<PAGE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 5, 1998
REGISTRATION NO.
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TIME WARNER COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
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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
</TABLE>
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
TIME WARNER INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
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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
</TABLE>
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
TURNER BROADCASTING SYSTEM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
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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
</TABLE>
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PETER R. HAJE, ESQ.
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:
WILLIAM P. ROGERS, JR., ESQ. LOUISE S. SAMS, ESQ.
CRAVATH, SWAINE & MOORE VICE PRESIDENT AND GENERAL COUNSEL
825 EIGHTH AVENUE TURNER BROADCASTING SYSTEM, INC.
NEW YORK, NEW YORK 10019 ONE CNN CENTER
(212) 474-1000 ATLANTA, GEORGIA 30303
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. [ ] . . . . . . .
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED DEBENTURE(1) OFFERING PRICE(1) FEE
<S> <C> <C> <C> <C>
6.95% Debentures Due 2028.............................. $500,000,000 100% $500,000,000 $0(2)
Guarantees of 6.95% Debentures Due 2028(3)............. $500,000,000 N/A N/A N/A(4)
</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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
PURSUANT TO RULE 429 OF THE GENERAL RULES AND REGULATIONS UNDER THE
SECURITIES ACT OF 1933, THE PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT
IS A COMBINED PROSPECTUS WHICH ALSO RELATES TO REGISTRATION STATEMENT NOS.
333-37827 AND 333-32813, PREVIOUSLY FILED BY TIME WARNER COMPANIES, INC. AND
TIME WARNER INC. ON FORM S-3. THIS REGISTRATION STATEMENT ALSO CONSTITUTES A
POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT NOS. 333-37827 AND 333-32813,
AND SUCH POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY
WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION
8(c) OF THE SECURITIES ACT OF 1933.
________________________________________________________________________________
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<PAGE>
(footnotes from previous page)
(1) Estimated solely for purposes of calculating the registration fee.
(2) Time Warner Companies, Inc. previously paid $287,879 of registration fees in
connection with its Registration Statement on Form S-3 (File No. 333-37827),
registering $950,000,000 of Debt Securities, none of which have been issued
or sold. Pursuant to Rule 429, Time Warner Companies, Inc. is hereby
applying $151,516 of those registration fees toward the payment in full of
the registration fees due under this Registration Statement on Form S-4.
(3) Time Warner Inc. and Turner Broadcasting System, Inc. will irrevocably and
unconditionally guarantee on an unsecured senior basis the 6.95% Debentures
Due 2028 of Time Warner Companies, Inc.
(4) Pursuant to Rule 457(n), no separate fee is required to be paid in respect
of guarantees of the 6.95% Debentures Due 2028, which are being registered
concurrently.
<PAGE>
<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1998
PROSPECTUS
EXCHANGE OFFER FOR ALL OUTSTANDING
6.95% DEBENTURES DUE 2028
OF
TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC.
AND
TURNER BROADCASTING SYSTEM, INC.
------------------------
THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME ON
, 1998, UNLESS EXTENDED.
------------------------
Time Warner Companies, Inc., a Delaware corporation ('TWC'), hereby offers
(the 'Exchange Offer'), upon the terms and subject to the conditions set forth
in this Prospectus and the accompanying Letter of Transmittal (the 'Letter of
Transmittal'), to exchange up to $500,000,000 aggregate principal amount of its
6.95% Debentures Due 2028 (the 'Exchange Debentures') that have been registered
under the Securities Act of 1933, as amended (the 'Securities Act'), pursuant to
a Registration Statement (as defined herein) of which this Prospectus
constitutes a part, for a like principal amount of its outstanding 6.95%
Debentures Due 2028 (the 'Outstanding Debentures' and, together with the
Exchange Debentures, the 'Debentures') with the holders thereof. The terms of
the Exchange Debentures are identical in all material respects to the
Outstanding Debentures except for certain transfer restrictions and registration
rights relating to the Outstanding Debentures and except that, if TWC has not
filed a Registration Statement covering the Exchange Debentures, caused such
registration statement to become effective and consummated the Exchange Offer or
caused a Shelf Registration Statement (as defined herein) with respect to
resales of the Outstanding Debentures to be declared effective within certain
time periods, then Additional Interest (as defined herein) on the Outstanding
Debentures will be payable until the consummation of the Exchange Offer or the
effectiveness of the Shelf Registration Statement. The Outstanding Debentures
were issued on January 12, 1998, pursuant to an offering (the 'Original
Offering') exempt from registration under the Securities Act. The initial price
of the Outstanding Debentures was 98.918% of the principal amount.
