Exhibit 4.8
GUARANTEE AGREEMENT (this "Agreement")
dated as of October 10, 1996, among TIME
WARNER INC., a Delaware corporation (the
"Original Guarantor"), TW INC., a Delaware
corporation (the "Additional Guarantor"), and
THE FIRST NATIONAL BANK OF CHICAGO (the
"Guarantee Trustee").
WHEREAS, in connection with the issuance by Time Warner
Capital I, a Delaware statutory business trust (the "Trust"), of
$575,000,000 aggregate liquidation amount of its 8-7/8% Preferred
Trust Securities (the "Preferred Securities") representing
undivided beneficial interests in the assets of the Trust, the
Original Guarantor and the Guarantee Trustee entered into a
Guarantee Agreement dated as of December 5, 1995 (the "Original
Guarantee Agreement"), pursuant to which the Original Guarantor
irrevocably and unconditionally agreed, to the extent set forth
therein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined in the Original Guarantee
Agreement) and to make certain other payments on the terms and
conditions set forth therein (collectively, the "Original
Guarantee"); and
WHEREAS the Additional Guarantor proposes in and by
this Agreement to unconditionally and irrevocably guarantee, on a
subordinated basis, the Original Guarantor's obligation to pay to
the Holders of the Preferred Securities the Guarantee Payments
and the other obligations of the Original Guarantor under the
Original Guarantee Agreement.
NOW THEREFORE, the Original Guarantor, the Additional
Guarantor and the Guarantee Trustee hereby agree as follows:
SECTION 1. Capitalized Terms. Capitalized terms used
herein and not defined herein shall have the meanings ascribed to
such terms in the Original Guarantee Agreement.
SECTION 2. Powers and Duties of the Guarantee
Trustee. (a) This Agreement shall be held by the Guarantee
Trustee in trust for the benefit of the Holders. The Guarantee
Trustee shall not transfer its right, title and interest in this
Agreement to any Person except a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment
to act as Guarantee Trustee or to
a Holder exercising his or her rights pursuant to Section 5. The
right, title and interest of the Guarantee Trustee to this
Agreement shall vest automatically in each Person who may
hereafter be appointed as Guarantee Trustee in accordance with
Article IV of the Original Guarantee Agreement. Such vesting and
cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered.
(b) If a default by the Additional Guarantor on any of
its payments or other obligations under this Agreement (an "Event
of Default") occurs and is continuing, the Guarantee Trustee
shall enforce this Agreement for the benefit of the Holders.
(c) This Agreement and all moneys received by the
Guarantee Trustee hereunder in respect of the Guarantee Payments
will not be subject to any right, charge, security interest, lien
or claim of any kind in favor of, or for the benefit of, the
Guarantee Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders, as their names and
addresses appear upon the register, notice of all Events of
Default known to the Guarantee Trustee, unless such defaults
shall have been cured before the giving of such notice; provided,
however, that the Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or
Responsible Officers of the Guarantee Trustee in good faith
determine that the withholding of such notice is in the interests
of the Holders. The Guarantee Trustee shall not be deemed to
have knowledge of any default except any default as to which the
Guarantee Trustee shall have received written notice or a
Responsible Officer charged with the administration of this
Agreement shall have obtained written notice.
(e) The Guarantee Trustee shall continue to serve as
trustee with respect to this Agreement until a Successor
Guarantee Trustee has been appointed in accordance with Article
IV of the Original Guarantee Agreement, which Successor Guarantee
Trustee, when so appointed, shall act as trustee with respect to
this Agreement from the date of such appointment until the
earlier of (i) the appointment of another Successor Guarantee
Trustee in accordance with this
paragraph (e) and Article IV of the Original Guarantee Agreement
and (ii) termination of this Agreement pursuant to the terms hereof.
