Exhibit 10.38


 


[Execution Copy]


 


PURCHASE AGREEMENT


 


This Purchase Agreement (this “Agreement”)
is made and entered into as of June 27, 2003, by and among Rainbow Media
Holdings, Inc., a Delaware corporation (“RMHI”), American Movie Classics
III Holding Corporation, a Delaware corporation (“AMC3HC”), American
Movie Classics IV Holding Corporation, a Delaware corporation (“AMC4HC”),
IFC II Holding Corporation, a Delaware corporation (“IFC2HC”),  IFC III Holding Corporation, a Delaware
corporation (“IFC3HC” and, together with AMC3HC, AMC4HC and IFC2HC, the
“Rainbow Buyers”), Metro-Goldwyn-Mayer Inc., a Delaware corporation (“MGM
Parent”), MGM Networks U.S. Inc., a Delaware corporation (“MGM Seller”),
and, solely for purposes of Sections 2.02(b), 2.02(c), 5.01, 10.05, 10.08 and
10.11 hereof, Cablevision Systems Corporation, a Delaware corporation (“Cablevision”).


 


R E C I T A L S


 


WHEREAS, American Movie Classics Holding
Corporation, a Delaware corporation (“AMCHC”), and AMC II Holding
Corporation, a Delaware corporation (“AMC2HC”) own, in the aggregate, an
80% partnership interest in American Movie Classics Company, a New York general
partnership (“AMCC”), which is the owner of the programming channels
American Movie Classics (“AMC”) and WE: Women’s Entertainment (“WE”);


 


WHEREAS, IFC Holding Corporation, a
Delaware corporation, owns an 80% membership interest in The Independent Film
Channel LLC, a Delaware limited liability company (“IFC LLC”), which is
the owner of the programming channel The Independent Film Channel (“IFC”);


 


WHEREAS, pursuant to (i) the Agreement
Between MGM and RMHI to Acquire Twenty-Percent Interest in the Rainbow Networks
(AMC, Bravo, IFC, WE: Women’s Entertainment and Digital Suites), dated as of
January 31, 2001 (the “2001 Agreement”) and (ii) the Agreement
dated as of November 4, 2002 (the “2002 Agreement”), among
Cablevision, RMHI, AMCHC, AMC2HC, Bravo Holding Corporation, Bravo II Holding
Corporation, MGM Parent and MGM Seller, MGM Seller, an indirect wholly-owned
subsidiary of MGM Parent, owns a 20% partnership interest in AMCC (the “MGM
AMC Interest”) and a 20% membership interest in IFC LLC (the “MGM IFC
Interest” and, together with the MGM AMC Interest, the “MGM Interests”);


 


WHEREAS, upon the terms and subject to the
conditions set forth herein, the Rainbow Buyers desire to purchase the MGM
Interests from MGM Seller and MGM Seller is willing to sell the MGM Interests
to the Rainbow Buyers (the “Transaction”);


 


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.


 

















 


ARTICLE I


 


DEFINITIONS


 


SECTION 1.01                    Definitions.  For purposes of this Agreement the following
terms shall have the meanings set forth below:


 


Affiliate of any
Person means any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such Person.  For purposes of this Agreement, “control”
(including the terms “controlled by” and “under common control with”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.


 


Agreement means
this Purchase Agreement and the Exhibits attached hereto.


 


AMC has the
meaning set forth in the Recitals to this Agreement.


 


AMCC has the
meaning set forth in the Recitals to this Agreement.


 


AMCHC has the
meaning set forth in the Recitals to this Agreement.


 


AMC2HC has the
meaning set forth in the Recitals to this Agreement.


 


AMC3HC has the
meaning set forth in the Preamble to this Agreement.


 


AMC4HC has the
meaning set forth in the Preamble to this Agreement.


 


Bill of Sale has the
meaning set forth in Section 6.02(a).


 


Business Day means
any day other than a Saturday, Sunday or a day on which banks in New York are
authorized or obligated by law or executive order to close.


 


Cablevision has the
meaning set forth in the Preamble to this Agreement.


 


Cablevision Note means
the promissory note of Cablevision in the initial principal amount of
$250,000,000 in the form of Exhibit D hereto and delivered pursuant to
Section 6.01(b) hereof.


 


Cablevision Release and Indemnity means
the release and indemnity in the form attached hereto as Exhibit A.


 


Cablevision Shares means
the shares of Cablevision NY Group Class A common stock, par value $0.01 per
share, delivered to MGM Seller in accordance with Section 2.02(b) hereof.


 


Cablevision Share Sale Net Proceeds has the
meaning set forth in Section 2.02(b).


 


2

















 


Closing means
the meeting for the purpose of concluding the transactions contemplated by this
Agreement held at the place and on the date fixed in accordance with
Section 9.01.


 


Closing Date means
the date fixed for the Closing in accordance with Section 9.01.


 


Contract means
any written contract, mortgage, deed of trust, bond, indenture, lease,
sublease, license, note, certificate, option, warrant, right, or other
instrument, document, agreement or arrangement.


 


CSC Holdings means
CSC Holdings, Inc., a Delaware corporation.


 


DOJ has the
meaning set forth in Section 5.05.


 


Encumbrance means
any Lien or any lease, license, servient easement, adverse claim, reversion,
reverter, preferential arrangement, restrictive covenant or restriction of any
kind, including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.


 


Fair Market Value Balance Sheet has the
meaning set forth in Section 2.04(a).


 


Film Rights Agreement means
collectively, the Film Rights Agreement, the Retrofit Agreement and the
Retrofit Side Letter, each in the form attached hereto as Exhibit E.


 


Final Maturity Date shall
have the meaning assigned to such term in the Cablevision Note.


 


Final Maturity Date Amount means
the outstanding principal amount of the Cablevision Note on the Final Maturity
Date.


 


FTC has the
meaning set forth in Section 5.05.


 


Governmental Authority means
any United States federal, state, county, municipal or local, or any non-U.S.
or supranational governmental, regulatory or administrative authority, agency,
commission or other body or entity.


 


HSR Act and Rules means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations promulgated thereunder, as from time to time in effect prior to the
Closing.


 


IFC has the
meaning set forth in the Recitals to this Agreement.


 


IFC2HC has the
meaning set forth in the Preamble to this Agreement.


 


IFC3HC has the
meaning set forth in the Preamble to this Agreement.


 


IFC LLC has the
meaning set forth in the Recitals to this Agreement.


 


3

















 


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


 


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.


 


LIBOR Component means
the sum of the daily amounts, from (and including) the Final Maturity Date to
(but excluding) the date upon which the Proceeds Excess or the Proceeds
Shortfall is determined in accordance with Section 2.02(b), determined by
multiplying (x) the Final Maturity Date Amount less the aggregate amount of all
Monthly Post-Maturity Payments made on or before such date (other than any Monthly
Post-Maturity Payment made on the Final Maturity Date and which reduces the
Final Maturity Date Amount) by (y) the Applicable Rate (as defined in the
Cablevision Note).


