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RESTRUCTURING AGREEMENT
AMONG
TIME WARNER INC.,
ITOCHU CORPORATION
AND
ITOCHU ENTERTAINMENT INC.
DATED AS OF AUGUST 31, 1995
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TABLE OF CONTENTS
Page
ARTICLE 1 RESTRUCTURING.................................2
Section 1.1 Exchange of Itochu Interests for
Exchange Consideration.................2
Section 1.2 Deliveries.............................2
Section 1.3 Valuation .............................3
ARTICLE 2 CLOSING; CLOSING DATE.........................3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES................3
Section 3.1 Representations and
Warranties of TWX......................3
(a) Organization, Standing and Power.......3
(b) Capital Structure......................4
(c) SEC Documents; Financial Statements....4
(d) Authority; Non-Contravention...........5
(e) Litigation.............................6
(f) TWX Preferred Stock....................7
Section 3.2 Representations and Warranties of
Itochu and Itochu Entertainment........7
(a) Organization; Standing and Power.......7
(b) Authority; Noncontravention............7
(c) Title to Itochu Interests..............8
(d) Investment Intent......................9
ARTICLE 4 COVENANTS.....................................9
(a) Publicity..............................9
(b) Satisfaction of Conditions.............9
(c) Additional Agreements..................9
(d) Other Actions..........................9
(e) Tax Matters...........................10
ARTICLE 5 CONDITIONS PRECEDENT.........................10
Section 5.1 Conditions to the Obligations
of TWX................................10
(a) Accuracy of Representations and Warranties10
(b) Performance of Agreements.............10
(c) No Injunctions........................11
(d) Required Consents.....................11
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Section 5.2 Conditions to the Obligations of
Itochu and Itochu Entertainment.......11
(a) Accuracy of Representations and
Warranties............................11
(b) Performance of Agreements.............11
(c) No Injunctions........................11
(d) Required Consents.....................12
(e) Registration Rights...................12
ARTICLE 6 GENERAL INDEMNIFICATION......................12
Section 6.1 Survival of Representations and
Warranties............................12
Section 6.2 Obligation of Itochu and Itochu
Entertainment to Indemnify............12
Section 6.3 Obligation of TWX to Indemnify........13
Section 6.4 Notice and Opportunity to Defend......13
ARTICLE 7 CONTINUING RIGHTS AND OBLIGATIONS OFITOCHU AND ITOCHU
ENTERTAINMENT.....................................14
Section 7.1 Termination of Rights as Partner......14
Section 7.2 Other Ventures........................14
Section 7.3 Standstill; Confidentiality...........14
Section 7.4 Continuing Strategic Relationship.....14
(a) Board Representation..................14
(b) Exchange of Personnel.................15
(c) Preferred Vendor/Supplier Status......15
(d) Covenant Against Competition..........15
(e) Additional Consultation Rights........16
Section 7.5 Statement of Enhanced Global
Strategic Alliance....................16
ARTICLE 8 RESTRICTIONS ON TRANSFERS....................16
Section 8.1 Restrictions on Transfer..............16
Section 8.2 Additional Restrictions on
Transfer..............................18
Section 8.3 Legends on Certificates of
TWX Stock.............................18
ARTICLE 9 GENERAL PROVISIONS...........................19
Section 9.1 Certain Definitions...................19
Section 9.2 Notices...............................20
Section 9.3 Alternative Transaction Option........22
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Section 9.4 Termination...........................22
Section 9.5 Interpretation........................22
Section 9.6 Waivers and Amendments................22
Section 9.7 Expenses..............................23
Section 9.8 Assignment............................23
Section 9.9 Entire Agreement; No Third Party
Beneficiaries.........................23
Section 9.10 Governing Law........................23
Section 9.11 Counterparts.........................23
EXHIBITS
Exhibit A-1 Certificate of Designations of Series G Preferred Stock
Exhibit A-2 Certificate of Designations of Series H Preferred Stock
Exhibit B Registration Rights Agreement
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RESTRUCTURING AGREEMENT
RESTRUCTURING AGREEMENT, dated as of August 31, 1995, among
TIME WARNER INC., a Delaware corporation ("TWX"), ITOCHU CORPORATION, a
corporation organized under the laws of Japan ("Itochu"), and ITOCHU
ENTERTAINMENT INC., a Delaware corporation and an indirect wholly-owned
subsidiary of Itochu ("Itochu Entertainment").
