AOL TIME WARNER INC.
AMERICA ONLINE, INC.
TIME WARNER INC.
TIME WARNER COMPANIES, INC.
▇▇▇▇▇▇ BROADCASTING SYSTEM, INC.
Underwriting Agreement
[% [Convertible] Debentures/Notes Due] __]
[Date]
New York, New York
To the Representatives
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
AOL Time Warner Inc., a Delaware corporation (the "Company"), proposes
to sell to the underwriters named in Schedule II hereto (the "Underwriters"),
for whom you (the "Representatives") are acting as representatives, the
principal amount of its [ ][security offered] due [ 20__ ] identified in
Schedule I hereto (the "Debt Securities"), to be issued under an indenture (as
from time to time amended or supplemented, the "Indenture") dated as of
, among the Company, America Online, Inc., a Delaware corporation
("America Online"), Time Warner Inc., a Delaware corporation ("Time Warner"),
Time Warner Companies, Inc., a Delaware corporation ("TWC"), ▇▇▇▇▇▇ Broadcasting
System, Inc., a Georgia corporation ("TBS", and, together with America Online,
Time Warner, and TWC, the "Guarantors"), and The Chase Manhattan Bank, as
trustee (the "Trustee"), providing for the issuance of debt securities in one or
more series, [which are convertible into shares of Common Stock, $0.01 par
value, of the Company ("Common Stock"), and] all of which will be entitled to
the benefit of the Guarantees referred to below. Each of America Online and Time
Warner, is a wholly owned subsidiary of the Company, and each of TWC and TBS is
a wholly owned subsidiary of Time Warner. Pursuant to the Indenture, each of
America Online, and Time Warner, as primary obligor and not merely as surety,
has agreed to fully, irrevocably and unconditionally guarantee (together, the
"AOL/TW Guarantee"), to each holder of Debt Securities and to the Trustee,
(i) the full and punctual payment of principal of and interest on the Debt
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under the
Indenture and the Debt Securities and (ii) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
the Indenture and the Debt Securities; and each of TWC and TBS, as primary
obligor and not merely as surety, has agreed to fully, irrevocably and
unconditionally guarantee (together, the "TWC/TBS Guarantees" and, together
with the AOL/TW Guarantees, the "Guarantees"; and the Guarantees, together with
the Debt Securities, the "Securities") Time Warner's guarantee of the Company's
Obligations. If the firm or firms listed in Schedule II hereto include only the
firm or firms listed in Schedule
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I hereto, then the terms "Underwriters" and "Representatives", as used herein,
shall each be deemed to refer to such firm or firms.
1. Representations and Warranties. Each of the Company, America Online,
Time Warner, TWC and TBS represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1. Certain terms used in this
Section 1 are defined in paragraph (r) hereof.
(a) If the offering of the Securities is a Delayed Offering
(as specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Securities is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Company and the Guarantors meet the
requirements for the use of Form S-3 under the Securities Act
of 1933, as amended (the "Act"), and have filed with the
Securities and Exchange Commission (the "Commission") a
registration statement (the file number of which is set forth
in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering and
sale of the Securities. The Company and the Guarantors may
have filed one or more amendments thereto, and may have used a
Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so
amended, has become effective. The offering of the Securities
is a Delayed Offering and, although the Basic Prospectus may
not include all the information with respect to the Securities
and the offering thereof required by the Act and the rules
thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the Act
and the rules thereunder to be included therein as of the
Effective Date. The Company and the Guarantors will next file
with the Commission pursuant to Rules 415 and 424(b)(2) or (5)
a final supplement to the form of prospectus included in such
registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus supplement
shall include all required information with respect to the
Securities and the offering thereof and, except to the extent
the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company and the Guarantors have advised
you, prior to the Execution Time, will be included or made
therein.
(ii) The Company and the Guarantors meet the
requirements for the use of Form S-3 under the Act and have
filed with the Commission a registration statement (the file
number of which is set forth in Schedule I hereto) on such
Form, including a basic prospectus, for registration under the
Act of the offering and sale of the Securities. The Company
and the Guarantors may have filed one or more amendments
thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company and
the Guarantors will next file with the Commission either (x) a
final prospectus supplement relating to the
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Securities in accordance with Rules 430A and 424(b)(1) or (4),
or (y) prior to the effectiveness of such registration
statement, an amendment to such registration statement,
including the form of final prospectus supplement. In the case
of clause (x), the Company and the Guarantors have included in
such registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required by
the Act and the rules thereunder to be included in the Final
Prospectus with respect to the Securities and the offering
thereof. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall
contain all Rule 430A Information, together with all other
such required information, with respect to the Securities and
the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company and the Guarantors have advised
you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined
herein), the Final Prospectus (and any supplement thereto) will, comply
in all material respects with the applicable requirements of the Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the
respective rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the Indenture
did or will comply in all material respects with the requirements of
the Trust Indenture Act and the rules thereunder; and, on the Effective
Date, the Final Prospectus, if not filed pursuant to Rule 424(b), did
not or will not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company and the Guarantors make no representations or warranties as to
(i) that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company or any Guarantor by or on behalf
of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Final Prospectus (or any
supplement thereto).
(c) (1) Each of the Company and America Online, Time Warner,
and TWC is validly existing as a corporation in good standing under the
laws of the State of Delaware, with full corporate power and authority
under such laws to own its properties and conduct its business as
described in the Basic Prospectus,
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and any amendment or supplement thereto, and to enter into and perform
its obligations under this Agreement; and each of the Company, America
Online, Time Warner, TWC and TBS is duly qualified to transact business
as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the Company
and its subsidiaries, considered as one enterprise.
