Document:

EXHIBIT
10.40

 

EXECUTION
COPY

 

PURCHASE
AGREEMENT

 

This Purchase Agreement (this “Agreement”) is
entered into as of December 12, 2003 by and among Fox Sports Net Bay Area
Holdings, LLC, a Delaware limited liability company (the “Pacific Seller”),
Fox Sports Net Chicago Holdings, LLC, a Delaware limited liability company (the
“Chicago Seller” and, collectively with the Pacific Seller, the “Sellers”)
and Fox Sports Net, LLC, a Delaware limited liability company (“Fox Sports
Net” and , collectively with the Sellers, the “Fox Parties”), on the
one hand, and Regional Pacific Holdings II, L.L.C., a Delaware limited
liability company (the “Pacific Purchaser”) and Regional Chicago
Holdings II, L.L.C., a Delaware limited liability company (the “Chicago
Purchaser” and, collectively with the Pacific Purchaser, the “Purchasers”).  Capitalized terms used but not otherwise
defined herein shall have the meanings set forth in Section 1.1 hereof.

 

RECITALS

 

Sports Channel Pacific Associates, a New York general
partnership (the “Pacific Partnership”), owns and operates a regional
sports programming service in the San Francisco Bay area.

 

Sports Channel Chicago Associates, a New York general
partnership (the “Chicago Partnership” and, collectively with the
Pacific Partnership, the “Partnerships”), owns and operates a regional
sports programming service in the Chicago metropolitan area

 

As of the date of this Agreement, the Pacific Seller
beneficially owns all right, title and interest to a fifty percent (50%)
general partnership interest in the Pacific Partnership and the Chicago Seller
beneficially owns all right, title and interest to a fifty percent (50%)
general partnership interest in the Chicago Partnership.

 

Subject to the terms and conditions of each of the
Partnership Agreements (as defined below) of each of the Partnerships, the
Sellers have initiated the IPO-Call Procedure (as defined in each of the
Partnership Agreements) and the Sellers and the Purchasers have agreed upon the
Fair Market Value (as defined in the Partnership Agreements) of all of the
partnership interests in each of the Partnerships and determined that the Call
Price (as defined in the Partnership Agreements) for each of the Partnerships
is equal to the respective Partnership Interest Purchase Price set forth
herein.

 

Pursuant to this Agreement, in simultaneous
transactions, (i) the Pacific Purchaser desires to purchase and the Pacific
Seller desires to sell, convey, transfer, assign and deliver to the Pacific
Purchaser, the Pacific Seller’s partnership interest in the Pacific Partnership
and (ii) the Chicago Purchaser desires to purchase and the Chicago Seller
desires to sell, convey, transfer, assign and deliver to the Chicago Purchaser,
the Chicago Seller’s partnership interest in the Chicago Partnership.

 

 

TERMS
OF AGREEMENT

 

In consideration of the mutual representations,
warranties, covenants and agreements contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1           Defined Terms.  As used herein the following terms shall
have the following meanings:

 

“Affiliate” shall have the meaning ascribed to
it in Rule 405 of the rules promulgated under the Securities Act, as in effect
on the date hereof.

 

“Agreement” shall mean this Purchase Agreement
including all Exhibits and Schedules hereto.

 

“Chicago Indemnified Party” has the meaning
specified in Section 7.2(b) of this Agreement.

 

“Chicago Indemnifying Party” has the meaning specified
in Section 7.2(b) of this Agreement.

 

“Chicago Note” means the Subordinated Note of
the Chicago Purchaser substantially in the form of Exhibit A-2 hereto and
delivered pursuant to Section 3.1(b)(i) hereof.

 

“Chicago Partnership” means Sports Channel
Chicago Associates, a New York general partnership.

 

“Chicago Partnership Agreement” means that
certain Third Amended and Restated Partnership Agreement of the Chicago
Partnership among the Existing Chicago RPP Partner and the Chicago Seller and
dated as of December 18, 1997.

 

“Chicago Partnership Interest Purchase Price”
has the meaning specified in Section 2.1 of this Agreement.

 

“Chicago Purchased Partnership Interest” has
the meaning specified in Section 2.1 of this Agreement.

 

“Chicago Purchaser” means Regional Chicago
Holdings II, L.L.C., a Delaware limited liability company.

 

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“Chicago Seller” means Fox Sports Net Chicago
Holdings, LLC, a Delaware limited liability company.

 

“Closing” has the meaning specified in Article
III of this Agreement.

 

“Closing Date” has the meaning specified in
Article III of this Agreement.

 

“Contract” means any indenture, lease,
sublease, loan agreement, mortgage, note, commitment, obligation or other
contract, agreement or instrument.

 

“Existing Chicago RPP Partner” means Regional
Chicago Holdings, L.L.C., a Delaware limited liability company.

 

“Existing Pacific RPP Partner” means Regional
Pacific Holdings, L.L.C., a Delaware limited liability company.

 

“Fox Chicago Parties” means Fox Sports and the
Chicago Seller.

 

“Fox Pacific Parties” means Fox Sports and the
Pacific Seller.

 

“Fox Parties” means Fox Sports and the Sellers.

 

“Fox Sports” means Fox Sports Net, LLC, a
Delaware limited liability company.

 

“Governmental Authority” means any nation or
government, any state or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial regulatory or
administrative functions of or pertaining to government.

 

“Hart-Scott Rodino Act” means the Hart-Scott
Rodino Antitrust Improvements Act of 1976, as amended.

 

“Indemnified Parties” has the meaning specified
in Section 7.2(b) of this Agreement.

 

“Indemnifying Parties” has the meaning
specified in Section 7.2(b) of this Agreement.

 

“Lien” means any mortgage, pledge, security
interest, encumbrance, restriction, lien or charge of any kind (including,
without limitation, any conditional sale or other title retention agreement,
any lease in the nature thereof, the filing of or agreement to give any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction in connection with such mortgage, pledge, security interest,
encumbrance, restriction, lien or charge).

 

“Losses” has the meaning specified in Section
7.2(a) of this Agreement.

 

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“Notes” means collectively the Pacific Note and
the Chicago Note.

 

“Pacific Indemnified Party” has the meaning
specified in Section 7.2(a) of this Agreement.

 

“Pacific Indemnifying Party” has the meaning
specified in Section 7.2(a) of this Agreement.

 

“Pacific Note” means the Subordinated Note of
the Pacific Purchaser substantially in the form of Exhibit A-1 hereto and
delivered pursuant to Section 3.1(b)(i) hereof.

 

“Pacific Partnership” means Sports Channel
Pacific Associates, a New York general partnership.

 

“Pacific Partnership Agreement” means that
certain Second Amended and Restated Partnership Agreement of the Pacific
Partnership among the Existing Pacific RPP Partner and the Pacific Seller and
dated as of December 18, 1997.

 

“Pacific Partnership Interest Purchase Price”
has the meaning specified in Section 2.1 of this Agreement.

 

“Pacific Purchased Partnership Interest” has
the meaning specified in Section 2.1 of this Agreement.

 

“Pacific Purchaser” means Regional Pacific
Holdings II, L.L.C., a Delaware limited liability company.

 

“Pacific Seller” means Fox Sports Net Bay Area
Holdings, LLC, a Delaware limited liability company.

 

“Partner Loans” means loans made by the partners
of the Partnership to the Partnership pursuant to the terms of the Partnership
Agreement.

 

“Partnerships” means the Chicago Partnership
and the Pacific Partnership.

 

“Partnership Agreements” means the Chicago
Partnership Agreement and the Pacific Partnership Agreement.

 

“Partnership Interest Purchase Prices” has the
meaning specified in Section 2.1 of this Agreement.

 

“Person” means an individual, partnership,
limited liability company, corporation, business trust, joint stock company,
trust, unincorporated association, joint venture, Governmental Authority or
other entity, of whatever nature.

 

4

 

“Pledge Agreement” means the Pledge Agreement
by and among the Pacific Purchaser, the Existing Pacific RPP Partner, the
Pacific Seller and the Chicago Seller securing the obligations of the Pacific
Purchaser under the Pacific Note and the Chicago Purchaser  under the Chicago Note and delivered
pursuant to Section 3.1(b)(iv) hereof.

