SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
TIME WARNER INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
887315109
(CUSIP Number)
R.E. Turner
c/o Turner Broadcasting System, Inc.
One CNN Center
Atlanta, GA 30303
(404) 827-1700
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
Thomas C. Janson, Jr., Esq.
Skadden, Arps, Slate, Meagher & Flom
300 S. Grand Avenue
Los Angeles, California 90071
(213) 687-5221
October 10, 1996
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following: ( )
Check the following box if a fee is being paid with this
Statement: ( )
CUSIP No. 887315109
Schedule 13D
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
R.E. Turner; ###-##-####
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
Not applicable.
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
Not applicable. ( )
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
USA
: (7) SOLE VOTING POWER
:
: 56,269,723
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
PERSON WITH : 1,568,234
:
:
: (9) SOLE DISPOSITIVE
:
: 56,269,723
:
:(10) SHARED DISPOSITIVE
:
: 1,568,234
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
57,862,957
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* ( )
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
11.4%
(14) TYPE OF REPORTING PERSON*
IN
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the Common Stock (the
"Common Stock"), par value $.01 per share, of Time Warner Inc., a
Delaware corporation (the "Company").
ITEM 2. IDENTITY AND BACKGROUND
This Schedule 13D is filed on behalf of the individual
listed below:
(a) R.E. Turner
(b) Mr. Turner's business address is c/o Turner
Broadcasting System, Inc., One CNN Center, Atlanta, Georgia 30303.
(c) Mr. Turner is Vice Chairman of the Company and
Chief Executive Officer of the Company's Video Division.
(d) During the last five years, Mr. Turner has not
been convicted in a criminal proceeding, excluding traffic
violations or similar misdemeanors.
(e) During the last five years, Mr. Turner has not
been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction the result of which
is that he is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or
finding any violation with respect to such laws.
(f) Mr. Turner is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On October 10, 1996, as a result of the merger (the
"Merger") of TW Acquisition Corp. into Turner Broadcasting
System, Inc. ("TBS"), TBS became a wholly owned subsidiary of the
Company. In the Merger, each outstanding share of Class A Common
Stock, par value $0.625 per share, of TBS ("Class A Common
Stock") and each outstanding share of Class B Common Stock, par
value $0.625 per share, of TBS (together with the Class A Common
Stock, "TBS Common Stock"), held by Mr. Turner was converted into
0.75 of a share of Common Stock, representing an aggregate of
57,862,957 shares of Common Stock.
ITEM 4. PURPOSE OF TRANSACTION
At the effective time of the Merger, which occurred on
October 10, 1996, each share of TBS Common Stock beneficially
owned by Mr. Turner as of such date was converted into 0.75 of a
share of Common Stock. Mr. Turner has acquired the securities of
the Company for investment purposes only.
The Company, Mr. Turner, Turner Outdoor, Inc., a
corporation that is wholly owned by Mr. Turner ("Turner
Outdoor"), and Turner Partners, L.P., a limited partnership of
which Mr. Turner is the sole general partner ("Turner Partners")
have entered into an Investors' Agreement (No. 1), dated as of
October 10, 1996 ("Investors' Agreement (No. 1)"). Pursuant to
Investors' Agreement (No. 1), the Company has agreed to use
reasonable efforts to cause to be elected to the Company's Board
of Directors two persons designated by Mr. Turner who are
Eligible Persons. "Eligible Person" means Mr. Turner and any
other individual (a) who is reasonably acceptable to the
Company's Board of Directors, (b) whose election to the Company's
Board of Directors would not, in the opinion of counsel for the
Company, violate, conflict with, or result in any material
limitation on the ownership or operation of any business or
assets of the Company or any of its subsidiaries under, any
statute, law, ordinance, regulation, rule, judgment, decree or
order of any governmental entity and (c) who has agreed in
writing to comply with certain covenants set forth in Investors'
Agreement (No. 1) and to resign as a director of the Company if
requested to do so upon a reduction in the number of designees to
the Company's Board of Directors to which Mr Turner is entitled,
as set forth in Investors' Agreement (No. 1). Investor's
Agreement (No. 1) is filed as an exhibit to this Schedule 13D and
is incorporated herein by reference.
Mr. Turner was elected to the Company's Board of
Directors on October 10, 1996. Pursuant to Investors' Agreement
(No. 1), Mr. Turner is entitled to designate another person for
election to the Company's Board of Directors.
The Company, Mr. Turner, Turner Outdoor and Turner
Partners have entered into a Registration Rights Agreement, dated
as of October 10, 1996 (the "Registration Rights Agreement"),
pursuant to which the Company has granted to Mr. Turner, Turner
Outdoor and Turner Partners and certain associated holders of
Common Stock rights to require the registration under the
Securities Act of 1933, as amended, of resales of certain shares
of Common Stock held by them. The Registration Rights Agreement
is filed as an exhibit to this Schedule 13D and is incorporated
herein by reference.
TCI Turner Preferred, Inc. ("TCITP"), Liberty
Broadcasting, Inc. ("Liberty"), Communication Capital Corp.
("CCC" and, together with TCITP and Liberty, the "TCITP
Stockholders"), Mr. Turner, Turner Outdoor and Turner Partners
(collectively, the "Turner Stockholders") have entered into a
Stockholders' Agreement, dated October 10, 1996 (the "Right of
First Refusal Agreement"), pursuant to which the TCITP
Stockholders, on the one hand, and the Turner Stockholders, on
the other hand, have granted first to the other group and then to
the Company a right of first refusal with respect to dispositions
of voting securities of the Company beneficially owned by them,
subject, in the case of purchases by the TCITP Stockholders, to
the Agreement Containing Consent Order (including the related
Interim Agreement) dated August 14, 1996 among the Time Warner
Companies Inc., a wholly owned subsidiary of the Company, TBS,
Tele-Communications, Inc. and Liberty Media Corporation. The
Right of First Refusal Agreement is filed as an exhibit to this
Schedule 13D and is incorporated herein by reference.
Subject to the terms of Investors' Agreement (No. 1)
and the Right of First Refusal Agreement, Mr. Turner reserves the
right to sell or otherwise dispose of some or all of the shares
of Common Stock beneficially owned by him in the open market, in
privately negotiated transactions, through derivative
transactions or otherwise, or to acquire additional shares of
Common Stock, in the open market, in privately negotiated
transactions or otherwise, in each case, depending upon market
conditions and other factors.
Mr. Turner currently expects to enter into one or more
transactions that may result in the transfer, either currently or
in the future, of beneficial ownership of approximately 5 million
shares of Common Stock.
Except as set forth herein, and other than in his
capacity as an officer or director of the Company or TBS or
pursuant to the exercise of outstanding options to purchase
shares of Common Stock, Mr. Turner has no present plans or
proposals that relate to or would result in any actions or events
required to be described in Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Mr. Turner beneficially owns 57,862,957 shares of
Common Stock, which represent approximately 11.4% of the shares
of Common Stock outstanding immediately following consummation of
the Merger. This number of shares beneficially owned by Mr.
Turner does not include 3,750,000 shares of Common Stock owned by
the Turner Foundation, Inc. (the "Turner Foundation"), of which
Mr. Turner is a director, as to which shares Mr. Turner disclaims
beneficial ownership, and 375,000 shares of Common Stock owned by
Jane Fonda, Mr. Turner's wife, as to which shares Mr. Turner
disclaims beneficial ownership.
(b) Mr. Turner has sole power to vote or to direct the
vote of 56,269,723 shares of Common Stock, the sole power to
dispose or direct the disposition of 56,269,723 shares of Common
Stock, the shared power to vote or to direct the vote of
1,568,234 shares of Common Stock and the shared power to dispose
or to direct the disposition of 1,568,234 shares of Common Stock.
The numbers set forth in the preceding sentence do not include
3,750,000 shares of Common Stock owned by the Turner Foundation,
as to which shares Mr. Turner disclaims beneficial ownership, and
375,000 shares of Common Stock owned by Jane Fonda, Mr. Turner's
wife, as to which shares Mr. Turner disclaims beneficial
ownership.
(c) At the effective time of the Merger, which
occurred on October 10, 1996, each share of TBS Common Stock
beneficially owned by Mr. Turner as of such date was converted
into 0.75 of a share of Common Stock.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF
THE ISSUER.
In connection with the consummation of the Merger, (a)
the Company, Mr. Turner, Turner Outdoor and Turner Partners
entered into Investors' Agreement (No. 1), (b) the Company, the
Turner Foundation and the R.E. Turner Charitable Remainder
Unitrust No. 2, of which Mr. Turner is a trustee and a
beneficiary, have entered into Investors' Agreement (No. 2),
dated as of October 10, 1996 ("Investors' Agreement (No. 2"),
(c) the Company, Mr. Turner, Turner Outdoor and Turner Partners
entered into the Registration Rights Agreement, and (d) TCITP,
Liberty, CCC, Mr. Turner, Turner Outdoor and Turner Partners
entered into the Right of First Refusal Agreement. Investors'
Agreement (No. 1), Investors' Agreement (No. 2), the Registration
Rights Agreement and the Right of First Refusal Agreement are
filed as exhibits to this Schedule 13D and are incorporated
herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Investors' Agreement (No. 1), dated as of October 10,
1996, among the Company, Mr. Turner, Turner Outdoor,
Inc. and Turner Partners, L.P.
Exhibit 2 Investors' Agreement (No. 2), dated as of October 10,
1996, among the Company, the Turner Foundation, Inc.
and the Robert E. Turner Charitable Remainder Unitrust
No. 2.
Exhibit 3 Registration Rights Agreement, dated as of October 10,
1996, among the Company, Mr. Turner, Turner Outdoor,
Inc. and Turner Partners, L.P.
Exhibit 4 Stockholders Agreement, dated October 10, 1994, by and
among TCI Turner Preferred, Inc., Liberty Broadcasting,
Communication Capital Corp, Mr. Turner, Turner Outdoor,
Inc. and Turner Partners, L.P.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that this statement is true,
complete and correct.
By: /s/ R. E. Turner
__________________________
R.E. Turner
Dated: October 10, 1996
INVESTORS' AGREEMENT (NO. 1) dated as of October
10, 1996, among TW INC. (to be renamed TIME WARNER
INC.), a Delaware corporation ("Holdco"), and the other
parties signatory hereto (each an "Investor").
This Agreement is entered into pursuant to Section 6.02(f) of
the Amended and Restated Agreement and Plan of Merger, dated as of
September 22, 1995 (the "Amended and Restated Merger Agreement"), among
Time Warner Inc., a Delaware corporation ("Parent"), Holdco, Time Warner
Acquisition Corp., a Delaware corporation ("Delaware Sub") and a direct
wholly owned subsidiary of Holdco, TW Acquisition Corp., a Georgia
corporation ("Georgia Sub") and a direct wholly owned subsidiary of Holdco,
and Turner Broadcasting System, Inc., a Georgia corporation (the
"Company"). In connection with the TBS Merger (as defined in the Amended
and Restated Merger Agreement), subject to certain exceptions, (a) each
share of Class A Common Stock, par value $.0625 per share, of the Company
and each share of Class B Common Stock, par value $.0625 per share, of the
Company will be converted into the right to receive 0.75 shares of Common
Stock, par value $0.01 per share, of Holdco ("Holdco Common Stock") and (b)
each share of Class C Convertible Preferred Stock, par value $.125 per
share, of the Company will be converted into the right to receive 4.80
shares of Holdco Common Stock. As a condition to the obligations of Parent,
Holdco, Delaware Sub and Georgia Sub to effect the Mergers (as defined in
the Amended and Restated Merger Agreement), Parent, Holdco, Delaware Sub
and Georgia Sub have required that each initial Investor enter into this
Agreement.
Accordingly, it is hereby agreed as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the
Amended and Restated Merger Agreement. For purposes of this Agreement, the
following terms shall have the following meanings:
"Affiliate" and "Associate", when used with reference to any
person, shall have the respective meanings ascribed to such terms in Rule
12b-2 of the Exchange Act, as in effect on the date of this Agreement.
Neither Holdco nor any of its subsidiaries or controlled Affiliates, on the
one hand, nor the Principal Investor, on the other hand, shall be an
"Affiliate" or an "Associate" of the other. The Turner Foundation, Inc. and
the Robert E. Turner Charitable Foundation Unitrust No. 2 shall be deemed
not to be Affiliate or Associates of any Investor.
A person shall be deemed the "beneficial owner" of, and shall
be deemed to "beneficially own", and shall be deemed to have "beneficial
ownership" of:
(i) any securities that such person or any of such person's
Affiliates or Associates is deemed to "beneficially own" within
the meaning of Rule 13d-3 under the Exchange Act, as in effect on
the date of this Agreement; and
(ii) any securities (the "underlying securities") that such
person or any of such person's Affiliates or Associates has the
right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement or understanding (written or oral), or upon the
exercise of conversion rights, exchange rights, rights, warrants
or options, or otherwise (it being understood that such person
shall also be deemed to be the beneficial owner of the securities
convertible into or exchangeable for the underlying securities).
"Board" shall mean the board of directors of Holdco.
"Charitable Transferee" shall mean any charitable
organization described in Section 501(c)(3) of the Code.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as in effect on the date in question, unless otherwise specifically
provided.
"Investor" shall mean each person that executes this
Agreement in such capacity and each successor, assign and other person that
pursuant to the terms hereof is required to become a party hereto as an
Investor.
"Investors' Agreement (No. 2)" shall mean an Investors'
Agreement (No. 2), substantially in the form of Exhibit C-2 to the Amended
and Restated Merger Agreement.
"permitted transferee" of any natural person shall mean (i)
in the case of the death of such person, such person's executors,
administrators, testamentary trustees, heirs, devisees and legatees and
(ii) such person's current or future spouse, parents, siblings or
descendants or such parents', siblings' or descendants' spouses (the
"Family Members").
"person" shall have the meaning given such term in the
Amended and Restated Merger Agreement.
"Principal Investor" shall mean R.E. Turner.
"Qualified Stockholder" shall mean any Charitable Transferee
or Qualified Trust from time to time bound as an "Investor" under an
Investors' Agreement (No. 2).
"Qualified Trust" shall mean any trust described in Section
664 of the Code of which the Principal Investor or members of his family
are income beneficiaries.
"Voting Power", when used with reference to any class or
series of securities of Holdco, or any classes or series of securities of
Holdco entitled to vote together as a single class or series, shall mean
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, rights, warrants, options or similar
securities held by such person shall be deemed to be outstanding for the
purpose of computing the percentage of outstanding securities of the class
or series (or classes or series) beneficially owned by such person, but
shall not be deemed to be outstanding for the purpose of computing the
percentage of the class or series (or classes or series) beneficially owned
by any other person.
"Voting Securities", when used with reference to any person,
shall mean any securities of such person having Voting Power or any
securities convertible into or exchangeable for any securities having
Voting Power.
ARTICLE II
Securities Act; Legend
SECTION 2.01. Transfers of Holdco Common Stock. None of the
Investors may offer for sale or sell any shares of Holdco Common Stock
acquired pursuant to the Amended and Restated Merger Agreement, or any
interest therein, except (a) pursuant to a registration of such shares
under the Securities Act and applicable state securities laws or (b) in a
transaction as to which such Investor has delivered an opinion of counsel
or other evidence reasonably satisfactory to Holdco, to the effect that
such transaction is exempt from, or not subject to, the registration
requirements of, the Securities Act and applicable state securities laws.
SECTION 2.02. Legends on Certificates. Each Investor shall
hold in certificate form all shares of Holdco Common Stock owned by such
Investor. Each certificate for shares of Holdco Common Stock issued to or
beneficially owned by a person that is subject to the provisions of this
Agreement shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
INVESTORS' AGREEMENT (NO. 1) DATED AS OF OCTOBER 10, 1996 (THE
"INVESTORS' AGREEMENT"), AMONG THE CORPORATION, THE ORIGINAL
HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND
CERTAIN OTHER STOCKHOLDERS OF THE CORPORATION. A COPY OF THE
INVESTORS' 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
INVESTORS' AGREEMENT.
ARTICLE III
Covenants of the Parties
SECTION 3.01. Standstill. None of the Investors may (and each
Investor shall cause its Affiliates and Associates that it controls, and
use reasonable efforts to cause its other Affiliates and Associates, not
to), without the prior written consent of the Board:
(a) publicly propose that any Investor or Qualified
Stockholder or any Affiliate or Associate of any Investor or
Qualified Stockholder enter into, directly or indirectly, any
merger or other business combination involving Holdco or propose
to purchase, directly or indirectly, a material portion of the
assets of Holdco or any material subsidiary of Holdco, or make
any such proposal privately if it would reasonably be expected to
require Holdco to make a public announcement regarding such
proposal;
(b) make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are
used in Regulation 14A promulgated under the Exchange Act) to
vote or consent with respect to any Voting Securities of Holdco
or become a "participant" in any "election contest" (as such
terms are defined or used in Rule 14a-11 under the Exchange Act)
with respect to Holdco;
(c) form, join or participate in or encourage the formation
of a "group" (within the meaning of Section 13(d)(3) of the
Exchange Act) with respect to any Voting Securities of Holdco,
other than a group consisting solely of Investors and Qualified
Stockholders;
(d) deposit any Voting Securities of Holdco into a voting
trust or subject any such Voting Securities to any arrangement or
agreement with respect to the voting thereof, other than any such
trust, arrangement or agreement (i) the only parties to, or
beneficiaries of, which are Investors and Qualified Stockholders
and (ii) the terms of which do not require or expressly permit
any party thereto to act in a manner inconsistent with this
Agreement;
(e) initiate, propose or otherwise solicit stockholders of
Holdco for the approval of one or more stockholder proposals with
respect to Holdco as described in Rule 14a-8 under the Exchange
Act, or induce or attempt to induce any other person to initiate
any stockholder proposal with respect to Holdco;
(f) except in accordance with Section 3.04, seek election
to or seek to place a representative on the Board or seek the
removal of any member of the Board;
(g) call or seek to have called any meeting of the
stockholders of Holdco;
(h)(A) solicit, seek to effect, negotiate with or provide
non-public information to any other person with respect to, (B)
make any statement or proposal, whether written or oral, to the
Board or any director or officer of Holdco with respect to, or
(C) otherwise make any public announcement or proposal whatsoever
with respect to any form of business combination transaction
(with any person) involving a change of control of Holdco or the
acquisition of a substantial portion of the equity securities or
assets of Holdco or any material subsidiary of Holdco, including
a merger, consolidation, tender offer, exchange offer or
liquidation of Holdco's assets, or any restructuring,
recapitalization or similar transaction with respect to Holdco or
any material subsidiary of Holdco; provided, however, that the
foregoing shall not (x) apply to any discussion between or among
the Investors and the Qualified Stockholders or any of their
respective officers, employees, agents or representatives or (y)
in the case of clause (B) above, be interpreted to limit the
ability of any Investor or Qualified Stockholder, or any designee
of any Investor or Qualified Stockholder, on the Board to make
any such statement or proposal or to discuss any such proposal
with any officer or director of or advisor to Holdco or advisor
to the Board unless, in either case, it would reasonably be
expected to require Holdco to make a public announcement
regarding such discussion, statement or proposal;
(i) otherwise act, alone or in concert with others, to seek
to control or influence the management or policies of Holdco
(except for (A) voting as a holder of Voting Securities in
accordance with the terms of such Voting Securities and (B)
actions taken as a director or officer of Holdco);
(j) publicly disclose any intention, plan or arrangement
inconsistent with the foregoing, or make any such disclosure
privately if it would reasonably be expected to require Holdco to
make a public announcement regarding such intention, plan or
arrangement; or
(k) advise, assist (including by knowingly providing or
arranging financing for that purpose) or knowingly encourage any
other person in connection with any of the foregoing.