(2) TBS is validly existing as a corporation in good standing
under the laws of the State of Georgia, with full corporate power and
authority under such laws to own its properties and conduct its
business as described in the Basic Prospectus, and any amendment or
supplement thereto, and to enter into and perform its obligations under
this Agreement.
(d) Each of the Company's significant subsidiaries, as such
term is defined in Rule 1-02(w) of Regulation S-X under the Act, is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with full power and
authority under such laws to own its properties and conduct its
business as described in the Basic Prospectus, and any amendment or
supplement thereto, and is duly qualified to transact business as a
foreign corporation or partnership and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the Company
and its subsidiaries, considered as one enterprise.
(e) The Company's authorized equity capitalization is as set
forth in the Basic Prospectus, and any amendment or supplement thereto;
all of the outstanding capital stock of the Guarantors is owned,
directly or indirectly, by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) There is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body
or any arbitrator involving the Company, America Online, Time Warner,
TWC or TBS or any of their respective subsidiaries of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Basic Prospectus, and any amendment or
supplement thereto, and there is no franchise, contract or other
document of a character required to be described in the Registration
Statement or Basic Prospectus, and any amendment or supplement thereto,
or to be filed as an exhibit, which is not described or filed as
required.
(g) This Agreement has been duly authorized, executed and
delivered by each of the Company, America Online, Time Warner, TWC and
TBS.
(h) No consent, approval, authorization or order of any court
or governmental agency or body is required for the authorization,
issuance, sale and delivery of the Securities by the Company and the
Guarantors or the consummation of the transactions contemplated by this
Agreement or in any Delayed Delivery Contracts, except such as have
been obtained under the Act, the Trust Indenture Act of 1939 and such
as may be required under the blue sky laws of any jurisdiction in
connection
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with the purchase and distribution of the Securities by the
Underwriters and such other approvals as have been obtained.
(i) The execution and delivery of this Agreement and the
Indenture by the Company, America Online, Time Warner, TWC and TBS, the
issuance, sale and delivery of Debt Securities by the Company, the
issuance and delivery of their respective Guarantees by America Online,
Time Warner, TWC and TBS, and the consummation by the Company, America
Online, Time Warner, TWC and TBS of the transactions contemplated in
this Agreement, the Indenture and the Registration Statement and
compliance by the Company, America Online, Time Warner, TWC and TBS
with the terms of this Agreement or any Delayed Delivery Contracts do
not and will not result in any violation of the Certificate of
Incorporation, as amended, or By-laws, as amended, of the Company,
America Online, Time Warner, TWC or TBS, and do not and will not
conflict with, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company, America Online, Time Warner, TWC or TBS, under
(i) any indenture, mortgage or loan agreement, or any other agreement
or instrument, to which the Company, America Online, Time Warner, TWC
or TBS is a party or by which any of them may be bound or to which any
of their properties may be subject (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise), (ii) any existing
applicable law, rule or regulation (except for such conflicts,
breaches, liens, charges or encumbrances that would not have a material
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, and other than the
securities or blue sky laws of various jurisdictions), or (iii) any
judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over the Company, America
Online, Time Warner, TWC or TBS or any of their properties
(except for such conflicts, breaches, liens, charges or encumbrances
that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise).
(j) The documents incorporated by reference in the Basic
Prospectus, and any amendment or supplement thereto, as of the dates
they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act.
(k) The Securities conform in all material respects to the
description thereof contained in the Basic Prospectus, and any
amendment or supplement thereto; if any of the Securities are to be
listed on any stock exchange, authorization therefor has been given,
subject to official notice of issuance and evidence of satisfactory
distribution, or the Company and the Guarantors have no reason to
believe that such Securities will not be authorized for listing,
subject to official notice of issuance and evidence of satisfactory
distribution.
[(1) The Common Stock issuable upon conversion of the
Securities conforms in all material respects to the description thereof
contained in the Basic Prospectus, and any amendment or supplement
thereto; the Common Stock has been duly authorized for listing, subject
to official notice of issuance, on the New York Stock Exchange; the
shares of Common Stock initially issuable upon
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conversion of the Securities have been duly and validly authorized and
reserved for issuance upon such conversion and, when issued upon
conversion, will be validly issued, fully paid and nonassessable and
the issuance of such Common Stock will not be subject to any premptive
or similar right.]
(m) The Indenture has been duly authorized by the Company, has
been duly qualified under the Trust Indenture Act, and, at the Closing
Date, will have been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery by the Trustee,
will, at the Closing Date, constitute a legal, valid and binding
instrument enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to enforceability
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law); and each of the Debt Securities and
the Guarantees have been duly authorized and, when the Debt Securities
are executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters pursuant to
this Agreement, in the case of the Underwriters' Securities, or by the
purchasers thereof pursuant to Delayed Delivery Contracts, in the case
of any Contract Securities, will constitute legal, valid and binding
obligations of the Company and the Guarantors, respectively, entitled
to the benefits of the Indenture, subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and subject as to enforceability to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
(n) The Indenture has been duly authorized by each of America
Online, Time Warner, TWC and TBS and, at the Closing Date, will have
been duly executed and delivered by each of America Online, Time
Warner, TWC and TBS and, assuming due authorization, execution and
delivery by the Trustee, will, at the Closing Date, constitute a legal,
valid and binding instrument enforceable against each of America
Online, Time Warner, TWC and TBS in accordance with its terms (subject
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to enforceability
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law).
(o) Each Delayed Delivery Contract that has been executed by
the Company, America Online, Time Warner, TWC and TBS has been duly
authorized, executed and delivered by the Company, America Online, Time
Warner, TWC and TBS, respectively, and, assuming the due authorization,
execution and delivery by the purchaser thereunder, is a valid and
binding obligation of the Company, America Online, Time Warner, TWC and
TBS enforceable against the Company, America Online, Time Warner, TWC
and TBS, respectively, in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws affecting
creditors' rights generally from time to time in effect and subject as
to enforceability to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
(p) Each firm of independent accountants, which is reporting
upon certain audited or reviewed financial statements and schedules
included or
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incorporated by reference in the Registration Statement, are
independent auditors with respect to the financial statements covered
by the audit or review of such firm, in accordance with the provisions
of the Exchange Act and the Act and the respective applicable published
rules and regulations thereunder.
