Document:

Exhibit 10.1 

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

          This Employment Agreement (the “Agreement”) is entered into on
January 8, 2010 (the “Execution
Date”) and is effective as of January 1, 2010 (the “Effective Date”),
by and between NovaDel Pharma, Inc. (the “Company”), and Steven B. Ratoff
(the “Executive”).
The Company and the Executive are hereinafter collectively referred to as the “Parties,”
and individually referred to as a “Party”. 

RECITALS

          A.          The Board of Directors of the Company (the
“Board”) desires to retain the Executive’s experience, skills, abilities,
background and knowledge and is willing to engage the Executive as President
and Chief Executive Officer on the terms and conditions set forth in this Agreement.

          B.          The Executive desires to be in the employ of
the Company as President and Chief Executive Officer and is willing to accept
such employment on the terms and conditions set forth in this Agreement. 

AGREEMENT

          In
consideration of the foregoing Recitals and the mutual promises and covenants
herein contained, and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows: 

          1.          EMPLOYMENT. 

                       1.1          Title. The Executive shall serve as the Company’s
President and Chief Executive Officer and shall report solely and directly to
the Board, and shall serve in such other capacities as the Board may from time
to time prescribe. The Executive shall also continue to serve as the Company’s
Chairman of the Board of Directors, Interim Chief Financial Officer and
Secretary, until such time as the Company’s Board determines that it is in the
best interest of the Company and its shareholders to select alternative
individual(s) for one or more of those positions. The Executive shall recuse
himself from participating in, and shall be prohibited from voting on any
matter which directly or indirectly impacts his position(s). 

                       1.2          Duties. The
Executive shall perform all services and actions necessary and/or advisable to
conduct the business of the Company and which are normally associated with the
position(s) the Executive holds in a corporation of the size and nature of the
Company. The Executive shall also perform such duties and assume such
responsibilities as the Board may assign from time to time. 

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                       1.3          Location. The Executive shall perform the services
required pursuant to this Agreement by telecommuting from his residence in
Arizona and to travel temporarily to any other locations as is necessary to
conduct the Company’s scheduled business, including attendance at all Board
meetings. 

          2.          LOYAL AND CONSCIENTIOUS PERFORMANCE. 

                       2.1          Loyalty. Except as otherwise specifically permitted
by the Board, during the
Executive’s employment with the Company, the Executive shall devote the
Executive’s full business energies, interest, abilities and productive time to
the proper and efficient performance of the Executive’s duties under this
Agreement. The Executive may devote a reasonable amount of time and energies
for duties as a member of other Board’s of Directors, as a Venture Partner for
Proquest Investments, as well as to conduct his own personal investment and
civic and charitable duties, as long as such functions will not in any manner
conflict with nor diminish the Executive’s ability to perform the duties set
forth in this Agreement and expected to be performed as the Company’s President
and Chief Executive Officer. In the event that the Board at any time identifies
one or more activities which they believe are in potential conflict with his
duties and responsibilities on behalf of the Company, the Executive shall
immediately make orderly arrangements to stop, resign, and/or refrain from such
activity(s); however, in no circumstance should such activity extend beyond
thirty (30) days from the time that written notice was given to the Executive
without the express approval of the Board. 

          3.          COMPENSATION OF THE EXECUTIVE. 

                       3.1          Base
Salary. Effective
January 1, 2010, the Company shall pay the Executive a base salary of Three
Hundred Fifty Thousand Dollars ($350,000) per year, payable in regular periodic
payments in accordance with Company policy. Such base salary shall be prorated
for any partial year of employment on the basis of a 365-day fiscal year. 

                       3.2          Annual
Incentive Bonus. In
addition to the Executive’s base salary, the Executive will be eligible to
participate in an annual performance incentive plan (“APIP”). The APIP
award that the Executive may earn shall consist of a target award equal to
fifty percent (50%) of the Executive’s annual base salary, with a maximum equal
to one hundred fifty percent (150%)of
the target award. The amount of the award will be based upon the Company’s
performance achieved during the Company’s fiscal year, as measured against
agreed-upon performance measures and targets established by the Board; the
level of achievement shall be determined by the Board in its sole and absolute
discretion. 

                       3.3          Changes
to Compensation. The
Executive’s compensation shall be reviewed from time to time by the Board or
the Compensation Committee thereof as it deems appropriate and may be increased
at any time by the Board or the Compensation Committee thereof; however, the
Executive’s base salary may be reduced and then only prospectively upon mutual
written agreement between the Executive and the Board or the Compensation
Committee thereof. 

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                       3.4          Employment
Taxes. All of the
Executive’s compensation (in any form) shall be subject to all required
withholding taxes, employment taxes and other deductions required by law. 

                       3.5          Benefits. The Executive shall, in accordance with
Company policy and the terms of the applicable plan documents, be eligible to
participate in benefits under any benefit plan or arrangement which may be in
effect from time to time and made available to the Company’s employees. In
addition, the Executive shall be eligible for paid vacation and holidays in
accordance with Company policy as in effect from time to time. 

                       3.6          Equity
Compensation. The
Compensation Committee of the Board will periodically evaluate the equity
position of Executive and determine changes, if any, at its annual meeting
addressing executive compensation in general. The Executive shall be eligible
to receive equity grants from time to time, in accordance with existing and any
new equity plans that have been put forward and approved by a majority of
shareholders. 

          4.          TERMINATION. 

                        4.1         Termination
by the Company. The
Executive’s employment with the Company may be terminated under the following
conditions: 

                                        4.1.1        Termination
for Death. The
Executive’s employment with the Company shall terminate effective upon the date
of the Executive’s death. 

                                      4.1.2          Termination
for Total Disability.
If, in the judgment of the Board, the Executive fails (with or without
reasonable accommodation) to render the services contemplated under this
Agreement because of illness or other incapacity for a period of six (6)
consecutive months, or for shorter periods aggregating to nine (9) months or
more in any consecutive twelve (12) month period, the Board may determine that
the Executive is totally disabled and discharge the Executive. The Board shall
base its determination upon medical advice provided by a licensed physician
acceptable to the Board. Based upon such medical advice or opinion, the
determination of the Board shall be final and binding and the date of such
determination shall be the date of such Total Disability for purposes of this
Agreement. 

                                      4.1.3         Termination
For Cause. The Board
may terminate the Executive’s employment under this Agreement “For Cause” at
any time after a reasonable and good-faith investigation by the Company. A
notice of termination given pursuant to this Section 4.1.3 shall effect
termination on the date upon which the notice is given. “For Cause” shall mean the occurrence of one or more of the following events:

                       
                               (i)          Any act or omission which the Company
reasonably deems to constitute gross negligence or misconduct in a material way
(whether financial or otherwise), unfavorable to the best interests of the
Company in the performance of the Executive’s obligations, duties and
responsibilities hereunder; 

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                               (ii)          Executive’s conviction of, or plea of guilty
or no contest to, any felony or any crime involving fraud, dishonesty or moral
turpitude under the laws of the United States or any state thereof; 

                       
                               (iii)         Executive’s commission of (or attempted
commission of), or participation in a fraud or act of dishonesty against the
Company; 

                       
                               (iv)         Executive’s material violation of any
statutory duty owed to the Company or material violation of any policy or rule
of the Company, including, (a) the determination by the Company after a
reasonable and good-faith investigation by the Company following a written
allegation by another employee of the Company, that the Executive engaged in
some form of harassment prohibited by law (including, without limitation, age,
sex or race discrimination), or (b) any misappropriation or embezzlement of the
property of the Company or its affiliates (whether or not a misdemeanor or
felony); 

                       
                               (v)          Executive’s material violation of any federal
or state statutory requirements, including but not limited to disclosures and
filings for the Securities and Exchange Commission (SEC), Sarbanes-Oxley Act,
and similar or successor regulatory requirements. 

                       
                               (vi)         Executive’s unauthorized use or disclosure of
the Company’s confidential information or trade secrets, or any other violation
of Section 5 of this Agreement; 

                       
                               (vii)         Executive’s gross misconduct; or conduct that
constitutes willful failure, disregard or refusal, or habitual neglect, of
duties that is not cured within thirty (30) days following receipt by the
Executive of written notification by the Board or a committee designated by the
Board of such conduct. 

                       
                               The determination that a termination is For
Cause shall be made by the Board in good faith. Any determination that the
Executive’s employment was terminated by reason of dismissal without Cause for
the purposes of this Agreement shall have no effect upon any determination of
the rights or obligations of the Company or the Executive for any other
purpose.

                       
               4.1.4        Termination
by the Company for Any Reason Other Than For Cause. The Executive’s employment by the Company
shall be “at will.” The Board may terminate the Executive’s employment under
this Agreement at any time, for any or no reason and with or without cause or
advance notice. This is the full and complete agreement between the Executive
and the Company on this term. Although the Executive’s duties, title,
compensation and benefits may change, the “at will” nature of the Executive’s
employment relationship with the Company may only be modified in an express
written agreement signed by the Executive and the Board. 

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                       4.2          Termination
by Mutual Agreement of the Parties. The Executive’s employment pursuant to this Agreement may be
terminated at any time upon the mutual written agreement of the Parties. 

                       4.3          Termination
by the Executive. The
Executive’s employment by the Company shall be “at will.” The Executive shall
have the right to resign or terminate his employment at any time, with or
without cause, notice or Good Reason; however, the Executive is obligated to
provide the Company at least ninety (90) days of notice in writing. The Board,
at its sole discretion, may terminate the Executive at any time prior to the
identified date of termination, and compensate the Executive for any portion of
the remaining ninety (90) days. 

                       4.4          Termination
by the Company in the Event of Bankruptcy. In the event of the Company’s bankruptcy,
including filing for protection under federal bankruptcy regulations, the
Company may terminate this Agreement at any time upon 30 days’ written notice
to the Executive, or immediately following a ruling to that effect by the
bankruptcy court. The Executive will continue to perform his duties and may be
paid his regular base salary up to the date of termination but shall not be
eligible to receive severance or other payments, other than those contractually
required, such as earned base salary and earned but unused and unpaid vacation.
The Company, nor its shareholders, shall be liable for any compensation or
severance subsequent to the date of termination. 

