Contribution Agreement - MediaOne TWE Holdings Inc., Warner Communications Inc. and AOL Time Warner Inc.
EXECUTION COPY
CONTRIBUTION AGREEMENT
BY AND BETWEEN
MEDIAONE TWE HOLDINGS, INC.,
WARNER COMMUNICATIONS INC.
AND
AOL TIME WARNER INC.
DATED AS OF AUGUST 20, 2002
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..........................................................1
ARTICLE II THE CONTRIBUTION....................................................16
2.1. Transfer of Assets and Assumption of Liabilities...........................16
2.2. Disclaimer of Representations and Warranties...............................18
2.3. Other Ancillary Agreements.................................................18
2.4. Documents Relating to Transfer of Real Property Interests and
Tangible Property Located Thereon..........................................18
2.5. Documents Relating to Other Transfers of Assets and Assumption
of Liabilities.............................................................19
2.6. Governmental Approvals and Consents........................................19
2.7. Novation of TWIC Broadband Liabilities.....................................20
2.8. Intellectual Property Matters..............................................21
2.9. Employee Benefits Matters..................................................21
ARTICLE III CONDITIONS..........................................................22
3.1. Conditions.................................................................22
ARTICLE IV INDEMNIFICATION.....................................................23
4.1. Indemnification by the Company.............................................23
4.2. Indemnification by AOLTW and Holdco........................................23
4.3. Indemnification Obligations Net of Insurance Proceeds and Other
Amounts....................................................................24
4.4. Procedures for Indemnification of Third Party Claims.......................25
4.5. Additional Matters.........................................................26
4.6. Remedies Cumulative........................................................26
4.7. Survival of Indemnities....................................................26
4.8. Tax Effects of Indemnification.............................................27
4.9. Refunds....................................................................27
ARTICLE V INSURANCE...........................................................28
5.1. Insurance Matters..........................................................28
ARTICLE VI EXCHANGE OF INFORMATION; CONFIDENTIALITY............................29
6.1. Agreement for Exchange of Information......................................29
6.2. Ownership of Information...................................................29
6.3. Compensation for Providing Information.....................................29
6.4. Record Retention...........................................................29
6.5. Limitation of Liability....................................................30
6.6. Other Agreements Providing for Exchange of Information.....................30
6.7. Production of Witnesses; Records; Cooperation..............................30
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6.8. Confidentiality............................................................31
6.9. Protective Arrangements....................................................32
ARTICLE VII FURTHER ASSURANCES; ADDITIONAL COVENANTS............................32
7.1. Further Assurances.........................................................32
ARTICLE VIII TERMINATION.........................................................33
8.1. Termination................................................................33
8.2. Effect of Termination......................................................33
ARTICLE IX MISCELLANEOUS.......................................................33
9.1. Counterparts; Entire Agreement.............................................33
9.2. Governing Law..............................................................33
9.3. Assignability..............................................................34
9.4. Jurisdiction...............................................................34
9.5. WAIVER OF JURY TRIAL.......................................................34
9.6. Third Party Beneficiaries..................................................34
9.7. Notices....................................................................34
9.8. Severability...............................................................36
9.9. Public Announcements.......................................................36
9.10. Expenses...................................................................37
9.11. Headings...................................................................37
9.12. Waivers of Default.........................................................37
9.13. Specific Performance.......................................................37
9.14. Amendments.................................................................37
9.15. Late Payments..............................................................37
9.16. Interpretation.............................................................38
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SCHEDULES:
Schedule 1.23: Excluded Assets
Schedule 1.24(b): Excluded Liabilities
Schedule 1.75(e): TWIC Franchises
Schedule 1.75(h): TWIC Systems
Schedule 1.75(i): Actions Contributed to the Company
Schedule 1.75(o): Other Assets Contributed to the Company
Schedule 1.76(e): Businesses/Assets/Liabilities Contributed to the Company
Schedule 1.77(b): Contracts Contributed to the Company
Schedule 1.80(h): Other Liabilities Contributed to the Company
Schedule 1.82(a): TWIC Real Property
Schedule 2.4(b): Leasehold Improvements, Etc. Contributed to the Company
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of August 20, 2002, is by
and between MediaOne TWE Holdings, Inc., a Delaware corporation (the "COMPANY"),
Warner Communications Inc., a Delaware corporation ("HOLDCO"), and AOL Time
Warner Inc., a Delaware corporation ("AOLTW") (which is a party for purposes of
Article IV only). Capitalized terms used herein and not otherwise defined shall
have the respective meanings assigned to them in Article I.
WHEREAS, prior to the Closing, AOLTW shall cause TWIC to
transfer, directly or indirectly, to Holdco all of the TWIC Broadband Assets
(other than the TWIC Delayed Transfer Assets), subject to the TWIC Broadband
Liabilities, such that, following such transfers, Holdco will own all of the
TWIC Broadband Assets, subject to the TWIC Broadband Liabilities (collectively,
the "INITIAL TWIC CONTRIBUTION");
WHEREAS, pursuant to the Restructuring Agreement (the
"RESTRUCTURING AGREEMENT"), dated as of the date hereof, by and among the
Company, Holdco and the other parties named therein, the parties thereto agreed
to, among other things, cause Holdco to contribute all of the TWIC Broadband
Assets, subject to the TWIC Broadband Liabilities, to the Company or other
Company Group Members, in exchange for shares of Company Class A Common Stock;
and
WHEREAS, it is appropriate and desirable to set forth the
principal corporate transactions required to effect certain transactions
contemplated by the Restructuring Agreement and certain other agreements that
will govern certain matters relating to such transactions and the relationship
of the parties hereto and their respective Subsidiaries following the Closing.
NOW, THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
ARTICLE I
DEFINITIONS
For the purpose of this Agreement the following terms shall have
the following meanings:
1.1. ACTION means any demand, action, suit, countersuit,
arbitration, inquiry, proceeding or investigation by or before any federal,
state, local, foreign or international Governmental Authority or any arbitration
or mediation tribunal.
1.2. 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
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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.
1.3. AGREEMENT means this Contribution Agreement, including all of the
Schedules and Exhibits hereto.
1.4. ANCILLARY AGREEMENTS means the Intellectual Property Agreement,
the Patent Assignment, the Copyright and Technology Assignment, the Trademark
and Service Mark Assignment and the Real Property Instruments.
1.5. AOLTW has the meaning set forth in the Preamble.
1.6. ASSETS means assets, properties and rights (including goodwill),
wherever located (including in the possession of vendors or other third parties
or elsewhere), whether real, personal or mixed, tangible, intangible or
contingent, in each case whether or not recorded or reflected or required to be
recorded or reflected on the books and records or financial statements of any
Person, including the following:
(a) all accounting and other books, records and files whether in
paper, microfilm, microfiche, computer tape or disc, magnetic tape or any other
form;
(b) all apparatus, computers and other electronic data processing
equipment, fixtures, machinery, equipment, furniture, office equipment,
automobiles, trucks, aircraft, rolling stock, vessels, motor vehicles and other
transportation equipment, special and general tools, test devices, prototypes
and models and other tangible personal property;
(c) all inventories of materials, parts, raw materials, supplies,
work-in-process and finished goods and products;
(d) all interests in real property of whatever nature, including
easements and rights of way, whether as owner, mortgagee or holder of a Security
Interest in real property, lessor, sublessor, lessee, sublessee or otherwise,
and copies of all related documentation;
(e) all interests in any capital stock or other equity interests of
any Subsidiary or any other Person, all bonds, notes, debentures or other
securities issued by any Subsidiary or any other Person, all loans, advances or
other extensions of credit or capital contributions to any Subsidiary or any
other Person and all other investments in securities of any Person;
(f) all license agreements, leases of personal property, open purchase
orders for raw materials, supplies, parts or services, unfilled orders for the
manufacture and sale of products and other contracts, agreements or commitments;
(g) all deposits, letters of credit and performance and surety bonds;
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(h) all written technical information, data, specifications, research
and development information, engineering drawings, operating and maintenance
manuals, and materials and analyses prepared by consultants and other third
parties;
(i) all domestic and foreign patents, copyrights, trade names,
trademarks, service marks and registrations and applications for any of the
foregoing, mask works, trade secrets, inventions, other proprietary information
and licenses from third Persons granting the right to use any of the foregoing;
(j) all computer applications, programs and other software, including
operating software, network software, firmware, middleware, design software,
design tools, systems documentation and instructions;
(k) all cost information, sales and pricing data, customer prospect
lists, supplier records, customer and supplier lists, records pertaining to
customers and customer accounts, customer and vendor data, correspondence and
lists, product literature, artwork, design, development and manufacturing files,
vendor and customer drawings, formulations and specifications, quality records
and reports and other books, records, studies, surveys, reports, plans and
documents;
(l) all prepaid expenses, trade accounts and other accounts and notes
receivable;
(m) all rights under contracts or agreements, all claims or rights
against any Person arising from the ownership of any Asset, all rights in
connection with any bids or offers and all claims, choses in action or similar
rights, whether accrued or contingent;
(n) all insurance proceeds and rights under insurance policies and all
rights in the nature of insurance, indemnification or contribution;
(o) all licenses (including radio and similar licenses), permits,
approvals and authorizations that have been issued by any Governmental
Authority;
(p) all cash or cash equivalents, bank accounts, lock boxes and other
deposit arrangements;
(q) copies of all documentation related to Insurance Policies; and
(r) interest rate, currency, commodity or other swap, collar, cap or
other hedging or similar agreements or arrangements.
1.7. AT&T means AT&T Corp., a New York corporation.
1.8. AT&T COMCAST means AT&T Comcast Corporation, a Pennsylvania
corporation; provided that, except as otherwise specifically provided herein,
following consummation of the AT&T Comcast Merger, all references to "AT&T"
shall mean AT&T Comcast and shall no longer mean AT&T Corp.
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1.9. AT&T-COMCAST MERGER has the meaning ascribed thereto in the
Restructuring Agreement.
1.10. AUTHORIZATION means any waiver, amendment, consent, approval,
license, franchise, permit (including construction permits), certificate,
exemption, variance or authorization of, expiration or termination of any
waiting period requirement (including pursuant to the HSR Act) or other action
by, or notice, filing, registration, qualification, declaration or designation
with, any Person (including any Governmental Authority).
1.11. BENEFIT PLAN means any employee benefit plan, arrangement, policy
or program (whether or not an employee benefit plan within the meaning of
Section 3(3) of ERISA and whether or not written), including, without
limitation, any employment, consulting or deferred compensation agreement,
executive compensation, bonus, incentive, pension, profit-sharing, savings,
retirement, stock option, stock purchase or severance pay plan, any life,
health, disability or accident insurance plan or any holiday or vacation
practice.
1.12. CLOSING has the meaning ascribed thereto in the Restructuring
Agreement.
1.13. CODE means the Internal Revenue Code of 1986.
1.14. COMPANY CLASS A COMMON STOCK has the meaning ascribed thereto in
the Restructuring Agreement.
1.15. COMPANY GROUP means, unless otherwise specified, the Company and
any direct or indirect Subsidiary of the Company (including their respective
successors and assigns), whether before or after the Closing. Any Person in the
Company Group may be referred to as a "COMPANY GROUP MEMBER."
1.16. COMPANY GROUP MEMBER has the meaning set forth in the definition
of Company Group.
1.17. COMMUNICATIONS ACT means the Communications Act of 1934.
1.18. CONSENTS means any consents, waivers or approvals from, or
notification requirements to, any third parties.
