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CONTRIBUTION AGREEMENT AMONG TIME WARNER INC. GOOGLE INC

Contribution Agreement

CONTRIBUTION AGREEMENT AMONG TIME WARNER INC. GOOGLE INC | Document Parties: GOOGLE INC. | AMERICA ONLINE, INC.  | TIME WARNER INC. You are currently viewing:
This Contribution Agreement involves

GOOGLE INC. | AMERICA ONLINE, INC. | TIME WARNER INC.

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Title: CONTRIBUTION AGREEMENT AMONG TIME WARNER INC. GOOGLE INC
Governing Law: New York     Date: 3/16/2006
Industry: Computer Services     Law Firm: Cravath Swaine     Sector: Technology

CONTRIBUTION AGREEMENT AMONG TIME WARNER INC. GOOGLE INC, Parties: google inc. , america online  inc.  , time warner inc.
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Exhibit 10.21

 

 


CONTRIBUTION AGREEMENT

AMONG

TIME WARNER INC.

GOOGLE INC.

and

AMERICA ONLINE, INC.

 



TABLE OF CONTENTS

 

 

 

 

 

 

 

 

  

 

  

Page

 

ARTICLE I

 

Pre-Closing Actions

 

 

 

 

SECTION 1.01.

  

Formation of NewCo

  

1

 

SECTION 1.02.

  

Contribution of AOL to NewCo

  

1

 

SECTION 1.03.

  

Conversion of AOL

  

1

 

SECTION 1.04.

  

Formation of HoldCo

  

1

 

SECTION 1.05.

  

AOL Transfers to NewCo

  

2

 

 

ARTICLE II

 

Closing Date Actions

 

 

 

SECTION 2.01.

  

NewCo Borrowing

  

3

 

SECTION 2.02.

  

Closing

  

4

 

SECTION 2.03.

  

Time and Place of Closing

  

5

 

 

ARTICLE III

 

General Representations and Warranties of Time Warner

 

 

 

SECTION 3.01.

  

Organization, Standing and Power

  

5

 

SECTION 3.02.

  

Authority; Execution and Delivery; Enforceability

  

5

 

SECTION 3.03.

  

No Conflicts; Consents

  

6

 

SECTION 3.04.

  

Membership Interests

  

7

 

SECTION 3.05.

  

Equity Interests in AOL

  

7

 

 

ARTICLE IV

 

Specified Representations and Warranties of Time Warner

 

 

 

SECTION 4.01.

  

AOL Subsidiaries

  

7

 

SECTION 4.02.

  

SEC Documents

  

8

 

SECTION 4.03.

  

Absence of Certain Changes or Events

  

8

 

SECTION 4.04.

  

Compliance with Applicable Laws

  

9

 

SECTION 4.05.

  

Ownership of Permits; Title to Assets

  

9

 

SECTION 4.06.

  

Adequacy of Internal Controls

  

9

 

 

i


 

 

 

 

 

 

ARTICLE V

 

Representations and Warranties of Google

 

 

 

SECTION 5.01.

  

Organization, Standing and Power

  

9

 

SECTION 5.02.

  

Authority; Execution and Delivery; Enforceability

  

10

 

SECTION 5.03.

  

No Conflicts; Consents

  

10

 

SECTION 5.04.

  

Accredited Investor

  

10

 

 

ARTICLE VI

 

Pre-Closing Covenants

 

 

 

SECTION 6.01.

  

Best Efforts

  

11

 

SECTION 6.02.

  

Regulatory Filings

  

11

 

 

ARTICLE VII

 

Additional Covenants

 

 

 

SECTION 7.01.

  

Contribution of AOLA Assets

  

11

 

SECTION 7.02.

  

Cash Contribution

  

11

 

SECTION 7.03.

  

Tax Characterization

  

12

 

 

ARTICLE VIII

 

Conditions Precedent

 

 

 

SECTION 8.01.

  

Conditions to each Party’s Obligations

  

12

 

SECTION 8.02.

  

Conditions to Obligations of Google

  

12

 

SECTION 8.03.

  

Conditions to Obligations of Time Warner, Etc

  

13

 

 

ARTICLE IX

 

Termination; Waiver

 

 

 

SECTION 9.01.

