TRANSACTION AGREEMENT

Exhibit 2.1

Execution Copy

     

TRANSACTION AGREEMENT

DISCOVERY HOLDING COMPANY,

DISCOVERY COMMUNICATIONS, INC.,

ADVANCE/NEWHOUSE PROGRAMMING PARTNERSHIP,

ADVANCE PUBLICATIONS, INC., and

NEWHOUSE BROADCASTING CORPORATION

Dated as of June 4, 2008

TABLE OF CONTENTS

		Page
ARTICLE I Definitions and Usage			2
Section 1.01. Definitions			2
Section 1.02. Additional Terms			9
ARTICLE II Transactions and Closing			11
Section 2.01. Pre-Closing Restructuring Transactions and AMG Spin-Off			11
Section 2.02. Contributions and Merger			12
Section 2.03. The Merger			13
Section 2.04. Closing Date			18
Section 2.05. ANPP Escrow Shares			19
ARTICLE III Representations and Warranties of DHC			19
Section 3.01. Organization and Standing			19
Section 3.02. Power and Authority; Execution and Delivery; Enforceability			19
Section 3.03. Board and Stockholder Approval			20
Section 3.04. No Conflicts; Consents			20
Section 3.05. Capitalization of DHC; New DHC and Merger Sub			21
Section 3.06. Subsidiaries			23
Section 3.07. DHC Reports and Financial Statements; Debt and No Undisclosed Material Liabilities			24
Section 3.08. Registration Statement; Proxy Statement/Prospectus			25
Section 3.09. Contracts			25
Section 3.10. Absence of Changes or Events			26
Section 3.11. Compliance with Laws			26
Section 3.12. Litigation			26
Section 3.13. Affiliate and Other Transactions			26
Section 3.14. Brokers or Finders			26
Section 3.15. Tax Matters			26
Section 3.16. Employee Matters			27
Section 3.17. Takeover Laws			28
Section 3.18. Limitation on Warranties			28
ARTICLE IV Representations and Warranties of ANPP			28
Section 4.01. Organization and Standing			28
Section 4.02. Power and Authority; Execution and Delivery; Enforceability			29
Section 4.03. No Conflicts; Consents			29
Section 4.04. Ownership of ANPP Contributed Assets; DHC Shares			30
Section 4.05. Registration Statement; Proxy Statement/Prospectus			30
Section 4.06. Litigation			31

		Page
Section 4.07. Brokers or Finders			31
Section 4.08. Private Placement and Certain Tax Representations			31
Section 4.09. Limitation on Warranties			32
ARTICLE V Agreements and Covenants			32
Section 5.01. Covenants Relating to Conduct of Business			32
Section 5.02. Access to Information			33
Section 5.03. No Additional Options			33
Section 5.04. Confidentiality			33
Section 5.05. Reasonable Best Efforts			33
Section 5.06. Expenses; Transfer Taxes			34
Section 5.07. Publicity			35
Section 5.08. Stockholder Meeting; Registration Statement and Other SEC Filings			35
Section 5.09. Notification of Certain Matters			36
Section 5.10. Defense of Litigation			36
Section 5.11. Section 16 Matters			37
Section 5.12. Transaction Documents			37
Section 5.13. Discovery Matters			37
Section 5.14. ANPP Parents Undertaking			38
Section 5.15. Tax Covenants			38
ARTICLE VI [Intentionally Omitted]			38
ARTICLE VII Conditions Precedent			38
Section 7.01. Conditions to Obligations of Each Party			38
Section 7.02. Additional Conditions to ANPP’s Obligations			39
Section 7.03. Additional Conditions to the DHC Parties’ Obligations			40
Section 7.04. Frustration of Closing Conditions			41
ARTICLE VIII Termination			41
Section 8.01. Termination			41
Section 8.02. Effect of Termination			42
ARTICLE IX Indemnification			42
Section 9.01. Indemnification			42
Section 9.02. Calculation of Losses			44
Section 9.03. Defense of Claims			45
Section 9.04. Survival			46
Section 9.05. Tax Treatment			47
Section 9.06. Exclusive Remedy			47
ARTICLE X Miscellaneous			47
Section 10.01. Notices			47

		Page
Section 10.02. No Third Party Beneficiaries			48
Section 10.03. Waiver			48
Section 10.04. Assignment			48
Section 10.05. Integration			48
Section 10.06. Captions			49
Section 10.07. Counterparts			49
Section 10.08. Severability			49
Section 10.09. Governing Law			49
Section 10.10. Jurisdiction			49
Section 10.11. WAIVER OF JURY TRIAL			49
Section 10.12. Specific Performance			49
Section 10.13. Amendments			50
Section 10.14. Interpretation			50
Section 10.15. Rules of Construction			50

Exhibits
Form of Escrow Agreement		Exhibit A
Form of Registration Rights Agreement		Exhibit B
Form of Reorganization Agreement		Exhibit C
Form of Tax Sharing Agreement		Exhibit D
Restated Certificate of Incorporation		Exhibit 2.01(c)(i)
Restated Bylaws		Exhibit 2.01(c)(ii)
Form of Rights Agreement		Exhibit 2.01(c)(iii)
Merger Agreement		Exhibit 2.03(a)
ANPP Tax Opinion Representations		Exhibit E
DHC Tax Opinion Representations		Exhibit F

          TRANSACTION AGREEMENT (this “ Agreement ”), dated as of June 4, 2008, by and among Discovery Holding Company, a Delaware corporation (“ DHC ”), Discovery Communications, Inc. a Delaware corporation and Wholly-Owned Subsidiary of DHC (“ New DHC ”), DHC Merger Sub, Inc., a Delaware corporation and Wholly-Owned Subsidiary of New DHC (“ Merger Sub ”), Advance/Newhouse Programming Partnership, a New York general partnership (“ ANPP ”), and with respect to Section 5.14 hereof only, Advance Publications, Inc., a New York corporation (“ API ”), and Newhouse Broadcasting Corporation, a New York corporation (“ NBCo ” and together with API, the “ ANPP Parents ”).

Preliminary Statement

          WHEREAS, DHC Beneficially Owns all of the membership interests of Ascent Media Group, LLC, a Delaware limited liability company (“ AMG ”), which, among other things, operates the Audio Business (as defined below);

          WHEREAS, the board of directors of DHC (the “ DHC Board ”) has deemed it advisable and in the best interest of DHC and its stockholders to effect the AMG Spin-Off (as defined below) pursuant to this Agreement and the Reorganization Agreement (as defined below), and the completion of the AMG Spin-Off is a condition precedent to the transactions contemplated by this Agreement;

          WHEREAS, DHC is the Beneficial Owner of 25,200 limited liability company interests (the “ DHC Discovery Shares ”) of Discovery Communications Holding, LLC, a Delaware limited liability company (“ Discovery ”), and ANPP is the owner of 12,600 limited liability company interests (the “ ANPP Discovery Shares ”) of Discovery;

          WHEREAS, DHC is the Beneficial Owner of limited partnership interests of Animal Planet, L.P., a Delaware limited partnership (“ Animal Planet ”), representing 10% of the outstanding partnership interests of Animal Planet (the “ DHC AP Interests ”), and ANPP is the owner of limited partnership interests of Animal Planet, representing 5% of the outstanding ownership interest of Animal Planet (such interests, the “ ANPP AP Interests ” and, together with the ANPP Discovery Shares, the “ ANPP Contributed Assets ”);