Interest on the Exchange Debentures is payable semi-annually on January 15
and July 15 of each year, commencing July 15, 1998, at a rate of 6.95% per
annum. The Exchange Debentures are not redeemable prior to maturity and do not
have the benefit of a sinking fund.
The Exchange Debentures will be unconditionally guaranteed (the
'Guarantees') by Time Warner Inc. and Turner Broadcasting System, Inc.
(collectively, the 'Guarantors'). The Exchange Debentures and the Guarantees
will be general, unsecured senior obligations of TWC and the Guarantors,
respectively, ranking pari passu in right of payment with all existing and
future unsecured unsubordinated obligations, and senior in right of payment to
all existing and future subordinated indebtedness of TWC and the Guarantors,
respectively.
TWC will accept for exchange any and all Outstanding Debentures that are
validly tendered and not withdrawn on or prior to midnight, New York City time,
on the date the Exchange Offer expires (the 'Expiration Date'), which will be
, 1998 ( business days following the commencement of the Exchange
Offer), unless the Exchange Offer is extended. Tenders of Outstanding Debentures
may be withdrawn at any time prior to midnight, New York City time, on the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
principal amount of Outstanding Debentures being tendered for exchange.
Outstanding Debentures may be tendered only in integral multiples of $1,000. See
'The Exchange Offer.'
(cover continued on next page)
- ----------------------------------------------------------
SEE 'CERTAIN FACTORS' BEGINNING ON PAGE 17 OF THIS PROSPECTUS FOR A
DESCRIPTION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER
THEIR OUTSTANDING DEBENTURES IN THE EXCHANGE OFFER.
------------------------
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 DATE OF THIS PROSPECTUS IS , 1998.
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 ANY SUCH STATE.
<PAGE>
<PAGE>
(cover continued from previous page)
For each Outstanding Debenture accepted for exchange, the holder of such
Outstanding Debenture will receive an Exchange Debenture having a principal
amount equal to that of the surrendered Outstanding Debenture. Holders whose
Outstanding Debentures are accepted for exchange will not receive accrued
interest thereon on the date of exchange. Instead, interest on the Exchange
Debentures will accrue from the last interest payment date on which interest was
paid on the Outstanding Debentures surrendered in exchange therefor or, if no
interest has been paid on the Outstanding Debentures, from January 12, 1998. See
'The Exchange Offer -- Interest on the Exchange Debentures.'
The Exchange Debentures are being offered hereunder in order to satisfy
certain obligations of TWC contained in the Registration Rights Agreement (as
defined herein). See 'The Exchange Offer -- Consequences of Exchanging
Outstanding Debentures' for a discussion of TWC's belief, based on
interpretations by the staff of the Securities and Exchange Commission (the
'Commission') as set forth in no-action letters issued to third parties, as to
the transferability of the Exchange Debentures upon satisfaction of certain
conditions. Each broker-dealer that receives Exchange Debentures for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Debentures. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an 'underwriter' within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Debentures received in exchange for Outstanding
Debentures where such Outstanding Debentures were acquired by such broker-dealer
as a result of market-making activities or other trading activities. TWC has
agreed that for a period of 90 days after the Expiration Date, it will make this
Prospectus available to any broker-dealer for use in connection with any resale
of Exchange Debentures. See 'Plan of Distribution.'
