Reimbursement Agreement - Time Warner Cable Inc., AOL Time Warner Inc., Warner Communications Inc., American Television and Communications Corp. and Time Warner Entertainment Co. LP
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FORM OF
REIMBURSEMENT AGREEMENT
by and among
TIME WARNER CABLE INC.,
AOL TIME WARNER INC.,
WARNER COMMUNICATIONS INC.,
AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION
and
TIME WARNER ENTERTAINMENT COMPANY, L.P.
Dated: [__________], 200[ ]
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TABLE OF CONTENTS
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1. Definitions.......................................................1
2. Option Reimbursement for AOLTW Options............................3
2.1 Company Eligible Option Holders..........................3
2.2 TWE Eligible Option Holders. ...........................3
2.3 Assumption of AOLTW Obligations. .......................4
2.4 Consistent Tax Treatment.................................4
2.5 Post-Contribution Option Grants..........................4
2.6 Post-IPO Option Grants...................................5
3. Reimbursement.....................................................5
3.1 TWE Debt Guarantor Payments..............................5
3.2 Priority of Rights.......................................5
3.3 Duty to TWE Debt Guarantors..............................5
3.4 Authorization of TWE Debt Guarantor Payment..............6
3.5 Certain Information......................................6
3.6 Systems Maintenance......................................6
3.7 Compliance with Article Ten of TWE Indenture.............6
4. Company Guarantee.................................................7
5. Employee and Benefit Reimbursement................................7
5.1 Employee Services. .....................................7
5.2 Benefit Plans. .........................................7
5.3 Method of Reimbursement. ...............................7
5.4 Other....................................................8
5.5 General..................................................8
6. Miscellaneous.....................................................8
6.1 Notices..................................................8
6.2 Successors and Assigns...................................9
6.3 Amendment and Waiver.....................................9
6.4 Survival.................................................9
6.5 TWE Debt Guarantor Rights and Remedies...................9
6.6 Counterparts; Effectiveness..............................9
6.7 Headings................................................10
6.8 GOVERNING LAW...........................................10
6.9 Jurisdiction............................................10
6.10 WAIVER OF JURY TRIAL. .................................10
6.11 Severability............................................10
6.12 Rules of Construction...................................10
6.13 Entire Agreement; Third Party Beneficiaries.............10
6.14 Further Assurances......................................11
Exhibit A
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REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT (this "Agreement"), dated
[__________], 200[ ], by and among Time Warner Cable Inc., a Delaware
corporation, f/k/a MediaOne TWE Holdings, Inc. (the "Company"), AOL Time Warner
Inc., a Delaware corporation ("AOLTW"), Warner Communications Inc., a Delaware
corporation ("WCI"), American Television and Communications Corporation, a
Delaware corporation ("ATC" and, together with WCI, the "TWE Debt Guarantors")
and Time Warner Entertainment Company, L.P., a Delaware limited partnership
("TWE").
WHEREAS, effective as of and in connection with the closing
of the transactions contemplated by the Restructuring Agreement, dated as of
August [ ], 2002 (the "Restructuring Agreement"), by and among AOLTW, AT&T
Corp., a New York corporation, the Company and the other parties thereto, the
parties have agreed to enter into certain reimbursement arrangements as
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. Definitions. As used in this Agreement, and unless
the context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common
control with such Person; provided, that, for purposes of this definition,
"control" (including with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or other equity securities, by contract or
otherwise; provided, further, that for purposes of this Agreement the Company
and its Subsidiaries shall not be deemed to be Affiliates of AOLTW or any of
its Affiliates.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"AOLTW" has the meaning set forth in the preamble of this
Agreement.
"ATC" has the meaning set forth in the preamble of this
Agreement.
"Board of Directors" means the Board of Directors of the
Company.
"Beneficiaries" has the meaning set forth in Section 3.1(a)
of this Agreement.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close.
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"Capital Stock" means the Common Stock, par value $0.01 per
share, of AOLTW or any other class of capital stock of AOLTW (or any
predecessor or successor class thereof).
"Closing Price" means, with respect to any given date, the
last reported sale price of a share of Capital Stock (regular way) on such date
as shown on the NYSE Composite Transactions Tape, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices of
such stock on such day on the NYSE, or, if such stock is not listed or admitted
to trading on the NYSE, on the principal national securities exchange on which
such stock is listed or admitted to trading, or, if it is not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices of such stock on such day as reported by NASDAQ,
or, if such stock is not so reported, the average of the closing bid and asked
prices of such stock on such day as furnished by any member of the National
Association of Securities Dealers, Inc. selected from time to time by AOLTW for
that purpose.