 

“Purchased Partnership Interests” has the
meaning specified in Section 2.1 of this Agreement.

 

“Purchasers” means the Chicago Purchaser and
the Pacific Purchaser.

 

“Requirement of Law” means as to any Person,
any domestic or foreign and federal, state or local law, rule, regulation,
statute or ordinance or determination of any arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its properties or to which such Person or any of its property is
subject.

 

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

 

“Sellers” means the Chicago Seller and the
Pacific Seller.

 

1.2           Other Definitional
Provisions.

 

(a)           All
terms defined in this Agreement shall have the defined meanings when used in
any certificates, reports or other documents made or delivered pursuant hereto
or thereto, unless the context otherwise requires.

 

(b)           Terms
defined in the singular shall have a comparable meaning when used in the
plural, and vice versa.

 

(c)           The
words “hereof,” “herein” and “hereunder,” and words of similar import, when
used in this Agreement shall refer to this Agreement as a whole (including any
Exhibits or Schedules hereto) and not to any particular provision of this
Agreement.

 

ARTICLE II

PURCHASE AND SALE

 

2.1           Transfer of Purchased Interest.  Subject to the terms and conditions of this
Agreement, at the Closing, in simultaneous transactions

 

(a)           the
Pacific Seller will sell, assign, transfer, convey and deliver to the Pacific
Purchaser and the Pacific Purchaser will purchase and accept from the Pacific
Seller, a fifty percent (50%) general partnership interest in the Pacific
Partnership (the “Pacific

 

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Purchased Partnership Interest”),
representing all of the Pacific Seller’s interests in the Pacific Partnership,
for an aggregate purchase price of One Hundred Ten Million Dollars
($110,000,000) for the Pacific Purchased Partnership Interest (the “Pacific
Partnership Interest Purchase Price”), which is payable in the form of the
Pacific Note substantially in the form attached as Exhibit A-1 hereto; and

 

(b)          
the Chicago Seller will sell, assign, transfer, convey and deliver to the
Chicago Purchaser and the Chicago Purchaser will purchase and accept from the
Chicago Seller, a fifty percent (50%) general partnership interest in the
Chicago Partnership (the “Chicago Purchased Partnership Interest” and,
collectively with the Pacific Purchased Partnership Interest, the “Purchased
Partnership Interests”), representing all of the Chicago Seller’s interests
in the Chicago Partnership, for an aggregate purchase price of Forty Million
Dollars ($40,000,000) for the Chicago Purchased Partnership Interest (the “Chicago
Partnership Interest Purchase Price” and, collectively with the Pacific
Partnership Interest Purchase Price, the “Partnership Interest Purchase
Prices”), which is payable in the form of the Chicago Note substantially in
the form attached as Exhibit A-2 hereto.

 

ARTICLE III

CLOSING

 

3.1           Closing and Closing Conditions.  The transactions contemplated herein shall
be consummated at a closing (the “Closing”) to be held at the offices of
Sullivan & Cromwell LLP, 125 Broad Street, New York, New York 10004 (or at
such other place or places as the parties may agree) at 10:00 a.m. on the date
hereof (the “Closing Date”).  All
transactions at Closing shall be deemed to take place simultaneously and none
shall be deemed to take place unless and until all shall have taken place.  The Purchasers collectively and the Sellers
collectively shall have the right to waive receipt of any documents at
Closing.  At the Closing, the following
shall occur:

 

(a)           The
Sellers shall deliver the following to the Purchasers:

 

(i)                                     assignments
of the Purchased Partnership Interests in form and substance reasonably
satisfactory to the Purchasers;

 

(ii)                                  copies
of all documents evidencing required consents and governmental approvals, if
any, as may be required by or with respect to this Agreement or the
transactions contemplated hereby to be obtained by either of the Sellers on or
prior to the Closing Date;

 

(iii)                               a
certificate dated as of the Closing Date, duly signed by an authorized officer
of each of the Sellers, certifying that (a) the representations and warranties
of such Seller are true and correct at and as of the Closing Date with the same
force and effect as though made at and as of that time, except that those
representations and warranties which address matters only as of a particular
date shall remain true and correct in all material respects as of such date,
and (b) that all obligations required to be

 

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performed by such Seller under this Agreement on or
prior to the Closing Date have been complied with and performed;

 

(iv)                              copies
of Uniform Commercial  Code and lien
searches in the jurisdictions requested by either of the Purchasers evidencing
the absence of any Liens in respect of the Purchased Partnership Interests;

 

(v)                                 the
appropriate Release by each Seller substantially in the form attached as
Exhibit C-1; and

 

(vi)                              such
other documents as may be necessary in the reasonable opinion of either of the
Purchasers, to transfer ownership of the Purchased Partnership Interests, free
and clear of any Liens, or to evidence the satisfaction of any other obligation
of the Sellers hereunder.

 

(b)           The
Purchasers shall deliver the following to the Sellers:

 

(i)                                     the
Pacific Note and the Chicago Note substantially in the form attached as Exhibit
A-1 and A-2 hereto, respectively;

 

(ii)                                  copies
of all documents evidencing required consents and governmental approvals, if
any, as may be required by or with respect to this Agreement or the
transactions contemplated hereby to be obtained by either of the Purchaser on
or prior to the Closing Date;

 

(iii)                               a
certificate, dated as of the Closing Date, duly signed by an authorized officer
of each of the Purchasers, certifying that (a) the representations and
warranties of such Purchaser are true and correct at and as of the Closing Date
and with the same force and effect as though made at and as of that time,
except that those representations and warranties which address matters only as
of a particular date shall remain true and correct in all material respects as
of such date, and (b) that all obligations required to be performed by such Purchaser
under this Agreement on or prior to the Closing Date have been complied with
and performed;

 

(iv)                              the
appropriate Release by the Existing Chicago RPP Partner and the Existing
Pacific RPP Partner substantially in the form attached as Exhibit C-2; and

 

(v)                                 the
Pledge Agreement substantially in the form attached as Exhibit B hereto.

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

Each Seller represents and warrants to the Purchaser
purchasing its Purchased Partnership Interest as follows:

 

4.1           Limited Liability Status.  Such Seller is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  Such Seller has all
requisite power and authority to own or lease, as the case may be, its
properties and to carry on its business as now conducted.  Such Seller is qualified or licensed to
conduct business in all jurisdictions where its ownership, lease or operation
of property or the conduct of its business requires such qualification.  There is no pending or, to the best of the
knowledge of such Seller, threatened proceeding or other action by any other
party with respect to the dissolution, liquidation, insolvency or
rehabilitation of such Seller.

 

4.2           Power and Authority; Enforceability.  Such Seller has the power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and
consummate the transactions contemplated hereby.  Such Seller has taken all necessary limited liability company
action to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby by it.  This Agreement has been duly executed and delivered by such
Seller and constitutes a legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether such
enforceability is considered in a proceeding at law or in equity.

 

4.3           Consents/Approvals.  Other than as described in Section 6.5 and
other than the consents described on Schedule 4.3, no consents, filings,
authorizations or actions of any Governmental Authority are required for such
Seller’s execution, delivery and performance of this Agreement.  No consent, approval, waiver or other
actions (“Consents”) by any Person (other than any Governmental
Authority referred to in the preceding sentence) under any Contract to which
such Seller is a party or by which such Seller or any of its properties or
assets are bound is required or necessary for the execution, delivery and
performance by such Seller of this Agreement and the consummation of the
transactions contemplated hereby.

 

4.4           No Violation.

 

(a)           Such
Seller is not in default under (and is not subject to any right of any other
party to, with the giving of notice or the passage of time or both, declare a
default or accelerate any obligation under) or in violation of (i) any
provision of its certificate of formation or limited liability company
agreement or (ii) the applicable Partnership Agreement or any Contract to which
such Seller is a party or by which any of its properties or assets are bound or
any Requirement of Law applicable to it, in any respect

 

8

 

that could have a material adverse effect on its ability to execute and
deliver this Agreement and to perform its obligations hereunder.

