TIME WARNER INC.
TIME WARNER COMPANIES, INC.
XXXXXX BROADCASTING SYSTEM, INC.
Placement Agreement
January 6, 0000
Xxx Xxxx, Xxx Xxxx
To the Representatives
named in Schedule I
hereto of the Placement Agents
named in Schedule II hereto
Ladies and Gentlemen:
Time Warner Companies, Inc., a Delaware corporation (the "Company"),
proposes to sell to the initial purchasers named in Schedule II hereto (the
"Placement Agents"), for whom you (the "Representatives") are acting as
representatives, the principal amount of the securities identified in Schedule I
hereto (the "Debt Securities"), to be issued under an indenture (as
supplemented, the "Indenture") dated as of January 15, 1993, between the Company
and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the
"Trustee"), as supplemented by a First Supplemental Indenture dated as of June
15, 1993 between the Company and the Trustee, a Second Supplemental Indenture
dated as of October 10, 1996, among the Company, TWI (as defined below) and the
Trustee, a Third Supplemental Indenture dated as of December 31, 1996, among the
Company, TWI and the Trustee, a Fourth Supplemental Indenture dated as of
December 17, 1997 among the Company, TWI, TBS (as defined below) and the Trustee
and a Fifth Supplemental Indenture to be dated as of January 12, 1998 among the
Company, TWI, TBS and the Trustee providing for the issuance of debt securities
in one or more series, all of which will be entitled to the benefit of the
Guarantees referred to below. Time Warner Inc., a Delaware corporation ("TWI"),
became the parent of the Company and Xxxxxx Broadcasting System, Inc., a Georgia
corporation ("TBS" and, together with TWI, the "Guarantors"), upon the merger of
the Company and TBS with separate subsidiaries of TWI. Each of TWI and TBS, as
primary obligor and not merely as surety has or will agree to irrevocably and
unconditionally guarantee (the "Guarantees"; and together with the Debt
Securities, the "Securities"), to each holder of Debt Securities and to the
Trustee, (i) the full and punctual payment of principal of and interest on the
Debt Securities when due and all other payment obligations of the Company under
the Indenture and the Debt Securities and (ii) the full and punctual performance
within
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applicable grace periods of all other obligations of the Company under the
Indenture and the Debt Securities. If the firm or firms listed in Schedule II
hereto include only the firm or firms listed in Schedule I hereto, then the
terms "Placement Agents" and "Representatives", as used herein, shall each be
deemed to refer to such firm or firms. Capitalized terms used herein without
definition have the respective meanings specified in the Offering Memorandum
referred to below.
The Debt Securities will be offered and sold to you without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance on an exemption therefrom. The Company has prepared an offering
memorandum dated January 6, 1998 (such offering memorandum, together with any
documents incorporated by reference therein, being hereinafter referred to as
the "Offering Memorandum"), setting forth information regarding the Company and
the Securities. The Company hereby confirms that it has authorized the use of
the Offering Memorandum in connection with the offering and resale of the
Securities by the Placement Agents.
The Company understands that you propose to make an offering of the
Securities only on the terms and in the manner set forth in the Offering
Memorandum and Section 2(e) hereof, as soon as you deem advisable after this
Agreement has been executed and delivered, (i) to persons in the United States
whom you reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, as such
rule may be amended from time to time ("Rule 144A"), in transactions under Rule
144A, (ii) to a limited number of other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Securities
Act ("Accredited Investors")) in private sales exempt from registration under
the Securities Act in minimum denominations of $100,000 and/or (iii) to non-U.S.
persons outside the United States to whom you reasonably believe offers and
sales of the Debt Securities may be made in reliance upon Regulation S under the
Securities Act ("Regulation S"), in transactions meeting the requirements of
Regulation S.
The holders of the Securities will be entitled to the benefits of the
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit D (the "Registration Rights Agreement"), pursuant to which the Company
will file a registration statement or registration statements (each, a
"Registration Statement") with the Commission registering the Securities and/or
the Exchange Securities (as defined in the Registration Rights Agreement) under
the Securities Act.
1. Representations and Warranties. Each of the Company and the
Guarantors represents and warrants to, and agrees with, each Placement Agent as
set forth below in this Section 1.
(a) (i) As of the date of the Offering Memorandum and at all times
subsequent thereto up to the Closing Date referred to below, neither the
Offering Memorandum nor any amendment or supplement thereto will include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements
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therein, in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing by you (the "Offering Memorandum Purchase
Letter") to the Company expressly for use in the Offering Memorandum or any
amendment or supplement thereto.
(ii) Each preliminary prospectus filed as part of a Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424(a) under the Securities Act, will comply at the time
it is filed in all material respects with the requirements of the
Securities Act and the rules and regulations of the Commission thereunder
(the "Securities Act Regulations") and, on the effective date of the
Registration Statement and at all times subsequent thereto (in the case of
an exchange offer, up to the date on which the exchange offer is closed
(the "Exchange Date") and, in the case of a shelf registration statement or
other registration statement used in connection with sales or resales of
Securities or Exchange Securities, for so long as such Registration
Statement is effective), (x) such Registration Statement, at the time it
becomes effective, and the final Prospectus contained therein (the
"Prospectus") and any amendments or supplements thereto will comply in all
material respects with the requirements of the Securities Act and the
Securities Act Regulations; (y) neither such Registration Statement (at the
time it becomes effective) nor any amendment or supplement thereto,
including the documents incorporated by reference therein, will contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and (z) neither the Prospectus nor any other offering
materials nor any amendments or supplements thereto, including the
documents incorporated by reference therein, will include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that this representation
and warranty does not apply to statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by you (the "Registration Statement Purchase Letter") expressly for use in
a Registration Statement or Prospectus (or any amendments or supplements
thereto) or any other offering materials.
(b) Any documents filed by the Company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are incorporated by
reference (in whole or in part) in the Offering Memorandum or that are
incorporated by reference (in whole or in part) in a Registration
Statement, as of the dates they were filed with the Commission, complied as
to form in all material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder (the "Exchange
Act Regulations").
(c) When the Debt Securities are issued and delivered pursuant to this
Agreement, such securities will not be of the same class (within the
meaning of Rule 144A) as securities of the Company which are listed on a
national securities exchange
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registered under Section 6 of the Exchange Act or quoted in a U.S.
automated interdealer quotation system.