  

Termination

  

13

 

SECTION 9.02.

  

Extension; Waiver

  

15

 

 

ARTICLE X

 

Miscellaneous

 

 

 

SECTION 10.01.

  

Survival of Representations and Warranties

  

15

 

SECTION 10.02.

  

Definitions

  

15

 

SECTION 10.03.

  

Notices

  

16

 

SECTION 10.04.

  

Failure to Pursue Remedies

  

17

 

 

ii


 

 

 

 

 

SECTION 10.05.

  

Cumulative Remedies

  

17

SECTION 10.06.

  

Parties in Interest

  

17

SECTION 10.07.

  

Headings

  

18

SECTION 10.08.

  

Severability

  

18

SECTION 10.09.

  

Counterparts

  

18

SECTION 10.10.

  

Entire Agreement

  

18

SECTION 10.11.

  

Governing Law; Waiver of Jury Trial

  

18

SECTION 10.12.

  

Absence of Presumption

  

18

 

iii


 

 

 

 

 

SCHEDULES

  

 

 

 

 

Schedule A

  

Initial Members and Membership Interests

  

 

 

 

 

Schedule B

  

Minority and Non-AOL Investments

  

 

 

 

 

Schedule C

  

HoldCo Adjusted Balance Sheet

  

 

 

 

 

Schedule D

  

AOL Guarantees

  

 

 

 

EXHIBITS

  

 

 

 

 

Exhibit A

  

Form of Adoption Agreement

  

 

 

 

 

Exhibit B

  

Form of Limited Liability Company Agreement of AOL

  

 

 

 

 

Exhibit C

  

Form of Amended and Restated Limited Liability Company Agreement of HoldCo

  

 

 

 

 

Exhibit D

  

Form of Tax Matters Agreement

  

 

 

 

 

Exhibit E

  

Form of Google Registration Rights Agreement

  

 

 

 

 

Exhibit F

  

Form of Time Warner Registration Rights Agreement

  

 

 

iv


This Contribution Agreement and Plan of Reorganization (this “ Agreement ”), dated as of March [    ], 2006, is entered into among TIME WARNER INC., a Delaware corporation (“ Time Warner ”), GOOGLE INC., a Delaware corporation (“ Google ”), and AMERICA ONLINE, INC., a Delaware corporation (“ AOL ”).

WHEREAS the parties hereto have entered into a letter agreement (and attached term sheets) (the “ Letter Agreement ”), dated as of December 20, 2005, whereby the parties have agreed to use their best efforts to consummate the transactions described in the Letter Agreement.

NOW, THEREFORE, in consideration of the agreements, representations and warranties, covenants and other provisions contained in this Agreement, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

Pre-Closing Actions

SECTION 1.01. Formation of NewCo . (a) Prior to the Closing (as defined in Section 2.03), Time Warner shall form a Virginia corporation (“ NewCo ”) pursuant to and in accordance with the Virginia Stock Corporation Act.

(b) Promptly thereafter, Time Warner shall cause NewCo to become a party to this Agreement and adopt this Agreement with the same force and effect as if it were originally a party hereto by executing the form of Adoption Agreement attached as Exhibit A.

SECTION 1.02. Contribution of AOL to NewCo . As soon as practicable following the formation of NewCo and in any event prior to the Closing, Time Warner shall contribute all of the outstanding equity interests of AOL to NewCo in exchange for all the equity interests in NewCo.

SECTION 1.03. Conversion of AOL . Following the contribution pursuant to Section 1.02 and in any event prior to the Closing, NewCo shall cause AOL to convert to a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act. The limited liability company agreement of AOL shall be in the form of Exhibit B. The transactions described in Sections 1.01, 1.02 and 1.03 of this Agreement, in the aggregate, shall be the “ AOL Reorganization .”

SECTION 1.04. Formation of HoldCo . (a) Prior to the Closing, Time Warner shall form a Delaware limited liability company (“ HoldCo ”) pursuant to and in accordance with the Delaware Limited Liability Company Act. In connection therewith, HoldCo shall issue to Time Warner 100% of the limited liability company interests (“ Membership Interests ”) in HoldCo.


