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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 27, 1994
TURNER BROADCASTING SYSTEM, INC.
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(Exact name of registrant as specified in its charter)
Georgia
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(State of incorporation or organization)
0-9334 58-0950695
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(Commission File Number) (I.R.S. Employer Identification No.)
One CNN Center, Atlanta, Georgia 30303
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(Address of principal executive offices) (Zip Code)
(404) 827-1700
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(Registrant's Telephone Number, Including Area Code)
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ITEM 7. EXHIBITS
(c) Exhibits
1(c) - Terms Agreement dated January 27, 1994 among Turner
Broadcasting System, Inc. (the "Company") and
Goldman, Sachs & Co., CS First Boston Corporation and
Merrill Lynch & Co., and the Underwriting Agreement
Basic Provisions dated June 30, 1993 incorporated by
reference therein
4(f) - Form of Officers' Certificate establishing the terms
of the Company's 7.40% Senior Notes due February 1,
2004 with Form of Note attached
4(g) - Form of Officers' Certificate establishing the terms
of the Company's 8.40% Senior Debentures due February
1, 2024 with form of Debenture attached
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
TURNER BROADCASTING SYSTEM, INC.
(Registrant)
Date: February 2, 1994 By: /s/ William S. Ghegan
-----------------------------------
Name: William S. Ghegan
Title: Vice President and Controller
and Chief Accounting Officer
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EXHIBIT INDEX
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Exhibits Page
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1(c) - Terms Agreement dated January 27, 1994 among Turner Broadcasting System, Inc. and Goldman, Sachs &
Co., CS First Boston Corporation and Merrill Lynch & Co., and the Underwriting Agreement Basic
Provisions dated June 30, 1993 incorporated by reference therein
4(f) - Form of Officers' Certificate establishing the terms of the Company's 7.40% Senior Notes due
February 1, 2004 with form of Note attached.
4(g) - Form of Officers' Certificate establishing the terms of the Company's 8.40% Senior Debentures due
February 1, 2024 with form of Debenture attached.
</TABLE>
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Exhibit 1(c)
TERMS AGREEMENT
January 27, 1994
GOLDMAN, SACHS & CO.
CS FIRST BOSTON CORPORATION
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
Dear Sirs:
Turner Broadcasting System, Inc., a Georgia corporation ("TBS"),
confirms its agreement with each of the Underwriters listed below (the
"Underwriters," which term shall also include any underwriter substituted as
provided in Section 2(c) of the Basic Provisions (defined below)). TBS hereby
agrees to sell and the Underwriters, acting severally and not jointly, agree to
purchase, the respective principal amounts of 7.40% Senior Notes due 2004 (the
"Notes") and 8.40% Senior Debentures due 2024 (the "Debentures" and, together
with the Notes, the "Underwritten Securities") set forth opposite their
respective names below at 98.595 % of the principal amount of the Notes and
98.422 % of the principal amount of the Debentures, in each case plus interest
accrued from February 1, 1994. Capitalized terms used herein and not otherwise
defined have the meanings given to such term in the Basic Provisions.
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Underwriter Principal Amount
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Notes Debentures
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Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . $ 83,334,000 $66,668,000
CS First Boston Corporation . . . . . . . . . . . . . . . 83,333,000 66,666,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . 83,333,000 66,666,000
------------- ------------
Total . . . . . . . . . . . . . . . . . . . . . $ 250,000,000 $200,000,000
============ ============
The Notes shall have the following terms:
Principal Amount . . . . . . . . . . . . . . . . $250,000,000
Date of maturity . . . . . . . . . . . . . . . . February 1, 2004
Interest rate or rates (as
method of determination) . . . . . . . . . . . 7.40% per annum
Initial public offering price (as a percentage
of the Principal Amount of the Notes) . . . . 99.845%
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Interest payment dates . . . . . . . . . . . . . February 1 and August 1, commencing August 1, 1994
Redemption provisions . . . . . . . . . . . . . The Notes are not redeemable at the option of TBS. The Notes are
redeemable at the option of the Holders upon a Change of Control,
certain mergers, sales or transfers of assets and certain Restricted
Payments, all as described in the Preliminary Prospectus Supplement,
dated January 24, 1994, and as described more fully in the Indenture,
dated as of May 15, 1993, as modified in the Officer's Certificate to
be issued with respect to the Underwritten Securities (together, the
"Indenture")
Additional Covenants . . . . . . . . . . . . . . Additional covenants include, without limitation, a limitation on the
incurrence of Funded Debt and certain Liens, as described in the
Preliminary Prospectus Supplement, dated January 24, 1994, and as
described more fully in the Indenture
Form and denomination . . . . . . . . . . . . . Certificated, in denominations of $1,000 and integral multiples
thereof
Specified funds for payment
of purchase price . . . . . . . . . . . . . . Certified or official bank check or checks payable in New York
Clearing House funds
The Debentures shall have the following terms:
Principal Amount . . . . . . . . . . . . . . . . $200,000,000
Date of maturity . . . . . . . . . . . . . . . . February 1, 2024
Interest rate or rates (or
method of determination) . . . . . . . . . . . 8.40% per annum
Initial public offering price (as a percentage
of the Principal Amount of the Debentures) . 99.922%
Interest payment dates . . . . . . . . . . . . . February 1 and August 1, commencing August 1, 1994
</TABLE>
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Redemption provisions . . . . . . . . . . . . . The Debentures will be subject to redemption at any time on or after
February 1, 2004, at the option of TBS, in whole or in part, on not
less than 30 nor more than 60 days' prior notice, at the redemption
prices (expressed as percentages of the Principal Amount of the
Debentures) set forth below, in each case together with accrued and
unpaid interest, if any, to but excluding the date of redemption, if
redeemed during the 12-month period beginning February 1 of the year
indicated below:
Redemption
Year Price
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2004 104.161%
2005 103.745
2006 103.329
2007 102.913
2008 102.497
2009 102.081
2010 101.664
2011 101.248
2012 100.832
2013 100.416
2014 and 100.000%
thereafter
The Debentures are redeemable at the option of the Holders upon a
Change of Control, certain mergers, sales or transfers of assets and
certain Restricted Payments, all as described in the Preliminary
Prospectus Supplement, dated January 24, 1994, and as described more
fully in the Indenture
Additional Covenants . . . . . . . . . . . . . . Additional covenants include, without limitation, a limitation on the
incurrence of Funded Debt and certain Liens, as described in the
Preliminary Prospectus Supplement, dated January 24, 1994, and as
described more fully in the Indenture
Form and denomination . . . . . . . . . . . . . Certificated, in denominations of $1,000 and integral multiples
thereof
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Specified funds for payment
of purchase price . . . . . . . . . . . . . . Certified or official bank check or checks payable in New York
Clearing House funds
</TABLE>
The specified address for notices, delivery date and place of closing
for purposes of the Underwritten Securities as set forth in the Basic
Provisions shall be as set forth below:
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Specified address for notices . . . . . . . . . . Goldman, Sachs & Co.
85 Broad Street
21st Floor
New York, New York 10004
Attn: Registration Department
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055
Attn: Joseph D. Fashano
New Issue Processing
Merrill Lynch & Co.
10900 Wilshire Boulevard
Los Angeles, California 90024
Attn: Scott A. Ryles
Delivery Date . . . . . . . . . . . . . . 9:00 a.m., Atlanta time, on February 3, 1994
Place of Closing . . . . . . . . . . . . . Atlanta, Georgia
</TABLE>
All of the provisions contained in the document entitled "Turner
Broadcasting System, Inc. -- Debt Securities -- Underwriting Agreement Basic
Provisions" and dated June 30, 1993 (the "Basic Provisions"), a copy of which
you have previously received, are herein incorporated by reference in their
entirety and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein; provided,
however, that solely with respect to the offering of the Underwritten
Securities covered by this Terms Agreement the Basic Provisions are modified as
follows:
1. Section 1(a)(x) of the Basic Provisions is hereby amended to read as
follows:
(x) The only subsidiaries of TBS are Cable News Network, Inc.,
SuperStation, Inc., Turner Entertainment Co., Turner Network
Television, Inc., Castle Rock Entertainment ("CRE") and New Line
Cinema Corporation ("New Line") and HB Holding Co. (collectively, the
"Significant Subsidiaries"), other than corporate consolidated
subsidiaries none of which would constitute a "significant subsidiary"
of TBS under Regulation S-X of the rules and regulations of the
Commission nor is material to the business of TBS and its
subsidiaries, taken as a whole.
2. Section 1(a)(xi) of the Basic Provisions is hereby amended to read as
follows:
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(xi) (A) Each of Cable News Network, Inc., SuperStation, Inc., Turner
Entertainment Co., Turner Network Television, Inc., New Line and HB
Holding Co. (collectively, the "Corporate Significant Subsidiaries")
has been duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its organization,
has corporate power and authority to own, lease and operate its
properties and to conduct the businesses in which it is engaged and is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to be so qualified
would not have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects
of TBS and its subsidiaries, considered as one enterprise; all of the
issued and outstanding capital stock of each such Corporate
Significant Subsidiary has been duly authorized and validly issued, is
fully paid and nonassessable and is owned beneficially by TBS free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity other than (a) restrictions arising under or by virtue
of the Federal Communications Act of 1934, as amended ("Communications
Act Restrictions"), and (b) restrictions arising under Article V,
Section 4(g) of the Restated Articles of Incorporation of TBS ("Class
C Restrictions").
(B) CRE is a California general partnership duly formed and validly
existing as a general partnership under the laws of the State of
California, has partnership power and authority to own, lease and
operate its properties and to conduct the businesses in which it is
engaged; all of the general partnership interests in CRE are owned
beneficially by TBS free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity other than (a)
the Communications Act Restrictions and (b) the Class C Restrictions.
3. The first clause of Section 1(a)(xii) of the Basic Provisions is
hereby amended to read as follows: "Neither TBS nor any of its
Significant Subsidiaries is in violation of its charter, bylaws or
other corresponding organizational documents".
4. For purposes of the opinion required by Section 5(b)(1) of the Basic
Provisions, the term "Significant Subsidiaries" shall not include CRE
or New Line.
5. For purposes of the opinion required by Section 5(b)(1) of the Basic
Provisions, the opinion of Troutman Sanders need not address matters
relating to CRE or New Line or the acquisitions thereof by TBS insofar
as such matters are being opined on by Steven W. Korn, Esq., General
Counsel of the Company, pursuant to the opinion delivered pursuant to
Section 5(b)(2)(iv) or (v) of the Basic Provisions, as amended hereby
(except with respect to the Amended 1993 Credit Agreement (as defined
in the Prospectus)).
6. For purposes of Section 5(b)(5) of the Basic Provisions, Troutman
Sanders need not express any opinion or belief with respect to
information included or incorporated by reference in the Registration
Statement or the Prospectus, or omitted therefrom, insofar as such
information relates to New Line or CRE or to the acquisition of New
Line or CRE by TBS (other than information relating to the Amended
1993 Credit Agreement (as defined in the Prospectus)).
7. In addition to the matters set forth in Section 5(b)(2) of the Basic
Provisions, the opinion of Steven W. Korn, Esq., General Counsel of
TBS shall include the following:
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(iii) CRE is a duly formed and validly existing general partnership
under the laws of the State of California, has partnership
power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus;
all of the general partnership interests in CRE are
beneficially owned by TBS free and clear of any material
security interest, mortgage, pledge, lien, encumbrance, claim
or equity, other than (a) the Communications Act Restrictions
and (b) the Class C Restrictions; New Line has been duly
organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, has
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which such qualification is required, except where the
failure to be so qualified would not have a material adverse
effect on TBS and its subsidiaries, considered as one
enterprise; all of the issued and outstanding capital stock of
New Line has been duly authorized and validly issued, is fully
paid and nonassessable and is beneficially owned by TBS, free
and clear of any material security interest, mortgage, pledge,
lien, encumbrance, claim or equity, other than (a) the
Communications Act Restrictions and (b) the Class C
Restrictions.
(iv) To the best of such counsel's knowledge and information, there
are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments entered into, acquired or
assumed in connection with the CRE or New Line acquisitions
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described, referred to therein or filed as exhibits thereto,
and the descriptions thereof or references thereto are correct
in all material respects.
(v) The issuance and delivery of the Underwritten Securities, the
execution and delivery of this Agreement and the Indenture,
and the consummation of the transactions contemplated herein
and therein, will not (i) conflict with or constitute a breach
of, or default under, (ii) result in the creation or
imposition of any material lien, charge or encumbrance upon
any property or assets of TBS, CRE or New Line pursuant to, or
(iii) result in any obligation to redeem or repurchase any
securities or indebtedness of TBS or its subsidiaries or
affiliates under, any agreement, indenture or instrument known
to such counsel and to which CRE or New Line is a party or by
which either of them may be bound or which TBS entered into,
assumed or acquired in connection with the acquisition of CRE
or New Line, or to which any of the property or assets of CRE
or New Line is subject except for such conflicts, breaches,
defaults, liens, charges, encumbrances or violations which,
singly or in the aggregate, would not have a material adverse
effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of TBS and
its subsidiaries, considered as one enterprise.
This Terms Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed in such State.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to TBS a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement
between the Underwriters and TBS in accordance with its terms.
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Very truly yours,
TURNER BROADCASTING SYSTEM, INC.
By: /s/ CHRISTIAN L. BECKEN
---------------------------------------------
Name: Christian L. Becken
Title: Vice President and Treasurer
Confirmed and accepted as of
the date first above written:
/s/ GOLDMAN, SACHS & CO.
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(GOLDMAN, SACHS & CO.)
CS FIRST BOSTON CORPORATION
By: /s/ JOSEPH D. FASHANO
-------------------------------
Name: Joseph D. Fashano
Title: Vice President
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ MATTHEW PENDO
--------------------------
Name: Matthew Pendo
Title: Vice President
</TABLE>
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TURNER BROADCASTING SYSTEM, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT BASIC PROVISIONS
June 30, 1993
The basic provisions set forth herein are intended to be incorporated by
reference in a terms agreement (a "Terms Agreement") of the type referred to in
Section 2(a) hereof. With respect to any particular Terms Agreement, the Terms
Agreement, together with the provisions hereof incorporated therein by
reference, is herein referred to as this "Agreement". Terms defined in the Terms
Agreement are used herein as therein defined.
Turner Broadcasting System, Inc. ("TBS") may issue and sell from time to
time debt securities registered under the registration statement referred to in
the following paragraph (the "Securities"). The Securities may have varying
designations, denominations, interest rates and payment dates, maturities,
redemption provisions and selling prices, with all such terms for any particular
Securities (together with any other terms relating to such securities) to be
determined and set forth in the Terms Agreement relating to such securities. As
used herein, the term "Underwritten Securities" shall mean the Securities that
the underwriter or underwriters party to the Terms Agreement have agreed to
purchase pursuant to such Terms Agreement. Unless otherwise defined in a Terms
Agreement, the term "Representatives" shall refer to the Underwriters, as
defined in the applicable Terms Agreement.
TBS has filed with the Securities and Exchange Commission (the "Commission)
a registration statement on Form S-3 (No. 33-66218) for the registration of debt
securities, including the Underwritten Securities, under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"). Such registration statement has been
declared effective by the Commission and the Indenture pursuant to which the
Underwritten Securities will be issued (the "Indenture") has been qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
As used in this Agreement, (i) "Registration Statement" means such registration
statement when it became effective under the Act, and as from time to time
amended or supplemented thereafter at the time of effectiveness of such
amendment or filing of such supplement with the Commission (including all
documents incorporated or deemed to be incorporated therein by reference); (ii)
"Basic Prospectus" means the prospectus (including all documents incorporated or
deemed to be incorporated therein by reference) included in the Registration
Statement; and (iii) "Prospectus" means the Basic Prospectus, together with any
preliminary prospectus supplement and any prospectus supplement, as filed with,
or transmitted by a means reasonably calculated to result in filing with, the
Commission pursuant to paragraph (b) of Rule 424 of the 1933 Act Regulations,
specifically relating to the Underwritten Securities (including in each case all
documents incorporated or deemed to be incorporated therein by reference),
except that, if any revised prospectus should be provided to the Underwriters by
TBS for use in connection with the offering of the Underwritten Securities that
is not required to be filed by TBS pursuant to Rule 424(b) of the 1933 Act
Regulations, the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for such use.
Notwithstanding the foregoing, for purposes of this Agreement, any prospectus
supplement prepared or filed with respect to an offering pursuant to the
Registration Statement of a series of debt securities other than the
Underwritten Securities shall not be deemed to have supplemented the Prospectus.
TBS understands that the Underwriters propose to make a public offering of
the Underwritten Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
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SECTION 1. Representations and Warranties of TBS. (a) TBS represents,
warrants and agrees to each of the Underwriters that:
(i) The Registration Statement is effective under the 1933 Act and, to
the best of TBS's knowledge and information, no stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933
Act or proceedings therefor initiated or threatened by the Commission and
no order directed to any document incorporated by reference in the
Prospectus has been issued.
(ii) The Registration Statement, at the time it became effective and
at the Representation Date (as hereinafter defined), and the Prospectus at
the Representation Date and at the Delivery Date (as hereinafter defined),
contained, and will contain, all statements which are required by the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), the
Trust Indenture Act and the rules and regulations of the Commission with
respect to such Acts; the Indenture, including any amendments and
supplements thereto, conforms and will conform with the requirements of the
Trust Indenture Act, and the rules and regulations of the Commission
thereunder; the Registration Statement, at the time it became effective, at
the Representation Date, at the Delivery Date and at each filing of TBS's
most recent annual report pursuant to Section 13(a) or 15(d) of the 1934
Act, did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and the Prospectus, at the time
the Registration Statement became effective, at the Representation Date and
at the Delivery Date did not and will not include an 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 representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or the Prospectus made in reliance upon and
in conformity with information furnished to TBS in writing through the
Representatives by or on behalf of any Underwriter specifically for use in
the Registration Statement or the Prospectus, or to any statements in or
omissions from the Statement of Eligibility on Form T-1 of the Trustee
under the Trust Indenture Act (the "Form T-1").