(d) TWI is subject to Section 13 or 15(d) of the Exchange Act.
(e) Neither the Company nor any of its affiliates (as defined in Rule
501(b) under the Securities Act) has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or
will be integrated with the sale of the Debt Securities in a manner that
would require the registration of the Debt Securities under the Securities
Act.
(f) Neither the Company nor any person (other than the Placement
Agents or their affiliates, as to whom the Company makes no representation)
acting on its behalf has engaged, in connection with the offering of the
Securities, (A) in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or (B) in any
directed selling efforts within the meaning of Rule 903 under the
Securities Act and the Commissions' Release No. 33-6863.
(g) Assuming that the representations and warranties of the Placement
Agents in Section 2(b) are true, correct and complete and assuming
compliance by the Placement Agents with their covenants in Section 2(b), it
is not necessary in connection with the offer, sale and delivery of the
Securities to the Placement Agents in the manner contemplated by this
Agreement to register the Securities under the Securities Act or to qualify
any indenture in respect of the Securities under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
(h) (1) Each of the Company and TWI is validly existing as a
corporation in good standing under the laws of the State of Delaware with
full corporate power and authority under such laws to own its properties
and conduct its business as described in the Offering Memorandum, and to
enter into and perform its obligations under this Agreement and the
Registration Rights Agreement; and each of the Company, TWI and TBS is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of
a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
TWI and its subsidiaries, considered as one enterprise.
(2) TBS is validly existing as a corporation in good standing
under the laws of the State of Georgia, with full corporate power and
authority under such laws to own its properties and conduct its business as
described in the Offering Memorandum, and to enter into and perform its
obligations under this Agreement and the Registration Rights Agreement.
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(i) Each of TWI's significant subsidiaries, as such term is defined in
Rule 1-02(w) of Regulation S-X under the Securities Act, is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with full power and authority under such
laws to own its properties and conduct its business as described in the
Offering Memorandum, and is duly qualified to transact business as a
foreign corporation or partnership and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or transacts
business of a type, that would make such qualification necessary, except to
the extent that the failure to so qualify or be in good standing would not
have a material adverse effect on TWI and its subsidiaries, considered as
one enterprise.
(j) TWI's authorized equity capitalization is as set forth in the
Offering Memorandum; all of the outstanding capital stock of the Company
and TBS is owned, directly or indirectly, by TWI, free and clear of all
liens, encumbrances, equities or claims.
(k) There is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or any
arbitrator involving the Company, TWI or TBS or any of their respective
subsidiaries of a character required to be disclosed in the Offering
Memorandum which is not adequately disclosed therein, and there is no
franchise, contract or other document of a character required to be
described in the Offering Memorandum, which is not described as required.
(l) This Agreement has been duly authorized, executed and delivered by
each of the Company, TWI and TBS.
(m) Assuming that the representations and warranties of each of the
Placement Agents in Section 2(b) are true, correct and complete and that
the representations and warranties of each subsequent transferee that is an
Accredited Investor (as set forth in the certificate required to be
executed and delivered by each such subsequent transferee) are true,
correct and complete, and assuming compliance by each of the Placement
Agents with its covenants in Section 2(b), no consent, approval,
authorization or order of, giving of notice to, or registration with, or
taking of any other action in respect of, any federal, state or foreign
governmental authority or agency is required for the authorization,
issuance, sale and delivery of the Securities by the Company and the
Guarantors or the consummation of the transactions contemplated by this
Agreement or the Registration Rights Agreement (except for the registration
of the Securities or the Exchange Securities pursuant to the Registration
Rights Agreement under the Securities Act and the registration of the
Securities and the Exchange Securities under state securities laws).
(n) The execution and delivery of this Agreement, the Indenture and
the Registration Rights Agreement by the Company, TWI and TBS, the
issuance, sale and delivery of the Debt Securities by the Company and the
consummation by the Company, TWI and TBS of the transactions contemplated
in this Agreement, the
6
Indenture and the Registration Rights Agreement and compliance by the
Company, TWI and TBS with the terms of this Agreement or the Registration
Rights Agreement do not and will not result in any violation of the
Certificate of Incorporation, as amended, or By-laws, as amended, of the
Company, TWI and TBS and do not and will not conflict with, or result in a
breach of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, TWI and TBS under (i) any
material agreement or instrument, to which the Company, TWI or TBS is a
party or by which any of them may be bound or to which any of their
properties may be subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of TWI and its subsidiaries, considered as
one enterprise), (ii) any existing applicable law, rule or regulation
(except for such conflicts, breaches, liens, charges or encumbrances that
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of TWI and its
subsidiaries, considered as one enterprise, and other than the securities
or blue sky laws of various jurisdictions), or (iii) any judgment, order or
decree of any government, governmental instrumentality or court having
jurisdiction over the Company, TWI or TBS or any of their properties.
(o) The Securities conform in all material respects to the description
thereof contained in the Offering Memorandum.
(p) The Indenture has been duly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery by the
Trustee, constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other laws affecting creditors' rights generally from time to time in
effect and subject as to enforceability to general principles of equity,
regardless of whether considered in a proceeding in equity or at law); and
the Debt Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Placement Agents pursuant to this
Agreement will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other laws affecting creditors' rights generally from time to time in
effect and subject as to enforceability to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
(q) The Indenture has been duly authorized, executed and delivered by
each of TWI and TBS and constitutes a legal, valid and binding instrument
enforceable against each of TWI and TBS in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to
7
enforceability to general principles of equity, regardless of whether
considered in a proceeding in equity or at law).
(r) At the Closing Date referred to below, the Registration Rights
Agreement will have been duly authorized, executed and delivered by the
Company, TWI and TBS and will constitute the valid and legally binding
obligation of the Company, TWI and TBS, enforceable against the Company,
TWI and TBS in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or conveyance or other similar laws affecting
enforcement of creditors' rights generally, except as enforcement thereof
is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and except
as any rights to indemnity and contribution may be limited by federal and
state securities laws and public policy considerations underlying such
laws. The Registration Rights Agreement will conform in all material
respects to the description thereof contained in the Offering Memorandum
and will conform in all material respects to the description thereof, if
any, to be contained in the Registration Statement and Prospectus.
