken to
prevent the consummation of the transactions contemplated hereby.

 

(20           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 within 45 days after the date of
this Agreement 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 Holdings
and CCI, 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.

 

(30           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 or any agency or instrumentality of the federal government by an
action to stay or enjoin such consummation or such a stay or injunction is
granted (preliminary or otherwise), then CCI and Transferor shall use their

 

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reasonable commercial efforts to contest such action until such time as either
party terminates this Agreement under Article 12.  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.  Each party promptly will inform the other of any
material communication from the Federal Trade Commission, the DOJ, the FCC or
any other domestic or foreign Governmental Authority regarding any antitrust,
competition or trade regulatory laws, rules or regulations of any domestic or
foreign Governmental Authority as they bear upon the transactions contemplated
by this Agreement.  If any party or any affiliate thereof receives a request for
additional information or documentary material from any such government or
authority with respect to the transactions contemplated by this Agreement, such
party will endeavor in good faith to make, as soon as reasonably practicable and
after consultation with the other party, an appropriate response to such
request.

 

9.3           Applications for Assignment of Contracts or CATV Instruments.  In
order to secure requisite consents or approvals of the assignment of any
Contracts or CATV Instruments to New LLC, and the subsequent transfer of control
thereof to CCI and the related assignment by CCI to Charter Holdco and a
subsidiary thereof (which shall be identified by name in any request for consent
or approval), CCI (with respect to CATV Instruments) and Holdings (with respect
to Contracts) shall proceed as promptly as practicable and in good faith and
using reasonable commercial efforts, to prepare, file and prosecute such
application or applications as may be necessary to obtain each such consent or
approval.   CCI and Holdings shall use reasonable commercial efforts to promptly
assist each other and shall take such prompt and affirmative actions as may be
reasonably necessary in obtaining such approvals and shall cooperate with each
other in the preparation, filing and prosecution of such applications as may be
reasonably necessary, and agree to furnish all information required by the
approving entity, and agree to (and shall have the right to) be represented at
and to participate in such meetings or hearings as may be scheduled to consider
such applications.  Without limiting in any respect the foregoing, each party
agrees to file mutually acceptable applications to all appropriate Governmental
Authorities for all consents or approvals required to consummate the
transactions hereunder within 45 days after the date of this Agreement.  Each
party promptly will inform the other of any material communication from any
Governmental Authority with respect to obtaining the consent of a Governmental
Authority that is necessary to transfer a franchise included within the CATV
Instruments.  CCI further agrees that it will not, without the prior written
consent of Holdings, take any action to amend or that would amend or modify any
application filed as provided in this Section 9.03 after the date that such
application is accepted as complete.  In the event that CCI amends or modifies
any such application for transfer of control of any Contracts or CATV
Instruments without Holdings’ prior written consent, and the approval period for
such transfer is extended by any such Governmental Authority or other third
party, then Holdings may (if it so elects) (a) extend the Outside Date in
Section 12.01 to a date that will give effect to any resulting delay or (b)
terminate this Agreement under Section 12.02 hereof.  No consent obtained
hereunder shall be conditioned on new obligations imposed by amendments to
franchises included within the CATV Instruments, by ordinance, or by any other
means, that include new obligations that are materially more onerous than the
obligations of Michigan or New LLC then existing with respect to the operation
of the CATV System covered by such franchise.  Nothing herein shall require the
expenditure or payment of any

 

37

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monies (other than in respect of normal and usual filing fees) or the giving of
any other consideration by CCI in order to obtain any of such approvals.

 

9.4           Records, Taxes and Related Matters.

 

(a)           Holdings and CCI shall, and shall each cause their respective
subsidiaries to, and in the case of Holdings, Cablevision Systems Corporation
to, make their or its, as the case may be, 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 (7) year period after the Closing Date with
respect to all transactions of the CATV Business occurring prior to or relating
to the Closing, and the historical financial condition, assets, liabilities,
results of operation and cash flows of the CATV Business for any period prior to
the Closing.  In the case of records owned by Holdings, such records shall be
made available at Holdings’ executive office, and in the case of records owned
by CCI, such records shall be made available at the office at which such records
are maintained.  As used in this Section 9.04, the right of inspection includes
the right to make copies for reasonable business purposes.  Holdings shall
notify CCI of any audit of any Tax Return involving the CATV Business.