(iii) The documents incorporated by reference into the Registration
Statement or the Prospectus, when they were filed or became effective with
the Commission (or if any such document was amended, at the time such
document was last amended) complied and any documents subsequently
incorporated by reference will comply, as of the applicable filing date or
effective date, in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations") and, when read together and with the other information in
the Prospectus, at the time the Registration Statement became effective, at
the Representation Date and at the Delivery Date, do not and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were or are
made, not misleading; and any documents deemed to be incorporated by
reference in the Prospectus will, if and at the time they are filed with
the Commission, comply in all material respects with the requirements of
the 1934 Act and the 1934 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iv) TBS, at the effective date of the Registration Statement, the
Representation Date and the Delivery Date, met and will meet the conditions
for use of Form S-3 under the 1933 Act and the 1933 Act Regulations.
(v) To the best of TBS's knowledge, the accountants who have audited
and reported upon the consolidated financial statements filed with the
Commission as part of the Registration Statement and the Prospectus are
independent public accountants with respect to TBS and its subsidiaries as
required by the 1933 Act and the 1933 Act Regulations.
(vi) The financial statements filed as part of the Registration
Statement or included or incorporated in the Prospectus, as of their date,
the Representation Date and the Delivery Date, present and will present
fairly the financial position of TBS and its consolidated subsidiaries as
of the dates indicated and
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the results of their operations for the periods specified; and said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis.
(vii) Since the date of the most recent consolidated financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, and except as otherwise stated in the
Registration Statement or the Prospectus, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of TBS and its
subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business and (B) there have been no transactions entered
into by TBS or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to TBS and its
subsidiaries, considered as one enterprise.
(viii) (A) The Indenture has been duly executed and delivered and
validly authorized by TBS and (assuming due authorization, execution and
delivery thereof by the Trustee) constitutes the legal, valid and binding
obligation of TBS enforceable against TBS in accordance with its terms
(except to the extent enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally or general
principles of equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law), (B) the Underwritten Securities have
been validly authorized for issuance and sale pursuant to this Agreement
and, when executed, authenticated and delivered as provided in the
Indenture and paid for in accordance with this Agreement, will be validly
issued and outstanding, and will constitute legal, valid and binding
obligations of TBS enforceable against TBS in accordance with their terms
and entitled to the benefits of the Indenture (subject to the exceptions
set forth in clause (A) of this paragraph (vii)), and (C) the Underwritten
Securities and the Indenture conform in all material respects to the
description thereof contained in the Prospectus.
(ix) TBS has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Georgia with
corporate power and authority to own, lease and operate its properties and
to conduct the businesses as described in the Prospectus; and TBS is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of TBS and its subsidiaries,
considered as one enterprise.
(x) The only subsidiaries of TBS are Cable News Network, Inc.,
SuperStation, Inc., Turner Entertainment Co. and Turner Network Television,
Inc. (collectively, the "Significant Subsidiaries"), other than corporate
consolidated subsidiaries none of which would constitute a "significant
subsidiary" of TBS under Regulation S-X of the rules and regulations of the
Commission nor is material to the business of TBS and its subsidiaries,
taken as a whole.
(xi) Each Significant Subsidiary of TBS has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its organization, has corporate power and authority to own,
lease and operate its properties and to conduct the businesses in which it
is engaged and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to be so
qualified would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of TBS and its subsidiaries, considered as one enterprise; all of
the issued and outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and is owned beneficially by TBS free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity
other than (a) restrictions arising under or by virtue of the Federal
Communications Act of 1934, as amended ("Communications Act Restrictions"),
and (b) restrictions arising under Article V, Section 4(g) of the Restated
Articles of Incorporation of TBS ("Class C Restrictions").
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(xii) Neither TBS nor any of its Significant Subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any agreement, indenture, or instrument to which TBS or any
of its Significant Subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of TBS or any of
its Significant Subsidiaries is subject, or any applicable law,
administrative regulation or administrative or court order or decree, which
default or violation would have a material adverse effect on TBS and its
subsidiaries, considered as one enterprise; and the execution, delivery and
performance by TBS of this Agreement and the Indenture and the consummation
of the transactions contemplated herein and therein have been duly
authorized by all necessary corporate action and will not (i) conflict with
or constitute a breach of, or default under, (ii) result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of TBS or any of its Significant Subsidiaries pursuant to, or (iii) except
as described in the Prospectus, result in any obligation to redeem or
repurchase any securities or indebtedness of TBS or its subsidiaries or
affiliates under, any agreement, indenture or instrument to which TBS or
any of its Significant Subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of TBS or any
of its Significant Subsidiaries is subject, except for such conflicts,
breaches, defaults, liens, charges or encumbrances which, singly or in the
aggregate, would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of TBS and its subsidiaries, considered as one enterprise, nor
will such action result in (i) any violation of the provisions of the
charter, by-laws or other corresponding organizational documents of TBS or
any of its Significant Subsidiaries, or (ii) any violation of any
applicable law, administrative regulation or administrative or court
decree, except for such violations which, singly or in the aggregate, would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of TBS
and its subsidiaries, considered as one enterprise and, except as required
by the 1933 Act, the 1934 Act, the Trust Indenture Act and applicable state
securities laws, no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
execution, delivery and performance of this Agreement or the Indenture.
(xiii) Except as described in the Prospectus, there is no action, suit
or proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of TBS, threatened,
against or affecting TBS or any of its Significant Subsidiaries, which is
required to be disclosed in the Registration Statement or the Prospectus;
all pending legal or governmental proceedings to which TBS or any of its
Significant Subsidiaries is a party or of which any of their respective
properties or assets is the subject which are not described in the
Registration Statement or the Prospectus, including ordinary routine
litigation incidental to the business, are, in the opinion of TBS,
considered in the aggregate, not material; and there are no contracts or
documents of TBS or any of its subsidiaries which are required to be filed
as exhibits to the Registration Statement, or to any documents incorporated
by reference therein, by the 1933 Act, the 1933 Act Regulations, the 1934
Act or the 1934 Act Regulations, which have not been so filed.
(xiv) No authorization, consent or approval of, or other order by, any
United States court or administrative or governmental authority or agency
is required in connection with the sale of the Underwritten Securities
under this Agreement to the Underwriters, except such as may be required
under state securities laws or except as may have been obtained.
(xv) Each of TBS and its Significant Subsidiaries owns, or is licensed
under or otherwise has sufficient right to use, all material licenses,
copyrights, trademarks, and trade names (collectively, "Intellectual
Property") used in, or necessary for the conduct of, its respective
businesses as described in the Prospectus. Other than as described in the
Prospectus, no claims have been asserted by any person to the use of any
such Intellectual Property or challenging or questioning the validity or
effectiveness of any such Intellectual Property or any license or agreement
related thereto, which claim, if determined adversely to TBS or any of its
subsidiaries, would materially and adversely affect the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of TBS and its subsidiaries, considered as one enterprise. The
use of such Intellectual Property in connection with the business and
operations of TBS and its subsidiaries does not, to TBS's knowledge,
infringe on the rights of any person.
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(xvi) TBS and its Significant Subsidiaries possess such certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, except where failure to possess such certificates,
authorities or permits would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of TBS and its subsidiaries, considered as one
enterprise, and neither TBS nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would materially
and adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of TBS and its
subsidiaries, considered as one enterprise.
(xvii) TBS has complied with and will be in compliance with the
provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes,
and the rules and regulations promulgated thereunder or is exempt
therefrom.
(xviii) This Agreement has been duly authorized and validly executed
and delivered by TBS and (assuming due authorization, execution and
delivery hereof by the Underwriters) it constitutes the legal, valid and
binding agreement of TBS, enforceable against TBS in accordance with its
terms (except as to the extent enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors rights generally or by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law)).
(b) Any certificate signed by any officer of TBS and delivered to the
Representatives or to counsel for the Underwriters in connection with the
transaction contemplated hereby shall be deemed a representation and warranty by
TBS to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing. (a) The
obligation of the Underwriters to purchase, and TBS to sell, the Underwritten
Securities is evidenced by a Terms Agreement delivered at the time TBS
determines to sell the Underwritten Securities (the date of delivery of a Terms
Agreement being hereinafter referred to as the "Representation Date"). The Terms
Agreement specifies the firm or firms which will be Underwriters and
Representatives, the principal amount of the Underwritten Securities to be
purchased by each Underwriter, the purchase price to be paid by the Underwriters
for the Underwritten Securities, the public offering price, if any, of the
Underwritten Securities, certain terms thereof and the Underwriters'
compensation therefor and any of the terms of the Underwritten Securities not
already specified in the Indenture including, but not limited to, designations,
denominations, interest rate or rates (and method of determining such rate or
rates), redemption provisions and sinking fund requirements. The Terms Agreement
also specifies any details of the terms of the offering which should be
reflected in a post-effective amendment to the Registration Statement or the
prospectus supplement relating to the offering of the Underwritten Securities.
(b) TBS shall not be obligated to deliver any Underwritten Securities
except upon payment for all the Underwritten Securities as provided in Section
2(d) hereof.
(c) If one or more of the Underwriters shall fail at the Delivery Date to
purchase the Underwritten Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth. If, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then;
(i) If the principal amount of the Defaulted Securities does not
exceed 10% of the Underwritten Securities, the non-defaulting Underwriters
shall be obligated to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(ii) If the principal amount of the Defaulted Securities exceeds 10%
of the Underwritten Securities, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
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<PAGE> 13
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, each of the Representatives and TBS shall have the right to
postpone the Delivery Date for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
(d) Delivery of and payment for the Underwritten Securities shall be made
at the office of the Representatives at such address and time as may be
specified in the Terms Agreement. This date and time are sometimes referred to
as the "Delivery Date." On the Delivery Date TBS shall deliver the Underwritten
Securities to the Representatives for the account of each Underwriter against
payment to or upon the order of TBS of the purchase price by (i) certified or
official bank check or checks payable in New York Clearing House funds or (ii)
wire transfer of immediately available funds, as shall be specified in the Terms
Agreement. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, unless the Terms Agreement relating
thereto otherwise provides, the Underwritten Securities shall be in definitive
fully registered form and in such denominations and registered in such names as
the Representatives shall request in writing not less than two full business
days prior to the Delivery Date. For the purpose of expediting the checking and
packaging of the Underwritten Securities, TBS shall make the Underwritten
Securities available for inspection by the Representatives in New York, New York
(or such other place as may be specified by the Representatives) not later than
10:00 P.M., New York City time, on the last business day prior to the Delivery
Date.
SECTION 3. Covenants of TBS. TBS covenants and agrees with each of the
Underwriters as follows:
(a) TBS will notify the Representatives immediately (i) of the
effectiveness of any post-effective amendment to the Registration
Statement, (ii) of any request or proposed request by the Commission for
any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or to any documents incorporated by reference into the
foregoing or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any order directed to the Prospectus or any
document incorporated therein by reference or the initiation or threat of
any stop order proceeding or of any challenge to the accuracy or adequacy
of the Registration Statement, the Prospectus or any document incorporated
by reference in the Prospectus and (iv) of the receipt by TBS of any
notification with respect to the suspension of the qualification of the
Underwritten Securities for sale in any jurisdiction or initiation or
threat of any proceedings for that purpose. TBS will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible time.
(b) TBS will deliver to the Representatives and to their counsel one
signed and as many conformed copies of the Registration Statement (as
originally filed) and each amendment thereto relating to the Underwritten
Securities (including exhibits filed therewith or incorporated by reference
therein) as the Underwriters may reasonably request, and a copy of each
Prospectus filed with the Commission, including all supplements thereto and
all documents incorporated therein by reference and all consent and
exhibits filed therewith. TBS will deliver to each of the Underwriters as
many copies of the Prospectus (as amended or supplemented) as the
Underwriters shall reasonably request so long as the Underwriters are
required to deliver a Prospectus in connection with sales or solicitations
of offers to purchase the Underwritten Securities.
(c) If during any period in which, in the opinion of counsel for the
Representatives, a prospectus relating to the Underwritten Securities is
required to be delivered under the Act, any event shall occur as a result
of which the Prospectus would include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary to amend the Prospectus to
comply with the 1933 Act, TBS will notify the Representatives and will
promptly prepare and file (subject to clause (g) below) an amendment or
supplement which will effect such compliance.
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<PAGE> 14
(d) TBS will endeavor, in cooperation with the Representatives, to
qualify the Underwritten Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the
United States as the Representatives may reasonably designate; provided,
however, that TBS shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. In each
jurisdiction in which the Underwritten Securities have been so qualified,
TBS will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for so long as
may be required to complete the distribution of the Underwritten
Securities.
(e) TBS will make generally available to its security holders as soon
as practicable, but not later than 90 days after the close of the period
covered, a consolidated earnings statement (which need not be audited) (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering the 12-month period beginning not later than the first day of
TBS's fiscal quarter next following each date which is an "effective date"
of the Registration Statement (as defined in said Rule 158).
(f) During the period in which, in the opinion of counsel for the
Representatives, any Prospectus is required by law to be delivered in
connection with sales of Securities, TBS will file promptly all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c),
14 or 15(d) of the 1934 Act.
(g) Prior to filing with the Commission any (i) amendment or
supplement to the Registration Statement or (ii) Prospectus or any
amendment or supplement thereto, TBS will furnish a copy thereto to the
Representatives and their counsel and to provide the Representatives an
opportunity to comment thereon and shall not file any such amendment or
supplement to which the Representative shall reasonably object.
(h) For one year after the Delivery Date, TBS will furnish to the
Representatives, promptly after the time TBS makes the same available to
others, copies of all reports and financial statements furnished by TBS to
any securities exchange pursuant to the requirements of or agreements with
such exchange or to the Commission pursuant to the 1934 Act or the 1934 Act
regulations.
(i) During the period beginning on the Representation Date and
continuing to the Delivery Date, TBS will not, without the Representatives'
prior written consent, directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, or enter into any
agreement to sell, any debt securities of TBS other than borrowings
obtained through the commercial banking market, including, without
limitation, under TBS's revolving credit agreements and lines of credit and
the issuance, in the ordinary course of business, of TBS's commercial
paper. Except as provided in Section 4 hereof, the Underwriters shall pay
their own costs and expenses, including the fees and expenses of counsel,
any transfer taxes on the Underwritten Securities which they may sell and
the expenses of advertising any offering of the Underwritten Securities
made by the Underwriters.
(j) TBS will use the net proceeds received by it from the sale of the
Underwritten Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(k) During the period of nine months from the Closing Date, the
Company will file such amendments to the Registration Statement or
amendments or supplements to the Prospectus as the Underwriters may
reasonably request in connection with the distribution and sale of the
Securities, and will furnish to the Underwriters, at the Company's expense,
as many copies of the Registration Statement or the Prospectus, or so
amended or supplemented, as the Underwriters may reasonably request.
SECTION 4. Payment of Expenses. TBS will pay all expenses incident to the
performance of its obligations under this Agreement, including expenses related
to the following, if incurred: (i) the preparation, filing, printing and
delivery to the Underwriters of the Registration Statement as originally filed
and any amendments, supplements or exhibits thereto; (ii) the preparation,
printing and filing of any document and any amendments or exhibits thereto
required to be filed by TBS under the 1934 Act; (iii) distributing the
Registration Statement, as originally filed, and each amendment and
post-effective amendment thereto (including exhibits), any Prospectus, any
supplement or amendment to the Prospectus and any documents incorporated by
reference in any of the foregoing documents; (iv) distributing the terms of the
agreement
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<PAGE> 15
relating to the organization of the underwriting syndicate to the Underwriters
by mail, telex or other means of communication; (v) the preparation, printing or
typing of this Agreement; (vi) the preparation, issuance and delivery of the
certificates for the Underwritten Securities to the Underwriters, including
capital duties, stamp duties and stock transfer taxes, if any, payable upon
issuance of any of the Underwritten Securities and the sale pursuant to this
Agreement of the Underwritten Securities to the Underwriters; (vii) the fees and
disbursements of TBS's counsel and accountants; (viii) the qualification of the
Underwritten Securities under securities laws in accordance with the provisions
of Section 3(e), including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with
the preparation of the Blue Sky Memorandum and a memorandum concerning the
legality of the Securities, including the Underwritten Securities as an
investment; (ix) the printing and delivery to the Underwriters of copies of the
Blue Sky Memorandum and a memorandum concerning the legality of the Securities,
including the Underwritten Securities, as an investment; (x) the fees payable in
connection with any filings with the National Association of Securities Dealers,
Inc., including the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith; (xi) the fee of the Commission; and (xii)
the fees and expenses incurred in connection with the listing of the
Underwritten Securities on any securities exchange.
If this Agreement is terminated by the Representatives in accordance with
the provisions of Section 5, TBS shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy in all
material respects, on the Representation Date and on the Delivery Date, of the
representations and warranties of TBS contained herein, to the performance by
TBS of its obligations hereunder, and to each of the following additional terms
and conditions applicable to the Underwritten Securities:
(a) At or before the Delivery Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued or
proceedings therefor initiated or threatened by the Commission nor shall
any order directed to any document incorporated by reference in the
Prospectus have been initiated or threatened by the Commission.
(b) At the Delivery Date, the Representatives shall have received:
(1) The favorable opinion, dated as of the Delivery Date, of
Troutman Sanders, counsel for TBS in form and substance satisfactory to
counsel for the Underwriters, with respect to the matters set forth
below. In rendering such opinion, Troutman Sanders may, as to matters of
New York law, rely upon the opinion of counsel to the Underwriters.
(i) TBS has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Georgia.
(ii) TBS has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus.
(iii) TBS is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to be so
qualified would not have a material adverse effect on TBS and its
subsidiaries, considered as one enterprise.
(iv) Each Significant Subsidiary of TBS has been duly organized
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its organization, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, except
where the failure to be so qualified would not have a material
adverse effect on TBS and its subsidiaries, considered as one
enterprise; all of the issued and outstanding capital stock of each
such Significant Subsidiary has been duly authorized and validly
issued, is fully paid and
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<PAGE> 16
nonassessable and is beneficially owned by TBS, free and clear of any
material security interest, mortgage, pledge, lien, encumbrance,
claim or equity, other than (a) the Communications Act Restrictions
and (b) the Class C Restrictions.
(v) The issuance and sale of the Underwritten Securities have
been duly authorized by TBS and, when executed and authenticated as
specified in the Indenture and delivered against payment of the
purchase price therefor in accordance with this Agreement, the
Underwritten Securities will be legal, valid and binding obligations
of TBS, enforceable against TBS in accordance with their terms,
except to the extent enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to or affecting creditors
rights generally or by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or
at law).