          WHEREAS, upon the terms and conditions set forth in this Agreement and the other Transaction Documents (as defined below), (i) each of DHC, New DHC and ANPP desire that, immediately following the AMG Spin-Off, ANPP contribute the ANPP Discovery Shares and the ANPP AP Interests to New DHC in exchange for shares of New DHC Preferred Stock (as defined below) as provided herein, and (ii) the DHC Board has deemed it advisable and in the best interest of DHC and its stockholders to, immediately following the contribution described in clause (i) of this recital, merge Merger Sub with and into DHC, which will result in New DHC becoming the new public parent company of Discovery and DHC (as the surviving corporation in the merger with Merger Sub) will become a Wholly-Owned Subsidiary of New DHC and shares of outstanding DHC Common Stock (as defined below) will be converted into shares of New DHC Common Stock (as defined below); and

          NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I

Definitions and Usage

      Section 1.01. Definitions . For purposes of this Agreement, the following terms will have the following meanings:

          “ Affiliate ” of any specified Person means any other Person directly or indirectly Controlling, Controlled by or under direct or indirect common Control with such specified Person; provided , that, for purposes of the foregoing, neither DHC nor ANPP will be an Affiliate of Discovery or of each other.

          “ AMG Spin-Off ” means the distribution to the holders of record of DHC Common Stock at the close of business on the record date set by the DHC Board, of all the issued and outstanding shares of capital stock of the Spin-Off Company on the terms and conditions described in the Reorganization Agreement.

          “ Animal Planet Limited Partnership Agreement ” means the Limited Partnership Agreement of Animal Planet L.P., dated as of December 20, 1996, by and among Animal Planet, L.L.C., Liberty Animal Planet, Inc., NBCo and Cox Discovery, Inc., as amended from time to time.

          “ ANPP Tax Opinion Representations ” means the representations set forth in a letter, which will be executed by ANPP on such date as the DHC Tax Counsel or the ANPP Tax Counsel issues its respective opinion and re-executed as of the Closing Date, to be made by ANPP to the ANPP Tax Counsel and DHC Tax Counsel as a condition to, and in connection with, the issuance of the respective opinions of the ANPP Tax Counsel and DHC Tax Counsel, including representations in form and substance as set forth in Exhibit E to this Agreement (amended as necessary to reflect changes in relevant facts occurring after the date of this Agreement and on or before the execution or re-execution date, as applicable).

          “ Antitrust Division ” means the Antitrust Division of the United States Department of Justice.

          “ Audio Business ” means the businesses operated in the United States by AMG and its subsidiaries under the brand names Soundelux, Todd-AO, Sound One, POP Sound, Modern Music, DMG and The Hollywood Edge, substantially all the assets and Liabilities of which as of the date hereof are reflected on the unaudited balance sheet of the Audio Company as of December 31, 2007, and the operating results of which are reflected on the unaudited Audio Business consolidated statement of operations (adjusted) for the period ended December 31, 2007, a copy of each of which is set forth as Schedule 1.01 hereto.

          “ Audio Company ” means Ascent Media Creative Sound Services, Inc., which following the DHC Restructuring will own all of the businesses, assets, properties and Liabilities comprising the Audio Business.

          “ Beneficial Ownership ” or “ Beneficially Own ” has the meaning given to such term in Rule 13d-3 under the Exchange Act; provided , however , that for purposes of determining

Beneficial Ownership, a Person will be deemed to be the Beneficial Owner of any securities which such Person has the right to acquire (whether such right is exercisable immediately or only after the passage of time or occurrence of conditions) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) or upon the exercise of conversion rights, exchange rights, warrants, options, rights or otherwise.

          “ Business Day ” means any day other than Saturday, Sunday or any day on which banks are required or permitted to close in Denver, Colorado or New York, New York.

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

          “ Communications Act ” means the Communications Act of 1934, as amended, and the rules, regulations and published orders of the FCC thereunder.

          “ Contracts ” means all contracts, agreements, commitments and other legally binding arrangements, whether oral or written.

          “ Control ” means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by agreement or otherwise, and the terms “Controlling”, “Controlled by”, and “under common Control with” will have correlative meanings.

          “ Current Effective Tax Rate ” means (i) 8.4%, in the case of amounts received as dividends from a domestic corporation for which the dividends received deduction is allowed under Section 243(a) of the Code, as modified by Section 243(c) of the Code (or any corresponding provision of any successor statute) and (ii) 42%, in all other cases, in each case, subject to adjustment for any calendar year in which the highest federal corporate Tax rate is other than the 35% Tax rate, or the percentage of the dividends received deduction under Section 243(a) of the Code (as modified by Section 243(c) of the Code) is other than the 80% deduction, included in the calculation of the applicable Tax rate above.

          “ Debt ” means, with respect to any Person at any time, without duplication, (i) all obligations of such Person for borrowed money; (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (iii) all obligations of such Person to pay the deferred purchase price of property or services, except (x) trade accounts payable that arise in the ordinary course of business and (y) obligations relating to employee benefits or any other compensatory arrangements in favor of any employee; (iv) all obligations of such Person as lessee under capital leases other than capital leases relating to equipment entered into in the ordinary course of business consistent with past practice; (v) all obligations of such Person, which such Person is required to, or may, at the option of any other Person, become obligated to, redeem, repurchase or retire; (vi) all Debt of others secured by a Lien on any asset of such Person; and (vii) all Debt of others guaranteed by such Person.

          “ DHC Common Stock ” means the DHC Series A Common Stock, the DHC Series B Common Stock and the DHC Series C Common Stock.

          “ DHC Incentive Plans ” means the Discovery Holding Company 2005 Incentive Plan (As Amended and Restated Effective August 15, 2007), the Discovery Holding Company 2005 Non-Employee Director Plan (As Amended and Restated Effective August 15, 2007) and the Discovery Holding Company Transitional Stock Adjustment Plan (As Amended and Restated Effective August 15, 2007).

          “ DHC Parties ” means, collectively, DHC, New DHC and Merger Sub.

          “ DHC Plan ” means each bonus, deferred compensation, incentive compensation, stock purchase, stock option, severance or termination pay, hospitalization, medical, life or other insurance, supplemental unemployment benefits, profit-sharing, pension or retirement plan, program, agreement or arrangement, and each other employee benefit plan, program, agreement or arrangement, sponsored, maintained or contributed to or required to be contributed to at any time since March 9, 2005 by DHC or by any trade or business, whether or not incorporated (“ DHC ERISA Affiliate ”), that together with DHC would be deemed a “controlled group” within the meaning of Section 4001(a)(14) of ERISA, for the benefit of any employee, director or former employee or director of DHC or any DHC ERISA Affiliate including any such type of plan established, maintained or contributed to under the laws of any foreign country; provided , however , that DHC Plan will not include any such plan or arrangement maintained by (i) Discovery or any Subsidiary of Discovery, (ii) the Spin-Off Company or any Subsidiary of the Spin-Off Company, or (iii) the Audio Company or any Subsidiary of the Audio Company.