 

(b)           Holdings and CCI each agree that they and their respective
affiliates shall file all Tax Returns in a manner consistent with the
qualification of such transfer and exchange as a “reorganization” within the
meaning of Section 368(a) of the Code.  CCI agrees that it shall not, nor shall
it permit any subsidiary of CCI to sell, exchange or otherwise dispose of
Acquired Assets (other than as described in Section 2.02) in a manner that would
violate “continuity of business enterprise” within the meaning of Section
1.368-1(d) of the Treasury regulations.  For purposes of the preceding sentence,
the term “subsidiary” shall include Charter Holdco and any of its subsidiaries.

 

9.5           Continuation Billing Services.  For a period of up to 150 days
after the Closing, Holdings shall cause existing arrangements for billing
services in respect of the CATV Business to be continued for the benefit of CCI,
and CCI shall pay all costs of Holdings in performing such services.

 

9.6           Non-Competition.  Holdings covenants that for a period of three
(3) years after the Closing Date, it will not, directly or indirectly, (a)
engage, or assist any other Person to engage, in the business of owning,
operating or advising a coaxial cable or fiber optic cable television system,
multichannel multipoint distribution service (“MMDS”) system or satellite master
antenna system (“SMATV”)  in the Service Territory or within a radius of 25
miles therefrom (“Competitive Business”); (b) acquire an equity interest in any
business (other than an interest of not more than five percent (5%) of the
outstanding equity interests in such business) which is engaged in any
Competitive Business; or (c) solicit the employment or services of any person
who, as of the Closing Date, is employed by Transferor or CCI, Holdco or any
subsidiary thereof, in connection with the CATV Business.  Notwithstanding
anything contained herein, (i) the ownership of securities of (A) less than 10%
of the common stock of Adelphia Communications Corporation or (B) any other
company which is “publicly held” and which does not constitute more than five
percent (5%) of the voting rights or equity interests of such entity shall not
constitute a violation of this covenant, (ii) the ownership of the Excluded
Assets, and (iii) this Section 9.06 shall not be construed to restrict ownership
of entities in

 

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the direct broadcast satellite business or wireless personal communications
services business or ownership of licenses related to the foregoing.

 

9.7           Retained Franchises.

 

(a)           Retained Franchises.  In the event that the Closing occurs without
the receipt of all consents and approvals to transfer all franchises included in
the CATV Business, such franchises for which consent or approval is required and
has not been obtained shall, subject to applicable Law, be transferred by the
Transferor to an affiliate of Holdings prior to the Closing or otherwise
excluded from the Transferor prior to Closing, and shall be treated as Excluded
Assets (each such franchise, a “Retained Franchise”).  The parties hereto
covenant and agree to act in good faith to obtain the approval or consent of any
Governmental Authorities that have not consented to the transfer of any Retained
Franchise.

 

(b)           Adjustment of Acquisition Value.  To give effect to the retention
of the Retained Franchises, the amount payable by CCI on the Closing Date in
accordance with Section 2.02 shall be reduced by an amount (the “Deferred
Acquisition Value”) equal to (1) the product of (i) $172,500,000 and (ii) the
quotient (the “Retained Percentage”) obtained by dividing (A) the number of
Basic Subscribers of the Retained Franchises on the Closing Date by (B) the
number of Basic Subscribers of the CATV Business on the Closing Date less
(2) the product of the Rebuild Shortfall, if any, and the Retained Percentage.

 

(c)           Operating Agreements.  Prior to the Closing, the parties shall
negotiate in good faith to reach agreement on one or more operating agreements
(the “Operating Agreements”) pursuant to which CCI will operate such Retained
Franchise to the extent not prohibited under the terms thereof.  As compensation
for operating the Retained Franchises, CCI shall receive an amount approximating
the net cash flow of such Retained Franchise as may be agreed upon and the
holder of the franchise shall receive a monthly payment equal to the product of
(i) .005 times (ii) $172,500,000 times (iii) the quotient obtained by dividing
(a) the difference between (1) the number of Basic Subscribers of the Retained
Franchises on the date of determination and (2) 10% times the number of Basic
Subscribers of the CATV Business on the Closing Date by (b) the number of Basic
Subscribers of the CATV Business on the Closing Date; provided that if the
result of the foregoing calculation is negative, the amount of such monthly
payment shall be zero.  The Operating Agreements shall also contain any required
signal sharing and head-end access arrangements that the parties, each acting in
good faith, may determine to be needed.  Under the Operating Agreements, CCI
shall be obligated to complete the Rebuild of such franchise.

