SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 4, 1996
TIME WARNER INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-8637 13-1388520
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
75 Rockefeller Plaza, New York, New York 10019
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(Address of principal executive offices)(zip code)
(212) 484-8000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On January 4, 1996, Time Warner Inc. ("Time Warner")
completed its acquisition of Cablevision Industries Corporation
("CVI") and certain related companies, as previously described in Time
Warner's Current Reports on Form 8-K dated February 6, 1995, May 30,
1995, August 14, 1995, and November 14, 1995, pursuant to which (i)
CVI merged with a wholly owned subsidiary of Time Warner and became a
direct, wholly owned subsidiary of Time Warner (the "CVI Merger"),
(ii) Cablevision Management Corporation of Philadelphia ("CMP") merged
with a wholly owned subsidiary of Time Warner and became a direct,
wholly owned subsidiary of Time Warner (the "CMP Merger"), (iii)
immediately following the CVI Merger, Cablevision Industries of Middle
Florida, Inc. ("CIMF") merged into CVI (the "CIMF Merger") and (iv)
immediately following the CVI Merger, CVI and certain of its
subsidiaries purchased the entire equity interests or all of the
assets (collectively, the "Gerry Purchase") of each of Cablevision
Industries of Tennessee L.P. ("CITLP"), Cablevision Industries Limited
Partnership ("CILP"), Cablevision Industries of Saratoga Associates
("CISA"), Cablevision of Fairhaven/Acushnet ("CFA") and Cablevision
Industries of Florida, Inc. ("CIF" and, together with CIMF, CMP,
CITLP, CILP, CISA and CFA, the "Gerry Companies", and together with
CVI, the "Cablevision Companies"). The CMP Merger, the CIMF Merger and
the Gerry Purchase are referred to herein as the "Gerry Acquisition".
The CVI Merger and the Gerry Acquisition are referred to herein as the
"Transactions".
The consideration received by the stockholders of CVI
(principally Alan Gerry) for the CVI Merger was 457,075 shares of the
common stock of Time Warner, 3,250,000 and 3,226,792 shares,
respectively, of two newly designated series of convertible preferred
stock of Time Warner and the assumption of the liabilities of CVI. A
description of the two newly designated series of convertible
preferred stock of Time Warner is provided in Time Warner's Current
Report on Form 8-K dated February 6, 1995. The aggregate consideration
received by Alan Gerry and certain related parties for the Gerry
Acquisition was 2,448,809 shares of the common stock of Time Warner,
approximately $210 million in cash and the assumption of the
liabilities of the Gerry Companies. The aggregate amount of
indebtedness assumed or incurred upon the closing of the Transactions
was approximately $2 billion.
In connection with the consummation of the Transactions, TWI
Cable Inc., a wholly owned subsidiary of Time Warner ("TWI Cable"),
borrowed approximately $1.5 billion under its five-year revolving
credit agreement entered into on June 30, 1995 (as amended, the "New
Credit Agreement"), and loaned such proceeds to CVI under the same
terms set forth in the New Credit Agreement. CVI used such proceeds to
repay or redeem an aggregate of approximately $1.2 billion of
outstanding indebtedness of CVI and indebtedness that was assumed in
the Gerry Acquisition, including redemption premiums thereon (the "CVI
Debt Refinancing"). In addition to the amount borrowed for the CVI
Debt Refinancing, CVI borrowed approximately $300 million from TWI
Cable under the New Credit Agreement, of which approximately $210
million was used to consummate the Gerry Acquisition and $90 million
was used to pay for transaction costs and other one-time costs related
to the Transactions. CVI, certain of its subsidiaries and certain of
the Gerry Companies have guaranteed the obligations of TWI Cable under
the New Credit Agreement. The New Credit Agreement is included as an
exhibit to Time Warner's Current Report on Form 8-K dated July 6,
1995.
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In connection with the Transactions, CVI has entered into a
management service arrangement with Time Warner Entertainment Company,
L.P. ("TWE"), a Delaware limited partnership in which 74.49% of the
pro rata priority capital and residual equity interests as well as
certain priority capital interests are owned by Time Warner and
certain of its wholly owned subsidiaries, pursuant to which TWE will
manage and operate the cable television systems of the Cablevision
Companies.
Item 7. Financial Statements and Exhibits.
(a) and (b) Financial Statements.
The financial statements of CVI and the pro forma financial
information of Time Warner required by this Item were previously filed
as exhibits to Time Warner's Current Report on Form 8-K dated November
14, 1995.
(c) Exhibits.
2 (a) Agreement and Plan of Merger dated as of February 6,
1995, among CVI, Alan Gerry, Time Warner and TW CVI
Acquisition Corp.
2 (b) Agreement and Plan of Merger dated as of
February 6, 1995, among CMP, Alan Gerry and Time
Warner.
2 (c) Agreement and Plan of Merger dated as of
December 8, 1995, among CIMF, Alan Gerry, Time
Warner and CVI.
2 (d) Purchase Agreement dated as of February 6,
1995, as amended and restated as of December 8,
1995, among Alan Gerry, the corporations and
partnerships listed on the signature pages thereof
as the Purchase Gerry Companies and the Direct
Holders, and Time Warner.
2 (e) Supplemental Agreement dated as of February
6, 1995, including Annex A thereto, among CVI, the
corporations and partnerships listed on the
signature pages thereof as the Gerry Companies and
the Direct Holders, Alan Gerry, Time Warner and TW
CVI Acquisition Corp.
2 (f) Amendment Agreement dated as of December 8,
1995, to the Supplemental Agreement dated as of
February 6, 1995, including Annex A thereto, among
CVI, the corporations and partnerships listed on
the signature pages thereof as the Gerry Companies
and the Direct Holders, Alan Gerry, Time Warner and
TW CVI Acquisition Corp.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on January 10, 1996.
TIME WARNER INC.,
by
/s/ Richard J. Bressler
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Name: Richard J. Bressler
Title: Senior Vice President
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description of Exhibit Sequentially
Numbered Page
2 (a) Agreement and Plan of Merger *
dated as of February 6, 1995,
among CVI, Alan Gerry,
Time Warner and TW CVI Acquisition
Corp (incorporated by reference to
exhibit 2(a) to Time Warner's
Current Report on Form 8-K dated
February 6, 1995).
2 (b) Agreement and Plan of Merger dated *
as of February 6, 1995, among CMP,
Alan Gerry and Time Warner
(incorporated by reference to
exhibit 2 (c) to Time Warner's
Current Report on Form 8-K dated
February 6, 1995).
2 (c) Agreement and Plan of Merger dated
as of December 8, 1995, among CIMF,
Alan Gerry, Time Warner and CVI.
2 (d) Purchase Agreement dated as of
February 6, 1995, as amended and
restated as of December 8, 1995,
among Alan Gerry, the corporations
and partnerships listed on the
signature pages thereof as the
Purchase Gerry Companies and the
Direct Holders, and Time Warner.
2 (e) Supplemental Agreement dated as *
of February 6, 1995, including
Annex A thereto, among CVI, the
corporations and partnerships
listed on the signature pages
thereof as the Gerry Companies
and the Direct Holders, Alan
Gerry, Time Warner and TW CVI
Acquisition Corp. (incorporated
by reference to exhibit 2(e) to
Time Warner's Current Report on
Form 8-K dated February 6, 1995).
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*Incorporated by reference.
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Exhibit No. Description of Exhibit Sequentially
Numbered Page
2 (f) Amendment Agreement dated as
of December 8, 1995, to the
Supplemental Agreement dated
as of February 6, 1995,
including Annex A thereto,
among CVI, the corporations
and partnerships listed on the
signature pages thereof as the
Gerry Companies and the Direct
Holders, Alan Gerry, Time Warner
and TW CVI Acquisition Corp.
Exhibit 2(c)
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AGREEMENT AND PLAN OF MERGER dated as of
December 8, 1995, among CABLEVISION
INDUSTRIES OF MIDDLE FLORIDA, INC., a Florida
corporation ("CIMF"), ALAN GERRY, an
individual residing at Loomis Road, Liberty,
New York (the "Principal Stockholder"), TIME
WARNER INC., a Delaware corporation
("Parent") and CABLEVISION INDUSTRIES
CORPORATION, a Delaware corporation (the
"Company").
WHEREAS Parent, CIMF and certain affiliates of CIMF,
including the Principal Stockholder, have previously entered into a
Purchase Agreement dated as of February 6, 1995 (the "Purchase
Agreement"), providing for, among other things, the purchase by Parent
and/or one or more Designated Entities of all of the assets of CIMF in
exchange for the assumption of all of its Assumed Liabilities;
WHEREAS Parent, CIMF and certain affiliates of CIMF,
including the Principal Stockholder, have now determined to change the
structure of Parent's acquisition of the business of CIMF and the form
of consideration to be paid for such acquisition;
WHEREAS the respective Boards of Directors of CIMF and
Parent have approved the merger of CIMF with and into the Company,
upon the terms and subject to the conditions set forth in this
Agreement (the "CIMF Merger"), whereby each issued and outstanding
share of Common Stock of CIMF not owned directly or indirectly by CIMF
or any subsidiary of CIMF (the "CIMF Common Stock"), will be converted
into the right to receive the Merger Consideration;
WHEREAS each of the Company and Cablevision Management
Corporation of Philadelphia ("CMP") have entered into a Merger
Agreement with the Principal Stockholder and Parent, pursuant to which
upon the terms and subject to the conditions set forth therein, TW CVI
Acquisition Corp. will be merged into the Company (the "Company
Merger") and CMP Acquisition Sub will be merged into CMP and the
Principal Stockholder will receive for each share of common stock of
the Company or CMP, as applicable, the Merger Consideration (as
defined in the relevant Merger Agreement); and
WHEREAS, concurrently with the execution and delivery
hereof, the Principal Stockholder, certain
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subsidiaries of the Principal Stockholder that are Purchase Gerry
Companies and the Direct Holders and Parent are entering into an
amended and restated Purchase Agreement dated as of December 8, 1995,
which eliminates CIMF as a party and pursuant to which, upon the terms
and subject to the conditions set forth therein, the Principal
Stockholder has agreed to sell and Parent has agreed to purchase all
of the equity interests in, or the assets of and assume the related
liabilities of, each of the Purchase Gerry Companies;
WHEREAS, the Company, the Direct Holders, the Gerry
Companies, the Principal Stockholder, Parent and Sub have entered into
the Supplemental Agreement dated as of February 6, 1995, as amended to
the date hereof, pursuant to which the Company, the Direct Holders,
the Gerry Companies, the Principal Stockholder, Parent and Sub are
making certain representations, warranties, covenants and agreements
in connection with the Mergers, the Purchase and the other
Transactions and also are prescribing various conditions to the
Mergers, the Purchase and the other Transactions; and
WHEREAS, for Federal income tax purposes, it is intended
that the CIMF Merger shall qualify as a reorganization within the
meaning of Section 368(a) of the Code;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements of the parties hereto contained
in the Acquisition Documents, the parties agree as follows:
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ARTICLE I
Definitions and Interpretation
Capitalized terms used herein and not defined herein have
the meanings given such terms in Annex A to the Supplemental
Agreement, as amended from time to time, and the rules of
interpretation set forth in such Annex A are applicable hereto.