(q) The consolidated financial statements and the related
notes of the Company, and any other person included or
incorporated by reference in the Registration Statement, present fairly
in accordance with generally accepted accounting principles the
consolidated financial position of the Company, and any such
other person, as of the dates indicated and the consolidated results of
operations of the Company, and any such other person, and cash
flows of each of the Company, and any other such person, for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, except as otherwise
noted therein and subject, in the case of interim statements, to normal
year-end audit adjustments. The financial statement schedules included
or incorporated by reference in the Registration Statement present
fairly in accordance with generally accepted accounting principles the
information required to be stated therein. Any supplementary summary
financial information or condensed consolidating financial information
included or incorporated in the Registration Statement complies with
all applicable accounting requirements and the applicable rules and
regulations of the Commission. Any pro forma financial information
included or incorporated by reference in the Registration Statement
complies with all applicable accounting requirements and the applicable
rules and regulations of the Commission for such pro forma information.
Such pro forma financial information has been properly compiled on the
pro forma bases described therein, and, in the opinion of the Company,
America Online and Time Warner, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions or circumstances referred to
therein.
(r) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective and each date after
the date hereof on which a document incorporated by reference in the
Registration Statement is filed. "Execution Time" shall mean the date
and time that this Agreement is executed and delivered by the parties
hereto. "Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean
any preliminary prospectus supplement to the Basic Prospectus which
describes the Securities and the offering thereof and is used prior to
filing of the Final Prospectus. "Final Prospectus" shall mean the
prospectus supplement relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities, including the Basic
Prospectus, included in the Registration Statement at the Effective
Date. "Registration Statement" shall mean the registration statement
referred to in paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective)
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and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall
also mean such registration statement as so amended. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule
430A" and "Regulation S-K" refer to such rules or regulation under the
Act. "Rule 430A Information" means information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
All references in this Agreement to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Exchange Act on or before the Effective Date of
the Registration Statement or the issue date of the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, as the case
may be; all references in this Agreement to financial statements and
schedules and other information that is "contained", "included" or
"stated" in the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that are or
are deemed to be incorporated by reference in the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement,
the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to mean and include the filing of any
document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may
be, deemed to be incorporated therein by reference. A "Non-Delayed
Offering" shall mean an offering of securities which is intended to
commence promptly after the effective date of a registration statement,
with the result that, pursuant to Rules 415 and 430A, all information
(other than Rule 430A Information) with respect to the securities so
offered must be included in such registration statement at the
effective date thereof. A "Delayed Offering" shall mean an offering of
securities pursuant to Rule 415 which does not commence promptly after
the effective date of a registration statement, with the result that
only information required pursuant to Rule 415 need be included in such
registration statement at the effective date thereof with respect to
the securities so offered. Whether the offering of the Securities is a
Non-Delayed Offering or a Delayed Offering shall be set forth in
Schedule I hereto.
(s) None of the Company, America Online, Time Warner, TWC or
TBS is an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company at the purchase price for the Debt
Securities set forth in Schedule I hereto, the principal amount of Debt
Securities set forth opposite such Underwriter's name in Schedule II hereto,
except that, if Schedule I hereto provides for
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the sale of Debt Securities pursuant to delayed delivery arrangements, the
respective principal amounts of Debt Securities to be purchased by the
Underwriters shall be as set forth in Schedule II hereto less the respective
amounts of Contract Securities determined as provided below. Debt Securities to
be purchased by the Underwriters are herein sometimes called the "Underwriters'
Securities" and Debt Securities to be purchased pursuant to Delayed Delivery
Contracts as hereinafter provided are herein called "Contract Securities".
If so provided in Schedule I hereto, the Underwriters are authorized to
solicit offers to purchase Debt Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts"), substantially in the form of
Schedule III hereto but with such changes therein as the Company, may authorize
or approve. The Underwriters will endeavor to make such arrangements and, as
compensation therefor, the Company will pay to the Representatives, for the
account of the Underwriters, on the Closing Date, the percentage set forth in
Schedule I hereto of the principal amount of the Debt Securities for which
Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. The Company and the Guarantors will enter into Delayed Delivery
Contracts in all cases where sales of Contract Securities arranged by the
Underwriters have been approved by the Company but, except as the Company may
otherwise agree, each such Delayed Delivery Contract must be for not less than
the minimum principal amount set forth in Schedule I hereto and the aggregate
principal amount of Contract Securities may not exceed the maximum aggregate
principal amount set forth in Schedule I hereto. The Underwriters will not have
any responsibility in respect of the validity or performance of Delayed Delivery
Contracts. The principal amount of Debt Securities to be purchased by each
Underwriter as set forth in Schedule II hereto shall be reduced by an amount
which shall bear the same proportion to the total principal amount of Contract
Securities as the principal amount of Debt Securities set forth opposite the
name of such Underwriter bears to the aggregate principal amount set forth in
Schedule II hereto, except to the extent that you determine that such reduction
shall be otherwise than in such proportion and so advise the Company in writing;
provided, however, that the total principal amount of Debt Securities to be
purchased by all Underwriters shall be the aggregate principal amount set forth
in Schedule II hereto less the aggregate principal amount of Contract
Securities.