 

(d)           Subsequent Transfer.  Following the Closing, the parties will
continue to use commercially reasonable efforts to obtain on an expedited basis
the required consents for all Retained Franchises.  The Operating Agreements
will contain mutually acceptable terms regarding the post-Closing exchange or
transfer (each, a “Subsequent Transfer”) of the Retained Franchises after the
receipt or failure to receive the required consents applicable to such Retained
Franchises.  At each such Subsequent Transfer, shares of Common Stock
representing a portion of the Deferred Equity Consideration equal to the
proportion of the Basic Subscribers on the Closing Date in the Retained
Franchises being transferred on such date as to all Basic Subscribers on the
Closing Date in Retained Franchises shall be issued to Holdings and registered
in the name of Holdings or its nominees.  The closing conditions in Articles 7
and 8 will not apply to any Retained Franchise transfer; provided, that

 

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the parties will negotiate in good faith to include appropriate conditions to
the Subsequent Transfer in the Operating Agreements, including the condition
that the portion of the Equity Consideration being issued be duly authorized,
validly issued, fully paid and non-assessable and the issuance thereof not be
subject to any preemptive or similar right.  Notwithstanding the foregoing, the
adjustments provided for in Section 2.04 will be made for all franchises as of
the Closing Date.

 

(e)           Operation of Retained Franchises Pending Subsequent Transfer.  All
representations and warranties (except as to those required consents that have
not been obtained) made in connection with the Retained Franchises will be made
as of the Closing Date rather than the date of the Subsequent Transfer, the
other covenants in Article 5 will not apply to the Retained Franchises following
the Closing Date, and the survival period applicable under Section 10.01 for all
such representations, warranties and covenants will accrue from the Closing
Date; provided, that the parties will negotiate in good faith to include
appropriate covenants in the Operating Agreements that will apply to the
Retained Franchises following Closing.

 

(f)            Further Assurances.  If the provisions of this Section 9.07
become operative, including, in particular, the inability to enter into an
Operating Agreement, the parties agree to use commercially reasonable efforts
and act in good faith in taking such actions and negotiating such additional
provisions or other agreements, including amendments to this Agreement, as may
be necessary or appropriate to carry out the intent of this Section 9.07,
including keeping franchise transfers effective.

 

10.                               Survival of Representations, Warranties,
Covenants and Other Agreements; Indemnification.

 

10.1         Survival of Representations, Warranties, Covenants and Other
Agreements.  All representations, warranties, covenants and other agreements
made by CCI, Holdings and Michigan in this Agreement shall survive the Closing
for a period of twelve months, and shall thereafter terminate with the exception
of Sections 3.01 (with respect to Michigan), 3.02 (with respect to director and
stockholder approval of the Merger), 3.05, 3.06(a), 4.01, 4.02 and 4.10(a) and
(b), which shall each survive for the applicable statute of limitations period. 
For purposes of this Article 10, the determination of whether any breach of any
representation or warranty in Article 3 or Article 4 has occurred, as well as
the determination of Losses therefrom, shall be made without regard to any
materiality, Transferor Material Adverse Effect or CCI Material Adverse Effect
qualifiers therein.

 

10.2         Indemnification by Holdings.

 

(1)           Indemnity.  Subject to Section 10.01, Holdings agrees to
indemnify, defend and hold harmless CCI, its affiliates (including, without
limitation, Holdco and its affiliates) and their respective shareholders,
directors, officers, partners, employees, agents, successors and assigns (each a
“Holdings Indemnified Party”), 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, without limitation,
settlement costs and reasonable legal fees) (collectively, “Losses”) to which
they may become subject as a direct result of (i) the Excluded Liabilities, (ii)
any and all misrepresentations or breaches of a representation or warranty of
Holdings or Michigan herein or the nonperformance or breach of any covenants or

 

40

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agreements of Holdings or Michigan contained herein except to the extent such
misrepresentation or breach is the result of a transfer by Transferor of the
Retained Franchises pursuant to Section 9.07(a), (iii) the ownership and
operation of the Acquired Assets and the CATV Business before the Closing (other
than in respect of Current Liabilities), or (iv) the ownership and operation of
the Retained Franchises prior to the Subsequent Transfer thereof.  Any claim for
indemnification pursuant to this Section 10.02(a) must be made in writing prior
to the expiration or termination of the applicable representation, warranty,
covenant or agreement under Section 10.01.  CCI acknowledges and agrees that any
Losses suffered by CCI arising out of or resulting from the transfer to CCI of
any pole attachment agreement included in the CATV Instruments without the
consent of the parties thereto shall not give rise to a claim for
indemnification under this Section 10.02.