(s) Each firm of independent accountants, which is reporting upon
certain audited or reviewed financial statements and schedules included or
incorporated by reference in the Offering Memorandum, are independent
auditors with respect to the financial statements covered by the audit or
review of such firm, in accordance with the provisions of the Exchange Act
and the Securities Act and the respective applicable published rules and
regulations thereunder.
(t) The consolidated financial statements and the related notes of
each of TWI, TWE and any other person included or incorporated by reference
in the Offering Memorandum (including the supplementary summary unaudited
financial information of the Company and TBS) present fairly in accordance
with generally accepted accounting principles the consolidated financial
position of each of the Company, TWI, TBS, TWE and any such other person as
of the dates indicated and the consolidated results of operations of each
of the Company, TWI, TBS, TWE and any such other person and cash flows of
each of TWI and TWE for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved,
except as otherwise noted therein and subject, in the case of interim
statements, to normal year-end audit adjustments. The financial statement
schedules included or incorporated by reference in the Offering Memorandum
present fairly in accordance with generally accepted accounting principles
the information required to be stated therein. Any pro forma financial
statements of the Company, TWI, TBS or TWE and other pro forma financial
information included or incorporated by reference in the Offering
Memorandum present fairly the information shown therein. Such pro forma
financial statements and other pro forma financial information, to the
extent required, have been prepared in accordance with applicable rules and
guidelines of the Commission, if any, with respect thereto, have been
properly compiled on the pro
8
forma bases described therein, and, in the opinion of the Company, TWI,
TBS and TWE, the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(u) Neither the Company, TWI nor TBS is an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended.
2. Purchase, Sale and Resale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, each
of the Company, TWI and TBS agrees to sell to each Placement Agent, and each
Placement Agent agrees, severally and not jointly, to purchase from the Company,
TWI and TBS, at the purchase price for the Securities set forth in Schedule I
hereto, the principal amount of Securities set forth opposite such Placement
Agent's name in Schedule II hereto.
(b) The Placement Agents have advised the Company, TWI and TBS that
they propose to offer the Securities for resale upon the terms and
conditions set forth in this Agreement and in the Offering Memorandum. Each
Placement Agent hereby represents and warrants to, and agrees with, the
Company that it (i) is a Qualified Institutional Buyer, (ii) has not
solicited offers for, or offered or sold, and will not solicit offers for,
or offer or sell, the Securities by means of any form of general
solicitation or general advertising or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act, or with
respect to Securities sold in reliance on Regulation S, by means of any
directed selling efforts within the meaning of Rule 903 under the
Securities Act and the Commission's Release No. 33-6863, and (iii) has
solicited and will solicit offers for the Securities only from, and have
offered and will offer, sell or deliver the Securities, as part of its
initial offering, only to (A) persons in the United States whom it
reasonably believes to be Qualified Institutional Buyers or, if any such
person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has
represented to it that each such account is a Qualified Institutional
Buyer, to whom notice has been given that such sale or delivery is being
made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A, (B) a limited number of other institutional investors whom it
reasonably believes to be Accredited Investors in private sales exempt from
registration under the Securities Act in minimum denominations of $100,000
and (C) non-U.S. persons outside the United States to whom it reasonably
believes offers and sales of the Securities may be made in reliance upon
Regulation S under the Securities Act, in transactions meeting the
requirements of Regulation S; provided that, with respect to clause (B) and
clause (C) above each such transfer of Securities is effected by the
delivery to such purchaser of Securities in definitive form and registered
in its name (or its nominee's name) on the books maintained by the Transfer
Agent. Each Placement Agent agrees to deliver, at the Closing Date, a
letter to the Company, TWI and TBS confirming its compliance with the
foregoing requirements.
9
Promptly following the occurrence thereof, the Placement Agents
will advise the Company, TWI and TBS of the date on which they and their
affiliates first ceased to hold Securities acquired as part of the initial
distribution thereof.
(c) On or prior to the Closing Date, each Placement Agent shall
deliver to the Company the Offering Memorandum Purchase Letter. If any
Placement Agent participates in the preparation of a Registration
Statement, such Placement Agent shall deliver the Registration Statement
Purchaser Letter on or prior to the effective date of such Registration
Statement.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made on the date and at the time specified in Schedule I hereto, which
date and time may be postponed to a date not later than five business days after
such specified date by agreement between the Representatives, acting jointly and
without regard to any agreement among placement agents, and the Company (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Placement Agents against payment by
the several Placement Agents through the Representatives of the purchase price
thereof to or upon the order of the Company by certified or official bank check
or checks drawn on or by a New York Clearing House bank and payable in
immediately available funds. Delivery of the Debt Securities shall be made at
such location as the Representatives shall reasonably designate on the Closing
Date and payment for the Securities shall be made at the office specified in
Schedule I hereto. Certificates for the Securities shall be registered in such
names and in such denominations as the Representatives may request not less than
one full business day in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
4. Agreements. The Company and the Guarantors agree with the several
Placement Agents that:
(a) The Company, TWI or TBS will deliver to the Representatives, as of
the date of the Offering Memorandum, such number of copies of the Offering
Memorandum, as it may then be amended or supplemented, as they may
reasonably request.
(b) None of the Company, TWI or TBS will at any time make any
amendment or supplement to the Offering Memorandum (other than amendments
of or supplements to any documents incorporated by reference in the
Offering Memorandum or the filing of subsequent documents under the
Exchange Act), of which the Representatives shall not have previously been
advised and furnished a copy, or to which the Representatives or their
counsel shall reasonably object. The Company shall not file any document
under the Exchange Act before the completion of the offering of
10
the Securities by the Placement Agents if such document would be
incorporated by reference in the Offering Memorandum and if the filing of
such document would cause the Offering Memorandum, as amended or
supplemented by the filing of such document, to contain an untrue statement
of a material fact or to omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(c) If at any time prior to completion of the distribution of the
Securities by the Placement Agents to purchasers who are not affiliates of
such Placement Agents any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Offering Memorandum in
order that the Offering Memorandum will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company, TWI and
TBS will promptly prepare such amendment or supplement as may be necessary
to correct such untrue statement or omission and furnish to the Placement
Agents such number of copies as they may reasonably request.