Holders whose Outstanding Debentures are not tendered and accepted in the
Exchange Offer will continue to hold such Outstanding Debentures and will be
entitled to all the rights and preferences and will be subject to the
limitations applicable thereto under the indenture governing the Outstanding
Debentures and the Exchange Debentures. FOLLOWING CONSUMMATION OF THE EXCHANGE
OFFER, THE HOLDERS OF OUTSTANDING DEBENTURES WILL CONTINUE TO BE SUBJECT TO THE
EXISTING RESTRICTIONS UPON TRANSFER THEREOF AND, EXCEPT AS PROVIDED HEREIN, TWC
WILL HAVE NO FURTHER OBLIGATION TO SUCH HOLDERS TO PROVIDE FOR THE REGISTRATION
UNDER THE SECURITIES ACT OF THE OUTSTANDING DEBENTURES HELD BY THEM.
There is no established trading market for the Exchange Debentures. TWC
does not currently intend to list the Exchange Debentures on any securities
exchange or to seek approval for quotation through any automated quotation
system. Accordingly, there can be no assurance as to the development or
liquidity of any market for the Exchange Debentures, or the ability of holders
of the Exchange Debentures to sell their Exchange Debentures or the price at
which such holders may be able to sell their Exchange Debentures. Morgan Stanley
& Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc.
(collectively, the 'Placement Agents') have advised TWC that they currently
intend to make a market in the Exchange Debentures. The Placement Agents are not
obligated to do so, however, and any market-making with respect to the Exchange
Debentures may be discontinued at any time without notice.
TWC will pay all of the expenses incident to the Exchange Offer. In the
event TWC terminates the Exchange Offer and does not accept for exchange any
Outstanding Debentures, TWC will promptly return the Outstanding Debentures to
the holders thereof. See 'The Exchange Offer.'
------------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
DEBENTURES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE 'PLAN OF DISTRIBUTION'.
2
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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Available Information...................................................................................... 3
Information Incorporated by Reference...................................................................... 4
Prospectus Summary......................................................................................... 5
TWC and the Guarantors..................................................................................... 11
Certain Factors............................................................................................ 13
Selected Historical and Pro Forma Financial Information.................................................... 15
Ratio of Earnings to Fixed Charges......................................................................... 18
The Exchange Offer......................................................................................... 20
Use of Proceeds............................................................................................ 26
Description of the Debentures and the Guarantees........................................................... 27
Registration Rights Agreement for Outstanding Debentures................................................... 34
Holding Company Structure.................................................................................. 35
Certain United States Federal Income Tax Considerations.................................................... 36
Plan of Distribution....................................................................................... 37
Legal Matters.............................................................................................. 38
Experts.................................................................................................... 38
</TABLE>
------------------------
Each of TWC and Turner Broadcasting System, Inc. ('TBS') is a wholly-owned
subsidiary of Time Warner Inc. ('TWI'). The principal executive offices of TWC
and TWI are located at 75 Rockefeller Plaza, New York, NY 10019, and the
telephone number of each is (212) 484-8000. TBS's principal executive offices
are located at One CNN Center, Atlanta, GA 30303 and its telephone number is
(404) 827-1700. TWI's common stock is listed on the New York Stock Exchange
under the symbol 'TWX.'
AVAILABLE INFORMATION
TWC and TBS are not required to file periodic reports and other information
under the Securities Exchange Act of 1934 (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 TWI. TWI is subject to the
informational requirements of the Exchange Act and, in accordance therewith,
files reports, proxy statements and other information with the Commission.
Reports, proxy statements and other information filed by TWI 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 TWI's securities are listed.
This Prospectus constitutes a part of a Registration Statement filed by
TWC, TWI and TBS with the Commission under 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 TWC, TWI and TBS and the Exchange Debentures. 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.
3
<PAGE>
<PAGE>
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission by TWI (File No.
001-12259) are incorporated by reference in this Prospectus:
(a) TWI'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, 'TWI's 1996 Form 10-K');
(b) TWI's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1997, June 30, 1997 and September 30, 1997 (collectively, the 'TWI
10-Qs'); and
(c) TWI's Current Reports on Form 8-K dated March 21, 1997, October
15, 1997, October 27, 1997 and November 13, 1997 (collectively, the 'TWI
8-Ks').