SECTION 3.02. Transfer Restrictions. None of the Investors
may, without the prior written consent of Holdco, sell, transfer, pledge,
encumber or otherwise dispose of, or agree to sell, transfer, pledge,
encumber or otherwise dispose of, any Voting Securities of Holdco, or any
rights or options to acquire such Voting Securities, except in a
transaction complying with any of the following clauses:
(a) to the underwriters in connection with an underwritten
public offering of shares of such securities on a firm commitment
basis registered under the Securities Act, pursuant to which the
sale of such securities is in a manner that is intended to effect
a broad distribution;
(b) to any wholly owned subsidiary of such Investor or any
partnership of which such Investor is the sole general partner;
provided, however, that such transferee becomes a party to this
Agreement as an Investor;
(c) to any person in a transaction that complies with the
volume and manner of sale provisions contained in Rule 144(e) and
Rule 144(f) as in effect on the date hereof under the Securities
Act (whether or not Rule 144 is in effect on the date of such
transaction); provided, however, that dispositions pursuant to
this clause (c) may not be made during any period that a person
has made and not withdrawn or terminated a tender or exchange
offer for Voting Securities of Holdco or announced its intention
to make such an offer;
(d) to any person (including any pledgee of shares of
Voting Securities), other than a person that such Investor, or
any of its Affiliates or Associates, knows or, after commercially
reasonable inquiry should have known, beneficially owns or, after
giving effect to such sale, will beneficially own more than 5% of
the aggregate Voting Power of the Voting Securities of Holdco;
(e) in the case of a natural person, to any permitted
transferee of such person; provided, however, that such
transferee becomes a party to this Agreement as an Investor;
(f) in a bona fide pledge of shares of Voting Securities of
Holdco to a financial institution to secure borrowings as
permitted by applicable laws, rules and regulations; provided,
however, that (i) such financial institution agrees to be bound
by this Section 3.02 and (ii) the borrowings so secured are full
recourse obligations of the pledgor and are entered into
substantially simultaneously with such pledge;
(g) upon five Business Days' prior notice to Holdco,
pursuant to the terms of any tender or exchange offer for Voting
Securities of Holdco made pursuant to the applicable provisions
of the Exchange Act or pursuant to any merger or consolidation of
Holdco (but in the case of any tender or exchange offer, only so
long as each Investor and Qualified Stockholder is at the time in
substantial compliance with the provisions of Sections 3.01 and
3.05(c), whether or not bound by such provisions, and such tender
or exchange offer is not materially related to any past
noncompliance with such provisions by any Investor or Qualified
Stockholder (whether or not bound by such provisions));
(h) a gift to a Charitable Transferee or Qualified Trust;
provided, however, that (i) at the time of such gift, the
Principal Investor and his Family Members constitute a sufficient
number of the directors or trustees, as appropriate, of such
Charitable Transferee or Qualified Trust to permit approval of
matters by such Charitable Transferee or Qualified Trust without
the approval of any other director or trustee of such Charitable
Transferee or Qualified Trust and (ii) such Charitable Transferee
or Qualified Trust is or simultaneously becomes a Qualified
Stockholder (and Holdco agrees upon request to enter into an
Investors' Agreement (No. 2) with such Charitable Transferee or
Qualified Trust);
(i) to TCI Turner Preferred, Inc. ("TCITP") or its designee
in accordance with the Stockholders' Agreement dated as of the
same date as this Agreement among TCITP, Holdco and certain
stockholders of Holdco; or
(j) to Holdco.
SECTION 3.03. Additional Agreements. None of the Investors
may (and each Investor shall cause its Affiliates and Associates that it
controls, and use reasonable efforts to cause its other Affiliates and
Associates, not to) (a) publicly request Holdco or any of its agents,
directly or indirectly, to amend or waive any provision of this Agreement
or (b) knowingly take any action that would reasonably be expected to
require Holdco to make a public announcement regarding the possibility of a
transaction with such Investor.
SECTION 3.04. Board Representation. (a) Upon execution of
this Agreement, Holdco shall use reasonable efforts to cause to be elected
to the Board two persons designated by the Principal Investor who are
Eligible Persons. "Eligible Person" means (i) the Principal Investor and
(ii) any other individual (A) who is reasonably acceptable to the Board,
(B) whose election to the Board would not, in the opinion of counsel for
Holdco, violate or be in conflict with, or result in any material
limitation on the ownership or operation of any business or assets of
Holdco or any of its subsidiaries under, any statute, law, ordinance,
regulation, rule, judgment, decree or order of any Governmental Entity and
(C) who has agreed in writing with Holdco to comply with Section 3.01 and
to resign as a director of Holdco if requested to do so pursuant to this
Section 3.04. With respect to each meeting of stockholders of Holdco at
which any designee of the Principal Investor on the Board comes up for
reelection, Holdco shall use reasonable efforts to cause such designee (or
another Eligible Person designated by the Principal Investor) to be
included in the list of candidates recommended by the Board for election to
the Board. Upon the death, resignation or removal of any designee of the
Principal Investor on the Board, Holdco shall use reasonable efforts to
have the vacancy thereby created filled with an Eligible Person designated
by the Principal Investor.
(b) Upon the Investors and (subject to Section 3.06) the
Qualified Stockholders, taken together, ceasing to own of record and
beneficially at least 50% of the Voting Securities of Holdco owned by the
Investors and the Qualified Stockholders, taken together, immediately
following the Mergers (appropriately adjusted for stock dividends, stock
splits, reverse stock splits and similar transactions), the number of
persons that the Principal Investor shall be entitled to designate for
election to the Board shall be reduced to one. If at such time there are
two designees of the Principal Investor on the Board, the Principal
Investor shall specify which of such designees shall continue to be
entitled to the benefits of Section 3.04(a), and the other designee shall
thereafter cease to constitute a designee of the Principal Investor for the
purposes of Section 3.04(a) (and, if requested by Holdco, such other
designee shall resign from the Board).
(c) Upon (i) (A) the Investors and (subject to Section 3.06)
the Qualified Stockholders, taken together, ceasing to own of record and
beneficially at least one-third of the Voting Securities of Holdco owned by
the Investors and the Qualified Stockholders, taken together, immediately
following the Mergers (appropriately adjusted for stock dividends, stock
splits, reverse stock splits and similar transactions) and (B) the
Principal Investor ceasing to be an employee of Holdco or any subsidiary of
Holdco, (ii) the death or incapacity of the Principal Investor, (iii) the
wilful violation in any material respect of this Article by any Investor or
(iv) five business days' prior written notice of termination from the
Principal Investor, the number of persons that the Principal Investor shall
be entitled to designate for election to the Board shall be reduced to
zero. At such time, if requested by Holdco, each designee of the Principal
Investor shall resign from the Board.
(d) The right of the Principal Investor to membership on the
Board, as set forth in his employment agreement with Holdco to be entered
into at the Effective Time of the Mergers, is not in addition to his rights
under this Section 3.04.
(e) For the purposes of the calculations required by the
first sentence of Section 3.04(b) and by Section 3.04(c)(i)(A), any Exempt
Stock (as defined below) shall be excluded from the calculation of each of
(i) the Voting Securities of Holdco owned of record and beneficially by the
Qualified Stockholders on the date of such calculation and (ii) the Voting
Securities of Holdco owned by the Qualified Stockholders immediately
following the Mergers. "Exempt Stock" shall mean (A) any Holdco Common
Stock acquired by any Qualified Stockholder pursuant to the TBS Merger in
exchange for Company Capital Stock owned by such Qualified Stockholder on
September 22, 1995, and (B) any Holdco Common Stock acquired after the
Effective Time of the Mergers by any Qualified Stockholder other than
pursuant to Section 3.02(h).
SECTION 3.05. Additional Covenants. (a) None of the Investors
shall permit any other Investor that is at any time after the date hereof a
wholly owned subsidiary of such Investor to cease to be a wholly owned
subsidiary of such Investor for so long as such other Investor owns any
Voting Securities of Holdco.
(b) None of the Investors shall permit any of its
subsidiaries, other than any such subsidiaries that are Investors, to hold,
directly or indirectly, any shares of Voting Securities of Holdco.
(c) Each Investor shall use reasonable efforts to cause
each of its officers, employees, agents and representatives not to take any
action that would be prohibited under Section 3.01 if taken by such
Investor.
SECTION 3.06. Certain Special Provisions. If at any time the
Principal Investor and his Family Members cease to constitute a sufficient
number of the directors or trustees, as applicable, of any Qualified
Stockholder to permit approval of matters by such Qualified Stockholder
without the approval of any other director or trustee of such Qualified
Stockholder, the Voting Securities of Holdco held by such Qualified
Stockholder shall thereafter be deemed not to be owned of record and
beneficially by such Qualified Stockholder (or any Investor) for the
purposes of Sections 3.04(b) and 3.04(c). The Principal Investor shall be
liable to Holdco under this Agreement for any actions taken by any
Qualified Stockholder that would have been violations of Section 3.01, 3.03
or 3.05(c) had such Qualified Stockholder been bound by such Sections.
ARTICLE IV
Miscellaneous
SECTION 4.01. Termination. (a) The covenants and agreements
of the Investors in Sections 3.01, 3.03 and 3.05(c) shall terminate, except
with respect to liability for prior breaches thereof, upon the last to
occur of (i) the Principal Investor ceasing to be an employee of Holdco or
any subsidiary of Holdco, (ii) the Principal Investor ceasing to be a
member of the Board, and (iii) the Principal Investor ceasing pursuant to
Section 3.04(c) to be entitled to designate any Eligible Persons for
election to the Board.
(b) The covenants and agreements of the Investors in Section
3.02 shall terminate, except with respect to liability for prior breaches
thereof, on the fifth anniversary of the Effective Time of the Mergers.
(c) The covenants and agreements of Holdco in Section 3.04
shall terminate, except with respect to liability for prior breaches
thereof, upon the Principal Investor ceasing pursuant to Section 3.04(c) to
be entitled to designate any Eligible Persons for election to the Board.
(d) Without limiting Sections 4.01(a) and 4.01(b), the
covenants and agreements of the Investors in Article III shall terminate,
except with respect to liability for prior breaches thereof, if the Board
does not (i) on the date of execution of this Agreement, elect to the Board
the two Eligible Persons designated by the Principal Investor, (ii)
recommend for election by the stockholders of Holdco to the Board any
Eligible Person designated by the Principal Investor in accordance with
Section 3.04 or (iii) reasonably promptly after request from the Principal
Investor, fill any vacancy created on the Board upon the death, resignation
or removal of any designee of the Principal Investor on the Board with
another Eligible Person designated by the Principal Investor, in each case
if the effect of such failure is that the Principal Investor does not have
the representation on the Board to which he is entitled under Section 3.04.
(e) The other covenants and agreements set forth in this
Agreement shall terminate, except with respect to liability for prior
breaches thereof, upon the later of (i) the termination of Section 3.01
pursuant to Section 4.01(a) or 4.01(d) and (ii) the termination of Section
3.02 pursuant to Section 4.01(b) or 4.01(d).
SECTION 4.02. Entire Agreement; Assignment. This Agreement
(i) constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof and (ii) except as provided in Section 3.02,
shall not be assigned by operation of law or otherwise without the prior
written consent of the other parties. Any person who agrees pursuant to
Section 3.02 to 6 become a party to this Agreement as an Investor shall
thereupon become, and have all the rights and obligations of, an Investor
hereunder. Any attempted assignment or transfer in violation of this
Section 4.02 shall be void and of no effect. Subject to the foregoing, the
provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective estates, heirs, successors and
assigns.
SECTION 4.03. Amendments; Waivers. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. The waiver
by any party of a breach of any provision of this Agreement shall not
operate, or be construed, as a waiver of any subsequent breach thereof.
SECTION 4.04. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be deemed
given (i) on the first Business Day following the date received, if
delivered personally or by telecopy (with telephonic confirmation of
receipt by the addressee), (ii) on the Business Day following timely
deposit with an overnight courier service, if sent by overnight courier
specifying next day delivery and (iii) on the first Business Day that is at
least five days following deposit in the mails, if sent by first class
mail, to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to any Investor, to:
R.E. Turner
In care of Turner Broadcasting System,
Inc.
One CNN Center
Box 105366
Atlanta, GA 30348-5366
Facsimile: (404) 827-3000
For Courier delivery:
One CNN Center
Atlanta, GA 30303
Attention: General Counsel
If to Holdco, to:
Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
Facsimile: (212) 956-7281
Attention: General Counsel
with a copy (which shall not constitute
notice) to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Facsimile: (212) 474-3700
Attention: Peter S. Wilson, Esq.
SECTION 4.05. Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of
Delaware.
SECTION 4.06. Specific Performance. Each party recognizes and
acknowledges that a breach by it of Article III would cause the other
parties to sustain damages for which they would not have an adequate remedy
at law for money damages, and therefore each party agrees that in the event
of any such breach any of the other parties shall be entitled to seek the
remedy of specific performance of such Article III and injunctive and other
equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
SECTION 4.07. Counterparts; Effectiveness. This Agreement may
be executed in two or more counterparts, all of which shall be considered
one and the same agreement, and shall become effective when two or more
counterparts have been signed by each of the parties and delivered to the
other parties.
SECTION 4.08. Descriptive Headings. The descriptive headings
used herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.
SECTION 4.09. Severability. Whenever possible, each provision
or portion of any provision of this Agreement shall be interpreted in such
manner as to be effective but if any provision or portion of any provision
of this Agreement is held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect
any other provision or portion of any provision, and this Agreement will be
reformed, construed and enforced as if such invalid, illegal or
unenforceable provision or portion of any provision had never been
contained herein. The parties shall endeavor in good faith negotiations to
replace any invalid, illegal or unenforceable provision with a valid
provision the effects of which come as close as possible to those of such
invalid, illegal or unenforceable provision.
SECTION 4.10. Attorneys' Fees. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees, costs
and necessary disbursements, in addition to any other relief to which such
party may be entitled.
IN WITNESS WHEREOF, Holdco and each Investor have caused this
Agreement to be duly executed as of the day and year first above written.
TW INC.,
by /s/ Thomas W. McEnerney
____________________________
Name: Thomas W. McEnerney
Title: Vice President
/s/ R. E. Turner
______________________________
R. E. Turner
TURNER OUTDOOR, INC.,
by /s/ R. E. Turner
____________________________
Name: R. E. Turner
Title: President
TURNER PARTNERS, L.P.,
by /s/ R. E. Turner
___________________________
Name: R. E. Turner
Title: General Partner
INVESTORS' AGREEMENT (NO. 2) dated as of October
10, 1996, among TW INC. (to be renamed TIME WARNER
INC.), a Delaware corporation ("Holdco"), and the other
parties signatory hereto (each an "Investor").
This Agreement is entered into pursuant to Section 6.02(f) of the
Amended and Restated Agreement and Plan of Merger (the "Amended and
Restated Merger A Agreement"), among Time Warner Inc., a Delaware
corporation ("Parent"), Holdco, Time Warner Acquisition Corp., a Delaware
corporation and a direct wholly owned subsidiary of Holdco, TW Acquisition
Corp., a Georgia corporation and a direct wholly owned subsidiary of
Holdco, and Turner Broadcasting System, Inc., a Georgia corporation (the
"Company"). In connection with the TBS Merger (as defined in the Amended
and Restated Merger Agreement), subject to certain exceptions, (a) each
share of Class A Common Stock, par value $.0625 per share, of the Company
and each share of Class B Common Stock, par value $.0625 per share, of the
Company will be converted into the right to receive 0.75 shares of Common
Stock, par value $0.01 per share, of Holdco ("Holdco Common Stock") and (b)
each share of Class C Convertible Preferred Stock, par value $.125 per
share, of the Company will be converted into the right to receive 4.80
shares of Holdco Common Stock.
Accordingly, it is hereby agreed as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Amended and
Restated Merger Agreement. For purposes of this Agreement, the following
terms shall have the following meanings:
"Affiliate" and "Associate", when used with reference to any
person, shall have the respective meanings ascribed to such terms in Rule
12b-2 of the Exchange Act, as in effect on the date of this Agreement.
A person shall be deemed the "beneficial owner" of, and shall be
deemed to "beneficially own", and shall be deemed to have "beneficial
ownership" of:
(i) any securities that such person or any of such
person's Affiliates or Associates is deemed to "beneficially own"
within the meaning of Rule 13d-3 under the Exchange Act, as in
effect on the date of this Agreement; and
(ii) any securities (the "underlying securities") that
such person or any of such person's Affiliates or Associates has
the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (written or oral), or
upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise (it being understood that such
person shall also be deemed to be the beneficial owner of the
securities convertible into or exchangeable for the underlying
securities).
"Covered Holdco Common Stock" shall mean (i) any shares of Holdco
Common Stock transferred to an Investor pursuant to Section 3.02(h) of the
Investors' Agreement (No. 1) dated as of October 10, 1996, among Holdco and
certain stockholders of Holdco and (ii) any shares of Holdco Common Stock
acquired by any Investor pursuant to the TBS Merger otherwise than in
exchange for Company Common Stock owned by such Investor on September 22,
1995.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
in effect on the date in question, unless otherwise specifically provided.
"Investor" shall mean each person that executes this Agreement in
such capacity.
"person" shall have the meaning given such term in the Amended and
Restated Merger Agreement.
"Voting Power", when used with reference to any class or series of
securities of Holdco, or any classes or series of securities of Holdco
entitled to vote together as a single class or series, shall mean 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, rights, warrants, options or similar securities
held by such person shall be deemed to be outstanding for the purpose of
computing the percentage of outstanding securities of the class or series
(or classes or series) beneficially owned by such person, but shall not be
deemed to be outstanding for the purpose of computing the percentage of the
class or series (or classes or series) beneficially owned by any other
person.
"Voting Securities", when used with reference to any person, shall
mean any securities of such person having Voting Power or any securities
convertible into or exchangeable for any securities having Voting Power.
ARTICLE II
Securities Act; Legend
SECTION 2.01. Transfers of Holdco Common Stock. None of the
Investors may offer for sale or sell any shares of Holdco Common Stock
acquired pursuant to the Amended and Restated Merger Agreement, or any
interest therein, except (a) pursuant to a registration of such shares
under the Securities Act and applicable state securities laws or (b) in a
transaction as to which such Investor has delivered an opinion of counsel
or other evidence reasonably satisfactory to Holdco, to the effect that
such transaction is exempt from, or not subject to, the registration
requirements of, the Securities Act and applicable state securities laws.
SECTION 2.02. Legends on Certificates. Each Investor shall hold in
certificate form all shares of Covered Holdco Common Stock owned by such
Investor. Each certificate for shares of Covered Holdco Common Stock issued
to or beneficially owned by a person that is subject to the provisions of
this Agreement shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
INVESTORS' AGREEMENT (NO. 2) DATED AS OF OCTOBER 10, 1996 (THE
"INVESTORS' AGREEMENT"), BETWEEN THE CORPORATION AND THE HOLDER OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE. A COPY OF THE
INVESTORS' 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
INVESTORS' AGREEMENT.
ARTICLE III
Covenants of the Investors
SECTION 3.01. Transfer Restrictions. None of the Investors may,
without the prior written consent of Holdco, sell, transfer, pledge,
encumber or otherwise dispose of, or agree to sell, transfer, pledge,
encumber or otherwise dispose of, any Covered Holdco Common Stock, or any
rights or options to acquire Covered Holdco Common Stock, except in a
transaction complying with any of the following clauses:
(a) to the underwriters in connection with an
underwritten public offering of shares of such securities on a
firm commitment basis registered under the Securities Act,
pursuant to which the sale of such securities is in a manner that
is intended to effect a broad distribution;
(b) to any person in a transaction that complies with the
volume and manner of sale provisions contained in Rule 144(e) and
Rule 144(f) as in effect on the date hereof under the Securities
Act (whether or not Rule 144 is in effect on the date of such
transaction); provided, however, that dispositions pursuant to
this clause (b) may not be made during any period that a person
has made and not withdrawn or terminated a tender or exchange
offer for Voting Securities of Holdco or announced its intention
to make such an offer;
(c) to any person (including any pledgee of Covered
Holdco Common Stock), other than a person that such Investor, or
any of its Affiliates, Associates, directors or trustees, knows
or, after commercially reasonable inquiry should have known,
beneficially owns or, after giving effect to such sale, will
beneficially own more than 5% of the aggregate Voting Power of
the Voting Securities of Holdco;
(d) in a bona fide pledge of shares of Covered Holdco
Common Stock to a financial institution to secure borrowings as
permitted by applicable laws, rules and regulations; provided,
however, that (i) such financial institution agrees to be bound
by this Section 3.01 and (ii) the borrowings so secured are full
recourse obligations of the pledgor and are entered into
substantially simultaneously with such pledge;
(e) upon five Business Days' prior notice to Holdco,
pursuant to the terms of any tender or exchange offer for Covered
Holdco Common Stock made pursuant to the applicable provisions of
the Exchange Act or pursuant to any merger or consolidation of
Holdco;
(f) to TCI Turner Preferred, Inc. ("TCITP") or its
designee in accordance with the Stockholders' Agreement dated as
of October 10, 1996, among TCITP, Holdco and certain stockholders
of Holdco; or
(g) to Holdco.