(d) Notwithstanding any provision of paragraph (b) or paragraph (c) of
this Section 4 to the contrary, however, the obligations of the Company,
TWI and TBS under paragraph (b) and paragraph (c) of this Section 4 shall
terminate on the earliest to occur of (i) 180 days after the date of the
Offering Memorandum (exclusive of any days during which use of the Offering
Memorandum is suspended as set forth below) and (ii) the date upon which
the Placement Agents and their affiliates first cease to hold Securities
acquired as part of the initial distribution thereof; provided, however,
that the Company, TWI and TBS shall, if requested by an Placement Agent,
amend or supplement the Offering Memorandum as provided in paragraph (c) of
this Section 4 after such 180-day period (but in no event beyond the date
on which an Exchange Offer is consummated pursuant to the Registration
Rights Agreement) so long as an Placement Agent shall have agreed to
reimburse the Company, TWI and TBS for their reasonable expenses in
connection therewith. In addition, after 30 days from the date hereof, the
Company shall not be required to amend or supplement the Offering
Memorandum pursuant to paragraph (b) or paragraph (c) of this Section 4 in
the event that, and for so long as (A) an event occurs and is continuing as
a result of which the Offering Memorandum as then amended or supplemented
would, in the Company's good faith judgment, contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
under which they are made, and (B) the Company determines in its good faith
judgment that the disclosure of such event at such time would materially
adversely affect the interests of the Company. The Company, TWI and TBS
agree to notify the Representatives to suspend use of the Offering
Memorandum as promptly as practicable after the occurrence of such an
event, and the Placement Agents hereby agree to suspend use of the Offering
Memorandum until the Company has amended or supplemented the Offering
Memorandum to correct such misstatement or omission. At such time as such
public disclosure is otherwise made or the Company
11
determines in its good faith judgment that the disclosure in the Offering
Memorandum of an event described above would no longer materially adversely
affect the Company or that such disclosure is not necessary, the Company
agrees promptly to notify the Representatives of such determination, to
amend or supplement the Offering Memorandum if necessary to correct any
untrue statement or omission therein and to furnish the Placement Agents
such numbers of copies of the Offering Memorandum, as so amended or
supplemented, as they may reasonably request.
(e) The Company will use its best efforts in cooperation with the
Representatives to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions as they
may designate, if any, and to maintain such qualifications in effect for so
long as required for the initial distribution of the Securities by the
Placement Agents; provided, however, that the Company shall not be
obligated to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(e), (ii) file any general consent to service
of process or (iii) subject itself to taxation in any such jurisdiction if
it is not so subject. The Company will file such statements and reports as
may be required by the laws of each jurisdiction in which the Securities
have been qualified as above provided.
(f) For a period of three years after the Closing Date, the Company
TWI, TBS and TWE will furnish to the Representatives copies of all annual
reports, quarterly reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated
by the Commission, and such other documents, reports and information as
shall be furnished by each of the Company, TWI, TBS and TWE to its public
stockholders generally.
(g) Neither the Company, TWI, TBS nor any person (other than the
Placement Agents or their affiliates, as to whom the Company makes no
representation) acting on its behalf will solicit any offer to buy or offer
or sell the Securities by means of any form of general solicitation or
general advertising (within the meaning of Rule 502(c) under the Securities
Act) or by means of any directed selling efforts (as defined under
Regulation S and the Commission's written releases related thereto).
(h) Neither the Company, TWI, TBS nor any of their affiliates (as
defined in Rule 501(b) of the Securities Act) will offer, sell or solicit
offers to buy or otherwise negotiate in respect of any security (as defined
in the Securities Act) which will be integrated with the sale of the
Securities in a manner that would require the registration of the
Securities under the Securities Act.
(i) During the period from the Closing Date to the earlier of (i) two
years after the Closing Date, or (ii) the date of effectiveness of a
registration statement with respect to the Securities as contemplated in
the Registration Rights Agreement, none of the Company, TWI or TBS will,
and will not permit any of its "affiliates" (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities that have been
12
reacquired by them, except for Securities purchased by the Company, TWI or
TBS or any of their affiliates and resold in a transaction registered under
the Securities Act.
(j) From and after the Closing Date, the Company will, so long as the
Securities are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, either (i) file reports
and other information with the Commission under Section 13 or 15(d) of the
Exchange Act, or (ii) in the event it is not subject to Section 13 or 15(d)
of the Exchange Act, furnish to holders of Securities and prospective
purchasers of Securities designated by such holders, upon request of such
holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act to permit
compliance with Rule 144A in connection with resales of the Securities.
(k) The Company will use its best efforts in cooperation with the
Representatives to permit the Debt Securities to be eligible for clearance
and settlement through The Depository Trust Company.
(l) Each Debt Security will bear the following legend until, in the
opinion of counsel to the Company, such legend is no longer advisable
because such Debt Security is no longer subject to the restrictions on
transfer described therein:
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS DEBENTURE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATIONS UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE DEBENTURES, RESELL OR
OTHERWISE TRANSFER THIS DEBENTURE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS DEBENTURE (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER
IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES
13
AT THE TIME OF TRANSFER OF LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND, IN CONNECTION WITH ANY TRANSFER OF THIS DEBENTURE WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE DEBENTURES THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS DEBENTURE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATIONS UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISIONS REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
DEBENTURE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(m) The proceeds of the offering of the Securities will be applied as
set forth in the Offering Memorandum.
(n) The Company and the Guarantors will pay and bear all costs and
expenses incident to the performance of their obligations under this
Agreement, including (i) the preparation and printing of the Offering
Memorandum (including financial statements) and any amendments or
supplements thereto, and the cost of furnishing copies thereof to the
Placement Agents, (ii) the preparation, printing and distribution of this
Agreement, the Indenture, the Securities and the Registration
Rights Agreement, (iii) the preparation, printing and delivery of the
Securities to the Placement Agents, (iv) the fees and disbursements of
the Company's and the Guarantors' counsel and the accountants required
hereby to provide "comfort letters", (v) the qualification of the
Securities under the applicable securities laws in accordance with
Section 4(e) and any filing for review of the offering with the
National Association of Securities Dealers, Inc., including filing fees
and fees and disbursements of counsel for the Placement Agents in
connection therewith and in connection with the preparation of a Blue
Sky Survey, (vi) any fees charged by rating agencies for rating
14
the Securities, (vii) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee, in connection with the
Indenture and the Securities, (viii) the cost and charges of any transfer
agent or registrar and (ix) the costs of qualifying the Securities with The
Depositary Trust Company.