"Company" has the meaning set forth in the preamble to this
Agreement.
"Company Eligible Option Holder" means any officer or other
employee of the Company (or any of its Subsidiaries, other than TWE and its
Subsidiaries) including, without limitation, any Person who becomes an officer
or other employee of the Company (or any of its Subsidiaries, other than TWE
and its Subsidiaries) as a result of the transactions contemplated by the
Restructuring Agreement, who has been, or from time to time is, issued stock
options to purchase shares of Capital Stock.
"Company Option Reimbursement Amount" has the meaning set
forth in Section 2.1 of this Agreement.
"Initial Offering Date" means the date upon which shares of
Class A Common Stock, par value $0.01 per share, of the Company, or Class B
Common Stock, par value $0.01 per share, of the Company, shall have been sold
in an initial public offering (whether primary or secondary) of the Company
pursuant to an effective registration statement filed by the Company.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"NYSE" means the New York Stock Exchange.
"Person" means any individual, corporation, limited liability
company, partnership, firm, group (as such term is used under Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended), joint venture,
association, trust, unincorporated organization, estate, trust or other entity.
"Restructuring Agreement" has the meaning set forth in the
recitals to this Agreement.
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"Subsidiary" means, with respect to any Person, any other
Person of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other body performing
similar functions are at any time directly or indirectly owned by such Person;
provided, that for purposes of this Agreement the Company and its Subsidiaries
shall not be deemed to be Subsidiaries of AOLTW or any of its Subsidiaries.
"TWE" has the meaning set forth in the preamble to this
Agreement.
"TWE Eligible Option Holder" means any officer or other
employee of TWE and its Subsidiaries, including, without limitation, any Person
who becomes an officer or other employee of TWE or any of its Subsidiaries as a
result of the transactions contemplated by the Restructuring Agreement, who has
been, or from time to time is, issued stock options to purchase shares of
Capital Stock.
"TWE Indenture" means that certain Indenture, dated as of
April 30, 1992, by and among Time Warner Inc., a Delaware Corporation, TWE and
The Bank of New York, a New York banking corporation, as trustee, as the same
may be amended, amended and restated, supplemented or otherwise modified from
time to time.
"TWE Option Reimbursement Amount" has the meaning set forth
in Section 2.2 of this Agreement.
"TWE Public Debt Guarantee" means the guarantee by the TWE
Debt Guarantors of TWE's obligations under the TWE Indenture.
"TWE Debt Guarantor Payment" has the meaning set forth in
Section 3.1 of this Agreement.
"TWE Debt Guarantors" has the meaning set forth in the
preamble to this Agreement.
"WCI" has the meaning set forth in the preamble to this
Agreement.
2. Option Reimbursement for AOLTW Options.
2.1 Company Eligible Option Holders. Upon the
exercise by any Company Eligible Option Holder of any stock option to purchase
shares of Capital Stock, the Company shall promptly (after notice of such
exercise is provided by AOLTW to the Company) pay to AOLTW, for each share of
Capital Stock so purchased, an amount (such amount, the "Company Option
Reimbursement Amount") equal to the excess of (i) the Closing Price of a share
of such Capital Stock as of the date of such exercise, over (ii) the aggregate
exercise price paid by such Company Eligible Option Holder for each such share
of Capital Stock.
2.2 TWE Eligible Option Holders. Upon the
exercise by any TWE Eligible Option Holder of any stock option to purchase
shares of Capital Stock,
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TWE shall promptly (after notice of such exercise is provided by AOLTW to the
Company) pay to AOLTW, for each share of Capital Stock so purchased, an amount
(such amount, the "TWE Option Reimbursement Amount") equal to the excess of (i)
the Closing Price of a share of such Capital Stock as of the date of such
exercise, over (ii) the aggregate exercise price paid by such TWE Eligible
Option Holder for each such share of Capital Stock.