(b) Promptly thereafter and in any event prior to the Closing, Time Warner shall cause HoldCo to become a party to this Agreement and adopt this Agreement with the same force and effect as if it were originally a party hereto by executing the form of Adoption Agreement attached as Exhibit A.

(c) Prior to the Closing Date (as defined in Section 2.03), HoldCo shall not carry on any business or conduct any operations other than the execution of this Agreement, the performance of its obligations hereunder and matters ancillary thereto.

SECTION 1.05. AOL Transfers to NewCo . Following the conversion of AOL pursuant to Section 1.03, but in any event prior to the contribution of AOL to HoldCo pursuant to Section 2.02 and the Closing:

(a) AOL shall transfer to NewCo all of the minority and non-AOL investments set forth on Schedule B (the “ Schedule B Investments ”). If any transfer of a Schedule B Investment requires the consent or other action of a third party, then such transfer shall be made subject to such consent being obtained or action being taken. AOL shall use commercially reasonable efforts to secure any such consent or other action on or prior to the Closing Date. If any such consent is not obtained or action not taken prior to the Closing, the Closing shall nonetheless take place on the terms set forth herein and, thereafter, AOL shall continue to use commercially reasonable efforts to secure such consent or other action as promptly as practicable after the Closing. With respect to such Schedule B Investments, the parties to this Agreement hereby agree that, as of the close of business on the business day immediately preceding the Closing Date, NewCo shall (i) have (without infringing upon the legal rights of such third party or violating any applicable Law (as defined in Section 3.03(a)) the economic claims, rights and benefits under such Schedule B Investment and all other rights (including voting rights) resulting from or incidental to ownership of such Schedule B Investment and (ii) assume any related economic burden with respect to such Schedule B Investment. The parties hereto intend to treat each such arrangement as if NewCo is the owner of such Schedule B Investment as of the close of business on the business day immediately preceding the Closing Date for U.S. Federal income tax purposes. None of Time Warner, Google, AOL, NewCo or HoldCo or any of their respective affiliates shall take any position inconsistent with such characterization on any return or filing or otherwise with any taxing authority unless otherwise required by applicable Law.

(b) AOL shall transfer to NewCo all cash and cash equivalents held by AOL or any of its U.S. subsidiaries as of the close of business on the business day immediately preceding the Closing Date.

(c) Time Warner shall cause all indebtedness (including all accrued and unpaid interest) outstanding at AOL or any of its subsidiaries as of the close of business on the business day immediately preceding the Closing Date that is not owed by or to Time Warner or any affiliate of Time Warner to be discharged or assumed by Time Warner or any affiliate of Time Warner (other than HoldCo, AOL or any subsidiary of HoldCo or AOL). This Section 1.05(c) shall not apply to (i) the indebtedness outstanding as of the close of business on the business day immediately preceding the Closing Date described

 

2


as “Current Portion of Long Term Notes Payable and Capital Leases”, “Long Term Notes Payable” and “Other Long Term Liabilities” of AOL, each as set forth on the consolidated balance sheet of AOL as of January 31, 2006, attached to the letter, dated as of the date of this Agreement, from Time Warner to Google (the “ Disclosure Letter ”) and (ii) any guarantees by AOL of indebtedness of affiliates of AOL listed on Schedule D (in the applicable maximum principal amount of indebtedness set forth on Schedule D, such guarantees of indebtedness in the principal amount set forth on Schedule D being hereinafter referred to as the “ Affiliate Guarantees ”).