 


Liens means
any security interest, pledge, hypothecation, mortgage, lien (including,
without limitation, environmental and tax liens but not including liens for
taxes not yet due and payable), charge or encumbrance.


 


MGM AMC Interest Allocable Portion has the
meaning set forth in Section 2.02(b).


 


MGM AMC Interest has the
meaning set forth in the Recitals to this Agreement.


 


MGM IFC Interest Allocable Portion has the
meaning set forth in Section 2.02(b).


 


MGM IFC Interest has the
meaning set forth in the Recitals to this Agreement.


 


MGM Interests has the
meaning set forth in the Recitals to this Agreement.


 


MGM Material Adverse Effect has the
meaning set forth in Section 3.02(b).


 


MGM Parent has the
meaning set forth in the Preamble to this Agreement.


 


MGM Release and Indemnity means
the Release and Indemnity in the form attached hereto as Exhibit C.


 


MGM Seller has the
meaning set forth in the Preamble to this Agreement.


 


Monthly Post-Maturity Payment means a
payment of $2,500,000 payable on the last Business Day of each month beginning
on the month in which the Final Maturity Date falls and ending on the last
Business Day of the month prior to the month the Proceeds Excess or the
Proceeds Shortfall is determined in accordance with Section 2.02(b).


 


Outside Date has the
meaning set forth in Section 9.02.


 


4

















 


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


 


Proceeds Excess shall have
the meaning set forth in Section 2.02(b).


 


Proceeds Shortfall shall
have the meaning set forth in Section 2.02(b).


 


Purchase Price has the
meaning set forth in Section 2.02(a).


 


Rainbow Buyers has the
meaning set forth in the Preamble to this Agreement.


 


Rainbow Material Adverse Effect has the
meaning set forth in Section 4.02(b).


 


Registration Rights Agreement shall
mean the Registration Rights Agreement by and between Cablevision and MGM
Seller substantially in the form attached hereto as Exhibit F.


 


Regulations has the
meaning set forth in Section 2.04(b).


 


Related Party Contract has the
meaning set forth in Section 3.06.


 


Releases and Indemnities means,
collectively, the MGM Release and Indemnity and the Cablevision Release and
Indemnity.


 


Requisite Number means
the quotient obtained by dividing (i) the outstanding principal amount of the
Cablevision Note upon the Final Maturity Date by (ii) the closing price of
Cablevision NY Group Class A common stock on the New York Stock Exchange or, if
not then listed, on the principal national securities exchange on which such
class of stock is listed or admitted to trading, on the trading day immediately
preceding the Final Maturity Date.


 


RMHI has the
meaning set forth in the Preamble to this Agreement.


 


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


 


Surviving Provisions has the
meaning set forth in Section 10.05.


 


Target Amount means
(i) the Final Maturity Date Amount plus (ii) the LIBOR Component minus (iii)
the aggregate amount of all Monthly Post-Maturity Payments made prior to the
determination of the Proceeds Excess or the Proceeds Shortfall (other than any
Monthly Post-Maturity Payment made on the Final Maturity Date and which reduces
the Final Maturity Date Amount).


 


Tax Basis Balance Sheet has the
meaning set forth in Section 2.04(a).


 


Transaction has the
meaning set forth in the Preamble to this Agreement.


 


WE has the
meaning set forth in the Recitals to this Agreement.


 


5

















 


SECTION 1.02                    Interpretation
and Rules of Construction. 
In this Agreement, except to the extent that the context otherwise
requires:


 


(a)                                  when a
reference is made in this Agreement to an Article, Section, Exhibit or
Schedule, such reference is to an Article or Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated;


 


(b)                                 the table
of contents and headings for this Agreement are for reference purposes only and
do not affect in any way the meaning or interpretation of this Agreement;


 


(c)                                  whenever the
words “include,” “includes,” or “including” are used in this Agreement, they
are deemed to be followed by the words “without limitation”;


 


(d)                                 reference
to any gender means both genders;


 


(e)                                  the words
“hereof,” “herein” and “hereunder” and words of similar import, when used in
this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;


 


(f)                                    the
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms;


 


(g)                                 unless
expressly provided otherwise, any Law defined or referred to herein or in any
agreement or instrument that is referred to herein means such Law as from time
to time amended, modified or supplemented;


 


(h)                                 references
to a Person are also to its permitted successors and assigns; and


 


(i)                                     references
to currency, monetary values and dollars shall mean United States (U.S.)
dollars and all payments hereunder shall be made in United States dollars.


 


ARTICLE II


 


THE PURCHASE AND SALE AND OTHER PAYMENTS


 


SECTION 2.01                    Purchase
and Sale.  Upon the terms and
subject to the conditions set forth in this Agreement, at the Closing MGM
Parent shall cause MGM Seller to, and MGM Seller shall, sell, assign, transfer,
convey and deliver to the Rainbow Buyers, and RMHI shall cause the Rainbow
Buyers to, and the Rainbow Buyers shall, purchase, acquire and accept, valid
title to the MGM Interests free and clear of all Encumbrances.


 


SECTION 2.02                    Purchase
Price.


 


(a)                                  Purchase
Price.  The aggregate purchase
price for the MGM Interests shall be $500,000,000 (the “Purchase Price”),
which shall be payable by the Rainbow Buyers to MGM Seller as follows:


 


6

















 


(i)                                     $107,500,000
of the Purchase Price shall be paid in cash by AMC3HC;


 


(ii)                                  $107,500,000
of the Purchase Price shall be paid in cash by AMC4HC;


 


(iii)                               the
Cablevision Note in the initial principal amount of $250,000,000 shall be
issued to MGM Seller;


 


(iv)                              $17,500,000
of the Purchase Price shall be paid in cash by IFC2HC in consideration for
one-half (1/2) of the MGM IFC Interest; and


 


(v)                                 $17,500,000
of the Purchase Price shall be paid in cash by IFC3HC in consideration for
one-half (1/2) of the MGM IFC Interest.


 


The cash payments identified in clauses
(i), (ii), (iv) and (v) above shall be made at Closing by wire transfer in
immediately available funds denominated in United States dollars to a bank
account designated by MGM Seller at least two (2) Business Days prior to the
Closing.


 


The cash paid by AMC3HC and one-half of the
Cablevision Note identified in clauses (i) and (iii) above shall be in
consideration  for one-half (1/2) of the
MGM AMC Interest, and the cash paid by AMC4HC and one-half of the Cablevision
Note identified in clauses (ii) and (iii) above shall be in consideration for
one-half (1/2) of the MGM AMC Interest.


 


The parties hereto and their respective
Affiliates and successors agree to file all tax returns and reports consistent
with such allocation of the Purchase Price and shall not take any action or
position that is inconsistent therewith.