ARTICLE II
The Merger
SECTION 2.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with DGCL
and the Florida Business Corporation Act (the "FBCA"), CIMF shall be
merged with and into the Company at the Effective Time and immediately
following the effectiveness of the Company Merger. Following the CIMF
Merger, the separate corporate existence of CIMF shall cease and the
Company shall continue as the surviving corporation (the "CIMF
Surviving Corporation") and shall succeed to and assume all the rights
and obligations of CIMF in accordance with the DGCL and the FBCA.
SECTION 2.02. Effective Time. At the time of the Closing, or
as soon as practicable thereafter, CIMF Surviving Corporation shall
file a certificate or articles of merger or other appropriate
documents (in any such case, the "Certificate of Merger") executed in
accordance with the relevant provisions of the DGCL and the FBCA and
shall make all other filings or recordings required under the DGCL and
the FBCA. The CIMF Merger shall become effective at the Effective Time
specified in the Certificate of Merger, which shall be after the
effectiveness of the Company Merger.
SECTION 2.03. Effects of the CIMF Merger. The CIMF Merger
shall have the effects set forth in Section 259 of the DGCL and
Section 607.1106 of the FBCA.
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ARTICLE III
The CIMF Surviving Corporation
SECTION 3.01. Certificate of Incorporation and By-laws. (a)
The certificate of incorporation of the Company as in effect
immediately prior to the Effective Time (after giving effect to the
Company Merger) shall become the certificate of incorporation of the
CIMF Surviving Corporation at the Effective Time, until thereafter
changed or amended as provided therein or by applicable law.
(b) The By-laws of the Company as in effect immediately
prior to the Effective Time (after giving effect to the Company
Merger) shall become the By-laws of the CIMF Surviving Corporation at
the Effective Time, until thereafter changed or amended as provided
therein or by applicable law.
SECTION 3.02. Directors. The directors of the Company
immediately prior to the Effective Time (after giving effect to the
Company Merger) shall become the directors of the CIMF Surviving
Corporation at the Effective Time, until the earlier of their
resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
SECTION 3.03. Officers. The officers of the Company
immediately prior to the Effective Time (after giving effect to the
Company Merger) shall become the officers of the CIMF Surviving
Corporation at the Effective Time, until the earlier of their
resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
ARTICLE IV
Effect of the CIMF Merger on the Capital Stock of the
Constituent Corporations; Merger Consideration;
Exchange of Certificates
SECTION 4.01. Effect on Capital Stock. As of the Effective
Time, by virtue of the CIMF Merger and without any
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action on the part of the holder of any shares of CIMF Common Stock or
any shares of capital stock of the Company:
(a) Capital Stock of the Company. The CIMF Merger shall not
have any effect on the authorized or issued capital stock of the
Company.
(b) Cancellation of Treasury Stock. Each share of Common
Stock of CIMF owned directly or indirectly by CIMF or any subsidiary
of CIMF immediately prior to the Effective Time shall automatically be
canceled and retired and shall cease to exist, and no consideration
shall be delivered in exchange therefor.
(c) Conversion of CIMF Common Stock. Subject to Section
4.06, each share of CIMF Common Stock outstanding immediately prior to
the Effective Time shall be converted into the right to receive a
number of fully paid and nonassessable shares of Parent Common Stock
equal to the Parent Common Share Number divided by the total number of
shares of CIMF Common Stock outstanding immediately prior to the
Effective Time (the "CIMF Common Share Number"). The term "Merger
Consideration" shall refer to the securities issuable pursuant to the
immediately preceding sentence, together with any assets or securities
payable by Parent pursuant to Section 4.06(a) hereof; and the amount
of any such assets or securities that are payable per share of CIMF
Common Stock as part of the Merger Consideration shall be determined
on the basis of the amount of any such assets or property that would
have been payable per share of Parent Common Stock had such securities
been outstanding at the relevant record and payment dates for the
distribution of such assets or securities. As of the Effective Time,
all shares of CIMF Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist,
and each holder of a certificate representing any such share of CIMF
Common Stock shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration. The "Parent
Common Share Number" shall equal 1,471,575, as such number shall be
further adjusted pursuant to Section 4.02, after first giving effect
to any adjustments to the Parent Common Share Number and Common
Valuation Number required by transactions covered by Section 4.06(b).
SECTION 4.02. Adjustment to the Parent Common Share Number.
(a) The Parent Common Share Number shall be adjusted in accordance
with this Section 4.02 if the
<PAGE>
Adjustment Amount exceeds the Threshold or the Threshold exceeds the
Adjustment Amount. The "Threshold" shall be $24,353,000.
(i) In the event that the Adjustment Amount exceeds the
Threshold, the Parent Common Share Number shall equal 1,471,575
less an amount equal to such excess divided by the Common
Valuation Number (the result being rounded to the nearest whole
number, with 0.5 being rounded to the next highest number).
(ii) In the event that the Threshold exceeds the Adjustment
Amount, the Parent Common Share Number shall equal 1,471,575 plus
an amount equal to such excess divided by the Common Valuation
Number (the result being rounded to the nearest whole number,
with 0.5 being rounded to the next highest number).
The Adjustment Amount shall be equal to, without
duplication, (A) the aggregate amount of Closing Indebtedness and
Other Liabilities of CIMF, plus (B) the amount of the Working Capital
Deficit of CIMF, if any, or minus (C) the amount of the Working
Capital Balance of CIMF, if any, plus (D) the amount of the Capital
Expenditure Deficiency of CIMF, if any, or minus (E) the amount of the
Capital Expenditure Excess of CIMF, if any, plus (F) the aggregate
amount of Severance and Incentive Liabilities of CIMF; provided that
in determining the Adjustment Amount effect shall be given to the sale
of assets by Cablevision of Fairhaven/Acushnet pursuant to the
Purchase Agreement and to the results of any post-closing adjustments
relating to CFA pursuant to the Purchase Agreement.
SECTION 4.03. Estimated Adjustment Amount; Initial
Calculation of Merger Consideration. Not later than five business days
prior to the Closing, CIMF shall deliver to Parent an estimate of the
Adjustment Amount (the "Estimated Adjustment Amount") of CIMF,
including therewith estimated Closing Indebtedness and Other
Liabilities ("Estimated Closing Indebtedness and Other Liabilities")
of CIMF, estimated Working Capital Deficit or estimated Working
Capital Balance ("Estimated Working Capital Deficit or Balance") of
CIMF, estimated Capital Expenditure Deficiency of CIMF or estimated
Capital Expenditure Excess of CIMF (the "Estimated Capital Expenditure
Deficiency or Excess") and estimated Severance and Incentive
Liabilities ("Estimated Severance and Incentive Liabilities") of CIMF,
and the Parent Common Share Number shall be calculated pursuant to
<PAGE>
Section 4.02 as if the Estimated Adjustment Amount were the Adjustment
Amount (the "Estimated Parent Common Share Number"). As of the
Closing, the aggregate Merger Consideration in respect of all shares
of CIMF Common Stock shall be deemed to comprise a number of shares of
Parent Common Stock equal to the Estimated Parent Common Share Number,
together with any assets or securities payable by Parent pursuant to
Section 4.06(a) hereof; and each share of CIMF Common Stock shall be
deemed to be converted into a number of shares of Parent Common Stock
equal to the Estimated Parent Common Share Number divided by the CIMF
Common Share Number, together with any assets or securities payable by
Parent pursuant to Section 4.06(a) hereof. After the Closing, the
Merger Consideration (as determined pursuant to this Section 4.03)
shall be subject to adjustment in accordance with Sections 4.05 and
4.06.
SECTION 4.04. Exchange of Certificates; Delivery of Parent
Stock; Escrow Arrangements. (a) At the Closing, Parent shall issue and
deliver to the Stockholders' Representative, upon surrender of each
certificate (a "Certificate") that immediately prior to the Effective
Time represents outstanding shares of CIMF Common Stock, the portion
of the Merger Consideration (as determined pursuant to Section 4.03)
that is issuable in respect of the shares of CIMF Common Stock
represented by such Certificate. Each Certificate so surrendered
pursuant to the preceding sentence shall forthwith be canceled.
Delivery of Certificates for cancellation shall be made by the
Stockholders' Representative on behalf of the CIMF Stockholders; and
delivery of the Merger Consideration in respect of all shares of CIMF
Common Stock outstanding immediately prior to the Effective Time shall
be delivered to the Stockholders' Representative for the benefit of
the CIMF Stockholders (and the Merger Consideration so delivered shall
be deemed to have been delivered to the CIMF Stockholders). For
purposes of this Section 4.04, the Escrowed Shares deposited into
escrow pursuant to Section 4.04(h) hereof and held in escrow pursuant
to the terms of the Escrow Agreement shall be deemed to have been
delivered to the Stockholders' Representative.