WHEREAS, TWX and Itochu, together with Toshiba Corporation
("Toshiba") and U S WEST, Inc. ("USW") are parties to an Agreement of
Limited Partnership, dated as of October 29, 1991, as amended (the "TWE
Partnership Agreement"), pursuant to which the parties thereto formed and
capitalized Time Warner Entertainment Company, L.P. ("TWE"), a strategic
global limited partnership created for the purpose of exploiting the
products, expertise and resources of the partners of TWE to maximize the
performance of the filmed entertainment, programming, cable and related
business previously owned and operated by TWX;
WHEREAS, Itochu Entertainment is currently a limited partner of
TWE and owns a partnership interest therein (the "Itochu TWE Partnership
Interest") consisting of a Common Sub-Account (as defined in the TWE
Partnership Agreement), entitling it to a Participating Percentage Share
(as defined in the TWE Partnership Agreement) of 5.61%, and an A Sub-
Account (as defined in the TWE Partnership Agreement), representing 5.61%
of the total A Sub-Accounts of TWE;
WHEREAS, pursuant to a Letter Agreement, dated May16, 1993,
between Itochu and TWX, Itochu has the right to increase its interest in
TWE under certain circumstances (the "Itochu Option");
WHEREAS, Itochu Entertainment is also a limited partner of TW
Service Holding I, L.P., a Delaware limited partnership ("TWSH I"), and
TW Service Holding II, L.P., a Delaware limited partnership ("TWSH II"),
and owns a partnership interest in each of TWSH I and TWSH II consisting
of a Common Sub-Account, entitling it to a Participating Percentage Share
of 6.25% (the "Itochu TWSH Partnership Interests", and together with the
Itochu TWE Partnership Interest and the Itochu Option, the "Itochu
Interests");
WHEREAS, TWX and Itochu believe that as the entertainment,
telecommunications and information services businesses continue to
evolve, the mutual ownership of TWE's current businesses and TWX's music,
publishing and other businesses will enhance the strategic value of their
relationship; and
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WHEREAS, TWX and Itochu accordingly wish to expand the scope of
their strategic alliance to encompass all such businesses through an
exchange of the Itochu Interests for a direct equity interest in TWX.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged by each of the parties hereto, the parties hereby agree as
follows:
ARTICLE 1
RESTRUCTURING
Section 1.1 EXCHANGE OF ITOCHU INTERESTS FOR EXCHANGE
CONSIDERATION. At the Closing (as defined below), (a) Itochu
Entertainment shall (and Itochu shall cause Itochu Entertainment to)
transfer, assign and convey the Itochu TWE Partnership Interest and the
Itochu TWSH Partnership Interests to TWX or its designee free and clear
of all liens and other encumbrances, and in consideration therefor TWX
shall issue to Itochu Entertainment 6.0 million shares of Series G
Convertible Preferred Stock, par value $1.00 per share, of TWX, having
the rights, preferences and terms set forth in a Certificate of
Designations substantially in the form of Exhibit A-1 hereto (or an
otherwise designated series of preferred stock of TWX having the same
rights, preferences and terms) (the "Series G Preferred Stock") and 1.8
million shares of Series H Convertible Preferred Stock, par value $1.00
per share, of TWX, having the rights, preferences and terms set forth in
a Certificate of Designations substantially in the form of Exhibit A-2
hereto (or an otherwise designated series of preferred stock of TWX
having the same rights, preferences and terms) (the "Series H Preferred
Stock" and together with the Series G Preferred Stock, the "TWX Preferred
Stock") and (b) Itochu shall transfer, assign and convey the Itochu
Option to TWX or its designee free and clear of all liens and other
encumbrances, and in consideration therefor TWX shall issue to Itochu
200,000 shares of Series G Preferred Stock. The Series G Preferred Stock
and the Series H Preferred Stock issued pursuant to this Section 1.1 are
referred to herein as the "Exchange Consideration".
Section 1.2 DELIVERIES.
(a) At the Closing, (i) Itochu Entertainment shall (and
Itochu shall cause Itochu Entertainment to) deliver to TWX or its
designee instruments executed by it and reasonably satisfactory to TWX,
transferring, assigning and conveying the Itochu TWE Partnership Interest
and the Itochu TWSH Partnership Interests to TWX or its designee and
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(ii) Itochu shall deliver to TWX or its designee instruments executed by it
and reasonably satisfactory to TWX, transferring, assigning and conveying
the Itochu Option to TWX or its designee.
(b) At the Closing, TWX shall deliver to Itochu
Entertainment and Itochu, as applicable, stock certificates representing
the number of shares of Series G Preferred Stock and Series H Preferred
Stock provided for in Section1.1, issued in the name of Itochu
Entertainment or Itochu, as applicable.
Section 1.3 VALUATION. At the Closing, Itochu, Itochu
Entertainment and TWX shall endeavor to agree on the value of the
Exchange Consideration and, if they shall agree on such value, neither
Itochu, Itochu Entertainment nor TWX shall take any position in its tax
return or in any tax proceeding that is contrary to such agreed upon
value, unless the value is otherwise determined pursuant to a Final
Determination (as defined in the TWE Partnership Agreement).
ARTICLE 2
CLOSING; CLOSING DATE
The closing of the restructuring transactions contemplated
hereby (the "Closing") shall take place at the offices of Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 10:00 A.M. New York time on Tuesday, September5, 1995
or, if the conditions set forth in Article5 have not been satisfied or
waived as of such date, on the fifth Business Day following their
satisfaction (or at such other place or such other time as TWX and Itochu
agree in writing). Each of TWX, on the one hand, and Itochu and Itochu
Entertainment, on the other hand, shall promptly notify the other parties
upon the satisfaction or waiver of the conditions set forth in Article 5
with respect to itself. The time and date upon which the Closing occurs
herein is called the "Closing Date."
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES OF TWX. TWX
represents and warrants to each of Itochu and Itochu Entertainment as
follows:
(a) ORGANIZATION, STANDING AND POWER. Each of TWX and
its Significant Subsidiaries (as defined below)
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is a corporation or partnership duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, has all requisite power and authority to carry on its
business as now being conducted, and is duly qualified to do business
and in good standing in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such qualification
necessary, other than in such jurisdictions where the failure so to qualify
would not have a Material Adverse Effect (as defined below) on TWX. TWX has
delivered to Itochu complete and correct copies of its Certificate of
Incorporation and By-Laws, each as amended to date.
(b) CAPITAL STRUCTURE. As of the date of this Agreement,
the authorized capital stock of TWX consists of 750,000,000 shares of
common stock, par value $1.00 per share, of TWX ("TWX Common Stock") and
250,000,000 shares of preferred stock, par value $1.00 per share (the
"Additional TWX Preferred Stock"). As of the close of business on
July31, 1995, 386,174,888 shares (excluding 45,712,535 shares held by
TWX in its treasury (or by wholly-owned subsidiaries of TWX)) of TWX
Common Stock were outstanding. As of the close of business on July 31,
1995, 14,729,146 shares of Additional TWX Preferred Stock were
outstanding (consisting of 464,638 shares of Series B 6.40% Preferred
Stock, 3,264,508 shares of Series C Convertible Preferred Stock, and
11,000,000 shares of Series D Convertible Preferred Stock), and 4,000,000
shares of Series A Participating Preferred Stock were reserved for
issuance pursuant to the Rights Agreement, dated as of January20, 1994,
between TWX and Chemical Bank, as Rights Agent. As of July31, 1995, TWX
had reserved (i) 95,831,405 shares of TWX Common Stock for issuance upon
the conversion of 8.75% convertible subordinated debentures, zero coupon
convertible notes and other convertible securities of TWX, and
(ii)78,632,660 shares of TWX Common Stock for issuance upon the exercise
of outstanding options to purchase shares of TWX. All outstanding shares
of capital stock of TWX have been duly authorized, validly issued, fully
paid and non-assessable, not subject to, or issued in violation of, any
preemptive rights and have not been issued in violation of any federal or
state securities laws.