2.3 Assumption of AOLTW Obligations. In lieu of
the procedures described in Sections 2.1 and 2.2 above, if satisfactory
arrangements are reached with a Company Eligible Option Holder or a TWE
Eligible Option Holder, as applicable, at AOLTW's request, the Company or TWE,
as applicable, shall agree to assume AOLTW's obligations with respect to any
outstanding stock options held by such Company Eligible Option Holder or TWE
Eligible Option Holder, as applicable. In such event, upon exercise of any such
stock option by such Company Eligible Option Holder or TWE Eligible Option
Holder, as applicable, the Company or TWE, as applicable, shall (A) purchase
the shares of Capital Stock issuable upon exercise of such stock option from
AOLTW at a price (payable in cash) equal to the Closing Price of a share of
such Capital Stock on the date of exercise and (B) deliver such shares to the
Company Eligible Option Holder or TWE Eligible Option Holder, as applicable,
against payment to the Company or TWE by such Company Eligible Option Holder or
TWE Eligible Option Holder, as applicable, of the exercise price therefor.
2.4 Consistent Tax Treatment. AOLTW agrees and
acknowledges that the Company or TWE, as applicable, shall be entitled to claim
the benefit of any federal, state and local income tax deduction with respect
to the Company Option Reimbursement Amount and the TWE Option Reimbursement
Amount permitted to be deducted by the Company or TWE, as applicable, in
accordance with applicable law, and AOLTW shall not take any position
inconsistent therewith, unless required by a change in applicable law or a good
faith resolution of a contest. In the event AOLTW takes such an inconsistent
position as permitted by the preceding sentence, it shall pay to the Company or
TWE, as applicable, any tax benefit actually realized as a result of claiming
the benefit of any tax deductions with respect to the Company Option
Reimbursement Amount or the TWE Option Reimbursement Amount, as applicable;
provided, however, that subject to the foregoing, the determination of whether
to claim any such benefit, whether by filing an original or amended tax return
or otherwise, shall be made by AOLTW in its sole and absolute discretion. For
purposes of the foregoing, any such benefit shall be deemed "actually realized"
by AOLTW only if and to the extent that AOLTW shall have determined, in its
sole reasonable discretion, that its liability for taxes is less than its
liability for taxes would have been had it not taken into account any such tax
deductions.
2.5 Post-Contribution Option Grants. After the
date hereof and prior to the date of the Initial Offering Date, options to
purchase Capital Stock shall be granted to officers or employees of the Company
or any of its Subsidiaries and to officers or employees of TWE or any of its
Subsidiaries only in the ordinary course of business consistent with past
practices.
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2.6 Post-IPO Option Grants. In no event shall
options to purchase Capital Stock be granted to officers or employees of the
Company or any of its Subsidiaries or to officers or employees of TWE or any of
its Subsidiaries after the Initial Offering Date.
3. Reimbursement.
3.1 TWE Debt Guarantor Payments. In the event
that any TWE Debt Guarantor makes any payment under its TWE Public Debt
Guarantee or any other indebtedness of the Company or its Subsidiaries
guaranteed from time to time by the TWE Debt Guarantors (a "TWE Debt Guarantor
Payment"):
(a) Each of TWE and the Company (the
"Beneficiaries") agrees, jointly and severally, to reimburse such TWE Debt
Guarantor in full for all TWE Debt Guarantor Payments of such TWE Debt
Guarantor together with interest thereon from the date of payment until
reimbursed in full at a rate per annum equal to the interest rate on the
indebtedness with respect to which such TWE Debt Guarantor Payment was made and
without regard to any rights that such Beneficiary may have against any other
guarantor of the obligations under the TWE Indenture which might otherwise
limit such Beneficiary's liability to reimburse such TWE Debt Guarantor in
full; and
(b) Each of the Beneficiaries hereby
acknowledges that such TWE Debt Guarantor shall be fully subrogated to the
extent of its TWE Debt Guarantor Payment to all of the rights and remedies
(including without limitation all security interests if any) of the holders
under the TWE Indenture against such Beneficiary.
3.2 Priority of Rights. Each of the
Beneficiaries hereby agrees that all of the rights of the TWE Debt Guarantors
referred to in this Agreement shall have priority over any right of such
Beneficiary, whether direct or indirect, by contribution, subrogation,
reimbursement, indemnification or otherwise, to demand any payment,
contribution or reimbursement whatsoever from the other Beneficiary until such
time as any and all TWE Debt Guarantor Payments have been repaid to the
respective TWE Debt Guarantors in full and the TWE Debt Guarantors have no
further obligations under their respective TWE Debt Guarantees, and until such
time such Beneficiary shall not be entitled to exercise any such rights against
any other party to this Agreement.