          “ DHC Restructuring ” means the restructuring effected by DHC and its Subsidiaries pursuant to the steps set forth on Schedule 1.02 hereto.

          “ DHC Rights Agreement ” means the Rights Agreement, dated as of July 18, 2005, between DHC and Computershare Trust Company, N.A., as Rights Agent.

          “ DHC Series A Common Stock ” means the Series A Common Stock, par value $0.01 per share, of DHC (including the DHC Series A Right attached thereto).

          “ DHC Series B Common Stock ” means the Series B Common Stock, par value $0.01 per share, of DHC (including the DHC Series B Right attached thereto).

          “ DHC Series C Common Stock ” means the Series C Common Stock, par value $0.01 per share, of DHC (including the DHC Series C Right attached thereto).

          “ DHC Series A Right ” has the meaning ascribed to it in the DHC Rights Agreement.

          “ DHC Series B Right ” has the meaning ascribed to it in the DHC Rights Agreement.

          “ DHC Series C Right ” has the meaning ascribed to it in the DHC Rights Agreement.

          “ DHC Tax Opinion Representations ” means the representations set forth in a letter, which will be executed by DHC on such date as the DHC Tax Counsel or the ANPP Tax

Counsel issues its respective opinion and re-executed as of the Closing Date, to be made by DHC to the DHC Tax Counsel and ANPP Tax Counsel as a condition to, and in connection with, the issuance of the respective opinions of the DHC Tax Counsel and the ANPP Tax Counsel, including representations in form and substance as set forth in Exhibit F to this Agreement (amended as necessary to reflect changes in relevant facts occurring after the date of this Agreement and on or before the execution or re-execution date, as applicable).

          “ Discovery Limited Liability Company Agreement ” means the Amended and Restated Limited Liability Company Agreement of Discovery Communications Holding, LLC, dated as of May 14, 2007, by and among ANPP, LMC Discovery, Inc. and John S. Hendricks.

          “ DGCL ” means the Delaware General Corporation Law, as amended from time to time.

          “ Escrow ” means the escrow account established pursuant to the Escrow Agreement.

          “ Escrow Agent ” means an entity mutually agreeable to New DHC and ANPP to serve as escrow agent under the Escrow Agreement.

          “ Escrow Agreement ” means the agreement between New DHC and ANPP in substantially the form of Exhibit A (subject to any reasonable changes requested by the Escrow Agent), pursuant to which, among other matters, ANPP and New DHC will establish the Escrow pursuant to the terms and conditions set forth in Section 2.05.

          “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

          “ Fair Market Value ” means with respect to a share of any series of New DHC Common Stock on any day, the last sale price (or, if no last sale price is reported, the average of the high bid and low asked prices) for a share of the applicable series of New DHC Common Stock on such day (or if such day is not a trading day, the next trading day) as reported on the Nasdaq Stock Market, Inc. or if such shares are not then listed on the Nasdaq Stock Market, Inc., as reported on the consolidated transaction reporting system for the principal national securities exchange on which shares of the applicable series of New DHC Common Stock are listed on such day; provided, that, if for any day the Fair Market Value of a share of the applicable series of New DHC Common Stock is not determinable by any of the foregoing means, then the Fair Market Value for such day shall be determined in good faith by the board of directors of New DHC or any committee thereof on the basis of such quotations and other considerations as the board or its committee deems appropriate.

          “ FCC ” means the United States Federal Communications Commission, including a bureau or subdivision thereof acting on delegated authority.

          “ FTC ” means the United States Federal Trade Commission.

          “ GAAP ” means generally accepted accounting principles as accepted by the accounting profession in the United States as in effect from time to time, consistently applied.

          “ Governmental Authority ” means any supranational, national, federal, state or local government, foreign or domestic, or the government of any political subdivision of any of the foregoing, or any entity, authority, agency, ministry, department, board, commission, court or other similar body exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any authority or other quasi-governmental entity established by a Governmental Authority to perform any of such functions.

          “ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

          “ Income Tax ” means all Taxes based on or measured by net income.

          “ Law ” means any federal, state, local or foreign law, statute or ordinance, common law or any rule, regulation, standard, judgment, order, writ, injunction, decree, arbitration award, agency requirement, license or permit of a Governmental Authority, including any of the foregoing as they relate to Tax.

          “ Liabilities ” means any and all debts, liabilities, commitments and obligations, whether or not fixed, contingent or absolute, matured or unmatured, direct or indirect, liquidated or unliquidated, accrued or unaccrued, known or unknown, and whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto.

          “ Lien ” means any lien, mortgage, pledge, security interest, encumbrance or other similar security arrangement which grants to any Person any security interest, including any restriction on the transfer of any asset, any right of first offer, right of first refusal, right of first negotiation or any similar right in favor of any Person, any restriction on the receipt of any income derived from any asset and any limitation or restriction on the right to own, vote, sell or otherwise dispose of any security, but excluding any such restrictions, limitations and other encumbrances for Taxes not yet due and payable.

          “ Loss ” means any loss, liability, claim, damage or expense (including reasonable legal fees and expenses).

          “ New DHC Common Stock ” means the New DHC Series A Common Stock, the New DHC Series B Common Stock and the New DHC Series C Common Stock.

          “ New DHC Preferred Stock ” means the New DHC Series A Preferred Stock and the New DHC Series C Preferred Stock.

          “ New DHC Rights ” means, collectively, the New DHC Series A Rights, the New DHC Series B Rights and the New DHC Series C Rights.

          “ New DHC Series A Common Stock ” means the Series A Common Stock, par value $0.01 per share, of New DHC (including, after the Effective Time of the Merger, the New DHC Series A Right attached thereto pursuant to the New DHC Rights Agreement).

          “ New DHC Series B Common Stock ” means the Series B Common Stock, par value $0.01 per share, of New DHC (including, after the Effective Time of the Merger, the New DHC Series B Right attached thereto pursuant to the New DHC Rights Agreement).

          “ New DHC Series C Common Stock ” means the Series C Common Stock, par value $0.01 per share, of New DHC (including, after the Effective Time of the Merger, the New DHC Series C Right attached thereto pursuant to the New DHC Rights Agreement).

          “ New DHC Series A Preferred Stock ” means the Series A Convertible Participating Preferred Stock, par value $0.01 per share, of New DHC (including, after the Effective Time of the Merger, the New DHC Series A Right attached thereto pursuant to the New DHC Rights Agreement).

          “ New DHC Series C Preferred Stock ” means the Series C Convertible Participating Preferred Stock, par value $0.01 per share, of New DHC (including, after the Effective Time of the Merger, the New DHC Series C Right attached thereto pursuant to the New DHC Rights Agreement).

          “ New DHC Series A Right ” means a Series A Right (as defined in the New DHC Rights Agreement).

          “ New DHC Series B Right ” means a Series B Right (as defined in the New DHC Rights Agreement).

          “ New DHC Series C Right ” means a Series C Right (as defined in the New DHC Rights Agreement).

          “ Permitted Liens ” means, collectively, (i) all statutory or other liens for taxes or assessments which are not yet due or the validity of which is being contested in good faith by appropriate proceedings, (ii) all mechanics’, material men’s, carriers’, workers’ and repairers’ liens, and other similar liens imposed by law, incurred in the ordinary course of business, which allege unpaid amounts that are less than 30 days delinquent or which are being contested in good faith by appropriate proceedings, and (iii) all other Liens which do not materially detract from or materially interfere with the marketability, value or present use of the asset subject thereto or affected thereby.