(c) SEC DOCUMENTS; FINANCIAL STATEMENTS. TWX has filed
with the Securities and Exchange Commission (the "SEC") all required
reports, schedules, registration statements and definitive proxy
statements since January1, 1993 (as such documents have since the time
of their filing been amended, the "TWX SEC Documents"). As of their
respective dates, the TWX SEC Documents complied in all material respects
with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Securities
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Exchange Act of 1934, as amended (the "Exchange Act"), as applicable, and the
rules and regulations of the SEC thereunder applicable to such TWX SEC
Documents, and none of such TWX SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to the extent
that information contained in any TWX SEC Document has been revised or
superseded by later filed TWX SEC Documents filed and publicly available
prior to the date this representation is made or deemed made, none of the
TWX SEC Documents contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of TWX included in the TWX SEC Documents comply as to form in
all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited financial statements, as permitted by the Exchange Act
Form10-Q) and fairly present the consolidated financial position of TWX
and its consolidated Subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of the unaudited financial statements,
to normal, recurring audit adjustments, which were not individually or in
the aggregate material). Except as set forth in the TWX SEC Documents or
on Schedule3.1(c), and except for liabilities and obligations incurred
in the ordinary course of business consistent with past practice since
the date of the most recent consolidated balance sheet contained in the
TWX SEC Documents, as of the date hereof, TWX and its Subsidiaries have
no liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be disclosed or recognized
on a consolidated balance sheet of TWX and its consolidated Subsidiaries
or in the notes thereto.
(d) AUTHORITY; NON-CONTRAVENTION. TWX has all requisite
corporate power and authority to enter into this Agreement and the
Registration Rights Agreement (the "Agreements"), to perform its
obligations thereunder and to consummate the transactions contemplated
thereby. The execution and delivery of the Agreements and the
consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of TWX and no
other corporate proceedings on the part of TWX are necessary to authorize
the Agreements or to
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consummate the transactions contemplated thereby. Each of the Agreements has
been duly executed and delivered by TWX and constitutes the valid and binding
obligation of TWX, enforceable against TWX in accordance with its terms,
subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer or similar laws affecting creditors' rights generally
and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or equity) and except as
rights to indemnity may be limited by federal or state securities laws or the
public policies embodied therein. The execution and delivery of each of the
Agreements by TWX do not, and the consummation of the transactions contemplated
thereby will not, (i)result in any violation of any provision of the
Certificate of Incorporation or By-laws or equivalent organizational
documents of TWX or any of its Subsidiaries; (ii)require TWX or any of
its Subsidiaries to obtain any consent, approval or action of, or make
any filing with, or give any notice to, any Governmental Entity or any
other Person, except as set forth on Schedule3.1(d) (the "TWX Required
Consents"); (iii)if the TWX Required Consents are obtained, result in
any violation or breach of, or result in a material modification of the
effect of, or constitute (with or without notice or lapse of time or
both) a default under or give rise to any right of termination,
cancellation or acceleration under, any contract, agreement, indenture,
note, bond, loan, mortgage, lease, instrument, license, permit,
concession, franchise, commitment or other binding arrangement
(collectively, "contracts") to which TWX or any of its Subsidiaries is a
party or by or to which any of them or any of their properties may be
bound or subject, or result in the creation of any lien or encumbrance
upon the properties of TWX or any of its Subsidiaries, in each case
pursuant to the terms of any such contract, other than any violations,
breaches, modifications, defaults, terminations, cancellations,
accelerations, liens or encumbrances which, individually and in the
aggregate, would not have a Material Adverse Effect on TWX; or (iv)if
the TWX Required Consents are obtained, result in any violation of any
law, statute, regulation, order, judgment or decree of any Governmental
Entity applicable to TWX.
(e) LITIGATION. As of the date of this Agreement, except
as disclosed in the TWX SEC Documents or in Schedule3.1(e), there is no
suit, action or proceeding pending, or, to the knowledge of TWX,
threatened against or affecting TWX or any Subsidiary of TWX, which,
individually or in the aggregate with any other such suits, actions or
proceedings, would have a Material Adverse Effect on TWX, nor is there
any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against TWX or any Subsidiary of TWX,
which, individually or in the
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aggregate with any other such judgments, decrees, injunctions, rules or
orders, would have a Material Adverse Effect on TWX.
(f) TWX PREFERRED STOCK. The TWX Preferred Stock
comprising the Exchange Consideration, when issued to Itochu
Entertainment at the Closing in accordance with Article 1, will be duly
authorized, validly issued, fully paid and non-assessable. The shares of
TWX Common Stock reserved for issuance upon conversion or exchange of the
shares of TWX Preferred Stock have been duly authorized and reserved for
issuance, and when issued upon such conversion or exchange in accordance
with the terms of the Certificate of Designations of the TWX Preferred
Stock will have been validly issued, fully paid and non-assessable, and
the issuance of such shares of TWX Common Stock is not subject to
preemptive or similar rights.
Section 3.2 REPRESENTATIONS AND WARRANTIES OF ITOCHU AND ITOCHU
ENTERTAINMENT. Itochu represents and warrants to TWX, on behalf of
itself and Itochu Entertainment, and Itochu Entertainment represents and
warrants to TWX, on behalf of itself only, as follows:
(a) ORGANIZATION; STANDING AND POWER. Each of Itochu and
Itochu Entertainment is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation
and has all requisite power and authority to carry on its business as now
being conducted.
