EXHIBIT 10.49
[CABLEVISION LETTERHEAD]
November 25, 1997
Xx. Xxxxxxx X. Xxxxx
Cablevision Systems Corporation
One Media Crossways
Woodbury, New York 11797-2013
CABLEVISION OF NEW YORK CITY
Dear Xx. Xxxxx:
Pursuant to the Purchase and Reorganization Agreement (the "CNYC
Agreement"), dated as of December 20, 1991, between Cablevision Systems
Corporation ("CSC") and Xxxxxxx X. Xxxxx ("Xxxxx"), Xxxxx has the right to put
to CSC all, but not less than all, of his partnership interests in Cablevision
of New York City, L.P. ("CNYC") during two periods. The first period (the
"First Put Period") commences on December 1, 1997 and ends on March 31, 1998, or
such later date that the appraisal contemplated by the CNYC Agreement is
completed. The second put period commences on December 1, 1998 and ends on
March 31, 1999, or such later date that the contemplated appraisal is completed.
Capitalized terms not otherwise defined herein have the meanings given them in
the CNYC Agreement.
The put price formula is set forth in section 6.1(a) of the CNYC
Agreement. Pursuant to an agreement between CSC and Xxxxx, Xxxxx has agreed to
reduce his put price by $2,730,000, representing a portion of certain payments
made to a group who provided seed capital to CNYC. (The price determined under
said section 6.1(a), as reduced by $2,730,000, the "Adjusted Put Price"). The
CNYC Agreement provides for the determination of the Appraised Equity Value of
CNYC in order to calculate the amount of the Preferential Payment (which is a
portion of the put price), but the Preferential Payment cannot exceed $190
million. CSC agrees that it is not necessary to determine the Appraised Equity
Value of CNYC, because it is clear that any determination would result in a
valuation that would exceed the maximum Preferential Payment under the CNYC
Agreement.
CSC has entered into a Contribution and Merger Agreement (as it may be
amended, the "TCI Agreement"), dated as of June 6, 1997, with TCI
Communications, Inc. ("TCI"), which provides, INTER ALIA, (a) for the merger of
a new subsidiary of CSC into CSC and the related creation of a new holding
company for CSC ("Holdings"), and the issuance of Holdings Class A and Class B
Common Stock to the holders of CSC Class A and Class B Common Stock,
respectively, and (b) the simultaneous acquisition by Holdings of certain
corporations that own cable television systems and assets from TCI in exchange
for the issuance to TCI of Class A Common Stock of Holdings. Such transactions
are intended to qualify under section 351 of the Internal Revenue Code of 1986,
as amended (the "Code"). It is anticipated that the closing under the TCI
Agreement will take place in the first or second quarter of 1998.
Under the CNYC Agreement, if Xxxxx exercises his put, CSC may pay the
Adjusted Put Price in cash or in shares of Class B Common Stock, valued at their
then Current Value, which is determined by an appraisal. If CSC elects to pay
in CSC Class B Common Stock and Xxxxx does not accept the appraised value of the
CSC Class B Common Stock, he may elect to take payment in CSC Class A Common
Stock, valued at its Current Value, which is based on the closing sale price on
the American Stock Exchange for the CSC Class A Common Stock over the 20 trading
days preceding the date of the closing of the purchase and sale pursuant to the
put.
If Xxxxx exercises his put during the First Put Period, CSC has agreed
to pay the purchase price to Xxxxx in cash as provided herein. However, CSC
will not be in the financial position to do so until the closing under the TCI
Agreement (the "TCI Closing"). Accordingly, CSC desires that Xxxxx agree to
defer the commencement of the First Put Period until the TCI Closing. In order
to induce Xxxxx to agree to the deferral, CSC and Xxxxx agree as follows:
1. The Preferential Payment is $190 million, and no determination of
the Appraised Equity Value of CNYC shall be required.
2. The First Put Period shall be deferred so it will commence upon
the earlier of (a) July 1, 1998, and (b) the date of the TCI Closing, and
end on the close of business on the 120th day following the date on which
the put first becomes exercisable.
3. On the date of the TCI Closing and thereafter during the First
Put Period, CSC will not be prohibited from paying the Adjusted Put Price
and premium in cash as provided herein by any credit facility, other debt
arrangement or other agreement.
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4. If Xxxxx gives CSC at least five days' notice that he intends to
exercise his put on the date of the TCI Closing, CSC will pay Xxxxx the
Adjusted Put Price in cash by wire transfer on the date of the TCI Closing.
Xxxxx and CSC will agree to the final amount of the Adjusted Put Price at
least two days prior to the TCI Closing. If Xxxxx exercises his put at any
other time during the First Put Period, CSC will pay Xxxxx the Adjusted Put
Price in cash by wire transfer on the fifth business day following receipt
of notice of Xxxxx'x exercise of the put.
5. If Xxxxx exercises his put during the First Put Period, CSC will
pay Xxxxx a premium, payable on the date of payment of the Adjusted Put
Price, equal to $4,483,232.
6. If the TCI Closing does not occur prior to July 1, 1998, this
agreement shall terminate and the CNYC Agreement shall remain in effect in
accordance with its terms, except that the First Put Period will commence
on July 1, 1998 and end on October 31, 1998.
Except as provided above, the CNYC Agreement shall continue in effect
in accordance with its terms.
If this correctly reflects our understanding, please sign and return
the extra copy of this letter, whereupon it will become a binding agreement
between CSC and Xxxxx.
Very truly yours,
CABLEVISION SYSTEMS CORPORATION
By: /s/ Xxxxxxx X. Xxxx
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Title: Vice Chairman
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Agreed as of November __, 1997
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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