TIME WARNER INC.
TIME WARNER COMPANIES, INC.
Underwriting Agreement
[________], ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
To the Representatives
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Time Warner Companies, 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 [the securities] identified in Schedule
I hereto (the "Debt Securities"), to be issued under an indenture (as
supplemented, the "Indenture") dated as of January 15, 1993, between the Company
and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the
"Trustee"), as supplemented by a Second Supplemental Indenture dated as of
October 10, 1996 and a Third Supplemental Indenture dated as of December 31,
1996, among the Company, the Guarantor and the Trustee, providing for the
issuance of debt securities in one or more series, all of which will be entitled
to the benefit of the Guarantee referred to below. Time Warner Inc., a Delaware
corporation (the "Guarantor"), became the parent of the Company and ▇▇▇▇▇▇
Broadcasting System, Inc., a Georgia corporation ("TBS"), upon the merger of the
Company and TBS with separate subsidiaries of the Guarantor. Immediately
following such merger, the Guarantor, as primary obligor and not merely as
surety, agreed to irrevocably and unconditionally guarantee (the "Guarantee";
and together with the Debt Securities, the "Securities"), to each holder of Debt
Securities and to the Trustee, (i) the full and punctual payment of principal of
and interest on the Debt Securities when due and all
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other payment 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. If the firm or firms listed in Schedule II hereto include only the
firm or firms listed in Schedule 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 and the
Guarantor 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 (q) 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 Guarantor 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 Guarantor 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 Guarantor 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
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the Guarantor have advised you, prior to the Execution Time,
will be included or made therein.
(ii) The Company and the Guarantor 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 Guarantor 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 Guarantor will next file with the Commission either (x) a
final prospectus supplement relating to the 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 Guarantor 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 Guarantor 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, 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
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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 Guarantor
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-l) 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 the 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) Each of the Company and the Guarantor 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, and any amendment or supplement thereto, and to enter into
and perform its obligations under this Agreement; and each of the
Company and the Guarantor 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 either the Company and its
subsidiaries or the Guarantor and its subsidiaries, in each case
considered as one enterprise.
(d) Each of the Company's and the Guarantor'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 either the
Company and its subsidiaries or the Guarantor and its subsidiaries, in
each case considered as one enterprise.
(e) The Guarantor's authorized equity capitalization is as set
forth in the Basic Prospectus, and any amendment or supplement thereto.
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(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 or the Guarantor 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 and the Guarantor.
(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
Guarantor 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 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.
(i) (1) The execution and delivery of this Agreement and the
Indenture by the Company, the issuance, sale and delivery of the Debt
Securities and the consummation by the Company of the transactions
contemplated in this Agreement, the Indenture and the Registration
Statement and compliance by the Company with the terms of this
Agreement or any Delayed Delivery Contracts do not and will not result
in any violation of the Restated Certificate of Incorporation, as
amended, or By-laws, as amended, of the Company, 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 under (i) that certain Amended and Restated
Credit Agreement (the "TWE Credit Agreement"), dated as of June 30,
1995, among Time Warner Entertainment Company, L.P., a Delaware limited
partnership ("TWE"), the Time Warner Entertainment-Advance/▇▇▇▇▇▇▇▇
Partnership, a New York general partnership, TWI Cable Inc., a Delaware
corporation and a wholly owned subsidiary of the Company, and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Administrative
Agent, the Agents and the Banks named therein, that certain Credit
Agreement (the "TWC Credit Agreement"), dated as of May 23, 1996, among
the Guarantor (as successor and permitted assign of the Company), The
Chase Manhattan Bank (formerly known as Chemical Bank), as
Administrative Agent, and the lenders named therein, or any indenture,
mortgage or loan agreement, or any
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other agreement or instrument, to which the Company is a party or by
which it may be bound or to which any of its 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 either the Company and its subsidiaries or the
Guarantor and its subsidiaries, in each case 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 either the Company and its subsidiaries or the Guarantor
and its subsidiaries, in each case 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 or any of
its properties.
