EXHIBIT: 10.6
EXECUTION COPY
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PARTNERSHIP INTEREST SALE AGREEMENT
among
TIME WARNER CABLE INC.,
AOL TIME WARNER INC.,
COMCAST CORPORATION
and
TWE HOLDINGS I TRUST
Dated: March 31, 2003
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TABLE OF CONTENTS
Page
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1. Definitions................................................... 1
2. Trust Disposition Rights...................................... 5
3. Appraisal Right............................................... 5
4. Sale Right.................................................... 8
5. Provisions Relating to Common Stock........................... 11
6. Miscellaneous................................................. 12
PARTNERSHIP INTEREST SALE AGREEMENT
PARTNERSHIP INTEREST SALE AGREEMENT (this "Agreement"), dated
March 31, 2003, among Time Warner Cable Inc., a Delaware corporation (formerly
named MOTH Holdings, Inc., the "Company"), AOL Time Warner Inc., a Delaware
corporation ("AOLTW"), TWE Holdings I Trust, a Delaware statutory trust ("Trust
I"), and, solely for the purposes of Section 6(c) hereof, Comcast Corporation, a
Pennsylvania corporation (formerly named AT&T Comcast Corporation, "Comcast").
WHEREAS, effective as of and in consideration of the closing
of the transactions contemplated by the Restructuring Agreement, dated as of
August 20, 2002 (as amended, the "Restructuring Agreement"), by and among the
Company, AOLTW, Comcast and the other parties thereto, the parties wish to
provide for certain rights with respect to the Disposition (as defined below) of
the partnership interest (the "Partnership Interest") held by Trust I or any
other Trust I Partner (as defined below) in Time Warner Entertainment Company,
L.P. ("TWE");
WHEREAS, pursuant to the Amended and Restated Agreement of
Limited Partnership of TWE, dated the date hereof (as amended, the "Partnership
Agreement"), a Trust I Partner may Dispose of all or any portion of its
Partnership Interest only in a Pre-Transfer Date Permitted Transfer (as defined
in the Partnership Agreement) or, from and after the Transfer Date (as defined
below), in a Permitted Transfer (as defined below); and
WHEREAS, a Disposition in accordance with this Agreement
constitutes a Permitted Transfer.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, and unless
the context requires a different meaning, the following terms have the meanings
indicated:
"AAA" has the meaning set forth in Section 3(d)(ii).
"Acquisition" has the meaning set forth in the Restructuring
Agreement.
"Affiliate" has the meaning set forth in the Partnership
Agreement.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"AOLTW" has the meaning set forth in the preamble.
"AOLTW Common Stock" means the common stock, par value $0.01
per share, of AOLTW, or any class of common stock of AOLTW into which such
common stock is recapitalized.
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"AOLTW Exercise Notice" has the meaning set forth in Section
3(b).
"AOLTW Matching Notice" has the meaning set forth in Section
4(d).
"AOLTW Matching Period" has the meaning set forth in Section
4(d).
"AOLTW Matching Price" has the meaning set forth in Section
4(d).
"AOLTW Matching Right" has the meaning set forth in Section
4(d).
"AOLTW Option" has the meaning set forth in Section 3(b).
"AOLTW Option Period" has the meaning set forth in Section
3(b).
"AOLTW Purchase Price" has the meaning set forth in Section
3(b).
"Appraisal Notice" has the meaning set forth in Section 3(a).
"Appraisal Right" has the meaning set forth in Section 3(a).
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law or executive order to close.
"Comcast" has the meaning set forth in the preamble.
"Company" has the meaning set forth in the preamble.
"Company Matching Notice" has the meaning set forth in Section
4(e).
"Company Matching Period" has the meaning set forth in Section
4(e).
"Company Matching Price" has the meaning set forth in Section
4(e).
"Company Matching Right" has the meaning set forth in Section
4(e).
"Company Purchase Price" has the meaning set forth in Section
3(c).
"Disposition" has the meaning set forth in the Restructuring
Agreement
"Investment Banking Firm" means an investment banking firm of
national reputation.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"NYSE" means the New York Stock Exchange.
"Offered Interest" has the meaning set forth in Section 3(a).
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"Offered Interest FMV" has the meaning set forth in Section
3(d).
"Partnership Agreement" has the meaning set forth in the
recitals.
"Partnership Interest" has the meaning set forth in the
recitals.
"Permitted Transfer" has the meaning set forth in the
Partnership Agreement.
"Person" means an individual, corporation, partnership,
limited liability company, association, trust, joint venture or other entity or
organization, including a government entity or any department, agency or
political subdivision thereof.