          “ Person ” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Authority or other entity.

          “ Registration Rights Agreement ” means the agreement between New DHC and ANPP relating to the registration of shares of New DHC Common Stock issuable upon conversion of shares of New DHC Preferred Stock, in substantially the form of Exhibit B hereto.

          “ Related Party ” means any Affiliate of a Person; provided , that, for the purposes of this definition only, without limiting the generality of the definition of Affiliate, any Person (“ First Person ”) that directly or indirectly owns and has the right to vote or direct the vote (in the election of directors) of securities of another Person (“ Other Person ”) constituting 25% or more of the outstanding voting power of such Other Person will be deemed to Control such

Other Person, so long as no other securityholder of such Other Person directly or indirectly owns and has the right to vote or direct the vote (in the election of directors) of securities of such Other Person constituting a greater percentage of the outstanding voting power that is owned by such First Person in such Other Person.

          “ Retained Subsidiaries ” means the Subsidiaries of DHC, after giving effect to the DHC Restructuring, other than the Spin-Off Company, the Audio Company and their respective Subsidiaries.

          “ SEC ” means the United States Securities and Exchange Commission.

          “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

          “ Reorganization Agreement ” means the agreement relating to the AMG Spin-Off by and among DHC, AMG and certain of their Subsidiaries, in substantially the form of Exhibit C hereto.

          “ Spin-Off Effective Time ” has the meaning ascribed to such term in the Reorganization Agreement.

          “ Subsidiary ” when used with respect to any Person, means any other Person (1) of which (x) in the case of a corporation, at least (A) a majority of the equity and (B) a majority of the voting interests are owned or Controlled, directly or indirectly, by such first Person, by any one or more of its Subsidiaries, or by such first Person and one or more of its Subsidiaries or (y) in the case of any Person other than a corporation, such first Person, one or more of its Subsidiaries, or such first Person and one or more of its Subsidiaries (A) owns a majority of the equity interests thereof and (B) has the power to elect or direct the election of a majority of the members of the governing body thereof or otherwise has Control over such organization or entity; or (2) that is required to be consolidated with such first Person for financial reporting purposes under GAAP; provided that, for purposes of this Agreement, unless otherwise specified, prior to the Closing neither Discovery nor any of its Subsidiaries will be deemed to be Subsidiaries of (x) DHC or any of DHC’s Subsidiaries or (y) ANPP or any of ANPP’s Subsidiaries, whether or not such entities would otherwise be Subsidiaries of DHC or any of DHC’s Subsidiaries or ANPP or any of ANPP’s Subsidiaries, as applicable, under the foregoing definition.

          “ Tax Return ” means a report, return or other information required to be supplied to or filed with a Taxing Authority with respect to any Tax including an information return, claim for refund, amended Tax Return or declaration of estimated Tax.

          “ Taxes ” means (i) all taxes (whether federal, state, local or foreign) based upon or measured by income and any other tax whatsoever, including gross receipts, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, employment, excise, or property taxes, and all unclaimed property assessments, together with any interest or penalties imposed with respect thereto and (ii) any obligations under any agreements or arrangements with respect to any Taxes described in clause (i) above.

          “ Taxing Authority ” means any Governmental Authority having jurisdiction over the assessment, determination, collection or other imposition of Tax.

          “ Tax Sharing Agreement ” means the agreement among DHC, New DHC, the Spin-Off Company and the other parties thereto, in substantially the form of Exhibit D hereto.

          “ Transaction Documents ” means this Agreement, the Merger Agreement, the Reorganization Agreement, the Registration Rights Agreement and the Escrow Agreement, collectively.

          “ Transactions ” means the transactions contemplated by the Transaction Documents.

          “ Unconditional Time ” means such time prior to the Spin-Off Effective Time as all conditions to each party’s obligation to consummate the Transactions have been satisfied or waived, other than the delivery of (v) the certificates specified in Sections 7.02(c) and 7.03(c), (w) the DHC Tax Opinion Representations and the ANPP Tax Opinion Representations, (x) the opinions of ANPP Tax Counsel and DHC Tax Counsel pursuant to Sections 7.02(d) and 7.03(d), respectively, (y) all documents and instruments necessary to effect the ANPP Contribution (including share, limited liability company interest or limited partnership interest certificates, if any, or other instruments evidencing the ANPP Contribution Shares and the ANPP Contributed Assets) and (z) all documents and instruments necessary to effect the Merger (including the Certificate of Merger), each of which have been validly executed by the applicable party.

          “ VWAP ” means, (i) with respect to the DHC Series A Common Stock or DHC Series B Common Stock, the average of the daily volume weighted average prices of such security over the 5-trading days ending on the trading day immediately preceding the Closing Date or, if applicable, the trading day immediately preceding the first date on which the DHC Series A Common Stock or DHC Series B Common Stock, as applicable, trades regular way on the Nasdaq Global Select Market without the right to receive shares of common stock of the Spin-Off Company, and (ii) with respect to the New DHC Series A Common Stock, New DHC Series B Common Stock, New DHC Series C Common Stock, Series A common stock of the Spin-Off Company or Series B common stock of the Spin-Off Company, the average of the daily volume weighted average prices of such security over the 10-trading days beginning on the day immediately following the Closing.

          “ Wholly-Owned Subsidiary ” means, as to any Person, a Subsidiary of such Person, 100% of the equity and voting interest in which is owned beneficially or of record, directly and/or indirectly, by such Person.

      Section 1.02. Additional Terms . As used in this Agreement, the following terms will have the meanings set forth in the referenced sections of this Agreement:

Term		Section
Agreement		Preamble
AMG		Preliminary Statement
Animal Planet		Preliminary Statement

Term		Section
ANPP		Preamble
ANPP AP Interests		Preliminary Statement
ANPP Indemnified Parties		Section 9.01(a)(i)
ANPP Contribution		Section 2.02(a)
ANPP Contributed Assets		Preliminary Statement
ANPP Contribution Shares		Section 2.02(a)
ANPP Discovery Shares		Preliminary Statement
ANPP Escrow Shares		Section 2.02(a)
ANPP Parents		Preamble
ANPP Tax Counsel		Section 7.02(d)
Antitrust Laws		Section 5.05(b)(ii)
API		Preamble
Balance Sheet		Section 3.07(b)
Carryover Director		Section 2.03(d)(ii)
Certificate of Merger		Section 2.03(a)
Closing		Section 2.04
Closing Date		Section 2.04
Closing Documents		Section 5.12(b)
Contribution Effective Time		Section 2.02(a)
Converted Options		Section 2.03(d)(iv)
Converted Series A Option		Section 2.03(d)(i)
Converted Series B Option		Section 2.03(d)(iv)
DHC		Preamble
DHC AP Interests		Preliminary Statement
DHC Board		Preliminary Statement
DHC Bylaws		Section 2.03(e)
DHC Charter		Section 2.03(e)
DHC Discovery Shares		Preliminary Statement
DHC Group		Section 3.15(b)
DHC Indemnified Parties		Section 9.01(b)
DHC Preferred Stock		Section 3.05(a)(i)
DHC SEC Filings		Section 3.07(a)
DHC Stockholder Approval		Section 3.03
DHC Tax Counsel		Section 7.03(d)
Director Series A Option		Section 2.03(d)(ii)
Discovery		Preliminary Statement
Effective Time		Section 2.03(a)
Existing New DHC Common Stock		Section 3.05(c)(i)
Indemnified Party		Section 9.03(a)
Indemnifying Party		Section 9.03(a)
LMC		Section 3.15(b)
LMC Group		Section 3.15(b)
Loss Percentage		Section 9.02
Material Contracts		Section 3.09

