<PAGE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 14, 1998
REGISTRATION NO. [ ]
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TIME WARNER INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 75 ROCKEFELLER PLAZA 13-3527249
(STATE OR OTHER JURISDICTION NEW YORK, NY 10019 (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION) (212) 484-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
TIME WARNER COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 75 ROCKEFELLER PLAZA 13-1388520
(STATE OR OTHER JURISDICTION NEW YORK, NY 10019 (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION) (212) 484-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
TURNER BROADCASTING SYSTEM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
GEORGIA ONE CNN CENTER 58-0950695
(STATE OR OTHER JURISDICTION ATLANTA, GEORGIA 30303 (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION) (404) 827-1700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
------------------------
PETER R. HAJE
EXECUTIVE VICE PRESIDENT, SECRETARY
AND GENERAL COUNSEL
TIME WARNER INC.
75 ROCKEFELLER PLAZA
NEW YORK, NY 10019
(212) 484-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C> <C>
WILLIAM P. ROGERS, JR. LOUISE S. SAMS, ESQ. FAITH GROSSNICKLE
CRAVATH, SWAINE & MOORE VICE PRESIDENT AND GENERAL COUNSEL SHEARMAN & STERLING
825 EIGHTH AVENUE TURNER BROADCASTING SYSTEM, INC. 599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10019 ONE CNN CENTER NEW YORK, NY 10022
(212) 474-1000 ATLANTA, GEORGIA 30303 (212) 848-8015
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement, as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box: [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
Approximate date of commencement of proposed sale to the public:
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2)
<S> <C> <C> <C>
Debt Securities........................................ $1,000,000,000(3) 100% $1,000,000,000(3)
Guarantees of Debt Securities(4)....................... $1,000,000,000 N/A N/A
<CAPTION>
AMOUNT OF
TITLE OF EACH CLASS OF REGISTRATION
SECURITIES TO BE REGISTERED FEE
<S> <C>
Debt Securities........................................ $295,000
Guarantees of Debt Securities(4)....................... N/A(5)
</TABLE>
(footnotes on next page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
________________________________________________________________________________
<PAGE>
<PAGE>
(footnotes from previous page)
(1) United States dollars or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies.
(2) Estimated solely for purposes of calculating the registration fee.
(3) Represents the aggregate principal amount plus, if any Debt Securities are
issued at an original issue discount, such principal amount as shall
result in an aggregate initial offering price of $1,000,000,000.
(4) Time Warner Companies, Inc. and Turner Broadcasting System, Inc. will
irrevocably and unconditionally guarantee on an unsecured senior basis Debt
Securities of Time Warner Inc.
(5) Pursuant to Rule 457(n), no separate fee is required to be paid in respect
of guarantees of the Debt Securities which are being registered
concurrently.
<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 14, 1998
PROSPECTUS
TIME WARNER INC.
DEBT SECURITIES
UNCONDITIONALLY GUARANTEED BY
TIME WARNER COMPANIES, INC.
AND
TURNER BROADCASTING SYSTEM, INC.
Time Warner Inc. (the 'Issuer') may offer from time to time, together or
separately, unsecured notes, debentures or other evidences of indebtedness
('Debt Securities'), having an aggregate initial public offering price not to
exceed $1,000,000,000 (including the U.S. dollar equivalent of securities for
which the initial public offering price is denominated in one or more foreign
currencies or composite currencies). The Debt Securities may be offered in one
or more series, in amounts, at prices and on terms determined at the time of
sale and set forth in a supplement to this Prospectus (a 'Prospectus
Supplement').
The Debt Securities will be irrevocably, fully and unconditionally
guaranteed (the 'Guarantees') on an unsecured basis by each of Time Warner
Companies, Inc. ('TWC') and Turner Broadcasting System, Inc. ('TBS'). TWC and
TBS are wholly owned subsidiaries of the Issuer. The Issuer is a holding company
that derives its operating income and cash flow primarily from TWC and TBS. The
assets of the Issuer consist primarily of its investments in TWC and TBS, and
the assets of TWC and TBS consist primarily of investments in their respective
consolidated and unconsolidated subsidiaries. The Issuer and its consolidated
and unconsolidated subsidiaries are collectively referred to as the 'Company'.
Unless otherwise specified in an accompanying Prospectus Supplement, the
Debt Securities and the Guarantees will be senior securities of the Issuer, TWC
and TBS, respectively, ranking equally with all other unsubordinated and
unsecured indebtedness and other obligations of the Issuer, TWC and TBS,
respectively.
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be set forth in an accompanying Prospectus
Supplement, including, where applicable, the specific designation, aggregate
principal amount, currency, denomination, maturity (which may be fixed or
extendible), priority, interest rate (or manner of calculation thereof), if any,
time of payment of interest, if any, terms for any redemption, terms for any
repayment at the option of the holder, terms for any sinking fund payments, the
initial public offering price, provisions regarding original issue discount
securities, additional covenants and any other specific terms of such Debt
Securities.
The Prospectus Supplement will also contain information, where applicable,
about certain United States Federal income tax considerations relating to, and
any listing on a securities exchange of, the Debt Securities covered by the
Prospectus Supplement.
The Debt Securities may be issued only in registered form, including in the
form of one or more global securities ('Global Securities'), unless otherwise
set forth in the Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Debt Securities may be offered directly, through agents designated from
time to time or through dealers or underwriters. If any agents of the Issuer,
TWC or TBS or any dealers or underwriters are involved in the offering of the
Debt Securities in respect of which this Prospectus is being delivered, the
names of such agents, dealers or underwriters and any applicable commissions or
discounts will be set forth in the Prospectus Supplement. The net proceeds to
the Issuer from such sale will also be set forth in the Prospectus Supplement.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE>
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH SECURITIES,
AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE 'PLAN OF DISTRIBUTION'.
------------------------
AVAILABLE INFORMATION
The Issuer is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the 'Commission'). TWC and TBS are not
required to file periodic reports and other information under the Exchange Act.
Instead, information with respect to TWC and TBS is provided, to the extent
required by the Commission, in the required filings made by the Issuer. Reports,
proxy statements and other information filed by the Issuer with the Commission
pursuant to the informational requirements of the Exchange Act may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048; and Citicorp Center, 500 West Madison Street (Suite
1400), Chicago, Illinois 60661; and copies of such material may be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates, or through the World Wide Web (http://www.sec.gov). Such
reports, proxy statements and other information may also be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York, on which one or more of the Issuer's securities are listed.
This Prospectus constitutes a part of a Registration Statement filed by the
Issuer, TWC and TBS with the Commission under the Securities Act of 1933, as
amended (the 'Securities Act'). This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Issuer, TWC, TBS and the Debt Securities. Statements contained herein concerning
the provisions of any document are not necessarily complete and, in each
instance, reference is made to the copy of such document filed as an Exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission by the Issuer (File No.
001-12259) are incorporated by reference in this Prospectus:
(a) the Issuer's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by Forms 10K/A dated March 27, 1997 and June
26, 1997 (as amended, the 'Issuer's 1996 Form 10-K');
(b) the Issuer's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997; and
(c) the Issuer's Current Reports on Form 8-K dated March 21, 1997,
October 15, 1997, October 27, 1997 and November 13, 1997.
All documents and reports subsequently filed by the Issuer pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus or any Prospectus Supplement to the extent that
a statement contained herein or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein modifies or
supersedes
2
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<PAGE>
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus or any Prospectus Supplement.
The Issuer will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus and the accompanying Prospectus
Supplement are delivered, upon the written or oral request of such person, a
copy of any or all the documents incorporated herein by reference, other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference in such documents, and any other documents specifically identified
herein as incorporated by reference into the Registration Statement to which
this Prospectus relates or into such other documents. Requests should be
addressed to: Shareholder Relations Department, Time Warner Inc., 75 Rockefeller
Plaza, New York, New York 10019; telephone: (212) 484-6971.
THE COMPANY
The Company, the world's leading media and entertainment company, has
interests in four fundamental areas of business: Entertainment, consisting
principally of interests in filmed entertainment, television production,
television broadcasting, recorded music and music publishing; Cable Networks,
consisting principally of interests in cable television programming; Publishing,
consisting principally of interests in magazine publishing, book publishing and
direct marketing; and Cable, consisting principally of interests in cable
television systems. Each of the Issuer, TWC and TBS is a holding company that
derives its operating income and cash flow primarily from its subsidiaries and
investments. The assets of the Issuer consist primarily of its investments in
TWC and TBS. The assets of TWC consist primarily of its investments in its
consolidated and unconsolidated subsidiaries, including Time Warner
Entertainment Company, L.P. ('TWE'). The assets of TBS consist primarily of
investments in its consolidated and unconsolidated subsidiaries. The ability of
the Issuer, TWC and TBS to service their respective indebtedness and other
liabilities, including the Debt Securities and the Guarantees, is dependent
primarily upon the earnings and cash flow of their respective consolidated and
unconsolidated subsidiaries and the distribution or other payment of such
earnings and cash flow to the Issuer, TWC and TBS. See 'Holding Company
Structure'.
The Issuer became the parent of TWC and TBS on October 10, 1996 upon the
merger of TWC and TBS with separate subsidiaries of the Issuer (the 'TBS
Transaction'), as more fully described below. In connection therewith, the
Issuer changed its name to Time Warner Inc. from TW Inc. and TWC changed its
name from Time Warner Inc. to Time Warner Companies, Inc.
TWE was formed as a Delaware limited partnership in 1992 to own and operate
substantially all of the business of Warner Bros., Home Box Office and the cable
television businesses owned and operated by TWC prior to such date. TWC and
certain of its wholly owned subsidiaries own general and limited partnership
interests aggregating 74.49% of the pro rata priority capital ('Series A
Capital') and residual equity capital ('Residual Capital') of TWE and 100% of
the senior priority capital and junior priority capital of TWE. The remaining
25.51% limited partnership interests in the Series A Capital and Residual
Capital of TWE are held by a subsidiary of U S WEST, Inc. TWC does not
consolidate TWE and certain related companies (the 'Entertainment Group') for
financial reporting purposes.
TBS TRANSACTION
On October 10, 1996, pursuant to an Amended and Restated Agreement and Plan
of Merger dated as of September 22, 1995, as amended, among the Issuer, TWC, TBS
and certain of their wholly owned subsidiaries, among other things: (a) each of
TWC and TBS became a wholly owned subsidiary of the Issuer through a merger with
a subsidiary of the Issuer, (b) each outstanding share of common stock of TWC,
other than shares held directly or indirectly by TWC, was converted into one
share of common stock of the Issuer, (c) each outstanding share of preferred
stock of TWC was converted into one share of a substantially identical series of
preferred stock of the Issuer, (d) each outstanding share of common stock of
TBS, other than shares held directly or indirectly by the Issuer or TWC or in
the treasury of TBS, was converted into the right to receive 0.75 shares of
common stock of the Issuer and (e) each outstanding share of preferred stock of
TBS, other than shares held directly or indirectly by the Issuer or TWC, was
converted into the right to receive 4.8 shares of common stock of the Issuer.
Additional
3
<PAGE>
<PAGE>
information on the TBS Transaction is set forth in Note 2 to the Issuer's
consolidated financial statements included in the Issuer's 1996 Form 10-K, which
is incorporated by reference herein.
RECIPROCAL GUARANTEES OF EXISTING INDEBTEDNESS
In order to integrate TBS into the Issuer's operating structure and
simplify the credit structure of the Issuer, TWC and TBS such that the financial
risks associated with investing in the indebtedness of any one of the three
companies are substantially equivalent to those associated with investing in the
indebtedness of any of the other companies, prior to the date of the
Registration Statement of which this Prospectus forms a part, the Issuer, TWC
and TBS entered into the following guarantees of outstanding publicly traded
indebtedness ('Outstanding Securities') of TWC and TBS:
The Issuer, as primary obligor and not merely as surety, has irrevocably
and unconditionally guaranteed (the 'Downstream Guarantees') (a) the full and
punctual payment of principal of and interest on the Outstanding Securities of
each of TWC and TBS when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of TWC and TBS under
the Outstanding Securities of TWC and TBS and the indentures relating to the
Outstanding Securities (including the obligations to the respective trustees)
and (b) the full and punctual performance within applicable grace periods of all
other obligations of TWC and TBS under the Outstanding Securities and the
respective indentures.
Each of TWC and TBS, as primary obligor and not merely as surety, has
irrevocably and unconditionally guaranteed (the 'Cross Guarantees') (a) the full
and punctual payment of principal of and interest on the Outstanding Securities
of the other party when due, whether at maturity, by acceleration, by redemption
or otherwise, and all other monetary obligations of the other party under the
Outstanding Securities of such other party and the indentures relating to such
Outstanding Securities (including the obligations to the respective trustees)
and (b) the full and punctual performance within applicable grace periods of all
other obligations of the other party under such Outstanding Securities and the
respective indentures. The maximum aggregate amount of the Cross Guarantee by
TBS shall not exceed the maximum amount that can be guaranteed by TBS without
rendering such guarantee voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
The Issuer's and TWC's principal executive offices are located at 75
Rockefeller Plaza, New York, New York 10019. TBS's principal executive offices
are located at One CNN Center, Atlanta, Georgia 30303.
RATIO OF EARNINGS TO FIXED CHARGES
The historical ratios of earnings to fixed charges for each of the Issuer,
TWC and TBS and the pro forma ratios of earnings to fixed charges for each of
the Issuer and TWC are set forth below for the periods indicated. For periods in
which earnings before fixed charges were insufficient to cover fixed charges,
the dollar amount of coverage deficiency (in millions), instead of the ratio, is
disclosed. The ratios of earnings to fixed charges of the Issuer and TWC for all
periods after 1992 reflect the deconsolidation of the Entertainment Group,
principally TWE, effective January 1, 1993.
The ratios of earnings to fixed charges of TBS for all post-merger periods
have been adjusted to reflect the Issuer's basis of accounting. The ratios of
earnings to fixed charges (or coverage deficiencies) of TBS for all pre-merger
periods are reflected at TBS's historical cost basis of accounting. Certain
reclassifications have been made to TBS's ratios of earnings to fixed charges
for pre-merger periods to conform to the post-merger presentation.
The historical ratio of earnings to fixed charges of each of the Issuer and
TWC for 1996 reflects (a) the use of approximately $1.55 billion of net proceeds
from the issuance of 1.6 million shares of Series M exchangeable preferred
stock, having an aggregate liquidation preference of $1.6 billion to reduce
outstanding indebtedness (the 'Preferred Stock Refinancing'), (b) the
acquisition of Cablevision Industries Corporation and related companies,
including the assumption or incurrence of approximately $2 billion of
indebtedness and, with respect to the Issuer only, (c) the TBS Transaction,
including the assumption of approximately $2.8 billion of indebtedness.
4
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<PAGE>
The historical ratio of earnings to fixed charges of each of the Issuer and
TWC for 1995 reflects (a) the acquisition of KBLCOM Incorporated and Summit
Communications Group, Inc., including the assumption or incurrence of
approximately $1.3 billion of indebtedness and (b) the exchange by Toshiba
Corporation and ITOCHU Corporation of their direct and indirect interests in
TWE.
The historical ratio of earnings to fixed charges of each of the Issuer and
TWC for 1993 reflects the issuance of $6.1 billion of long-term debt and the use
of $500 million of cash and equivalents for the exchange or redemption of
preferred stock having an aggregate liquidation preference of $6.4 billion. The
historical ratio of earnings to fixed charges for 1992 reflects the
capitalization of TWE on June 30, 1992 and associated refinancings, and the
acquisition of the 18.7% minority interest in American Television and
Communications Corporation as of June 30, 1992, using the purchase method of
accounting for business combinations.
The pro forma ratios of earnings to fixed charges for each of the Issuer
and TWC for the nine months ended September 30, 1997 and the year ended December
31, 1996 give effect to (i) the agreed-upon transfer by a wholly owned
subsidiary of TWC of cable television systems serving an aggregate of
approximately 667,000 subscribers to the Time Warner
Entertainment-Advance/Newhouse Partnership, ('TWE-A/N'), a partnership currently
owned 66.7% by TWE and 33.3% by the Advance/Newhouse Partnership, subject to
approximately $1 billion of debt, in exchange for common and preferred
partnership interests therein, as well as certain related transactions (the
'TWE-A/N Transfers'), pursuant to an agreement entered into by such subsidiary
on October 27, 1997 with TWE-A/N and each of its partners and (ii) with respect
to 1996 only, (a) the Preferred Stock Refinancing and certain other debt
refinancings and (b) with respect to the Issuer only, the TBS Transaction, as if
such transactions had occurred at the beginning of such periods. The pro forma
information presented below should be read in conjunction with the pro forma
consolidated condensed financial statements contained in the Issuer's Current
Report on Form 8-K dated November 13, 1997 and incorporated herein by reference.
Such pro forma amounts are presented for informational purposes only and are not
necessarily indicative of the actual ratios that would have occurred if such
transactions had been consummated as of the dates indicated, nor are they
necessarily indicative of future results.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------------- -------------------------------------------------
PRO FORMA PRO FORMA
1997 1997 1996 1996 1996 1995 1994 1993 1992
--------- ---- ---- --------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuer............................... 1.4x 1.4x 1.0x 1.1x 1.1x 1.1x 1.1x 1.1x 1.4x
TWC.................................. 1.4x 1.4x 1.0x 1.2x 1.1x 1.1x 1.1x 1.1x 1.4x
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS NINE MONTHS YEARS ENDED DECEMBER 31,
ENDED ENDED ENDED ----------------------------
SEPTEMBER 30, 1997 DECEMBER 31, 1996 SEPTEMBER 30, 1996 1995 1994 1993 1992
------------------ ----------------- ------------------ ---- ---- ---- ----
TBS.................... 1.8x 1.6x $ (44) 1.7x 1.3x 1.6x 1.4x
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
were calculated by adding (i) pretax income, (ii) interest expense, including
previously capitalized interest amortized to expense and the portion of rents
representative of an interest factor for the Issuer, TWC and TBS and their
respective majority-owned subsidiaries, (iii) the Issuer's, TWC's and TBS's
respective proportionate share of the items included in (ii) above for their
50%-owned companies, (iv) preferred stock dividend requirements of
majority-owned subsidiaries, (v) minority interest in the income of
majority-owned subsidiaries that have fixed charges and (vi) the amount of
undistributed losses of each of the Issuer's, TWC's and TBS's less than
50%-owned companies. Fixed charges consist of (i) interest expense, including
interest capitalized and the portion of rents representative of an interest
factor for the Issuer, TWC and TBS and their respective majority-owned
subsidiaries, (ii) the Issuer's, TWC's and TBS's respective proportionate share
of such items for their 50%-owned companies and (iii) preferred stock dividend
requirements of majority-owned subsidiaries. Earnings as defined include
significant noncash charges for depreciation and amortization. Historical fixed
charges of the Issuer and TWC for the nine months ended September 30, 1997 and
1996 and the years ended December 31, 1996, 1995 and 1994 include noncash
interest expense of $73 million, $68 million, $91 million, $176 million and $219
5
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<PAGE>
million, respectively, principally relating to TWC's Liquid Yield Option Notes
due 2012 and 2013 and, in 1995 and 1994 only, TWC's Redeemable Reset Notes due
2002. Historical fixed charges of the Issuer for the nine months ended September
30, 1997 and the year ended December 31, 1996 include an additional $2 million
and $5 million, respectively, in noncash interest expense relating to TBS's zero
coupon convertible notes due 2007. Pro forma fixed charges of the Issuer for the
year ended December 31, 1996 similarly include an additional $14 million in
noncash interest expense relating to TBS's zero coupon convertible notes due
2007 for the period prior to the consummation of the TBS Transaction. Historical
fixed charges of TBS include noncash interest expense of $2 million, $5 million,
$14 million, $18 million, $17 million, $29 million and $34 million for the nine
months ended September 30, 1997, the three months ended December 31, 1996 and
the nine months ended September 30, 1996 and the years ended December 31, 1995,
1994, 1993 and 1992, respectively.
USE OF PROCEEDS
Except as otherwise set forth in the Prospectus Supplement, the net
proceeds to the Issuer from the sale of Debt Securities will be used to
repurchase, redeem or otherwise repay indebtedness of the Issuer and its
subsidiaries, including TWC and/or TBS. Additional information on the use of net
proceeds from the sale of any particular Debt Securities will be set forth in
the Prospectus Supplement relating to such Debt Securities.
6
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<PAGE>
DESCRIPTION OF THE DEBT SECURITIES AND THE GUARANTEES
GENERAL
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of any Debt Securities
and the extent, if any, to which such general provisions will not apply to such
Debt Securities will be described in the Prospectus Supplement relating to such
Debt Securities.
The Debt Securities will be issued from time to time in series under an
Indenture (the 'Indenture'), between the Issuer and The Chase Manhattan Bank
(the 'Trustee'), as Trustee. The statements set forth below are brief summaries
of certain provisions contained in the Indenture, which summaries do not purport
to be complete and are qualified in their entirety by reference to the
Indenture, a copy of which is an Exhibit to the Registration Statement of which
this Prospectus is a part. Numerical references in parentheses below are to
articles or sections of the Indenture, unless otherwise indicated. Wherever
defined terms are used but not defined herein, such terms shall have the
meanings assigned to them in the Indenture, it being intended that such
referenced articles and sections of the Indenture and such defined terms shall
be incorporated herein by reference.
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and Debt Securities may be issued thereunder up to the
aggregate principal amount which may be authorized from time to time by the
Issuer. Any such limit applicable to a particular series will be specified in
the Prospectus Supplement relating to that series.
Reference is made to the Prospectus Supplement for the following terms of
each series of Debt Securities in respect to which this Prospectus is being
delivered: (i) the designation, date, aggregate principal amount, currency or
currency unit of payment if other than United States dollars and authorized
denominations of such Debt Securities; (ii) the date or dates on which such Debt
Securities will mature (which may be fixed or extendible); (iii) the rate or
rates (or manner of calculation thereof), if any, per annum at which such Debt
Securities will bear interest; (iv) the dates, if any, on which such interest
will be payable, (v) the terms of any mandatory or optional redemption
(including any sinking, purchase or analogous fund) and any purchase at the
option of holders (including whether any such purchase may be paid in cash,
common stock or other securities or property); (vi) whether such Debt Securities
are to be issued in the form of Global Securities and, if so, the identity of
the Depository with respect to such Global Securities; and (vii) any other
specific terms.
Unless otherwise set forth in the Prospectus Supplement, interest on
outstanding Debt Securities will be paid to holders of record on the date which
is 15 days prior to the date such interest is to be paid. Unless otherwise
specified in the Prospectus Supplement, Debt Securities will be issued in fully
registered form only and in denominations of $1,000 and integral multiples
thereof. Unless otherwise specified in the Prospectus Supplement, the principal
amount of the Debt Securities will be payable at the corporate trust office of
the Trustee in New York, New York. The Debt Securities may be presented for
transfer or exchange at such office unless otherwise specified in the Prospectus
Supplement, subject to the limitations provided in the Indenture, without any
service charge, but the Issuer may require payment of a sum sufficient to cover
any tax or other governmental charges payable in connection therewith. (Section
3.05)
GUARANTEES
Under the Guarantees, each of TWC and TBS, as primary obligor and not
merely as surety, will irrevocably and unconditionally guarantee, to each Holder
of Debt Securities, and to the Trustee and its successors and assigns, (i) the
full and punctual payment of principal of and interest on the Debt Securities
when due, whether at maturity, by acceleration, by redemption or otherwise, and
all other monetary obligations of the Issuer under the Indenture (including
obligations to the Trustee) and the Debt Securities and (ii) the full and
punctual performance within applicable grace periods of all other obligations of
the Issuer under the Indenture and the Debt Securities. The Guarantees
constitute guarantees of payment, performance and compliance and not merely of
collection. The obligations of TWC and TBS to make any payments may be satisfied
by causing the Issuer to make such payments. Further, TWC and TBS agree to pay
any and all costs and expenses (including reasonable attorneys'
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fees) incurred by the Trustee or any Holder of Debt Securities in enforcing any
of their respective rights under the Guarantees. The Indenture provides that
each of the Guarantees of TWC and TBS is limited to the maximum amount that can
be guaranteed by TWC or TBS, respectively, without rendering the relevant
Guarantee voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
(Article XIII)
RANKING
Unless otherwise specified in a Prospectus Supplement for a particular
series of Debt Securities, all series of Debt Securities will be senior
indebtedness of the Issuer and will be direct, unsecured obligations of the
Issuer, ranking on a parity with all other unsecured and unsubordinated
obligations of the Issuer, and the Guarantees will be senior obligations of TWC
and TBS and will be direct unsecured obligations of TWC and TBS, ranking on a
parity with all other unsecured and unsubordinated obligations of TWC and TBS.
Each of the Issuer, TWC and TBS is a holding company and the Debt Securities and
the Guarantees will be effectively subordinated to all existing and future
liabilities, including indebtedness, of the subsidiaries of the Issuer, TWC and
TBS, respectively. See 'Holding Company Structure'.
CERTAIN COVENANTS
Limitation on Liens. The Indenture provides that neither the Issuer nor any
Material Subsidiary of the Issuer shall incur, create, issue, assume, guarantee
or otherwise become liable for any indebtedness for money borrowed that is
secured by a lien on any asset now owned or hereafter acquired by it unless the
Issuer makes or causes to be made effective provision whereby the Debt
Securities will be secured by such lien equally and ratably with (or prior to)
all other indebtedness thereby secured so long as any such indebtedness shall be
secured. The foregoing restriction does not apply to the following:
(i) liens existing as of the date of the Indenture;
(ii) liens created by Subsidiaries of the Issuer to secure
indebtedness of such Subsidiaries to the Issuer or to one or more other
Subsidiaries of the Issuer;
(iii) liens affecting property of a person existing at the time it
becomes a Subsidiary of the Issuer or at the time it merges into or
consolidates with the Issuer or a Subsidiary of the Issuer or at the time
of a sale, lease or other disposition of all or substantially all of the
properties of such person to the Issuer or its Subsidiaries;
(iv) liens on property existing at the time of the acquisition thereof
or incurred to secure payment of all or a part of the purchase price
thereof or to secure Indebtedness incurred prior to, at the time of, or
within one year after the acquisition thereof for the purpose of financing
all or part of the purchase price thereof;
(v) liens on any property to secure all or part of the cost of
improvements or construction thereon or indebtedness incurred to provide
funds for such purpose in a principal amount not exceeding the cost of such
improvements or construction;
(vi) liens consisting of or relating to the sale, transfer or
financing of motion pictures, video and television programs, sound
recordings, books or rights with respect thereto or with so-called tax
shelter groups or other third-party investors in connection with the
financing of such motion pictures, video and television programming, sound
recordings or books in the ordinary course of business and the granting to
the Issuer or any of its Subsidiaries of rights to distribute such motion
pictures, video and television programming, sound recordings or books;
provided, however, that no such lien shall attach to any asset or right of
the Issuer or its Subsidiaries (other than the motion pictures, video and
television programming, sound recordings, books or rights which were sold,
transferred to or financed by the tax shelter group or third-party
investors in question or the proceeds arising therefrom);
(vii) liens on shares of stock, indebtedness or other securities of a
Person that is not a Subsidiary;
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(viii) 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.
(ix) 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 Issuer 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;
(x) 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;
(xi) 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 Issuer's or any of its Subsidiaries' interests
therein;
(xii) liens on capital leases entered into after the date of the
Indenture provided that such liens extend only to the property or assets
that are the subject of such capital leases;
(xiii) Liens resulting from progress payments or partial payments
under United States government contracts or subcontracts;
(xiv) other liens arising in connection with indebtedness of the
Issuer and its Subsidiaries in an aggregate principal amount for the Issuer
and its Subsidiaries not exceeding at the time such lien is issued, created
or assumed the greater of (A) 10% of the Consolidated Net Worth of the
Issuer and (B) $500 million; and
(xv) any extensions, renewal or replacement of any lien referred to in
the foregoing clauses (i) through (xiv) inclusive, or of any indebtedness
secured thereby; provided that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so secured at
the time of such extension, renewal or replacement, or at the time the lien
was issued, created or assumed or otherwise permitted, and that such
extension, renewal or replacement lien shall be limited to all or part of
substantially the same property which secured the lien extended, renewed or
replaced (plus improvements on such property). (Section 10.06)
Limitation on Senior Debt. Subject to the covenant termination provisions
of the following paragraph, the Indenture provides that the Issuer will not, and
will not permit any of its Subsidiaries to, incur, create, issue, assume,
guarantee or otherwise become directly or indirectly liable for (collectively,
'incur') any Senior Debt, if after giving effect to such incurrence of Senior
Debt, determined on a pro forma basis as if such incurrence had occurred on the
first day of the Test Period, the Consolidated Cash Flow Coverage Ratio for the
Issuer and its Subsidiaries for the Test Period would be less than 1.5 to 1;
provided, however, that the foregoing restrictions will not apply to TWE or any
of its Subsidiaries to the extent that the application of such restrictions
would be prohibited under, or cause a violation of, TWE's bank credit agreement
as in effect from time to time or any successor or replacement credit agreement.
(Section 10.07)
After the Issuer has reached Investment Grade Status, and notwithstanding
that any series of the Debt Securities may later cease to have an Investment
Grade Rating from either or both of the Rating Agencies, the Issuer will be
released from its obligations to comply with the restrictive covenant described
under 'Limitation on Senior Debt'.
Limitation on Merger, Consolidation and Certain Sales of Assets. The
Indenture provides that neither the Issuer, TWC nor TBS will merge or
consolidate with or into, or convey or transfer its property substantially as an
entirety to, any Person unless (a) the successor is organized and existing under
the laws of the United States or any State or the District of Columbia, (b) (i)
in the case of the
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Issuer, the successor assumes the Issuer's obligations under the Indenture and
the Debt Securities on the same terms and conditions and (ii) in the case of TWC
or TBS, the successor assumes TWC or TBS's obligations under the Indenture and
the Guarantees on the same terms and conditions and (c) immediately after giving
effect to such transactions, there is no default under the Indenture. (Sections
8.01 and 8.02)
Other than the restrictions in the Indenture on liens and incurrence of
Senior Debt described above, the Indenture and the Debt Securities do not
contain any covenants or other provisions designed to afford Holders of Debt
Securities protection in the event of a recapitalization or highly leveraged
transaction involving the Issuer.
Any additional covenants of the Issuer, TWC or TBS pertaining to a series
of Debt Securities will be set forth in a Prospectus Supplement relating to such
series of Debt Securities.