3.3 Duty to TWE Debt Guarantors. Except for
non-waivable, mandatory duties imposed by law, each of the Beneficiaries hereby
acknowledges and agrees that (i) neither of the TWE Debt Guarantors has any
duties to them with respect to the method, manner and timing of the exercise or
nonexercise of any of such TWE Debt Guarantor's rights to recover payment of
any TWE Debt Guarantor Payment of such TWE Debt Guarantor and (ii) to the
extent that any such duties may exist, they are hereby waived.
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3.4 Authorization of TWE Debt Guarantor
Payment. In the event that a TWE Debt Guarantor makes any TWE Debt Guarantor
Payment, such TWE Debt Guarantor is hereby irrevocably authorized by each of
the Beneficiaries at any time and from time to time without notice to such
Beneficiary, any such notice being hereby waived by such Beneficiary, to set
off and appropriate and apply any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such TWE Debt Guarantor, its Subsidiaries or its Affiliates to or for
the credit or the account of such Beneficiary, or any part thereof in such
amounts as such TWE Debt Guarantor may elect, on account of the liabilities of
such Beneficiary to such TWE Debt Guarantor in respect of such TWE Debt
Guarantor Payment hereunder or under the TWE Indenture, whether or not such TWE
Debt Guarantor has made any demand for payment. Such TWE Debt Guarantor shall
notify such Beneficiary promptly of any such set-off made by it and the
application made by it of the proceeds thereof; provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each TWE Debt Guarantor under this Section 3 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which such TWE Debt Guarantor may have against such Beneficiary.
3.5 Certain Information. Each of the
Beneficiaries, at its own cost and expense, shall provide, or cause to be
provided, to the TWE Debt Guarantors, as soon as reasonably practicable after
written request therefor, any information in the possession or under the
control of such Beneficiary that the requesting TWE Debt Guarantor reasonably
requires (i) to comply with reporting, disclosure, filing or other requirements
imposed on the requesting TWE Debt Guarantor (including under applicable
securities or tax laws) by a governmental authority having jurisdiction over
the requesting TWE Debt Guarantor, (ii) for use in any other judicial,
regulatory, administrative, tax or other proceeding or in order to satisfy
audit, accounting, claims, regulatory, litigation, tax or other similar
requirements or (iii) to comply with its obligations under this Agreement;
provided, however, that in the event that any party determines that any such
provision of information would reasonably be expected to violate any law or
agreement or waive any attorney-client privilege, the parties shall take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such consequence. Each of the Beneficiaries intends that any
transfer of information that would otherwise be within the attorney-client
privilege shall not operate as a waiver of any potentially applicable
privilege.
3.6 Systems Maintenance. After the date hereof,
each of the Beneficiaries shall maintain in effect adequate systems and
controls to the extent necessary to enable them to satisfy their respective
reporting, accounting, audit and other obligations.
3.7 Compliance with Article Ten of TWE
Indenture. Each of the Beneficiaries agrees to comply with the covenants
contained in Article Ten of the TWE Indenture as in effect on the date hereof.
The provisions of Article Ten of the TWE
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Indenture and the related definitions are hereby incorporated by reference into
this Agreement with the same effect as if set forth fully herein.
4. Company Guarantee. On the date hereof, the Company
is entering into a guarantee agreement (in the form attached hereto as Exhibit
A or in any other form as the parties shall agree) providing for a guarantee by
the Company to the holders of debt securities issued by TWE pursuant to the TWE
Indenture. At the request of the Company, TWE (or any of its Subsidiaries) will
execute a guarantee in a similar form in respect of any indebtedness of the
Company or its Subsidiaries outstanding from time to time.
5. Employee and Benefit Reimbursement.
5.1 Employee Services. Upon the agreement of
AOLTW and the Company, certain employees of AOLTW and/or its Affiliates may
from time to time provide services to the Company or its Subsidiaries. From and
after the date hereof, the Company or its Subsidiaries, as applicable, shall
reimburse AOLTW and/or any such Affiliates, in the manner set forth in Section
5.3 hereof, for the costs of providing such services, including reasonable
allocations of compensation, employee benefit plan costs (including
administration costs and benefit accruals associated therewith), overhead, and
other fixed costs and expenses.