"Prohibited Activity" means, with respect to any Valuation
Period: (a) any Acquisition or Disposition, in open market transactions, private
transactions, or otherwise, during the period beginning on (and including) the
first day of the Valuation Period and ending on (and including) the last day of
the Valuation Period, of (i) any shares of AOLTW Common Stock or Time Warner
Cable Common Equity, as applicable (i.e., if the applicable shares are to be
delivered in full or partial satisfaction of the purchase price), or (ii) any
securities convertible into or exchangeable for or derivative of shares of AOLTW
Common Stock or Time Warner Cable Common Equity, as applicable (other than, in
each case, (A) shares (including restricted shares) or options to acquire shares
issued to or Acquired by directors, officers, employees or consultants pursuant
to any existing employee benefit plan of AOLTW or any of its Subsidiaries, the
AOL Time Warner Inc. 2003 Stock Incentive Plan, any employee benefit plan
assumed by AOLTW or any of its Subsidiaries in connection with the acquisition
of a business, or any employee benefit plan of the Company or any of its
Subsidiaries, (B) sales or other Dispositions of shares by directors, officers
or employees, (C) shares Acquired or Disposed of in the ordinary course of
business pursuant to the ISDA Master Agreement, dated as of February 11, 2002,
between Xxxxxxx Xxxxx International and TWE or any Transactions (as defined
therein) or (D) shares Acquired or Disposed of in the ordinary course of
business pursuant to the ISDA Master Agreement, dated as of February 11, 2002,
between Xxxxxxx Xxxxx International and AOLTW or any Transactions (as defined
therein)), in each of clauses (C) and (D), in connection with prepaid forward
contracts relating to AOLTW or TWE deferred compensation plans), or (b) any
other action taken intentionally for the purpose of manipulating the price of
AOLTW Common Stock or Time Warner Cable Common Equity, as applicable, during the
Valuation Period.
"Prospective Purchaser" has the meaning set forth in Section
4(b).
"Restructuring Agreement" has the meaning set forth in the
recitals.
"Sale Notice" has the meaning set forth in Section 4(b).
"Sale Price" has the meaning set forth in Section 4(b).
"Sale Right" has the meaning set forth in Section 4(a).
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"Selling Partner" has the meaning set forth in Section 2.
"Stock Election Notice" has the meaning set forth in Section
5(a).
"Subsidiary" has the meaning set forth in the Partnership
Agreement.
"Time Warner Cable Common Stock" means the Class A Common
Stock, par value $0.01 per share, of the Company, or any class of common stock
into which such common stock is recapitalized.
"Time Warner Cable Class B Common Stock" means the Class B
Common Stock, par value $0.01 per share, of the Company, or any class of common
stock into which such common stock is recapitalized.
"Time Warner Cable Common Equity" means Time Warner Cable
Common Stock and Time Warner Cable Class B Common Stock.
"Trading Day" has the meaning set forth in Section 5(c).
"Trading Value" has the meaning set forth in Section 5(c).
"Transfer Date" means the second anniversary of the date
hereof.
"Trust I" has the meaning set forth in the preamble.
"Trust II" has the meaning set forth in Section 5(a).
"Trust I Partner" has the meaning set forth in the Partnership
Agreement.
"TWE" has the meaning set forth in the recitals.
"Valuation Period" means the period beginning on (and
including) the day that is seventeen (17) Trading Days prior to the closing of
any Disposition of an Offered Interest pursuant to Section 3 or 4 hereof with
respect to which AOLTW and/or the Company has delivered a Stock Election Notice,
and ending on (and including) the day that is two (2) Trading Days prior to such
closing.
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2. Trust Disposition Rights. Following the Transfer
Date, if any Trust I Partner (any such Trust I Partner, a "Selling Partner")
wishes to Dispose of all or any portion of its Partnership Interest in
accordance with this Agreement, it shall effectuate such Disposition by
exercising either its Appraisal Right (as defined in Section 3(a)) or its Sale
Right (as defined in Section 4(a)); provided that (a) no Selling Partner shall
be entitled to exercise any Appraisal Right or Sale Right in respect of any
Offered Interest (as defined below) while it is pursuing its Sale Right or
Appraisal Right, respectively, in respect of such Offered Interest or its
Appraisal Right or Sale Right in respect of any other Offered Interest and (b)
any Disposition must comply with Section 3.1 of the Partnership Agreement. Prior
to the Transfer Date, except as provided in the second proviso to Section 3.1(a)
of the Partnership Agreement, no Trust I Partner shall enter into an agreement
to Dispose of all or any portion of its Partnership Interest.