(b) AUTHORITY; NONCONTRAVENTION. Each of Itochu and
Itochu Entertainment has all requisite corporate power and authority to
enter into this Agreement, to perform its obligations thereunder and to
consummate the transactions contemplated thereby. The execution and
delivery of the Agreements and the consummation of the transactions
contemplated thereby have been duly and validly authorized by all
necessary corporate action on the part of Itochu and Itochu Entertainment
and no other corporate proceedings on the part of Itochu or Itochu
Entertainment are necessary to authorize the Agreements or to consummate
the transactions contemplated thereby. Each of the Agreements has been
duly and validly executed and delivered by each of Itochu and Itochu
Entertainment and constitutes a valid and binding obligation of each of
Itochu and Itochu Entertainment enforceable against each of Itochu and
Itochu Entertainment in accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or transfer or similar laws affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
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considered in a proceeding at law or equity) and except as rights
to indemnity may be limited by federal or state securities laws
or the public policies embodied therein. The execution and delivery of
each of the Agreements by each of Itochu and Itochu Entertainment do not,
and the consummation of the transactions contemplated thereby will not,
(i) result in any violation of any provision of the Certificate of
Incorporation or By-laws or equivalent organizational documents of Itochu
or Itochu Entertainment; (ii) require Itochu or Itochu Entertainment to
obtain any consent, approval or action of, or make any filing with, or
give any notice to, any Governmental Entity or any other Person, except
as set forth on Schedule 3.2(b) (the "Itochu Required Consents" and
together with the TWX Required Consents, the "Required Consents"), and
except for such consents, approvals, actions, filings or notices the
failure to obtain or give which would not have a Material Adverse Effect
on Itochu; (iii) if the Itochu Required Consents are obtained, result in
any violation or breach of, or result in a material modification of the
effect of, or constitute (with or without notice or lapse of time or
both) a default under, or give rise to any right of termination,
cancellation or acceleration under any contract to which Itochu or Itochu
Entertainment is a party or by or to which any of them or any of their
properties may be bound or subject, or result in the creation of any lien
or encumbrance upon the properties of Itochu or Itochu Entertainment
pursuant to the terms of any such contract other than any violations,
breaches, modifications, defaults, terminations, cancellations,
accelerations, liens or encumbrances which, individually and in the
aggregate, would not have a Material Adverse Effect on Itochu; (iv) if
the Itochu Required Consents are obtained, result in the violation of any
law, statute, regulation, order, judgment or decree of any Governmental
Entity applicable to Itochu.
(c) TITLE TO ITOCHU INTERESTS. Except as provided in the
TWE Partnership Agreement, the Itochu Option or the TWSH Partnership
Agreements (as defined below), (i) Itochu Entertainment owns the Itochu
TWE Partnership Interest and the Itochu TWSH Partnership Interests free
and clear of any lien or other encumbrance and has full power and authority to
convey the Itochu TWE Partnership Interest and the Itochu TWSH Partnership
Interests free and clear of any lien or other encumbrance and, upon the
consummation of the transactions contemplated hereby, TWX will acquire
good and valid title to the Itochu TWE Partnership Interest and the
Itochu TWSH Partnership Interests free and clear of any lien or other
encumbrance and (ii) Itochu owns the Itochu
Option free and clear of any lien or other encumbrance and has full power
and authority to convey the Itochu Option free and clear of any lien or
other encumbrance and, upon the consummation of the transactions
contemplated hereby,
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TWX will acquire good and valid title to the Itochu Option free and clear of
any lien or other encumbrance.
(d) INVESTMENT INTENT. Each of Itochu and Itochu
Entertainment is acquiring the TWX Preferred Stock comprising the
Exchange Consideration for investment and is not acquiring such TWX
Preferred Stock with a view to, or for sale in connection with any,
distribution thereof within the meaning of the Securities Act.
ARTICLE 4
COVENANTS
(a) PUBLICITY. Except as otherwise required by law or
the rules or regulations of any securities exchange on which the
securities of such party or any Affiliate of such party are listed or
traded, so long as this Agreement is in effect, no party shall (and each
party shall cause its Subsidiaries not to) issue or cause the publication
of any press release or other public announcement with respect to the
transactions contemplated by this Agreement without the consent of the
other parties, which consent shall not be unreasonably withheld.
(b) SATISFACTION OF CONDITIONS. Each party shall use its
respective reasonable best efforts to cause the conditions set forth in
Article 5 to be satisfied as promptly as practicable.
(c) ADDITIONAL AGREEMENTS. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use
all reasonable efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including cooperating fully
with the other parties. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of
this Agreement, each party shall take all such necessary action.
(d) OTHER ACTIONS. No party shall (and each party shall
cause its Subsidiaries not to) take any action that would or is
reasonably likely to result in any of the representations and warranties
of such party set forth in this Agreement being untrue as of the date
made (to the extent so limited), or in any of the conditions to the
Closing set forth in Article5 not being satisfied.
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(e) TAX MATTERS.
(i) Itochu hereby agrees that it shall (and shall
cause its Subsidiaries to) report the transaction contemplated by Section
1.1 above as a taxable sale of the Itochu Interests for income tax
purposes and Itochu shall not (and shall cause its Subsidiaries not to)
take any position in any tax return or tax proceeding contrary to the
foregoing.
(ii) No later than September30, 1995 TWX shall cause
TWE to prepare and deliver to Itochu Entertainment an estimate of Itochu
Entertainment's share of the income or loss of TWE for the period from
January1, 1995 through the Closing Date. In addition, TWX shall cause
TWE to prepare and deliver to Itochu Entertainment in accordance with
Section 9.4(a) of the TWE Partnership Agreement a preliminary draft
Schedule K-1 of TWE and a final statement setting forth Itochu
Entertainment's share of the income or loss of TWE for the period from
January 1, 1995 through the Closing Date.
ARTICLE 5
CONDITIONS PRECEDENT
Section 5.1 CONDITIONS TO THE OBLIGATIONS OF TWX. The
obligations of TWX under this Agreement to consummate the transactions
contemplated hereby are subject to the satisfaction of the following
conditions, the imposition of which is solely for the benefit of TWX and
any one of more of which may be expressly waived by TWX, in its sole
discretion, except as otherwise required by law:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Itochu and Itochu Entertainment
contained herein shall have been true and correct when made, and shall be
true and correct at and as of the Closing Date as though made on and as
of the Closing Date (except to the extent that any such representation or
warranty had by its terms been made as of a specific date in which case
such representation or warranty shall have been true and correct as of
such specific date). TWX shall have received a certificate dated the
Closing Date signed by an officer of each of Itochu and Itochu
Entertainment certifying to the fulfillment of this condition.
(b) PERFORMANCE OF AGREEMENTS. Itochu and Itochu
Entertainment shall have performed all obligations and agreements and
complied with all covenants and conditions contained in this Agreement to
be performed and com-
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plied with by them at or prior to the Closing Date.
TWX shall have received a certificate dated the Closing Date signed by an
officer of each of Itochu and Itochu Entertainment certifying to the
fulfillment of this condition.