5.2 Benefit Plans. Except as otherwise
specifically provided in this Agreement with respect to options to purchase
shares of Capital Stock, to the extent that, on or after the date hereof, any
current, future or former employees of the Company or its Subsidiaries
participate in any benefit plans, programs, or arrangements maintained by AOLTW
or any of its Affiliates, the Company or its Subsidiaries, as applicable, shall
reimburse AOLTW or, if applicable, such Affiliate or Affiliates, in the manner
set forth in Section 5.3 hereof, for all costs, including administration costs
and benefit accruals, associated with such employees' participation in the
employee benefit plans, programs or arrangements with respect to employment by
the Company or its Subsidiaries in a manner that is consistent with past
practice; provided, however, that (i) except as set forth in Section 5.1, in
the event that any employee described above becomes employed by AOLTW or any of
its Affiliates after the Closing (as defined in the Restructuring Agreement),
then the Company and its Subsidiaries will not be required to reimburse AOLTW
or any of its Affiliates for any costs associated with such employee's
participation in employee benefit plans, programs or arrangements while
employed by, or on account of such employee's employment with, AOLTW or any of
its Affiliates after the Closing and (ii) in the event that any employee of
AOLTW or any of its Affiliates becomes employed by the Company or any of its
Subsidiaries after the Closing then the Company and its Subsidiaries will not
be required to reimburse AOLTW or any of its Affiliates for any costs
associated with such employee's participation in employee benefit plans,
programs or arrangements while such employee was employed by, or on account of
such employee's employment with, AOLTW or any of its Affiliates.
5.3 Method of Reimbursement. Any reimbursement
pursuant to Section 5.1 or 5.2 shall be made by the Company or its
Subsidiaries, as applicable, in a
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manner consistent with prior practices of AOLTW and TWE with respect to such
reimbursement.
5.4 Other. The provisions of this Agreement
will be interpreted in a manner consistent with past practice, except as
otherwise expressly provided by this Agreement or in any other agreement or
arrangement between or among the parties contemplated by the Restructuring
Agreement (or any other Transaction Agreement (as defined therein)) or entered
into after the date hereof.
5.5 General. The provisions of this Section 5
shall at all times be subject to the requirements of Article VI of the By-laws
of the Company. No reimbursement will be made pursuant to this Section 5 if
reimbursement in respect of the same payment or service has been made pursuant
to another provision of this Agreement or any other agreement among the
parties.
6. Miscellaneous.
6.1 Notices. All notices, demands or other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first class mail, return receipt requested,
telecopier, courier service or personal delivery:
(a) if to the Company or TWE:
c/o Time Warner Cable Inc.
75 Rockefeller Plaza
New York, New York 10019-6908
Telecopy: (212) 258-3172
Attention: Executive Vice President
and General Counsel:
(b) if to AOLTW, ATC or WCI:
c/o AOL Time Warner Inc.
75 Rockefeller Plaza
New York, New York 10019-6908
Telecopy: (212) 258-3172
Attention: Executive Vice President
and General Counsel
or such other address or facsimile number as such party hereto may hereafter
specify for such purpose by notice to the other parties hereto. All such
notices, requests and other communications shall be deemed received on the date
of receipt by the recipient thereof if received prior to 5 p.m. on a Business
Day, in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
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6.2 Successors and Assigns. The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided that no party
hereto may assign, delegate or transfer any of its rights or obligations
hereunder without the consent of the other parties hereto.
6.3 Amendment and Waiver.
(a) Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure by any party from
the terms of any provision of this Agreement, shall be effective only if it is
made or given in writing and signed by the Company and AOLTW; provided, that
any material amendment, supplement or modification of or to this Agreement
shall also require the approval of a majority of the Independent Directors (as
defined in the Restated Certificate of Incorporation of the Company). Any such
amendment, supplement, modification, waiver or consent shall be binding upon
the Company, AOLTW and the other parties hereto.
(b) No failure or delay on the part of
any party hereto in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The rights and remedies provided for herein are
cumulative and are not exclusive of any rights and remedies that may be
available to the parties hereto at law, in equity or otherwise.
6.4 Survival. The rights of each party under
this Agreement shall continue to be effective, or be reinstated, as the case
may be, if any payment made hereunder, or any part thereof, on account of any
of the reimbursement obligations hereunder is at any time rescinded or at any
time must otherwise be restored or returned by such party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of any other party, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, such party or any substantial part of
their property, or otherwise, all as though such payments had not been made.