(b) In the event of a transfer of ownership of CIMF Common
Stock that is not registered in the transfer records of CIMF, the
Merger Consideration issuable in respect of such shares may be issued
to a Person other than the Person in whose name any Certificate so
surrendered is registered, provided that such Certificate is properly
<PAGE>
endorsed or otherwise in proper form for transfer and the Person
requesting such payment shall pay any transfer or other taxes required
by reason of the issuance of such Merger Consideration to a Person
other than the registered holder of such Certificate or establish to
the satisfaction of Parent that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 4.04,
each Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the portion
of the Merger Consideration that is issuable in respect of each share
of CIMF Common Stock that was represented by such Certificate prior to
the Effective Time, together with any dividends or distributions with
respect to any such shares of capital stock of Parent constituting
Merger Consideration for which the record date is after the Effective
Time. Subject to the effect of applicable laws, following surrender of
any such Certificate, Parent shall deliver to the Stockholders'
Representative, for the benefit of such Person, the portion of the
Merger Consideration issued in exchange therefor, without interest,
together with (x) at the time of such surrender, the amount of
dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of
any class of capital stock of Parent constituting Merger Consideration
and (y) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable
with respect to such shares of capital stock of Parent constituting
Merger Consideration.
(c) No dividends or other distributions declared or made
after the Effective Time with respect to shares of any class of
capital stock of Parent constituting Merger Consideration with a
record date after the Effective Time shall be paid to the holder of
any unsurrendered Certificate, or to the Stockholders' Representative
for the benefit of such holder, with respect to the applicable shares
of capital stock of Parent constituting Merger Consideration
represented thereby until the holder of record of such Certificate, or
the Stockholders' Representative on behalf of such holder, shall
surrender such Certificate.
(d) The shares of capital stock of Parent constituting
Merger Consideration issued or issuable upon the surrender for
exchange of Certificates in accordance with the terms of this Article
IV shall be deemed to have been issued in full satisfaction of all
rights pertaining to
<PAGE>
the shares of CIMF Common Stock theretofore represented by such
Certificates, and there shall be no further registration of transfers
on the stock transfer books of the CIMF Surviving Corporation of the
shares of CIMF Common Stock which were outstanding immediately prior
to the Effective Time. If, after the Effective Time, Certificates are
presented to the CIMF Surviving Corporation or Parent for any reason,
they shall be canceled and exchanged as provided in this Article IV.
(e) Neither Parent nor CIMF shall be liable to any Person in
respect of any Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(f) If any Certificates shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed, and the
delivery to Parent of an indemnification agreement and bond
satisfactory to Parent, will issue in exchange for such lost, stolen
or destroyed Certificate the Merger Consideration (and any dividend or
distribution with respect thereto pursuant to Section 4.04(b))
issuable or deliverable in respect thereof as determined in accordance
with the terms of this Agreement.
(g) No certificates or scrip representing fractional shares
of capital stock of Parent shall be issued to any CIMF Stockholder (or
to the Stockholders' Representative for the benefit of a CIMF
Stockholder) upon the surrender for exchange of certificates of CIMF
Common Stock, the number of shares of each class of capital stock of
Parent to be issued pursuant to the CIMF Merger to each CIMF
Stockholder (after consolidating all Certificates to be surrendered by
such CIMF Stockholder) being rounded up or down, as the case may be,
to the nearest whole share (with one-half of a share being rounded to
the next highest number).
(h) At the Closing, Parent shall, on behalf of the CIMF
Stockholders, deposit into escrow, in accordance with the terms of the
Escrow Agreement, an aggregate number of shares of shares of Parent
Common Stock (collectively, the "Escrowed Shares") which together
shall have a value (based on the Common Valuation Number) of $202,214.
The allocation among CIMF Stockholders of such shares of Parent
<PAGE>
Common Stock, shall be determined pursuant to Section 4.04(i).
(i) The Principal Stockholder shall be entitled to determine
the allocation, as among the CIMF Stockholders, of the shares of
Parent Common Stock that are to be deposited into escrow pursuant to
the Escrow Agreement, and unless otherwise specified shall be deemed
to have determined that all such shares shall be from among those
issuable to the Principal Stockholder.
SECTION 4.05. Reconciliation of Adjustment Amount;
Adjustment of Merger Consideration. (a) Within 90 days after the
Closing Date, Parent shall prepare and deliver to the Stockholders'
Representative, a statement (the "Statement") setting forth Parent's
determination of the Adjustment Amount, including Closing Indebtedness
and Other Liabilities, the Working Capital Deficit or Working Capital
Balance, the Capital Expenditure Deficiency or Capital Expenditure
Excess and the Severance and Incentive Liabilities, in each case of
CIMF, and the calculation of the Parent Common Share Number in
accordance with Section 4.02. During the 30-day period following
delivery of the Statement to the Stockholders' Representative and his
representatives, Parent shall provide the Stockholders' Representative
and his Representatives with access during normal business hours to
any books, records, working papers or other information reasonably
necessary or useful in the preparation of the Statement and the
calculation of the Adjustment Amount to enable the Stockholders'
Representative or his Representatives (as defined in Section 5.01 of
the Supplemental Agreement) to verify the accuracy of the Statement.
The Statement shall become final and binding upon all parties hereto
on the thirtieth day following delivery thereof to the Stockholders'
Representative unless the Stockholders' Representative gives written
notice of disagreement with the Statement (a "Notice of Disagreement")
to Parent prior to such date. Any Notice of Disagreement shall specify
in reasonable detail the nature of any disagreement so asserted and
relate solely to the preparation of the Statement and the calculation
of the Adjustment Amount, the Parent Common Share Number in accordance
with Section 4.02.
(b) If a Notice of Disagreement is received by Parent in a
timely manner, then the Statement (as revised in accordance with
clause (c) or (d) below) shall become final and binding upon the
parties hereto on the earlier of
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(i) the date the Stockholders' Representative and Parent resolve in
writing any differences they may have with respect to any matter
specified in the Notice of Disagreement or (ii) the date any disputed
matters are finally resolved in writing by the Arbitrator (as defined
below). During the 30-day period following the delivery of a Notice of
Disagreement, Parent and the Stockholders' Representative shall seek
in good faith to resolve in writing any differences which they may
have with respect to any matter specified in the Notice of
Disagreement and each shall provide the other (and their respective
representatives) with reasonable access to any books, records, working
papers or other information reasonably necessary or useful in the
preparation or calculation of (u) the Estimated Adjustment Amount,
including Estimated Closing Indebtedness and Other Liabilities, the
Estimated Working Capital Deficit or Balance, the Estimated Capital
Expenditure Deficiency or Excess and the Estimated Severance Incentive
Liabilities, in each case of CIMF, (v) the Adjustment Amount,
including Closing Indebtedness and Other Liabilities, the Working
Capital Deficit or Working Capital Balance, the Capital Expenditure
Deficiency or Capital Expenditure Excess and the Severance and
Incentive Liabilities, in each case of CIMF, (w) the Parent Common
Share Number, (x) the Statement, (y) any Notice of Disagreement or (z)
otherwise with respect to any thereof. At the end of such 30-day
period if there has been no resolution of the matters specified in the
Notice of Disagreement, Parent and the Stockholders' Representative
shall submit to an arbitrator (the "Arbitrator") for review and
resolution any and all matters arising under this Section which remain
in dispute. The Arbitrator shall be Price Waterhouse, or if such firm
is unable or unwilling to act, such other nationally recognized
independent public accounting firm as shall be agreed upon by Parent
and the Stockholders' Representative in writing. The Arbitrator shall
render a written decision resolving the matters submitted to the
Arbitrator within 30 days following submission thereto. The cost of
any arbitration (including the fees of the Arbitrator) pursuant to
this Section shall be borne 50% by Parent and 50% by the CIMF
Stockholders.
(c) If the Adjustment Amount is higher or lower than the
Estimated Adjustment Amount, the Parent Common Share Number shall be
finally adjusted pursuant to Section 4.02. If the Parent Common Share
Number, in each case as so finally adjusted, is greater than the
Estimated Parent Common Share Number, respectively, Parent shall,
<PAGE>
within 15 days after the Statement becomes final and binding upon the
parties, issue and deliver to the Stockholders' Representative, for
the benefit of the CIMF Stockholders, an aggregate number of shares,
rounded to the nearest whole share, of Parent Common Stock
(collectively, the "Additional Parent Shares") (in each case with
one-half of a share being rounded to the next highest number) equal to
the excess of the Parent Common Share Number as so finally determined,
over the Estimated Parent Common Share Number. The Additional Parent
Shares shall be allocated to each CIMF Stockholder pro rata on the
basis of the ratio (the "Allocation Ratios") that the number of shares
of Parent Common Stock issued and delivered to such Stockholder at the
Closing with respect to such Stockholder's shares of CIMF Common Stock
bears to the total number of Parent Common Stock issued and delivered
to all Stockholders at the Closing.
(d) If the Parent Common Share Number as so finally adjusted
is less than the Estimated Parent Common Share Number, Parent shall be
entitled to receive, within 15 days after the Statement becomes final
and binding upon the parties, an aggregate number of shares, rounded
to the nearest whole share, of Parent Common Stock (collectively, the
"Returned Parent Shares") (in each case with one-half of a share being
rounded to the next highest number), equal to the excess of the
Estimated Parent Common Share Number over the Parent Common Share
Number as so finally determined. The number of Returned Parent Shares
to be returned to Parent by each CIMF Stockholder shall be calculated
pro rata on the basis of the Allocation Ratios. The obligation to
deliver Returned Parent Shares shall be satisfied, first, out of the
Escrowed Shares, and second, out of other shares held by the CIMF
Stockholders.