3. Appraisal Right.
(a) Following the Transfer Date, the
Selling Partner shall have the right (the "Appraisal Right") to Dispose of all
or any portion of its Partnership Interest (the "Offered Interest") pursuant to
this Section 3 by delivery of written notice (the "Appraisal Notice") to AOLTW
and the Company (it being understood that no such notice may be delivered prior
to the Transfer Date).
(b) For a period of fifteen (15) days
after receipt of the Appraisal Notice (the "AOLTW Option Period"), AOLTW shall
have the right (the "AOLTW Option") but not the obligation to elect to purchase
all or any portion of the Offered Interest at a purchase price (the "AOLTW
Purchase Price") equal to (x) the percentage of the Offered Interest AOLTW
proposes to purchase multiplied by (y) the Offered Interest FMV (as defined in
Section 3(d) below). The AOLTW Option shall be exercisable by giving written
notice (the "AOLTW Exercise Notice") of the exercise thereof, prior to the
expiration of the AOLTW Option Period, to the Selling Partner, with a copy to
the Company, which notice shall state the portion of the Offered Interest to be
purchased by AOLTW. Upon delivery of the AOLTW Exercise Notice, AOLTW shall be
obligated to purchase, and the Selling Partner shall be obligated to sell, the
Offered Interest specified in the AOLTW Exercise Notice for the AOLTW Purchase
Price. The failure of AOLTW to respond within the AOLTW Option Period shall be
deemed to be an election by AOLTW not to purchase any of the Offered Interest
and shall be a waiver of the AOLTW Option; provided that AOLTW may elect not to
purchase the Offered Interest and to waive its rights under this Section 3(b)
prior to the expiration of the AOLTW Option Period by giving written notice to
the Selling Partner, with a copy to the Company.
(c) If AOLTW does not elect to purchase
all of the Offered Interest, then the Company shall be obligated to purchase,
and the Selling Partner shall be obligated to sell, the remaining portion of the
Offered Interest for a purchase price (the "Company Purchase Price") equal to
(x) the percentage of the Offered Interest not purchased by AOLTW multiplied by
(y) the Offered Interest FMV.
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(d) The "Offered Interest FMV" shall be
determined as follows:
(i) Upon delivery of an
Appraisal Notice, the Selling Partner shall, by written notice to the Company,
designate an Investment Banking Firm to prepare a valuation of the Offered
Interest. Within five (5) days of delivery of the Appraisal Notice, the Company
shall, by written notice to the Selling Partner, designate a second Investment
Banking Firm to prepare a valuation of the Offered Interest; provided that if
the Company fails to designate an Investment Banking Firm within such 5-day
period, the Investment Banking Firm selected by the Selling Partner shall
determine the Offered Interest FMV, without regard to the remainder of this
Section 3(d), in accordance with the guidelines set forth on Exhibit A.
(ii) Within ten (10) days
following the designation by the Company of the second Investment Banking Firm
pursuant to Section 3(d)(i), if such second Investment Banking Firm has been so
designated, the two Investment Banking Firms shall select a third Investment
Banking Firm and the Selling Partner and the Company shall engage such third
Investment Banking Firm on reasonable and customary terms. If the two Investment
Banking Firms are unable to agree on the identity of a third Investment Banking
Firm within such 10-day period, or the Selling Partner and the Company are
unable to agree as to the terms of engagement for such firm within such period,
then either the Selling Partner or the Company may refer the matter to the
American Arbitration Association (the "AAA") which shall select such third
Investment Banking Firm, and establish the terms of engagement of such firm,
within fifteen (15) days following such request; provided that all parties shall
be given notice of such referral and afforded the opportunity to participate in
any presentations to be made to the AAA. The firm selected by the AAA shall not
derive a material portion of its revenues from the Selling Partner, the Company
or any of their respective Affiliates, shall have experience in valuing
companies engaged in the same business then engaged in by TWE and shall be
engaged on reasonable and customary terms.
(iii) No later than thirty (30)
days following the delivery of the Appraisal Notice, the Investment Banking Firm
selected by the Selling Partner and the Investment Banking Firm selected by the
Company shall simultaneously disclose to each other their respective
determinations of the fair market value of the Offered Interest, each of which
shall be prepared in accordance with the guidelines set forth in Exhibit A;
provided that if either Investment Banking Firm is not prepared to disclose its
valuation on such day, the valuation of the Investment Banking Firm that is so
prepared shall be the Offered Interest FMV. If the amount of the higher of the
values determined by the two Investment Banking Firms is no more than 110% of
the lower value, such values will be averaged and such average shall be the
Offered Interest FMV. If the amount of the higher of the values determined by
the two Investment Banking Firms is more than 110% of the lower value, then on a
day no later than forty (40) days after the delivery of the Appraisal Notice,
each of the two Investment Banking Firms will make a presentation to the third
Investment Banking Firm, regarding the methodology and conclusions used by it in
arriving at its valuation. Each party and such party's
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Investment Banking Firm shall be entitled to attend the presentation of the
other party's Investment Banking Firm. Within five (5) days following the
presentations, the third Investment Banking Firm shall determine which valuation
more accurately reflects the value of the Offered Interest, and such valuation
shall be the Offered Interest FMV and shall be final and binding upon the
parties.
(iv) Each party will pay the
fees and expenses of the Investment Banking Firm it selects and 50% of the fees
and expenses of the third Investment Banking Firm. If the parties are unable to
agree on the fees payable to the third Investment Banking Firm, the fees shall
be set by the AAA and the parties shall each be liable for 50% of such fees.
(e) The Company will supply, subject to
the recipients entering into customary confidentiality agreements, the following
information regarding TWE and the Company to the Investment Banking Firms and to
the Selling Partner within fifteen (15) days of delivery of the Appraisal Notice
(except that information to be provided pursuant to a request under "(4)" below
shall be provided as soon as reasonably practicable after the date of such
request): (1) 3 years of historical financial statements, (2) current year
interim quarterly financial statements, (3) certain operating statistics (e.g.
subscribers, homes passed, rebuild status) and (4) other due diligence items
that any appraiser may reasonably request (but, with respect to (4), only to the
extent such information exists or is readily available within the relevant time
period). In addition to such information, if, upon the delivery of an Appraisal
Notice, the Selling Partner elects in writing to have the Company prepare
projections for the Company and TWE for the then-current fiscal year and one (1)
prospective year, then the Company shall have sixty (60) days to deliver such
projections to the Investment Banking Firms and to the Selling Partner and the
30-day and 40-day time periods set forth in Section 3(d)(iii) shall be adjusted
to 75-day and 85-day periods, respectively; provided that unless the Selling
Partner so elects to have the Company prepare projections for the Company and
TWE as described in this sentence, then none of the Investment Banking Firms
shall utilize projections in determining the value of the Offered Interest,
other than projections that have previously been made available (by the Company,
analysts or otherwise) to the general public (to the extent that such
projections are relevant). The Company shall make its executive officers
available for due diligence sessions, as reasonably requested.
(f) The consummation of any purchase of
the Offered Interest by AOLTW and/or the Company pursuant to this Section 3
shall be held at a single closing at the executive office of the Company at
11:00 a.m., local time, on a Business Day within 30 days following the
determination of the Offered Interest FMV pursuant to Section 3(d) (upon at
least five (5) days' notice to the Selling Partner); provided that such period
shall be extended for 90 additional days, or such shorter period of time, as
shall be necessary in order to obtain requisite governmental or regulatory
approvals with respect to such transaction (which the parties shall use their
respective commercially reasonable efforts to obtain as promptly as
practicable), or as provided in Section 5(a); and provided further, that such
closing may be held at such other time and place as the parties to the
transaction may agree. At such closing, AOLTW and/or the
8
Company shall, severally (with respect to itself) and not jointly, pay to the
Selling Partner the AOLTW Purchase Price and/or the Company Purchase Price, as
applicable, in respect of the portion of the Offered Interest to be purchased by
such party in any combination of (x) cash, which shall be payable by wire
transfer of immediately available funds, and (y) validly issued, fully paid and
non-assessable shares of AOLTW Common Stock (in the case of the AOLTW Purchase
Price) or Time Warner Cable Common Stock (in the case of the Company Purchase
Price) (the fair market value of which will be determined pursuant to Section 5
below) pursuant to such instruments as may be reasonably necessary to deliver
the AOLTW Common Stock or Time Warner Cable Common Stock, as applicable, and in
appropriate form for transfer, free and clear of any lien or other encumbrance,
and the Selling Partner shall, pursuant to such instruments as may be reasonably
necessary, deliver to AOLTW and/or the Company, as applicable, the Offered
Interest to be sold at such closing, in appropriate form for transfer, free and
clear of any lien or other encumbrance.
4. Sale Right.
(a) Following the Transfer Date, the
Selling Partner shall have the right (the "Sale Right") to Dispose of all or any
portion of its Offered Interest to any Person pursuant to this Section 4, so
long as the Selling Partner first complies with clauses (b) through (h) below.
(b) The Selling Partner shall give
written notice (the "Sale Notice") to AOLTW and the Company (it being understood
that no such notice may be delivered prior to the Transfer Date), which Sale
Notice shall state (i) the name of the Person (the "Prospective Purchaser") to
whom the Selling Partner wishes to Dispose of such Offered Interest, and, if
such Prospective Purchaser is a Subsidiary of another Person, the name of the
Ultimate Parent (as defined in the Partnership Agreement) of such Prospective
Purchaser, neither of which Persons may be an Affiliate of, or otherwise acting
in concert to circumvent the provisions of this Section 4 with, the Selling
Partner (ii) the price to be paid for such Offered Interest (the "Sale Price"),
which price must be payable in cash upon consummation of such Disposition, (iii)
the date on which such Disposition is scheduled to occur and (iv) that the offer
of the Prospective Purchaser was made after the Transfer Date and has been
accepted by the Selling Partner subject to the rights of AOLTW and the Company
contained in this Agreement.
(c) The Sale Notice shall be
accompanied by a certificate of the Prospective Purchaser (and, if such
Prospective Purchaser is a Subsidiary of another Person, then also a certificate
of the Ultimate Parent of such Prospective Purchaser) stating that (i) its offer
to purchase the Offered Interest has been approved by its board of directors
(or, if such Person is not a corporation, the equivalent), (ii) the description
of its offer contained in the Sale Notice is complete and accurate in accordance
with the requirements of this Section 4, (iii) adequate financing arrangements
have been, or are reasonably expected to be, secured in respect of its offer,
(iv) its offer is reasonably capable of being consummated and that there are no
significant regulatory impediments to such consummation (other than any required
regulatory approval
9
disclosed in the Sale Notice) and (v) it is aware of the rights of AOLTW and the
Company contained in this Agreement and that it is not an Affiliate of, or
otherwise acting in concert to circumvent the provisions of this Section 4 with,
the Selling Partner.
(d) For a period of fifteen (15) days
after receipt of the Sale Notice and the certificate required by Section 4(c)
above (the "AOLTW Matching Period"), AOLTW shall have the right (the "AOLTW
Matching Right") but not the obligation to elect to purchase all or any portion
of the Offered Interest at a purchase price (the "AOLTW Matching Price") equal
to (x) the percentage of the Offered Interest AOLTW proposes to purchase
multiplied by (y) the Sale Price. The AOLTW Matching Right shall be exercisable
by giving written notice (the "AOLTW Matching Notice") of the exercise thereof,
prior to the expiration of the AOLTW Matching Period, to the Selling Partner,
with a copy to the Company, which notice shall state the portion of the Offered
Interest to be purchased by AOLTW. Upon delivery of the AOLTW Matching Notice,
subject to Section 4(f) below, AOLTW shall be obligated to purchase, and the
Selling Partner shall be obligated to sell, the Offered Interest specified in
the AOLTW Matching Notice at the AOLTW Matching Price and upon the terms and
conditions set forth in the Sale Notice, except that AOLTW (or any Affiliate
thereof) shall be entitled to pay all or any portion of the AOLTW Matching Price
in shares of AOLTW Common Stock as provided in Section 5 below. The failure of
AOLTW to respond within the AOLTW Matching Period shall be deemed to be an
election by AOLTW not to purchase any of the Offered Interest and shall be a
waiver of the AOLTW Matching Right; provided that AOLTW may elect not to
purchase the Offered Interest and to waive its rights under this Section 4(d)
prior to the expiration of the AOLTW Matching Period by giving written notice to
the Selling Partner, with a copy to the Company.
(e) If AOLTW does not elect to purchase
all of the Offered Interest, then for a period of five (5) days after the
earlier to occur of (a) the expiration of the AOLTW Matching Period and (b) the
receipt of the AOLTW Matching Notice (or written notice from AOLTW of its waiver
of the AOLTW Matching Right) (the "Company Matching Period"), the Company shall
have the right (the "Company Matching Right") but not the obligation to elect to
purchase all but not less than all of the remaining Offered Interest at a
purchase price (the "Company Matching Price") equal to (x) the percentage of the
Offered Interest not purchased by AOLTW multiplied by (y) the Sale Price. The
Company Matching Right shall be exercisable by giving written notice (the
"Company Matching Notice") of the exercise thereof, prior to the expiration of
the Company Matching Period, to the Selling Partner. Upon delivery of the
Company Matching Notice, the Company shall be obligated to purchase, and the
Selling Partner shall be obligated to sell, all of such remaining Offered
Interest for the Company Matching Price and upon the terms and conditions set
forth in the Sale Notice, except that the Company (or any Affiliate thereof)
shall be entitled to pay all or any portion of the Company Matching Price in
shares of Time Warner Cable Common Stock as provided in Section 5 below. The
failure of the Company to respond within the Company Matching Period shall be
deemed to be an election by the Company not to purchase the remaining Offered
Interest and shall be deemed to be a waiver of the Company Matching Right;
provided that the Company may waive its rights under this Section 4(e) prior to
the
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expiration of the Company Matching Period by giving written notice to the
Selling Partner.
(f) If AOLTW and the Company
(individually or in the aggregate) do not elect to purchase all of the Offered
Interest pursuant to Sections 4(d) and 4(e) above, the Selling Partner shall
have the right to Dispose of all but not less than all of the Offered Interest
to the Prospective Purchaser upon terms and conditions that are no more
favorable to the Prospective Purchaser with respect to the Offered Interest than
those contained in the Sale Notice; provided that such sale is bona fide and
made within 45 days after the date of the expiration of the Company Matching
Period (as such may be extended for 90 additional days, or such shorter period
of time, as shall be necessary in order to obtain requisite governmental or
regulatory approvals with respect to such transaction). Upon closing of any such
Disposition, the Prospective Purchaser shall succeed to all of the rights and be
subject to all of the obligations of the Selling Partner under this Agreement
(including, without limitation, Sections 3 and 4 hereof) and the Partnership
Agreement.
(g) The consummation of any purchase of
the Offered Interest by AOLTW and/or the Company pursuant to this Section 4
shall be held at a single closing at the executive office of the Company at
11:00 a.m., local time, on a Business Day within 30 days following the delivery
of the Company Matching Notice (upon at least five (5) days' notice to the
Selling Partner); provided that such period shall be extended for 90 additional
days, or such shorter period of time, as shall be necessary in order to obtain
requisite governmental or regulatory approvals with respect to such transaction
(which the parties shall use their respective commercially reasonable efforts to
obtain as promptly as practicable), or as provided in Section 5(a); and
provided, further, that such closing may be held at such other time and place as
the parties to the transaction may agree. At such closing, AOLTW and/or the
Company shall, severally (with respect to itself) and not jointly, pay to the
Selling Partner the AOLTW Matching Price and/or the Company Matching Price in
respect of the portion of the Offered Interest to be purchased by such party in
any combination of (x) cash, which shall be payable by wire transfer of
immediately available funds, and (y) validly issued, fully paid and
non-assessable shares of AOLTW Common Stock (in the case of the AOLTW Matching
Price) or Time Warner Cable Common Stock (in the case of the Company Matching
Price) (the fair market value of which will be determined pursuant to Section 5
below) pursuant to such instruments as may be reasonably necessary to deliver
the AOLTW Common Stock or Time Warner Cable Common Stock, as applicable, and in
appropriate form for transfer, free and clear of any lien or other encumbrance,
and the Selling Partner shall, pursuant to such instruments as may be reasonably
necessary, deliver to AOLTW and/or the Company, as applicable, the Offered
Interest to be sold at such closing, in appropriate form for transfer, free and
clear of any lien or other encumbrance.
(h) If the Selling Partner does not
complete the sale of all of the Offered Interest to (x) a Prospective Purchaser
in accordance with the time period specified in Section 4(f) above (or
affirmatively waives the right to complete such sale, in writing, prior to the
expiration of such period) or (y) AOLTW and/or the
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Company in the time period specified in Section 4(g) above (other than as a
result of a breach by AOLTW or the Company of such party's obligations under
this Section 4), then in each case, the provisions of this Section 4 shall again
be applicable and the Selling Partner shall again be permitted to elect to
exercise either its Appraisal Right or its Sale Right with respect to any
Offered Interest, as provided in Section 2; provided, that in the case of a
failure to complete a sale to a Prospective Purchaser (other than as a result of
a breach by AOLTW or the Company of such party's obligations under this Section
4), such Selling Partner shall not be entitled to exercise its Sale Right or
Appraisal Right until sixty (60) days after the expiration of the 45-day period
referred to in Section 4(f) (or such longer period to which such 45-day period
has been extended pursuant to Section 4(f)); provided, further, that if the
Selling Partner has waived its right to complete the sale to a Prospective
Purchaser pursuant to clause (x) above, such 60-day period shall commence on the
date of such waiver.
5. Provisions Relating to Common Stock.
(a) If any portion of the purchase
price payable by AOLTW or the Company pursuant to Section 3 or 4 is to be paid
in shares of AOLTW Common Stock or Time Warner Cable Common Stock, as
applicable, then (x) the fair market value of such shares shall be deemed to be
equal to the average (rounded to the nearest 1/10,000) of the Trading Values (as
defined below) of a share of AOLTW Common Stock or Time Warner Cable Common
Stock, as applicable, for each of the fifteen (15) consecutive Trading Days
ending two (2) Trading Days prior to the applicable closing date, (y) any shares
of Time Warner Cable Common Stock received by the Selling Partner shall, after
they are issued to such Selling Partner, be deemed to be "Registrable
Securities" held by TWE Holdings II Trust, a Delaware statutory trust ("Trust
II") (or its permitted transferee), under the Registration Rights Agreement,
dated the date hereof, among the Company, AOLTW and Trust II (provided that, if
such Selling Partner is not then a party to such Agreement, such shares shall
only be deemed to be Registrable Securities if Trust II agrees to transfer all
or a portion of its right thereunder to such Selling Partner and such Selling
Partner agrees to be bound by the terms and conditions of such agreement) and
(z) any shares of AOLTW Common Stock received by the Selling Partner shall,
after they are issued to such Selling Partner, have registration rights
substantially identical to the rights of Trust II (or its permitted transferee)
under the Registration Rights Agreement, dated as of August 20, 2002, as
amended, between AOLTW and Trust II (as assignee of Comcast of Georgia, Inc.
(formerly named MediaOne of Colorado, Inc.), a Colorado corporation); provided
that promptly upon exercise by AOLTW of any right to use AOLTW Common Stock as a
portion of the purchase price pursuant to Section 3 or 4, AOLTW will use all
commercially reasonable efforts to have a "shelf" registration statement
declared effective as of the date the AOLTW Common Stock is delivered pursuant
hereto or as promptly thereafter as practicable. Notwithstanding anything to the
contrary in this Agreement, no shares of AOLTW Common Stock or Time Warner Cable
Common Stock, as applicable, may be delivered in full or partial satisfaction of
any purchase price payable pursuant to Section 3 or Section 4, (A) if shares of
such class are not then admitted for trading on the NYSE or for quotation on
NASDAQ or (B) if AOLTW and/or
12
the Company, as applicable, has not delivered to the Selling Partner written
notice (a "Stock Election Notice") setting forth (i) such party's election
(which election shall be irrevocable) to deliver such shares in full or partial
satisfaction of any such purchase price (which Stock Election Notice shall
specify what portion of the purchase price will be satisfied in shares) and (ii)
the closing date designated for the closing of such purchase, which closing date
(x) shall comply with the requirements of Section 3(f) or 4(g), as applicable
and (y) shall be no fewer than twenty (20) Trading Days subsequent to the date
of such Stock Election Notice; provided that if, as a result of events
subsequent to the delivery of the Stock Election Notice the number of Trading
Days between the date of delivery of a Stock Election Notice and the date of
closing set forth in such Stock Election Notice is fewer than twenty (20), such
closing date shall be extended to the extent necessary such that there are no
fewer than twenty (20) Trading Days between the date of such delivery and such
closing date.
(b) The parties hereto shall not, and
shall cause their respective Affiliates, agents and representatives not to,
engage in, announce an intention to engage in, or act in concert with any Person
to engage in, a Prohibited Activity.
(c) For the purposes of this Agreement,
(x) the term "Trading Value" means, with respect to any AOLTW Common Stock or
Time Warner Cable Common Stock on any given Trading Day, the volume weighted
trading price (rounded to the nearest 1/10,000) of such security on the NYSE or
NASDAQ, as applicable, as reported by Bloomberg Financial Markets (or such other
source as the Selling Partner and the Company shall agree) for that Trading Day,
and (y) the term "Trading Day" means any day on which shares of AOLTW Common
Stock or Time Warner Cable Common Stock, as applicable, are traded on the NYSE
or NASDAQ, as applicable.
6. Miscellaneous.
(a) Notices. All notices, demands or
other communications provided for or permitted hereunder shall be made in
writing and shall be by registered or certified first class mail, return receipt
requested, telecopier, courier service or personal delivery:
if to AOLTW or the Company, to: 00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Executive Vice
President, General
Counsel and Secretary
Fax: (000) 000-0000
13
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
if to Trust I, to: TWE Holdings I Trust
c/o Xxxxx X. Holiday
000 Xxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
And a copy to:
Potter Xxxxxxxx & Xxxxxxx LLP
Hercules Plaza, 0000 X. Xxxxxx
Xxxxxx X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
And a copy to:
Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
And a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
14
if to Comcast, to: Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
With a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
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.
(b) Successors and Assigns. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns; provided that no
party hereto may assign, delegate or transfer any of its rights or obligations
hereunder without the consent of the other parties hereto; provided, further,
that if any Trust I Partner transfers all or any portion of its Partnership
Interest to any other Person in accordance with the Partnership Agreement, the
rights and obligations of such Trust I Partner under this Agreement, to the
extent relating to and in the proportion of the Partnership Interest
transferred, shall be assigned to and assumed by such transferee.