 


(b)                                 Payment
of Proceeds Shortfall or Proceeds Excess. 
If Cablevision elects to repay the Final Maturity Date Amount through
the issuance and delivery to MGM Seller on the Final Maturity Date of the
Requisite Number of Cablevision Shares, MGM Seller shall, as soon as
practicable after the Final Maturity Date, sell such Cablevision Shares in (i)
a widely distributed underwritten public offering for cash pursuant to the
terms of the Registration Rights Agreement or (ii) such other manner as
approved by Cablevision (which approval Cablevision shall not unreasonably
withhold if MGM Seller has previously been cutback twice under the Registration
Rights Agreement).  As promptly as
practicable following the closing of such sale, MGM Seller shall provide to
Cablevision a written statement setting for the amount of the gross proceeds of
such sale, the amount of underwriting fees, discounts and commissions paid or
otherwise incurred by MGM Seller in connection with such sale, the amount of
out-of-pocket offering expenses incurred by MGM Seller in connection with such
sale, the amount of any taxes and other governmental charges (other than income
taxes) paid or payable by MGM Seller in connection with such sale and, after
deducting all such amounts, the net proceeds to MGM from such sale (the total
aggregate amount of such net proceeds from the sale of all Cablevision Shares,
the “Cablevision Share Sale Net Proceeds”).  If the Cablevision Share Sale Net Proceeds is less than the
Target Amount (the “Proceeds Shortfall”), then Cablevision shall, within
five Business Days of receipt from MGM Seller of written notice of the
existence and amount of the Proceeds Shortfall, pay to MGM Seller the amount of
the Proceeds Shortfall in cash by wire transfer in immediately available funds
denominated in United States dollars to a bank account


 


7

















 


designated by MGM Seller at least two
Business Days prior to such payment date. 
If the amount of the Cablevision Share Sale Net Proceeds is greater than
the Target Amount (the “Proceeds Excess”), then MGM Seller shall, within
five Business Days of receipt from Cablevision of written notice of the
existence and amount of the Proceeds Excess, pay to Cablevision the amount of
the Proceeds Excess in cash by wire transfer in immediately available funds
denominated in United States Dollars to a bank account designated by
Cablevision at least two Business Days prior to such payment date.


 


(c)                                  On the
last Business Day of each month beginning on the month in which the Final
Maturity Date falls and ending on the last Business Day of the month prior to
the month the Proceeds Excess or the Proceeds Shortfall is determined,
Cablevision shall pay to MGM Seller the Monthly Post-Maturity Payment by wire
transfer in immediately available funds denominated in United States dollars to
a bank account designated by MGM Seller at least two Business Days prior to
each such payment.


 


SECTION 2.03                    No Right
to Proceeds or Profits from Subsequent Sales of Partnership and/or Membership
Interests.  MGM Parent and MGM
Seller acknowledge that they have been informed by the Rainbow Buyers that the
Rainbow Buyers and their Affiliates are considering entering into one or more
transactions concerning their interests in AMCC and IFC LLC. MGM Parent and MGM
Seller hereby expressly agree that they shall have no right or claim to share
in any proceeds or profits from any post-Closing sale, assignment, transfer,
pledge or other disposition, direct or indirect, of all or a part of the MGM
Interests, whether individually or as part of a sale, assignment, transfer,
pledge or other disposition, direct or indirect, of all or a part of AMCC or
IFC LLC or any of all of the respective assets of AMCC or IFC LLC, including
AMC, WE or IFC.


 


SECTION 2.04                    Tax
Treatment. The parties to this Agreement agree as follows:


 


(a) 
As promptly as practicable and in no event more than 100 days after the
Closing Date, the applicable Rainbow Buyer shall prepare or cause to be prepared,
and shall submit to MGM Seller, (i) a balance sheet of AMCC or IFC LLC, as
applicable, as of the Closing Date, that sets out the tax basis of the assets
owned by AMCC or IFC LLC, as applicable, on the Closing Date and the amount of
the liabilities of AMCC or IFC LLC, as applicable, on the Closing Date (the “Tax
Basis Balance Sheet”) and (ii) a balance sheet of AMCC or IFC LLC, as
applicable, as of the Closing Date, that sets out the fair market value of the
assets owned by AMCC or IFC LLC, as applicable, on the Closing Date and the
amount of the liabilities of AMCC or IFC LLC, as applicable, on the Closing
Date (the “Fair Market Value Balance Sheet”).  The Tax Basis Balance Sheet and the Fair Market Value Balance
Sheet shall be prepared in good faith by the applicable Rainbow Buyer and shall
be reasonably acceptable to the MGM Seller. 
The applicable Rainbow Buyer shall use reasonable commercial efforts to
resolve any objections raised by the MGM Seller with respect to the Tax Basis
Balance Sheet and the Fair Market Value Balance Sheet.  The Fair Market Value Balance Sheet (1)
shall be prepared in a manner consistent with the Purchase Price allocation set
forth in Section 2.02 hereof and (2) shall contain sufficient detail to
permit AMCC or IFC LLC, as applicable, and the parties to make the computations
and adjustments required under Section 743(b), Section 751 and
Section 755 of the Internal Revenue Code of 1986, as amended.  The applicable Rainbow


 


8

















 


Buyer and MGM Seller shall, and the
applicable Rainbow Buyer shall cause AMCC or IFC LLC, as applicable, to, report
the tax consequences of the transactions contemplated by this Agreement in a
manner consistent with the Tax Basis Balance Sheet and the Fair Market Value
Balance Sheet (as finally determined pursuant to Section 2.04(a)) and
shall not take any action or position that is inconsistent therewith.


 


(b) 
As promptly as practicable and in no event more than 100 days after the
Closing Date, AMCC and IFC LLC shall prepare and deliver to MGM Seller (A) the
statement of adjustment described in Section 1.743-1(k)(1) of the U.S.
Treasury Regulations (the “Regulations”), (B) the notice described in
Section 1.743-1(k)(2) of the Regulations and (C) the statement described
in Section 1.751-1(a)(3) of the Regulations, in each case prepared in a
manner that is consistent with the Tax Basis Balance Sheet and the Fair Market
Value Balance Sheet (as finally determined pursuant to Section 2.04(a)).


 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES OF MGM
PARENT AND MGM SELLER


 


To induce RMHI and the Rainbow Buyers to
enter into this Agreement, MGM Parent and MGM Seller jointly and severally
represent and warrant to RMHI and the Rainbow Buyers as follows:


 


SECTION 3.01                    Organization
and Authority.  Each of MGM Parent and
MGM Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.


 


SECTION 3.02                    Legal
Capacity; Approvals and Consents.


 


(a) 
Authority and Binding Effect. 
Each of MGM Parent and MGM Seller has all requisite corporate power and
authority to (i) execute, deliver and perform this Agreement, the Releases and
Indemnities (to the extent a party thereto) and the Bill of Sale, (ii) approve,
adopt and consummate the transactions contemplated hereby and thereby, and
(iii) perform its obligations hereunder and thereunder.  This Agreement has been, and upon their
execution the Releases and Indemnities and the Bill of Sale will be, duly
executed and delivered by MGM Parent and MGM Seller, to the extent a party
thereto, and this Agreement is and, upon their execution, the Releases and
Indemnities (to the extent a party thereto) and the Bill of Sale will be valid
and binding obligations of MGM Parent and MGM Seller enforceable against them
in accordance with their respective 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. Without
limiting the foregoing, any and all actions of the directors and stockholders
of MGM Parent and MGM Seller required to approve and adopt this Agreement, the
Releases and Indemnities and the Bill of Sale have been duly taken and no
further action of the directors or stockholders of MGM Parent or MGM Seller is
required in order to permit the consummation of the transactions contemplated
hereby or thereby or to permit MGM Parent and MGM Seller to perform their
respective obligations hereunder or thereunder.