                       4.5          Compensation
upon Termination. 

                                      4.5.1          Termination
by the Company. The
Executive’s employment with the Company may be terminated for the reasons
indicated in Section 4.1. For the purposes of clarity, the payments to which
the Executive would be entitled to receive at termination are summarized in Exhibit C to this Agreement. 

                                      4.5.2          Termination
for Death or Total Disability. .Upon the Executive’s termination due to Death or Total Disability,
the Executive’s base salary shall be paid up to the date of termination. Any
payments that the Executive would be entitled to receive under the APIP would
be paid on a prorated basis up until the date of termination; such payment will
be made to the Executive or his estate (in the event of his death) at the
conclusion of the Plan Year for which payments have been earned, and the award
shall be prorated for the performance period up until the date of termination;
the calculation and timing of such APIP payment shall be consistent with the
process for other APIP participants. Any previously awarded and unvested equity
grants shall immediately vest upon the date of termination, and the Executive (or
his estate in the event of his death), shall have twelve (12) months following
the date of termination in which to exercise any unexercised stock options, so
long as the period in which to exercise the options is not in conflict with the
normal expiration dates of such options, in which case the period in which to
exercise the options will expire on that date. In addition, the Executive and
his covered beneficiaries as of the date of termination shall continue to be
covered by the Company’s health benefits for twelve (12) months following the
date of termination. If the Company is unable to provide such coverage based on
restrictions in its health insurance 

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policy, the Company shall pay the COBRA premiums for the period of
severance for a period not to exceed twelve (12) months. The Executive shall
also be entitled to receive any accrued and unused vacation benefits earned
through the date of termination at the Executive’s base salary rate in effect
at the time of termination. All payments shall be made less standard deductions
and withholdings. 

                              4.5.3     Termination
For Cause. Not withstanding any conflicting federal or
New Jersey labor laws to the contrary, upon termination For Cause, the
Executive shall be paid his prorated base salary up to the date of termination.
The Executive shall not be entitled to receive any APIP payments, even if the
performance measures were met and he would otherwise have been entitled to such
award. The Executive will be required to forfeit all unvested and vested but
unexercised options as of the date of termination, and his right to exercise
any unexercised options shall cease as of the date of termination. All benefits
that the Executive had participated in would terminate as of the date of
termination. The Executive shall be entitled to receive any accrued and unused
vacation benefits earned through the date of termination at his base salary rate
in effect at the time of termination. All payments shall be made less standard
deductions and withholdings. 

                              4.5.4     Termination
by the Company for Any Reason Other Than For Cause. In
the event the Executive is terminated by the Company for any reason other than
For Cause, the Executive shall be paid the greater of twelve (12) months base
salary at the time of the date of termination or the intrinsic value of any
unvested and vested but unexercised stock grants as of the date of termination.
In the event that the value of the equity grants is less than twelve (12)
months of base salary, the Executive shall receive payment equal to twelve (12)
months of base salary and all unvested and vested but unexercised equity grants
shall immediately be forfeited. The Executive shall be entitled to receive any
APIP payments to which he would have been entitled if the performance measures
were met; however, such payment will not be made until the end of the full
performance period, and the award shall be prorated for the performance period
up until the date of termination. In addition, the Executive and his covered
beneficiaries as of the date of termination shall continue to be covered by the
Company’s health benefits for twelve (12) months following the date of
termination. If the Company is unable to provide such coverage based on
restrictions inherent in its health insurance policy, the Company shall pay the
COBRA premiums for the period of severance for a period not to exceed twelve (12)
months. The Executive shall also be entitled to receive any accrued and unused
vacation benefits earned through the date of termination at the rate in effect
at the time of termination. All payments shall be made less standard deductions
and withholdings. 

                              4.5.5     Termination
by Mutual Agreement of the Parties. Upon termination
by Mutual Agreement, the same compensation shall be paid as in 4.5.2. 

                              4.5.6     Termination
by the Executive. In the event that the termination of
employment is voluntary by the Executive, the base salary shall be paid though
the date of termination and any unpaid APIP payments will be forfeited upon the
date of termination. The Executive shall be required to forfeit all unvested
and vested but unexercised options as of the 

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date of termination. The Executive will no longer be eligible to
participate in Company-sponsored benefits, other than his ability to apply for
and participate in health benefits provided through COBRA. The Executive shall
also be entitled to receive any accrued and unused vacation benefits earned
through the date of termination at the rate in effect at the time of
termination. All payments shall be made less standard deductions and
withholdings. 

                              4.5.7     Termination
by the Executive for Good Cause. The Company shall
continue to pay the Executive’s base salary during the period following the
termination or resignation of the Executive for a period equal to twelve (12)
months (the “Compensation
Severance Period”). Such severance payments shall be subject to
standard deductions and withholdings and paid in accordance with the Company’s
regular payroll policies and practices. For purposes of calculating the amount
to be paid pursuant this Section 4.5.7, the Company shall use the Executive’s
base salary in effect on the date of such termination or resignation, but
determined prior to any reduction in base salary that would permit the
Executive to voluntarily resign for Good Reason. 

                                        (i)     Each
month during the Compensation Severance Period, the Company shall pay the
Executive an amount equal to one-twelfth (1/12th) of the greater of
(a) the average of the annual bonuses paid to the Executive by the Company
prior to the date of termination or resignation, (b) the last annual bonus paid
to the Executive by the Company prior to the date of termination or
resignation, or (c) if the termination occurs within the first twelve 12 months
following the Effective Date of this Agreement, then the Target Bonus Amount.
Such payment shall be subject to standard deductions and withholdings and paid
in equal monthly installments over the Compensation Severance Period in
accordance with the Company’s regular payroll policies and practices. 

                                        (ii)     The
Executive and his covered beneficiaries, as of the date of termination, shall
continue to be covered by the Company’s health benefits for twelve (12) months
following the date of termination. The Executive shall not continue to accrue
any other benefits to which he would have been eligible prior to the date of
termination, including but not limited to life insurance, vacation, etc. 

                                        (iii)     Any
previously awarded equity grant(s) shall immediately vest upon the “Effective
Date”. Executive or his estate in the event of his death, shall have twelve
(12) months following the Effective Date in which to exercise any unexercised
stock options, so long as the period in which to exercise the options is not in
conflict with the normal expiration dates of such options, in which case the
period in which to exercise the options will expire on that date.
Notwithstanding anything to the contrary, nothing in this Section 4.5.5(iii)
prohibits the Company or a successor organization (or its parent) from causing
such equity grants to terminate in connection with a merger, consolidation or
other corporate transaction pursuant to the terms of the applicable equity plan
or award agreements, in which case the Executive or his estate will receive the
net value after payment of any option price and related commissions that may be
required, as if the Executive had exercised and subsequently sold all unexercised
grants. 

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                                        (iv)     Assuming
the Executive timely and accurately elects to continue his health insurance
benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”), the Company shall pay the COBRA premiums for the Executive and his
or her qualified beneficiaries until the earliest of (a) the end of the
Compensation Severance Period not to exceed twelve (12) months, (b) the
expiration of the Executive’s continuation coverage under COBRA and any
applicable state COBRA-like statute that provides mandated continuation
coverage, or (c) the date the Executive becomes eligible for health insurance
benefits of a subsequent employer. Executive agrees to immediately notify the
Company in writing of any such eligibility. For purposes of this Section 4.5.7,
references to COBRA premiums shall not include any amounts payable by the
Executive under an Internal Revenue Code Section 125 health care reimbursement
plan. 

                                        “Good
Reason” means, with respect to the Executive, the
occurrence of one or more of the following, without the Executive’s express
written consent, provided that Executive has first provided written notice to
any member of the Board (or the surviving corporation, as applicable) within 90
days of the first such occurrence of such condition specifying the event(s)
constituting Good Reason and specifying that Executive intends to terminate
employment not earlier than 30 days after providing such notice, and the
Company (or surviving corporation) has not cured such event(s) within 30 days
(or such longer period as may be specified by Executive in such notice) after
such written notice is received by such member of the Board (or by the
surviving corporation) (the “Cure Period”), and Executive resigns within thirty
(30) days following the end of the Cure Period: 

                                        (i)      a material breach of the
employment agreement by the Company; or 

                                        (ii)     a
material reduction in the Executive’s duties, authority or responsibilities
relative to the duties, or authority or responsibilities in effect immediately
prior to such reduction. 

                              4.5.8   Termination
by the Executive for Change in Control. Upon
termination due to a Change in Control, the same compensation shall be paid as
in 4.5.2. 

                                        “Change
in Control” shall mean a transaction (excluding in
each case transactions in which securities are purchased from the Company for
the principal purpose of raising capital for the Company) in which one of the
following occurs: 

                                        
(i)      any person or related group of
persons (other than the Parent or an affiliate of the Parent) directly acquires
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Company’s outstanding securities; 

                                        (ii)     the
composition of the Board changes over a period of twenty-four (24) consecutive
months or less in a way that results in a majority of the Board 

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(rounded up to the next whole number) ceasing, by reason of one or more
proxy contests for the election of Board members, to be comprised of
individuals who either (A) have been Board members continuously since the
beginning of the period or (B) have been elected or nominated for election as
Board members during the period by at least two-thirds of the Board members
described in clause (A) who were still in office at the time the election or
nomination was approved by the Board; 

                                        (iii)     (a)
a merger or consolidation occurs in which the Parent is not the surviving
entity, or (b) any reverse merger occurs in which the Parent is the surviving
entity, or (c) any merger involving a subsidiary of the Parent occurs in which
the Parent is a surviving entity, but in each case in which holders of the
Parent’s outstanding voting securities immediately prior to such transaction,
as such, do not hold, immediately following such transaction, securities
possessing fifty percent (50%) or more of the total combined voting power of
the surviving entity’s outstanding securities (in the case of clause (a)) or
the Parent’s outstanding voting securities (in the case of clauses (b) and
(c)); or 

                                        (iv)     all
or substantially all of the Parent’s assets are sold of transferred other than
in connection with an internal reorganization of the Parent or the Parent’s
complete liquidation (other than a liquidation of the Parent into a
wholly-owned subsidiary). 