6.5 TWE Debt Guarantor Rights and Remedies.
Notwithstanding anything in this Agreement to the contrary, the rights accorded
to each TWE Debt Guarantor hereunder shall be in addition to, and not in lieu
of, any rights that such TWE Debt Guarantor may have to be reimbursed for all
TWE Debt Guarantor Payments of such TWE Debt Guarantor at common law, in
equity, by separate agreement or otherwise.
6.6 Counterparts; Effectiveness. This Agreement
may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other parties hereto.
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6.7 Headings. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
6.8 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
6.9 Jurisdiction. Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought exclusively in any federal or state court located in
the State and City of New York, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court.
6.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
6.11 Severability. If any term, provision,
covenant or restriction of this Agreement is determined by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party hereto. Upon such a determination, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner so that the
transactions contemplated hereby may be consummated as originally contemplated
to the fullest extent possible.
6.12 Rules of Construction. Unless the context
otherwise requires, references to sections or subsections refer to sections or
subsections of this Agreement.
6.13 Entire Agreement; Third Party
Beneficiaries.
(a) This Agreement (together with all
exhibits hereto) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both oral and written, among the parties with respect to such
subject matter.
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(b) Except as provided below, this
Agreement shall be binding upon and inure solely to the benefit of each party
hereto and their respective successors and permitted assigns, and nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement. Notwithstanding the foregoing, AT&T (as defined in
the Restructuring Agreement) shall be deemed a third party beneficiary of
Sections 2.5 and 2.6 hereof for so long as AT&T Corp. holds a number of shares
of Class A Common Stock, par value $0.01 per share, of the Company at least
equal to five percent (5%) of the aggregate number of outstanding shares of
such Class A Common Stock and Class B Common Stock, par value $0.01 per share,
of the Company.
6.14 Further Assurances. Each of the parties
shall, and shall cause their respective Affiliates to, execute such documents
and perform such further acts as may be reasonably required or desirable to
carry out or to perform the provisions of this Agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
<PAGE>
12
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Reimbursement Agreement on the date first written
above.
TIME WARNER CABLE INC.
By:
----------------------------------------
Name:
Title:
AOL TIME WARNER INC.
By:
----------------------------------------
Name:
Title:
WARNER COMMUNICATIONS INC.
By:
----------------------------------------
Name:
Title:
AMERICAN TELEVISION AND COMMUNICATIONS
CORPORATION
By:
----------------------------------------
Name:
Title:
TIME WARNER ENTERTAINMENT COMPANY, L.P.
By: WARNER COMMUNICATIONS INC.,
as General Partner
By:
----------------------------------------
Name:
Title:
<PAGE>
Exhibit A
TIME WARNER ENTERTAINMENT COMPANY, L.P.,
AND
TIME WARNER CABLE INC.
TO
THE BANK OF NEW YORK,
TRUSTEE
EIGHTH SUPPLEMENTAL INDENTURE
DATED AS OF [_______________]
<PAGE>
EIGHTH SUPPLEMENTAL INDENTURE dated as of [_____], 200[_], by
and among TIME WARNER ENTERTAINMENT COMPANY, L.P., a Delaware limited
partnership ("TWE"), TIME WARNER CABLE INC., a corporation duly organized and
existing under the laws of the State of Delaware ("TW Cable "), and THE BANK OF
NEW YORK, a banking corporation duly organized and existing under the laws of
New York, Trustee (the "Trustee").
RECITALS
Time Warner, Inc. ("TWI"), TWE, the Trustee and certain other
parties have executed and delivered an Indenture dated as of April 30, 1992, as
amended by a First Supplemental Indenture dated as of June 30, 1992, a Second
Supplemental Indenture dated as of December 9, 1992, a Third Supplemental
Indenture dated as of October 12, 1993, a Fourth Supplemental Indenture dated
as of March 29, 1994, a Fifth Supplemental Indenture dated as of December 28,
1994, a Sixth Supplemental Indenture dated as of September 29, 1997 and a
Seventh Supplemental Indenture dated as of December 29, 1997 (the "Indenture"),
providing for, among other things, the issuance from time to time of unsecured
debentures, notes or other evidences of indebtedness (the "Securities"), to be
issued in one or more series as provided in the Indenture.