(vi) This Agreement has been duly authorized, executed and
delivered by TBS.
(vii) The Indenture has been duly authorized, executed and
delivered by TBS, and (assuming due authorization, execution and
delivery thereof by the Trustee) is a legal, valid and binding
obligation of TBS enforceable against TBS in accordance with its
terms, except to the extent enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors'
rights generally or by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or
at law).
(viii) The Underwritten Securities and Indenture conform in all
material respects to the statements relating thereto contained in the
Prospectus and the Registration Statement.
(ix) The Indenture has been qualified under and complies as to
form with the Trust Indenture Act.
(x) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge and information, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission and no order directed to any document
incorporated by reference in the Prospectus has been issued.
(xi) Each of the Registration Statement, as of the time it
became effective, at the Representation Date and at the Delivery Date
and the Prospectus, at the Representation Date and at the Delivery
Date (other than the financial statements, supporting schedules, and
other financial data included or incorporated by reference therein,
and the Form T-1, as to which no opinion need be rendered) appeared
on its face to be appropriately responsive in all material respects
to the requirements of the 1933 Act and the 1933 Act Regulations and
the Trust Indenture Act.
(xii) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus (other than financial
statements, supporting schedules and other financial data included or
incorporated by reference therein, and the Form T-1 as to which no
opinion need be rendered) appeared on its face as of its date of
filing to be appropriately responsive in all material respects to the
requirements of the 1934 Act and the 1934 Act Regulations.
(xiii) To the best of such counsel's knowledge and information,
there are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as exhibits
thereto other than those described, referred to therein or filed as
exhibits thereto, and the descriptions thereof or references thereto
are correct in all material respects.
(xiv) The issuance and delivery of the Underwritten Securities,
the execution and delivery of this Agreement and the Indenture, and
the consummation of the transactions contemplated herein and therein,
will not (i) conflict with or constitute a breach of, or default
under,
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<PAGE> 17
(ii) result in the creation or imposition of any material lien,
charge or encumbrance upon any property or assets of TBS or any of
its Significant Subsidiaries pursuant to, or (iii) except as
contemplated in the Prospectus, result in any obligation to redeem or
repurchase any securities or indebtedness of TBS or its subsidiaries
or affiliates under, any agreement, indenture or instrument known to
such counsel and to which TBS or any of its Significant Subsidiaries
is a party or by which it or any of them may be bound, or to which
any of the property or assets of TBS or any of its Significant
Subsidiaries is subject, nor will such action result in any violation
of the provisions of the charter or by-laws of TBS, or any material
applicable law, administrative regulation or administrative or court
decree except for such conflicts, breaches, defaults, liens, charges,
encumbrances or violations which, singly or in the aggregate, would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
TBS and its subsidiaries, considered as one enterprise.
(xv) No authorization, consent or approval of, or other order
by, any United States court or administrative or governmental
authority or agency is required in connection with the sale of the
Underwritten Securities under this Agreement to the Underwriters,
except such as may be required under state securities laws or except
as may have been obtained.
(2) The favorable opinion, dated as of the Delivery Date, of Steven
W. Korn, Esq., General Counsel of TBS, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) Except as disclosed in the Prospectus, each of TBS and its
subsidiaries owns, or is licensed under, or otherwise has sufficient
rights to use, all material licenses, trademarks, tradenames and
copyrights (collectively "Intellectual Property") used in, or
necessary for the conduct of, its respective business as set forth in
the Prospectus. To the best of such counsel's knowledge, no claims
have been asserted against TBS or its subsidiaries by any person with
respect to the use of any such Intellectual Property or challenging
or questioning the validity or effectiveness of any such Intellectual
Property or any license or agreement related thereto which, if
finally determined adversely to TBS or any of its subsidiaries,
would, singly or in the aggregate, have a material adverse effect on
TBS and its subsidiaries, considered as one enterprise. Except as
disclosed in the Prospectus, the use of such Intellectual Property in
connection with the business and operations of TBS and of its
subsidiaries does not, to the best of such counsel's knowledge,
materially infringe on the rights of any person.
(ii) There is no action, suit, proceeding or investigation
pending or, to the best of such counsel's knowledge after due
inquiry, threatened, against or affecting TBS or any of its
subsidiaries in any court or before any governmental authority or
arbitration board or tribunal, which seeks to restrain, enjoin,
prevent consummation of or otherwise challenge any of the
transactions contemplated hereby (including the authorization,
issuance, sale and delivery of the Underwritten Securities). To the
best of such counsel's knowledge, except as disclosed in the
Prospectus, there is no action, suit, proceeding or investigation
pending to which TBS or any of its subsidiaries is a party or of
which the business or property of TBS or any of its subsidiaries is
the subject, the outcome of which would have a material adverse
effect, financial or otherwise, upon TBS and its subsidiaries,
considered as one enterprise, nor is there any active threat of any
such action, suit, proceeding or investigation as to which such
counsel has knowledge.
(3) The favorable opinion, dated as of the Delivery Date, of Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., special counsel to TBS, in
form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) The information in the Registration Statement and the
Prospectus or, as applicable, in TBS's Annual Report on Form 10-K for
the year ended December 31, 1992 or TBS's Quarterly Report on Form
10-Q for the quarter ended March 31, 1993 under the captions
"Business," "Regulation" or "Recent Developments" insofar as such
statements constitute a summary of
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<PAGE> 18
federal communications law and copyright law and the rules,
regulations and administrative orders promulgated or proposed for
promulgation under each thereof and decisions or orders of any court
or administrative agency or authority relating to each thereof
relevant to the operations of TBS and its Significant Subsidiaries as
currently conducted and as described in the Prospectus, or insofar as
such statements constitute a summary of the status of administrative,
judicial or legislative proceedings, represents an accurate and fair
summary of such laws, rules, regulations, orders and proceedings.
(ii) No approvals are required under federal communications law
and copyright law and the rules, regulations and administrative
orders promulgated under each thereof and decisions or orders of any
court or administrative agency or authority relating to each thereof
in connection with the consummation by TBS of the transactions
contemplated by this Agreement and the Indenture and the fulfillment
of the obligations hereunder and thereunder.
(iii) Except as set forth in the Prospectus, neither TBS nor any
of its Significant Subsidiaries is in violation of any federal
communications law or copyright law or the rules, regulations and
administrative orders promulgated under each thereof or any order of
any court or administrative agency or authority relating to each
thereof which violation would have a material adverse effect on TBS
and its subsidiaries, considered as one enterprise.
(4) The favorable opinion, dated as of the Delivery Date, of
Skadden, Arps, Slate, Meagher & Flom, counsel for the Underwriters, with
respect to the matters set forth in (v) through (xi), inclusive (but not
with respect to any documents incorporated by reference), of subsection
(b)(1) of this Section. In rendering such opinion, Skadden, Arps, Slate,
Meagher & Flom may, as to matters of Georgia law, rely upon the opinion
of Troutman Sanders.
(5) In giving their opinions required by subsections (b)(1), (b)(2)
and (b)(4), respectively, of this Section, Troutman Sanders, Steven W.
Korn, Esq. and Skadden, Arps, Slate, Meagher & Flom shall each state
that they have participated in conferences with officers and other
representatives of TBS, outside counsel for TBS, representatives of the
independent public accountants for TBS, Representatives and counsel for
the Underwriters, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed and,
although they are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus and have not made any
independent check or verification thereof, on the basis of the
foregoing, nothing has come to such counsel's attention that lead them
to believe that either the Registration Statement (except for (i)
financial statements and other financial data included or incorporated
by reference therein, (ii) in the case of Skadden, Arps, Slate, Meagher
& Flom only, any of the documents incorporated or deemed to be
incorporated by reference therein and (iii) with respect to the opinions
being rendered by Troutman Sanders and Skadden, Arps, Slate, Meagher &
Flom, respectively, matters affecting TBS or any of its subsidiaries
insofar as such matters are being opined on by Steven W. Korn, General
Counsel of TBS, pursuant to Section 5(b)(2) hereof or by Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C. pursuant to Section 5 (b)(3)
hereof), at the time it became effective or at the Representation Date,
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 that the Prospectus (except for (i)
financial statements and other financial data included or incorporated
by reference therein, (ii) in the case of Skadden, Arps, Slate, Meagher
& Flom only, any of the documents incorporated or deemed to be
incorporated by reference therein and (iii) with respect to the opinions
being rendered by Troutman Sanders and Skadden, Arps, Slate, Meagher &
Flom, respectively, matters affecting TBS or any of its subsidiaries
insofar as such matters are being opined on by Steven W. Korn, General
Counsel of TBS, pursuant to Section 5(b)(2) hereof or by Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C. pursuant to Section 5(b)(3)
hereof), at the Representation Date or at the Delivery Date, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they were made, not misleading.
11
<PAGE> 19
(c) Except as contemplated in the Prospectus or reflected therein by
the filing of any amendment or supplement thereto or any document
incorporated or deemed to be incorporated therein by reference, at the
Delivery Date, there shall not have been, since the date of the most recent
consolidated financial statements included or incorporated by reference in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
TBS and its subsidiaries, considered as one enterprise, whether or not in
the ordinary course of business. The Representatives shall have received a
certificate signed by (A) the President, Vice President-Finance, Vice
President-Treasurer or Vice President-Controller of TBS and (B) another
Vice President, dated as of the Delivery Date, to the effect (i) that there
has been no such material adverse change, (ii) that the representations and
warranties in Section 1 are true and correct with the same force and effect
as though expressly made at and as of the Delivery Date, (iii) that TBS has
complied with all agreements and satisfied all conditions required by this
Agreement or the Indenture on its part required to be performed or
satisfied at or prior to the Delivery Date, and (iv) that no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been initiated or threatened by
the Commission.
(d) The Representatives shall have received from the Company's
independent public accountants a letter, dated as of the Representation
Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) they are independent public accountants with respect to TBS and
its subsidiaries within the meaning of the 1933 Act and the 1933 Act
Regulations;
(ii) in their opinion the financial statements and supporting
schedules of the Company and its subsidiaries incorporated by reference
in the Registration Statement and covered by their opinions therein
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1934 Act and the
published rules and regulations thereunder with respect to registration
statements on Form S-3;
(iii) based upon limited procedures set forth in such letter,
nothing has come to their attention which causes them to believe that
(A) the unaudited financial information of TBS and its subsidiaries
included or incorporated by reference in the Registration Statement and
the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the 1934 Act and the 1934 Act
Regulations as they apply to Form 10-Q or any material modifications
should be made to the unaudited financial statements for them to be in
conformity with generally accepted accounting principles in the United
States applied on a basis substantially consistent with that of the
audited financial statements incorporated by reference therein, or (B)
at a specified date not more than five days prior to the Representation
Date, there was any change in the capital stock of TBS (except for
subsequent issuances, if any, pursuant to the reservations, commitments,
employee benefit plans, agreements or convertible securities referred to
in the Registration Statement or the Prospectus) or any increase in the
consolidated long-term debt of TBS and its subsidiaries as compared with
the amounts shown in the most recent consolidated balance sheets
incorporated by reference in the Registration Statement and Prospectus,
except in each such case as set forth in or contemplated by the
Registration Statement and Prospectus or except for such exceptions
enumerated in such letter as shall have been agreed to by the
Representatives and TBS;
(iv) in addition to the examination referred to in their opinions
and the limited procedures referred to in clause (iii) above, they have
carried out certain specified procedures, not constituting an audit,
with respect to certain amounts, percentages, ratios and financial
information which is included or incorporated by reference in the
Registration Statement and the Prospectus and which are specified by the
Representatives, and have found such amounts, percentages, ratios and
financial information to be in agreement with, or calculated from, the
relevant accounting records of TBS and its subsidiaries identified in
such letter.
(e) At the Delivery Date, the Representatives shall have received from
the Company's independent public accountants a letter, dated as of the
Delivery Date, to the effect that they reaffirm the statements
12
<PAGE> 20
made in the letter furnished pursuant to subsection (d) of this Section,
except that the specified date referred to shall be a date not more than
five days prior to the Delivery Date.
(f) At the Delivery Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities as herein contemplated and related proceedings, or
in order to evidence the accuracy of any of the representations or
warranties or the fulfillment of any of the conditions herein contained;
and all proceedings taken by TBS in connection with the issuance and sale
of the Underwritten Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and counsel for
the Underwriters.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to TBS at any time at or prior to the Delivery Date,
and such termination shall be without liability of any party to any other party
except as provided in Section 4.
SECTION 6. Indemnification. (a) TBS agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, joint or several, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of TBS; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the reasonable fees and disbursements of
counsel chosen by the Underwriters), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (A) the foregoing indemnity shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to TBS by or on behalf
of the Underwriters expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto);
(B) the foregoing indemnity with respect to any untrue statement contained in or
omission from a Prospectus shall not inure to the benefit of any Underwriter, or
any person controlling such Underwriter from whom the person asserting any such
loss, liability, claim, damage or expense purchased any of the Underwritten
Securities which are the subject thereof if (i) such person was not sent or
given a copy of the Prospectus (or the Prospectus as amended or supplemented)
(in each case exclusive of the documents from which information is incorporated
by reference) at or prior to the written confirmation of the sale of such
Underwritten Securities to such person, (ii) TBS shall have delivered the
Prospectus (as amended or supplemented) to the Underwriters on a reasonably
timely basis and in requisite quantity to permit the Underwriters to send or
deliver such amended or supplemented Prospectus to such person at or prior to
the written confirmation of the sale of such Underwritten Securities and (iii)
the untrue statement contained in or omission from such Prospectus was corrected
in such amendment or supplement to the Prospectus; and (C) the foregoing
indemnity shall not apply to any loss, liability, claim, damage or expense to
the extent arising out of or based upon any untrue statement or omission or
alleged untrue statement or omission made in reliance upon the Form T-1.
13
<PAGE> 21
(b) Each Underwriter severally agrees to indemnify and hold harmless TBS,
its directors, each of its officers who signed the Registration Statement and
each person, if any, who controls TBS within the meaning of Section 15 of the
1933 Act against any and all loss, liability, joint or several claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement or Prospectus
in reliance upon and in conformity with written information furnished to TBS by
such Underwriter expressly for use in the Registration Statement or the
Prospectus.
(c) Promptly after receipt by an indemnified party under this Section of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party in writing of the claim
or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section. If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein, and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
claim or action and to participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such claim or action and
employ counsel reasonably satisfactory to the indemnified party, in which case,
if such indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
or action on behalf of such indemnified party, it being understood, however,
that the indemnifying party shall not, in connection with any one such claim or
action or separate but substantially similar or related claims or action in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties, which firm shall be
designated in writing by the Representatives, if the indemnified parties under
this Section consist of any Underwriter or any of their respective controlling
persons, or by TBS, if the indemnified parties under this Section consist of TBS
or any of its directors, officers or controlling persons. Each indemnified
party, as a condition of the indemnity agreements contained in Section 6(a) and
6(b) hereof, shall use its best efforts to cooperate with the indemnifying party
in the defense of any such claim or action. The indemnifying party shall not be
liable for any settlement of any such claim or action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment in favor of the
plaintiff in any such claim or action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason unavailable to an indemnified party although
applicable in accordance with its terms, then each indemnifying party shall, in
lieu of indemnifying the indemnified party, contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by TBS on the
one hand and the Underwriters and the Participants on the other from the
offering of the Underwritten Securities, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits
14
<PAGE> 22
referred to in clause (i) above but also the relative fault of TBS on the one
hand and the Underwriters and the Participants on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by TBS on the one hand and the
Underwriters on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Underwritten Securities (before deducting expenses) received by TBS bear to the
total underwriting discounts and commissions received by the Underwriters with
respect to such offering in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by TBS
or the Underwriters, the intent of the parties and the opportunity to correct or
prevent such statement or omission. TBS and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation or by any other method of allocation (even if
the Underwriters were treated as one entity for such purpose) which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
shall be deemed to include, for purposes of this Section, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Underwritten Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. 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. The Underwriters' obligations to contribute as provided in
this Section are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section, each person, if any,
who controls an Underwriter within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as such Underwriter, and each
director of TBS, each officer of TBS who signed the Registration Statement and
each person, if any, who controls TBS within the meaning of Section 15 of the
1933 Act shall have the same rights to contribution as TBS.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of TBS submitted pursuant
hereto shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of TBS, and shall survive delivery of the Underwritten
Securities to the Underwriters.
SECTION 9. Termination of Agreement. (a) The obligations of the
Underwriters under this Agreement may be terminated by the Representatives, in
their absolute discretion, by notice to and received by TBS, prior to the
delivery of and payments for the Underwritten Securities, if during the period
beginning on the date of the Terms Agreement to and including the Delivery Date
(i) there has occurred any material adverse change in the financial markets in
the United States or any outbreak or escalation of hostilities or other calamity
or crisis, the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Underwritten Securities or to
enforce contracts for the sale of the Underwritten Securities, or (ii) if
trading in securities of TBS has been suspended by any official act, or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said Exchanges or by order of the Commission or any other governmental
authority, or (iii) if a banking moratorium has been declared by either federal,
New York or Georgia authorities or (iv) the rating of any of TBS's debt
securities shall have been lowered by any nationally recognized statistical
rating organization ("NRSO") or any such NRSO shall have placed such debt
securities on "creditwatch" or any similar listing with negative implications,
or (v) there has occurred any material and adverse change, or any development
involving a prospective material and adverse change, in or affecting the
business or properties of TBS and its subsidiaries, considered as one enterprise
which, in the judgment of a majority in interest of the Underwriters materially
impairs the investment quality of the Notes.
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<PAGE> 23
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4.
SECTION 10. Notices. TBS shall be entitled to act and rely upon any
request, consent, notice or agreement on behalf of the Representatives. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Representatives shall be directed as specified
in the Terms Agreement with a copy to Skadden, Arps, Slate, Meagher & Flom, 300
South Grand Avenue, Suite 3400, Los Angeles, California 90071, attention of
Thomas C. Janson, Jr.; notices to TBS shall be directed to it at One CNN Center,
Atlanta, Georgia 30303, attention of Christian L. Becken, Vice President and
Treasurer, with a copy to Troutman Sanders, NationsBank Plaza, Suite 5200, 600
Peachtree Street, N.E., Atlanta, Georgia 30308, attention of Terry C. Bridges.