ARTICLE IV
Miscellaneous
SECTION 4.01. Termination. The covenants and agreements of the
Investors in Section 3.01 shall terminate, except with respect to liability
for prior breaches thereof, on the earlier of (a) the fifth anniversary of
the Effective Time of the Mergers and (b) the date on which the covenants
and agreements contained in Section 3.02 of the Investors' Agreement (No.
1) dated as of October 10, 1996, among Holdco and certain of its other
stockholders, have been terminated.
SECTION 4.02. Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof and (ii) shall not be assigned by operation of
law or otherwise without the prior written consent of the other parties.
Any attempted assignment or transfer in violation of this Section 4.02
shall be void and of no effect. Subject to the foregoing, the provisions of
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
SECTION 4.03. Amendments; Waivers. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. The waiver
by any party of a breach of any provision of this Agreement shall not
operate, or be construed, as a waiver of any subsequent breach thereof.
SECTION 4.04. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed
given (i) on the first Business Day following the date received, if
delivered personally or by telecopy (with telephonic confirmation of
receipt by the addressee), (ii) on the Business Day following timely
deposit with an overnight courier service, if sent by overnight courier
specifying next day delivery and (iii) on the first Business Day that is at
least five days following deposit in the mails, if sent by first class
mail, to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to any Investor, to:
R.E. Turner
In care of Turner Broadcasting System, Inc.
One CNN Center
Box 105366
Atlanta, GA 30348-5366
Facsimile: (404) 827-3000
For Courier delivery:
One CNN Center
Atlanta, GA 30303
Attention: General Counsel
If to Holdco, to:
Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
Facsimile: (212) 956-7281
Attention: General Counsel
with a copy (which shall not constitute notice)
to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Facsimile: (212) 474-3700
Attention: Peter S. Wilson, Esq.
SECTION 4.05. Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of
Delaware.
SECTION 4.06. Specific Performance. Each party recognizes and
acknowledges that a breach by it of Article III would cause the other
parties to sustain damages for which they would not have an adequate remedy
at law for money damages, and therefore each party agrees that in the event
of any such breach any of the other parties shall be entitled to seek the
remedy of specific performance of such Article III and injunctive and other
equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
SECTION 4.07. Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, all of which shall be considered one
and the same agreement, and shall become effective when two or more
counterparts have been signed by each of the parties and delivered to the
other parties.
SECTION 4.08. Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement.
SECTION 4.09. Severability. Whenever possible, each provision or
portion of any provision of this Agreement shall be interpreted in such
manner as to be effective but if any provision or portion of any provision
of this Agreement is held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect
any other provision or portion of any provision, and this Agreement will be
reformed, construed and enforced as if such invalid, illegal or
unenforceable provision or portion of any provision had never been
contained herein. The parties shall endeavor in good faith negotiations to
replace any invalid, illegal or unenforceable provision with a valid
provision the effects of which come as close as possible to those of such
invalid, illegal or unenforceable provision.
SECTION 4.10. Attorneys' Fees. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements, in addition to any other relief to which such
party may be entitled.
IN WITNESS WHEREOF, Holdco and each Investor have caused this
Agreement to be duly executed as of the day and year first above written.
TW INC.,
by /s/ Thomas W. McEnerney
___________________________
Name: Thomas W. McEnerney
Title: Vice President
INITIAL INVESTORS:
TURNER FOUNDATION, INC.,
by /s/ R. E. Turner
__________________________
Name: R. E. Turner
Title: President
ROBERT E. TURNER CHARITABLE
REMAINDER UNITRUST NO. 2,
by /s/ R. E. Turner
_________________________
Name: R. E. Turner
Title: Trustee
REGISTRATION RIGHTS AGREEMENT, dated as of October
10, 1996, among TW INC. (to be renamed TIME WARNER
INC.), a Delaware corporation (the "Company"), and the
Holders (as defined below).
WHEREAS, in connection with the Amended and Restated
Agreement and Plan of Merger, dated as of September 22, 1995 (the "Amended
and Restated Merger Agreement"), among Time Warner Inc., a Delaware
corporation ("Parent"), the Company, Time Warner Acquisition Corp., a
Delaware corporation and a direct wholly owned subsidiary of the Company,
TW Acquisition Corp., a Georgia corporation and a direct wholly owned
subsidiary of the Company, and Turner Broadcasting System, Inc., a Georgia
corporation, each initial Holder will receive shares of Common Stock (as
defined below); and
WHEREAS, in order to induce the initial Holders to execute
and deliver to the Company the letters contemplated by Section 5.11 of the
Amended and Restated Merger Agreement, the Company has agreed to provide
each Holder with the registration rights set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:
SECTION 1. Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 5
hereof.
"Affiliate" means, with respect to any specified person, any
other person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person. For the
purposes of this definition, "control" when used with respect to any
specified person means the power to direct the management and policies of
such person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Amended and Restated Merger Agreement" shall have the
meaning set forth in the introductory clauses hereof.
"Business Day" means any day that is not a Saturday, a Sunday
or a legal holiday on which banking institutions in the State of New York
are not required to be open.
"Capital Stock" means, with respect to any person, any and
all shares, interests, participations or other equivalents (however
designated) of corporate stock issued by such person, including each class
of common stock and preferred stock of such person.
"Common Stock" means the Common Stock, par value $0.01 per
share, of the Company issued to any Holder named on the signature pages
hereof or any other shares of capital stock or other securities of the
Company into which such shares of Common Stock shall be reclassified or
changed, including, by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed,
or if the Company pays a dividend or makes a distribution on the Common
Stock in shares of capital stock, or subdivides (or combines) its
outstanding shares of Common Stock into a greater (or smaller) number of
shares of Common Stock, a share of Common Stock shall be deemed to be such
number of shares of stock and amount of other securities to which a holder
of a share of Common Stock outstanding immediately prior to such change,
reclassification, exchange, dividend, distribution, subdivision or
combination would be entitled.
"Company" shall have the meaning set forth in the
introductory clauses hereof.
"Delay Period" shall have the meaning set forth in Section
2(d) hereof.
"Demand Notice" shall have the meaning set forth in Section
2(a) hereof.
"Demand Registration" shall have the meaning set forth in
Section 2(b) hereof.
"Effectiveness Period" shall have the meaning set forth in
Section 2(d) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Hold Back Period" shall have the meaning set forth in
Section 4 hereof.
"Holder" means a person who owns Registrable Shares and is
either (i) named on the signature pages hereof as a Holder, or (ii) a
person who has agreed to be bound by the terms of this Agreement as if such
person were a Holder and is (A) a person to whom a Holder has transferred
Registrable Shares pursuant to Rule "4(1-1/2)" (or any similar private
transfer exemption), (B) upon the death of any Holder, the executor of the
estate of such Holder or any of such Holder's heirs, devisees, legatees or
assigns or (C) upon the disability of any Holder, any guardian or
conservator of such Holder.
"Interruption Period" shall have the meaning set forth in
Section 5 hereof.
"person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Piggyback Registration" shall have the meaning set forth in
Section 3 hereof.
"Prospectus" means the prospectus included in any
Registration Statement (including a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Shares covered by such
Registration Statement and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
prospectus.
"Registrable Shares" means shares of Common Stock unless (i)
they have been effectively registered under Section 5 of the Securities Act
and disposed of pursuant to an effective Registration Statement, (ii) such
securities can be freely sold and transferred without restriction under
Rule 145 or any other restrictions under the Securities Act or (iii) such
securities have been transferred pursuant to Rule 144 under the Securities
Act or any successor rule such that, after any such transfer referred to in
this clause (iii), such securities may be freely transferred without
restriction under the Securities Act.
"Registration" means registration under the Securities Act of
an offering of Registrable Shares pursuant to a Demand Registration or a
Piggyback Registration.
"Registration Period" shall have the meaning set forth in
Section 2(a) hereof.
"Registration Statement" means any registration statement
under the Securities Act of the Company that covers any of the Registrable
Shares pursuant to the provisions of this Agreement, including the related
Prospectus, all amendments and supplements to such registration statement,
including pre-and post-effective amendments, all exhibits thereto and all
material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Shelf Registration" shall have the meaning set forth in
Section 2(b) hereof.
"underwritten registration or underwritten offering" means a
registration under the Securities Act in which securities of the Company
are sold to an underwriter for reoffering to the public.
SECTION 2. Demand Registration. (a) The Holders shall have
the right, during the period (the "Registration Period") commencing on the
date of this Agreement and ending on the third anniversary of the date of
this Agreement, by written notice (the "Demand Notice") given to the
Company, to request the Company to register under and in accordance with
the provisions of the Securities Act all or any portion of the Registrable
Shares designated by such Holders; provided, however, that the aggregate
number of Registrable Shares requested to be registered pursuant to any
Demand Notice and pursuant to any related Demand Notices received pursuant
to the following sentence shall be at least 5,000,000. Upon receipt of any
such Demand Notice, the Company shall promptly notify all other Holders of
the receipt of such Demand Notice and allow them the opportunity to include
Registrable Shares held by them in the proposed registration by submitting
their own Demand Notice. In connection with any Demand Registration in
which more than one Holder participates, in the event that such Demand
Registration involves an underwritten offering and the managing underwriter
or underwriters participating in such offering advise in writing the
Holders of Registrable Shares to be included in such offering that the
total number of Registrable Shares to be included in such offering exceeds
the amount that can be sold in (or during the time of) such offering
without delaying or jeopardizing the success of such offering (including
the price per share of the Registrable Shares to be sold), then the amount
of Registrable Shares to be offered for the account of such Holders shall
be reduced pro rata on the basis of the number of Registrable Shares to be
registered by each such Holder. The Holders as a group shall be entitled to
three Demand Registrations pursuant to this Section 2 unless any Demand
Registration does not become effective or is not maintained for a period
(whether or not continuous) of at least 120 days (or such shorter period as
shall terminate when all the Registrable Shares covered by such Demand
Registration have been sold pursuant thereto), in which case the Holders
will be entitled to an additional Demand Registration pursuant hereto.
(b) The Company, within 45 days of the date on which the
Company receives a Demand Notice given by Holders in accordance with
Section 2(a) hereof, shall file with the SEC, and the Company shall
thereafter use its best efforts to cause to be declared effective, a
Registration Statement on the appropriate form for the registration and
sale, in accordance with the intended method or methods of distribution, of
the total number of Registrable Shares specified by the Holders in such
Demand Notice, which may include a "shelf" registration (a "Shelf
Registration") pursuant to Rule 415 under the Securities Act (a "Demand
Registration").
(c) The Company shall use commercially reasonable efforts to
keep each Registration Statement filed pursuant to this Section 2
continuously effective and usable for the resale of the Registrable Shares
covered thereby (i) in the case of a Registration that is not a Shelf
Registration, for a period of 120 days from the date on which the SEC
declares such Registration Statement effective and (ii) in the case of a
Shelf Registration, for a period of 180 days from the date on which the SEC
declares such Registration Statement effective, in either case (x) until
all the Registrable Shares covered by such Registration Statement have been
sold pursuant to such Registration Statement), and (y) as such period may
be extended pursuant to this Section 2.
(d) The Company shall be entitled to postpone the filing of
any Registration Statement otherwise required to be prepared and filed by
the Company pursuant to this Section 2, or suspend the use of any effective
Registration Statement under this Section 2, for a reasonable period of
time, but not in excess of 90 days (a "Delay Period"), if any executive
officer of the Company determines that in such executive officer's
reasonable judgment and good faith the registration and distribution of the
Registrable Shares covered or to be covered by such Registration Statement
would materially interfere with any pending material financing, acquisition
or corporate reorganization or other material corporate development
involving the Company or any of its subsidiaries or would require premature
disclosure thereof and promptly gives the Holders written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the period of the anticipated delay;
provided, however, that (i) the aggregate number of days included in all
Delay Periods during any consecutive 12 months shall not exceed the
aggregate of (x) 180 days minus (y) the number of days occurring during all
Hold Back Periods and Interruption Periods during such consecutive 12
months and (ii) a period of at least 60 days shall elapse between the
termination of any Delay Period, Hold Back Period or Interruption Period
and the commencement of the immediately succeeding Delay Period. If the
Company shall so postpone the filing of a Registration Statement, the
Holders of Registrable Shares to be registered shall have the right to
withdraw the request for registration by giving written notice from the
Holders of a majority of the Registrable Shares that were to be registered
to the Company within 45 days after receipt of the notice of postponement
or, if earlier, the termination of such Delay Period (and, in the event of
such withdrawal, such request shall not be counted for purposes of
determining the number of requests for registration to which the Holders of
Registrable Shares are entitled pursuant to this Section 2). The time
period for which the Company is required to maintain the effectiveness of
any Registration Statement shall be extended by the aggregate number of
days of all Delay Periods, all Hold Back Periods and all Interruption
Periods occurring during such Registration and such period and any
extension thereof is hereinafter referred to as the "Effectiveness Period".
The Company shall not be entitled to initiate a Delay Period unless it
shall (A) to the extent permitted by agreements with other security holders
of the Company, concurrently prohibit sales by such other security holders
under registration statements covering securities held by such other
security holders and (B) in accordance with the Company's policies from
time to time in effect, forbid purchases and sales in the open market by
senior executives of the Company.
(e) Except to the extent required by agreements with other
security holders of the Company or Parent entered into prior to September
22, 1995, the Company shall not include any securities that are not
Registrable Shares in any Registration Statement filed pursuant to this
Section 2 without the prior written consent of the Holders of a majority in
number of the Registrable Shares covered by such Registration Statement.
(f) Holders of a majority in number of the Registrable Shares
to be included in a Registration Statement pursuant to this Section 2 may,
at any time prior to the effective date of the Registration Statement
relating to such Registration, revoke such request by providing a written
notice to the Company revoking such request. The Holders of Registrable
Shares who revoke such request shall reimburse the Company for all its
out-of-pocket expenses incurred in the preparation, filing and processing
of the Registration Statement; provided, however, that, if such revocation
was based on the Company's failure to comply in any material respect with
its obligations hereunder, such reimbursement shall not be required.
SECTION 3. Piggyback Registration. (a) Right To Piggyback. If
at any time during the Registration Period the Company proposes to file a
registration statement under the Securities Act with respect to a public
offering of securities of the same type as the Registrable Shares pursuant
to a firm commitment underwritten offering solely for cash for its own
account (other than a registration statement (i) on Form S-8 or any
successor forms thereto, or (ii) filed solely in connection with a dividend
reinvestment plan or employee benefit plan covering officers or directors
of the Company or its Affiliates) or for the account of any holder of
securities of the same type as the Registrable Shares (to the extent that
the Company has the right to include Registrable Shares in any registration
statement to be filed by the Company on behalf of such holder), then the
Company shall give written notice of such proposed filing to the Holders at
least 15 days before the anticipated filing date. Such notice shall offer
the Holders the opportunity to register such amount of Registrable Shares
as they may request (a "Piggyback Registration"). Subject to Section 3(b)
hereof, the Company shall include in each such Piggyback Registration all
Registrable Shares with respect to which the Company has received written
requests for inclusion therein within 10 days after notice has been given
to the Holders. Each Holder shall be permitted to withdraw all or any
portion of the Registrable Shares of such Holder from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration; provided, however, that if such withdrawal occurs after the
filing of the Registration Statement with respect to such Piggyback
Registration, the withdrawing Holders shall reimburse the Company for the
portion of the registration expenses payable with respect to the
Registrable Shares so withdrawn.
(b) Priority on Piggyback Registrations. The Company shall
permit the Holders to include all such Registrable Shares on the same terms
and conditions as any similar securities, if any, of the Company included
therein. Notwithstanding the foregoing, if the Company or the managing
underwriter or underwriters participating in such offering advise the
Holders in writing that the total amount of securities requested to be
included in such Piggyback Registration exceeds the amount which can be
sold in (or during the time of) such offering without delaying or
jeopardizing the success of the offering (including the price per share of
the securities to be sold), then the amount of securities to be offered for
the account of the Holders and other holders of securities who have
piggyback registration rights with respect thereto shall be reduced (to
zero if necessary) pro rata on the basis of the number of common stock
equivalents requested to be registered by each such Holder or holder
participating in such offering.
(c) Right To Abandon. Nothing in this Section 3 shall create
any liability on the part of the Company to the Holders if the Company in
its sole discretion should decide not to file a registration statement
proposed to be filed pursuant to Section 3(a) hereof or to withdraw such
registration statement subsequent to its filing, regardless of any action
whatsoever that a Holder may have taken, whether as a result of the
issuance by the Company of any notice hereunder or otherwise.
SECTION 4. Holdback Agreement. If (i) during the
Effectiveness Period, the Company shall file a registration statement
(other than in connection with the registration of securities issuable
pursuant to an employee stock option, stock purchase or similar plan or
pursuant to a merger, exchange offer or a transaction of the type specified
in Rule 145(a) under the Securities Act) with respect to the Common Stock
or similar securities or securities convertible into, or exchangeable or
exercisable for, such securities and (ii) with reasonable prior notice, the
Company (in the case of a nonunderwritten public offering by the Company
pursuant to such registration statement) advises the Holders in writing
that a public sale or distribution of such Registrable Shares would
materially adversely affect such offering or the managing underwriter or
underwriters (in the case of an underwritten public offering by the Company
pursuant to such registration statement) advises the Company in writing (in
which case the Company shall notify the Holders) that a public sale or
distribution of Registrable Shares would materially adversely impact such
offering, then each Holder shall, to the extent not inconsistent with
applicable law, refrain from effecting any public sale or distribution of
Registrable Shares during the 10 days prior to the effective date of such
registration statement and until the earliest of (A) the abandonment of
such offering, (B) 90 days from the effective date of such registration
statement and (C) if such offering is an underwritten offering, the
termination in whole or in part of any "hold back" period obtained by the
underwriter or underwriters in such offering from the Company in connection
therewith (each such period, a "Hold Back Period").
