Document:

exv10w2

Exhibit 10.2

TAX DISAFFILIATION AGREEMENT

BETWEEN

CABLEVISION SYSTEMS CORPORATION

AND

MADISON SQUARE GARDEN, INC.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	SECTION 1. Definition of Terms	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 2. Allocation of Taxes and Tax-Related Losses	 	 	7	 
	 
	 	 	 	 	 	 
	2.1
	 	Allocation of Taxes	 	 	8	 
	2.2
	 	Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes	 	 	8	 
	2.3
	 	Tax Payments	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 3. Preparation and Filing of Tax Returns	 	 	8	 
	 
	 	 	 	 	 	 
	3.1
	 	Combined Returns	 	 	8	 
	3.2
	 	Separate Returns	 	 	8	 
	3.3
	 	Agent	 	 	9	 
	3.4
	 	Provision of Information	 	 	9	 
	3.5
	 	Special Rules Relating to the Preparation of Tax Returns	 	 	9	 
	3.6
	 	Refunds, Credits or Offsets	 	 	10	 
	3.7
	 	Carrybacks	 	 	10	 
	3.8
	 	Amended Returns	 	 	10	 
	3.9
	 	Compensatory Equity Interests	 	 	10	 
	 
	 	 	 	 	 	 
	SECTION 4. Tax Payments	 	 	10	 
	 
	 	 	 	 	 	 
	4.1
	 	Payment of Taxes to Tax Authority	 	 	10	 
	4.2
	 	Indemnification Payments	 	 	10	 
	4.3
	 	Interest on Late Payments	 	 	11	 
	4.4
	 	Tax Consequences of Payments	 	 	11	 
	4.5
	 	Section 336(e) Election	 	 	11	 
	4.6
	 	Certain Final Determinations	 	 	11	 
	 
	 	 	 	 	 	 
	SECTION 5. Cooperation and Tax Contests	 	 	12	 
	 
	 	 	 	 	 	 
	5.1
	 	Cooperation	 	 	12	 
	5.2
	 	Notices of Tax Contests	 	 	12	 
	5.3
	 	Control of Tax Contests	 	 	12	 
	5.4
	 	Cooperation Regarding Tax Contests	 	 	12	 
	 
	 	 	 	 	 	 
	SECTION 6. Tax Records	 	 	13	 
	 
	 	 	 	 	 	 
	6.1
	 	Retention of Tax Records	 	 	13	 
	6.2
	 	Access to Tax Records	 	 	13	 
	6.3
	 	Confidentiality	 	 	13	 
	 
	 	 	 	 	 	 
	SECTION 7. Representations and Covenants	 	 	13	 
	 
	 	 	 	 	 	 
	7.1
	 	Covenants of Cablevision and MSG	 	 	13	 
	7.2
	 	Private Letter Ruling	 	 	14	 
	7.3
	 	Covenants of MSG	 	 	14	 
	7.4
	 	Covenants of Cablevision	 	 	14	 
	7.5
	 	Exceptions	 	 	15	 
	7.6
	 	Further Assurances	 	 	15	 

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	 	 	 	 	Page	 
	 
	SECTION 8. General Provisions	 	 	15	 
	 
	 	 	 	 	 	 
	8.1
	 	Predecessors or Successors	 	 	15	 
	8.2
	 	Construction	 	 	15	 
	8.3
	 	Ancillary Agreements	 	 	15	 
	8.4
	 	Counterparts	 	 	16	 
	8.5
	 	Notices	 	 	16	 
	8.6
	 	Amendments	 	 	16	 
	8.7
	 	Assignment	 	 	16	 
	8.8
	 	Successors and Assigns	 	 	16	 
	8.9
	 	Change in Law	 	 	16	 
	8.10
	 	Authorization, Etc.	 	 	16	 
	8.11
	 	Termination	 	 	16	 
	8.12
	 	Subsidiaries	 	 	16	 
	8.13
	 	Third-Party Beneficiaries	 	 	17	 
	8.14
	 	Titles and Headings	 	 	17	 
	8.15
	 	Governing Law	 	 	17	 
	8.16
	 	Waiver of Jury Trial	 	 	17	 
	8.17
	 	Severability	 	 	17	 
	8.18
	 	No Strict Construction; Interpretation	 	 	17	 

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TAX DISAFFILIATION AGREEMENT

     THIS TAX DISAFFILIATION AGREEMENT (the “Agreement”) is dated as of • ___, 2009, by and between
Cablevision Systems Corporation, a Delaware corporation (“Cablevision”), and Madison Square Garden,
Inc., a Delaware corporation and a wholly-owned subsidiary of Cablevision (“MSG” and, together with
Cablevision, the “Parties”). Unless otherwise indicated, all “Section” references in this Agreement
are to sections of the Agreement.

RECITALS

     WHEREAS, the Board of Directors of Cablevision determined that, based on the Corporate
Business Purposes, it is in the best interests of Cablevision and its stockholders to separate the
businesses of MSG, all as more fully described in MSG’s registration statement on Form 10, from
Cablevision’s other businesses on the terms and conditions set forth in the Distribution Agreement
between Cablevision and MSG dated on or about the date hereof (the “Distribution Agreement”);

     WHEREAS, the Board of Directors of CSC Holdings, LLC (“CSC”) authorized the distribution to
Cablevision, as the sole stockholder of CSC, of all the MSG Common Stock (the “CSC Distribution”)
and has determined that, based on the Corporate Business Purposes, the CSC Distribution is in the
best interests of CSC and its stockholder and has approved the Distribution Agreement;

     WHEREAS, the Board of Directors of Cablevision has authorized the distribution to the holders
of the issued and outstanding shares of NY Group Class A Common Stock, par value $0.01 per share,
of Cablevision (“Cablevision Class A Stock”) and NY Group Class B Common Stock, par value $0.01 per
share, of Cablevision (“Cablevision Class B Stock” and, together with the Cablevision Class A
Stock, the “Cablevision Common Stock”) as of the record date for the distribution of all the issued
and outstanding shares of Class A common stock, par value $0.01 per share, of MSG (the “MSG Class A
Common Shares”) and Class B common stock, par value $0.01 per share, of MSG (the “MSG Class B
Common Shares”) (each such MSG Class A Common Share and MSG Class B Common Share is individually
referred to as an “MSG Share” and collectively referred to as the “MSG Shares”), respectively, on
the basis of one MSG Share for each ___ shares of Cablevision Common Stock (the “Distribution”);

     WHEREAS, Cablevision intends the Distribution to qualify as a tax-free transaction described
under Sections 368(a)(1)(D), 355, and 361 of the Code;

     WHEREAS, the Boards of Directors of Cablevision and MSG have each determined that the
Distribution and the other transactions contemplated by the Distribution Agreement, and the
Ancillary Agreements (as defined below) are in furtherance of and consistent with the Corporate
Business Purposes and, as such, are in the best interests of their respective companies and
stockholders or sole stockholder, as applicable, and have approved the Distribution Agreement, and
each of the Ancillary Agreements;

     WHEREAS, the Parties set forth in the Distribution Agreement the principal arrangements
between them regarding the separation of the MSG Group from the Cablevision Group; and

     WHEREAS, the Parties desire to provide for and agree upon the allocation between the Parties
of liabilities for Taxes arising prior to, as a result of, and subsequent to the Distribution, and
to provide for and agree upon other matters relating to Taxes.

     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the
Parties hereby agree as follows:

     SECTION 1. Definition of Terms. For purposes of this Agreement (including the recitals
hereof), the following terms have the following meanings:

     “Affiliate” means, when used with respect to any specified Person, a Person that directly or
indirectly Controls, is Controlled by, or is under common Control with such specified Person.
Unless explicitly provided

 

 

herein to the contrary, (x) neither Cablevision nor any member of the Cablevision Group shall
be deemed to be an Affiliate of MSG or any of its Subsidiaries; and (y) neither MSG nor any member
of the MSG Group shall be deemed to be an Affiliate of Cablevision or any of its Subsidiaries.

     “Agreement” has the meaning set forth in the preamble hereof.

     “Ancillary Agreements” means the agreements encompassed by such term in the Distribution
Agreement.

     “Business Day” has the meaning set forth in the Distribution Agreement.

     “Cablevision” has the meaning set forth in the preamble hereof.

     “Cablevision Business” means such cable video business as set forth in the Ruling Request that
constitutes an active trade or business, within the meaning of Section 355(b) of the Code, of the
separate affiliated group of Cablevision, as determined in the Ruling.

     “Cablevision Class A Common Stock” has the meaning set forth in the recitals to this
Agreement.

     “Cablevision Class B Common Stock” has the meaning set forth in the recitals to this
Agreement.

     “Cablevision Common Stock” has the meaning set forth in the recitals to this Agreement.

     “Cablevision Group” means Cablevision and each Subsidiary of Cablevision (but only while such
Subsidiary is a Subsidiary of Cablevision) other than any Person that is a member of the MSG Group
(but only during the period such Person is treated as a member of the MSG Group).

     “Cablevision Indemnified Party” includes each member of the Cablevision Group, each of their
representatives and Affiliates, each of their respective directors, officers, managers and
employees, and each of their heirs, executors, trustees, administrators, successors and assigns.

     “Cablevision Tainting Act” means any breach of a representation or covenant made by
Cablevision in Section 7.1 or Section 7.4 of this Agreement, if as a result of such breach a Final
Determination is made that the Contribution and Distribution failed to be tax-free by reason of (i)
failing to qualify as a distribution described in Sections 355 and 368(a)(1)(D) of the Code, (ii)
any stock of MSG failing to qualify as “qualified property” within the meaning of Section 355(c)(2)
of the Code or, where applicable, failing to be stock permitted to be received without recognition
of gain or loss under Section 361(a) of the Code, or (iii) the application of Sections 355(d) or
355(e) of the Code to the Distribution.

     “Code” means the U.S. Internal Revenue Code of 1986, as amended.

     “Combined Return” means a consolidated, combined or unitary Tax Return that includes, by
election or otherwise, one or more members of the Cablevision Group and one or more members of the
MSG Group.

     “Companies” means Cablevision and MSG.