 

(b)           The
execution and delivery by such Seller of this Agreement and the consummation of
the transactions contemplated hereby will not result in a default under (or
give any other party the right, with the giving of notice or the passage of
time or both, to declare a default or accelerate any obligation under) or
violate (x) its certificate of formation or limited liability company agreement
or (y) any Contract to which such Seller is a party or by which it or any of
its properties or assets are bound, or any Requirement of Law applicable to it,
or result in the creation or imposition of any Lien upon any of its membership
interests, properties or assets in any case under this clause (y) in any respect
that could have a material adverse effect on it or its ability to execute and
deliver this Agreement and perform its obligations hereunder.

 

4.5           Litigation.  There is no claim, action, suit, or legal, administrative or
other proceeding or governmental investigation pending or, to the best
knowledge of such Seller, threatened, anticipated or contemplated against such
Seller which, in any single case or in the aggregate, challenges or questions
in any respect the validity of, or would prevent or hinder the consummation of,
the transactions contemplated by this Agreement.

 

4.6           Title to Purchase Partnership Interests.  Such Seller owns beneficially and of record
the Purchased Partnership Interest that it is transferring hereunder.  Such Seller has good, valid and marketable
title to the Purchased Partnership Interest it is transferring hereunder, free
and clear of any Liens, and has complied with or obtained waivers of all
conditions to the transfer thereof.  At
the Closing, the Purchaser to which such Seller is transferring its Purchased
Partnership Interest will acquire good, valid, indefeasible and marketable
title to and beneficial and record ownership of the Purchased Partnership
Interest such Seller is transferring hereunder, free and clear of any Liens.

 

4.7           Governing Documents.  Other than any rights of the Purchaser to
which such Seller is transferring its Purchased Partnership Interest pursuant
to the applicable Partnership Agreement, there are no preemptive rights, rights
of first refusal or similar rights with respect to such Seller’s Purchased
Partnership Interest and no such rights arise by virtue of or in connection
with the transactions contemplated hereby. 
There are no other voting or similar contracts or agreements with
respect to such Purchased Partnership Interest other than such Partnership
Agreement.

 

4.8           Investment Intent.  Such Seller is acquiring the Note that it is
acquiring hereunder for its own account and with no present intention of
distributing or transferring such Note in violation of the Securities Act or
any applicable state securities laws.

 

4.9           No Commissions.  Such Seller has not incurred any obligation
for any finder’s or broker’s or agent’s fees or commissions in connection with
the transactions contemplated hereby.

 

9

 

4.10         Affiliate Transactions.  Such Seller has not on behalf of either of
the Partnerships entered into any Contract or understanding between such
Partnership, on the one hand, and (i) either Seller or any Affiliate of
either Seller (each, a “Related Party Contract”) or (ii) any other
party, on the other hand. To the best knowledge of such Seller, no event has
occurred which constitutes, or after notice or the passage of time (or both)
would constitute, a default by such Seller, any Affiliate of such Seller or the
applicable Partnership under any Related Party Contract.

 

4.11         Exclusivity of Representations.  THE REPRESENTATIONS AND WARRANTIES MADE BY
THE SELLERS IN THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER
REPRESENTATIONS AND WARRANTIES RELATING TO THE TRANSACTIONS CONTEMPLATED
HEREUNDER, INCLUDING ANY IMPLIED WARRANTIES. 
THE SELLERS HEREBY DISCLAIM ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR
WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE PURCHASERS OR
THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY
DOCUMENTATION OR OTHER INFORMATION (INCLUDING, WITHOUT LIMITATION, ANY
FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA).

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

Each Purchaser represents and warrants to the Seller
from which it is purchasing a Purchased Partnership Interest as follows:

 

5.1           Limited Liability Status.  Such Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware.  Such Purchaser
has all requisite power and authority to own or lease, as the case may be, its
properties and to carry on its business as now conducted.  Such Purchaser is qualified or licensed to
conduct business in all jurisdictions where its ownership, lease or operation
of property or the conduct of its business requires such qualification.  There is no pending or, to the best of the
knowledge of such Purchaser, threatened proceeding or other action by any other
party with respect to the dissolution, liquidation, insolvency or
rehabilitation of such Purchaser.

 

5.2           Power and Authority: Enforceability.  Such Purchaser has the power and authority
to execute and deliver this Agreement and to perform its obligations hereunder
and consummate the transactions contemplated hereby.  Such Purchaser has taken all necessary limited liability company
action to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby by it.  This Agreement has been duly executed and delivered by such
Purchaser and constitutes a legal, valid and binding obligation of such
Purchaser, enforceable against such Purchaser in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the

 

10

 

enforcement of creditors’ rights generally and general equitable
principles, regardless of whether such enforceability is considered in a
proceeding at law or in equity.

 

5.3           Consents/Approvals.  Other than as described in Section 6.5 and
other than the consents of the Federal Communications Commission (the “FCC”) to
the transfer of the control of the Chicago Partnership relating to certain FCC
licenses held by the Chicago Partnership, no consents, filings, authorizations
or actions of any Governmental Authority are required for such Purchaser’s
execution, delivery and performance of this Agreement.  No Consents by any Person (other than any
Governmental Authority referred to in the preceding sentence) under any
Contract to which such Purchaser is a party or by which such Purchaser or any
of its properties or assets are bound is required or necessary for the
execution, delivery and performance by such Purchaser of this Agreement and the
consummation of the transactions contemplated hereby.

 

5.4           No Violation.

 

(a)           Such
Purchaser is not in default under (and is not subject to any right of any other
party to, with the giving of notice or the passage of time or both, declare a
default or accelerate any obligation under) or in violation of (i) any
provision of such Purchaser’s certificate of formation or limited liability
company agreement or (ii) the applicable Partnership Agreement or any Contract
to which such Purchaser is a party or by which it or any of its properties or
assets are bound or any Requirement of Law applicable to it, in any respect
that could have a material adverse effect on its ability to execute and deliver
this Agreement and to perform its obligations hereunder.

 

(b)           The
execution and delivery by such Purchaser of this Agreement and the consummation
of the transactions contemplated hereby will not result in a default under (or
give any other party the right, with the giving of notice or the passage of
time or both, to declare default or accelerate any obligation under) or violate
(x) its certificate of formation or limited liability company agreement, or (y)
any Contract to which such Purchaser is a party or by which its properties or
assets are bound, or any Requirement of Law applicable to it, or result in the
creation or imposition of any Lien upon any of its membership interests,
properties or assets in any case under this clause (y) in any respect that
could have a material adverse effect on it or its ability to execute and
deliver this Agreement and perform its obligations hereunder.

 

5.5           Litigation.  There is no claim, action, suit, or legal, administrative or
other proceeding or governmental investigation pending or, to the best
knowledge of such Purchaser, threatened, anticipated or contemplated against
such Purchaser which, in any single case or in the aggregate, challenges or
questions in any respect the validity of, or would prevent or hinder the
consummation of, the transactions contemplated by this Agreement.

 

5.6           Investment Intent.  Such Purchaser is acquiring the Purchased
Partnership Interest that it is acquiring hereunder for its own account and
with no present

 

11

 

intention of distributing or selling such Purchased Partnership
Interest, in violation of the Securities Act or any applicable state securities
law.

 

5.7           No Commissions.  Such Purchaser has not incurred any
obligation for any finder’s or broker’s or agent’s fees or commissions in
connection with the transactions contemplated hereby.

 

5.8           Exclusivity of Representations.  THE REPRESENTATIONS AND WARRANTIES MADE BY
THE PURCHASERS IN THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER
REPRESENTATIONS AND WARRANTIES RELATING TO THE TRANSACTIONS CONTEMPLATED
HEREUNDER, INCLUDING ANY IMPLIED WARRANTIES. 
THE PURCHASERS HEREBY DISCLAIM ANY SUCH OTHER OR IMPLIED REPRESENTATIONS
OR WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE SELLERS OR
THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY
DOCUMENTATION OR OTHER INFORMATION (INCLUDING, WITHOUT LIMITATION, ANY
FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA).

 

ARTICLE VI

COVENANTS

 

6.1           Filings.  Each of the Purchasers and the Sellers shall make (or cause the
Partnerships to make), on a prompt and timely basis, all governmental or
regulatory notifications and filings required to be made by it for the consummation
of the transactions contemplated hereby.

 

6.2           Public Announcements.  The form and content of all press releases
or other public communications of any sort relating to the subject matter of
this Agreement, and the method of their release, or publication thereof, shall,
except as required by law, be subject to the prior approval of the parties
hereto, which approval shall not be unreasonably withheld or delayed.