SECTION 11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and TBS and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, or corporation, other than the Underwriters and TBS and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein or therein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and exclusive benefit of
the Underwriters and TBS and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from the Underwriters shall be deemed to be a successor by reason
merely of such purchase.
SECTION 12. Governing Law and Time. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Unless otherwise set forth
herein, specified times of day refer to New York City time.
SECTION 13. Terms Agreement. The Terms Agreement may be executed in one or
more counterparts and if executed in more than one counterpart, the executed
counterparts shall together constitute a single instrument.
16
<PAGE> 1
EXHIBIT 4(F)
TURNER BROADCASTING SYSTEM, INC.
OFFICERS' CERTIFICATE
Pursuant to Sections 201 and 301 of the Indenture, dated as of May 15,
1993, relating to senior debt securities (including the Turner Broadcasting
System, Inc. Standard Multiple-Series Indenture Provisions dated May 15, 1993
incorporated therein by reference, as amended or supplemented from time to time,
and including, with respect to a particular series of securities, the terms of
such securities established as contemplated by Section 301, whether established
in or pursuant to a supplemental indenture, a Board Resolution or an Officers'
Certificate, the "Indenture"), between Turner Broadcasting System, Inc., a
Georgia corporation (the "Company"), and The First National Bank of Boston, as
trustee (the "Trustee"), the undersigned, Wayne H. Pace, Vice President-Finance
and Chief Financial Officer of the Company, and Steven W. Korn, Vice President,
Secretary and General Counsel of the Company, hereby certify on behalf of the
Company as follows:
(1) Authorization. The establishment of a series of Securities of the
Company has been approved and authorized in accordance with the provisions
of the Indenture and in accordance with resolutions adopted by unanimous
written consent of the Board of Directors of the Company on April 24, 1993
and resolutions adopted by unanimous written consent of the Finance
Committee of the Board of Directors of the Company on January 18, 1994.
(2) Compliance with Covenants and Conditions Precedent. All covenants
and conditions precedent provided for in the Indenture relating to the
establishment of the form and terms of the Notes (as defined below) as a
series of Securities have been complied with.
(3) Terms. The terms of the series of the Securities established
pursuant to this Officers' Certificate shall be as follows:
(a) Title. The title of the series of Securities is the "7.40%
Senior Notes due 2004" (the "Notes").
(b) Aggregate Principal Amount. The aggregate principal amount of
the Notes which may be authenticated and delivered pursuant to the
Indenture (except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Notes pursuant to Sections 304, 305, 306 and 906 of the Indenture) is
$250,000,000.
(c) Persons to Whom Interest Payable. Interest on any Note which
is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the person in whose name that Note (or one
or more Predecessor Securities) is registered at the close of business
on the Regular Record Date (whether or not a Business Day) for such
interest set forth in Section 3(e), except that defaulted interest shall
be payable to the persons provided in Section 307 of the Indenture.
(d) Stated Maturity. The outstanding principal amount of the Notes
will be payable on February 1, 2004.
(e) Rate of Interest; Interest Payment Date; Regular Record Date;
Accrual of Interest. The Notes will bear interest at a rate of 7.40%
per annum. Interest on the Notes will be paid semi-annually in arrears
on February 1 and August 1 of each year (each of which is an Interest
Payment Date with respect to the Notes), commencing on August 1, 1994,
and at maturity. The Regular Record Date for interest payable on each
February 1 will be the immediately preceding January 15, and the Regular
Record Date for interest payable on each August 1 will be the
immediately preceding July 15 (in each case whether or not a Business
Day).
<PAGE> 2
The Notes will bear interest from February 1, 1994 or from the most
recent date to which interest has been paid or duly provided for until
the principal thereof is paid or made available for payment. Interest
payments shall be the amount of interest accrued from and including the
most recent date in respect of which interest has been paid or duly
provided for (or from and including February 1, 1994 if no interest has
been paid or duly provided for with respect to such Note), to but
excluding the next succeeding Interest Payment Date (or, if applicable,
Redemption Date or other payment date). Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Notes shall be
issuable as fully registered senior notes, without coupons in
denominations of $1,000 and any integral multiple thereof.
(f) Place of Payment; Registration of Transfer and Exchange;
Notices to Company. Payment of the principal of and interest on the
Notes will be made at the Corporate Trust Office of the Trustee, or at
any other office or agency designated by the Company for such purpose;
provided, however, that, at the option of the Company, payment of
interest may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register.
The Notes may be presented for registration of transfer or exchange at
the Corporate Trust Office of the Trustee or at any other office or
agency hereafter designated by the Company for such purpose. Notices and
demands to or upon the Company in respect of the Notes and the Indenture
may be served at the Corporate Trust Office of the Trustee or at Turner
Broadcasting System, Inc., One CNN Center, Atlanta, Georgia 30303,
Attention: Secretary, or at such other address as the Company may
designate by notice to holders.
(g) Redemption at the Option of the Holder.
(i) Upon the occurrence of a Triggering Event (as defined in
Section 3(h)), subject to the conditions of this clause (g), each
Holder of Notes shall have the option to require the Company to
redeem all, but not less than all, of the Notes owned by such Holder
(the "Redemption Right") at a redemption price, payable in cash,
equal to 101% of the principal amount, plus accrued and unpaid
interest to the date fixed for redemption.
(ii) If a Triggering Event occurs with respect to the Company,
then, as soon as practicable and in any event within 30 days after
the occurrence of such Triggering Event, the Company shall mail to
each Holder and the Trustee a notice which shall disclose the
occurrence of the Triggering Event and the right of the Holder to
require the Company to redeem all, but not less than all, of such
Holder's Notes pursuant to this clause (g) and shall state the
Redemption Date (as defined below), the redemption price, the name
and address of the Paying Agent, and that the Notes to be redeemed
must be surrendered to the Paying Agent in order for the Holder of
the Notes to collect the redemption price. Such notice shall be
accompanied by a form of written demand to be used by the Holder to
exercise his Redemption Right (a "Demand Form").
(iii) In the event of any Triggering Event each Holder shall
have the Redemption Right for a period of 45 days after the date that
notice of such Triggering Event is mailed to Holders of the Notes and
the Trustee pursuant to clause (g)(ii); provided, that the failure of
the Company to mail such notice shall not affect the right of the
Holders to require the Company to repurchase such Holders' Notes, in
which event the Redemption Date shall be the 45th day following the
last day on which the Company was permitted to mail such notice
pursuant to clause (g)(ii). A Holder may exercise such Redemption
Right at any time within the 45-day period after the mailing of such
notice by the Company by submitting to the Trustee not later than the
close of business on the Redemption Date a completed Demand Form
relating to the Notes to be redeemed. Unless sooner exercised, the
Redemption Right will expire with respect to such Triggering Event at
the close of business on the last day of such 45-day period (the
"Redemption Date"). Exercise of such Redemption Right will be
irrevocable and interest on the Notes tendered for redemption will
cease to accrue from and after the Redemption Date.
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<PAGE> 3
(iv) Within 30 days after the occurrence of a Triggering Event
(but in any event not later than the date notice of such Triggering
Event is mailed to the Holders and the Trustee), the Company shall
deposit with the Trustee or one or more Paying Agents (or, if the
Company is acting as its own Paying Agent, set aside, segregate and
hold in trust as provided in Section 1003) immediately available
funds in an amount sufficient to redeem on the Redemption Date all of
the Notes outstanding on the date of the delivery of such notice.
Following payment of the Redemption Price of all Notes required to be
redeemed pursuant to this clause (g), all funds remaining from the
amounts previously deposited with the Trustee or other Paying Agent
or set aside by the Company, and all interest earned thereon, shall
belong and be immediately released to the Company as part of its
general funds (or assets).
(v) The provisions of this clause 3(g) shall supersede the
redemption provisions in Article XI of the Indenture for purposes of
the Notes.
(vi) The Company will comply with all applicable tender offer
rules under the Securities Exchange Act of 1934, as amended,
including, but not limited to, Rule 14e-1 thereunder, as then in
effect, with respect to any offer by the Company to redeem the Notes
upon a Triggering Event.
(h) Triggering Events.
Each of the following events set forth in clauses (i), (ii) or
(iii) below shall be a "Triggering Event" as used herein.
(i) Restricted Payments. It shall be a Triggering Event if the
Company or any of its Subsidiaries declares or makes any Restricted
Payment if, at the time of such Restricted Payment, (x) an Event of
Default shall have occurred and be continuing or would result
therefrom or (y) after giving effect to such Restricted Payment, the
Consolidated Interest Coverage Ratio of the Company would be less
than 1.50 to 1.
Notwithstanding the foregoing, the following actions shall
not be a Triggering Event:
A. the payment of any dividend within 60 days after the
date of its declaration if the dividend would have been
permitted on the date of declaration;
B. the issuance of Capital Stock (other than
Disqualified Capital Stock) of the Company upon conversion of
the Company's Class C Convertible Preferred Stock, par value
$.125 per share;
C. the issuance of Capital Stock (other than
Disqualified Capital Stock) of the Company upon the
conversion of, or in exchange for, Capital Stock of the
Company;
D. the declaration or payment by the Company or any
Subsidiary in Capital Stock (other than Disqualified Capital
Stock) of any dividend on, or the making by the Company or
any Subsidiary of any distribution of Capital Stock (other
than Disqualified Capital Stock) in respect of, the Capital
Stock of the Company;
E. the declaration or payment of any dividend or the
making of any distribution in respect of the Capital Stock of
any Subsidiary of the Company to the Company or another
Subsidiary of the Company or the redemption, purchase,
retirement or other acquisition for value by a Subsidiary of
shares of such Subsidiary from the Company or another
Subsidiary;
F. the declaration or payment to any Person other than
the Company or a Subsidiary of the Company (each such Person
other than the Company or a Subsidiary of the Company being
referred to as an "Equity Holder") of any dividend, the
making of any distribution in respect of the Capital Stock of
a Subsidiary of the Company held by any Equity Holder or the
redemption, purchase, retirement or other acquisition for
value by a Subsidiary of the Company of Capital Stock of such
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<PAGE> 4
Subsidiary held by any Equity Holder, provided that the
amounts declared or paid in respect thereof subsequent to the
Issue Date shall not exceed the sum of:
1. the aggregate proceeds received by such
Subsidiary from purchases of equity interests in such
Subsidiary by the Equity Holders or other capital
contributions made by the Equity Holders to such
Subsidiary subsequent to the Issue Date and
2. the Equity Holders' pro rata share of the
aggregate Consolidated Operating Cash Flow of such
Subsidiary (or if such aggregate Consolidated Operating
Cash Flow is a deficit, minus 100% of such deficit)
earned subsequent to June 30, 1993 through the end of the
most recent fiscal quarter for which financial
information in respect thereof is available preceding the
fiscal quarter in which such declaration or payment
occurs, less all other declarations or payments to Equity
Holders subsequent to the Issue Date and prior to such
declaration or payment; or
G. the acquisition by the Company of its Capital Stock
(or, in the case of clause (4), below, warrants, rights or
options to purchase or acquire shares of its Capital Stock)
(1) to eliminate fractional shares, (2) to collect or
compromise in good faith a debt, claim or controversy with
any shareholder at a price not in excess of the fair market
value thereof, (3) from any shareholder who, by reason of
dissent from any corporate action, is entitled under
applicable laws to be paid the fair market value of his
shares, (4) from a director or an employee who has purchased
or otherwise acquired the shares, warrants, rights or options
from the Company or a Subsidiary under an agreement
permitting or obligating the Company or a Subsidiary to
repurchase the shares, warrants, rights or options, but in no
event for a price greater than the higher of the fair market
value thereof or the price at which they were sold by the
Company, or (5) pursuant to a court order; provided, that the
aggregate amount paid by the Company subsequent to the Issue
Date pursuant to subclauses (1), (2), (3), (4) and (5) shall
not exceed $100,000,000.
(ii) Change of Control. It shall be a Triggering Event if
there shall be a Change of Control with respect to the Company.
(iii) Amendments to Section 801. Section 801 of the
Indenture is amended, but only insofar as it relates to the
Notes, to read in its entirety as follows:
"Section 801. Company May Consolidate, Etc., Only on
Certain Terms. It shall be a Triggering Event if
A. the Company consolidates with, or merges into,
any other Person,
B. the Company conveys or transfers (by sale, lease,
assignment or otherwise), directly or indirectly, in a
single transaction or a series of related transactions,
its properties and assets as an entirety or substantially
as an entirety to a Person or group of related Persons;
or
C. the Company or any Subsidiary conveys or
transfers (by sale, lease, assignment or otherwise),
directly or indirectly, in a single transaction or a
series of related transactions not in the ordinary course
of the business of the Company or such Subsidiary, as the
case may be, to any Person or group of related Persons
(other than the Company or another Subsidiary) its
properties or assets (including Capital Stock
representing a majority of the Voting Power of
Subsidiaries that owned such properties or assets) if
either (i) such properties or assets produced more than
25% of the Company's Consolidated Operating Cash Flow for
the four fiscal quarters ending immediately prior to such
conveyance or transfer for which financial information in
respect thereof is available, or (ii) the
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<PAGE> 5
book value of such property or assets equals or exceeds
25% of the consolidated assets of the Company and its
Subsidiaries at the end of the most recent fiscal quarter
for which financial information in respect thereof is
available, unless the following conditions are met:
(1) either the Company shall be the surviving
Person or the Person (if other than the Company)
formed by such consolidation or into which the
Company is merged or to which the properties and
assets of the Company as an entirety or substantially
as an entirety are conveyed or transferred shall be
organized and existing under the laws of the United
States of America, any State thereof or the District
of Columbia and shall expressly assume, by an
indenture supplemental to the Indenture, executed and
delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual
payment of the principal of, premium, if any, and
interest, if any, on all outstanding Notes and the
performance of every covenant of the Indenture and
provisions of the Notes on the part of the Company to
be performed or observed;
(2) immediately after giving effect to such
transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be
continuing;
(3) if a supplemental indenture is required in
connection with such transaction, the Company shall
have delivered to the Trustee an Officers'
Certificate stating that such consolidation, merger,
conveyance or transfer and such supplemental
indenture comply with this Article and that all
conditions precedent herein provided for relating to
such transaction have been complied with and, upon
closing of the consolidation, merger, conveyance or
transfer, an Opinion of Counsel stating that the
corporation formed by such consolidation or into
which the Company is merged or the Person which
acquires by conveyance or transfer the properties and
assets of the Company as an entirety or substantially
as an entirety is organized and existing under the
laws of the United States of America, any State
thereof or the District of Columbia and has assumed,
by an indenture supplemental to the Indenture,
executed and delivered to the Trustee, the due and
punctual payment of the principal of, premium, if
any, and interest, if any, on all outstanding Notes
and the performance of every covenant of the
Indenture and provisions of the Notes on the part of
the Company to be performed or observed; and
(4) immediately after giving effect to such
transaction on a pro forma basis the Consolidated
Interest Coverage Ratio of the Company (if the
Company is the surviving Person or in the event of a
conveyance or transfer described in Section 801.C) or
the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or
to which the properties and assets of the Company as
an entirety or substantially as an entirety are
conveyed or transferred is at least equal to 1.50 to
1."
(i) Redemption of the Option of the Company. The Notes are not
redeemable at the Company's option.
(j) Additional Covenants.
(i) Incurrence of Certain Liens. The Company shall not, and
shall not permit any Subsidiary to, subject to any Lien, or
suffer to exist any Lien on, the whole or any part of any
Property now owned or hereafter acquired by it, except as
hereinafter provided in
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<PAGE> 6
clause 3(d)(ii), unless the Company secures the Notes, and any
other securities which may then be outstanding and entitled to
the benefit of a covenant similar in effect to this covenant,
equally and ratably with the indebtedness or obligations secured
by such Lien, so long as any such indebtedness or obligations
shall be so secured.