(d) Time Warner shall cause (i) all receivables and payables (including all accrued and unpaid expenses) of AOL or any of its subsidiaries owed by or to Time Warner or any affiliate of Time Warner (other than HoldCo, AOL or any subsidiary of HoldCo or AOL) outstanding as of the close of business on the business day immediately preceding the Closing Date to be distributed to or assumed by Time Warner or any affiliate of Time Warner (other than HoldCo, AOL or any subsidiary of HoldCo or AOL) and (ii) all indebtedness (including all accrued and unpaid interest) outstanding at AOL or any of its subsidiaries as of the close of business on the business day immediately preceding the Closing Date that is owed by or to Time Warner or any affiliate of Time Warner (other than HoldCo, AOL or any subsidiary of HoldCo or AOL) to be discharged or assumed by Time Warner or any affiliate of Time Warner (other than HoldCo, AOL or any subsidiary of HoldCo or AOL). This Section 1.05(d) shall not apply to (i) any outstanding operational intercompany trade receivable or trade payable incurred in the ordinary course of business, (ii) any International Debt and (iii) any non-operational intercompany receivables (including all accrued and unpaid expenses) that are owed by Time Warner or any affiliate of Time Warner (other than HoldCo, AOL or any subsidiary of HoldCo or AOL) to any non-U.S. subsidiary of AOL.

(e) For purposes of Sections 1.05(b), 1.05(c) and 1.05(d), and the definitions of “International Debt” and “Net International Debt”, (i) AOL Europe Sarl and its subsidiaries shall be deemed subsidiaries of AOL and (ii) America Online Latin America, Inc. and its subsidiaries, Africana.com, Inc. and any entity listed on Schedule B shall be deemed not to be a subsidiary of AOL.

(f) By way of illustration, if the several transactions contemplated by this Section 1.05 were effected as of January 31, 2006, the adjusted balance sheet of HoldCo would be as set forth in Schedule C.

ARTICLE II

Closing Date Actions

SECTION 2.01. NewCo Borrowing . (a) On the Closing Date but prior to the Closing, NewCo shall borrow from third party lenders an amount (the “ Loan ”) equal to $1,000,000,000 less the amount of Estimated Net International Debt (calculated in accordance with Section 2.01(b)).

 

3


(b) On the Closing Date, Time Warner shall estimate the amount of the Net International Debt outstanding as of the close of business on the business day immediately preceding the Closing Date. The amount of that estimate, minus $50,000,000, shall be the “ Estimated Net International Debt ”.

SECTION 2.02. Closing . At the Closing, the following transactions shall occur simultaneously:

(a) Cancellation of Membership Interests . The initial Membership Interests issued to Time Warner upon the formation of HoldCo (as described under Section 1.04(a)) shall be canceled.

(b) Time Warner Contribution . Time Warner shall unconditionally and irrevocably contribute to HoldCo, and HoldCo shall unconditionally and irrevocably accept from Time Warner, all of Time Warner’s right, title and interest to all of the outstanding equity interests of AOL Europe Sarl held by Time Warner or any of its subsidiaries other than any interests held by AOL or any of its subsidiaries.

(c) NewCo Contribution . NewCo shall unconditionally and irrevocably contribute to HoldCo, and HoldCo shall unconditionally and irrevocably accept from NewCo, all of NewCo’s right, title and interest to AOL. In connection with such contribution, NewCo shall assign and HoldCo shall assume all of NewCo’s rights and obligations in connection with the Loan.

(d) Google Contribution . Google shall unconditionally and irrevocably contribute to HoldCo, and HoldCo shall unconditionally and irrevocably accept from Google, cash in the amount of $1,000,000,000.

(e) Issue of Membership Interests . In connection with the contributions described in Sections 2.02(b), 2.02(c) and 2.02(d), HoldCo shall issue to each of Time Warner, NewCo and Google the total number of Membership Interests set forth next to such party’s name on Schedule A. The contributions, assumptions and issuances described in Section 2.02(b), Section 2.02(c), Section 2.02(d) and this Section 2.02(e), in the aggregate, shall be the “ HoldCo Contribution ”.

(f) Amended and Restated LLC Agreement . Time Warner, NewCo and Google shall execute the amended and restated limited liability company agreement of HoldCo substantially in the form attached as Exhibit C (the “ HoldCo Operating Agreement ”).

(g) Tax Matters Agreement . Time Warner and HoldCo shall execute the tax matters agreement substantially in the form attached as Exhibit D.

(h) Registration Rights Agreements . Time Warner, Google and HoldCo shall execute the registration rights agreement substantially in the form attached as Exhibit E (the “ Google Registration Rights Agreement ”). Time Warner, NewCo and HoldCo shall execute the registration rights agreement substantially in the form attached as Exhibit

 

4


F (the “ Time Warner Registration Rights Agreement ” and, together with the Google Registration Rights Agreement, the “ Registration Rights Agreements ”).