(o) Until the Closing Date or such other date as may be specified in
Schedule I, none of the Company, TWI or TBS (and if so specified in
Schedule I or TWE) will, without the consent of Xxxxxx Xxxxxxx & Co.
Incorporated, offer, sell or contract to sell, or announce the offering of,
any debt securities designed or intended to be traded or distributed in the
public or private securities markets; provided, however, that the foregoing
shall not prohibit (i) the Company, TWI, TBS or TWE from issuing long-term
debt as all or part of the consideration in any merger or acquisition
and/or in connection with the settlement of any litigation, (ii) the
Company, TWI, TBS or TWE from filing with the Commission a "shelf"
registration statement for the offering of securities under Rule 415 of the
Act (or any similar rule that may be adopted by the Commission) or amending
any existing shelf registration statement provided that such securities are
not issued until the business day following the Closing Date or such other
date as may be specified in Schedule I or (iii) any of the foregoing from
issuing commercial paper.
5. Conditions to the Obligations of the Placement Agents. The
obligations of the Placement Agents to purchase the Securities shall be subject
to the accuracy in all material respects of the representations and warranties
on the part of the Company and the Guarantors contained herein as of the Closing
Date, to the accuracy in all material respects of the statements of the Company
and the Guarantors made in any certificates pursuant to the provisions hereof,
to the performance by each of the Company, TWI and TBS of its obligations
hereunder, to the due execution and delivery of the Indenture, to the absence of
any event or condition which would give you the right to terminate this
Agreement and to the following additional conditions:
(a) The Registration Rights Agreement shall have been duly executed
and delivered by the Company and the Guarantors, the Indenture shall have
been duly authorized by the Company and the Guarantors, all covenants and
agreements contained herein to be performed on the part of the Company and
the Guarantors and all conditions contained herein to be fulfilled or
complied with by the Company and the Guarantors at or prior to such Closing
Date shall have been duly performed, fulfilled or complied with in all
material respects and no event shall have occurred and no condition shall
exist which would give you the right to terminate this Agreement.
(b) At the Closing Date, the Company shall have furnished to you the
opinion of Xxxxx X. Xxxx, General Counsel to TWI, dated the Closing Date,
substantially in the form of Exhibit A hereto.
(c) At the Closing Date, the Company shall have furnished to you the
opinion and statement of Cravath, Swaine & Xxxxx, counsel to the Company
and the
15
Guarantors, each dated the Closing Date, substantially in the form of
Exhibit B and Exhibit C hereto, respectively.
(d) The Representatives shall have received from Shearman & Sterling,
counsel for the Placement Agents, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Debt Securities,
the Indenture, the Registration Rights Agreement, the Offering Memorandum
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company and the Guarantors
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(e) (1) The Company shall have furnished to the Representatives a
certificate of the Company, signed by any two officers who are an Executive
or Senior Vice President of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined the
Offering Memorandum and this Agreement and that the representations and
warranties of the Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same effect as if
made on the Closing Date and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.
(2) TWI shall have furnished to the Representatives a certificate of
TWI, signed by any two officers who are an Executive or Senior Vice
President of TWI, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Offering Memorandum and this
Agreement and that:
(i) the representations and warranties of the Company, TWI and
TBS in this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date each of the Company, and TWI and TBS has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Offering Memorandum, there has been no material
adverse change in the condition (financial or otherwise), earnings, or
business prospects of TWI and its subsidiaries, considered as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Offering
Memorandum.
(3) TBS shall have furnished to the Representatives a certificate of
TBS, signed by any two officers who are Vice Presidents of TBS, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Offering Memorandum and this Agreement and that the
representations and warranties of TBS in this Agreement are true and
correct in all material respects on and as of the Closing
16
Date with the same effect as if made on the Closing Date and TBS has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing Date.
(f) At the Closing Date, Ernst & Young LLP shall have furnished to the
Representatives a letter or letters, dated respectively as of the Closing
Date, in form and substance satisfactory to the Representatives, confirming
that they are independent auditors with respect to the Company, TWI, TBS
and TWE within the meaning of the Securities Act and the Exchange Act and
the respective applicable published rules and regulations thereunder and
stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules of TWI and TWE (including the
supplementary summary unaudited financial information of the Company
and TBS) included or incorporated in the Offering Memorandum comply in
form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements (including the notes thereto and the supplementary summary
unaudited financial information of the Company and TBS) made available
by TWI, the Company, TBS and TWE and their respective consolidated
subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and executive,
finance and audit committees of TWI and TWE and their respective
consolidated subsidiaries; and inquiries of certain officials of TWI,
the Company, TBS and TWE who have responsibility for financial and
accounting matters of TWI, the Company, TBS and TWE and their
respective consolidated subsidiaries as to transactions and events
subsequent to the date of the most recent audited financial statements
in or incorporated in the Offering Memorandum, and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention which caused them to believe that:
(1) any of such unaudited financial statements included or
incorporated in the Offering Memorandum do not comply in form in
all material respects with applicable accounting requirements of
the Securities Act and the Exchange Act and with the published
rules and regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; or said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Offering Memorandum; or
17
(2) with respect to the period subsequent to the date of the
most recent unaudited financial statements in or incorporated in
the Offering Memorandum, there were any increases, at a specified
date not more than five business days prior to the date of the
letter, in the long-term debt of TWI, TWE and certain related
unconsolidated subsidiaries (together with TWE, the
"Entertainment Group") and their respective consolidated
subsidiaries or any decreases in stockholders' equity or the
consolidated capital stock of TWI, TWE and the Entertainment
Group as compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated in the
Offering Memorandum, for such entities, or for the period from
the date of the most recent unaudited financial statements
included or incorporated in the Offering Memorandum, for such
specified date there were any decreases, as compared with the
corresponding period in the preceding year, in revenues, income
before income taxes (or any increase in the loss before income
taxes) or net income (or any increase in net loss), except in all
instances for decreases or increases disclosed in the Offering
Memorandum;
(iii) they are unable to and do not express any opinion on the
pro forma adjustments to the financial statements included or
incorporated by reference in the Offering Memorandum, or on the pro
forma adjustments applied to the historical amounts included or
incorporated by reference in the Offering Memorandum; however, for
purposes of such letter they have:
(1) read the pro forma adjustments to such financial
statements;
(2) made inquiries of certain officials of TWI, the Company,
TBS and TWE who have responsibility for financial and accounting
matters about the basis for their determination of the pro forma
adjustments to such financial statements and whether such pro
forma adjustments comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X; and
(3) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts included or
incorporated by reference in the Offering Memorandum; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that the pro forma adjustments
to the financial statements included or incorporated by reference in
the Offering Memorandum do not comply as to form in all material
respects with the applicable requirements of Rule 11-02 of
18
Regulation S-X and that such pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
financial statements; and
(iv) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Offering Memorandum agrees with the accounting records of
the Company and its subsidiaries, TWI and its subsidiaries, TBS and
its subsidiaries or TWE and its subsidiaries, as the case may be,
excluding any questions of legal interpretation.