     “Company” means Cablevision or MSG, as the context requires.

     “Compensatory Equity Interests” means options, stock appreciation rights, restricted stock,
restricted stock units or other rights with respect to Cablevision Common Stock or MSG Stock that
are granted by Cablevision, MSG or any of their respective Subsidiaries in connection with employee
or director compensation or other employee benefits.

     “Compensatory Equity Net Share Settlements” means “net share settlement” transactions with
respect to Compensatory Equity Interests between either Party (or any of their respective
Subsidiaries) on the one hand and the employee (or director, as the case may be) of such Party or
the other Party (or any of their respective Subsidiaries)

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on the other hand, in each case pursuant to the terms of the relevant agreement with respect
to such Compensatory Equity Interests.

     “Contribution” means the contribution by Cablevision (through entities disregarded as separate
from Cablevision for U.S. federal tax purposes) to MSG of all the shares of Rainbow Garden Corp., a
Delaware corporation, and all the membership interests of Regional MSG Holdings LLC, a Delaware
limited liability company, in exchange for the MSG Stock.

     “Control” means, with respect to any Person, the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such Person, whether
through ownership of securities or partnership, membership, limited liability company, or other
ownership interests, by contract or otherwise and the terms “Controlling” and “Controlled” have
meanings correlative to the foregoing.

     “Controlling Party” means, with respect to a Tax Contest, the Person that has responsibility,
control and discretion in handling, defending, settling or contesting such Tax Contest.

     “Corporate Business Purposes” means the Corporate Business Purposes as set forth in the Tax
Opinion Representations and the “Reasons for the Distribution” in MSG’s Registration statement on
Form 10.

     “Covered Income Taxes” means any Income Taxes other than New York City Unincorporated Business
Tax as currently imposed by Section 11-503 of the New York City Administrative Code or any
successor thereto.

     “CSC” has the meaning set forth in the recitals to this Agreement.

     “CSC Distribution” has the meaning set forth in the recitals to this Agreement.

     “Deconsolidation Taxes” means any Taxes imposed on any member of the Cablevision Group or the
MSG Group as a result of or in connection with the Contribution and the Distribution (or any
portion thereof), including, but not limited to, any Taxes imposed pursuant to or as a result of
Section 311 or 1502 of the Code or the Treasury Regulations thereunder (and under any applicable
similar state, local or foreign law), but excluding any Transfer Taxes and Distribution Taxes.

     “Disclosing Party” has the meaning set forth in Section 6.3.

     “Distribution” has the meaning set forth in the recitals hereof.

     “Distribution Agreement” has the meaning set forth in the recitals hereof.

     “Distribution Date” means the date on which the Distribution occurs.

     “Distribution Taxes” means any Taxes arising from a Final Determination that the Contribution
and Distribution failed to be tax-free to Cablevision in accordance with the requirements of
Section 355 or 368(a)(1)(D) of the Code (including any Taxes resulting from the application of
Section 355(d) or (e) to the Distribution), and shall include any Taxes resulting from an election
under Section 336(e) of the Code in the circumstances set forth in Section 4.5 hereof.

     “Due Date” has the meaning set forth in Section 4.3.

     “Effective Time” shall mean 11:59 p.m., New York City time, on the Distribution Date.

     “Employee Matters Agreement” means the Employee Matters Agreement by and between Cablevision
and MSG entered into on or about the date hereof.

     “Excess Taxes” means the excess of (x) the Taxes for which Cablevision Group is liable if an
election is made pursuant to Section 336(e) of the Code under Section 4.5 of this Agreement,
over (y) the Taxes for which

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Cablevision Group is liable if such an election is not made, in each case taking into account
the allocation of Taxes that is otherwise applicable in this Agreement but without regard to
Section 4.5 hereof.

     “Expert Law Firm” means a law firm nationally recognized for its expertise in the matter for
which its opinion is sought.

     “Fifty-Percent Equity Interest” means, in respect of any corporation (within the meaning of
the Code), stock or other equity interests of such corporation possessing (i) at least fifty
percent (50%) of the total combined voting power of all classes of stock or equity interests
entitled to vote, or (ii) at least fifty percent (50%) of the total value of shares of all classes
of stock or of the total value of all equity interests.

     “Final Determination” means a determination within the meaning of Section 1313 of the Code or
any similar provision of state or local Tax Law.

     “Group” means the Cablevision Group or the MSG Group, as the context requires.

     “Income Taxes” means any Tax which is based upon, measured by, or calculated with respect to
(i) net income or profits (including, but not limited to, any capital gains, gross receipts, value
added or minimum Tax) or (ii) multiple bases (including, but not limited to, corporate franchise,
doing business or occupation Taxes) if one or more of the bases upon which such Tax may be based,
by which it may be measured, or with respect to which it may be calculated is described in clause
(i) of this sentence.

     “Indemnified Party” has the meaning set forth in Section 4.4.

     “Indemnifying Party” has the meaning set forth in Section 4.4.

     “Interest Rate” means the Rate determined below, as adjusted as of each Interest Rate
Determination Date. The “Rate” means, with respect to each period between two consecutive Interest
Rate Determination Dates, a rate determined at approximately 11:00 a.m., New York time, two
Business Days before the first Interest Rate Determination Date equal to: (x) the sum of (i) the
six-month dollar LIBOR rate as displayed on page “LR” of Bloomberg (or such other appropriate page
as may replace such page), plus (ii) 2%, or (y) if higher and if with respect to a
payment to indemnify for a Tax to which the “large corporate underpayment” provision within the
meaning of Section 6621(c) applies, such interest rate that would be applicable at such time to
such “large corporate underpayment.”

     “Interest Rate Determination Date” means the Due Date and each March 31, June 30, September 30
and December 31 thereafter.

     “IRS” means the Internal Revenue Service.

     “MSG” has the meaning set forth in the preamble hereof.

     “MSG Business” means the “Fuse national music programming network” business as set forth in
the Ruling Request that constitutes an active trade or business, within the meaning of Section
355(b) of the Code, of the separate affiliated group of MSG, as determined in the Ruling.

	 	 	“MSG Class A Common Shares” has the meaning set forth in the recitals to this
Agreement.

     “MSG Class B Common Shares” has the meaning set forth in the recitals to this Agreement.

     “MSG Group” means (x) with respect to any Tax Year (or portion thereof) ending at or before
the Effective Time, MSG and each of its Subsidiaries at the Effective Time; and (y) with respect to
any Tax Year (or portion thereof) beginning after the Effective Time, MSG and each Subsidiary of
MSG (but only while such Subsidiary is a Subsidiary of MSG).

4

 

     “MSG Indemnified Party” includes each member of the MSG Group, each of their representatives
and Affiliates, each of their respective directors, officers, managers and employees, and each of
their heirs, executors, trustees, administrators, successors and assigns.

     “MSG Shares” has the meaning set forth in the recitals to this Agreement.

     “MSG Tainting Act” means a breach of the covenant made by MSG in Section 7.1 of this Agreement
or the taking of a Restricted Action, if as a result of such breach or taking of a Restricted
Action a Final Determination is made that the Contribution and Distribution failed to be tax-free
by reason of (i) failing to qualify as a distribution described in Sections 355 and 368(a)(1)(D) of
the Code, (ii) any stock of MSG failing to qualify as “qualified property” within the meaning of
Section 355(c)(2) of the Code or, where applicable, failing to be stock permitted to be received
without recognition of gain or loss under Section 361(a) of the Code, or (iii) the application of
Sections 355(d) or 355(e) of the Code to the Distribution.

     “Non-Controlling Party” has the meaning set forth in Section 5.3(a).

     “Non-Preparer” means any Company that is not responsible for the preparation and filing of the
applicable Tax Return pursuant to Sections 3.1 or 3.2.

     “Parties” has the meaning set forth in the preamble hereof.

     “Payment Date” means (x) with respect to any U.S. federal income tax return, the date on which
any required installment of estimated taxes determined under Section 6655 of the Code is due, the
date on which (determined without regard to extensions) filing the return determined under Section
6072 of the Code is required, and the date the return is filed, and (y) with respect to any other
Tax Return, the corresponding dates determined under the applicable Tax Law.

     “Permitted Acquisition” means any acquisition (as a result of the Distribution) of MSG Shares
solely by reason of holding Cablevision Common Stock, but does not include such an acqusition if
such Cablevision Common Stock, before such acquisition, was itself acquired in a manner to which
the flush language of Section 355(e)(3)(A) of the Code applies (thus causing, for the avoidance of
doubt, Section 355(e)(3)(A)(i), (ii), (iii) or (iv) not to apply).

     “Person” means any individual, corporation, company, partnership, trust, incorporated or
unincorporated association, joint venture or other entity of any kind.

     “Post-Distribution Period” means any Tax Year or other taxable period beginning after the
Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other
taxable period that begins at the beginning of the day after the Distribution Date.

     “Pre-Distribution Period” means any Tax Year or other taxable period that ends on or before
the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other
taxable period through the end of the day on the Distribution Date.

     “Preparer” means the Company that is responsible for the preparation and filing of the
applicable Tax Return pursuant to Sections 3.1 or 3.2.

     “Receiving Party” has the meaning set forth in Section 6.3.

     “Residual Taxes” means all Taxes other than Covered Income Taxes.

     “Restricted Action” means any action by MSG or any of its Subsidiaries inconsistent with the
covenants set forth in Section 7.3; and, for the avoidance of doubt, an action shall be and remain
a Restricted Action even if MSG or any of its Subsidiaries is permitted to take such an action
pursuant to Section 7.5.

5

 

     “Restriction Period” means the period beginning on the Distribution Date and ending
twenty-four (24) months after the Distribution Date.

     “Ruling” means the private letter ruling that was issued to Cablevision in response to the
Ruling Request.

     “Ruling Request” means the request for ruling in connection with the Distribution filed by
Cablevision with the IRS, as amended or supplemented, including any appendices and exhibits
attached thereto or included therewith and including so much of the pre-submission materials
submitted by Cablevision to the IRS, as relate to the Distribution.

     “Satisfactory Guidance” means either a ruling from the IRS or an Unqualified Opinion, in
either case reasonably satisfactory to Cablevision in both form and substance.