 

6.3           Further Assurances.  Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.

 

6.4           Cooperation.  The Purchasers and the Sellers each agree to cooperate with the
other in the preparation and filing of all forms, notifications, reports and
information, if any, required or reasonably deemed advisable pursuant to any
Requirement of Law in connection with the transactions contemplated by this
Agreement.

 

12

 

6.5           Tax.

 

(a)           The
Sellers and the Purchasers agree that upon the Closing each Partnership will
adopt the “closing of the books” method of income allocation as prescribed in
Treasury Regulation Section 1.706-1(c)(2) for purposes of allocating income,
gain, loss, deductions and credits between the Sellers and the Purchasers for
the year of sale.

 

(b)           Sellers
and Purchasers hereby agree to cause each Partnership to make an Internal
Revenue Code Section 754 election in respect of each sale and purchase of the
Purchaser Partnership Interests.  Each
Purchaser hereby covenants to keep such Section 754 election in effect for any
taxable period that any obligations under the Notes remain outstanding.

 

ARTICLE VII

INDEMNIFICATION

 

7.1           Survival.  The representations,
warranties, agreements, covenants and obligations of the Purchasers and the
Sellers contained in this Agreement, the Schedules and Exhibits hereto, and any
certificate, documents or statement delivered to the other parties pursuant
hereto, shall survive for a period of three (3) years following the Closing and
not be affected in any respect by the Closing, any investigations conducted by
any parties or any knowledge of any party; provided,
that the survival of the representations and warranties of each Seller in
Section 4.6 hereof shall not be limited.

 

7.2           Indemnification.

 

(a)           The
Fox Pacific Parties, on the one hand, and the Pacific Purchaser, on the other
hand (each, an “Pacific Indemnifying Party”), shall indemnify the others
and their respective officers, members and Affiliates (each, an “Pacific
Indemnified Party”) from and against any and all losses, damages,
liabilities, claims, charges, actions, proceedings, demands, judgments,
deficiencies, settlement costs and expenses of any nature whatsoever
(including, without limitation, reasonable attorneys fees and expenses but net
of any insurance proceeds and tax benefits received in connection with such
indemnification claim by such Indemnified Party) (collectively, “Losses”)
directly or indirectly incurred by a Pacific Indemnified Party and resulting
from (i) the inaccuracy, in any material respect, of any representation or
warranty of a Pacific Indemnifying Party or (ii) any breach of or failure to
perform by a Pacific Indemnifying Party any agreement, covenant or obligation
contained in or made pursuant to this Agreement and all claims, charges,
actions or proceedings incident to or arising out of the foregoing.

 

(b)           The
Fox Chicago Parties, on the one hand, and the Chicago Purchaser, on the other
hand (each, an “Chicago Indemnifying Party” and, collectively with the
Pacific Indemnifying Parties, the “Indemnifying Parties”), shall
indemnify the others and their respective officers, members and Affiliates
(each, an “Chicago Indemnified Party” and, collectively with the Pacific
Indemnifying Parties, the “Indemnified Parties”) from and

 

13

 

against any and all Losses directly or indirectly incurred by a Chicago
Indemnified Party and resulting from (i) the inaccuracy, in any material
respect, of any representation or warranty of a Chicago Indemnifying Party or
(ii) any breach of or failure to perform by a Chicago Indemnifying Party any
agreement, covenant or obligation contained in or made pursuant to this
Agreement and all claims, charges, actions or proceedings incident to or
arising out of the foregoing.

 

7.3           Indemnification Procedures.  Each Indemnified Party shall give notice as
promptly as reasonably practicable to each Indemnifying Party from which it is
entitled to seek indemnity under Section 7.2 of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so notify
an Indemnifying Party shall not relieve such Indemnifying Party from any
liability that it may have on account of this indemnity agreement or otherwise
so long as such failure shall not have materially prejudiced the position of
the Indemnifying Party.  Upon such
notification, the Indemnifying Party shall assume the defense of such action
and after such assumption the Indemnified Party shall not be entitled to
reimbursement of any expenses incurred by it in connection with such action
except as described below.  In any such
action, any Indemnified Party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the applicable Indemnifying Party and the
Indemnified Party shall have mutually agreed to the contrary or (ii) the named  parties in any such action (including any
impleaded parties) include both the applicable Indemnifying Party and the
Indemnified Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them.  The Indemnifying Party shall not
be liable for any settlement of any proceeding effected without its written
consent (which shall not be unreasonably withheld or delayed by such
Indemnifying Party), but if settled with such consent or if there be final
judgment for the plaintiff, the Indemnifying Party shall indemnify the
applicable Indemnified Party from and against any loss, damage or liability by
reason of such settlement or judgment. 
To the extent permitted by law, indemnification payments shall be
treated as adjustments to the appropriate Partnership Interest Purchase Price
for all tax purposes.

 

7.4           Subrogation.  In the event that an Indemnifying Party shall be obligated to
indemnify an Indemnified Party pursuant to this Article VII, the Indemnifying
Party shall upon payment of such indemnity in full, be subrogated to all rights
of the applicable Indemnified Party with respect to the claims for which such
indemnification relates.

 

ARTICLE VIII

MISCELLANEOUS

 

8.1           Notices.  All notices, requests, demands, claims, and other communications
hereunder shall be in writing and shall be delivered by certified or registered
mail (first class postage pre-paid), guaranteed overnight delivery, or
facsimile transmission if such transmission is confirmed by delivery by
certified or registered mail (first class postage pre-paid) or guaranteed
overnight delivery, to the following addresses

 

14

 

and facsimile numbers (or to such other addresses or facsimile numbers
which such party shall designate in writing to the other party):

 

(a)           if
to either of the Purchasers to:

 

Regional Programming
Partners

c/o Rainbow Media Holdings,
LLC

200 Jericho Quadrangle

Jericho, N.Y. 11753

Attention: President

Facsimile: (516) 803-4755

With a copy to Attention:
General Counsel/Senior Vice President

Business
Affairs

 

cc:                                 Cablevision Systems Corporation

1111 Stewart Avenue

Bethpage, New York 11714

Attention:  Vice Chairman
Facsimile: (516) 803-2577

 

(b)           If
to any of the Fox Parties:

 

c/o Fox Cable Networks Group

10000 Santa Monica Boulevard

Los Angeles, CA 90067

Telephone:  (310) 284-2399

Telecopier:  (310) 299-5656

Attention:  Daniel M. Fawcett, Esq.

 

With a copy to:

 

The News Corporation Limited

1211 Avenue of the Americas

New York, New York 10036

Telephone:  (212) 852-7000

Telecopier:  (212) 768-2029

Attention:  Arthur M. Siskind, Esq.

 

and:

 

15

 

Hogan & Hartson L.L.P.

875 Third Avenue

New York, New York 10022

Telephone:  (212) 918-3000

Telecopier:  (212) 918-3100

Attention:  Ira S. Sheinfeld, Esq.

 

8.2           Entire
Agreement.  This
Agreement, including the Exhibits and Schedules attached hereto and other
documents delivered at the Closing pursuant to this Agreement, contain the
entire understanding of the parties in respect of its subject matter and
supersede all prior agreements and understanding between or among the parties
with respect to such subject matter. 
The Exhibits and Schedules constitute a part hereof as though set forth in
full above.

 

8.3           Expenses; Taxes.  The parties shall pay their own fees and
expenses, including their own counsel fees, incurred in connection with this
Agreement or any transaction contemplated by this Agreement.  Any income tax on either of the Sellers or
capital gains tax on either of the Sellers or stamp duty arising out of the
sale by either of the Sellers of the Purchased Partnership Interests to the
Purchasers shall be the sole responsibility of and shall be paid by the
Sellers.  Any deed, transfer or other
tax arising out of the sale of the Purchased Partnership Interests and the
filing fees for the filing under the Hart-Scott-Rodino Act shall be paid
one-half each by the Sellers and the Purchasers.