(ii) Permitted Liens. The provisions of clause 3(j)(i)
shall not be applicable to the following:
A. Liens imposed by any governmental authority for taxes,
assessments or charges not yet delinquent or which are being
contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the
books of the Company or any of its Subsidiaries, as the case may
be, in accordance with generally accepted accounting principles;
B. pledges or deposits securing non-delinquent obligations
under worker's compensation, unemployment insurance and other
social security legislation;
C. easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements,
leases, subleases, licenses, sublicenses, restrictions on the use
of Property or minor imperfections in title thereto which, in the
aggregate, are not material in amount, and which do not in any
case materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the business of
the Company or any of its Subsidiaries;
D. Liens on Property of Persons which become Subsidiaries of
the Company after the Issue Date securing Debt described in
clause 3(j)(iii)D hereof, provided that:
1. such Liens were in existence at the time the
respective Persons became Subsidiaries of the Company and
were not created in anticipation thereof; and
2. such Liens do not extend to Property other than the
Property of such Subsidiary that secured such Debt;
E. Liens on Works which either:
1. existed in such Works before the time of their
acquisition and were not created in anticipation thereof, or
2. were created solely for the purpose of securing
obligations to financiers, producers, distributors,
exhibitors, completion guarantors, inventors, copyright
holders, financial institutions or other participants
incurred in the ordinary course of business in connection
with the acquisition, financing, production, completion,
distribution or exhibition of Works;
F. Liens upon Property acquired after the Issue Date (by
purchase, production, construction or otherwise) by the Company
or any of its Subsidiaries, each of which either:
1. existed on such Property before the time of its
acquisition and was not created in anticipation thereof, or
2. was created solely for the purpose of securing Debt
representing, or incurred to finance, refinance or refund,
the cost (including cost of construction, production,
development or acquisition) of the respective Property or of
the Capital Stock or other ownership interest in the entity
which owns the Property at the time of acquisition; provided
that no such Lien shall extend to or cover any Property of
the Company or such Subsidiary other than the respective
Property so acquired (including Property so acquired
indirectly as a result of the acquisition by the Company or
any Subsidiary
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<PAGE> 7
through the acquisition of such Capital Stock or ownership
interest), improvements thereon, products and proceeds
thereof and revenues therefrom;
G. Any Lien on the office building and hotel complex located
in Atlanta, Georgia known as the CNN Center Complex, including
the parking decks for such complex (to the extent such parking
decks are owned or leased by the Company or its Subsidiaries), or
any portion thereof and all property rights therein and the
products, revenues and proceeds therefrom created as part of any
mortgage financing or sale-leaseback of the CNN Center Complex;
H. Liens on satellite transponders and all property rights
therein and the products, revenues and proceeds therefrom which
secure obligations incurred in connection with the acquisition,
utilization or operation of such satellite transponders or the
refinancing of any such obligations;
I. additional Liens created after the Issue Date on
Property, provided that the aggregate Debt secured thereby and
incurred on and after the Issue Date shall not exceed on the date
that any such Lien is granted, the greater of $100,000,000 and
five percent (5%) of the book value, net of depreciation and
amortization, of the total assets of the Company, on a
consolidated basis, shown on the consolidated financial
statements of the Company as of the last day of the month
preceding the creation of such Lien;
J. Liens existing on the Issue Date;
K. Liens resulting from progress payments or partial
payments under United States government contracts or
subcontracts;
L. Liens arising from legal proceedings, so long as such
proceedings are being contested in good faith by appropriate
proceedings diligently conducted and so long as execution is
stayed on all judgments resulting from any such proceedings;
M. restrictions arising under the Federal Communications Act
of 1934, as amended, and similar statutes in effect in
jurisdictions outside the United States of America;
N. restrictions on the Atlanta National League Baseball
Club, Inc. and Atlanta Hawks, L.P. and their respective assets
imposed by Major League Baseball or the Commissioner of Baseball,
and the National Basketball Association, respectively, including,
without limitation, restrictions on the transferability of the
Company's or any of its Subsidiary's interests therein;
O. Liens imposed under capital leases entered into after the
Issue Date provided that such Liens extend only to the property
or assets that are the subject of such capital leases;
P. Liens on Capital Stock of or other ownership interest in
any Person not a Subsidiary of the Company securing Debt of such
Person;
Q. Liens arising in the ordinary course of business that do
not secure the repayment of Debt, including, without limitation,
the following Liens:
1. Liens on film or television production in favor of
the Screen Actors Guild or other similar trade groups or
guilds securing rights to residual payments owing to the
Screen Actors Guild, such other trade group or their
respective members in respect of such film or television
production;
2. Liens to secure the performance of bids, trade
contracts (other than for borrowed money), statutory
obligations, surety and appeal bonds, leases (other than
capital leases), performance bonds and other obligations of a
like nature;
3. Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs
duties in connection with the importation of goods;
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<PAGE> 8
4. restrictions (other than security interests) on the
transferability of investments in favor of co-investors or
the issuers of such investments or imposed by law;
5. Liens on works arising out of the sale, license,
syndication, transfer or other disposition of such works made
in accordance with the customary practices in the film,
publishing, video and television industries, of rights or
interests in works, so long as such Lien attaches only to
works of the Company or its Subsidiaries being so sold,
licensed, syndicated, transferred or disposed of; and
6. Liens to secure the performance of operating leases
provided that such Liens extend only to the property or
assets that are the subject of such operating leases;
R. carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens (whether or not statutory)
arising in the ordinary course of business which are not overdue
for a period of more than 90 days or which are being contested in
good faith and by appropriate proceedings, for which a reserve or
other appropriate provision, if any, as shall be required by
generally accepted accounting principles shall have been made;
and
S. any extension, renewal or replacement of the foregoing,
provided, however, that the Liens permitted hereunder shall not
be spread to cover any additional Property (other than a
substitution of like Property).
(iii) Incurrence of Senior Funded Debt. Except as hereinafter
described, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, issue, incur,
assume, guarantee or otherwise become liable, contingently or
otherwise, with respect to, extend the maturity of or otherwise
become responsible for the payment of (collectively "incur"), any
Funded Debt, unless, after giving effect to (A) the issuance of such
Funded Debt and (if applicable) the application of the net proceeds
thereof to refinance other Funded Debt as if such Funded Debt was
issued and the application of the proceeds occurred at the beginning
of the period and (B) the issuance and retirement of any other Funded
Debt since the first day of the period as if such Funded Debt was
issued or retired at the beginning of the period, the Consolidated
Interest Coverage Ratio is at least 1.50 to 1.
Notwithstanding the foregoing, the Company and its Subsidiaries
may incur each and all of the following:
A. Debt outstanding on the Issue Date and any extension,
renewal, replacement or refinancing thereof;
B. Debt of Subsidiaries of the Company to the Company or to
other Subsidiaries of the Company;
C. up to $200,000,000 in aggregate principal amount at any
one time outstanding of Debt of Subsidiaries of the Company
incurred in the ordinary course of business the proceeds of which
are used to finance the production, completion, distribution or
exhibition of Works;
D. Debt of Persons which become Subsidiaries of the Company
after the Issue Date, provided that such Debt is in existence at
the time the respective Persons become Subsidiaries of the
Company and was not incurred or created in anticipation thereof;
E. Debt of the Company to Subsidiaries of the Company;
F. Debt of the Company which is subordinated in right of
payment to the Notes; and
G. up to $200,000,000 in aggregate principal amount of
Funded Debt of the Company and its Subsidiaries outstanding at
any time.
For the purposes of this clause 3(j)(iii), if the Company or any
of its Subsidiaries has incurred Funded Debt to any other Subsidiary
of the Company and such other Subsidiary
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<PAGE> 9
thereafter ceases to be a Subsidiary of the Company, the Company and
its Subsidiaries shall be deemed to have incurred such Funded Debt
immediately after such Subsidiary ceases to be a Subsidiary of the
Company. In the event that an item of Funded Debt meets the criteria
of more than one type of Funded Debt described in the above
paragraph, the Company shall have the right to determine in its sole
discretion the category to which such Funded Debt applies and shall
not be required to include the amount and type of such Funded Debt in
more than one of such categories.
(iv) Limitation on Subsidiary Funded Debt
Notwithstanding the provisions of clause 3(j)(iii), Subsidiaries
shall not incur Funded Debt if at the time of incurrence and after
giving effect thereto the aggregate of the outstanding Funded Debt of
Subsidiaries exceeds the greater of (x) 15% of consolidated Funded
Debt of the Company and its Subsidiaries (without including Debt
specified in clauses (A) through (C) of the following sentence) and
(y) the sum of (i) 10% of consolidated borrowing capacity then
available to the Company under the Consolidated Interest Coverage
Ratio test set forth in clause 3(j)(iii) hereof plus (ii)
$20,000,000.
The foregoing limitation on Funded Debt of Subsidiaries shall
not apply to:
A. Debt of Subsidiaries of the Company incurred in the
ordinary course of business the proceeds of which are used to
finance the production, completion, distribution or exhibition of
Works,
B. Debt of Subsidiaries outstanding on the Issue Date and
any extensions, renewals, replacements or refinancings thereof
and
C. any Debt of Subsidiaries of the nature described in
clauses 3(j)(iii)B and 3(j)(iii) D hereof.
(k) Satisfaction and Discharge. The indebtedness represented by
the Notes may be satisfied and discharged by the Company at any time
upon compliance with the provisions of Section 403 of the Indenture as
amended pursuant to clause 3(o) hereof.
(l) Register of Securities; Registrar and Paying Agent. The
Company hereby appoints the Trustee as the initial Paying Agent with
respect to the Notes. The Trustee is hereby appointed agent of the
Company for the registration of transfer and exchange of the Notes.
(m) Form. The Notes will be in substantially the form set forth in
Exhibit A hereto and may have such other terms as are provided in such
form, and said terms are incorporated herein and in the Indenture by
reference.
(n) Certain Definitions. The following definitions are applicable
to the Notes and, in the case of any term which is defined below and
which is also defined in the Indenture, such term, as used in the
Indenture (but only insofar as it relates to the Notes), this Officers'
Certificate and the Notes, shall have the meaning set forth below:
"Change of Control" is deemed to occur on the first date on
which (i) the Permitted Turner Holders and the Permitted Other
Holders (individually, collectively or in the aggregate) cease to
beneficially own and have the power to vote at least a majority of
the aggregate voting power of the Voting Stock of the Company and
(ii) within 120 days of the occurrence of the event specified in
clause (i), the Notes are downgraded to (A) lower than BB+ by
Standard and Poor's Corporation or any successor rating agency
thereto and (B) lower than Ba2 by Moody's Investors Service or any
successor rating agency thereto. As used herein, a person shall be
deemed to have "beneficial ownership" with respect to, and shall be
deemed to "beneficially own," any securities of the Company in
accordance with the definitions of such terms in Section 13 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations (including Rule 13d-3, Rule 13d-5, and any successor
rules) promulgated by the Securities and
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<PAGE> 10
Exchange Commission thereunder; provided, however, that a person
shall be deemed to have beneficial ownership of all securities that
any such person has a right to acquire whether such right is
exercisable immediately or only after the passage of time and without
regard to the 60-day limitation referred to in Rule 13d-3.
"Consolidated Interest Coverage Ratio" means, for any Person, as
of any date of determination, the ratio of (i) the aggregate amount
of Consolidated Operating Cash Flow of such Person for the four
fiscal quarters for which financial information in respect thereof is
available ending immediately prior to the date of the transaction
giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date") to (ii) the aggregate
Consolidated Interest Expense of such Person for the four fiscal
quarters for which financial information in respect thereof is
available ending immediately prior to the Transaction Date, assuming
for purposes of this calculation that base interest rates in respect
of floating interest obligations being incurred are equal to base
interest rates on such obligations in effect as of the Transaction
Date. In addition to the foregoing, for purposes of this definition
"Consolidated Operating Cash Flow" and "Consolidated Interest
Expense" shall be calculated after giving effect, on a pro forma
basis for such four-quarter period, to (i) the acquisition of the
assets, Property or business of another Person during the period
commencing on the first day of such period to and including the
Transaction Date (the "Reference Period") if during the Reference
Period such Person becomes (or such assets, Property or business, as
acquired, become all or substantially all the assets or business of)
a consolidated Subsidiary of the Company and (ii) each sale,
transfer, lease, mortgage or other disposition (including, without
limitation, a sale-leaseback transaction or a merger or
consolidation) of assets, Property or business ("disposition") or
series of related dispositions during the Reference Period by the
Company or any Subsidiary (other than to the Company or a Subsidiary)
which disposition or series of related dispositions is not in the
ordinary course of business of the Company or the Subsidiary making
such disposition.
"Consolidated Interest Expense" means, for any Person, for any
period, the aggregate amount, determined on a consolidated basis in
accordance with GAAP, of interest, whether expensed or capitalized,
paid or accrued during such period, in respect of all Funded Debt of
such Person and its consolidated subsidiaries.
"Consolidated Operating Cash Flow" means for any Person, for any
period, net income from continuing operations for such Person and its
consolidated subsidiaries for such period taken as a single
accounting period determined on a consolidated basis in accordance
with GAAP, excluding the effect of (i) Consolidated Interest Expense;
(ii) provision for income taxes; (iii) depreciation of property,
plant and equipment; (iv) amortization expense (excluding
amortization of licensed rights); (v) extraordinary items; (vi) the
cumulative effect of a change in accounting principle; and (vii)
gains or losses on the sale of assets to the extent such gains or
losses are included in the calculation of net income from continuing
operations, all as determined in accordance with GAAP.
"Disqualified Capital Stock" means, (i) with respect to any
Person, any Capital Stock of such Person that, by its terms or by the
terms of any security into which it is convertible or exchangeable,
is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased by such Person or its
subsidiaries, including at the option of the holder, in whole or in
part, or has, or upon the happening of an event or the passage of
time would have, a redemption or similar payment due, on or prior to
the earlier of the Stated Maturity of the Notes or the first date on
which none of the Notes are outstanding and (ii) with respect to any
Subsidiary of the Company, any Capital Stock of such Subsidiary that
has a preference, conditionally or otherwise, as to the declaration,
payment or accrual of dividends, the distribution of assets upon
liquidation, dissolution or winding up, or both, over any other
Capital Stock of such Subsidiary.
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"Funded Debt" means, with respect to any Person at any date,
without duplication (a) indebtedness created, issued or incurred by
such Person for borrowed money (whether by loan or the issuance and
sale of debt securities); (b) obligations of such Person (contingent
or otherwise) in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for the
account of such Person (other than trade letters of credit or letters
of credit securing performance of bids, trade contracts, statutory
obligations (including obligations in respect of taxes and tax
refunds), surety and appeal bonds, leases, performance bonds and
similar obligations), (c) Capitalized Lease Obligations of such
Person and (d) Funded Debt of others Guaranteed by such Person. For
purposes of calculating the amount of any Funded Debt hereunder: (i)
there shall be no double-counting of direct obligations, Guarantees
and reimbursement obligations for letters of credit, (ii) the
principal amount of any Funded Debt of any Person arising by reason
of such Person having granted a Lien on its Property to secured
Funded Debt of others, when such Funded Debt has not been assumed by
such Person, shall be the lower of the principal amount of such
Funded Debt or the fair market value of such Property at the time the
Lien is granted by such Person and (iii) the principal amount of any
Funded Debt of any Person arising by reason of such Person having
Guaranteed Funded Debt of others where the amount of such Guarantee
is limited to an amount less than the principal amount of the Funded
Debt Guaranteed, shall be the amount as so limited.
"GAAP" means generally accepted accounting principles as in
effect on the date hereof.
"Issue Date" means February 3, 1994.
"Permitted Other Holders" means (a) each Person that, on the
date hereof, was either (i) the beneficial holder (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
as in effect on the Issue Date) of shares of the Class C Convertible
Preferred Stock, par value $.125 per share, of the Company or (ii) an
Affiliate of a Person specified in clause (i) above and (b) each
Person at least 51% of the voting power of the Voting Stock of which
is beneficially owned (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, as in effect on the
Issue Date) by one or more of the Persons specified in clause (a)
above.
"Permitted Turner Holders" means R.E. Turner and his estate,
heirs and legatees, and the legal representatives of any of the
foregoing, including, without limitation, the Turner Foundation,
Inc., Turner Charitable Remainder Unitrust or the trustee of any
trust of which one or more of the foregoing are the sole
beneficiaries.
"Property" means with respect to any Person, any and all
tangible or intangible property, assets, revenues, rights (including,
without limitation with respect to the Company, rights of the Company
and/or any of its Subsidiaries to use (whether by ownership, license
or otherwise) copyrighted programs, programming, films and similar
assets) or business of such Person, owned by leasehold or in fee, by
license, sublicense or outright, whether now owned or hereafter
acquired by such Person.
"Restricted Payment" means (a) the declaration or payment by the
Company or any Subsidiary, either in cash or in property, of any
dividend on, or the making by the Company or any Subsidiary of any
other distribution in respect of, the Capital Stock of the Company or
any Subsidiary, or (b) the redemption, repurchase, retirement or
other acquisition for value (whether in cash, property or otherwise)
by the Company or any Subsidiary, directly or indirectly, of any
Capital Stock of the Company.
"Works" means motion pictures, video, television, interactive or
multi-media programming, audio-visual works, sound recordings, books
and other literary or written material, any software, copyright or
other intellectual property related thereto, acquired directly or
indirectly after the date hereof by purchase, business combination,
production, creation or otherwise, any
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<PAGE> 12
component of the foregoing or rights with respect thereto, and all
improvements thereon, products and proceeds thereof and revenues
derived therefrom.
"works" means Works without reference to when acquired.
(o) Amendments to Section 403. Section 403 of the Indenture is
amended, but only insofar as it relates to the Notes, to read in its
entirety as follows:
"Section 403. Satisfaction, Discharge and Defeasance of the
Notes. The Company will be deemed to have been Discharged (as defined
below) from its obligations with respect to the Notes when
(1) with respect to all Outstanding Notes, the Company has
deposited or caused to be deposited with the Trustee as a trust
fund specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Notes, (i) money in an
amount as will or (ii) U.S. Government Obligations (as defined
below), as will, together with the predetermined and certain
income to accrue thereon, without consideration of any
reinvestment thereof, or (iii) a combination of (i) and (ii) as
will (in a written opinion with respect to (ii) or (iii) of
independent public accountants delivered to the Trustee), be
sufficient to pay and discharge the entire principal of and
interest, if any, to Stated Maturity on the Outstanding Notes at
the time such payments become due;
(2) the Company has paid or caused to be paid all other sums
payable with respect to the Notes;
(3) no default or Event of Default shall have occurred and
be continuing and no Triggering Event shall have occurred as to
which the Company has not fully satisfied the Redemption Rights
of all Holders electing to have their Notes redeemed; and
(4) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of the entire
indebtedness on all Outstanding Notes have been complied with and
an Opinion of Counsel to the effect that no other action under
the Indenture is required as a precondition to the discharge of
the Company's obligations.
Any deposits with the Trustee referred to in Section 403(1)
above shall be irrevocable and shall be made under the terms of an
escrow trust agreement in form and substance satisfactory to the
Trustee."
(4) Defined Terms. Terms (whether or not capitalized) used herein and
not otherwise defined shall have the meanings specified in the Indenture.
Each of the undersigned, for himself, states that he has read and is
familiar with the provisions of Articles II and III of the Indenture relating to
the establishment of the form of security representing a series of Securities
thereunder and the establishment of the terms of a series of Securities
thereunder and, in each case, the definitions therein relating thereto; that he
is generally familiar with the other provisions of the Indenture and with the
affairs of the Company and its acts and proceedings and that the statements and
opinions made by him in this Officers' Certificate are based upon such
familiarity; and that, in his opinion, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not the covenants or conditions referred to above have been complied
with, and that in his opinion such covenants and conditions have been complied
with.
[Remainder of page intentionally left blank]
12
<PAGE> 13
IN WITNESS WHEREOF, the undersigned have hereunto signed this Certificate
on behalf of the Company as of this 3rd day of February, 1994.
TURNER BROADCASTING SYSTEM, INC.
By
Wayne H. Pace
Vice President-Finance and
Chief Financial Officer
By:
Steven W. Korn
Vice President, Secretary and
General Counsel
13
<PAGE> 14
EXHIBIT A
[FORM OF FACE OF NOTE]
REGISTERED NUMBER:
PRINCIPAL AMOUNT:
CUSIP:
TURNER BROADCASTING SYSTEM, INC.