 


9

















 


(b)                                 No Breach
or Violation.  The execution, delivery
and performance of this Agreement, the Releases and Indemnities (to the extent
a party thereto) and the Bill of Sale do not, and will not, (i) conflict with,
violate or result in the breach of any provision of the certificate of
incorporation or by-laws of MGM Parent or MGM Seller, (ii) conflict with or
violate any Law or Judgment applicable to MGM Parent or MGM Seller or the MGM
Interests, (iii) conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or both, would
become a default) under, or require any consent under or pursuant to, any
Contract to which MGM Parent or MGM Seller is a party or by which they are
otherwise bound, or (iv) result in the creation of any Encumbrance on the MGM
Interests, except, in the case of clauses (ii) and (iii), any conflict,
violation, breach or default, or where the failure to obtain a consent, would
not, individually or in the aggregate, have a material adverse effect upon MGM
Parent and MGM Seller and their subsidiaries taken as a whole (an “MGM
Material Adverse Effect”) or on the ability of MGM Parent or MGM Seller to
consummate the transactions contemplated hereby and by the Releases and
Indemnities and the Bill of Sale.


 


(c)                                  Required
Consents.  Other than (i) the
notification requirements of the HSR Act and Rules, if any, (ii) the release of
the MGM Interests from any Liens arising under any MGM credit agreement or security
or collateral agreements, and/or (iii) any waivers or consents required to be
obtained from any bank or other lender of MGM Parent, MGM Seller or any other
Affiliate of MGM Parent in connection with the sale of the MGM Interests, there
is no Person whose approval or consent, or with whom the filing of any
certificate, notice, application, report or other document, is legally or
contractually required or is otherwise necessary in connection with the
execution, delivery or performance by MGM Parent and MGM Seller of this
Agreement, the Releases and Indemnities or the Bill of Sale and the
consummation of the transactions contemplated hereby and thereby, except where
failure to obtain such consent or approval or failure to make such filing would
not, individually or in the aggregate, reasonably be expected to have a MGM
Material Adverse Effect.


 


SECTION 3.03                    MGM
Interests.  MGM Seller owns and has,
and immediately prior to the Closing will own and will have, good and valid
title to the MGM Interests free and clear of all Encumbrances and, upon
delivery to the Rainbow Buyers hereunder, good and valid title to the MGM
Interests, free and clear of all Encumbrances other than Encumbrances created
by the Rainbow Buyers and their Affiliates, will pass to the Rainbow Buyers.


 


SECTION 3.04                    Legal and
Governmental Proceedings and Judgments. 
There are (i) no actions or proceedings by or against MGM Parent or MGM
Seller pending or, to the knowledge of MGM Parent or MGM Seller, threatened, by
any Person, (ii) no Judgments outstanding against MGM Parent or MGM Seller or
to or by which the MGM Interests are subject or bound, and (iii) no outstanding
consent decrees, settlements, injunctions or rulings imposed by any court, in
each case which could reasonably be expected to adversely affect the ability of
MGM Parent or MGM Seller to consummate any of the transactions contemplated
hereby or by the Releases and Indemnities or the Bill of Sale.


 


SECTION 3.05                    Preemptive
and Similar Rights.  Other than any rights of
the Rainbow Buyers pursuant to the 2001 Agreement and the 2002 Agreement, there
are no preemptive rights, rights of first refusal or similar rights with
respect to the MGM Interests and


 


10

















 


no such rights arise by virtue of or in
connection with the transactions contemplated hereby.  There are no other voting or similar contracts or agreements with
respect to the MGM Interests other than the 2001 Agreement and the 2002
Agreement.


 


SECTION 3.06                    Affiliate
Transactions.  Neither MGM Seller nor
MGM Parents has on behalf of either AMCC or IFC LLC entered into any Contract
or understanding between AMCC or IFC LLC, on the one hand, and (i) MGM Parent
or any Affiliate of MGM Parent or (ii) any other party, on the other hand.


 


SECTION 3.07                    Securities
Law Matters.  MGM Seller represents
that it is an “accredited investor” as that term is defined in Regulation D
under the Securities Act and that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of acquisition of the Cablevision Note and of making an informed
investment decision with respect thereto. MGM Seller is taking the Cablevision
Note solely for investment purposes, and has no present intention to sell or
otherwise transfer the Cablevision Note. 
MGM Seller is aware that the Cablevision Note is not and will not be
registered under the Securities Act or under any state securities laws. MGM
Seller agrees not to offer, sell, or otherwise dispose of the Cablevision Note
except as permitted therein.  MGM Seller
understands that it may be required to bear the economic risk of the investment
represented by the Cablevision Note for an indefinite period. MGM Seller
acknowledges that the Cablevision Note shall bear the following legend:


 


THIS NOTE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. 
THIS NOTE IS NOT NEGOTIABLE AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.  EXCEPT AS PROVIDED IN THIS NOTE, THE
TRANSFER OF THIS NOTE IS PROHIBITED.


 


ARTICLE IV


 


REPRESENTATIONS AND WARRANTIES OF RMHI AND
THE RAINBOW BUYERS


 


To induce MGM Parent and MGM Seller to
enter into this Agreement, RMHI and the Rainbow Buyers jointly and severally
represent and warrant to MGM Parent and MGM Seller as follows:


 


SECTION 4.01                    Organization
and Authority.  Each of RMHI and each
Rainbow Buyer is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware.


 


SECTION 4.02                    Legal
Capacity: Approvals and Consents.


 


(a)                                  Authority;
Binding Effect.  Each of RMHI and each
Rainbow Buyer has all requisite corporate power and authority to (i) execute,
deliver and perform this Agreement


 


11

















 


and the Releases and Indemnities (to the
extent a party thereto), (ii) approve, adopt and consummate the transactions
contemplated hereby and thereby, and (iii) perform its obligations hereunder
and thereunder.  This Agreement has
been, and upon their execution the Releases and Indemnities will be, duly
executed and delivered by each of RMHI and each Rainbow Buyer, to the extent a
party thereto, and this Agreement is and, upon their execution, the Releases
and Indemnities (to the extent a party thereto) will be valid and binding
obligations of each of RMHI and each Rainbow Buyer, enforceable against them 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. 
Without limiting the foregoing, any actions of the directors and
stockholders of RMHI and each Rainbow Buyer required to approve and adopt this
Agreement and the Releases and Indemnities have been duly taken and no further
action of the directors and stockholders of RMHI or any Rainbow Buyer is
required in order to permit the consummation of the transactions contemplated
hereby and by the Releases and Indemnities or to permit RMHI and each Rainbow
Buyer to perform its respective obligations hereunder and thereunder.