CERTAIN DEFINITIONS
The following are certain of the terms defined in the Indenture:
'Consolidated Cash Flow' means, with respect to the Issuer, for any
period, the net income of the Issuer and its Subsidiaries as determined on
a consolidated basis in accordance with GAAP consistently applied, plus the
sum of depreciation, amortization, other noncash charges which reduce net
income, income tax expense and interest expense, in each case to the extent
deducted in determining such net income, and excluding extraordinary gains
or losses. Notwithstanding the foregoing, for purposes of determining the
Consolidated Cash Flow of the Issuer, there shall be included, in respect
of each other Person that is accounted for by the Issuer on the equity
method (as determined in accordance with GAAP), the Issuer's proportionate
amount of such other Person's and its Subsidiaries' consolidated net
income, depreciation, amortization, other noncash charges which reduce net
income, income tax expense and interest expense, in each case to the extent
deducted in determining such other Person's net income, excluding
extraordinary gains and losses.
'Consolidated Cash Flow Coverage Ratio' means, for any period, the
ratio for such period of Consolidated Cash Flow to Consolidated Interest
Expense. In determining the Consolidated Cash Flow Coverage Ratio, effect
shall be given to the application of the proceeds of Senior Debt whose
incurrence is being tested to the extent such proceeds are to be used to
repay or refinance other Senior Debt.
'Consolidated Interest Expense' means, with respect to the Issuer, for
any period, cash interest expense of the Issuer and its Subsidiaries on
Senior Debt for such period other than the amount amortized during such
period in respect of all fees paid in connection with the incurrence of
such Senior Debt, such expense to be determined on a consolidated basis in
accordance with GAAP consistently applied. Notwithstanding the foregoing,
for purposes of determining the Consolidated Interest Expense of the
Issuer, there shall be included, in respect of each other Person that is
accounted for by the Issuer on the equity method (as determined in
accordance with GAAP), the Issuer's proportionate amount of the cash
interest expense of such other Person and its Subsidiaries on Senior Debt
for the relevant period other than the amount amortized during such period
in respect of all fees paid in connection with the incurrence of such
Senior Debt, such expense to be determined on a consolidated basis in
accordance with GAAP consistently applied.
'Consolidated Net Worth' means, with respect to the Issuer, at the
date of any determination, the consolidated stockholders' or owners' equity
of the Issuer and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP consistently applied.
'GAAP' means generally accepted accounting principles as such
principles are in effect as of the date of the Indenture.
'Investment Grade Rating' means a rating equal to or higher than Baa3
(or the equivalent) by Moody's and BBB - (or the equivalent) by S&P.
'Investment Grade Status' shall be deemed to have been reached on the
date that the Debt Securities have an Investment Grade Rating from both
Rating Agencies.
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'Material Subsidiary' means, with respect to the Issuer, any Person
that is a Subsidiary if at the end of the most recent fiscal quarter of the
Issuer, the aggregate amount, determined in accordance with GAAP
consistently applied, of securities of, loans and advances to, and other
investments in, such Person held by the Issuer and its other Subsidiaries
exceeded 10% of the Issuer's Consolidated Net Worth.
'Moody's' means Moody's Investors Service, Inc. or any successor to
the rating agency business thereof.
'Person' means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
'Rating Agencies' means Moody's and S&P.
'S&P' means Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.
'Senior Debt' means, with respect to any Person, all indebtedness of
such Person in respect of money borrowed, determined in accordance with
GAAP consistently applied, other than indebtedness as to which the
instrument governing such indebtedness provides that such indebtedness is,
or which is in effect, subordinated or junior in right of payment to any
other indebtedness of such Person.
'Subsidiary' means, with respect to any Person, any corporation more
than 50% of the voting stock of which is owned directly or indirectly by
such Person, and any partnership, association, joint venture or other
entity in which such Person owns more than 50% of the equity interests or
has the power to elect a majority of the board of directors or other
governing body.
'Test Period' means, with respect to any date, the period consisting
of the most recent four full fiscal quarters for which financial
information is generally available.
'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 of the Indenture 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.
DEFEASANCE
The Indenture provides that the Issuer (and to the extent applicable, TWC
and TBS), at its option, (a) will be Discharged from any and all obligations in
respect of any series of Debt Securities (except in each case for certain
obligations to register the transfer or exchange of Debt Securities, replace
stolen, lost or mutilated Debt Securities, maintain paying agencies and hold
moneys for payment in trust) or (b) need not comply with the covenants described
above under 'Certain Covenants' and any other restrictive covenants described in
a Prospectus Supplement relating to such series of Debt Securities, and certain
Events of Default (other than those arising out of the failure to pay interest
or principal on the Debt Securities of a particular series and certain events of
bankruptcy, insolvency and reorganization) will no longer constitute Events of
Default with respect to such series of Debt Securities, in each case if the
Issuer deposits with the applicable Trustee, in trust, money or the equivalent
in securities of the government which issued the currency in which the Debt
Securities are denominated or government agencies backed by the full faith and
credit of such government, or a combination thereof, which through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal (including any
mandatory sinking fund payments) of, and interest on, such series on the dates
such payments are due in accordance with the terms of such series. To exercise
any such option, the Issuer is required, among other things, to deliver to the
Trustee an opinion of counsel to the effect that (i) the deposit and related
defeasance would not cause the Holders of such series to recognize income, gain
or loss for Federal income tax purposes and, in the case of a Discharge pursuant
to clause (a), accompanied by a ruling to
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such effect received from or published by the United States Internal Revenue
Service and (ii) the creation of the defeasance trust will not violate the
Investment Company Act of 1940, as amended. In addition, the Issuer is required
to deliver to the Trustee an Officers' Certificate stating that such deposit was
not made by the Issuer with the intent of preferring the Holders over other
creditors of the Issuer or with the intent of defeating, hindering, delaying or
defrauding creditors of the Issuer or others. (Article IV)
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that, if an Event of Default specified therein with
respect to any series of Debt Securities issued thereunder shall have happened
and be continuing, either the Trustee thereunder or the Holders of 25% in
aggregate principal amount of the outstanding Debt Securities of such series (or
25% in aggregate principal amount of all outstanding Debt Securities under the
Indenture, in the case of certain Events of Default affecting all series of Debt
Securities under the Indenture) may declare the principal of all the Debt
Securities of such series to be due and payable. (Section 5.02)
Events of Default in respect of any series are defined in the Indenture as
being: (i) default for 30 days in payment of any interest installment with
respect to such series; (ii) default in payment of principal of, or premium, if
any, on, or any sinking fund or analogous payment with respect to, Debt
Securities of such series when due at their stated maturity, by declaration or
acceleration, when called for redemption or otherwise; (iii) default for 90 days
after notice to the Issuer (or TWC or TBS, if applicable) by the Trustee
thereunder or by Holders of 25% in aggregate principal amount of the outstanding
Debt Securities of such series in the performance of any covenant pertaining to
Debt Securities of such series; (iv) failure to pay when due, upon final
maturity or upon acceleration, the principal amount of any indebtedness for
money borrowed of the Issuer, TWC or TBS in excess of $50 million, if such
indebtedness is not discharged, or such acceleration is not annulled, within 60
days after written notice; (v) certain events of bankruptcy, insolvency and
reorganization with respect to the Issuer or any Material Subsidiary thereof
which is organized under the laws of the United States or any political
sub-division thereof and (vi) any Guarantee, ceasing to be, or asserted by any
Guarantor as not being, in full force and effect, enforceable according to its
terms, except to the extent contemplated by the Indenture. (Section 5.01)
Any additions, deletions or other changes to the Events of Default which
will be applicable to a series of Debt Securities will be described in the
Prospectus Supplement relating to such series of Debt Securities.
The Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default with respect to the Debt Securities of any
series, give to the Holders of the Debt Securities of such series notice of all
uncured and unwaived defaults known to it; provided that, except in the case of
default in the payment of principal of, premium, if any, or interest, if any, on
any of the Debt Securities of such series, the Trustee thereunder will be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the Holders of the Debt
Securities of such series. The term 'default' for the purpose of this provision
means the happening of any of the Events of Default specified above, except that
any grace period or notice requirement is eliminated. (Section 6.02)
The Indenture contains provisions entitling the Trustee, subject to the
duty of the Trustee during an Event of Default to act with the required standard
of care, to be indemnified by the Holders of the Debt Securities before
proceeding to exercise any right or power under the Indenture at the request of
Holders of the Debt Securities. (Section 6.03)
The Indenture provides that the Holders of a majority in aggregate
principal amount of the outstanding Debt Securities of any series may direct the
time, method and place of conducting proceedings for remedies available to the
Trustee or exercising any trust or power conferred on the Trustee in respect of
such series, subject to certain conditions. (Section 5.12)
The Indenture includes a covenant that the Issuer will file annually with
the Trustee a certificate of no default or specifying any default that exists.
(Section 10.04)
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In certain cases, the Holders of a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of such series waive any past default or Event of Default with
respect to the Debt Securities of such series except, among other things, a
default not theretofore cured in payment of the principal of, or premium, if
any, or interest, if any, on any of the Debt Securities of such series.
(Sections 5.13)
MODIFICATION OF THE INDENTURE
The Issuer and the Trustee may, without the consent of the Holders of the
Debt Securities, enter into indentures supplemental to the Indenture for, among
others, one or more of the following purposes: (i) to evidence the succession of
another Person to the Issuer, TWC or TBS, and the assumption by such successor
of the Issuer's, TWC's or TBS's obligations under the Indenture and the Debt
Securities of any series or the Guarantees relating thereto; (ii) to add
covenants of the Issuer, TWC or TBS, or surrender any rights of the Issuer, TWC
or TBS, for the benefit of the Holders of Debt Securities of any or all series;
(iii) to cure any ambiguity, or correct any inconsistency in the Indenture; (iv)
to evidence and provide for the acceptance of any successor Trustee with respect
to one or more series of Debt Securities or to facilitate the administration of
the trusts thereunder by one or more trustees in accordance with the Indenture;
(v) to establish the form or terms of any series of Debt Securities; and (vi) to
provide any additional Events of Default. (Section 9.01)
The Indenture contains provisions permitting the Issuer and the Trustee
thereunder, with the consent of the Holders of a majority in principal amount of
the outstanding Debt Securities of all series to be affected voting as a single
class, to execute supplemental indentures adding any provisions to or changing
or eliminating any of the provisions of the Indenture or modifying the rights of
the Holders of the Debt Securities of such series to be affected, except that no
such supplemental indenture may, without the consent of the Holders of affected
Debt Securities, among other things, change the fixed maturity of any Debt
Securities, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce the number of shares of any
common stock or other securities to be delivered by the Issuer in respect of a
conversion of any convertible Debt Securities, or amend or modify the terms of
either Guarantee in a manner adverse to the Holders or reduce the aforesaid
percentage of Debt Securities of any series the consent of the Holders of which
is required for any such supplemental indenture. (Section 9.02)
THE TRUSTEE
The Chase Manhattan Bank is the Trustee under the Indenture. The Trustee is
a depository for funds and performs other services for, and transacts other
banking business with, the Company in the normal course of business.
GOVERNING LAW
The Indenture will be governed by, and construed in accordance with, the
laws of the State of New York.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depository (the 'Depository') identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depository for such Global Security to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by the Depository or any nominee of such Depository to a successor
Depository or any nominee of such successor.
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The specific terms of the depository arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. Unless otherwise specified in the Prospectus Supplement, the Issuer
anticipates that the following provisions will apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ('Participants'). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Issuer if such Debt Securities are offered and sold
directly by the Issuer. Ownership of beneficial interests in a Global Security
will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in such Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depository or its nominee (with respect to
interests of Participants) and records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, pledge or transfer beneficial interests in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Debt Securities of
the series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Global Security must rely on the procedures of the
Depository for such Global Security and, if such person is not a Participant, on
the procedures of the Participant through which such person owns its interest,
to exercise any rights of a holder under the Indenture. The Issuer understands
that under existing industry practices, if the Issuer requests any action of
holders or if an owner of a beneficial interest in a Global Security desires to
give or take any action which a holder is entitled to give or take under the
Indenture, the Depository for such Global Security would authorize the
Participants holding the relevant beneficial interests to give or take such
action, and such Participants would authorize beneficial owners owning through
such Participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Payments of principal of and any premium and any interest on individual
Debt Securities represented by a Global Security registered in the name of a
Depository or its nominee will be made to the Depository or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. None of the Issuer, the Trustee, any paying agent or the
registrar for such Debt Securities will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Issuer expects that the Depository for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depository or its nominee. The Issuer also expects that payments by Participants
to owners of beneficial interests in such Global Security held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in 'street name'. Such payments will be the responsibility of
such Participants.
If a Depository for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depository and a successor depository is not
appointed by the Issuer within 90 days, the
14
<PAGE>
<PAGE>
Issuer will issue individual Debt Securities of such series in exchange for the
Global Security representing such series of Debt Securities. In addition, the
Issuer may, at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities,
determine not to have any Debt Securities of such series represented by one or
more Global Securities and, in such event, will issue individual Debt Securities
of such series in exchange for the Global Security or Securities representing
such series of Debt Securities. Individual Debt Securities of such series so
issued will be issued in denominations, unless otherwise specified by the
Issuer, of $1,000 and integral multiples thereof. Any Debt Securities issued in
definitive form in exchange for a Global Security will be registered in such
name or names as the Depository shall instruct the Trustee. It is expected that
such instructions will be based upon directions received by the Depository from
Participants with respect to ownership of beneficial interests in such Global
Security.
HOLDING COMPANY STRUCTURE
Each of the Issuer, TWC and TBS is a holding company, the assets of which
consist primarily of investments in its consolidated and
unconsolidated subsidiaries. The assets of the Issuer consist primarily of its
investment in TWC and TBS. The assets of TWC consist primarily of its
investments in its consolidated and unconsolidated subsidiaries, including TWE.
Although the assets of TBS consist primarily of investments in its consolidated
and unconsolidated subsidiaries, TBS also directly owns certain assets that are
used in the operation of WTBS, a television station in Atlanta, Georgia and TBS,
a copyright-paid cable programming service and certain retail stores that
together represent less than 5% of the consolidated assets of TBS at December
31, 1996. A substantial portion of the consolidated liabilities of the Issuer,
TWC and TBS have been incurred by subsidiaries. TWE, which is not consolidated
with either the Issuer or TWC for financial reporting purposes, also has
substantial indebtedness and other liabilities. The rights of the Issuer and the
Guarantors and the rights of their creditors, including Holders of Debt
Securities, to participate in the distribution of assets of any person in which
the Issuer or the Guarantors owns an equity interest (including any subsidiary
and TWE) upon such person's liquidation or reorganization will be subject to
prior claims of such person's creditors, including trade creditors, except to
the extent that the Issuer or the Guarantors may be a creditor with recognized
claims against such person (in which case the claims of the Issuer and the
Guarantors would still be subject to the prior claims of any secured creditor of
such person and of any holder of indebtedness of such person that is senior to
that held by the Issuer or the Guarantors). Accordingly, the Holders of Debt
Securities may be deemed to be effectively subordinated to such claims.
The ability of the Issuer and the Guarantors to service their respective
indebtedness and other obligations, including the Debt Securities and the
Guarantees, and the ability of each of them to pay dividends on
its common and/or preferred stock is dependent primarily upon the earnings and
cash flow of their respective consolidated and unconsolidated subsidiaries and
the distribution or other payment to them of such earnings and cash flow. The
TWE Agreement of Limited Partnership and its bank credit facilities limit
distributions and other transfers of funds to the Issuer and TWC.
Additional information concerning the indebtedness of the Issuer, TWC and
TBS and their subsidiaries will be set forth in the Prospectus Supplement.
PLAN OF DISTRIBUTION
The Issuer may sell the Debt Securities to one or more underwriters or
dealers for public offering and sale by them or may sell the Debt Securities to
investors directly or through agents. The Prospectus Supplement with respect to
the Debt Securities offered thereby describes the terms of the offering of such
Debt Securities and the method of distribution of the Debt Securities offered
thereby and identifies any firms acting as underwriters, dealers or agents in
connection therewith.
The Debt Securities may be distributed from time to time in one or more
transactions at a fixed price or prices (which may be changed) or at prices
determined as specified in the Prospectus Supplement. In connection with the
sale of the Debt Securities, underwriters, dealers or agents may be deemed to
have received compensation from the Issuer in the form of underwriting discounts
or commissions and may also receive commissions from purchasers of the Debt
Securities for whom they
15
<PAGE>
<PAGE>
may act as agent. Underwriters may sell the Debt Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters or commissions from the
purchasers for whom they may act as agent. Certain of the underwriters, dealers
or agents who participate in the distribution of the Debt Securities may engage
in other transactions with, and perform other services for, the Issuer, TWC and
TBS in the ordinary course of business.
Any underwriting compensation paid by the Issuer to underwriters or agents
in connection with the offering of the Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to dealers, are set forth in
the Prospectus Supplement. Underwriters, dealers and agents participating in the
distribution of the Debt Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
the resale of the Debt Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters and their controlling
persons, dealers and agents may be entitled, under agreements entered into with
the Issuer, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
LEGAL OPINIONS
Certain legal matters in connection with the Debt Securities will be passed
upon for the Issuer, TWC and TBS by Cravath, Swaine & Moore, Worldwide Plaza,
825 Eighth Avenue, New York, New York and for the Underwriters, if any, named in
a Prospectus Supplement, by Shearman & Sterling, 599 Lexington Avenue, New York,
New York.
EXPERTS
The consolidated financial statements and schedules of the Issuer and TWE
appearing in the Issuer's 1996 Form 10-K and the combined financial statements
of the Time Warner Service Partnerships incorporated by reference therein, have
been audited by Ernst & Young LLP, Independent Auditors, as set forth in their
reports thereon included therein and incorporated herein by reference. Such
financial statements and schedules are incorporated herein by reference in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing.
The consolidated financial statements of Cablevision Industries Corporation
at December 31, 1995, and for the year then ended, incorporated by reference in
this Prospectus from the Issuer's Current Report on Form 8-K dated November 13,
1997, have been audited by Ernst & Young LLP, Independent Auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such reports given upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Cablevision Industries Corporation
as of December 31, 1994, and for each of the two years in the period ended
December 31, 1994, incorporated by reference in this Prospectus from the
Issuer's Current Report on Form 8-K dated November 13, 1997, have been audited
by Arthur Andersen LLP, Independent Public Accountants, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements have been incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The financial statements of Paragon Communications as of December 31, 1993
and 1994, and for each of the three years in the period ended December 31, 1994,
incorporated by reference in this Prospectus from the Issuer's 1996 Form 10-K,
and the consolidated financial statements of TBS, as of December 31, 1994 and
1995, and for the three years in the period ended December 31, 1995,
incorporated by reference in this Prospectus from the Issuer's Current Report on
Form 8-K dated November 13, 1997, have been audited by Price Waterhouse LLP,
Independent Accountants, as set forth in their reports thereon included therein
and incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus or any
accompanying Prospectus Supplement in connection with the offer
16
<PAGE>
<PAGE>
made by this Prospectus or any Prospectus Supplement, and, if given or made,
such other information or representations must not be relied upon as having been
authorized by the Issuer, TWC or TBS or by any underwriter, dealer or agent.
This Prospectus and any Prospectus Supplement do not constitute an offer to sell
or a solicitation of an offer to buy any securities other than those to which
they relate. Neither the delivery of this Prospectus and any accompanying
Prospectus Supplement nor any sale of or offer to sell the Debt Securities
offered hereby shall, under any circumstances, create an implication that there
has been no change in the affairs of the Issuer, TWC or TBS or that the
information herein is correct as of any time after the date hereof. This
Prospectus and any accompanying Prospectus Supplement do not constitute an offer
to sell or a solicitation of an offer to buy any of the Debt Securities offered
hereby in any State to any person to whom it is unlawful to make such offer or
solicitation in such State.
17
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following statement sets forth the estimated amounts of expenses, other
than underwriting, discounts, to be borne by the registrants in connection with
the distribution of the Debt Securities and the Guarantees.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............................. $ 295,000
Trustee's fees.................................................................. 40,000
Printing and engraving expenses................................................. 200,000
Rating agency fees.............................................................. 500,000
Accounting fees and expenses.................................................... 100,000
Legal fees and expenses......................................................... 250,000
Miscellaneous expenses.......................................................... 15,000
Total expenses.................................................................. $1,400,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Issuer and TWC
Section 145 of the Delaware General Corporation law (the 'DGCL') provides
that a corporation may indemnify directors and officers as well as other
employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation -- a
'derivative action'), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) actually and reasonably incurred
in connection with the defense or settlement of such action, and the statute
requires court approval before there can be any indemnification where the person
seeking indemnification has been found liable to the corporation. The statute
provides that it is not exclusive of other indemnification that may be granted
by a corporation's charter, by-laws, disinterested director vote, stockholder
vote, agreement or otherwise.
Each of the Issuer's and TWC's By-laws require indemnification to the
fullest extent permitted under Delaware law of any person who is or was a
director or officer of the Issuer who is or was involved or threatened to be
made so involved in any action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that such person is or
was serving as a director, officer or employee of the Issuer or TWC or any
predecessor of the Issuer or TWC or was serving at the request of the Issuer or
TWC as a director, officer or employee of any other enterprise.
Section 102(b)(7) of the DGCL permits a provision in the certificate of
incorporation of each corporation organized thereunder, such as the Issuer and
TWC, eliminating or limiting, with certain exceptions, the personal liability of
a director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director. Section 1, Article X of the Issuer's and
Article VIII of TWC's Restated Certificate of Incorporation eliminates the
liability of directors to the extent permitted by Section 102(b)(7) of the DGCL.
The foregoing statements are subject to the detailed provisions of Sections
145 and 102(b)(7) of the DGCL, the Issuer's and TWC's By-laws and Section 1,
Article X of the Issuer's and Article VIII of TWC's Restated Certificate of
Incorporation, as applicable.
The Directors' and Officers' Liability and Reimbursement Insurance Policy
of the Issuer is designed to reimburse each of the registrants for any payments
made by each pursuant to the foregoing indemnification. The policy has coverage
of $50,000,000.
II-1
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<PAGE>
TBS
TBS's By-laws provide for indemnification of directors and officers of TBS
against expenses (including attorneys' fees), judgments, fines, settlements and
other amounts actually incurred in connection with any proceeding arising by
reason of the fact that such person is or was an officer or director of TBS.
TBS's By-laws provide for indemnification of directors and officers of TBS
in connection with or resulting from any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, in which he or she may become involved by reason of his or her
being or having been a director or officer, or by reason of any action taken or
not taken in his or her capacity as such director or officer or as a member of
any committee appointed by the Board of Directors of TBS to act for, in the
interest of, or on behalf of TBS provided such person acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of TBS and, in addition, with respect to any criminal action or
proceeding, did not have reasonable cause to believe that his or her conduct was
unlawful.
Indemnification is mandatory in the case of a director or officer who is
wholly successful on the merits or otherwise with respect to any claim, action,
suit or proceeding of the character described above. In other cases, the
determination whether to indemnify a director or officer is made by a majority
of disinterested directors, a majority of disinterested shareholders, or
independent legal counsel selected by any Judge of the United States District
Court for the Northern District of Georgia, Atlanta Division, at the request of
either TBS or the person seeking indemnification.
TBS's Articles of Incorporation provide that a director of the Company will
not be personally liable to TBS or its shareholders for monetary damages for
breach of duty of care or other duty as a director, except for liability (i) for
any appropriation, in violation of the director's duties, of any business
opportunity of the Company, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law, (iii) for
making a distribution in violation of Section 14-2-831 of the Georgia Business
Corporation Code or (iv) for any transaction from which the director derived an
improper personal benefit.
TBS has insurance to indemnify its directors and officers, subject to the
limits contained in those policies, from those liabilities in respect of which
such indemnification insurance is permitted under the laws of the State of
Georgia.
ITEM 16. EXHIBITS
<TABLE>
<C> <C> <S>
1 -- Proposed form of Underwriting Agreement.**
4.1 -- Proposed form of Indenture between the Issuer and The Chase Manhattan Bank as Trustee**
5 -- Opinion of Cravath, Swaine & Moore.**
12 -- Statement regarding the computation of the ratio of earnings to fixed charges of the Issuer.**
12.1 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWC.**
12.2 -- Statement regarding the computation of the ratio of earnings to fixed charges of TBS.**
23.1 -- Consent of Ernst & Young LLP, Independent Auditors.**
23.2 -- Consent of Counsel (included in Exhibit 5).
23.3 -- Consent of Arthur Andersen LLP, Independent Public Accountants.**
23.4 -- Consent of Price Waterhouse LLP, Independent Accountants.**
23.5 -- Consent of Price Waterhouse LLP, Independent Accountants.**
24.1 -- Power of Attorney of the Issuer.**
24.2 -- Power of Attorney of TWC.**
24.3 -- Power of Attorney of TBS.**
25 -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect to the
Issuer, TWC and TBS.**
</TABLE>
- ------------
* Incorporated by reference.
** Filed herewith.
II-2
<PAGE>
<PAGE>
ITEM 17. UNDERTAKINGS
A. UNDERTAKINGS PURSUANT TO RULE 415
The undersigned registrants hereby undertake:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the 'Calculation of
Registration Fee' table in the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrants
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement;
(b) that, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(c) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS
BY REFERENCE
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of any of the
registrants' annual reports pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. UNDERTAKING IN RESPECT OF INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described in Item 15 above, or otherwise,
the registrants have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
officer, director or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether or not such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on January 14, 1998.
TIME WARNER INC.
By: /s/ JOHN A. LABARCA
.................................
NAME: JOHN A. LABARCA
TITLE: SENIOR VICE PRESIDENT AND
CONTROLLER
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below on January 14, 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<C> <S>
* (i) Director, Chairman of the Board and Chief Executive Officer
.........................................
(GERALD M. LEVIN)
* (ii) Senior Vice President and Chief Financial Officer
.........................................
(RICHARD J. BRESSLER)
/s/ JOHN A. LABARCA (iii) Senior Vice President and Controller
.........................................
(JOHN A. LABARCA)
* (iv) Directors
.........................................
(MERV ADELSON)
*
.........................................
(J. CARTER BACOT)
*
.........................................
(STEPHEN F. BOLLENBACH)
*
.........................................
(BEVERLY SILLS GREENOUGH)
*
.........................................
(GERALD GREENWALD)
*
.........................................
(CARLA A. HILLS)
*
.........................................
(REUBEN MARK)
*
.........................................
(MICHAEL A. MILES)
*
.........................................
(RICHARD D. PARSONS)
</TABLE>
II-4
<PAGE>
<PAGE>
<TABLE>
<C> <S>
*
.........................................
(DONALD S. PERKINS)
*
.........................................
(RAYMOND S. TROUBH)
*
.........................................
(R. E. TURNER)
*
.........................................
(FRANCIS T. VINCENT, JR.)
*By: /s/ JOHN A. LABARCA
.........................................
(ATTORNEY-IN-FACT)
</TABLE>
II-5
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on January 14, 1998.
TIME WARNER COMPANIES, INC.
By: /s/ JOHN A. LABARCA
.................................
NAME: JOHN A. LABARCA
TITLE: SENIOR VICE PRESIDENT AND
CONTROLLER
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below on January 14, 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<C> <S>
* (i) Chairman and Chief Executive Officer
.........................................
(GERALD M. LEVIN)
* (ii) Director, Senior Vice President and Chief Financial Officer
.........................................
(RICHARD J. BRESSLER)
/s/ JOHN A. LABARCA (iii) Senior Vice President and Controller
.........................................
(JOHN A. LABARCA)
* (iv) Directors
.........................................
(PETER R. HAJE)
*
.........................................
(RICHARD D. PARSONS)
*By: /s/ JOHN A. LABARCA
.........................................
(ATTORNEY-IN-FACT)
</TABLE>
II-6
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on January 14, 1998.
TURNER BROADCASTING SYSTEM, INC.
By: /s/ PETER R. HAJE
.................................
NAME: PETER R. HAJE
TITLE: VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below on January 14, 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<C> <S>
* (i) President and Chief Executive Officer and Chairman of the Board
.........................................
(TERENCE F. MCGUIRK)
* (ii) Executive Vice President, Chief Financial and Administrative
......................................... Officer
(WAYNE H. PACE)
* (iii) Vice President, Controller and Chief Accounting Officer
.........................................
(LANDEL C. HOBBS)
* (iv) Directors
.........................................
(R. E. TURNER)
*
.........................................
(W. THOMAS JOHNSON)
*
.........................................
(RICHARD D. PARSONS)
*
.........................................
(ROBERT SHAYE)
*
.........................................
(JEFFREY L. BEWKES)
*
.........................................
(GERALD M. LEVIN)
*By: /s/ PETER R. HAJE
........................................
(ATTORNEY-IN-FACT)
</TABLE>
II-7
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------ ---------------------------------------------------------------------------------------------------- ----
<C> <S> <C>
1 -- Proposed form of Underwriting Agreement.**.......................................................
4.1 -- Proposed form of Indenture between the Issuer and The Chase Manhattan Bank as Trustee**..........
5 -- Opinion of Cravath, Swaine & Moore**.............................................................
12 -- Statement regarding the computation of the ratio of earnings to fixed charges of the Issuer**....
12.1 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWC**...........
12.2 -- Statement regarding the computation of the ratio of earnings to fixed charges of TBS**...........
23.1 -- Consent of Ernst & Young LLP, Independent Auditors**.............................................
23.2 -- Consent of Counsel (included in Exhibit 5).......................................................
23.3 -- Consent of Arthur Andersen LLP, Independent Public Accountants**.................................
23.4 -- Consent of Price Waterhouse LLP, Independent Accountants**.......................................
23.5 -- Consent of Price Waterhouse LLP, Independent Accountants**.......................................
24.1 -- Power of Attorney of the Issuer**................................................................
24.2 -- Power of Attorney of TWC**.......................................................................
24.3 -- Power of Attorney of TBS**.......................................................................
25 -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect
to the Issuer, TWC and TBS**......................................................................
</TABLE>
- ------------
* Incorporated by reference.
** Filed herewith.
STATEMENT OF DIFFERENCES
The section symbol shall be expressed as .............'SS'
<PAGE>
<PAGE> TIME WARNER INC.
TIME WARNER COMPANIES, INC.
TURNER BROADCASTING SYSTEM, INC.
Underwriting Agreement
[________], 199_
New York, New York
To the Representatives
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Time Warner Inc., a Delaware corporation (the "Company"),
proposes to sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of [the securities] identified in Schedule
I hereto (the "Debt Securities"), to be issued under an indenture (as from time
to time amended or supplemented, the "Indenture") dated as of [__________,
____], among the Company, Time Warner Companies, Inc., a Delaware corporation
("TWC"), Turner Broadcasting System, Inc., a Georgia corporation ("TBS", and,
together with TWC, the "Guarantors"), and The Chase Manhattan Bank, as trustee
(the "Trustee"), providing for the issuance of debt securities in one or more
series, all of which will be entitled to the benefit of the Guarantees referred
to below. Each of TWC and TBS is a wholly owned subsidiary of the Company.