7.40% SENIOR NOTE DUE 2004
Turner Broadcasting System, Inc., a Georgia corporation (herein called the
"Company", which term shall refer to such Company until a successor corporation
shall have become such pursuant to the provisions of the Indenture referred to
on the reverse hereof and thereafter "Company" shall mean such successor
corporation), for value received, hereby promises to pay to , or
registered assigns, the principal sum of $ on February 1, 2004, and to
pay interest thereon from February 1, 1994 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for semiannually
on February 1 and August 1 of each year, commencing February 1, 1994, at the
rate of seven and four-tenths percent (7.40%) per annum until the principal
hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Note or one or more Predecessor Securities is registered at
the close of business on the Regular Record Date for such interest, which shall
be the January 15 or July 15 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Any interest not punctually paid
or provided for shall forthwith cease to be paid to the holder on such Regular
Record Date and may either be paid to the Persons in whose names this Note (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date established for the payment of such defaulted interest fixed
by the Trustee, notice whereof shall be given to the Holders of Notes of the
series not less than fifteen (15) days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes of this series may be
listed and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
Payment of the principal of this Note will be made at the office of the
Trustee, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts upon
surrender of this Note, and any interest on this Note will be paid at the by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
REFERENCE IS HEREBY MADE TO FURTHER PROVISIONS OF THIS NOTE SET FORTH ON
THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
A-1
<PAGE> 15
Unless the Certificate of Authentication has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
TURNER BROADCASTING SYSTEM, INC.
By:
--------------------------------
Title:
---------------------------
Attest:
----------------------------
Title:
---------------------------
(CORPORATE SEAL)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated herein issued under the
within mentioned Indenture.
Dated:
-------------- THE FIRST NATIONAL BANK OF BOSTON,
as Trustee
By:
----------------------------------
Authorized Signatory
A-2
<PAGE> 16
[FORM OF REVERSE OF NOTE]
TURNER BROADCASTING SYSTEM, INC.
7.40% SENIOR NOTE DUE 2004
This Note is one of a duly authorized issue of Securities of the Company
(which series is herein called the "Notes"), issued and to be issued in one or
more series under an Indenture, dated as of May 15, 1993, (as amended or
supplemented from time to time, and including, with respect to a particular
series of securities, the terms of such securities established as contemplated
by Section 301, whether established in or pursuant to a supplemental indenture,
a Board Resolution or an Officers' Certificate, the "Indenture") between the
Company and The First National Bank of Boston, as Trustee (herein called the
"Trustee," which term includes any successor trustee or trustees under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Notes and of the terms upon which the Notes are and are to be authenticated
and delivered. This Note is one of the series designated on the face hereof,
limited in the aggregate principal amount to $250,000,000 issued pursuant to the
Indenture.
This Note is not redeemable at the option of the Company prior to its
Stated Maturity.
Each Holder shall have the option to require the Company to redeem all, but
not less than all, of the Notes owned by such Holder at a redemption price,
payable in cash, equal to 101% of the principal amount, plus accrued and unpaid
interest to the date fixed for redemption upon the occurrence of certain
Triggering Events, such as certain payments in respect of Capital Stock, a
Change in Control or certain mergers, consolidations or sales of assets and
properties.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Securities at that time outstanding of all series to be affected (acting as one
class). The Indenture also provides that, regarding the Notes, the Holders of
not less than a majority in principal amount of the Notes at the time
outstanding may waive certain past defaults and their consequences on behalf of
the Holders of all Notes. Any such consent or waiver by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future holders of
this Note and of any Note issued upon the register of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon the Note.
As provided in the Indenture, the Company shall be discharged from its
obligations with respect to the Notes when (1) with respect to all Outstanding
Notes, the Company has deposited or caused to be deposited with the Trustee as a
trust fund specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Notes (i) money in an amount as will or (ii) U.S.
Government Obligations, as will, together with the predetermined and certain
income to accrue thereon without consideration of any reinvestment thereof, or
(iii) a combination of (i) and (ii) as will (in a written opinion with respect
to (ii) or (iii) of independent public accountants delivered to the Trustee) be
sufficient to pay and discharge the entire indebtedness on all outstanding Notes
of such series for principal, premium, if any and interest, if any, to the
Stated Maturity or any Redemption Date, as the case may be, (2) the Company has
paid or caused to be paid all other sums payable with respect to the Notes, (3)
no default or Event of Default shall have occurred and be continuing and no
Triggering Event shall have occurred as to which the Company has not fully
satisfied the Redemption Rights of all Holders electing to have their Notes
redeemed and (4) the Company has delivered to the Trustee an Officers'
Certificate stating that all such conditions precedent have been complied with
and an Opinion of Counsel to the effect that no other action under the Indenture
is required as a precondition to the discharge of the Company's obligations.
Upon and following the deposit of such funds or U.S. Government Obligations and
satisfaction of such other conditions the Holders shall only be entitled to
receive payment of
A-3
<PAGE> 17
the principal of (and premium, if any) and interest, if any, on the Notes from
deposited funds and the Company shall have no further obligations with respect
thereto except for certain obligations with respect to transfer and exchange of
the Notes.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest, if any, on the Notes at the times, place and rate, and in the coin or
currency herein and in the Indenture provided; subject, however, to the
provisions for the discharge of the Company from its obligations under the Notes
upon satisfaction of the conditions set forth in the preceding paragraph or in
the Indenture.
As provided in the Indenture, upon any consolidation or merger or any
conveyance, transfer or lease of the properties and assets of the Company as an
entirety or substantially as an entirety in accordance with the provisions of
the Indenture, the successor corporation formed by such consolidation or into
which the predecessor corporation is merged or to which such conveyance,
transfer or lease is made shall be substituted for the predecessor corporation
with the same effect as if such successor corporation had been named as the
Company. Thereafter the predecessor corporation shall be relieved of the
performance and observance of all obligations and covenants of the Indenture and
the Notes, including but not limited to the obligation to make payment of the
principal of and interest, if any, on all the Notes then outstanding, and, in
the event of any such conveyance, transfer or lease, may be liquidated and
dissolved.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Security Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company maintained for such purpose, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and Security
Registrar duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more Notes of authorized denominations and for
like aggregate principal amount and tenor will be issued to the designated
transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any larger amount that is an integral multiple of
$1,000. As provided in the Indenture and subject to certain limitations therein
set forth, Notes are exchangeable for a like principal amount and tenor of Notes
of a different authorized denomination, upon surrender of the Notes to be
exchanged at the office or agency of the Company maintained for such purpose.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to the due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
person in whose name the Note is registered as the owner hereof for all
purposes, whether or not the Notes shall be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee and the Paying Agents will pay the money back to the Company
at its request. After that, all liability of the Trustee and such Paying Agents
with respect to such money shall cease.
The Indenture imposes certain limitations on the ability of the Company and
its Subsidiaries, among other things, to incur senior Funded Debt and create
Liens. The Indenture also imposes additional limitations on the ability of
Subsidiaries of the Company to incur Funded Debt. These limitations are subject
to important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations.
As provided in the Indenture, no recourse shall be had for the payment of
the principal of, premium, if any, or the interest, if any, on this Note or any
part hereof or for any claim based hereon or otherwise in respect hereof, or of
the indebtedness represented hereby, or upon any obligation, covenant or
agreement of
A-4
<PAGE> 18
the Company in the Indenture against any incorporator, direct or indirect
stockholder, officer, director, as such, past, present or future, of the
Company, or of any successor corporation, whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all liability, if any, of that character
against every such incorporator, stockholder, officer and director, being by the
acceptance hereof, and as a condition of and as a part of the consideration for
the issue hereof, expressly waived and released.
THE INDENTURE AND NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note shall be construed as though they were written out in full according
to the applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties with right of survivorship and
not as tenants in common
JT TEN -- as joint tenants with right of survivorship and not as tenants
in common
UNIF GIFT ACT -- (cust) custodian (minor) under Uniform Gift to Minors Act
(state)
</TABLE>
Additional abbreviations may also be used that are not in the above list.
---------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) to the within Note of Turner Broadcasting System,
Inc. and irrevocably constitutes and appoints attorney to
transfer such Note on the books of the within named Company, with full power of
substitution in the premises.
Dated:
---------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement, or any change whatsoever. The signature should be guaranteed by a
commercial bank or trust company, or by a New York, American, Boston, Midwest,
Philadelphia or Pacific stock exchange member, a member of the National
Association of Securities Dealers, Inc., or firm whose signature is known to the
registrar.
A-5
<PAGE> 1
EXHIBIT 4(G)
TURNER BROADCASTING SYSTEM, INC.
OFFICERS' CERTIFICATE
Pursuant to Sections 201 and 301 of the Indenture, dated as of May 15,
1993, relating to senior debt securities (including the Turner Broadcasting
System, Inc. Standard Multiple-Series Indenture Provisions dated May 15, 1993
incorporated therein by reference, as amended or supplemented from time to time,
and including, with respect to a particular series of securities, the terms of
such securities established as contemplated by Section 301, whether established
in or pursuant to a supplemental indenture, a Board Resolution or an Officers'
Certificate, the "Indenture"), between Turner Broadcasting System, Inc., a
Georgia corporation (the "Company"), and The First National Bank of Boston, as
trustee (the "Trustee"), the undersigned, Wayne H. Pace, Vice President-Finance
and Chief Financial Officer of the Company, and Steven W. Korn, Vice President,
Secretary and General Counsel of the Company, hereby certify on behalf of the
Company as follows:
(1) Authorization. The establishment of a series of Securities of the
Company has been approved and authorized in accordance with the provisions
of the Indenture and in accordance with resolutions adopted by unanimous
written consent of the Board of Directors of the Company on April 24, 1993
and resolutions adopted by unanimous written consent of the Finance
Committee of the Board of Directors of the Company on January 18, 1994.
(2) Compliance with Covenants and Conditions Precedent. All covenants
and conditions precedent provided for in the Indenture relating to the
establishment of the form and terms of the Debentures (as defined below) as
a series of Securities have been complied with.
(3) Terms. The terms of the series of the Securities established
pursuant to this Officers' Certificate shall be as follows:
(a) Title. The title of the series of Securities is the "8.40%
Senior Debentures due 2024" (the "Debentures").
(b) Aggregate Principal Amount. The aggregate principal amount of
the Debentures which may be authenticated and delivered pursuant to the
Indenture (except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Debentures pursuant to Sections 304, 305, 306 and 906 of the Indenture)
is $200,000,000.
(c) Persons to Whom Interest Payable. Interest on any Debenture
which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the person in whose name that
Debenture (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date (whether or not a Business
Day) for such interest set forth in Section 3(e), except that defaulted
interest shall be payable to the persons provided in Section 307 of the
Indenture.
(d) Stated Maturity. The outstanding principal amount of the
Debentures will be payable on February 1, 2024.
(e) Rate of Interest; Interest Payment Date; Regular Record Date;
Accrual of Interest. The Debentures will bear interest at a rate of
8.40% per annum. Interest on the Debentures will be paid semi-annually
in arrears on February 1 and August 1 of each year (each of which is an
Interest Payment Date with respect to the Debentures), commencing on
August 1, 1994, and at maturity. The Regular Record Date for interest
payable on each February 1 will be the immediately preceding January 15,
and the Regular Record Date for interest payable on each August 1 will
be the immediately preceding July 15 (in each case whether or not a
Business Day).
<PAGE> 2
The Debentures will bear interest from February 1, 1994 or from the
most recent date to which interest has been paid or duly provided for
until the principal thereof is paid or made available for payment.
Interest payments shall be the amount of interest accrued from and
including the most recent date in respect of which interest has been
paid or duly provided for (or from and including February 1, 1994 if no
interest has been paid or duly provided for with respect to such
Debenture), to but excluding the next succeeding Interest Payment Date
(or, if applicable, Redemption Date or other payment date). Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
The Debentures shall be issuable as fully registered senior debentures,
without coupons in denominations of $1,000 and any integral multiple
thereof.
(f) Place of Payment; Registration of Transfer and Exchange;
Notices to Company. Payment of the principal of and interest on the
Debentures will be made at the Corporate Trust Office of the Trustee, or
at any other office or agency designated by the Company for such
purpose; provided, however, that, at the option of the Company, payment
of interest may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register.
The Debentures may be presented for registration of transfer or exchange
at the Corporate Trust Office of the Trustee or at any other office or
agency hereafter designated by the Company for such purpose. Notices and
demands to or upon the Company in respect of the Debentures and the
Indenture may be served at the Corporate Trust Office of the Trustee or
at Turner Broadcasting System, Inc., One CNN Center, Atlanta, Georgia
30303, Attention: Secretary, or at such other address as the Company may
designate by notice to holders.
(g) Redemption at the Option of the Holder.
(i) Upon the occurrence of a Triggering Event (as defined in
Section 3(h)), subject to the conditions of this clause (g), each
Holder of Debentures shall have the option to require the Company to
redeem all, but not less than all, of the Debentures owned by such
Holder (the "Redemption Right") at a redemption price, payable in
cash, equal to 101% of the principal amount, plus accrued and unpaid
interest to the date fixed for redemption.
(ii) If a Triggering Event occurs with respect to the Company,
then, as soon as practicable and in any event within 30 days after
the occurrence of such Triggering Event, the Company shall mail to
each Holder and the Trustee a notice which shall disclose the
occurrence of the Triggering Event and the right of the Holder to
require the Company to redeem all, but not less than all, of such
Holder's Debentures pursuant to this clause (g) and shall state the
Redemption Date (as defined below), the redemption price, the name
and address of the Paying Agent, and that the Debentures to be
redeemed must be surrendered to the Paying Agent in order for the
Holder of the Debentures to collect the redemption price. Such notice
shall be accompanied by a form of written demand to be used by the
Holder to exercise his Redemption Right (a "Demand Form").
(iii) In the event of any Triggering Event each Holder shall
have the Redemption Right for a period of 45 days after the date that
notice of such Triggering Event is mailed to Holders of the
Debentures and the Trustee pursuant to clause (g)(ii); provided, that
the failure of the Company to mail such notice shall not affect the
right of the Holders to require the Company to repurchase such
Holders' Debentures, in which event the Redemption Date shall be the
45th day following the last day on which the Company was permitted to
mail such notice pursuant to clause (g)(ii). A Holder may exercise
such Redemption Right at any time within the 45-day period after the
mailing of such notice by the Company by submitting to the Trustee
not later than the close of business on the Redemption Date a
completed Demand Form relating to the Debentures to be redeemed.
Unless sooner exercised, the Redemption Right will expire with
respect to such Triggering Event at the close of business on the last
day of such 45-day period (the "Redemption Date"). Exercise of such
Redemption Right will be irrevocable and interest on the Debentures
tendered for redemption will cease to accrue from and after the
Redemption Date.
2
<PAGE> 3
(iv) Within 30 days after the occurrence of a Triggering Event
(but in any event not later than the date notice of such Triggering
Event is mailed to the Holders and the Trustee), the Company shall
deposit with the Trustee or one or more Paying Agents (or, if the
Company is acting as its own Paying Agent, set aside, segregate and
hold in trust as provided in Section 1003) immediately available
funds in an amount sufficient to redeem on the Redemption Date all of
the Debentures outstanding on the date of the delivery of such
notice. Following payment of the Redemption Price of all Debentures
required to be redeemed pursuant to this clause (g), all funds
remaining from the amounts previously deposited with the Trustee or
other Paying Agent or set aside by the Company, and all interest
earned thereon, shall belong and be immediately released to the
Company as part of its general funds (or assets).
(v) The provisions of this clause 3(g) shall supersede the
redemption provisions in Article XI of the Indenture for purposes of
any redemption at the option of the Holders of the Debentures.
(vi) The Company will comply with all applicable tender offer
rules under the Securities Exchange Act of 1934, as amended,
including, but not limited to, Rule 14e-1 thereunder, as then in
effect, with respect to any offer by the Company to redeem the
Debentures upon a Triggering Event.
(h) Triggering Events.
Each of the following events set forth in clauses (i), (ii) or
(iii) below shall be a "Triggering Event" as used herein.
(i) Restricted Payments. It shall be a Triggering Event if the
Company or any of its Subsidiaries declares or makes any Restricted
Payment if, at the time of such Restricted Payment, (x) an Event of
Default shall have occurred and be continuing or would result
therefrom or (y) after giving effect to such Restricted Payment, the
Consolidated Interest Coverage Ratio of the Company would be less
than 1.50 to 1.
Notwithstanding the foregoing, the following actions shall
not be a Triggering Event:
A. the payment of any dividend within 60 days after the
date of its declaration if the dividend would have been
permitted on the date of declaration;
B. the issuance of Capital Stock (other than
Disqualified Capital Stock) of the Company upon conversion of
the Company's Class C Convertible Preferred Stock, par value
$.125 per share;
C. the issuance of Capital Stock (other than
Disqualified Capital Stock) of the Company upon the
conversion of, or in exchange for, Capital Stock of the
Company;
D. the declaration or payment by the Company or any
Subsidiary in Capital Stock (other than Disqualified Capital
Stock) of any dividend on, or the making by the Company or
any Subsidiary of any distribution of Capital Stock (other
than Disqualified Capital Stock) in respect of, the Capital
Stock of the Company;
E. the declaration or payment of any dividend or the
making of any distribution in respect of the Capital Stock of
any Subsidiary of the Company to the Company or another
Subsidiary of the Company or the redemption, purchase,
retirement or other acquisition for value by a Subsidiary of
shares of such Subsidiary from the Company or another
Subsidiary;
F. the declaration or payment to any Person other than
the Company or a Subsidiary of the Company (each such Person
other than the Company or a Subsidiary of the Company being
referred to as an "Equity Holder") of any dividend, the
making of any distribution in respect of the Capital Stock of
a Subsidiary of the Company held by any Equity Holder or the
redemption, purchase, retirement or other
3
<PAGE> 4
acquisition for value by a Subsidiary of the Company of
Capital Stock of such Subsidiary held by any Equity Holder,
provided that the amounts declared or paid in respect thereof
subsequent to the Issue Date shall not exceed the sum of:
1. the aggregate proceeds received by such
Subsidiary from purchases of equity interests in such
Subsidiary by the Equity Holders or other capital
contributions made by the Equity Holders to such
Subsidiary subsequent to the Issue Date and
2. the Equity Holders' pro rata share of the
aggregate Consolidated Operating Cash Flow of such
Subsidiary (or if such aggregate Consolidated Operating
Cash Flow is a deficit, minus 100% of such deficit)
earned subsequent to June 30, 1993 through the end of the
most recent fiscal quarter for which financial
information in respect thereof is available preceding the
fiscal quarter in which such declaration or payment
occurs, less all other declarations or payments to Equity
Holders subsequent to the Issue Date and prior to such
declaration or payment; or
G. the acquisition by the Company of its Capital Stock
(or, in the case of clause (4), below, warrants, rights or
options to purchase or acquire shares of its Capital Stock)
(1) to eliminate fractional shares, (2) to collect or
compromise in good faith a debt, claim or controversy with
any shareholder at a price not in excess of the fair market
value thereof, (3) from any shareholder who, by reason of
dissent from any corporate action, is entitled under
applicable laws to be paid the fair market value of his
shares, (4) from a director or an employee who has purchased
or otherwise acquired the shares, warrants, rights or options
from the Company or a Subsidiary under an agreement
permitting or obligating the Company or a Subsidiary to
repurchase the shares, warrants, rights or options, but in no
event for a price greater than the higher of the fair market
value thereof or the price at which they were sold by the
Company, or (5) pursuant to a court order; provided, that the
aggregate amount paid by the Company subsequent to the Issue
Date pursuant to subclauses (1), (2), (3), (4) and (5) shall
not exceed $100,000,000.