3. Delivery and Payment. Delivery of and payment for the Underwriters'
Securities shall be made on the date and at the time specified in Schedule I
hereto, which date and time may be postponed to a date not later than five
business days after such specified date by agreement between the
Representatives, acting jointly and without regard to any agreement among
underwriters, and the Company or as provided in Section 8 hereof (such date and
time of delivery and payment for the Underwriters' Securities being herein
called the "Closing Date"). Delivery of the Underwriters' Securities shall be
made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in immediately available federal funds (unless
another form of payment is specified in Schedule I hereto). Delivery of the
Underwriters' Securities shall be made at such location as the Representatives
shall reasonably designate on the Closing Date and payment for the Securities
shall be made at the office specified in Schedule I hereto.
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Certificates for the Underwriters' Securities shall be registered in such names
and in such denominations as the Representatives may request not less than one
full business day in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 PM on the business day prior to the Closing Date.
4. Agreements. The Company and the Guarantors agree with the several
Underwriters that:
(a) Each of the Company, America Online, Time Warner, TWC and
TBS will use its best efforts to cause the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, to
become effective. Prior to the termination of the offering of the
Securities, none of the Company, America Online, Time Warner, TWC and
TBS will file any amendment to the Registration Statement or supplement
(including the Final Prospectus or any Preliminary Final Prospectus) to
the Basic Prospectus unless the Company or a Guarantor has furnished
you a copy for your review prior to filing or will file any such
proposed amendment or supplement to which you reasonably object on a
timely basis (other than filings of documents pursuant to Section 13(a)
or 14(a) under the Exchange Act). Subject to the foregoing sentence,
the Company and the Guarantors will cause the Final Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to
the Representatives of such timely filing. The Company, America Online,
Time Warner, TWC and TBS will promptly advise the Representatives (i)
when the Registration Statement, if not effective at the Execution
Time, and any amendment thereto, shall have become effective, (ii) when
the Final Prospectus, and any supplement thereto, shall have been filed
with the Commission pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of each series of Securities, any amendment
to the Registration Statement shall have been filed or become
effective, (iv) of any request by the Commission for any amendment to
the Registration Statement or supplement to the Final Prospectus or for
any additional information relating to the offering of the Securities,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (vi) of the receipt
by the Company, America Online, Time Warner, TWC or TBS of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. Each of the Company,
America Online, Time Warner, TWC and TBS will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or
11
supplement the Final Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company and the Guarantors
promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect such
compliance.
(c) As soon as practicable, the Company and the Guarantors
will make generally available to their respective security holders and
to the Representatives an earnings statement or statements of each of
the Company, America Online, Time Warner, TWC and TBS and their
respective subsidiaries which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(d) If and to the extent specified in Schedule I, each of the
Company, America Online, Time Warner, TWC and TBS will use its
reasonable best efforts to cause the Securities to be duly authorized
for listing or trading on a securities exchange or inter-dealer
quotation system and to be registered under the Exchange Act.
(e) For a period of three years after the Closing Date, upon
request, the Company will furnish to you and to each Underwriter,
copies of all annual reports, quarterly reports and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company
to its public stockholders generally.
(f) The proceeds of the offering of the Securities will be
applied as set forth in the Final Prospectus.
(g) The Company, America Online, Time Warner, TWC and TBS will
furnish to the Representatives and counsel for the Underwriters,
without charge, copies of the Registration Statement (including
exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and any
supplement thereto as the Representatives may reasonably request.
(h) The Company and the Guarantors will pay and bear all costs
and expenses incident to the performance of their obligations under
this Agreement, including (i) the preparation, printing and filing of
the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, any preliminary
prospectus supplements and the Basic Prospectus, the Preliminary Final
Prospectus and the Final Prospectus and any amendments or supplements
thereto, and the cost of furnishing copies thereof to the Underwriters,
(ii) the preparation, printing and distribution of this Agreement, the
Indenture, the Securities, any Delayed Delivery Contracts, any Blue Sky
Survey and any Legal Investment Survey, (iii) the delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the
Company's and the Guarantors' counsel and the accountants required
hereby to provide "comfort letters", (v) the qualification of the
Securities under the applicable securities laws in accordance with
Section 4(i) and any filing for review of the offering with the
National Association of Securities Dealers, Inc., including filing fees
and fees and disbursements of counsel for the Underwriters in
connection therewith and in
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connection with any Blue Sky Survey and any Legal Investment Survey,
(vi) any fees charged by rating agencies for rating the Securities,
(vii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee, in connection with the
Indenture and the Securities, (viii) any expenses and listing fees in
connection with the listing of the Securities, (ix) the cost and
charges of any transfer agent or registrar and (x) the costs of
qualifying the Securities with The Depository Trust Company.
(i) The Company and the Guarantors will arrange for the
qualification of each series of Securities for distribution, offering
and sale under the laws of such jurisdictions as the Representatives
may designate, will maintain such qualifications in effect so long as
required for the distribution of such series of Securities and will
arrange for the determination of the legality of the Securities for
purchase by institutional investors; provided, however, that none of
the Company, America Online, Time Warner, TWC or TBS shall be required
to (i) qualify as a foreign corporation or as a dealer in securities in
any jurisdiction where it would not otherwise be required to qualify
but for this Section 4(i), (ii) file any general consent to service of
process or (iii) subject itself to taxation in any such jurisdiction if
it is not so subject.
(j) The Company shall comply with the terms of any lock-up
agreement specified in Schedule I hereto with respect to sales and
dispositions of Underwritten Securities.
5. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwriters' Securities shall be subject to
the accuracy in all material respects of the representations and warranties on
the part of the Company and the Guarantors contained herein as of the Execution
Time and the Closing Date, to the accuracy in all material respects of the
statements of the Company and the Guarantors made in any certificates pursuant
to the provisions hereof, to the performance by each of the Company, America
Online, Time Warner, TWC and TBS of its obligations hereunder, to the due
execution and delivery of the Indenture, to the absence of any event or
condition which would give you the right to terminate this Agreement and to the
following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
12:00 Noon on the business day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424(b);
and at the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings therefor initiated or threatened by the Commission.