Term		Section
Merger		Section 2.03(a)
Merger Agreement		Section 2.03(a)
Merger Sub		Preamble
NBCo		Preamble
New DHC		Preamble
New DHC Bylaws		Section 2.01(c)(ii)
New DHC Charter		Section 2.01(c)(i)
New DHC Rights Agreement		Section 2.01(c)(iii)
Nondisclosure Agreement		Section 5.04
Proxy Statement/Prospectus		Section 5.08(b)
Registration Statement		Section 5.08(b)
Rights Dividend		Section 2.03(c)
Rollover SARs		Section 2.03(d)(iii)
Scheduled Series A Option		Section 2.03(d)(i)
Series A Option		Section 2.03(d)(iii)
Series B Option		Section 2.03(d)(iv)
Series C Option		Section 2.03(d)(i)
Series A SAR		Section 2.03(d)(iii)
Series C SAR		Section 2.03(d)(iii)
Special Meeting		Section 5.08(a)
Spin-Off Company		Section 2.01(a)(i)
Spin-Off Company Series A Option		Section 2.03(d)(i)
Spin-Off Company Series B Option		Section 2.03(d)(iv)
Submission		Section 5.05(b)
Surviving Entity		Section 2.03(a)
Transfer Taxes		Section 5.06(b)
Voting Subsidiary Debt		Section 3.06(a)

ARTICLE II

Transactions and Closing

          Upon the terms and subject to the conditions set forth herein, the parties will consummate each of the following transactions.

      Section 2.01. Pre-Closing Restructuring Transactions and AMG Spin-Off .

          (a) After the Unconditional Time, but prior to the Spin-Off Effective Time, DHC will complete the DHC Restructuring such that after the DHC Restructuring:

          (i) DHC will be the sole shareholder of an entity (the “ Spin-Off Company ”) that owns (x) all of the businesses, assets, properties and Liabilities currently held by AMG, other than the businesses, assets, properties and Liabilities comprising the Audio Business and (y) all cash and cash equivalents held by DHC immediately prior to

the Closing (other than, at the sole discretion of DHC, cash held in bank accounts in the name of Audio Company or any of its Subsidiaries); and

          (ii) DHC, the Retained Subsidiaries and the Audio Company and its Subsidiaries will hold all of the businesses, assets, properties and Liabilities currently held by DHC, other than those businesses, assets (including all cash and cash equivalents held by DHC immediately prior to the Closing (other than, at the sole discretion of DHC, cash held in bank accounts in the name of Audio Company or any of its Subsidiaries)), properties and Liabilities transferred to the Spin-Off Company.

          (b) Following the Unconditional Time and the completion of the DHC Restructuring, but prior to the Contribution Effective Time (as defined below), DHC will take all actions within its control legally required to effect the AMG Spin-Off. The parties agree that, notwithstanding any other provision of this Agreement, DHC and its Subsidiaries, and to the extent applicable, Discovery and its Subsidiaries, are expressly authorized and permitted to take the actions contemplated in Article II.

          (c) Prior to the Contribution Effective Time, New DHC will:

          (i) cause the Certificate of Incorporation of New DHC (“ New DHC Charter ”) to be restated as set forth in Exhibit 2.01(c)(i) and filed with the Delaware Secretary of State;

          (ii) cause the Bylaws (“ New DHC Bylaws ”) of New DHC to be restated as set forth in Exhibit 2.01(c)(ii) ; and

          (iii) execute and deliver to the Computershare Trust Company, N.A., the Rights Agreement between New DHC and the Computershare Trust Company, N.A., in substantially the form of Exhibit 2.01(c)(iii) hereof (the “ New DHC Rights Agreement ”).

      Section 2.02. Contributions and Merger . At the Closing, immediately following the consummation of the AMG Spin-Off, upon the terms and subject to the conditions set forth in this Agreement and in the order set forth below (and otherwise substantially concurrently):

          (a) ANPP will contribute, convey, transfer, assign and deliver to New DHC (the “ ANPP Contribution ”), free and clear of all Liens, the ANPP Contributed Assets, in exchange for (i) a number of shares of New DHC Series A Preferred Stock equal to one-half of the sum of (x) the aggregate number of shares of New DHC Series A Common Stock to be issued in the Merger and (y) the aggregate number of shares of New DHC Series B Common Stock to be issued in the Merger, (ii) a number of shares of New DHC Series C Preferred Stock equal to one-half of the aggregate number of shares of New DHC Series C Common Stock to be issued in the Merger, (iii) an additional number of shares of New DHC Series A Preferred Stock equal to one-half of the sum of (x) the aggregate number of shares of New DHC Series A Common Stock to which the Series A SARs (as defined below) relate, (y) the aggregate number of shares of New DHC Series A Common Stock issuable upon exercise of the Converted Series A Options (as defined below) and (z) the aggregate number of shares of New DHC Series B Common Stock issuable upon exercise of the Converted Series B Option (as defined below), and

(iv) an additional number of shares of New DHC Series C Preferred Stock equal to one-half of the sum of (x) the aggregate number of shares of New DHC Series C Common Stock to which the Series C SARs (as defined below) relate and (y) the aggregate number of shares of New DHC Series C Common Stock issuable upon exercise of the Series C Options (as defined below) (such additional shares of New DHC Preferred Stock referenced in (iii) and (iv) (including any shares of New DHC Common Stock issuable upon conversion of such shares of New DHC Preferred Stock) are referred to collectively as the “ ANPP Escrow Shares ”, and together with the other shares of New DHC Preferred Stock referenced in (i) and (ii) are referred to collectively as the “ ANPP Contribution Shares ”). The contribution, conveyance, transfer and assignment by ANPP of the ANPP Contributed Assets will be evidenced by duly endorsed in blank limited liability company interest or limited partnership interest certificates, if any, or by instruments of transfer reasonably satisfactory in form and substance to DHC, and the issuance of the ANPP Contribution Shares by New DHC to ANPP will be evidenced by share certificates or by instruments reasonably satisfactory in form and substance to ANPP. The time at which the ANPP Contribution is completed pursuant to this Section 2.02(a) is referred to as the “ Contribution Effective Time ”. The ANPP Escrow Shares will be issued by New DHC to ANPP no later than the second Business Day after the number of shares of New DHC Common Stock subject to the Series A SARs, the Converted Series A Options, Converted Series B Options, Series C SARs and Series C Options is determined as provided in Section 2.03(d) below.

          (b) DHC, New DHC and Merger Sub will effect the Merger, as described in Section 2.03 below.

      Section 2.03. The Merger .