Pursuant to the Indenture, each of TWC and TBS, as primary obligor and not
merely as surety, has agreed to irrevocably and unconditionally guarantee
(together, the "Guarantees"; and together with the Debt Securities, the
"Securities"), to each holder of Debt Securities and to the Trustee, (i) the
full and punctual payment of principal of and interest on the Debt Securities
when due, whether at maturity, by acceleration, by redemption or otherwise, and
all other monetary obligations of the Company under the Indenture and the Debt
Securities and (ii) the full and punctual
<PAGE>
<PAGE>
2
performance within applicable grace periods of all other obligations of the
Company under the Indenture and the Debt Securities. If the firm or firms listed
in Schedule II hereto include only the firm or firms listed in Schedule I
hereto, then the terms "Underwriters" and "Representatives", as used herein,
shall each be deemed to refer to such firm or firms.
1. Representations and Warranties. Each of the Company, TWC and
TBS represents and warrants to, and agrees with, each Underwriter as set forth
below in this Section 1. Certain terms used in this Section 1 are defined in
paragraph (q) hereof.
(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and,
if the offering of the Securities is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Company and the Guarantors meet the requirements
for the use of Form S-3 under the Securities Act of 1933, as
amended (the "Act"), and have filed with the Securities and
Exchange Commission (the "Commission") a registration statement
(the file number of which is set forth in Schedule I hereto) on
such Form, including a basic prospectus, for registration under
the Act of the offering and sale of the Securities. The Company
and the Guarantors may have filed one or more amendments thereto,
and may have used a Preliminary Final Prospectus, each of which
has previously been furnished to you. Such registration
statement, as so amended, has become effective. The offering of
the Securities is a Delayed Offering and, although the Basic
Prospectus may not include all the information with respect to
the Securities and the offering thereof required by the Act and
the rules thereunder to be included in the Final Prospectus, the
Basic Prospectus includes all such information required by the
Act and the rules thereunder to be included therein as of the
Effective Date. The Company and the Guarantors will next file
with the Commission pursuant to Rules 415 and 424(b)(2) or (5) a
final supplement to the form of prospectus included in such
registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus supplement
shall include all required information with respect to the
Securities and the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the Company
and the Guarantors have advised you, prior to the Execution Time,
will be included or made therein.
(ii) The Company and the Guarantors meet the requirements
for the use of Form S-3 under the Act and have filed with the
Commission a registration statement (the file number of which is
set forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the
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3
Act of the offering and sale of the Securities. The Company and
the Guarantors may have filed one or more amendments thereto,
including a Preliminary Final Prospectus, each of which has
previously been furnished to you. The Company and the Guarantors
will next file with the Commission either (x) a final prospectus
supplement relating to the Securities in accordance with Rules
430A and 424(b)(1) or (4), or (y) prior to the effectiveness of
such registration statement, an amendment to such registration
statement, including the form of final prospectus supplement. In
the case of clause (x), the Company and the Guarantors have
included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in the Final Prospectus with respect to the Securities
and the offering thereof. As filed, such final prospectus
supplement or such amendment and form of final prospectus
supplement shall contain all Rule 430A Information, together with
all other such required information, with respect to the
Securities and the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the Company
and the Guarantors have advised you, prior to the Execution Time,
will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the respective
rules thereunder; on the Effective Date, the Registration Statement did
not or will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; on the Effective
Date and on the Closing Date the Indenture did or will comply in all
material respects with the requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Final Prospectus,
if not filed pursuant to Rule 424(b), did not or will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date, the
Final Prospectus (together with any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company and the Guarantors make no
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-l) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement
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4
thereto) in reliance upon and in conformity with information furnished
in writing to the Company or either Guarantor by or on behalf of any
Underwriter through the Representatives specifically for inclusion in
the Registration Statement or the Final Prospectus (or any supplement
thereto).
(c) (1) Each of the Company and TWC is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority under such laws to own its
properties and conduct its business as described in the Basic
Prospectus, and any amendment or supplement thereto, and to enter into
and perform its obligations under this Agreement; and each of the
Company, TWC and TBS is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which
it owns or leases property of a nature, or transacts business of a type,
that would make such qualification necessary, except to the extent that
the failure to so qualify or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, considered
as one enterprise.
(2) TBS is validly existing as a corporation in good standing
under the laws of the State of Georgia, with full corporate power and
authority under such laws to own its properties and conduct its business
as described in the Basic Prospectus, and any amendment or supplement
thereto, and to enter into and perform its obligations under this
Agreement.
(d) Each of the Company's significant subsidiaries, as such term
is defined in Rule 1-02(w) of Regulation S-X under the Act, is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with full power and authority under such
laws to own its properties and conduct its business as described in the
Basic Prospectus, and any amendment or supplement thereto, and is duly
qualified to transact business as a foreign corporation or partnership
and is in good standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a type, that would
make such qualification necessary, except to the extent that the failure
to so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise.
(e) The Company's authorized equity capitalization is as set
forth in the Basic Prospectus, and any amendment or supplement thereto;
all of the outstanding capital stock of the Guarantors is owned,
directly or indirectly, by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) There is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or any
arbitrator involving the Company, TWC or TBS or any of their respective
subsidiaries of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the
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5
Basic Prospectus, and any amendment or supplement thereto, and there is
no franchise, contract or other document of a character required to be
described in the Registration Statement or Basic Prospectus, and any
amendment or supplement thereto, or to be filed as an exhibit, which is
not described or filed as required.
(g) This Agreement has been duly authorized, executed and
delivered by each of the Company, TWC and TBS.
(h) No consent, approval, authorization or order of any court or
governmental agency or body is required for the authorization, issuance,
sale and delivery of the Securities by the Company and the Guarantors or
the consummation of the transactions contemplated by this Agreement or
in any Delayed Delivery Contracts, except such as have been obtained
under the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals as have been
obtained.
(i) The execution and delivery of this Agreement and the
Indenture by the Company, TWC and TBS, the issuance, sale and delivery
of Debt Securities by the Company, the issuance and delivery of their
respective guarantees by TWC and TBS and the consummation by the
Company, TWC and TBS of the transactions contemplated in this Agreement,
the Indenture and the Registration Statement and compliance by the
Company, TWC and TBS with the terms of this Agreement or any Delayed
Delivery Contracts do not and will not result in any violation of the
Certificate of Incorporation, as amended, or By-laws, as amended, of the
Company, TWC or TBS, and do not and will not conflict with, or result in
a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, TWC or TBS,
under (i) any indenture, mortgage or loan agreement, or any other
agreement or instrument, to which the Company, TWC or TBS is a party or
by which any of them may be bound or to which any of their properties
may be subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise), (ii) any existing applicable law, rule or
regulation (except for such conflicts, breaches, liens, charges or
encumbrances that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as
one enterprise, and other than the securities or blue sky laws of
various jurisdictions), or (iii) any judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction
over the Company, TWC or TBS or any of their properties.
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6
(j) The documents incorporated by reference in the Basic
Prospectus, and any amendment or supplement thereto, as of the dates
they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act.
(k) The Securities conform in all material respects to the
description thereof contained in the Basic Prospectus, and any amendment
or supplement thereto; if any of the Securities are to be listed on any
stock exchange, authorization therefor has been given, subject to
official notice of issuance and evidence of satisfactory distribution,
or the Company and the Guarantors have no reason to believe that such
Securities will not be authorized for listing, subject to official
notice of issuance and evidence of satisfactory distribution.
(l) The Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and, assuming due authorization, execution and delivery
by the Trustee, constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditors' rights generally from time
to time in effect and subject as to enforceability to general principles
of equity, regardless of whether considered in a proceeding in equity or
at law); and the Debt Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters pursuant to
this Agreement, in the case of the Underwriters' Securities, or by the
purchasers thereof pursuant to Delayed Delivery Contracts, in the case
of any Contract Securities, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to enforceability
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.
(m) The Indenture has been duly authorized, executed and
delivered by each of TWC and TBS and constitutes a legal, valid and
binding instrument enforceable against each of TWC and TBS in accordance
with its terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other laws affecting creditors'
rights generally from time to time in effect and subject as to
enforceability to general principles of equity, regardless of whether
considered in a proceeding in equity or at law).
(n) Each Delayed Delivery Contract that has been executed by the
Company, TWC and TBS has been duly authorized, executed and delivered by
the Company, TWC and TBS, respectively, and, assuming the due
authorization, execution and delivery by the purchaser thereunder, is a
valid and binding obligation
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7
of the Company, TWC and TBS enforceable against the Company, TWC and
TBS, respectively, in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to enforceability
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.
(o) Each firm of independent accountants, which is reporting upon
certain audited or reviewed financial statements and schedules included
or incorporated by reference in the Registration Statement, are
independent auditors with respect to the financial statements covered by
the audit or review of such firm, in accordance with the provisions of
the Exchange Act and the Act and the respective applicable published
rules and regulations thereunder.
(p) The consolidated financial statements and the related notes
of each of the Company, TWE and any other person included or
incorporated by reference in the Registration Statement (including the
supplementary summary unaudited financial information of TWC and TBS)
present fairly in accordance with generally accepted accounting
principles the consolidated financial position of each of the Company,
TWC, TBS, TWE and any such other person as of the dates indicated and
the consolidated results of operations of each of the Company, TWC, TBS,
TWE and any such other person and cash flows of each of the Company and
TWE -for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as
otherwise noted therein and subject, in the case of interim statements,
to normal year-end audit adjustments. The financial statement schedules
included or incorporated by reference in the Registration Statement
present fairly in accordance with generally accepted accounting
principles the information required to be stated therein. Any pro forma
financial statements of the Company, TWC or TBS and other pro forma
financial information included or incorporated by reference in the
Registration Statement present fairly the information shown therein.
Such pro forma financial statements and other pro forma financial
information, to the extent required, have been prepared in accordance
with applicable rules and guidelines of the Commission, if any, with
respect thereto, have been properly compiled on the pro forma bases
described therein, and, in the opinion of the Company, TWC and TBS, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(q) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the
date hereof on which a document incorporated by reference in the
Registration Statement is filed. "Execution Time"
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8
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall mean the
prospectus referred to in paragraph (a) above contained in the
Registration Statement at the Effective Date including, in the case of a
Non-Delayed Offering, any Preliminary Final Prospectus. "Preliminary
Final Prospectus" shall mean any preliminary prospectus supplement to
the Basic Prospectus which describes the Securities and the offering
thereof and is used prior to filing of the Final Prospectus. "Final
Prospectus" shall mean the prospectus supplement relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus or, if, in the case
of a Non-Delayed Offering, no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to the
Securities, including the Basic Prospectus, included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean the
registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at
the Execution Time (or, if not effective at the Execution Time, in the
form in which it shall become effective) and, in the event any
post-effective amendment thereto becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration
statement as so amended. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the Act. "Rule
430A Information" means information with respect to the Securities and
the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. All
references in this Agreement to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under
the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, as the case may be; all
references in this Agreement to financial statements and schedules and
other information that is "contained", "included" or "stated" in the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial
statements and schedules and other information that are or are deemed to
be incorporated by reference in the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to
mean and include the filing of any document under the Exchange Act after
the Effective Date of the Registration Statement or the issue date of
the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that,
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9
pursuant to Rules 415 and 430A, all information (other than Rule 430A
Information) with respect to the securities so offered must be included
in such registration statement at the effective date thereof. A "Delayed
Offering" shall mean an offering of securities pursuant to Rule 415
which does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement at
the effective date thereof with respect to the securities so offered.
Whether the offering of the Securities is a Non-Delayed Offering or a
Delayed Offering shall be set forth in Schedule I hereto.
(r) None of the Company, TWC or TBS is an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company at the purchase price for the Debt
Securities set forth in Schedule I hereto, the principal amount of Debt
Securities set forth opposite such Underwriter's name in Schedule II hereto,
except that, if Schedule I hereto provides for the sale of Debt Securities
pursuant to delayed delivery arrangements, the respective principal amounts of
Debt Securities to be purchased by the Underwriters shall be as set forth in
Schedule II hereto less the respective amounts of Contract Securities determined
as provided below. Debt Securities to be purchased by the Underwriters are
herein sometimes called the "Underwriters' Securities" and Debt Securities to be
purchased pursuant to Delayed Delivery Contracts as hereinafter provided are
herein called "Contract Securities".
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Debt Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts"),
substantially in the form of Schedule III hereto but with such changes therein
as the Company, TWC or TBS may authorize or approve. The Underwriters will
endeavor to make such arrangements and, as compensation therefor, the Company
will pay to the Representatives, for the account of the Underwriters, on the
Closing Date, the percentage set forth in Schedule I hereto of the principal
amount of the Debt Securities for which Delayed Delivery Contracts are made.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. The Company and the
Guarantors will enter into Delayed Delivery Contracts in all cases where sales
of Contract Securities arranged by the Underwriters have been approved by the
Company but, except as the Company may otherwise agree, each such Delayed
Delivery Contract must be for not less than the minimum principal amount set
forth in Schedule I hereto and the aggregate principal amount of Contract
Securities may not exceed the maximum aggregate principal amount set forth in
Schedule I hereto. The Underwriters will not have any responsibility in respect
of the validity or performance of Delayed Delivery
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10
Contracts. The principal amount of Debt Securities to be purchased by each
Underwriter as set forth in Schedule II hereto shall be reduced by an amount
which shall bear the same proportion to the total principal amount of Contract
Securities as the principal amount of Debt Securities set forth opposite the
name of such Underwriter bears to the aggregate principal amount set forth in
Schedule II hereto, except to the extent that you determine that such reduction
shall be otherwise than in such proportion and so advise the Company in writing;
provided, however, that the total principal amount of Debt Securities to be
purchased by all Underwriters shall be the aggregate principal amount set forth
in Schedule II hereto less the aggregate principal amount of Contract
Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwriters' Securities shall be made on the date and at the time specified in
Schedule I hereto, which date and time may be postponed to a date not later than
five business days after such specified date by agreement between the
Representatives, acting jointly and without regard to any agreement among
underwriters, and the Company or as provided in Section 8 hereof (such date and
time of delivery and payment for the Underwriters' Securities being herein
called the "Closing Date"). Delivery of the Underwriters' Securities shall be
made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer or certified or official bank check or checks drawn on
or by a New York Clearing House bank and payable in same day funds (unless
another form of payment is specified in Schedule I hereto). Delivery of the
Underwriters' Securities shall be made at such location as the Representatives
shall reasonably designate on the Closing Date and payment for the Securities
shall be made at the office specified in Schedule I hereto. Certificates for the
Underwriters' Securities shall be registered in such names and in such
denominations as the Representatives may request not less than one full business
day in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities available
for inspection, checking and packaging by the Representatives in New York, New
York, not later than 1:00 PM on the business day prior to the Closing Date.
4. Agreements. The Company and the Guarantors agree with the
several Underwriters that:
(a) Each of the Company, TWC and TBS will use its best efforts to
cause the Registration Statement, if not effective at the Execution
Time, and any amendment thereto, to become effective. Prior to the
termination of the offering of the Securities, none of the Company, TWC
and TBS will file any amendment to the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus unless the Company or a Guarantor
has furnished you a copy for your review prior to filing or will file
any such proposed amendment or supplement to which you reasonably object
on a timely basis (other than filings of periodic reports pursuant to
Section 13(a) under the
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11
Exchange Act). Subject to the foregoing sentence, the Company and the
Guarantors will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. The Company, TWC and TBS will promptly advise the
Representatives (i) when the Registration Statement, if not effective at
the Execution Time, and any amendment thereto, shall have become
effective, (ii) when the Final Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule 424(b), (iii)
when, prior to termination of the offering of each series of Securities,
any amendment to the Registration Statement shall have been filed or
become effective, (iv) of any request by the Commission for any
amendment to the Registration Statement or supplement to the Final
Prospectus or for any additional information relating to the offering of
the Securities, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi)
of the receipt by the Company, TWC or TBS of any notification with
respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. Each of the Company, TWC and TBS will use
its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result
of which the Final Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company and the Guarantors promptly will prepare
and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 4, an amendment or supplement which will
correct such statement or omission or effect such compliance.
(c) As soon as practicable, the Company and the Guarantors will
make generally available to their respective security holders and to the
Representatives an earnings statement or statements of each of the
Company, TWC and TBS and their respective subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) If and to the extent specified in Schedule I, each of the
Company, TWC and TBS will use its reasonable best efforts to cause the
Securities to be duly authorized for listing on the New York Stock
Exchange and to be registered under the Exchange Act.
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12
(e) For a period of three years after the Closing Date, the
Company will furnish to you and, upon request, to each Underwriter,
copies of all annual reports, quarterly reports and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company
to its public stockholders generally.
(f) The proceeds of the offering of the Securities will be
applied as set forth in the Final Prospectus.
(g) The Company, TWC or TBS will furnish to the Representatives
and counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of any Preliminary Final Prospectus and the
Final Prospectus and any supplement thereto as the Representatives may
reasonably request.
(h) The Company and the Guarantors will pay and bear all costs
and expenses incident to the performance of their obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, any preliminary prospectus supplements
and the Basic Prospectus, the Preliminary Final Prospectus and the Final
Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Underwriters, (ii) the preparation,
printing and distribution of this Agreement, the Indenture, the
Securities, any Delayed Delivery Contracts, the Blue Sky Survey and the
Legal Investment Survey, (iii) the delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's and the
Guarantors' counsel and the accountants required hereby to provide
"comfort letters", (v) the qualification of the Securities under the
applicable securities laws in accordance with Section 4(i) and any
filing for review of the offering with the National Association of
Securities Dealers, Inc., including filing fees and fees and
disbursements of counsel for the Underwriters in connection therewith
and in connection with the Blue Sky Survey and the Legal Investment
Survey, (vi) any fees charged by rating agencies for rating the
Securities, (vii) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee, in connection with
the Indenture and the Securities, (viii) any expenses and listing fees
in connection with the listing of the Securities, (ix) the cost and
charges of any transfer agent or registrar and (x) the costs of
qualifying the Securities with The Depository Trust Company.
(i) The Company and the Guarantors will arrange for the
qualification of each series of Securities for distribution, offering
and sale under the laws of such jurisdictions as the Representatives may
designate, will maintain such qualifications in effect so long as
required for the distribution of such series of Securities and will
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13
arrange for the determination of the legality of the Securities for
purchase by institutional investors; provided, however, that none of the
Company, TWC or TBS shall be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 4(i),
(ii) file any general consent to service of process or (iii) subject
itself to taxation in any such jurisdiction if it is not so subject.
(j) Until the Closing Date or such other date as may be specified
in Schedule I, none of the Company, TWC or TBS (and if so specified in
Schedule I, TWE) will, without the consent of the managing underwriter
specified in Schedule I, offer, sell or contract to sell, or announce
the offering of, any debt securities designed or intended to be traded
or distributed in the public or private securities markets; provided,
however, that the foregoing shall not prohibit (i) the Company, TWC, TBS
or TWE from issuing long-term debt as all or part of the consideration
in any merger or acquisition and/or in connection with the settlement of
any litigation, (ii) the Company, TWC, TBS or TWE from filing with the
Commission a "shelf" registration statement for the offering of
securities under Rule 415 of the Act (or any similar rule that may be
adopted by the Commission) or amending any existing shelf registration
statement provided that such securities are not issued until the
business day following the Closing Date or such other date as may be
specified in Schedule I or (iii) any of the foregoing from issuing
commercial paper.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwriters' Securities shall
be subject to the accuracy in all material respects of the representations and
warranties on the part of the Company and the Guarantors contained herein as of
the Execution Time and the Closing Date, to the accuracy in all material
respects of the statements of the Company and the Guarantors made in any
certificates pursuant to the provisions hereof, to the performance by each of
the Company, TWC and TBS of its obligations hereunder, to the due execution and
delivery of the Indenture, to the absence of any event or condition which would
give you the right to terminate this Agreement and to the following additional
conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later
than (i) 6:00 PM New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to
3:00 PM New York City time on such date or (ii) 12:00 Noon on the
business day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City
time on such date; if filing of the Final Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Final Prospectus, and
any such supplement, shall have been filed in the manner and within the
time period required by Rule 424(b); and at the Closing Date no stop
order suspending the effectiveness of the
<PAGE>
<PAGE>
14
Registration Statement shall have been issued under the Act or
proceedings therefor initiated or threatened by the Commission.
(b) At the Closing Date, the Company shall have furnished to you
the opinion of Peter R. Haje, General Counsel to the Company, dated the
Closing Date, substantially in the form of Exhibit A hereto.
(c) At the Closing Date, the Company shall have furnished to you
the opinion and statement of Cravath, Swaine & Moore, counsel to the
Company and the Guarantors, each dated the Closing Date, substantially
in the form of Exhibit B and Exhibit C hereto, respectively.
(d) The Representatives shall have received from Shearman &
Sterling, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, any Delayed Delivery Contracts, the
Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company and the Guarantors shall have
furnished to such counsel such documents as they request for the purpose
of enabling them to pass upon such matters.
(e) (1) The Company shall have furnished to the Representatives a
certificate of the Company, signed by any two officers who are an
Executive or Senior Vice President of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Final Prospectus, any
supplement to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company, TWC
and TBS in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if
made on the Closing Date and each of the Company, TWC and TBS has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change in
the condition (financial or otherwise), earnings, or business
prospects of the Company and its subsidiaries, considered as a
whole, whether or not arising from transactions in
<PAGE>
<PAGE>
15
the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(2) TWC shall have furnished to the Representatives a certificate
of TWC, signed by any two officers who are an Executive or Senior Vice
President of TWC, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Registration Statement,
the Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that the representations and warranties of TWC in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and TWC
has complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date.
(3) TBS shall have furnished to the Representatives a certificate
of TBS, signed by any two officers who are Vice Presidents of TBS, dated
the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Final
Prospectus, any supplement to the Final Prospectus and this Agreement
and that the representations and warranties of TBS in this Agreement are
true and correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date and TBS has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date.
(f) At the Closing Date, and, if specified in Schedule I, at the
Execution Time, Ernst & Young LLP shall have furnished to the
Representatives a letter or letters, dated respectively as of the
Closing Date and the Execution Time, in form and substance satisfactory
to the Representatives, confirming that they are independent auditors
with respect to the Company, TWC, TBS, and TWE within the meaning of the
Act and the Exchange Act and the respective applicable published rules
and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules of the Company and TWE included or
incorporated in the Registration Statement and the Final
Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements (including the notes thereto and the
supplementary summary unaudited financial information of TWC and
TBS) made available by the Company, TWC, TBS and TWE and their
respective consolidated subsidiaries; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set
<PAGE>
<PAGE>
16
forth in such letter; a reading of the minutes of the meetings of
the stockholders, directors and executive, finance and audit
committees of the Company and TWE and their respective
consolidated subsidiaries; and inquiries of certain officials of
the Company, TWC, TBS and TWE who have responsibility for
financial and accounting matters of the Company, TWC, TBS and TWE
and their respective consolidated subsidiaries as to transactions
and events subsequent to the date of the most recent audited
financial statements in or incorporated in the Final Prospectus,
and such other inquiries and procedures as may be specified in
such letter, nothing came to their attention which caused them to
believe that:
(1) any of such unaudited financial statements
included or incorporated in the Registration Statement and
the Final Prospectus do not comply in form in all material
respects with applicable accounting requirements of the
Act and the Exchange Act and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports
on Form 10-Q under the Exchange Act; or said unaudited
financial statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus; or
(2) with respect to the period subsequent to the
date of the most recent unaudited financial statements in
or incorporated in the Registration Statement and the
Final Prospectus, there were any increases, at a specified
date not more than five business days prior to the date of
the letter, in the long-term debt of the Company, TWE and
certain related unconsolidated subsidiaries (together with
TWE, the "Entertainment Group") and their respective
consolidated subsidiaries or any decreases in
stockholders' equity or the consolidated capital stock of
the Company, TWE and the Entertainment Group as compared
with the amounts shown on the most recent consolidated
balance sheet included or incorporated in the Registration
Statement and the Final Prospectus for such entities, or
for the period from the date of the most recent unaudited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus for such
entities to such specified date there were any decreases,
as compared with the corresponding period in the preceding
year, in revenues, income before income taxes (or any
increase in the loss before income taxes) or net income
(or any increase in net loss), except in all instances for
decreases or increases disclosed in the Final Prospectus;
<PAGE>
<PAGE>
17
(iii) they are unable to and do not express any opinion on
the pro forma adjustments to the financial statements included or
incorporated by reference in the Registration Statement and the
Final Prospectus or on the pro forma adjustments applied to the
historical amounts included or incorporated by reference in the
Registration Statement and the Final Prospectus; however, for
purposes of such letter they have:
(1) read the pro forma adjustments to such
financial statements;
(2) made inquiries of certain officials of the
Company, TWC, TBS and TWE who have responsibility for
financial and accounting matters about the basis for their
determination of the pro forma adjustments to such
financial statements and whether such pro forma
adjustments comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02
of Regulation S-X; and
(3) proved the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts included or incorporated by reference in the
Registration Statement and the Final Prospectus; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that the pro forma
adjustments to the financial statements included or incorporated
by reference in the Registration Statement and the Final
Prospectus do not comply as to form in all material respects with
the applicable requirements of Rule 11-02 of Regulation S-X and
that such pro forma adjustments have not been properly applied to
the historical amounts in the compilation of such financial
statements; and
(iv) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibits 12, 12.1 and
12.2 to the Registration Statement agrees with the accounting
records of the Company and its subsidiaries, TWC and its
subsidiaries, TBS and its subsidiaries or TWE and its
subsidiaries, as the case may be, excluding any questions of
legal interpretation.
<PAGE>
<PAGE>
18
(g) At the Closing Date and, if and to the extent specified in
Schedule I, at the Execution Time, each other firm of independent
accountants who audited or reviewed financial statements included or
incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter or letters, dated respectively
as of the Closing Date and the Execution Time, in form and substance
satisfactory to the Representatives, confirming that they are
independent auditors with respect to the financial statements audited or
reviewed by them within the meaning of the Act and the Exchange Act and
the respective applicable published rules and regulations thereunder and
to the same effect as the letter or letters of Ernst & Young LLP as
described in Section 5(f)(i) and 5(f)(ii)(1) hereto.
(h) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive
of any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto), there shall not have been (i) any decrease or
increase specified in the letter or letters referred to in paragraph (f)
of this Section 5 or (ii) any change, or any development involving a
prospective change, in or affecting the business (including the results
of operations or management) or properties of the Company and its
subsidiaries the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the reasonable judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of any series of Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, (i) there shall not have
been any downgrade in the credit ratings of any of the Company's, TWC's
or TBS's debt securities by Moody's Investor Service, Inc. or Standard &
Poor's Ratings Group, and (ii) none of the Company, TWC or TBS shall
have been placed under special surveillance, with negative implications,
by Moody's Investor Service, Inc. or Standard & Poor's Ratings Group.
(j) Prior to the Closing Date, the Company and the Guarantors
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
(k) The Company shall have accepted the Delayed Delivery
Contracts in any case where sales of Contract Securities arranged by the
Underwriters have been approved by the Company.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be
<PAGE>
<PAGE>
19
cancelled at, or at any time prior to, the Closing Date by the Representatives
and such cancellation shall be without liability of any party to any other
party, except to the extent provided in Sections 4 and 6. Notice of such
cancellation shall be given to the Company, TWC or TBS in writing or by
telephone or telegraph confirmed in writing.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company, TWC
or TBS to perform any agreement herein or comply with any provision hereof other
than by reason of a default by any of the Underwriters, the Company and the
Guarantors will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
7. Indemnification and Contribution. (a) Each of the Company, TWC
and TBS agrees to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that none of the Company, TWC or TBS
will be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon (i) any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company, TWC and TBS by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein or (ii) that part of the
Registration Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee. This
indemnity agreement will be in addition to any liability which the Company, TWC
or TBS may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless each of the Company, TWC and TBS, each of their respective directors,
each of their respective officers who signs the Registration Statement, and each
person who controls the Company,
<PAGE>
<PAGE>
20
TWC or TBS within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company, TWC and TBS to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Company, TWC and TBS by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. Each
of the Company, TWC and TBS acknowledges that the statements set forth [in the
last paragraph of the cover page, the first and third paragraphs under the
heading "Underwriters" and, if Schedule I hereto provides for sales of
Securities pursuant to delayed delivery arrangements, in the last sentence under
the heading "Delayed Delivery Arrangements"] in any Preliminary Final Prospectus
or the Final Prospectus constitute the only information furnished in writing by
or on behalf of the several Underwriters for inclusion in the documents referred
to in the foregoing indemnity, and you, as the Representatives, confirm that
such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party (it being
understood, however, that in connection with such action, the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, representing the indemnified parties who are
parties to such action or actions), (iii) the indemnifying party shall not have
employed counsel
<PAGE>
<PAGE>
21
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, TWC, TBS and the Underwriters
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company,
the Guarantors and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company, TWC and TBS on one hand, and by the Underwriters, on the other hand,
from the offering of the Securities; provided, however, that in no case shall
any Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company, TWC,
TBS and the Underwriters shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company and the Guarantors and of the Underwriters in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and the
Guarantors shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses), and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the Final Prospectus. Relative
fault shall be determined by reference to whether any alleged untrue statement
or omission relates to information provided by the Company, TWC or TBS or the
Underwriters. The Company, the Guarantors and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company, TWC or TBS within the
meaning of either the Act or the Exchange Act, each officer of the Company, TWC
or TBS who shall have signed the
<PAGE>
<PAGE>
22
Registration Statement and each director of the Company, TWC or TBS shall have
the same rights to contribution as the Company and the Guarantors, subject in
each case to the applicable terms and conditions of this paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters
shall fail on the Closing Date to purchase and pay for any of the Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions for
each of the Debt Securities which such Underwriter failed to purchase which the
amount of the Debt Securities set forth opposite their names in Schedule II
hereto bears to the aggregate amount of such Debt Securities set forth opposite
the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all of the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the Company
and the Guarantors. In the event of a default by any Underwriter as set forth in
this Section 8, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company, the Guarantors and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company,
TWC or TBS prior to delivery of and payment for the Securities, if prior to such
time (i) trading in the Company's common stock or any of the Company's, TWC's or
TBS's debt securities shall have been suspended by the Commission or the New
York Stock Exchange or trading in securities generally on such Exchange shall
have been suspended or limited or minimum or maximum prices shall have been
established on such Exchange, or maximum ranges for prices for securities have
been required, by such Exchange or by order of the Commission or any other
governmental authority, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any new outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets of the United States is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to proceed
with the offering or delivery of a series of Securities as contemplated by the
Final Prospectus (exclusive of any supplement thereto). If this Agreement is
terminated pursuant to this Section, such termination shall be without liability
of any party to any other party, except to the extent provided in Sections 4 and
6.
<PAGE>
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23
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, TWC or TBS or any of their respective officers and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company, TWC or TBS, or any of the officers, directors or controlling
persons referred to in Section 7 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 6 and 7 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, at the address specified in
Schedule I hereto; or, if sent to the Company, TWC or TBS, will be mailed,
delivered or telegraphed and confirmed to it care of the Company at 75
Rockefeller Plaza, New York, New York 10019, attention of General Counsel.
12. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business day"
means any day on which the New York Stock Exchange is open for trading.
15. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
<PAGE>
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, TWC, TBS and the several Underwriters.
Very truly yours,
TIME WARNER INC.
By____________________________________
Name:
Title:
TIME WARNER COMPANIES, INC.
By____________________________________
Name:
Title:
TURNER BROADCASTING SYSTEM, INC.
By____________________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
specified in Schedule I hereto.
[---------]
By: [________]
By____________________________________
Name:
Title:
For themselves and the other several
Underwriters, if any, named in Schedule
II to the foregoing Agreement.
<PAGE>
<PAGE>
SCHEDULE I
Underwriting Agreement:
Registration Statement:
Representatives:
Managing Underwriter:
Title, Purchase Price and Description of Securities:
-----------------------:
Title:
Principal amount:
Interest rate:
Interest payment dates:
Date of maturity:
Purchase price (include accrued
interest or amortization, if
any):
Initial public offering price:
Sinking fund provisions:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Type of funds payable at Closing: Immediately available funds
Type of Offering: Delayed Offering
Delayed Delivery Arrangements: Not Applicable
Listing requirements:
Comfort letter at Execution Time:
<PAGE>
<PAGE>
SCHEDULE II
[Name of Securities]:
Principal
Amount
to
Underwriters be Purchased
Total.............................
<PAGE>
<PAGE>
EXHIBIT A
FORM OF OPINION OF PETER R. HAJE, ESQ.
(i) each of the Company, TWC and TBS is validly existing as a
corporation in good standing under the laws of the jurisdiction in which
it is chartered or organized, with full corporate power and authority
under such laws to own its properties and conduct its business as
described in the Final Prospectus and each of the Company, TWC and TBS
is duly qualified to transact business as a foreign corporation and is
in good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to
so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise;
(ii) each of the Company's significant subsidiaries, as such term
is defined in Rule 1-02(w) of Regulation S-X under the Act, is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with full power and authority under such
laws to own its properties and conduct its business as described in the
Basic Prospectus, and any amendment or supplement thereto, and is duly
qualified to transact business as a foreign corporation or partnership
and is in good standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a type, that would
make such qualification necessary, except to the extent that the failure
to so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise;
(iii) all of the outstanding capital stock of TWC and TBS is
owned, directly or indirectly, by the Company free and clear of all
liens, encumbrances, equities or claims; and the Company's authorized
equity capitalization is as set forth in the Final Prospectus;
(iv) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company, TWC or TBS or any of their respective subsidiaries of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Final Prospectus, or to be
filed as an exhibit, which is not described or filed as required;
(v) no authorization, approval, consent, order or license of any
government, governmental instrumentality, agency or body or court (other
than such as has been obtained under the Act and such as may be required
under the securities
<PAGE>
<PAGE>
A-2
or blue sky laws of various jurisdictions) is required for the
authorization, issuance, sale and delivery of the Securities by the
Company, TWC and TBS and the consummation by the Company, TWC and TBS of
the transactions contemplated by the Underwriting Agreement;
(vi) the Indenture and the Underwriting Agreement have been duly
authorized, executed and delivered by each of the Company, TWC and TBS;
(vii) the execution and delivery of the Underwriting Agreement
and the Indenture by the Company, TWC and TBS, the issuance, sale and
delivery of the Debt Securities by the Company, the issuance and
delivery of their respective guarantees by TWC and TBS, and the
consummation by the Company, TWC and TBS of the transactions
contemplated in the Underwriting Agreement, the Indenture and the
Registration Statement and compliance by the Company, TWC and TBS with
the terms of the Underwriting Agreement or any Delayed Delivery
Contracts do not and will not result in any violation of the Certificate
of Incorporation, as amended, or By-laws, as amended, of the Company,
TWC or TBS and do not and will not conflict with, or result in a breach
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, TWC or TBS under (i) any
indenture, mortgage or loan agreement, or any other agreement or
instrument known to such counsel, to which the Company, TWC or TBS is a
party or by which any of them may be bound or to which any of their
properties may be subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise), (ii) any existing
applicable law, rule or regulation (except for such conflicts, breaches,
liens, charges or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, and other than the securities or blue sky
laws of various jurisdictions), or (iii) any judgment, order or decree
of any government, governmental instrumentality or court having
jurisdiction over the Company, TWC or TBS or any of their properties.
(viii) the documents incorporated by reference in the Final
Prospectus (except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as to which such
counsel need express no opinion), as of the dates they were filed with
the Commission, complied as to form in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended.
In addition, such counsel shall also state as follows: As General
Counsel, I have reviewed and participated in the preparation of the Registration
Statement and the Final Prospectus, including the documents incorporated by
reference therein. In examining the Registration Statement and Final Prospectus,
I have necessarily assumed the correctness and
<PAGE>
<PAGE>
A-3
completeness of the statements made or included therein by the Company and the
Guarantors and take no responsibility therefor. However, in the course of the
preparation by the Company and the Guarantors of the Registration Statement and
the Final Prospectus, I have participated in conferences with certain officers
of, and accountants for, the Company and the Guarantors with respect thereto,
and my examination of the Registration Statement and Final Prospectus and my
discussions in the above-mentioned conferences did not disclose any information
which gave me reason to believe that the Registration Statement (except for the
financial statements and other financial or statistical data included therein or
omitted therefrom, as to which I express no opinion) at the time it became
effective included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, not misleading
or that the Final Prospectus (except as aforesaid), at its issue date or on the
date of this opinion, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
United States, the State of New York and the General Corporation Law of the
State of Delaware, to the extent such counsel deems proper and specified in such
opinion, upon the opinion of other counsel of good standing whom such counsel
believes to be reliable and who are satisfactory to counsel for the
Underwriters; and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company, TWC or TBS and
public officials.
<PAGE>
<PAGE>
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & MOORE
(i) Based solely upon a certificate from the Secretary of State
of Delaware each of the Company and TWC is a corporation validly existing in
good standing under the laws of the State of Delaware, with full corporate power
and authority to own its properties and conduct its business as described in the
Final Prospectus;
(ii) the Securities conform in all material respects to the
description thereof contained in the Prospectus;
(iii) the Indenture has been duly authorized, executed and
delivered by each of the Company and TWC, has been duly qualified under the
Trust Indenture Act of 1939, and, assuming due authorization, execution and
delivery by TBS and the Trustee, constitutes a legal, valid and binding
obligation of the Company, TWC and TBS, enforceable against the Company, TWC and
TBS in accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether considered in
a proceeding in equity or at law); and the Debt Securities have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters
pursuant to the Underwriting Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting creditors' rights generally from time
to time in effect and subject to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law);
(iv) the Registration Statement became effective under the
Securities Act on [____]; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated; and
(v) the Underwriting Agreement has been duly authorized, executed
and delivered by the each of the Company and TWC;
We are admitted to practice in the State of New York, and we
express no opinion as to any matters governed by any law other than the law of
the State of New York, the Federal law of the United States of America and the
General Corporation Law of the
<PAGE>
<PAGE>
B-2
State of Delaware. In particular, we do not purport to pass on any matter
governed by the laws of the State of Georgia.
<PAGE>
<PAGE>
EXHIBIT C
FORM OF SIDE LETTER OF CRAVATH, SWAINE & MOORE
Although we have made certain inquiries and investigations in
connection with the preparation of the Registration Statement and the
Prospectus, the limitations inherent in the role of outside counsel are such
that we cannot and do not assume responsibility for the accuracy or completeness
of the statements made in the Registration Statement and Prospectus, except
insofar as such statements relate to us and except to the extent set forth in
paragraph (ii) of our opinion to you dated the date hereof. Subject to the
foregoing, we hereby advise you that our work in connection with this matter did
not disclose any information that gave us reason to believe that: (i) the
Registration Statement, at the time the Registration Statement became effective,
or the Prospectus, as of the date hereof, (except in each case the financial
statements and other information of an accounting, statistical or financial
nature included therein, and the Statement of Eligibility (Form T-1) included as
an exhibit to the Registration Statement, as to which we do not express any
view) were not appropriately responsive in all material respects to the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder; or (ii) the Registration Statement, at the time the
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, at its issue date and at the date hereof, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to made the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case except
for the financial statements and other information of an accounting, statistical
or financial nature included therein, as to which we do not express any view).
<PAGE>
<PAGE>
- --------------------------------------------------------------------
TIME WARNER INC.,
TIME WARNER COMPANIES, INC.,
as Guarantor
TURNER BROADCASTING SYSTEM, INC.,
as Guarantor
and
THE CHASE MANHATTAN BANK,
Trustee
INDENTURE
Dated as of [ ]
-----------------
Providing for Issuance of Senior Securities in Series
- -------------------------------------------------------------------------------
<PAGE>
<PAGE>
1
Table Showing Reflection in Indenture of Certain Provisions
of Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990
--------------------
<TABLE>
<CAPTION>
Reflected in Indenture
TIA Section
<S> <C>
'SS' 310(a)(1)................................................ 6.09
(a)(2)................................................ 6.09
(a)(3)................................................ Not Applicable
(a)(4)................................................ Not Applicable
(a)(5)................................................ 6.09
(b)................................................... 6.08
'SS' 311(a)................................................... 6.13(a)
(b)................................................... 6.13(b)
(b)(2)................................................ 7.03(a)(2)
...................................................... 7.03(b)
'SS' 312(a)................................................... 7.01
...................................................... 7.02(a)
(b)................................................... 7.03(b)
(c)................................................... 7.02(c)
'SS' 313(a)................................................... 7.03(a)
(b)................................................... 7.03(b)
(c)................................................... 7.03(a)
...................................................... 7.03(b)
(d)................................................... 7.03(c)
'SS' 314(a)(1)................................................ 7.04
(a)(2)................................................ 7.04
(a)(3)................................................ 7.04
(a)(4)................................................ 10.04
(b)................................................... Not Applicable
(c)(1)................................................ 1.02
(c)(2)................................................ 1.02
(c)(3)................................................ Not Applicable
(d)................................................... Not Applicable
(e)................................................... 1.02
'SS' 315(a)................................................... 6.01(a)
...................................................... 6.01(c)
(b)................................................... 6.02
...................................................... 7.03(a)(6)
(c)................................................... 6.01(b)
(d)................................................... 6.01
</TABLE>
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2
<TABLE>
<S> <C>
(d)(1)................................................ 6.01(a)
(d)(2)................................................ 6.01(c)(2)
(d)(3)................................................ 6.01(c)(3)
(e)................................................... 5.14
'SS' 316(a)................................................... 1.01
(a)(1)(A)............................................. 5.02
...................................................... 5.12
(a)(1)(B)............................................. 5.13
(a)(2)................................................ Not Applicable
(b)................................................... 5.08
(c)................................................... 1.04(d)
'SS' 317(a)(1)................................................ 5.03
(a)(2)................................................ 5.04
(b)................................................... 10.03
'SS' 318(a).................................................... 1.07
</TABLE>
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Recitals of the Company........................................................ 1
Agreements of the Parties...................................................... 1
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.01. Definitions............................................ 1
SECTION 1.02. Compliance Certificates and
Opinions............................................ 15
SECTION 1.03. Form of Documents Delivered to
Trustee............................................. 15
SECTION 1.04. Acts of Securityholders................................ 16
SECTION 1.05. Notices, etc., to Trustee and
Company............................................. 18
SECTION 1.06. Notices to Securityholders; Waiver..................... 19
SECTION 1.07. Conflict with Trust Indenture Act...................... 19
SECTION 1.08. Effect of Headings and Table of
Contents............................................ 19
SECTION 1.09. Successors and Assigns................................. 19
SECTION 1.10. Separability Clause.................................... 20
SECTION 1.11. Benefits of Indenture.................................. 20
SECTION 1.12. Governing Law.......................................... 20
SECTION 1.13. Counterparts........................................... 20
SECTION 1.14. Judgment Currency...................................... 20
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally........................................ 21
SECTION 2.02. Forms of Securities.................................... 21
SECTION 2.03. Form of Trustee's Certificate of
Authentication...................................... 22
SECTION 2.04. Securities Issuable in the Form of a
Global Security..................................... 22
</TABLE>
i
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<TABLE>
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ARTICLE III
The Securities
<S> <C> <C>
SECTION 3.01. General Title; General Limitations;
Issuable in Series; Terms of
Particular Series................................... 24
SECTION 3.02. Denominations.......................................... 28
SECTION 3.03. Execution, Authentication and
Delivery and Dating................................. 28
SECTION 3.04. Temporary Securities................................... 30
SECTION 3.05. Registration, Transfer and
Exchange............................................ 31
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen
Securities.......................................... 33
SECTION 3.07. Payment of Interest; Interest Rights
Preserved........................................... 33
SECTION 3.08. Persons Deemed Owners.................................. 35
SECTION 3.09. Cancelation............................................ 35
SECTION 3.10. Computation of Interest................................ 36
SECTION 3.11. Delayed Issuance of Securities......................... 36
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of
Indenture........................................... 37
SECTION 4.02. Application of Trust Money............................. 38
SECTION 4.03. Defeasance Upon Deposit of Funds or
Government Obligations.............................. 39
SECTION 4.04. Reinstatement.......................................... 41
ARTICLE V
Remedies
SECTION 5.01. Events of Default...................................... 42
SECTION 5.02. Acceleration of Maturity; Rescission
and Annulment....................................... 45
SECTION 5.03. Collection of Indebtedness and Suits
for Enforcement by Trustee.......................... 47
SECTION 5.04. Trustee May File Proofs of Claim....................... 48
SECTION 5.05. Trustee May Enforce Claims Without
Possession of Securities............................ 49
SECTION 5.06. Application of Money Collected......................... 49
SECTION 5.07. Limitation on Suits.................................... 49
</TABLE>
ii
<PAGE>
<PAGE>
<TABLE>
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Page
<S> <C> <C>
SECTION 5.08. Unconditional Right of Securityholders
To Receive Principal, Premium and
Interest............................................ 50
SECTION 5.09. Restoration of Rights and Remedies..................... 51
SECTION 5.10. Rights and Remedies Cumulative......................... 51
SECTION 5.11. Delay or Omission Not Waiver........................... 51
SECTION 5.12. Control by Securityholders............................. 51
SECTION 5.13. Waiver of Past Defaults................................ 52
SECTION 5.14. Undertaking for Costs.................................. 52
SECTION 5.15. Waiver of Stay or Extension Laws....................... 53
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities.................... 53
SECTION 6.02. Notice of Defaults..................................... 54
SECTION 6.03. Certain Rights of Trustee.............................. 55
SECTION 6.04. Not Responsible for Recitals or
Issuance of Securities.............................. 56
SECTION 6.05. May Hold Securities.................................... 57
SECTION 6.06. Money Held in Trust.................................... 57
SECTION 6.07. Compensation and Reimbursement......................... 57
SECTION 6.08. Disqualification; Conflicting
Interests........................................... 58
SECTION 6.09. Corporate Trustee Required;
Eligibility......................................... 58
SECTION 6.10. Resignation and Removal................................ 59
SECTION 6.11. Acceptance of Appointment by
Successor.............................................. 61
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business.............................. 62
SECTION 6.13. Preferential Collection of Claims
Against Company..................................... 62
SECTION 6.14. Appointment of Authenticating Agent.................... 67
ARTICLE VII
Securityholders' Lists and Reports by Trustee and Company
SECTION 7.01. Company To Furnish Trustee Names and
Addresses of Securityholders........................ 69
SECTION 7.02. Preservation of Information;
Communications to Securityholders................... 70
SECTION 7.03. Reports by Trustee..................................... 71
SECTION 7.04. Reports by Company..................................... 71
</TABLE>
iii
<PAGE>
<PAGE>
<TABLE>
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Page
ARTICLE VIII
Consolidation, Merger, Conveyance or Transfer
<S> <C> <C>
SECTION 8.01. Consolidation, Merger, Conveyance or
Transfer on Certain Terms........................... 72
SECTION 8.02. Successor Person Substituted........................... 73
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without
Consent of Securityholders.......................... 73
SECTION 9.02. Supplemental Indentures with Consent
of Securityholders.................................. 75
SECTION 9.03. Execution of Supplemental Indentures................... 77
SECTION 9.04. Effect of Supplemental Indentures...................... 77
SECTION 9.05. Conformity with Trust Indenture Act.................... 77
SECTION 9.06. Reference in Securities to
Supplemental Indentures............................. 77
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and
Interest............................................ 77
SECTION 10.02. Maintenance of Office or Agency........................ 78
SECTION 10.03. Money for Security Payments To Be Held
in Trust............................................ 79
SECTION 10.04. Statement as to Compliance............................. 80
SECTION 10.05. Legal Existence........................................ 80
SECTION 10.06. Limitation on Liens.................................... 80
SECTION 10.07. Limitations on Senior Debt............................. 83
SECTION 10.08. Waiver of Certain Covenants............................ 84
ARTICLE XI
Redemption of Securities
SECTION 11.01. Applicability of Article............................... 84
SECTION 11.02. Election To Redeem; Notice to
Trustee................................................ 85
SECTION 11.03. Selection by Trustee of Securities To
Be Redeemed......................................... 85
</TABLE>
iv
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Page
----
<S> <C> <C>
SECTION 11.04. Notice of Redemption................................... 86
SECTION 11.05. Deposit of Redemption Price............................ 87
SECTION 11.06. Securities Payable on Redemption Date..................
SECTION 11.07. Securities Redeemed in Part............................ 88
SECTION 11.08. Provisions with Respect to Any Sinking
Funds............................................... 88
SECTION 11.09. Rescission of Redemption............................... 90
ARTICLE XII
Conversion
SECTION 12.01. Conversion Privilege................................... 91
SECTION 12.02. Conversion Procedure; Rescission of
Conversion; Conversion Price;
Fractional Shares................................... 92
SECTION 12.03. Adjustment of Conversion Price for
Common Stock or Marketable
Securities.......................................... 95
SECTION 12.04. Consolidation or Merger of the
Company................................................ 99
SECTION 12.05. Notice of Adjustment................................... 100
SECTION 12.06. Notice in Certain Events............................... 100
SECTION 12.07. Company To Reserve Stock or other
Marketable Securities; Registration;
Listing............................................. 101
SECTION 12.08. Taxes on Conversion.................................... 102
SECTION 12.09. Conversion After Record Date........................... 102
SECTION 12.10. Corporate Action Regarding Par Value
of Common Stock..................................... 103
SECTION 12.11. Company Determination Final............................ 103
SECTION 12.12. Trustee's Disclaimer................................... 103
ARTICLE XIII
Guarantees
SECTION 13.01. Guarantees............................................. 104
</TABLE>
v
<PAGE>
<PAGE>
1
THIS INDENTURE between TIME WARNER INC., a Delaware
corporation (hereinafter called the "Company") having its
principal office at 75 Rockefeller Plaza, New York, New
York 10019, TIME WARNER COMPANIES, INC., a Delaware
corporation ("TWC"), TURNER BROADCASTING SYSTEM, INC., a
Georgia corporation ("TBS" and together with TWC, the
"Guarantors"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, trustee (hereinafter called the
"Trustee"), is made and entered into as of the [ ]th day
of [ ].
Recitals of the Company
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its debentures, notes, bonds or
other evidences of indebtedness, to be issued in one or more fully registered
series.
All things necessary to make this Indenture a valid agreement of
the Company, TWC and TBS in accordance with its terms, have been done.
Agreements of the Parties
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions. For all purposes of
this Indenture and of any indenture supplemental hereto,
<PAGE>
<PAGE>
2
except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to
them herein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles and any
accounting rules or interpretations promulgated by the Commission as are
generally accepted in the United States of America at the date of this
Indenture; and
(4) all references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this instrument as originally
executed. The words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article VI, are defined in
that Article.
"Act", when used with respect to any Securityholder, has the
meaning specified in Section 1.04.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
<PAGE>
<PAGE>
3
"Authenticating Agent" means any Person authorized by the Trustee
to authenticate Securities under Section 6.14.
"Board of Directors" means (i) the board of directors of the
Company, (ii) any duly authorized committee of such board, (iii) any committee
of officers of the Company or (iv) any officer of the Company acting, in the
case of (iii) or (iv), pursuant to authority granted by the board of directors
of the Company or any committee of such board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, with respect to any series of Securities,
unless otherwise specified in a Board Resolution and an Officer's Certificate
with respect to a particular series of Securities, each day which is not a
Saturday, Sunday or other day on which banking institutions in the pertinent
Place or Places of Payment or the city in which the Corporate Trust Office is
located are authorized or required by law or executive order to be closed.
"Closing Price" of the Common Stock or other Marketable Security,
as the case may be, shall mean the last reported sale price of such stock or
other Marketable Security (regular way) as shown on the Composite Tape of the
NYSE (or, if such stock or other Marketable Security is not listed or admitted
to trading on the NYSE, on the principal national securities exchange on which
such stock or other Marketable Security is listed or admitted to trading), or,
in case no such sale takes place on such day, the average of the closing bid and
asked prices on the NYSE (or, if such stock or other Marketable Security is not
listed or admitted to trading on the NYSE, on the principal national securities
exchange on which such stock or other Marketable Security is listed or admitted
to trading), or, if it is not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as reported
by the National Association of Securities Dealers Automated Quotation System
(NASDAQ), or if such stock or other Marketable Security is not so reported, the
average of the closing bid and asked prices as furnished by any member of the
National Association of Securities Dealers, Inc., selected from time to time by
the Company for that purpose.
<PAGE>
<PAGE>
4
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Stock" shall mean the class of Common Stock, par value
$1.00 per share, of the Company authorized at the date of this Indenture as
originally signed, or any other class of stock resulting from successive changes
or reclassifications of such Common Stock, and in any such case including any
shares thereof authorized after the date of this Indenture, and any other shares
of stock of the Company which do not have any priority in the payment of
dividends or upon liquidation over any other class of stock.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.
"Company Request", "Company Order" and "Company Consent" mean a
written request, order or consent, respectively, signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Cash Flow" means, with respect to any Person, for
any period, the net income of such Person and its Subsidiaries as determined on
a consolidated basis in accordance with GAAP consistently applied, plus the sum
of depreciation, amortization, other noncash charges which reduce net income,
income tax expense and interest expense, in each case to the extent deducted in
determining such net income, and excluding extraordinary gains or losses.
Notwithstanding the foregoing, for purposes of determining the Consolidated Cash
Flow of any Person, there shall be included, in respect of each other Person
that is accounted for by the first Person on the equity method (as determined in
accordance with GAAP), the first Person's proportionate amount of such other
Person's and its Subsidiaries' consolidated net income, depreciation,
amortization, other noncash charges which reduce net income, income tax expense
and interest expense, in each case to the extent deducted in determining such
other Person's net income, excluding extraordinary gains and losses.
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"Consolidated Cash Flow Coverage Ratio" means, with respect to
any Person, for any period, the ratio for such period of Consolidated Cash Flow
to Consolidated Interest Expense. In determining the Consolidated Cash Flow
Coverage Ratio for any Person, effect shall be given to the application of the
proceeds of Senior Debt whose incurrence is being tested to the extent such
proceeds are to be used to repay or refinance other Senior Debt.
"Consolidated Interest Expense" means, with respect to any
Person, for any period, cash interest expense of such Person and its
subsidiaries on Senior Debt for such period other than the amount amortized
during such period in respect of all fees paid in connection with the incurrence
of such Senior Debt, such expense to be determined on a consolidated basis in
accordance with GAAP consistently applied. Notwithstanding the foregoing, for
purposes of determining the Consolidated Interest Expense of any Person, there
shall be included, in respect of each other Person that is accounted for by the
first Person on the equity method (as determined in accordance with GAAP), the
first Person's proportionate amount of the cash interest expense of such other
Person and its Subsidiaries on Senior Debt for the relevant period other than
the amount amortized during such period in respect of all fees paid in
connection with the incurrence of such Senior Debt, such expense to be
determined on a consolidated basis in accordance with GAAP consistently applied.
"Consolidated Net Worth" means, with respect to any Person, at
the date of any determination, the consolidated stockholders' or owners' equity
of the holders of capital stock or partnership interests of such Person and its
subsidiaries, determined on a consolidated basis in accordance with GAAP
consistently applied.
"Conversion Agent" means any Person authorized by the Company to
receive Securities to be converted into Common Stock or other Marketable
Securities on behalf of the Company. The Company initially authorizes the
Trustee to act as Conversion Agent for the Securities on its behalf. The Company
may at any time and from time to time authorize one or more Persons to act as
Conversion Agent in addition to or in place of the Trustee with respect to any
series of Securities issued under this Indenture.
"Conversion Price" means, with respect to any series of
Securities which are convertible into Common Stock or other Marketable
Securities, the price per share of Common Stock or the price per designated unit
of other Marketable Security at which the Securities of such series
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are so convertible as set forth in the Board Resolution with respect to such
series (or in any supplemental indenture entered into pursuant to Section
9.01(9) with respect to such series), as the same may be adjusted from time to
time in accordance with Section 12.03 (or such supplemental indenture).
"Converting Holder" shall have the meaning specified in Section
12.02(c) of this Indenture.
"Corporate Trust Office" means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 450 West 33rd
Street, 15th Floor, New York, New York 10001.
"Current Market Price" on any date shall mean the average of the
daily Closing Prices per share of Common Stock or of such other Marketable
Securities for any thirty (30) consecutive Trading Days selected by the Company
prior to the day in question, which thirty (30) consecutive Trading Day period
shall not commence more than forty-five (45) Trading Days prior to the day in
question; provided that with respect to Section 12.03(3), the "Current Market
Price" of the Common Stock or of such other Marketable Securities shall mean the
average of the daily Closing Prices per share of common Stock or of such other
Marketable Securities for the five (5) consecutive Trading Days ending on the
date of the distribution referred to in Section 12.03(3) (or if such date shall
not be a Trading Day, on the Trading Day immediately preceding such date).
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depository" means, unless otherwise specified by the Company
pursuant to either Section 2.04 or 3.01, with respect to Securities of any
series issuable or issued as a Global Security, The Depository Trust Company,
New York, New York, or any successor thereto registered as a clearing agency
under the Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation.
"Discharged" has the meaning specified in Section 4.03.
"Event of Default" has the meaning specified in Article V.
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"Federal Bankruptcy Act" has the meaning specified in Section
5.01(6).
"GAAP" means generally accepted accounting principles as such
principles are in effect as of the date of this Indenture.
"Global Security", when used with respect to any series of
Securities issued hereunder, means a Security which is executed by the Company
and authenticated and delivered by the Trustee to the Depository or pursuant to
the Depository's instruction, all in accordance with this Indenture and an
indenture supplemental hereto, if any, or Board Resolution and pursuant to a
Company Request, which shall be registered in the name of the Depository or its
nominee and which shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding Securities of such
series or any portion thereof, in either case having the same terms, including,
without limitation, the same original issue date, date or dates on which
principal is due, and interest rate or method of determining interest.
"Guarantee" has the meaning specified in Section 13.01(a).
"Guarantors" means TBS and TWC.
"Holder", when used with respect to any Security,
means a Securityholder.
"Indenture" or "this Indenture" means this instrument as
originally executed or as it may from time to time be supplemented or amended by
one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series of
Securities established as contemplated by Section 3.01.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Investment Grade Rating" means a rating equal to or higher than
Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P.
"Investment Grade Status" shall be deemed to have been reached on
the date that the Securities have an Investment Grade Rating from both Rating
Agencies.
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"Marketable Security" means any common stock, debt security or
other security of a Person which is (or will, upon distribution thereof, be)
listed on the NYSE, the American Stock Exchange or any national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934, as
amended, or approved for quotation in the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System or any
similar system of automated dissemination of quotations of securities prices in
the United States or for which there is a recognized market maker or trading
market.
"Material Subsidiary" means any Person that is a Subsidiary if at
the end of the most recent fiscal quarter of the Company, the aggregate amount,
determined in accordance with GAAP consistently applied, of securities of, loans
and advances to, and other investments in, such Person held by the Company and
its other Subsidiaries exceeded 10% of the Company's Consolidated Net Worth.
"Material U.S. Subsidiary" means any Material Subsidiary that is
organized under the laws of the United States of America or any political
subdivision thereof (including any State thereof or the District of Columbia).
"Maturity", when used with respect to any Securities, means the
date on which the principal of any such Security becomes due and payable as
therein or herein provided, whether on a Repayment Date, at the Stated Maturity
or by declaration of acceleration, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. or
any successor to the rating agency business thereof.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary
or an Assistant Secretary of the Company, and delivered to the Trustee. Wherever
this Indenture requires that an Officers' Certificate be signed also by an
engineer or an accountant or other expert, such engineer, accountant or other
expert (except as otherwise expressly provided in this Indenture) may be in the
employ of the Company, and shall be acceptable to the Trustee.
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"Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
of counsel to the Company, which is delivered to the Trustee. Such counsel shall
be acceptable to the Trustee, whose acceptance shall not be unreasonably
withheld.
"Original Issue Discount Security" means (i) any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof, and (ii) any
other security which is issued with "original issue discount" within the meaning
of Section 1273(a) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Outstanding", when used with respect to Securities or Securities
of any series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except:
(i) such Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancelation;
(ii) such Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Securities; provided that,
if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of
Section 3.06 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by a
Person in whose hands such Security is a legal, valid and binding
obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (i) the principal amount of any Original
Issue Discount Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as of the date of
the taking of such action upon a declaration of acceleration of the
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Maturity thereof, and (ii) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding. In determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer assigned to the Corporate Trust Department of the Trustee
knows to be owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to act as owner with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of (and premium, if any) or interest on any Securities on behalf
of the Company. The Company initially authorizes the Trustee to act as Paying
Agent for the Securities on its behalf. The Company may at any time and from
time to time authorize one or more Persons to act as Paying Agent in addition to
or in place of the Trustee with respect to any series of Securities issued under
this Indenture.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means with respect to any series of Securities
issued hereunder the city or political subdivision so designated with respect to
the series of Securities in question in accordance with the provisions of
Section 3.01.
"Predecessor Securities" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.06 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Rating Agencies" means Moody's and S&P.
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"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price specified in the Security at which it is to be
redeemed pursuant to this Indenture.
"Redemption Rescission Event" shall mean the occurrence of (a)
any general suspension of trading in, or limitation on prices for, securities on
the principal national securities exchange on which shares of Common Stock or
Marketable Securities are registered and listed for trading (or, if shares of
Common Stock or Marketable Securities are not registered and listed for trading
on any such exchange, in the over-the-counter market) for more than
six-and-one-half (6-1/2) consecutive trading hours, (b) any decline in either
the Dow Jones Industrial Average or the S&P's Index of 400 Industrial Companies
(or any successor index published by Dow Jones & Company, Inc. or S&P) by either
(i) an amount in excess of 10%, measured from the close of business on any
Trading Day to the close of business on the next succeeding Trading Day during
the period commencing on the Trading Day preceding the day notice of any
redemption of Securities is given (or, if such notice is given after the close
of business on a Trading Day, commencing on such Trading Day) and ending at the
time and date fixed for redemption in such notice or (ii) an amount in excess of
15% (or if the time and date fixed for redemption is more than 15 days following
the date on which such notice of redemption is given, 20%), measured from the
close of business on the Trading Day preceding the day notice of such redemption
is given (or, if such notice is given after the close of business on a Trading
Day, from such Trading Day) to the close of business on any Trading Day at or
prior-to the time and date fixed for redemption, (c) a declaration of a banking
moratorium or any suspension of payments in respect of banks by Federal or state
authorities in the United States or (d) the commencement of a war or armed
hostilities or other national or international calamity directly or indirectly
involving the United States which in the reasonable judgment of the Company
could have a material adverse effect on the market for the Common Stock or
Marketable Securities.