SECTION 3. Certain Rights and Duties of the
Guarantee Trustee. (a) The Guarantee Trustee, before the
occurrence of an Event of Default and after the curing or waiving
of all Events of Default that may have occurred, shall undertake
to perform only such duties as are specifically set forth in this
Agreement, and no implied covenants shall be read into this
Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant
to Section 11(a)), the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and use the
same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(b) No provision of this Agreement shall be construed
to relieve the Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act or its own
wilful misconduct, except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Guarantee
Trustee under this Agreement shall be determined solely by
the express provisions of this Agreement, and the Guarantee
Trustee shall not be liable under this Agreement except for
the performance of such duties and obligations as are
specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement
against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Agreement; but in the case of
any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Guarantee Trustee, the Guarantee Trustee shall be under
a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be proved
that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it
pursuant to this Agreement in good faith in accordance with
the direction of the Holders as provided herein relating to
the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee, or exercising
any trust or power conferred upon the Guarantee Trustee
under this Agreement; and
(iv) no provision of this Agreement shall require the
Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable ground
for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Sections 3(a) and
(b):
(i) Whenever in the administration of this Agreement,
the Guarantee Trustee shall deem it desirable that a matter
be proved or established prior to taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon
a certificate, which shall comply with the provisions of
Section 314(e) of the Trust Indenture Act, signed by any
authorized officer of the Additional Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel
(which may be counsel to the Additional Guarantor or any of
its Affiliates and may include any
of its employees) selected by it in good faith and with due
care and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and
opinion and (B) shall have the right at any time to seek
instructions concerning the administration of this Agreement
from any court of competent jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Agreement at the request or direction of any Holders, unless
such Holders shall have offered to the Guarantee Trustee
reasonable security and indemnity against the costs,
expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with
such request or direction; provided, however, that nothing
contained in this clause (iv) shall relieve the Guarantee
Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived) to exercise
such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in
this exercise as a prudent person would exercise or use
under the circumstances in the conduct of his or her own
affairs; and
(v) any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders and the signature of
the Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no
third party shall be required to inquire as to the authority
of the Guarantee Trustee so to act, or as to its compliance
with any of the terms and provisions of this Agreement, both
of which shall be conclusively evidenced by the Guarantee
Trustee's or its agent's taking such action.
SECTION 4. Additional Guarantee. (a) The Additional
Guarantor irrevocably and unconditionally guarantees, on a
subordinated basis as provided herein, the Original Guarantor's
obligations to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Trust or
the Original Guarantor), as and when due, regardless of any
defense, right of setoff or counterclaim that the Trust may have
or assert (the "Additional Guarantee"). The Additional
Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the
Additional Guarantor to the Holders or by causing the Original
Guarantor or the Trust to pay such amounts to the Holders.
(b) The Additional Guarantor hereby waives notice of
acceptance of this Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Original Guarantor or
the Trust or any other Person before proceeding against the
Additional Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
(c) The obligations, covenants, agreements and duties
of the Additional Guarantor under this Agreement shall in no way
be affected or impaired by reason of the happening from time to
time of any of the following:
(i) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Trust or
the Original Guarantor of any express or implied agreement,
covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Trust or the
Original Guarantor;
(ii) the extension of time for the payment by the
Trust of all or any portion of the Distributions, Redemption
Price, Liquidation Distribution or any other sums payable
under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any
interest payment period on the Subordinated Debentures or any
extension of the maturity date of the Subordinated
Debentures permitted by the Indenture);
(iii) any failure, omission, delay or lack of
diligence on the part of the Holders to enforce, assert or
exercise any right, privilege, power or remedy conferred on
the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Trust granting
indulgence or extension of any kind;
(iv) the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings
affecting, the Trust or any of the assets of the Trust;
(v) any invalidity of, or defect or deficiency in,
the Preferred Securities;
(vi) the settlement or compromise of any
obligation guaranteed hereby or hereby incurred; or
(vii) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or
defense of a guarantor, it being the intent of this
Section that the obligations of the Additional Guarantor
hereunder shall be absolute and unconditional under any and
all circumstances.
(d) There shall be no obligation of the Holders to
give notice to, or obtain consent of, the Additional Guarantor
with respect to the happening of anything set forth in Section 4(c).
SECTION 5. Enforcement of Additional Guarantee. The
Additional Guarantor and the Guarantee Trustee expressly
acknowledge that (i) this Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders;
(ii) the Guarantee Trustee has the right to enforce this
Agreement on behalf of the Holders; (iii) Holders representing
not less than a Majority in aggregate liquidation amount of the
Preferred Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available
in respect of this Agreement, including the giving of directions
to the Guarantee Trustee, or exercising any trust or other power
conferred upon the Guarantee Trustee under this Agreement;
provided, however, that, except for directing the time, method
and place of conducting any proceeding for any remedy available
to the Guarantee Trustee, the Guarantee Trustee shall not take
any of the foregoing actions at the direction of the Holders
unless the Guarantee Trustee shall have received, at the expense
of the Additional Guarantor, an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect
that such action will not result in the Trust being treated as an
association taxable as a corporation or a partnership for United
States Federal income tax purposes and that, following such
action, each holder of Trust Securities will be treated for
United States Federal income tax purposes as owning an undivided
beneficial interest in the Subordinated Debentures; and (iv) if
the Guarantee Trustee fails to enforce this Agreement for any
reason, any Holder may, at its own expense, institute a legal
proceeding directly against the Additional Guarantor to enforce
its rights under this Agreement, without first instituting a legal
proceeding against the Trust, the Guarantee Trustee or any other Person.