     “Separate Return” means (a) in the case of any Tax Return required under relevant Tax Law to
be filed by any member of the Cablevision Group (including any consolidated, combined or unitary
Tax Return), any such Tax Return that does not include any member of the MSG Group, and (b) in the
case of any Tax Return required under relevant Tax Law to be filed by any member of the MSG Group
(including any consolidated, combined or unitary Tax Return), any such Tax Return that does not
include any member of the Cablevision Group.

     “Straddle Period” means any taxable period beginning on or prior to, and ending after, the
Distribution Date.

     “Subsidiary” when used with respect to any Person, means (i)(A) a corporation a majority in
voting power of whose share capital or capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by
one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such
Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a
partnership or limited liability company in which such Person or a Subsidiary of such Person is, at
the date of determination, (1) in the case of a partnership, a general partner of such partnership
with the power affirmatively to direct the policies and management of such partnership or (2) in
the case of a limited liability company, the managing member or, in the absence of a managing
member, a member with the power affirmatively to direct the policies and management of such limited
liability company, or (C) any other Person (other than a corporation) in which such Person, one or
more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or
direct the election of a majority of the members of the governing body of such Person, whether or
not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of
such a governing body, at least a majority ownership interest or (ii) any other Person of which an
aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by
such Person and/or one or more Subsidiaries of such Person.

     “Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock,
franchise, withholding, payroll, social security, workers’ compensation, employment, unemployment,
disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use,
license, lease, transfer, import, export, value added, alternative minimum, estimated or other
similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax)
imposed by any Tax Authority and any interest, penalties, additions to tax, or additional amounts
in respect of the foregoing, together with any reasonable expenses, including attorneys’ fees,
incurred in defending against any such tax.

     “Tax Adjustment” has the meaning set forth in Section 4.6.

     “Tax Authority” means, with respect to any Tax, the governmental entity or political
subdivision, agency, commission or authority thereof that imposes such Tax, and the agency,
commission or authority (if any) charged with the assessment, determination or collection of such
Tax for such entity or subdivision.

     “Tax Benefit” means a reduction in the Tax liability of a taxpayer (or of the affiliated group
of which it is a member) for any taxable period. Except as otherwise provided in this Agreement, a
Tax Benefit shall be deemed to

6

 

have been realized or received from a Tax Item in a taxable period only if and to the extent
that the Tax liability of the taxpayer (or of the affiliated group of which it is a member) for
such period, after taking into account the effect of the Tax Item on the Tax liability of such
taxpayer in the current period and all prior periods, is less than it would have been if such Tax
liability were determined without regard to such Tax Item.

     “Tax Contest” means an audit, review, examination, or any other administrative or judicial
proceeding with the purpose, potential or effect of redetermining Taxes of any member of either
Group (including any administrative or judicial review of any claim for refund).

     “Tax Counsel” means Sullivan & Cromwell LLP.

     “Tax-Free Status” means the qualification of the Contribution and Distribution (a) as a
transaction described in Sections 355(a) and 368(a)(1)(D) of the Code and (b) as a transaction in
which the stock distributed thereby are “qualified property” for purposes of Section 361(c) of the
Code.

     “Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit
or other attribute that may have the effect of increasing or decreasing any Tax.

     “Tax Law” means the law of any governmental entity or political subdivision thereof, and any
controlling judicial or administrative interpretations of such law, relating to any Tax.

     “Tax Opinion” means the opinion to be delivered by Tax Counsel to Cablevision in connection
with the Distribution to the effect that (i) Cablevision will not recognize gain or loss upon the
Distribution under Section 361(c) of the Code, and (ii) shareholders of Cablevision will not
recognize gain or loss upon the Distribution under Section 355(a) of the Code, and no amount will
be included in such shareholders’ income, except in respect of cash received in lieu of fractional
shares of MSG.

     “Tax Opinion Representations” means the representations made to Tax Counsel in connection with
the Tax Opinion.

     “Tax Records” means Tax Returns, Tax Return work papers, documentation relating to any Tax
Contests, and any other books of account or records required to be maintained under applicable Tax
Laws (including but not limited to Section 6001 of the Code) or under any record retention
agreement with any Tax Authority.

     “Tax Return” means any report of Taxes due, any claims for refund of Taxes paid, any
information return with respect to Taxes, or any other similar report, statement, declaration, or
document filed or required to be filed (by paper, electronically or otherwise) under any applicable
Tax Law, including any attachments, exhibits, or other materials submitted with any of the
foregoing, and including any amendments or supplements to any of the foregoing.

     “Tax Year” means, with respect to any Tax, the year, or shorter period, if applicable, for
which the Tax is reported as provided under applicable Tax Law.

     “Transfer Taxes” means all U.S. federal, state, local or foreign sales, use, privilege,
transfer, documentary, gains, stamp, duties, recording, and similar Taxes and fees (including any
penalties, interest or additions thereto) imposed upon any Party hereto or any of its Affiliates in
connection with the Distribution.

     “Treasury Regulations” means the regulations promulgated from time to time under the Code as
in effect for the relevant Tax Year.

     “Unqualified Opinion” means an unqualified “will” opinion of an Expert Law Firm that permits
reliance by Cablevision. For the avoidance of doubt, an Unqualified Opinion may be based on
factual representations and assumptions that are reasonably satisfactory to Cablevision.

     SECTION 2. Allocation of Taxes and Tax-Related Losses.

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     2.1 Allocation of Taxes. Except as provided in Section 2.2 (Allocation of Deconsolidation
Taxes, Distribution Taxes and Transfer Taxes), Taxes shall be allocated as follows:

     (a) Cablevision shall be liable for and shall be allocated (i) any Taxes attributable
to members of the Cablevision Group for all periods, and (ii) any Covered Income Taxes
attributable to members of the MSG Group for a Pre-Distribution Period.

     (b) MSG shall be liable for and shall be allocated (i) any Residual Taxes attributable
to members of the MSG Group for a Pre-Distribution Period, and (ii) any Taxes attributable
to members of the MSG Group for any Post-Distribution Period.

     (c) Notwithstanding the provisions of Sections 2.1(a) and 2.1(b) (but subject to the
provisions of Section 2.2), Taxes attributable to any transaction or action taken by or with
respect to any member of the MSG Group before the Effective Time on the Distribution Date
shall be allocated to the Pre-Distribution Period, and Taxes attributable to any transaction
or action taken by or with respect to any member of the MSG Group after the Effective Time
on the Distribution Date shall be allocated to the Post-Distribution Period.

     2.2 Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes.
Notwithstanding any other provision of this Agreement:

     (a) Any and all Deconsolidation Taxes shall be borne by Cablevision.

     (b) MSG shall indemnify and hold harmless each Cablevision Indemnified Party from and
against any liability of Cablevision for Distribution Taxes to the extent such Distribution
Taxes are attributable to an MSG Tainting Act, provided, however, that MSG
shall have no obligation to indemnify any Cablevision Indemnified Party hereunder if there
has occurred, prior to such MSG Tainting Act, a Cablevision Tainting Act.

     (c) Cablevision shall indemnify and hold harmless each MSG Indemnified Party from and
against any liability of MSG for Distribution Taxes to the extent that MSG is not liable for
such Taxes pursuant to Section 2.2(b).

     (d) The Companies shall cooperate with each other and use their commercially reasonable
efforts to reduce and/or eliminate any Transfer Taxes. If any Transfer Tax remains payable
after application of the first sentence of this Section 2.2(d) and notwithstanding any other
provision in this Section 2, all Transfer Taxes shall be allocated to Cablevision.

     2.3 Tax Payments. Each Company shall be liable for and shall pay the Taxes allocated to it by
this Section 2 either to the applicable Tax Authority or to the other Company in accordance with
Section 4 and the other applicable provisions of this Agreement.

     SECTION 3. Preparation and Filing of Tax Returns.

     3.1 Combined Returns. Cablevision shall be responsible for preparing and filing (or causing
to be prepared and filed) all Combined Returns for any Tax Year, provided, however,
that MSG shall have the right to review and comment with respect to items on such returns if and to
the extent such items directly relate to Taxes for which MSG would be liable under Section
2.1(b)(i), such comment not to be unreasonably rejected.

     3.2 Separate Returns.

     (a) Tax Returns to be Prepared by Cablevision. Cablevision shall be responsible for
preparing and filing (or causing to be prepared and filed):

8

 

     (i) all Separate Returns which relate to one or more members of the Cablevision
Group for any Tax Year, and

     (ii) all Separate Returns which relate to one or more members of the MSG Group
for any Pre-Distribution Period or Straddle Period if such return is in respect of
Covered Income Taxes, provided, however, that MSG shall have the
right to review and comment with respect to items on such returns if and to the
extent such items directly relate to a Tax for which MSG would be liable under
Section 2.1(b)(i), such comment not to be unreasonably rejected.

     (b) Tax Returns to be Prepared by MSG. MSG shall be responsible for preparing and
filing (or causing to be prepared and filed) all Separate Returns which relate to one or
more members of the MSG Group and for which Cablevision is not responsible under Section
3.2(a), provided, however, that in the case of such returns in respect of
any Pre-Distribution Period or Straddle Period, Cablevision shall have the right to review
and comment on such returns, such comment not to be unreasonably rejected.

     3.3 Agent. Subject to the other applicable provisions of this Agreement (including, without
limitation, Section 5), MSG irrevocably designates, and agrees to cause each MSG Affiliate so to
designate, Cablevision as its sole and exclusive agent and attorney-in-fact to take such action
(including execution of documents) as Cablevision may deem reasonably appropriate in matters
relating to the preparation or filing of any Tax Return described in Sections 3.1 and 3.2(a)(ii).

     3.4 Provision of Information.

     (a) Cablevision shall provide to MSG, and MSG shall provide to Cablevision, any
information about members of the Cablevision Group or the MSG Group, respectively, that the
Preparer reasonably requires to determine the amount of Taxes due on any Payment Date with
respect to a Tax Return for which the Preparer is responsible pursuant to Section 3.1 or 3.2
and to properly and timely file all such Tax Returns.