"Regular Record Date" for the interest payable on any Security on
any Interest Payment Date means the date specified in such Security as the
Regular Record Date.
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"Repayment Date", when used with respect to any Security to be
repaid, means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to be
repaid, means the price at which it is to be repaid pursuant to such Security.
"Required Currency", when used with respect to any Security, has
the meaning set forth in Section 1.14.
"Responsible Officer", when used with respect to the Trustee,
means any officer of the Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"S&P" means Standard & Poor's Ratings Service or any successor to
the rating agency business thereof.
"Security" or "Securities" means any note or notes, bond or
bonds, debenture or debentures, or any other evidences of indebtedness, as the
case nay be, of any series authenticated and delivered from time to time under
this Indenture.
"Security Register" shall have the meaning
specified in Section 3.05.
"Security Registrar" means the Person who keeps the Security
Register specified in Section 3.05. The Company initially appoints the Trustee
to act as Security Registrar for the Securities on its behalf. The Company may
at any time and from time to time authorize any Person to act as Security
Registrar in place of the Trustee with respect to any series of Securities
issued under this Indenture.
"Securityholder" means a Person in whose name a
security is registered in the Security Register.
"Senior Debt" means, with respect to any Person, all indebtedness
of such Person in respect of money borrowed, determined in accordance with GAAP
consistently applied, other than indebtedness as to which the instrument
governing such indebtedness provides that such indebtedness is, or which is in
effect, subordinated or junior in right of payment to any other indebtedness of
such Person.
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"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified in
such Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation
more than 50% of the voting stock of which is owned directly or indirectly by
such Person, and any partnership, association, joint venture or other entity in
which such Person owns more than 50% of the equity interests or has the power to
elect a majority of the board of directors or other governing body.
"TBS" means Turner Broadcasting System, Inc., a Georgia
corporation and wholly owned subsidiary of the Company, until a successor shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter "TBS" shall mean such successor.
"Test Period" means, with respect to any date, the period
consisting of the most recent four full fiscal quarters for which financial
information is generally available.
"Trading Day" shall mean, with respect to the Common Stock or a
Marketable Security, so long as the common stock or such Marketable Security, as
the case may be, is listed or admitted to trading on the NYSE, a day on which
the NYSE is open for the transaction of business, or, if the Common Stock or
such Marketable Security, as the case may be, is not listed or admitted to
trading on the NYSE, a day on which the principal national securities exchange
on which the Common Stock or such Marketable Security, as the case may be, is
listed is open for the transaction of business, or, if the Common Stock or such
Marketable Security, as the case may be, is not so listed or admitted for
trading on any national securities exchange, a day on which NASDAQ is open for
the transaction of business.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was executed; provided,
however, that, in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" or "TIA" means, to the extent required by any
such amendment, the Trust Indenture Act of 1939 as so amended.
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14
"Trustee" means the Person named as the Trustee in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean and include each Person who is then a Trustee hereunder. If
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"TWC" means Time Warner Companies, Inc., a Delaware corporation
and wholly owned subsidiary of the Company, until a successor shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"TWC" shall mean such successor.
"TWE" means Time Warner Entertainment Company, L.P., a Delaware
limited partnership and subsidiary of TWC.
"Vice President" when used with respect to the Company or the
Trustee means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president", including,
without limitation, an assistant vice president.
"Voting Stock", as applied to the stock of any corporation, means
stock of any class or classes (however designated) having by the terms thereof
ordinary voting power to elect a majority of the members of the board of
directors (or other governing body) of such corporation other than stock having
such power only by reason of the happening of a contingency.
"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 of this
Indenture 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.
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated by the Company at the time of issuance of such series of
Securities, or, if applicable, at the most recent redetermination of interest on
such series, in accordance with accepted financial practice.
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15
SECTION 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any (including
any covenants compliance with which constitutes a condition precedent), provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such Counsel all such
conditions precedent, if any (including any covenants compliance with which
constitutes a condition precedent), have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than annual
statements of compliance provided pursuant to Section 10.04) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
may certify or give an opinion as to the other
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16
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such Counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing or may be embodied in or evidenced by an
electronic transmission which identifies the documents containing the proposal
on which such consent is requested and certifies such Securityholders' consent
thereto and agreement to be bound thereby; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Company. If any Securities are denominated in coin or currency
other than that of the United States, then for the purposes of determining
whether the Holders of the requisite principal amount of Securities have taken
any action as herein described, the principal amount of such Securities shall be
deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Securities are denominated (as
evidenced to the Trustee by an Officers' Certificate) as of
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the date the taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in the immediately preceding
sentence. If any Securities are Original Issue Discount Securities, then for the
purposes of determining whether the Holders of the requisite principal amount of
Securities have taken any action as herein described, the principal amount of
such Original Issue Discount Securities shall be deemed to be the amount of the
principal thereof that would be due and payable upon a declaration of
accelleration of the Maturity thereof as of the date the taking of such action
by the Holders of such requisite principal amount is evidenced to the Trustee as
provided in the first sentence of this Section 1.04(a). Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Securityholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a member of a partnership, on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved
by the Security Register.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, by Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. Such record date shall be the later
of 10 days prior to the first solicitation of such action or the date of the
most recent list of Holders furnished to the
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18
Trustee pursuant to Section 7.01. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other action may be
given before or after the record date, but only the Holders of record at the
close of business on the record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Securities outstanding have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other action, and
for that purpose the Securities outstanding shall be computed as of the record
date; provided that no such authorization, agreement or consent by the Holders
on the record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date, and that no such authorization, agreement or consent may be
amended, withdrawn or revoked once given by a Holder, unless the Company shall
provide for such amendment, withdrawal or revocation in conjunction with such
solicitation of authorizations, agreements or consents or unless and to the
extent required by applicable law.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind the
Holder of every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done or suffered to
be done by the Trustee or the Company in reliance thereon whether or not
notation of such action is made upon such Security.
SECTION 1.05. Notices, etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of
Securityholders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(1) the Trustee by any Securityholder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department; or
(2) the Company by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (except as provided in Section
5.01(4) and (5) or, in the case of a request for repayment, as specified
in the Security carrying the right to repayment) if in writing and
mailed, first-class postage prepaid, to the Company addressed to it at
the address of its principal office specified in the first
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19
paragraph of this instrument, Attention: Treasurer, or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 1.06. Notices to Securityholders; Waiver. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Securityholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Securityholders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any event to any Securityholder when such notice is required to be
given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
SECTION 1.07. Conflict with Trust Indenture Act. If and to the
extent that any provision hereof limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, any of Sections 310 to 318, inclusive, of the
Trust Indenture Act, such imposed duties or incorporated provision shall
control.
SECTION 1.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and
agreements in this Indenture by the Company
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20
and the Guarantors shall bind their respective successors and assigns, whether
so expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or
in any Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar and the Holders of Securities (or such of
them as may be affected thereby), any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 1.12. Governing Law. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York.
SECTION 1.13. Counterparts. This instrument may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 1.14. Judgment Currency. The Company agrees, to the
fullest extent that it may effectively do so under applicable law, that (a) if
for the purpose of obtaining judgment in any court it is necessary to convert
the sum due in respect of the principal of, or premium or interest, if any, on
the Securities of any series (the "Required Currency") into a currency in which
a judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in the City of New York the Required Currency with the
Judgment Currency on the New York Banking Day preceding that on which a final
unappealable judgment is given and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
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21
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture. For purposes of the foregoing, "New York Banking
Day" means any day except a Saturday, Sunday or a legal holiday in the City of
New York or a day on which banking institutions in the City of New York are
authorized or required by law or executive order to close.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may be required to comply with the rules of any securities exchange, or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. Any portion of
the text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities, subject, with respect to the Securities of any series, to the rules
of any securities exchange on which such Securities are listed.
SECTION 2.02. Forms of Securities. Each Security shall be in one
of the forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form approved by or
pursuant to a Board Resolution, the Company shall deliver to the Trustee the
Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved
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22
by or pursuant to a Board Resolution must be acceptable as to form to the
Trustee, such acceptance to be evidenced by the Trustee's authentication of
Securities in that form or a certificate signed by a Responsible Officer of the
Trustee and delivered to the Company.
SECTION 2.03. Form of Trustee's Certificate of Authentication.
The form of Trustee's Certificate of Authentication for any Security issued
pursuant to this Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as
Trustee
by
------------------------------
Authorized Officer
SECTION 2.04. Securities Issuable in the Form of a Global
Security. (a) If the Company shall establish pursuant to Sections 2.02 and 3.01
that the Securities of a particular series are to be issued in whole or in part
in the form of one or more Global Securities, then the Company shall execute and
the Trustee or its agent shall, in accordance with Section 3.03 and the Company
Order delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Order, (ii) shall be registered in the name of the Depository for such
Global Security or Securities or its nominee, (iii) shall be delivered by the
Trustee or its agent to the Depository or pursuant to the Depository's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depository to Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of the nominee of
the Depository or in such other name as is requested by an authorized
representative of the Depository (and any payment is made to the nominee of the
Depository or to such
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23
other entity as is requested by an authorized representative of the Depository),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, the nominee of the
Depository, has an interest herein."
(b) Notwithstanding any other provision of this Section 2.04 or
of Section 3.05, and subject to the provisions of paragraph (c) below, unless
the terms of a Global Security expressly permit such Global Security to be
exchanged in whole or in part for individual Securities, a Global Security may
be transferred, in whole but not in part and in the manner provided in Section
3.05, only to a nominee of the Depository for such Global Security, or to the
Depository, or a successor Depository for such Global Security selected or
approved by the Company, or to a nominee of such successor Depository.
(c) (i) If at any time the Depository for a Global Security
notifies the Company that it is unwilling or unable to continue as Depository
for such Global Security or if at any time the Depository for the Securities for
such series shall no longer be eligible or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, the
Company shall appoint a successor Depository with respect to such Global
Security. If a successor Depository for such Global Security is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such ineligibility, the Company will execute, and the Trustee or its
agent, upon receipt of a Company Request for the authentication and delivery of
individual Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the Company
will execute, and the Trustee, upon receipt of a Company Request for the
authentication and delivery of individual Securities of such series in exchange
in whole or in part for such Global Security, will authenticate and deliver
individual Securities of such series of like tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such Global
Security
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24
or Securities representing such series or portion thereof in exchange for such
Global Security or Securities.
(iii) If specified by the Company pursuant to Sections 2.02 and
3.02 with respect to Securities issued or issuable in the form of a Global
Security, the Depository for such Global Security may surrender such Global
Security in exchange in whole or in part for individual Securities of such
series of like tenor and terms in definitive form on such terms as are
acceptable to the Company and such Depository. Thereupon the Company shall
execute, and the Trustee or its agent shall authenticate and deliver, without
service charge, (1) to each Person specified by such Depository a new Security
or Securities of the same series of like tenor and terms and of any authorized
denomination as requested by such Person in aggregate principal amount equal to
and in exchange for such Person's beneficial interest as specified by such
Depository in the Global Security; and (2) to such Depository a new Global
Security of like tenor and terms and in an authorized denomination equal to the
difference, if any, between the principal amount of the surrendered Global
Security and the aggregate principal amount of Securities delivered to Holders
thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of a
Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depository for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or the
Security Registrar. The Trustee or the Security Registrar shall deliver at its
Corporate Trust Office such Securities to the Persons in whose names such
Securities are so registered.
ARTICLE III
The Securities
SECTION 3.01. General Title; General Limitations; Issuable in
Series; Terms of Particular Series. The aggregate principal amount of Securities
which may be
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25
authenticated and delivered and Outstanding under this Indenture is not limited.
The Securities may be issued in one or more series as from time
to time may be authorized by the Board of Directors. There shall be established
in or pursuant to a Board Resolution or in a supplemental indenture, subject to
Section 3.11, prior to the issuance of Securities of any such series:
(1) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of any other
series);
(2) the Person to whom any interest on a Security of such series
shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest;
(3) the date or dates on which the principal of the Securities
of such series is payable;
(4) the rate or rates at which the Securities of such series
shall bear interest, if any, the date or dates from which such interest
shall accrue, the Interest Payment Dates on which any such interest
shall be payable and the Regular Record Date for any interest payable on
any Interest Payment Date;
(5) the place or places where the principal of and any premium
and interest on Securities of such series shall be payable;
(6) the period or periods within which, the Redemption Price or
Prices or the Repayment Price or Prices, as the case may be, at which
and the terms and conditions upon which Securities of such series may be
redeemed or repaid (including the applicability of Section 11.09), as
the case may be, in whole or in part, at the option of the Company or
the Holder;
(7) the obligation, if any, of the Company to purchase Securities
of such series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon
which Securities of such series shall be purchased, in whole or in part,
pursuant to such obligation;
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26
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of such series
shall be issuable;
(9) provisions, if any, with regard to the conversion or exchange
of the Securities of such series, at the option of the Holders thereof
or the Company, as the case may be, for or into new Securities of a
different series, Common Stock or other securities and, if the
Securities of such series are convertible into common stock or other
Marketable Securities, the Conversion Price therefor;
(10) if other than U.S. dollars, the currency or currencies or
units based on or related to currencies in which the Securities of such
series shall be denominated and in which payments of principal of, and
any premium and interest on, such Securities shall or may be payable;
(11) if the principal of (and premium, if any) or interest, if
any, on the Securities of such series are to be payable, at the election
of the Company or a Holder thereof, in a coin or currency (including a
composite currency) other than that in which the Securities are stated
to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(12) if the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of such series may be
determined with reference to an index based on a coin or currency
(including a composite currency) other than that in which the Securities
are stated to be payable, the manner in which such amounts shall be
determined;
(13) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of such series pursuant to Section 3.04, 3.05, 3.06, 9.06,
11.07 and 12.02 and except for any Securities which, pursuant to Section
3.03, are deemed never to have been authenticated and delivered
hereunder);
(14) provisions, if any, with regard to the exchange of
Securities of such series, at the option of the Holders thereof, for
other Securities of the same
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27
series of the same aggregate principal amount of a different
authorized kind or different authorized denomination or denominations,
or both;
(15) provisions, if any, with regard to the appointment by the
Trustee of an Authenticating Agent in one or more places other than the
location of the office of the Trustee with power to act on behalf of the
Trustee and subject to its direction in the authentication and delivery
of the Securities of any one or more series in connection with such
transactions as shall be specified in the provisions of this Indenture
or in or pursuant to such Board Resolution or supplemental indenture;
(16) the portion of the principal amount of Securities of the
series, if other than the principal amount thereof, which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 5.02 or provable in bankruptcy pursuant to Section
5.04;
(17) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions or other
changes to the Events of Default set forth herein that shall be
applicable to the Securities of such series;
(18) any covenant solely for the benefit of the Securities of
such series and any additions, deletions or other changes to the
provisions of Article X or Section 1.01 or any definitions relating to
such Article that would otherwise be applicable to the Securities of
such series;
(19) if Section 4.03 of this Indenture shall not be applicable to
the Securities of such series and if Section 4.03 shall be applicable to
any covenant or Event of Default established in or pursuant to a Board
Resolution or in a supplemental indenture as described above that has
not already been established herein;
(20) if the Securities of such series shall be issued in whole or
in part in the form of a Global Security or Securities, the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for other individual Securities; and the
Depository for such Global Security or Securities; and
(21) any other terms of such series.
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28
all upon such terms as may be determined in or pursuant to such Board Resolution
or supplemental indenture with respect to such series.
The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in the supplemental indenture creating such series. The Securities
of each series shall be distinguished from the Securities of each other series
in such manner, reasonably satisfactory to the Trustee, as the Board of
Directors may determine.
Unless otherwise provided with respect to Securities of a
particular series, the Securities of any series may only be issuable in
registered form, without coupons.
Any terms or provisions in respect of the Securities of any
series issued under this Indenture may be determined pursuant to this Section by
providing for the method by which such terms or provisions shall be determined.
SECTION 3.02. Denominations. The Securities of each series shall
be issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
SECTION 3.03. Execution, Authentication and Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer under its
corporate seal reproduced thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
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29
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication; and the Trustee shall, upon Company
Order, authenticate and deliver such Securities as in this Indenture provided
and not otherwise.
Prior to any such authentication and delivery, the Trustee shall
be entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 1.02, and
the Board Resolution and any certificate relating to the issuance of the series
of Securities required to be furnished pursuant to Section 2.02, an Opinion of
Counsel stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority
hereunder for the Trustee to authenticate and deliver such Securities;
(2) the form and terms of such Securities have been established
in conformity with the provisions of this Indenture;
(3) all laws and requirements with respect to the execution and
delivery by the Company of such Securities have been complied with, the
Company has the corporate power to issue such Securities and such
Securities have been duly authorized and delivered by the Company and,
assuming due authentication and delivery by the Trustee, constitute
legal, valid and binding obligations of the Company enforceable in
accordance with their terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws and legal principles affecting creditors' rights generally from
time to time in effect and to general equitable principles, whether
applied in an action at law or in equity) and entitled to the benefits
of this Indenture, equally and ratably with all other Securities, if
any, of such series Outstanding;
(4) the Indenture is qualified under the Trust Indenture
Act; and
(5) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental
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30
hereto, also stating that all laws and requirements with respect to the form and
execution by the Company of the supplemental indenture with respect to that
series of Securities have been complied with, the Company has corporate power to
execute and deliver any such supplemental indenture and has taken all necessary
corporate action for those purposes and any such supplemental indenture has been
executed and delivered and constitutes the legal, valid and binding obligation
of the Company enforceable in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws and legal principles affecting creditors' rights
generally from time to time in effect and to general equitable principles,
whether applied in an action at law or in equity).
The Trustee shall not be required to authenticate such Securities
if the issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any series,
all Securities shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancelation as provided in Section 3.09, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and, upon receipt
of the documents required by Section 3.03, together with a Company Order, the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as
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31
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment, without
charge to the Holder; and upon surrender for cancelation of any one or more
temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of such series of authorized denominations and of like
tenor and terms. Until so exchanged the temporary Securities of such series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 3.05. Registration, Transfer and Exchange. The Company
shall keep or cause to be kept a register or registers (herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities, or of Securities of a particular series, and of transfers of
Securities or of Securities of such series. Any such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time. At all reasonable times the information contained in
such register or registers shall be available for inspection by the Trustee at
the office or agency to be maintained by the Company as provided in Section
10.02. There shall be only one Security Register per series of Securities.
Subject to Section 2.04, upon surrender for registration of
transfer of any Security of any series at the office or agency of the Company
maintained for such purpose in a Place of Payment, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of such series of any
authorized denominations, of a like aggregate principal amount and Stated
Maturity and of like tenor and terms.
Subject to Section 2.04, at the option of the Holder, Securities
of any series may be exchanged for other Securities of such series of any
authorized denominations, of a like aggregate principal amount and Stated
Maturity and
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32
of like tenor and terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Securityholder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed, by the Holder thereof
or his attorney duly authorized in writing.
Unless otherwise provided in the Security to be registered for
transfer or exchanged, no service charge shall be made on any Securityholder for
any registration of transfer or exchange of Securities, but the Company may
(unless otherwise provided in such Security) require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06 or 11.07 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption under Section
11.03 and ending at the close of business on the date of such mailing, or (ii)
to register the transfer of or exchange any Security so selected for redemption
in whole or in part.
None of the Company, the Trustee, any agent of the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
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33
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities.
If (i) any mutilated Security is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, and (ii) there is delivered to the Company and the
Trustee such Security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a bona fide purchaser, the Company shall
execute and upon its written request the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Security, a new Security of like tenor, series, Stated Maturity and principal
amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided with respect to such Security pursuant to Section
3.01, interest on any Security 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 Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
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Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of his having
been such Holder; and, except as hereinafter provided, such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in Clause
(1) or Clause (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names any such Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 nor less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first class
postage prepaid, to the Holder of each such Security at his address as
it appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent
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with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
If any installment of interest the Stated Maturity of which is on
or prior to the Redemption Date for any Security called for redemption pursuant
to Article XI is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. Persons Deemed Owners. The Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any), and (subject to Section
3.07) interest on, such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the
Security Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 3.09. Cancelation. All Securities surrendered for
payment, conversion, redemption, registration of transfer, exchange or credit
against a sinking fund shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and, if not already canceled, shall be
promptly canceled by it. The Company may at any time deliver to the Trustee for
cancelation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be
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promptly canceled by the Trustee. No Security shall be authenticated in lieu of
or in exchange for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. The Trustee shall dispose of all
canceled Securities in accordance with its standard procedures and deliver a
certificate of such disposition to the Company.
SECTION 3.10. Computation of Interest. Unless otherwise provided
as contemplated in Section 3.01, interest on the Securities shall be calculated
on the basis of a 360- day year of twelve 30-day months.
SECTION 3.11. Delayed Issuance of Securities. Notwithstanding any
contrary provision herein, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary for the Company to
deliver to the Trustee an Officers' Certificate, Board Resolution, supplemental
indenture, opinion of counsel or Company Order otherwise required pursuant to
Sections 1.02, 2.02, 3.01 and 3.03 at or prior to the time of authentication of
each Security of such series if such documents are delivered to the Trustee or
its agent at or prior to the authentication upon original issuance of the first
Security of such series to be issued; provided that any subsequent request by
the Company to the Trustee to authenticate Securities of such series upon
original issuance shall constitute a representation and warranty by the Company
that as of the date of such request, the statements made in the Officers'
Certificate or other certificates delivered pursuant to Sections 1.02 and 2.02
shall be true and correct as if made on such date.
A Company Order, Officers' Certificate or Board Resolution or
supplemental indenture delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph may provide that Securities
which are the subject thereof will be authenticated and delivered by the Trustee
or its agent on original issue from time to time in the aggregate principal
amount, if any, established for such series pursuant to such procedures
acceptable to the Trustee as may be specified from time to time by Company Order
upon the telephonic, electronic or written order of Persons designated in such
Company Order, Officers' Certificate, supplemental indenture or Board Resolution
(any such telephonic or electronic instructions to be promptly confirmed in
writing by such Persons) and that such Persons are authorized to determine,
consistent with such Company Order, Officers' Certificate, supplemental
indenture or Board Resolution, such terms and conditions of said
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Securities as are specified in such Company Order, Officers' Certificate,
supplemental indenture or Board Resolution.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to any series of
Securities (except as to any surviving rights of conversion or transfer or
exchange of Securities of such series expressly provided for herein or in the
form of Security for such series), and the Trustee, on receipt of a Company
Request and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture as to such series,
when:
(1) either
(A) all Securities of that series theretofore
authenticated and delivered (other than (i) Securities of such
series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.06, and (ii)
Securities of such series for whose payment money in the Required
Currency has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section
10.03) have been delivered to the Trustee canceled or for
cancelation; or
(B) all such Securities of that series not theretofore
delivered to the Trustee canceled or for cancelation:
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii)
above, has irrevocably deposited or caused to be
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deposited with the Trustee as trust funds in trust for the purpose an
amount in the Required Currency sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the
Trustee canceled or for cancelation, for principal (and premium, if any)
and interest to the date of such deposit (in the case of Securities
which have become due and payable), or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company with respect to the Securities of such
series; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture with respect to the Securities of such series have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with respect to
any series of Securities, the obligations of the Company to the Trustee with
respect to that series under Section 6.07 shall survive and the obligations of
the Company and the Trustee under Sections 3.05, 3.06, 4.02, 10.02 and 10.03
shall survive.
SECTION 4.02. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 10.03, all money deposited with the
Trustee pursuant to Section 4.01 or Section 4.03 shall be held in trust and
applied by it, in accordance with the provisions of the series of Securities in
respect of which it was deposited and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
Anything herein to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or securities deposited with and held by it as provided in Section 4.03
and this Section 4.02 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be
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39
required to be deposited to effect an equivalent satisfaction and discharge,
Discharge or covenant defeasance, provided that the Trustee shall not be
required to liquidate any securities in order to comply with the provisions of
this paragraph.
SECTION 4.03. Defeasance Upon Deposit of Funds or Government
Obligations. Unless pursuant to Section 3.01 provision is made that this Section
shall not be applicable to the Securities of any series, at the Company's
option, either (a) the Company shall be deemed to have been Discharged (as
defined below) from its obligations with respect to any series of Securities
after the applicable conditions set forth below have been satisfied or (b) the
Company shall cease to be under any obligation to comply with any term,
provision or condition set forth in Sections 10.05, 10.06 and 10.07 and Article
VIII (and any other Sections or covenants applicable to such Securities that are
determined pursuant to Section 3.01 to be subject to this provision), and clause
(5) of Section 5.01 of this Indenture (and any other Events of Default
applicable to such Securities that are determined pursuant to Section 3.01 to be
subject to this provision) shall be deemed not to be an Event of Default, with
respect to any series of Securities at any time after the applicable conditions
set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities of such series (i) money in an amount, or (ii)
the equivalent in securities of the government which issued the currency
in which the Securities are denominated or government agencies backed by
the full faith and credit of such government which through the payment
of interest and principal in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment, money in an amount, or (iii) a combination of (i) and (ii),
sufficient, in the opinion (with respect to (ii) and (iii)) of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge each installment of principal (including mandatory sinking
fund payments) and any premium of, interest on and any repurchase or
redemption obligations with respect to the outstanding Securities of
such series on the dates such installments of interest or principal or
repurchase or redemption obligations are due (before such a deposit, if
the Securities of such series are
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then redeemable or may be redeemed in the future pursuant to the terms
thereof, in either case at the option of the Company, the Company may
give to the Trustee, in accordance with Section 11.02, a notice of its
election to redeem all of the Securities of such series at a future date
in accordance with Article XI);
(2) no Event of Default or event (including such deposit) which
with notice or lapse of time would become an Event of Default with
respect to the Securities of such series shall have occurred and be
continuing on the date of such deposit;
(3) the Company shall have delivered to the Trustee (A) an
Opinion of Counsel to the effect that Holders of the Securities of such
series will not recognize income, gain or loss for Federal income tax
purposes as a result of the Company's exercise of its option under this
Section 4.03 and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been
the case if such option had not been exercised, and, in the case of
Securities being Discharged, accompanied by a ruling to that effect from
the Internal Revenue Service, unless, as set forth in such Opinion of
Counsel, there has been a change in the applicable federal income tax
law since the date of this Indenture such that a ruling from the
Internal Revenue Service is no longer required and (B) an Opinion of
Counsel, subject to such qualifications, exceptions, assumptions and
limitations as are reasonably deemed necessary by such counsel and are
reasonably satisfactory to counsel for the Trustee, to the effect that
the trust resulting from the deposit referred to in paragraph (1) above
does not violate the Investment Company Act of 1940;
(4) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit referred to in paragraph (1) above
was not made by the Company with the intent of preferring the Holders
over other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others;
and
(5) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture with respect to the Securities of such series have
been complied with.
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If the Company, at its option, with respect to a series of
Securities, satisfies the applicable conditions pursuant to either clause (a) or
(b) of the first sentence of this Section, then (x), in the event the Company
satisfies the conditions to clause (a) and elects clause (a) to be applicable,
each of TBS and TWC shall be deemed to have paid and discharged the entire
indebtedness represented by, and obligations under, its respective guarantee of
the Securities of such series and to have satisfied all the obligations under
this Indenture relating to the Securities of such series and (y) in either case,
each of TBS and TWC shall cease to be under any obligation to comply with any
term, provision or condition set forth in Article Eight (and any other
covenants applicable to such Securities that are determined pursuant to Section
3.01 to be subject to this provision), and clause (5)(ii) of Section 5.01 (and
any other Events of Default applicable to such series of Securities that are
determined pursuant to Section 3.01 to be subject to this provision) shall be
deemed not to be an Event of Default with respect to such series of Securities
at any time thereafter.
"Discharged" means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by, and obligations under,
the Securities of such series and to have satisfied all the obligations under
this Indenture relating to the Securities of such series (and the Trustee, on
receipt of a Company Request and at the expense of the Company, shall execute
proper instruments acknowledging the same), except (A) the rights of Holders of
Securities to receive, from the trust fund described in clause (1) above,
payment of the principal and any premium of and any interest on such Securities
when such payments are due; (B) the Company's obligations with respect to such
Securities under Sections 3.05, 3.06, 4.02, 6.07, 10.02 and 10.03; (C) the
Company's right of redemption, if any, with respect to any Securities of such
series pursuant to Article XI, in which case the Company may redeem the
Securities of such series in accordance with Article XI by complying with such
Article and depositing with the Trustee, in accordance with Section 11.05, an
amount of money sufficient, together with all amounts held in trust pursuant to
Section 4.02 with respect to Securities of such series, to pay the Redemption
Price of all the Securities of such series to be redeemed; and (D) the rights,
powers, trusts, duties and immunities of the Trustee hereunder.