 


(b)                                 No Breach
or Violation.  The execution, delivery
and performance of this Agreement and the Releases and Indemnities (to the
extent a party thereto) do and will not: (i) conflict with, violate or result
in the breach of any provision of the certificate of incorporation or bylaws of
RMHI or any Rainbow Buyer, (ii) conflict with or violate any Law or Judgment
applicable to RMHI or any Rainbow Buyer or (iii) conflict with, result in any
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or require any consent
under or pursuant to, any Contract to which RMHI or any Rainbow Buyer is a
party or by which they are otherwise bound, except, in the case of clauses (ii)
and (iii), any conflict, violation, breach or default, or where the failure to
obtain a consent, would not, individually or in the aggregate, have a material
adverse effect upon RMHI and its subsidiaries taken as a whole (a “Rainbow
Material Adverse Effect”) or on the ability of RMHI and the Rainbow Buyers
to consummate the transactions contemplated hereby and by the Releases and
Indemnities.


 


(c)                                  Required
Consents.  Other than (i) the
notification requirements of the HSR Act and Rules and/or (ii) any waivers or
consents required to be obtained from any bank or other lender of RMHI, any
Rainbow Buyer or any Affiliate of RMHI or a Rainbow Buyer in connection with
the purchase of the MGM Interests, there is no Person whose approval or
consent, or with whom the filing of any certificate, notice, application,
report or other document, is legally or contractually required or otherwise is
necessary in connection with the execution, delivery or performance by RMHI and
the Rainbow Buyers of this Agreement and the Releases and Indemnities and the
consummation of the transactions contemplated hereby and thereby, except where
failure to obtain such, consent or approval or failure to make such filing
would not, individually or in the aggregate, reasonably be expected to have a
Rainbow Material Adverse Effect.


 


SECTION 4.03                    Legal and
Governmental Proceedings and Judgments. 
There are (i) no actions or proceedings by or against RMHI or any
Rainbow Buyer pending or, to the knowledge of RMHI or any Rainbow Buyer
threatened by any Person, (ii) no Judgments outstanding against RMHI or the
Rainbow Buyers and (iii) no outstanding consent decrees, settlements,
injunctions or rulings imposed by any court, in each case which could
reasonably be


 


12

















 


expected to adversely affect the ability
of RMHI or the Rainbow Buyers to consummate any of the transactions
contemplated hereby or by the Releases and Indemnities.


 


ARTICLE V


 


COVENANTS AND AGREEMENTS


 


SECTION 5.01                    Certain
Actions.  No party hereto nor its
Affiliates shall take any action that would or would reasonably be expected to
prevent or materially delay the ability of any party to consummate the
transactions contemplated by this Agreement, the Releases and Indemnities, the
Cablevision Note, the Registration Rights Agreement or the Bill of Sale.  The parties hereto shall proceed as promptly
as practicable and in good faith and shall each use reasonable best efforts to
obtain each consent or approval required to be obtained prior to the
consummation of the transactions contemplated hereby.  Each party will advise the other parties in writing promptly of
the written assertion or commencement of any claim, litigation, proceeding or
investigation of which such party becomes aware that could reasonably be
expected to delay or prevent the consummation of the transactions contemplated
hereby or that otherwise relates to the transactions contemplated hereby.


 


SECTION 5.02                    Satisfaction
of Conditions.  Each of the parties
hereto covenants and agrees with the others to exercise reasonable best 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 best efforts to notify promptly the others if it shall learn that
any conditions to performance of any party will not be fulfilled.


 


SECTION 5.03                    Further
Assurances.  From time to time after
the Closing, each party will execute and deliver such other instruments of
conveyance and transfer, fully cooperate with the other parties and take such
other actions as the other parties reasonably may request to effect the
purposes and intent of this Agreement.


 


SECTION 5.04                    Releases
and Indemnities.  RMHI and the Rainbow
Buyers shall execute and deliver, and shall cause Cablevision to execute and
deliver to MGM Seller the Cablevision Release and Indemnity at the
Closing.  MGM Parent and MGM Seller
shall execute and deliver, to RMHI and the Rainbow Buyers the MGM Release and
Indemnity at the Closing.


 


SECTION 5.05                    HSR
Filing; Required Consents. 
Within five Business Days after the date of execution of this Agreement,
RMHI shall, and shall cause its Affiliates to, make the applicable filings
under the HSR Act and Rules with the U.S. Federal Trade Commission (the “FTC”)
and the Antitrust Division of the U.S Department of Justice (the “DOJ”).  Thereafter, the parties hereto shall, and
shall cause their Affiliates to, proceed as promptly as practicable in good
faith and shall use reasonable commercial efforts to (i) obtain the early
termination of any applicable waiting periods under the HSR Act and Rules and
any other required consents or approvals by or from any antitrust authorities
and (ii) comply with any additional request for documents or information made
by the FTC, the DOJ or a court or other governmental authority.  The parties hereto shall, and shall cause
their Affiliates to, proceed as promptly as practicable in good faith and shall
use reasonable commercial efforts to obtain any waivers or consents required to
be obtained from any bank or other lender in connection with


 


13

















 


such parties’ performance of their
obligations hereunder and the transactions contemplated hereby, including
obtaining releases of all Liens, if any, on the MGM Interests arising under any
MGM Parent or MGM Seller credit agreement or security or collateral agreements
or otherwise.


 


SECTION 5.06                    No
Distributions.  The parties hereto agree
that neither AMCC nor IFC LLC shall make, or be obligated in any way to make,
any distributions between the date hereof and the earlier of (i) the Closing or
(ii) the date that this Agreement is terminated in accordance with its terms.


 


SECTION 5.07                    Tax.  The parties hereto agree that upon the
Closing each of AMCC and IFC LLC will adopt the “closing of the books” method
of income allocation as prescribed in Treasury Regulation
Section 1.706-1(c)(2) for purposes of allocating income, gain, loss, deductions
and credits between the partners in AMCC and the members in IFC LLC for the
year of sale, determined in a manner consistent with the provisions of Sections
2.04 and 10.05 and reasonably acceptable to MGM Seller.


 


SECTION 5.08                    Financial
Statements.  RMHI shall, or shall
cause each of AMCC and IFC LLC to, prepare and deliver to MGM Seller (i)
financial statements of each of AMCC and IFC LLC for the fiscal year ending
December 31, 2003 no later than March 31, 2004 and (ii) financial
statements of each of AMCC and IFC LLC for each fiscal quarter in 2003 ending
after the date of execution hereof during any portion of which MGM Seller was a
partner in AMCC or a member of IFC LLC no more than 45 days after the last day
of such fiscal quarter; provided that RMHI shall not be required to
deliver, or cause the delivery of, any financial statements to MGM Seller if
(1) neither it nor any of its subsidiaries owns a majority of the partnership
interests of AMCC or ownership interests of IFC LLC, as applicable, on the last
day of the applicable annual or quarterly period and (2) it has not been able,
despite of its commercial reasonable efforts, to require the owner of a
majority of the partnership interests of AMCC or ownership interests of IFC
LLC, as applicable, to deliver, or cause the delivery of, such financial
statements to MGM Seller.