     (b) If a member of the MSG Group supplies information to a member of the Cablevision
Group, or a member of the Cablevision Group supplies information to a member of the MSG
Group, and an officer of the requesting member intends to sign a statement or other document
under penalties of perjury in reliance upon the accuracy of such information, then a duly
authorized officer of the member supplying such information shall certify, to the best of
such officer’s knowledge, the accuracy of the information so supplied.

     3.5 Special Rules Relating to the Preparation of Tax Returns.

     (a) In General. All Tax Returns that include any members of the MSG Group or
Cablevision Group, or any of their respective Affiliates, shall be prepared in a manner that
is consistent with the Ruling Request, the Ruling, and the Tax Opinion (including, for the
avoidance doubt, the Tax Opinion Representations). Except as otherwise set forth in this
Agreement, all Tax Returns for which Cablevision is responsible under Sections 3.1 and 3.2
shall be prepared (x) in accordance with elections, Tax accounting methods and other
practices used with respect to such Tax Returns filed prior to the Distribution Date (unless
such past practices are not permissible under applicable law), or (y) to the extent any
items are not covered by past practices (or in the event such past practices are not
permissible under applicable Tax Law), in a manner reasonably acceptable to both Parties;
provided, however, that in each case of (x) and (y) to the extent that a
change in such elections, methods or practices would not reasonably be expected to result in
any adverse impact on MSG, such Tax Returns shall be prepared in accordance with reasonable
practices selected by Cablevision.

     (b) Election to File Consolidated, Combined or Unitary Tax Returns. Cablevision shall
have the sole discretion in electing to file any Tax Return on a consolidated, combined or
unitary basis, if such Tax Return would include at least one member of each Group and the
filing of such Tax Return is elective under the relevant Tax Law.

9

 

     3.6 Refunds, Credits or Offsets.

     (a) Any refunds, credits or offsets with respect to Taxes allocated to, and actually
paid by, Cablevision pursuant to this Agreement shall be for the account of Cablevision.
Any refunds, credits or offsets with respect to Taxes, allocated to, and actually paid by,
MSG pursuant to this Agreement shall be for the account of MSG.

     (b) Cablevision shall forward to MSG, or reimburse MSG for, any such refunds, credits
or offsets, plus any interest received thereon, net of any Taxes incurred with respect to
the receipt or accrual thereof and any expenses incurred in connection therewith, that are
for the account of MSG within 15 Business Days from receipt thereof by Cablevision or any of
its Affiliates. MSG shall forward to Cablevision, or reimburse Cablevision for, any
refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred
with respect to the receipt or accrual thereof and any expenses incurred in connection
therewith, that are for the account of Cablevision within 15 Business Days from receipt
thereof by MSG or any of its Affiliates. Any refunds, credits or offsets, plus any interest
received thereon, or reimbursements not forwarded or made within the 15 Business Day period
specified above shall bear interest from the date received by the refunding or reimbursing
party (or its Affiliates) through and including the date of payment at the Interest Rate
(treating the date received as the Due Date for purposes of determining such interest). If,
subsequent to a Tax Authority’s allowance of a refund, credit or offset, such Tax Authority
reduces or eliminates such allowance, any refund, credit or offset, plus any interest
received thereon, forwarded or reimbursed under this Section 3.6 shall be returned to the
party who had forwarded or reimbursed such refund, credit or offset and interest upon the
request of such forwarding party in an amount equal to the applicable reduction, including
any interest received thereon.

     3.7 Carrybacks. To the extent permitted under applicable Tax Laws, the MSG Group shall make
the appropriate elections in respect of any Tax Returns to waive any option to carry back any net
operating loss, any credits or any similar item from a Post-Distribution Period to any
Pre-Distribution Period or to any Straddle Period. Any refund of or credit for Taxes resulting
from any such carryback by a member of the MSG Group that cannot be waived shall be payable to MSG
net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred
in connection therewith.

     3.8 Amended Returns. Any amended Tax Return or claim for Tax refund, credit or offset with
respect to any member of the MSG Group may be made only by the Company (or its Affiliates)
responsible for preparing the original Tax Return with respect to such member pursuant to Sections
3.1 or 3.2 (and, for the avoidance of doubt, subject to the same review and comment rights set
forth in Sections 3.1 or 3.2, to the extent applicable). Such Company (or its Affiliates) shall
not, without the prior written consent of the other Company (which consent shall not be
unreasonably withheld or delayed), file, or cause to be filed, any such amended Tax Return or claim
for Tax refund, credit or offset to the extent that such filing, if accepted, is likely to increase
the Taxes allocated to, or the Tax indemnity obligations under this Agreement of, such other
Company for any Tax Year (or portion thereof); provided, however, that such consent
need not be obtained if the Company filing the amended Tax Return by written notice to the other
Company agrees to indemnify the other Company for the incremental Taxes allocated to, or the
incremental Tax indemnity obligation resulting under this Agreement to, such other Company as a
result of the filing of such amended Tax Return.

     3.9 Compensatory Equity Interests. Matters relating to Taxes and/or Tax Items with respect to
Compensatory Equity Interests shall be governed by the Employee Matters Agreement.

     SECTION 4. Tax Payments.

     4.1 Payment of Taxes to Tax Authority. Cablevision shall be responsible for remitting to the
proper Tax Authority the Tax shown on any Tax Return for which it is responsible for the
preparation and filing pursuant to Section 3.1 or Section 3.2, and MSG shall be responsible for
remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible
for the preparation and filing pursuant to Section 3.2.

     4.2 Indemnification Payments.

10

 

     (a) Tax Payments Made by the Cablevision Group. If any member of the Cablevision Group
is required to make a payment to a Tax Authority for Taxes allocated to MSG under this
Agreement, MSG will pay the amount of Taxes allocated to it to Cablevision not later than
the later of (i) five Business Days after receiving notification requesting such amount, and
(ii) one Business Day prior to the date such payment is required to be made to such Tax
Authority.

     (b) Tax Payments Made by the MSG Group. If any member of the MSG Group is required to
make a payment to a Tax Authority for Taxes allocated to Cablevision under this Agreement,
Cablevision will pay the amount of Taxes allocated to it to MSG not later than the later of
(i) five Business Days after receiving notification requesting such amount, and (ii) one
Business Day prior to the date such payment is required to be made to such Tax Authority.

     4.3
Interest on Late Payments. Payments pursuant to this Agreement that are not made by the
date prescribed in this Agreement or, if no such date is prescribed, not later than five Business
Days after demand for payment is made (the “Due Date”) shall bear interest for the period from and
including the date immediately following the Due Date through and including the date of payment at
the Interest Rate. Such interest will be payable at the same time as the payment to which it
relates. Interest will be calculated on the basis of a year of 365 days and the actual number of
days for which due.

     4.4 Tax Consequences of Payments. For all Tax purposes and to the extent permitted by
applicable Tax Law, the parties hereto shall treat any payment made pursuant to this Agreement as a
capital contribution or a distribution, as the case may be, immediately prior to the Distribution.
If the receipt or accrual of any indemnity payment under this Agreement causes, directly or
indirectly, an increase in the taxable income of the recipient under one or more applicable Tax
Laws, such payment shall be increased so that, after the payment of any Taxes with respect to the
payment, the recipient thereof shall have realized the same net amount it would have realized had
the payment not resulted in taxable income. For the avoidance of doubt, any liability for Taxes
due to an increase in taxable income described in the immediately preceding sentence shall be
governed by this Section 4.4 and not by Section 2.2. To the extent that Taxes for which any Party
hereto (the “Indemnifying Party”) is required to pay another Party (the “Indemnified Party”)
pursuant to this Agreement may be deducted or credited in determining the amount of any other Taxes
required to be paid by the Indemnified Party (for example, state Taxes which are permitted to be
deducted in determining federal Taxes), the amount of any payment made to the Indemnified Party by
the Indemnifying Party shall be decreased by taking into account any resulting reduction in other
Taxes actually realized by the Indemnified Party. If such a reduction in Taxes of the Indemnified
Party occurs following the payment made to the Indemnified Party with respect to the relevant
indemnified Taxes, the Indemnified Party shall promptly repay the Indemnifying Party the amount of
such reduction when actually realized. If the Tax Benefit arising from the foregoing reduction of
Taxes described in this Section 4.4 is subsequently decreased or eliminated, then the Indemnifying
Party shall promptly pay the Indemnified Party the amount of the decrease in such Tax Benefit.

     4.5 Section 336(e) Election. In the event that Section 355(d) or 355(e) of the Code applies
to the Distribution as a result of a Final Determination, and if the proposed Treasury Regulations
under Section 336(e) of the Code and published at 73 Fed. Reg. 49965-81 (or similar Treasury
Regulations) have been adopted as final, Cablevision agrees (if so requested by MSG in a written
notice) to make an election (if Cablevision is legally able to do so) pursuant to such final
Treasury Regulations to treat the Distribution as an asset sale for U.S. federal tax purposes,
provided that MSG shall indemnify Cablevision for any cost to the Cablevision Group of
making such an election (but it being understood that any such cost arising from Taxes shall be
limited to Excess Taxes).

     4.6 Certain Final Determinations. If an adjustment (a “Tax Adjustment”) pursuant to a Final
Determination in a Tax Contest initiated by a Tax Authority results in a Tax greater than the Tax
shown on the relevant Tax Return for any Pre-Distribution Period, the Indemnified Party shall pay
to the Indemnifying Party an amount equal to any Tax Benefit as and when actually realized by such
Indemnified Party as a result of such Tax Adjustment. The Parties agree that if an Indemnified
Party is required to make a payment to an Indemnifying Party pursuant to this Section 4.6, the
Parties shall negotiate in good faith to set off the amount of such payment against any indemnity
payments owed by the Indemnifying Party to the Indemnified Party, taking into account time value
and similar concepts as appropriate.

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     SECTION 5. Cooperation and Tax Contests.

     5.1 Cooperation. In addition to the obligations enumerated in Sections 3.4 and 5.4,
Cablevision and MSG will cooperate (and cause their respective Subsidiaries and Affiliates to
cooperate) with each other and with each other’s agents, including accounting firms and legal
counsel, in connection with Tax matters, including provision of relevant documents and information
in their possession and making available to each other, as reasonably requested and available,
personnel (including officers, directors, employees and agents of the Parties or their respective
Subsidiaries or Affiliates) responsible for preparing, maintaining, and interpreting information
and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of
providing information or documents in connection with any administrative or judicial proceedings
relating to Taxes.