SECTION 4.06. Participation Rights and Additional
Adjustments; Adjustments to Threshold. (a) Without limiting the
conditions precedent to the obligations of CIMF and the Principal
Stockholder hereunder, in the event that (i) Parent makes a
distribution of the type that would require a distribution to holders
of Parent Preferred Stock pursuant to Section 2.3 or 3.7 of the Parent
Series E Certificate or the Parent Series F Certificate (a
"Distribution"), and (ii) the record date or (if there shall not be a
record date) effective date for the Distribution shall occur on or
after the date hereof and prior to the Effective Time, Parent shall,
at the Effective Time (or if the date for payment of the Distribution
is after the
<PAGE>
Effective Time, on the date of payment) pay to the Persons who become
record holders of Parent Common Stock at the Effective Time the
amounts and kinds of assets or capital stock or other securities that
such Persons would have been entitled to receive had such Persons been
record holders of such Parent Common Stock on the relevant record date
or effective date for the Distribution (taking into account (and
giving effect to) any right of election set forth in such Sections).
(b) Without limiting the conditions precedent to the
obligations of CIMF and the Principal Stockholder hereunder, the
Parent Common Share Number shall be adjusted from time to time after
the date hereof and prior to the Effective Time for events described
in paragraphs 3.6 and 3.7 of the Parent Series E Certificate and
Parent Series F Certificate as if the references therein to the term
"Conversion Rate" were instead references to the Common Share Number
as in effect at the time (provided that the Conversion Price shall be
appropriately adjusted by the parties) and the references therein to
"Series E Stock" and "Series F Stock" were instead to CIMF Common
Stock (taking into account (and giving effect to) any right of
election set forth in such Section, including any right of election
that would give such holders a right to receive a distribution (which
distribution shall be treated as a Distribution for purposes of
Section 4.06(a) hereof).
(c) The Threshold shall be reduced in the event the
Principal Stockholder designates as Excluded Assets any System or
Systems (or portions thereof) owned by CIMF as of the date of this
Agreement pursuant to Section 5.25 of the Supplemental Agreement by an
amount equal to the Excluded Systems Amount. The "Excluded Systems
Amount" shall equal 13.5 multiplied by the aggregate amount of
operating cash flow of the CIMF for the fiscal year immediately
preceding the Effective Time that is attributable to each System (or
portion thereof) so designated (it being understood that such
operating cash flow shall be as so determined in preparing the
Company's audited financial statements for such fiscal year).
SECTION 4.07. Stockholders' Representative. Each holder of
CIMF Common Stock, by approval of the CIMF Merger by the requisite
vote of the CIMF Stockholders, designates Philip Dropkin or such other
Person as designated by the Principal Stockholder to be the
representative of each such
<PAGE>
CIMF Stockholder (the "Stockholders' Representative") for purposes of
this Agreement.
ARTICLE V
Conditions Precedent
The respective obligation of each party to effect the CIMF
Merger and the other transactions contemplated hereby is subject to
the satisfaction or waiver (by the parties for whose benefit the
condition is imposed) on or prior to the Closing Date of the
conditions set forth in Article VI of the Supplemental Agreement.
ARTICLE VI
Termination, Amendment and Waiver
This Agreement may be terminated or amended or the parties
may extend the time for the performance of any of the obligations or
other acts of the other parties, waive any inaccuracies in the
representations and warranties contained in or in any document
delivered pursuant to this Agreement or waive compliance with any of
the agreements or conditions contained in this Agreement, in each case
as provided in Article VIII of the Supplemental Agreement.
ARTICLE VII
Governing Law
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, regardless of the
laws that might otherwise govern under applicable principles of
conflict of laws thereof, except to the extent that the laws of the
States of Delaware and Florida are mandatorily applicable to the CIMF
Merger.
<PAGE>
IN WITNESS WHEREOF, CIMF, the Principal Stockholder and
Parent have caused this Agreement to be signed by their respective
duly authorized officers (or, in the case of the Principal
Stockholder, has signed this Agreement), all as of the date first
written above.
CABLEVISION INDUSTRIES OF MIDDLE
FLORIDA, INC.
by
Name:
Title:
Alan Gerry
TIME WARNER INC.,
by
Name:
Title:
CABLEVISION INDUSTRIES CORPORATION,
by
Name:
Title:
Exhibit 2(d)
<PAGE>
PURCHASE AGREEMENT dated as of February 6, 1995,
as Amended and Restated as of December 8, 1995, among
ALAN GERRY, an individual residing at Loomis Road,
Liberty, New York (the "Principal Stockholder"), the
corporations and partnerships listed on the signature
pages hereof as Purchase Gerry Companies (the "Purchase
Gerry Companies"), the corporations listed on the
signature pages hereof as Direct Holders (the "Direct
Holders") and TIME WARNER INC., a Delaware corporation
("Parent").
WHEREAS the Principal Stockholder is the sole beneficial
owner of the Gerry Companies;
WHEREAS Parent desires to acquire the business and
operations of the Gerry Companies, either (i) by purchasing from
certain Gerry Companies specified in Section 2.01 (each an "Asset
Gerry Company") all of the assets, and assuming the liabilities
(except as provided herein), of such Asset Gerry Company or (ii) in
the case of certain other Gerry Companies specified in Section 2.01
(each an "Equity Gerry Company"), by purchasing all the partnership
interests thereof (the "Equity Interests") of the Equity Gerry
Companies from the Principal Stockholder or, in the case of the Equity
Interests that are not owned directly by the Principal Stockholder, by
the direct holder of such Equity Interests (all such acquisitions
being referred to collectively as the "Purchase"), and the Principal
Stockholder is willing to cause each Asset Gerry Company to sell all
the assets, subject to the liabilities (except provided herein), of
such Asset Gerry Company or to sell, and to cause the Direct Holders
to sell, the Equity Interests of the Equity Gerry Companies;
WHEREAS concurrently with the original execution and
delivery hereof, Cablevision Industries Corporation (the "Company"),
the Principal Stockholder, Parent and Sub entered into the Company
Merger Agreement, pursuant to which upon the terms and subject to the
conditions set forth therein, Sub will be merged with and into the
Company and the Principal Stockholder and the other Stockholders will
receive for each share of Company Common Stock the Merger
Consideration (as defined in the Company Merger Agreement);
<PAGE>
WHEREAS concurrently with the original execution and
delivery hereof, each of Cablevision Properties, Inc., a Delaware
corporation ("CPI") and Cablevision Management Corporation of
Philadelphia, a Delaware corporation ("CMP") entered into a Merger
Agreement with the Principal Stockholder and Parent (the "CPI Merger
Agreement" and the "CMP Merger Agreement", respectively), pursuant to
which upon the terms and subject to the conditions set forth therein,
CPI Acquisition Sub was to be merged into CPI and CMP Acquisition Sub
was to be merged into CMP, as applicable, and the Principal
Stockholder was to receive for each share of common stock of CPI or
CMP, as applicable, the Merger Consideration (as defined in the
relevant Merger Agreement); and
WHEREAS concurrently with the original execution and
delivery hereof, the Company, the Gerry Companies, the Direct Holders,
the Principal Stockholder, Parent and Sub entered into the
Supplemental Agreement pursuant to which the Company, the Gerry
Companies, the Principal Stockholder, the Direct Holders, Parent and
Sub made certain representations, warranties, covenants and agreements
in connection with the Merger, the Purchase and the other Transactions
and also are prescribed various conditions to the Merger, the Purchase
and the other Transactions;
WHEREAS subsequent to the original execution and delivery
hereof, the parties hereto and CPI have determined that they wish to
revise the structure of the Transactions, without changing the
aggregate amount or types of consideration to be paid, so that (i)
Parent and/or one or more Designated Entities will acquire all of the
assets (consisting only of a partnership interest in CILP) and assume
all of the related liabilities of CPI pursuant to this Agreement and
CPI will become a Direct Holder hereunder, (ii) the CPI Merger
Agreement will be terminated, (iii) the consideration to be paid by
Parent and/or one or more Designated Entities for the assets of CFA
will be changed to substitute the assumption of liabilities (or
payment of cash) for the portion thereof that was to have consisted of
Parent Common Stock and (iv) CIMF will no longer be a Purchase Gerry
Company and a party to this Agreement and instead will be acquired by
the Company (immediately following its acquisition by Parent) for
Parent Common Stock pursuant to a Merger Agreement among Parent, CIMF,
the Principal Stockholder and the Company.
<PAGE>
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements of the parties hereto contained
in the Acquisition Documents, the parties agree as follows:
ARTICLE I
Definitions and Interpretation
Capitalized terms used herein and not defined herein have
the meanings given such terms in Annex A to the Supplemental
Agreement, as amended from time to time, and the rules of
interpretation set forth in such Annex A are applicable hereto.
ARTICLE II
The Purchase
Section 2.01. Purchase Transactions. On the terms and
subject to the conditions specified in this Agreement and the
Supplemental Agreement, (x) Parent and (y) the relevant Purchase Gerry
Company, Alan Gerry or the Direct Holder will effect the following
transactions on the Closing Date.
(a) Parent and/or one or more Designated Entities will
purchase from Cablevision Industries of Delaware, Inc., a
Delaware corporation ("CID"), its partnership interest in
Cablevision Industries Limited Partnership, a Delaware limited
partnership ("CILP"), in exchange for the assumption of the
obligations of CID with respect thereto;
(b) Parent and/or one or more Designated Entities (which
entity shall not be the same entity purchasing from CID its
partnership interest in CILP) will purchase from CPI its
partnership interest in CILP in exchange for the assumption of
the obligations of CPI with respect thereto;
(c) Parent and/or one or more Designated Entities will
purchase from Cablevision Industries of Tennessee L.P., a
Delaware limited partnership ("CITLP"), all of its assets, in
exchange for the assumption of all its Assumed Liabilities;
<PAGE>
(d) Parent and/or one or more Designated Entities will
purchase from Cablevision of Fairhaven/Acushnet, a New York
general partnership ("CFA"), all of its assets, in exchange for
the assumption of all its Assumed Liabilities;
(e) Parent and one or more Designated Entities will purchase
from the Principal Stockholder and ARA Cablevision, Inc., a
Delaware corporation, all of the partnership interests owned by
them in Cablevision Industries of Saratoga Associates, a New York
partnership ("CISA"), in exchange for the assumption of all its
Assumed Liabilities;
(f) Parent and/or one or more Designated Entities will
purchase from Cablevision Industries of Florida, Inc., a Florida
corporation ("CIF"), all of its assets, in exchange for the
assumption of all its Assumed Liabilities.