          (a) Simultaneously with the execution and delivery of this Agreement, DHC, New DHC and Merger Sub have entered into an Agreement and Plan of Merger, dated the date hereof, a copy of which is attached hereto as Exhibit 2.03(a) (the “ Merger Agreement ”). As described in Section 2.02, upon the terms and conditions of the Merger Agreement and immediately following the Contribution Effective Time, Merger Sub will merge (the “ Merger ”) with and into DHC in accordance with the provisions of the DGCL, and upon the Effective Time, the separate corporate existence of Merger Sub will cease and DHC will continue as the surviving entity in the Merger (the “ Surviving Entity ”). The Effective Time of the Merger (the “ Effective Time ”) will be on the date and at the time that the certificate of merger with respect to the Merger, containing the provisions required by, and executed in accordance with Section 251 of the DGCL (the “ Certificate of Merger ”), has been accepted for filing by the Delaware Secretary of State, and all other documents required by the DGCL to effectuate the Merger will have been properly executed and filed (or such later date and time as may be specified in the Certificate of Merger); provided that, under no circumstances, will the Effective Time of the Merger occur prior to the Spin-Off Effective Time or the Contribution Effective Time.

          (b) From and after the Effective Time of the Merger, the Merger will have the effects set forth in the DGCL (including Sections 259, 260 and 261 thereof) and the Merger Agreement, the terms of which are incorporated into this Section 2.03. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time of the Merger, all the properties, rights, privileges, powers and franchises of DHC and Merger Sub will vest in the

Surviving Entity, and all debts, liabilities and duties of DHC and Merger Sub will, by operation of law, become the debts, liabilities and duties of the Surviving Entity.

          (c) By virtue of the Merger and as more fully described in the Merger Agreement, at the Effective Time of the Merger:

          (i) each share of DHC Series A Common Stock outstanding immediately prior to the Effective Time of the Merger (together with the DHC Series A Right attached thereto) will be converted into and represent the right to receive, and will be exchangeable for, 0.50 shares of New DHC Series A Common Stock and 0.50 shares of New DHC Series C Common Stock;

          (ii) each share of DHC Series B Common Stock outstanding immediately prior to the Effective Time of the Merger (together with the DHC Series B Right attached thereto) will be converted into and represent the right to receive and will be exchangeable for, 0.50 shares of New DHC Series B Common Stock and 0.50 shares of New DHC Series C Common Stock;

          (iii) each share of DHC Series A Common Stock and DHC Series B Common Stock held in treasury of DHC immediately prior to the Effective Time of the Merger will be canceled and retired without payment of any consideration therefor and without any conversion thereof; and

          (iv) each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time of the Merger will be converted into one share of the common stock of the Surviving Entity and the shares of common stock of the Surviving Entity so issued in such conversion will constitute the only outstanding shares of capital stock of the Surviving Entity.

Immediately after the Effective Time of the Merger, the board of directors of New DHC will declare a dividend (the “ Rights Dividend ”) of preferred share purchase rights pursuant to the New DHC Rights Agreement to holders of New DHC Common Stock of record as of the Effective Time of the Merger and the holders of the New DHC Preferred Stock. The Rights Dividend will consist of one New DHC Series A Right for each share of New DHC Series A Common Stock issued in the Merger, one New DHC Series B Right for each share of New DHC Series B Common Stock issued in the Merger, one New DHC Series C Right for each share of New DHC Series C Common Stock issued in the Merger, one New DHC Series A Right for each share of New DHC Series A Preferred Stock outstanding immediately following the Merger, and one New DHC Series C Right for each share of New DHC Series C Preferred Stock outstanding immediately following the Merger. Notwithstanding anything to the contrary contained herein, in the New DHC Charter or any of the Transaction Documents, ANPP hereby acknowledges and agrees to, and ANPP will not object to, the adoption and entering into by New DHC of the New DHC Rights Agreement, the declaration and distribution of the Rights Dividend and the filing of the Certificates of Designation (in substantially the form attached to the New DHC Rights Agreement) establishing the rights, preferences and designations of the series of preferred stock issuable upon exercise of the applicable New DHC Rights.

          (d) Treatment of Options.

          (i) At the Effective Time of the Merger, each of the then outstanding stock options, if any, to purchase shares of DHC Series A Common Stock set forth on Schedule 2.03(d) hereto (each, a “ Scheduled Series A Option ”) issued by DHC pursuant to the DHC Incentive Plans, will, by virtue of the AMG Spin-Off and the Merger, and without any further action on the part of any holder thereof, be converted into (A) an option (a “ Converted Series A Option ”) to purchase shares of New DHC Series A Common Stock in an amount and at an exercise price as determined below, (B) an option (a “ Series C Option ”) to purchase shares of New DHC Series C Common Stock in an amount and at an exercise price as determined below, and (C) an option (a “ Spin-Off Company Series A Option ”) to purchase shares of Series A common stock of the Spin-Off Company in an amount and at an exercise price as determined below. The exercise price of such Converted Series A Option, Series C Option and Spin-Off Company Series A Option will be equal to the applicable VWAP for the series of common stock subject to such option, multiplied by a fraction, the numerator of which is the exercise price of such Scheduled Series A Option and the denominator of which is the VWAP for the DHC Series A Common Stock. The number of shares of New DHC Series A Common Stock, New DHC Series C Common Stock and Series A common stock of the Spin-Off Company subject to the Converted Series A Option, Series C Option and Spin-Off Company Series A Option, as applicable, will be determined so that the aggregate amount by which the Scheduled Series A Option was “in-the-money” or “out-of-the-money”, as applicable, immediately prior to the Transactions (determined according to the VWAP for the DHC Series A Common Stock) is preserved immediately following the Transactions (allocating such aggregate “in-the-money” or “out-of-the-money” amounts according to the applicable VWAP for the New DHC Series A Common Stock, New DHC Series C Common Stock and Series A common stock of the Spin-Off Company). The terms and conditions of each Converted Series A Option, Series C Option and Spin-Off Company Series A Option, including vesting conditions (which will not be accelerated by the Transactions) and the scheduled expiration date, will otherwise remain as set forth in the Scheduled Series A Option converted into such Converted Series A Option, Series C Option and Spin-Off Company Series A Option. If the foregoing calculation results in a Converted Series A Option, Series C Option or Spin-Off Company Series A Option being exercisable for a fraction of a share of New DHC Series A Common Stock, New DHC Series C Common Stock or Series A common stock of the Spin-Off Company, as applicable, then the number of shares of New DHC Series A Common Stock, New DHC Series C Common Stock or Series A common stock of the Spin-Off Company, as applicable, subject to such option will be rounded down to the nearest whole number of shares, with no cash being payable for such fractional share.