 


SECTION 5.09                    Prior
Distributions.  RMHI and MGM Parent
hereby acknowledge and agree, on behalf of themselves and their Affiliates,
that the last distribution made by or in respect of AMCC, AMC, IFC LLC, IFC or
WE was a distribution in the amount of $50,000,000 made on February 4,
2003, $10,000,000 of which was distributed to MGM Seller on such date.


 


SECTION 5.10                    Repayment
of the Cablevision Note. 
RMHI shall use reasonable commercial efforts to obtain additional RMHI
financing necessary to permit Cablevision to repay the Cablevision Note at the
earliest practicable time.


 


SECTION 5.11                    Waivers
of Piggy-Back Registration Rights. 
The parties hereto acknowledge that certain holders of shares of
Cablevision NY Group Class A common stock have piggy-back registration rights
pursuant to the Registration Rights Agreements, each dated as of
January 27, 1986, as amended, between the Company and Cablevision Systems
Company, in the first case, and the Company and CSC Holdings Company, in the
second case, which entitle such holders to participate on a “piggy-back” basis
on the registration statement relating to the Cablevision Shares to be filed
pursuant to the Registration Rights Agreement.


 


14

















 


RMHI shall use commercial
reasonable efforts to obtain waivers of such piggy-back registration rights
from such holders prior to the delivery of the Cablevision Shares.


 


ARTICLE VI


 


DELIVERIES AT CLOSING


 


SECTION 6.01                    Deliveries
by the Rainbow Buyers.  At the Closing,
RMHI and the Rainbow Buyers will deliver or cause to be delivered to MGM
Seller:


 


(a)                                  payment
of the cash portion of the Purchase Price for the MGM Interests as provided in
Section 2.02;


 


(b)                                 the
Cablevision Note in the form attached hereto as Exhibit D;


 


(c)                                  the
certificate required to be delivered pursuant to Section 7.02;


 


(d)                                 the
Releases and Indemnities in the form attached hereto as Exhibits A and C;


 


(e)                                  the Film
License Agreement in the form attached hereto as Exhibit E; and


 


(f)                                    the
Registration Rights Agreement substantially in the form of Exhibit F.


 


SECTION 6.02                    Deliveries
by MGM.  At the Closing, MGM
Parent and MGM Seller will deliver or cause to be delivered to the Rainbow Buyers:


 


(a)                                  the Bill
of Sale and Assignment of the MGM Interests (the “Bill of Sale”) in the
form attached hereto as Exhibit B;


 


(b)                                 all
certificates, if any, representing the MGM Interests in proper form for
transfer;


 


(c)                                  the
certificate required to be delivered pursuant to Section 8.02;


 


(d)                                 evidence
that the Liens on the MGM Interests arising under any MGM Parent or MGM Seller
credit agreement or security or collateral agreements or otherwise have been
fully released;


 


(e)                                  the
Releases and Indemnities in the form attached hereto as Exhibits A and C;


 


(f)                                    the Film
License Agreement in the form attached hereto as Exhibit E; and


 


(g)                                 the
Registration Rights Agreement substantially in the form of Exhibit F.


 


15

















 


ARTICLE VII


 


CONDITIONS TO THE OBLIGATIONS OF MGM
PARENT AND MGM SELLER


 


The obligations of MGM Parent and MGM
Seller 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 MGM Parent or MGM Seller:


 


SECTION 7.01                    Performance
by RMHI and the Rainbow Buyers. 
Each of RMHI and each Rainbow Buyer and their Affiliates shall have
performed in all material respects their respective agreements and covenants to
be performed by each of them hereunder to the extent such are required to be
performed at or prior to the Closing, including with respect to its closing
deliveries in Section 6.01.


 


SECTION 7.02                    Absence
of Breach of Representations and Warranties. 
The representations and warranties of RMHI and each Rainbow Buyer
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as if then made,
and MGM Parent and MGM Seller shall have received a certificate from each of
RMHI and each Rainbow Buyer to such effect signed by a duly authorized officer
thereof.


 


SECTION 7.03                    Absence
of Proceedings.  No Judgment shall have
been issued, and no action or proceeding shall have been instituted by any
Governmental Authority, enjoining or preventing, or seeking to enjoin or
prevent, the consummation of the transactions contemplated hereby.


 


SECTION 7.04                    Compliance
with HSR Act.  Any and all waiting
periods under the HSR Act shall have expired or been terminated.


 


SECTION 7.05                    Cablevision
Release and Indemnity. 
Each of RMHI, each Rainbow Buyer and Cablevision shall have duly
executed and delivered the Cablevision Release and Indemnity.


 


ARTICLE VIII


 


CONDITIONS TO THE OBLIGATIONS OF RMHI AND

THE RAINBOW BUYERS


 


The obligations of RMHI and each Rainbow
Buyer 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 RMHI or the Rainbow Buyers.


 


SECTION 8.01                    Performance
by MGM Parent and MGM Seller. 
MGM Parent, MGM Seller and their Affiliates shall have performed in all
material respects their respective agreements and covenants to be performed by
each of them hereunder to the extent such are required to be performed at or
prior to the Closing, including with respect to its closing deliveries in
Section 6.02.


 


16

















 


SECTION 8.02                    Absence
of Breach of Representations and Warranties. 
The representations and warranties of MGM Parent and MGM Seller
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as if then
made.  RMHI and the Rainbow Buyers shall
have received a certificate from each of MGM Parent and MGM Seller to such
effect signed by a duly authorized officer thereof.


 


SECTION 8.03                    Absence
of Proceedings.  No Judgment shall have
been issued, and no action or proceeding shall have been instituted by any
Governmental Authority, enjoining or preventing, or seeking to enjoin or
prevent, the consummation of the transactions contemplated hereby.


 


SECTION 8.04                    Release
of Liens.  MGM Parent and MGM
Seller shall have obtained the release of all Liens on the MGM Interests
arising under any MGM Parent or MGM Seller credit agreement or security or
collateral agreements or otherwise.


 


SECTION 8.05                    Compliance
with HSR Act.  Any and all applicable
waiting periods under the HSR Act shall have expired or been terminated.


 


SECTION 8.06                    MGM
Release and Indemnity. 
Each of MGM Parent and MGM Seller shall have duly executed and delivered
the MGM Release and Indemnity.


 


ARTICLE IX


 


CLOSING


 


SECTION 9.01                    Closing.  The Closing shall take place at the offices
of Sullivan & Cromwell LLP, 375 Park Avenue, New York, New York 10152 at
10:00 a.m., local time, on the third Business Day after the later of the
expiration or early termination of the waiting period under the HSR Act or the
satisfaction or waiver of the conditions to Closing set forth in Sections 7 and
8 of this Agreement (the “Closing Date”).