SECTION 4.04. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or securities in accordance with Section 4.02 of this
Indenture, by reason of
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42
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and, if applicable, the Guarantors' obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 4.01 or 4.03 of this Indenture, as the
case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such money or securities in accordance with Section 4.02 of this
Indenture; provided that, if the Company has made any payment of principal of or
interest on any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or securities held by the Trustee or Paying
Agent.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever
used herein, means with respect to any series of Securities any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body), unless such event is either
inapplicable to a particular series or it is specifically deleted or modified in
or pursuant to the supplemental indenture or Board Resolution creating such
series of Securities or in the form of Security for such series:
(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (or
premium, if any, on) any Security of that series at its
Maturity; or
(3) default in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of such series; or
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(4) default under any bond, debenture, note, guarantee or other
evidence of indebtedness for money borrowed by the Company, TWC or TBS
(including a default with respect to Securities of any series other than
such series and any indebtedness for borrowed money guaranteed by the
Company) or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company, TWC or TBS (including
this Indenture), whether such indebtedness now exists or shall hereafter
be created, which default (i) shall constitute a failure to pay the
principal of such indebtedness having an outstanding principal amount in
excess of $50 million in the aggregate when due and payable at the final
(but not any interim) maturity thereof after the expiration of any
applicable grace period with respect thereto and the holders of such
indebtedness shall not have waived such default or (ii) shall have
resulted in such indebtedness having an outstanding principal amount in
excess of $50 million in the aggregate becoming or being declared due
and payable prior to the date on which it would otherwise have become
due and payable, in either case without such indebtedness having been
discharged, or such acceleration having been rescinded or annulled,
within a period of 60 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of such series, a written notice
specifying such default and requiring the Company, TWC or TBS to cause
such indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(5) default in the performance, or breach, of any covenant or
warranty of the Company, TWC or TBS in this Indenture in respect of the
Securities of such series (other than a covenant or warranty in respect
of the Securities of such series a default in the performance of which
or the breach of which is elsewhere in this Section specifically dealt
with), all of such covenants and warranties in the Indenture which are
not expressly stated to be for the benefit of a particular series of
Securities being deemed in respect of the Securities of all series for
this purpose, and continuance of such default or breach for a period of
90 days after there has been given, by registered or certified mail, to
the Company (or, if applicable, TWC or TBS) by the Trustee or to the
Company (or, if applicable, TWC or TBS) and
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the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of such series, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(6) the entry of an order for relief against the Company or any
Material U.S. Subsidiary thereof under Title 11, United States Code (the
"Federal Bankruptcy Act") by a court having jurisdiction in the premises
or a decree or order by a court having jurisdiction in the premises
adjudging the Company or any Material U.S. Subsidiary thereof a bankrupt
or insolvent under any other applicable Federal or State law, or the
entry of a decree or order approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company or any Material U.S. Subsidiary thereof under the
Federal Bankruptcy Act or any other applicable Federal or State law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or any Material U.S. Subsidiary
thereof or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 90
consecutive days; or
(7) the consent by the Company or any Material U.S. Subsidiary
thereof to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Act or any
other applicable Federal or State law, or the consent by it to the
filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Company or any Material U.S. Subsidiary thereof or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company or any Material U.S. Subsidiary
thereof in furtherance of any such action;
(8) any Guarantee shall for any reason cease to be, or be
asserted in writing by any Guarantor or the Company not to be, in full
force and effect, enforceable in accordance with its terms, except to
the extent contemplated by this Indenture and any such Guarantee; or
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(9) any other Event of Default provided in the supplemental
indenture or Board Resolution under which such series of Securities is
issued or in the form of Security for such series.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default described in paragraph (1), (2), (3), (4), (5) or (8) (if
the Event of Default under paragraph (5) or (8) is with respect to less than all
series of Securities then Outstanding) of Section 5.01 occurs and is continuing
with respect to any series, then and in each and every such case, unless the
principal of all the Securities of such series shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding hereunder
(each such series acting as a separate class), by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the principal
amount (or, if the Securities of such series are original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of such series and all accrued
interest thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities of such series contained to the
contrary notwithstanding. If an Event of Default described in paragraph (5) or
(8) (if the Event of Default under paragraph (5) or (8) is with respect to all
series of Securities then Outstanding), of Section 5.01 occurs and is
continuing, then and in each and every such case, unless the principal of all
the Securities shall have already become due and payable, either the Trustee or
the Holders of not less than 25% in aggregate principal amount of all the
Securities then Outstanding hereunder (treated as one class), by notice in
writing to the Company (and to the Trustee if given by Holders), may declare the
principal amount (or, if any Securities are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms thereof)
of all the Securities then Outstanding and all accrued interest thereon to be
due and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, anything in this Indenture or in the
Securities contained to the contrary notwithstanding. If an Event of Default of
the type set forth in subparagraph 6 or subparagraph 7 of Section 5.01 occurs
and is continuing, the principal of and any interest on the Securities then
outstanding shall become immediately due and payable.
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At any time after such a declaration of acceleration has been
made with respect to the Securities of any or all series, as the case may be,
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the outstanding Securities of such series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on the
Securities of such series;
(B) the principal of (and premium, if any, on) any
Securities of such series which have become due otherwise than by
such declaration of acceleration, and interest thereon at the
rate or rates prescribed therefor by the terms of the Securities
of such series, to the extent that payment of such interest is
lawful;
(C) interest upon overdue installments of interest at the
rate or rates prescribed therefor by the terms of the Securities
of such series to the extent that payment of such interest is
lawful; and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and all other amounts due
the Trustee under Section 6.07; and
(2) all Events of Default with respect to such series of
Securities, other than the nonpayment of the principal of the Securities
of such series which have become due solely by such acceleration, have
been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
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SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of
interest on any Security of any series when such interest becomes due
and payable; or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof; or
(3) default is made in the payment of any sinking or purchase
fund or analogous obligation when the same becomes due by the terms of
the Securities of any series;
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee, pay
to it, for the benefit of the Holder of any such Security (or the Holders of any
such series in the case of Clause (3) above), the whole amount then due and
payable on any such Security (or on the Securities of any such series in the
case of Clause (3) above) for principal (and premium, if any) and interest, with
interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at such rate or rates as may be prescribed therefor by
the terms of any such Security (or of Securities of any such series in the case
of Clause (3) above); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due the Trustee under Section 6.07.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities of
such series and collect the money adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities, wherever situated.
If an Event of Default with respect to any series of Securities
occurs and is continuing, the Trustee may in
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its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim for the whole amount of principal
(or portion thereof determined pursuant to Section 3.01(16) to be
provable in bankruptcy) (and premium, if any) and interest owing and
unpaid in respect of the Securities and to file such other papers or
documents as may be necessary and advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel and all other amounts due the Trustee under Section 6.07) and of
the Securityholders allowed in such judicial proceeding; and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.07.
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Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder,
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any, Securityholder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel and any other amounts due the Trustee under Section 6.07, be for the
ratable benefit of the Holders of the Securities of the series in respect of
which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected
by the Trustee with respect to a series of Securities pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities of such
series and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.07.
SECOND: To the payment of the amounts then due and unpaid upon
the Securities of that series for principal (and premium, if any) and interest,
in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and premium, if any) and
interest, respectively.
SECTION 5.07. Limitation on Suits. No Holder of any Security of
any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this
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Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of, a continuing Event of Default with respect to Securities of
such series;
(2) the Holders of not less than 25% in principal amount of the
outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60- day period by the Holders of a
majority in principal amount of the Outstanding Securities of such
series;
it being understood and intended that no one or more Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Securities of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and proportionate benefit of all the Holders of all Securities of such
series.
SECTION 5.08. Unconditional Right of Securityholders To Receive
Principal, Premium and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of (and premium, if any)
and (subject to Section 3.07) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
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SECTION 5.09. Restoration of Rights and Remedies. If the Trustee
or any Securityholder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, then and in every such case the Company, the Trustee
and the Securityholders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Securityholders shall
continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission
of the Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.
SECTION 5.12. Control by Securityholders. The Holders of a
majority in principal amount of the Outstanding Securities of any series shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Securities of such series, provided
that:
(1) the Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by counsel, determines that
the action so directed may not lawfully be taken or would conflict with
this Indenture or if the Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed would involve it in
personal liability or be
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52
unjustly prejudicial to the Holders not taking part in
such direction, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default not theretofore cured:
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any
sinking or purchase fund or analogous obligation with respect to the
Securities of such series, or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than lot in principal
amount of the Outstanding Securities of any series to which the suit relates, or
to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on an Security
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53
on or after the respective Stated Maturities expressed in such Security (or, in
the case of redemption or repayment, on or after the Redemption Date or
Repayment Date, as the case may be).
SECTION 5.15. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default with respect to any series of
Securities:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture with respect to
the Securities of such series, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may,
with respect to Securities of such series, conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any
such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series such of the rights and powers vested in
it by
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this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to Securities of any series,
the Trustee shall transmit by mail to all Securityholders of such series, as
their names and addresses appear in the Security Register, notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any
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55
Security of such series or in the payment of any sinking or purchase fund
installment or analogous obligation with respect to Securities of such series,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Securityholders of such
series; and provided, further, that in the case of any default of the character
specified in Section 5.01(5) with respect to Securities of such series no such
notice to Securityholders of such series shall be given until at least 90 days
after the occurrence thereof. For the purpose of this Section, the term
"default", with respect to Securities of any series, means any event which is,
or after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 6.03. Certain Rights of Trustee. Except as otherwise
provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice
of such counsel or and Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
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56
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Securityholders pursuant to this Indenture,
unless such Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by
agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(h) the Trustee shall not be charged with knowledge of any
default (as defined in Section 6.02) or Event of Default with respect to
the Securities of any series for which it is acting as Trustee unless
either (1) a Responsible Officer of the Trustee assigned to the
Corporate Trust Department of the Trustee (or any successor division or
department of the Trustee) shall have actual knowledge of such default
or Event of Default or (2) written notice of such default or Event of
Default shall have been given to the Trustee by the Company or any other
obligor on such Securities or by any Holder of such Securities; and
(i) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
certificates of authentication, shall be taken as the statements of the
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Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any
Authenticating Agent, any Paying Agent, the Security Registrar, any Conversion
Agent or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.08 and 6.13, may otherwise deal with the Company or any Guarantor with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar, Conversion Agent or such other agent.
SECTION 6.06. Money Held in Trust. Subject to the provisions
of Section 10.03 hereof, all moneys in any currency or currency received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 6.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
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expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the
Company under this Section the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(6) or (7), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any bankruptcy law.
The Company's obligations under this Section 6.07 and any lien
arising hereunder shall survive the resignation or removal of any Trustee, the
discharge of the Company's obligations pursuant to Article IV of this Indenture
and/or the termination of this Indenture.
SECTION 6.08. Disqualification; Conflicting Interests. The
Trustee for the Securities of any series issued hereunder shall be subject to
the provisions of Section 310(b) of the Trust Indenture Act during the period of
time provided for therein. In determining whether the Trustee has a conflicting
interest as defined in Section 310(b) of the Trust Indenture Act with respect to
the Securities of any series, there shall be excluded this Indenture with
respect to Securities of any particular series of Securities other than that
series. Nothing herein shall prevent the Trustee from filing with the Commission
the application referred to in the second to last paragraph of Section 310(b) of
the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder with respect to each series of
Securities, which shall be either:
(i) a corporation organized and doing business under the laws
of the United States of America or of any State, authorized under such
laws to exercise corporate trust powers and subject to supervision or
examination by Federal or State authority, or
(ii) a corporation or other Person organized and doing
business under the laws of a foreign government that is permitted to
act as Trustee pursuant to a rule,
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regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or
examination applicable to United States institutional trustees;
in either case having a combined capital and surplus of at least $50,000,000. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Company nor any
Person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as trustee for the Securities of any series
issued hereunder. If at any time the Trustee with respect to any series of
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect specified
in Section 6.10.
SECTION 6.10. Resignation and Removal. (a) No
resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the
successor Trustee under Section 6.11.
(b) The Trustee may resign with respect to any series of
Securities at any time by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the outstanding Securities of that series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act pursuant to Section 6.08 with respect to any
series of Securities
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after written request therefor by the Company or by any Securityholder
who has been a bona fide Holder of a Security of that series for at
least six months, unless the Trustee's duty to resign is stayed in
accordance with the provisions of Section 310(b) of the Trust Indenture
Act, or
(2) the Trustee shall cease to be eligible under Section 6.09
with respect to any series of Securities and shall fail to resign after
written request therefor by the Company or by any such Securityholder,
or
(3) the Trustee shall become incapable of acting
with respect to any series of Securities, or
(4) the Trustee shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (4), with respect
to all series, or (ii) subject to Section 5.14, any Securityholder who has been
a bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to the series, or, in the case of Clause (4),
with respect to all series.
(e) If the Trustee shall resign, be removed or become
incapable of acting with respect to any series of Securities, or if a vacancy
shall occur in the office of the Trustee with respect to any series of
Securities for any cause, the Company, by Board Resolution, shall promptly
appoint a successor Trustee for that series of Securities. If, within one year
after such resignation, removal or incapacity, or the occurrence of such
vacancy, a successor Trustee with respect to such series of Securities shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to such series
and supersede the successor Trustee appointed by the Company with respect to
such series. If no successor Trustee with respect to such series
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61
shall have been so appointed by the Company or the Securityholders of such
series and accepted appointment in the manner hereinafter provided, subject to
Section 5.14, any Securityholder who has been a bona fide Holder of a Security
of that series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to any series and each appointment of a
successor Trustee with respect to any series by mailing written notice of such
event by first-class mail, postage prepaid, to the Holders of Securities of that
series as their names and addresses appear in the Security Register. Each notice
shall include the name of the successor Trustee and the address of its principal
Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the predecessor Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the predecessor Trustee
shall become effective with respect to any series as to which it is resigning or
being removed as Trustee, and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the predecessor Trustee with respect to any such series; but, on
request of the Company or the successor Trustee, such predecessor Trustee shall,
upon payment of its reasonable charges, if any, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the predecessor Trustee, and shall duly assign, transfer and deliver
to such successor Trustee all property and money held by such predecessor
trustee hereunder with respect to all or any such series, subject nevertheless
to its lien, if any, provided for in Section 6.07. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the predecessor Trustee and each successor Trustee with respect to the
Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain
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such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor Trustee with respect to
the Securities of any series as to which the predecessor Trustee is not being
succeeded shall continue to be vested in the predecessor Trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be Trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee.
No successor Trustee with respect to any series of Securities
shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible with respect to that series
under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against
Company. (a) Subject to Subsection (b) of this Section, if the Trustee shall be
or shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of
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the Securities and the holders of other indenture securities
(as defined in Subsection (c) of this Section):
(1) an amount equal to any and all reduction in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three-month period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Company upon
the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in satisfaction
or composition thereof, or otherwise, after the beginning of such
three-month period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of
the Company and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third Person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three-month period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received
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the Trustee had no reasonable cause to believe that a default as
defined in Subsection (c) of this Section would occur within three
months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C) or against the release of any property held as security for
such claim as provided in paragraph (B) or (C), as the case may be, to
the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three-month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Securityholders and the holders of other
indenture securities in such manner that the Trustee, the Securityholders and
the holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law, the same
percentage of their respective claims, figured before crediting to the claim of
the Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee and the Securityholders and the holders of
other indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for reorganization pursuant
to the Federal Bankruptcy Act or applicable State law, whether such distribution
is made in cash, securities, or other property, but shall not include any such
distribution with
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respect to the secured portion, if any, of such claim. The court in which such
bankruptcy, receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion between the Trustee and the Securityholders and
the holders of other indenture securities, in accordance with the provisions of
this paragraph, the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to
the provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee and the Securityholders and the
holders of other indenture securities with respect to their respective claims,
in which extent it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the
beginning of such three-month period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three-month
period, it shall be subject to the provisions of this Subsection if and only if
the following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such three-month
period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection
(a) of this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or
bankruptcy court of competent jurisdiction, or by this
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Indenture, for the purpose of preserving any property which shall at
any time be subject to the lien of this Indenture or of discharging tax
liens or other prior liens or encumbrances thereon, if notice of such
advances and of the circumstances surrounding the making thereof is
given to the Securityholders at the time and in the manner provided in
this Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depository, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable.
(2) The term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section, and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account.
(3) The term "cash transaction" means any transaction in which
full payment for goods or securities sold is made within seven days
after
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delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company" means any obligor upon the
Securities.
SECTION 6.14. Appointment of Authenticating Agent. At any time
when any of the Securities remain Outstanding the Trustee, with the approval of
the Company, may appoint an Authenticating Agent or Agents with respect to one
or more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon original issuance,
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.06, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as an
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and, if other than the Company itself, subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant
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to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and, if other than the Company, to the
Company. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent and, if
other than the Company, to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee, with the approval of the Company, may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, as their names and addresses appear
in the Security Register. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be
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entitled to be reimbursed for such payments, subject to the
provisions of Section 6.07.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
by
------------------------------
As Authenticating Agent
by
-------------------------------
As Authorized Agent
ARTICLE VII
Securityholders' Lists and Reports by
Trustee and Company
SECTION 701. Company To Furnish Trustee Names and
Addresses of Securityholders. The Company will furnish or
cause to be furnished to the Trustee:
(1) semi-annually, not more than 15 days after December 15 and
June 15 in each year in such form as the Trustee may reasonably
require, a list of the names and addresses of the Holders of Securities
of each series as of such December 15 and June 15, as applicable, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a series, no
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such list need be furnished with respect to such series of
Securities.
SECTION 7.02. Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Securities received by
the Trustee in its capacity as Security Registrar, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 7.01 upon receipt of a
new list so furnished.
(b) If three or more Holders of Securities of any series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security of such series for a period of at least six months preceding the date
of such application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either:
(i) afford such applicants access to the
information preserved at the time by the Trustee in
accordance with Section 7.02(a), or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or all Securities, as the case may
be, whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 7.02(a), and as to
the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all
Securityholders, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with Section
7.02(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender
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to the Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless, within five days after
such tender, the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the Holders of Securities of such series or
all Securityholders, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all Securityholders
of such series or all Securityholders, as the case may be, with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with Section 7.02(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 7.02(b).
SECTION 7.03. Reports by Trustee. (a) Within 60 days after May
15 of each year commencing with the first May 15 after the issuance of
Securities, the Trustee shall transmit by mail, at the Company's expense, to all
Holders as their names and addresses appear in the Security Register, as
provided in Trust Indenture Act 313(c), a brief report dated as of May 15 in
accordance with and with respect to the matters required by Trust Indenture Act
Section 313(a).
SECTION 7.04. Reports by Company. The Company shall file with
the Trustee, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such
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Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 shall be filed with the Trustee within 15 days after the
same is so required to be filed with the Commission. The Company also shall
comply with the other provisions of Trust Indenture Act Section 314(a).
ARTICLE VIII
Consolidation, Merger, Conveyance or Transfer
SECTION 8.01. Consolidation, Merger, Conveyance or Transfer on
Certain Terms. None of the Company, TBS or TWC shall consolidate with or merge
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(1)(a) in the case of the Company, the Person 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 substantially as an entirety shall be organized and existing
under the laws of the United States of America or any State thereof or
the District of Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities
and the performance of every covenant of this Indenture (as
supplemented from time to time) on the part of the Company to be
performed or observed; (b) in the case of either Guarantor, the Person
formed by such consolidation or into which such Guarantor is merged or
the Person which acquires by conveyance or transfer the properties and
assets of such Guarantor substantially as an entirety shall be
organized and existing under the laws of the United States of America
or any State or the District of Columbia, and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the performance of every
covenant of this Indenture (as supplemented from time to time) on the
part of such Guarantor 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
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Event of Default, shall have happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an opinion of Counsel each 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.
SECTION 8.02. Successor Person Substituted. Upon any
consolidation or merger, or any conveyance or transfer of the properties and
assets of the Company or either Guarantor substantially as an entirety in
accordance with Section 8.01, the successor Person formed by such consolidation
or into which the Company or such Guarantor is merged or to which such
conveyance or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or such Guarantor under this
Indenture with the same effect as if such successor had been named as the
Company or such Guarantor herein. In the event of any such conveyance or
transfer, the Company or such Guarantor, as the case may be, as the predecessor
shall be discharged from all obligations and covenants under this Indenture and
the Securities and may be dissolved, wound up or liquidated at any time
thereafter.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Securityholders. Without the consent of the Holders of any Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation or
Person to the Company or any Guarantor, and the assumption by any such
successor of the respective covenants of the Company or any Guarantor
herein and in the Securities contained; or
(2) to add to the covenants of the Company or any Guarantor,
or to surrender any right or power herein conferred upon the Company or
any Guarantor, for the benefit of the Holders of the Securities of any
or all
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series (and if such covenants or the surrender of such right or power
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included or such
surrenders are expressly being made solely for the benefit of one or
more specified series); or
(3) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; or
(4) to add to this Indenture such provisions as may be
expressly permitted by the TIA, excluding, however, the provisions
referred to in Section 316(a)(2) of the TIA as in effect at the date as
of which this instrument was executed or any corresponding provision in
any similar federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in Article
II and to provide for the issuance of any series of Securities as
provided in Article III and to set forth the terms thereof, and/or to
add to the rights of the Holders of the Securities of any series; or
(6) to evidence and provide for the acceptance of appointment
by another corporation as a successor Trustee hereunder with respect to
one or more series of Securities and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to Section 6.11; or
(7) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of
Default are to be in respect of less than all series of Securities,
stating that such Events of Default are expressly being included solely
for the benefit of one or more specified series); or
(8) to provide for the issuance of Securities in
coupon as well as fully registered form; or
(9) to provide for the terms and conditions of conversion into
Common Stock or other Marketable Securities of the Securities of any
series which are
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convertible into Common Stock or other Marketable Securities, if
different from those set forth in Article XII; or
(10) to secure the Securities of any series pursuant to
Section 10.06 or otherwise.
No supplemental indenture for the purposes identified in
Clauses (2), (3), (5) or (7) above may be entered into if to do so would
adversely affect the interest of the Holders of Securities of any series in any
material respect.
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders. With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of all series affected by such
supplemental indenture or indentures (acting as one class), by Act of said
Holders delivered to the Company and the Trustee (in accordance with Section
1.04 hereof), the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of the Securities of each such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(1) change the Maturity of the principal of, or the Stated
Maturity of any premium on, or any installment of interest on, any
Security, or reduce the principal amount thereof or the interest or any
premium thereon, or change the method of computing the amount of
principal thereof or interest thereon on any date or change any Place
of Payment where, or the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Maturity or the Stated Maturity, as the case may be, thereof (or, in
the case of redemption or repayment, on or after the Redemption Date or
the Repayment Date, as the case may be), or alter the provisions of
this Indenture so as to affect adversely the terms, if any, of
conversion of any Securities into Common Stock or other securities; or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental
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indenture, or the consent of whose Holders is required for any waiver
of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences, provided for in this
Indenture; or
(3) modify any of the provisions of this Section, Section 5.13
or Section 10.08, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby;
(4) impair or adversely affect the right of any Holder to
institute suit for the enforcement of any payment on, or with respect
to, the Securities of any series on or after the Stated Maturity of
such Securities (or in the case of redemption, on or after the
Redemption Date);
(5) amend or modify Section 13.01 of this Indenture in any
manner adverse to the Holders of the Securities.
For purposes of this Section 9.02, if the Securities of any
series are issuable upon the exercise of warrants, each holder of an unexercised
and unexpired warrant with respect to such series shall be deemed to be a Holder
of Outstanding Securities of such series in the amount issuable upon the
exercise of such warrant. For such purposes, the ownership of any such warrant
shall be determined by the Company in a manner consistent with customary
commercial practices. The Trustee for such series shall be entitled to rely on
an Officers' Certificate as to the principal amount of Securities of such series
in respect of which consents shall have been executed by holders of such
warrants.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of Holders of Securities of any other series.
It shall not be necessary for any Act of Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
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SECTION 9.03. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby to the extent provided therein.
SECTION 9.05. Conformity with Trust Indenture
Act. Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of TIA as then in
effect.
SECTION 9.06. Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest.
With respect to each series of Securities, the Company will duly and punctually
pay the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture, and will
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duly comply with all the other terms, agreements and conditions contained in, or
made in the Indenture for the benefit of, the Securities of such series.
SECTION 10.02. Maintenance of Office or Agency. The Company
will maintain an office or agency in each Place of Payment where Securities may
be presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served and where
any Securities with conversion privileges may be presented and surrendered for
conversion. The Company will give prompt written notice to the Trustee of the
location, and of any change in the location, of such office or agency. If at any
time the Company shall fail to maintain such office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Unless otherwise set forth in, or pursuant to, a Board
Resolution or Indenture supplemental hereto with respect to a series of
Securities, the Company hereby initially designates as the Place of Payment for
each series of Securities, the Borough of Manhattan, the City and State of New
York, and initially appoints the Trustee at its Corporate Trust Office as the
Company's office or agency for each such purpose in such city.
SECTION 10.03. Money for Security Payments To Be Held in
Trust. If the Company shall at any time act as its own Paying Agent for any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on, any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its action or
failure to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, on or prior to each due date of the principal
of (and premium, if any) or interest on, any Securities of such series, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to
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such principal (and premium, if any) or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the
Trustee for any series of Securities to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of principal of
(and premium, if any) or interest on Securities of such series in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of such series) in the making of
any such payment of principal (and premium, if any) or interest on the
Securities of such series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent in respect of each and every series of Securities as to which it
seeks to discharge this Indenture or, if for any other purpose, all sums so held
in trust by the Company in respect of all Securities, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be
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discharged from such trust; and the Holder of such Security shall thereafter as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease. The Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company mail to the Holders of the
Securities as to which the money to be repaid was held in trust, as their names
and addresses appear in the Security Register, a notice that such moneys remain
unclaimed and that, after a date specified in the notice, which shall not be
less than 30 days from the date on which the notice was first mailed to the
Holders of the Securities as to which the money to be repaid was held in trust,
any unclaimed balance of such moneys then remaining will be paid to the Company
free of the trust formerly impressed upon it.
SECTION 10.04. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
written statement signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company stating that:
(1) a review of the activities of the Company during such year
and of performance under this Indenture and under the terms of the
Securities has been made under his supervision; and
(2) to the best of his knowledge, based on such review, the
Company has fulfilled all its obligations under this Indenture and has
complied with all conditions and covenants on its part contained in
this Indenture through such year, or, if there has been a default in
the fulfillment of any such obligation, covenant or condition,
specifying each such default known to him and the nature and status
thereof.
For the purpose of this Section 10.04, default and compliance
shall be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
SECTION 10.05. Legal Existence. Subject to
Article VIII the Company will do or cause to be done all
things necessary to preserve and keep in full force and
effect its legal existence.
SECTION 10.06. Limitation on Liens. Neither the
Company nor any Material Subsidiary of the Company shall
incur, create, issue, assume, guarantee or otherwise become
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liable for any indebtedness for money borrowed that is secured by a lien on any
asset now owned or hereafter acquired by it unless the Company makes or causes
to be made effective provision whereby the Securities issued under this
Indenture will be secured by such lien equally and ratably with (or prior to)
all other indebtedness thereby secured so long as any such indebtedness shall be
secured. The foregoing restriction does not apply to the following:
(i) liens existing as of the date this Indenture;
(ii) liens created by Subsidiaries of the Company to secure
indebtedness of such Subsidiaries to the Company or to one or more
other Subsidiaries of the Company;
(iii) liens affecting property of a Person existing at the
time it becomes a Subsidiary of the Company or at the time it merges
into or consolidates with the Company or a Subsidiary of the Company or
at the time of a sale, lease or other disposition of all or
substantially all of the properties of such Person to the Company or
its Subsidiaries;
(iv) liens on property existing at the time of the acquisition
thereof or incurred to secure payment of all or a part of the purchase
price thereof or to secure indebtedness incurred prior to, at the time
of, or within one year after the acquisition thereof for the purpose of
financing all or part of the purchase price thereof;
(v) liens on any property to secure all or part of the cost of
improvements or construction thereon or indebtedness incurred to
provide funds for such purpose in a principal amount not exceeding the
cost of such improvements or construction;
(vi) liens consisting of or relating to the sale, transfer or
financing of motion pictures, video and television programs, sound
recordings, books or rights with respect thereto to or with so-called
tax shelter groups or other third-party investors in connection with
the financing of such motion pictures, video and television
programming, sound recordings or books in the ordinary course of
business and the granting to the Company or any of its Subsidiaries of
rights to distribute such motion pictures, video and television
programming, sound recordings or books; provided, however, that no such
lien shall attach to any asset or right of the Company or its
Subsidiaries (other than
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the motion pictures, video and television programming, sound
recordings, books or rights which were sold, transferred to or financed
by the tax shelter group or third-party investors in question or the
proceeds arising therefrom);
(vii) liens on shares of stock, indebtedness or other
securities of a Person that is not a Subsidiary of the Company;
(viii) other liens arising in connection with indebtedness of
the Company and its Subsidiaries in an aggregate principal amount for
the Company and its Subsidiaries not exceeding at the time such lien is
issued, created or assumed the greater of (A) 10% of the Consolidated
Net Worth of the Company and (B) $500 million;
(ix) 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;
(x) 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;
(xi) 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;
(xii) 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,
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without limitation, restrictions on the transferability
of the Company's or any of its Subsidiary's interests
therein;
(xiii) liens on capital leases entered into after the date of
this Indenture provided that such liens extend only to the property or
assets that are the subject of such capital leases;
(xiv) liens resulting from progress payments or partial
payments under United States government contracts or subcontracts; and
(xv) any extensions, renewal or replacement of any lien
referred to in the foregoing clauses (i) through (xiv) inclusive, or of
any indebtedness secured thereby; provided that the principal amount of
indebtedness secured thereby shall not exceed the principal amount of
indebtedness so secured at the time of such extension, renewal or
replacement, or at the time the lien was issued, created or assumed or
otherwise permitted, and that such extension, renewal or replacement
lien shall be limited to all or part of substantially the same property
which secured the lien extended, renewed or replaced (plus improvements
on such property).
SECTION 10.07. Limitations on Senior Debt. (a) Subject to the
provisions of Subsection (b) of this Section, the Company will not, and will not
permit any of its Subsidiaries to, incur, create, issue, assume, guarantee or
otherwise become directly or indirectly liable for (collectively, "incur") any
Senior Debt, if, after giving effect to such incurrence of Senior Debt,
determined on a pro forma basis as if such incurrence had occurred on the first
day of the Test Period, the Consolidated Cash Flow Coverage Ratio for the
Company and its Subsidiaries for the Test Period would be less than 1.5 to 1;
provided, however, that the foregoing restrictions will not apply to TWE or any
of its Subsidiaries to the extent that the application of such restrictions
would be prohibited under, or cause a violation of, TWE's bank credit agreement
as in effect from time to time or any successor or replacement credit agreement.
(b) After the Company has reached Investment Grade Status, and
notwithstanding that any series of Securities may later cease to have an
Investment Grade Rating from either or both Rating Agencies, the Company will be
released from its obligations to comply with Subsection (a) of this Section.
Without limiting the
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foregoing, once the Company reaches Investment Grade Status, it shall deliver
to the Trustee and (subject to Section 6.01) the Trustee shall be fully
protected in relying upon, an Officers' Certificate stating the date on which
the Company reached Investment Grade Status.
SECTION 10.08. Waiver of Certain Covenants. The Company may
omit in respect of any series of Securities, in any particular instance, to
comply with any covenant or condition set forth in Sections 10.05, 10.06 or
10.07 or set forth in a Board Resolution or supplemental indenture with respect
to the Securities of such series, unless otherwise specified in such Board
Resolution or supplemental indenture, if before or after the time for such
compliance the Holders of not less than a majority in principal amount of the
Outstanding Securities of all series affected by such waiver (voting as one
class) shall, by Act of such Securityholders delivered to the Company and the
Trustee (in accordance with Section 1.04 hereof), either waive such compliance
in such instance or generally waive compliance with such covenant or condition,
but no such waiver shall extend to or affect such covenant or condition except
to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such covenant or condition shall remain in full force and effect.
Nothing in this Section 10.08 shall permit the waiver of compliance with any
covenant or condition set forth in such Board Resolution or supplemental
indenture which, if in the form of an indenture supplemental hereto, would not
be permitted by Section 9.02 without the consent of the Holder of each
Outstanding Security affected thereby.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Applicability of Article. The Company may
reserve the right to redeem and pay before Stated Maturity all or any part of
the Securities of any series, either by optional redemption, sinking or purchase
fund or analogous obligation or otherwise, by provision therefor in the form of
Security for such series established and approved pursuant to Section 2.02 and
on such terms as are specified in such form or in the indenture supplemental
hereto with respect to Securities of such series as provided in Section 3.01.