 

(2)           Payment.  Any obligations of Holdings under the provisions of this
Article 10 shall be paid promptly to the applicable Holdings Indemnified Party
by Holdings in the manner set forth in Section 10.06 and shall represent a
retrospective adjustment to Acquisition Value.  The amount of such payment (and
adjustment) shall be equal to the amount of the Loss incurred by the Holdings
Indemnified Party on account of the matter for which indemnification is required
hereunder less any payments made or to be made to Holdings Indemnified Party
under any insurance, indemnity or similar policy or arrangement. 
Notwithstanding anything contained herein to the contrary, the indemnification
provided above shall not apply until the aggregate of all amounts subject to
indemnification under this Section 10.02 exceeds $671,000; provided, that in the
event the aggregate amount of all claims hereunder exceeds $671,000, Holdings
shall be liable for the total amount of all such claims starting from the first
dollar.  In any event, the maximum amount that Holdings will be required to pay
under this Section 10.02 in respect of all claims by all parties is Ten Million
Dollars ($10,000,000).

 

10.3         Indemnification by CCI.  CCI agrees to indemnify, defend and hold
harmless Holdings, its affiliates and their respective shareholders, partners,
directors, officers, employees, agents, successors and assigns (a “CCI
Indemnified Party”), from and against all Losses to which they may become
subject as a direct result of:  (a) any and all misrepresentations or breaches
of a representation herein or warranty or the nonperformance or breach of any
covenant or agreement of CCI  contained herein; (b) the Remaining Liabilities;
(c) the ownership and operation of the Acquired Assets and the CATV Business
after the Closing; or (d) the ownership or operation of the Retained Franchises
after the Subsequent Transfer thereof.  Any obligations of CCI under the
provisions of this Article shall be paid promptly to a CCI Indemnified Party by
CCI in the manner set forth in Section 10.06.  Notwithstanding anything
contained herein to the contrary, the indemnification provided above shall not
apply until the aggregate of all amounts subject to indemnification under this
Section 10.03 equals or exceeds $671,000; provided, that in the event the
aggregate amount of all claims hereunder equals or exceeds $671,000, CCI shall
be liable for the total amount of all such claims starting from the first
dollar.  In any event, the maximum amount that CCI will be required to pay under
this Section 10.03 in respect of all claims by all parties is Ten Million
Dollars ($10,000,000).  Any claim for indemnification pursuant to this
Section 10.03 must be made in writing prior to the expiration or termination of
the applicable representation, warranty, covenant or agreement under
Section 10.01.

 

10.4         Third Party Claims.  If any claim (“Asserted Claim”) covered by the
foregoing indemnities is asserted against any indemnified party (“Indemnitee”),
it shall be a condition to the obligations under this Article 10 that the
Indemnitee shall promptly give the indemnifying party

 

41

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(“Indemnitor”) notice thereof in accordance with Section 13.06.  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 to defend 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.  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.

 

10.5         Remaining Liabilities.  Holdings agrees to indemnify, defend and
hold harmless each Holdings Indemnified Party from against all Losses to which
they may become subject as result of all liabilities, obligations and
commitments (whether direct or indirect, matured or unmatured, known or unknown,
absolute, accrued, contingent or otherwise) of Michigan or New LLC arising from
any facts in existence, event or activity occurring, prior to the Effective
Time, that are not Remaining Liabilities.  For the avoidance of doubt, Holdings
obligation to indemnify, defend and hold harmless each Holdings Indemnified
Party shall exclude all Losses to which they may become subject as result of all
liabilities, obligations and commitments (whether direct or indirect, matured or
unmatured, known or unknown, absolute, accrued, contingent or otherwise) arising
out or relating to the  Remaining Liabilities.

 

10.6         Method of Payment.  Payments under this Article 10 shall be
effected promptly by wire transfer of immediately available funds.

 

10.7         Tax Matters.  In the event a judicial or administrative proceeding
is commenced with respect to any Taxes for which Holdings or any of its parents
are responsible under this Article 10, Holdings shall have the option to
represent Transferor before the Internal Revenue Service or any other
Governmental Authority or authority or any court regarding such Taxes and to
settle such matters provided, however, that any such settlement shall be subject
to the consent of CCI if it would adversely affect CCI or its subsidiaries.