1.19. CONTINUED TWIC EMPLOYEES has the meaning ascribed thereto in
Section 2.9.
1.20. CONTRACT means any contract, lease, agreement, covenant,
indenture, note, security, instrument, arrangement, commitment or any other
binding understanding, whether written or oral.
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1.21. COPYRIGHT AND TECHNOLOGY ASSIGNMENT means the Copyright and
Technology Assignment, dated as of the date hereof, by and between the Company
and Holdco.
1.22. DELAYED TRANSFER ASSETS means any TWIC Broadband Assets that are
to be transferred after the Closing pursuant to Section 2.6 of this Agreement or
pursuant to any Ancillary Agreement.
1.23. EXCLUDED ASSETS means (without duplication):
(a) any Assets listed or described on Schedule 1.23(a); and
(b) all cash and cash equivalents held by (A) TWIC, (B) Holdco or (C)
any wholly-owned Subsidiaries of TWIC or Holdco that, in each case, are
generated in compliance with the Restructuring Agreement and, in the case of
Subsidiaries, are legally and contractually available for transfer to TWIC or
Holdco, as applicable.
1.24. EXCLUDED LIABILITIES means the following and, in each case,
whether arising before, on or after the Closing: (a) all Liabilities arising out
of, relating to or resulting from any Excluded Assets; and (b) any Liabilities
listed or described on Schedule 1.24(b).
1.25. ENVIRONMENTAL LAW means any Law (including common law) relating to
pollution or the protection of public health, safety, welfare or the pollution,
protection or restoration of the environment, including Laws relating to
emissions, discharges, releases or threatened releases of Hazardous Substances
into the environment (including ambient air, surface water, ground water or
land) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances.
1.26. ENVIRONMENTAL LIABILITIES means all Liabilities relating to,
arising out of or resulting from any Environmental Law or contract or agreement
relating to environmental, health or safety matters (including all removal,
remediation or cleanup costs, investigatory costs, governmental response costs,
costs arising out of the actual or alleged violation of Environmental Laws,
natural resources damages, property damages, personal injury damages, costs of
compliance with any settlement, judgment or other determination of Liability and
indemnity, contribution or similar obligations) and all costs and expenses,
interest, fines, penalties or other monetary sanctions in connection therewith.
1.27. EQUITY SECURITY has the meaning ascribed to such term in Rule 405
promulgated under the Securities Act of 1933 as in effect on the date hereof
and, in any event, shall also include (i) any capital stock of a corporation,
any partnership interest, any limited liability company interest and any other
equity interest; (ii) any security or Indebtedness having the attendant right to
vote for directors or similar representatives; (iii) any security or right
convertible into, exchangeable for, or evidencing the right to subscribe for any
such stock, equity interest, security or Indebtedness referred to in clause (i)
or (ii); (iv) any stock appreciation right, contingent
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value right or similar security or right that is derivative of any such stock,
equity interest, security or Indebtedness referred to in clause (i), (ii) or
(iii); and (v) any Contract to grant, issue, award, convey or sell any of the
foregoing.
1.28. ERISA means the Employee Retirement Income Securities Act of 1974.
1.29. EXCEPTED THIRD PARTY CLAIM means a Third Party Claim (a) for
injunctive or equitable relief against the Indemnitee or (b) in respect of which
it is reasonably likely that, based on the financial condition of the
Indemnifying Party and the maximum amount of Liability that could reasonably be
expected to result from such Third Party Claim, the Indemnifying Party would not
possess the financial resources to satisfy such Liability.
1.30. EXCLUDED TAX LIABILITIES shall mean all Income Taxes other than
Pass-Through Entity Level Income Taxes arising out of the TWIC Broadband
Business.
1.31. FORMER TWIC EMPLOYEES has the meaning ascribed thereto in Section
2.9.
1.32. FRANCHISES means a written "franchise" within the meaning of
Section 602(9) of the Communications Act.
1.33. GAAP means generally accepted accounting principles in the United
States in effect from time to time.
1.34. GOVERNMENTAL APPROVALS means any notices, reports or other filings
to be made, or any consents, registrations, approvals, permits or authorizations
to be obtained from, any Governmental Authority.
1.35. GOVERNMENTAL AUTHORITY means any supranational, national, state,
municipal or local government, political subdivision or other governmental
department, court, commission, board, bureau, agency, instrumentality, or other
authority thereof, or any quasi-governmental or private body exercising any
regulatory, taxing, importing or other governmental or quasi-governmental
authority, whether domestic or foreign.
1.36. GROUP means the TWIC Broadband Group or the Company Group as the
context requires. Any Person in a Group may be referred to as a "MEMBER."
1.37. HAZARDOUS SUBSTANCES means (a) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act of 1976 (RCRA) (42 U.S.C. Sections
6901 et seq.); (b) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) (CERCLA); (c) any substance regulated by the Toxic
Substances Control Act (TSCA) (42 U.S.C. Section 2601 et seq.) or the Federal
Insecticide, Fungicide and Rodenticide Act (FIFRA) (7 U.S.C. Section 136 et
seq.); (d) asbestos or asbestos-containing material of any kind or character;
(e) polychlorinated biphenyls; (f) any substances regulated under the
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provisions of Subtitle I of RCRA relating to underground storage tanks; (g) any
substance the presence, use, handling, treatment, storage, release or disposal
of which on real property owned or leased by TWIC is regulated or prohibited by
any Environmental Law; and (h) any other substance which by any Environmental
Law requires special handling, reporting or notification of any Governmental
Authority in its collection, storage, release, use, treatment or disposal.
1.38. HOLDCO has the meaning set forth in the Preamble.
1.39. HSR ACT means the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
1.40. INCOME TAXES means any Tax which is based upon, measured by, or
calculated with respect to net income or profits (including alternative minimum
Tax).
1.41. INDEBTEDNESS means, with respect to any Person, (a) any obligation
of such Person (i) for borrowed money, (ii) evidenced by a bond, note, debenture
or similar instrument for value received or in settlement of claims, (iii) under
conditional sale or other title retention agreements relating to property
acquired by such Person, (iv) for the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, or (v) under any lease or similar arrangement that would be required
to be accounted for by the lessee as a capital lease in accordance with GAAP, or
(b) without duplication, any guarantee (or keepwell agreement) by such Person of
any Indebtedness of others described in clause (a); provided, that in no event
shall Indebtedness include letters of credit that are performance or surety
bonds or similar instruments issued in the ordinary course of business or
disclosed pursuant to Schedule 1.80(h).
1.42. INDEMNIFICATION PAYMENT has the meaning set forth in Section
4.8(a).
1.43. INDEMNIFYING PARTY has the meaning set forth in Section 4.3(a).
1.44. INDEMNITEE has the meaning set forth in Section 4.3(a).
1.45. INDEMNITY PAYMENT has the meaning set forth in Section 4.3(a).
1.46. INFORMATION means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
Contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product) and other technical, financial,
employee or business information or data.
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1.47. INITIAL TWIC CONTRIBUTION has the meaning ascribed thereto in the
Recitals.
1.48. INSURANCE POLICIES means the insurance policies written by
insurance carriers under which, prior to the consummation of the Initial TWIC
Contribution, any TWIC Broadband Assets or any TWIC Broadband Member (or such
TWIC Broadband Member's officers or directors) are insured parties, excluding
insurance policies funding Benefit Plans.
1.49. INSURANCE PROCEEDS means those monies:
(a) received by an insured from an insurance carrier; or
(b) paid by an insurance carrier on behalf of an insured;
in any such case net of any costs or expenses incurred in the collection
thereof.
1.50. INTELLECTUAL PROPERTY AGREEMENT means the Intellectual Property
Agreement, dated as of the date hereof, by and between the Company and Holdco.
1.51. JUDGMENT means any judicial decision, judgment, writ, order,
injunction, stipulation, award or decree of any court, judge, justice or
magistrate, including any bankruptcy court or judge or the arbitrator in any
binding arbitration, and any order of or by any Governmental Authority.
1.52. LAW means any foreign or domestic law, statute, code, ordinance,
rule, regulation, treaty or Judgment, enacted, entered, promulgated, applied or
followed by a Governmental Authority.
1.53. LIABILITIES means any and all losses, claims, charges,
Indebtedness, demands, Actions, damages, obligations, payments, costs and
expenses, bonds, indemnities and similar obligations, covenants, Contracts,
controversies, omissions, make whole agreements and similar obligations, and
other liabilities, including all Contractual obligations, whether due or to
become due, absolute or contingent, inchoate or otherwise, matured or unmatured,
liquidated or unliquidated, accrued or unaccrued, known or unknown, determined
or determinable, whenever arising, and including those arising under any Law,
principles of common law or equity (including negligence and strict liability),
Action, threatened or contemplated Action (including the costs and expenses of
demands, assessments, judgments, settlements and compromises relating thereto
and attorneys' fees and any and all costs and expenses, whatsoever reasonably
incurred in investigating, preparing or defending against any such Actions or
threatened or contemplated Actions), order or consent decree of any Governmental
Authority or any award of any arbitrator or mediator of any kind, and those
arising under any Contract, commitment or undertaking, including those arising
under this Agreement or any Ancillary Agreement or incurred by a party hereto or
thereto in connection with enforcing its rights to indemnification hereunder or
thereunder, in each case, whether or not recorded or reflected or required to be
recorded or reflected on the books and records or financial statements of any
Person.
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1.54. LIEN means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any property or asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
1.55. MEMBER has the meaning set forth in the definition of Group.
1.56. NON-INCOME TAXES shall mean all Taxes other than Income Taxes. For
the avoidance of doubt, Non-Income Taxes shall include, but not be limited to,
business and occupation, sales, use, ad valorem property, real property gains,
real or personal property, intangibles, transfer, telecommunications, or similar
Taxes.
1.57. PASS-THROUGH ENTITY means an entity which, for federal income tax
purposes, is treated as a partnership, disregarded entity or a grantor trust or
any entity treated similarly to any of the foregoing for federal income tax
purposes.
1.58. PASS-THROUGH ENTITY LEVEL INCOME TAXES shall mean Income Taxes of
a Pass-Through Entity or any entity owned directly or indirectly, in whole or in
part, by such Pass-Through Entity to the extent that such Income Taxes are
imposed by Law on such entity and not passed through to its owners by reason of
such entity being a Pass-Through Entity.
1.59. PATENT ASSIGNMENT means the Patent Assignment, dated as of the
date hereof, by and between the Company and Holdco.
1.60. PERSON means an individual, corporation, partnership, limited
liability company, association, trust, joint venture or other entity or
organization, including a Governmental Authority.
1.61. PRIME RATE means the rate that the Bank of New York (or any
successor thereto or other major money center commercial bank agreed to by the
parties hereto) announces from time to time as its prime lending rate, as in
effect from time to time.
1.62. REAL PROPERTY INSTRUMENTS has the meaning set forth in Section
2.4(a).
1.63. RESTRUCTURING AGREEMENT has the meaning ascribed thereto in the
Recitals.
1.64. SECURITY INTEREST means any mortgage, security interest, pledge,
lien, charge, claim, option, right to acquire, voting or other restriction,
right-of-way, covenant, condition, easement, encroachment, restriction on
transfer, or other encumbrance of any nature whatsoever.
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1.65. SUBSIDIARY means, with respect to any Person, any entity 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, however,
that no Person that is not directly or indirectly wholly owned by any other
Person shall be a Subsidiary of such other Person unless such other Person
controls, or has the right, power or ability to control that Person.