 

8.4           Amendment; Waiver.  This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
all of the parties.  Except as expressly
provided herein, no failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege.  No waiver of any breach of any provision
shall be deemed to been a waiver of any preceding or succeeding breach of the
same or any other provision, nor shall any waiver be implied from any course of
dealing between or among the parties. 
No extension of time for performance of any obligations or other acts
hereunder or under any agreement shall be deemed to be an extension of the time
or performance of any obligations or any other acts.  The rights and remedies of the parties under this Agreement are
in addition to all other rights and remedies, at law or equity, that they may
have against each other.

 

8.5           Binding Effect; Assignment.  The rights and obligations under this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and permitted assigns. 
The rights and obligations of this Agreement may not be assigned by any
of the parties without the prior written consent of the other parties.

 

16

 

8.6           Counterparts.  This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one and the same instrument.

 

8.7           Headings.  The headings contained in this Agreement are for the convenience
of reference only and are not to be given any legal effect and shall not affect
the meaning or interpretation of this Agreement.

 

8.8           Governing Law; Interpretation.  This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of New
York applicable to contracts to be wholly performed within such State.  The Sellers and Purchasers hereby (i)
irrevocably submit to the jurisdiction of any New York State or Federal court
sitting in New York City in any action or proceeding arising out of or relating
to this Agreement, (ii) waive any defense based on doctrines of venue or forum
non conveniens, or similar rules or doctrines, and (iii) irrevocably agree that
all claims in respect of such an action or proceeding may be heard and
determined in such New York State or Federal court.  The Sellers and Purchasers hereby waive any right to trial by
jury in any action, proceeding or counterclaim arising out of or relating to
this Agreement.

 

8.9           Severability.  The parties stipulate that the terms and provisions of this
Agreement are fair and reasonable as of the date of this Agreement.  However, if any provision of this Agreement
is determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions
of this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.  If,
moreover, any of those provisions shall for any reason be determined by a court
of competent jurisdiction to be unenforceable because excessively broad or
vague as to duration, geographical scope, activity or subject, it shall be
construed by limiting, reducing or defining it, so as to be enforceable.

 

8.10         Benefit.  Nothing in this Agreement, express or implied, is intended or
shall be construed to confer upon or give to any person, firm or corporation
other than the parties hereto any remedy or claim under or by reason of this
Agreement or any term, covenant or condition hereof, all of which shall be for
the sole and exclusive benefit of the parties hereto.

 

8.11         Non-Recourse.  Notwithstanding anything contained in this Agreement to the
contrary, it is expressly understood and agreed by the parties hereto that no
representation, undertaking or agreement made in this Agreement on the part of
any party hereto was made or intended to be made as a personal or individual
representation, undertaking or agreement on the part of any incorporator,
stockholder, director, officer, agent, member or partner (past, present or
future), of any party and no personal or individual liability or responsibility
is assumed by, nor shall any recourse at any time be asserted or enforced
against, any such incorporator, stockholder, director, officer, agent, member
or partner, all of which recourse (whether in common law, in equity, by statute
or otherwise) is hereby forever waived and released.

 

17

 

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

 

	
   

  	
  FOX SPORTS NET BAY AREA
  HOLDINGS,

  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  FOX SPORTS NET CHICAGO
  HOLDINGS,  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  FOX SPORTS NET,  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
  Title:

  

 

18

 

	
   

  	
  REGIONAL PACIFIC
  HOLDINGS II, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Regional Programming
  Partners, its 

  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Rainbow Regional
  Holdings LLC,

  its Managing Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RRH I, LLC, a member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Rainbow Media Holdings,
  LLC

  its sole member

  

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
   

  	
  REGIONAL CHICAGO
  HOLDINGS II, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Regional Programming
  Partners, its

  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Rainbow Regional
  Holdings LLC,

  its Managing Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RRH I, LLC, a member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Rainbow Media Holdings,
  LLC

  its sole member

  

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

The undersigned hereby unconditionally and irrevocably
guarantees to the Fox Parties the punctual performance of all obligations of
the Pacific Purchaser hereunder.

 

	
   

  	
  REGIONAL PACIFIC
  HOLDINGS, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

19

 

The undersigned hereby unconditionally and irrevocably
guarantees to the Fox Parties the punctual performance of all obligations of
the Chicago Purchaser hereunder.

 

 

	
   

  	
  REGIONAL CHICAGO
  HOLDINGS, L.L.C

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

20Exhibit 10.41

 

EXECUTION
COPY

 

AGREEMENT AND PLAN OF MERGER

 

 

AS OF MARCH 6, 2000

 

 

BY AND BETWEEN

 

CABLEVISION OF MICHIGAN, INC.

 

CSC HOLDINGS, INC.

 

AND

 

CHARTER COMMUNICATIONS, INC.

 

 

TABLE OF CONTENTS

 

	
  Section

  	
  1.

  	
  Definitions

  	
   

  
	
   

  	
  1.01

  	
  Certain Definitions

  	
   

  
	
   

  	
  1.02

  	
  Other
  Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  2.

  	
  The Merger

  	
   

  
	
   

  	
  2.01

  	
  The Merger

  	
   

  
	
   

  	
  2.02

  	
  Issuance of Common
  Stock

  	
   

  
	
   

  	
  2.03

  	
  Estimated
  Adjustment Statement; Basic Subscriber Estimate

  	
   

  
	
   

  	
  2.04

  	
  Post Closing
  Adjustment

  	
   

  
	
   

  	
  2.05

  	
  Sales and Transfer Taxes

  	
   

  
	
   

  	
  2.06

  	
  Directors of Michigan

  	
   

  
	
   

  	
  2.07

  	
  Officers of Michigan

  	
   

  
	
   

  	
  2.08

  	
  Surrender and Payment

  	
   

  
	
   

  	
  2.09

  	
  Charter of CCI

  	
   

  
	
   

  	
  2.10

  	
  By-laws of CCI

  	
   

  
	
   

  	
  2.11

  	
  Directors
  and Officers of CCI

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  3.

  	
  Representations and
  Warranties of Holdings and Michigan

  	
   

  
	
   

  	
  3.01

  	
  Organization
  and Authority

  	
   

  
	
   

  	
  3.02

  	
  Legal Capacity;
  Approvals and Consents

  	
   

  
	
   

  	
  3.03

  	
  Financial
  Statements

  	
   

  
	
   

  	
  3.04

  	
  Changes in Operation

  	
   

  
	
   

  	
  3.05

  	
  Taxes

  	
   

  
	
   

  	
  3.06

  	
  Acquired Assets

  	
   

  
	
   

  	
  3.07

  	
  The CATV Business

  	
   

  
	
   

  	
  3.08

  	
  Labor Contracts
  and Actions

  	
   

  
	
   

  	
  3.09

  	
  Employee Benefit Plans

  	
   

  
	
   

  	
  3.10

  	
  Contracts

  	
   

  
	
   

  	
  3.11

  	
  Legal
  and Governmental Proceedings and Judgments

  	
   

  
	
   

  	
  3.12

  	
  Finders and Brokers

  	
   

  
	
   

  	
  3.13

  	
  Intangible Property

  	
   

  
	
   

  	
  3.14

  	
  Insurance

  	
   

  
	
   

  	
  3.15

  	
  Inventory

  	
   

  
	
   

  	
  3.16

  	
  Overbuilds

  	
   

  
	
   

  	
  3.17

  	
  Rebuild

  	
   

  
	
   

  	
  3.18

  	
  Acquisition of
  Right

  	
   

  
	
   

  	
  3.19

  	
  Securities Laws Matters

  	
   

  
	
   

  	
  3.20

  	
  Basis of
  the Acquired Assets

  	
   

  
	
   

  	
  3.21

  	
  Title to Capital
  Stock

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  4.

  	
  Representations and
  Warranties of CCI

  	
   

  
	
   

  	
  4.01

  	
  Organization;
  Authority.

  	
   

  
	
   

  	
  4.02

  	
  Authorization and
  Binding Obligation.

  	
   

  
	
   

  	
  4.03

  	
  No Conflict; Required
  Consents.

  	
   

  

 

i

 

	
   

  	
  4.04

  	
  Finders and
  Brokers.

  	
   

  
	
   

  	
  4.05

  	
  Private Offering.

  	
   

  
	
   

  	
  4.06

  	
  Investment Company.

  	
   

  
	
   

  	
  4.07

  	
  Claims and Litigation.

  	
   

  
	
   

  	
  4.08

  	
  Absence of Certain
  Changes.