 

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
party and take such other actions as the other party reasonably may request to
effect the purposes and intent of this Agreement.

 

12.          Closing.

 

12.1         Closing.  The Closing shall take place at the offices of Holdings’
outside counsel at 10:00 a.m. local time, on the date which is (i) not earlier
than the fifth business day after all consents required as conditions to the
sale as provided in Section 7.01 have been received, and (ii) designated by CCI
or Holdings in a written notice to the other and CCI (the “Closing Date”);
provided, however,

 

42

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that if the Closing shall not have occurred on or prior to one year from the
date of this Agreement or as extended pursuant to Section 9.03 (the “Outside
Date”), either party shall have the right to terminate this Agreement on ten
days’ written notice to the other unless the Closing shall occur within such ten
day period.  If, as of the Outside Date, the Closing cannot be effected, all
parties hereto shall be released from all obligations hereunder other than
obligations arising from a breach or default hereunder, and each party hereto
will bear expenses as provided in Section 13.07 hereof.  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
consummate the transactions contemplated herein (other than the transfer of the
Retained Franchises and the issuance of the related portion of the Equity
Consideration).

 

12.2         Termination.  In addition to the termination provided for in
Section 12.01, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned:

 

(1)           At any time, by the mutual written agreement of CCI, on the one
hand, and Holdings and Michigan, on the other hand;

 

(2)           By CCI, effective five days after notice to Holdings that it is
terminating this Agreement pursuant to this Section 12.02(b), if on any date
determined for the Closing pursuant to Section 12.01 each condition set forth in
Article 8 has been satisfied (or will be satisfied by the delivery of documents
at Closing) or waived in writing by Holdings and Michigan and either (i) a
condition set forth in Article 7 has not been satisfied (or will not be
satisfied by the delivery of documents at Closing) or waived in writing by CCI
or (ii) Holdings and Michigan have nonetheless refused to consummate the
Closing; provided, that Holdings and Michigan shall have five days to cure such
matter after receipt of notice from CCI that CCI is terminating this Agreement. 
Notwithstanding the foregoing, CCI may not rely on the failure of any condition
set forth in Article 7 to be satisfied if such failure was caused principally by
CCI’s failure to act in good faith or a breach of or failure to perform any of
its representations, warranties, covenants or other obligations in accordance
with the terms of this Agreement;

 

(3)           By Holdings, effective five days after notice to CCI that it is
terminating this Agreement pursuant to this Section 12.02(c), if on any date
determined for the Closing pursuant to Section 12.01 each condition set forth in
Article 7 has been satisfied (or will be satisfied by the delivery of documents
at Closing) or waived in writing by CCI and either (i) a condition set forth in
Article 8 has not been satisfied (or will not be satisfied by the delivery of
documents at Closing) or waived in writing by Holdings or (ii) CCI has
nonetheless refused to consummate the Closing; provided, that CCI shall have
five days to cure such matter after receipt of notice from Holdings that
Holdings is terminating this Agreement.  Notwithstanding the foregoing, Holdings
may not rely on the failure of any condition set forth in Article 8 to be
satisfied if such failure was caused principally by Holdings’ or Michigan’s
failure to act in good faith or a breach of or failure to perform any of its
representations, warranties, covenants or other obligations in accordance with
the terms of this Agreement; or

 

(4)           By Holdings, upon and effective as of the date of written notice
to CCI, pursuant to the termination provisions of Section 9.03.

 

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13.          Miscellaneous.

 

13.1         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.

 

13.2         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 Registration Rights Agreement, the Confidentiality
Agreement referred to in Section 5.02(a), and any other agreement or document
executed on or prior to the date of this Agreement that 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,
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.

 

13.3         Cablevision Name.  The parties agree that Holdings and its
affiliates shall retain the right to use the names “Cablevision,” “Cablevision
Systems,” “Optimum,” “Optimum Cable” or any and all derivations thereof or any
name which may include any of such terms, and after the Closing, CCI shall
remove or delete the names “Cablevision,” “Cablevision Systems,” “Optimum,”
“Optimum Cable,” “Optimum TV” or any and all derivations thereof or any name
which may include any of such terms from the Acquired Assets as soon as
reasonably practicable but in any event by the 120th day following the Closing. 
From and after the 120th day following the Closing, Transferor and its
affiliates shall retain the sole and exclusive right to use the names
“Cablevision,” “Cablevision Systems,”  “Optimum,” “Optimum Cable” or any and all
derivations thereof or any name which may include any of such terms.  Holdings
acknowledges that the foregoing shall not require CCI or its successor to remove
the above-listed names from any cable modems or other similar equipment that is
in the possession of customers until such time as such equipment is no longer in
the possession of customers.