1.66. SYSTEM means a "cable television system" within the meaning of
Section 602(7) of the Communications Act.
1.67. TAX RETURN shall mean any report, return or other information
(including any attached schedules or any amendments to such report, return or
other information) required to be supplied to or filed with a Governmental
Authority with respect to any Tax, including an information return, claim for
refund, amended return, declaration or estimated Tax return, in connection with
the determination, assessment, collection or administration of any Tax.
1.68. TAXES shall mean all forms of taxes, fees, imposts, levies or
other assessments whenever created or imposed, and whether of the United States
or elsewhere, and whether imposed by any Governmental Authority, and, without
limiting the generality of the foregoing, shall include income, gross receipts,
business and occupation, property, sales, use, license, excise, franchise,
capital stock, employment, payroll, unemployment insurance, social security,
stamp, environmental, value added, alternative or added minimum, ad valorem,
trade, recording, withholding, occupation or transfer tax, custom or duty or
other like governmental assessment or charge of any kind whatsoever, whether
computed on a separate, consolidated, unitary, combined or any other basis,
together with any related interest, penalties and additions imposed by any
Governmental Authority.
1.69. THIRD PARTY CLAIM has the meaning set forth in Section 4.4(a).
1.70. TRADEMARK AND SERVICE MARK ASSIGNMENT means the Trademark and
Service Mark Assignment, dated as of the date hereof, by and between the Company
and Holdco.
1.71. TRANSACTION AGREEMENTS has the meaning ascribed thereto in the
Restructuring Agreement.
1.72. TRANSFEREE INDEMNIFICATION PAYMENT has the meaning set forth in
Section 4.8(a).
1.73. TRANSFEROR INDEMNIFICATION PAYMENT has the meaning set forth in
Section 4.8(a).
1.74. TWIC means TWI Cable Inc., a Delaware corporation.
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1.75. TWIC BROADBAND ASSETS means (without duplication):
(a) any Assets existing on the date hereof, subject to any
dispositions of such Assets subsequent to the date hereof in compliance with the
terms of the Restructuring Agreement, that are primarily related to or primarily
used in the TWIC Broadband Business;
(b) any Assets acquired subsequent to the date hereof, in compliance
with the terms of the Restructuring Agreement, that are primarily related to the
TWIC Broadband Business;
(c) any rights, benefits and privileges of any TWIC Broadband Member
under any TWIC Broadband Contract, this Agreement and any Ancillary Agreement,
including any Assets to be conveyed to any Company Group Member under the terms
of any Ancillary Agreement, and any rights, benefits and privileges of Holdco
related to the Initial TWIC Contribution;
(d) any interests in and rights with respect to Equity Securities in
any TWIC Broadband Member (other than Holdco), unless disposed of after the date
hereof in compliance with the terms of the Restructuring Agreement;
(e) any Authorizations of any TWIC Broadband Member, that are
primarily related to or primarily used in the TWIC Broadband Business, including
any rights, benefits, privileges or other interests of any TWIC Broadband Member
in any Franchises (including those set forth on Schedule 1.75(e));
(f) any TWIC Broadband Real Property and related Assets referred to in
Section 2.4(b);
(g) any other Assets that are expressly identified by this Agreement
or any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be
assigned to any Company Group Member or retained by any TWIC Broadband Member
(other than Holdco), and all rights of any TWIC Broadband Member under this
Agreement or any of the Ancillary Agreements following the Closing;
(h) any Assets comprising, and any rights, benefits, privileges or
other interests in, the Systems set forth on Schedule 1.75(h) and any and all
other Systems owned, managed or operated directly or indirectly by any TWIC
Broadband Member;
(i) any rights relating to, arising out of or resulting from any
Actions primarily related to the TWIC Broadband Business, including those listed
on Schedule 1.75(i) that are primarily related to the TWIC Broadband Business;
(j) any monies, contracts or other funds relating to the participation
of any Continued TWIC Employee or Former TWIC Employees in any Benefit Plan,
except to the extent that sponsorship of a funded Benefit Plan is continued by
AOLTW or any of its Affiliates (other than the Company or any Company Group
Member);
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(k) any other Assets that are primarily used or primarily held for use
in the TWIC Broadband Business;
(l) any interest in and rights with respect to any Equity Security in
a joint venture or similar investment primarily related to the TWIC Broadband
Business (including, without limitation, the interest of any TWIC Broadband
Member in Road Runner Holdco LLC, a Delaware limited liability company, Time
Warner Entertainment-Advance/Newhouse Partnership, a New York general
partnership, and any joint venture the primary business of which is the
ownership or management of Systems);
(m) any interest in any other investments related primarily to the
TWIC Broadband Business;
(n) any Assets received by Holdco or any Subsidiary of Holdco from
TWIC or any of TWIC's Subsidiaries pursuant to the Initial TWIC Contribution,
including Assets received by Holdco or any Subsidiary of Holdco from TWIC or any
of TWIC's Subsidiaries after the Closing pursuant to the Initial TWIC
Contribution; and
(o) any Assets listed or described on Schedule 1.75(o) that are
primarily related to the TWIC Broadband Business.
Notwithstanding the foregoing, the TWIC Broadband Assets shall not in any event
include the Excluded Assets.
1.76. TWIC BROADBAND BUSINESS means the businesses conducted directly or
indirectly by TWIC and its Subsidiaries prior to the Initial TWIC Contribution
and by any TWIC Broadband Member after the Initial TWIC Contribution (in each
case, either itself or through direct or indirect divisions, subsidiaries,
affiliates, joint ventures, or other investments, or any of their predecessors
or successors) with, through, in or by (a) all of the business relating to the
ownership, management and operation of any Systems that are owned, managed or
operated directly or indirectly by any TWIC Broadband Member, including those
described in Section 1.75(h) and any Systems divested by TWIC or any TWIC
Broadband Members; (b) all of the business related to the ownership and
operation of the Road Runner high speed data service business and the interest
in Road Runner Holdco, LLC, a Delaware limited liability company, held by TWIC,
Holdco or any TWIC Broadband Member; (c) any terminated, divested or
discontinued businesses or operations that at the time of termination,
divestiture or discontinuation primarily related to the TWIC Broadband Business;
(d) all of the business related to the ownership and operation of local news
channels in the locations of the Systems described in clause (a); and (e) the
businesses, Assets and Liabilities primarily related to the TWIC Broadband
Business, including the ownership interests in joint ventures that are primarily
engaged in the TWIC Broadband Business, including those listed or described on
Schedule 1.76(e); provided that the TWIC Broadband Business shall not include
(x) any Assets disposed of or otherwise transferred from, or Liabilities
discharged by, TWIC or its Subsidiaries or Holdco or the TWIC Broadband Group
after the date hereof in compliance with the terms of the Restructuring
Agreement or (y) the Excluded Assets or the Excluded Liabilities.
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1.77. TWIC BROADBAND CONTRACTS means the following Contracts to which
Holdco or any TWIC Broadband Member is a party or by which it or any TWIC
Broadband Member or any of their respective Assets is bound or which have been
assigned to Holdco pursuant to the Initial TWIC Contribution, even if TWIC or
any of its Subsidiaries remains a party thereto (provided that any contract or
agreement that is expressly contemplated to be retained by Holdco or any of its
Subsidiaries (that remain Subsidiaries of Holdco subsequent to the Closing)
pursuant to any provision of this Agreement or any Ancillary Agreement shall not
be considered a TWIC Broadband Contract):
(a) any Contract that relates primarily to the TWIC Broadband Business
including Contracts that may be extended, modified or terminated after the date
hereof;
(b) any Contract listed or described on Schedule 1.77(b) that relates
primarily to the TWIC Broadband Business;
(c) any Contract that pursuant to this Agreement or any Ancillary
Agreement is otherwise to be expressly retained by any TWIC Broadband Member
(other than Holdco) or assumed by any Company Group Member;
(d) this Agreement and the Ancillary Agreements, to the extent of the
rights or obligations of any TWIC Broadband Member (other than Holdco) hereunder
or thereunder; and
(e) the rights and obligations of the TWIC Broadband Members under the
Contracts pursuant to which the Initial TWIC Contribution was effected.
1.78. TWIC BROADBAND GROUP means, unless otherwise specified, Holdco
(other than any divisions of Holdco that are not primarily engaged in the TWIC
Broadband Business) and any direct or indirect Subsidiary of Holdco (other than
TWE and its Subsidiaries) primarily engaged in the TWIC Broadband Business
(including their respective successors and assigns). Any Person in the TWIC
Broadband Group may be referred to as A "TWIC BROADBAND MEMBER."
1.79. TWIC BROADBAND INDEMNITEES has the meaning set forth in Section
4.1.
1.80. TWIC BROADBAND LIABILITIES means (without duplication) the
following and, in each case, whether arising before, on or after the Closing:
(a) any Liabilities existing on the date hereof, subject to any
discharge of such Liabilities subsequent to the date hereof, that are primarily
related to the TWIC Broadband Business;
(b) any Liabilities that are expressly identified by this Agreement or
any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to
be retained by any TWIC Broadband Member (other than Holdco) or assumed by any
Company
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Group Member, subject to discharge of such Liabilities subsequent to the date
hereof and all agreements, obligations and Liabilities of any TWIC Broadband
Member (other than Holdco) under this Agreement or any of the Ancillary
Agreements following the Closing;
(c) any Liabilities relating to, arising out of or resulting from any
TWIC Broadband Contract, including any such Liabilities of Holdco or its
Subsidiaries relating to, arising out of or resulting from the Contracts
pursuant to which the Initial TWIC Contribution was effected;
(d) any Liabilities assumed, incurred or arising subsequent to the
date hereof that are primarily related to the TWIC Broadband Business;
(e) any Liabilities to the extent relating to, arising out of or
resulting from any Actions related to the TWIC Broadband Business, including
those Actions listed on Schedule 1.75(i) to the extent related to the TWIC
Broadband Business;
(f) any Liabilities, including any Environmental Liabilities,
Liabilities for Non-Income Taxes and Pass Through Entity-Level Income Taxes,
primarily relating to:
(i) the TWIC Broadband Business, including the operation of the
TWIC Broadband Business, as conducted at any time prior to, on or after
the Closing (including any such Liability relating to, arising out of or
resulting from any act or failure to act by any director, officer,
employee, agent or representative (whether or not such act or failure to
act is or was within such Person's authority));
(ii) the operation of any business conducted by any TWIC
Broadband Member at any time after the Closing (including any such
Liability relating to, arising out of or resulting from any act or
failure to act by any director, officer, employee, agent or
representative (whether or not such act or failure to act is or was
within such Person's authority)); or
(iii) any TWIC Broadband Assets (including any TWIC Broadband
Contracts and any TWIC Broadband Real Property);
(g) except as set forth in Section 2.9, any Liabilities relating to,
arising out of, or resulting from any employee, employment activity or practice
or Benefit Plan, with respect to any Continued TWIC Employees or Former TWIC
Employees, but only to the extent such Liabilities are primarily related to the
TWIC Broadband Business; and
(h) any Liabilities listed or described on Schedule 1.80(h) that are
primarily related to the TWIC Broadband Business.
Notwithstanding the foregoing, the TWIC Broadband Liabilities shall not
include the Excluded Liabilities or the Excluded Tax Liabilities.
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1.81. TWIC BROADBAND MEMBER has the meaning set forth in the definition
of TWIC Broadband Group.