TWE and TW Cable have duly authorized the execution and
delivery of this Eighth Supplemental Indenture to provide for, among other
things, (i) the guarantee of TWE's obligations under the Securities by TW Cable
(the "TW Cable Guaranty") and (ii) the addition of TW Cable as a party to the
Indenture, subject in each case to the terms and conditions described herein.
This Eighth Supplemental Indenture is being executed pursuant
to and in accordance with Section 901 of the Indenture.
All things necessary to make this Eighth Supplemental
Indenture a valid and binding agreement of TWE and TW Cable have been done.
NOW, THEREFORE, WITNESSETH:
For and in consideration of the promises and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, it is mutually agreed, for the equal proportionate benefit of all
Holders of the Securities, as follows:
ARTICLE ONE
INCORPORATION OF PREVIOUS DOCUMENTS
SECTION 101. INCORPORATION OF PREVIOUS DOCUMENTS.
This Eighth Supplemental Indenture is a supplemental
indenture within the meaning of the Indenture and shall be read together and
shall have the same effect as
<PAGE>
2
though all the provisions thereof and hereof were contained in one instrument.
Unless otherwise expressly provided, the provisions of the Indenture are
incorporated herein by reference.
SECTION 102. DEFINITIONS.
Unless otherwise provided herein, the terms used herein shall
have the meanings ascribed to such terms in the Indenture.
SECTION 103. GOVERNING LAW.
This Eighth Supplemental Indenture, the Indenture and the
Securities shall be governed by and construed in accordance with the laws of
the State of New York.
ARTICLE TWO
GUARANTY
SECTION 201. TW CABLE GUARANTY.
For value received, TW Cable, and each of its successors and
assigns, hereby fully and unconditionally guarantees to each Holder of the
Securities upon which this TW Cable Guaranty is referred to, and to the Trustee
on behalf of each such Holder, the due and punctual payment of all principal of
(and premium, if any, on) and interest on such Security, when and as the same
shall become due and payable, whether at Stated Maturity upon redemption or
repayment, upon declaration of acceleration or otherwise, according to the
terms of the Securities and of the Indenture. In case of the failure of TWE or
any successor thereto punctually to pay any such principal, premium or
interest, TW Cable hereby agrees to immediately cause any such payment to be
made punctually when and as the same shall become due and payable, whether at
Stated Maturity, upon redemption or repayment, upon declaration of acceleration
or otherwise, as if such payment were made by TWE.
TW Cable hereby agrees that as long as this Section 201 is in
effect with respect to TW Cable pursuant to the Indenture, its obligations
hereunder shall be unconditional and absolute, irrespective of the validity,
regularity or enforceability of any such Security or the Indenture, the absence
of any action to enforce the same, the granting of any waiver or consent by the
Holder of any such Security with respect to any provisions thereof, the
recovery of any judgment against TWE or any action to enforce the same, or any
other circumstances which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. TW Cable hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of TWE, any right to require a proceeding be brought
first against TWE, protest, notice and all demands whatsoever, and covenants
that as long as this Section 201 is in effect with respect to TW Cable pursuant
to the Indenture, this TW Cable Guaranty will not be discharged except by
complete payment of the payment and other obligations contained in any such
Security or in this Section 201.
<PAGE>
3
TW Cable acknowledges and agrees for the benefit of the
Trustee and such Holders that the Trustee and such Holders (in the case of an
Event of Default under Section 501(1) or (2) of the Indenture) may directly and
simultaneously proceed against TW Cable for the enforcement of this TW Cable
Guaranty and against TWE (as Obligor). The obligations of TW Cable hereunder
are independent of the obligations of TWE under the Securities and the
Indenture, and a separate action or actions may be brought and prosecuted
against TW Cable hereunder whether or not (i) an action or proceeding is
brought against TWE or any other guarantor, (ii) TWE or TW Cable is joined in
any such action or proceeding against such other guarantor and (iii) the
Trustee or such Holders have taken any action to collect or attempt to
otherwise collect such obligations from TWE or any other Person liable
therefor.
Anything in this Section 201 to the contrary notwithstanding,
the TW Cable Guaranty is and shall be deemed to be a Guarantee of payment, and
not a Guarantee of collection.