SECTION 5. Registration Procedures. In connection with the
registration obligations of the Company pursuant to and in accordance with
Sections 2 and 3 hereof (and subject to Sections 2 and 3 hereof), the
Company shall use commercially reasonable efforts to effect such
registration to permit the sale of such Registrable Shares in accordance
with the intended method or methods of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible (but subject to
Sections 2 and 3 hereof):
(a) prepare and file with the SEC a Registration
Statement for the sale of the Registrable Shares on any form for
which the Company then qualifies or which counsel for the Company
shall deem appropriate in accordance with such Holders' intended
method or methods of distribution thereof, subject to Section 2(b)
hereof, and, subject to the Company's right to terminate or
abandon a registration pursuant to Section 3(c) hereof, use
commercially reasonable efforts to cause such Registration
Statement to become effective and remain effective as provided
herein;
(b) prepare and file with the SEC such amendments
(including post-effective amendments) to such Registration
Statement, and such supplements to the related Prospectus, as may
be required by the rules, regulations or instructions applicable
to the Securities Act during the applicable period in accordance
with the intended methods of disposition specified by the Holders
of the Registrable Shares covered by such Registration Statement,
make generally available earnings statements satisfying the
provisions of Section 11(a) of the Securities Act (provided that
the Company shall be deemed to have complied with this clause if
it has complied with Rule 158 under the Securities Act), and cause
the related Prospectus as so supplemented to be filed pursuant to
Rule 424 under the Securities Act; provided, however, that before
filing a Registration Statement or Prospectus, or any amendments
or supplements thereto (other than reports required to be filed by
it under the Exchange Act), the Company shall furnish to the
Holders of Registrable Shares covered by such Registration
Statement and their counsel for review and comment, copies of all
documents required to be filed;
(c) notify the Holders of any Registrable Shares covered
by such Registration Statement promptly and (if requested) confirm
such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to such Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request
by the SEC for amendments or supplements to such Registration
Statement or the related Prospectus or for additional information
regarding such Holders, (iii) of the issuance by the SEC of any
stop order suspending the effectiveness of such Registration
Statement or the initiation of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding
for such purpose, and (v) of the happening of any event that
requires the making of any changes in such Registration Statement,
Prospectus or documents incorporated or deemed to be incorporated
therein by reference so that they will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading:
(d) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of such
Registration Statement, or the lifting of any suspension of the
qualification or exemption from qualification of any Registrable
Shares for sale in any jurisdiction in the United States;
(e) furnish to the Holder of any Registrable Shares
covered by such Registration Statement, each counsel for such
Holders and each managing underwriter, if any, without charge, one
conformed copy of such Registration Statement, as declared
effective by the SEC, and of each post-effective amendment
thereto, in each case including financial statements and schedules
and all exhibits and reports incorporated or deemed to be
incorporated therein by reference; and deliver, without charge,
such number of copies of the preliminary prospectus, any amended
preliminary prospectus, each final Prospectus and any
post-effective amendment or supplement thereto, as such Holder may
reasonably request in order to facilitate the disposition of the
Registrable Shares of such Holder covered by such Registration
Statement in conformity with the requirements of the Securities
Act;
(f) prior to any public offering of Registrable Shares
covered by such Registration Statement, use commercially
reasonable efforts to register or qualify such Registrable Shares
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Holders of such Registrable Shares shall
reasonably request in writing; provided, however, that the Company
shall in no event be required to qualify generally to do business
as a foreign corporation or as a dealer in any jurisdiction where
it is not at the time so qualified or to execute or file a general
consent to service of process in any such jurisdiction where it
has not theretofore done so or to take any action that would
subject it to general service of process or taxation in any such
jurisdiction where it is not then subject;
(g) upon the occurrence of any event contemplated by
paragraph 5(c)(v) above, prepare a supplement or post-effective
amendment to such Registration Statement or the related Prospectus
or any document incorporated or deemed to be incorporated therein
by reference and file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Shares
being sold thereunder (including upon the termination of any Delay
Period), such Prospectus will not contain an untrue statement of a
material fact or omit to state any 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;
(h) use commercially reasonable efforts to cause all
Registrable Shares covered by such Registration Statement to be
listed on each securities exchange or automated interdealer
quotation system, if any, on which similar securities issued by
the Company are then listed or quoted;
(i) on or before the effective date of such Registration
Statement, provide the transfer agent of the Company for the
Registrable Shares with printed certificates for the Registrable
Shares covered by such Registration Statement, which are in a form
eligible for deposit with The Depository Trust Company;
(j) if such offering is an underwritten offering, make
available for inspection by any Holder of Registrable Shares
included in such Registration Statement, any underwriter
participating in any offering pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by
any such Holder or underwriter (collectively, the "Inspectors"),
all financial and other records and other information, pertinent
corporate documents and properties of any of the Company and its
subsidiaries and affiliates (collectively, the "Records"), as
shall be reasonably necessary to enable them to exercise their due
diligence responsibilities; provided, however, that the Records
that the Company determines, in good faith, to be confidential and
which it notifies the Inspectors in writing are confidential shall
not be disclosed to any Inspector unless such Inspector signs a
confidentiality agreement reasonably satisfactory to the Company
(which shall permit the disclosure of such Records in such
Registration Statement or the related Prospectus if necessary to
avoid or correct a material misstatement in or material omission
from such Registration Statement or Prospectus) or either (i) the
disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such Registration Statement or (ii)
the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction; provided
further, however, that (A) any decision regarding the disclosure
of information pursuant to subclause (i) shall be made only after
consultation with counsel for the applicable Inspectors and the
Company and (B) with respect to any release of Records pursuant to
subclause (ii), each Holder of Registrable Shares agrees that it
shall, promptly after learning that disclosure of such Records is
sought in a court having jurisdiction, give notice to the Company
so that the Company, at the Company's expense, may undertake
appropriate action to prevent disclosure of such Records; and
(k) if such offering is an underwritten offering, enter
into such agreements (including an underwriting agreement in form,
scope and substance as is customary in underwritten offerings) and
take all such other appropriate and reasonable actions requested
by the Holders of a majority of the Registrable Shares being sold
in connection therewith (including those reasonably requested by
the managing underwriters) in order to expedite or facilitate the
disposition of such Registrable Shares, and in such connection,
(i) use commercially reasonable efforts to obtain opinions of
counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters and counsel to the
Holders of the Registrable Shares being sold), addressed to each
selling Holder of Registrable Shares covered by such Registration
Statement and each of the underwriters as to the matters
customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by
such counsel and underwriters, (ii) use commercially reasonable
efforts to obtain "cold comfort" letters and updates thereof from
the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants
of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are,
or are required to be, included in the Registration Statement),
addressed to each selling holder of Registrable Shares covered by
the Registration Statement (unless such accountants shall be
prohibited from so addressing such letters by applicable standards
of the accounting profession) and each of the underwriters, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings, (iii) if requested and if an underwriting
agreement is entered into, provide indemnification provisions and
procedures substantially to the effect set forth in Section 8
hereof with respect to all parties to be indemnified pursuant to
said Section. The above shall be done at each closing under such
underwriting or similar agreement, or as and to the extent
required thereunder.
The Company may require each Holder of Registrable Shares
covered by a Registration Statement to furnish such information regarding
such Holder and such Holder's intended method of disposition of such
Registrable Shares as it may from time to time reasonably request in
writing. If any such information is not furnished within a reasonable
period of time after receipt of such request, the Company may exclude such
Holder's Registrable Shares from such Registration Statement.
Each Holder of Registrable Shares covered by a Registration
Statement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c)(ii),
5(c)(iii), 5(c)(iv) or 5(c)(v) hereof, that such Holder shall forthwith
discontinue disposition of any Registrable Shares covered by such
Registration Statement or the related Prospectus until receipt of the
copies of the supplemented or amended Prospectus contemplated by Section
5(g) hereof, or until such Holder is advised in writing (the "Advice") by
the Company that the use of the applicable Prospectus may be resumed, and
has received copies of any amended or supplemented Prospectus or any
additional or supplemental filings which are incorporated, or deemed to be
incorporated, by reference in such Prospectus (such period during which
disposition is discontinued being an "Interruption Period") and, if
requested by the Company, the Holder shall deliver to the Company (at the
expense of the Company) all copies then in its possession, other than
permanent file copies then in such holder's possession, of the Prospectus
covering such Registrable Shares at the time of receipt of such request.
Each Holder of Registrable Shares covered by a Registration
Statement further agrees not to utilize any material other than the
applicable current preliminary prospectus or Prospectus in connection with
the offering of such Registrable Shares.
SECTION 6. Registration Expenses. Whether or not any
Registration Statement is filed or becomes effective, the Company shall pay
all costs, fees and expenses incident to the Company's performance of or
compliance with this Agreement, including (i) all registration and filing
fees, including NASD filing fees, (ii) all fees and expenses of compliance
with securities or Blue Sky laws, including reasonable fees and
disbursements of counsel in connection therewith, (iii) printing expenses
(including expenses of printing certificates for Registrable Shares and of
printing prospectuses if the printing of prospectuses is requested by the
Holders or the managing underwriter, if any), (iv) messenger, telephone and
delivery expenses, (v) fees and disbursements of counsel for the Company,
(vi) fees and disbursements of all independent certified public accountants
of the Company (including expenses of any "cold comfort" letters required
in connection with this Agreement) and all other persons retained by the
Company in connection with such Registration Statement, (vii) fees and
disbursements of one counsel, other than the Company's counsel, selected by
Holders of a majority of the Registrable Shares being registered, to
represent all such Holders, (viii) fees and disbursements of underwriters
customarily paid by the issuers or sellers of securities and (ix) all other
costs, fees and expenses incident to the Company's performance or
compliance with this Agreement. Notwithstanding the foregoing, the fees and
expenses of any persons retained by any Holder, other than one counsel for
all such Holders, and any discounts, commissions or brokers' fees or fees
of similar securities industry professionals and any transfer taxes
relating to the disposition of the Registrable Shares by a Holder, will be
payable by such Holder and the Company will have no obligation to pay any
such amounts.
SECTION 7. Underwriting Requirements. (a) Subject to Section
7(b) hereof, any Holder shall have the right, by written notice, to request
that any Demand Registration provide for an underwritten offering.
(b) In the case of any underwritten offering pursuant to a
Demand Registration, the Holders of a majority of the Registrable Shares to
be disposed of in connection therewith shall select the institution or
institutions that shall manage or lead such offering, which institution or
institutions shall be reasonably satisfactory to the Company. In the case
of any underwritten offering pursuant to a Piggyback Registration, the
Company shall select the institution or institutions that shall manage or
lead such offering. No Holder shall be entitled to participate in an
underwritten offering unless and until such Holder has entered into an
underwriting or other agreement with such institution or institutions for
such offering in such form as the Company and such institution or
institutions shall determine.
SECTION 8. Indemnification. (a) Indemnification by the
Company. The Company shall, without limitation as to time, indemnify and
hold harmless, to the full extent permitted by law, each Holder of
Registrable Shares whose Registrable Shares are covered by a Registration
Statement or Prospectus, the officers, directors and agents and employees
of each of them, each Person who controls each such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such
controlling person, to the fullest extent lawful, from and against any and
all losses, claims, damages, liabilities, judgment, costs (including,
without limitation, costs of preparation and reasonable attorneys' fees)
and expenses (collectively, "Losses"), as incurred, arising out of or based
upon any untrue or alleged untrue statement of a material fact contained in
such Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or based upon
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same are based upon information furnished in writing to the
Company by or on behalf of such Holder expressly for use therein; provided,
however, that the Company shall not be liable to any such Holder to the
extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any 4 preliminary prospectus if (i) having previously been furnished by
or on behalf of the Company with copies of the Prospectus, such Holder
failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of Registrable Shares by such
Holder to the person asserting the claim from which such Losses arise and
(ii) the Prospectus would have corrected in all material respects such
untrue statement or alleged untrue statement or such omission or alleged
omission; and provided further, however, that the Company shall not be
liable in any such case to the extent that any such Losses arise out of or
are based upon an untrue statement or alleged untrue statement or omission
or alleged omission in the Prospectus, if (x) such untrue statement or
alleged untrue statement, omission or alleged omission is corrected in all
material respects in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of the Company with copies
of the Prospectus as so amended or supplemented, such Holder thereafter
fails to deliver such Prospectus as so amended or supplemented, prior to or
concurrently with the sale of Registrable Shares.
(b) Indemnification by Holder of Registrable Shares. In
connection with any Registration Statement in which a Holder is
participating, such Holder shall furnish to the Company in writing such
information as the Company reasonably requests for use in connection with
such Registration Statement or the related Prospectus and agrees to
indemnify, to the full extent permitted by law, the Company, its directors,
officers, agents or employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) and the directors, officers, agents or employees of such
controlling Persons, from and against all Losses arising out of or based
upon any untrue or alleged untrue statement of a material fact contained in
such Registration Statement or the related Prospectus or any amendment or
supplement thereto, or any preliminary prospectus, or arising out of or
based upon any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue or
alleged untrue statement or omission or alleged omission is based upon any
information so furnished in writing by or on behalf of such Holder to the
Company expressly for use in such Registration Statement or Prospectus.
(c) Conduct of Indemnification Proceedings. If any Person
shall be entitled to indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party from which such
indemnity is sought (the "indemnifying party") of any claim or of the
commencement of any proceeding with respect to which such indemnified party
seeks indemnification or contribution pursuant hereto; provided, however,
that the delay or failure to so notify the indemnifying party shall not
relieve the indemnifying party from any obligation or liability except to
the extent that the indemnifying party has been prejudiced by such delay or
failure. The indemnifying party shall have the right, exercisable by giving
written notice to an indemnified party promptly after the receipt of
written notice from such indemnified party of such claim or proceeding, to
assume, at the indemnifying party's expense, the defense of any such claim
or proceeding, with counsel reasonably satisfactory to such indemnified
party; provided, however, that (i) an indemnified party shall have the
right to employ separate counsel in any such claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless: (1) the
indemnifying party agrees to pay such fees and expenses; (2) the
indemnifying party fails promptly to assume the defense of such claim or
proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party; or (3) the named parties to any proceeding (including
impleaded parties) include both such indemnified party and the indemnifying
party, and such indemnified party shall have been advised by counsel that
there may be one or more legal defenses available to it that are
inconsistent with those available to the indemnifying party or that a
conflict of interest is likely to exist among such indemnified party and
any other indemnified parties (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of such
indemnified party); and (ii) subject to clause (3) above, the indemnifying
party shall not, in connection with any one such claim or proceeding or
separate but substantially similar or related claims or proceedings in the
same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one firm of
attorneys (together with appropriate local counsel) at any time for all of
the indemnified parties, or for fees and expenses that are not reasonable.
Whether or not such defense is assumed by the indemnifying party, such
indemnified party shall not be subject to any liability for any settlement
made without its consent. The indemnifying party shall not consent to entry
of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance reasonably
satisfactory to the indemnified party, from all liability in respect of
such claim or litigation for which such indemnified party would be entitled
to indemnification hereunder.
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any Losses
(other than in accordance with its terms), then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party, on the one hand, and indemnified party, on the other hand, shall be
determined by reference to, among other things, whether any action in
question, including any untrue statement of a material fact or omission or
alleged omission to state a material fact, has been taken by, or relates to
information supplied by, such indemnifying party or indemnified party, and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or omission.
The amount paid or payable by a party as a result of any Losses shall be
deemed to include any legal or other fees or expenses incurred by such
party in connection with any investigation or proceeding. The parties
hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provision of this Section 8(d), an indemnifying party
that is a Holder shall not be required to contribute any amount which is in
excess of the amount by which the total proceeds received by such Holder
from the sale of the Registrable Shares sold by such Holder (net of all
underwriting discounts and commissions) exceeds the amount of any damages
that such indemnifying party has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
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.
SECTION 9. Miscellaneous. (a) Termination. This Agreement and
the obligations of the Company and the Holders hereunder (other than
Section 8 hereof) shall terminate on the first date on which no Registrable
Shares remain outstanding.
(b) Notices. All notices or communications hereunder shall be
in writing (including telecopy or similar writing), addressed as follows:
To the Company:
Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
Telecopier: (212) 765-0899
Attention: General Counsel
With a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Telecopier: (212) 474-3700
Attention: Peter S. Wilson, Esq.
To the Holders:
R.E. Turner
In care of Turner Broadcasting System, Inc.
One CNN Center
Box 105366
Atlanta, GA 30348-5366
Telecopier: (404) 827-3000
For Courier delivery
One CNN Center
Atlanta, GA 30303
Attention: General Counsel
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
Telecopier: (213) 687-5600
Attention: Thomas C. Janson, Jr., Esq.
Any such notice or communication shall be deemed given (i)
when made, if made by hand delivery, (ii) upon transmission, if sent by
confirmed telecopier, (iii) one business day after being deposited with a
next-day courier, postage prepaid, or (iv) three business days after being
sent certified or registered mail, return receipt requested, postage
prepaid, in each case addressed as above (or to such other address or to
such other telecopier number as such party may designate in writing from
time to time).
(c) Separability. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof which shall remain in full force and effect.
(d) Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
devisees, legatees, legal representatives, successors and assigns.
(e) Entire Agreement. This Agreement represents the entire
agreement of the parties and shall supersede any and all previous
contracts, arrangements or understandings between the parties hereto with
respect to the subject matter hereof.
(f) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written
consent of Holders of at least a majority in number of the Registrable
Shares then outstanding.
(g) Publicity. No public release or announcement concerning
the transactions contemplated hereby shall be issued by any party without
the prior consent of the other parties, except to the extent that such
party is advised by counsel that such release or announcement is necessary
or advisable under applicable law or the rules or regulations of any
securities exchange, in which case the party required to make the release
or announcement shall to the extent practicable provide the other party
with an opportunity to review and comment on such release or announcement
in advance of its issuance.
(h) Expenses. Whether or not the transactions contemplated
hereby are consummated, except as otherwise provided herein, all costs and
expenses incurred in connection with the execution of this Agreement shall
be paid by the party incurring such costs or expenses, except as otherwise
set forth herein.
(i) Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
(j) Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be one and the same agreement, and
shall become effective when counterparts have been signed by each of the
parties and delivered to each other party.
(k) Governing Law. This Agreement shall be construed,
interpreted, and governed in accordance with the internal laws of New York.
(l) Calculation of Time Periods. Except as otherwise
indicated, all periods of time referred to herein shall include all
Saturdays, Sundays and holidays; provided, however, that if the date to
perform the act or give any notice with respect to this Agreement shall
fall on a day other than a Business Day, such act or notice may be timely
performed or given if performed or given on the next succeeding Business
Day.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first written above.
TW INC.,
by /s/ Thomas W. McEnerney
____________________________
Name: Thomas W. McEnerney
Title: Vice President
/s/ R. E. Turner
_____________________________
R. E. Turner
TURNER OUTDOOR, INC.,
by /s/ R. E. Turner
__________________________
Name: R. E. Turner
Title: President
TURNER FOUNDATION, INC.,
by /s/ R. E. Turner
___________________________
Name: R. E. Turner
Title: President
ROBERT E. TURNER CHARITABLE
REMAINDER UNITRUST NO. 2,
by /s/ R. E. Turner
___________________________
Name: R. E. Turner
Title: Trustee
TURNER PARTNERS, L.P.,
by /s/ R. E. Turner
___________________________
Name: R. E. Turner
Title: General Partner
STOCKHOLDERS' AGREEMENT
Stockholders' Agreement, dated October 10, 1996, by and among TCI
Turner Preferred, Inc., a Colorado corporation ("TCITP"), Liberty
Broadcasting, Inc. ("LBI") and Communication Capital Corp. ("CCC" and,
together with LBI and TCITP, the "TCITP Stockholders"), R.E. Turner, III
("Turner"), Turner Outdoor, Inc. ("TOI") and Turner Partners, L.P., a
Georgia limited partnership ("TP" and, together with Turner, the "Turner
Stockholders"), and TW Inc., a Delaware corporation, which promptly
following the date hereof will change its name to Time Warner Inc.
("Holdco").
Each of the TCITP Stockholders and the Turner Stockholders is or
may become a beneficial owner of shares of capital stock of Holdco. The
Turner Stockholders, Holdco and the TCITP Stockholders desire to enter into
the arrangements set forth in this Agreement regarding future dispositions
of shares of Holdco capital stock which the Turner Stockholders or the
TCITP Stockholders now or may in the future beneficially own.
Therefore, in consideration of the premises and the mutual
benefits to be derived hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Definitions: The following terms in this Agreement shall have the
respective meanings listed below:
Affiliate: With respect to any Person, any other Person which
directly or indirectly Controls, is under common Control with or is
Controlled by such first Person. The term "affiliated" (whether or not
capitalized) shall have a correlative meaning. For purposes of this
Agreement (i) the Turner Foundation, Inc. (the "Turner Foundation"), the
R.E. Turner Charitable Remainder Unitrust No. 2 (the "Turner Unitrust") and
any other Charitable Transferee or Qualified Trust shall be deemed not to
be Affiliates of any Turner Stockholder and (ii) (A) no TCITP Affiliate
shall be deemed to be an Affiliate of any Turner Affiliate, or vice versa,
and (B) no TCITP Affiliate or Turner Affiliate shall be deemed to be an
Affiliate of any Holdco Affiliate, or vice versa.