1.82. TWIC BROADBAND REAL PROPERTY means all right, title and interest
in real property primarily used in connection with the TWIC Broadband Business,
wherever located, of TWIC or any of its Subsidiaries or Holdco or any TWIC
Broadband Member, including: (a) the real property listed on Schedule 1.82(a)
that is primarily used or primarily held for use in connection with the TWIC
Broadband Business, (b) all land (the "LAND") owned by any TWIC Broadband Member
and primarily used or primarily held for use in connection with the TWIC
Broadband Business, together with all buildings, structures and other
improvements (the "IMPROVEMENTS") now or hereafter located thereon (the Land and
the Improvements, collectively, the "OWNED REAL PROPERTY"), (c) all real
property leased, subleased or otherwise occupied by any TWIC Broadband Member
and primarily used or primarily held for use in connection with the TWIC
Broadband Business (the "LEASED REAL PROPERTY" and, together with the Owned Real
Property, the "REAL PROPERTY"), (d) all easements, licenses, permits, rights of
way, reservations, privileges, and other estates and rights of any TWIC
Broadband Member, either in gross or appurtenant pertaining to such Real
Property or to any other real property and primarily used or primarily held for
use in connection with the TWIC Broadband Business, (e) all right, title and
interest of any TWIC Broadband Member in and to all strips and gores, all alleys
adjoining land, and the land lying in the bed of any street, road or avenue,
opened or proposed, in front of or adjoining the Land to the center line
thereof, and all right, title and interest of any TWIC Broadband Member in and
to any award made or to be made in lieu thereof and in and to any unpaid award
for any taking by condemnation or any damages to the Owned Real Property by
reason of any change of grade of any street, road or avenue, in each case,
primarily used or primarily held for use in connection with the TWIC Broadband
Business, (f) all right, title and interest of any TWIC Broadband Member in and
to the airspace above the Real Property (and the rights to use such airspace)
and any transferable development or similar rights appurtenant to the Real
Property by allocation under applicable Laws, by zoning lot merger or otherwise
and (g) all rights, licenses, easements, leases, indefeasible rights of use,
title, attachment rights, authorizations and other rights pertaining to poles,
conduits and cable primarily used or primarily held for use in connection with
the TWIC Broadband Business and held by any TWIC Broadband Member.
1.83. TWIC DELAYED TRANSFER ASSETS means any TWIC Broadband Assets that
are to be transferred after the Closing pursuant to the Initial TWIC
Contribution.
1.84. TWIC NON-BROADBAND ASSETS means all Assets of TWIC, Holdco and
their respective Subsidiaries, including their ownership interests in their
respective Subsidiaries and TWIC Non-Broadband Real Property but, in each case,
excluding the TWIC Broadband Assets; provided that, to the extent that any
direct or indirect Subsidiary of TWIC or Holdco owns any assets other than TWIC
Broadband Assets, such other assets shall be deemed to be TWIC Non-Broadband
Assets hereunder,
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including for purposes of Section 2.1(a). Notwithstanding the foregoing, the
TWIC Non-Broadband Assets shall include the Excluded Assets.
1.85. TWIC NON-BROADBAND BUSINESS means the businesses conducted
(including any businesses or operations terminated, discontinued or divested)
directly or indirectly by TWIC or Holdco (in each case, either itself or through
direct or indirect divisions, subsidiaries, affiliates, joint ventures or other
investments, or any of their predecessors or successors), other than the TWIC
Broadband Business.
1.86. TWIC NON-BROADBAND LIABILITIES means all Liabilities of TWIC,
Holdco or their respective Subsidiaries, including all Liabilities primarily
relating to, arising out of or resulting from the TWIC Non-Broadband Real
Property but excluding the TWIC Broadband Liabilities. Notwithstanding the
foregoing, the TWIC Non-Broadband Liabilities shall include the Excluded
Liabilities and Excluded Tax Liabilities.
1.87. TWIC NON-BROADBAND REAL PROPERTY means all right, title and
interest in real property, wherever located, of TWIC, Holdco or their respective
Subsidiaries, other than the TWIC Broadband Real Property.
1.88. TWIC CONTRIBUTION GROUP EMPLOYEES means all employees of TWIC and
its Subsidiaries who are primarily employed in connection with the TWIC
Broadband Business as of immediately prior to consummation of the Initial TWIC
Contribution, including individuals on leave of absence, short-term disability
and long-term disability.
ARTICLE II
THE CONTRIBUTION
2.1. TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES
(a) Subject to Section 2.1(e) and Section 3.1, at the Closing, Holdco
will contribute, assign, transfer, convey and deliver (herein "contribute"), or
cause to be contributed, to the Company (or to one or more Company Group Members
designated by the Company), and the Company (or such Company Group Member(s))
will accept from Holdco and its applicable Subsidiaries, all of each TWIC
Broadband Member's respective right, title and interest in and to all of the
TWIC Broadband Assets, other than the Delayed Transfer Assets.
(b) Subject to Section 2.1(e) and Section 3.1, at the Closing and
concurrently with the transactions contemplated in Section 2.1(a), Holdco will
contribute, or cause to be contributed, to the Company (or to one or more
Company Group Members designated by the Company), and the Company (or such
Company Group Member(s)) will assume and agree faithfully to perform and fulfill
all the TWIC Broadband Liabilities in accordance with their respective terms;
provided that such TWIC Broadband Liabilities shall not be assigned or otherwise
transferred to the extent that such TWIC Broadband Liabilities are Liabilities
of a TWIC Broadband Member all of the Equity Securities of which are transferred
to the Company or one of its Subsidiaries.
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The Company (or the Company Group Member receiving the corresponding TWIC
Broadband Assets) shall be responsible for all TWIC Broadband Liabilities,
regardless of when or where such Liabilities arose or arise, or whether the
facts on which they are based occurred prior to, on or subsequent to the date
hereof, regardless of where or against whom such Liabilities are asserted or
determined or whether asserted or determined prior to the date hereof, and
regardless of whether arising from or alleged to arise from negligence,
recklessness, violation of Law, fraud or misrepresentation by a Member of any
Group or any of their respective directors, officers, employees or agents or
Affiliates.
(c) Each of the parties hereto agrees that the Delayed Transfer Assets
will be contributed in accordance with the terms of Section 2.6 or other
agreements that provide for such contribution after the Closing. The parties
hereto further agree (i) that all such Delayed Transfer Assets shall be treated
for all Tax purposes as assets of the beneficial owner and (ii) not to report or
take any Tax position (on a Tax Return or otherwise) inconsistent with such
treatment (unless required by a change in applicable Tax law or good faith
resolution of a contest). Following the Closing, the Delayed Transfer Assets
shall (except when the context otherwise requires) be treated for all purposes
of this Agreement and the Ancillary Agreements as TWIC Broadband Assets.
(d) In the event that at any time or from time to time (whether prior
to or after the Closing), Holdco or any of its Subsidiaries (other than, prior
to the Closing, TWE or its Subsidiaries) shall receive or otherwise possess any
Asset that should have been assigned or transferred to the Company (or retained
by any TWIC Broadband Member, other than Holdco) pursuant to this Agreement or
any Ancillary Agreement, including Assets transferred to Holdco or any of its
Subsidiaries pursuant to the Initial TWIC Contribution after consummation of
such transaction, Holdco shall promptly transfer, or cause to be transferred,
such Asset to the Company. Prior to any such transfer, Holdco shall, or shall
cause its Subsidiary to, hold such Asset in trust for the Company.
(e) The parties acknowledge and agree that any TWIC Broadband Asset to
be contributed hereunder, and any TWIC Broadband Liability to be assumed
hereunder, that is already owned by a TWIC Broadband Member (other than Holdco)
or for which a TWIC Broadband Member (other than Holdco) is already liable, as
applicable, shall be contributed or assumed, as applicable, at Holdco's option
by either (i) contributing to the Company (or to one or more Company Group
Members designated by the Company) all of the Equity Securities of the TWIC
Broadband Member that directly or indirectly owns such TWIC Broadband Asset or
is subject to such TWIC Broadband Liability, as applicable (provided that if
such Person owns any Assets other than TWIC Broadband Assets such Assets will be
contributed to, and if such Person is subject to any Liabilities other than TWIC
Broadband Liabilities such Liabilities will be assumed by, Holdco (or one or
more Subsidiaries of Holdco designated by Holdco that are not TWIC Broadband
Members) prior to the Closing), or (ii) causing such TWIC Broadband Member to
contribute or assign, as applicable, such TWIC Broadband Assets or TWIC
Broadband Liabilities directly to the Company (or to one or more Company Group
Members designated by the Company).
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2.2. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. EXCEPT AS MAY
EXPRESSLY BE SET FORTH HEREIN, IN ANY ANCILLARY AGREEMENT, IN THE RESTRUCTURING
AGREEMENT, IN ANY OTHER TRANSACTION AGREEMENT OR IN ANY REAL PROPERTY
INSTRUMENT, (A) NONE OF THE COMPANY, HOLDCO OR ANY OTHER PERSON MAKES ANY
REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING ANY CONSENTS
OR APPROVALS REQUIRED IN CONNECTION THEREWITH) OR THE BUSINESS, ASSETS,
CONDITION OR PROSPECTS (FINANCIAL OR OTHERWISE) OF, OR ANY OTHER MATTER
INVOLVING, THE ASSETS, BUSINESSES OR LIABILITIES OF THE COMPANY, THE COMPANY
GROUP, HOLDCO OR THE TWIC BROADBAND GROUP; (B) ALL OF THE ASSETS TO BE RETAINED
OR TRANSFERRED OR THE LIABILITIES TO BE RETAINED, ASSUMED OR TRANSFERRED IN
ACCORDANCE WITH THIS AGREEMENT SHALL BE TRANSFERRED OR ASSUMED ON AN "AS IS,
WHERE IS BASIS," AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
SPECIFIC PURPOSE OR OTHERWISE ARE HEREBY EXPRESSLY DISCLAIMED AND (C) NONE OF
THE COMPANY, HOLDCO OR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY
WITH RESPECT TO ANY INFORMATION, DOCUMENTS OR MATERIAL MADE AVAILABLE IN
CONNECTION WITH THE ENTERING INTO OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
2.3. OTHER ANCILLARY AGREEMENTS. On or prior to the Closing, each of
the Company and Holdco will execute and deliver, and will cause its Subsidiaries
to execute and deliver, all Ancillary Agreements to which such Person is a
party.
2.4. DOCUMENTS RELATING TO TRANSFER OF REAL PROPERTY INTERESTS AND
TANGIBLE PROPERTY LOCATED THEREON. (a) To the extent necessary, in furtherance
of the assignment, transfer and conveyance of the TWIC Broadband Real Property
and the assumption of the related TWIC Broadband Liabilities pursuant to
Sections 2.1(a) and (b), at the Closing (to the extent practicable) or promptly
thereafter in accordance with Article VII hereof, each of the Company and
Holdco, or their applicable Subsidiaries, will execute and deliver such deeds,
lease assignments and assumptions, leases, subleases and sub-subleases, transfer
tax returns, affidavits and similar instruments as may be necessary to effect
the transactions contemplated by this Agreement, including this Section 2.4
(collectively, the "REAL PROPERTY INSTRUMENTS"). The applicable Real Property
Instruments will be on mutually acceptable terms.