  	
   

  
	
   

  	
  4.09

  	
  Compliance with
  Laws and Court Orders.

  	
   

  
	
   

  	
  4.10

  	
  CCI Capital Stock.

  	
   

  
	
   

  	
  4.11

  	
  No Vote Required.

  	
   

  
	
   

  	
  4.12

  	
  SEC Filings; Financial
  Information.

  	
   

  
	
   

  	
  4.13

  	
  Existing
  Registration Rights Agreements

  	
   

  
	
   

  	
  4.14

  	
  Transfers of
  New LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  5.

  	
  Covenants
  Pending Closing

  	
   

  
	
   

  	
  5.01

  	
  Business of Transferor

  	
   

  
	
   

  	
  5.02

  	
  Access to Information

  	
   

  
	
   

  	
  5.03

  	
  Monthly
  Financial Statements

  	
   

  
	
   

  	
  5.04

  	
  Notification of
  Certain Matters

  	
   

  
	
   

  	
  5.05

  	
  Environmental
  Reports

  	
   

  
	
   

  	
  5.06

  	
  Modifications to
  Rebuild

  	
   

  
	
   

  	
  5.07

  	
  Lien Searches

  	
   

  
	
   

  	
  5.08

  	
  Covenants of CCI.

  	
   

  
	
   

  	
  5.09

  	
  Listing of  Equity Consideration

  	
   

  
	
   

  	
  5.10

  	
  Certificate of Merger

  	
   

  
	
   

  	
  5.11

  	
  Excluded Assets
  and Excluded Liabilities

  	
   

  
	
   

  	
  5.12

  	
  Transfer of
  Acquired Assets to New LLC

  	
   

  
	
   

  	
  5.13

  	
  Formation of New LLC

  	
   

  
	
   

  	
  5.14

  	
  Franchise Renewal

  	
   

  
	
   

  	
  5.15

  	
  Retransmission
  Consent Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  6.

  	
  Deliveries at
  Closing

  	
   

  
	
   

  	
  6.01

  	
  Deliveries by Holdings

  	
   

  
	
   

  	
  6.02

  	
  Deliveries by CCI

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  7.

  	
  Conditions
  to the Obligations of CCI

  	
   

  
	
   

  	
  7.01

  	
  Receipt of Consents

  	
   

  
	
   

  	
  7.02

  	
  Holdings’ and Michigan’s
  Authority

  	
   

  
	
   

  	
  7.03

  	
  Performance by
  Holdings and Michigan

  	
   

  
	
   

  	
  7.04

  	
  Absence of
  Breach of Warranties and Representations

  	
   

  
	
   

  	
  7.05

  	
  Absence of
  Proceedings

  	
   

  
	
   

  	
  7.06

  	
  No Transferor
  Material Adverse Effect

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  8.

  	
  Conditions to
  the Obligations of Holdings and Michigan

  	
   

  
	
   

  	
  8.01

  	
  Receipt of Consents

  	
   

  
	
   

  	
  8.02

  	
  CCI’s Authority

  	
   

  
	
   

  	
  8.03

  	
  Performance by CCI

  	
   

  
	
   

  	
  8.04

  	
  Absence
  of Breach of Representations and Warranties

  	
   

  
	
   

  	
  8.05

  	
  Absence of
  Proceedings

  	
   

  
	
   

  	
  8.06

  	
  No CCI Material
  Adverse Effect

  	
   

  

 

ii

 

	
   

  	
  8.07

  	
  Listing of
  Equity Consideration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  9.

  	
  Covenants

  	
   

  
	
   

  	
  9.01

  	
  Compliance
  with Conditions

  	
   

  
	
   

  	
  9.02

  	
  Compliance
  with HSR Act and Rules

  	
   

  
	
   

  	
  9.03

  	
  Applications
  for Assignment of Contracts or CATV Instruments

  	
   

  
	
   

  	
  9.04

  	
  Records, Taxes and Related
  Matters

  	
   

  
	
   

  	
  9.05

  	
  Continuation Billing
  Services

  	
   

  
	
   

  	
  9.06

  	
  Non-Competition

  	
   

  
	
   

  	
  9.07

  	
  Retained
  Franchises

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  10.

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

  	
   

  
	
   

  	
  10.01

  	
  Survival of
  Representations, Warranties, Covenants and Other Agreements

  	
   

  
	
   

  	
  10.02

  	
  Indemnification
  by Holdings

  	
   

  
	
   

  	
  10.03

  	
  Indemnification
  by CCI

  	
   

  
	
   

  	
  10.04

  	
  Third Party
  Claims

  	
   

  
	
   

  	
  10.05

  	
  Remaining
  Liabilities

  	
   

  
	
   

  	
  10.06

  	
  Method of Payment

  	
   

  
	
   

  	
  10.07

  	
  Tax Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  11.

  	
  Further
  Assurances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  12.

  	
  Closing

  	
   

  
	
   

  	
  12.01

  	
  Closing

  	
   

  
	
   

  	
  12.02

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  13.

  	
  Miscellaneous

  	
   

  
	
   

  	
  13.01

  	
  Amendments; Waivers

  	
   

  
	
   

  	
  13.02

  	
  Entire Agreement

  	
   

  
	
   

  	
  13.03

  	
  Cablevision Name.

  	
   

  
	
   

  	
  13.04

  	
  Binding Effect;
  Assignment

  	
   

  
	
   

  	
  13.05

  	
  Construction;
  Counterparts

  	
   

  
	
   

  	
  13.06

  	
  Notices

  	
   

  
	
   

  	
  13.07

  	
  Expenses of the Parties

  	
   

  
	
   

  	
  13.08

  	
  Non-Recourse

  	
   

  
	
   

  	
  13.09

  	
  Third Party Beneficiary

  	
   

  
	
   

  	
  13.10

  	
  Governing Law

  	
   

  
	
   

  	
  13.11

  	
  Press Releases

  	
   

  
	
   

  	
  13.12

  	
  Severability

  	
   

  
	
   

  	
  13.13

  	
  Specific Performance

  	
   

  

 

iii

 

	
  EXHIBIT A

  	
   

  	
  -

  	
   

  	
  Service Territory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
   

  	
  -

  	
   

  	
  Form of Opinion of
  Holdings’ Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
   

  	
  -

  	
   

  	
  Form of Opinion of
  Holdings’ FCC Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT D

  	
   

  	
  -

  	
   

  	
  Form of Opinion of CCI’s
  Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT E

  	
   

  	
  -

  	
   

  	
  Form of Registration
  Rights Agreement

  

 

vi

 

	
  Schedule 1.01(a)

  	
   

  	
  -

  	
   

  	
  CATV Licenses

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01(b)

  	
   

  	
  -

  	
   

  	
  Current Assets

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01(c)

  	
   

  	
  -

  	
   

  	
  Current Liabilities

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01(d)

  	
   

  	
  -

  	
   

  	
  Excluded Assets

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01(e)

  	
   

  	
  -

  	
   

  	
  Excluded Liabilities

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01(f)

  	
   

  	
  -

  	
   

  	
  Permitted Encumbrances

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01(g)

  	
   

  	
  -

  	
   

  	
  Rebuild Expenditure

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.02

  	
   

  	
  -

  	
   

  	
  Consents and Approvals

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.05

  	
   

  	
  -

  	
   

  	
  Tax Notices and
  Assessments

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.06(b)

  	
   

  	
  -

  	
   

  	
  Real Property

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.06(d)

  	
   

  	
  -

  	
   

  	
  Environmental Matters

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.06(g)

  	
   

  	
  -

  	
   

  	
  Other Commitments

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.07(b)

  	
   

  	
  -

  	
   

  	
  Material Contracts

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.07(c)

  	
   

  	
  -

  	
   

  	
  Notice of Claims or
  Purported Defaults in CATV Instruments

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.07(d)

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.07(e)

  	
   

  	
  -

  	
   

  	
  Copyrights

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.07(f)

  	
   

  	
  -

  	
   

  	
  Head-ends

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.09(a)

  	
   

  	
  -

  	
   

  	
  Employee Benefit Plans

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.10

  	
   

  	
  -

  	
   

  	
  Contracts in Default

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.11

  	
   

  	
  -

  	
   

  	
  Legal Proceedings

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.13

  	
   

  	
  -

  	
   

  	
  Intangible Property

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.14

  	
   

  	
  -

  	
   

  	
  Insurance

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.16

  	
   

  	
  -

  	
   

  	
  Overbuilds

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.10

  	
   

  	
  -

  	
   

  	
  Capital Stock

  

 

viii

 

AGREEMENT AND PLAN OF MERGER

 

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

 

R E C I T A L S

 

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

 

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

 

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

 

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

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained
herein, the parties agree as follows, each intending to be legally bound as and
to the extent herein provided.