          (ii) At the Effective Time of the Merger, each of the then outstanding stock options, if any, to purchase shares of DHC Series A Common Stock (excluding any Scheduled Series A Options and any such options that are, at the option of the holder, exercisable for shares of DHC Series A Common Stock or DHC Series B Common Stock) held by those members of the DHC Board (other than those directors that hold Scheduled Series A Options) as of the date of this Agreement who will be directors of New DHC immediately after the Effective Time of the Merger (each, a “ Director Series

A Option ” any such director, and any director that holds a Scheduled Series A Option, a “ Carryover Director ”) issued by DHC pursuant to the DHC Incentive Plans, will, by virtue of the AMG Spin-Off and the Merger, and without any further action on the part of any holder thereof, be converted into (A) a Converted Series A Option to purchase shares of New DHC Series A Common Stock in an amount and at an exercise price as determined below, and (B) a Series C Option to purchase shares of New DHC Series C Common Stock in an amount and at an exercise price as determined below. The exercise price of such Converted Series A Option and Series C Option will be equal to the applicable VWAP for the series of common stock subject to such option, multiplied by a fraction, the numerator of which is the exercise price of such Director Series A Option and the denominator of which is the VWAP for the DHC Series A Common Stock. The number of shares of New DHC Series A Common Stock and New DHC Series C Common Stock subject to the Converted Series A Option and Series C Option, as applicable, will be determined so that the aggregate amount by which the Director Series A Option was “in-the-money” or “out-of-the-money”, as applicable, immediately prior to the Transactions (determined according to the VWAP for the DHC Series A Common Stock) is preserved immediately following the Transactions (allocating such aggregate “in-the-money” or “out-of-the-money” amounts according to the applicable VWAP for the New DHC Series A Common Stock and New DHC Series C Common Stock). The terms and conditions of each Converted Series A Option and Series C Option, including vesting conditions (which will not be accelerated by the Transactions) and the scheduled expiration date, will otherwise remain as set forth in the Director Series A Option converted into such Converted Series A Option and Series C Option. If the foregoing calculation results in a Converted Series A Option or a Series C Option being exercisable for a fraction of a share of New DHC Series A Common Stock or New DHC Series C Common Stock, as applicable, then the number of shares of New DHC Series A Common Stock or New DHC Series C Common Stock, as applicable, subject to such option will be rounded down to the nearest whole number of shares, with no cash being payable for such fractional share.

          (iii) At the Effective Time of the Merger, each of the then outstanding stock options, if any, to purchase shares of DHC Series A Common Stock other than the Director Series A Options and the Scheduled Series A Options (each, a “ Series A Option ”) issued by DHC pursuant to the DHC Incentive Plans, will, by virtue of the AMG Spin-Off and the Merger, and without any further action on the part of any holder thereof, be converted into (A) a stock appreciation right (a “ Series A SAR ”) with respect to that number of shares of New DHC Series A Common Stock and at such base price as determined below, and (B) a stock appreciation right (a “ Series C SAR ” and, together with the Series A SARs, the “ Rollover SARs ”) with respect to that number of shares of New DHC Series C Common Stock and at such base price as determined below. The base price of each Series A SAR and Series C SAR will be equal to the applicable VWAP for the series of common stock subject to such Rollover SAR, multiplied by a fraction, the numerator of which is the exercise price of such Series A Option and the denominator of which is the VWAP for the DHC Series A Common Stock. The number of shares of New DHC Series A Common Stock and New DHC Series C Common Stock to which the Series A SAR and Series C SAR, as applicable, relate will be determined so that the aggregate amount by which the Series A Option was “in-the-money” or “out-of-

the-money”, as applicable, immediately prior to the Transactions (determined according to the VWAP for the DHC Series A Common Stock) is preserved immediately following the Transactions (allocating such aggregate “in-the-money” or “out-of-the-money” amounts according to the applicable VWAP for the New DHC Series A Common Stock and New DHC Series C Common Stock). The terms and conditions of each Series A SAR and Series C SAR, including vesting conditions (which will not be accelerated by the Transactions) and the scheduled expiration date, will otherwise remain as set forth in the Series A Option converted into such Series A SARs and Series C SARs, except, that, the spread between the Fair Market Value of the underlying shares and the base price of each Series A SAR and Series C SAR will be payable solely in shares of New DHC Series A Common Stock or New DHC Series C Common Stock, as applicable (with such shares of New DHC Common Stock valued at the Fair Market Value of shares of New DHC Series A Common Stock or New DHC Series C Common Stock, as applicable, on the date of exercise). If the foregoing calculation results in a Series A SAR or a Series C SAR being exercisable for a fraction of a share of New DHC Series A Common Stock or New DHC Series C Common Stock, as applicable, then the number of shares of New DHC Series A Common Stock or New DHC Series C Common Stock, as applicable, subject to such SAR will be rounded down to the nearest whole number of shares, with no cash being payable for such fractional share.

          (iv) At the Effective Time of the Merger, each of the then outstanding stock options, if any, to purchase shares of DHC Series B Common Stock (including any such options that are, at the option of the holder, exercisable for shares of DHC Series B Common Stock or DHC Series A Common Stock) held by any Carryover Director (each, a “ Series B Option ”) issued by DHC pursuant to the DHC Incentive Plans, will, by virtue of the AMG Spin-Off and the Merger, and without any further action on the part of any holder thereof, be converted into (A) an option (a “ Converted Series B Option ” and, together with the Converted Series A Options and Series C Options, the “ Converted Options ”) to purchase shares of New DHC Series B Common Stock in an amount and at an exercise price as determined below, (B) a Series C Option to purchase shares of New DHC Series C Common stock in an amount and at an exercise price as determined below, and (C) an option (a “ Spin-Off Company Series B Option ”) to purchase shares of Series B common stock of the Spin-Off Company in an amount and at an exercise price as determined below. The exercise price of such Converted Series B Option, Series C Option and Spin-Off Company Series B Option will be equal to the applicable VWAP for the series of common stock subject to such option, multiplied by a fraction, the numerator of which is the exercise price of the Series B Option and the denominator of which is the VWAP for the DHC Series B Common Stock. The number of shares of New DHC Series B Common Stock, New DHC Series C Common Stock and Series B common stock of the Spin-Off Company subject to the Converted Series B Option, Series C Option and Spin-Off Company Series B Option, as applicable, will be determined so that the aggregate amount by which the Series B Option was “in-the-money” or “out-of-the-money”, as applicable, immediately prior to the Transactions (determined according to the VWAP for the DHC Series B Common Stock) is preserved immediately following the Transactions (allocating such aggregate “in-the-money” or “out-of-the-money” amounts according to the applicable VWAP for the New DHC Series B Common Stock, New DHC Series C Common Stock and Series B common stock of the Spin-Off

Company). The terms and conditions of each Converted Series B Option, Series C Option and Spin-Off Company Series B Option, including vesting conditions (which will not be accelerated by the Transactions) and the scheduled expiration date, will otherwise remain as set forth in the Series B Option converted into such Converted Series B Option, Series C Option and Spin-Off Company Series B Option. If the foregoing calculation results in a Converted Series B Option, a Series C Option or a Spin-Off Company Series B Option being exercisable for a fraction of a share of New DHC Series B Common Stock, New DHC Series C Common Stock or Series B common stock of the Spin-Off Company, as applicable, then the number of shares of New DHC Series B Common Stock, New DHC Series C Common Stock or Series B common stock of the Spin-Off Company, as applicable, subject to such option will be rounded down to the nearest whole number of shares, with no cash being payable for such fractional share.

          (v) Notwithstanding the foregoing, DHC may, in its sole discretion, cancel any or all outstanding Director Series A Options, Scheduled Series A Options, Series A Options or Series B Options prior to or as of the Effective Time of the Merger for such cash or other consideration as may be determined to be appropriate by the DHC Board.