Notwithstanding the foregoing, a cash payment will be made pursuant to
Section 4.01 (and, after the Closing, Section 4.04) to the extent the
Adjustment Amount for any Purchase Gerry Company differs from the
Threshold of such Purchase Gerry Company. The consideration payable
pursuant to this Section 2.01, as so adjusted pursuant to Sections
4.01 and 4.04 is called the "Purchase Consideration". Each of CITLP,
CFA and CIF shall be an "Asset Gerry Company", and each of CISA and
CILP shall be an "Equity Gerry Company". Each Person from which the
Parent or one or more Designated Entities shall purchase assets or
Equity Interests shall be a "Seller".
Section 2.02. Purchase of Equity Interests. In the case
where the transactions described in Section 2.01 consist of the
purchase of Equity Interests, the Principal Stockholder shall or shall
cause the Direct Holder to sell, transfer and deliver or cause to be
sold, transferred and delivered to Parent and/or one or more
Designated Entities (as specified above), free and clear of any and
all Liens (other than Liens permitted under the Supplemental
Agreement), and Parent and one or more Designated Entities shall
purchase the Equity Interests to be sold and shall assume the
liabilities associated with such Equity Interests, including arising
out of the ownership as a general and/or limited partner of the Equity
Gerry Companies (such liabilities, together with the liabilities
assumed pursuant to Section 2.04, the "Assumed Liabilities").
<PAGE>
SECTION 2.03. Purchase of Assets. In the case where the
transactions described in Section 2.01 consist of the purchase of
assets (other than Equity Interests) and assumption of liabilities,
each Asset Gerry Company shall, and the Principal Stockholder shall
cause each Asset Gerry Company to, sell, assign, transfer, convey and
deliver or cause to be sold, transferred, conveyed and delivered to
Parent, and Parent and/or one or more Designated Entities shall
purchase from the Principal Stockholder, all the assets, rights,
properties, goodwill and business of every kind and description,
wherever located, of each Asset Gerry Company, in each case as the
same shall exist at the Closing Date (the "Assets" of such Asset Gerry
Company), including all properties, tangible or intangible, real, or
personal, and all additions thereto on and after the date hereof and
through and including the Closing Date, other than such of those
assets and properties as may have been disposed of as permitted by
Section 4.01 of the Supplemental Agreement, but including the
following in respect of each Asset Gerry Company:
(i) such Asset Gerry Company's right, title and interest in
and to all parcels of real property owned in fee by such Asset
Gerry Company or in which such Asset Gerry Company has a
leasehold interest, and all buildings, structures and other
improvements located thereon and all rights of way and similar
authorizations;
(ii) such Asset Gerry Company's right, title and interest in
and to all of the tangible personal property owned or leased by
such Asset Gerry Company, including all towers, tower equipment,
antennas, above ground and underground cable, distribution
systems, headend amplifiers, line amplifiers, testing equipment,
motor vehicles, office equipment, furniture and fixtures,
supplies and other physical assets;
(iii) such Asset Gerry Company's right, title and interest
in and to all contracts, options, leases (whether of realty or
personalty), purchase orders, commitments or other agreements of
such Asset Gerry Company (other than the Franchises of such Asset
Gerry Company), whether oral or written, including agreements of
such Asset Gerry Company listed in Sections 3.01(m)(i),
3.01(m)(ii) and 3.01(m)(iii) of the Disclosure Schedule, all
subscription agreements with individuals for cable television,
security or
<PAGE>
satellite service entered into in the ordinary course of business
and other contracts entered into in the ordinary course of
business prior to the date hereof or after the date hereof;
(iv) such Asset Gerry Company's right, title and interest in
and to all subscriber, customer and advertiser lists;
(v) such Asset Gerry Company's right, title and interest in
and to all municipal, county, state and federal franchises,
domestic satellite, business radio and other licenses and all
other permits, licenses and authorizations issued by local, state
and federal Governmental Entities, and applications therefor,
including the Franchises of such Asset Gerry Company;
(vi) such Asset Gerry Company's right, title and interest in
and to copyrights, patents, or any applications for any of the
foregoing, and any goodwill associated therewith, and other
similar intangible rights and interests;
(vii) all subscriber, customer and trade accounts receivable
due to such Asset Gerry Company as a result of such Asset Gerry
Company's (or the Company's) operation of the Systems prior to
the Closing Date;
(viii) all deposits under subscriber, utility, pole rental
and similar agreements of such Asset Gerry Company;
(ix) such Asset Gerry Company's records, files and data,
including maps, plans, diagrams, blueprints and schematics, if
any; and
(x) the Working Capital Assets of such Asset Gerry Company.
(b) Notwithstanding anything in Section 2.01 to the
contrary, no Asset Gerry Company shall have any obligation to sell,
nor shall Parent have any obligation to purchase, the Excluded Assets
or Excluded Systems Assets held by any Asset Gerry Company.
Section 2.04. Assumption of Certain Liabilities of the Asset
Gerry Companies by Purchaser. In the case where the transactions
described in Section 2.01 consist of
<PAGE>
the purchase of assets (other than Equity Interests) and the
assumption of liabilities, Parent and/or one or more Designated
Entities shall assume and agree to pay, perform and discharge, and
indemnify each Asset Gerry Company against and hold it harmless from
(the following, together with the liabilities assumed pursuant to
Section 2.02, being called the "Assumed Liabilities"):
(a) all the obligations and liabilities of such Asset Gerry
Company under the Franchises (without limiting the provisions of
Section 5.02 of the Supplemental Agreement);
(b) all of the obligations of such Asset Gerry Company for
the provision of cable television or other services after the Closing
Date to subscribers to the Systems of such Asset Gerry Company;
(c) the obligations and liabilities of such Asset Gerry
Company under the express terms of all leases, subleases, contracts,
agreements and other instruments or binding arrangements to which such
Asset Gerry Company is a party or by which it is bound on the Closing
Date;
(d) the Working Capital Liabilities, and the Closing
Indebtedness and Other Liabilities, in each case of such Asset Gerry
Company;
(e) all obligations and liabilities in respect of Debt
Documents of such Asset Gerry Company;
(f) all Tax Liabilities of such Asset Gerry Company;
(g) all liabilities in respect of such Asset Gerry Company
disclosed in the Balance Sheets or in Section 3.01(e)(ii) of the
Disclosure Schedule; and
(h) all other obligations and liabilities of such Asset
Gerry Company;
provided, however, that Parent shall not assume or become liable to
pay, perform or discharge or to indemnify any Asset Gerry Company
against or hold it harmless from (and the Assumed Liabilities shall
not include) any of the following (the "Excluded Liabilities"):
<PAGE>
(i) any obligations or liabilities of any Asset Gerry
Company under this Agreement or with respect to or arising
out of the Transactions which, pursuant to the terms of the
Acquisition Documents, are to be borne by the Principal
Stockholder or a Cablevision Company (except as may
otherwise be provided in Section 5.02 of the Supplemental
Agreement);
(ii) any obligations or liabilities of such Asset Gerry
Company arising or incurred after the Closing Date to the
extent not reflected in the Adjustment Amount;
(iii) any obligation or liability of such Asset Gerry
Company related to any Excluded Asset or Excluded Systems
Asset of such Asset Gerry Company;
(iv) any Severance and Incentive Liabilities of such
Asset Gerry Company, to the extent not reflected in the
Adjustment Amount;
(v) any obligation or liability of such Asset Gerry
Company in respect of taxes for pre-Closing Tax Periods for
which no accrual has been made in the determination of
Working Capital Liabilities; and
(vi) any obligations or liabilities that are not
related to such Asset Gerry Company's cable television
operations and that are incurred in violation of Section
4.01 of the Supplemental Agreement.
SECTION 2.05. Allocation. The parties agree that the
purchase price for the Equity Interests and Assets of the Purchase
Gerry Companies, as applicable, is allocated as provided in Section
2.01 (as adjusted pursuant to Section 4.01) of this Agreement, and
none of Parent, the Purchase Gerry Companies, the Direct Holders or
the Principal Stockholder (nor any of their respective affiliates)
shall take any position on any tax return or with any taxing authority
that is inconsistent with the allocation of the Purchase Consideration
set forth in Section 2.01 of this Agreement.
<PAGE>
Article III
The Closing
SECTION 3.01. Closing; Delivery of Cash. (a) In
consideration of the Purchase and the Principal Stockholder's and each
Purchase Gerry Company's performance of the Acquisition Documents to
which it is a party, on the terms and subject to the conditions set
forth herein and in the Supplemental Agreement, at the Closing, Parent
shall deliver to the Principal Stockholder, on behalf of the Sellers,
(A) executed assumption agreements in form and substance reasonably
satisfactory to the Principal Stockholder that shall provide for the
assumption by Parent and/or one or more Designated Entities of the
Assumed Liabilities and (B) by wire transfer to a bank account
designated in writing by the Principal Stockholder at least three
business days prior to the Closing Date, in immediately available
funds, an amount equal to the aggregate amount of any cash payable
pursuant to Section 4.01.
(b) At the Closing, (i) the Principal Stockholder shall
cause each Asset Gerry Company to deliver to Parent (A) special
warranty deeds to any parcels of real property owned by such Asset
Gerry Company in fee, in accordance with local practice, and (B) bills
of sale, assignments and other instruments of transfer and conveyance,
transferring and assigning to Parent and/or one or more Designated
Entities the Assets of such Asset Gerry Company; and (ii) the
Principal Stockholder shall, and shall cause each Direct Holder of an
Equity Gerry Company to, deliver to Parent an executed assignment
agreement in form and substance reasonably satisfactory to Parent that
shall provide for the assignment of the Equity Interests of such
Equity Gerry Company to Parent and/or one or more Designated Entities,
as specified by Parent not later than three business days prior to the
Closing Date.