Affiliated Group: With respect to any Stockholder, the group
consisting of such Stockholder and all Controlled Affiliates of such
Stockholder.
Agreement: This Agreement as the same may be amended from time to
time in accordance with its terms.
Appraised Value: As defined in Section 4.1 hereof.
The "beneficial owner" of any security means a direct or indirect
beneficial owner of such security within the meaning of Rule 13d-3 under
the Exchange Act, as in effect on and as interpreted by the Commission
through the date of this Agreement, and the terms (whether or not
capitalized) "beneficially own," "beneficially owned" and "owned
beneficially" shall have correlative meanings; provided, however, that any
Person who at any time beneficially owns any Option or Convertible Security
shall also be deemed to beneficially own the Underlying Securities, whether
or not such Option or Convertible Security then is or within 60 days will
be exercisable, exchangeable or convertible.
Board of Directors: The Board of Directors of Holdco.
Bona Fide Offer: As defined in Section 3.1 hereof.
Broker Transactions: "Broker's transactions" within the meaning
of paragraph (g) of Rule 144 of the General Rules and Regulations under the
Securities Act.
Charitable Transfer: Any Disposition of Covered Securities by a
Turner Stockholder to the Turner Foundation, any other Charitable
Transferee, the Turner Unitrust or any other Qualified Trust that is not an
Exempt Transfer pursuant to clause (vii) of the definition of Exempt
Transfer; provided, however, that any such transferee shall, by a written
instrument in form and substance reasonably satisfactory to TCITP, agree to
be bound by the provisions of this Agreement with respect to the Covered
Securities that are the subject of such Charitable Transfer to the same
extent as the Turner Stockholder making such Disposition.
Charitable Transferee: Any charitable organization described in
Section 501(c)(3) of the Code.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act or the Exchange
Act.
Common Stock: The common stock, par value $.01 per share, of
Holdco or any other shares of capital stock of Holdco into which the Common
Stock may be reclassified or changed.
Contract: Any agreement, contract, commitment, indenture, lease,
license, instrument, note, bond or security.
Control: As to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person (whether through ownership of securities,
partnership interests or other ownership interests, by contract, or
otherwise). The terms "Controlled," "Controlling" and similar variations
shall have correlative meanings.
Controlled Affiliate: When used with respect to a specified
Person, means each Affiliate of such Person which is Controlled by such
Person and which is not Controlled by or under common Control with any
other Person (except one or more other Controlled Affiliates of such
specified Person); provided, however, that for purposes of any provision of
this Agreement which requires any Stockholder to cause one or more of its
Controlled Affiliates to take or refrain from taking any action (including
any action relating to the Disposition of any Covered Securities) or which
otherwise purports to be applicable to any Covered Securities owned or held
by one or more Controlled Affiliates of such Stockholder, no Affiliate of
such Stockholder which otherwise would be a Controlled Affiliate of such
Stockholder shall be deemed to be a Controlled Affiliate of such
Stockholder unless such Stockholder possesses, directly or indirectly, the
power to direct decisions regarding such action or the Disposition of such
Covered Securities.
Convertible Securities: Evidences of indebtedness, shares of
stock or other securities or obligations which are convertible into or
exchangeable, with or without payment of additional consideration in cash
or property, for any Holdco Shares, either immediately or upon the
occurrence of a specified date or a specified event, the satisfaction of or
failure to satisfy any condition or the happening or failure to happen of
any other contingency.
Covered Securities: Any and all Holdco Shares, Convertible
Securities and Options.
Current Market Price: As to any share of Common Stock at any
date, the average of the daily closing prices for shares of the Common
Stock for the 5 consecutive trading days ending on the trading day
immediately before the day in question. The closing price for such shares
for each day shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported closing
bid and asked prices, in either case on the principal United States
securities exchange on which such shares are listed or admitted to trading,
or if they are not listed or admitted to trading on any such exchange, the
last reported sale price (or the average of the quoted closing bid and
asked prices if no sale is reported) as reported on the Nasdaq Stock
Market, or any comparable system, or if such shares are not quoted on the
Nasdaq Stock Market, or any comparable system, the average of the closing
bid and asked prices as furnished by any member of the National Association
of Securities Dealers, Inc. selected by Holdco.
Defensive Provision: (i) any control share acquisition,
interested stockholder, business combination or other similar antitakeover
statute (including the Delaware Statute) applicable to Holdco, (ii) any
provision of the Restated Certificate of Incorporation or Bylaws of Holdco
(including Article V of such Restated Certificate of Incorporation), and
(iii) any plan or agreement to which Holdco is a party, whether now or
hereafter existing, which would constitute a "poison pill" or similar
antitakeover device (including any Rights Plan).
Delaware Statute: Section 203 of the Delaware General Corporation
Law or any successor statutory provision.
Disadvantageous Result: (i) The breach or violation of any
Restriction applicable to any member of the Group of such Stockholder or
its Affiliates, (ii) any member of the Group of such Stockholder or its
Affiliates becoming subject to any Restriction to which it was not
previously subject, or (iii) the occurrence of any Rights Plan Triggering
Event.
Disposition: When used with respect to any Covered Security, any
sale, assignment, alienation, gift, exchange, conveyance, transfer,
hypothecation or other disposition whatsoever, whether voluntary or
involuntary and whether direct or indirect, of such Covered Security or of
dispositive control over such Covered Security. "Disposition" shall not
include (i) a transfer of voting control of a Covered Security to the
extent required to avoid imposition of any prohibition, restriction,
limitation or condition on or requirement under any Requirement of Law or
Defensive Provision having any of the effects described in clauses (A) and
(B) of the definition of Restriction herein, or (ii) delivery of a
revocable proxy in the ordinary course of business. The term "dispose"
(whether or not capitalized) shall mean to make a Disposition. Without
limiting the generality of the foregoing:
(i) any redemption, purchase or other acquisition in any
manner (whether or not for any consideration) by Holdco of any
Covered Securities shall be deemed to be a Disposition of such
Covered Securities; and
(ii) none of the conversion or exchange of a Convertible
Security, the exercise of any Option or the failure to convert or
exchange a Convertible Security or to exercise any Option prior to
the expiration of the right of conversion, exchange or exercise
shall be deemed to be a Disposition of such Convertible Security
or such Option.
For purposes of this Agreement any Disposition of any Option or
Convertible Security shall also constitute a Disposition of the Underlying
Securities.
Effective Time: "Effective Time of the Merger", as defined in the
Merger Agreement.
Encumbrance: As defined in Section 3.1(f) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, or
any successor Federal statute, and the rules and regulations of the
Commission promulgated thereunder, as from time to time in effect.
Exempt Transfer: Any Disposition that falls within any one of the
following clauses: (i) An exchange or conversion of Covered Securities
which occurs by operation of law in connection with a merger, consolidation
of Holdco with or into another corporation, or a recapitalization,
reclassification or similar event that has been duly authorized and
approved by the required vote of the Board of Directors and the
stockholders of Holdco pursuant to the Restated Certificate of
Incorporation of Holdco and the law of the jurisdiction of incorporation of
Holdco; (ii) any surrender by a Stockholder to Holdco of Covered Securities
upon redemption by Holdco of such Covered Securities pursuant to any right
or obligation under the express terms of such Covered Securities that is
made on a proportionate basis from all holders of such Covered Securities
and is not at the option of such Stockholder; (iii) any Permitted Pledge
and any transfer of such pledged Covered Securities to the Pledgee upon
default of the obligations secured by such pledge; (iv) any transfer solely
from one member of the Affiliated Group of a Stockholder to another member
of the Affiliated Group of a Stockholder; (v) any transfer by a Stockholder
who is an individual to (A) a spouse, (B) any other member of his immediate
family (i.e., parents, children, including those adopted before the age of
18, grandchildren, brothers, sisters, and the spouses or children of the
foregoing), (C) Qualified Trust or (D) a custodian under the Uniform Gifts
to Minors Act or similar fiduciary for the exclusive benefit of his
children during their lives; (vi) subject to Section 4, any transfer to the
legal representatives of a Stockholder who is an individual upon his death
or adjudication of incompetency or by any such legal representatives to any
Person to whom such Stockholder could have transferred such Covered
Securities pursuant to any clause of this definition; (vii) a transfer by
the Turner Stockholders of up to an aggregate of 12 million shares (less
the product of (A) the number of shares of Class A Common Stock and Class B
Common Stock of TBS that are the subject of a Disposition (as such term is
defined in the TBS Shareholders' Agreement) effected by Turner that is
contemplated by Section 3(a) of the TBS Shareholders' Agreement after
September 22, 1995, and (B) the Common Conversion Number (as defined in the
Merger Agreement)) of Common Stock (appropriately adjusted to take into
account any stock split, reverse stock split, reclassification,
recapitalization, conversion, reorganization, merger or other change in
such Common Stock) to any Charitable Transferee if, in the written opinion
of legal counsel reasonably acceptable to TCITP, requiring such Charitable
Transferee to become a party to this Agreement would limit by a material
amount the amount of the deduction for federal income tax purposes that
would be available to the applicable Turner Stockholder in the absence of
such requirement, and any subsequent transfer by any such Charitable
Transferee of any such shares; (viii) any exchange, conversion or transfer
of Covered Securities pursuant to Section 4.1 of the LMC Agreement; and
(ix) any sale or transfer permitted by and made in accordance with Section
3 or 4 hereof; provided, however, that no Disposition pursuant to clause
(iii), (iv), (v) or (vi) shall be an Exempt Transfer, unless each Person to
whom any such Disposition is made, unless already a party to this Agreement
and bound by such provisions or a Controlled Affiliate of a party to this
Agreement who is bound by such provisions, shall by a written instrument
become a party to this Agreement bound by all of the provisions hereof
applicable to the Stockholder making such Disposition.
Exercise Notice: Either an Other Stockholder Exercise Notice or a
Holdco Exercise Notice, as the context requires.
Fast-Track Offer Notice: As defined in Section 3.3(a) hereof.
Fast-Track Sale: Any sale of shares of Common Stock for the
account of any Stockholder which meets all of the following requirements as
of the date a Fast-Track Offer Notice is given with respect thereto
pursuant to Section 3.3:
(i) such Stockholder has a bona fide intention to sell such
shares of Common Stock within a period of 115 days after such date
and such sale is not being undertaken as a result of any offer to
buy, bid or request, invitation or solicitation to sell made by
any Person (other than any such offer, bid, request, invitation or
solicitation from a registered broker-dealer or investment banker
not intended to circumvent the provisions of Section 3.1);
(ii) the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act and is listed for trading on a national
securities exchange registered under the Exchange Act or traded in
the over-the-counter market and quoted in an automated quotation
system of the National Association of Securities Dealers, Inc.;
(iii) such sale is to be effected through Broker
Transactions or pursuant to a registration statement covering such
shares in effect at the date of the Fast-Track Offer Notice; and
(iv) the following sum does not exceed $100 million:
(A) the aggregate Current Market Price of the shares
of Common Stock to be sold (determined as of the
date a Fast-Track Offer Notice with respect thereto
is given pursuant to Section 3.3), plus
(B) the aggregate sale price of all shares of Common
Stock sold pursuant to Section 3.3 by any member or
former member of the same Group as such Stockholder
during the 90 days immediately preceding the date of
such Fast Track Offer Notice, plus
(C) without duplication, the aggregate Current
Market Price, determined as of the date specified in
subclause (A) of this clause (iv), of all shares of
Common Stock as to which any Fast-Track Offer Notice
is given by any other Stockholder who is a member of
the same Group as such Stockholder within two
business days before or two business days after such
date.
Fast-Track Shares: As defined in Section 3.3(a) hereof.
Free to Sell Date: As defined in Section 3.1(j) hereof.
FTC: The Federal Trade Commission.
FTC Consent Decree: The Agreement Containing Consent Order (the
"ACCO") dated as of August 14, 1996, as amended on September 4, 1996 among
Old TW, TCI, TBS, LMC and the FTC which contemplates the issuance of an
Order, together with such Order and the Interim Agreement attached as
Exhibit I to the ACCO, in each case as the same may be amended from time to
time hereafter.
Governmental Authority: Any nation or government, any state or
other political subdivision thereof and any court, commission, agency or
other body exercising executive, legislative, judicial or regulatory
functions.
Group: Either the TCITP Stockholders considered collectively as a
group or the Turner Stockholders considered collectively as a group, as the
context requires.
Holdco: As defined in the opening paragraphs of this Agreement.
Holdco Affiliates: Holdco and Affiliates of Holdco.
Holdco Elected Shares: In the case of any Offer Notice, any
Subject Shares covered thereby as to which Holdco exercises its right of
purchase pursuant to Section 3.1(e).
Holdco Exercise Notice: As defined in Section 3.1(e).
Holdco Shares: Any and all shares of capital stock of Holdco of
any class or series, whether now or hereafter authorized or existing.
Holdco Stockholders Agreement: Any stockholders' agreement between
Holdco and any one or more of the Turner Stockholders in effect on the date
hereof.
Initial Trigger: As of a given time, for either Stockholder, with
respect to the Subject Shares covered by any Offer Notice or Tender Notice,
the greatest number of such Subject Shares as may then be acquired by such
Stockholder (or its Affiliates) without causing a Disadvantageous Result.
Involuntary Event: As defined in Section 4.1 hereof.
Judgment: Any order, judgment, writ, decree, award or other
determination, decision or ruling of any court, judge, justice or
magistrate, any other Governmental Authority or any arbitrator.
LMC Agreement: The Second Amended and Restated LMC Agreement dated
as of September 22, 1995, among Old TW, Holdco, LMC Parent and certain
subsidiaries of LMC Parent.
LMC Parent: Liberty Media Corporation, a Delaware corporation.
Merger Agreement: The Amended and Restated Agreement and Plan of
Merger dated as of September 22, 1995, among Old TW, Holdco, TW Acquisition
Corp., a Georgia corporation, Time Warner Acquisition Corp., a Delaware
corporation, and TBS, as amended by Amendment No. 1 thereto dated as of
August 8, 1996.
Offer Notice: As defined in Section 3.1(a) hereof.
Old TW: The Delaware corporation known on September 22, 1995 as
Time Warner Inc.
Old TW Rights Plan: The Rights Agreement dated as of January 20,
1994, between Old TW and Chemical Bank, as Rights Agent.
Options: Any options, warrants or other rights (except Convertible
Securities), however denominated, to subscribe for, purchase or otherwise
acquire any Holdco Shares or Convertible Securities, with or without
payment of additional consideration in cash or property, either immediately
or upon the occurrence of a specified date or a specified event or the
satisfaction or failure to satisfy any condition or the happening or
failure to happen of any other contingency.
Other Stockholder: With respect to a Turner Stockholder, the
"Other Stockholder" shall be TCITP, and with respect to a TCITP
Stockholder, the "Other Stockholder" shall be Turner.
Other Stockholder Elected Shares: As defined in Section 3.1(e)
hereof.
Other Stockholder Exercise Notice: As defined in Section 3.1(e)
hereof.
Other Stockholder Group: With respect to any Other Stockholder,
the Group of which such Other Stockholder is a member.
Permitted Pledge: A bona fide pledge of Covered Securities by a
Stockholder to a financial institution to secure borrowings permitted by
applicable law; provided that such financial institution agrees in writing
to be bound by the provisions of Sections 2, 3 and 4 of this Agreement to
the same extent and with the same effect as such Stockholder and the
borrowings so secured are with full recourse against other assets of such
Stockholder or other collateral.
Per-Share Offer Consideration: As defined in Section 3.1(a)
hereof.
Person: Any individual, corporation, limited liability company,
general or limited partnership, joint venture, association, joint stock
company, trust, unincorporated business or organization, governmental
authority or other legal entity or legal person, whether acting in an
individual, fiduciary or other capacity. The term "Person" also includes
any group of two or more Persons formed for any purpose.
Prospective Purchaser: As defined in Section 3.1 hereof.
Public Sale: Any sale to the public for the account of any
Stockholder, (i) in Broker Transactions, (ii) otherwise pursuant to Rule
144 or (iii) through a registered offering pursuant to an effective
registration statement under the Securities Act which in any case meets
both of the following requirements (to the extent applicable) as of the
date an Offer Notice is given:
(A) such Stockholder has a bona fide intention to sell such
shares of Common Stock as promptly as practicable after all
applicable requirements of the Securities Act are satisfied, and
such sale is not being undertaken as a result of any offer to buy,
bid or request, invitation or solicitation to sell made by any
Person (other than any such offer, bid, request, invitation or
solicitation from a registered broker-dealer or investment banker
not intended to circumvent the provisions of Section 3.1); and
(B) in the case of a registered offering, such shares either
have been registered under the Securities Act or such Stockholder
has the immediate right to require Holdco to register such shares
under the Securities Act.
Purchase Price: As defined in Section 3.1(a) hereof.
Purchase Right: As defined in Section 3.1(c) hereof.
Purchased Shares: When used with reference to a Purchaser
which is the Other Stockholder, the Other Stockholder Elected Shares, and
when used with respect to a Purchaser which is a Holdco Affiliate, the
Holdco Elected Shares.
Purchaser: The term "Purchaser" means TCITP, in the case of
any purchase of TCITP Elected Shares pursuant to any Other Stockholder
Exercise Notice, Turner, in the case of any purchase of Turner Elected
Shares pursuant to any Other Stockholder Exercise Notice, and Holdco, in
the case of any purchase of Holdco Elected Shares pursuant to any Holdco
Exercise Notice.
Qualified Trust: Any trust described in Section 664 of the
Code of which a Stockholder, members of his family or a Charitable
Transferee (and no other persons) are income beneficiaries.
Related Party: As to any Person, any Affiliate of such
Person and, if such Person is a natural person, such Person's parents,
children, siblings and spouse, the parents and siblings of such Person's
spouse and the spouses of such Person's children who become parties to this
Agreement.
Requirement of Law: With respect to any Person, all federal,
state and local laws, rules, regulations, Judgments, injunctions and orders
of a court or other Governmental Authority or an arbitrator, applicable to
or binding upon such Person, any of its property or any business conducted
by it or to which such Person, any of its assets or any business conducted
by it is subject.
Restriction: Any prohibition, restriction, limitation or
condition on or requirement under any Defensive Provision or Requirement of
Law, including the FTC Consent Decree, (A) that (i) limits the ability of
any Stockholder to acquire additional Holdco Shares or hold or dispose of
any Holdco Shares or to participate in any material right or benefit
otherwise available or to be distributed to security holders of the same
class as the Holdco Shares, generally, or requires such Stockholder to
Dispose of any Holdco Shares, (ii) reduces or otherwise limits the ability
to exercise the voting or other rights of all or a portion of the Holdco
Shares beneficially owned by such Stockholder below that applicable to
Holdco Shares generally, or (iii) limits the ability of any Stockholder to
consummate any merger, consolidation, business combination or other
transaction with, Holdco or any of its subsidiaries or other Affiliates or
substantially increases the cost of consummation or (B) under which the
acquisition or ownership of additional Holdco Shares (i) would result in a
material violation of applicable law, (ii) would require the discontinuance
of any material business or activity or the divestiture of any material
portion of any business or property, or (iii) would make the continuation
of any such business or activity or the ownership of such property illegal
or subject to material damages or penalties.
Rights: The rights issued to the holders of record of the
Common Stock pursuant to any Rights Plan, having the rights and privileges,
and subject to the terms and conditions, set forth in such Rights Plan, and
any other security or right which may be issued or granted in exchange or
substitution therefor or in replacement or upon exercise thereof.
Rights Plan: Any stockholder rights plan or other form of
"poison pill" adopted by Holdco and in effect at any time during the term
of this Agreement, as amended or modified from time to time.
Rights Plan Trigger: As of a given time, for either
Stockholder, with respect to the Subject Shares covered by any Offer Notice
or Tender Notice, the greatest number of such Subject Shares as may then be
acquired by such Stockholder (or its Affiliates) without causing a Rights
Plan Triggering Event; provided, however, that if at such time there shall
be no Rights Plan in effect, the Rights Plan Trigger shall be equal to the
total number of Subject Shares covered by such Offer Notice or Tender
Notice.