(b) Except as otherwise expressly provided in this Agreement or any
Ancillary Agreement or on Schedule 2.4(b), all leasehold improvements, fixtures,
furniture, office equipment, servers, private branch exchanges, artwork and
other tangible property (other than equipment subject to capital or operating
equipment leases, which will be transferred or retained based on whether the
associated capital or operating equipment lease is or is not an TWIC Broadband
Contract) located as of the date hereof
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on any TWIC Broadband Real Property shall be transferred to the Company and
included within the definition of TWIC Broadband Assets.
2.5. DOCUMENTS RELATING TO OTHER TRANSFERS OF ASSETS AND ASSUMPTION OF
LIABILITIES. In furtherance of the assignment, transfer and conveyance of TWIC
Broadband Assets and the assumption of TWIC Broadband Liabilities pursuant to
Section 2.1(a) and (b), simultaneously with the Closing or, to the extent not
capable of being delivered at such time, as promptly as practicable thereafter,
(a) Holdco shall execute and deliver, and shall cause its Subsidiaries to
execute and deliver, such bills of sale, stock powers, certificates of title,
assignments and assumptions of contracts and other instruments of transfer,
conveyance, assignment and assumption as and to the extent necessary to evidence
the contribution, transfer, conveyance and assignment of all of Holdco's and its
Subsidiaries' right, title and interest in and to the TWIC Broadband Assets to
the Company (or the Company Group Member designated by the Company) and (b) the
Company shall execute and deliver, and shall cause its Subsidiaries to execute
and deliver, such bills of sale, stock powers, certificates of title,
assignments and assumptions of contracts and other instruments of transfer,
conveyance, assignment and assumption as and to the extent necessary to evidence
the valid and effective assumption of the TWIC Broadband Liabilities by the
Company (or the Company Group Members receiving the corresponding TWIC Broadband
Asset), to the extent required by Section 2.1(b).
2.6. GOVERNMENTAL APPROVALS AND CONSENTS. (a) If and to the extent that
the valid, complete and perfected transfer or assignment to the Company (or the
applicable Company Group Member) of any TWIC Broadband Assets would be a
violation of applicable Laws or require any Consent or Governmental Approval in
connection with the transactions contemplated by the Restructuring Agreement
then, unless Holdco shall otherwise determine, the transfer or assignment to the
Company (or such Company Group Member) of such TWIC Broadband Assets shall be
automatically deemed deferred and any such purported transfer or assignment
shall be null and void until such time as all legal impediments are removed
and/or such Consents or Governmental Approvals have been made or obtained.
Notwithstanding the foregoing, any such Delayed Transfer Asset shall be deemed a
TWIC Broadband Asset for purposes of determining whether any Liability is a TWIC
Broadband Liability.
(b) If the transfer or assignment of any Asset intended to be
transferred or assigned hereunder is not consummated prior to or at the Closing,
whether as a result of the provisions of Section 2.6(a) or for any other reason,
then Holdco or its Subsidiary shall thereafter hold such Asset for the use and
benefit, insofar as reasonably possible, of the Company or its Subsidiary (at
the expense of the Company). In addition, Holdco shall take such other actions
as may be reasonably requested by the Company in order to place the Company or
its Subsidiary, insofar as reasonably possible, in the same position as if such
Asset had been transferred as contemplated hereby and so that all the benefits
and burdens relating to such Assets including possession, use, risk of loss,
potential for gain, and dominion, control and command over such Asset, are to
inure from and after the Closing to the Company Group. To the extent permitted
by Law and to the extent otherwise permissible in light of any required Consent
and/or Governmental
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Approval, the Company Group shall be entitled to, and shall be responsible for,
the management of any TWIC Broadband Assets not yet transferred to it as a
result of this Section 2.6(b) and the parties agree to use reasonable commercial
efforts to cooperate and coordinate with respect thereto.
(c) If and when the Consents and/or Governmental Approvals, the
absence of which caused the deferral of transfer of any Asset pursuant to
Section 2.6(a), are obtained, the transfer of the applicable Asset shall be
effected in accordance with the terms of this Agreement and/or the applicable
Ancillary Agreement.
(d) Holdco shall not be obligated, in connection with the foregoing,
to expend any money unless the necessary funds are advanced by the Company,
other than reasonable out-of-pocket expenses, attorneys' fees and recording or
similar fees, all of which shall be promptly reimbursed by the Company.
(e) At Closing, Holdco will deliver to the Company a list identifying,
in reasonable detail and to Holdco's knowledge, the Delayed Transfer Assets and
the Consents or Governmental Approvals required therefor.
2.7. NOVATION OF TWIC BROADBAND LIABILITIES. (a) Each of the Company
and Holdco, at the reasonable written request of the other, shall use its
reasonable commercial efforts to obtain, or to cause to be obtained, any
release, consent, substitution, approval or amendment required to novate and
assign all obligations under Contracts, licenses and other obligations or
Liabilities of any nature whatsoever that constitute TWIC Broadband Liabilities,
or to obtain in writing the unconditional release of all parties to such
arrangements other than the Company (or the Company Group Member that received
the corresponding TWIC Broadband Asset), so that, in any such case, the Company
(or such Company Group Member) will be solely responsible for such Liabilities;
provided, however, that none of the Members of any Group shall be obligated to
pay any consideration or surrender, release or modify any rights or remedies
therefor to any third party from whom such releases, consents, approvals,
substitutions and amendments are requested, except as explicitly set forth in
the Restructuring Agreement or any other Transaction Agreement.
(b) If the Company or Holdco is unable to obtain, or to cause to be
obtained, any such required release, consent, substitution, approval or
amendment, Holdco shall continue to be bound by such Contracts, licenses and
other obligations and, unless not permitted by Law or the terms thereof, the
applicable Company Group Member shall, as agent or subcontractor for Holdco,
pay, perform and discharge fully all the obligations or other Liabilities of
Holdco thereunder from and after the Closing. The Company shall indemnify each
TWIC Broadband Indemnitee and hold it harmless against any Liabilities arising
in connection therewith. Holdco shall, without further consideration, pay and
remit, or cause to be paid or remitted, to the applicable Company Group Member
promptly all money, rights and other consideration received by it in respect of
such performance. If and when any such release, consent, substitution, approval
or amendment shall be obtained or such agreement, lease, license or other rights
or obligations shall otherwise become assignable or able to be novated, Holdco
shall
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thereafter assign, or cause to be assigned, all of its rights, obligations and
other Liabilities thereunder to the Company (or one or more Company Group
Members designated by the Company) without payment of further consideration and
such Company Group Member shall, without the payment of any further
consideration, assume such rights and obligations. Notwithstanding the
foregoing, unless Holdco shall so elect in writing, the Company shall assume, or
cause the assumption of, all TWIC Broadband Liabilities as of the Closing.
2.8. INTELLECTUAL PROPERTY MATTERS. To the extent that this Agreement
or any Ancillary Agreement contains provisions which purport to cover or address
any matter addressed in the Intellectual Property Agreement, the Intellectual
Property Agreement, shall prevail.
2.9. EMPLOYEE BENEFITS MATTERS.
(a) All TWIC Contribution Group Employees who are employees of Holdco
or any other member of the TWIC Broadband Group as of immediately prior to the
Closing, including individuals on leave of absence, short term disability and
long term disability, shall become employees of the Company or one of the
Company Group Members as of the Closing. Employees who commence employment with
the Company or any Company Group Member as of the Closing shall be referred to
herein as "CONTINUED TWIC EMPLOYEES." In order to effectuate the transfer of
employment described in this Section, the Company and the Company Group Members
shall take such actions as are reasonably necessary, including, without
limitation, making a general offer of employment to each employee of TWIC and
its Subsidiaries. The parties hereto shall not take any action that would
interfere with such employees becoming employed by the Company or one of the
Company Group Members as of the Closing. Such employment shall be at
substantially the same compensation rates and terms and conditions of
employment, including benefits under any Benefit Plan, as were provided to
employees immediately prior to the Closing.
(b) Notwithstanding any provision of this Agreement to the contrary,
subject to applicable law and the terms of any employment or other agreement,
the Company shall have the right, in its sole discretion, to modify the
compensation rates and other terms and conditions of employment and to dismiss
any employee at any time, with or without cause, and to modify or terminate any
Benefit Plan it sponsors or its participation in any Benefit Plan at any time
and for any reason after the Closing.
(c) The Company shall recognize the period of service (without
duplication of benefits) with AOLTW and any of its Affiliates (other than the
Company or any Company Group Member) prior to the Closing under all Benefit
Plans maintained by the Company as of the Closing to the extent so recognized by
AOLTW and its Affiliates prior to the Closing.
(d) Notwithstanding any provision in this Agreement to the contrary,
the parties hereto agree that, except to the extent used in connection with the
funding of any Benefit Plan that is continued by AOLTW or any of its Affiliates
(other than the
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Company or any Company Group Member), the parties hereto shall cause to be
transferred to or held for the benefit of the Company their interests in all
life, medical and other insurance policies to the extent relating to Continued
TWIC Employees or Former TWIC Employees.
(e) Subject to obtaining any necessary consents, as of the Closing,
AOLTW and its Affiliates (other than the Company or any Company Group Member)
shall assign to, and the Company or one of it Subsidiaries shall assume, all
rights, obligations and Liabilities of AOLTW and its Affiliates (other than the
Company or any Company Group Member) under all employment agreements and
unfunded compensation arrangements relating to Continued TWIC Employees.
(f) Notwithstanding any provision in this Agreement to the contrary,
the parties hereto agree that, except to the extent that sponsorship of a funded
Benefit Plan is continued by AOLTW or any of its Affiliates (other than the
Company or any Company Group Member), the TWIC Broadband Assets shall include
any moneys, contracts or other funds relating to the participation of any
Continued TWIC Employees or any former employee of TWIC or its Subsidiaries (the
"FORMER TWIC EMPLOYEES") in any Benefit Plan.
(g) Notwithstanding any provision in this Agreement to the contrary,
the parties hereto agree that, except to the extent that sponsorship of a funded
Benefit Plan is continued by AOLTW or any of its Affiliates (other than the
Company or any Company Group Member), the TWIC Broadband Liabilities shall
include all Liabilities relating to the participation of any Continued TWIC
Employee or Former TWIC Employee in any Benefit Plan.
(h) Subject to any required notification, as of the Closing, the
parties agree to take such action, and to cause their Affiliates to take such
action, as is necessary to cause the Company (or any Company Group Member) to
succeed to the rights and obligations of AOLTW and its Affiliates (other than
the Company or any Company Group Member), including its rights and obligations
with respect to any "multiemployer plan" (as defined in Section 3(37) of ERISA),
under any collective bargaining agreement (if any so exist) to the extent such
agreement covers Continued TWIC Employees or Former TWIC Employees.
ARTICLE III
CONDITIONS
3.1. CONDITIONS. The obligations of each party hereto to consummate the
transactions contemplated by this Agreement are subject to the satisfaction or
waiver of the conditions set forth in Article XI of the Restructuring Agreement.
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ARTICLE IV
INDEMNIFICATION
4.1. INDEMNIFICATION BY THE COMPANY. Except as provided in Section 4.3,
following the Closing, the Company shall indemnify, defend and hold harmless
Holdco, each of its Subsidiaries (other than the Company and its Subsidiaries)
and each of their respective directors, officers, agents and employees, and each
of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "TWIC BROADBAND INDEMNITEES"), from and against any and all
Liabilities of the TWIC Broadband Indemnitees relating to, arising out of or
resulting from any of the following items (without duplication), whether arising
prior to or after the Closing or the date hereof:
(a) the failure of the Company or any other Company Group Member or
any other Person to pay, perform or otherwise promptly discharge any TWIC
Broadband Liabilities in accordance with their respective terms;
(b) the TWIC Broadband Business, including the operation thereof;
(c) any breach by the Company or any Company Group Member of this
Agreement or any of the Ancillary Agreements; and
(d) any Third Party Claim in respect of any TWIC Broadband Liability.