SECTION 2.03. Time and Place of Closing . The closing (the “ Closing ”) of the transactions set forth in Section 2.02 shall take place at the offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New York, New York 10019 15 business days after the date hereof provided that the conditions set forth in Article VIII have been satisfied (or, to the extent permitted by Law, waived by the party or parties entitled to the benefits thereof) or as soon thereafter as is practicable after the conditions set forth in Article VIII have been satisfied (or, to the extent permitted by Law, waived by the party or parties entitled to the benefits thereof), or at such other place, time and date as shall be agreed in writing between Time Warner and Google. The date on which the Closing occurs is referred to in this Agreement as the “ Closing Date ”.

ARTICLE III

General Representations and Warranties of Time Warner

Time Warner represents and warrants to Google that:

SECTION 3.01. Organization, Standing and Power . (a) Each of Time Warner and AOL is validly existing and in good standing under the laws of Delaware and has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets, and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, have not had and could not reasonably be expected to have a material adverse effect on Time Warner or AOL, as the case may be.

(b) Upon formation, each of NewCo and HoldCo will be validly existing and in good standing under the laws of Virginia and Delaware, respectively, and will have all requisite power and authority and possess all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets, and to conduct its businesses as then conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, have not had and could not reasonably be expected to have a material adverse effect on NewCo or HoldCo, as the case may be.

SECTION 3.02. Authority; Execution and Delivery; Enforceability . (a) Each of Time Warner and AOL has all requisite corporate power and authority to execute and deliver this Agreement, the Time Warner Registration Rights Agreement and the HoldCo Operating Agreement (in each case, to the extent a party thereto), to perform their respective obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Time Warner and AOL of this Agreement, the Time Warner Registration Rights Agreement and the HoldCo Operating Agreement (in each case, to the extent a party thereto), the performance of their obligations hereunder and thereunder and the consummation by Time Warner and AOL of

 

5


the transactions contemplated hereby and thereby have been or will be duly authorized by all necessary corporate action on the part of Time Warner, NewCo, HoldCo and AOL (in each case, to the extent a party thereto). Each of Time Warner and AOL has duly executed and delivered this Agreement, and this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

(b) Upon formation of NewCo and HoldCo and execution by them of an Adoption Agreement: each of NewCo and HoldCo will have all requisite power and authority to execute and deliver its respective Adoption Agreement, its respective Registration Rights Agreement, the HoldCo Operating Agreement (by NewCo) and the AOL Operating Agreement (by HoldCo), to perform their respective obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby; the execution and delivery by NewCo and HoldCo of its respective Adoption Agreement, its respective Registration Rights Agreement, the HoldCo Operating Agreement (by NewCo) and the AOL Operating Agreement (by HoldCo), the performance by NewCo and HoldCo of their respective obligations hereunder and thereunder and the consummation by NewCo and HoldCo of the transactions contemplated hereby and thereby will have been duly authorized by all necessary corporate action on the part of NewCo and HoldCo; each of NewCo and HoldCo will have duly executed its respective Adoption Agreement, its respective Registration Rights Agreement, the HoldCo Operating Agreement (by NewCo) and the AOL Operating Agreement (by HoldCo); and their respective Adoption Agreements, this Agreement, their respective Registration Rights Agreements, the HoldCo Operating Agreement (for NewCo) and the AOL Operating Agreement (for HoldCo) will constitute the legal, valid and binding obligation of each of NewCo and HoldCo, enforceable against NewCo and HoldCo in accordance with its terms.

SECTION 3.03. No Conflicts; Consents . (a) The execution and delivery by Time Warner, AOL, NewCo and HoldCo of the Transaction Agreements to which they are respectively parties do not, and the performance of their respective obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any person under, or result in the creation of any lien upon any of the respective properties or assets of AOL or HoldCo under, any provision of (i) the certificate of incorporation, by-laws or other constitutive documents of Time Warner, AOL, NewCo or HoldCo, (ii) any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (a “ Contract ”) to which Time Warner, AOL, NewCo or HoldCo is a party or by which a


 
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