13
(b) At the Closing Date, the Company shall have furnished to
you the opinion of General Counsel to the Company, or, if such General
Counsel is not available, an Associate or Deputy General Counsel to the
Company that practices in the area of corporate and securities law,
dated the Closing Date, substantially in the form of Exhibit A hereto.
(c) At the Closing Date, the Company shall have furnished to
you the opinion and statement of Cravath, Swaine & ▇▇▇▇▇, counsel to
the Company and the Guarantors, each dated the Closing Date,
substantially in the form of Exhibit B and Exhibit C hereto,
respectively.
(d) The Representatives shall have received from counsel for
the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the issuance and sale of the Securities, the Indenture,
any Delayed Delivery Contracts, the Registration Statement, the Final
Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company
and the Guarantors shall have furnished to such counsel such documents
as they request for the purpose of enabling them to pass upon such
matters.
(e) (1) The Company shall have furnished to the
Representatives a certificate of the Company, signed by any two
officers who are an Executive or Senior Vice President of the Company,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the
Company, America Online, Time Warner, TWC and TBS in this
Agreement are true and correct in all material respects on and
as of the Closing Date with the same effect as if made on the
Closing Date and each of the Company, America Online, Time
Warner, TWC and TBS has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), the Company has made all filings
with the Commission and announcements, in either case required
to be made by the Act or the Exchange Act.
(2) America Online shall have furnished to the Representatives
a certificate of America Online, signed by any two officers, one of
whom is an Executive or Senior Vice President of America Online, dated
the Closing Date, to the effect
14
that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, any supplement to the
Final Prospectus and this Agreement and that the representations and
warranties of America Online in this Agreement are true and correct in
all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and America Online has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date.
(3) Time Warner shall have furnished to the Representatives a
certificate of Time Warner, signed by any two officers, one of whom is
an Executive or Senior Vice President of Time Warner, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any
supplement to the Final Prospectus and this Agreement and that the
representations and warranties of Time Warner in this Agreement are
true and correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date and Time Warner has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date.
(4) TWC shall have furnished to the Representatives a
certificate of TWC, signed by any two officers, one of whom is an
Executive or Senior Vice President of TWC, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined
the Registration Statement, the Final Prospectus, any supplement to the
Final Prospectus and this Agreement and that the representations and
warranties of TWC in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same effect as
if made on the Closing Date and TWC has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date.
(5) TBS shall have furnished to the Representatives a
certificate of TBS, signed by any two officers who are Vice
Presidents of TBS, dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplement to the Final Prospectus
and this Agreement and that the representations and warranties of TBS
in this Agreement are true and correct in all material respects on and
as of the Closing Date with the same effect as if made on the Closing
Date and TBS has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date.
(f) At the Closing Date, and, if specified in Schedule I, at
the Execution Time, Ernst & Young LLP shall have furnished to the
Representatives a letter or letters, dated respectively as of the
Closing Date and the Execution Time, in form and substance reasonably
satisfactory to the Representatives, confirming that they are
independent auditors with respect to the Company, America Online, Time
Warner, TWC and TBS, within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations
thereunder and stating in effect that:
15
(i) in their opinion the audited financial statements
and financial statement schedules of the Company, America
Online, Time Warner, and their respective consolidated
subsidiaries included or incorporated in the Registration
Statement and the Final Prospectus comply in form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements (including the notes thereto
and the supplementary summary unaudited financial information
of America Online, Time Warner, TWC and TBS) made available by
the Company, America Online, Time Warner, TWC and TBS and
their respective consolidated subsidiaries; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors,
and, if applicable, executive, finance and audit committees of
the Company, America Online, Time Warner and their respective
consolidated subsidiaries; and inquiries of certain officials
of the Company, America Online, Time Warner, TWC and TBS who
have responsibility for financial and accounting matters
of the Company, America Online, Time Warner, TWC and TBS
and their respective consolidated subsidiaries as to
transactions and events subsequent to the date of the most
recent audited financial statements in or incorporated in the
Final Prospectus, and such other inquiries and procedures as
may be specified in such letter, nothing came to their
attention which caused them to believe that:
(1) any of such unaudited financial
statements included or incorporated in the
Registration Statement and the Final Prospectus do
not comply in form in all material respects with
applicable accounting requirements of the Act and the
Exchange Act and with the published rules and
regulations of the Commission with respect to
financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange
Act; or said unaudited financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated in the
Registration Statement and the Final Prospectus; or
(2) with respect to the period subsequent to
the date of the most recent unaudited financial
statements in or incorporated in the Registration
Statement and the Final Prospectus, there were any
increases, at a specified date not more than five
business days prior to the date of the letter, in the
long-term debt of the Company and its consolidated
subsidiaries, or any decreases in stockholders'
equity or the consolidated capital stock of the
Company as compared with
16
the amounts shown on the most recent consolidated
balance sheet included or incorporated in the
Registration Statement and the Final Prospectus
for such entities, or for the period from the date
of the most recent unaudited financial statements
included or incorporated in the Registration
Statement and the Final Prospectus for such entities
to such specified date there were any decreases, as
compared with the corresponding period in the
preceding year, in revenues, income before income
taxes (or any increase in the loss before income
taxes) or net income (or any increase in net loss),
except in all instances for decreases or increases
set forth in such letter;
(iii) if any pro forma financial statements
are included or incorporated by reference in the Registration
Statement pursuant to Article 11 of Regulation S-X, they are
unable to and do not express any opinion on the pro forma
adjustments to the financial statements included or
incorporated by reference in the Registration Statement and
the Final Prospectus or on the pro forma adjustments applied
to the historical amounts included or incorporated by
reference in the Registration Statement and the Final
Prospectus; however, for purposes of such letter they have:
(1) read the pro forma adjustments to such
financial statements;
(2) made inquiries of certain officials of
the Company and its subsidiaries who have
responsibility for financial and accounting matters
about the basis for their determination of the pro
forma adjustments to such financial statements and
whether such pro forma adjustments comply as to form
in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation
S-X;
(3) proved the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts included or incorporated by
reference in the Registration Statement and the Final
Prospectus; and
(4) on the basis of such procedures, and
such other inquiries and procedures as may be
specified in such letter, nothing came to their
attention that caused them to believe that the pro
forma adjustments to the financial statements
included or incorporated by reference in the
Registration Statement and the Final Prospectus do
not comply as to form in all material respects with
the applicable requirements of Rule 11-02 of
Regulation S-X and that such pro forma adjustments
have not been properly applied to the historical
amounts in the compilation of such financial
statements.