(2) The execution and delivery of this Agreement and the
Indenture by the Guarantor, the issuance, sale and delivery of the
Guarantee and the consummation by the Guarantor of the transactions
contemplated in this Agreement, the Indenture and the Registration
Statement and compliance by the Guarantor 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 Guarantor, 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
Guarantor under (i) the TWC Credit Agreement or any indenture, mortgage
or loan agreement, or any other agreement or instrument, to which the
Guarantor is a party or by which it may be bound or to which any of its
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 either the Company
and its subsidiaries or the Guarantor and its subsidiaries, in each
case 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 either the Company and its subsidiaries or the
Guarantor and its subsidiaries, in each case 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 Guarantor or any of its properties.
(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
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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 Guarantor 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.
(l) The Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and, assuming due authorization, execution and delivery
by the Trustee, constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to enforceability
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law); and the 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 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
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.
(m) The Indenture has been duly authorized, executed and
delivered by the Guarantor and constitutes a legal, valid and binding
instrument enforceable against the Guarantor 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).
(n) Each Delayed Delivery Contract that has been executed by
the Company and the Guarantor has been duly authorized, executed and
delivered by the Company and the Guarantor, respectively, and, assuming
the due authorization, execution and delivery by the purchaser
thereunder, is a valid and binding obligation
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of the Company and the Guarantor enforceable against the Company and
the Guarantor, 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.
(o) Each firm of independent accountants, which is reporting
upon certain audited or reviewed financial statements and schedules
included or 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.
(p) The consolidated financial statements and the related
notes of each of the Company, the Guarantor, TWE 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 each of the Company,
the Guarantor, TWE and any such other person as of the dates indicated
and the consolidated results of operations and cash flows of each of
the Company, the Guarantor, TWE and any such other 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 pro forma financial
statements of the Company or the Guarantor and other pro forma
financial information included or incorporated by reference in the
Registration Statement present fairly the information shown therein.
Such pro forma financial statements and other pro forma financial
information, to the extent required, have been prepared in accordance
with applicable rules and guidelines of the Commission, if any, with
respect thereto, have been properly compiled on the pro forma bases
described therein, and, in the opinion of the Company and the
Guarantor, 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.
(q) 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
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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)
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
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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.
(r) Neither the Company nor the Guarantor 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, each of
the Company and the Guarantor agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Guarantor, at the purchase price for the Securities set forth in Schedule I
hereto, the principal amount of Securities set forth opposite such Underwriter's
name in Schedule II hereto, except that, if Schedule I hereto provides for the
sale of Securities pursuant to delayed delivery arrangements, the respective
principal amounts of 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. Securities to be purchased by the
Underwriters are herein sometimes called the "Underwriters' Securities" and
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 Securities from the Company and the
Guarantor pursuant to delayed delivery contracts ("Delayed Delivery Contracts"),
substantially in the form of Schedule III hereto but with such changes therein
as the Company or the Guarantor 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 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 Guarantor will
enter into Delayed Delivery Contracts in all cases where sales of Contract
Securities arranged by the Underwriters have been approved by the
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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 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 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 and the Guarantor in writing; provided,
however, that the total principal amount of 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 certified or official bank check or checks drawn on or by a New York
Clearing House bank and payable in next day 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. 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 Guarantor agree with the
several Underwriters that:
(a) Each of the Company and the Guarantor will use its best
efforts to cause the Registration Statement, if not effective at the
Execution Time, and any
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amendment thereto, to become effective. Prior to the termination of the
offering of the Securities, neither the Company nor the Guarantor 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 the Guarantor has furnished
you a copy for your review prior to filing and neither will file any
such proposed amendment or supplement to which you reasonably object on
a timely basis (other than filings of periodic reports pursuant to
Section 13(a) under the Exchange Act). Subject to the foregoing
sentence, the Company and the Guarantor 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
or the Guarantor 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 or the Guarantor 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 and the Guarantor 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, in the opinion of counsel for you or counsel for
the Company and the Guarantor, to amend the Registration Statement or
supplement the Final Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company and the Guarantor
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 Guarantor will
make generally available to their respective security holders and to
the Representatives an
13
earnings statement or statements of each of the Company and the
Guarantor 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 and the Guarantor will use its best efforts to cause the
Securities to be duly authorized for listing on the New York Stock
Exchange and to be registered under the Exchange Act.