                              4.5.9
Release. Notwithstanding the foregoing, the Executive
shall not receive any of the severance payments or benefits set forth under
Section 4.5.7, except as required by law, unless within the time period set
forth therein, but in no event later than (i) if a Change in Control shall have
occurred prior to such Covered Termination, twenty-five (25) days following
termination of employment, or (ii) if a Change in Control shall not have
occurred prior to such Covered Termination, the later of (a) twenty-five (25)
days following termination of employment or (b) twenty-five (25) days following
the effective date of such Change in Control, the Executive furnishes the
Company with a waiver and release of claims in a form acceptable to the Parties
and substantially as attached hereto as Exhibit
A, including such changes as may be made by the Company as necessary
to comply with applicable laws (the “Release”), and permits such Release to
become effective in accordance with its terms. If the Executive has breached
any provision of this Agreement or the Release, the Company shall be excused
from the obligation to provide any severance payment under Section 4.5.7;
provided, however, that the Company shall not be entitled to recovery of any
severance payment already provided to the Executive under Section 4.5.7. 

                              4.5.10
No Mitigation. Amounts payable to the Executive under
Section 4.5.7 shall not be reduced by any amount of the Executive’s earnings
from other employment during the Compensation Severance Period, if applicable,
and, during the Compensation Severance Period, the Executive shall not have an
affirmative duty to seek other employment or otherwise mitigate the amount of
any payment contemplated by this Agreement. 

                    4.6     Definitions.
For purposes of this Agreement, the following terms shall have the following
meanings: 

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                              4.6.1
   Covered Termination. “Covered Termination” means the
Executive’s employment is terminated by the Company without Cause, or the
Executive resigns for Good Reason within the period commencing three (3) months
before and ending twelve (12) months following a Change in Control (as defined
above). 

                              4.6.2
   “Payment Commencement Date” means: 

                                        
(i)      with respect to a Covered
Termination resulting from the Executive resigning for Good Reason within
twelve (12) months following a Change in Control, (a) if such Covered
Termination occurs prior to the effective date of the applicable Change in
Control, the later of (1) the effective date of such Change in Control or (2)
the effective date of the Release required by Section 4.5.8 or (b) if such
Covered Termination occurs on or after the effective date of the applicable
Change in Control, the later of (1) the date of such Covered Termination or (2)
the effective date of the Release required by Section 4.5.8. 

                                        
(ii)      with respect to a Covered
Termination resulting from the Company terminating Executive without Cause, the
later of (1) the date of such Covered Termination or (2) the effective date of
the Release required by Section 4.5.8. 

                    4.7     Parachute Payments. Anything in this Agreement
to the contrary notwithstanding, if any payment or benefit the Executive would
receive from the Company pursuant to this Agreement or otherwise (a “Payment”)
would (i) constitute a “parachute payment” within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”),
then such Payment shall be equal to the Reduced Amount. The “Reduced Amount”
shall be either (x) the largest portion of the Payment that would result in no
portion of the Payment being subject to the Excise Tax or (y) the largest
portion of the Payment, up to and including the total Payment, whichever
amount, after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate), results in the Executive’s receipt, on an after-tax
basis, of the greater amount of the Payment notwithstanding that all or some
portion of the Payment may be subject to the Excise Tax. If a reduction in
payments or benefits constituting “parachute payments” is necessary so that the
Payment equals the Reduced Amount, reduction shall occur in the following
order: reduction of cash payments; cancellation of accelerated vesting of stock
awards; reduction of employee benefits. If acceleration of vesting of stock
award compensation is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of the date of grant of the Executive’s stock
awards. 

                              The
Company shall appoint a nationally recognized independent accounting firm to
make the determinations required hereunder, which accounting firm shall not
then be serving as accountant or auditor for the individual, entity or group
that effected the Change in Control. The Company shall bear all expenses with
respect to the determinations by such accounting firm required to be made
hereunder. 

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                              The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company
and the Executive within fifteen (15) calendar days after the date on which the
Executive’s right to a Payment is triggered (if requested at that time by the
Company or the Executive) or such other time as requested by the Company or the
Executive. If the accounting firm determines that no Excise Tax is payable with
respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and the Executive with an opinion
reasonably acceptable to the Executive that no Excise Tax will be imposed with
respect to such Payment. The Company shall be entitled to rely upon the
accounting firm’s determinations, which shall be final and binding on all
persons. 

                    4.8     Exclusive
Remedy. In the event Executive executes the Release, the rights, remedies and payments
set forth in this Section 4 shall be the exclusive rights, remedies and
payments available to the Executive upon termination of this Agreement and the
Executive’s employment hereunder. Such rights remedies and payments shall
supersede and replace any and all rights and remedies under state or federal
law. To the extent permitted by applicable laws, the Company may deduct any
amounts the Executive owes the Company at the time of the Executive’s
termination of employment from any severance payments. 

                    4.9     Application
of Section 409A. Notwithstanding anything to the
contrary set forth herein, any payments and benefits provided under this
Agreement (the “Severance Benefits”) that constitute “deferred compensation”
within the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the regulations and other guidance thereunder and any
state law of similar effect (collectively “Section 409A”) shall not commence in
connection with Executive’s termination of employment unless and until
Executive has also incurred a “separation from service” (as such term is
defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”).

                              It
is intended that each installment of the Severance Benefits payments provided
for in this Agreement is a separate “payment” for purposes of Treasury
Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is
intended that payments of the Severance Benefits set forth in this Agreement
satisfy, to the greatest extent possible, the exemptions from the application
of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4),
1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the Company (or, if applicable,
the successor entity thereto) determines that the Severance Benefits, or a
portion thereof, constitute “deferred compensation” under Section 409A and
Executive is, on the termination of Executive’s service, a “specified employee”
of the Company or any successor entity thereto, as such term is defined in
Section 409A(a)(2)(B)(i) of the Code, then, to the extent necessary to avoid
the imposition of any additional tax or income recognition under Section 409A
prior to actual payment to the Executive, the timing of the Severance Benefit
payments that constitute “deferred compensation” under Section 409A shall be
delayed until the earlier to occur of: (i) the date that is six months and one
day after Executive’s Separation From Service or (ii) the date of Executive’s
death (such applicable date, the “Specified Employee Initial Payment 

11.

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

Date”). On the Specified Employee Initial Payment Date, the Company (or
the successor entity thereto, as applicable) shall (A) pay to Executive a lump
sum amount equal to the sum of the Severance Benefit payments that Executive
would otherwise have received through the Specified Employee Initial Payment
Date if the commencement of the payment of the Severance Benefits had not been
so delayed pursuant to this Section and (B) commence paying the balance of the Severance
Benefits in accordance with the applicable payment schedules set forth in this
Agreement. 

                              Except
to the extent that payments are delayed until the Specified Employee Initial
Payment Date pursuant to the preceding paragraph, on the first regular payroll
pay day following the Payment Commencement Date, the Company will pay Executive
the Severance Benefits Executive would otherwise have received under the
Agreement on or prior to such date but for the delay in payment related to the
effectiveness of the Release or the occurrence of the Change of Control, as
applicable, with the balance of the Severance Benefits being paid as originally
scheduled. All amounts payable under the Agreement will be subject to standard
payroll taxes and deductions. 

                              It
is the intent of this Agreement to comply with the requirements of Section 409A
so that none of the Severance Benefits to be provided hereunder will be subject
to the additional tax imposed under Section 409A, and any ambiguities herein
will be interpreted to so comply. The Company and the Executive agree to work
together in good faith to consider amendments to this Agreement and to take
such reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition under Section 409A prior
to actual payment to the Executive (provided that no such amendment shall
materially reduce the benefits provided hereunder). 

                    4.10   Survival
of Certain Sections. Sections 3.4, 4.5 through 4.9 and 5 through 16 of this Agreement
shall survive the termination of this Agreement. 

          5.       CONFIDENTIAL
AND PROPRIETARY INFORMATION;  

                    5.1     Proprietary
Information and Inventions Agreement. As a condition
of employment, the Executive agrees to execute and abide by the Proprietary
Information and Inventions Agreement attached hereto as Exhibit B. As noted in the Proprietary
Information and Inventions Agreement, the Executive shall not communicate,
divulge or disseminate Confidential Information at any time during or after
Employee’s employment with the Company, except with the prior written consent
of the Company or as may be required by law or the legal process. 

                    5.2     Non-Solicitation.
During the Executive’s employment with the Company and for two (2) years after
termination, the Executive agrees that he shall not, either directly or through
others, solicit or attempt to solicit any employee, consultant or independent
contractor of the Company or its subsidiaries to terminate his or her
relationship with the Company (or the applicable subsidiary) in order to become
an employee, consultant or independent contractor to 

12.

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

or for any other person or business entity. The Executive shall refrain
either directly or indirectly from approaching or attempting to solicit any
business of the Company 

          6.       ASSIGNMENT
AND BINDING EFFECT.  

                    This
Agreement shall be binding upon and inure to the benefit of the
Executive and the Executive’s heirs, executors, personal representatives,
assigns, administrators and legal representatives. Because of the unique and
personal nature of the Executive’s duties under this Agreement, neither this
Agreement nor any rights or obligations under this Agreement shall be
assignable by the Executive. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors, assigns and legal
representatives. 

          7.       CHOICE
OF LAW.  

                    This
Agreement shall be construed and interpreted in accordance with the internal laws
of the state of New Jersey (without giving effect to principles of conflicts of law). 