4.2. INDEMNIFICATION BY AOLTW AND HOLDCO. (a) Except as provided in
Section 4.3, following the Closing, AOLTW and Holdco, on a joint and several
basis, shall indemnify, defend and hold harmless the Company, each Company Group
Member and each of their respective directors, officers, agents and employees,
and each of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "COMPANY INDEMNITEES"), from and against any and all
Liabilities of the Company Indemnitees relating to, arising out of or resulting
from any of the following items (without duplication), whether arising prior to
or after the Closing or the date hereof:
(i) the failure of Holdco or any of its Subsidiaries or any
other Person to pay, perform or otherwise promptly discharge any TWIC
Non-Broadband Liabilities in accordance with their respective terms;
(ii) the TWIC Non-Broadband Business, including the operation
thereof;
(iii) any breach by Holdco or any of its Subsidiaries (other than
the Company and its Subsidiaries) of this Agreement or any of the
Ancillary Agreements; and
(iv) any Third Party Claim in respect of any TWIC Non-Broadband
Liability.
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(b) Notwithstanding the foregoing, AOLTW in its sole discretion can
elect at any time upon written notice to the Company to terminate this Section
4.2 with respect to Holdco (and only with respect to Holdco) and to release
Holdco from any and all of its obligations and Liabilities under this Section
4.2, and the Company shall execute and deliver all instruments reasonably
requested by AOLTW to evidence such release and termination.
4.3. INDEMNIFICATION OBLIGATIONS NET OF INSURANCE PROCEEDS AND OTHER
AMOUNTS. (a) The parties intend that any indemnification or reimbursement
obligation pursuant to this Agreement or any Ancillary Agreement will be net of
Insurance Proceeds that actually reduce the amount of the Liability.
Accordingly, the amount which any party (an "INDEMNIFYING PARTY") is required to
pay to any Person entitled to indemnification hereunder (an "INDEMNITEE") will
be reduced by any Insurance Proceeds theretofore actually recovered by or on
behalf of the Indemnitee in reduction of the related Liability. If an Indemnitee
receives a payment (an "INDEMNITY PAYMENT") required by this Agreement from an
Indemnifying Party in respect of any Liability and subsequently receives
Insurance Proceeds, then the Indemnitee will pay to the Indemnifying Party an
amount equal to the excess of the Indemnity Payment received over the amount of
the Indemnity Payment that would have been due if the Insurance Proceeds had
been received, realized or recovered before the Indemnity Payment was made.
(b) An insurer who would otherwise be obligated to defend or make
payment in response to any claim shall not be relieved of the responsibility
with respect thereto or, solely by virtue of the indemnification provisions
hereof, have any subrogation rights with respect thereto, it being expressly
understood and agreed that no insurer or any other third party shall be entitled
to a "windfall" (i.e., a benefit it would not be entitled to receive in the
absence of the indemnification provisions) by virtue of the indemnification
provisions hereof.
(c) With respect to all policies of insurance with insurance
companies, the parties agree to act in good faith and to use their reasonable
best efforts to preserve and maximize the insurance benefits due to be provided
thereunder and to cooperate with one another as necessary to permit each other
to access or obtain the benefits under those policies, provided, however, that
nothing in this Section 4.3 shall be construed to prevent any party or any other
Person from asserting claims for insurance benefits or accepting insurance
benefits provided by the policies. The parties agree to exchange information
upon reasonable request of the other party regarding requests that they have
made for insurance benefits, notices of claims, occurrences and circumstances
that they have submitted to the insurance companies or other entities managing
the policies, responses they have received from those insurance companies or
entities, including any payments they have received from the insurance companies
and any agreements by the insurance companies to make payments, and any other
information that the parties may need to determine the status of the insurance
policies and the continued availability of benefits thereunder.
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4.4. PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS. (a) If an
Indemnitee shall receive notice or otherwise learn of the assertion by a Person
(including any Governmental Authority) who is not a Member of either Group of
any claim or of the commencement by any such Person of any Action (collectively,
a "THIRD PARTY CLAIM") with respect to which an Indemnifying Party may be
obligated to provide indemnification to such Indemnitee pursuant to Section 4.1
or 4.2, or any other Section of this Agreement or any Ancillary Agreement
(except as otherwise provided therein), such Indemnitee shall give such
Indemnifying Party written notice thereof promptly after receipt of notice or
senior executives actually becoming aware of such Third Party Claim. Any such
notice shall describe the Third Party Claim in reasonable detail.
Notwithstanding the foregoing, the failure of any Indemnitee to give notice as
provided in this Section 4.4(a) shall not relieve the related Indemnifying Party
of its obligations under this Agreement or any Ancillary Agreement, except to
the extent that such Indemnifying Party is actually prejudiced by such failure
to give notice.
(b) An Indemnifying Party may elect to defend (and, except as set out
in (e) below, unless the Indemnifying Party has specified any reservations or
exceptions, to seek to settle or compromise), at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel (provided such counsel is
reasonably acceptable to the Indemnitee), any Third Party Claim; provided that,
notwithstanding the foregoing, an Indemnitee may elect to defend any Excepted
Third Party Claim and the Indemnifying Party shall have the right to elect to
defend such Excepted Third Party Claim only if the Indemnitee does not elect to
do so. Within 30 days after the receipt of notice from an Indemnitee in
accordance with Section 4.4(a) (or sooner, if the nature of such Third Party
Claim so requires), the Indemnifying Party shall notify the Indemnitee of its
election whether the Indemnifying Party will assume responsibility for defending
such Third Party Claim, which election shall specify any reservations or
exceptions. After notice from an Indemnifying Party to an Indemnitee of its
election to assume the defense of a Third Party Claim, such Indemnitee shall
have the right to employ separate counsel and to participate in (but not
control) the defense, compromise or settlement thereof, but the fees and
expenses of such counsel shall be the expense of such Indemnitee, except as set
forth in the next sentence. In the event that the Indemnifying Party has elected
to assume the defense of the Third Party Claim but has specified and continues
to assert, any reservations or exceptions in such notice, then, in any such
case, the reasonable fees and expenses of one separate counsel (and one separate
local counsel) for all Indemnitees shall be borne by the Indemnifying Party.
(c) If an Indemnifying Party elects not to assume responsibility for
defending a Third Party Claim, or fails to notify an Indemnitee of its election
as provided in Section 4.4(b), or in the case of an Excepted Third Party Claim,
such Indemnitee may defend such Third Party Claim at the cost and expense of the
Indemnifying Party.
(d) Unless the Indemnifying Party has failed to assume the defense of
the Third Party Claim in accordance with the terms of this Agreement, no
Indemnitee may settle or compromise any Third Party Claim without the consent of
the Indemnifying Party (not to be unreasonably withheld), unless such Indemnitee
has waived any rights to indemnification hereunder in respect of such Third
Party Claim.
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(e) Without the consent of the Indemnitee (which consent shall not be
unreasonably withheld), the Indemnifying Party shall not enter into or consent
to any settlement or compromise of the Third Party Claim, unless such settlement
or compromise involves only the payment of money damages concurrently with such
settlement (and such amount is so paid by the Indemnifying Party), does not
impose any equitable relief upon the Indemnitee or any of its Affiliates, or any
of its or their respective officers or directors and contains an unconditional
release of the Indemnitee, each of its Affiliates and each of its and their
respective officers or directors in respect of such claim.
4.5. ADDITIONAL MATTERS. (a) Any claim on account of a Liability that
does not result from a Third Party Claim shall be asserted by written notice
given by the Indemnitee to the related Indemnifying Party. Such Indemnifying
Party shall have a period of 30 days after the receipt of such notice within
which to respond thereto (or sooner, if the nature of such claim so requires).
If such Indemnifying Party does not respond within such period, such
Indemnifying Party shall be deemed to have refused to accept responsibility to
make payment. If such Indemnifying Party does not respond within such period or
rejects such claim in whole or in part, such Indemnitee shall be free to pursue
such other remedies as may be available to such party.
(b) In the event of payment by or on behalf of any Indemnifying Party
to any Indemnitee in connection with any Third Party Claim, such Indemnifying
Party shall be subrogated to and shall stand in the place of such Indemnitee as
to any events or circumstances in respect of which such Indemnitee may have any
right, defense or claim relating to such Third Party Claim against any claimant
or plaintiff asserting such Third Party Claim or against any other person, but
only to the extent of such payment. Such Indemnitee shall cooperate with such
Indemnifying Party in a reasonable manner, and at the reasonable cost and
expense of such Indemnifying Party, in prosecuting any subrogated right, defense
or claim.
(c) In the event of an Action in which the Indemnifying Party is not a
named defendant, if either the Indemnitee or Indemnifying Party shall so
request, the parties shall endeavor to substitute the Indemnifying Party for the
named defendant, if at all practicable. If such substitution or addition cannot
be achieved for any reason or is not requested, the named defendant shall allow
the Indemnifying Party to manage the Action as set forth in Section 4.4 and the
Indemnifying Party shall fully indemnify the named defendant against all
Liabilities in connection therewith, including costs of defending the Action
(including court costs, sanctions imposed by a court, attorneys' fees, experts'
fees and all other external expenses), the costs of any judgment or settlement,
and the cost of any interest or penalties relating to any judgment or
settlement.
4.6. REMEDIES CUMULATIVE. The remedies provided in this Article IV
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
4.7. SURVIVAL OF INDEMNITIES. The rights and obligations of Holdco,
AOLTW each TWIC Broadband Member, the Company, each Company Group Member
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and their respective Indemnitees under this Article IV shall survive the sale or
other transfer by any party of any Assets or businesses or the assignment by it
of any Liabilities.
4.8. TAX EFFECTS OF INDEMNIFICATION. (a) For all Tax purposes (unless
required by a change in applicable Tax law or good faith resolution of a
contest), the parties hereto agree to treat, and to cause their respective
Affiliates to treat any payment (i) to the Company by AOLTW or Holdco pursuant
to an indemnification, reimbursement or refund obligation provided for in this
Agreement (a "TRANSFEROR INDEMNIFICATION PAYMENT"), or (ii) to Holdco by the
Company pursuant to an indemnification, reimbursement or refund obligation
provided for in this Agreement (a "TRANSFEREE INDEMNIFICATION PAYMENT" and,
collectively with any Transferor Indemnification Payment, an "INDEMNIFICATION
PAYMENT") as (x) with respect to a Transferor Indemnification Payment, a
contribution by Holdco to the Company as part of the transfer described in
Section 2.1(a), and (y) with respect to a Transferee Indemnification Payment,
the retention by Holdco of the amount of such Indemnification Payment.