     5.2 Notices of Tax Contests. Each Company shall provide prompt notice to the other Company of
any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it
becomes aware relating to (i) Taxes for which it is or may be indemnified by such other Company
hereunder or (ii) Tax Items that may affect the amount or treatment of Tax Items of such other
Company. Such notice shall contain factual information (to the extent known) describing any
asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and
other documents received from any Tax Authority in respect of any such matters; provided,
however, that failure to give such notification shall not affect the indemnification
provided hereunder except, and only to the extent that, the indemnifying Company shall have been
actually prejudiced as a result of such failure. Thereafter, the indemnified Company shall deliver
to the indemnifying Company such additional information with respect to such Tax Contest in its
possession that the indemnifying Company may reasonably request.

     5.3 Control of Tax Contests.

     (a) Controlling Party. Subject to the limitations set forth in Section 5.3(b), each
Preparer (or the appropriate member of its Group) shall be the Controlling Party with
respect to any Tax Contest involving a Tax reported (or that, it is asserted, should have
been reported) on a Tax Return for which such Company is responsible for preparing and
filing (or causing to be prepared and filed) pursuant to Section 3 of this Agreement (it
being understood, for the avoidance of doubt but subject to the other provisions of this
Section 5.3(a), that Cablevision shall be the Controlling Party with respect to any Tax
Contest involving Distribution Taxes), in which case any Non-Preparer that could have
liability under this Agreement for a Tax to which such Tax Contest relates shall be treated
as the “Non-Controlling Party.” Notwithstanding the immediately preceding sentence, if a
Non-Preparer (x) acknowledges to the Preparer in writing its full liability under this
Agreement to indemnify for any Tax, and (y) provides to the Preparer evidence (that is
satisfactory to the Preparer as determined in the Preparer’s reasonable discretion) of the
Non-Preparer’s financial readiness and capacity to make such indemnity payment, then
thereafter with respect to the Tax Contest relating solely to such Tax the Non-Preparer
shall be the Controlling Party (subject to Section 5.3(b)) and the Preparer shall be treated
as the Non-Controlling Party.

     (b) Non-Controlling Party Participation Rights. With respect to a Tax Contest of any
Tax Return that could result in a Tax liability that is allocated under this Agreement, (i)
the Non-Controlling Party shall, at its own cost and expense, be entitled to participate in
such Tax Contest and to provide comments and suggestions to the Controlling Party, such
comments and suggestions not to be unreasonably rejected, (ii) the Controlling Party shall
keep the Non-Controlling Party updated and informed, and shall consult with the
Non-Controlling Party, (iii) the Controlling Party shall act in good faith with a view to
the merits in connection with the Tax Contest, and (iv) the Controlling Party shall not
settle or compromise such Tax Contest without the prior written consent of the
Non-Controlling Party (which consent shall not be unreasonably withheld).

     5.4 Cooperation Regarding Tax Contests. The Parties shall provide each other with all
information relating to a Tax Contest which is needed by the other Party or Parties to handle,
participate in, defend, settle or contest the Tax Contest. At the request of any party, the other
Parties shall take any action (e.g., executing a power of attorney) that is reasonably necessary in
order for the requesting Party to exercise its rights under this Agreement in respect of a Tax
Contest. MSG shall assist Cablevision, and Cablevision shall assist MSG, in taking any remedial
actions that are necessary or desirable to minimize the effects of any adjustment made by a Tax
Authority. The

12

 

Indemnifying Party or Parties shall reimburse the Indemnified Party or Parties for any
reasonable out-of-pocket costs and expenses incurred in complying with this Section 5.4.

     SECTION 6. Tax Records.

     6.1
Retention of Tax Records. Each of Cablevision and MSG shall preserve, and shall cause
their respective Subsidiaries to preserve, all Tax Records that are in their possession, and that
could affect the liability of any member of the other Group for Taxes, for as long as the contents
thereof may become material in the administration of any matter under applicable Tax Law, but in
any event until the later of (x) the expiration of any applicable statute of limitations, as
extended, and (y) seven years after the Distribution Date.

     6.2
Access to Tax Records. MSG shall make available, and cause its Subsidiaries to make
available, to members of the Cablevision Group for inspection and copying (x) all Tax Records in
their possession that relate to a Pre-Distribution Period, and (y) the portion of any Tax Record in
their possession that relates to a Post-Distribution Period and which is reasonably necessary for
the preparation of a Tax Return by a member of the Cablevision Group or any of their Affiliates or
with respect to any Tax Contest with respect to such return. Cablevision shall make available, and
cause its Subsidiaries to make available, to members of the MSG Group for inspection and copying
the portion of any Tax Record in their possession that relates to a Pre-Distribution Period and
which is reasonably necessary for the preparation of a Tax Return by a member of the MSG Group or
any of their Affiliates or with respect to any Tax Contest with respect to such return.

     6.3
Confidentiality. Each party hereby agrees that it will hold, and shall use its reasonable
best efforts to cause its officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence all records and information prepared and shared by and
among the Parties in carrying out the intent of this Agreement, except as may otherwise be
necessary in connection with the filing of Tax Returns or any administrative or judicial
proceedings relating to Taxes or unless disclosure is compelled by a governmental authority.
Information and documents of one Party (the “Disclosing Party”) shall not be deemed to be
confidential for purposes of this Section 6.3 to the extent that such information or document (i)
is previously known to or in the possession of the other Party or Parties (the “Receiving Party”)
and is not otherwise subject to a requirement to be kept confidential, (ii) becomes publicly
available by means other than unauthorized disclosure under this Agreement by the Receiving Party
or (iii) is received from a third party without, to the knowledge of the Receiving Party after
reasonable diligence, a duty of confidentiality owed to the Disclosing Party.

     SECTION 7. Representations and Covenants.

     7.1 Covenants of Cablevision and MSG.

     (a) Cablevision hereby covenants that, to the fullest extent permissible under United
States federal income and state Tax Laws, it will, and will cause the members of the
Cablevision Group to, treat the Contribution and Distribution in accordance with the
Tax-Free Status. MSG hereby covenants that, to the fullest extent permissible under United
States federal income and state Tax Laws, it will, and will cause each Subsidiary of MSG to,
treat the Contribution and Distribution in accordance with the Tax-Free Status.

     (b) Cablevision further covenants that, as of and following the date hereof,
Cablevision shall not and shall cause the members of the Cablevision Group not to take any
action that (or fail to take any action the omission of which) (i) would be inconsistent
with the Contribution and Distribution qualifying, or would preclude the Contribution and
Distribution from qualifying, for the Tax-Free Status, or (ii) would cause any holders of
Cablevision Common Stock that receive stock of MSG in the Distribution to recognize gain or
loss, or otherwise include any amount in income, as a result of the Contribution and/or the
Distribution for U.S. federal income tax purposes (except with respect to cash received in
lieu of fractional shares).

     (c) MSG further covenants that, as of and following the date hereof, MSG shall not and
shall cause its Subsidiaries not to take any action that (or fail to take any action the
omission of which) (i) would be inconsistent with the Contribution and Distribution
qualifying, or would preclude the Contribution and

13

 

Distribution from qualifying, for the Tax-Free Status, or (ii) would cause any holders
of Cablevision Common Stock that receive stock of MSG in the Distribution to recognize gain
or loss, or otherwise include any amount in income, as a result of the Contribution and/or
the Distribution for U.S. federal income tax purposes (except with respect to cash received
in lieu of fractional shares).

     7.2 Private Letter Ruling. Cablevision represents that it has provided MSG with a copy of the
Ruling and the Ruling Request submitted on or prior to the Distribution Date, and agrees to provide
MSG with copies of any additional documents submitted to the IRS relating to the Ruling Request and
prepared after the Distribution Date prior to the submission of such documents to the IRS in
connection with the Distribution.

     7.3 Covenants of MSG.

     (a) Without limiting the generality of the provisions of Section 7.1, MSG, on behalf of
itself and its Subsidiaries, agrees and covenants that MSG and each of its Subsidiaries will
not, directly or indirectly, during the Restriction Period, (i) take any action that would
result in MSG’s ceasing to be engaged in the active conduct of the MSG Business with the
result that MSG is not engaged in the active conduct of a trade or business within the
meaning of Section 355(b)(2) of the Code, (ii) redeem or otherwise repurchase (directly or
through an Affiliate of MSG) any of MSG’s outstanding stock, other than through stock
purchases meeting the requirements of section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1
C.B. 696 (but it being understood, for the avoidance of doubt, that no agreement or covenant
under this Section 7.3(a)(ii) is being entered with respect to Compensatory Equity Net Share
Settlements), (iii) amend the certificate of incorporation (or other organizational
documents) of MSG that would affect the relative voting rights of separate classes of MSG’s
stock or would convert one class of MSG’s stock into another class of its stock, (iv)
liquidate (within the meaning of Section 331 of the Code and the Treasury Regulations
promulgated thereunder) or partially liquidate (within the meaning of Section 346 of the
Code and the Treasury Regulations promulgated thereunder) MSG, (v) merge MSG with any other
corporation (other than in a transaction that does not affect the relative shareholding of
MSG shareholders), sell or otherwise dispose of (other than in the ordinary course of
business) the assets of MSG and its Subsidiaries, or take any other action or actions if
such merger, sale, other disposition or other action or actions in the aggregate would have
the effect that one or more Persons acquire (or have the right to acquire), directly or
indirectly, as part of a plan or series of related transactions, assets representing
one-half or more of the asset value of the MSG Group, or (vi) take any other action or
actions that in the aggregate would have the effect that one or more Persons acquire (or
have the right to acquire), directly or indirectly, as part of a plan or series of related
transactions, stock of MSG representing a Fifty-Percent Equity Interest in MSG, other than a
Permitted Acquisition.