ARTICLE IV
Purchase Consideration Adjustments
SECTION 4.01. Adjustments to Purchase Consideration. (a) The
Purchase Consideration shall be adjusted in accordance with this
Section 4.01(a) if the Adjustment Amount of such Purchase Gerry
Company is higher
<PAGE>
or lower than the Threshold of such Purchase Gerry Company. The
Threshold of each Purchase Gerry Company is set forth below:
Purchase Gerry Company Threshold
(1) CILP $245,742,000
(2) CITLP $67,032,000
(3) CFA $22,923,000
(4) CISA $60,410,000
(5) CIF $21,140,000
For purposes of this Agreement, the portion of the Threshold of CILP
that shall be allocable to CID's Equity Interest in CILP shall be
$101,982,930 and the portion of such Threshold that shall be allocable
to CPI's Equity Interest in CILP shall be $143,759,070. In the event
that the Threshold of CILP is adjusted pursuant to Section 4.05, the
portion thereof that is allocable to CID's and CPI's respective Equity
Interests in CILP shall be appropriately adjusted (without
duplication).
In the event that the Threshold of any Purchase Gerry Company (other
than CILP, CISA and CFA) exceeds the Adjustment Amount of such
Purchase Gerry Company a cash payment shall be made to the Principal
Stockholder (on behalf of the Sellers) in the amount of such excess.
In the case of CID and CPI, in the event that the portion of the
Threshold of CILP allocable to CID's and CPI's respective Equity
Interests in CILP shall exceed the portion of the Adjustment Amount
allocable to CID's and CPI's respective Equity Interests in CILP, a
cash payment shall be made to the Principal Stockholder (on behalf of
the relevant Seller) in the amount of such excess. In the case of
CISA, in the event that the Threshold exceeds the Adjustment Amount, a
cash payment shall be made to the Principal Stockholder (on his own
behalf and on behalf of ARA Cablevision, Inc.) in an amount equal to
95.2% of such excess, and a cash payment shall be made to CFA (or its
successors-in-interest) in an amount equal to 4.8% of such excess. In
the case of CFA, in the event that the Threshold exceeds the
Adjustment Amount, a cash payment shall be made to the Principal
Stockholder (on behalf of CFA) in an amount equal to 98% of such
excess,
<PAGE>
and a cash payment shall be made to CIMF (or its successor-
in-interest) in an amount equal to 2% of such excess. In the event
that the Adjustment Amount of any Purchase Gerry Company (other than
CILP, CISA and CFA) exceeds the Threshold of such Purchase Gerry
Company, a cash payment shall be made by the Sellers in the amount of
such excess. In the case of CID and CPI, in the event that the portion
of the Adjustment Amount of CILP allocable to CID's and CPI's
respective Equity Interests in CILP exceeds the portion of CILP's
Threshold allocable to CID's and CPI's respective Equity Interests in
CILP, a cash payment shall be made by the Principal Shareholder (on
behalf of the relevant Sellers) to Parent. In the case of CISA, in the
event that the Adjustment Amount exceeds the Threshold, a cash payment
shall be made by the Principal Stockholder in an amount equal to 95.2%
of such excess and a cash payment shall be made by CFA (or its
successors-in-interest) in an amount equal to 4.8% of such excess. In
the case of CFA, in the event that the Adjustment Amount exceeds the
Threshold, a cash payment shall be made by the Principal Stockholder
in an amount equal to 98% of such excess, and a cash payment shall be
made by CIMF (or its successor-in-interest) in an amount equal to 2%
of such excess. The amount of cash, if any, payable pursuant to this
Section 4.01(a) in respect of a Purchase Gerry Company shall be called
the "Cash Amount".
(b) The "Adjustment Amount" of any Purchase Gerry Company
shall be an amount equal to, without duplication, (A) the aggregate
amount of Closing Indebtedness and Other Liabilities of such Purchase
Gerry Company, plus (B) the amount of the Working Capital Deficit of
such Purchase Gerry Company, if any, or minus (C) the amount of the
Working Capital Balance of such Purchase Gerry Company, if any, plus
(D) the amount of the Capital Expenditure Deficiency of such Purchase
Gerry Company, if any, or minus (E) the amount of the Capital
Expenditure Excess of such Purchase Gerry Company, if any, plus (F)
the aggregate amount of Severance and Incentive Liabilities of such
Purchase Gerry Company; provided that in determining the Adjustment
Amount of CFA effect shall be given to CFA's sale of a 4.8%
partnership interest in CISA pursuant to this Purchase Agreement and
to the results of any post-closing adjustments relating to CISA
pursuant to this Purchase Agreement.
(c) The Adjustment Amount of CILP allocable to CID's Equity
Interest in CILP (the "CID Adjustment Amount") shall be 41.5% of the
Adjustment Amount of CILP:
<PAGE>
(d) The Adjustment Amount of CILP allocable to CPI's Equity
Interest in CILP (the "CPI Adjustment Amount") shall be 58.5% of the
Adjustment Amount of CILP:
SECTION 4.02. Estimated Adjustment Amount; Initial
Calculation of Purchase Consideration. Not later than five business
days prior to the Closing, each Purchase Gerry Company shall deliver
to Parent an estimate of the Adjustment Amount (the "Estimated
Adjustment Amount") of such Purchase Gerry Company, including
therewith estimated Closing Indebtedness and Other Liabilities
("Estimated Closing Indebtedness and Other Liabilities") of such
Purchase Gerry Company, estimated Working Capital Deficit or estimated
Working Capital Balance ("Estimated Working Capital Deficit or
Balance") of such Purchase Gerry Company, estimated Capital
Expenditure Deficiency or estimated Capital Expenditure Excess
("Estimated Capital Expenditure Deficiency or Excess") of such
Purchase Gerry Company, and estimated Severance and Incentive
Liabilities ("Estimated Severance and Incentive Liabilities") of such
Purchase Gerry Company, and the Cash Amount of such Purchase Gerry
Company shall be determined pursuant to Section 4.01 as if the
Estimated Adjustment Amount of such Purchase Gerry Company were the
Adjustment Amount of such Purchase Gerry Company (the "Estimated Cash
Amount" of such Purchase Gerry Company). As of the Closing, the Cash
Amount of each Purchase Gerry Company shall be deemed to comprise the
Estimated Cash Amount of such Purchase Gerry Company. After the
Closing, the Purchase Consideration shall be subject to adjustment in
accordance with Section 4.04.
SECTION 4.03. Escrow Arrangements. At the Closing, the
Principal Stockholder shall, on behalf of the Sellers, deposit into
escrow, in accordance with the terms of the Escrow Agreement, an
amount in cash (the "Escrowed Cash") in respect of each Purchase Gerry
Company, as set
<PAGE>
forth below (and the Principal Stockholder hereby directs the Parent
to deposit such amounts out of the Purchase Consideration):
Purchase Gerry Company Escrowed Cash
CILP $479,528
CITLP $162,887
CFA $30,287
CISA $146,795
CIF $51,369
For purposes of this Agreement, the portion of the Escrowed Cash of
CILP that shall be allocable to CID's Equity Interest in CILP shall be
$199,004 and the portion thereof allocable CPI's Equity Interest in
CILP shall be $280,524. The Principal Stockholder shall be entitled to
determine the allocation, as among the Sellers, of the Escrowed Cash
to be deposited into escrow pursuant to the Escrow Agreement, and
unless otherwise specified shall be deemed to have determined that all
such Escrowed Cash required to be so deposited shall be the Cash
Amount payable to the Principal Stockholder.
SECTION 4.04. Reconciliation of Adjustment Amount;
Adjustment of Purchase Consideration. (a) Within 90 days after the
Closing Date, Parent shall prepare and deliver to the Principal
Stockholder, a statement (the "Statement") setting forth Parent's
determination of the Adjustment Amount of each Purchase Gerry Company,
including Closing Indebtedness and Other Liabilities, the Working
Capital Deficit or Working Capital Balance, the Capital Expenditure
Deficiency or the Capital Expenditure Excess and the Severance and
Incentive Liabilities, in each case of such Purchase Gerry Company,
and the calculation of the Cash Amount in accordance with Section
4.01. During the 30-day period following delivery of the Statement to
the Principal Stockholder, Parent shall provide the Principal
Stockholder with access during normal business hours to any books,
records, working papers or other information reasonably necessary or
useful in the preparation of the Statement and the calculation of the
Adjustment Amount to enable the Principal Stockholder to verify the
accuracy of the
<PAGE>
Statement. The Statement shall become final and binding upon all
parties hereto on the thirtieth day following delivery thereof to the
Principal Stockholder unless the Principal Stockholder gives written
notice of disagreement with the Statement (a "Notice of Disagreement")
to Parent prior to such date. Any Notice of Disagreement shall specify
in reasonable detail the nature of any disagreement so asserted and
relate solely to the preparation of the Statement and the calculation
of the Adjustment Amount of any Gerry Company, the Cash Amount for any
Purchase Gerry Company in accordance with Section 4.01.
(b) If a Notice of Disagreement is received by Parent in a
timely manner, then the Statement (as revised in accordance with
clause (c) or (d) below) shall become final and binding upon the
parties hereto on the earlier of (i) the date the Principal
Stockholder and Parent resolve in writing any differences they may
have with respect to any matter specified in the Notice of
Disagreement or (ii) the date any disputed matters are finally
resolved in writing by the Arbitrator (as defined below). During the
30-day period following the delivery of a Notice of Disagreement,
Parent and the Principal Stockholder shall seek in good faith to
resolve in writing any differences which they may have with respect to
any matter specified in the Notice of Disagreement and each shall
provide the other with reasonable access to any books, records,
working papers or other information reasonably necessary or useful in
the preparation or calculation of (u) the Estimated Adjustment Amount
of each Purchase Gerry Company, including Estimated Closing
Indebtedness and Other Liabilities, the Estimated Working Capital
Deficit or Balance, the Estimated Capital Expenditure Deficiency or
Excess and the Estimated Severance and Incentive Liabilities, in each
case of each Purchase Gerry Company, (v) the Adjustment Amount of each
Purchase Gerry Company, including Closing Indebtedness and Other
Liabilities, the Working Capital Deficit or Working Capital Balance,
the Capital Expenditure Deficiency or the Capital Expenditure Excess
and the Severance and Incentive Liabilities, in each case of each
Purchase Gerry Company, (w) the Cash Amount of such Purchase Gerry
Company, (x) the Statement, (y) any Notice of Disagreement or (z)
otherwise with respect to any thereof. At the end of such 30-day
period if there has been no resolution of the matters specified in the
Notice of Disagreement, Parent and the Principal Stockholder shall
submit to an arbitrator (the "Arbitrator") for review and resolution
any and all matters arising under this Section which remain in
dispute. The
<PAGE>
Arbitrator shall be Price Waterhouse, or if such firm is unable or
unwilling to act, such other nationally recognized independent public
accounting firm as shall be agreed upon by Parent and the Principal
Stockholder in writing. The Arbitrator shall render a decision
resolving the matters submitted to the Arbitrator within 30 days
following submission thereto. The cost of any arbitration (including
the fees of the Arbitrator) pursuant to this Section shall be borne
50% by Parent and 50% by the Principal Stockholder.