          8.       INTEGRATION.  

                    Except
as may otherwise be provided herein, this Agreement, including Exhibit A and Exhibit B, contains the complete, final and exclusive
agreement of the Parties relating to the terms and conditions of the
Executive’s employment and the termination of Executive’s employment, and
supersedes all prior and contemporaneous oral and written employment agreements
or arrangements between the Parties, including but not limited to the Prior
Agreement. To the extent this Agreement conflicts with the Proprietary
Information and Inventions Agreement attached as Exhibit B, the Proprietary Information and Inventions
Agreement controls. 

          9.      AMENDMENT.  

                    This Agreement
cannot be amended or modified except by a written agreement signed by the Executive and the Board. 

          10.     WAIVER.  

                    No
term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the Party against whom the
waiver is claimed, and any waiver or any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach. 

          11.     SEVERABILITY.  

                    The
finding by a court of competent jurisdiction or other authorized body of the
unenforceability, invalidity or illegality of any provision of this Agreement
shall not render any 

13.

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

other provision of this Agreement unenforceable, invalid or illegal.
The invalid or unenforceable term or provision shall be modified or replaced
with a valid and enforceable term or provision which most accurately represents
the Parties’ intention with respect to the invalid or unenforceable term or provision. 

          12.     INTERPRETATION; CONSTRUCTION.  

                    The
headings set forth in this Agreement are for convenience of reference only and
shall not be used in interpreting this Agreement. The Executive has been
encouraged to consult with, and has consulted with, Executive’s own independent
counsel and tax advisors with respect to the terms of this Agreement. The
Parties acknowledge that each Party and its counsel has reviewed and revised,
or had an opportunity to review and revise, this Agreement, and any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement. 

          13.     REPRESENTATIONS
AND WARRANTIES.  

                    The Executive represents and warrants that the Executive is not
restricted or prohibited, contractually or otherwise, from entering into and
performing each of the terms and covenants contained in this Agreement, and
that the Executive’s execution and performance of this Agreement shall not
violate or breach any other agreements between the Executive and any other
person or entity. 

          14.     COUNTERPARTS.  

                    This Agreement may be executed in two counterparts, each of which shall
be deemed an original, all of which together shall constitute one and the same instrument. 

          15.     ARBITRATION. 

                    To
ensure the rapid and economical resolution of disputes that may arise in
connection with the Executive’s employment with the Company, the Executive and
the Company agree that any and all disputes, claims, or causes of action, in
law or equity, arising from or relating to Executive’s employment, or the
termination of that employment, will be resolved, to the fullest extent
permitted by law, by final binding arbitration. Both the Executive and the
Company shall be entitled to all rights and remedies that either the Executive
or the Company would be entitled to pursue in a court of law. The Company shall
pay all administrative fees associated with the arbitration and the fees of the
arbitrator. Nothing in this Agreement is intended to prevent either the
Executive or the Company from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration.
Notwithstanding the foregoing, the Executive and the Company each have the
right to resolve any and all issues or disputes involving confidential
information, proprietary information, trade secrets or related information or
intellectual property rights by court action instead of arbitration. 

14.

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

          16.          TRADE SECRETS OF OTHERS. 

                         It
is the understanding of both the Company and the Executive that the Executive
shall not divulge to the Company and/or its subsidiaries any confidential
information or trade secrets belonging to others, including the Executive’s
former employers, nor shall the Company and/or its subsidiaries seek to elicit
from the Executive any such information. Consistent with the foregoing, the
Executive shall not provide to the Company and/or its subsidiaries, and the
Company and/or its subsidiaries shall not request, any documents or copies of
documents containing such information. 

15.

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

          IN WITNESS WHEREOF, the Parties have executed this Agreement as
of the date first shown above. 

NOVADEL PHARMA INC. 

	
  

 	
  

 
	
 /s/ Charles Nemeroff

 	
  

 
	 

 	
  

 
	
 CHARLES NEMEROFF, MD 

 
	
 CHAIRMAN OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

 

EXECUTIVE

	
  

 	
  

 
	
 /s/ Steven B. Ratoff

 	
  

 
	 

 	
  

 
	
 STEVEN B. RATOFF

 
	
 PRESIDENT AND CHIEF EXECUTIVE OFFICER 

 

16.

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

                    In
consideration of the payments and other benefits set forth in Section 4.5 of
the Employment Agreement dated January 1, 2010 (the “Employment Agreement”),
to which this form is attached, I, Steven B. Ratoff, hereby furnish Novadel
Pharma, Inc. (the “Company”), with the following release and waiver
(“Release
and Waiver”): 

          In
exchange for the consideration provided to me by the Employment Agreement that
I am not otherwise entitled to receive, I hereby generally and completely
release the Company and its directors, officers, employees, shareholders,
partners, agents, attorneys, predecessors, successors, parent and subsidiary
entities, insurers, affiliates, and assigns from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are
in any way related to events, acts, conduct, or omissions occurring prior to my
signing this Release and Waiver. This general release includes, but is not
limited to: (1) all claims arising out of or in any way related to my
employment with the Company or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including, but
not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements,
severance pay, fringe benefits, stock, stock options, or any other ownership
interests in the Company, except to the extent that such claims cannot be
released pursuant to the New Jersey Labor Code; (3) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good
faith and fair dealing; (4) all tort claims, including, but not limited to,
claims for fraud, defamation, emotional distress, and discharge in violation of
public policy; and (5) all federal, state, and local statutory claims,
including, but not limited to, claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 and the federal Age Discrimination in Employment Act of 1967 (as amended)
(“ADEA”).

          I
acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this Release and Waiver is knowing and voluntary, and
that the consideration given for this Release and Waiver is in addition to
anything of value to which I was already entitled as an executive of the
Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the release and waiver granted
herein does not relate to claims under the ADEA which may arise after this
Release and Waiver is executed; (b) I should consult with an attorney prior to
executing this Release and Waiver; (c) I have twenty-one (21) days in which to
consider this Release and Waiver (although I may choose voluntarily to execute
this Release and Waiver earlier); (d) I have seven (7) days following the
execution of this Release and Waiver to revoke my consent to this Release and
Waiver; and (e) this Release and Waiver shall not be effective until the eighth
day after I execute this Release and Waiver and the revocation period has
expired unexercised (the “Effective Date”). 

          I
acknowledge and agree to my continuing obligations under my Proprietary
Information and Inventions Agreement, a copy of which is attached to the
Employment Agreement. I 

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

understand
and agree that my right to the severance pay I am receiving in exchange for my
agreement to the terms of this Release and Waiver is contingent upon my
continued compliance with my Proprietary Information and Inventions Agreement. 

          I
represent that I have not filed any claims against the Company, and agree that,
except as such waiver may be prohibited by statute, I will not file any claim
against the Company or seek any compensation for any claim other than the
payments and benefits referenced herein. I agree to indemnify and hold the
Company harmless from and against any and all loss, cost, and expense, including,
but not limited to court costs and attorney’s fees, arising from or in
connection with any action which may be commenced, prosecuted, or threatened by
me or for my benefit, upon my initiative, or with my aid or approval, contrary
to the provisions of this Release and Waiver. 

          This
Release and Waiver, including any referenced documents, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company and me with regard to the subject matter hereof. I am not relying on
any promise or representation by the Company that is not expressly stated
herein. This Release and Waiver may only be modified by a writing signed by
both me and a member of the Board of Directors of the Company. 

	
  

 	
  

 	
  

 	
  

 
	
 Date:

 	
  

 	
 By: 

 	
  

 
	
  

 	 

 	
  

 	 

 
	
  

 	
  

 	
  

 	
 STEVEN B. RATOFF

 

2.

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

EXHIBIT B

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

	
  

 	
  

 
	
 

	
 EXECUTION VERSION

 

	
  

 
	
 EMPLOYMENT AGREEMENT

 

EXHIBIT C

                    The
following table provides a summary of the applicable severance and payments
that would be provided to the Executive and/or his estate under different
termination scenarios: 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Reason For

 Termination

 	
  

 	
  

 	
 Base
 Salary

 	
  

 	
  

 	
 APIP

 	
  

 	
  

 	
 Equity
 Plans

 	
  

 	
  

 	
 Healthcare

 Benefits/Vacation

 
	
 Death

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Immediate vesting &

 12 months to

 exercise

 	
  

 	
  

 	
 Continue up to 12 months or
 COBRA; accrued and unused vacation days through date of termination are paid.
 

 
	
 Total Disability

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Immediate vesting &

 12 months to

 exercise

 	
  

 	
  

 	
 Continue up to 12 months or COBRA; accrued and
 unused vacation days through date of termination are paid.

 
	
 For Cause

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 None

 	
  

 	
  

 	
 Forfeit all unvested

 and vested

 unexercised

 	
  

 	
  

 	
  Date of
 termination or COBRA; accrued and unused
 vacation days through date of termination are paid.

 
	
 Without Cause

 	
  

 	
  

 	
 Greater of (i) 12

 months or (ii) intrinsic

 value of equity grants

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 If Salary received,

 then forfeit all

 unvested and vested

 unexercised

 	
  

 	
  

 	
 Continue up to 12 months or
 COBRA; accrued and unused vacation days through date of termination are paid.

 
	
 Mutual

 Agreement

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Immediate vesting &

 12 months to

 exercise

 	
  

 	
  

 	
 Continue up to 12 months or
 COBRA; accrued and unused vacation days through date of termination are paid.

 
	
 Voluntary by

 Executive

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Forfeit Any Unpaid

 	
  

 	
  

 	
 Forfeit all unvested

 and vested

 unexercised

 	
  

 	
  

 	
 Date of termination or
 COBRA; accrued and unused vacation days through date of termination are paid.

 
	
 Change in

 Control

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Date of Termination

 	
  

 	
  

 	
 Immediate vesting &

 12 months to

 exercise

 	
  

 	
  

 	
 Continue up to 12 months or
 COBRA; accrued and unused vacation days through date of termination are paid.

 
	
 For Good Reason

 	
  

 	
  

 	
 12 months

 	
  

 	
  

 	
 Greater of (a) average

 of annual bonuses, (b)

 last annual bonus, or

 (c) if no bonus yet

 paid, target bonus

 amount.