(ii) Change of Control. It shall be a Triggering Event if
there shall be a Change of Control with respect to the Company.
(iii) Amendments to Section 801. Section 801 of the
Indenture is amended, but only insofar as it relates to the
Debentures, to read in its entirety as follows:
"Section 801. Company May Consolidate, Etc., Only on
Certain Terms. It shall be a Triggering Event if
A. the Company consolidates with, or merges into,
any other Person,
B. the Company conveys or transfers (by sale, lease,
assignment or otherwise), directly or indirectly, in a
single transaction or a series of related transactions,
its properties and assets as an entirety or substantially
as an entirety to a Person or group of related Persons;
or
C. the Company or any Subsidiary conveys or
transfers (by sale, lease, assignment or otherwise),
directly or indirectly, in a single transaction or a
series of related transactions not in the ordinary course
of the business of the Company or such Subsidiary, as the
case may be, to any Person or group of related Persons
(other than the Company or another Subsidiary) its
properties or assets (including Capital Stock
representing a majority of the Voting Power of
Subsidiaries that owned such properties or assets) if
either (i) such properties or assets produced more than
25% of the Company's Consolidated Operating Cash Flow for
the four fiscal quarters ending immediately prior to such
conveyance or
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<PAGE> 5
transfer for which financial information in respect
thereof is available, or (ii) the book value of such
property or assets equals or exceeds 25% of the
consolidated assets of the Company and its Subsidiaries
at the end of the most recent fiscal quarter for which
financial information in respect thereof is available,
unless the following conditions are met:
(1) either the Company shall be the surviving
Person or the Person (if other than the Company)
formed by such consolidation or into which the
Company is merged or to which the properties and
assets of the Company as an entirety or substantially
as an entirety are conveyed or transferred shall be
organized and existing under the laws of the United
States of America, any State thereof or the District
of Columbia and shall expressly assume, by an
indenture supplemental to the Indenture, executed and
delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual
payment of the principal of, premium, if any, and
interest, if any, on all outstanding Debentures and
the performance of every covenant of the Indenture
and provisions of the Debentures on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such
transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be
continuing;
(3) if a supplemental indenture is required in
connection with such transaction, the Company shall
have delivered to the Trustee an Officers'
Certificate stating that such consolidation, merger,
conveyance or transfer and such supplemental
indenture comply with this Article and that all
conditions precedent herein provided for relating to
such transaction have been complied with and, upon
closing of the consolidation, merger, conveyance or
transfer, an Opinion of Counsel stating that the
corporation formed by such consolidation or into
which the Company is merged or the Person which
acquires by conveyance or transfer the properties and
assets of the Company as an entirety or substantially
as an entirety is organized and existing under the
laws of the United States of America, any State
thereof or the District of Columbia and has assumed,
by an indenture supplemental to the Indenture,
executed and delivered to the Trustee, the due and
punctual payment of the principal of, premium, if
any, and interest, if any, on all outstanding
Debentures and the performance of every covenant of
the Indenture and provisions of the Debentures on the
part of the Company to be performed or observed; and
(4) immediately after giving effect to such
transaction on a pro forma basis the Consolidated
Interest Coverage Ratio of the Company (if the
Company is the surviving Person or in the event of a
conveyance or transfer described in Section 801.C) or
the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or
to which the properties and assets of the Company as
an entirety or substantially as an entirety are
conveyed or transferred is at least equal to 1.50 to
1."
(i) Redemption at the Option of the Company. The Debentures are
redeemable, at the Company's option, in whole or in part, at any time on
or after February 1, 2004 and prior to maturity, upon not less than 30
nor more than 60 days' prior notice given in accordance with the
provisions of Article XI of the Indenture, at the following Redemption
Prices (expressed as a percentage of principal amount), in each case
together with accrued and unpaid interest if any, to but excluding
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<PAGE> 6
the Redemption Date, if redeemed during the 12-month period beginning
February 1 of the years indicated below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
----------------------- ----------
<S> <C>
2004................... 104.161%
2005................... 103.745
2006................... 103.329
2007................... 102.913
2008................... 102.497
2009................... 102.081
2010................... 101.664
2011................... 101.248
2012................... 100.832
2013................... 100.416
2014 and thereafter.... 100.000%
</TABLE>
If less than all of the Debentures are to be redeemed, the Trustee
shall select the Debentures or the portion thereof to be redeemed pro
rata, by lot or by any other method the Trustee shall deem fair and
reasonable. To the extent not addressed in this clause 3(i), any such
redemption will comply with the provisions of Article XI of the
Indenture.
(j) Additional Covenants.
(i) Incurrence of Certain Liens. The Company shall not, and
shall not permit any Subsidiary to, subject to any Lien, or
suffer to exist any Lien on, the whole or any part of any
Property now owned or hereafter acquired by it, except as
hereinafter provided in clause 3(j)(ii), unless the Company
secures the Debentures, and any other securities which may then
be outstanding and entitled to the benefit of a covenant similar
in effect to this covenant, equally and ratably with the
indebtedness or obligations secured by such Lien, so long as any
such indebtedness or obligations shall be so secured.
(ii) Permitted Liens. The provisions of clause 3(j)(i)
shall not be applicable to the following:
A. Liens imposed by any governmental authority for taxes,
assessments or charges not yet delinquent or which are being
contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the
books of the Company or any of its Subsidiaries, as the case may
be, in accordance with generally accepted accounting principles;
B. pledges or deposits securing non-delinquent obligations
under worker's compensation, unemployment insurance and other
social security legislation;
C. easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements,
leases, subleases, licenses, sublicenses, restrictions on the use
of Property or minor imperfections in title thereto which, in the
aggregate, are not material in amount, and which do not in any
case materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the business of
the Company or any of its Subsidiaries;
D. Liens on Property of Persons which become Subsidiaries of
the Company after the Issue Date securing Debt described in
clause 3(j)(iii)D hereof, provided that:
1. such Liens were in existence at the time the
respective Persons became Subsidiaries of the Company and
were not created in anticipation thereof; and
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<PAGE> 7
2. such Liens do not extend to Property other than the
Property of such Subsidiary that secured such Debt;
E. Liens on Works which either:
1. existed in such Works before the time of their
acquisition and were not created in anticipation thereof, or
2. were created solely for the purpose of securing
obligations to financiers, producers, distributors,
exhibitors, completion guarantors, inventors, copyright
holders, financial institutions or other participants
incurred in the ordinary course of business in connection
with the acquisition, financing, production, completion,
distribution or exhibition of Works;
F. Liens upon Property acquired after the Issue Date (by
purchase, production, construction or otherwise) by the Company
or any of its Subsidiaries, each of which either:
1. existed on such Property before the time of its
acquisition and was not created in anticipation thereof, or
2. was created solely for the purpose of securing Debt
representing, or incurred to finance, refinance or refund,
the cost (including cost of construction, production,
development or acquisition) of the respective Property or of
the Capital Stock or other ownership interest in the entity
which owns the Property at the time of acquisition; provided
that no such Lien shall extend to or cover any Property of
the Company or such Subsidiary other than the respective
Property so acquired (including Property so acquired
indirectly as a result of the acquisition by the Company or
any Subsidiary through the acquisition of such Capital Stock
or ownership interest), improvements thereon, products and
proceeds thereof and revenues therefrom;
G. Any Lien on the office building and hotel complex located
in Atlanta, Georgia known as the CNN Center Complex, including
the parking decks for such complex (to the extent such parking
decks are owned or leased by the Company or its Subsidiaries), or
any portion thereof and all property rights therein and the
products, revenues and proceeds therefrom created as part of any
mortgage financing or sale-leaseback of the CNN Center Complex;
H. Liens on satellite transponders and all property rights
therein and the products, revenues and proceeds therefrom which
secure obligations incurred in connection with the acquisition,
utilization or operation of such satellite transponders or the
refinancing of any such obligations;
I. additional Liens created after the Issue Date on
Property, provided that the aggregate Debt secured thereby and
incurred on and after the Issue Date shall not exceed on the date
that any such Lien is granted, the greater of $100,000,000 and
five percent (5%) of the book value, net of depreciation and
amortization, of the total assets of the Company, on a
consolidated basis, shown on the consolidated financial
statements of the Company as of the last day of the month
preceding the creation of such Lien;
J. Liens existing on the Issue Date;
K. Liens resulting from progress payments or partial
payments under United States government contracts or
subcontracts;
L. Liens arising from legal proceedings, so long as such
proceedings are being contested in good faith by appropriate
proceedings diligently conducted and so long as execution is
stayed on all judgments resulting from any such proceedings;
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<PAGE> 8
M. restrictions arising under the Federal Communications Act
of 1934, as amended, and similar statutes in effect in
jurisdictions outside the United States of America;
N. restrictions on the Atlanta National League Baseball
Club, Inc. and Atlanta Hawks, Ltd. and their respective assets
imposed by Major League Baseball or the Commissioner of Baseball,
and the National Basketball Association, respectively, including,
without limitation, restrictions on the transferability of the
Company's or any of its Subsidiary's interests therein;
O. Liens imposed under capital leases entered into after the
Issue Date provided that such Liens extend only to the property
or assets that are the subject of such capital leases;
P. Liens on Capital Stock of or other ownership interest in
any Person not a Subsidiary of the Company securing Debt of such
Person;
Q. Liens arising in the ordinary course of business that do
not secure the repayment of Debt, including, without limitation,
the following Liens:
1. Liens on film or television production in favor of
the Screen Actors Guild or other similar trade groups or
guilds securing rights to residual payments owing to the
Screen Actors Guild, such other trade group or their
respective members in respect of such film or television
production;
2. Liens to secure the performance of bids, trade
contracts (other than for borrowed money), statutory
obligations, surety and appeal bonds, leases (other than
capital leases), performance bonds and other obligations of a
like nature;
3. Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs
duties in connection with the importation of goods;
4. restrictions (other than security interests) on the
transferability of investments in favor of co-investors or
the issuers of such investments or imposed by law;
5. Liens on works arising out of the sale, license,
syndication, transfer or other disposition of such works made
in accordance with the customary practices in the film,
publishing, video and television industries, of rights or
interests in works, so long as such Lien attaches only to
works of the Company or its Subsidiaries being so sold,
licensed, syndicated, transferred or disposed of; and
6. Liens to secure the performance of operating leases
provided that such Liens extend only to the property or
assets that are the subject of such operating leases;
R. carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens (whether or not statutory)
arising in the ordinary course of business which are not overdue
for a period of more than 90 days or which are being contested in
good faith and by appropriate proceedings, for which a reserve or
other appropriate provision, if any, as shall be required by
generally accepted accounting principles shall have been made;
and
S. any extension, renewal or replacement of the foregoing,
provided, however, that the Liens permitted hereunder shall not
be spread to cover any additional Property (other than a
substitution of like Property).
(iii) Incurrence of Senior Funded Debt. Except as hereinafter
described, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, issue, incur,
assume, guarantee or otherwise become liable, contingently or
otherwise, with respect to, extend the maturity of or otherwise
become responsible for the payment of (collectively "incur"), any
Funded Debt, unless, after giving effect to (A) the issuance of such
Funded Debt and (if applicable) the application of the net proceeds
thereof to refinance other Funded Debt as if such Funded Debt was
issued and the application of the proceeds occurred at the beginning
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<PAGE> 9
of the period and (B) the issuance and retirement of any other Funded
Debt since the first day of the period as if such Funded Debt was
issued or retired at the beginning of the period, the Consolidated
Interest Coverage Ratio is at least 1.50 to 1.
Notwithstanding the foregoing, the Company and its Subsidiaries
may incur each and all of the following:
A. Debt outstanding on the Issue Date and any extension,
renewal, replacement or refinancing thereof;
B. Debt of Subsidiaries of the Company to the Company or to
other Subsidiaries of the Company;
C. up to $200,000,000 in aggregate principal amount at any
one time outstanding of Debt of Subsidiaries of the Company
incurred in the ordinary course of business the proceeds of which
are used to finance the production, completion, distribution or
exhibition of Works;
D. Debt of Persons which become Subsidiaries of the Company
after the Issue Date, provided that such Debt is in existence at
the time the respective Persons become Subsidiaries of the
Company and was not incurred or created in anticipation thereof;
E. Debt of the Company to Subsidiaries of the Company;
F. Debt of the Company which is subordinated in right of
payment to the Debentures; and
G. up to $200,000,000 in aggregate principal amount of
Funded Debt of the Company and its Subsidiaries outstanding at
any time.
For the purposes of this clause 3(j)(iii), if the Company or any
of its Subsidiaries has incurred Funded Debt to any other Subsidiary
of the Company and such other Subsidiary thereafter ceases to be a
Subsidiary of the Company, the Company and its Subsidiaries shall be
deemed to have incurred such Funded Debt immediately after such
Subsidiary ceases to be a Subsidiary of the Company. In the event
that an item of Funded Debt meets the criteria of more than one type
of Funded Debt described in the above paragraph, the Company shall
have the right to determine in its sole discretion the category to
which such Funded Debt applies and shall not be required to include
the amount and type of such Funded Debt in more than one of such
categories.
(iv) Limitation on Subsidiary Funded Debt
Notwithstanding the provisions of clause 3(j)(iii), Subsidiaries
shall not incur Funded Debt if at the time of incurrence and after
giving effect thereto the aggregate of the outstanding Funded Debt of
Subsidiaries exceeds the greater of (x) 15% of consolidated Funded
Debt of the Company and its Subsidiaries (without including Debt
specified in clauses (A) through (C) of the following sentence) and
(y) the sum of (i) 10% of consolidated borrowing capacity then
available to the Company under the Consolidated Interest Coverage
Ratio test set forth in clause 3(j)(iii) hereof plus (ii)
$20,000,000.
The foregoing limitation on Funded Debt of Subsidiaries shall
not apply to:
A. Debt of Subsidiaries of the Company incurred in the
ordinary course of business the proceeds of which are used to
finance the production, completion, distribution or exhibition of
Works,
B. Debt of Subsidiaries outstanding on the Issue Date and
any extensions, renewals, replacements or refinancings thereof
and
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<PAGE> 10
C. any Debt of Subsidiaries of the nature described in
clauses 3(j)(iii)B and 3(j)(iii) D hereof.
(k) Satisfaction and Discharge. The indebtedness represented by
the Debentures may be satisfied and discharged by the Company at any
time upon compliance with the provisions of Section 403 of the Indenture
as amended pursuant to clause 3(o) hereof.
(l) Register of Securities; Registrar and Paying Agent. The
Company hereby appoints the Trustee as the initial Paying Agent with
respect to the Debentures. The Trustee is hereby appointed agent of the
Company for the registration of transfer and exchange of the Debentures.
(m) Form. The Debentures will be in substantially the form set
forth in Exhibit A hereto and may have such other terms as are provided
in such form, and said terms are incorporated herein and in the
Indenture by reference.
(n) Certain Definitions. The following definitions are applicable
to the Debentures and, in the case of any term which is defined below
and which is also defined in the Indenture, such term, as used in the
Indenture (but only insofar as it relates to the Debentures), this
Officers' Certificate and the Debentures, shall have the meaning set
forth below:
"Change of Control" is deemed to occur on the first date on
which (i) the Permitted Turner Holders and the Permitted Other
Holders (individually, collectively or in the aggregate) cease to
beneficially own and have the power to vote at least a majority of
the aggregate voting power of the Voting Stock of the Company and
(ii) within 120 days of the occurrence of the event specified in
clause (i), the Debentures are downgraded to (A) lower than BB+ by
Standard and Poor's Corporation or any successor rating agency
thereto and (B) lower than Ba2 by Moody's Investors Service or any
successor rating agency thereto. As used herein, a person shall be
deemed to have "beneficial ownership" with respect to, and shall be
deemed to "beneficially own," any securities of the Company in
accordance with the definitions of such terms in Section 13 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations (including Rule 13d-3, Rule 13d-5, and any successor
rules) promulgated by the Securities and Exchange Commission
thereunder; provided, however, that a person shall be deemed to have
beneficial ownership of all securities that any such person has a
right to acquire whether such right is exercisable immediately or
only after the passage of time and without regard to the 60-day
limitation referred to in Rule 13d-3.