(c) NO INJUNCTIONS. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the transactions
contemplated hereby shall be in effect.
(d) REQUIRED CONSENTS. The Required Consents shall have
been obtained and TWX shall have received evidence thereof reasonably
satisfactory to it.
Section 5.2 CONDITIONS TO THE OBLIGATIONS OF ITOCHU AND ITOCHU
ENTERTAINMENT. The obligations of Itochu and Itochu Entertainment to
consummate the transactions contemplated hereby are subject to the
satisfaction of the following conditions, the imposition of which is
solely for the benefit of Itochu and Itochu Entertainment and any one or
more of which may be expressly waived by Itochu and Itochu Entertainment,
in their sole discretion, except as otherwise required by law:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of TWX contained herein shall have been
true and correct when made, and shall be true and correct at and as of
the Closing Date as though made on and as of the Closing Date (except to
the extent that any such representation or warranty had by its terms been
made as of a specific date, in which case such representation or warranty
shall have been true and correct as of such specific date). Itochu and
Itochu Entertainment shall have received a certificate dated the Closing
Date signed by an officer of TWX certifying to the fulfillment of this
condition.
(b) PERFORMANCE OF AGREEMENTS. TWX shall have performed
all obligations and agreements and complied with all covenants and
conditions contained in this Agreement to be performed and complied with
by it at or prior to the Closing Date. Itochu and Itochu Entertainment
shall have received a certificate dated the Closing Date signed by an
officer of TWX certifying to the fulfillment of this condition.
(c) NO INJUNCTIONS. No Injunction preventing the
consummation of the transactions contemplated hereby shall be in effect.
Page 12
(d) REQUIRED CONSENTS. The Required Consents shall have
been obtained and Itochu shall have received evidence thereof reasonably
satisfactory to it.
(e) REGISTRATION RIGHTS. TWX shall have executed and
delivered a registration rights agreement, substantially in the form of
Exhibit B, relating to the registration of resales by Itochu or Itochu
Entertainment of the TWX Common Stock into which the TWX Preferred Stock
comprising the Exchange Consideration is convertible or exchangeable.
ARTICLE 6
GENERAL INDEMNIFICATION
Section 6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties, covenants and agreements of the parties
contained in this Agreement, or in any Exhibit or Schedule, or in any
other document delivered pursuant to this Agreement, shall survive the
Closing and shall survive any investigation at any time made by or on
behalf of the party to whom any such representations, warranties,
covenants and agreements were made; provided, however, that, (i) except
as provided in clause (ii) of this Section 6.1, all unasserted claims
with respect to a breach of the representations and warranties of TWX,
Itochu and Itochu Entertainment shall expire on the close of business on
the first anniversary of the Closing Date and cannot thereafter be
asserted; and (ii) all unasserted claims with respect to a breach of the
representations and warranties of (A) Itochu and Itochu Entertainment set
forth in Sections 3.2(b) and 3.2(c) relating to Itochu Entertainment's
ownership and title to the Itochu TWE Partnership Interest and the Itochu
TWSH Partnership Interests and Itochu's ownership and title to the Itochu
Option, and the authority of Itochu and Itochu Entertainment to execute
and deliver this Agreement and to perform their obligations hereunder and
(B) TWX set forth in Section 3.1(d) relating to the authority of TWX to
execute and deliver this Agreement and to perform its obligations
hereunder, shall survive indefinitely.
Section 6.2 OBLIGATION OF ITOCHU AND ITOCHU ENTERTAINMENT TO
INDEMNIFY. Subject to the limitations contained in Section 6.1, Itochu
and Itochu Entertainment jointly and severally agree to indemnify, defend
and hold harmless TWX (and its directors, officers, employees,
Affiliates, successors and assigns) from and against all losses,
liabilities, damages, deficiencies, demands, claims, actions, judgments
or causes of action, assessments, costs or expenses (including, without
limitation, interest, penal-
Page 13
ties and reasonable attorneys' fees and disbursements whether arising out of a
suit or proceeding between the indemnitee and the indemnitor or between the
indemnitee and a third party) ("Losses") based upon, arising out of or
otherwise in respect of any inaccuracy in or any breach of any
representation, warranty, covenant or agreement of Itochu and Itochu
Entertainment contained in this Agreement or in any documents delivered
pursuant
to this Agreement.
Section 6.3 OBLIGATION OF TWX TO INDEMNIFY. Subject to the
limitations contained in Section 6.1, TWX agrees to indemnify, defend and
hold harmless Itochu and Itochu Entertainment (and their respective
directors, officers, employees, Affiliates, successors or assigns) from
and against all Losses based upon, arising out of or otherwise in respect
of any inaccuracy in or any breach of any representation, warranty,
covenant or agreement of TWX contained in this Agreement or in any
documents delivered pursuant to this Agreement.
Section 6.4 NOTICE AND OPPORTUNITY TO DEFEND. Promptly after
receipt by any party hereto (the "Indemnified Party") of notice or
knowledge of any demand, claim or circumstances which, with the lapse of
time, would or might give rise to a claim or the commencement (or
threatened commencement) of any action, proceeding or investigation (an
"Asserted Liability") that may result in a Loss, the Indemnified Party
shall give notice thereof (the "Claims Notice") to any other party (or
parties) obligated to provide indemnification pursuant to Section 6.2 or
6.3 (the "Indemnifying Party"); provided that subject to Section 6.1 the
delay or failure to give prompt notice shall not affect the rights of any
Indemnified Party unless and to the extent such delay or failure shall be
prejudicial or otherwise adversely affect the Indemnifying Party. The
Claims Notice shall describe the Asserted Liability in reasonable detail,
and shall indicate the amount (estimated, if necessary and to the extent
feasible) of the Loss that has been or may be suffered by an Indemnified
Party. The Indemnifying Party may assume the defense of such Asserted
Liability at its own expense and by its own counsel, and after notice
from the Indemnifying Party to the Indemnified Party of its election to
assume the defense of such Asserted Liability, the Indemnifying Party
shall not be liable hereunder for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the
defense of such Asserted Liability, except as set forth below. At the
request of, and at the expense of, the Indemnifying Party, the
Indemnified Party shall cooperate in the defense of any such Asserted
Liability and shall make available to the Indemnifying Party any books,
records or other documents within its control necessary or appropriate
for such defense. No Indemnifying Party shall, without the consent
Page 14
of the Indemnified Party, consent to the entry of judgment or enter into any
settlement that does not include a release of the Indemnified Party from
all liability in respect of such Asserted Liability. No Indemnified
Party shall consent to the entry of such judgment or enter into any
settlement without the consent of the Indemnifying Party.