 	
  

 	
  

 	
 Immediate vesting &

 12 months to

 exercise

 	
  

 	
  

 	
 Continue up to 12 months or
 COBRA.exv10w1

Exhibit 10.1

FORM OF

TRANSITION SERVICES AGREEMENT

BY AND BETWEEN

CABLEVISION SYSTEMS CORPORATION

AND

MADISON SQUARE GARDEN, INC.

DATED
AS OF •, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I

	DEFINITIONS

	 
	 	 	 	 	 	 
	Section 1.1.
	 	General	 	 	1	 
	Section 1.2.
	 	Reference; Interpretation	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE II

	SERVICES

	 
	 	 	 	 	 	 
	Section 2.1.
	 	Services	 	 	2	 
	Section 2.2.
	 	Standard of Service	 	 	3	 
	Section 2.3.
	 	Additional Services	 	 	3	 
	Section 2.4.
	 	Representative	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE III

	LICENSES AND PERMITS

	 
	 	 	 	 	 	 
	Section 3.1.
	 	Licenses and Permits	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE IV

	PAYMENT

	 
	 	 	 	 	 	 
	Section 4.1.
	 	General	 	 	4	 
	Section 4.2.
	 	Additional Expenses	 	 	4	 
	Section 4.3.
	 	Invoices	 	 	4	 
	Section 4.4.
	 	Failure to Pay	 	 	5	 
	Section 4.5.
	 	Termination of Services	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE V

	INSURANCE MATTERS

	 
	 	 	 	 	 	 
	Section 5.1.
	 	Disclaimer	 	 	5	 
	Section 5.2.
	 	Insurance Transition	 	 	6	 
	Section 5.3.
	 	Claims Made Policies	 	 	6	 
	Section 5.4.
	 	Audits and Adjustments	 	 	6	 
	Section 5.5.
	 	No Assignment or Waiver	 	 	6	 
	Section 5.6.
	 	No Limitation on MSG Insurance	 	 	6	 
	Section 5.7.
	 	Scope	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE VI

	INDEMNIFICATION

	 
	 	 	 	 	 	 
	Section 6.1.
	 	Indemnification by Party Receiving Services	 	 	6	 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 6.2.
	 	Indemnification by Party Providing Services	 	 	7	 
	Section 6.3.
	 	Third Party Claims	 	 	7	 
	Section 6.4.
	 	Indemnification Payments	 	 	9	 
	Section 6.5.
	 	Survival	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VII

	COOPERATION; CONFIDENTIALITY; TITLE

	 
	 	 	 	 	 	 
	Section 7.1.
	 	Good Faith Cooperation; Consents	 	 	10	 
	Section 7.2.
	 	Confidentiality	 	 	10	 
	Section 7.3.
	 	Internal Use; Title, Copies, Return	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VIII

	TERM

	 
	 	 	 	 	 	 
	Section 8.1.
	 	Duration	 	 	11	 
	Section 8.2.
	 	Early Termination by Cablevision	 	 	11	 
	Section 8.3.
	 	Early Termination by MSG	 	 	11	 
	Section 8.4.
	 	Suspension Due to Force Majeure	 	 	12	 
	Section 8.5.
	 	Consequences of Termination	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE IX

	RECORDS

	 
	 	 	 	 	 	 
	Section 9.1.
	 	Maintenance of Records	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE X

	DISPUTE RESOLUTION

	 
	 	 	 	 	 	 
	Section 10.1.
	 	Negotiation	 	 	12	 
	Section 10.2.
	 	Continuity of Service and Performance	 	 	13	 
	Section 10.3.
	 	Other Remedies	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE XI

	NOTICES

	 
	 	 	 	 	 	 
	Section 11.1.
	 	Notices	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE XII

	MISCELLANEOUS

	 
	 	 	 	 	 	 
	Section 12.1.
	 	Taxes	 	 	13	 
	Section 12.2.
	 	Relationship of Parties	 	 	14	 
	Section 12.3.
	 	Complete Agreement; Construction	 	 	14	 
	Section 12.4.
	 	Counterparts	 	 	14	 
	Section 12.5.
	 	Waivers	 	 	14	 

-ii-

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 12.6.
	 	Amendments	 	 	14	 
	Section 12.7.
	 	Assignment	 	 	14	 
	Section 12.8.
	 	Successors and Assigns	 	 	14	 
	Section 12.9.
	 	Third Party Beneficiaries	 	 	14	 
	Section 12.10.
	 	Governing Law	 	 	15	 
	Section 12.11.
	 	Waiver of Jury Trial	 	 	15	 
	Section 12.12.
	 	Specific Performance	 	 	15	 
	Section 12.13.
	 	Severability	 	 	15	 
	Section 12.14.
	 	Provisions Unaffected	 	 	15	 
	Section 12.15.
	 	No Presumption	 	 	15	 

-iii-

 

     Transition Services Agreement, dated as of •, 2010 (this “Agreement”), between
Cablevision Systems Corporation, a Delaware corporation (“Cablevision”), and Madison Square
Garden, Inc., a Delaware corporation (“MSG”).

W I T N E S S E T H:

     WHEREAS, Cablevision and MSG have entered into a Distribution Agreement, dated as of •, 2010
(the “Distribution Agreement”), which sets forth the terms pursuant to which Cablevision
and its subsidiary CSC Holdings, Inc. (“CSC Holdings”), will transfer certain assets to MSG and
Cablevision will distribute the common stock of MSG to shareholders of Cablevision (the
“Distribution”); and

     WHEREAS, in connection with the Distribution, and in order to ensure an orderly transition
under the Distribution Agreement, it will be necessary for each of the parties to provide to the
other the Services described herein for a transitional period;

     NOW, THEREFORE, the parties hereto, in consideration of the premises and the mutual covenants
contained herein, agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1. General. As used in this Agreement, the following terms have the respective
meanings set forth below:

     “Ancillary Agreement” shall have the meaning assigned to that term in the Distribution
Agreement.

     “Applicable Rate” shall mean the rate of interest per annum announced from time to
time by Citibank, N.A., as its prime lending rate plus three percent (3%) per annum.

     “Bankruptcy Event” with respect to a party shall mean the filing of an involuntary
petition in bankruptcy or similar proceeding against such party seeking its reorganization,
liquidation or the appointment of a receiver, trustee or liquidator for it or for all or
substantially all of its assets, whereupon such petition shall not be dismissed within sixty (60)
days after the filing thereof, or if such party shall (i) apply for or consent in writing to the
appointment of a receiver, trustee or liquidator of all or substantially all of its assets, (ii)
file a voluntary petition or admit in writing its inability to pay its debts as they become due,
(iii) make a general assignment for the benefit of creditors, (iv) file a petition or an answer
seeking reorganization or an arrangement with its creditors or take advantage of any insolvency law
with respect to itself as debtor, or (v) file an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization, insolvency proceedings or any similar
proceedings.

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

 

 

     “Cablevision Services” shall mean those transitional services, including any
Additional Services, to be provided by Cablevision to MSG set forth on Schedule A hereto to assist
MSG in operating MSG’s business following the Distributions. Services or actions of Overlap
Individuals shall not be considered to be Cablevision Services under this Agreement unless
expressly agreed in writing by both parties to this Agreement.

     “Loss” shall mean any damage, claim, loss, charge, action, suit, proceeding,
deficiency, tax, interest, penalty and reasonable costs and expenses related thereto (including
reasonable attorneys’ fees).

     “Person” shall mean any natural person, corporation, business trust, limited liability
company, joint venture, association, company, partnership or government, or any agency or political
subdivision thereof.

     “MSG Services” shall mean those transitional services, including any Additional
Services, to be provided by MSG to Cablevision set forth on Schedule B hereto to assist Cablevision
in operating Cablevision’s business following the Distributions. Services or actions of Overlap
Individuals shall not be considered to be MSG Services under this Agreement unless expressly agreed
in writing by both parties to this Agreement.

     “Overlap Individuals” shall mean Persons who are officers or directors of both
Cablevision and MSG.

     “Services” shall mean, collectively, the Cablevision Services and the MSG Services.

     “Third-Party” shall mean any Person who is not a Party to this Agreement.

     Section 1.2. Reference; Interpretation. References in this Agreement to any gender include
references to all genders, and references to the singular include references to the plural and vice
versa. The words “include”, “includes” and “including” when used in this Agreement shall be deemed
to be followed by the phrase “without limitation.” Unless the context otherwise requires,
references in this Agreement to Articles, Sections and Schedules shall be deemed references to
Articles and Sections of, and Schedules to, this Agreement. Unless the context otherwise requires,
the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement
refer to this Agreement in its entirety and not to any particular Article, Section or provision of
this Agreement.

ARTICLE II

SERVICES

     Section 2.1. Services. Cablevision shall provide to MSG each Cablevision Service for the
term set forth opposite the description of such Cablevision Service in Schedule A. Additional
Services may be provided to MSG by Cablevision as provided in Section 2.3. At its option and with
the consent of MSG (which consent shall not unreasonably be withheld), Cablevision may cause any
Cablevision Service it is required to provide hereunder to be provided

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by any other Person or entity that is providing, or may from time to time provide, the same or
similar services for Cablevision.

     (a) MSG shall provide to Cablevision each MSG Service for the term set forth opposite the
description of such MSG Service in Schedule B. Additional Services may be provided by MSG to
Cablevision as provided in Section 2.3. At its option and with the consent of Cablevision (which
consent shall not unreasonably be withheld), MSG may cause any MSG Service it is required to
provide hereunder to be provided by any other Person or entity that is providing, or may from time
to time provide, the same or similar services for MSG.

     Section 2.2. Standard of Service. Cablevision and MSG shall maintain sufficient resources to
perform their respective obligations hereunder. In performing the Services, Cablevision and MSG
shall provide substantially the same level of service and use substantially the same degree of care
as their respective personnel provided and used in providing such Services prior to completion of
the Distribution for itself (but in no event less than a reasonable degree of care), subject in
each case to any provisions set forth on Schedule A or Schedule B with respect to each such
Service. Each party shall provide reasonable assistance to the other party in migrating the
applicable Services to the recipient of such Services.