 

1.             Definitions.

 

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

 

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

 

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

 

 

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

 

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

 

Asserted
Claim has the meaning
set forth in Section 10.04.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

CCI’s
Counsel means Irell
& Manella LLP.

 

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

 

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

 

3

 

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

 

Charter
Holdco has the
meaning set forth in Section 2.02.

 

Closing means a meeting for the purpose of
concluding the transactions contemplated by this Agreement held at the place
and on the date fixed in accordance with Section 12.01.

 

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

 

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

 

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

 

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

 

Competitive
Business has the
meaning set forth in Section 9.06.

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

DOJ means the United States Department of
Justice.

 

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

 

Employees means all current active employees of
Transferor.

 

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

 

Environmental
Firm has the meaning
set forth in Section 5.05.

 

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

 

Environmental
Reports has the
meaning set forth in Section 5.05.

 

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

 

5

 

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

 

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

 

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

 

ERISA means the Employee Retirement Income
Security Act of 1974, as the same has been and may be amended from time to
time.

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

FCC means the Federal Communications Commission.

 

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

 

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

 

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

 

FTC means the United States Federal Trade
Commission.

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

HSR
Report means the
Notification and Report Form for Certain Mergers and Acquisitions mandated by
the HSR Act and Rules.

 

Income
Statement has the
meaning set forth in Section 3.03.

 

Indemnitee has the meaning set forth in Section 10.04.

 

Indemnitor has the meaning set forth in Section 10.04.

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

MMDS has the meaning set forth in Section 9.06.

 

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

 

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

 

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

 

Outside
Date has the meaning
set forth in Section 12.01.

 

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

 

Permitted
Encumbrances means
those Encumbrances set forth in Schedule 1.01(f) hereto and all other
Encumbrances (excluding Encumbrances for borrowed money), if any, which do not
materially detract from the value of the tangible property subject thereto and
which do not materially interfere with the present and continued use of such
property in the operation of the CATV Business.

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SMATV has the meaning set forth in Section 9.06.

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Working
Capital means Current
Assets minus Current Liabilities.

 

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

 

11

 

20           The Merger.

 

2.1           The Merger.

 

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

 

(b)           As part of a simultaneous transaction occurring at the
Closing, Michigan and CCI will cause a Certificate of Merger (the “Certificate
of Merger”) to be executed, acknowledged and filed with the Secretary of
State of the State of Delaware as provided in Section 251 of the Delaware
General Corporation Law, as amended (“DGCL”).  The Merger shall become effective at the time when the
Certificate of Merger has been duly filed with the Secretary of the State of
Delaware or such other time as shall be agreed upon by the parties and set
forth in the Certificate of Merger in accordance with the DGCL (the “Effective
Time”).  From and after the
Effective Time, CCI will possess all the rights, powers, privileges and
franchises and be subject to all of the obligations, liabilities, restrictions
and disabilities of Michigan and CCI, all as provided under the DGCL.

 

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

 

2.3           Estimated
Adjustment Statement; Basic Subscriber Estimate.

 

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

 

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

 

12

 

2.4           Post Closing
Adjustment.

 

(1)                                  Preliminary Adjustment; Final Adjustment.

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

(2)                                  Subscriber Adjustment.

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

30           Representations and Warranties
of Holdings and Michigan.

 

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

 

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

 

3.2           Legal
Capacity; Approvals and Consents.

 

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

 

16

 

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

 

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

 

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

 

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

 

3.5           Taxes.  Except as disclosed on Schedule 3.05:

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

3.8           Labor
Contracts and Actions.

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

3.12         Finders and
Brokers.  Holdings has employed
Waller Capital Corporation as its broker in the sale provided herein and will
pay and discharge the claim thereof for commission or expense reimbursement in
connection therewith.  Neither Holdings
nor Michigan has entered into any other contract, arrangement or understanding
with any Person or firm, nor is either of them aware of any claim or basis for
any claim based upon any act or omission of Holdings or any of its affiliates,
which may result in the obligation of CCI to pay any finder’s fees, brokerage
or agent’s commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

3.19         Securities
Laws Matters.

 

(10           Holdings (i) understands that the Equity
Consideration has not been registered under the Securities Act or under any
state securities law or blue sky law of any jurisdiction (“Blue Sky Law”)
and that the Equity Consideration is being offered and sold in reliance upon
federal and state exemptions for transactions not involving a public offering;
(ii) is an “accredited investor” as that term is defined under
Rule 501 promulgated under the Securities Act; (iii) has received the
CCI SEC Documents and has had the opportunity to obtain additional information
as desired in order to evaluate the merits and risks inherent in holding the
Equity Consideration; (iv) is able to bear the economic risk of holding
the Equity Consideration; and (v) is acquiring the Equity Consideration
solely for investment and not with a view to the distribution or resale
thereof; provided that, in each
case, Holdings may sell the Common Stock pursuant to an effective registration
statement, may sell all or any part of the Equity Consideration pursuant to an
exemption from registration under the Securities Act or may enter into
transactions which have the effect of “monetizing” or hedging its ownership of
the Equity Consideration (provided any such sale or transfer of the Equity
Consideration is exempt from registration under the Securities Act or, if not
exempt, would be registered under the terms of the Registration Rights
Agreement).  The term “solely for
investment” used in this Section has the meaning given to that term for
purposes of determining the availability of an exemption from registration
under Section 4(2) of the Securities Act.

 

24

 

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

 

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

 

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

 

4.             Representations and Warranties of
CCI.

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

4.10         CCI Capital
Stock.

 

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

 

(20           The Equity Consideration has been duly authorized and,
when issued and delivered in accordance with the terms of this Agreement, will
have been validly issued and will be fully paid and nonassessable and the
issuance thereof is not subject to any preemptive or other similar right.

 

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

 

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

 

4.12         SEC Filings;
Financial Information.

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

5.             Covenants Pending Closing.

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

5.2           Access to
Information.

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

6.             Deliveries at Closing.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

(100         The stock certificates and corporate
records of Michigan.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7.             Conditions to the Obligations of CCI.

 

The obligations of CCI to
complete the transactions provided for herein are subject to the fulfillment of
all of the following conditions, any of which may be waived in writing by CCI:

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

8.             Conditions to the Obligations of Holdings
and Michigan.

 

The obligations of Holdings
and Michigan to complete the transactions provided for herein are subject to
the fulfillment of all of the following conditions, any of which may be waived
in writing by Transferor.

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

9.             Covenants.

 

9.1           Compliance
with Conditions.  Each of
the parties hereto covenants and agrees with the other to exercise reasonable
commercial efforts to perform, comply with and otherwise satisfy each and every
one of the conditions to be satisfied by such party hereunder, and each party
shall use reasonable commercial efforts to notify promptly the other if it
shall learn that any conditions to performance of either party will not be
fulfilled.

 

9.2           Compliance
with HSR Act and Rules.

 

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

 

(20           Each of the parties hereto will use its reasonable
commercial efforts to comply promptly with any applicable requirements under
the HSR Act and Rules relating to filing and furnishing of information to the
FTC and the Antitrust Division of the DOJ, the parties’ actions to include,
without limitation, (i) filing or causing to be filed within 45 days after
the date of this Agreement the HSR Report required to be filed by them, or by
any other Person that is part of the same “person” (as defined in the HSR Act
and Rules) or any of them, and taking all other action required by the HSR Act
or Rules; (ii) coordinating the filing of such HSR Reports (and exchanging
mutual information required to be disclosed therein) so as to present both HSR
Reports to the FTC and the DOJ at the time selected by the mutual agreement of
Holdings and CCI, and to avoid substantial errors or inconsistencies between
the two in the description of the transaction; and (iii) using their reasonable
commercial efforts to comply with any additional request for documents or
information made by the FTC or the DOJ or by a court and assisting the other
parties to so comply.

