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Exhibit 4.2
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT No. 1 dated as of December 15, 1998 to the RIGHTS AGREEMENT
dated as of October 10, 1996 (the "Rights Agreement"), between TIME WARNER INC.,
a Delaware corporation formerly named TW Inc. (the "Company"), and CHASEMELLON
SHAREHOLDER SERVICES L.L.C., as Rights Agent (the "Rights Agent").
WHEREAS, the Company has determined that, in connection with a
two-for-one common stock split effective on December 15, 1998, it is
advantageous to adopt a book-entry form of registration for its Common Stock,
that permits uncertificated shares of Common Stock, through the Direct
Registration System and has done so;
WHEREAS, the Company considers it advisable to amend the Rights
Agreement explicitly to provide for uncertificated shares of Common Stock; and
WHEREAS, pursuant to Section 26 of the Rights Agreement, prior to the
Distribution Date, the Company may, and the Rights Agent shall if the Company so
directs, amend the Rights Agreement to provide for uncertificated shares of
Common Stock with associated Rights.
NOW, THEREFORE, the Company and the Rights Agent hereby agree that the
Rights Agreement is hereby amended as follows by this Amendment No. 1 thereto
(the "Amendment"):
1. Definitions. Capitalized terms used herein and not defined herein
have the meanings ascribed to such terms in the Rights Agreement.
2. Amendments to Section 3 Regarding Issue of Rights and Rights
Certificates.
(a) Subsection 3(b)(x) of the Rights Agreement is hereby amended to
read in its entirety as follows:
"(x) the Rights will be evidenced by the certificates for Common Shares
registered in the names of the holders thereof, or by a current
ownership statement issued with respect to uncertificated Common Shares
in lieu of such a
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certificate (an "Ownership Statement"), and not by separate Rights Certificates
and"
(b) Subsection 3(c) of the Rights Agreement is hereby amended
to read in its entirety as follows:
"(c) With respect to any certificate for Common Shares, or any
Ownership Statement, until the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, the Rights associated with the
Common Shares represented by any such certificate, or covered by an
Ownership Statement, shall be evidenced by such certificate, or
Ownership Statement, alone, the registered holders of the Common Shares
shall also be the registered holders of the associated Rights and the
surrender for transfer of any such certificate, or the transfer of any
Common Shares covered by such an Ownership Statement, shall also
constitute the transfer of the Rights associated with the Common Shares
represented or covered thereby."
(c) Subsection 3(d) of the Rights Agreement is hereby amended
to read in its entirety as follows:
"(d) Certificates (or Ownership Statements) issued for Common
Shares after the Record Date (including, without limitation, upon
transfer or exchange of outstanding Common Shares), but prior to the
earliest of the Distribution Date, the Redemption Date or the
Expiration Date, may have printed on, written on or otherwise affixed
to them the following, or a substantially similar, legend:
This [certificate][statement] also evidences and
entitles the holder hereof to certain Rights as set forth in a
Rights Agreement dated as of October 10, 1996, as it may be
amended from time to time (the "Rights Agreement"), between
Time Warner Inc. (the "Company") and ChaseMellon Shareholder
Services L.L.C., as Rights Agent (the "Rights Agent"), the
terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
[certificate][statement]. The Rights Agent will mail to the
holder hereof a copy of the Rights Agreement without charge
after receipt of a written request
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therefor. Rights beneficially owned by Acquiring Persons or
their Affiliates or Associates (as such terms are defined in
the Rights Agreement) and by any subsequent holder of such
Rights are null and void and nontransferable."
3. Amendment to Section 17(c). Section 17(c) of the Rights Agreement is
hereby amended to read in its entirety as follows:
"(c) the Company and the Rights Agent may deem and treat the
Person in whose name a Right Certificate (or, prior to the Distribution
Date, the associated Common Shares) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the
associated certificate for Common Shares or Ownership Statement made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary."
4. Amendment to Section 21(j). Section 21(j) of the Rights Agreement is
hereby amended by adding the following sentence at the end thereof:
"Anything to the contrary notwithstanding, the Rights Agent shall not
be liable for indirect, consequential or incidental loss or damage of
any kind whatsoever (including but not limited to lost profits) except
for any such loss or damage determined by a court of competent
jurisdiction to be as a result of, or arising out of, the Rights
Agent's bad faith or willful misconduct, even if the Rights Agent has
been advised of the likelihood of such loss or damage."
5. Amendment to Section 22. The fourth sentence of Section 22 of the
Rights Agreement is hereby amended to read in its entirety as follows:
"If the Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares) (who shall,
with such notice, submit his Right Certificate or, prior to the
Distribution Date, the certificate representing his Common Shares or an
Ownership Statement, for inspection by
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the Company), then the registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares) may apply to any
court of competent jurisdiction for the appointment of a new Rights
Agent."
6. Effect on Rights Agreement. Except as expressly modified by this
Amendment, the Rights Agreement is in all respects ratified and confirmed and
all the terms, conditions and provisions thereof shall remain in full force and
effect.
7. Governing Law. This Amendment shall be governed by and construed in
accordance with the law of the state of Delaware applicable to contracts to be
made and performed entirely within such state.
8. Descriptive Headings. Descriptive headings used in this Amendment
are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Amendment.
9. Counterparts. This Amendment may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Rights Agreement to be duly executed as of the day and year first above
written.
TIME WARNER INC.
By /s/Thomas W. McEnerney
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Name: Thomas W. McEnerney
Title: Vice President
CHASEMELLON SHAREHOLDER
SERVICES L.L.C., as Rights
Agent
By /s/Gary D'Alessandro
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Name: Gary D'Alessandro
Title: Vice President
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