Rights Plan Triggering Event: Any event under any Rights
Plan analogous (in terms of its effects under such Rights Plan) to one of
the following events under the Old TW Rights Plan:
(i) any member of either Group becoming an "Acquiring
Person" within the meaning of the Old TW Rights Plan or
(ii) the Rights becoming transferable separately from shares
of the Common Stock;
in any such case, in the event of a dispute, as determined in accordance
with Section 3.1(d).
Sale Agreement: As defined in Section 3.1(f) hereof.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder, as from
time to time in effect.
Selling Stockholder: As defined in Section 3.1 hereof.
Stockholder: Any TCITP Stockholder or Turner Stockholder.
Subject Shares: As defined in Section 3.1 hereof.
TBS: Turner Broadcasting System, Inc.
TBS Shareholders' Agreement: The Shareholders' Agreement
dated as of June 3, 1987, among TBS, Turner and the Original Investors
named therein.
TCITP: As defined in the opening paragraphs of this
Agreement.
TCITP Affiliates: TCITP and the Affiliates of TCITP.
TCITP Stockholders: TCITP and all Controlled Affiliates of
TCITP, in each case so long as such Person is or is required to be a party
to this Agreement or is the beneficial owner of any TCITP Holdco Shares.
TCITP Holdco Shares: Any and all Covered Securities of which
any TCITP Stockholder becomes the direct or indirect beneficial owner at
the Effective Time or thereafter.
Tendering Stockholder: As defined in Section 3.4(a) hereof.
Tender Notice: As defined in Section 3.4(a) hereof.
Tender Shares: As defined in Section 3.4(a) hereof.
TOI: As defined in the opening paragraphs of this Agreement.
TP: As defined in the opening paragraphs of this Agreement.
Turner: As defined in the opening paragraphs of this
Agreement.
Turner Affiliates: The Turner Stockholders and the
Affiliates of the Turner Stockholders.
Turner Stockholders: Turner and all Affiliates of Turner, in
each case so long as such Person is the beneficial owner of any Covered
Securities, the Turner Foundation, the Turner Unitrust or any other
Charitable Transferee if such entity is required to become a party to this
Agreement as a result of a Charitable Transfer (provided, however, that any
such entity shall be deemed a Turner Stockholder only with respect to
Turner Holdco Shares acquired by such entity in a Charitable Transfer) and
any Turner Related Party who is required to become a party to this
Agreement pursuant to the terms hereof.
Turner Holdco Shares: Any and all Covered Securities of
which any Turner Stockholder becomes the direct or indirect beneficial
owner at the Effective Time or thereafter; provided, however, that Covered
Securities beneficially owned by the Turner Foundation or the Turner
Unitrust immediately after the Effective Time shall not be Turner Holdco
Shares.
Underlying Securities: When used with reference to any
Option or Convertible Security as of any time, the Covered Securities
issuable or deliverable upon exercise, exchange or conversion of such
Option or Convertible Security (whether or not such Option or Convertible
Security is then exercisable, exchangeable or convertible). In the case of
an Option to acquire a Convertible Security, the Underlying Securities of
such Option shall include the Underlying Securities of such Convertible
Security.
2. Restrictions on Dispositions of Covered Securities. No
Turner Stockholder shall Dispose of any Turner Holdco Shares, except in an
Exempt Transfer or a Charitable Transfer. No TCITP Stockholder shall
Dispose of any TCITP Holdco Shares, except in an Exempt Transfer. Any
purported Disposition of Covered Securities in violation of this Agreement
shall be null and void and of no force or effect, and, if Holdco has actual
knowledge of such violation, Holdco shall (and shall direct each registrar
and transfer agent, if any, for the Covered Securities to) refuse to
register or record any such purported Disposition on its transfer and
registration books and records or to otherwise recognize such purported
Disposition. Subject to Section 4, if any Involuntary Event affecting any
Stockholder shall occur, such Stockholder's legal representatives, heirs,
successors or transferees, as the case may be, and all Covered Securities
beneficially owned by them shall be bound by all the terms and provisions
of this Agreement. The Turner Stockholders shall, and shall cause each
Related Party of Turner to, comply with the provisions of this Agreement
intended to be applicable to the Turner Stockholders or any Turner Holdco
Shares. The TCITP Stockholders shall, and shall cause each Related Party of
each TCITP Stockholder to, comply with the provisions of this Agreement
intended to be applicable to the TCITP Stockholders or any TCITP Holdco
Shares.
3. Right of First Refusal:
3.1 If any Stockholder (the "Selling Stockholder") desires
to accept an offer (other than with respect to a Public Sale or a
Fast-Track Sale, consistent with the definitions thereof, or a tender or
exchange offer to which Section 3.4 is applicable) (a "Bona Fide Offer")
from a Person which is not a Related Party of such Selling Stockholder (the
"Prospective Purchaser") to purchase any or all of the Covered Securities
beneficially owned by such Selling Stockholder (the "Subject Shares"), such
Selling Stockholder shall, in accordance with the following procedures,
terms and conditions, first offer to sell the Subject Shares to the Other
Stockholder for consideration (subject to subsections (g) and (h) of this
Section 3.1) and on terms no more favorable to the Selling Stockholder than
those which would apply if the Selling Stockholder accepted the Bona Fide
Offer:
(a) The Selling Stockholder shall deliver to the
Other Stockholder a written notice (the "Offer Notice", which term shall
include any Offer Notice delivered pursuant to Section 3.2(a)) which shall
(i) state the number of shares or other appropriate unit of Covered
Securities of each class, series or other type that comprise the Subject
Shares; (ii) identify the Prospective Purchaser; and (iii) state the
aggregate purchase price to be paid by the Prospective Purchaser for the
Subject Shares (the "Purchase Price") and the kind and amount of
consideration proposed to be paid or delivered by the Prospective Purchaser
for the Subject Shares of each class, series or other type and the amount
thereof allocable to each share or other appropriate unit of the Subject
Shares of that class, series or other type (the "Per-Share Offer
Consideration" for the Covered Securities of that class, series or other
type), the timing and manner of the payment or other delivery thereof and
any other material terms of such Bona Fide Offer. The Selling Stockholder
shall deliver a copy of the Offer Notice to Holdco at the same time it is
delivered to the Other Stockholder.
(b) The Offer Notice shall be accompanied by a true
and complete copy of the Bona Fide Offer.
(c) If an Offer Notice is given by a Selling
Stockholder, the Other Stockholder shall have the right (the "Purchase
Right"), exercisable in the manner hereinafter provided, to require the
Selling Stockholder to sell to the Other Stockholder the number or other
amount of the Subject Shares determined in accordance with this Section
3.1(c). If there is no Defensive Provision or Requirement of Law in effect
at the time any Offer Notice is given that imposes any Restriction on the
Other Stockholder (or that would impose a Restriction if the Other
Stockholder were to exercise the Purchase Right as to all the Subject
Shares), the Other Stockholder may exercise the Purchase Right only as to
all, but not less than all of the Subject Shares. If there are one or more
Defensive Provisions or Requirements of Law in effect at the time such
Offer Notice is given that impose any Restriction on the Other Stockholder
(or that would impose such a Restriction if the Other Stockholder were to
exercise the Purchase Right as to all the Subject Shares), the Other
Stockholder may exercise the Purchase Right only as to a number of Subject
Shares that is greater than or equal to the Initial Trigger relating to the
Other Stockholder at such time and less than or equal to the Rights Plan
Trigger relating to the Other Stockholder at such time. For purposes of
this Section 3.1(c), the Initial Trigger and the Rights Plan Trigger will
be determined as provided in Section 3.1(d).
(d) Commencing not later than the second business day
after an Offer Notice is given if there are one or more Defensive
Provisions in effect at such time, the Selling Stockholder and the Other
Stockholder shall consult with each other and Holdco in an effort to agree
with respect to the Initial Trigger and the Rights Plan Trigger, and upon
request Holdco will provide the Stockholders with information relating
thereto pursuant to Section 3.5. If agreement is not reached by the Selling
Stockholder and the Other Stockholder on or prior to the fifth business day
after the Offer Notice was given, then, within two business days after such
fifth business day, the Selling Stockholder and the Other Stockholder shall
jointly designate an independent law firm of recognized national standing,
which firm will be directed to submit a written report regarding its
conclusions as to the Initial Trigger and the Rights Plan Trigger within 5
business days (which report shall include, if requested, such law firm's
conclusion as to whether any specified event under a Rights Plan
constitutes a Rights Plan Triggering Event). The number of Subject Shares
as to which the Other Stockholder may exercise the Purchase Right shall be
determined as follows:
(i) upon such law firm rendering a written report
within such 5 business day period as to the Initial Trigger
and the Rights Plan Trigger, if the Other Stockholder
elects to exercise its Purchase Right, the Other
Stockholder may exercise such Purchase Right only as to a
number of Subject Shares equal to or greater than the
Initial Trigger and less than or equal to the Rights Plan
Trigger, as such amounts shall be specified in such report;
and
(ii) if such law firm does not render a written
report as to the Initial Trigger and the Rights Plan
Trigger within such 5 business day period, if the Other
Stockholder elects to exercise its Purchase Right, the
Other Stockholder may exercise such Purchase Right only as
to a number of Subject Shares equal to or greater than the
Initial Trigger and less than or equal to the Rights Plan
Trigger, as determined by such Other Stockholder.
If any law firm is so retained, Holdco, the Other Stockholder and the
Selling Stockholder shall provide such law firm with such information as
may be reasonably requested in connection with the preparation of such
report and shall otherwise cooperate with each other and such law firm with
the goal of allowing such law firm to render such report as promptly as
reasonably practicable. Each of Holdco, the Other Stockholder and the
Selling Stockholder shall be responsible for the payment of one-third of
the fees and disbursements of such law firm, except that if, at the time
such law firm is retained, Holdco waives its right to purchase any Subject
Shares covered by the current Offer Notice, Holdco shall not be responsible
for any such fees and disbursements, which shall in such case be borne
equally by the Selling Stockholder and the Other Stockholder. If the
Selling Stockholder and the Other Stockholder are unable to agree upon the
selection of an independent law firm within the two business day period
provided for in this Section 3.1(d), either such Stockholder may apply to
the American Arbitration Association (or another nationally-recognized
organization that provides alternative dispute resolution services) to
appoint an independent law firm to prepare and submit the report provided
for in this Section 3.1(d), and any law firm so appointed shall constitute
the law firm contemplated by this Section 3.1(d). Anything contained herein
to the contrary notwithstanding, no determination relating to the Initial
Trigger, the Rights Plan Trigger or any Rights Plan Triggering Event
pursuant to this Section 3.1(d) shall be binding upon Holdco in the absence
of a written instrument signed by Holdco agreeing to such determination (it
being understood that Holdco has no obligation to provide the Stockholders
with any such written instrument).
(e) If the Other Stockholder desires to exercise the
Purchase Right with respect to any Subject Shares covered by any Offer
Notice, it shall do so by a written notice (an "Other Stockholder Exercise
Notice") delivered to the Selling Stockholder by the Other Stockholder
prior to 5:00 P.M., New York City time, on the eighth business day
following the receipt of an Offer Notice or, if there is any dispute as to
the Initial Trigger or the Rights Plan Trigger, within 3 business days
after the resolution of such dispute. The Other Stockholder Exercise Notice
shall state the aggregate number or other appropriate amount of each class,
series or other type of the Subject Shares to be purchased (the "Other
Stockholder Elected Shares"). A copy of the Other Stockholder Exercise
Notice shall be sent to Holdco at the same time it is given to the Selling
Stockholder. If an Other Stockholder Exercise Notice is given within such
period but, in accordance with Sections 3.1(c) and 3.1(d), such Other
Stockholder Exercise Notice specifies that only a portion of the Subject
Shares are elected to be purchased (a "Partial Exercise Notice), then the
Selling Stockholder shall have the right, exercisable by written notice to
each of the Other Stockholder and Holdco given within five business days
after the Partial Exercise Notice was given, to terminate the Offer Notice
and abandon the proposed sale pursuant to the Bona Fide Offer, in which
case the provisions of this Section 3.1 shall be reinstated with respect to
any and all proposed future Dispositions of the same or any Subject Shares
pursuant to any subsequent Bona Fide Offer by the same or any other
Prospective Purchaser. If no Other Stockholder Exercise Notice is delivered
within the applicable number of business days, or if an Other Stockholder
Exercise Notice is delivered but the number of Other Stockholder Elected
Shares is less than the number of Covered Securities that are the subject
of such Offer Notice and the Selling Stockholder does not exercise its
right to terminate the Offer Notice and abandon the proposed sale pursuant
to the preceding sentence, Holdco shall have the right, exercisable by a
written notice (a "Holdco Exercise Notice") given to the Selling
Stockholder by Holdco prior to 5:00 P.M., New York City time, on the second
business day following the expiration of such period of 8 or 3 business
days, as the case may be, to elect to purchase all, but not less than all
of the Subject Shares which are not Other Stockholder Elected Shares, in
accordance with the procedures, terms and conditions set forth below in
this Section 3.1 and for a consideration (subject to subsections (g) and
(h) of this Section 3.1) and on terms no more favorable to the Selling
Stockholder than those which would apply if the Selling Stockholder
accepted the Bona Fide Offer with respect to the Holdco Elected Shares. A
copy of the Holdco Exercise Notice shall be sent to the Other Stockholder
at the same time it is given to the Selling Stockholder. The Selling
Stockholder shall have the right to condition the closing of the sale of
the Other Stockholder Elected Shares to the Other Stockholder upon the
closing of the sale of any Holdco Elected Shares and the closing of the
sale of any Holdco Elected Shares on the closing of the sale of the Other
Stockholder Elected Shares.
(f) If an Exercise Notice is given in accordance with
Section 3.1(e), within 5 business days thereafter the Purchaser and the
Selling Stockholder shall enter into a binding agreement (the "Sale
Agreement") for the sale of the Purchased Shares to the Purchaser, which
agreement shall contain such representations, warranties, covenants and
conditions no less favorable to the Selling Stockholder than the terms
contemplated by the Bona Fide Offer, except with respect to the kind and
number or other amount of Subject Shares to be purchased and the aggregate
purchase price payable in the event that the Purchased Shares constitute
fewer than all the Subject Shares. The Sale Agreement shall provide for the
closing of the purchase and sale of the Purchased Shares to be held at the
offices of the Selling Stockholder at 11:00 a.m. local time on the 60th day
after the Offer Notice was given (subject to extension in accordance with
Sections 3.1(i) and 5.1) or at such other place or on such earlier date as
the parties to the Sale Agreement may agree. At such closing, the Purchaser
shall (subject to subsections (e), (g) and (h) of this Section 3.1)
purchase the Purchased Shares for cash by wire transfer of immediately
available funds in an account at a bank designated by the Selling
Stockholder, such designation to be made no less than three days prior to
closing. At the closing, the Selling Stockholder shall deliver the
certificates and other evidences of the Purchased Shares to the Purchaser,
against payment in full for the Purchased Shares, free and clear of any
pledge, claim, lien, option, restriction, charge, shareholders' agreement,
voting trust or other encumbrance of any nature whatsoever to which the
Purchased Shares are subject in the hands of the Selling Stockholder other
than restrictions on transfer arising under federal and state securities
laws and claims, restrictions, options and encumbrances arising under this
Agreement (an "Encumbrance"). Without limiting the generality of the
immediately preceding sentence, if such Purchased Shares are Other
Stockholder Elected Shares and if the Other Stockholder is TCITP, such
Purchased Shares shall be free and clear of all Encumbrances existing or
arising under any Holdco Stockholders Agreement, and Holdco shall release
all such Encumbrances upon the closing of the purchase and sale of such
Purchased Shares pursuant hereto. The certificates evidencing the Purchased
Shares will be in proper form for transfer, with appropriate stock powers
executed in blank attached and documentary or transfer tax stamps affixed.
The Selling Stockholder shall execute such other documents as shall be
necessary to effectuate the sale of the Purchased Shares and such
additional documents as may be contemplated by the Bona Fide Offer or as
may reasonably be requested by any purchaser. The Other Stockholder may
assign any or all of its rights, and delegate any or all of its
obligations, under any Sale Agreement to which it is a party with respect
to the purchase and sale of any or all of the Other Stockholder Elected
Shares to any Controlled Affiliate of the Other Stockholder, provided that
no such assignment or delegation shall release the Other Stockholder from
its obligations thereunder without the written consent of the Selling
Stockholder. Holdco may assign any or all of its rights, and delegate any
or all of its obligations, under any Sale Agreement to which it is a party
or otherwise with respect to the purchase and sale of any or all of the
Holdco Elected Shares to any Controlled Affiliate of Holdco, provided that
no such assignment or delegation shall release Holdco from its obligations
thereunder without the written consent of the Selling Stockholder.
(g) Subject to Section 3.1(h), if the Bona Fide Offer
contemplated that the Purchase Price for the Subject Shares proposed to be
Disposed of by the Selling Stockholder would be paid, in whole or in part,
other than in cash, then the Purchaser shall pay for its Purchased Shares
in cash in lieu of such other consideration in an amount equal to the fair
market value of such other consideration as agreed by the Selling
Stockholder and the Other Stockholder. In the event of any disagreement
between the Other Stockholder and the Selling Stockholder as to the fair
market value of any non-cash consideration payable to the Selling
Stockholder, then at the request of either such party given within 5
business days following the delivery of the Offer Notice such determination
shall be conclusively made by a panel of appraisers, one of whom shall be
selected by the Other Stockholder, the second of whom shall be selected by
the Selling Stockholder and the third of whom shall be selected by the
first two appraisers. The Other Stockholder and the Selling Stockholder
shall each designate their appraiser within 3 business days after receipt
of any request for appraisal, and such appraisers shall designate the third
appraiser within 3 business days thereafter. Each appraiser shall submit
its determination of the fair market value of such non-cash consideration
to the Other Stockholder, Holdco and the Selling Stockholder within 5
business days after the panel is empaneled and such fair market value shall
be the average of the two closest valuations (or the middle valuation, if
the highest and lowest valuation differ from the middle valuation by an
equal amount). Each appraiser appointed shall be a nationally recognized
investment banking, appraisal or accounting firm which is not directly or
indirectly a Related Party of any party to this Agreement or any
Prospective Purchaser and which has no interest (other than the receipt of
customary fees) in the event giving rise to the need for the appraisal.
Each of the Other Stockholder and the Selling Stockholder shall be
responsible for the payment of one-half of the costs of such appraisal.
(h) If the Bona Fide Offer contemplated that any part
of the Purchase Price for any Subject Shares would be paid in debt
securities, each purchaser of any of such Subject Shares may, in its
discretion, elect to pay the equivalent portion of its allocable share of
the Purchase Price for the Purchased Shares through the issuance of debt
securities with substantially similar terms in an amount the fair market
value of which is equal to the fair market value of the equivalent portion
of the debt securities specified in the Bona Fide Offer, in each case as
agreed by such purchaser and the Selling Stockholder or, failing such
agreement, as determined in accordance with the appraisal procedures
specified in Section 3.1(g), taking into consideration relevant credit
factors relating to the Prospective Purchaser and such purchaser and the
marketability and liquidity of such debt securities.
(i) All time periods specified in subsection (e) or
(f) of this Section 3.1 shall be extended for a number of days equal to the
number of days in the period from the date the request for appraisal is
made pursuant to subsection (g) or (h) of this Section 3.1 or Section 4 (as
the case may be) through and including the date of submission of the last
to be submitted of the required appraisals. Each of the Other Stockholder,
the Selling Stockholder and Holdco shall be responsible for the payment of
one-third of the costs of each appraisal pursuant to subsection (h) of this
Section 3.1 (including the fees of all appraisers appointed in accordance
with subsection (h) of this Section 3.1), except that, if, at the time such
appraisal is requested, Holdco waives its right to purchase any Subject
Shares covered by the current Offer Notice, Holdco shall not be responsible
for any such fees and disbursements, which shall in such case be borne
equally by the Selling Stockholder and the Other Stockholder.