ARTICLE 7
CONTINUING RIGHTS AND OBLIGATIONS OF
ITOCHU AND ITOCHU ENTERTAINMENT
Section 7.1 TERMINATION OF RIGHTS AS PARTNER. Upon the
consummation of the transactions contemplated hereby, Itochu
Entertainment shall cease to be a Partner (as defined in the TWE
Partnership Agreement) of TWE, TWSH I and TWSH II, Itochu shall cease to
be a Participant (as defined in the TWE Partnership Agreement) and,
except as provided below, Itochu Entertainment and Itochu shall cease to
have any rights or obligations under (a) the TWE Partnership Agreement,
(b) the Itochu Option or (c) the TWSH Partnership Agreements.
Section 7.2 OTHER VENTURES. Nothing contained herein shall
modify, amend or otherwise affect the agreements, understandings and
arrangements of TWX, Itochu, Toshiba, USW and their respective Affiliates
relating to Time Warner Entertainment Japan Inc. ("TWE Japan"), Xxxxx
Communications Corp. and Chofu Cable Kabushiki Kaisha.
Section 7.3 STANDSTILL; CONFIDENTIALITY. Itochu shall continue
to be bound by and entitled to the benefits of the "Confidentiality"
provisions set forth in Section 5.3 of the TWE Partnership Agreement and,
for so long as Itochu directly or indirectly owns at least 50 percent of
the Exchange Consideration, whether in the form of TWX Preferred Stock or
TWX Common Stock received upon conversion or exchange thereof (the
"Itochu Minimum Interest"), Itochu shall be bound by the "Standstill"
provisions set forth in Section5.6 of the TWE Partnership Agreement.
Section 7.4 CONTINUING STRATEGIC RELATIONSHIP. Itochu and
Itochu Entertainment shall have the additional rights and obligations set
forth in this Section 7.4.
(a) BOARD REPRESENTATION. For so long as Itochu directly
or indirectly owns an interest in TWX at least equal to the Itochu
Minimum Interest, (i)Itochu shall be entitled to designate one Non-
Voting Class A Representative to the Board of Representatives of TWE (in
accordance with Section 12.2(a) of the TWE Partnership
Page 15
Agreement) and shall continue to be bound by the provisions of Article XII of
the TWE Partnership Agreement as it relates to the appointment, removal and
conduct of such Non-Voting Class A Representative, and (ii) Itochu shall
be entitled to designate representatives to serve on the committees of
the Board of Representatives of TWE (including without limitation the
Full Service Network Management Committee) existing as of the date hereof
to the same extent as it is entitled as of the date hereof.
(b) EXCHANGE OF PERSONNEL. For so long as Itochu
directly or indirectly owns an interest in TWX at least equal to the
Itochu Minimum Interest, Itochu shall have the rights and obligations of
a Class A Partner with respect to the "Exchange of Personnel"
arrangements provided in Section 12.7 of the TWE Partnership Agreement,
and TWX shall cause similar arrangements to be effectuated with respect
to the music and publishing businesses of TWX.
(c) PREFERRED VENDOR/SUPPLIER STATUS. For so long as
Itochu directly or indirectly owns an interest in TWX at least equal to
the Itochu Minimum Interest, Itochu Entertainment shall continue to be
entitled to the benefits of the "Preferred Vendor/Supplier Status"
provisions set forth in Section 5.8 of the TWE Partnership Agreement to
the same extent as if Itochu Entertainment were a Partner; provided that
for purposes of determining Itochu Entertainment's (or its Affiliate's)
pro rata share of any supply arrangement (in the event more than one
Partner (or Affiliate of a Partner) provides the relevant product or
service) its Participating Percentage Share shall be deemed to equal
5.61% multiplied by the percentage of the Exchange Consideration then
owned directly or indirectly by Itochu, whether in the form of Series G
Preferred Stock or TWX Common Stock received upon conversion or exchange
thereof (the "Itochu Participating Percentage Share"); and provided
further, that for purposes of Section 5.8 of the TWE Partnership
Agreement only, for so long as Itochu is entitled to any rights under
such Section the Participating Percentage Share of the TW Partners (as
defined in the TWE Partnership Agreement) shall be reduced by an amount
equal to the Itochu Participating Percentage Share. In addition, TWX
shall cause similar arrangements to be effectuated with respect to the
music and publishing business of TWX. If and for so long as TWX controls
any successor to the assets of TWE, TWX shall cause such successor to
grant Itochu rights comparable to those provided by this Section 7.4(c),
and if TWX shall not control any such successor then TWX shall use its
reasonable best efforts to cause such successor to grant Itochu such
rights.
(d) COVENANT AGAINST COMPETITION. Notwithstanding the
provisions of Section 5.5(a)(i) and (ii)
Page 16
of the TWE Partnership Agreement, for so long as Itochu directly or indirectly
owns at least 15% of the equity of TWE Japan, Itochu shall be subject to the
restrictions, and entitled to the benefits, of the "Covenants Against
Competition" set forth in Section 5.5 of the TWE Partnership Agreement, but
only to the extent such provisions restrict any party from engaging, directly
or indirectly (whether by operation, investment or otherwise), in any
Restricted Business in Japan. In addition, for so long as TWX shall
control TWE, TWX shall cause TWE to comply with Sections 5 and 6 of the
TWE Japan Agreement (as defined below) in accordance with the terms
thereof.
(e) ADDITIONAL CONSULTATION RIGHTS. Following the
Closing, members of the senior management of TWX and Itochu shall consult
regularly with respect to the cable, programming, filmed entertainment,
music and publishing businesses and shall explore possible areas of joint
cooperation in connection with such businesses. In addition, (i)
representatives of TWX and Itochu shall meet quarterly to exchange
information and ideas regarding markets, products, technologies and
opportunities in the cable, programming, filmed entertainment, music and
publishing businesses and (ii) representatives of TWX and Itochu shall
meet quarterly to discuss new business opportunities in the areas of
music and publishing in Japan.