(a) The amount of any loss for which indemnification is provided under
this Agreement shall be (i) increased to take account of the net Tax cost, if
any, incurred by the indemnitee arising from the receipt or accrual of an
Indemnification Payment hereunder (grossed up for such increase) and (ii)
reduced to take account of the net Tax benefit, if any, realized by the
indemnitee arising from incurring or paying such loss. In computing the amount
of any such Tax cost or benefit, the indemnitee shall be deemed to recognize all
other items of income, gain, loss, deduction or credit before recognizing any
item arising from the receipt or accrual of any Indemnification Payment
hereunder, or incurring or paying any indemnified loss. Any Indemnification
Payment hereunder shall initially be made without regard to this Section 4.8(b)
and shall be increased or reduced to reflect any such net Tax cost (including
gross-up) or net Tax benefit only after the indemnitee has actually realized
such cost or benefit. For purposes of this Agreement, an indemnitee shall be
deemed to have "actually realized" a net Tax cost or a net Tax benefit to the
extent that, and at such time as, the amount of Taxes payable by such indemnitee
is increased above or reduced below, as the case may be, the amount of Taxes
that such indemnitee would be required to pay but for the receipt or accrual of
the Indemnification Payment or the incurrence or payment of such loss. The
amount of any increase or reduction hereunder shall be adjusted to reflect any
adjustment with respect to the indemnitee's liability for Taxes, and payments
between the parties hereto to reflect such adjustment shall be made. In the
event that the parties disagree regarding the appropriate application of this
Section 4.8(c), such disagreement shall be resolved by submitting the same to a
national accounting firm that does not have a material relationship with either
party.
4.9. REFUNDS. The Company shall pay to Holdco all refunds or credits of
Taxes received by the Company after the Closing that are attributable to the
TWIC Non-Broadband Business, net of any Taxes imposed on such refund amount, to
be paid to Holdco promptly following any receipt thereof by the Company. In the
event that the parties disagree regarding the appropriate application of this
Section 4.9, such
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disagreement shall be resolved by submitting the same to a national accounting
firm that does not have a material relationship with either party.
ARTICLE V
INSURANCE
5.1. INSURANCE MATTERS. (a) The parties intend that both the Company
and each other Company Group Member, after the Closing, shall be
successors-in-interest to and retain all rights and interest (whether known,
unknown, contingent or otherwise) that each has as of the Closing under any
Insurance Policy issued to and/or providing coverage (i) to Holdco, as it
existed immediately prior to the Closing, or any of its Subsidiaries or
Affiliates or (ii) to TWIC, as it existed immediately prior to the Initial TWIC
Contribution, or any of its Subsidiaries or Affiliates, and any agreements
related to such Insurance Policies executed and delivered prior to the Closing,
including any rights or interests each has, as an insured, named insured, or
additional named insured, Subsidiary, Affiliate, division or department, to
avail itself of any benefit under any such Insurance Policy or any such
agreement related to such policy as in effect prior to the Closing. The
provisions of this Agreement are not intended to relieve any insurer of any
Liability under any policy. Notwithstanding the foregoing, neither Holdco nor
any TWIC Broadband Member shall be deemed to have made any representation or
warranty as to the availability of any Insurance Policy or the rights and
benefits provided thereunder.
(b) This Agreement shall not be considered as an attempted assignment
(if such an assignment would be prohibited or would otherwise adversely affect
the rights of the insured parties under such policies) of any rights or interest
under any policy of insurance or as a contract of insurance and shall not be
construed to waive any right or remedy of any TWIC Broadband Member or Company
Group Member in respect of any Insurance Policy or any other contract or policy
of insurance.
(c) Holdco does hereby, for itself and each of its Subsidiaries (other
than the Company and its Subsidiaries) agree that, as and to the extent
necessary to give effect to Section 5.1(a), it will assign any chose in action,
claim, right or benefit under an Insurance Policy.
(d) Each of Holdco and the Company does hereby, for itself and each
other TWIC Broadband Member and Company Group Member, respectively, agree that
all duties and obligations under any Insurance Policy, including the fulfillment
of any conditions and the payment of any deductibles, retentions, co-insurance
payment or retrospective premiums, that correspond in any way with or may be
necessary to perfect, preserve or maintain an insured's right to obtain benefits
under that Insurance Policy, will be performed by the insured that is seeking
the benefits, subject to the indemnification provisions of Article IV. In the
event Members of both Groups have claims under a given policy, any deductibles,
retentions, co-insurance payments, retrospective premiums, caps, limitations on
average and similar items will be appropriately allocated between such parties
based on the recoveries they would have obtained in the absence of such items.
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ARTICLE VI
EXCHANGE OF INFORMATION; CONFIDENTIALITY
6.1. AGREEMENT FOR EXCHANGE OF INFORMATION. (a) Each of Holdco and the
Company agrees to provide, or cause to be provided, to each other Group, at any
time before or after the Closing, as soon as reasonably practicable after
written request therefor, any Information in the possession or under the control
of its respective Group that the requesting party reasonably needs (i) to comply
with reporting, disclosure, filing or other requirements imposed on the
requesting party (including under applicable securities or Tax Laws) by a
Governmental Authority having jurisdiction over the requesting party, (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 or any Ancillary Agreement; provided, however, that in the event that
any party determines that any such provision of Information could be
commercially detrimental, 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
harm or consequence. Holdco and the Company intend 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.
(b) After the date hereof, each of Holdco (and its Subsidiaries) and
the Company (and its Subsidiaries) shall maintain in effect adequate systems and
controls to the extent necessary to enable the members of the other Group to
satisfy their respective reporting, accounting, audit and other obligations.
6.2. OWNERSHIP OF INFORMATION. Any Information owned by one Group that
is provided to a requesting party pursuant to Section 6.1 shall be deemed to
remain the property of the providing party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such Information.
6.3. COMPENSATION FOR PROVIDING INFORMATION. The party requesting such
Information agrees to reimburse the other party for the reasonable costs, if
any, of creating, gathering and copying such Information, to the extent that
such costs are incurred for the benefit of the requesting party. Except as may
be otherwise specifically provided elsewhere in this Agreement or in any other
agreement between the parties, such costs shall be computed in accordance with
the providing party's standard methodology and procedures.
6.4. RECORD RETENTION. To facilitate the possible exchange of
Information pursuant to this Article VI and other provisions of this Agreement
after the Closing, the parties agree to use their reasonable best efforts to
retain all Information in their respective possession or control on the Closing
in accordance with their respective record retention policies as in effect on
the Closing. No party will destroy, or permit any of its Subsidiaries to
destroy, any Information that the other party may have the right to obtain
pursuant to this Agreement prior to the third anniversary of the date hereof
without
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first using its reasonable best efforts to notify the other party of the
proposed destruction and giving the other party the opportunity to take
possession of such Information prior to such destruction; provided, however,
that in the case of any Information relating to Taxes, employee-related matters
or to Environmental Liabilities, such period shall be extended to the expiration
of the applicable statute of limitations (giving effect to any extensions
thereof). Moreover, no party will destroy, or permit any of its Subsidiaries to
destroy, any policies of insurance (or records related to such insurance
policies) without first using its reasonable best efforts to notify the other
party of the proposed destruction and giving the other party reasonable
opportunity to take possession of such Information prior to such destruction, if
it is possible (in the first party's reasonable judgment) that the other party
may be able to obtain coverage under such policies. (The foregoing includes
"occurrence"-based liability policies, which continue to cover liability for
alleged harm during their policy period, even if no claim is made based on such
alleged harm until after the end of the policy period.)
6.5. LIMITATION OF LIABILITY. No party shall have any Liability to any
other party in the event that any Information exchanged or provided pursuant to
this Agreement that is an estimate or forecast, or that is based on an estimate
or forecast, is found to be inaccurate, in the absence of willful misconduct by
the party providing such Information. No party shall have any Liability to any
other party if any Information is destroyed after reasonable best efforts by
such party to comply with the provisions of Section 6.4.
6.6. OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF INFORMATION. The rights
and obligations granted under this Article VI are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of Information set forth in any Ancillary Agreement.
6.7. PRODUCTION OF WITNESSES; RECORDS; COOPERATION. (a) After the
Closing, except in the case of an adversarial Action by one party against the
other party (which shall be governed by such discovery rules as may be
applicable thereto), each party hereto shall take all reasonable steps to make
available to the other party, upon written request, the former, current and
future directors, officers, employees, other personnel and agents of the Members
of its respective Group (whether as witnesses or otherwise) and any books,
records or other documents within its control or that it otherwise has the
ability to make available, to the extent that such person (giving consideration
to business demands of such directors, officers, employees, other personnel and
agents) or books, records or other documents may reasonably be required in
connection with any Action (including preparation for such Action) in which the
requesting party may from time to time be involved, regardless of whether such
Action is a matter with respect to which indemnification may be sought
hereunder. The requesting party shall bear all reasonable costs and expenses
(including allocated costs of in-house counsel and other personnel) in
connection therewith.
(b) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, or if any party chooses or is
required to prosecute, pursue, otherwise evaluate or defend any Action, the
other party shall
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reasonably cooperate in such defense, settlement or compromise, or such
prosecution, evaluation or pursuit, as the case may be. The requesting party
shall bear all reasonable costs and expenses in connection therewith.
(c) Without limiting the foregoing, the parties shall cooperate and
consult to the extent reasonably necessary with respect to any Actions.
(d) The obligation of the parties to make available former, current
and future directors, officers, employees and other personnel and agents
pursuant to this Section 6.7 is intended to be interpreted in a manner so as to
facilitate cooperation and shall include the obligation to make available
inventors and other officers without regard to whether such individual or the
employer of such individual could assert a possible business conflict (subject
to the exception set forth in the first sentence of Section 6.7(a)). Without
limiting the foregoing, each party agrees that neither it nor any member of its
respective Group will take any adverse action against any employee of its Group
based on such employee's provision of assistance or information to the other
party pursuant to Section 6.7(a).
(e) In connection with any Action contemplated by this Article VI, the
parties will enter into a mutually acceptable joint defense agreement so as to
maintain to the extent practicable any applicable attorney-client privilege or
work product immunity of either Group.
6.8. CONFIDENTIALITY. (a) Subject to Section 6.9, each of the Company
and Holdco, on behalf of itself and each Member of its respective Group, agrees
to hold, and to cause its respective directors, officers, employees, agents,
accountants, counsel and other advisors and representatives to hold, in strict
confidence, with at least the same degree of care that it applies to Holdco's
confidential and proprietary information pursuant to policies in effect as of
the Closing, all Information concerning the other Group that is either in its
possession (including Information in its possession prior to the date hereof or
of the Closing) or furnished by the other Group or its respective directors,
officers, employees, agents, accountants, counsel and other advisors and
representatives at any time pursuant to this Agreement, or any Ancillary
Agreement, and shall not use any such Information other than for such purposes
as shall be expressly permitted hereunder or thereunder, except, in each case,
to the extent that such Information has been (i) in the public domain through no
fault of such party or such party's Group or any of their respective directors,
officers, employees, agents, accountants, counsel and other advisors and
representatives, (ii) later lawfully acquired from other sources by such party
(or such party's Group), which sources are not themselves bound by a
confidentiality obligation to the knowledge of such party or members of such
party's Group or (iii) independently generated without reference to any
proprietary or confidential Information of the other party.
(b) Each party agrees not to release or disclose, or permit to be
released or disclosed, any such Information concerning the other Group to any
other Person, except its directors, officers, employees, agents, accountants,
counsel and other advisors and representatives who need to know such Information
(who shall be advised
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of their obligations hereunder with respect to such Information) and in
compliance with Section 6.9. Without limiting the foregoing, when any
Information is no longer needed for the purposes contemplated by this Agreement
or any Ancillary Agreement, each party will promptly after request of the other
party either return to the other party all Information in a tangible form
(including all copies thereof and all notes, extracts or summaries based
thereon) or certify to the other party that it has destroyed such Information
(and all electronic or other copies thereof and all notes, extracts or summaries
based thereon).