(e) For a period of three years after the Closing Date, the
Guarantor will furnish to you and, upon request, 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
Guarantor 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 or the Guarantor 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 Guarantor 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, the Blue Sky
Survey and the Legal Investment Survey, (iii) the delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the
Company's and the Guarantor's 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 connection with the Blue Sky Survey and the
Legal Investment Survey, (vi)
14
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 Depositary Trust Company.
(i) The Company and the Guarantor 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 neither
the Company nor the Guarantor shall not 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) Until the Closing Date or such other date as may be
specified in Schedule I, none of the Company or the Guarantor (and if
so specified in Schedule I, TBS or TWE) will, without the consent of
the managing underwriter specified in Schedule I, offer, sell or
contract to sell, or announce the offering of, any debt securities
designed or intended to be traded or distributed in the public or
private securities markets; provided, however, that the foregoing shall
not prohibit (i) the Company, the Guarantor, TBS or TWE from issuing
long-term debt as all or part of the consideration in any merger or
acquisition and/or in connection with the settlement of any litigation,
(ii) the Company, the Guarantor, TBS or TWE from filing with the
Commission a "shelf" registration statement for the offering of
securities under Rule 415 of the Act (or any similar rule that may be
adopted by the Commission) or amending any existing shelf registration
statement provided that such securities are not issued until the
business day following the Closing Date or such other date as may be
specified in Schedule I or (iii) any of the foregoing from issuing
commercial paper.
15
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 Guarantor 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 Guarantor made in any
certificates pursuant to the provisions hereof, to the performance by each of
the Company and the Guarantor 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.
(b) At the Closing Date, the Company shall have furnished to
you the opinion of ▇▇▇▇▇ ▇. ▇▇▇▇, General Counsel to the Company and
the Guarantor, 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 Guarantor, each dated the Closing Date,
substantially in the form of Exhibit B and Exhibit C hereto,
respectively.
(d) The Representatives shall have received from Shearman &
Sterling, counsel for the 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 Guarantor shall have
furnished to such counsel
16
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
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(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), there has been no material adverse change
in the condition (financial or otherwise), earnings, or
business prospects of the Company and its subsidiaries,
whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(2) The Guarantor shall have furnished to the Representatives
a certificate of the Guarantor, signed by any two officers who are an
Executive or Senior Vice President of the Guarantor, 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
Guarantor and the Company in this Agreement are true and
correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date and each
of the Guarantor and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
17
(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 Guarantor's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or otherwise), earnings, or
business prospects of either the Company and its subsidiaries
or the Guarantor and its subsidiaries, in each case considered
as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(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 satisfactory
to the Representatives, confirming that they are independent auditors
with respect to the Company, the Guarantor and TWE within the meaning
of the Act and the Exchange Act and the respective applicable published
rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules of the Company, the
Guarantor and TWE 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)
made available by the Company, the Guarantor and TWE and their
respective consolidated subsidiaries; carrying out certain
specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and executive,
finance and audit committees of the Company, the Guarantor and
TWE and their respective consolidated subsidiaries; and
inquiries of certain officials of the Company, the Guarantor
and TWE who have responsibility for financial and accounting
matters of the Company, the Guarantor and TWE and their
respective consolidated subsidiaries as to transactions and
events subsequent to the date of the most recent audited
financial statements in or incorporated in the Final
Prospectus, and such other inquiries and procedures
18
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, the Guarantor, TWE and
certain related unconsolidated subsidiaries (together
with TWE, the "Entertainment Group") and their
respective consolidated subsidiaries or any decreases
in stockholders' equity or the consolidated capital
stock of the Company, the Guarantor, TWE and the
Entertainment Group as compared with 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 disclosed in the Final
Prospectus;
(iii) they are unable to and do not express any
opinion on the pro forma adjustments to the financial
statements included or incorporated by reference in the
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:
19
(1) read the pro forma adjustments to such
financial statements;
(2) made inquiries of certain officials of
the Company and the Guarantor who have responsibility
for financial and accounting matters about the basis
for their determination of the pro forma adjustments
to such financial statements and whether such pro
forma adjustments comply as to form in all material
respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X; and
(3) proved the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts included or incorporated by
reference in the Registration Statement and the Final
Prospectus; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that the pro forma
adjustments to the financial statements included or
incorporated by reference in the 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; and
(iv) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibit 12 to the
Registration Statement agrees with the accounting records of
the Company and its subsidiaries or the Guarantor and its
subsidiaries, as the case may be, 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
20
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)(i) and
5(f)(ii)(1) hereto.