(j) The Selling Stockholder shall have the right to
sell Subject Shares to the Prospective Purchaser only in the following
circumstances:
(i) If neither an Other Stockholder Exercise Notice nor a
Holdco Exercise Notice is given in accordance with Section 3.1(e)
within the applicable time period specified therein (as such
period may be extended pursuant to subsection (i) of this Section
3.1), the Selling Stockholder shall have the right (within the
period specified below in this subsection) to sell all but not
less than all of the Subject Shares to the Prospective Purchaser,
and in such case the "Free to Sell Date" shall be the business day
following the expiration of the last to expire of all time periods
provided for in Section 3.1(e).
(ii) If an Other Stockholder Exercise Notice is given but
the number of Other Stockholder Elected Shares is less than the
number of Covered Securities that are subject to the relevant
Offer Notice, and if no Holdco Exercise Notice is given in
accordance with Section 3.1(e) within the applicable time period
specified therein (as such period may be extended pursuant to
subsection (i) of this Section 3.1), then the Selling Stockholder
shall have the right (within the period specified below in this
subsection) to sell all, but not less than all of the Subject
Shares which are not Other Stockholder Elected Shares to the
Prospective Purchaser, and in such case the "Free to Sell Date"
shall be the earlier of the fifth business day following the date
the Other Stockholder Exercise Notice was given and the date that
Holdco notifies the Selling Stockholder that it has determined not
to purchase any such Subject Shares.
(iii) If an Other Stockholder Exercise Notice is given but a
Sale Agreement for the Other Stockholder Elected Shares is not
executed by the Purchaser and tendered to the Selling Stockholder
for execution within the 5 business day period specified in the
first sentence of Section 3.1(f) (as such period may be extended
pursuant to subsection (i) of this Section 3.1), then the Selling
Stockholder shall have the right (within the period specified
below in this subsection) to sell all, but not less than all of
the Subject Shares to the Prospective Purchaser, and in such case
the "Free to Sell Date" shall be the business day after expiration
of such 5 business day period.
(iv) If a Holdco Exercise Notice is given but a Sale
Agreement for the Holdco Elected Shares is not executed by the
Purchaser and tendered to the Selling Stockholder for execution
within the 5 business day period specified in the first sentence
of Section 3.1(f) (as such period may be extended pursuant to
subsection (i) of this Section 3.1), then the Selling Stockholder
shall have the right (within the period specified below in this
subsection) to sell all, but not less than all of the Holdco
Elected Shares to the Prospective Purchaser, and in such case the
"Free to Sell Date" shall be the business day after the expiration
of such 5 business day period.
(v) If a Sale Agreement for either Other Stockholder Elected
Shares or Holdco Elected Shares is executed by the Purchaser and
the Selling Stockholder, but the closing of the purchase and sale
thereunder shall not occur by the latest date for such closing
determined in accordance with Sections 3.1(f), 3.1(i) and 5.1 for
any reason other than a breach or violation by the Selling
Stockholder of any of such Selling Stockholder's representations,
warranties, covenants or agreements that are a condition to such
closing, then the Selling Stockholder shall have the right (within
the period specified below in this subsection) to sell all, but
not less than all of such Other Stockholder Elected Shares or the
Holdco Elected Shares covered by such Sale Agreement to the
Prospective Purchaser, and in such case the "Free to Sell Date"
shall be the business day after such latest date for such closing
as so determined.
(vi) If between the date an Other Stockholder Election
Notice is given with respect to any Other Stockholder Elected
Shares and the closing of the purchase and sale of such Other
Stockholder Elected Shares, there shall be any amendment or
modification adverse to the Other Stockholder of any Defensive
Provision in effect on the date the Other Stockholder Election
Notice was given, adoption of any other Defensive Provision
adverse to the Other Stockholder, waiver adverse to the Other
Stockholder of any term or provision of or exercise adverse to the
Other Stockholder of any other discretionary right or power under
any Defensive Provision (whether then or thereafter in effect),
any reorganization, transfer of assets, consolidation, merger,
share exchange, dissolution, issue or sale of securities or any
other action or event which in the opinion of the Other
Stockholder would, if such purchase and sale were consummated,
have a Disadvantageous Result, then notwithstanding any other
provision of this Agreement or any provision of any Sale Agreement
to which any member of the Other Stockholder Group may be a party
and without any liability or obligation to the Selling
Stockholder, Holdco, any other party to this Agreement or any
Prospective Purchaser, the Other Stockholder may, by written
notice given to the Selling Stockholder and Holdco within five
business days after the Other Stockholder acquires actual
knowledge of such action or event, rescind the Other Stockholder
Election Notice and any Sale Agreement to which any member of the
Other Stockholder Group may be a party and abandon the purchase
and sale of the Other Stockholder Elected Shares pursuant thereto.
In such event, the Selling Stockholder shall have the right to
sell all or any portion of the Subject Shares to the Prospective
Purchaser and the "Free to Sell Date" shall be the business day
following receipt by the Selling Stockholder of such written
notice of abandonment.
Any sale of Subject Shares to the Prospective Purchaser permitted by this
Section shall be for the Purchase Price (or a greater price), payable in
the manner specified in the Bona Fide Offer, and otherwise on terms and
conditions no more favorable to the Prospective Purchaser than those
contained in the Bona Fide Offer; provided, however, that if such Subject
Shares constitute fewer than all the Subject Shares, the purchase price
therefor shall be equal to or greater than the portion of the Purchase
Price allocable to such Subject Shares (determined by multiplying each
share or other appropriate unit of such Subject Shares of each class,
series or other type by the Per-Share Offer Consideration for the Subject
Shares of that class, series or other type). In the event that (i) the
Prospective Purchaser has not entered into a binding agreement with the
Selling Stockholder for the purchase of such Subject Shares within the
30-day period following the Free to Sell Date or (ii) the Prospective
Purchaser has not purchased such Subject Shares within the time period
which would be applicable to a purchase thereof by a Purchaser under the
second sentence of Section 3.1(f) as if calculated from the Free to Sell
Date (except that the 60-day period referred to therein shall be construed
as a 120-day period for this purpose), then, in either such case, the
Selling Stockholder's right to sell Subject Shares to the Prospective
Purchaser pursuant to this Section 3.1(j) shall expire and the provisions
of this Section 3.1 shall be reinstated with respect to any and all
proposed future Dispositions of the same or any other Subject Shares
pursuant to any subsequent Bona Fide Offer by the same or any other
Prospective Purchaser.
3.2 Public Sales.
(a) If any Stockholder at any time intends to effect
a Public Sale of Covered Securities (other than a Fast-Track Sale), such
Stockholder may deliver to the Other Stockholder an Offer Notice pursuant
to Section 3.1 offering to sell such Covered Securities to the Other
Stockholder at a price equal to the aggregate Current Market Price thereof
on the date on which such Offer Notice is given. A copy of such Offer
Notice shall be sent to Holdco at the same time it is given to the Other
Stockholder. If any such Offer Notice with respect to any Covered
Securities is given, the Stockholder giving the Offer Notice shall have all
rights and obligations of a "Selling Stockholder" under Section 3.1 and
each of the Other Stockholder and Holdco shall have all of their respective
rights and obligations provided for in Section 3.1, in each case with the
same effect as if such Covered Securities were "Subject Shares" proposed to
be sold by the Selling Stockholder to a Prospective Purchaser for
"Per-Share Offer Consideration" consisting of cash in an amount equal to
the Current Market Price of the Covered Securities on the date such Offer
Notice is given and for a "Purchase Price" equal to the total Current
Market Price on such date of all such Subject Shares, and as if the other
terms of the Public Sale were the terms of the "Bona Fide Offer" made by
such assumed Prospective Purchaser, except that subsections (g), (h) and
(i) of Section 3.1 shall not apply and the provisions of subsection (j) of
Section 3.1 shall apply only as modified by subsection (b) of this Section
3.2.
(b) Subject Shares covered by any Offer Notice given
pursuant to this Section 3.2 may be sold (after full compliance with this
Section 3.2 and the applicable provisions of Section 3.1) by the Selling
Stockholder at any available price in a Public Sale of the type described
in such Offer Notice, provided that such sale or sales are completed within
the period of 120 days after the applicable Free to Sell Date; provided,
however, that if the issuer of any Covered Securities exercises any right
to delay the filing or effectiveness of a registration statement relating
to such Covered Securities or to suspend sales under such registration
statement, then the period shall be extended by the number of days in any
such delay or suspension period. If any Subject Shares covered by such
Offer Notice which such Selling Stockholder becomes obligated under this
Section 3.2 to sell to one or more purchasers or their permitted assignees
are not, for any reason, sold to such Persons within any applicable period
determined pursuant to Section 3.1, or if any such Subject Shares which
such Selling Stockholder is entitled, pursuant to the first sentence of
this Section 3.2(b), to sell in the Public Sale are not so sold within the
period provided in such sentence, then in each case the right of such
Selling Stockholder to sell such unsold Subject Shares shall terminate and
such Subject Shares shall thereafter continue to be subject to the
restriction on Dispositions of Covered Securities contained in Section 2.
3.3 Fast-Track Sales.
(a) Any Stockholder who proposes to make a Fast-Track
Sale may deliver to each of the Other Stockholder and Holdco a written
notice (the "Fast-Track Offer Notice") to such effect which states the
number of shares of Common Stock proposed to be sold (the "Fast-Track
Shares"). The delivery of any such notice shall constitute the offer by
such Stockholder to sell to the Other Stockholder, Holdco or both all or
such portion of the Fast-Track Shares as it or they may have the right to
purchase in accordance with this Section 3.3 at a price payable in cash
equal to the aggregate Current Market Price thereof on the date on which
such Fast-Track Offer Notice is given.
(b) The Other Stockholder shall have the right to
elect to purchase (or to designate any one or more of the members of the
Other Stockholder Group as purchasers of) all or any number of the
Fast-Track Shares. The Other Stockholder and Holdco shall consult with each
other in an effort to resolve any questions as to the Initial Trigger and
the Rights Plan Trigger; provided, that if the Other Stockholder and Holdco
cannot resolve such issue, then the Other Stockholder shall have the right
to purchase only the number of Fast-Track Shares that Holdco shall specify.
Anything contained herein to the contrary notwithstanding, no determination
relating to the Initial Trigger or the Rights Plan Trigger pursuant to this
Section 3.3(b) shall be binding upon Holdco in the absence of a written
instrument signed by Holdco agreeing to such determination (it being
understood that Holdco has no obligation to provide the Other Stockholder
with any such written instrument). If the Other Stockholder desires to
exercise its purchase right under this Section 3.3, it shall do so by a
written notice specifying the number of the Fast-Track Shares to be
purchased and identifying the purchasers thereof, given to the Stockholder
who gave the Fast-Track Offer Notice prior to 5:00 P.M., New York City
time, on the third business day following the receipt by the Other
Stockholder of the Fast-Track Offer Notice (provided that any Fast-Track
Offer Notice received on a day that is not a business day or after 12 noon,
New York City time, on a business day, shall be deemed to have been
received on the next following business day). Holdco shall have the right
to elect to purchase any or all of the Fast-Track Shares that the Other
Stockholder does not elect to purchase or have one or more other members of
the Other Stockholder Group purchase in accordance with the immediately
preceding sentence, which right shall be exercisable by a written notice
specifying the number of such Fast-Track Shares to be purchased, which
notice shall be given by Holdco to the Stockholder proposing to sell such
Fast-Track Shares and the Other Stockholder prior to 5:00 P.M., New York
City time, on the fifth business day following the receipt by the Other
Stockholder and Holdco of the Fast-Track Offer Notice. If any such notice
is given by either the Other Stockholder or Holdco, the closing of the
purchase and sale of the Fast-Track Shares covered thereby shall be held at
the offices in the continental United States of the Other Stockholder or
Holdco (as the case may be) specified in such notice, 11:00 A.M., New York
City time, on the fourth business day after such notice was given or at
such other place or date as the Stockholder selling the Fast-Track Shares
and the purchasers thereof may agree, and such closing date shall not be
subject to extension pursuant to Section 5.1 or otherwise unless such
selling Stockholder and such purchasers agree to such extension. At such
closing, the purchasers shall purchase such Fast-Track Shares for cash by
wire transfer of immediately available funds in an account at a bank
designated by the selling Stockholder, such designation to be made no less
than three business days prior to closing, against delivery at the closing
by the selling Stockholder of the certificates evidencing the Fast-Track
Shares to be sold to such purchasers, in proper form for transfer, with
appropriate stock powers executed in blank attached and documentary or
transfer tax stamps affixed. Such delivery of such certificates shall
constitute the representation and warranty of such selling Stockholder that
upon such delivery, such selling Stockholder duly transferred good and
marketable title to the shares evidenced thereby, clear of any Encumbrance.
Without limiting the generality of the immediately preceding sentence, if
the Other Stockholder is TCITP, such purchased Fast-Track Shares shall be
free and clear of all Encumbrances existing or arising under any Holdco
Stockholders Agreement, and Holdco shall release all such Encumbrances upon
the closing of the purchase and sale thereof. The purchase price payable
for each Fast-Track Share purchased pursuant to this Section 3.3 shall be
the Current Market Price determined as of the date the Fast-Track Offer
Notice was given.
(c) Any Fast-Track Shares not purchased pursuant to
Section 3.3(b) may be sold by the selling Stockholder at any available
price in one or more Fast-Track Sales within the 90-day period following
the twelfth business day after the receipt by both Holdco and the Other
Stockholder of the Fast-Track Offer Notice, and if all Fast-Track Shares
for any reason are not sold within such period either pursuant to Section
3.3(b) or in one or more Fast-Track Sales, then the right to sell such
Fast-Track Shares shall terminate and such Fast-Track Shares shall
thereafter continue to be subject to the restrictions on Dispositions of
Covered Securities contained in Section 2.
3.4 Tender or Exchange Offer Sales.
(a) If any Person shall make a tender or exchange
offer to acquire any Covered Securities, and if any Stockholder (a
"Tendering Stockholder") intends to tender any Covered Securities, such
Tendering Stockholder shall give the Other Stockholder written notice (the
"Tender Notice") of such intention not later than ten calendar days prior
to the latest time by which securities must be tendered in order to be
accepted pursuant to such offer as such date may from time to time be
extended (the "Tender Date"), specifying the Covered Securities proposed to
be tendered (the "Tender Shares"), together with copies of all written
materials by which such offer is being made. A copy of such Tender Notice
shall be sent to Holdco at the same time it is given to the Other
Stockholder.
(b) Any Tender Notice given by any Tendering
Stockholder shall constitute an offer by such Tendering Stockholder to sell
to the Other Stockholder the Tender Shares. The Other Stockholder shall
have the right to elect to purchase (or to designate any one or more of the
members of the Other Stockholder Group as purchasers of) all or any number
of the Tender Shares in accordance with this Section 3.4. The Other
Stockholder and Holdco shall consult with each other in an effort to
resolve any questions as to the Initial Trigger and the Rights Plan
Trigger, but the rights of the Other Stockholder under this Section 3.4
shall not be affected by the failure of Holdco to concur in any conclusion
of the Other Stockholder with respect to any such matter. Anything
contained herein to the contrary notwithstanding, no determination relating
to the Initial Trigger or the Rights Plan Trigger pursuant to this Section
3.4(b) shall be binding upon Holdco in the absence of a written instrument
signed by Holdco agreeing to such determination (it being understood that
Holdco has no obligation to provide the Other Stockholder with any such
written instrument). If the Other Stockholder desires to exercise its
purchase right under this Section 3.4, it shall do so by a written notice
specifying the number of the Tender Shares to be purchased and identifying
the purchasers thereof, given to the Tendering Stockholder at least three
business days prior to the Tender Date. If any such notice is given by the
Other Stockholder, the closing of the purchase and sale of the Tender
Shares covered thereby shall be held at the offices of the Other
Stockholder within the continental United States specified in such notice
at 11:00 A.M., New York City time, on a date specified in such notice that
is not later than two business days prior to the Tender Date, or at such
other place or date as the Tendering Stockholder and the Other Stockholder
may agree, and such closing date shall not be subject to extension pursuant
to Section 5.1 or otherwise unless the Tendering Stockholder and the Other
Stockholder agree to such extension. At such closing, the purchasers
identified by the Other Stockholder shall purchase such Tender Shares for
cash by wire transfer of immediately available funds to an account at a
bank designated by the Tendering Stockholder in the Tender Notice, against
delivery at the closing by the Tendering Stockholder of the certificates or
other instruments evidencing the Tender Shares to be sold to such
purchasers, in proper form for transfer, with appropriate stock powers
executed in blank attached and documentary or transfer tax stamps affixed.
Such delivery of such certificates shall constitute the representation and
warranty of such Tendering Stockholder that upon such delivery, such
Tendering Stockholder duly transferred good and marketable title to the
shares evidenced thereby, free and clear of any Encumbrance. Without
limiting the generality of the immediately preceding sentence, such
purchased Tender Shares shall be free and clear of all Encumbrances
existing or arising under any Holdco Stockholders Agreement, and Holdco
shall release all such Encumbrances upon the closing of the purchase and
sale thereof. The total purchase price to be paid by such purchasers for
such Tender Shares shall be (i) if such tender or exchange offer is
consummated, the purchase price that the Tendering Stockholder would have
received if it had tendered such Tender Shares and all such Tender Shares
had been purchased in such tender or exchange offer, including any
increases in the price paid by the offeror after exercise by the Other
Stockholder of its right of first refusal under this Section 3.4 or after
the closing of the purchase of Tender Shares pursuant to such exercise,
(ii) if such tender or exchange offer is not consummated, the highest price
offered pursuant thereto, or (iii) if any other tender or exchange offer is
commenced prior to the expiration or termination of such tender or exchange
offer, the highest price offered in either such tender or exchange offers
in each case with any offered securities or other property except cash to
be valued as provided in Section 3.4(c).
(c) If the consideration offered in such tender or
exchange offer consists, in whole or in part, of securities or other
property except cash, then the purchasers identified by the Other
Stockholder shall pay for the Tender Shares cash in lieu of such other
consideration in an amount equal to the fair market value of such other
consideration as agreed by the Tendering Stockholder and the Other
Stockholder. In the event the Tendering Stockholder and the Other
Stockholder do not agree as to the fair market value of any such non-cash
consideration by the beginning of the second business day after the Offer
Notice is given, then such determination shall be conclusively made by a
panel of appraisers, one of whom shall be selected by the Other
Stockholder, the second of whom shall be selected by the Tendering
Stockholder and the third of whom shall be selected by the first two
appraisers. The Other Stockholder and the Tendering Stockholder shall each
designate their appraiser within three business days after such Offer
Notice is given, and such appraisers shall designate the third appraiser
within three business days thereafter. Each appraiser shall submit its
determination of the fair market value of such non-cash consideration
within three business days after the panel is empaneled and such fair
market value shall be the average of the two closest valuations (or the
middle valuation, if the highest and lowest valuation differ from the
middle valuation by an equal amount). Each appraiser appointed shall be a
nationally recognized investment banking, appraisal or accounting firm
which is not directly or indirectly a Related Party of any party to this
Agreement or the Person making the tender or exchange offer and which has
no interest (other than the receipt of customary fees) in the event giving
rise to the need for the appraisal. Each of the Other Stockholder and the
Tendering Stockholder shall be responsible for the payment of one-half of
the costs of such appraisal.
(d) If the Other Stockholder does not exercise its
right of first refusal under this Section 3.4 by giving a notice of
exercise in accordance with Section 3.4(b) or, having given such notice,
fails to purchase and pay for (or have one or more of its designees
purchase and pay for) such Tender Shares on or prior to the business day
prior to the Tender Date, then the Tendering Stockholder shall be free to
accept the tender or exchange offer with respect to which the Tender Notice
was given or any other tender or exchange offer commenced during the
pendency of the tender or exchange offer with respect to which the Tender
Notice was given.