(iv) they have performed certain other specified
procedures as a result of which they determined that certain
17
information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement
and the Final Prospectus and in Exhibits 12.1,
12.2, 12.3, 12.4 and 12.5 to the Registration
Statement agrees with the accounting records of the
Company and its subsidiaries, excluding any questions
of legal interpretation.
(g) At the Closing Date and, if and to the extent specified in
Schedule I, at the Execution Time, each other firm of independent
accountants who audited or reviewed financial statements included or
incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter or letters, dated
respectively as of the Closing Date and the Execution Time, in form and
substance satisfactory to the Representatives, confirming that they are
independent auditors with respect to the financial statements audited
or reviewed by them within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations
thereunder and to the same effect as the letter or letters of Ernst &
Young LLP as described in Section 5(f) hereof.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any decrease or increase specified in the letter or letters referred to
in paragraph (f) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting the
business (including the results of operations or management) or
properties of the Company and its subsidiaries the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the reasonable
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of
any series of Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, (i) there shall not have
been any downgrade in the credit ratings of any of the Company's,
America Online's, Time Warner's, TWC's or TBS's debt securities by
▇▇▇▇▇'▇ Investor Service, Inc. or Standard & Poor's Ratings Group, and
(ii) none of the Company, America Online, Time Warner, TWC or TBS shall
have been placed under special surveillance, with negative
implications, by ▇▇▇▇▇'▇ Investor Service, Inc. or Standard & Poor's
Ratings Group.
(j) Prior to the Closing Date, the Company and the Guarantors
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
(k) The Company shall have accepted the Delayed Delivery
Contracts in any case where sales of Contract Securities arranged by
the Underwriters have been approved by the Company.
18
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives and such
cancelation shall be without liability of any party to any other party, except
to the extent provided in Sections 4 and 6. Notice of such cancelation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company,
America Online, Time Warner, TWC or TBS to perform any agreement herein or
comply with any provision hereof other than by reason of a default by any of the
Underwriters, the Company and the Guarantors will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) Each of the Company, America
Online, Time Warner, TWC and TBS agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that none of
the Company, America Online, Time Warner, TWC or TBS will be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon (i) any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company, America Online, Time Warner,
TWC and TBS by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein or (ii) that part of the Registration
Statement which shall constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee. This indemnity
agreement will be in addition to any liability which the Company, America
Online, Time Warner, TWC or TBS may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
each of the Company, America Online, Time Warner, TWC and TBS, each of their
19
respective directors, each of their respective officers who signs the
Registration Statement, and each person who controls the Company, America
Online, Time Warner, TWC or TBS within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company,
America Online, Time Warner, TWC and TBS to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company, America Online, Time Warner, TWC and TBS by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. [Each
of the Company, America Online, Time Warner, TWC and TBS acknowledges that the
statements set forth in the last paragraph of the cover page, the first and
third paragraphs under the heading "Underwriters" and, if Schedule I hereto
provides for sales of Securities pursuant to delayed delivery arrangements, in
the last sentence under the heading "Delayed Delivery Arrangements" in any
Preliminary Final Prospectus or the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in the documents referred to in the foregoing indemnity, and you, as
the Representatives, confirm that such statements are correct.]
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party (it being understood, however, that in
connection with such action, the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
representing the indemnified parties who are parties to such action or actions),
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or
20
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. No indemnifying party
shall, without the prior written consent of the indemnified parties, effect any
settlement or compromise or consent to the entry of any judgment with respect
to any pending or threatened action, suit or proceeding in respect of which
any indemnified party is or could have been a party and indemnification or
contribution may be sought hereunder by such party unless such settlement,
compromise or consent includes an unconditional release of such indemnified
party from all liability arising out of such action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 7 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company, America Online, Time Warner, TWC, TBS and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company, the Guarantors and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company, America Online, Time Warner, TWC and TBS on one hand, and by the
Underwriters, on the other hand, from the offering of the Securities; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company, America Online, Time Warner, TWC, TBS and the Underwriters
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Guarantors
and of the Underwriters in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company and the Guarantors shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company, America Online, Time Warner, TWC or TBS or the Underwriters. The
Company, the Guarantors and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter, and
each person who controls the Company, America Online, Time Warner, TWC or TBS
within the meaning of either the Act or the Exchange Act, each officer of the
Company, America Online, Time Warner, TWC or TBS who shall have signed the
Registration Statement and each director of the Company, America Online, Time
Warner, TWC or TBS shall have the same rights to contribution as the Company and
the Guarantors, subject in each case to the applicable terms and conditions of
this paragraph (d).