     7.4 Covenants of Cablevision.

     (a) Without limiting the generality of the provisions of Section 7.1, Cablevision, on
behalf of itself and each member of the Cablevision Group, agrees and covenants that
Cablevision and each member of the Cablevision Group will not, directly or indirectly,
during the Restriction Period, (i) take any action that would result in Cablevision’s
ceasing to be engaged in the active conduct of the Cablevision Business with the result that
Cablevision is not engaged in the active conduct of a trade or business within the meaning
of Section 355(b)(2) of the Code, (ii) redeem or otherwise repurchase (directly or through
an Affiliate of Cablevision) any of Cablevision’s outstanding stock, other than through
stock purchases meeting the requirements of section 4.05(1)(b) of Revenue Procedure 96-30,
1996-1 C.B. 696 (but it being understood, for the avoidance of doubt, that no agreement or
covenant under this Section 7.4(a)(ii) is being entered with respect to Compensatory Equity
Net Share Settlements), (iii) amend the certificate of incorporation (or other
organizational documents) of Cablevision that would affect the relative voting rights of
separate classes of Cablevision’s stock or would convert one class of Cablevision’s stock
into another class of its stock, (iv) liquidate (within the meaning of Section 331 of the
Code and the Treasury Regulations promulgated thereunder) or partially liquidate (within the
meaning of Section 346 of the Code and the Treasury Regulations promulgated thereunder)
Cablevision, (v) merge Cablevision with any other corporation (other than in a transaction
that does not affect the relative shareholding of Cablevision shareholders), sell or
otherwise dispose of (other than in the ordinary course of business) the assets of
Cablevision and its Subsidiaries, or take any other action or actions if such merger, sale,
other disposition

14

 

or other action or actions in the aggregate would have the effect that one or more
Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or
series of related transactions, assets representing one-half or more of the asset value of
the Cablevision Group, or (vi) take any other action or actions that in the aggregate would
have the effect that one or more Persons acquire (or have the right to acquire), directly or
indirectly, as part of a plan or series of related transactions, stock of Cablevision
representing a Fifty-Percent Equity Interest in Cablevision.

     (b) Nothing in this Section 7 shall be construed to give MSG or any Affiliates of MSG
any right to remedies other than indemnification for any increase in the actual Tax
liability (and/or decrease in Tax Benefit) of MSG or any Affiliate of MSG that results from
Cablevision Group’s failure to comply with the covenants and representations in this Section
7.

     7.5
Exceptions.

     (a) Notwithstanding Section 7.3 above, MSG or any of its Subsidiaries may take a
Restricted Action if Cablevision consents in writing to such Restricted Action, or if MSG
provides Cablevision with Satisfactory Guidance concluding that such Restricted Action will
not alter the Tax-Free Status of the Contribution and Distribution in respect of Cablevision
and Cablevision’s shareholders.

     (b) MSG and each of its Subsidiaries agree that Cablevision and each Cablevision
Affiliate are to have no liability for any Tax resulting from any Restricted Actions
permitted pursuant to this Section 7.5 and, subject to Section 2.2, agree to indemnify and
hold harmless each Cablevision Indemnified Party against any such Tax. MSG shall bear all
costs incurred by it, and all reasonable costs incurred by Cablevision, in connection with
requesting and/or obtaining any Satisfactory Guidance.

     7.6 Injunctive Relief. For the avoidance of doubt, Cablevision shall have the right to seek
injunctive relief to prevent MSG or any of its Subsidiaries from taking any action that is not
consistent with the covenants of the MSG or any of its Subsidiaries under Section 7.1 or 7.3.

     7.7
Further Assurances. For the avoidance of doubt, (i) neither Cablevision nor a member of
the Cablevision Group shall take any action on the Distribution Date that would result in an
increase of the actual Tax liability (and/or decrease of any Tax Benefit) of MSG or any of its
Subsidiaries, other than in the ordinary course of business, except for actions undertaken in
connection with the Distribution, which actions are described in the Ruling Request or the Ruling,
and (ii) neither MSG nor any of its Subsidiaries shall take any action on the Distribution Date
that would result in an increase of the actual Tax liability (and/or decrease of any Tax Benefit)
of Cablevision or a member of the Cablevision Group, other than in the ordinary course of business,
except for actions undertaken in connection with the Distribution, which actions are described in
the Ruling Request or the Ruling.

     SECTION 8. General Provisions.

     8.1
Predecessors or Successors. Any reference to Cablevision, MSG, a Person, or a Subsidiary
in this Agreement shall include any predecessors or successors (e.g., by merger or other
reorganization, liquidation, conversion, or election under Treasury Regulations Section 301.7701-3)
of Cablevision, MSG, such Person, or such Subsidiary, respectively, including within the meaning of
Section 355(e)(4)(D) of the Code and the Treasury Regulations promulgated thereunder.

     8.2
Construction. This Agreement shall constitute the entire agreement (except insofar and to
the extent that it specifically and expressly references the Distribution Agreement and any other
Ancillary Agreement) between the Parties with respect to the subject matter hereof and shall
supersede all previous negotiations, commitments and writings with respect to such subject matter.

     8.3
Ancillary Agreements. This Agreement is not intended to address, and should not be
interpreted to address, the matters specifically and expressly covered by the Distribution
Agreement or any other Ancillary Agreement.

15

 

     8.4
Counterparts. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when one or more such
counterparts have been signed by each of the Parties and delivered to the other Party.

     8.5
Notices. All notices and other communications hereunder shall be in writing, shall
reference this Agreement and shall be hand delivered or mailed by registered or certified mail
(return receipt requested) to the Parties at the following addresses (or at such other addresses
for a Party as shall be specified by like notice) and will be deemed given on the date on which
such notice is received:

To Cablevision:

Cablevision Systems Corporation

1111 Stewart Avenue

Bethpage, NY 11714

Attention: General Counsel

To MSG:

Madison Square Garden, Inc.

Two Penn Plaza

New York, NY 10001

Attention: General Counsel

     8.6
Amendments. This Agreement may not be modified or amended except by an agreement in
writing signed by each of the Parties.

     8.7
Assignment. This Agreement shall not be assignable, in whole or in part, directly or
indirectly, by any Party without the prior written consent of the other Party, and any attempt to
assign any rights or obligations arising under this Agreement without such consent shall be void;
provided that either Party may assign this Agreement to a purchaser of all or substantially
all of the properties and assets of such Party so long as such purchaser expressly assumes, in a
written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual
performance or observance of every agreement and covenant of this Agreement on the part of the
assigning Party to be performed or observed.

     8.8
Successors and Assigns. The provisions to this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the Parties and their respective successors and permitted
assigns.

     8.9
Change in Law. Any reference to a provision of the Code or any other Tax Law shall
include a reference to any applicable successor provision or law.

     8.10
Authorization, Etc. Each of the Parties hereto hereby represents and warrants that it
has the power and authority to execute, deliver and perform this Agreement, that this Agreement has
been duly authorized by all necessary corporate action on the part of such Party, that this
Agreement constitutes a legal, valid and binding obligation of such Party and that the execution,
delivery and performance of this Agreement by such Party does not contravene or conflict with any
provision of law or the Party’s charter or bylaws or any agreement, instrument or order binding
such Party.

     8.11
Termination. This Agreement may be terminated at any time prior to the Distribution by
and in the sole discretion of Cablevision without the approval of MSG or the stockholders of
Cablevision. In the event of such termination, no Party shall have any liability of any kind to
any other Party or any other Person. After the Distribution, this Agreement may not be terminated
except by an agreement in writing signed by the Parties.

     8.12
Subsidiaries. Each of the Parties shall cause to be performed, and hereby guarantees the
performance of, all actions, agreements and obligations set forth herein to be performed by any
entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.

16

 

     8.13
Third-Party Beneficiaries. Except with respect to Cablevision Indemnified Parties and
MSG Indemnified Parties, and in each case, only where and as indicated herein, this Agreement is
solely for the benefit of the Parties and their respective Subsidiaries and Affiliates and should
not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of
action or other right in excess of those existing without reference to this Agreement.
Notwithstanding anything in this Agreement to the contrary, this Agreement is not intended to
confer upon any MSG Indemnified Parties any rights or remedies against MSG hereunder, and this
Agreement is not intended to confer upon any Cablevision Indemnified Parties any rights or remedies
against Cablevision hereunder.

     8.14
Titles and Headings. Titles and headings to Sections herein are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.

     8.15
Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed in the State of New
York.

     8.16
Waiver of Jury Trial. The Parties hereby irrevocably waive any and all right to trial by
jury in any legal proceeding arising out of or related to this Agreement or the transactions
contemplated hereby.

     8.17
Severability. In the event any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable provisions.

     8.18
No Strict Construction; Interpretation.

     (a) Each of Cablevision and MSG acknowledges that this Agreement has been prepared
jointly by the Parties hereto and shall not be strictly construed against any Party hereto.

     (b) The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without limitation”. The words
“hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute defined or referred to herein or
in any agreement or instrument that is referred to herein means such agreement, instrument
or statute as from time to time amended, modified or supplemented, including (in the case of
agreements or instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and instruments
incorporated therein. References to a Person are also to its permitted successors and
assigns.

17

 

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by the respective
officers as of the date set forth above.

	 	 	 	 	 
	 	CABLEVISION SYSTEMS CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	MADISON SQUARE GARDEN, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

18exv10w13

OPTION AGREEMENT

Exhibit 10.13

Dear        
       
      :

          Pursuant to the Cablevision Systems Corporation                      Employee Stock Plan, on                      (the
“Grant Date”), you were granted options to purchase      
            
    shares of Cablevision Systems
Corporation (“Cablevision”). In conjunction with the spin-off of Madison Square Garden,
Inc. (the “Company”) from Cablevision on          
            (the “Distribution Date”), and
pursuant to the Company’s 2009 Employee Stock Plan (the “Plan”), you are receiving the
award described in this Option Agreement (the “Agreement”) of nonqualified stock options
(the “Options”) to purchase        
              shares of Madison Square Garden, Inc. Class A common
stock (the “Class A Common Stock”) at a price
of $                     per share.