(c) If the Adjustment Amount of any Purchase Gerry Company
is higher or lower than the Estimated Adjustment Amount of such
Purchase Gerry Company, the Cash Amount of such Purchase Gerry Company
shall be finally adjusted pursuant to Section 4.01. If the Cash Amount
of such Purchase Gerry Company other than CISA or CFA as so finally
adjusted, is greater than the Estimated Cash Amount of such Purchase
Gerry Company, Parent shall, within 15 days after the Statement
becomes final and binding upon the parties, pay to the Principal
Stockholder on behalf of himself and the other Sellers an aggregate
amount equal to the excess of the Cash Amount of such Purchase Gerry
Company, as so finally determined, over the Estimated Cash Amount of
such Purchase Gerry Company; provided, however, that if there shall be
an excess or deficiency in the Cash Amount in respect of more than one
such Purchase Gerry Company, only one net amount shall in each case be
payable hereunder. If the Cash Amount of CISA, as so finally adjusted,
is greater than the Estimated Cash Amount of CISA, Parent shall,
within 15 days after the Statement becomes final and binding upon the
parties, pay to the Principal Stockholder on his own behalf and on
behalf of ARA Cablevision, Inc. an aggregate amount equal to 95.2% of
the excess of the Cash Amount of CISA, as so finally determined, over
the Estimated Cash Amount of CISA, and shall pay to CFA (or its
successors-in-interest) an aggregate amount equal to 4.8% of the
excess of the Cash Amount of CISA, as so finally determined, over the
Estimated Cash Amount of CISA. If the Cash Amount of CFA, as so
finally adjusted, is greater than the Estimated Cash Amount of CFA,
Parent shall, within 15 days after the Statement becomes final and
binding upon the parties, pay to the Principal Stockholder on behalf
of CFA an aggregate amount equal to 98% of the excess of the Cash
Amount of CFA, as so finally determined, over the Estimated Cash
Amount of CFA, and shall pay to CIMF (or its successor-in-interest) an
aggregate amount equal to 2% of the excess of the Cash
<PAGE>
Amount of CFA, as so finally determined, over the Estimated Cash
Amount of CFA.
(d) If the Cash Amount of any Purchase Gerry Company other
than CISA or CFA, as so finally adjusted, is less than the Estimated
Cash Amount of such Purchase Gerry Company, Parent shall be entitled
to receive, within 15 days after the Statement becomes final and
binding upon the parties, an aggregate amount (the "Returned Amount")
equal to the excess of the Estimated Cash Amount of such Purchase
Gerry Company over the Cash Amount of such Purchase Gerry Company as
so finally determined. If the Cash Amount of CISA, as so finally
adjusted, is less than the Estimated Cash Amount of CISA, Parent shall
be entitled to receive from the Principal Stockholder, within 15 days
after the Statement becomes final and binding upon the parties, an
aggregate amount (the "CISA Returned Amount") equal to 95.2% of the
excess of the Estimated Cash Amount of CISA over the Cash Amount of
CISA, as so finally determined, and shall be entitled to received from
CFA (or its successors-in-interest), within 15 days after the
Statement becomes final and binding upon the parties, an aggregate
amount equal to 4.8% of the excess of the Estimated Cash Amount of
CISA over the Cash Amount of CISA, as so finally determined. If the
Cash Amount of CFA, as so finally adjusted, is less than the Estimated
Cash Amount of CFA, Parent shall be entitled to receive from the
Principal Stockholder, within 15 days after the Statement becomes
final and binding upon the parties, an aggregate amount (the "CFA
Returned Amount") equal to 98% of the excess of the Estimated Cash
Amount of CFA over the Cash Amount of CFA, as so finally determined,
and shall be entitled to receive from CIMF (or its successor-in-
interest), within 15 days after the Statement becomes final and
binding upon the parties, an aggregate amount equal to 2% of the
excess of the Estimated Cash Amount of CFA over the Cash Amount of
CFA, as so finally determined. The Principal Stockholder's obligation
to deliver the Returned Amount, the CISA Returned Amount and the CFA
Returned Amount shall be satisfied, first, out of the Escrowed Amount,
and second, out of other cash held by the Stockholders.
SECTION 4.05. Adjustments to Threshold. The Threshold of
each Purchase Gerry Company shall be reduced in the event the
Principal Stockholder designates as Excluded Assets any System or
Systems (or portions thereof) owned by such Purchase Gerry Company as
of the date of this Agreement pursuant to Section 5.25 of the
Supplemental Agreement by an amount equal to the Excluded Systems
Amount of such Purchase
<PAGE>
Gerry Company. The "Excluded Systems Amount" shall equal 13.5
multiplied by the aggregate amount of operating cash flow of such
Purchase Gerry Company for the fiscal year immediately preceding the
Closing that is attributable to each System (or portion thereof) so
designated (it being understood that such cash flow shall be as so
determined in preparing such Purchase Gerry Company's audited
financial statements for such fiscal year).
SECTION 4.06. Stockholders' Representative. The Principal
Stockholder, each Direct Holder and each Asset Gerry Company hereby
designates Philip Dropkin or such other Person as designated by the
Principal Stockholder to be the representative of each such person or
entity (the "Stockholders' Representative") for purposes of this
Agreement.
ARTICLE V
Conditions Precedent
The respective obligation of each party to effect the
Purchase and the other transactions contemplated hereby is subject to
the satisfaction or waiver (by the parties for whose benefit the
condition is imposed) on or prior to the Closing Date of the
conditions set forth in Article VI of the Supplemental Agreement.
ARTICLE VI
Termination, Amendment and Waiver
This Purchase Agreement may be terminated or amended or the
parties may extend the time for the performance of any of the
obligations or other acts of the other parties, waive any inaccuracies
in the representations and warranties contained in or in any document
delivered pursuant to this Agreement or waive compliance with any of
the agreements or conditions contained in this Agreement, in each case
as provided in Article VIII of the Supplemental Agreement.
<PAGE>
ARTICLE VII
Termination of CPI Merger Agreement; Elimination
of CIMF as a Party
Parent, the Principal Stockholder and CPI hereby agree that
the transaction intended to be accomplished by way of the CPI Merger
Agreement shall instead be accomplished by way of this Agreement, so
that the CPI Merger Agreement is hereby terminated and shall no longer
be of any force or effect. The Purchase Agreement, dated as of
February 6, 1995, is hereby amended and restated in its entirety
pursuant to the terms hereof. The parties hereto hereby agree that
CIMF shall cease to be a party hereto and shall instead be acquired by
Parent pursuant to the CIMF Merger Agreement.
ARTICLE VIII
Governing Law
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, regardless of the
laws that might otherwise govern under applicable principles of
conflict of laws thereof.
<PAGE>
IN WITNESS WHEREOF, the Principal Stockholder, the Purchase
Gerry Companies, the Direct Holders and Parent have caused this
Agreement to be signed by their respective duly authorized officers
(or, in the case of the Principal Stockholder, has signed this
Agreement), all as of the date first written above.
Alan Gerry, as the
Principal Stockholder
CABLEVISION INDUSTRIES LIMITED
PARTNERSHIP (a Purchase Gerry
Company),
by CABLEVISION INDUSTRIES OF
DELAWARE, INC., as General
Partner,
by
Name: Keith Suehnholz
Title: Vice President
and by CABLEVISION PROPERTIES,
INC., as General Partner,
by
Name: Keith Suehnholz
Title: Vice President
CABLEVISION INDUSTRIES OF
TENNESSEE L.P. (a Purchase Gerry
Company),
by CABLEVISION INDUSTRIES OF
TENNESSEE, INC., as General
Partner,
by
Name: Keith Suehnholz
Title: Vice President
<PAGE>
and by
Alan Gerry, as
General Partner
CABLEVISION INDUSTRIES OF SARATOGA
ASSOCIATES (a Purchase Gerry
Company),
by ARA CABLEVISION, INC.,
as General Partner,
by
Name: Keith Suehnholz
Title: Vice President
and by
Alan Gerry, as
General Partner
<PAGE>
CABLEVISION OF FAIRHAVEN/ACUSHNET
(a Purchase Gerry Company),
by CABLEVISION INDUSTRIES OF
MIDDLE FLORIDA, INC., as General
Partner,
by
Name: Keith Suehnholz
Title: Vice President
and by
Alan Gerry, as
General Partner
CABLEVISION INDUSTRIES OF FLORIDA,
INC. (a Purchase Gerry Company),
by
Name: Keith Suehnholz
Title: Vice President
CABLEVISION INDUSTRIES OF DELAWARE,
INC. (a Direct Holder),
by
Name: Keith Suehnholz
Title: Vice President
CABLEVISION PROPERTIES INC. (a
Direct Holder),
by
Name:
Title:
<PAGE>
ARA CABLEVISION, INC. (a Direct
Holder),
by
Name: Keith Suehnholz
Title: Vice President
TIME WARNER INC.,
by
Name: Spencer B. Hays
Title: Vice President
and Deputy
General Counsel
Exhibit 2(f)
<PAGE>
AMENDMENT AGREEMENT dated as of December 8, 1995,
to the SUPPLEMENTAL AGREEMENT dated as of February 6,
1995, among CABLEVISION INDUSTRIES CORPORATION, a
Delaware corporation (the "Company"), the corporations
and partnerships listed on the signature pages hereof
as Gerry Companies ("the Gerry Companies" and together
with their respective subsidiaries and the Company, the
"Cablevision Companies"), the corporations listed on
the signature pages hereof as Direct Holders (the
"Direct Holders"), ALAN GERRY, an individual residing
at Loomis Road, Liberty, New York (the "Principal
Stockholder"), TIME WARNER INC., a Delaware Corporation
("Parent"), and TW CVI ACQUISITION CORP., a Delaware
corporation and a wholly owned subsidiary of Parent
("Sub").
