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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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. ▇▇▇▇▇▇
In care of ▇▇▇▇▇▇ Broadcasting System, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For Courier delivery:
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
If to Holdco, to:
Time Warner Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy (which shall not constitute notice)
to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
___________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
INITIAL INVESTORS:
▇▇▇▇▇▇ FOUNDATION, INC.,
by /s/ R. E. ▇▇▇▇▇▇
__________________________
Name: R. E. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ CHARITABLE
REMAINDER UNITRUST NO. 2,
by /s/ R. E. ▇▇▇▇▇▇
_________________________
Name: R. E. ▇▇▇▇▇▇
Title: Trustee