 

(30           Notwithstanding anything herein to the contrary, in the
event that the consummation of the transactions contemplated hereby is
challenged by the FTC or the DOJ or any agency or instrumentality of the
federal government by an action to stay or enjoin such consummation or such a
stay or injunction is granted (preliminary or otherwise), then CCI and
Transferor shall use their

 

36

 

reasonable
commercial efforts to contest such action until such time as either party
terminates this Agreement under Article 12. 
To effectuate the intent of the foregoing provisions of this Section
9.02, the parties agree to exchange requested or required information in making
the filings and in complying as above provided, and the parties agree to take
all necessary steps to preserve the confidentiality of the information set
forth in any filings including, without limitation, limiting disclosure of
exchanged information to counsel for the nondisclosing party.  Each party promptly will inform the other of
any material communication from the Federal Trade Commission, the DOJ, the FCC
or any other domestic or foreign Governmental Authority regarding any
antitrust, competition or trade regulatory laws, rules or regulations of any
domestic or foreign Governmental Authority as they bear upon the transactions
contemplated by this Agreement.  If any
party or any affiliate thereof receives a request for additional information or
documentary material from any such government or authority with respect to the
transactions contemplated by this Agreement, such party will endeavor in good
faith to make, as soon as reasonably practicable and after consultation with
the other party, an appropriate response to such request.

 

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

 

37

 

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

 

9.4           Records,
Taxes and Related Matters.

 

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

 

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

 

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

 

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

 

38

 

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

 

9.7           Retained
Franchises.

 

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

 

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

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

10.2         Indemnification
by Holdings.

 

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

 

40

 

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

 

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

 

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

 

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

 

41

 

(“Indemnitor”)
notice thereof in accordance with Section 13.06.  The Indemnitee shall give Indemnitor an opportunity to control
negotiations toward resolution of such claim without the necessity of
litigation, and, if litigation ensues, to defend the same with counsel
reasonably acceptable to Indemnitee, at Indemnitor’s expense, and Indemnitee
shall extend reasonable cooperation in connection with such defense.  If the Indemnitor fails to assume control of
the negotiations prior to litigation or to defend such action within a
reasonable time, Indemnitee shall be entitled, but not obligated, to assume
control of such negotiations or defense of such action, and Indemnitor shall be
liable to the Indemnitee for its expenses reasonably incurred in connection
therewith which Indemnitor shall promptly pay. 
Neither Indemnitor nor Indemnitee shall settle, compromise, or make any
other disposition of any Asserted Claims, which would or might result in any
liability to Indemnitee or Indemnitor, respectively, under this Article 10
without the written consent of Indemnitee or Indemnitor, respectively, which
shall not be unreasonably withheld.

 

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

 

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

 

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

 

11.          Further Assurances.

 

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

 

12.          Closing.

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

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

 

43

 

13.          Miscellaneous.

 

13.1         Amendments;
Waivers.  This Agreement cannot be
changed or terminated orally and no waiver of compliance with any provision or
condition hereof and no consent provided for herein shall be effective unless
evidenced by an instrument in writing duly executed by the party hereto sought to
be charged with such waiver or consent. 
No waiver of any term or provision hereof shall be construed as a
further or continuing waiver of such term or provision or any other term or
provision.  Any condition to the
performance of any party hereto which may legally be waived at or prior to the
Closing may be waived in writing at any time by the party or parties entitled
to the benefit thereof.

 

13.2         Entire Agreement.  This Agreement sets forth the entire
understanding and agreement of the parties and supersedes any and all prior
agreements, memoranda, arrangements and understandings relating to the subject
matter hereof other than the Registration Rights Agreement, the Confidentiality
Agreement referred to in Section 5.02(a), and any other agreement or document
executed on or prior to the date of this Agreement that expressly refers to
this Section 13.02.  No
representation, warranty, promise, inducement or statement of intention has
been made by any party which is not contained in this Agreement, and no party
shall be bound by, or be liable for, any alleged representation, promise,
inducement or statement of intention not contained herein or therein.

 

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

 

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

 

13.5         Construction;
Counterparts.  The Recitals, the
Article and Section headings in, and the title of Schedules to this Agreement
are for convenience of reference only and do not form a part hereof and do not
in any way modify, interpret or construe the intentions of the parties.  This

 

44

 

Agreement
may be executed in one or more counterparts, and all such counterparts shall
constitute one and the same instrument.

 

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

 

	
   

  	
  If to Holdings

  	
   

  	
   

  
	
   

  	
  or Michigan:

  	
   

  	
  CSC Holdings, Inc.

  
	
   

  	
   

  	
   

  	
  1111 Stewart Avenue

  
	
   

  	
   

  	
   

  	
  Bethpage, New York  11714

  
	
   

  	
   

  	
   

  	
  Telephone:  (516) 803-2300

  
	
   

  	
   

  	
   

  	
  Facsimile:  (516) 803-2577

  
	
   

  	
   

  	
   

  	
  Attention:  General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  copies to:

  	
   

  	
  Cablevision Systems
  Corporation

  
	
   

  	
   

  	
   

  	
  1111 Stewart Avenue

  
	
   

  	
   

  	
   

  	
  Bethpage, New York  11714

  
	
   

  	
   

  	
   

  	
  Telephone:  (516) 803-2300

  
	
   

  	
   

  	
   

  	
  Facsimile:  (516) 803-2577

  
	
   

  	
   

  	
   

  	
  Attention:  General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Sullivan & Cromwell

  
	
   

  	
   

  	
   

  	
  125 Broad Street

  
	
   

  	
   

  	
   

  	
  New York, New York  10004

  
	
   

  	
   

  	
   

  	
  Telephone:  (212) 558-4000

  
	
   

  	
   

  	
   

  	
  Facsimile:  (212) 558-3588

  
	
   

  	
   

  	
   

  	
  Attention:  John P. Mead

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to CCI

  	
   

  	
  c/o Charter
  Communications, Inc.

  
	
   

  	
   

  	
   

  	
  1244 Powerscourt Drive

  
	
   

  	
   

  	
   

  	
  St. Louis, MO  63131

  
	
   

  	
   

  	
   

  	
  Telephone:

  	
  (314) 965-0555

  
	
   

  	
   

  	
   

  	
  Facsimile:

  	
  (304) 965-8793

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  Heather
  L. Wood, Vice President

  Finance & Acquisitions

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  	
  Kent Kalkwarf

  
	
   

  	
   

  	
   

  	
  Senior Vice President
  & Chief Financial Officer

  
	
   

  	
   

  	
   

  	
  Curtis Shaw, Esq.,

  
	
   

  	
   

  	
   

  	
  Senior Vice President
  & General Counsel

  

 

45

 

	
   

  	
  and copies to:

  	
   

  	
  Irell & Manella LLP

  
	
   

  	
   

  	
   

  	
  1800 Avenue of the Stars,
  Suite 900

  
	
   

  	
   

  	
   

  	
  Los Angeles, CA  90067

  
	
   

  	
   

  	
   

  	
  Telephone:

  	
  (310) 277-1010

  
	
   

  	
   

  	
   

  	
  Facsimile:

  	
  (310) 203-7199

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  Alvin G. Segel, Esq.

  

 

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

 

13.7         Expenses of
the Parties.  Except as otherwise
provided herein, all expenses incurred by or on behalf of the parties hereto in
connection with the authorization, preparation and consummation of this
Agreement, including, without limitation, all fees and expenses of agents,
representatives, counsel and accountants employed by the parties hereto in
connection with the authorization, preparation, execution and consummation of
this Agreement shall be borne solely by the party who shall have incurred the same.

 

13.8         Non-Recourse.  No partner, officer, director, shareholder
or other holder of an ownership interest of or in any party to this Agreement
shall have any personal liability in respect of any such party’s obligations
under this Agreement by reason of his or its status as such partner, officer,
director, shareholder or other holder.

 

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

 

13.10       Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW
OF CONFLICTS, OF THE STATE OF NEW YORK.

 

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

 

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

 

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

 

46

 

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

 

(SIGNATURE PAGE FOLLOWS)

 

47

 

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

 

	
   

  	
  CSC HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CABLEVISION OF MICHIGAN,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHARTER COMMUNICATIONS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

48

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]