Redemption of Securities of any series shall be made in accordance with the
terms of such Securities and, to the extent that this Article does not conflict
with such terns, the succeeding Sections of this Article. Notwithstanding
anything to the contrary in this
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Indenture, except in the case of redemption pursuant to a sinking fund, the
Trustee shall not make any payment in connection with the redemption of
Securities until the close of business on the Redemption Date.
SECTION 11.02. Election To Redeem; Notice to Trustee. The
election of the Company to redeem any Securities redeemable at the election of
the Company shall be evidenced by, or pursuant to authority granted by, a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Securities of any series, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities of such series and the Tranche (as defined
in Section 11.03) to be redeemed.
In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
SECTION 11.03. Selection by Trustee of Securities To Be
Redeemed. If less than all the Securities of like tenor and terms of any series
(a "Tranche") are to be redeemed, the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such Tranche not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may include provision for the selection for redemption of portions of the
principal of Securities of such Tranche of a denomination larger than the
minimum authorized denomination for Securities of that series. Unless otherwise
provided in the terms of a particular series of Securities, the portions of the
principal of Securities so selected for partial redemption shall be equal to the
minimum authorized denomination of the Securities of such series, or an integral
multiple thereof, and the principal amount which remains outstanding shall not
be less than the minimum authorized denomination for Securities of such series.
If less than all the Securities of unlike tenor and terms of a series are to be
redeemed, the particular Tranche of Securities to be redeemed shall be selected
by the Company.
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If any convertible Security selected for partial redemption is
converted in part before the termination of the conversion right with respect to
the portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Upon any redemption of fewer than all the Securities of a
series or Tranche, the Company and the Trustee may treat as Outstanding any
Securities surrendered for conversion during the period of fifteen days next
preceding the mailing of a notice of redemption, and need not treat as
Outstanding any Security authenticated and delivered during such period in
exchange for the unconverted portion of any Security converted in part during
such period.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Security selected
for partial redemption, the principal amount thereof to be redeemed.
Securities shall be excluded from eligibility for selection
for redemption if they are identified by registration and certificate number in
a written statement signed by an authorized officer of the Company and delivered
to the Trustee at least 60 days prior to the Redemption Date as being owned of
record and beneficially by, and not pledged or hypothecated by either, (a) the
Company or (b) an entity specifically identified in such written statement as
being an Affiliate of the Company.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal of such Security which has been or is to
be redeemed.
SECTION 11.04. Notice of Redemption. Notice of redemption
shall be given by first-class mail, postage prepaid, mailed not less than 30 (or
15 if so provided in the Board Resolution establishing the relevant series) nor
more than 60 days prior to the Redemption Date, to each holder of Securities to
be redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
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(2) the Redemption Price;
(3) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security, and that interest, if
any, thereon shall cease to accrue from and after said date;
(5) the place where such Securities are to be surrendered for
payment of the Redemption Price, which shall be the office or agency of
the Company in the Place of Payment;
(6) that the redemption is on account of a sinking or purchase
fund, or other analogous obligation, if that be the case;
(7) if such Securities are convertible into Common Stock or
other securities, the Conversion Price or other conversion price and
the date on which the right to convert such Securities into Common
Stock or other securities will terminate; and
(8) that the redemption may be rescinded by the Company, at
its sole option, pursuant to Section 11.09 of this Indenture upon the
occurrence of a Redemption Rescission Event, except in the case of any
redemption on account of a sinking fund.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 11.05. Deposit of Redemption Price. On or prior to any
Redemption Date and subject to Section 11.09, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.03) an amount of
money sufficient to pay the Redemption Price of all the Securities which are to
be redeemed on that date. If any Security to be redeemed is converted into
Common Stock or other securities, any money so deposited with the Trustee or a
Paying Agent shall be paid to the Company upon Company Request or, if then so
segregated and held in trust by the Company, shall be discharged from such
trust.
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SECTION 11.06. Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Securities so to be redeemed
shall, subject to Section 11.09, on the Redemption Date, become due and payable
at the Redemption Price therein specified and from and after such date (unless
the Company shall default in the payment of the Redemption Price) such
Securities shall cease to bear interest and any rights to convert such
Securities shall terminate. Upon surrender of such Securities for redemption in
accordance with the notice and subject to Section 11.09, such Securities shall
be paid by the Company at the Redemption Price. Unless otherwise provided with
respect to such Securities pursuant to Section 3.01, installments of interest
the Stated Maturity of which is on or prior to the Redemption Date shall be
payable to the Holders of such Securities registered as such on the relevant
Regular Record Dates according to their terms and the provisions of Section
3.07.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security, or as
otherwise provided in such Security.
SECTION 11.07. Securities Redeemed in Part. Any Security which
is to be redeemed only in part shall be surrendered at the office or agency of
the Company in the Place of Payment with respect to that series (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and Stated Maturity and of like tenor and terms, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
SECTION 11.08. Provisions with Respect to Any Sinking Funds.
Unless the form or terms of any series of Securities shall provide otherwise, in
lieu of making all or any part of any mandatory sinking fund payment with
respect to such series of Securities in cash, the Company may at its option (1)
deliver to the Trustee for cancelation any Securities of such series theretofore
acquired by the Company or converted by the Holder thereof into Common Stock or
other securities, or (2) receive credit for any
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Securities of such series (not previously so credited) acquired by the Company
(including by way of optional redemption (pursuant to the sinking fund or
otherwise but not by way of mandatory sinking fund redemption) or converted by
the Holder thereof into Common Stock or other securities and theretofore
delivered to the Trustee for cancelation, and if it does so then (i) Securities
so delivered or credited shall be credited at the applicable sinking fund
Redemption Price with respect to Securities of such series, and (ii) on or
before the 60th day next preceding each sinking fund Redemption Date with
respect to such series of Securities, the Company will deliver to the Trustee
(A) an Officers' Certificate specifying the portions of such sinking fund
payment to be satisfied by payment of cash and by delivery or credit of
Securities of such series acquired by the Company or converted by the Holder
thereof, and (B) such Securities, to the extent not previously surrendered. Such
Officers' Certificate shall also state the basis for such credit and that the
Securities for which the Company elects to receive credit have not been
previously so credited and were not acquired by the Company through operation of
the mandatory sinking fund, if any, provided with respect to such Securities and
shall also state that no Event of Default with respect to Securities of such
series has occurred and is continuing. All Securities so delivered to the
Trustee shall be canceled by the Trustee and no Securities shall be
authenticated in lieu thereof.
If the sinking fund payment or payments (mandatory or
optional) with respect to any series of Securities made in cash plus any unused
balance of any preceding sinking fund payments with respect to Securities of
such series made in cash shall exceed $50,000 (or a lesser sum if the Company
shall so request), unless otherwise provided by the terms of such series of
Securities, that cash shall be applied by the Trustee on the sinking fund
Redemption Date with respect to Securities of such series next following the
date of such payment to the redemption of Securities of such series at the
applicable sinking fund Redemption Price with respect to Securities of such
series, together with accrued interest, if any, to the date fixed for
redemption, with the effect provided in Section 11.06. The Trustee shall select,
in the manner provided in Section 11.03, for redemption on such sinking fund
Redemption Date a sufficient principal amount of Securities of such series to
utilize that cash and shall thereupon cause notice of redemption of the
Securities of such series for the sinking fund to be given in the manner
provided in Section 11.04 (and with the effect provided in Section 11.06) for
the redemption of Securities in part at the option of the Company. Any sinking
fund moneys not so applied or allocated by the Trustee to the redemption of
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Securities of such series shall be added to the next cash sinking fund payment
with respect to Securities of such series received by the Trustee and, together
with such payment, shall be applied in accordance with the provisions of this
Section 11.08. Any and all sinking fund moneys with respect to Securities of any
series held by the Trustee at the Maturity of Securities of such series, and not
held for the payment or redemption of particular Securities of such series,
shall be applied by the Trustee, together with other moneys, if necessary, to be
deposited sufficient for the purpose, to the payment of the principal of the
Securities of such series at Maturity.
On or before each sinking fund Redemption Date provided with
respect to Securities of any series, the Company shall pay to the Trustee in
cash a sum equal to all accrued interest, if any, to the date fixed for
redemption on Securities to be redeemed on such sinking fund Redemption Date
pursuant to this Section 11.08.
SECTION 11.09. Rescission of Redemption. In the event that
this Section 11.09 is specified to be applicable to a series of Securities
pursuant to Section 3.01 and a Redemption Rescission Event shall occur following
any day on which a notice of redemption shall have been given pursuant to
Section 11.04 hereof but at or prior to the time and date fixed for redemption
as set forth in such notice of redemption, the Company may, at its sole option,
at any time prior to the earlier of (i) the close of business on that day which
is two Trading Days following such Redemption Rescission Event and (ii) the time
and date fixed for redemption as set forth in such notice, rescind the
redemption to which such notice of redemption shall have related by making a
public announcement of such rescission (the date on which such public
announcement shall have been made being hereinafter referred to as the
"Rescission Date"). The Company shall be deemed to have made such announcement
if it shall issue a release to the Dow Jones New Service, Reuters Information
Services or any successor news wire service. From and after the making of such
announcement, the Company shall have no obligation to redeem Securities called
for redemption pursuant to such notice of redemption or to pay the Redemption
Price therefor and all rights of Holders of Securities shall be restored as if
such notice of redemption had not been given. As promptly as practicable
following the making of such announcement, the Company shall telephonically
notify the Trustee and the Paying Agent of such rescission. The Company shall
give notice of any such rescission by first-class mail, postage prepaid, mailed
as promptly as practicable but in no event later than the close of business on
that day which is five
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Trading Days following the Rescission Date to each Holder of Securities at the
close of business on the Rescission Date, to any other Person that was a Holder
of Securities and that shall have surrendered Securities for conversion
following the giving of notice of the subsequently rescinded redemption and to
the Trustee and the Paying Agent. Each notice of rescission shall (w) state that
the redemption described in the notice of redemption has been rescinded, (x)
state that any Converting Holder shall be entitled to rescind the conversion of
Securities surrendered for conversion following the day on which notice of
redemption was given but on or prior to the date of the mailing of the Company's
notice of rescission, (y) be accompanied by a form prescribed by the Company to
be used by any Converting Holder rescinding the conversion of Securities so
surrendered for conversion (and instructions for the completion and delivery of
such form, including instructions with respect to any payment that may be
required to accompany such delivery) and (z) state that such form must be
properly completed and received by the Company no later than the close of
business on a date that shall be 1.5 Trading Days following the date of the
mailing of such notice of rescission.
ARTICLE XII
Conversion
SECTION 12.01. Conversion Privilege. If so provided in a Board
Resolution with respect to the Securities of any series, the Holder of a
Security of such series shall have the right, at such Holder's option, to
convert, in accordance with the terms of such series of Securities and this
Article XII, all or any part (in a denomination of, unless otherwise specified
in a Board Resolution or supplemental indenture with Respect to Securities of
such series, $1,000 in principal amount or any integral multiple thereof) of
such Security into shares of Common Stock or other Marketable Securities
specified in such Board Resolution at any time or, as to any Securities called
for redemption, at any time prior to the time and date fixed for such redemption
(unless the Company shall default in the payment of the Redemption Price, in
which case such right shall not terminate at such time and date). The provisions
of this Article Twelve shall not be applicable to the Securities of a series
unless otherwise specified in a Board Resolution with respect to the Securities
of such series.
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SECTION 12.02. Conversion Procedure; Rescission of Conversion;
Conversion Price; Fractional Shares. (a) Each Security to which this Article is
applicable shall be convertible at the office of the Conversion Agent, and at
such other place or places, if any, specified in a Board Resolution with respect
to the Securities of such series, into fully paid and nonassessable shares
(calculated to the nearest 1/100th of a share) of Common Stock or other
Marketable Securities. The Securities will be converted into shares of Common
Stock or such other Marketable Securities at the Conversion Price therefor. No
payment or adjustment shall be made in respect of dividends on the Common Stock
or such other Marketable Securities, or accrued interest on a converted Security
except as described in Section 12.09. The Company may, but shall not be
required, in connection with any conversion of Securities, to issue a fraction
of a share of Common Stock or of such other Marketable Security, and, if the
Company shall determine not to issue any such fraction, the Company shall,
subject to Section 12.03(4), make a cash payment (calculated to the nearest
cent) equal to such fraction multiplied by the Closing Price of the Common Stock
or such other Marketable Security on the last Trading Day prior to the date of
conversion.
(b) Before any Holder of a Security shall be entitled to
convert the same into Common Stock or other Marketable Securities, such Holder
shall surrender such Security duly endorsed to the Company or in blank, at the
office of the Conversion Agent or at such other place or places, if any,
specified in a Board Resolution with respect to the Securities of such series,
and shall give written notice to the Company at said office or place that he
elects to convert the same and shall state in writing therein the principal
amount of Securities to be converted and the name or names (with addresses) in
which he wishes the certificate or certificates for Common Stock or for such
other Marketable Securities to be issued; provided, however, that no Security or
portion thereof shall be accepted for conversion unless the principal amount of
such Security or such portion, when added to the principal amount of all other
Securities or portions thereof then being surrendered by the Holder thereof for
conversion, exceeds the then effective Conversion Price with respect thereto. If
more than one Security shall be surrendered for conversion at one time by the
same Holder, the number of full shares of Common Stock or such other Marketable
Securities which shall be deliverable upon conversion shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof to the extent permitted thereby) so surrendered. Subject to the next
succeeding sentence,
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the Company will, as soon as practicable thereafter, issue and deliver at said
office or place to such Holder of a Security, or to his nominee or nominees,
certificates for the number of full shares of Common Stock or other Marketable
Security to which he shall be entitled as aforesaid, together, subject to the
last sentence of paragraph (a) above, with cash in lieu of any fraction of a
share to which he would otherwise be entitled. The Company shall not be required
to deliver certificates for shares of Common Stock or other Marketable
Securities while the stock transfer books for such stock or the transfer books
for such Marketable Securities, as the case may be, or the Security Register are
duly closed for any purpose, but certificates for shares of Common Stock or
other Marketable Securities shall be issued and delivered as soon as practicable
after the opening of such books or Security Register. A Security shall be deemed
to have been converted as of the close of business on the date of the surrender
of such Security for conversion as provided above, and the person or persons
entitled to receive the Common Stock or other Marketable Securities issuable
upon such conversion shall be treated for all purposes as the record Holder or
Holders of such Common Stock or other Marketable Securities as of the close of
business on such date. In case any Security shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the Holder of the Securities so
surrendered, without charge to such Holder (subject to the provisions of Section
12.08), a new Security or Securities in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Security.
(c) Notwithstanding anything to the contrary contained herein,
in the event the Company shall have rescinded a redemption of Securities
pursuant to Section 11.09 hereof, any Holder of Securities that shall have
surrendered Securities for conversion following the day on which notice of the
subsequently rescinded redemption shall have been given but prior to the later
of (a) the close of business on the Trading Day next succeeding the date on
which public announcement of the rescission of such redemption shall have been
made and (b) the date of the mailing of the notice of rescission required by
Section 11.09 hereof (a "Converting Holder") may rescind the conversion of such
Securities surrendered for conversion by (i) properly completing a form
prescribed by the Company and mailed to Holders of Securities (including
Converting Holders) with the Company's notice of rescission, which form shall
provide for the certification by any Converting Holder rescinding a conversion
on behalf of any beneficial owner
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(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of
Securities that the beneficial ownership (within the meaning of such Rule) of
such Securities shall not have changed from the date on which such Securities
were surrendered for conversion to the date of such certification and (ii)
delivering such form to the Company no later than the close of business on that
date which is fifteen Trading Days following the date of the mailing of the
Company's notice of rescission. The delivery of such form by a Converting Holder
shall be accompanied by (x) any certificates representing shares of Common Stock
or other securities issued to such Converting Holder upon a conversion of
Securities that shall be rescinded by the proper delivery of such form (the
"Surrendered Securities"), (y) any securities, evidences of indebtedness or
assets (other than cash) distributed by the Company to such Converting Holder by
reason of such Converting Holder being a record holder of Surrendered Securities
and (z) payment in New York Clearing House funds or other funds acceptable to
the Company of an amount equal to the sum of (I) any cash such Converting Holder
may have received in lieu of the issuance of fractional Surrendered Securities
and (II) any cash paid or payable by the Company to such Converting Holder by
reason of such Converting Holder being a record holder of Surrendered
Securities. Upon receipt by the Company of any such form properly completed by a
Converting Holder and any certificates, securities, evidences of indebtedness,
assets or cash payments required to be returned by such Converting Holder to the
Company as set forth above, the Company shall instruct the transfer agent or
agents for shares of Common Stock or other securities to cancel any certificates
representing Surrendered Securities (which Surrendered Securities shall be
deposited in the treasury of the Company) and shall instruct the Registrar to
reissue certificates representing Securities to such Converting Holder (which
Securities shall be deemed to have been outstanding at all times during the
period following their surrender for conversion). The Company shall, as promptly
as practicable, and in no event more than five Trading Days following the
receipt of any such properly completed form and any such certificates,
securities, evidences of indebtedness, assets or cash payments required to be so
returned, pay to the Holder of Securities surrendered to the Company pursuant to
a rescinded conversion or as otherwise directed by such Holder any interest paid
or other payment made to Holders of Securities during the period from the time
such Securities shall have been surrendered for conversion to the rescission of
such conversion. All questions as to the validity, form, eligibility (including
time of receipt) and acceptance of any form submitted to the Company to rescind
the conversion
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of Securities, including questions as to the proper completion or execution of
any such form or any certification contained therein, shall be resolved by the
Company, whose determination shall be final and binding.
SECTION 12.03. Adjustment of Conversion Price for Common Stock
or Marketable Securities. The Conversion Price with respect to any Security
which is convertible into Common Stock or other Marketable Securities shall be
adjusted from time to time as follows:
(1) In case the Company shall, at any time or from time to
time while any of such Securities are outstanding, (i) pay a dividend
in shares of its Common Stock or other Marketable Securities, (ii)
combine its outstanding shares of Common Stock or other Marketable
Securities into a smaller number of shares or securities, (iii)
subdivide its outstanding shares of Common Stock or other Marketable
Securities or (iv) issue by reclassification of its shares of Common
Stock or other Marketable Securities any shares of stock or other
Marketable Securities of the Company, then the Conversion Price in
effect immediately before such action shall be adjusted so that the
Holders of such Securities, upon conversion thereof into Common Stock
or other Marketable Securities immediately following such event, shall
be entitled to receive the kind and amount of shares of capital stock
of the Company or other Marketable Securities which they would have
owned or been entitled to receive upon or by reason of such event if
such Securities had been converted immediately before the record date
(or, if no record date, the effective date) for such event. An
adjustment made pursuant to this Section 12.03(1) shall become
effective retroactively immediately after the record date in the case
of a dividend or distribution and shall become effective retroactively
immediately after the effective date in the case of a subdivision,
combination or reclassification. For the purposes of this Section
12.03(1), each Holder of Securities shall be deemed to have failed to
exercise any right to elect the kind or amount of securities receivable
upon the payment of any such dividend, subdivision, combination or
reclassification (provided that if the kind or amount of securities
receivable upon such dividend, subdivision, combination or
reclassification is not the same for each nonelecting share, then the
kind and amount of securities or other property receivable upon such
dividend, subdivision, combination or reclassification for each
nonelecting share shall be
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deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares).
(2) In case the Company shall, at any time or from time to
time while any of such Securities are outstanding, issue rights or
warrants to all holders of shares of its Common Stock or other
Marketable Securities entitling them (for a period expiring within 45
days after the record date for such issuance) to subscribe for or
purchase shares of Common Stock or other Marketable Securities (or
securities convertible into shares of Common Stock or other Marketable
Securities) at a price per share less than the Current Market Price of
the Common Stock or other Marketable Securities at such record date
(treating the price per share of the securities convertible into Common
Stock or other Marketable Securities as equal to (x) the sum of (i) the
price for a unit of the security convertible into Common Stock or other
Marketable Securities plus (ii) any additional consideration initially
payable upon the conversion of such security into Common Stock or other
Marketable Securities divided by (y) the number of shares of Common
Stock or other Marketable Securities initially underlying such
convertible security), the Conversion Price with respect to such
Securities shall be adjusted so that it shall equal the price
determined by dividing the Conversion Price in effect immediately prior
to the date of issuance of such rights or warrants by a fraction, the
numerator of which shall be the number of shares of Common Stock or
other Marketable Securities outstanding on the date of issuance of such
rights or warrants plus the number of additional shares of Common Stock
or other Marketable Securities offered for subscription or purchase (or
into which the convertible securities so offered are initially
convertible), and the denominator of which shall be the number of
shares of Common Stock or other Marketable Securities outstanding on
the date of issuance of such rights or warrants plus the number of
shares or securities which the aggregate offering price of the total
number of shares or securities so offered for subscription or purchase
(or the aggregate purchase price of the convertible securities so
offered plus the aggregate amount of any additional consideration
initially payable upon conversion of such Securities into Common Stock
or other Marketable Securities) would purchase at such Current Market
Price of the Common Stock or other Marketable Securities. Such
adjustment shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to receive
such rights or warrants.
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(3) In case the Company shall, at any time or from time to
time while any of such Securities are outstanding, distribute to all
holders of shares of its Common Stock or other Marketable Securities
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation and the Common Stock or other Marketable Securities are not
changed or exchanged) cash, evidences of its indebtedness, securities
or assets (excluding (i) regular periodic cash dividends in amounts, if
any, determined from time to time by the Board of Directors, (ii)
dividends payable in shares of Common Stock or other Marketable
Securities for which adjustment is made under Section 12.03(1) or (iii)
rights or warrants to subscribe for or purchase securities of the
Company (excluding those referred to in Section 12.03(2)), then in each
such case the Conversion Price with respect to such Securities shall be
adjusted so that it shall equal the price determined by dividing the
Conversion Price in effect immediately prior to the date of such
distribution by a fraction, the numerator of which shall be the Current
Market Price of the Common Stock or other Marketable Securities on the
record date referred to below, and the denominator of which shall be
such Current Market Price of the Common Stock or other Marketable
Securities less the then fair market value (as determined by the Board
of Directors of the Company, whose determination shall be conclusive)
of the portion of the cash or assets or evidences of indebtedness or
securities so distributed or of such subscription rights or warrants
applicable to one share of Common Stock or one other Marketable
Security (provided that such denominator shall never be less than 1.0);
provided, however, that no adjustment shall be made with respect to any
distribution of rights to purchase securities of the Company if a
Holder of Securities would otherwise be entitled to receive such rights
upon conversion at any time of such Securities into Common Stock or
other Marketable Securities unless such rights are subsequently
redeemed by the Company, in which case such redemption shall be treated
for purposes of this Section as a dividend on the Common Stock or other
Marketable Securities. Such adjustment shall become effective
retroactively immediately after the record date for the determination
of stockholders or holders of Marketable Securities entitled to receive
such distribution; and in the event that such distribution is not so
made, the Conversion Price shall again be adjusted to the Conversion
Price which would then be in effect if such record date had not been
fixed.
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(4) The Company shall be entitled to make such additional
adjustments in the Conversion Price, in addition to those required by
subsections 12.03(1), 12.03(2) and 12.03(3), as shall be necessary in
order that any dividend or distribution of Common Stock or other
Marketable Securities, any subdivision, reclassification or combination
of shares of Common Stock or other Marketable Securities or any
issuance of rights or warrants referred to above shall not be taxable
to the holders of Common Stock or other Marketable Securities for
United States Federal income tax purposes.
(5) In any case in which this Section 12.03 shall require that
any adjustment be made effective as of or retroactively immediately
following a record date, the Company may elect to defer (but only for
five (5) Trading Days following the filing of the statement referred to
in Section 12.05) issuing to the Holder of any Securities converted
after such record date the shares of Common Stock and other capital
stock of the Company or other Marketable Securities issuable upon such
conversion over and above the shares of Common Stock and other capital
stock of the Company or other Marketable Securities issuable upon such
conversion on the basis of the Conversion Price prior to adjustment;
provided, however, that the Company shall deliver to such Holder a due
bill or other appropriate instrument evidencing such Holder's right to
receive such additional shares upon the occurrence of the event
requiring such adjustment.
(6) All calculations under this Section 12.03 shall be made to
the nearest cent or one-hundredth of a share or security, with one-half
cent and .005 of a share, respectively, being rounded upward.
Notwithstanding any other provision of this Section 12.03, the Company
shall not be required to make any adjustment of the Conversion Price
unless such adjustment would require an increase or decrease of at
least 1% of such price. Any lesser adjustment shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least 1%
in such price. Any adjustments under this Section 12.03 shall be made
successively whenever an event requiring such an adjustment occurs.
(7) In the event that at any time, as a result of
an adjustment made pursuant to this Section 12.03, the
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Holder of any Security thereafter surrendered for conversion shall
become entitled to receive any shares of stock of or other Marketable
Securities of the Company other than shares of Common Stock or
Marketable Securities into which the Securities originally were
convertible, the Conversion Price of such other shares or Marketable
Securities so receivable upon conversion of any such Security shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to
Common Stock and Marketable Securities contained in subparagraphs (1)
through (6) of this Section 12.03, and the provision of Sections 12.01,
12.02 and 12.04 through 12.09 with respect to the Common Stock or other
Marketable Securities shall apply on like or similar terms to any such
other shares or Marketable Securities and the determination of the
Board of Directors as to any such adjustment shall be conclusive.
(8) No adjustment shall be made pursuant to this Section (i)
if the effect thereof would be to reduce the Conversion Price below the
par value (if any) of the Common Stock or other Marketable Security, if
any, or (ii) subject to 12.03(5) hereof, with respect to any Security
that is converted prior to the time such adjustment otherwise would be
made.
SECTION 12.04. Consolidation or Merger of the Company. In case
of either (a) any consolidation or merger to which the Company is a party, other
than a merger or consolidation in which the Company is the surviving or
continuing corporation and which does not result in a reclassification of, or
change (other than a change in par value or from par value to no par value or
from no par value to par value, as a result of a subdivision or combination) in,
outstanding shares of Common Stock or other Marketable Securities or (b) any
sale or conveyance of all or substantially all of the property and assets of the
Company to another Person, then each Security then Outstanding shall be
convertible from and after such merger, consolidation, sale or conveyance of
property and assets into the kind and amount of shares of stock or other
securities and property (including cash) receivable upon such consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
or other Marketable Securities into which such Securities would have been
converted immediately prior to such consolidation, merger, sale or conveyance,
subject to adjustments which shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Article XII (and assuming such holder of
Common Stock or
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other Marketable Securities failed to exercise his rights of election, if any,
as to the kind or amount of securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance (provided that,
if the kind or amount of securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance is not the same
for each nonelecting share, then the kind and amount of securities, cash or
other property (including cash) receivable upon such consolidation, merger, sale
or conveyance for each nonelecting share, shall be deemed to be the kind and
amount so receivable per share by a plurality of the nonelecting shares or
securities)). The Company shall not enter into any of the transactions referred
to in clause (a) or (b) of the preceding sentence unless effective provision
shall be made so as to give effect to the provisions set forth in this Section
12.04. The provisions of this Section 12.04 shall apply similarly to successive
consolidations, mergers, sales or conveyances.
SECTION 12.05. Notice of Adjustment. Whenever an
adjustment in the Conversion Price with respect to a series
of Securities is required:
(1) the Company shall forthwith place on file with the Trustee
and any Conversion Agent for such Securities a certificate of the
Treasurer of the Company, stating the adjusted Conversion Price
determined as provided herein and setting forth in reasonable detail
such facts as shall be necessary to show the reason for and the manner
of computing such adjustment, such certificate to be conclusive
evidence that the adjustment is correct; and
(2) a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall
forthwith be mailed, first class postage prepaid, by the Company to the
Holders of record of such Outstanding Securities.
SECTION 12.06. Notice in Certain Events. In case:
(1) of a consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the sale or conveyance to another person or entity or
group of persons or entities acting in concert as a partnership,
limited partnership, syndicate or other group (within the meaning of
Rule 13d-3 under the Securities Exchange
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Act of 1934) of all or substantially all of the
property and assets of the Company; or
(2) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(3) of any action triggering an adjustment of the
Conversion Price pursuant to this Article XII;
then, in each case, the Company shall cause to be filed with the Trustee and the
Agent for the applicable Securities, and shall cause to be mailed, first class
postage prepaid, to the Holders of record of applicable Securities, at least
fifteen (15) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of any
distribution or grant of rights or warrants triggering an adjustment to the
Conversion Price pursuant to this Article XII, or, if a record is not to be
taken, the date as of which the holders of record of Common Stock or other
Marketable Securities entitled to such distribution, rights or warrants are to
be determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article XII is expected to
become effective, and the date as of which it is expected that holders of Common
Stock or other Marketable Securities of record shall be entitled to exchange
their Common Stock or other Marketable Securities for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not
affect the legality or validity of the proceedings described in clause (1), (2)
or (3) of this Section.
SECTION 12.07. Company To Reserve Stock or other Marketable
Securities; Registration; Listing. (a) The Company shall at all times reserve
and keep available, free from preemptive rights, out of its authorized but
unissued shares of Common Stock or other Marketable Securities, for the purpose
of effecting the conversion of the Securities, such number of its duly
authorized shares of Common Stock or number or principal amount of other
Marketable Securities as shall from time to time be sufficient to effect the
conversion of all applicable outstanding Securities into such Common Stock or
other Marketable Securities at any time (assuming that, at the time of the
computation of such number of shares or securities, all such Securities would be
held by a single Holder); provided, however, that nothing
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contained herein shall preclude the Company from satisfying its obligations in
respect of the conversion of the Securities by delivery of purchased shares of
Common Stock or other Marketable Securities which are held in the treasury of
the Company. The Company shall from time to time, in accordance with the laws of
the State of Delaware, use its best efforts to cause the authorized amount of
the Common Stock or other Marketable Securities to be increased if the aggregate
of the authorized amount of the Common Stock or other Marketable Securities
remaining unissued and the issued shares of such Common Stock or other
Marketable Securities in its treasury (other than any such shares reserved for
issuance in any other connection) shall not be sufficient to permit the
conversion of all Securities.
(b) If any shares of Common Stock or other Marketable
Securities which would be issuable upon conversion of Securities hereunder
require registration with or approval of any governmental authority before such
shares or securities may be issued upon such conversion, the Company will in
good faith and as expeditiously as possible endeavor to cause such shares or
securities to be duly registered or approved, as the case may be. The Company
will endeavor to list the shares of Common Stock or other Marketable Securities
required to be delivered upon conversion of the Securities prior to such
delivery upon the principal national securities exchange upon which the
outstanding Common Stock or other Marketable Securities is listed at the time of
such delivery.