If the Trustee or the Holder of any such Security is required
by any court or otherwise to return to TWE or any custodian, receiver,
liquidator, trustee, sequestrator or other similar official acting in relation
to TWE, any amount paid to the Trustee or such Holder in respect of such
Security, this TW Cable Guaranty, to the extent theretofore discharged, shall
be reinstated in full force and effect. TW Cable further agrees, to the fullest
extent that it may lawfully do so, that, as between TW Cable, on the one hand,
and such Holders and the Trustee, on the other hand, the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Five of
the Indenture for the purposes of this TW Cable Guaranty, notwithstanding any
stay, injunction or other prohibition extent under any applicable bankruptcy
law preventing such acceleration in respect of the obligations guaranteed
hereby.
TW Cable hereby irrevocably subordinates to the prior payment
in full of all Securities guaranteed by TW Cable hereunder, any claim or other
rights which it may now or hereafter acquire against TWE that arises from the
existence, payment, performance or enforcement of TW Cable's obligations under
this TW Cable Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of any Holder of any such Security
or the Trustee on behalf of such Holder against TWE or any collateral which any
such Holder or the Trustee on behalf of such Holder hereafter acquires, whether
or not such claim, remedy or right arises in equity, or under contract, statute
or common law, including, without limitation, the right to take or receive from
TWE, directly or indirectly, in cash or other property or by set-off or in any
other manner, payment or security on account of such claim or other rights. If
any amount shall be paid to TW Cable in violation of the preceding sentence at
any time prior to the payment in full of all obligations and all other amounts
payable hereunder, such amount shall be deemed to have been paid to TW Cable
for the benefit of, and held in trust for the benefit of, any Holder of such
Security and the Trustee on behalf of such Holder, and shall forthwith be paid
to the Trustee for the benefit of such Holder to be credited and applied upon
such guaranteed obligations, whether matured or unmatured, in accordance
<PAGE>
4
with the terms of the Indenture. TW Cable acknowledges that the subordination
set forth in this Section 201 is knowingly made.
This TW Cable Guaranty shall become effective upon execution
and delivery of this Eighth Supplemental Indenture by each of the parties
hereto.
No reference herein to the Indenture and no provision of this
Section 201 or of the Indenture shall alter or impair the Guarantee of TW
Cable, which is absolute and unconditional, of the due and punctual payment of
the principal of (and premium, if any) and interest on the Securities upon
which this TW Cable Guaranty is referred to.
ARTICLE THREE
ADDITION OF TW CABLE AS A PARTY TO INDENTURE
By execution of this Eighth Supplemental Indenture, TW Cable
agrees that it shall be party to, and shall be subject to, bound by and
entitled to the benefits of, the Indenture as supplemented by this Eighth
Supplemental Indenture.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one of the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
<PAGE>
5
IN WITNESS WHEREOF, the parties hereto have caused this
Eighth Supplemental Indenture to be duly executed by their respective officers
or agents, all as of the day and year first above written.
TIME WARNER ENTERTAINMENT
COMPANY, L.P.
By:
----------------------------------------
Name:
Title:
TIME WARNER CABLE INC.
By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK, Trustee
By:
----------------------------------------
Name:
Title:
<PAGE>
6
STATE OF NEW YORK )
:
COUNTY OF NEW YORK )
On the ____ day of ________, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
he is a ____________ of TIME WARNER ENTERTAINMENT COMPANY, L.P., the Delaware
limited partnership described in and which executed the foregoing instrument;
that he knows the seal of said limited partnership; that the seal affixed to
said instrument is such seal; that it was so affixed by authority of the Board
of Representatives or the Managing General Partners of said limited
partnership, and that he signed his name thereto by like authority.
----------------------------------
------------------------
Notary Public, State of New York
No. ____________
Qualified in New York County
Commission Expires ________
STATE OF NEW YORK )
:
COUNTY OF NEW YORK )
On the __ day of ________, before me personally came
___________, to me known, who, being by me duly sworn, did depose and say that
he is a __________ of TIME WARNER CABLE INC., one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
----------------------------------
------------------------
Notary Public, State of New York
No. ____________
Qualified in New York County
Commission Expires ________
<PAGE>
7
STATE OF NEW YORK )
:
COUNTY OF NEW YORK )
On the ____ day of ________, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
he is a ____________ of THE BANK OF NEW YORK, one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of said
limited partnership; that the seal affixed to said instrument is such seal;
that it was so affixed by authority of the Board of Representatives or the
Managing General Partners of said limited partnership, and that he signed his
name thereto by like authority.
----------------------------------
------------------------
Notary Public, State of New York
No. ____________
Qualified in New York County
Commission Expires ________