          Capitalized terms used but not defined in this Agreement have the meanings given to them in
the Plan. The Options are granted subject to the terms and conditions set forth below:

          1. Vesting. The Options are immediately exercisable.

          2. Exercise. You may exercise the Options by giving written notice to the Secretary of the
Company, or by following such procedures as established by the Company, specifying the number of
shares of Class A Common Stock as to which the Options are being exercised (the “Exercise
Notice”), together with a copy of this Agreement. Unless the Company chooses to settle such
exercise in cash, shares of Class A Common Stock, or a combination thereof pursuant to Paragraph 3,
you will be required to deliver to the Company, or such person as the Company may designate, within
such time period as the Company may require, payment in full of the exercise price due on account
of such exercise. You may pay the exercise price by cash, by certified check, by surrendering
shares of Class A Common Stock or by any combination thereof. Class A Common Stock used to pay the
exercise price pursuant to this Paragraph 2 will be valued at the Fair Market Value as of the day
preceding the date of exercise.

          3. Option Spread. Upon receipt of the Exercise Notice, the Company may elect, in lieu of
issuing shares of Class A Common Stock, to settle the exercise covered by such notice by paying you
an amount equal to the product obtained by multiplying (i) the excess of the Fair Market Value of
one (1) share of Class A Common Stock on the date of exercise over the per share exercise price of
the Options (the “Option Spread”) by (ii) the number of shares of Class A Common Stock
specified in the Exercise Notice. The amount payable to you in these circumstances may be paid by
the Company either in cash or in shares of Class A Common Stock having a Fair Market Value equal to
the Option Spread, or a combination thereof, as the Company shall determine. Class A Common Stock
used to pay the Option Spread pursuant to this Paragraph 3 will be valued at the Fair Market Value
as of the day the Exercise Notice is received by the Company.

          4. Expiration. The Options will terminate automatically and without further notice on the
tenth (10th) anniversary of the Grant Date, or at any of the following dates, if
earlier:

 

 

	 	(A)	 	one hundred and eighty (180) days following the date upon which
you are no longer employed by either the MSG Group or the Cablevision Group
(each as defined below), unless you cease to be an employee by reason of (x)
death, Disability (as defined below) or Retirement (as defined below) with your
Employer’s consent or (y) termination from your Employer for Cause (as defined
below); provided, that for purposes of this Section 4(A), you shall be
deemed to cease to be an employee of the MSG Group or the Cablevision Group if
you transfer between the MSG Group and the Cablevision Group at a time when the
Company and Cablevision are not considered Affiliates;
	 
	 	(B)	 	three (3) years following the date upon which you are no longer
employed by either the MSG Group or the Cablevision Group, if such cessation is
the result of death, Disability or Retirement; or
	 
	 	(C)	 	the date upon which your employment with your Employer is
terminated for Cause.

          Notwithstanding the first sentence of this Paragraph 4, in the event of your death during the
period that your Options are exercisable, whether death occurs before or after you cease
employment, the Options that are exercisable at the time of your death shall remain exercisable by
your estate or beneficiary until the earlier of the third (3rd) anniversary of your death and the
eleventh (11th) anniversary of the Grant Date.

          For purposes of this Agreement, the “Cablevision Group” means Cablevision Systems
Corporation and any of its subsidiaries and Affiliates, other than Madison Square Garden, Inc. and
its subsidiaries. The “MSG Group” means Madison Square Garden, Inc. and any of its
subsidiaries and Affiliates, other than Cablevision Systems Corporation and its subsidiaries.

          For purposes of this Agreement, “Cause” means, as determined by the compensation
committee of your Employer, your (i) commission of an act of fraud, embezzlement, misappropriation,
willful misconduct, gross negligence or breach of fiduciary duty against your Employer or any of
its Affiliates, or (ii) commission of any act or omission that results in a conviction, plea of no
contest, plea of nolo contendere, or imposition of unadjudicated probation for any crime involving
moral turpitude or any felony.

          For purposes of this Agreement, “Disability” means your inability to perform for six
(6) continuous months substantially all the essential duties of your occupation, as determined by
the compensation committee of your Employer.

          For purposes of this Agreement, if you are employed by the Cablevision Group, your
“Employer” means Cablevision Systems Corporation; if you are employed by the MSG Group,
your “Employer” means Madison Square Garden, Inc.; and if you are employed by both the
Cablevision Group and the MSG Group, your “Employer” shall mean Cablevision Systems
Corporation.

-2-

 

          For purposes of this Agreement, “Retirement” means the voluntary termination by you of
your employment with your Employer at such time as (i) you have attained at least the age of
fifty-five (55) and (ii) you have been employed by the MSG Group or the Cablevision Group for at
least five (5) years in the aggregate, provided that your Employer, may nevertheless
decide, in its sole discretion, not to treat your termination of employment as a “Retirement”
hereunder. Treatment of your termination of employment as a “Retirement” hereunder shall be
further subject to your execution (and the effectiveness) of a retirement agreement to your
Employer’s satisfaction, including, without limitation (to the extent desired by your Employer),
non-compete, non-disparagement, non-solicitation, confidentiality and further cooperation
obligations/restrictions on you as well as a general release by you of your Employer. The above
definition of “Retirement” is solely for purposes of this Agreement and shall not, in any way,
create or imply any obligations of the MSG Group or the Cablevision Group (under any other
agreement or otherwise) with respect to any such termination of your employment.

          5. Change of Control/Going Private Transaction. As set forth in Appendix 1 attached
hereto, the Options may be affected in the event of a Change of Control or a going private
transaction (each as defined in Appendix 1 attached hereto).

          6. Tax Representations and Tax Withholding. You hereby acknowledge that you have reviewed
with your own tax advisors the federal, state and local tax consequences of exercising the Options
and receiving shares of Class A Common Stock and cash. You hereby represent to the MSG Group and
the Cablevision Group that you are relying solely on such advisors and not on any statements or
representations of the Company, Cablevision or any of their respective Affiliates or agents.

          If, in connection with the exercise of the Options, your Employer is required to withhold any
amounts by reason of any federal, state or local tax, such withholding shall be effected in
accordance with Section 16 of the Plan.

          7. Section 409A. It is the intent that payments under this Agreement are exempt from Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), and that the Agreement
be administered and interpreted accordingly. To the extent necessary to give effect to this
intent, in the case of any conflict or potential inconsistency between the provisions of the Plan
and this Section 7 of the Agreement, the provisions of Section 7 of this Agreement shall govern.
Notwithstanding anything to the contrary contained in this Agreement, if and to the extent that any
payment or benefit under this Agreement is determined by your Employer to constitute “non-qualified
deferred compensation” subject to Section 409A of the Code (“Section 409A”) and is payable
to you by reason of your termination of employment, then (a) such payment or benefit shall be made
or provided to you only upon a “separation from service” as defined for purposes of Section 409A
under applicable regulations and (b) if you are a “specified employee” (within the meaning of
Section 409A and as determined by your Employer), such payment or benefit shall not be made or
provided before the date that is six months after the date of your separation from service (or your
earlier death). Any amount not paid in respect of the six month period specified in the preceding
sentence will be paid to you in a lump sum after the expiration of such six month period. Any such
payment or benefit shall be treated as a separate payment for purposes of Section 409A to the
extent Section 409A applies to such payments.

-3-

 

          8. Transfer Restrictions. You may not transfer, assign, pledge or otherwise encumber the
Options, other than to the extent provided in the Plan.

          9. Non-Qualification as ISO. The Options are not intended to qualify as “incentive stock
options” within the meaning of Section 422A of the Code.

          10. Securities Law Acknowledgments. You hereby acknowledge and confirm to the MSG Group and
the Cablevision Group that (i) you are aware that the shares of Class A Common Stock are
publicly-traded securities and (ii) the shares of Class A Common Stock issuable upon exercise of
the Options may not be sold or otherwise transferred unless such sale or transfer is registered
under the Securities Act of 1933, as amended, and the securities laws of any applicable state or
other jurisdiction, or is exempt from such registration.

          11. Governing Law. This Agreement shall be deemed to be made under, and in all respects shall
be interpreted, construed and governed by and in accordance with, the laws of the State of New
York.

          12. Jurisdiction and Venue. You hereby irrevocably submit to the jurisdiction of the courts
of the State of New York and the Federal courts of the United States of America located in the
Southern District and Eastern District of the State of New York in respect of the interpretation
and enforcement of the provisions of this Agreement, and hereby waive, and agree not to assert, as
a defense that you are not subject thereto or that the venue thereof may not be appropriate. You
hereby agree that mailing of process or other papers in connection with any such action or
proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.

          13. Right of Offset. You hereby agree that the Company shall have the right to offset against
its obligation to deliver shares of Class A Common Stock, cash or other property under this
Agreement to the extent that it does not constitute “non-qualified deferred compensation” pursuant
to Section 409A, any outstanding amounts of whatever nature that you then owe to the Company or a
subsidiary of the Company.

          14. The Committee. For purposes of this Agreement, the term “Committee” means the
Compensation Committee of the Board of Directors of the Company or any replacement committee
established under, and as more fully defined in, the Plan.

          15. Committee Discretion. The Committee has full discretion with respect to any actions to be
taken or determinations to be made in connection with this Agreement, and its determinations shall
be final, binding and conclusive.

          16. Amendment. The Committee reserves the right at any time to amend the terms and conditions
set forth in this Agreement, except that the Committee shall not make any amendment or revision in
a manner unfavorable to you (other than if immaterial), without your consent. No consent shall be
required for amendments made pursuant to Section 12 of the Plan, except that, for purposes of
Section 19 of the Plan, Section 5 and Appendix 1 of this Agreement are deemed to be “terms of an
Award Agreement expressly referring to an Adjustment Event.” Any amendment of this Agreement shall
be in writing and signed by an authorized member of the Committee or a person or persons designated
by the Committee.

