EXHIBIT 99.7
EXECUTION COPY
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (this "Agreement"), dated as of April
20, 2005, by and between American Television and Communications Corporation, a
Delaware corporation ("ATC"), and Time Warner NY Cable LLC, a Delaware limited
liability company that has elected to be classified as a corporation for United
States federal income tax purposes ("TW NY"), an indirect wholly-owned
subsidiary of Time Warner Cable Inc., a Delaware corporation ("TWC").
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings ascribed thereto in the Asset Purchase Agreement, dated as
of the date hereof (the "Asset Purchase Agreement"), between Adelphia
Communication Corporation ("Adelphia") and TW NY; except that "ATC Partnership
Interest," shall have the meaning set forth in the Amended and Restated
Agreement of Limited Partnership of Time Warner Entertainment Company, L.P.
("TWE"), dated as of March 31, 2003.
WHEREAS, pursuant to the Asset Purchase Agreement, TW NY has agreed
to purchase from Adelphia certain assets and assume certain liabilities of
Adelphia;
WHEREAS, after the date hereof but prior to the closing of the
transactions contemplated by the Asset Purchase Agreement (the "Adelphia
Closing"), TW NY intends to cause TWC to form (or cause one or more of its
subsidiaries to form) an indirect wholly owned subsidiary of TWC, which
subsidiary shall be the parent of TW NY (such entity, "Newco");
WHEREAS, ATC has agreed, on the terms and subject to the conditions
set forth in this Agreement, to contribute, concurrently with the Adelphia
Closing, all of its partnership interests in TWE to Newco in exchange for newly
issued shares of non-voting common stock of Newco; and
WHEREAS, the parties intend that the contribution hereunder shall
qualify under Section 351 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Contribution and Issuance. On the terms and subject to the
conditions set forth in this Agreement, at a closing contemplated by Section 3
(the "Closing") (a) ATC hereby agrees to assign, convey, transfer, contribute
and deliver to Newco (or such other direct or indirect wholly owned subsidiary
of TWC that holds TWC's interest in TW NY or to TW NY, as designated by TW NY
(the "Issuing Entity")) all of its right, title and interest in the ATC
Partnership Interest and (b) as consideration for the contribution of the ATC
Partnership Interest, TW NY hereby agrees to cause the Issuing Entity to issue
to ATC shares of non-voting common stock (the "Issued Equity Interests") in an
amount determined in accordance with Section 2 of this
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Agreement. The ATC Partnership Interest and the Issued Equity Interests shall,
subject to the satisfaction or waiver of the conditions set forth in this
Agreement, be transferred or issued, as applicable, free and clear of any liens
(other than those imposed by the organizational documents of TWE or Newco, as
applicable, or by applicable securities laws).
2. Valuation of ATC Partnership Interest and Issued Equity
Interests. The Issued Equity Interests shall have a fair market value equal to
the fair market value of the ATC Partnership Interest. For purposes of this
Agreement, the fair market value of the ATC Partnership Interest shall be deemed
equal to $2,925,000,000. In determining the fair market value of the Issued
Equity Interests, (i) the Closing and the Adelphia Closing shall be assumed to
have occurred concurrently and (ii) the cable systems owned by the Issuing
Entity and its subsidiaries, after giving effect to the Adelphia Closing, shall
be valued at $3,700 per basic subscriber served by such systems. For the
avoidance of doubt, assuming the entire cash infusion to Newco from its
Affiliate was in the form of a contribution to Newco for equity and the Closing
and the Adelphia Closing occurred concurrently as of the date hereof, the Issued
Equity Interests, would represent approximately 9% of the equity of Newco.
3. Closing. The Closing shall take place at the offices of Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000 on a date and time agreed to by the parties subject to
satisfaction or waiver of the conditions set forth in Section 4 below.
4. Conditions. The obligations of the parties to consummate the
transactions contemplated by this Agreement are subject to the prior
satisfaction or waiver of the following conditions:
4.1.1 All of the conditions to the obligations of the parties under
the Asset Purchase Agreement shall have been satisfied in accordance with their
terms or waived, other than those conditions which, by their terms, can be
satisfied only at the Adelphia Closing, which conditions shall be satisfied or
waived at the Adelphia Closing concurrently with the transactions contemplated
by this Agreement.
4.1.2 The transactions contemplated by this Agreement shall not be
prohibited by any Law nor by any order of any Governmental Entity and, if
applicable, (x) all approvals from Governmental Entities shall have been
obtained, (y) all filings with Governmental Entities shall have been made, and
(z) all applicable waiting periods in respect of filings or notices to
Governmental Entities shall have expired, in each case, as necessary to
consummate the transactions contemplated by this Agreement.
5. Further Assurances. Each party hereto shall execute, deliver,
file and record, or cause to be executed, delivered, filed and recorded, such
further agreements, instruments and other documents, and take, or cause to be
taken, such further actions, as the other party hereto may reasonably request as
being necessary or advisable to effect or evidence the transactions contemplated
by this Agreement.
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6. Miscellaneous. The provisions of this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any party hereto from the terms of any provision
of this Agreement, shall be effective (i) only if it is made or given in writing
and signed by each party hereto, and (ii) only in the specific instance and for
the specific purpose for which made or given. This Agreement may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument. The parties hereto
confirm that any facsimile copy of another party's executed counterpart of this
letter (or its signature page thereof) shall be deemed to be an executed
original thereof.
7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISIONS OR RULE (WHETHER OF
THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
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IN WITNESS WHEREOF, this Contribution Agreement has been duly
executed and delivered by a duly authorized officer of each party hereto as of
the date first above written.
TIME WARNER NY CABLE LLC
By: /s/ Xxxxx X. X'Xxxxx
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Name: Xxxxx X. X'Xxxxx
Title: Executive Vice President,
Investments
AMERICAN TELEVISION AND
COMMUNICATIONS CORPORATION
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
ATC Contribution Agreement