     Section 2.3. Additional Services. From time to time after the date hereof, the parties may
identify additional services that one party will provide to the other party in accordance with the
terms of this Agreement (the “Additional Services”). The parties shall cooperate and act
in good faith to agree on the terms pursuant to which any such Additional Service shall be provided
and to amend Schedule A or B, as applicable, in accordance with such terms. Notwithstanding the
foregoing, neither party shall have any obligation to agree to provide Additional Services.

     Section 2.4. Representative. The parties shall each appoint a representative (each, a
“Representative”) to facilitate communications and performance under this Agreement. Each
party may treat an act of a Representative of another party as being authorized by such other party
without inquiring behind such act or ascertaining whether such Representative had authority to so
act. Each Party shall have the right at any time and from time to time to replace its
Representative by giving notice in writing to the other party. The initial representative of each
party is as set forth on Schedule C.

ARTICLE III

LICENSES AND PERMITS

     Section 3.1. Licenses and Permits. Each party warrants and covenants that all duties and
obligations (including with respect to Cablevision, all Cablevision Services and with respect to
MSG, all MSG Services) to be performed hereunder shall be performed in compliance with all material
applicable federal, state and local laws, rules and regulations. Each party shall obtain and
maintain all material permits, approvals and licenses necessary or appropriate to perform its
duties and obligations (including with respect to Cablevision, the Cablevision Services and with
respect to MSG, the MSG Services) hereunder and shall at all times comply with the terms and
conditions of such permits, approvals and licenses.

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ARTICLE IV

PAYMENT

     Section 4.1. General. (a) In consideration for the provision of each of the Cablevision
Services, MSG shall pay to Cablevision the fee calculated as set forth for such Cablevision Service
on Schedule A.

     (b) In consideration for the provision of each of the MSG Services, Cablevision shall pay to
MSG the fee as calculated as set forth for such MSG Service on Schedule B.

     Section 4.2. Additional Expenses. (a) In addition to the fees payable in accordance with
Section 4.1(a), MSG shall reimburse Cablevision for all reasonable and necessary out-of-pocket
costs and expenses (including without limitation postage and other delivery costs, telephone,
telecopy and similar expenses) incurred by Cablevision with respect
to Third Parties in connection
with the provision of Cablevision Services to MSG pursuant to the terms of this Agreement or paid
by Cablevision on behalf of MSG; provided that if Cablevision expects to incur in respect
of a Third Party in any month costs and expenses in excess of $25,000 and not already contemplated
by Schedule A, Cablevision shall use best reasonable efforts to provide to MSG prior to the first day
of such month a written notice setting forth Cablevision’s reasonable estimate of the expenses it
expects to incur.

     (b) In addition to the fees payable for expenses in accordance with Section 4.1(b),
Cablevision shall reimburse MSG for all reasonable and necessary out-of-pocket costs and expenses
(including without limitation postage and other delivery costs, telephone, telecopy and similar
expenses) incurred by MSG with respect to Third Parties in connection with the provision of MSG
Services to Cablevision pursuant to the terms of this Agreement or paid by MSG on behalf of
Cablevision; provided that if MSG expects to incur in respect of a Third Party in any month
costs and expenses in excess of $25,000 and not already contemplated
by Schedule B, MSG shall use best
reasonable efforts to provide to Cablevision prior to the first day of such a month written notice
setting forth MSG’s reasonable estimate of the expenses it expects to incur

     Section 4.3. Invoices. (a) Cablevision will invoice MSG in U.S. dollars: (i) as of the
last day of each calendar month for any fees payable by MSG in accordance with Section 4.1(a) for
Cablevision Services listed on Schedule A provided pursuant to the terms of this Agreement during
such month; (ii) as of the last day of each calendar month for any amounts payable by MSG in
accordance with Section 4.2(a) (and enclosing invoices from the relevant Third Parties); and (iii)
as of the last day of each calendar month for any taxes (excluding income taxes) accrued with
respect to the provision of Cablevision Services to MSG during such month. Cablevision shall
deliver or cause to be delivered to MSG each such invoice within thirty (30) days following the
last day of the calendar month to which such invoice relates. MSG shall pay each such invoice
received by electronic funds transfer as follows: in the case of clauses (i) and (ii), within
twenty (20) Business Days of the date on which such invoice was received, and in the case of clause
(iii), not later than one (1) Business Day prior to the due date for such tax payments;
provided that Cablevision delivers such invoice not less than three (3) Business Days prior
to the due date for such tax payments.

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     (b) MSG will invoice Cablevision in U.S. dollars: (i) as of the last day of each calendar
month for any fees payable by Cablevision in accordance with Section 4.1(b) for MSG Services listed
on Schedule B provided pursuant to the terms of this Agreement during such month; (ii) as of the
last day of each calendar month for any amounts payable by Cablevision in accordance with Section
4.2(b) (and enclosing invoices from such Third Parties); and (iii) as of the last day of each
calendar month for any taxes (excluding income taxes) accrued with respect to the provision of MSG
Services to Cablevision during such month. MSG shall deliver or cause to be delivered to
Cablevision each such invoice within thirty (30) days following the last day of the calendar month
to which such invoice relates. Cablevision shall pay each such invoice received by electronic
funds transfer: in the case of clauses (i) and (ii), within twenty (20) Business Days of the date
on which such invoice was received, and in the case of clause (iii), not later than one (1)
Business Day prior to the due date for such tax payments’ provided that MSG delivers such
invoice not less than three (3) Business Days prior to the due date for such tax payments.

     Section 4.4. Failure to Pay. Any undisputed amount not paid when due shall be subject to a
late payment fee computed daily at a rate equal to the Applicable Rate from the due date of such
amount to the date such amount is paid. Each party agrees to pay the other party’s reasonable
attorneys’ fees and other costs incurred in collection of any amounts owed to such other party
hereunder and not paid when due. Notwithstanding anything to the contrary contained herein, in the
event either party fails to make a payment of any undisputed amount when due hereunder, and such
failure continues for a period of thirty (30) days following delivery of notice to such non-paying
party of such failure, the other party shall have the right to cease provision of such Services to
such non-paying party until such overdue payment (and any applicable late payment fee accrued with
respect thereto) is paid in full. Such right of the party providing services shall not in any
manner limit or prejudice any of such party’s other rights or remedies in the event of the
non-paying party’s failure to make payments when due hereunder, including without limitation any
rights or remedies pursuant to Sections 6, 8 and 10.

     Section 4.5. Termination of Services. In the event of a termination of Services pursuant to
Section 8, with respect to the calendar month in which such Services cease to be provided, the
recipient of such Services shall be obligated to pay a fee for such Services calculated as set
forth on Schedule A or B, as applicable for the portion of the
month prior to the termination. Where possible, the parties agree to
work together cooperatively to seek to have terminations occur as of
month ends, but this agreement shall not limit a party’s right
to effect a termination in accordance with this agreement other than
as of a month end.

ARTICLE V

INSURANCE MATTERS

     Section 5.1. Disclaimer. MSG does hereby, for itself and each of its subsidiaries, agree
that Cablevision and its subsidiaries and their respective directors, officers and employees shall
not have any liability whatsoever as a result of the insurance policies and practices of
Cablevision and its affiliates as in effect at any time prior to the Distribution, including as a
result of the level or scope of any such insurance, the creditworthiness of any insurance carrier,
the selection, identity or performance of any third party administrator, the terms and conditions
of any policy, the adequacy or timeliness of any notice to any insurance carrier with respect to
any claim or potential claim or otherwise.

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     Section 5.2. Insurance Transition. Cablevision agrees to use its best reasonable efforts to
cause the interest and rights of MSG and each of its subsidiaries as of the date of the
Distribution as insureds, additional named insureds or beneficiaries or in any other capacity under
occurrence-based insurance policies and programs (and under claims-made policies and programs to
the extent a claim has been submitted prior to the Distribution or later if so permitted by the
terms of the applicable insurance policy and assuming that such policy is then in effect) of
Cablevision in respect of periods prior to the date of the Distribution to survive the Distribution
for the period for which such interests and rights would have survived without regard to the
transactions contemplated hereby to the extent permitted by such policies. In accordance with this
Agreement, Cablevision shall transition the administration of such insurance policies and programs
to MSG and MSG shall pay the costs and fees of Cablevision during such transition as provided in
Article IV and Schedule A. Any proceeds received by Cablevision or any of its subsidiaries or
affiliates after the date of the Distribution under such policies and programs in respect of MSG
shall be for the benefit of MSG.

     Section 5.3. Claims Made Policies. Cablevision agrees that if it obtains or maintains any
insurance coverage after the date of the Distribution for matters occurring prior to that time
(e.g., a claims made directors and officers insurance policy) it will also obtain or maintain such
coverage for MSG and its subsidiaries, subject to MSG’s payment of the fees and costs in connection
therewith as provided in this Agreement.

     Section 5.4. Audits and Adjustments. MSG agrees that it will reimburse Cablevision under
this Agreement for any additional premiums or other amounts owing to any third party as a result of
any audit or similar procedure by a third party, to the extent that such additional premiums or
amounts owing relate to MSG or any of its subsidiaries during the period MSG or such subsidiaries
were covered by the relevant insurance policy.

     Section 5.5. No Assignment or Waiver. This Agreement is not intended as an attempted
assignment of any policy of insurance or as a contract of insurance and shall not be construed to
waive any right or remedy of Cablevision in respect of any insurance policy or any other contract
or policy of insurance.

     Section 5.6. No Limitation on MSG Insurance. Nothing in this Agreement shall be deemed to
restrict MSG from acquiring at its own expense any other insurance policy in respect of any
liabilities or covering any period.

     Section 5.7. Scope. The provisions of this Article V shall not apply to insurance practices
or policies relating to health and welfare plans or any other employee benefit arrangement.