 


SECTION 9.02                    Termination.  (a) 
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned:


 


(i)                                     at any
time, by the mutual written agreement of the parties; or


 


(ii)                                  by any
party (other than a party whose material breach or default of its obligations
under this Agreement has caused the Closing not to occur on or prior to
September 1, 2003 (the “Outside Date”)) if the Closing shall not
have occurred prior to the Outside Date; provided, that if all the
conditions to the parties’ obligations to close the transactions provided for
herein have been satisfied or waived on or prior to September 1, 2003
other than the conditions set forth in Sections 7.04 and 8.05, the Outside Date
shall be automatically extended until November 30, 2003; or


 


17

















 


(iii)                               by MGM
Parent or MGM Seller, upon a breach of or failure to perform in any material
respect any representation, warranty, covenant or agreement on the part of RMHI
or the Rainbow Buyers set forth in this Agreement, such that the conditions set
forth in Section 7 of this Agreement cannot be satisfied on or prior to
the Outside Date; or


 


(iv)                              by RMHI
or any Rainbow Buyer, upon a breach of or failure to perform in any material
respect any representation, warranty, covenant or agreement on the part of MGM
Parent or MGM Seller set forth in this Agreement, such that the conditions set
forth in Section 8 of this Agreement cannot be satisfied on or prior to
the Outside Date; or


 


(v)                                 by either
RMHI and the Rainbow Buyers, on the one hand, or MGM Parent and MGM Seller, on
the other hand, in the event that any Judgment restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement shall
have become final and nonappealable.


 


(b)                                 In the
event of the termination of this Agreement as provided in this
Section 9.02, this Agreement shall forthwith become void and there shall
be no liability on the part of any party hereto, except (i) that the provisions
of Article X shall survive a termination of this Agreement, and (ii)
nothing shall relieve any party from liability for any breach of this
Agreement, including any failure to deliver the documents required by
Section 6.01 or 6.02, respectively.


 


ARTICLE X


 


MISCELLANEOUS


 


SECTION 10.01              Survival
of Representations and Warranties. 
Each of the representations and warranties of RMHI, the Rainbow Buyers,
MGM Parent and MGM Seller contained in this Agreement shall survive the Closing
for a period of eighteen (18) months following the Closing Date; provided,
however, that the representations and warranties contained in
Section 3.03 shall survive the Closing indefinitely.


 


SECTION 10.02              Indemnification.


 


(a)                                  MGM
Parent and MGM Seller, on the one hand, and RMHI and the Rainbow Buyers, on the
other hand (each, an “Indemnifying Party”), shall indemnify the others
and their respective officers, members and Affiliates (each, an “Indemnified
Party”) from and against any and all losses, damages, liabilities, claims,
charges, actions, proceedings, demands, judgments, deficiencies, settlement
costs and expenses of any nature whatsoever (including, without limitation,
reasonable attorneys fees and expenses in connection with such indemnification
claim by such Indemnified Party) (collectively, “Losses”) directly or
indirectly incurred by an Indemnified Party and resulting from (i) the
inaccuracy, in any material respect, of any representation or warranty of an
Indemnifying Party or Cablevision or (ii) any breach of or failure to perform
by an Indemnifying Party or Cablevision any agreement, covenant or obligation
contained in or made pursuant to this Agreement, the Registration Rights
Agreement


 


18

















 


or the Cablevision Note
and all claims, charges, actions or proceedings incident to or arising out of
the foregoing.


 


(b)                                 Each
Indemnified Party shall give notice as promptly as reasonably practicable to
each Indemnifying Party from which it is entitled to seek indemnity under
Section 10.02 of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an Indemnifying
Party shall not relieve such Indemnifying Party from any liability that it may
have on account of this indemnity agreement or otherwise so long as such
failure shall not have materially prejudiced the position of the Indemnifying
Party.  Upon such notification, the
Indemnifying Party shall assume the defense of such action and after such
assumption the Indemnified Party shall not be entitled to reimbursement of any
expenses incurred by it in connection with such action except as described
below.  In any such action, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the applicable Indemnifying Party and the Indemnified Party shall
have mutually agreed to the contrary or (ii) the named  parties in any such action (including any
impleaded parties) include both the applicable Indemnifying Party and the
Indemnified Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them.  An Indemnifying Party shall not, without
the written consent of each Indemnified Party, settle or compromise any action,
suit or proceeding or consent to the entry of any judgment that (i) involves
any injunction or equitable relief beyond money damages or other money payments
or (ii) does not include as an unconditional term thereof the delivery by the
claimant or plaintiff to the Indemnified Person of a written release from all
liability in respect of the indemnified portion of any such action or
proceeding.  The Indemnifying Party
shall not be liable for any settlement of any proceeding effected without its
written consent (which shall not be unreasonably withheld or delayed by such
Indemnifying Party), but if settled with such consent or if there be final
judgment for the plaintiff, the Indemnifying Party shall indemnify the
applicable Indemnified Party from and against any loss, damage or liability by
reason of such settlement or judgment. 
To the extent permitted by law, indemnification payments shall be
treated as adjustments to the appropriate Purchase Price for all tax purposes.


 


(c)                                  In the
event that an Indemnifying Party shall be obligated to indemnify an Indemnified
Party pursuant to this Section 10.02, the Indemnifying Party shall upon
payment of such indemnity in full, be subrogated to all rights of the
applicable Indemnified Party with respect to the claims for which such
indemnification relates.


 


SECTION 10.03              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 parties 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 by 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.


 


SECTION 10.04              Entire
Agreement.  This Agreement sets
forth the entire understanding and agreement of the parties and supersedes any
and all prior agreements,


 


19

















 


memoranda, arrangements
and understandings relating to the subject matter hereof other than the
Releases and Indemnities, the Cablevision Note, the Bill of Sale and any other
writing signed by the parties, dated on or prior to the date of this Agreement
and which expressly refers to this Section 10.04.  No representation, warranty, promise,
inducement or statement of intention has been made by any party which is not
contained in this Agreement, the Releases and Indemnities, the Cablevision
Note, the Registration Rights Agreement, the Bill of Sale or any such writing,
and no party shall be bound by, or be liable for, any alleged representation,
promise, inducement or statement of intention not contained herein or therein
and each party expressly agrees that it has not relied upon any such
representation, promise, inducement or statement of intent.


 


SECTION 10.05              Existing
Agreements.  The 2001 Agreement and
the 2002 Agreement shall terminate in their entirety upon the Closing and none
of the parties thereto shall have any further liability thereunder for any
actions, circumstances or events occurring before or after such termination,
except that (1) Sections 2.01 through 2.05, 2.07, 8.01 through 8.09 and 8.11 of
the 2002 Agreement and the confidentiality provisions in Section 9 of the
2001 Agreement (the “Surviving Provisions”) and the Releases delivered
in connection with the 2002 Agreement shall survive in accordance with their
respective terms and (2) Cablevision and its Affiliates shall comply with the
terms of the 2001 Agreement and the 2002 Agreement (including
Section 3(b)(f) of the 2002 Agreement) in preparing all tax returns, and
in taking any other tax position, with respect to any period (or portion
thereof) during which MGM Seller held a partnership interest in AMCC or an
ownership interest in IFC LLC.  If the
Closing shall not occur, the 2001 Agreement and the 2002 Agreement shall remain
in full force and effect in accordance with their respective terms.