3.5 Holdco to Provide Certain Information. If requested at
any time or from time to time by any Stockholder, Holdco shall promptly
provide to such Stockholder in writing (i) all information which such
Stockholder reasonably may request for the purpose of determining whether,
based on the facts set forth by such Stockholder in such request, any
acquisition of beneficial ownership by such Stockholder or the Other
Stockholder would result in the occurrence of a Disadvantageous Result
under or in respect of any Defensive Provision and (ii) such other
non-confidential information known to Holdco as such Stockholder may
reasonably request regarding (A) the number of Covered Securities issued
and outstanding at any time, (B) the number of Covered Securities owned of
record by any person at any time, or (C) the terms and conditions of any
Defensive Provision.
3.6 Certain Actions by Holdco. In the event that Holdco
shall (i) amend or modify any Defensive Provision in effect on the date
hereof, or (ii) adopt any Defensive Provision after the date hereof, or
(iii) purchase, redeem or otherwise acquire any outstanding Covered
Securities, directly or indirectly through any Controlled Affiliate of
Holdco, and the result of any such action is to reduce the Initial Trigger
or the Rights Plan Trigger with respect to any Stockholder Group, then, in
the case of any Offer Notice or Tender Notice delivered after such action,
if such action shall have had the effect of reducing the number of Subject
Shares covered by such Offer Notice that may then be purchased by the Other
Stockholder pursuant to this Agreement, Holdco shall have no right under
this Agreement to purchase any Subject Shares covered by such Offer Notice.
4. Involuntary Event; Death or Incapacity.
4.1 In the event that (i) any Stockholder shall be
adjudicated bankrupt or insolvent or file a voluntary petition for
bankruptcy (or an involuntary petition for bankruptcy shall have been filed
against any Stockholder and the same shall not have been dismissed within
60 days after the date of filing), or file a pleading in any court of
record admitting his inability to pay his debts as they become due, or make
a general assignment for the benefit of creditors, or (ii) a receiver,
administrator, guardian, legal committee or other legal custodian of any
Stockholder's property shall be appointed (other than in connection with
his death or incapacity) and not discharged within 60 days, or (iii) a writ
of attachment or levy or other similar court order shall prevent any
Stockholder from exercising his or its right to vote or Dispose of any of
his or its Covered Securities and such writ or levy is not dismissed (or
such court order is not reversed) within 60 days, then such Stockholder
shall promptly notify the Other Stockholder of the occurrence of any such
event (the "Involuntary Event"). Simultaneously with the delivery of any
such notice required by this Section 4.1, such Stockholder shall deliver an
Offer Notice to such Other Stockholder pursuant to Section 3.1, offering to
sell all Covered Securities beneficially owned by such Stockholder to such
Other Stockholder at the Appraised Value. Each Stockholder giving such an
Offer Notice shall have, in respect of such Offer Notice, all rights and
obligations under Section 3.1 of a Selling Stockholder, except that if such
Stockholder is a Turner Stockholder, for so long as such Turner Stockholder
is subject to the restrictions on transfer contained in the Holdco
Stockholders' Agreement, it shall not be entitled to sell any Covered
Securities to any Person other than the Purchasers, if any; each Other
Stockholder and Holdco shall have, in respect of such Offer Notice, all
rights and obligations under Section 3.1 which are provided for therein in
the case of any Offer Notice given pursuant thereto. For the purpose
hereof, the term "Appraised Value" means the fair market value of the
Covered Securities to be sold as determined by appraisal in the same manner
as provided in Section 3.1(h) with respect to appraisals of non-cash
consideration. Each of such Stockholder, the Other Stockholder and Holdco
shall be responsible for the payment of one-third of the costs of such
appraisal, except that, if, at the time such appraisal is requested, Holdco
waives its right to purchase any Subject Shares covered by the current
Offer Notice, Holdco shall not be responsible for any such fees and
disbursements, which shall in such case be borne equally by such
Stockholder and the Other Stockholder. All time periods specified in
subsection (e) or (f) of Section 3.1 shall be extended for a number of days
equal to the number of days in the period from the delivery of the Offer
Notice pursuant to this Section 4.1 through and including the date of
submission of the last to be submitted of the required appraisals.
4.2 Any Sale Agreement entered into by any Stockholder and
the Purchaser pursuant to an Offer Notice required by Section 4.1 shall
provide that the closing of the sale of the Covered Securities to be sold
and purchased thereunder may be postponed for such period as may be
necessary to effect the purchase of such Covered Securities free from any
claims of a trustee in bankruptcy, any garnishee or any court order. In the
event that any Covered Securities subject to such Offer Notice are not
purchased for any reason, such Covered Securities shall continue to be
subject to this Agreement.
4.3 In the event of Turner's incapacity or death, his legal
representative or the executor or administrator of his estate, as the case
may be, shall be bound by all the terms and provisions of this Agreement as
fully as if such representative, executor or administrator were a party
hereto and his or its name were substituted for Turner's name herein and
shall be entitled to exercise Turner's rights and required to perform his
obligations hereunder.
5. Regulatory Approvals; Certain Representations, Warranties
and Covenants.
5.1 Regulatory Approvals. If any sale of Covered Securities
to any Stockholder, Holdco or any permitted assignee of any Stockholder or
Holdco in accordance with Section 3.1, 3.2 or 4 requires, as a condition to
the legal and valid transfer thereof to such Purchaser, any consent,
approval, waiver, or authorization of, notice to or filing with, any
Governmental Authority or the expiration of any waiting period imposed by
applicable law and if Section 3.1, 3.2 or 4 (as the case may be) provides
for the closing of such sale to be held before some fixed or ascertainable
date, then such date shall be extended for the period of time during which
efforts to obtain each such consent, approval, waiver, or authorization, to
give such notice or make such filing and to obtain the termination of each
such waiting period at the earliest reasonably practicable time are
diligently being made; provided, however, that in no event shall the
extension of any such closing date pursuant to this Section 5.1 exceed 90
days. Each party shall (and shall cause such party's Controlled Affiliates
to) reasonably cooperate with the other parties in obtaining any such
consent, approval, waiver, or authorization, to give any such notice or
make any such filing and in obtaining the termination of any such waiting
period at the earliest practicable time.
5.2 Representation and Warranty of Holdco. Holdco represents
and warrants to each of TCITP and Turner that, other than the Old TW Rights
Plan, the provisions of TW's Restated Certificate of Incorporation and
By-laws and the Delaware Statute, there were no Defensive Provisions in
effect on September 22, 1995; provided, however, that no representation is
made as to the laws of any jurisdiction other than Delaware.
6. Legend on Stock Certificates; No Recordation of Transfer.
6.1 Each certificate or instrument representing Covered
Securities directly or indirectly beneficially owned by any Stockholder
shall bear the following legend until such time as the shares represented
thereby are no longer subject to this Agreement:
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE
SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF OCTOBER 10,
1996, AMONG R.E. TURNER, III, TCI TURNER PREFERRED, INC., TURNER
PARTNERS, L.P., TIME WARNER INC. AND CERTAIN OTHER PERSONS. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE OFFICES OF TIME WARNER INC.
Holdco shall not be responsible for placing the above legend on any
certificate representing Covered Securities, except to the extent that it
has actual knowledge that such certificate has been issued in the name of
any Stockholder.
6.2 Holdco agrees not to knowingly effect a transfer of any
Covered Securities which to Holdco's actual knowledge are directly or
indirectly beneficially owned by any Stockholder on its books except as
permitted by the terms of this Agreement. A copy of this Agreement shall be
filed with the Secretary of Holdco.
7. Representations and Warranties; Certain Additional
Covenants.
7.1 Certain Representations and Covenants of the TCITP
Stockholders. Each of the TCITP Stockholders represent and warrant to the
Turner Stockholders and Holdco as follows:
(a) Neither such TCITP Stockholder nor any of its
Controlled Affiliates that hold Holdco Shares is a party to or
bound by, any Contract, Requirement of Law or Judgment, other than
Requirements of Law referred to in Section 7.3(d), that does or
may prevent, impede or delay the due and punctual performance by
any such Person of its agreements, obligations and commitments
contained in this Agreement, and such TCITP Stockholder will not
enter into or permit any of its Controlled Affiliates to enter
into any such Contract or take any other voluntary action or
voluntarily omit to take any action that would have any such
effect.
(b) Except for this Agreement and except for any
Permitted Pledge in effect as of the date hereof, there is no
option, warrant, right, call, proxy, or Contract that directly or
indirectly provides for the sale, pledge or other Disposition of
any of such TCITP Holdco Shares or any interest therein or any
rights with respect thereto, relates to the voting, Disposition or
control of any thereof or obligates or may obligate such TCITP
Stockholder or any of its Controlled Affiliates to grant, offer or
enter into any of the foregoing.
No breach or violation of any of the foregoing representations, warranties
or covenants shall result or be deemed to result directly or indirectly
from or by reason of any Contract between TCITP and any of its Affiliates
and Holdco and any of its Affiliates, directors or officers, whether now
existing or hereafter entered into, nor from or by reason of the execution,
delivery or performance of or action taken or omitted to be taken pursuant
to the terms of any such Contract or the consummation of any transaction
contemplated thereby, nor from or by reason of any option, warrant, right,
call, proxy or other right granted, covenant made or obligation incurred
under any such Contract that directly or indirectly provides for the sale,
pledge or other Disposition of any of the TCITP Holdco Shares or any
interest therein or any rights with respect thereto.
7.2 Certain Representations and Covenants of the Turner
Stockholders. Each of the Turner Stockholders represents and warrants to
the TCITP Stockholders and Holdco as follows:
(a) Neither such Turner Stockholder nor any of his or
its Controlled Affiliates that hold Holdco Shares is a party to or
bound by, any Contract, Requirement of Law or Judgment, other than
any Requirements of Law referred to in Section 7.3(d), that does
or may prevent, impede or delay the due and punctual performance
by any such Person of his or its agreements, obligations and
commitments contained in this Agreement, and such Turner
Stockholder will not enter into or permit any of his or its
Controlled Affiliates to enter into any such Contract or take any
other voluntary action or voluntarily omit to take any action that
would have any such effect.
(b) Except for this Agreement and any Holdco
Stockholders Agreement and except for any Permitted Pledge in
effect as of the date hereof, there is no option, warrant, right,
call, proxy, or Contract that directly or indirectly provides for
the sale, pledge or other Disposition of any of such Turner Holdco
Shares or any interest therein or any rights with respect thereto,
relates to the voting, Disposition or control of any thereof or
obligates or may obligate such Turner Stockholder or any of his or
its Controlled Affiliates to grant, offer or enter into any of the
foregoing. Each of the Turner Stockholders has delivered to TCITP
a true and complete copy of each Holdco Stockholders Agreement to
which it is a party, if any, as amended through and in effect on
the date of this Agreement.
No Turner Stockholder shall permit the amendment of any Holdco Stockholders
Agreement to which it is a party in any manner that would have any effect
referred to in Section 7.2(a).
7.3 Representations and Warranties of Each Party. Each
party, severally and not jointly, represents and warrants to each of the
other parties as follows:
(a) If such party is a corporation or partnership, such
party has all requisite corporate power and authority or partnership power
and authority (as the case may be) to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by such party
of, and the consummation of the transactions contemplated by, this
Agreement have been duly and validly authorized by all necessary corporate
action or partnership action (as the case may be) on the part of such
party.
(b) If such party is a natural person (whether acting
individually or in a fiduciary capacity), such party has full legal
capacity, right, power and authority to execute, deliver and perform his or
her obligations under this Agreement and to consummate the transactions
contemplated hereby.
(c) This Agreement has been duly executed and delivered by
such party. This Agreement constitutes a legal, valid and binding
obligation of such party enforceable in accordance with its terms, except
that (i) such enforceability may be subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights and (ii) such
enforceability may be subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
(d) The execution, delivery and performance of this
Agreement by such party do not, either with or without the giving of notice
or the passage of time or both, (i) assuming compliance with the
requirements referred to in clause (ii) of this sentence, violate or
conflict with any Requirement of Law or Judgment applicable to such party,
(ii) except for (A) requirements, if any, arising out of any required
pre-merger notification and related filings with the FTC and the Antitrust
Division of the Department of Justice pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, (B) requirements, if any,
arising out of the rules and regulations adopted by the Federal
Communications Commission, and (C) requirements, if any, arising out of the
FTC Consent Decree, require the consent or authorization of or waiver by or
filing with any Governmental Authority or (iii) conflict with, result in
the breach of any provision of, result in the modification or termination
of, require the consent or authorization of or waiver by or filing with any
other parties to, or result in the creation or imposition of any
Encumbrance pursuant to, or constitute a default under, any material
agreement, permit, indenture, note, lease, license or franchise or any
other material instrument to which such party is a party or by which such
party's properties or assets are bound or from which such party derives
benefit. For purposes of this Section 7.3(d), the word "party" includes (i)
in the case of Holdco, Holdco and its Affiliates, and (ii) in the case of
any Turner Stockholder, such Turner Stockholder and his or its Related
Parties.
8. No Assignment.
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted
assigns and, in the event of the incapacity or death of any Turner
Stockholder who is a natural person, his legal representatives, the
executor or administrator of his estate, and his heirs and beneficiaries,
as provided in Section 4 hereof. Except as specifically provided herein,
this Agreement and the rights and obligations of the parties hereunder may
not be assigned or delegated, in whole or in part. Without prejudice to the
rights of Holdco under any other provision of this Agreement, none of the
provisions of Section 2 (other than the third sentence of Section 2) of
this Agreement are intended to be for the benefit of or enforceable by
Holdco, and Holdco shall not have any right, remedy or claim against any
Stockholder by reason of any breach or violation thereof.
9. Specific Performance. The parties hereto acknowledge that
the benefits to them under this Agreement are unique, that they are willing
to enter into this Agreement only upon performance by each other of all of
their obligations hereunder and that monetary damage would not afford
adequate remedy for failure to perform any such obligations hereunder.
Accordingly, the parties hereby consent to specific performance of their
obligations hereunder and waive any requirement for securing or posting of
any bond in connection with the obtaining of any injunctive or other
equitable relief to enforce their rights hereunder.
10. Termination, Amendment and Waiver. This Agreement shall
terminate as to all parties on the first to occur of (i) the date on which
no TCITP Stockholder beneficially owns any Covered Securities (otherwise
than by reason of any Disposition made in violation of this Agreement),
(ii) the date on which no Turner Stockholder beneficially owns any Covered
Securities (otherwise than by reason of any Disposition made in violation
of this Agreement) and (iii) any date of termination agreed to by TCITP and
Turner. If, by reason of one or more Dispositions, the number of Holdco
Shares directly or indirectly beneficially owned by the TCITP Stockholders,
as a group, or the Turner Stockholders, as a group, is less than one-third
of the number of the shares beneficially owned by such Group immediately
after the Effective Time (which number, in the case of the TCITP
Stockholders, shall be calculated after giving effect to the exchange
required by Section 4.1 of the LMC Agreement and, as to each Group, shall
be appropriately adjusted to take into account any stock split, reverse
stock split, reclassification, recapitalization, conversion,
reorganization, merger or other change in such Holdco Shares) then such
group shall no longer have any right of first refusal under Section 3 or
Section 4, but shall continue to be subject to all obligations and
restrictions arising under this Agreement with respect to all Covered
Securities which the members of that group continue to beneficially own.
This Agreement may be amended by the parties hereto only by an instrument
in writing signed by each party; provided, however, that execution of any
such amendment by or on behalf of Holdco shall not be required unless such
amendment adversely affects the rights or obligations of Holdco hereunder.
Any term or provisions of this Agreement may be waived in writing at any
time by the party which is entitled to the benefits thereof.
11. General Provisions
11.1 All periods of time referred to in this Agreement
(other than references to business days ) shall include all Saturdays,
Sundays or State of New York holidays provided that if the date or last
date to perform the act or give any notice with respect to this Agreement
shall fall on a Saturday, Sunday or State of New York holiday, such act or
notice may be timely performed or given if performed or given on the next
succeeding day which is not a Saturday, Sunday or State of New York
holiday.
11.2 All notices, requests, consents and other
communications required or permitted hereunder shall be in writing and
shall be deemed effectively given or delivered upon confirmed facsimile
transmission, personal delivery or the day following delivery to a courier
service which guarantees overnight delivery of such notice or five (5) days
after deposit with the U.S. Post Office, by registered or certified mail,
return receipt requested, postage prepaid, and, in the case of courier or
mail delivery, addressed to the intended recipient at his or its address as
shown on Schedule I attached hereto or such other address as a party may
specify in writing.
11.3 This Agreement constitutes the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, whether oral or written, relating to the
subject matter hereof (it being understood that this Section 11.3 is not
intended to obviate the respective rights and obligations of Turner, Holdco
and the other parties thereto under the Investors Agreement (No. 1) dated
as of the same date as this Agreement among Holdco, Turner, TOI and TP).
11.4 Any provision hereof which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11.5 The headings of the articles and sections contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect the meaning or interpretation
of this Agreement. The definitions in Section 1 and elsewhere in this
Agreement shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The words "herein", "hereof" and "hereunder"
and words of similar import refer to this Agreement in its entirety and not
to any part hereof unless the context shall otherwise require. All
references herein to Sections, Exhibits and Schedules shall be deemed
references to and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Unless otherwise
expressly provided herein or unless the context shall otherwise require,
any references as of any time to the "Certificate of Incorporation",
"Restated Certification of Incorporation", "Articles of Incorporation",
"charter", "organizational or governing documents" or "By-laws" of any
Entity, to any agreement (including this Agreement) or other Contract,
instrument or document or to any statute or regulation or any specific
section or other provision thereof are to it as amended and supplemented
through such time (and, in the case of a statute or regulation or specific
section or other provision thereof, to any successor of such statute,
regulation, section or other provision). Unless otherwise expressly
provided herein or unless the context shall otherwise require, any
provision of this Agreement using a defined term (by way of example and
without limitation, such as "Controlled Affiliate") which is based on a
specified characteristic, qualification, feature, relationship or status
shall, as of any time, refer only to such Persons who have the specified
characteristic, qualification, feature, relationship or status as of that
particular time.
11.6 This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but which together
shall constitute but one and the same instrument.
11.7 This Agreement and the validity, interpretation and
performance of the terms and provisions hereof shall be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to the provisions thereof relating to choice or conflict of laws,
except to the extent that the laws of the jurisdiction of incorporation of
Holdco shall be mandatorily applicable.
11.8 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY (I) SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN NEW YORK CITY (AND OF ANY APPELLATE COURT TO WHICH
AN APPEAL OF ANY JUDGMENT, ORDER, DECREE OR DECISION OF ANY SUCH COURT MAY
BE TAKEN) IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RENDERED
IN ANY SUCH SUIT, ACTION OR PROCEEDING, (II) WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING IN ANY SUCH COURT, INCLUDING ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND (III)
WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING.
IN WITNESS WHEREOF, the parties have executed this
Stockholders' Agreement in two or more counterparts as of the day and year
first above written.
TCI TURNER PREFERRED, INC.
By: /s/ Robert R. Bennett
_____________________________
Name: Robert R. Bennett
Title: Executive Vice President
LIBERTY BROADCASTING, INC.
By: /s/ Robert R. Bennett
_____________________________
Name: Robert R. Bennett
Title: Executive Vice President
COMMUNICATION CAPITAL CORP.
By: /s/ Robert R. Bennett
_____________________________
Name: Robert R. Bennett
Title: Executive Vice President
/s/ R. E. Turner
__________________________
R. E. TURNER, III
TURNER OUTDOOR, INC.
By: /s/ R. E. Turner
______________________________
Name: R. E. Turner, III
Title: President
TURNER PARTNERS, L.P.
By: /s/ R. E. Turner
______________________________
Name: R. E. Turner,III
Title: General Partner
TW INC. (which promptly following the date hereof is
changing its name to Time Warner Inc.)
By: /s/ Thomas W. McEnerney
_______________________________
Name: Thomas W. McEnerney
Title: Vice President