ARTICLE VI

INDEMNIFICATION

     Section 6.1. Indemnification by Party Receiving Services. (a) MSG agrees to indemnify,
defend and hold Cablevision harmless from and against any Loss to which Cablevision may become
subject arising out of, by reason of or otherwise in connection with the provision hereunder by
Cablevision of Cablevision Services, other than Losses resulting from

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Cablevision’s gross negligence, willful misconduct or breach of its obligations pursuant to
this Agreement. Notwithstanding any provision in this Agreement to the contrary, MSG shall not be
liable under this Section 6.1 for any consequential, special or punitive damages (including but not
limited to lost profits), except to the extent that such consequential, special or punitive damages
relate to a Loss resulting from a Third Party Claim (as defined below).

     (b) Cablevision agrees to indemnify, defend and hold MSG harmless from and against any Loss to
which MSG may become subject arising out of, by reason of or otherwise in connection with the
provision hereunder by MSG of MSG Services, other than Losses resulting from MSG’s gross
negligence, willful misconduct or breach of its obligations pursuant to this Agreement.
Notwithstanding any provision in this Agreement to the contrary, Cablevision shall not be liable
under this Section 6.1 for any consequential, special or punitive damages (including but not
limited to lost profits), except to the extent that such consequential, special or punitive damages
relate to a Loss resulting from a Third Party Claim (as defined below).

     Section 6.2. Indemnification by Party Providing Services. (a) Cablevision agrees to
indemnify, defend and hold MSG harmless from and against any Loss to which MSG may become subject
arising out of, by reason of or otherwise in connection with, the provision hereunder by
Cablevision of Cablevision Services to MSG where such Losses resulted from Cablevision’s gross
negligence, willful misconduct or breach of its obligations pursuant to this Agreement.

     (b) MSG agrees to indemnify, defend and hold Cablevision harmless from and against any Loss to
which Cablevision may become subject arising out of, by reason of or otherwise in connection with
the provision hereunder by MSG of MSG Services to Cablevision where such Losses resulted from MSG’s
gross negligence, willful misconduct or breach of its obligations pursuant to this Agreement.

     Section 6.3. Third Party Claims. (a) If a claim or demand is made against MSG or
Cablevision (each, an “Indemnitee”) by any Third Party (a “Third Party Claim”) as
to which such Indemnitee is entitled to indemnification pursuant to this Agreement, such Indemnitee
shall notify the party which is or may be required pursuant to Section 6.1 or Section 6.2 hereof to
make such indemnification (the “Indemnifying Party”) in writing, and in reasonable detail,
of the Third Party Claim promptly and in any event by the date (the “Outside Notice Date”)
that is the 15th Business Day after receipt by such Indemnitee of written notice of the Third Party
Claim; provided, however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party shall have been
actually prejudiced as a result of such failure (except that the Indemnifying Party shall not be
liable for any expenses incurred during the period beginning immediately after the Outside Notice
Date and ending on the date that the Indemnitee gives the required notice). Thereafter, the
Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten Business
Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court
papers) received by the Indemnitee relating to the Third Party Claim.

     (b) If a Third Party Claim is made against an Indemnitee, the Indemnifying Party shall be
entitled to participate in the defense thereof and, if it so chooses and acknowledges

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in writing its obligation to indemnify the Indemnitee therefor, to assume the defense thereof
with counsel selected by the Indemnifying Party, provided, however, that such counsel is
not reasonably objected to by the Indemnitee. Should the Indemnifying Party so elect to assume the
defense of a Third Party Claim, the Indemnifying Party shall, within 30 days (or sooner if the
nature of the Third Party Claim so requires), notify the Indemnitee of its intent to do so, and the
Indemnifying Party shall thereafter not be liable to the Indemnitee for legal or other expenses
subsequently incurred by the Indemnitee in connection with the defense thereof; provided,
however, that such Indemnitee shall have the right to employ counsel to represent such Indemnitee
if, in such Indemnitee’s reasonable judgment, a conflict of interest between such Indemnitee and
such Indemnifying Party exists in respect of such claim which would make representation of both
such parties by one counsel inappropriate, and in such event the fees and expenses of such separate
counsel shall be paid by such Indemnifying Party. If the Indemnifying Party assumes such defense,
the Indemnitee shall have the right to participate in the defense thereof and to employ counsel,
subject to the proviso of the preceding sentence, at its own expense, separate from the counsel
employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control
such defense. The Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnitee for any period during which the Indemnifying Party has failed to assume the
defense thereof (other than during the period prior to the time the Indemnitee shall have given
notice of the Third Party Claim as provided above). If the Indemnifying Party so elects to assume
the defense of any Third Party Claim, all of the Indemnitees shall cooperate with the Indemnifying
Party in the defense or prosecution thereof, including by providing or causing to be provided
agreements, documents, books, records, files and witnesses as soon as reasonably practicable after
receiving any request therefor from or on behalf of the Indemnifying Party, except to the extent
that providing or causing the foregoing to be provided would constitute a waiver of any
Indemnitee’s attorney-client privilege.

     (c) If the Indemnifying Party acknowledges in writing responsibility under this Article VI for
a Third Party Claim, then in no event will the Indemnitee admit any liability with respect to, or
settle, compromise or discharge, any Third Party Claim without the Indemnifying Party’s prior
written consent; provided, however, that the Indemnitee shall have the right to settle,
compromise or discharge such Third Party Claim without the consent of the Indemnifying Party if the
Indemnitee releases the Indemnifying Party from its indemnification obligation hereunder with
respect to such Third Party Claim and such settlement, compromise or discharge would not otherwise
adversely affect the Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for a Third Party Claim, the Indemnitee will agree to any settlement, compromise or
discharge of a Third Party Claim that the Indemnifying Party may recommend and that by its terms
obligates the Indemnifying Party to pay the full amount of the liability in connection with such
Third Party Claim and releases the Indemnitee completely in connection with such Third Party Claim
and that would not otherwise adversely affect the Indemnitee. If an Indemnifying Party elects not
to assume the defense of a Third Party Claim, or fails to notify an Indemnitee of its election to
do so as provided herein, such Indemnitee may compromise, settle or defend such Third Party Claim.

     (d) Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the
defense of any Third Party Claim (and shall be liable for the fees and expenses of counsel incurred
by the Indemnitee in defending such Third Party Claim) if the

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Third Party Claim seeks an order, injunction or other equitable relief or relief for other
than money damages against the Indemnitee which the Indemnitee reasonably determines, after
conferring with its counsel, cannot be separated from any related claim for money damages. If such
equitable relief or other relief portion of the Third Party Claim can be so separated from that for
money damages, the Indemnifying Party shall be entitled to assume the defense of the portion
relating to money damages.

     (e) In the event and to the extent of payment by an Indemnifying Party to any Indemnitee in
connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall
stand in the place of such Indemnitee as to any events or circumstances in respect of which such
Indemnitee may have any right or claim relating to such Third-Party Claim against any claimant or
plaintiff asserting such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right or claim.

     (f) MSG and Cablevision shall cooperate as may reasonably be required in connection with the
investigation, defense and settlement of any Third-Party Claim. In furtherance of this obligation,
the parties agree that if an Indemnifying Party chooses to defend or to compromise or settle any
Third-Party Claim, Cablevision or MSG, as the case may be, shall use its best reasonable efforts to
make available to the other party, upon written request, their former and then current directors,
officers, employees and agents and those of their subsidiaries as witnesses and any records or
other documents within its control or which it otherwise has the ability to make available, to the
extent that (i) any such Person, records or other documents may reasonably be required in
connection with such defense, settlement or compromise and (ii) making such Person, records or
other documents so available would not constitute a waiver of the attorney-client privilege of
Cablevision or MSG, as the case may be.. At the request of an Indemnifying Party, an Indemnitee
shall enter into a reasonably acceptable joint defense agreement.

     (g) The remedies provided in this Article VI shall be cumulative and shall not preclude
assertion by any Indemnitee of any other rights or the seeking of any and all other remedies
against any Indemnifying Party.

     Section 6.4. Indemnification Payments. (a) Indemnification required by this Article VI
shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or any Loss is incurred. If the Indemnifying Party fails
to make an indemnification payment required by this Article VI within 30 days after receipt of a
bill therefore or notice that a Loss has been incurred, the Indemnifying Party shall also be
required to pay interest on the amount of such indemnification payment, from the date of receipt of
the bill or notice of the Loss to, but not including the date of payment, at the Applicable Rate.

     (b) The amount of any claim by an Indemnitee under this Agreement shall be reduced to reflect
any actual tax savings or insurance proceeds received by any Indemnitee that result from the Losses
that gave rise to such indemnity.

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     Section 6.5. Survival. The parties’ obligations under this Article VI shall survive the
termination of this Agreement.

ARTICLE VII

COOPERATION; CONFIDENTIALITY; TITLE

     Section 7.1. Good Faith Cooperation; Consents. Each party shall use best reasonable efforts
to cooperate with the other party in all matters relating to the provision and receipt of the
Services. Such cooperation shall include, but not be limited to, exchanging information, providing
electronic access to systems used in connection with the Services, performing true-ups and
adjustments and obtaining all consents, licenses, sublicenses or approvals necessary to permit each
party to perform its obligations hereunder. Cablevision and MSG shall maintain reasonable
documentation related to the Services and cooperate with each other in making such information
available as needed.

     Section 7.2. Confidentiality. Each party shall keep confidential the Schedules to this
Agreement and all information received from the other party regarding the Services, including,
without limitation, any information received with respect to products and services of Cablevision
or MSG, and to use such information only for the purposes set forth in this Agreement unless (i)
otherwise agreed to in writing by the party from which such information was received or (ii)
required by applicable law or any securities exchange (in which case the parties shall cooperate in
seeking to obtain a protective order or other arrangement pursuant to which the confidentiality of
such information is preserved) . The covenants in this Article VII shall survive any termination
of this Agreement for a period of three (3) years from the date such termination becomes effective.