6.9. PROTECTIVE ARRANGEMENTS. In the event that any party or any member
of its Group either determines on the advice of its counsel that it is required
to disclose any Information concerning the other Group pursuant to applicable
Law or receives any demand under lawful process or from any Governmental
Authority to disclose or provide Information concerning the other Group that is
subject to the confidentiality provisions hereof, such party shall notify the
other party prior to disclosing or providing such Information and shall
cooperate at the expense of the requesting party in seeking any reasonable
protective arrangements requested by such other party. Subject to the foregoing,
the Person that received such request may thereafter disclose or provide
Information to the extent required by such Law (as so advised by counsel) or by
lawful process or such Governmental Authority.
ARTICLE VII
FURTHER ASSURANCES; ADDITIONAL COVENANTS
7.1. FURTHER ASSURANCES. (a) In addition to the actions specifically
provided for elsewhere in this Agreement, the Ancillary Agreements, the
Restructuring Agreement or any Transaction Agreement, but subject to the
provisions hereof and thereof, each of the parties hereto shall use its
reasonable best efforts, prior to, on and after the Closing, to take, or cause
to be taken, all actions, and to do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable laws, regulations and agreements
to consummate and make effective the transactions contemplated by this Agreement
and the Ancillary Agreements.
(b) Without limiting the foregoing, prior to, on and after the
Closing, each party hereto shall cooperate with the other party, and without any
further consideration, but at the expense of the requesting party, to execute
and deliver, or use its reasonable best efforts to cause to be executed and
delivered, all instruments, including instruments of conveyance, assignment and
transfer, and to make all filings with, and to obtain all consents, approvals or
authorizations of, any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument (including any
Consents or Governmental Approvals), and to take all such other actions as such
party may reasonably be requested to take by any other party hereto from time to
time, consistent with the terms of this Agreement, the Ancillary Agreements, the
Restructuring Agreement and the Transaction Agreements, in order to effectuate
the provisions and purposes of this Agreement and the Ancillary Agreements and
the
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transfers of the TWIC Broadband Assets and the assignment and assumption of the
TWIC Broadband Liabilities and the other transactions contemplated hereby and
thereby.
(c) On or prior to the Closing, Holdco and the Company in their
respective capacities as direct and indirect shareholders of their respective
Subsidiaries, shall each ratify any actions that are reasonably necessary or
desirable to be taken by Holdco and the Company or any of their respective
Subsidiaries, as the case may be, to effectuate the transactions contemplated by
this Agreement.
(d) Holdco hereby agrees that, at any time following the Initial TWIC
Contribution and through to the Holdco Contribution (i) it will not, and will
not permit any TWIC Broadband Members to, assign, transfer, convey and deliver
any TWIC Broadband Asset to any Affiliate of Holdco, or any division of Holdco,
that is not also a TWIC Broadband Member and (ii) except through the TWIC
Broadband Members, no Subsidiary of Holdco will own or hold any TWIC Broadband
Asset or conduct the TWIC Broadband Business.
ARTICLE VIII
TERMINATION
8.1. TERMINATION. This Agreement shall automatically, and without any
further action by either party, terminate immediately upon the termination of
the Restructuring Agreement in accordance with its terms.
8.2. EFFECT OF TERMINATION. In the event of any termination of this
Agreement prior to the Closing, no Member of either Group (or any of its
directors or officers) shall have any Liability or further obligation to any
Member of the other Group with respect to this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1. COUNTERPARTS; ENTIRE AGREEMENT. (a) This Agreement and each
Ancillary Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other party.
(b) This Agreement, together with the Ancillary Agreements, the
Restructuring Agreement, the Transaction Agreements and the Confidentiality
Agreements and the Exhibits, Schedules and Appendices hereto and thereto
constitute the entire agreement between the parties with respect to the subject
matter hereof or thereof and supersede all prior agreements and understandings,
both oral and written, between the parties with respect to such subject matter.
9.2. GOVERNING LAW. This Agreement and, unless expressly provided
therein, each Ancillary Agreement, shall be governed by and construed and
interpreted in
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accordance with the Laws of the State of New York, irrespective of the choice of
laws principles of the State of New York, as to all matters, including matters
of validity, construction, effect, enforceability, performance and remedies.
9.3. ASSIGNABILITY. Except as set forth in any Ancillary Agreement,
this Agreement and each Ancillary Agreement shall be binding upon and inure to
the benefit of the parties hereto and thereto, respectively, and their
respective successors and assigns; provided, however, that no party hereto or
thereto may assign its respective rights or delegate its respective obligations
under this Agreement or any Ancillary Agreement without the express prior
written consent of each of the other parties hereto or thereto.
9.4. 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 in any
federal court located in the State of New York or any New York state court, and
each of the parties hereby consents to the exclusive 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 either
party hereto anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party hereto agrees that
service of process on such party as provided in Section 9.7 shall be deemed
effective service of process on such party.
9.5. 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.
9.6. THIRD PARTY BENEFICIARIES. Except for the indemnification rights
under this Agreement of any TWIC Broadband Indemnitee or Company Indemnitee in
their respective capacities as such (i) the provisions of this Agreement and
each Ancillary Agreement are solely for the benefit of the relevant parties and
are not intended to confer upon any Person except the relevant parties any
rights or remedies hereunder or thereunder and (ii) there are no third party
beneficiaries of this Agreement or any Ancillary Agreement and neither this
Agreement nor any Ancillary Agreement shall provide any third person with any
remedy, claim, liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement or any Ancillary
Agreement.
9.7. NOTICES. All notices, requests or other communications under this
Agreement or any Ancillary Agreement shall be in writing (including facsimile
transmission) and shall be given:
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Prior to the Closing:
If to the Company to:
MediaOne TWE Holdings, Inc.
c/o AT&T Corp.
295 North Maple Avenue
Basking Ridge, New Jersey 07920
Attn: Secretary
Fax: (908) 953-8360
After the Closing:
Time Warner Cable Inc.
290 Harbor Drive
Stamford, Connecticut 06902
Prior to the consummation of the AT&T
With a copy to: Comcast Merger:
AT&T Corp.
295 North Maple Avenue
Basking Ridge, New Jersey 07920
Attention: Corporate Secretary
Fax: (908) 953-8360
With a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Trevor S. Norwitz
Fax: (212) 403-2000
Following Consummation of the AT&T
Comcast Merger:
AT&T Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102
Attention: General Counsel
Fax: (215) 981-7794
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
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Attention: Dennis S. Hersch
William L. Taylor
Fax: (212) 450-4800
If to Holdco to: Warner Communications Inc.
c/o AOL Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
Attn: Executive Vice President
and General Counsel
Fax: (212) 258-3172
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attn: Robert B. Schumer, Esq.
Fax: 212-757-3990
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. Any party may, by notice to the
other party, change the address to which such notices are to be given.
9.8. 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 be
consummated as originally contemplated to the fullest extent possible.
9.9. PUBLIC ANNOUNCEMENTS. Prior to Closing, the parties hereto will
consult with each other before issuing any press release or making any public
statement with respect to, this Agreement, any Ancillary Agreements, the
Restructuring Agreement or any other Transaction Agreement (except to the extent
consistent with a release or statement previously approved hereunder) and,
except as may be required by applicable Law or any listing agreement with any
national securities exchange or quotation system,
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will not issue any such press release or make any such public statement without
the prior consent of the other parties, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, any such press release or public
statement that may be required by applicable Law or any listing agreement with
any national securities exchange or quotation system may be issued without such
consent, if the party hereto making such release or statement has used its
reasonable efforts to consult with the other parties.
9.10. EXPENSES. Whether or not the transactions contemplated by this
Agreement are consummated, all third party fees, costs and expenses (including
governmental transfer taxes, recording fees and other similar fees and
impositions) paid or incurred in connection with such transactions will be paid
in accordance with Section 12.3 of the Restructuring Agreement.
9.11. HEADINGS. The Article, Section and paragraph headings contained in
this Agreement and in the Ancillary Agreements are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement
or any Ancillary Agreement.
9.12. WAIVERS OF DEFAULT. Waiver by any party of any default by the
other party of any provision of this Agreement or any Ancillary Agreement shall
not be deemed a waiver by the waiving party of any subsequent or other default,
nor shall it prejudice the rights of the other party.
9.13. SPECIFIC PERFORMANCE. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement or any Ancillary Agreement, the party or parties who are or are to be
thereby aggrieved shall have the right to specific performance and injunctive or
other equitable relief of its rights under this Agreement or such Ancillary
Agreement, in addition to any and all other rights and remedies at Law or in
equity, and all such rights and remedies shall be cumulative. The parties agree
that the remedies at Law for any breach or threatened breach, including monetary
damages, are inadequate compensation for any loss and that any defense in any
action for specific performance that a remedy at Law would be adequate is
waived. Any requirements for the securing or posting of any bond with such
remedy are waived.
9.14. AMENDMENTS. No provisions of this Agreement or any Ancillary
Agreement shall be deemed waived, amended, supplemented or modified by any
party, unless such waiver, amendment, supplement or modification is in writing
and signed by the authorized representative of the party against whom such
waiver, amendment, supplement or modification it is sought to be enforced.
9.15. LATE PAYMENTS. Except as expressly provided to the contrary in
this Agreement or in any Ancillary Agreement, any amount not paid when due
pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or
otherwise invoiced or demanded and properly payable that are not paid within 30
days of such bill, invoice or other demand) shall accrue interest at a rate per
annum equal to the Prime Rate plus 2%.
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9.16. INTERPRETATION. In this Agreement, unless otherwise specified or
where the context otherwise requires:
(a) a reference to a Recital is to the relevant Recital to this
Agreement, to a Section is to the relevant Section of this Agreement and to an
Exhibit is to the relevant Exhibit to this Agreement;
(b) words importing any gender shall include other genders;
(c) words importing the singular only shall include the plural and
vice versa;
(d) the words "include," "includes" or "including" shall be deemed to
be followed by the words "without limitation";
(e) the words "hereof," "herein," "hereunder" and "herewith" and words
of similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Article, clause and Exhibit references are to the Articles, clauses and Exhibits
to this Agreement unless otherwise specified;
(f) references to any Person or any other agreement or document shall
include such Person's successors and permitted assigns;
(g) the parties hereto have participated jointly in the negotiation
and drafting of this Agreement, and, in the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party hereto by virtue of the authorship of any
provisions of this Agreement; and
(h) unless otherwise expressly provided herein, any Contract or Law
defined or referred to herein or in any Contract that is referred to herein
means such Contract or Law as from time to time amended, modified or
supplemented, including (in the case of a Contract) by waiver or consent and (in
the case of a Law) by succession of comparable successor Laws to all attachments
thereto and instruments incorporated therein, and any reference in this
Agreement to a Law shall be deemed to include any rules and regulations
promulgated thereunder.
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IN WITNESS WHEREOF, the parties have caused this Contribution Agreement
to be executed by their duly authorized representatives.
MEDIAONE TWE HOLDINGS, INC.
By: /s/ Charles H. Noski
--------------------------------
Name: Charles H. Noski
Title: Authorized Signatory
WARNER COMMUNICATIONS INC.
By: /s/ Spencer B. Hays
--------------------------------
Name: Spencer B. Hays
Title: Senior Vice President
For purposes of Article IV only:
AOL TIME WARNER INC.
By: /s/ Spencer B. Hays
----------------------------------
Name: Spencer B. Hays
Title: Senior Vice President
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