 

13.4         Binding Effect; Assignment.  This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns.  This Agreement may not be assigned by any party without the
prior written consent of the other parties hereto; provided, however, that CCI
may, following consummation of the Merger, assign its rights under this
Agreement to one or more wholly-owned subsidiaries of CCI, without the prior
written consent of Holdings, provided CCI remains liable to fully perform the
obligations and terms of this Agreement and the other documents to which it is a
party.

 

13.5         Construction; Counterparts.  The Recitals, the Article and Section
headings in, and the title of Schedules to 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.

 

13.6         Notices.  All notices and communications hereunder shall be in
writing and shall be deemed to have been duly given to a party when delivered in
person, faxed (with confirmation) 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 Holdings

 

 

 

or Michigan:

 

CSC Holdings, Inc.

 

 

 

1111 Stewart Avenue

 

 

 

Bethpage, New York  11714

 

 

 

Telephone:  (516) 803-2300

 

 

 

Facsimile:  (516) 803-2577

 

 

 

Attention:  General Counsel

 

 

 

 

 

copies to:

 

Cablevision Systems Corporation

 

 

 

1111 Stewart Avenue

 

 

 

Bethpage, New York  11714

 

 

 

Telephone:  (516) 803-2300

 

 

 

Facsimile:  (516) 803-2577

 

 

 

Attention:  General Counsel

 

 

 

 

 

 

 

and

 

 

 

 

 

 

 

Sullivan & Cromwell

 

 

 

125 Broad Street

 

 

 

New York, New York  10004

 

 

 

Telephone:  (212) 558-4000

 

 

 

Facsimile:  (212) 558-3588

 

 

 

Attention:  John P. Mead

 

 

 

 

 

If to CCI

 

c/o Charter Communications, Inc.

 

 

 

1244 Powerscourt Drive

 

 

 

St. Louis, MO  63131

 

 

 

Telephone:

(314) 965-0555

 

 

 

Facsimile:

(304) 965-8793

 

 

 

Attention:

Heather L. Wood, Vice President
Finance & Acquisitions

 

 

 

 

 

with a copy to:

 

Kent Kalkwarf

 

 

 

Senior Vice President & Chief Financial Officer

 

 

 

Curtis Shaw, Esq.,

 

 

 

Senior Vice President & General Counsel

 

45

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and copies to:

 

Irell & Manella LLP

 

 

 

1800 Avenue of the Stars, Suite 900

 

 

 

Los Angeles, CA  90067

 

 

 

Telephone:

(310) 277-1010

 

 

 

Facsimile:

(310) 203-7199

 

 

 

Attention:

Alvin G. Segel, Esq.

 

Any party may change its address for the purpose of notice by giving notice in
accordance with the provisions of this Section 13.06.

 

13.7         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.

 

13.8         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.

 

13.9         Third Party Beneficiary.  This Agreement is entered into only for
the benefit of the parties and their respective successors and assigns, and
nothing hereunder shall be deemed to constitute any person a third party
beneficiary to this Agreement except as expressly provided in Article 10.

 

13.10       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.

 

13.11       Press Releases.  No press release or other public information
relating to the purchase and sale contemplated in this Agreement shall be made
or disclosed by either party hereto without the consent of the other party;
provided, however, that either party may disclose such information if reasonably
deemed to be required by law by the legal counsel for such party; provided
further that such party shall notify the other as soon as reasonably practicable
prior to the issuance of such press release.

 

13.12       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.

 

13.13       Specific Performance.  The parties hereto acknowledge that money
damages are not an adequate remedy for violations of this Agreement and that any
such party may, in its sole discretion, apply to a court of competent
jurisdiction for specific performance or injunctive or other

 

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relief (without the posting of any bond or other security) as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof by either party hereto and, to the extent permitted under applicable law,
each party hereto waives any objection to the imposition of such relief.  Any
such specific or equitable relief granted shall not be exclusive and any party
entitled to indemnification under Article 10 hereof shall be entitled to seek
payment in the manner specified therein.

 

(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.

 

 

CSC HOLDINGS, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

CABLEVISION OF MICHIGAN, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

CHARTER COMMUNICATIONS, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

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