21
8. Default by an Underwriter. If any one or more Underwriters shall
fail on the Closing Date to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions for each of the
Debt Securities which such Underwriter failed to purchase which the amount of
the Debt Securities set forth opposite their names in Schedule II hereto bears
to the aggregate amount of such Debt Securities set forth opposite the names of
all the remaining Underwriters) the Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule II hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all of the Securities, this Agreement will terminate without liability
to any nondefaulting Underwriter or the Company and the Guarantors. In the event
of a default by any Underwriter as set forth in this Section 8, the Closing Date
shall be postponed for such period, not exceeding seven days, as the
Representatives and the Company shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company, the Guarantors and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's common stock or any of the Company's, America Online's,
Time Warner's, TWC's or TBS's debt securities shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
such exchange shall have been suspended or limited or minimum or maximum prices
shall have been established on such exchange, or maximum ranges for prices for
securities have been required, by such exchange or by order of the Commission
or any other governmental authority, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there shall
have occurred any new outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or other calamity or crisis
the effect of which on financial markets of the United States is such as to
make it, in the judgment of the Representatives, impracticable or inadvisable
to proceed with the offering or delivery of a series of Securities as
contemplated by the Final Prospectus (exclusive of any supplement thereto). If
this Agreement is terminated pursuant to this Section, such termination shall
be without liability of any party to any other party, except to the extent
provided in Sections 4 and 6.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, America Online, Time Warner, TWC or TBS or any of their respective
officers and of the Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter or the Company, America Online, Time Warner, TWC or
TBS, or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will
22
survive delivery of and payment for the Securities. The provisions of Sections 6
and 7 hereof shall survive the termination or cancelation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule I hereto; or, if sent to the Company, America Online, Time Warner, TWC
or TBS, will be mailed, delivered or telegraphed and confirmed to it care of the
Company at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of General
Counsel.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business day" means
any day on which the New York Stock Exchange is open for trading.
15. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, America Online, Time Warner, TWC, TBS and the several Underwriters.
Very truly yours,
AOL TIME WARNER INC.,
By
----------------------------------
Name:
Title:
AMERICA ONLINE, INC.,
By
---------------------------------
Name:
Title:
TIME WARNER INC.,
23
By
---------------------------------
Name:
Title:
TIME WARNER COMPANIES, INC.,
By
---------------------------------
Name:
Title:
▇▇▇▇▇▇ BROADCASTING SYSTEM, INC.,
By
---------------------------------
Name:
Title:
24
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
[Names of Representatives]
By: [Name of Lead Representative]
By
----------------------------------
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement: Dated
Registration Statement: No. 333-54518
Representatives:
Managing Underwriter:
Title, Purchase Price and Description of Securities:
$
Title:
Principal amount:
Interest rate:
Interest payment dates:
Date of maturity:
Purchase price (include accrued
interest or amortization, if
any):
Initial public offering price:
Sinking fund provisions:
Redemption provisions:
Other provisions: None
Closing Date, Time and Location: at 10 a.m. at
Type of funds payable at Closing: [Immediately available federal funds]
Type of Offering:
Delayed Delivery Arrangements:
Listing requirements:
Comfort letter at Execution Time:
Lock-up Agreement:
2
SCHEDULE II
Principal
Amount to
Underwriters be Purchased
------------ ------------
Total
------------
Total...............................
EXHIBIT A
FORM OF OPINION OF [ ],
ESQ.
(i) each of the Company, America Online, Time Warner, TWC and
TBS is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized, with
full corporate power and authority under such laws to own its
properties and conduct its business as described in the Final
Prospectus and each of the Company, America Online, Time Warner, TWC
and TBS is duly qualified to transact business as a foreign corporation
and is in good standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, considered as one
enterprise;
(ii) each of the Company's significant subsidiaries, as such
term is defined in Rule 1-02(w) of Regulation S-X under the Act, is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with full power and
authority under such laws to own its properties and conduct its
business as described in the Final Prospectus, and any amendment or
supplement thereto, and is duly qualified to transact business as a
foreign corporation or partnership and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the Company
and its subsidiaries, considered as one enterprise;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus; [the holders of the outstanding shares
of capital stock of the Company are not entitled to any preemptive or
other rights to subscribe for the shares of Common Stock issuable upon
the conversion thereof; and the shares of Common Stock initially
issuable upon conversion of the Securities have been duly and validly
authorized and reserved for issuance upon such conversion and, when
issued upon conversion, will be validly issued, fully paid and
nonassessable;] all of the outstanding capital stock of the Guarantors,
is owned, directly or indirectly, by the Company free
and clear of all liens, encumbrances, equities or claims;
(iv) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company, America Online, Time Warner, TWC or TBS or any of their
respective subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not described
or filed as required;
(v) no consent, approval, authorization or order of any court,
governmental agency or body
A-1
is required for the authorization, issuance, sale and delivery of the
Securities by the Company and the Guarantors or the consummation by
the Company and the Guarantors or of the transactions contemplated by
the Underwriting Agreement (other than such as have been obtained
under the Act and the Trust Indenture Act of 1939 and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other approvals as have been obtained);
(vi) the Indenture and the Underwriting Agreement have been
duly authorized, executed and delivered by each of the Company, America
Online, Time Warner, TWC and TBS;
(vii) the execution and delivery of the Underwriting Agreement
and the Indenture by the Company, America Online, Time Warner, TWC and
TBS, the issuance, sale and delivery of the Debt Securities by the
Company, the issuance and delivery of their respective guarantees by
America Online, Time Warner, TWC and TBS, and the consummation by the
Company, America Online, Time Warner, TWC and TBS of the transactions
contemplated in the Underwriting Agreement, the Indenture and the
Registration Statement and compliance by the Company, America Online,
Time Warner, TWC and TBS with the terms of the Underwriting Agreement
or any Delayed Delivery Contracts do not and will not result in any
violation of the Certificate of Incorporation, as amended, or By-laws,
as amended, of the Company, America Online, Time Warner, TWC or TBS and
do not and will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company, America Online, Time Warner, TWC or
TBS under (i) any indenture, mortgage or loan agreement, or any other
agreement or instrument known to such counsel, to which the Company,
America Online, Time Warner, TWC or TBS is a party or by which any of
them may be bound or to which any of their properties may be subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as
one enterprise), (ii) any existing applicable law, rule or regulation
(except for such conflicts, breaches, liens, charges or encumbrances
that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, and other than the securities or blue sky laws of various
jurisdictions), or (iii) any judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction
over the Company, America Online, Time Warner, TWC or TBS or any of
their properties (except for such conflicts, breaches, liens, charges
or encumbrances that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered
as one enterprise);
(viii) the documents incorporated by reference in the Final
Prospectus (except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as to which
such counsel need express no opinion), as of the dates they were filed
with the Commission, complied as to form in all material respects with
the requirements of the Securities Exchange Act of 1934, as amended.