(g) At the Closing Date, each other firm of independent accountants
who audited or reviewed financial statements included or incorporated by
reference in the Offering Memorandum shall have furnished to the
Representatives a letter or letters, dated respectively as of the Closing
Date, in form and substance satisfactory to the Representatives, confirming
that they are independent auditors with respect to the financial statements
audited or reviewed by them within the meaning of the Securities Act and
the Exchange Act and the respective applicable published rules and
regulations thereunder and to the same effect as the letter or letters of
Ernst & Young LLP as described in Section 5(f)(i) and 5(f)(ii)(1) hereto.
(h) Subsequent to the dates as of which information is given in the
Offering Memorandum, there shall not have been (i) any decrease or increase
specified in the letter or letters referred to in paragraph (f) of this
Section 5 or (ii) any change, or any development involving a prospective
change, in or affecting the business (including the results of operations
or management) or properties of the Company and its subsidiaries, TWI and
its subsidiaries, TBS and its subsidiaries, TWE and its subsidiaries the
effect of which, in any case referred to in clause (i) or (ii) above, is,
in the reasonable judgment of the Representatives, so material and adverse
as to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Offering Memorandum.
(i) Subsequent to the date hereof, (i) there shall not have been any
downgrade in the credit ratings of any of the Company's, TWI's or TBS's
debt securities by Xxxxx'x Investor Service, Inc. or Standard & Poor's
Ratings Group, and (ii) none of the Company, TWI or TBS shall have been
placed under special surveillance, with negative implications, by Xxxxx'x
Investor Service, Inc. or Standard & Poor's Ratings Group.
(j) Prior to the Closing Date, the Company and the Guarantors shall
have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
19
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Placement Agents, this
Agreement and all obligations of the Placement Agents hereunder may be canceled
at, or at any time prior to, the Closing Date by the Representatives and such
cancellation shall be without liability of any party to any other party, except
to the extent provided in Sections 4 and 6. Notice of such cancellation shall be
given to the Company, TWI or TBS in writing or by telephone or telegraph
confirmed in writing.
6. Reimbursement of Placement Agents' Expenses. If the sale of the
Debt Securities provided for herein is not consummated because any condition to
the obligations of the Placement Agents set forth in Section 5 hereof is not
satisfied or because of any refusal, inability or failure on the part of the
Company, TWI or TBS to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Placement Agents, the
Company and the Guarantors will reimburse the Placement Agents severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) Each of the Company, TWI and
TBS agrees to indemnify and hold harmless each Placement Agent, the directors,
officers, employees and agents of each Placement Agent and each person who
controls any Placement Agent within the meaning of either the Securities Act or
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Offering Memorandum, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that none of the Company, TWI or TBS
will be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company, TWI and TBS
by or on behalf of any Placement Agent through the Representatives specifically
for inclusion therein. This indemnity agreement will be in addition to any
liability which the Company, TWI or TBS may otherwise have.
(b) Each Placement Agent severally agrees to indemnify and hold
harmless each of the Company, TWI and TBS, each of their respective directors,
officers and each person who controls the Company, TWI or TBS within the meaning
of either the Securities
20
Act or the Exchange Act, to the same extent as the foregoing indemnity from the
Company, TWI and TBS to each Placement Agent, but only with reference to written
information relating to such Placement Agent furnished to the Company, TWI or
TBS by or on behalf of such Placement Agent through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Placement Agent may otherwise have. Each of the Company, TWI and TBS
acknowledges that the statements set forth in the last paragraph of the cover
page and the first and fifth paragraphs under the heading "Private Placement" in
the Offering Memorandum constitute the only information furnished in writing by
or on behalf of the several Placement Agents for inclusion in the documents
referred to in the foregoing indemnity, and you, as the Representatives, confirm
that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party (it being understood, however, that in
connection with such action, the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
representing the indemnified parties who are parties to such action or actions),
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any
21
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, TWI, TBS and the Placement Agents
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company,
the Guarantors and one or more of the Placement Agents may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company, TWI and TBS, on one hand, and by the Placement Agents, on the other
hand, from the offering of the Securities; provided, however, that in no case
shall any Placement Agent (except as may be provided in any agreement among
underwriters relating to the offering of the Debt Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable to
the Debt Securities purchased by such Placement Agent hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company, TWI, TBS and the Placement Agents shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Guarantors and of the Placement Agents
in connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company and the Guarantors shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and benefits received by the
Placement Agents shall be deemed to be equal to the total underwriting discounts
and commissions. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company, TWI, or TBS or the Placement Agents. The Company, the Guarantors and
the Placement Agents agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls an Placement Agent within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Placement Agent shall have the same rights to contribution as such
Placement Agent, and each person who controls the Company, TWI or TBS within the
meaning of either the Securities Act or the Exchange Act, each director,
officer, employee and agent of the Company, TWI or TBS shall have the same
rights to contribution as the Company and the Guarantor, subject in each case to
the applicable terms and conditions of this paragraph (d).