SECTION 6. Guarantee of Payment. This Agreement
creates a guarantee of payment and not merely of collection.
SECTION 7. Subrogation. The Additional Guarantor
shall be subrogated to all (if any) rights of the Holders against
the Trust and the Original Guarantor in respect of any amounts
paid to the Holders by the Additional Guarantor under this
Agreement; provided, however, that the Additional Guarantor shall
not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights that it may
acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this
Agreement, if, at the time of any such payment, any amounts are
due and unpaid under this Agreement. If any amount shall be paid
to the Additional Guarantor in violation of the preceding
sentence, the Additional Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
SECTION 8. Independent Obligations. The Additional
Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the
Preferred Securities and the Original Guarantor with respect to
the Original Guarantee, and that the Additional Guarantor shall
be liable as principal and as
debtor hereunder to make any payments required pursuant to the
terms of this Agreement notwithstanding the occurrence of any
event referred to in paragraphs (i) through (vii) of Section 4(c) hereof.
SECTION 9. Subordination. This Agreement constitutes
an unsecured obligation of the Additional Guarantor that ranks
(a) pari passu with the guarantees delivered by the Additional
Guarantor in connection with the PERCS, (b) pari passu with the
most senior preferred or preference stock of the Additional
Guarantor outstanding on the date of this Agreement or hereafter
issued and with any guarantee now or hereafter entered into by
the Additional Guarantor in respect of any preferred or
preference stock of any affiliate of the Additional Guarantor,
(c) senior in right of payment to the common stock and series
common stock of the Additional Guarantor and (d) subordinate and
junior in right of payment to all other liabilities of the
Additional Guarantor.
SECTION 10. Events of Default; Waiver. (a) Subject
to paragraph (b) of this Section, Holders may by vote of at least
a Majority in aggregate liquidation amount of the Preferred
Securities, (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee,
or exercising any trust or power conferred upon the Guarantee
Trustee or (ii) on behalf of all of the Holders waive any past
Event of Default and its consequences. Upon such waiver, any
such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every
purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
(b) The right of any Holder to receive payment of the
Guarantee Payments in accordance with this Guarantee Agreement,
or to institute suit for the enforcement of any such payment,
shall not be impaired without the consent of each such Holder.
SECTION 11. Termination. This Agreement shall
terminate and be of no further force and effect upon (i) full
payment of the Redemption Price of all of the Preferred
Securities, (ii) the distribution of the Subordinated Debentures
to all of the Holders or (iii) full payment of the amounts
payable in accordance with the Declaration upon liquidation of
the Trust. Notwithstanding
the foregoing, this Agreement will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid under the Preferred
Securities, the Original Guarantee or under the Additional Guarantee.
SECTION 12. Successors and Assigns. All guarantees
and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of
the Additional Guarantor, including any successors permitted
under Article Five of the Indenture, and shall inure to the
benefit of the Holders then outstanding. Except in connection
with a consolidation, merger or sale involving the Additional
Guarantor that is permitted under Article Five of the Indenture,
the Additional Guarantor shall not assign its obligations hereunder.
SECTION 13. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall
be in writing, duly signed by the party giving such notice, and
delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Additional Guarantor, to the
address set forth in the Original Guarantee Agreement for notices
given to the Original Guarantor or such other address as the
Additional Guarantor may give notice of to the Holders;
(b) if given to the Guarantee Trustee, to the address
set forth in the Original Guarantee Agreement or to such other
address as the Guarantee Trustee may give notice of to the Holders; and
(c) if given to any Holder, at the address set forth on
the books and records of the Trust.
All notices hereunder shall be deemed to have been
given when received in person, telecopied with receipt confirmed,
or three Business Days after mailed by first class mail, postage
prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or
inability to deliver.
SECTION 14. Benefit. This Agreement is solely for the
benefit of the Holders and, subject to Section 2, is not
separately transferable from the Preferred Securities.
SECTION 15. Not Responsible for Recitals or Issuance
of Guarantee. The recitals contained in this Agreement shall be
taken as the statements of the Original Guarantor and the
Additional Guarantor and the Guarantee Trustee does not assume
any responsibility for their correctness. The Guarantee Trustee
makes no representations as to the validity or sufficiency of
this Agreement.
SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
This Agreement is executed as of the day and year first
above written.
TIME WARNER INC., as Original
Guarantor,
By ___________________________
Name: Xxxxxx X. XxXxxxxxx
Title: Vice President
TW INC., as Additional Guarantor,
By ___________________________
Name: Xxxxxx X. XxXxxxxxx
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO,
as Guarantee Trustee,
By _______________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