In addition, such counsel shall also state as follows: As
the General Counsel/[an Associate/Deputy General Counsel], I have
reviewed and participated in the preparation of the Registration
A-2
Statement and the Final Prospectus, including the documents incorporated by
reference therein. In examining the Registration Statement and Final Prospectus,
I have necessarily assumed the correctness and completeness of the statements
made or included therein by the Company and the Guarantors and take no
responsibility therefor. However, in the course of the preparation by the
Company and the Guarantors of the Registration Statement and the Final
Prospectus, I have participated in conferences with certain officers of, and
accountants for, the Company and the Guarantors with respect thereto, and my
examination of the Registration Statement and Final Prospectus and my
discussions in the above-mentioned conferences did not disclose any information
which gave me reason to believe that: (i) the Registration Statement
(except or the financial statements and other financial or statistical data
included therein or omitted therefrom and the Statement of Eligibility
(Form T-1) included as an exhibit to the Registration Statement, as to which I
express no opinion) at the time it became effective, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, not misleading, or (ii) that the Final
Prospectus (except as aforesaid), at its issue date or on the date of this
opinion, included or includes any untrue statement of a material fact or omitted
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
United States[, the State of New York] and the General Corporation Law of the
State of Delaware, to the extent such counsel deems proper and specified in such
opinion, upon the opinion of other counsel of good standing whom such counsel
believes to be reliable and who are satisfactory to counsel for the
Underwriters; and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company, America Online,
Time Warner, TWC or TBS and public officials.
A-3
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & ▇▇▇▇▇
(i) Based solely upon certificates from the Secretary of
State of Delaware each of the Company, America Online, Time Warner, and TWC is a
corporation validly existing in good standing under the laws of the State of
Delaware, with full corporate power and authority to own its properties and
conduct its business as described in the Final Prospectus;
(ii) the Securities conform in all material respects to the
description thereof contained in the Prospectus;
(iii) the Indenture has been duly authorized, executed and
delivered by each of the Company, America Online, Time Warner, and TWC, has been
duly qualified under the Trust Indenture Act of 1939, and, assuming due
authorization, execution and delivery by TBS and the Trustee, constitutes a
legal, valid and binding obligation of the Company, America Online, Time Warner,
TWC and TBS, enforceable against the Company, America Online, Time Warner, TWC
and TBS in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law); and the Debt Securities have
been duly authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters
pursuant to the Underwriting Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting creditors' rights generally from time
to time in effect and subject to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law);
[(iv) the Securities and the shares of Common Stock issuable
upon conversion of the Securities have been duly authorized for listing, subject
to official notice of issuance and, in the case of the Securities, evidence of
satisfactory distribution, on the New York Stock Exchange; and the shares of
Common Stock initially issuable upon conversion of the Securities have been duly
and validly authorized and reserved for issuance upon such conversion and, when
issued upon conversion, will be validly issued, fully paid and nonassessable.]
(v) the Registration Statement became effective under the
Securities Act on [ , 2001]; any required filing of the Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated; and
(vi) the Underwriting Agreement has been duly authorized,
executed and delivered by the each of the Company, America Online, Time Warner,
TWC and TBS.
B-1
We are admitted to practice in the State of New York, and we express no
opinion as to any matters governed by any law other than the law of the State of
New York, the Federal law of the United States of America and the General
Corporation Law of the State of Delaware. In particular, we do not purport to
pass on any matter governed by the laws of the State of Georgia. To the extent
this opinion involves matters of law of the state of Georgia, we have relied,
with your consent, on the opinion of counsel for TBS, a copy of which has been
delivered to you.
B-2
EXHIBIT C
FORM OF SIDE LETTER OF CRAVATH, SWAINE & ▇▇▇▇▇
Although we have made certain inquiries and investigations in connection
with the preparation of the Registration Statement and the Prospectus, the
limitations inherent in the role of outside counsel are such that we cannot and
do not assume responsibility for the accuracy or completeness of the statements
made in the Registration Statement and Prospectus, except insofar as such
statements relate to us and except to the extent set forth in paragraph (ii) of
our opinion to you dated the date hereof. Subject to the foregoing, we hereby
advise you that our work in connection with this matter did not disclose any
information that gave us reason to believe that: (i) the Registration Statement,
at the time the Registration Statement became effective, or the Prospectus,
as of the date hereof, (except in each case the financial statements and other
information of an accounting, statistical or financial nature included therein,
and the Statement of Eligibility (Form T-1) included as an exhibit to the
Registration Statement, as to which we do not express any view) were not
appropriately responsive in all material respects to the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder; or (ii) the Registration Statement, at the time the Registration
Statement became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus, at its
issue date and at the date hereof, included or includes an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading (in each case except for the financial statements
and other information of an accounting, statistical or financial nature included
therein, as to which we do not express any view).
C-1