(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 Guarantor and its subsidiaries or 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 or the
Guarantor's debt securities by ▇▇▇▇▇'▇ Investor Service, Inc. or
Standard & Poor's Ratings Group, and (ii) neither the Company nor the
Guarantor 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 Guarantor
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.
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 cancellation shall be without liability of any party to
any other party, except to the extent provided in Sections 4 and 6. Notice of
such cancellation shall be given to the Company or the Guarantor in writing or
by telephone or telegraph confirmed in writing.
21
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 or
the Guarantor 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 Guarantor 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
and the Guarantor 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 neither the Company nor the
Guarantor 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 or the Guarantor 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 or
the Guarantor may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless each of the Company and the Guarantor, each of their respective
directors, each of their respective officers who signs the Registration
Statement, and each person who controls the Company or the Guarantor within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Guarantor to each Underwriter, but
only with reference to written information relating to such Underwriter
furnished to the
22
Company or the Guarantor 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 and the
Guarantor 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
23
reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Guarantor 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 Guarantor 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 and the Guarantor, 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, the Guarantor 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 Guarantor 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 Guarantor 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 or the Guarantor or the Underwriters. The Company, the Guarantor 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
24
who controls the Company or the Guarantor within the meaning of either the Act
or the Exchange Act, each officer of the Company or the Guarantor who shall have
signed the Registration Statement and each director of the Company or the
Guarantor shall have the same rights to contribution as the Company and the
Guarantor, subject in each case to the applicable terms and conditions of this
paragraph (d).
8. Default by an 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 Guarantor. 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 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 Guarantor 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 or the Guarantor prior to delivery of and payment for the Securities, if
prior to such time (i) trading in the Guarantor's common stock or any of the
Company's or the Guarantor's debt securities shall have been suspended by the
Commission or the New York Stock Exchange or the Pacific Stock Exchange or
trading in securities generally on either of such Exchanges shall have been
suspended or limited or minimum or maximum prices shall have been established on
either of such Exchanges, or maximum ranges for prices for securities have been
required, by such Exchanges 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
25
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 or the Guarantor, 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 or the Guarantor or any of the officers, directors or
controlling persons referred to in Section 7 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 6 and 7 hereof
shall survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them, at the address specified
in Schedule I hereto; or, if sent to the Company or the Guarantor, will be
mailed, delivered or telegraphed and confirmed to it care of the Guarantor 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 and the several Underwriters.
Very truly yours,
TIME WARNER INC.
By__________________________
Name:
Title:
TIME WARNER COMPANIES, INC.
By__________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
[_________]
By: [________]
By______________________________
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement:
Registration Statement:
Representatives:
Title, Purchase Price and Description of Securities:
1. _______________________:
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:
Closing Date, Time and Location:
Type of funds payable at Closing: Immediately available funds
Type of Offering: Delayed Offering
Delayed Delivery Arrangements: Not Applicable
Listing requirements:
Comfort letter at Execution Time:
SCHEDULE II
[Name of Securities]:
Principal
Amount
to
Underwriters be Purchased
Total......................................
EXHIBIT A
FORM OF OPINION OF ▇▇▇▇▇ ▇. ▇▇▇▇, ESQ.