WHEREAS, concurrently with the execution and delivery of
this Amendment Agreement, certain of the parties hereto are executing
and delivering (i) an Amended and Restated Purchase Agreement, (ii)
the CIMF Merger Agreement, providing for the merger of CIMF with and
into the Company, and (iii) the Seminole County Agreement, providing
for the purchase of certain cable television systems in and around
Seminole County, Florida, which are owned by CILP; and
WHEREAS the parties hereto desire to (i) amend Annex A to
the Supplemental Agreement as originally executed in order to effect
the transactions contemplated by the foregoing Agreements and (ii) set
forth their understanding with respect to certain other matters
arising under the Supplemental Agreement.
NOW THEREFORE, in consideration of the agreements contained
in this Amendment Agreement, the parties hereto hereby agree as
follows:
SECTION 1. Defined Terms. Capitalized terms used herein and
not defined herein have the meanings given such terms in Annex A to
the Supplemental Agreement, as amended hereby, and the rules of
interpretation set forth in Annex A, as amended hereby, are applicable
hereto.
<PAGE>
SECTION 2. Amendments to Annex A. (a) The following
definitions shall hereby be added to Annex A to the Supplemental
Agreement to read as follows:
"CIMF" means Cablevision Industries of Middle Florida, Inc,
a Florida corporation.
"CIMF Merger" has the meaning given to such term in the
Introduction to the CIMF Merger Agreement.
"CIMF Merger Agreement" means the Agreement and Plan of
Merger dated as of December 8, 1995, among CIMF, the Company, the
Principal Stockholder and Parent.
"Seminole County Agreement" means the Agreement dated as of
December 8, 1995, among the Principal Stockholder, CPI, CID and
Parent.
(b) The following definitions contained in Annex A shall
hereby be amended in their entirety to read as follows:
"Acquisition Documents" means the Supplemental Agreement,
the Merger Agreements, the Escrow Agreement and the Purchase
Agreement, including in each case all exhibits and schedules
(including the Disclosure Schedule), as such agreements may be amended
from time to time by agreement of the parties but shall in no event be
deemed to include the agreements or documents referred to in the
Disclosure Schedule (as amended from time to time by agreement of the
parties).
"CMP Acquisition Sub" means TW CVI Acquisition Corp. II, a
Delaware corporation.
"Merger Agreement" means each of the Company Merger
Agreement, the CMP Merger Agreement and the CIMF Merger
Agreement.
"Merger Gerry Companies" means CMP and CIMF.
"Mergers" means the Company Merger, the CMP Merger and the
CIMF Merger.
"Purchase Agreement" means the Purchase Agreement dated as
of February 6, 1995, as amended and restated
<PAGE>
as of December 8, 1995, as such agreement may be amended from
time to time by agreement of the parties, among the Principal
Stockholder, the Purchase Gerry Companies, the Direct Holders and
Parent.
(c) The following definitions are hereby deleted from Annex
A to the Supplemental Agreement.
"CPI Acquisition Sub"
"CPI Merger"
"CPI Merger Agreement"
"CPI Surviving Corporation"
(d) The last paragraph of page 2 of Attachment I to Annex A
is hereby amended to delete the reference to Seminole County Florida
contained therein so that certain subscribers and equipment and
facilities relating thereto located in various portions of, in, or
around Seminole County, Florida will constitute Individual Subscribers
and Systems for purposes of the Supplemental Agreement.
SECTION 3. Amendments. (a) Section 3.03(f)(iii) shall be
amended to read as follows:
Immediately prior to the Mergers, Parent will be in control of
Sub and CMP Acquisition Sub within the meaning of Section 368(c)
of the Code. Immediately prior to the CIMF Merger, Parent will be
in control of the Company within the meaning of Section 368(c) of
the Code.
(b) Section 5.16(c) shall be amended to read in its entirety
as follows:
(c) Parent shall prepare and file, or cause to be prepared
and filed, in accordance with the Company's past custom and
practice, all tax returns for the Company for all Pre-Closing Tax
Periods for which tax returns have not been filed prior to the
Closing, and the Surviving Corporation (as defined in the Company
Merger Agreement) shall pay all Taxes shown to be due on such tax
returns. In preparing such Company tax returns, Parent shall
consult with the Principal Stockholder in good faith and shall
provide the Principal Stockholder with drafts of such tax returns
(together with the relevant back-up information upon request) for
review at least
<PAGE>
10 days prior to filing. The Principal Stockholder shall prepare
and file, or cause to be prepared and filed, all tax returns for
each Gerry Company for all Pre-closing Tax Periods. Such tax
returns shall be prepared in accordance with such Gerry Company's
past custom and practice and, with respect to CILP, CFA and CISA,
items of income, gain, loss and deduction shall be prepared using
the closing of the books method. In preparing such Gerry Company
tax returns, the Principal Stockholder shall consult with Parent
in good faith and shall provide Parent with drafts of such tax
returns (together with the relevant back-up information upon
request) for review at least 10 days prior to filing.
(c) Section 5.24(b) shall be amended by adding the following
sentence at the end thereof:
"Such employees shall be deemed to be terminated prior to the
Closing Date for purposes of clause (i) of the definition of
"Severance and Incentive Liabilities" set forth in Annex A
hereto."
(c) The form of opinion attached as Exhibit H to the
Supplemental Agreement shall be revised to read as set forth in
Exhibit A hereto.
SECTION 4. Agreement with respect to Certain Matters. For
purposes of determining (i) whether the conditions specified in
Sections 6.03(h) and (i) have been satisfied, and for purposes of
determining whether the conditions in Section 6.03(b) and (e) have
been satisfied, but only to the extent that such Sections refer to
Section 6.03(h) and 6.03(i), and (ii) whether an indemnification
obligation is owed pursuant to Section 7.01(b) of the Supplemental
Agreement in respect of the Franchise agreements or FCC licenses to
which CFA, CILP and CIMF (or entities in which they own an interest)
are parties or licensees, and any consents, approvals or waivers
required thereunder, the change in the structure of the acquisitions
of CFA, CILP and CIMF, as reflected in the Amended and Restated
Purchase Agreement and the CIMF Merger Agreement, shall be
disregarded. The foregoing agreement shall not, however, affect any
other obligation, representation or warranty of the parties to the
Acquisition Documents.
<PAGE>
SECTION 5. Counterparts. This Amendment Agreement may be
executed in one or more counterparts, all of which shall be considered
one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to
the other parties.
SECTION 6. Governing Law. This Amendment Agreement shall be
governed by, and construed in accordance with, the laws of the State
of New York, regardless of the laws that might otherwise govern under
applicable principles of conflict of laws thereof, except to the
extent that the laws of the State of Delaware are mandatorily
applicable.
<PAGE>
IN WITNESS WHEREOF, the Company, the Gerry Companies, the
Direct Holders, the Principal Stockholder, Parent and Sub have caused
this Amendment Agreement to be signed by their respective duly
authorized officers (or, in the case of the Principal Stockholder, has
signed this Agreement), all as of the date first written above.
CABLEVISION INDUSTRIES CORPORATION,
by
Name:
Title:
CABLEVISION MANAGEMENT CORPORATION
OF PHILADELPHIA (a Merger Gerry
Company),
by
Name:
Title:
CABLEVISION PROPERTIES, INC. (a
Direct Holder),
by
Name:
Title:
<PAGE>
CABLEVISION INDUSTRIES LIMITED
PARTNERSHIP (a Purchase Gerry
Company),
by CABLEVISION INDUSTRIES OF
DELAWARE, INC., as General
Partner,
by
Name:
Title:
and by CABLEVISION PROPERTIES, INC.,
as General Partner,
by
Name:
Title:
CABLEVISION INDUSTRIES OF
TENNESSEE L.P. (a Purchase Gerry
Company),
by CABLEVISION INDUSTRIES OF
TENNESSEE, INC., as General
Partner,
by
Name:
Title:
and by
Alan Gerry, as
General Partner
<PAGE>
CABLEVISION INDUSTRIES OF SARATOGA
ASSOCIATES (a Purchase Gerry
Company),
by ARA CABLEVISION, INC.,
as General Partner,
by
Name:
Title:
and by
Alan Gerry, as
General Partner
and by CABLEVISION OF
FAIRHAVEN/ACUSHNET, as General
Partner,
by CABLEVISION INDUSTRIES OF
MIDDLE FLORIDA, INC., as
General Partner,
by
Name:
Title:
and by
Alan Gerry, as
General Partner
<PAGE>
CABLEVISION OF FAIRHAVEN/ACUSHNET
(a Purchase Gerry Company),
by CABLEVISION INDUSTRIES OF
MIDDLE FLORIDA, INC., as General
Partner,
by
Name:
Title:
and by
Alan Gerry, as
General Partner
CABLEVISION INDUSTRIES OF MIDDLE
FLORIDA, INC. (a Merger Gerry
Company),
by
Name:
Title:
CABLEVISION INDUSTRIES OF FLORIDA,
INC. (a Purchase Gerry Company),
by
Name:
Title:
CABLEVISION INDUSTRIES OF DELAWARE,
INC. (a Direct Holder),
by
Name:
Title:
<PAGE>
ARA CABLEVISION, INC. (a Direct
Holder),
by
Name:
Title:
Alan Gerry, as the
Principal Stockholder
TIME WARNER INC.,
by
Name: Spencer B. Hays
Title: Vice President
TW CVI ACQUISITION CORP.,
by
Name:
Title:
