EXHIBIT 1.1
TIME WARNER CAPITAL I and TIME WARNER INC.
Underwriting Agreement
New York, New York
September __, 1995
To the Representatives
named in Schedule II
hereto of the Underwriters
named in Schedule I hereto
Dear Sirs:
Time Warner Capital I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. SECTION 3801 et
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seq.), proposes to sell to the underwriters named in Schedule I hereto (the
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"Underwriters"), for whom you (the "Representatives") are acting as
representatives, [ ] [____]% Preferred Trust Securities (the "Preferred
Securities") to be specified in Schedule II hereto. If the firm or firms listed
in Schedule I hereto include only the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representatives", as used herein,
shall each be deemed to refer to such firm or firms.
The Preferred Securities and the Common Securities (as defined herein)
are to be issued pursuant to the terms of a declaration of trust, dated as of
August 2, 1995, as amended and restated as of ________, 1995 (the
"Declaration"), among Time Warner Inc., a Delaware corporation (the "Company"
and, together with the Trust, the "Offerors"), as sponsor, the trustees named
therein (the "Time Warner Trustees") and the holders from time to time of
undivided beneficial interests in the assets of the Trust. The Declaration is
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Pursuant to the Declaration, the number of Time Warner
Trustees will initially be five. Three of the Time Warner Trustees (the
"Regular Trustees") will be persons who are employees or officers of, or
affiliated with, the Company. The fourth trustee will be a financial
institution unaffiliated with the Company that will serve as property trustee
under the Declaration and as indenture trustee with respect to the Preferred
Securities for purposes of the Trust Indenture Act (the "Property Trustee").
The fifth Time Warner Trustee will be a person with a residence in the State of
Delaware or a financial institution or an affiliate thereof which maintains a
principal place of business or residence in the State of Delaware, meeting the
requirements of the Delaware Act (the "Delaware Trustee"). Initially, The First
National Bank of Chicago will act as the Property Trustee and such person or
institution will act as the Delaware Trustee until removed or replaced by the
holder of the Common Securities. The Preferred Securities will be guaranteed by
the Company on
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a subordinated basis with respect to distributions and payments upon
liquidation, redemption or otherwise (the "Guarantee") pursuant to the Guarantee
Agreement dated as of __________, 1995 (the "Guarantee Agreement") between the
Company and The First National Bank of Chicago, as Trustee (the "Guarantee
Trustee"). The assets of the Trust will consist of, among other things, ___%
Subordinated Debentures Due [ ], 2025 (the "Subordinated Debentures") of the
Company which will be issued under an indenture, dated as of __________, 1995,
between the Company and Chemical Bank, as Trustee (the "Indenture Trustee"), as
supplemented by a supplemental indenture dated as of __________, 1995 between
the Company and the Indenture Trustee (the "Supplemental Indenture", the
indenture as so supplemented being the "Indenture"). Under certain
circumstances, the Subordinated Debentures will be distributable to the holders
of undivided beneficial interests in the assets of the Trust. The Preferred
Securities, the related Guarantee and the Subordinated Debentures are referred
to herein as the "Securities".
The Offerors understand that the Underwriters propose to make a public
offering of the Preferred Securities as soon as the Underwriters deem advisable
after this Agreement has been executed and delivered, and the Declaration, the
Guarantee Agreement and the Indenture have been qualified under the Trust
Indenture Act. The entire proceeds from the sale of the Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the "Common Securities"), and will be used by the Trust
to purchase an equivalent amount of the Subordinated Debentures.
1. Representations and Warranties. The Offerors jointly and
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severally represent and warrant to, and agree with, each Underwriter as set
forth below in this Section 1. Certain terms used in this Section 1 are defined
in paragraph (w) hereof.
(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule II hereto), paragraph (i) below is applicable and, if
the offering of the Securities is a Non-Delayed Offering (as so specified),
paragraph (ii) below is applicable.
(i) Each of the Offerors meets the requirements for the use of
Form S-3 under the Securities Act of 1933 (the "Act") and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement (the file number of which is set forth in
Schedule II hereto) on such Form, including a basic prospectus, for
registration under the Act of the offering and sale of the Securities.
The Offerors may have filed one or more amendments thereto, and may
have used a Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so amended,
has become effective. The offering of the Securities is a Delayed
Offering and, although the Basic Prospectus may not include all the
information with respect to the Securities and the offering thereof
required by
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the Act and the rules thereunder to be included in the Final
Prospectus, the Basic Prospectus includes all such information
required by the Act and the rules thereunder to be included therein as
of the Effective Date. The Offerors will next file with the
Commission pursuant to Rules 415 and 424(b)(2) or (5) a final
supplement to the form of prospectus included in such registration
statement relating to the Securities and the offering thereof. As
filed, such final prospectus supplement shall include all required
information with respect to the Securities and the offering thereof
and, except to the extent the Representatives shall agree in writing
to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Offerors
have advised you, prior to the Execution Time, will be included or
made therein.
(ii) Each of the Offerors meets the requirements for the use of
Form S-3 under the Act and has filed with the Commission a
registration statement (the file number of which is set forth in
Schedule II hereto) on such Form, including a basic prospectus, for
registration under the Act of the offering and sale of the Securities.
The Offerors may have filed one or more amendments thereto, including
a Preliminary Final Prospectus, each of which has previously been
furnished to you. The Offerors will next file with the Commission
either (x) a final prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b)(1) or (4), or (y) prior to the
effectiveness of such registration statement, an amendment to such
registration statement, including the form of final prospectus
supplement. In the case of clause (x), the Offerors have included in
such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in the Final Prospectus with
respect to the Securities and the offering thereof. As filed, such
final prospectus supplement or such amendment and form of final
prospectus supplement shall contain all Rule 430A Information,
together with all other such required information, with respect to the
Securities and the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Offerors have advised you, prior
to the Execution Time, will be included or made therein.
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(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Trust Indenture Act and the respective
rules thereunder; on the Effective Date, the Registration Statement did not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; on the Effective Date and on the
Closing Date, each of the Declaration, the Indenture and the Guarantee
Agreement did and will comply in all material respects with the
requirements of the Trust Indenture Act and the rules thereunder; and, on
the Effective Date, the Final Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
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representations or warranties as to (i) those parts of the Registration
Statement which shall constitute the Statements of Eligibility (Form T-1)
under the Trust Indenture Act of the Property Trustee, the Guarantee
Trustee and the Indenture Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Offerors by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(c) The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware, with full corporate power and
authority under such laws to own its properties and conduct its business as
described in the Basic Prospectus, and any amendment or supplement thereto,
to enter into and perform its obligations under this Agreement, the
Declaration, the Indenture and the Guarantee Agreement and to purchase, own
and hold the Common Securities issued by the Trust; and the Company is duly
qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of
a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the Company and its subsidiaries, considered as one enterprise.
(d) Each of the Company's significant subsidiaries, as such term is
defined in Rule 1-02(v) of Regulation S-X under the Act, is validly
existing and in good
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standing under the laws of the jurisdiction of its incorporation or
organization, with full power and authority under such laws to own its
properties and conduct its business as described in the Basic Prospectus,
and any amendment or supplement thereto, and is duly qualified to transact
business as a foreign corporation or partnership and is in good standing in
each other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
(e) The Company's authorized equity capitalization and pro forma
equity capitalization is as set forth in the Basic Prospectus, and any
amendment or supplement thereto.
(f) The Trust has been duly created and is validly existing and in
good standing as a business trust under the Delaware Act with the power and
authority to own property and to conduct its business as described in the
Registration Statement and Basic Prospectus, and any amendment or
supplement thereto, and to enter into and perform its obligations under
this Agreement, the Preferred Securities and the Declaration and is not
required to be authorized to do business in any other jurisdiction; the
Trust is not a party to or otherwise bound by any agreement other than
those described in the Basic Prospectus, and any amendment or supplement
thereto; the Trust is not and will not be classified as an association
taxable as a corporation for United States federal income tax purposes; and
the Trust is and will be treated as a consolidated subsidiary of the
Company pursuant to generally accepted accounting principles.
(g) This Agreement has been duly authorized, executed and delivered by
each of the Offerors.
(h) The Preferred Securities have been duly authorized by the
Declaration and, when issued and delivered pursuant to this Agreement
against payment of the consideration set forth in Schedule II hereto, will
be validly issued and (subject to the terms of the Declaration) fully paid
and non-assessable undivided beneficial interests in the assets of the
Trust, will be entitled to the benefits of the Declaration and will conform
to all statements relating thereto contained in the Basic Prospectus, and
any amendment or supplement thereto; the issuance of the Preferred
Securities is not subject to preemptive or other similar rights; holders of
Preferred Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit; if
the Preferred Securities are to be listed on any stock exchange (as
indicated in Schedule II hereto), authorization therefor has been given,
subject to official notice of issuance and evidence of satisfactory
distribution, or the
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Offerors have no reason to believe that the Preferred Securities will not
be authorized for listing, subject to official notice of issuance and
evidence of satisfactory distribution.
(i) The Declaration has been duly authorized by the Company and, at
the Closing Date, will have been duly executed and delivered by the Company
and the Time Warner Trustees, and assuming due authorization, execution and
delivery of the Declaration by the Property Trustee, the Declaration will,
at the Closing Date, be a valid and binding obligation of the Company and
the Time Warner Trustees, enforceable against the Company and the Time
Warner Trustees in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other laws affecting creditors' rights generally from time to time in
effect and subject as to enforceability to general principles of equity,
regardless of whether considered in a proceeding in equity or at law); the
Declaration will conform to all statements relating thereto contained in
the Basic Prospectus, and any amendment or supplement thereto; and the
Declaration, at the Closing Date, will have been duly qualified under the
Trust Indenture Act.
(j) The Guarantee Agreement has been duly authorized by the Company
and, when validly executed and delivered by the Company, will constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms and the Guarantee and the Guarantee
Agreement will conform to all statements relating thereto contained in the
Basic Prospectus, and any amendment or supplement thereto; and the
Guarantee Agreement, at the Closing Date, will have been duly qualified
under the Trust Indenture Act.
(k) The Indenture has been duly authorized, executed and delivered by
the Company, has been duly qualified under the Trust Indenture Act and
constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other laws affecting creditors' rights generally from time to time in
effect and subject as to enforceability to general principles of equity,
regardless of whether considered in a proceeding in equity or at law); and
the Indenture will conform to all statements relating thereto contained in
the Basic Prospectus, and any amendment or supplement thereto.
(l) The Subordinated Debentures have been duly authorized by the
Company and, at the Closing Date, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Indenture
and delivered against payment therefor as described in the Basic
Prospectus, and any amendment or supplement thereto, will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, will be in the form
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contemplated by, and entitled to the benefits of, the Indenture and will
conform to all statements relating thereto in the Basic Prospectus, and any
amendment or supplement thereto.
(m) The Company's obligations under the Guarantee are subordinate and
junior in right of payment to all other liabilities of the Company and pari
passu with the most senior preferred stock issued from time to time, if
any, by the Company.
(n) The Subordinated Debentures are subordinated and junior in right
of payment to all present and future Senior Indebtedness (as defined in the
Indenture) of the Company.
(o) There is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or any
arbitrator involving the Trust, the Company or any of their subsidiaries of
a character required to be disclosed in the Registration Statement which is
not adequately disclosed in the Basic Prospectus, and any amendment or
supplement thereto, and there is no franchise, contract or other document
of a character required to be described in the Registration Statement or
Basic Prospectus, and any amendment or supplement thereto, or to be filed
as an exhibit, which is not described or filed as required.
(p) No authorization, approval, consent, order or license of any
government, governmental instrumentality, agency or body or court (other
than under the Act and the securities or blue sky laws of various
jurisdictions) is required for the authorization, issuance, sale and
delivery of the Preferred Securities, the Subordinated Debentures or the
Guarantee or the consummation by the Trust and the Company of the
transactions contemplated by this Agreement.
(q) Neither the Company nor any of its subsidiaries is in violation of
its certificate of incorporation or by-laws; the Trust is not in violation
of the Declaration or its Certificate of Trust filed with the State of
Delaware on July __, 1995 (the "Certificate of Trust"); and the execution,
delivery and performance of this Agreement, the Declaration, the Preferred
Securities, the Indenture, the Subordinated Debentures, the Guarantee
Agreement and the Guarantee and the consummation of the transactions
contemplated herein and therein and compliance by the Offerors with their
respective obligations hereunder and thereunder have been duly authorized
by all necessary action (corporate or otherwise) on the part of the
Offerors and do not and will not result in any violation of the certificate
of incorporation or by-laws of the Company or the Declaration or
Certificate of Trust of the Trust and do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Trust or the Company
under
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(i) that certain Amended and Restated Credit Agreement (the "TWE Credit
Agreement"), dated as of June 30, 1995, among Time Warner Entertainment
Company, L.P., a Delaware limited partnership ("TWE"), the Time Warner
Entertainment-Advance/Xxxxxxxx Partnership, a New York general partnership,
TWI Cable, a wholly owned subsidiary of the Company and Chemical Bank, as
Administrative Agent, the Agents and the Banks named therein or any
indenture, mortgage or loan agreement, or any other agreement or
instrument, to which the Trust or the Company is a party or by which the
Trust or the Company may be bound or to which any of the Trust's or the
Company's properties may be subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a material
adverse effect on the condition (financial or otherwise), earnings,
business prospects of the Trust or of the Company and its subsidiaries,
considered as one enterprise), (ii) any existing applicable law, rule or
regulation (except for such conflicts, breaches, liens, charges or
encumbrances that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business prospects
of the Trust or of the Company and its subsidiaries, considered as one
enterprise, and other than the securities or blue sky laws of various
jurisdictions), or (iii) any judgment, order or decree of any government,
governmental instrumentality or court having jurisdiction over the Trust,
the Company or any of their respective properties.
(r) The documents incorporated by reference in the Basic Prospectus,
and any amendment or supplement thereto, as of the dates they were filed
with the Commission, complied as to form in all material respects with the
requirements of the Exchange Act.
(s) Xxxx X. XxXxxxx, Xxxxxx X. Xxxxxxx, Xx. and Xxxxxx X. XxXxxxxxx
(the "Regular Trustees") of the Trust are employees of the Company and have
been duly authorized by the Company to execute and deliver the Declaration;
the Declaration has been duly executed and delivered by the Regular
Trustees and is a valid and binding obligation of each Regular Trustee,
enforceable against such Regular Trustee in accordance with its terms.
(t) The Trust is not an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(u) Each of Ernst & Young LLP, Deloitte & Touche LLP, Xxxx Xxxxxxx &
Company LLP and Xxxxxx Xxxxxxxx LLP, which is reporting upon the audited
financial statements and schedules included or incorporated by reference in
the Registration Statement, are independent accountants in accordance with
the provisions of the Exchange Act and the rules and regulations
thereunder.
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(v) The consolidated financial statements and the related notes of each of
the Company and TWE included or incorporated by reference in the
Registration Statement present fairly in accordance with generally accepted
accounting principles the consolidated financial position of each of the
Company and TWE as of the dates indicated, and the consolidated results of
operations and cash flows of each of the Company and TWE for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as otherwise noted therein and
subject, in the case of interim statements, to normal year-end audit
adjustments. The financial statement schedules included or incorporated by
reference in the Registration Statement present fairly in accordance with
generally accepted accounting principles the information required to be
stated therein. Any pro forma financial statements of the Company and
other pro forma financial information included or incorporated by reference
in the Registration Statement present fairly the information shown therein.
Such pro forma financial statements and other pro forma financial
information, to the extent required, have been prepared in accordance with
applicable rules and guidelines of the Commission, if any, with respect
thereto, have been properly compiled on the pro forma basis described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(w) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date, including,
in the case of a Non-Delayed Offering, any Preliminary Final Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that is first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus or, if, in the case of a Non-
Delayed Offering, no filing pursuant to Rule 424(b) is required, shall mean
the form of final prospectus relating to the Securities, including the
Basic Prospectus, included in the Registration Statement at the Effective
Date. "Registration Statement" shall mean the registration statement
referred to in paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time (or, if
not effective at the Execution Time, in the form in which it
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shall become effective) and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended. Such
term shall include any Rule 430A Information deemed to be included therein
at the Effective Date as provided by Rule 430A. "Rule 415", "Rule 424",
"Rule 430A" and "Regulation S-K" refer to such rules or regulation under
the Act. "Rule 430A Information" means information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
All references in this Agreement to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange
Act on or before the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; all references in this Agreement to
financial statements and schedules and other information that is
"contained", "included" or "stated" in the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus
(and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information
that are or are deemed to be incorporated by reference in the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; and all references in this Agreement
to amendments or supplements to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to mean and include the filing of any document under the Exchange
Act after the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration statement
at the effective date thereof. A "Delayed Offering" shall mean an offering
of securities pursuant to Rule 415 which does not commence promptly after
the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such
registration statement at the effective date thereof with respect to the
securities so offered. Whether the offering of the Securities is a Non-
Delayed Offering or a Delayed Offering shall be set forth in Schedule II
hereto.
(x) None of the Trust, the Time Warner Trustees, the Company, its
directors or officers or any person who controls the Trust or the Company,
as the case may be, within the meaning of Section 15 of the Act has taken,
directly or
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indirectly, any action which has constituted or resulted in stabilization
or manipulation of the price of any debt security of the Trust or the
Company in order to facilitate the sale or resale of the Preferred
Securities.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Trust
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Trust, at the purchase price set forth in
Schedule II hereto, the Preferred Securities set forth opposite such
Underwriter's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Preferred
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Securities shall be made on the date and at the time specified in Schedule II
hereto, which date and time may be postponed to a date not later than five
business days after such specified date by agreement between the
Representatives, acting jointly and without regard to any agreement among
underwriters, and the Company or as provided in Section 8 hereof (such date and
time of delivery and payment for the Preferred Securities being herein called
the "Closing Date"). Delivery of the Preferred Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Trust by certified or official bank
check or checks drawn on or by a New York Clearing House bank and payable in
next day funds (unless another form of payment is specified in Schedule II
hereto). Delivery of the Preferred Securities shall be made at such location as
the Representatives shall reasonably designate on the Closing Date and payment
for the Preferred Securities shall be made at the office specified in Schedule
II hereto. Certificates for the Preferred Securities shall be registered in
such names and in such denominations as the Representatives may request not less
than two full business days in advance of the Closing Date.
The Company agrees to have the Preferred Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 P.M. on the business day prior to the Closing Date.
4. Agreements. The Offerors agree with the several Underwriters
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that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, to become effective. Prior to the termination of the offering of
the Preferred Securities, the Offerors will not file any amendment to the
Registration Statement or supplement (including the Final Prospectus or any
Preliminary Final Prospectus) to the Basic Prospectus unless the Offerors
have furnished you a copy for your review prior to
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filing and will not file any such proposed amendment or supplement to which
you reasonably object on a timely basis. Subject to the foregoing sentence,
the Offerors will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely
filing. The Offerors will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the Final
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424(b), (iii) when, prior to termination of the
offering of the Preferred Securities, any amendment to the Registration
Statement shall have been filed or become effective, (iv) of any request by
the Commission for any amendment to the Registration Statement or
supplement to the Final Prospectus or for any additional information
relating to the offering of the Preferred Securities, (v) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (vi) of the receipt by the Offerors of any
notification with respect to the suspension of the qualification of the
Preferred Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Offerors will use their
best efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Preferred
Securities is required to be delivered under the Act, any event occurs as a
result of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary, in
the opinion of counsel for you or counsel for the Offerors, to amend the
Registration Statement or supplement the Final Prospectus to comply with
the Act or the Exchange Act or the respective rules thereunder, the
Offerors promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect such
compliance.
(c) As soon as practicable, the Company will make generally available
to the Trust's security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) If and to the extent specified in Schedule II, the Offerors will
use their best efforts to cause the Preferred Securities to be duly
authorized for listing on the New York Stock Exchange and to be registered
under the Exchange Act.
13
(e) For a period of three years after the Closing Date, the Company
will furnish to you and, upon request, to each Underwriter, copies of all
annual reports, quarterly reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may
be designated by the Commission, and such other documents, reports and
information as shall be furnished by the Company to its stockholders
generally.
(f) The proceeds of the offering of the Preferred Securities will be
applied as set forth in the Final Prospectus.
(g) The Offerors will furnish to the Representatives and counsel for
the Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and any supplement
thereto as the Representatives may reasonably request.
(h) The Company will pay and bear all costs and expenses incident to
the performance of each Offeror's obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits), as originally
filed and as amended, any preliminary prospectus supplements and the Basic
Prospectus, the Preliminary Final Prospectus and the Final Prospectus and
any amendments or supplements thereto, and the cost of furnishing copies
thereof to the Underwriters, (ii) the preparation, printing and
distribution of this Agreement, the Declaration, the Indenture, the
Guarantee Agreement, the Preferred Securities, the Subordinated Debentures,
the Blue Sky Survey and the Legal Investment Survey, (iii) the delivery of
the Preferred Securities to the Underwriters, (iv) the fees and
disbursements of the Trust's and the Company's counsel and accountants
required hereby to provide comfort letters, (v) the qualification of the
Preferred Securities, the Subordinated Debentures and the Guarantee under
the applicable securities laws in accordance with Section 4(i) and any
filing for review of the offering with the National Association of
Securities Dealers, Inc., including filing fees and fees and disbursements
of counsel for the Underwriters in connection therewith and in connection
with the Blue Sky Survey and the Legal Investment Survey, (vi) any fees
charged by rating agencies for rating the Preferred Securities and the
Subordinated Debentures, (vii) the fees and expenses of the Indenture
Trustee, including the fees and disbursements of counsel for the Indenture
Trustee, in connection with the Indenture and the Subordinated Debentures,
(viii) the fees and expenses of the Property Trustee and Delaware Trustee,
including the fees and disbursements of counsel for the Property Trustee
and Delaware Trustee in connection with the Declaration and the Certificate
of Trust, (ix) if the Securities are to be listed on any exchange (as
indicated in Schedule II hereto), any expenses and
14
listing fees in connection with the listing of the Preferred Securities
and, if applicable, the Subordinated Debentures on such exchange, (x) the
cost and charges of any transfer agent or registrar and (xi) the costs of
qualifying the Preferred Securities with The Depository Trust Company.
(i) The Offerors will arrange for the qualification of the Preferred
Securities and the Subordinated Debentures for distribution, offering and
sale under the laws of such jurisdictions as the Representatives may
designate, will maintain such qualifications in effect so long as required
for the distribution of the Preferred Securities and the Subordinated
Debentures and will arrange for the determination of the legality of the
Preferred Securities and the Subordinated Debentures for purchase by
institutional investors; provided, however, that the Trust or the Company,
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as the case may be, shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would
not otherwise be required to qualify but for this Section 4(i), (ii) file
any general consent to service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not so subject.
(j) Until the Closing Date or such other date as may be specified in
Schedule II, neither of the Offerors will, without the consent of Xxxxxxx
Xxxxx & Co. and Xxxxxx Xxxxxxx & Co. Incorporated, offer, sell or contract
to sell, or announce the offering of, any debt securities designed or
intended to be traded or distributed in the public or private securities
markets; provided, however, that the foregoing shall not prohibit (i) the
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Company or TWE from issuing long-term debt as all or part of the
consideration in any merger or acquisition or in connection with the
settlement of any litigation or (ii) the Company or TWE from filing with
the Commission a "shelf" registration statement for the offering of
securities under Rule 415 of the Act (or any similar rule that may be
adopted by the Commission) or amending any existing shelf registration
statement provided that such securities are not issued until the business
day following the Closing Date or such other date as may be specified in
Schedule I.
(k) Each of the Offerors confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-
198, An Act Relating to Disclosure of Doing Business with Cuba, and each of
---------------------------------------------------------
the Offerors further agrees that if the information reported in the
Prospectus concerning its business with Cuba or with any person or
affiliate located in Cuba changes in any material way, such Offeror will
provide the Florida Department of Banking and Finance (the "Department")
notice of such business or change, as appropriate, in a form acceptable to
the Department.
5. Conditions to the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the Underwriters to purchase the Preferred Securities shall be
subject to the accuracy in all material respects of the representations and
warranties on the part of the Offerors contained herein as of the Execution Time
and the Closing Date, to the accuracy in all
15
material respects of the statements of the Trust and the Company made in any
certificates pursuant to the provisions hereof, to the performance by the Trust
and the Company of their obligations hereunder, to the due execution and
delivery of the Declaration, the Indenture and the Guarantee Agreement, to the
absence of any event or condition which would give you the right to terminate
this Agreement and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
5:30 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 12:00 Noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM New York City time on such date;
if filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b); and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings therefor initiated or threatened by the Commission.
(b) At the Closing Date, the Offerors shall have furnished to you the
opinion of Xxxxx X. Xxxx, General Counsel to the Offerors, dated the
Closing Date, substantially in the form of Exhibit A hereto.
(c) At the Closing Date, the Offerors shall have furnished to you the
opinion of Cravath, Swaine & Xxxxx, counsel to the Offerors, dated the
Closing Date, substantially in the form of Exhibit B hereto.
(d) At the Closing Date, the Offerors shall have furnished to you the
opinion of Xxxxxxxx, Xxxxxx & Finger, special counsel to the Offerors,
dated the Closing Date, substantially in the form of Exhibit C hereto.
(e) At the Closing Date, you shall have received from The Law
Department, The First National Bank of Chicago, counsel of The First
National Bank of Chicago, as Property Trustee under the Declaration and
Guarantee Trustee under the Guarantee Agreement, dated the Closing Date,
substantially in the form of Exhibit D hereto.
(f) The Representatives shall have received from Shearman & Sterling,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with
16
respect to the legal existence of the Trust, the Preferred Securities, the
Indenture, the Guarantee Agreement, this Agreement, the Registration
Statement, the Final Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and
the Offerors shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(g) Each of the Trust and the Company shall have furnished to the
Representatives a certificate of the Trust and the Company, respectively,
signed by any two Time Warner Trustees for the Trust and by any two
officers who are an Executive or Senior Vice President of the Company for
the Company, respectively, dated the Closing Date, to the effect that the
signers of such certificates have carefully examined the Registration
Statement, the Final Prospectus, any supplement to the Final Prospectus and
this Agreement and that:
(i) the representations and warranties of the Trust and the
Company, as the case may be, in this Agreement are true and correct in
all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and the Trust and the Company,
as the case may be, has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Trust's or the Company's, as
the case may be, knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the condition
(financial or otherwise), earnings, or business prospects of the
Company and its subsidiaries, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(h) At the Closing Date and, if specified in Schedule II, at the
Execution Time, Ernst & Young shall have furnished to the Representatives a
letter or letters, dated as of the Closing Date and the Execution Time,
respectively, in form and substance satisfactory to the Representatives,
confirming that they are independent auditors with respect to the Company
and TWE within the meaning of the Act and the Exchange Act and the
respective applicable published rules and regulations thereunder and
stating in effect that:
17
(i) in their opinion the audited financial statements and
financial statement schedules of the Company and TWE included or
incorporated in the Registration Statement and the Final Prospectus
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements (including the notes thereto) made available by the Company
and TWE and their respective consolidated subsidiaries; carrying out
certain specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and executive, finance and
audit committees of the Company and TWE and their respective
consolidated subsidiaries; and inquiries of certain officials of the
Company and TWE who have responsibility for financial and accounting
matters of the Company and TWE and their respective consolidated
subsidiaries as to transactions and events subsequent to the date of
the most recent audited financial statements in or incorporated in the
Final Prospectus, and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention which caused
them to believe that:
(A) any of such unaudited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus do not comply in form in all material respects with
applicable accounting requirements of the Act and the Exchange
Act and with the published rules and regulations of the
Commission with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under the Exchange
Act; or said unaudited financial statements are not in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included or incorporated in the Registration Statement
and the Final Prospectus; or
(B) with respect to the period subsequent to the date of the
most recent unaudited financial statements in or incorporated in
the Registration Statement and the Final Prospectus, there were
any increases, at a specified date not more than five business
days prior to the date of the letter, in the long-term debt of
the Company, TWE and the Entertainment Group and their respective
consolidated subsidiaries or any decreases in stockholders'
equity or the consolidated capital stock of the Company, TWE and
the Entertainment Group as compared
18
with the amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration Statement and
the Final Prospectus for such entities, or for the period from
the date of the most recent unaudited financial statements
included or incorporated in the Registration Statement and the
Final Prospectus for such entities to such specified date there
were any decreases, as compared with the corresponding period in
the preceding year, in revenues, income before income taxes (or
any increase in the loss before income taxes) or net income (or
any increase in net loss), except in all instances for decreases
or increases disclosed in the Final Prospectus;
(iii) they are unable to and do not express any opinion on the
pro forma adjustments to the financial statements included or
incorporated by reference in the Registration Statement and the Final
Prospectus or on the pro forma adjustments applied to the historical
amounts included or incorporated by reference in the Registration
Statement and the Final Prospectus; however, for purposes of such
letter they have:
(A) read the pro forma adjustments to such financial
statements;
(B) made inquiries of certain officials of the Company who
have responsibility for financial and accounting matters about
the basis for their determination of the pro forma adjustments to
such financial statements and whether such pro forma adjustments
comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X; and
(C) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts included or
incorporated by reference in the Registration Statement and the
Final Prospectus; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that the pro forma adjustments
to the financial statements included or incorporated by reference in
the Registration Statement and the Final Prospectus do not comply as
to form in all material respects with the applicable requirements of
Rule 11-02 of Regulation S-X and that such pro forma adjustments have
not been properly applied to the historical amounts in the compilation
of such financial statements; and
19
(iv) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Final Prospectus and in
Exhibit 12 to the Registration Statement agrees with the accounting
records of the Company and its subsidiaries, excluding any questions
of legal interpretation.
(i) At the Closing Date and, if specified in Schedule II, at the
Execution Time, each of (i) Xxxx Xxxxxxx & Company LLP, (ii) Deloitte &
Touche LLP and (iii) Xxxxxx Xxxxxxxx LLP shall have furnished to the
Representatives a letter or letters, dated respectively as of the Closing
Date and the Execution Time, in form and substance satisfactory to the
Representatives, confirming that they are independent auditors with respect
to (i) Vision Cable Division of Vision Cable Communications, Inc. and
Subsidiaries and Xxxxxxxx Broadcasting Cable Division of Xxxxxxxx
Broadcasting Corporation and Subsidiaries, (ii) KBLCOM Incorporated, and
(iii) Cablevision Industries Limited Partnership and Combined Entities and
Cablevision Industries Corporation and Subsidiaries, respectively, within
the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and to the same effect as the
letter or letters of Ernst & Young LLP as described in Section 5(h)(i) and
5(h)(ii)(l) hereto.
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any decrease or increase specified
in the letter or letters referred to in paragraph (h) of this Section 5 or
(ii) any change, or any development involving a prospective change, in or
affecting the business (including the results of operations or management)
or properties of the Trust or the Company and its subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the
reasonable judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or delivery
of the Securities as contemplated by the Registration Statement (exclusive
of any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(k) Subsequent to the Execution Time, there shall not have been any
downgrade in the credit ratings of the Company's debt securities by Xxxxx'x
Investor Services, Inc. or Standard & Poor's Ratings Group, nor shall the
Company have been placed under special surveillance, with negative
implications, by Xxxxx'x Investor Service, Inc.
20
(l) If any of the Preferred Securities are to be listed on any stock
exchange (as indicated in Schedule II hereto), at the Closing Date the
Preferred Securities shall have been approved for listing on such exchange
upon notice of issuance.
(m) Prior to the Closing Date, the Offerors shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives and such
cancellation shall be without liability of any party to any other party, except
to the extent provided in Sections 4 and 6. Notice of such cancellation shall
be given to the Offerors in writing or by telephone or telegraph confirmed in
writing.
6. Reimbursement of Underwriters' Expenses. If the sale of the
---------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Trust or the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) The Offerors agree to
--------------------------------
jointly and severally indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, or in any amendment thereof or
supplement thereto or (ii) the omission or alleged omission to state in the
documents referred to in clause (i) above a material fact required to be stated
therein or necessary to make the statements therein not misleading, and in each
case agrees to reimburse each such
21
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Trust and the
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Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (A) any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the documents referred to in clause (i) above in reliance upon and in conformity
with written information furnished to the Trust and the Company by or on behalf
of any Underwriter through the Representatives specifically for inclusion
therein or (B) those parts of the Registration Statement which shall constitute
the Statements of Eligibility (Form T-1) under the Trust Indenture Act of the
Property Trustee, the Guarantee Trustee and the Indenture Trustee. This
indemnity agreement will be in addition to any liability which the Trust or the
Company may otherwise have.
(b) The Company agrees to indemnify the Trust against all loss,
liability, claim, damage and expense whatsoever, as due from the Trust under
7(a) hereunder.
(c) Each Underwriter agrees to indemnify and hold harmless the
Offerors, their directors, trustees, each of their officers who signs the
Registration Statement, and each person who controls the Offerors within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Offerors to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Offerors by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in clause (i) in 7(a).
This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Offerors acknowledge that the statements
set forth in the last paragraph of the cover page, the first sentence and list
of Underwriters in the first paragraph under the heading "Underwriting" and the
second paragraph under the heading "Underwriting" constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in the documents referred to in the foregoing indemnity, and you, as
the Representatives, confirm that such statements are correct.
(d) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which
22
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
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indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party (it being
understood, however, that in connection with such action, the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, representing the indemnified parties who are
parties to such action or actions), (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Offerors and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Offerors and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Offerors and by the Underwriters from the
offering of the Securities; provided, however, that in no case shall any
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Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Offerors and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such
23
relative benefits but also the relative fault of the Offerors, on the one hand,
and of the Underwriters, on the other hand, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Offerors shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses), and
benefits received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to information
provided by or concerning the Trust or the Company on the one hand or provided
by the Underwriters on the other. The Offerors and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Trust or the Company within the
meaning of either the Act or the Exchange Act, each trustee of the Trust or
officer of the Company who shall have signed the Registration Statement and each
trustee of the Trust or director of the Company shall have the same rights to
contribution as the Offerors, subject in each case to the applicable terms and
conditions of this paragraph (e).
8. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any one of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
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Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 8, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representatives shall determine in order that the required
changes in the Registration Statement and the Final Prospectus or in any other
documents or
24
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Trust and the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
9. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representatives, by notice given to the Offerors
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or the Pacific Stock Exchange or
trading in securities generally on either of such Exchanges shall have been
suspended or limited or minimum or maximum prices shall have been established on
either of such Exchanges, or maximum ranges for prices for securities have been
required, by such Exchanges or by order of the Commission or any other
governmental authority, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any new outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets of the United States is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the Final
Prospectus (exclusive of any supplement thereto). If this Agreement is
terminated pursuant to this Section, such termination shall be without liability
of any party to any other party, except to the extent provided in Sections 4 and
6.
10. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Trust or the Time Warner Trustees, the Company or its officers and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter, the Trust or the Time Warner Trustees or the Company or any of the
officers, directors, trustees or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 6 and 7 hereof shall survive the termination or
cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule II hereto, or, if sent to the Offerors, will be mailed, delivered or
telegraphed and confirmed to the Company, or the Trust in care of the Company,
at 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of General Counsel.
12. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the
officers, directors, trustees
25
and controlling persons referred to in Section 7 hereof, and no other person
will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
--------------
construed in accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business day"
------------
means any day on which the New York Stock Exchange is open for trading.
15. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Trust, the Company and the several Underwriters.
Very truly yours,
TIME WARNER CAPITAL I
By: Time Warner Inc., as Sponsor
By:
-------------------------------------------
Name:
Title:
TIME WARNER INC.
By:
-------------------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted as of
the date specified in Schedule II hereto.
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
By: XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By:
-------------------------------------------
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule I to
the foregoing Agreement.
SCHEDULE I
----------
Number of Preferred
Securities to Be
Underwriter Purchased
----------- -------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
SCHEDULE II
-----------
TIME WARNER CAPITAL I and TIME WARNER INC.
Underwriting Agreement: dated September __, 1995
Registration Statement: No. 33-
Representatives: Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Title, Purchase Price and Description of Securities:
[ ] [ ]% Preferred Trust Securities:
----------------------------------------------
Title: Preferred Trust Securities
Securities issued:
Distribution rate: ____% per annum
Distribution dates: March __, June __, September __ and
December __, beginning December __, 1995
Mandatory redemption date: , 2025
Purchase price (include accrued
interest or amortization, if
any): _____%
Initial public offering price:
Other provisions:
(continued)
2
SCHEDULE II (continued)
Closing Date, Time and Location: September __, 1995 at 10 A.M.
at the offices of Cravath, Swaine & Xxxxx, Worldwide Plaza,
000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
Type of funds payable at Closing: Next day funds
Type of Offering:
Listing requirements: New York Stock Exchange
Comfort letter at Execution Time:
EXHIBIT A
FORM OF OPINION OF XXXXX X. XXXX, ESQ.
(i) the Company is validly existing as a corporation in good standing
under the laws of the State of Delaware, with full corporate power and
authority under such laws to own its properties and conduct its business as
described in the Final Prospectus, and the Company is duly qualified to
transact business as a foreign corporation and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise;
(ii) each of the Company's significant subsidiaries, as such term is
defined in Rule 1-02(v) of Regulation S-X under the Act, is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with full power and authority under such
laws to own its properties and conduct its business as described in the
Basic Prospectus, and any amendment or supplement thereto, and is duly
qualified to transact business as a foreign corporation or partnership and
is in good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the Company and its subsidiaries, considered as one enterprise;
(iii) the Company's authorized equity capitalization and pro forma
equity capitalization is as set forth in the Final Prospectus;
(iv) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Trust, the
Company or any of its subsidiaries of a character required to be disclosed
in the Registration Statement which is not adequately disclosed in the
Final Prospectus, and there is no franchise, contract or other document of
a character required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit, which is not described or filed
as required;
(v) no authorization, approval, consent or license of any government,
governmental instrumentality, agency or body or court (other than under the
Act and the securities or blue sky laws of various jurisdictions) is
required for the
A-2
authorization, issuance, sale and delivery of the Preferred Securities or
the Common Securities or the offering of the Subordinated Debentures or the
Guarantee or the consummation by the Trust and the Company of the
transactions contemplated by the Underwriting Agreement;
(vi) the Declaration, the Underwriting Agreement, the Indenture and
the Guarantee Agreement have been duly authorized, executed and delivered
by the Company;
(vii) the execution, delivery and performance of the Underwriting
Agreement, the Declaration, the Indenture, the Subordinated Debentures and
the Guarantee Agreement and the consummation of the transactions
contemplated herein and therein and compliance by the Company with its
obligations hereunder and thereunder have been duly authorized by all
necessary action (corporate or otherwise) on the part of the Company and do
not and will not result in any violation of the Restated Certificate of
Incorporation, as amended, or By-laws, as amended, of the Company and do
not and will not conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company under (i) the TWE Credit Agreement or any indenture,
mortgage or loan agreement, or any other agreement or instrument known to
such counsel, to which the Company is a party or by which the Company may
be bound or to which any of the Company's properties may be subject (except
for such conflicts, breaches or defaults or liens, charges or encumbrances
that would not have a material adverse effect on the condition (financial
or otherwise), earnings or business prospects of the Company and its
subsidiaries, considered as one enterprise), (ii) any existing applicable
law, rule or regulation (except for such conflicts, breaches, liens,
charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings or business prospects of
the Company and its subsidiaries, considered as one enterprise, and other
than the securities or blue sky laws of various jurisdictions), or (iii)
any judgment, order or decree of any government, governmental
instrumentality or court having jurisdiction over the Company or any of its
properties;
(viii) the execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions contemplated therein and
compliance by the Trust with its obligations thereunder do not and will not
conflict with, or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Trust
under (i) any indenture, mortgage or loan agreement, or any other agreement
or instrument known to such counsel, to which the Trust is a party or by
which the Trust may be bound or to which any of the Trust's
A-3
properties may be subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise), earnings or business
prospects of the Trust) or (ii) any judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction over
the Trust or any of its properties;
(ix) the documents incorporated by reference in the Final Prospectus
(except for the financial statements and other financial or statistical
data included therein or omitted therefrom, as to which such counsel need
express no opinion), as of the dates they were filed with the Commission,
complied as to form in all material respects with the requirements of the
Exchange Act; and
(x) the Regular Trustees are employees of the Company and have been
duly authorized by the Company to execute and deliver the Declaration; the
Declaration has been duly executed and delivered by the Regular Trustees
and is a valid and binding obligation of each Regular Trustee, enforceable
against such Regular Trustee in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditors' rights generally from time to
time in effect and subject as to enforceability to general principles of
equity regardless of whether considered in a proceeding in equity or at
law).
In addition, such counsel shall also state as follows: As General
Counsel, I have reviewed and participated in the preparation of the Registration
Statement and the Final Prospectus, including the documents incorporated by
reference therein. In examining the Registration Statement and Final
Prospectus, I have necessarily assumed the correctness and completeness of the
statements made or included therein by the Trust and the Company, as the case
may be, and take no responsibility therefor. However, in the course of the
preparation by the Trust and the Company of the Registration Statement and the
Final Prospectus, I have participated in conferences with the Time Warner
Trustees and certain officers of, and accountants for, the Company with respect
thereto, and my examination of the Registration Statement and Final Prospectus
and my discussions in the above-mentioned conferences did not disclose any
information which gave me reason to believe that the Registration Statement
(except for the financial statements and other financial or statistical data
included therein or omitted therefrom, as to which I express no opinion) at the
time it became effective included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein not misleading or that the Final Prospectus (except as aforesaid), at
its issue date or on the date of this opinion, included or includes any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
A-4
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the United
States, the State of New York, the Delaware Act and the General Corporation Law
of the State of Delaware, to the extent such counsel deems proper and specified
in such opinion, upon the opinion of other counsel of good standing whom such
counsel believes to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of the Trustees and responsible officers of the Company
and public officials.
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & XXXXX
(i) the Company is validly existing as a corporation in good standing
under the laws of the State of Delaware, with full corporate power and
authority under such laws to own its properties and conduct its business as
described in the Final Prospectus;
(ii) the Declaration has been duly authorized, executed and delivered
by the Company and each of the Time Warner Trustees, has been duly
qualified under the Trust Indenture Act, and constitutes a legal, valid and
binding instrument enforceable against the Company and each of the Time
Warner Trustees in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other laws affecting creditors' rights generally from time to time in
effect and subject as to enforceability to general principles of equity,
regardless of whether considered in a proceeding in equity or at law);
(iii) the Trust is not and will not be classified as an association
taxable as a corporation for United States income tax purposes;
(iv) the Trust is not an "investment company" or an entity
"controlled" by an "investment company" and is exempt from the relevant
provisions of the 1940 Act;
(v) the Preferred Securities have been approved for listing on the New
York Stock Exchange subject to official notice of issuance and evidence of
satisfactory distribution;
(vi) the Guarantee Agreement has been duly authorized, executed and
delivered by the Company and, assuming it is duly authorized, executed and
delivered by the Guarantee Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other laws affecting creditors'
rights generally from time to time in effect and subject as to
enforceability to general principles of equity, regardless of whether
considered in a proceeding in equity or at law); and the Guarantee
Agreement has been duly qualified under the Trust Indenture Act;
(vii) the Indenture has been duly authorized, executed and delivered
by the Company, has been duly qualified under the Trust Indenture Act and,
assuming the due authorization, execution and delivery thereof by the
Indenture Trustee, constitutes
B-2
a legal, valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
subject as to enforceability to general principles of equity, regardless of
whether considered in a proceeding in equity or at law);
(viii) the Subordinated Debentures have been duly authorized,
executed and delivered by the Company and, when authenticated in the manner
provided for in the Indenture and delivered against payment therefor as
described in the Final Prospectus, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms;
(ix) the Preferred Securities, the Subordinated Debentures, the
Declaration, the Indenture and the Guarantee Agreement conform to all
statements relating thereto contained in the Final Prospectus;
(x) the Registration Statement has become effective under the Act; any
required filing of the Final Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been instituted or
threatened; and the Registration Statement and the Final Prospectus (other
than the financial statements and other financial and statistical
information contained therein as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder;
(xi) the Underwriting Agreement has been duly authorized, executed and
delivered by the Trust and the Company;
(xii) the statements made in the Final Prospectus under "Description
of the Preferred Securities", "Description of the Guarantee", "Description
of the Subordinated Debentures", "Effect of Obligations Under the
Subordinated Debentures and the Guarantee" and "United States Federal
Income Taxation" in the prospectus supplement and under "Description of the
Preferred Securities", "Description of the Subordinated Debentures" and
"Description of the Guarantees" in the base prospectus, to the extent that
they constitute matters of law or legal conclusions, have been reviewed by
us and fairly present the information discussed therein in all material
respects; and
B-3
(xiii) the execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions contemplated therein and
compliance by the Trust with its obligations thereunder do not and will not
conflict with, or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Trust
under any existing applicable law, rule or regulation (except for such
conflicts, breaches, liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or otherwise), earnings
or business prospects of the Trust and other than the securities or blue
sky laws of various jurisdictions).