Section 7.5 STATEMENT OF ENHANCED GLOBAL STRATEGIC ALLIANCE.
Following the execution of this Agreement, the parties will consider
preparing a statement intended to formalize the terms and objectives of
their enhanced long-term global strategic relationship.
ARTICLE 8
RESTRICTIONS ON TRANSFERS
Section 8.1 RESTRICTIONS ON TRANSFER. Itochu agrees that it
shall not (and shall cause its Subsidiaries not to), without the prior
written consent of the board of directors of TWX, directly or indirectly,
sell, transfer, pledge, encumber or otherwise dispose of, or agree to
sell, transfer, pledge, encumber or otherwise dispose of, any shares of
TWX Preferred Stock acquired pursuant to this Agreement, any TWX Common
Stock issued upon conversion or exchange of such TWX Preferred Stock, or
any interest therein (collectively, "TWX Stock"), except that such
consent shall not be necessary if any such disposition is:
(i) to the underwriters in connection with an
underwritten public offering of shares of TWX Stock on a firm commitment
basis registered under the Securities Act,
Page 17
pursuant to which the sale of such securities is effected in a manner
that will result in a broad distribution thereof;
(ii) to a third party in a transaction that complies with
the volume and manner of sale provisions contained in Rule 144(e) and (f)
as in effect on the date hereof under the Securities Act (whether or not
applicable in accordance with the terms thereof);
(iii) to a third party in a transaction or series of
related transactions whenever occurring (provided that this paragraph
(iii) will be unavailable where the senior executives or Agents of Itochu
or any of its Subsidiaries know or, after reasonable inquiry should have
known, that such third party directly or indirectly beneficially owns or,
after giving effect to such sale will beneficially own, more than five
percent of the aggregate Voting Power of any class or series of Voting
Securities of TWX or, if such class or series votes together with any
other classes or series as a single class or series, more than five
percent of the aggregate Voting Power of such classes or series);
(iv) to a financial institution as a bona fide pledge as
security for money borrowed;
(v) pursuant to the terms of any tender or exchange offer
for Voting Securities of TWX not opposed by the board of directors of TWX
(provided that Itochu or Itochu Entertainment shall not be permitted to
make any such transfer prior to the date on which TWX files a
Schedule14D-9 with respect to such tender or exchange offer); and
(vi) to Itochu or an Affiliate of Itochu;
provided, however, that the restrictions set forth in this Section 8.1
shall not apply to (A)the transfer of any Voting Securities of TWX to
TWX and (B)Voting Securities of TWX held by one or more employee benefit
plans (or trusts for such plans) of Itochu and its Subsidiaries, provided
that all decisions whether to purchase or sell such shares are made by
Persons independent of Itochu and its Affiliates. Notwithstanding
anything in the first sentence of this Section 8.1 to the contrary, any
transfer pursuant to clause (iv) of this Section 8.1, and any transfer or
series of related transfers to any Person pursuant to clause (iii) of
this Section 8.1 of Voting Securities representing (on an as-converted
basis) three percent (3%) or more of the outstanding shares of TWX Common
Stock (determined on the basis of the most recent Annual Report on Form
10-K or Quarterly Report on Form 10-Q, as applicable), shall include the
written agreement of the transferee in a form reasonably
Page 18
satisfactory to TWX to be bound by the terms of this Section 8.1.
Section 8.2 ADDITIONAL RESTRICTIONS ON TRANSFER. Itochu shall
not (and Itochu shall cause its subsidiaries not to), directly or
indirectly, offer, sell, assign, pledge, encumber, transfer, or otherwise
dispose of any TWX Stock, except pursuant to a registration of such
securities under the Securities Act and applicable state securities laws
or in a transaction that, in the opinion of Xxxxx Xxxx & Xxxxxxxx or
other counsel reasonably satisfactory to TWX, is exempt from, or not
subject to, the registration requirements of the Securities Act and
applicable state securities laws.
Section 8.3 LEGENDS ON CERTIFICATES OF TWX STOCK.
(a) Each of Itochu and Itochu Entertainment agrees that
each certificate for shares of TWX Stock shall bear the following
legends:
(A) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, ASSIGNED,
PLEDGED, ENCUMBERED, TRANSFERRED OR OTHERWISE DISPOSED OF
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
ACT.
(B) THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RESTRUCTURING AGREEMENT, DATED AS OF AUGUST 31, 1995, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME (THE "RESTRUCTURING
AGREEMENT"), BETWEEN THE CORPORATION AND THE ORIGINAL HOLDER OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE. A COPY OF THE
RESTRUCTURING AGREEMENT MAY BE OBTAINED FROM THE CORPORATION
FREE OF CHARGE. BY ITS ACCEPTANCE HEREOF, THE HOLDER OF THIS
CERTIFICATE AGREES TO COMPLY IN ALL RESPECTS WITH THE
REQUIREMENTS OF THE RESTRUCTURING AGREEMENT.
(b) In connection with any transfer in accordance with
Sections 8.1(i) and (ii), TWX shall deliver new certificates for the
shares of TWX Stock without the legends specified in paragraph (a) above,
and, in connection with any transfer in accordance with Section 8.1(v),
TWX shall deliver new certificates for the shares of TWX Stock without
the legend specified in paragraph (a)(B) above, in each case, in exchange
for the surrender of existing certi-
Page 19
ficates representing TWX Stock and, in the case of Section 8.1(ii), evidence
reasonably satisfactory to TWX (consisting of an officer's certificate or an
opinion of counsel, as reasonably determined by TWX) that the provisions of
Rule 144(e) and (f) under the Securities Act have been followed.
ARTICLE 9
GENERAL PROVISIONS
Section 9.1 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms will have the meanings set forth in this Section:
(a) "Affiliate" means, with respect to any Person, any
other Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control
with, such first Person.
(b) "Agent" means, with respect to any Person, such
Person's officers, directors, employees, attorneys, accountants,
representatives and agents.
(c) "beneficially owned" has the meaning ascribed to such
term in Rule 13d-3 of the Exchange Act, as in effect, on the date of this
Agreement.