     Section 7.3. Internal Use; Title, Copies, Return. Except to the extent inconsistent with the
express terms of the Distribution Agreement and any Ancillary Agreement other than this Agreement,
each party agrees that:

     (a) title to all systems used in performing any Service provided hereunder shall remain in the
party providing such Service or its third party vendors; and

     (b) to the extent the provision of any Service involves intellectual property, including
without limitation software programs or patented or copyrighted material, or material constituting
trade secrets, the recipient of such Service shall not copy, modify, reverse engineer, decompile or
in any way alter any of such material, or otherwise use such material in a manner inconsistent with
the terms and provisions of this Agreement, without the express written consent of the party
providing such Service; and upon the termination of any Service, the recipient of such Service
shall return to the party providing such Service, as soon as practicable, any equipment or other
property of the party providing such Service relating to such Service which is owned or leased by
the party providing such Service and is or was in its possession or control.

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ARTICLE VIII

TERM

     Section 8.1.
Duration. (a) Except as provided in Sections 4.5, 6.5, 7.2, 8.2, 8.3, 8.4 and 8.5, the
term of this Agreement shall commence on the date hereof and shall continue in full force and
effect with respect to each Service until the earlier of (i) the expiration of the term set forth
opposite the description of such Service in Schedule A or B, as applicable, unless otherwise
mutually agreed by the parties and (ii) the termination of such Service in accordance with Section
4.4 or 8.1(b).

     (b) Each party acknowledges that the purpose of this Agreement is for Cablevision to provide
the Cablevision Services to MSG on an interim basis until MSG can perform the Cablevision Services
for itself, and for MSG to provide the MSG Services to Cablevision on an interim basis until
Cablevision can perform the MSG Services for itself. Accordingly, each of Cablevision and MSG
shall use its best reasonable efforts to make or obtain such approvals, permits and licenses and
implement such systems, as shall be necessary for it to provide the appropriate services for itself
as promptly as reasonably practicable. As MSG becomes self-sufficient or engages other sources to
provide any Cablevision Service, MSG shall be entitled to release Cablevision from providing any or
all of the Cablevision Services hereunder by delivering a written notice thereof to Cablevision at
least twenty (20) Business Days prior to the effective date of release of such Cablevision
Service(s). At the end of such twenty (20) Business Day period (or such shorter period as may be
agreed by the parties), Cablevision shall discontinue the provision of the Cablevision Services
specified in such notice and any such Cablevision Services shall be excluded from this Agreement,
and Schedule A shall be deemed to be amended accordingly. Cablevision shall also be entitled to
release MSG from providing any or all of the MSG Services hereunder by delivering a written notice
thereof to MSG at least twenty (20) Business Days prior to the effective date of release of such
MSG Service(s). At the end of such twenty (20) Business Day period (or such shorter period as may
be agreed by the parties), MSG shall discontinue the provision of the MSG Services specified in
such notice and any such MSG Services shall be excluded from this Agreement, and Schedule B shall
be deemed to be amended accordingly.

     Section 8.2. Early Termination by Cablevision. Cablevision may terminate this Agreement by
giving written notice to MSG under the following circumstances:

     (a) if MSG shall default in the performance of any of its material obligations under this
Agreement, and such default or breach shall continue and not be remedied for a period of thirty
(30) days after Cablevision has given written notice to MSG specifying such default and requiring
it to be remedied; or

     (b) if a Bankruptcy Event has occurred with respect to MSG.

     Section 8.3. Early Termination by MSG. MSG may terminate this Agreement by giving written
notice to Cablevision under the following circumstances:

     (a) if Cablevision shall default in the performance of any of its material obligations under
this Agreement and such default shall continue and not be remedied for a

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period of thirty (30) days after MSG has given written notice to Cablevision specifying such
default and requiring it to be remedied; or

     (b) if a Bankruptcy Event has occurred with respect to Cablevision.

     Section 8.4. Suspension Due to Force Majeure. In the event the performance by either MSG or
Cablevision of its duties or obligations hereunder is interrupted or interfered with by reason of
any cause beyond its reasonable control including, but not limited to, fire, storm, flood,
earthquake, explosion, war, strike or labor disruption, rebellion, insurrection, quarantine, act of
God, boycott, embargo, shortage or unavailability of supplies, riot, or governmental law,
regulation or edict (collectively, “Force Majeure Events”), the party affected by such
Force Majeure Event shall not be deemed to be in default of this Agreement by reason of its
non-performance due to such Force Majeure Event, but shall give notice to the other party of the
Force Majeure Event and the fee provided for in Section 4.1 shall be equitably adjusted to reflect
the reduced performance. In such event, the party affected by such Force Majeure Event shall
resume the performance of its duties and obligations hereunder as soon as reasonably practicable
after the end of the Force Majeure Event.

     Section 8.5.
Consequences of Termination. In the event this Agreement expires or is
terminated in accordance with this Article VIII, then (a) all Services to be provided will promptly
cease, (b) each of Cablevision and MSG shall, upon request of the other party, promptly return or
destroy all confidential information received from the other party in connection with this
Agreement (including the return of all information received with respect to the Services or
products of Cablevision or MSG, as the case may be), without retaining a copy thereof (other than
one copy for file purposes), and (c) each of Cablevision and MSG shall honor all credits and make
any accrued and unpaid payment to the other party as required pursuant to the terms of this
Agreement, and no rights already accrued hereunder shall be affected.

ARTICLE IX

RECORDS

     Section 9.1. Maintenance of Records. Each of the parties shall create and maintain full and
accurate books in connection with the provision of the Services, and all other records relevant to
this Agreement, and upon reasonable notice from the other party shall make available for inspection
and copy by such other party’s agents such records during reasonable business hours.

ARTICLE X

DISPUTE RESOLUTION

     Section 10.1. Negotiation. In the event of a controversy, dispute or claim arising out of,
in connection with, or in relation to the interpretation, performance, nonperformance, validity or
breach of this Agreement or otherwise arising out of, or in any way related to this Agreement or
the transactions contemplated hereby, including, without limitation, any claim based on contract,
tort, statute or constitution (but excluding any controversy, dispute or claim arising out of any
agreement relating to the use or lease of real property if any Third Party is a party to such
controversy, dispute or claim) (collectively, “Agreement Disputes”), the

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management of the parties shall negotiate in good faith for a reasonable period of time to
settle such Agreement Dispute, provided, however, that such reasonable period shall not,
unless otherwise agreed by the parties in writing, exceed 30 days from the time the parties began
such negotiations.

     Section 10.2. Continuity of Service and Performance. Unless otherwise agreed in writing, the
parties will continue to provide service and honor all other commitments under this Agreement
during the course of any form of dispute resolution with respect to all matters not subject to such
dispute, controversy or claim.

     Section 10.3. Other Remedies. Nothing in this Article X shall limit the right that any party
may otherwise have to seek to obtain (a) preliminary injunctive relief in order to preserve the
status quo pending the resolution of a dispute or (b) temporary or permanent injunctive relief from
any breach of any provisions of this Agreement.

ARTICLE XI

NOTICES

     Section 11.1. 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 address
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, New York 11714

Attention: General Counsel

     To MSG:

Madison Square Garden, Inc.

Two Pennsylvania Plaza

New York, NY 10001

Attention: General Counsel

ARTICLE XII

MISCELLANEOUS

     Section 12.1. Taxes. Except as may otherwise be specifically provided herein, each party
shall bear all taxes, duties and other similar charges (and any related interest and penalties)
imposed as a result of its receipt of Services under this Agreement.

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     Section 12.2. Relationship of Parties. Nothing in this Agreement shall be deemed or
construed by the parties or any third party as creating the relationship of principal and agent,
partnership or joint venture between the parties, it being understood and agreed that no provision
contained herein, and no act of the parties, shall be deemed to create any relationship between the
parties other than the relationship of independent contractor nor be deemed to vest any rights,
interest or claims in any third parties.

     Section 12.3. Complete Agreement; Construction. This Agreement, including the Schedules
hereto, shall constitute the entire 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. In the event of any inconsistency between this Agreement and any Schedule,
the Schedule shall prevail. The rights and remedies of the parties herein provided shall be
cumulative and in addition to any other or further remedies provided by law or equity.

     Section 12.4. 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 party and delivered to the other party.

     Section 12.5. Waivers. The failure of any party to require strict performance by the other
party of any provision in this Agreement will not waive or diminish that party’s right to demand
strict performance thereafter of that or any other provision hereof.

     Section 12.6. Amendments. This Agreement may not be modified or amended except by an
agreement in writing signed by each of the parties.

     Section 12.7. Assignment. This Agreement shall not be assignable, in whole or in part, 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.

     Section 12.8. 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.

     Section 12.9. Third Party Beneficiaries. This Agreement is solely for the benefit of the
parties and shall not be deemed to confer upon any other Person any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing without reference to this
Agreement.

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     Section 12.10. 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.

     Section 12.11. 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.

     Section 12.12. Specific Performance. Subject to Article X, in the event of any actual or
threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement,
the parties agree that the party who is or is to be thereby aggrieved shall have the right to
specific performance and injunctive or other equitable relief of its rights under this Agreement,
in addition to any and all other rights and remedies at law or in equity, and all such rights and
remedies shall be cumulative. The parties agree that the remedies at law for any breach or
threatened breach of this Agreement, including monetary damages, are inadequate compensation for
any loss, that any defense in any action for specific performance that a remedy at law would be
adequate is hereby waived, and that any requirements for the securing or posting of any bond with
such remedy are hereby waived.

     Section 12.13. 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.

     Section 12.14. Provisions Unaffected. Nothing contained in this Agreement shall affect the
rights and obligations of Cablevision and MSG pursuant to the Distribution Agreement.

     Section 12.15. No Presumption. Neither Cablevision nor MSG shall be deemed to be the drafter
of this Agreement and no term or provision of this Agreement may be construed against any party on
that basis.

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     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on behalf of the
parties as of the date first herein above written.

	 	 	 	 	 
	 	CABLEVISION SYSTEMS CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	MADISON SQUARE GARDEN, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

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