In addition, such counsel shall also state as follows: We have
necessarily assumed the correctness and completeness of the statements made or
included in the Registration Statement and the Final Prospectus by the Trust and
the Company, as the case may be, and take no responsibility therefor, except
insofar as such statements relate to the description of the Securities or relate
to us. However, in the course of the preparation by the Trust and the Company
of the Registration Statement and the Final Prospectus (the documents
incorporated by reference in the Final Prospectus having been prepared and filed
by the Trust and the Company, as the case may be, without our participation), we
participated in conferences with the Trustees of the Trust and certain officers
of, and accountants for, the Company with respect thereto, and our examination
of the Registration Statement and the Final Prospectus and our discussions in
the above-mentioned conferences did not disclose any information which gave us
reason to believe that (i) the Registration Statement (except for the financial
statements and other financial or statistical data included therein or omitted
therefrom, as to which we express no opinion), at the time the Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) the Final Prospectus (except
as aforesaid), at its issue date or on the date of this opinion, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the United
States, the State of New York and the General Corporation Law of the State of
Delaware, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Underwriter and (B) as to matters of
fact, to the extent they deem proper, on certificates of the Trustees and
responsible officers of the Company and public officials.
EXHIBIT C
FORM OF OPINION OF XXXXXXXX, XXXXXX AND FINGER
(i) the Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act with all filings
required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been
made;
(ii) under the Declaration and the Delaware Act, the Trust has the
power and authority to own property and to conduct its business as
described in the Final Prospectus and to enter into and perform its
obligations under the Underwriting Agreement, the Preferred Securities, the
Common Securities and the Declaration;
(iii) no authorization, approval, consent or order of any Delaware
court or governmental authority or agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the Preferred
Securities;
(iv) under the Delaware Act and the Declaration, the execution and
delivery of the Underwriting Agreement and the performance by the Trust of
its obligations thereunder, have been duly authorized by all necessary
action on the part of the Trust and do not and will not result in any
violation of the Declaration or any applicable Delaware law or regulation;
(v) the Preferred Securities have been duly authorized by the Trust
and are validly issued and (subject to the terms of the Declaration) when
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement will be fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will be entitled to the benefits
of the Declaration; under the Declaration and the Delaware Act, the
issuance of the Preferred Securities is not subject to preemptive rights;
and the holders of Preferred Securities, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware;
(vi) the holders of the Preferred Securities (other than those holders
of the Preferred Securities who reside or are domiciled in the State of
Delaware) will have no liability for income taxes imposed by the State of
Delaware or any political subdivision or taxing authority thereof solely as
a result of their participation in the Trust, and the Trust will not be
liable for any income tax imposed by the State of Delaware or any political
subdivision or taxing authority thereof; and
C-2
(vii) the Declaration constitutes a legal, valid and binding obligation of
Time Warner and the Time Warner Trustees and is enforceable against each of
the Time Warner Trustees in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditors' rights generally from time to
time in effect and subject as to enforceability to general principles of
equity, regardless of whether considered in a proceeding in equity or at
law).
EXHIBIT D
FORM OF OPINION OF
THE LAW DEPARTMENT OF
THE FIRST NATIONAL BANK OF CHICAGO
___________, 1995
As counsel to the Corporate Trust Services Division of The First
National Bank of Chicago (the "Bank"), we have examined (i) the Declaration of
Trust, dated as of August 2, 1995, as amended and restated in its entirety
effective as of ________, 1995 (the "Declaration"), of Time Warner Capital I, a
Delaware business trust, pursuant to which the Bank has been appointed Property
Trustee (in such capacity, the "Property Trustee") and (ii) the Guarantee
Agreement dated as of ________, 1995 (the "Guarantee") between Time Warner Inc.
and the Bank, as Guarantee Trustee (in such capacity, the "Guarantee Trustee").
Except as otherwise defined herein, capitalized terms used herein shall have the
meanings assigned them in either the Declaration or the Guarantee.
As such counsel we are familiar with the articles of association and
the bylaws of the Bank, with certificates of authority to exercise corporate
trust powers issued to the Bank by the Federal Reserve Board of the United
States (as predecessor in jurisdiction to the Comptroller of the Currency of the
United States), and with certain resolutions of the board of directors of the
Bank pertaining to the operation of the Corporate Trust Services Division of the
Bank with respect to the authorization, execution and delivery of the
Declaration and the Guarantee.
Basing our conclusions on such examination and familiarity, we are of
the opinion that:
(1) The Bank is a national banking association with trust powers, duly
organized, validly existing and in good standing under the laws of the
United States of America, with all necessary power and authority (i)
to execute and deliver the Declaration and the Guarantee, and (ii) to
carry out and perform its obligations in its respective capacities as
Property Trustee under the Declaration and Guarantee Trustee under the
Guarantee.
(2) (i) The execution and delivery by the Bank of, and (ii) the
performance by the Bank of its obligations in its respective
capacities as Property Trustee and Guarantee Trustee under, the
Declaration and the Guarantee, as the case may be, has been duly
authorized by all necessary corporate action on the part of the Bank,
and each of the Declaration and the Guarantee have been
duly executed and delivered by the Bank respectively. The Declaration
and the Guarantee Agreement have been duly executed and delivered by
the Property Trustee, and constitute the legal, valid and binding
obligation of the Property Trustee, enforceable against the Property
Trustee in accordance with their terms, except as enforcement thereof
may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other laws affecting
creditors' rights generally from time to time in effect and subject as
to enforceability to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
(3) To the best of our knowledge, there are no actions, proceedings or
investigations pending or threatened against or affecting the Bank
before any court, arbitrator, administrative agency or other
governmental authority which, if adversely decided, would materially
and adversely affect the Bank's ability to carry out the transactions
contemplated in the Declaration or in the Guarantee.
(4) (i) The execution and delivery by the Bank of, and (ii) the
performance by the Property Trustee and the Guarantee Trustee under,
each of the Declaration and the Guarantee, respectively, do not
conflict with or constitute a breach of the articles of association or
bylaws of the Bank.
(5) No consent, approval or authorization of, or registration with or
notice to, any Illinois or federal banking authority, other than such
as has been obtained or accomplished, is required for (i) the
execution and delivery by the Bank of, or (ii) the performance by the
Bank in its respective capacities as Property Trustee and Guarantee
Trustee under, the Declaration and the Guarantee, as the case may be.
(6) The Bank in its capacity as Property Trustee is the record holder of
the Subordinated Debentures and the Guarantee, and no security
interest, mortgage, pledge, lien, encumbrance, claim or equity is
noted thereon.
We are attorneys licensed to practice law in the State of Illinois and
do not express any opinion as to any matters governed by any laws other than the
laws of the State of Illinois and federal laws applicable to the fiduciary
powers of national banks. Furthermore, no opinion is expressed as to any
federal or state securities or tax laws.
This opinion is furnished solely for your benefit in connection with the
transactions contemplated by the Declaration, and may not be used, circulated,
quoted or otherwise referred to without our prior written consent.
D-2