 


SECTION 10.06              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, except that the Rainbow Buyers may assign any of
their rights hereunder, including the right to purchase the MGM Interests, to
any Affiliate of CSC Holdings.


 


SECTION 10.07              Construction;
Counterparts.  The Article and
Section headings of this Agreement are for convenience of reference only
and do not form a part hereof and do not in any way modify, interpret or
construe the intentions of the parties. 
This Agreement may be executed in one or more counterparts, and all such
counterparts shall constitute one and the same instrument.


 


SECTION 10.08              Notices.  All notices and communications hereunder
shall be in writing and shall be deemed to have been duly given to and received
by a party when delivered in person, faxed or e-mailed (with confirmation of
transmission by the transmitting equipment) or three Business Days after such
notice is enclosed in a properly sealed envelope, certified or registered, and
deposited (postage and certification or registration prepaid) in a post office
or collection facility regularly maintained by the United States Postal
Service, or one Business Day after delivery to a nationally recognized
overnight courier service, and addressed as follows:


 


20

















 


(a)  if to Cablevision, RMHI or
any Rainbow Buyer:


 


	
  Rainbow Media Holdings, Inc.

  	
   

  
	
  1111 Stewart Avenue

  	
   

  
	
  Bethpage, New York 11714

  	
   

  
	
  Telephone:

  	
  (516) 803-4800

  
	
  Facsimile:

  	
  (516) 803-4824

  
	
  Attention:

  	
  General Counsel

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Sullivan & Cromwell LLP

  	
   

  
	
  125 Broad Street

  	
   

  
	
  New York, New York 10004

  	
   

  
	
  Telephone:

  	
  (212) 558-4000

  
	
  Facsimile:

  	
  (212) 558-3588

  
	
  Attention:

  	
  John P. Mead

  
			



 


(b)  If to MGM Parent or MGM
Seller:


 


	
  Metro-Goldwyn-Mayer Inc.

  	
   

  
	
  2500 Broadway Street

  	
   

  
	
  Santa Monica, California 90404

  	
   

  
	
  Telephone:

  	
  (310) 449-3000

  
	
  Facsimile:

  	
  (310) 586-8193

  
	
  Attention:

  	
  General Counsel

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Kirkland & Ellis

  	
   

  
	
  Citigroup Center

  	
   

  
	
  153 East 53rd Street

  	
   

  
	
  New York, New York 10022

  	
   

  
	
  Telephone:

  	
  (212) 446-4800

  
	
  Facsimile:

  	
  (212) 446-4900

  
	
  Attention:

  	
  Thomas W. Christopher

  
			



 


Any party may change its address for the
purpose of notice by giving notice in accordance with the provisions of this
Section 10.08.


 


SECTION 10.09              Expenses
of the Parties.  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.


 


21

















 


SECTION 10.10              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.


 


SECTION 10.11              Governing
Law Choice of Forum; Waiver of Jury Trial; Set-off.


 


(a)                                  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.


 


(b)                                 All
actions and proceedings arising out of or relating to this Agreement, the Bill
of Sale, the Cablevision Note, the Registration Rights Agreement or the
Releases and Indemnities shall be heard and determined exclusively in any New
York state or federal court sitting in the Borough of Manhattan of The City of
New York.  The parties hereto hereby (i)
submit to the exclusive jurisdiction of any state or federal court sitting in
the Borough of Manhattan of The City of New York for the purpose of any action
or proceeding arising out of or relating to this Agreement, the Bill of Sale,
the Cablevision Note, the Registration Rights Agreement or the Releases and
Indemnities brought by any party hereto, and (ii) irrevocably waive, and agree
not to assert by way of motion, defense, or otherwise, in any such action or
proceeding, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that its property is exempt or immune from attachment
or execution, that the action or proceeding is brought in an inconvenient
forum, that the venue of the action or proceeding is improper, or that this
Agreement, the Bill of Sale, the Cablevision Note, the Registration Rights
Agreement or the Releases and Indemnities or the transactions contemplated
hereby or thereby may not be enforced in or by any of the above-named
courts.  No party hereby waives any
right to remove or seek to remove any action brought in any state court
sitting  in the Borough of Manhattan of
The City of New York to any federal court sitting in the Borough of Manhattan
of The City of New York.


 


(c)                                  Each of
the parties hereto hereby waives to the fullest extent permitted by applicable
Law any right it may have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in connection with this
Agreement, the Bill of Sale, the Cablevision Note, the Registration Rights
Agreement or the Releases and Indemnities or the transactions contemplated
hereby or thereby.  Each of the parties
hereto (i) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce that foregoing waiver and (ii)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement, the Bill of Sale, the Cablevision Note, the Registration
Rights Agreement and the Releases and Indemnities and the transactions
contemplated hereby and thereby, as applicable, by, among other things, the
mutual waivers and certifications in this Section 10.11.


 


SECTION 10.12              Press
Releases.  No press release or
other public information relating to the transactions contemplated by this
Agreement shall be made or disclosed by any party hereto without the prior
written consent of the other parties, provided, however, that any party may
disclose such information if reasonably deemed by legal counsel for such party
to be required by Law or the rules of any stock exchange on which such party’s


 


22

















 


common stock is listed;
provided further that such party shall notify the other parties as soon as
reasonably practicable prior to the issuance of such press release.


 


SECTION 10.13              Severability.  If any provision of this Agreement is
finally determined to be illegal, void or unenforceable, such determination
shall not, of itself, nullify this Agreement, which shall continue in full force
and effect subject to the conditions and provisions hereof.


 


(SIGNATURE PAGE FOLLOWS)


 


23

















 


IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.


 


	
   

  	
  RAINBOW MEDIA HOLDINGS,
  INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Hank J. Ratner

  
	
   

  	
   

  	
  Title:  Vice Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN MOVIE CLASSICS
  III

  HOLDING CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Hank J. Ratner

  
	
   

  	
   

  	
  Title:  Vice Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN MOVIE CLASSICS
  IV

  HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Hank J. Ratner

  
	
   

  	
   

  	
  Title:  Vice Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IFC II HOLDING
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Hank J. Ratner

  
	
   

  	
   

  	
  Title:  Vice Chairman

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IFC III HOLDING
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Hank J. Ratner

  
	
   

  	
   

  	
  Title:  Vice Chairman

  
						



 

















 


	
   

  	
  CABLEVISION SYSTEMS

  CORPORATION (solely for purposes of

  Sections 2.02(b), 2.02(c), 5.01, 10.05, 10.08

  and 10.11)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Hank J. Ratner

  
	
   

  	
   

  	
  Title:  Vice Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  METRO-GOLDWYN-MAYER INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Jay Rakow

  
	
   

  	
   

  	
  Title:  General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MGM NETWORKS U.S., INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:  Jay Rakow

  
	
   

  	
   

  	
  Title:  General Counsel