8. Default by an Placement Agent. If any one or more Placement Agents
shall fail on the Closing Date to purchase and pay for any of the Debt
Securities agreed to be purchased by such Placement Agent or Placement Agents
hereunder and such failure to
22
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Placement Agents shall be
obligated severally to take up and pay for (in the respective proportions for
each of the Debt Securities which such Placement Agent failed to purchase which
the amount of the Debt Securities set forth opposite their names in Schedule II
hereto bears to the aggregate amount of such Debt Securities set forth opposite
the names of all the remaining Placement Agents) the Debt Securities which the
defaulting Placement Agent or Placement Agents agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of Debt
Securities which the defaulting Placement Agent or Placement Agents agreed but
failed to purchase shall exceed 10% of the aggregate amount of Debt Securities
set forth in Schedule II hereto, the remaining Placement Agents shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Debt Securities, and if such nondefaulting Placement Agents do not purchase
all of the Debt Securities, this Agreement will terminate without liability to
any nondefaulting Placement Agent or the Company and the Guarantors. In the
event of a default by any Placement Agent as set forth in this Section 8, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Representatives shall determine in order that the required changes in the
Offering Memorandum, or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Placement Agent
of its liability, if any, to the Company, the Guarantors and any nondefaulting
Placement Agent for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company, TWI
or TBS prior to delivery of and payment for the Debt Securities, if prior to
such time (i) trading in the TWI's common stock or any of the Company's or the
TWI's or TBS's debt securities shall have been suspended by the Commission or
the New York Stock Exchange or trading in securities generally on such Exchange
shall have been suspended or limited or minimum or maximum prices shall have
been established on such Exchange, or maximum ranges for prices for securities
have been required, by such Exchange or by order of the Commission or any other
governmental authority, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any new outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets of the United States is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to proceed
with the offering or delivery of a series of Securities as contemplated by the
Offering Memorandum. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party,
except to the extent provided in Sections 4 and 6.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company TWI or TBS or any of their respective officers and of the Placement
Agents set forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation made by or on behalf of any
Placement Agent or the Company, TWI or TBS or any of the officers, directors or
controlling persons referred to in Section 7 hereof, and will survive delivery
of
23
and payment for the Securities. The provisions of Sections 6 and 7 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule I hereto; or, if sent to the Company, TWI or TBS, will be mailed,
delivered or telegraphed and confirmed to it care of TWI at 00 Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of General Counsel.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business day" means
any day on which the New York Stock Exchange is open for trading.
15. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company, TWI, TBS and each of the Placement Agents.
Very truly yours,
TIME WARNER INC.
By /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
TIME WARNER COMPANIES, INC.
By /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
XXXXXX BROADCASTING SYSTEM, INC.
By /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
CHASE SECURITIES INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX, INCORPORATED
X. X. XXXXXX SECURITIES INC.
By /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
SCHEDULE I
Placement Agreement: Dated January 6, 1998
Representatives: Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Chase Securities Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx,Incorporated
X. X. Xxxxxx Securities Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Title, Purchase Price and Description of Debt Securities:
Title: 6.95% Debentures Due 2028
Principal amount: $500,000,000
Interest rate: 6.95%
Interest payment dates: January 15 and July 15
Date of maturity: January 15, 2028
Purchase price (include
accrued interest or
amortization, if any): 98.043%
Initial public offering price: 98.918%
Sinking fund provisions: None
Redemption provisions: Not redeemable
Other provisions: None
Closing Date, Time and Location: January 12, 1998 at 10:00 A.M. at the
offices of Shearman & Sterling, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
SCHEDULE II
$500,000,000 6.95% Debentures due 2028:
Principal
Amount
to
Placement Agents be Purchased
---------------- -------------
Xxxxxx Xxxxxxx & Co. Incorporated...................... $100,000,000
Bear, Xxxxxxx & Co. Inc................................ $100,000,000
Chase Securities Inc................................... $100,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated..... $100,000,000
X.X. Xxxxxx Securities Inc............................. $100,000,000
-----------
Total.............................................. $500,000,000
===========
EXHIBIT A
FORM OF OPINION OF XXXXX X. XXXX, ESQ.
(i) each of the Company, TWI and TBS is validly existing as a
corporation in good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and authority under
such laws to own its properties and conduct its business as described in
the Offering Memorandum and each of the Company, TWI and TBS is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of
a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
TWI and its subsidiaries, considered as one enterprise;
(ii) each of TWI's significant subsidiaries, as such term is defined
in Rule 1-02(w) of Regulation S-X under the Securities Act, is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with full power and authority under such
laws to own its properties and conduct its business as described in the
Offering Memorandum, and any amendment or supplement thereto, and is duly
qualified to transact business as a foreign corporation or partnership and
is in good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
TWI and its subsidiaries, considered as one enterprise;
(iii) TWI's authorized equity capitalization is as set forth in the
Offering Memorandum; all of the outstanding capital stock of the Company
and TBS is owned, directly or indirectly, by TWI, free and clear of all
liens, encumbrances, equities or claims;
(iv) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving either the Company,
TWI or TBS or any of their respective subsidiaries of a character required
to be disclosed in the Offering Memorandum or that is likely to result in
any material adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of TWI and its subsiaries,
considered as one enterprise, which is not adequately disclosed in the
Offering Memorandum;
(v) the Indenture, the Placement Agreement, the Fourth Supplemental
Indenture, the Fifth Supplemental Indenture and the Registration Rights
Agreement have been duly authorized, executed and delivered by each of the
Company, TWI and TBS; and the Fourth Supplemental Indenture, the Fifth
Supplemental Indenture and the Registration Rights Agreement, assuming due
authorization thereof by the Trustee or the Placement Agents, as
applicable, constitute legal, valid and binding obligations of each of the
Company, TWI and TBS, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in effect and
subject as to enforceability to general principles of equity, regardless of
whether considered in a proceeding in equity
A-2
or at law and except as any rights to indemnity and contribution may be
limited by federal and state securities laws and public policy
considerations underlying such laws;
(vi) the Debt Securities have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Placement Agents pursuant to
the Placement Agreement will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors'
rights generally from time to time in effect and subject as to
enforceability to general principles of equity, regardless of whether
considered in a proceeding in equity or at law;
(vii) the execution and delivery of the Placement Agreement, the
Indenture and the Registration Rights Agreement by the Company, TWI and
TBS, the issuance, sale and delivery of the Debt Securities by the Company
and the consummation by the Company, TWI and TBS of the transactions
contemplated in the Placement Agreement, the Indenture and the Registration
Rights Agreement and compliance by the Company, TWI and TBS with the terms
of the Placement Agreement or the Registration Rights Agreement do not and
will not result in any violation of the Certificate of Incorporation, as
amended, or By-laws, as amended, of the Company, TWI and TBS and do not and
will not conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company, TWI and TBS under any agreement or instrument, to which the
Company, TWI or TBS is a party or by which any of them may be bound or to
which any of their properties may be subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have
a material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of TWI and its
subsidiaries, considered as one enterprise), (ii) any existing applicable
law, rule or regulation (except for such conflicts, breaches, liens,
charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of TWI and its subsidiaries, considered as one
enterprise, and other than the securities or blue sky laws of various
jurisdictions), or (iii) any judgment, order or decree of any government,
governmental instrumentality or court having jurisdiction over the Company,
TWI or TBS or any of their properties;
(viii) any documents filed by the Company under the Securities
Exchange Act of 1934, as amended, that are incorporated by reference (in
whole or in part) in the Offering Memorandum or that are incorporated by
reference (in whole or in part) in a Registration Statement, as of the
dates they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; and
A-3
(ix) no consent, approval, authorization or order of, giving of notice
to, or registration with, or taking of any other action in respect of, any
federal or state governmental authority or agency is required for the
consummation of the transactions contemplated in the Placement Agreement or
the issuance, sale and delivery of the Securities, except such as may be
required under the Securities Act and under the blue sky laws of any
jurisdiction in connection with the purchase and resale of the Securities
by the Placement Agents.