(d) "Business Day" means any day other than a Saturday,
Sunday or other day on which banks in the State of New York are
authorized or obligated to be closed.
(e) "Governmental Entity" means any foreign, Federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality.
(f) "Material Adverse Effect" means, with respect to any
Person, any effect that is or is reasonably likely to be materially
adverse to (x) the business, results of operations, properties, assets,
liabilities or condition (financial or otherwise) of such Person and its
Subsidiaries taken as a whole, (y) such Person's or its Subsidiaries'
ability to consummate the transactions contemplated hereby or (z) in the
case of Itochu or Itochu Entertainment, the Itochu Interests.
(g) "Person" means any individual, corporation,
partnership, firm, group (as such term is used in this Section 13(d)(3)
of the Exchange Act), joint venture, association, trust, limited
liability company, unincorporated organization, estate, trust or other
entity.
Page 20
(h) "Significant Subsidiary" of any Person (as defined
below) means any Subsidiary (as defined below) of such Person that would
constitute a "significant subsidiary" of such Person within the meaning
of Rule1-02(v)(1) or (2) of RegulationS-X promulgated by the SEC.
(i) "Subsidiary" of any Person means any corporation,
partnership, joint venture or other legal entity of which such Person
(either directly or through or together with any other Subsidiary of such
Person), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for
the election of the board of directors or similar governing body of such
corporation or other legal entity.
(j) "TWE Japan Agreement" means the TWE Japan Agreement,
dated as of October29, 1991, as amended, among Itochu, Toshiba, TWX and
Warner Bros. Inc.
(k) "TWSH Partnership Agreements" means the Agreements of
Limited Partnership, each dated as of September 14, 1993, governing TWSH
I and TWSH II.
(l) "Voting Power" means, with respect to any class or
series of securities of TWX, or any classes or series of securities of
TWX generally entitled to vote together as a single class or series, the
power of such class or series (or such classes or series) to vote for the
election of directors. For purposes of determining the percentage of
Voting Power of any class or series (or classes or series) beneficially
owned by any Person, any securities not outstanding which are subject to
conversion rights, exchange rights, warrants, options or similar
securities held by such Person shall be deemed to be outstanding, but
shall not be deemed to be outstanding for the purposes of computing the
percentage of the class or series (or classes or series) beneficially
owned by any other Person.
(m) "Voting Securities" means, with respect to any
Person, any securities of such Person having Voting Power or any
securities convertible into or exchangeable for any securities having
Voting Power.
Section 9.2 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, upon a receipt of a transmittal confirmation if sent by
telecopy or like transmission, and on the next Business Day when sent by
Federal Express, Express Mail or similar overnight courier service to the
parties at the following addresses or facsimile
Page 21
numbers (or at such other address or facsimile number for a party as shall be
specified by like notice):
(a) If to TWX to:
Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx,
General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx
& Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(b) If to Itochu, to:
Itochu Corporation
0-0, Xxxx-Xxxxxx 0 xxxxx
Xxxxxx-xx, Xxxxx 000-00, Xxxxx
Attention: X. Xxx
Facsimile: 00-0-0000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Facsimile: (000) 000-0000
(c) If to Itochu Entertainment, to:
Itochu Entertainment Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Itochu Corporation
0-0, Xxxx-Xxxxxx 0 xxxxx
Xxxxxx-xx, Xxxxx 000-00, Xxxxx
Attention: X. Xxx
Page 22
Facsimile: 00-0-0000-0000
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Facsimile: (000) 000-0000
Section 9.3 ALTERNATIVE TRANSACTION OPTION. Itochu shall have
the option, exercisable by delivering a written notice to TWX within ten
days after the date hereof (but in any event prior to the Closing), to
transfer the Itochu Option and the capital stock of its Subsidiary that
indirectly owns the Itochu Partnership Interest (in lieu of transferring
the Itochu Interests in accordance with this Agreement) in a transaction
identical to the transaction contemplated by the Restructuring Agreement,
dated as of the date hereof, between TWX and Toshiba (but for the parties
thereto and such other changes as are necessary or appropriate to reflect
the different parties).
Section 9.4 TERMINATION. This Agreement may be terminated
(i)upon the written agreement of the parties or (ii)by either TWX or
Itochu if the transactions contemplated hereby shall not have occurred by
December31, 1995 upon written notice delivered by such party to the
other.
Section 9.5 INTERPRETATION. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. The
term "reasonable best efforts" as used throughout this Agreement with
respect to actions to be taken by any party shall not be construed to
require any party to make any material expenditure in connection with
such actions. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the
words "without limitation." The phrases "the date of this Agreement,"
"the date hereof," and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to August 31, 1995.
Section 9.6 WAIVERS AND AMENDMENTS. This Agreement may be
amended, superseded, cancelled, renewed or extended, and the terms hereof
may be waived, only by written instruments signed by the parties to this
Agreement, or in the case of a waiver, by the party waiving compliance.
Except where a specific period for action or inaction is
Page 23
provided herein, no delay on the part of a party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof. Neither any
waiver on the part of a party of any such right, power or privilege, nor
any single or partial exercise of any such right, power or privilege,
shall preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
Section 9.7 EXPENSES. The parties to this Agreement shall
bear their respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the
transactions contemplated hereby, including, without limitation, all fees
and expenses of agents, representatives, counsel and accountants.
Section 9.8 ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and
assigns.
Section 9.9 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
This Agreement (including the documents and the instruments referred to
herein) (a)constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (b)is not intended to
confer upon any person other than the parties hereto any rights or
remedies hereunder.
Section 9.10 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York (other
than its rules of conflicts of law to the extent the application of the
laws of another jurisdiction would be required thereby).
Section 9.11 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be an original and all of
which, when taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
TIME WARNER INC.
By:/s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and Chief
Executive Officer
ITOCHU CORPORATION
By:/s/ Xxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President and
Chief Executive Officer
ITOCHU ENTERTAINMENT INC.
By:/s/ Xxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
Schedule 3.1(c)
UNDISCLOSED LIABILITIES
None.
Schedule 3.1(d)
TWX REQUIRED CONSENTS
None.
Schedule 3.1(e)
MATERIAL LITIGATION
None.
Schedule 3.2(c)
ITOCHU REQUIRED CONSENTS
1. Japanese Export-Import Bank.