(i) each of the Company and the Guarantor 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
and the Guarantor 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 either the Company and its
subsidiaries or the Guarantor and its subsidiaries, in each case
considered as one enterprise;
(ii) each of the Company's and the Guarantor'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 to enter into and perform its obligations under
this Agreement; and each of the Company and the Guarantor 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 either the Company and its subsidiaries or the
Guarantor and its subsidiaries, in each case considered as one
enterprise;
(iii) each of the Company's and the Guarantor's authorized
equity capitalization is as set forth in the Final Prospectus;
(iv) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving
either the Company or the Guarantor 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;
A-2
(v) no authorization, approval, consent, order or license of
any government, governmental instrumentality, agency or body or court
(other than under the Act and the securities or blue sky laws of
various jurisdictions) is required for the authorization, issuance,
sale and delivery of the Securities by the Company and the Guarantor,
and the consummation by the Company and the Guarantor of the
transactions contemplated by the Underwriting Agreement;
(vi) the Indenture and the Underwriting Agreement have been
duly authorized, executed and delivered by each of the Company and the
Guarantor;
(vii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated by the Underwriting Agreement, except
such as have been obtained under the Act 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 (specified in such opinion) as have been obtained;
(viii) the execution and delivery of the Underwriting
Agreement and the Indenture by the Company, the issuance, sale and
delivery of the Debt Securities and the consummation by the Company of
the transactions contemplated in the Underwriting Agreement, the
Indenture and the Registration Statement and compliance by the Company
with the terms of the Underwriting Agreement do not and will not result
in any violation of the Restated Certificate of Incorporation, as
amended, or By-laws, as amended, of the Company, 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 under (i) the TWE Credit Agreement or any
indenture, mortgage or loan agreement, or any other agreement or
instrument known to such counsel, to which the Company is a party or by
which it may be bound or to which any of its 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 or business prospects of
either the Company and its subsidiaries or the Guarantor and its
subsidiaries, in each case 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 or
business prospects of either the Company and its subsidiaries or the
Guarantor and its subsidiaries, in each case 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 or any of its properties; and
A-3
(ix) the execution and delivery of the Underwriting Agreement
and the Indenture by the Guarantor, the issuance, sale and delivery of
the Guarantee and the consummation by the Guarantor of the transactions
contemplated in the Underwriting Agreement, the Indenture and the
Registration Statement and compliance by the Guarantor 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 Guarantor,
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 Guarantor under (i) the TWC Credit Agreement
or any indenture, mortgage or loan agreement, or any other agreement or
instrument, to which the Guarantor is a party or by which it may be
bound or to which any of its 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 either
the Company and its subsidiaries or the Guarantor and its subsidiaries,
in each case 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 either the Company and its
subsidiaries or the Guarantor and its subsidiaries, in each case
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 Guarantor or any of its properties.
(x) 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
General Counsel, I have reviewed and participated in the preparation of the
Registration 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 Guarantor and
take no responsibility therefor. However, in the course of the preparation by
the Company and the Guarantor of the Registration Statement and the Final
Prospectus, I have participated in conferences with certain officers of, and
accountants for, the Company and the Guarantor 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
A-4
information which gave me reason to believe that the Registration Statement
(except for the financial statements and other financial or statistical data
included therein or omitted therefrom, 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 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 or the Guarantor
and public officials.
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & ▇▇▇▇▇
(i) each of the Company and the Guarantor 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 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 the Company, has been duly qualified under the Trust Indenture Act,
and, assuming due authorization, execution and delivery by the Trustee,
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other laws
affecting creditors' rights generally from time to time in effect and subject as
to enforceability to general principles of equity, regardless of whether such
enforceability is 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 laws affecting creditors' rights generally
from time to time in effect and subject as to enforceability to general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law;
(iv) the Indenture has been duly authorized, executed and
delivered by the Guarantor and constitutes a legal, valid and binding instrument
enforceable against the Guarantor 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 such enforceability is considered in a proceeding in
equity or at law);
(v) the Registration Statement has become effective under the
Act; 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 threatened;
B-2
(vi) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor;
(vii) the statements made in the Prospectus under "Description
of the Debt Securities and the Guarantee", to the extent that they
constitute matters of law or legal conclusions, have been reviewed by
us and fairly present the information discussed therein in all material
respects.
We are attorneys admitted to practice only in the State of New
York and, accordingly, do not express any opinion as to any laws other than the
laws of the State of New York, the Federal laws of the United States and the
General Corporation Law of the State of Delaware.
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 (vii) and in the first sentence of paragraph (ii) of our opinion to
you dated the date hereof. Subject to the foregoing, we hereby advise you that
our work in connection with this matter did not disclose any information that
gave us reason to believe that the Registration Statement and the Prospectus
(except 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. Furthermore, subject to the
foregoing, we hereby advise you that our work in connection with this matter did
not disclose any information that gave us reason to believe that the
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 made 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).