          (e) At the Effective Time of the Merger, the Amended and Restated Certificate of Incorporation of DHC (the “ DHC Charter ”) will be amended pursuant to the Certificate of Merger to be identical to the Certificate of Incorporation of Merger Sub in effect immediately prior to the Effective Time of the Merger, except that Article FIRST thereof will read as follows: “The name of the Corporation (which is hereinafter called the “Corporation”) is Discovery Holding Company”. Such DHC Charter as so amended will be the Certificate of Incorporation of the Surviving Entity until thereafter duly amended or restated in accordance with the terms thereof and the DGCL. At the Effective Time, the Restated Bylaws of DHC (the “ DHC Bylaws ”) will be amended to be identical to the bylaws of Merger Sub in effect immediately prior to the Effective Time and, in such amended form, will be the Bylaws of the Surviving Entity until thereafter duly amended or restated in accordance with the terms thereof, the terms of the Certificate of Incorporation of the Surviving Entity and the DGCL.

          (f) As provided in the Merger Agreement, as of and following the Effective Time of the Merger, until their successors are duly elected or appointed in accordance with the New DHC Charter and the New DHC Bylaws, the directors, executive officers and certain other officers of New DHC will be as set forth on Schedule 2.03(f) .

      Section 2.04. Closing Date . Subject to the satisfaction of the conditions set forth in Article VII hereof and the Unconditional Time having occurred (or the waiver thereof by the party entitled to waive that condition), the closing of the AMG Spin-Off, the ANPP Contribution and the Merger (the “ Closing ”) will take place at the offices of Baker Botts L.L.P., 30 Rockefeller Plaza, New York, New York 10012, immediately following the Unconditional Time in the order specified in Sections 2.01 and 2.02, which will be no later than on the second Business Day following the Unconditional Time, or at such other place, time and date as the parties hereto may agree. The date on which the Closing will occur is referred to in this Agreement as the “ Closing Date ”.

      Section 2.05. ANPP Escrow Shares .

          (a) Immediately following the issuance by New DHC of the ANPP Escrow Shares to ANPP pursuant to Section 2.02 hereof, ANPP will deliver the ANPP Escrow Shares to the Escrow Agent pursuant to the Escrow Agreement. The ANPP Escrow Shares, and, except as otherwise provided herein or in the Escrow Agreement, all dividends and distributions made or paid thereon and all income and property resulting therefrom, will be held by the Escrow Agent in Escrow and be subject to the terms of the Escrow Agreement and this Agreement, subject to release as described in the Escrow Agreement. Except as provided in the Escrow Agreement, all of the costs, fees and expenses of the Escrow Agent, and all other costs, fees and expenses arising under the Escrow Agreement, will be borne by New DHC.

          (b) All voting rights with respect to any of the ANPP Escrow Shares may be exercised by ANPP, and the Escrow Agent will from time to time execute and deliver to ANPP such proxies, consents, or other documents as may be necessary to enable ANPP to exercise such rights.

ARTICLE III

Representations and Warranties of DHC

          DHC hereby represents and warrants to ANPP as follows:

      Section 3.01. Organization and Standing . Each DHC Party and Retained Subsidiary is duly organized or formed, validly existing and in good standing under the laws of its respective jurisdiction of organization or formation and has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign corporation or other legal entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where failure to be so qualified or in good standing would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business and operations of DHC and the Retained Subsidiaries, taken as a whole.

      Section 3.02. Power and Authority; Execution and Delivery; Enforceability . Each DHC Party has all requisite corporate power and authority to enter into and deliver this Agreement, the other Transaction Documents to which it is a party and each other agreement, instrument or other document to be executed and delivered by it in connection with this Agreement and the Transactions, to consummate the Transactions and to perform and comply with all the terms and conditions of each Transaction Document to which it is a party. The execution, delivery and, subject to receipt of the DHC Stockholder Approval, performance of this Agreement by each DHC Party and the consummation by the DHC Parties of the Transactions, including the execution, delivery and performance of the other Transaction Documents to which it is a party and the other agreements, documents and instruments to be executed and delivered in connection with this Agreement by such DHC Party and the consummation of the Transactions, have been duly authorized by all necessary action on the part of each DHC Party. This Agreement has been duly executed and delivered by each DHC Party and constitutes the legal, valid and binding

obligation of each DHC Party, enforceable against each DHC Party in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other Laws regarding fraudulent conveyances and preferential transfers and subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity). When executed and delivered in accordance with and pursuant to this Agreement, each other Transaction Document and the other agreements, documents, certificates and instruments to be executed and delivered by a DHC Party in connection with this Agreement and the Transactions will have been duly executed and delivered by such DHC Party thereto and will constitute the legal, valid and binding obligation of such DHC Party, enforceable against it in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect relating to or affecting creditors’ rights generally, including the effect of statutory and other Laws regarding fraudulent conveyances and preferential transfers and subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity).

      Section 3.03. Board and Stockholder Approval . The DHC Board, at a meeting duly called and held, has duly determined that the Transaction Documents and the Transactions are advisable, fair to and in the best interests of DHC and its stockholders. The only vote of stockholders of DHC required under the DGCL, the DHC Charter, DHC’s Bylaws and the rules and regulations of the Nasdaq Global Select Market in order for DHC to validly perform its obligations under this Agreement is the affirmative vote of a majority of the aggregate voting power of the issued and outstanding shares of DHC Common Stock voting together as a single class, and no other vote or approval of or other action by the holders of any capital stock or other securities of DHC is required thereby (the “ DHC Stockholder Approval ”).

      Section 3.04. No Conflicts; Consents . Except as set forth on Schedule 3.04 , none of the execution, delivery and performance by each DHC Party of this Agreement, the execution, delivery and performance by each DHC Party of each other Transaction Document to which it is a party and the other agreements, documents and instruments to be executed and delivered by each of them in connection with the Transactions, nor the consummation of the Transactions, will:

          (a) conflict with, or result in a breach of, the organizational documents of any DHC Party;

          (b) conflict with, violate, result in a breach of, terminate, constitute a default (or an event that, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or require any action, consent, waiver or approval of any Person pursuant to, or give others any rights to modify, amend, accelerate or cancel any term or provision of any material Contract to which DHC or any Retained Subsidiary is a party or pursuant to which any of their respective properties or assets are bound, or result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of DHC or any Retained Subsidiary, except, in each case, for any such conflicts, violations, breaches, defaults or occurrences which

would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business and operations of DHC and the Retained Subsidiaries, taken as a whole;

          (c) assuming the approvals required under Section 3.04(d) are obtained, violate any judgment, order, writ, or injunction, or any decree, or any material Law applicable to DHC or any Retained Subsidiary, or any of their respective properties or assets; or

          (d) require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except for (i) (A) applicable requirements of the Exchange Act, the Securities Act, and state securities or “blue sky” Laws, (B) the pre-merger notification requirements of the HSR Act, (C) DHC Stockholder Approval and (D) approval of the Transactions under the Communications Act and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business and operations of DHC and the Retained Subsidiaries, taken as a whole.

      Section 3.05. Capitalization and Continuation of Existence of DHC; New DHC and Merger Sub .

          (a) Capitalization of DHC .

          (i) The authorized capital stock of DHC consists of (i) 1,250,000,000 shares of common stock, par value $0.01 per share, of which 600,000,000 shares ar