(c) Covenant of Comcast. Comcast shall
cause (i) any Prospective Purchaser and any Trust I Partner (and any direct or
indirect transferee thereof) to whom all or any portion of the Trust I
Partnership Interest (as defined in the Partnership Agreement) is transferred to
deliver an agreement, in form and substance reasonably satisfactory to AOLTW and
the Company, to the Company and AOLTW agreeing to be bound by and entitled to
the benefits of the terms and conditions of this Agreement and the Partnership
Agreement and (ii) for so long as such Person (and any direct or indirect
transferee thereof) is an Affiliate of Comcast, Trust I and any other Trust I
Partner to comply with all of the obligations of such Trust I Partner hereunder.
(d) Amendment and Waiver.
(i) Any amendment, supplement
or modification of or to any provision of this Agreement, any waiver of any
provision of this
15
Agreement, and any consent to any departure by any party from the terms of any
provision of this Agreement, shall be effective only if it is made or given in
writing and signed by (i) the Company, (ii) AOLTW, (iii) the Trust I Partners
holding a majority of the Trust I Partnership Interest, and (iv) with respect to
any amendment, supplement or modification of, or of any defined term used in,
Section 6(c) of this Agreement, Comcast. Any such amendment, supplement,
modification, waiver or consent shall be binding upon all of the parties hereto.
(ii) No failure or delay on the
part of any party hereto in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The rights and remedies provided for herein are
cumulative and are not exclusive of any rights and remedies that may be
available to the parties hereto at law, in equity or otherwise.
(e) Counterparts; Effectiveness. This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other parties hereto.
(f) Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
(h) 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 any party hereto anywhere in the world, whether
within or without the jurisdiction of any such court.
(i) 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.
16
(j) Severability. If any term,
provision, covenant or restriction of this Agreement is determined by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party hereto. Upon such a determination, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner so that the transactions
contemplated hereby may be consummated as originally contemplated to the fullest
extent possible.
(k) Specific Performance. The parties
hereto agree that irreparable damage would occur if any provision of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to an injunction or injunctions to enforce
specifically the performance of the terms and provisions hereof in any federal
court located in the State of New York or any New York state court, in addition
to any other remedy to which they are entitled at law or in equity.
(l) Rules of Construction. Unless the
context otherwise requires, references to sections or subsections refer to
sections or subsections of this Agreement.
(m) Entire Agreement. This Agreement
(together with the Partnership Agreement) constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both oral and written, between the parties
with respect to such subject matter.
(n) Further Assurances. Each of the
parties shall, and shall cause their respective Affiliates to, execute such
documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
17
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Partnership Interest Sale Agreement on the date
first written above; provided, however, Comcast is a party to this Agreement
solely for purposes of being bound by Section 6(c) hereof.
TIME WARNER CABLE INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Executive Vice President, General
Counsel & Secretary
AOL TIME WARNER INC.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
TWE HOLDINGS I TRUST
By: /s/ Xxxxx X. Holiday
-----------------------------------------
Name: Xxxxx X. Holiday, solely in her
capacity as operating trustee
COMCAST CORPORATION
By: /s/ Xxxxxx X. Pick
-----------------------------------------
Name: Xxxxxx X. Pick
Title: Senior Vice President
EXHIBIT A
VALUATION GUIDELINES
(a) Valuation of the Offered Interest will be based upon the fully
distributed public market value of the common equity of TWE assuming
TWE was a corporation and all such common equity was represented by a
single class of common stock. Such valuation will be determined without
regard to offering discounts or any discount in respect of liquidity,
corporate structure (including, without limitation, the fact that TWE
is a partnership and that the stake is a minority interest) or tax
liability from any allocation of taxable income in respect of the
Offered Interest, and will assume, notwithstanding any facts to the
contrary, that TWE is not to be liquidated in the near future; provided
that if TWE is in fact in the process of being liquidated or is to be
liquidated in the near future, the valuation shall take into account
any economic circumstances leading to such liquidation.
(b) Any debt and preferred equity of TWE or any comparable company will be
measured at book value for purposes of preparing the valuation.
(c) The appraisers will rely on the current public trading values of a
group of not more than 3 companies which are comparable to TWE
(businesses engaged in the same business, with similar scale, credit
quality and capital structures).
(d) For purposes of determining a cable-only multiple, the value of the
non-cable assets shall be determined as the amount reflected in the
relevant company's publicly traded share price as a result of the
ownership of such assets.
(e) In calculating the value, the appraisers shall disregard any guarantees
by TWE or its Subsidiaries of debt or other obligations of the Company
or any of its Subsidiaries or by the Company or any of its Subsidiaries
of debt or other obligations of TWE or its Subsidiaries.