"Consolidated Interest Coverage Ratio" means, for any Person, as
of any date of determination, the ratio of (i) the aggregate amount
of Consolidated Operating Cash Flow of such Person for the four
fiscal quarters for which financial information in respect thereof is
available ending immediately prior to the date of the transaction
giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date") to (ii) the aggregate
Consolidated Interest Expense of such Person for the four fiscal
quarters for which financial information in respect thereof is
available ending immediately prior to the Transaction Date, assuming
for purposes of this calculation that base interest rates in respect
of floating interest obligations being incurred are equal to base
interest rates on such obligations in effect as of the Transaction
Date. In addition to the foregoing, for purposes of this definition
"Consolidated Operating Cash Flow" and "Consolidated Interest
Expense" shall be calculated after giving effect, on a pro forma
basis for such four-quarter period, to (i) the acquisition of the
assets, Property or business of another Person during the period
commencing on the first day of such period to and including the
Transaction Date (the "Reference Period") if during the Reference
Period such Person becomes (or such assets, Property or business, as
acquired, become all or substantially all the assets or business of)
a consolidated Subsidiary of the Company and (ii) each sale,
transfer, lease, mortgage or other disposition (including, without
limitation, a sale-leaseback transaction or a merger or
consolidation) of assets, Property or business ("disposition") or
series of related dispositions during the Reference Period by the
Company or any Subsidiary (other than to the Company or a Subsidiary)
which disposition or
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<PAGE> 11
series of related dispositions is not in the ordinary course of
business of the Company or the Subsidiary making such disposition.
"Consolidated Interest Expense" means, for any Person, for any
period, the aggregate amount, determined on a consolidated basis in
accordance with GAAP, of interest, whether expensed or capitalized,
paid or accrued during such period, in respect of all Funded Debt of
such Person and its consolidated subsidiaries.
"Consolidated Operating Cash Flow" means for any Person, for any
period, net income from continuing operations for such Person and its
consolidated subsidiaries for such period taken as a single
accounting period determined on a consolidated basis in accordance
with GAAP, excluding the effect of (i) Consolidated Interest Expense;
(ii) provision for income taxes; (iii) depreciation of property,
plant and equipment; (iv) amortization expense (excluding
amortization of licensed rights); (v) extraordinary items; (vi) the
cumulative effect of a change in accounting principle; and (vii)
gains or losses on the sale of assets to the extent such gains or
losses are included in the calculation of net income from continuing
operations, all as determined in accordance with GAAP.
"Disqualified Capital Stock" means, (i) with respect to any
Person, any Capital Stock of such Person that, by its terms or by the
terms of any security into which it is convertible or exchangeable,
is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased by such Person or its
subsidiaries, including at the option of the holder, in whole or in
part, or has, or upon the happening of an event or the passage of
time would have, a redemption or similar payment due, on or prior to
the earlier of the Stated Maturity of the Debentures or the first
date on which none of the Debentures are outstanding and (ii) with
respect to any Subsidiary of the Company, any Capital Stock of such
Subsidiary that has a preference, conditionally or otherwise, as to
the declaration, payment or accrual of dividends, the distribution of
assets upon liquidation, dissolution or winding up, or both, over any
other Capital Stock of such Subsidiary.
"Funded Debt" means, with respect to any Person at any date,
without duplication (a) indebtedness created, issued or incurred by
such Person for borrowed money (whether by loan or the issuance and
sale of debt securities); (b) obligations of such Person (contingent
or otherwise) in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for the
account of such Person (other than trade letters of credit or letters
of credit securing performance of bids, trade contracts, statutory
obligations (including obligations in respect of taxes and tax
refunds), surety and appeal bonds, leases, performance bonds and
similar obligations), (c) Capitalized Lease Obligations of such
Person and (d) Funded Debt of others Guaranteed by such Person. For
purposes of calculating the amount of any Funded Debt hereunder: (i)
there shall be no double-counting of direct obligations, Guarantees
and reimbursement obligations for letters of credit, (ii) the
principal amount of any Funded Debt of any Person arising by reason
of such Person having granted a Lien on its Property to secured
Funded Debt of others, when such Funded Debt has not been assumed by
such Person, shall be the lower of the principal amount of such
Funded Debt or the fair market value of such Property at the time the
Lien is granted by such Person and (iii) the principal amount of any
Funded Debt of any Person arising by reason of such Person having
Guaranteed Funded Debt of others where the amount of such Guarantee
is limited to an amount less than the principal amount of the Funded
Debt Guaranteed, shall be the amount as so limited.
"GAAP" means generally accepted accounting principles as in
effect on the date hereof.
"Issue Date" means February 3, 1994.
"Permitted Other Holders" means (a) each Person that, on the
date hereof, was either (i) the beneficial holder (within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
as in effect on the Issue Date) of shares of the Class C Convertible
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<PAGE> 12
Preferred Stock, par value $.125 per share, of the Company or (ii) an
Affiliate of a Person specified in clause (i) above and (b) each
Person at least 51% of the voting power of the Voting Stock of which
is beneficially owned (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, as in effect on the
Issue Date) by one or more of the Persons specified in clause (a)
above.
"Permitted Turner Holders" means R.E. Turner and his estate,
heirs and legatees, and the legal representatives of any of the
foregoing, including, without limitation, the Turner Foundation,
Inc., Turner Charitable Remainder Unitrust or the trustee of any
trust of which one or more of the foregoing are the sole
beneficiaries.
"Property" means with respect to any Person, any and all
tangible or intangible property, assets, revenues, rights (including,
without limitation with respect to the Company, rights of the Company
and/or any of its Subsidiaries to use (whether by ownership, license
or otherwise) copyrighted programs, programming, films and similar
assets) or business of such Person, owned by leasehold or in fee, by
license, sublicense or outright, whether now owned or hereafter
acquired by such Person.
"Restricted Payment" means (a) the declaration or payment by the
Company or any Subsidiary, either in cash or in property, of any
dividend on, or the making by the Company or any Subsidiary of any
other distribution in respect of, the Capital Stock of the Company or
any Subsidiary, or (b) the redemption, repurchase, retirement or
other acquisition for value (whether in cash, property or otherwise)
by the Company or any Subsidiary, directly or indirectly, of any
Capital Stock of the Company.
"Works" means motion pictures, video, television, interactive or
multi-media programming, audio-visual works, sound recordings, books
and other literary or written material, any software, copyright or
other intellectual property related thereto, acquired directly or
indirectly after the date hereof by purchase, business combination,
production, creation or otherwise, any component of the foregoing or
rights with respect thereto, and all improvements thereon, products
and proceeds thereof and revenues derived therefrom.
"works" means Works without reference to when acquired.
(o) Amendments to Section 403. Section 403 of the Indenture is
amended, but only insofar as it relates to the Debentures, to read in
its entirety as follows:
"Section 403. Satisfaction, Discharge and Defeasance of the
Debentures. The Company will be deemed to have been Discharged (as
defined below) from its obligations with respect to the Debentures
when
(1) with respect to all Outstanding Debentures, the Company
has deposited or caused to be deposited with the Trustee as a
trust fund specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of the Debentures, (i)
money in an amount as will or (ii) U.S. Government Obligations
(as defined below), as will, together with the predetermined and
certain income to accrue thereon, without consideration of any
reinvestment thereof, or (iii) a combination of (i) and (ii) as
will (in a written opinion with respect to (ii) or (iii) of
independent public accountants delivered to the Trustee), be
sufficient to pay and discharge the entire principal of and
interest, if any, to Stated Maturity on the Outstanding
Debentures at the time such payments become due;
(2) the Company has paid or caused to be paid all other sums
payable with respect to the Debentures;
(3) no default or Event of Default shall have occurred and
be continuing and no Triggering Event shall have occurred as to
which the Company has not fully satisfied the Redemption Rights
of all Holders electing to have their Debentures redeemed; and
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<PAGE> 13
(4) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of the entire
indebtedness on all Outstanding Debentures have been complied
with and an Opinion of Counsel to the effect that no other action
under the Indenture is required as a precondition to the
discharge of the Company's obligations.
Any deposits with the Trustee referred to in Section 403(1)
above shall be irrevocable and shall be made under the terms of an
escrow trust agreement in form and substance satisfactory to the
Trustee."
(4) Defined Terms. Terms (whether or not capitalized) used herein and
not otherwise defined shall have the meanings specified in the Indenture.
Each of the undersigned, for himself, states that he has read and is
familiar with the provisions of Articles II and III of the Indenture relating to
the establishment of the form of security representing a series of Securities
thereunder and the establishment of the terms of a series of Securities
thereunder and, in each case, the definitions therein relating thereto; that he
is generally familiar with the other provisions of the Indenture and with the
affairs of the Company and its acts and proceedings and that the statements and
opinions made by him in this Officers' Certificate are based upon such
familiarity; and that, in his opinion, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not the covenants or conditions referred to above have been complied
with, and that in his opinion such covenants and conditions have been complied
with.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have hereunto signed this Certificate
on behalf of the Company as of this 3rd day of February, 1994.
TURNER BROADCASTING SYSTEM, INC.
By:
Wayne H. Pace
Vice President-Finance and
Chief Financial Officer
By:
Steven W. Korn
Vice President, Secretary and
General Counsel
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EXHIBIT A
[FORM OF FACE OF DEBENTURE]
REGISTERED NUMBER:
PRINCIPAL AMOUNT:
CUSIP:
TURNER BROADCASTING SYSTEM, INC.
8.40% SENIOR DEBENTURE DUE 2024
Turner Broadcasting System, Inc., a Georgia corporation (herein called the
"Company", which term shall refer to such Company until a successor corporation
shall have become such pursuant to the provisions of the Indenture referred to
on the reverse hereof and thereafter "Company" shall mean such successor
corporation), for value received, hereby promises to pay to
, or registered assigns, the principal sum of $ on
February 1, 2024, and to pay interest thereon from February 1, 1994 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for semiannually on February 1 and August 1 of each year, commencing
February 1, 1994, at the rate of eight and four-tenths percent (8.40%) per annum
until the principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Debenture or one or more Predecessor Securities is registered
at the close of business on the Regular Record Date for such interest, which
shall be the January 15 or July 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any interest not punctually
paid or provided for shall forthwith cease to be paid to the holder on such
Regular Record Date and may either be paid to the Persons in whose names this
Debenture (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date established for the payment of such defaulted
interest fixed by the Trustee, notice whereof shall be given to the Holders of
Debentures of the series not less than fifteen (15) days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Debentures of this
series may be listed and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
Payment of the principal of this Debenture will be made at the office of
the Trustee, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts upon
surrender of this Debenture, and any interest on this Debenture will be paid at
the by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
REFERENCE IS HEREBY MADE TO FURTHER PROVISIONS OF THIS DEBENTURE SET FORTH
ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
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<PAGE> 16
Unless the Certificate of Authentication has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Debenture shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
TURNER BROADCASTING SYSTEM, INC.
By:
---------------------------------
Title:
------------------------------
Attest:
-----------------------------
Title:
------------------------------
(CORPORATE SEAL)
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series designated herein issued under
the within mentioned Indenture.
<TABLE>
<S> <C>
THE FIRST NATIONAL BANK OF
Dated: BOSTON, as Trustee
----------------
By:
--------------------------
Authorized Signatory
</TABLE>
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<PAGE> 17
[FORM OF REVERSE OF DEBENTURE]
TURNER BROADCASTING SYSTEM, INC.
8.40% SENIOR DEBENTURE DUE 2024
This Debenture is one of a duly authorized issue of Securities of the
Company (which series is herein called the "Debentures"), issued and to be
issued in one or more series under an Indenture, dated as of May 15, 1993, (as
amended or supplemented from time to time, and including, with respect to a
particular series of securities, the terms of such securities established as
contemplated by Section 301, whether established in or pursuant to a
supplemental indenture, a Board Resolution or an Officers' Certificate, the
"Indenture") between the Company and The First National Bank of Boston, as
Trustee (herein called the "Trustee," which term includes any successor trustee
or trustees under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Debentures and of the terms upon which the
Debentures are and are to be authenticated and delivered. This Debenture is one
of the series designated on the face hereof, limited in the aggregate principal
amount to $200,000,000 issued pursuant to the Indenture.
The Debentures are redeemable at the option of the Company at any time on
or after February 1, 2004, in whole or in part, on not less than 30 nor more
than 60 days' prior notice, at the redemption prices set forth below (expressed
as percentages of the principal amount), together with accrued and unpaid
interest, if any, to but excluding the date of redemption, if redeemed during
the 12-month period beginning February 1 of the years indicated below:
<TABLE>
<S> <C>
2004....................................................................... 104.161%
2005....................................................................... 103.735
2006....................................................................... 103.329
2007....................................................................... 102.913
2008....................................................................... 102.497
2009....................................................................... 102.081
2010....................................................................... 101.664
2011....................................................................... 101.248
2012....................................................................... 100.832
2013....................................................................... 100.416
2014 and thereafter........................................................ 100.000%
</TABLE>
Each Holder shall have the option to require the Company to redeem all, but
not less than all, of the Debentures owned by such Holder at a redemption price,
payable in cash, equal to 101% of the principal amount, plus accrued and unpaid
interest to the date fixed for redemption upon the occurrence of certain
Triggering Events, such as certain payments in respect of Capital Stock, a
Change in Control or certain mergers, consolidations or sales of assets and
properties.
If an Event of Default with respect to the Debentures shall occur and be
continuing, the principal of the Debentures may be declared due and payable in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Securities at that time outstanding of all series to be affected (acting as one
class). The Indenture also provides that, regarding the Debentures, the Holders
of not less than a majority in principal amount of the Debentures at the time
outstanding may waive certain past defaults and their consequences on behalf of
the Holders of all Debentures. Any such consent or waiver by the Holder of this
Debenture shall be conclusive and binding upon such Holder and upon all future
holders of this Debenture and of any Debenture issued upon the register of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon the Debenture.
A-3
<PAGE> 18
As provided in the Indenture, the Company shall be discharged from its
obligations with respect to the Debentures when (1) with respect to all
Outstanding Debentures, the Company has deposited or caused to be deposited with
the Trustee as a trust fund specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of the Debentures (i) money in an amount
as will or (ii) U.S. Government Obligations, as will, together with the
predetermined and certain income to accrue thereon without consideration of any
reinvestment thereof, or (iii) a combination of (i) and (ii) as will (in a
written opinion with respect to (ii) or (iii) of independent public accountants
delivered to the Trustee) be sufficient to pay and discharge the entire
indebtedness on all outstanding Debentures of such series for principal,
premium, if any and interest, if any, to the Stated Maturity or any Redemption
Date, as the case may be, (2) the Company has paid or caused to be paid all
other sums payable with respect to the Debentures, (3) no default or Event of
Default shall have occurred and be continuing and no Triggering Event shall have
occurred as to which the Company has not fully satisfied the Redemption Rights
of all Holders electing to have their Debentures redeemed and (4) the Company
has delivered to the Trustee an Officers' Certificate stating that all such
conditions precedent have been complied with and an Opinion of Counsel to the
effect that no other action under the Indenture is required as a precondition to
the discharge of the Company's obligations. Upon and following the deposit of
such funds or U.S. Government Obligations and satisfaction of such other
conditions the Holders shall only be entitled to receive payment of the
principal of (and premium, if any) and interest, if any, on the Debentures from
deposited funds and the Company shall have no further obligations with respect
thereto except for certain obligations with respect to transfer and exchange of
the Debentures.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest, if any, on the Debentures at the times, place and rate, and in the
coin or currency herein and in the Indenture provided; subject, however, to the
provisions for the discharge of the Company from its obligations under the
Debentures upon satisfaction of the conditions set forth in the preceding
paragraph or in the Indenture.
As provided in the Indenture, upon any consolidation or merger or any
conveyance, transfer or lease of the properties and assets of the Company as an
entirety or substantially as an entirety in accordance with the provisions of
the Indenture, the successor corporation formed by such consolidation or into
which the predecessor corporation is merged or to which such conveyance,
transfer or lease is made shall be substituted for the predecessor corporation
with the same effect as if such successor corporation had been named as the
Company. Thereafter the predecessor corporation shall be relieved of the
performance and observance of all obligations and covenants of the Indenture and
the Debentures, including but not limited to the obligation to make payment of
the principal of and interest, if any, on all the Debentures then outstanding,
and, in the event of any such conveyance, transfer or lease, may be liquidated
and dissolved.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Debenture is registrable in the Security Register,
upon surrender of this Debenture for registration of transfer at the office or
agency of the Company maintained for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more Debentures of
authorized denominations and for like aggregate principal amount and tenor will
be issued to the designated transferee or transferees.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 and any larger amount that is an integral multiple of
$1,000. As provided in the Indenture and subject to certain limitations therein
set forth, Debentures are exchangeable for a like principal amount and tenor of
Debentures of a different authorized denomination, upon surrender of the
Debentures to be exchanged at the office or agency of the Company maintained for
such purpose.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
A-4
<PAGE> 19
Prior to the due presentment of this Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name the Debenture is registered as the owner
hereof for all purposes, whether or not the Debentures shall be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee and the Paying Agents will pay the money back to the Company
at its request. After that, all liability of the Trustee and such Paying Agents
with respect to such money shall cease.
The Indenture imposes certain limitations on the ability of the Company and
its Subsidiaries, among other things, to incur senior Funded Debt and create
Liens. The Indenture also imposes additional limitations on the ability of
Subsidiaries of the Company to incur Funded Debt. These limitations are subject
to important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations.
As provided in the Indenture, no recourse shall be had for the payment of
the principal o, premium, if any, or the interest, if any, on this Debenture or
any part hereof or for any claim based hereon or otherwise in respect hereof, or
of the indebtedness represented hereby, or upon any obligation, covenant or
agreement of the Company in the Indenture against any incorporator, direct or
indirect stockholder, officer, director, as such, past, present or future, of
the Company, or of any successor corporation, whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all liability, if any, of that character
against every such incorporator, stockholder, officer and director, being by the
acceptance hereof, and as a condition of and as a part of the consideration for
the issue hereof, expressly waived and released.
THE INDENTURE AND DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Debenture which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Debenture shall be construed as though they were written out in full
according to the applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties with right of survivorship and
not as tenants in common
JT TEN -- as joint tenants with right of survivorship and not as tenants
in common
UNIF GIFT ACT -- (cust) custodian (minor) under Uniform Gift to Minors Act
(state)
</TABLE>
Additional abbreviations may also be used that are not in the above list.
---------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) to the within Debenture of Turner Broadcasting
System, Inc. and irrevocably constitutes and appoints attorney to transfer such
Debenture on the books of the within named Company, with full power of
substitution in the premises.
Dated:
--------------------------
---------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Debenture in every particular without alteration or
enlargement, or any change whatsoever. The signature should be guaranteed by a
commercial bank or trust company, or by a New York, American, Boston, Midwest,
Philadelphia or Pacific stock exchange member, a member of the National
Association of Securities Dealers, Inc., or firm whose signature is known to the
registrar.
A-5