In addition, such counsel shall also state as follows: As General Counsel,
I have reviewed and participated in the preparation of the Offering Memorandum,
including the documents incorporated by reference therein. In examining the
Offering Memorandum, I have necessarily assumed the correctness and completeness
of the statements made or included therein by the Company, TWI and TBS and take
no responsibility therefor. However, in the course of the preparation by the
Company, TWI and TBS of the Offering Memorandum, I have participated in
conferences with certain officers of, and accountants for, the Company, TWI and
TBS with respect thereto, and my examination of the Offering Memorandum and my
discussions in the above-mentioned conferences did not disclose any information
which gave me reason to believe that the Offering Memorandum (except for the
financial statements and other financial or statistical data included therein or
omitted therefrom, as to which I express no opinion), at its issue date or on
the date of this opinion, included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the United
States, the State of New York and the General Corporation Law of the State of
Delaware, to the extent such counsel deems proper and specified in such opinion,
upon the opinion of other counsel of good standing whom such counsel believes to
be reliable and who are satisfactory to counsel for the Placement Agents; and
(B) as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company, TWI or TBS and public
officials.
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & XXXXX
(i) each of the Company and TWI is a corporation validly existing in
good standing under the laws of the State of Delaware, with full corporate
power and authority to own its properties and conduct its business as
described in the Offering Memorandum;
(ii) the Securities conform in all material respects to the
description thereof contained in the Offering Memorandum;
(iii) the Indenture has been duly authorized, executed and delivered
by each of the Company and TWI and, assuming due authorization, execution
and delivery by TBS and the Trustee, constitutes a legal, valid and binding
instrument enforceable against each of the Company, TWI and TBS in
accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law); and the Debt
Securities have been duly authorized by the Company and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Placement Agents pursuant to the Placement
Agreement, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws affecting creditors' rights generally from time to time
in effect and to general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at
law);
(iv) the Securities are eligible for resale by the Placement Agents
and by subsequent transferees to persons who constitute Qualified
Institutional Buyers under Rule 144A under the Securities Act in accordance
with the provisions of such rule; assuming (i) the accuracy of, and
compliance with, the representations, warranties and covenants of the
Company, TWI and TBS in Sections 1(c), (e), (f) and (u) of the Placement
Agreement, (ii) the accuracy of, and compliance with, the representations,
warranties and covenants of the Placement Agents in Section 2(b) of the
Placement Agreement, (iii) the accuracy of the representations and
warranties of each of the purchasers to whom the Placement Agents initially
resell the Securities, as specified in Section 2(b) of the Placement
Agreement (and as set forth in the certificate, if any, required to be
executed and delivered by each such subsequent transferee) and (iv) the
compliance by the Placement Agents with the offering and transfer
procedures and restrictions described in the Offering Memorandum, (x) it is
not necessary in
B-2
connection with the offer, sale and delivery of the Securities or in
connection with the initial resale of such Securities in the manner
contemplated by the Placement Agreement and the Offering Memorandum to
register the Securities under the Securities Act, and (y) no consent,
approval, authorization or order of, giving of notice to, or registration
with, or taking of any other action in respect of, any federal or New York
State governmental authority or agency is required for the authorization,
issuance, sale and delivery of the Securities by the Company, TWI and TBS
or the consummation of the transactions contemplated by the Placement
Agreement or the Registration Rights Agreement (except for the registration
of the Securities or the Exchange Securities pursuant to the Registration
Rights Agreement under the Securities Act and the registration of the
Securities and the Exchange Securities uner state securities laws), in
either case, it being understood that no opinion is expressed as to any
subsequent resale of any Securities; and
(v) the Placement Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company and TWI.
We are admitted to practice in the State of New York, and we express no
opinion as to any matters governed by any law other than the law of the State of
New York, the Federal law of the United States of America and the General
Corporation Law of the State of Delaware; provided that we express no opinion
with respect to (a) the Communications Act of 1934, as amended, or Federal or
state energy, utility or environmental laws and, in each case, the rules and
regulations promulgated thereunder, including the rules and regulations
promulgated by the Federal Communications Commission or (b) any matter relating
to any statute, ordinance, license, franchise, approval, authorization, or
permit of any governmental authority applicable to the construction, ownership
or operation of any cable television system or any component thereof, including
the reception and transmission of signals by microwave or, with respect to the
matters described in the foregoing clauses (a) and (b), the impact thereof on
the Company, TWI or TBS, including with respect to the transactions contemplated
by the Placement Agreement and the Offering Memorandum. In particular, we do not
purport to pass on any matter governed by the laws of the State of Georgia.
EXHIBIT C
FORM OF SIDE LETTER OF CRAVATH, SWAINE & XXXXX
Although we have made certain inquiries and investigations in connection
with the preparation of the Offering Memorandum, the limitations inherent in the
role of outside counsel are such that we cannot and do not assume responsibility
for the accuracy or completeness of the statements made in the Offering
Memorandum, except insofar as such statements relate to us and except to the
extent set forth in paragraph (ii) of our opinion to you dated the date hereof.
Subject to the foregoing, we hereby advise you that our work in connection with
this matter did not disclose any information that gave us reason to believe that
the Offering Memorandum (except for the financial statements and other
information of an accounting, statistical or financial nature included therein,
as to which we do not express any view), as of its date or as of the date
hereof, included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
B-4
EXHIBIT D