SECTION 12.08. Taxes on Conversion. The Company shall pay any
and all documentary, stamp or similar issue or transfer taxes that may be
payable in respect of the issue or delivery of shares of Common Stock or other
Marketable Securities on conversion of Securities pursuant hereto. The Company
shall not, however, be required to pay any such tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common
Stock or other Marketable Securities or the portion, if any, of the Securities
which are not so converted in a name other than that in which the Securities so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the Company the amount of
such tax or has established to the satisfaction of the Company that such tax has
been paid.
SECTION 12.09. Conversion After Record Date. If any Securities
are surrendered for conversion subsequent to the record date preceding an
Interest Payment Date but on or prior to such Interest Payment Date (except
Securities called for redemption on a Redemption Date between such
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record date and Interest Payment Date), the Holder of such Securities at the
close of business on such record date shall be entitled to receive the interest
payable on such securities on such Interest Payment Date notwithstanding the
conversion thereof. Securities surrendered for conversion during the period from
the close of business on any record date next preceding any Interest Payment
Date to the opening of business on such Interest Payment Date shall (except in
the case of Securities which have been called for redemption on a Redemption
Date within such period) be accompanied by payment in New York Clearing House
funds or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the Securities being
surrendered for conversion. Except as provided in this Section 12.09, no
adjustments in respect of payments of interest on Securities surrendered for
conversion or any dividends or distributions or interest on the Common Stock or
other Marketable Securities issued upon conversion shall be made upon the
conversion of any Securities.
SECTION 12.10. Corporate Action Regarding Par Value of Common
Stock. Before taking any action which would cause an adjustment reducing the
applicable Conversion Price below the then par value (if any) of the shares of
Common Stock or other Marketable Securities deliverable upon conversion of the
Securities, the Company will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock or other Marketable
Securities at such adjusted Conversion Price.
SECTION 12.11. Company Determination Final. Any
determination that the Company or the Board of Directors must make pursuant to
this Article is conclusive.
SECTION 12.12. Trustee's Disclaimer. The Trustee has no duty
to determine when an adjustment under this Article should be made, how it should
be made or what it should be. The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities. The Trustee shall not be responsible for the Company's failure to
comply with this Article. Each Conversion Agent other than the Company shall
have the same protection under this Section as the Trustee.
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ARTICLE XIII
Guarantees
SECTION 13.01. Guarantees. (a) Each of TBS and TWC irrevocably
and unconditionally guarantees (each, a "Guarantee"), to each Holder of
Securities (including each Holder of Securities issued under the Indenture after
the date of this Indenture) and to the Trustee and its successors and assigns
(i) the full and punctual payment of principal of and interest on the Securities
when due, whether at maturity, by acceleration, by redemption or otherwise, and
all other monetary obligations of the Company under this Indenture (including
obligations to the Trustee) and the Securities and (ii) the full and punctual
performance within applicable grace periods of all other obligations of the
Company under this Indenture and the Securities.
(b) Each of TBS and TWC further agrees that each Guarantee
constitutes a guarantee of payment, performance and compliance and not merely of
collection.
(c) Each of TBS and TWC further agrees to waive presentment
to, demand of payment from and protest to the Company of any of the Guarantees,
and also waives notice of acceptance of its Guarantee and notice of protest for
nonpayment.
(d) The obligation of each of TBS and TWC to make any payment
hereunder may be satisfied by causing the Company to make such payment.
(e) Each of TBS and TWC also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder of Securities in enforcing any of their respective rights under the
Guarantees.
(f) Any term or provision of this Indenture to the contrary
notwithstanding, the maximum aggregate amount of each of the Guarantees of TWC
and TBS shall not exceed the maximum amount that can be guaranteed by the
relevant Guarantor without rendering the relevant Guarantee under this Indenture
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
TIME WARNER INC.,
by
----------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
TIME WARNER COMPANIES, INC.,
by
--------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
TURNER BROADCASTING SYSTEM, INC.,
by
---------------------------
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
<PAGE>
<PAGE>
106
THE CHASE MANHATTAN BANK, as Trustee
by
--------------------------------
Name:
Title:
Attest:
- ---------------------------------
Name:
Title:
<PAGE>
<PAGE>
[Letterhead of]
CRAVATH, SWAINE & MOORE
[New York Office]
January 14, 1998
Time Warner Inc.
Time Warner Companies, Inc.
Turner Broadcasting System, Inc.
Ladies and Gentlemen:
We have acted as counsel for Time Warner Inc., a Delaware corporation
(the "Issuer"), Time Warner Companies, Inc., a Delaware corporation ("TWC") and
Turner Broadcasting System, Inc., a Georgia corporation ("TBS" and, together
with TWC, the "Guarantors"), in connection with the Registration Statement on
Form S-3 (the "Registration Statement") being filed by the Issuer and the
Guarantors with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
(i) the debt securities of the Issuer (the "Debt Securities") and (ii) the
guarantees of the Debt Securities by the Guarantors (the "Guarantees"). The Debt
Securities and the Guarantees will be issued under an Indenture (the
"Indenture"), among the Issuer, the Guarantors and The Chase Manhattan Bank (the
"Trustee"), as Trustee, filed as Exhibit 4.1 to the Registration Statement.
In connection with the foregoing, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate for the purposes of this opinion, including (a) the Certificate of
Incorporation, as amended, of each of the Issuer, TWC and TBS, (b) the By-laws,
as amended, of each of the Issuer, TWC and TBS, (c) the Indenture, (d) the form
of the Debt Securities, (e) the resolutions of the Board of Directors of each of
the Issuer, TWC and TBS authorizing the registration of the Debt Securities and
the Guarantees and
<PAGE>
<PAGE>
2
(f) certain resolutions adopted by the Board of Directors of each of the Issuer,
TWC and TBS.
Based upon the foregoing and subject to the qualifications hereinafter
set forth, we are of opinion that:
1. The Issuer is a corporation validly existing and in good
standing under the laws of State of Delaware.
2. TWC is a corporation validly existing and in good standing
under the laws of the State of Delaware.
3. TBS is a corporation validly existing and in good standing
under the laws of the State of Georgia.
4. The Indenture has been duly authorized, and when executed and
delivered, and the Debt Securities, when duly authorized, issued,
authenticated and delivered in accordance with the terms of the
Indenture, and the Guarantees related thereto, will constitute legal,
valid and binding obligations of the Issuer and the Guarantors,
respectively, entitled to the benefits of the Indenture and
enforceable against the Issuer and the Guarantors, respectively, in
accordance with their respective terms.
The opinion set forth above in paragraph 4 is qualified to the extent
we have assumed the due execution and delivery of the Indenture by the Trustee
pursuant to appropriate corporate authority.
Our opinion set forth above in paragraph 4 is subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors' rights generally from time to time in
effect. The enforceability of the Issuer's and the Guarantors' obligations is
also subject to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing, regardless
of whether such enforceability is considered in a proceeding in equity or at
law.
Our opinion set forth above in paragraphs 3 and 4 in so far as it
involves matters of law of the State of Georgia is qualified to the extent we
have relied upon the opinion dated January 14, 1998, of Louise S. Sams, Esq.,
<PAGE>
<PAGE>
3
Vice President and General Counsel of TBS (the "Sams Opinion"), a copy of which
has been delivered to you, and we have assumed, without independent
investigation, the correctness of, and take no responsibility for, the Sams
Opinion.
We are aware that we are referred to under the heading "Legal
Opinions" in the prospectus forming a part of the Registration Statement, and we
hereby consent to such use of our name therein and the filing of this opinion as
Exhibit 5 to the Registration Statement. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act or the Rules and Regulations of
the Commission promulgated thereunder.
Very truly yours,
Time Warner Inc.
Time Warner Companies, Inc.
Turner Broadcasting System, Inc.
75 Rockefeller Plaza
New York, NY 10019
337A
<PAGE>
<PAGE>
EXHIBIT 12
TIME WARNER INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
------------------------
PRO
FORMA HISTORICAL
------ ----------------
1997(a) 1997 1996
------ ------- -------
(IN MILLIONS, EXCEPT
RATIOS)
<S> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 373 $ 360 $ (172)
Interest expense.......... 742 792 688
Amortization of
capitalized interest.... 17 17 1
Portion of rents
representative of an
interest factor......... 63 63 43
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54
Adjustment for partially
owned subsidiaries and
50% owned companies..... 719 682 594
Undistributed losses of
less than 50% owned
companies............... 16 16 24
------ ------- -------
Total earnings........ $1,984 $ 1,984 $ 1,232
------ ------- -------
------ ------- -------
Fixed charges:
Interest expense.......... $ 742 $ 792 $ 688
Capitalized interest...... 17 17 1
Portion of rents
representative of an
interest factor......... 63 63 43
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54
Adjustment for partially
owned subsidiaries and
50% owned companies..... 504 457 446
------ ------- -------
Total fixed charges... $1,380 $ 1,383 $ 1,232
------ ------- -------
------ ------- -------
Ratio of earnings to fixed
charges..................... 1.4 x 1.4x 1.0x
------ ------- -------
------ ------- -------
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
PRO
FORMA HISTORICAL
------- -------------------------------------------
1996(a) 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items.....$ (117 ) $ 4 $ 2 $ 89 $ 81 $ 320
Interest expense.......... 1,011 968 877 769 698 729
Amortization of
capitalized interest.... 19 6 2 2 -- 19
Portion of rents
representative of an
interest factor......... 86 63 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 844 801 691 665 663 97
Undistributed losses of
less than 50% owned
companies............... 46 52 117 82 47 56
------- ------- ------- ------- ------- -------
Total earnings........$1,961 $ 1,966 $ 1,757 $ 1,659 $ 1,543 $ 1,306
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Fixed charges:
Interest expense..........$1,011 $ 968 $ 877 $ 769 $ 698 $ 729
Capitalized interest...... 23 7 4 2 -- 15
Portion of rents
representative of an
interest factor......... 86 63 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 668 607 697 668 664 81
------- ------- ------- ------- ------- -------
Total fixed charges...$1,860 $ 1,717 $ 1,646 $ 1,491 $ 1,416 $ 910
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Ratio of earnings to fixed
charges..................... 1.1 x 1.1x 1.1x 1.1x 1.1x 1.4x
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
</TABLE>
- ------------
(a) The pro forma ratio of earnings to fixed charges for the Issuer for the
nine months ended September 30, 1997 and the year ended December 31, 1996
gives effect to (i) the TWE-A/N Transfers and (ii) with respect to 1996
only, the TBS Transaction, the Preferred Stock Refinancing and certain
other debt refinancings as if such transactions had occurred at the
beginning of such periods. The pro forma information presented above should
be read in conjunction with the pro forma consolidated condensed financial
statements contained in the Issuer's Current Report on Form 8-K dated
November 13, 1997 and incorporated herein by reference.
<PAGE>
<PAGE>
EXHIBIT 12.1
TIME WARNER COMPANIES, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
------------------------
PRO
FORMA HISTORICAL
------ ----------------
1997(a) 1997 1996
------ ------- -------
(IN MILLIONS, EXCEPT
RATIOS)
<S> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 282 $ 269 $ (172)
Interest expense.......... 643 693 688
Amortization of
capitalized interest.... 1 1 1
Portion of rents
representative of an
interest factor......... 41 41 43
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54
Adjustment for partially
owned subsidiaries and
50% owned companies..... 719 682 594
Undistributed losses of
less than 50% owned
companies............... 10 10 24
------ ------- -------
Total earnings........ $1,750 $ 1,750 $ 1,232
------ ------- -------
------ ------- -------
Fixed charges:
Interest expense.......... $ 643 $ 693 $ 688
Capitalized interest...... -- -- 1
Portion of rents
representative of an
interest factor......... 41 41 43
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54
Adjustment for partially
owned subsidiaries and
50% owned companies..... 504 457 446
------ ------- -------
Total fixed charges... $1,242 $ 1,245 $ 1,232
------ ------- -------
------ ------- -------
Ratio of earnings to fixed
charges..................... 1.4 x 1.4x 1.0x
------ ------- -------
------ ------- -------
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
PRO
FORMA HISTORICAL
------- -------------------------------------------
1996(a) 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items.....$ 45 $ (15) $ 2 $ 89 $ 81 $ 320
Interest expense.......... 805 908 877 769 698 729
Amortization of
capitalized interest.... 2 2 2 2 -- 19
Portion of rents
representative of an
interest factor......... 55 55 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 844 801 691 665 663 97
Undistributed losses of
less than 50% owned
companies............... 50 50 117 82 47 56
------- ------- ------- ------- ------- -------
Total earnings........$1,873 $ 1,873 $ 1,757 $ 1,659 $ 1,543 $ 1,306
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Fixed charges:
Interest expense..........$ 805 $ 908 $ 877 $ 769 $ 698 $ 729
Capitalized interest...... 1 1 4 2 -- 15
Portion of rents
representative of an
interest factor......... 55 55 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 668 607 697 668 664 81
------- ------- ------- ------- ------- -------
Total fixed charges...$1,601 $ 1,643 $ 1,646 $ 1,491 $ 1,416 $ 910
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Ratio of earnings to fixed
charges..................... 1.2 x 1.1x 1.1x 1.1x 1.1x 1.4x
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
</TABLE>
- ------------
(a) The pro forma ratio of earnings to fixed charges for TWC for the nine
months ended September 30, 1997 and the year ended December 31, 1996 gives
effect to (i) the TWE-A/N Transfers and (ii) with respect to 1996 only, the
Preferred Stock Refinancing and certain other debt refinancings as if such
transactions had occurred at the beginning of such periods. The pro forma
information presented above should be read in conjunction with the pro
forma consolidated condensed financial statements contained in the Issuer's
Current Report on Form 8-K dated November 13, 1997 and incorporated herein
by reference.
<PAGE>
<PAGE>
EXHIBIT 12.2
TURNER BROADCASTING SYSTEM, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS NINE MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1997 1996 1996
------------- ------------- -------------
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 143 $ 42 $ (42)
Interest expense.......... 153 60 141
Amortization of
capitalized interest.... 15 5 13
Portion of rents
representative of an
interest factor......... 23 8 23
Adjustment for partially
owned subsidiaries and
50% owned companies..... -- -- --
Undistributed losses of
less than 50% owned
companies............... 6 2 1
----- ----- -----
Total earnings........ $ 340 $ 117 $ 136
----- ----- -----
----- ----- -----
Fixed charges:
Interest expense.......... $ 153 $ 60 $ 141
Capitalized interest...... 16 6 16
Portion of rents
representative of an
interest factor......... 23 8 23
Adjustment for partially
owned subsidiaries and
50% owned companies..... -- -- --
----- ----- -----
Total fixed charges... $ 192 $ 74 $ 180
----- ----- -----
----- ----- -----
Ratio of earnings to fixed
charges
(deficiency in the coverage
of fixed charges by earnings
before fixed charges)(a).... 1.8x 1.6x $ (44)
----- ----- -----
----- ----- -----
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1995 1994 1993 1992
---- ---- ---- ----
<S> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items.....$173 $ 79 $121 $100
Interest expense.......... 209 219 195 201
Amortization of
capitalized interest.... 11 7 -- --
Portion of rents
representative of an
interest factor......... 31 30 26 22
Adjustment for partially
owned subsidiaries and
50% owned companies..... -- -- -- 9
Undistributed losses of
less than 50% owned
companies............... 16 15 16 --
---- ---- ---- ----
Total earnings........$440 $350 $358 $332
---- ---- ---- ----
---- ---- ---- ----
Fixed charges:
Interest expense..........$209 $219 $195 $201
Capitalized interest...... 15 14 -- --
Portion of rents
representative of an
interest factor......... 31 30 26 22
Adjustment for partially
owned subsidiaries and
50% owned companies..... -- -- -- 9
---- ---- ---- ----
Total fixed charges...$255 $263 $221 $232
---- ---- ---- ----
---- ---- ---- ----
Ratio of earnings to fixed
charges
(deficiency in the coverage
of fixed charges by earnings
before fixed charges)(a).... 1.7x 1.3x 1.6x 1.4x
---- ---- ---- ----
---- ---- ---- ----
</TABLE>
- ------------
(a) TBS became a wholly owned subsidiary of the Issuer on October 10, 1996
through a merger with a subsidiary of the Issuer in connection with the TBS
Transaction. The ratios of earnings to fixed charges of TBS for all
post-merger periods have been adjusted to reflect the Issuer's basis of
accounting. The ratios of earnings to fixed charges (or coverage
deficiencies) of TBS for all pre-merger periods are reflected at TBS's
historical cost basis of accounting. Certain reclassifications have been
made to TBS's ratios of earnings to fixed charges for pre-merger periods to
conform to the post-merger presentation.
<PAGE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the caption 'Experts' in the
Registration Statement on Form S-3 and related Prospectus of Time Warner Inc.
(the 'Issuer') for the registration of $1,000,000,000 of Debt Securities of the
Issuer unconditionally guaranteed by Time Warner Companies, Inc. and Turner
Broadcasting System, Inc. and to the incorporation by reference therein of (i)
our reports dated February 11, 1997, with respect to the consolidated financial
statements and schedules of the Issuer and Time Warner Entertainment Company,
L.P., and our report dated March 3, 1995 with respect to the combined financial
statements of the Time Warner Service Partnerships, incorporated by reference
from the Issuer's Annual Report on Form 10-K for the year ended December 31,
1996, as amended by the Issuer's Forms 10-K/A dated March 27, 1997 and June 26,
1997, and (ii) our report dated March 8, 1996, with respect to the consolidated
financial statements and schedule of Cablevision Industries Corporation and
Subsidiaries, from the Issuer's Current Report on Form 8-K dated November 13,
1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
January 9, 1998
<PAGE>
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
Registration Statement on Form S-3 for the registration under the Securities Act
of 1933, as amended, of Debt Securities of Time Warner Inc. unconditionally
guaranteed by Time Warner Companies, Inc., and Turner Broadcasting System, Inc.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
January 9, 1998
<PAGE>
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Time Warner Inc. (the 'Issuer') related to the
registration of Debt Securities of the Issuer unconditionally guaranteed by Time
Warner Companies, Inc. and Turner Broadcasting System, Inc. of our report on the
Paragon Communications financial statements and schedule dated January 19, 1995,
except as to Note 6, which is as of January 27, 1995, which is incorporated by
reference in the Issuer's Annual Report on Form 10-K for the year ended December
31, 1996. We also consent to the reference to us under the heading 'Experts' in
such Registration Statement.
PRICE WATERHOUSE LLP
Denver, Colorado
January 9, 1998
<PAGE>
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Time Warner Inc.
(the 'Issuer') related to the registration of Debt Securities of the Issuer
unconditionally guaranteed by Time Warner Companies, Inc. and Turner
Broadcasting System, Inc. of our report dated February 5, 1996, which appears on
page 53 of Turner Broadcasting System, Inc.'s 1995 Annual Report to
Shareholders, which is incorporated by reference in Turner Broadcasting System,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995, which is
incorporated by reference in the Current Report on Form 8-K of Time Warner Inc.
dated November 13, 1997, which is incorporated by reference in the Prospectus.
We also consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page 43 of such Annual Report on Form 10-K.
We also consent to the reference to us under the heading 'Experts' in such
Prospectus.
PRICE WATERHOUSE LLP
Atlanta, Georgia
January 9, 1998
<PAGE>
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of TIME WARNER INC., a Delaware corporation (the 'Corporation'),
hereby constitutes and appoints RICHARD J. BRESSLER, PETER R. HAJE, JOHN A.
LABARCA, GERALD M. LEVIN, PHILIP R. LOCHNER, JR. and RICHARD D. PARSONS, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power to act without the others, for him or her and in his or her name, place
and stead, in any and all capacities, to sign Registration Statements on Form
S-3 or other appropriate form and any and all amendments to such Registration
Statements (including post-effective amendments), to be filed with the
Securities and Exchange Commission in connection with (a) the 'shelf'
registration pursuant to Rule 415 under the provisions of the Securities Act of
1933, as amended, of securities of up to $1 billion aggregate initial offering
price of one or more of the following (i) debt securities issued by the
Corporation, (ii) securities of the Corporation convertible into shares of
Common Stock, par value $.01 per share ('Common Stock'), of the Corporation,
(iii) rights or warrants to acquire any such debt or Common Stock and (iv) other
securities of the Corporation, in any combination thereof, and (b) the
registration of shares of Common Stock issuable upon conversion of the debt
securities or upon exercise of the rights or warrants referred to above, with
power where appropriate to affix thereto the corporate seal of the Corporation
and to attest said seal, and to file such Registration Statements, including in
each case a form of prospectus, and any and all amendments and post-effective
amendments to such Registration Statements, and any subsequent registration
statement filed by the Corporation pursuant to Rule 462(b) of the Securities Act
of 1933, as amended, with all exhibits thereto, and any and all documents in
connection therewith, with the Securities and Exchange Commission, hereby
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her
name as of the 6th day of January, 1998.
<TABLE>
<S> <C>
(i) Principal Executive Officer:
/S/ GERALD M. LEVIN
.....................................................
GERALD M. LEVIN,
DIRECTOR, CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
(ii) Principal Financial Officer:
/S/ RICHARD J. BRESSLER
.....................................................
RICHARD J. BRESSLER,
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(iii) Principal Accounting Officer:
/S/ JOHN A. LABARCA
.....................................................
JOHN A. LABARCA,
SENIOR VICE PRESIDENT AND CONTROLLER
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C>
(iv) Directors:
/S/ MERV ADELSON /S/ J. CARTER BACOT
..................................................... ......................................................
MERV ADELSON, J. CARTER BACOT,
DIRECTOR DIRECTOR
/S/ STEPHEN F. BOLLENBACH /S/ BEVERLY SILLS GREENOUGH
..................................................... ......................................................
STEPHEN F. BOLLENBACH, BEVERLY SILLS GREENOUGH,
DIRECTOR DIRECTOR
/S/ GERALD GREENWALD /S/ CARLA A. HILLS
..................................................... ......................................................
GERALD GREENWALD, CARLA A. HILLS,
DIRECTOR DIRECTOR
/S/ REUBEN MARK /S/ MICHAEL A. MILES
..................................................... ......................................................
REUBEN MARK, MICHAEL A. MILES,
DIRECTOR DIRECTOR
/S/ RICHARD D. PARSONS /S/ DONALD S. PERKINS
..................................................... ......................................................
RICHARD D. PARSONS, DONALD S. PERKINS,
DIRECTOR AND PRESIDENT DIRECTOR
/S/ RAYMOND S. TROUBH /S/ R. E. TURNER
..................................................... ......................................................
RAYMOND S. TROUBH, R. E. TURNER,
DIRECTOR DIRECTOR
/S/ FRANCIS T. VINCENT, JR.
.....................................................
FRANCIS T. VINCENT, JR.,
DIRECTOR
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of TIME WARNER COMPANIES, INC., a Delaware corporation (the
'Corporation'), hereby constitutes and appoints RICHARD J. BRESSLER, PETER R.
HAJE, JOHN A. LABARCA, GERALD M. LEVIN, PHILIP R. LOCHNER, JR. and RICHARD D.
PARSONS, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power to act without the others, for him or her and in his or
her name, place and stead, in any and all capacities, to sign Registration
Statements on Form S-3 or other appropriate form and any and all amendments to
such Registration Statements (including post-effective amendments), to be filed
with the Securities and Exchange Commission in connection with the 'shelf'
registration pursuant to Rule 415 under the provisions of the Securities Act of
1933, as amended, of guarantees of up to $1 billion aggregate initial offering
price of one or more of the following (i) debt securities issued by Time Warner
Inc., a Delaware corporation and parent of the Corporation ('TWI'), (ii)
securities of TWI convertible into shares of Common Stock, par value $.01 per
share ('Common Stock'), of TWI, (iii) rights or warrants to acquire any such
debt or Common Stock and (iv) other securities of TWI, in any combination
thereof, with power where appropriate to affix thereto the corporate seal of the
Corporation and to attest said seal, and to file such Registration Statements,
including in each case a form of prospectus, and any and all amendments and
post-effective amendments to such Registration Statements, and any subsequent
registration statement filed by the Corporation pursuant to Rule 462(b) of the
Securities Act of 1933, as amended, with all exhibits thereto, and any and all
documents in connection therewith, with the Securities and Exchange Commission,
hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her
name as of the 12th day of January, 1998.
<TABLE>
<S> <C>
(i) Principal Executive Officer:
/s/ GERALD M. LEVIN
.................................................
GERALD M. LEVIN,
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
(ii) Principal Financial Officer:
/s/ RICHARD J. BRESSLER
.................................................
RICHARD J. BRESSLER,
DIRECTOR, SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(iii) Principal Accounting Officer:
/s/ JOHN A. LABARCA
.................................................
JOHN A. LABARCA,
SENIOR VICE PRESIDENT AND CONTROLLER
(iv) Directors:
/S/ PETER R. HAJE /s/ RICHARD D. PARSONS
..................................................... ......................................................
PETER R. HAJE, RICHARD D. PARSONS,
DIRECTOR DIRECTOR
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of TURNER BROADCASTING SYSTEM, INC., a Georgia corporation (the
'Corporation'), hereby constitutes and appoints PETER R. HAJE, SPENCER B. HAYS,
LANDEL C. HOBBS, THOMAS W. MCENERNEY, TERENCE F. MCGUIRK, WAYNE H. PACE and
LOUISE S. SAMS, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power to act without the others, for him or her and in his
or her name, place and stead, in any and all capacities, to sign Registration
Statements on Form S-3 or other appropriate form and any and all amendments to
any such Registration Statements (including post-effective amendments), to be
filed with the Securities and Exchange Commission in connection with the 'shelf'
registration pursuant to Rule 415 under the provisions of the Securities Act of
1933, as amended, of guarantees of up to $1 billion aggregate initial offering
price of one or more of the following (i) debt securities issued by Time Warner
Inc., a Delaware corporation and parent of the Corporation ('TWI'), (ii)
securities of TWI convertible into shares of Common Stock, par value $.01 per
share ('Common Stock'), of TWI, (iii) rights or warrants to acquire any such
debt or Common Stock and (iv) other securities of TWI, in any combination
thereof, with power where appropriate to affix thereto the corporate seal of the
Corporation and to attest said seal, and to file such Registration Statements,
including in each case a form of prospectus, and any and all amendments and
post-effective amendments to such Registration Statements, and any subsequent
registration statement filed by the Corporation pursuant to Rule 462(b) of the
Securities Act of 1933, as amended, with all exhibits thereto, and any and all
documents in connection therewith, with the Securities and Exchange Commission,
hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her
name as of the 7th day of January, 1998.
<TABLE>
<S> <C>
(i) Principal Executive Officer:
/S/ TERENCE F. MCGUIRK
.................................................
TERENCE F. MCGUIRK,
DIRECTOR, PRESIDENT AND CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD
(ii) Principal Financial Officer:
/S/ WAYNE H. PACE
.................................................
WAYNE H. PACE,
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER
AND ADMINISTRATIVE OFFICER
(iii) Principal Accounting Officer:
/S/ LANDEL C. HOBBS
.................................................
LANDEL C. HOBBS,
VICE PRESIDENT, CONTROLLER AND
CHIEF ACCOUNTING OFFICER
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<S> <C>
(iv) Directors:
/S/ JEFFREY L. BEWKES /S/ RICHARD D. PARSONS
................................................. ......................................................
JEFFREY L. BEWKES, RICHARD D. PARSONS
DIRECTOR DIRECTOR
/S/ W. THOMAS JOHNSON /S/ ROBERT SHAYE
................................................. ......................................................
W. THOMAS JOHNSON, ROBERT SHAYE,
DIRECTOR DIRECTOR
/S/ GERALD M. LEVIN /S/ R. E. TURNER
................................................. ......................................................
GERALD M. LEVIN, R. E. TURNER,
DIRECTOR DIRECTOR
</TABLE>
<PAGE>
<PAGE>
-------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
TIME WARNER INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-3527249
(State other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
75 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019
(Address of principal executive Offices)
TIME WARNER COMPANIES, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-1388520
(State other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
75 ROCKEFELLER PLAZA 10019
NEW YORK, NEW YORK (Zip Code)
(Address of principal executive offices)
TURNER BROADCASTING SYSTEM, INC.
(Exact name of obligor as specified in its charter)
GEORGIA 58-0958695
(State other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
ONE CNN CENTER
ATLANTA, GEORGIA 30303
(Address of principal executive offices) (Zip Code)
-----------------------------------------
DEBT SECURITIES AND GUARANTEES OF DEBT SECURITIES
(Title of the indenture securities)
---------------------------------------------
<PAGE>
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE>
<PAGE>
-3-
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 13th day of January, 1998.
THE CHASE MANHATTAN BANK
By /s/ R. Lorenzen
---------------------------
R. Lorenzen
Senior Trust Officer
<PAGE>
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ......................................... $ 11,760
Interest-bearing balances ................................. 4,343
Securities:
Held to maturity securities ................................... 2,704
Available for sale securities ................................. 37,885
Federal funds sold and securities purchased under
agreements to resell ........................................ 27,358
Loans and lease financing receivables:
Loans and leases, net of unearned income ........ $127,370
Less: Allowance for loan and lease losses ....... 2,760
Less: Allocated transfer risk reserve ........... 13
--------
Loans and leases, net of unearned income,
allowance, and reserve .................................. 124,597
Trading Assets ................................................ 64,630
Premises and fixed assets (including capitalized
leases) .................................................... 2,925
Other real estate owned ....................................... 286
Investments in unconsolidated subsidiaries and
associated companies ....................................... 232
Customers' liability to this bank on acceptances
outstanding ................................................ 2,212
Intangible assets ............................................. 1,480
Other assets .................................................. 11,117
--------
TOTAL ASSETS .................................................. $291,529
========
</TABLE>
-4-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ........................................ $ 86,574
Noninterest-bearing ............................. $ 31,818
Interest-bearing ................................ 54,756
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .................................................. 69,887
Noninterest-bearing ............................. $ 3,777
Interest-bearing ................................ 66,110
Federal funds purchased and securities sold under
agreements to repurchase ....................................... 45,307
Demand notes issued to the U.S. Treasury ....................... 161
Trading liabilities ............................................ 47,406
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less .............. 4,578
With a remaining maturity of more than one year
through three years ................................. 261
With a remaining maturity of more than three years ....... 131
Bank's liability on acceptances executed and outstanding ....... 2,212
Subordinated notes and debentures .............................. 5,715
Other liabilities .............................................. 12,355
TOTAL LIABILITIES .............................................. 274,587
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus .................. 0
Common stock ................................................... 1,211
Surplus (exclude all surplus related to preferred stock) ...... 10,294
Undivided profits and capital reserves ......................... 5,414
Net unrealized holding gains (losses)
on available-for-sale securities ............................... 7
Cumulative foreign currency translation adjustments ............ 16
TOTAL EQUITY CAPITAL ........................................... 16,942
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................... $291,529
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
<PAGE>