-4-

 

          17. Options Subject to the Plan. The Options granted by this Agreement are subject to the
Plan.

          18. Entire Agreement. Except for any employment agreement between you and the MSG Group or
the Cablevision Group in effect as of the Distribution Date (as such employment agreement may be
modified, renewed or replaced, provided that such modification, renewal or replacement shall not
extend the time any Options may be exercised or accelerate the vesting of any Options beyond the
time provided herein or in such original employment agreement), this Agreement and the Plan
constitute the entire understanding and agreement of you and the Company with respect to the
Options covered hereby and supersede all prior understandings and agreements. Except as provided
in this Agreement, in the event of a conflict among the documents with respect to the terms and
conditions of the Options covered hereby, the documents will be accorded the following order of
authority: the terms and conditions of the Plan will have highest authority followed by the terms
and conditions of your employment agreement, if any, followed by the terms and conditions of this
Agreement.

          19. Successors and Assigns. The terms and conditions of this Agreement shall be binding upon,
and shall inure to the benefit of, the Company and its successors and assigns.

          20. Waiver. No waiver by the Company at any time of any breach by you of, or compliance with,
any term or condition of this Agreement or the Plan to be performed by you shall be deemed a waiver
of the same, any similar or any dissimilar term or condition at the same or at any prior or
subsequent time.

          21. Severability. The terms or conditions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any term or condition hereof shall not affect the validity or
enforceability of the other terms and conditions set forth herein.

          22. Exclusion from Compensation Calculation. By acceptance of this Agreement, you shall be
considered in agreement that all shares of Class A Common Stock and cash received upon each
exercise of the Options shall be considered special incentive compensation and will be exempt from
inclusion as “wages” or “salary” in pension, retirement, life insurance and other employee benefits
arrangements of your Employer, except as determined otherwise by your Employer. In addition, each
of your beneficiaries shall be deemed to be in agreement that all such shares of Class A Common
Stock and cash be exempt from inclusion in “wages” or “salary” for purposes of calculating benefits
of any life insurance coverage sponsored by your Employer.

          23. No Right to Continued Employment. Nothing contained in this Agreement or the Plan shall
be construed to confer on you any right to continue in the employ of the MSG Group or the
Cablevision Group, as applicable, or derogate from the right of the MSG Group or the Cablevision
Group, as applicable, to retire, request the resignation of, or discharge you, at any time, with or
without cause.

          24. Headings. The headings in this Agreement are for purposes of convenience only and are not
intended to define or limit the construction of the terms and conditions of this Agreement.

-5-

 

          25. Effective Date. Upon execution by you, this Agreement shall be effective from and as of
the Distribution Date.

          26. Signatures. Execution of this Agreement by the Company may be in the form of an
electronic or similar signature and such signature shall be treated as an original signature for
all purposes.

	 	 	 	 	 
	 	MADISON SQUARE GARDEN, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

          By your signature, you (i) acknowledge that a complete copy of the Plan and an executed
original of this Agreement have been made available to you and (ii) agree to all of the terms and
conditions set forth in the Plan and this Agreement.

      
          
            
                
             
            
           

Optionee:             
              
                
                  

-6-

 

APPENDIX 1

TO

STOCK OPTION AWARD AGREEMENT

     1. In the event of a “Change of Control” or a “going private transaction” with
respect to the Company, as defined below, your entitlement to exercise the Options shall be as
follows:

          a. If the Company or the “Surviving Entity,” as defined below, has shares of common
stock (or partnership units) traded on a national stock exchange or on the over-the-counter market
as reported on NASDAQ, the Committee shall, to the extent that the Options have not been exercised
and have not expired (the “Outstanding Options”), no later than the effective date of the
transaction which results in a Change of Control or going private transaction with respect to the
Company either (A) convert your rights in the Outstanding Options into a right to receive an amount
of cash equal to (i) the number of common shares subject or relating to the Outstanding Options
multiplied by (ii) the excess of (x) the “offer price per share,” the “acquisition
price per share” or the “merger price per share,” each as defined below, whichever of
such amounts is applicable, over (y) the exercise price of the shares subject or relating to the
Outstanding Options, or (B) arrange to have the Surviving Entity grant to you in substitution for
your Outstanding Options an award of options for shares of common stock (or partnership units) of
the Surviving Entity on the same terms with a value equivalent to the Outstanding Options and which
will, in the good faith determination of the Committee, provide you with an equivalent profit
potential.

          b. If the Company or the Surviving Entity does not have shares of common stock (or partnership
units) traded on a national stock exchange or on the over-the-counter market as reported on NASDAQ,
the Committee shall convert your rights in the Outstanding Options into a right to receive an
amount of cash equal to the amount calculated as per Section 1(A) above.

          c. The cash award provided in Section 1(a) or 1(b) shall become payable to you, and the
substitute options of the Surviving Entity provided in Section 1(a) will become exercisable (1)
with respect to the Outstanding Options that were not exercisable on the effective date of the
Change of Control or going private transaction with respect to the Company, as the case may be, at
the earlier of (a) the date on which the Outstanding Options would otherwise have become
exercisable hereunder had they continued in effect, or (b) if immediately prior to termination you
were a MSG Employee, the date on which (i) your employment with the MSG Group or the Surviving
Entity is terminated by the MSG Group or the Surviving Entity other than for Cause, if such
termination occurs within three (3) years of the Change of Control or going private transaction
with respect to the Company, (ii) your employment with the MSG Group or the Surviving Entity is
terminated by you for “good reason,” as defined below, if such termination occurs within three (3)
years of the Change of Control or going private transaction with respect to the Company or (iii)
your employment with the MSG Group or one of its subsidiaries or the Surviving Entity is terminated
by you for any reason at least six (6) months, but not more than

-7-

 

nine (9) months after the effective date of the Change of Control or going private transaction
with respect to the Company; provided that clause (iii) herein shall not apply in the event
that your rights in the Outstanding Options are converted into a right to receive an amount of cash
in accordance with Section 1(a), or (2) with respect to the Outstanding Options that were
exercisable on the effective date of the Change of Control or going private transaction with
respect to the Company, as the case may be, the substitute options shall become exercisable
immediately and the cash awards shall become payable promptly. The amount payable in cash shall be
payable together with interest from the effective date of the Change of Control or going private
transaction with respect to the Company until the date of payment at (a) the weighted average cost
of capital of the Company immediately prior to the effectiveness of the Change of Control or going
private transaction with respect to the Company, or (b) if the Company (or the Surviving Entity)
sets aside the funds in a trust or other funding arrangement, the actual earnings of such trust or
other funding arrangement.

     2. As used herein,

     “Acquisition price per share” shall mean the greater of (i) the highest price per
share stated on the Schedule 13D or any amendment thereto filed by the holder of twenty percent
(20%) or more of the Company’s voting power which gives rise to the Change of Control or going
private transaction with respect to the Company, and (ii) the highest fair market value per share
of common stock during the ninety-day period ending on the date of such Change of Control or going
private transaction with respect to the Company.

     “Change of Control” means the acquisition, in a transaction or a series of related
transactions, by any person or group, other than Charles F. Dolan or members of the immediate
family of Charles F. Dolan or trusts for the benefit of Charles F. Dolan or his immediate family
(or an entity or entities controlled by any of them) or any employee benefit plan sponsored or
maintained by the Company, of the power to direct the management of the Company or substantially
all its assets (as constituted immediately prior to such transaction or transactions).

     “Going private transaction” means a transaction involving the purchase of Company
securities described in Rule 13e-3 to the Securities and Exchange Act of 1934.

     “Good reason” means

     (i) without your express written consent any reduction in your base salary or bonus potential,
or any material impairment or material adverse change in your working conditions (as the same may
from time to time have been improved or, with your written consent, otherwise altered, in each
case, after the Distribution Date) at any time after or within ninety (90) days prior to the Change
of Control, including, without limitation, any material reduction of your other compensation,
executive perquisites or other employee benefits (measured, where applicable, by level or
participation or percentage of award under any plans of the Company), or material impairment or
material adverse change of your level of responsibility, authority, autonomy or title, or to your
scope of duties;

-8-

 

     (ii) any failure by your Employer to comply with any of the provisions of this Agreement,
other than an insubstantial or inadvertent failure remedied by your Employer promptly after receipt
of notice thereof given by you;

     (iii) your Employer’s requiring you to be based at any office or location more than
thirty-five (35) miles from your location immediately prior to such event except for travel
reasonably required in the performance of your responsibilities; or

     (iv) any failure by the Company to obtain the assumption and agreement to perform this
Agreement by a successor as contemplated by Section 1.

     “Merger price per share” shall mean, in the case of a merger, consolidation, sale,
exchange or other disposition of assets that results in a Change of Control or going private
transaction with respect to the Company (a “Merger”), the greater of (i) the fixed or
formula price for the acquisition of shares of common stock occurring pursuant to the Merger, and
(ii) the highest fair market value per share of common stock during the ninety-day period ending on
the date of such Change of Control or going private transaction with respect to the Company. Any
securities or property which are part or all of the consideration paid for shares of common stock
pursuant to the Merger shall be valued in determining the merger price per share at the higher of
(A) the valuation placed on such securities or property by the Company, person or other entity
which is a party with the Company to the Merger, or (B) the valuation placed on such securities or
property by the Committee.

     “MSG Employee” means any individual who is employed by the MSG Group.

     “Offer price per share” shall mean, in the case of a tender offer or exchange offer
which results in a Change of Control or going private transaction with respect to the Company (an
“Offer”), the greater of (i) the highest price per share of common stock paid pursuant to
the Offer, or (ii) the highest fair market value per share of common stock during the ninety-day
period ending on the date of a Change of Control or going private transaction with respect to the
Company. Any securities or property which are part or all of the consideration paid for shares of
common stock in the Offer shall be valued in determining the Offer Price per share at the higher of
(A) the valuation placed on such securities or property by the Company, person or other entity
making such offer or (B) the valuation placed on such securities or property by the Committee.

     “Surviving Entity” means the entity that owns, directly or indirectly, after
consummation of any transaction, substantially all of the Company’s assets (as constituted
immediately prior to such transaction). If any such entity is at least majority-owned, directly or
indirectly, by any entity (a “parent entity”) which has shares of common stock (or partnership
units) traded on a national stock exchange or the over-the-counter market, as reported on NASDAQ,
then such parent entity shall be deemed to be the Surviving Entity provided that it there shall be
more than one such parent entity, the parent entity closest to ownership of the Company’s assets
shall be deemed to be the Surviving Entity.

-9-

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