All documents and reports subsequently filed by TWI 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 Exchange Offer 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 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 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.
TWC will furnish without charge to each person, including any beneficial
owner, to whom this Prospectus is 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 this
Prospectus 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.
4
<PAGE>
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information included elsewhere in this
Prospectus.
THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $500 million aggregate
principal amount of Outstanding Debentures for an equal aggregate principal
amount of Exchange Debentures. The Exchange Debentures are obligations of TWC
entitled to the benefits of the Indenture relating to the Outstanding
Debentures. The form and terms of the Exchange Debentures are the same as the
form of the Outstanding Debentures except that the Exchange Debentures have been
registered under the Securities Act, and following the completion of the
Exchange Offer, the Exchange Debentures generally will not be entitled to a
contingent increase in the interest rate otherwise provided under certain
circumstances.
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Securities Offered........................ Up to $500,000,000 aggregate principal amount of 6.95% Debentures Due
2028, which have been registered under the Securities Act. The
terms of the Exchange Debentures are identical in all material
respects to the Outstanding Debentures except for certain transfer
restrictions and registration rights relating to the Outstanding
Debentures and except that, if TWC has not filed a Registration
Statement covering the Exchange Debentures, caused such
registration statement to become effective and consummated the
Exchange Offer or caused a Shelf Registration Statement with
respect to resales of the Outstanding Debentures to be declared
effective within certain time periods, then Additional Interest on
the Outstanding Debentures will be payable until the consummation
of the Exchange Offer or the effectiveness of the Shelf
Registration Statement.
The Exchange Offer........................ $1,000 principal amount of Exchange Debentures will be issued in
exchange for each $1,000 principal amount of Outstanding Debentures
validly tendered pursuant to the Exchange Offer. As of the date
hereof, $500 million in aggregate principal amount of Outstanding
Debentures is outstanding. TWC will issue the Exchange Debentures
to tendering holders of Outstanding Debentures on or promptly after
the Expiration Date.
Expiration of Exchange Offer.............. Midnight, New York City time, on the Expiration Date, unless the
Exchange Offer is extended, in which case the term 'Expiration
Date' means the latest date and time to which the Exchange Offer is
extended. See 'The Exchange Offer -- Terms of the Exchange Offer;
Period for Tendering Outstanding Debentures.'
Conditions to the Exchange Offer.......... The Exchange Offer will not be subject to any conditions, other than
that (i) the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the Commission and (ii)
there is no injunction, order or decree issued by any court or any
governmental agency that would prohibit, prevent or otherwise
materially impair the ability of TWC to proceed with the Exchange
Offer. There
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5
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<TABLE>
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can be no assurance that any such conditions will not occur.
Holders of Outstanding Debentures will have certain rights against
TWC, TWI and TBS under the Registration Rights Agreement should
TWC, TWI and TBS fail to consummate the Exchange Offer. See 'The
Exchange Offer -- Certain Conditions to the Exchange Offer.'
Procedures for Tendering
Outstanding Debentures.................. Each holder of Outstanding Debentures wishing to accept the Exchange
Offer must complete, sign and date the Letter of Transmittal (or a
facsimile thereof or an Agent's Message (as defined below) in lieu
thereof), in accordance with the instructions contained herein and
therein, and mail or otherwise deliver such Letter of Transmittal
(or such facsimile or such Agent's Message), together with any other
required documentation, to The Chase Manhattan Bank in its capacity
as the Exchange Agent at the address set forth herein and therein.
See 'The Exchange Offer -- Procedures for Tendering.'
By executing the Letter of Transmittal or by causing an Agent's
message to be delivered, each holder will represent to TWC, TWI and
TBS that, among other things, (i) the Exchange Debentures acquired
pursuant to the Exchange Offer are being obtained in the ordinary
course of business of the person receiving such Exchange
Debentures, whether or not such person is the holder, (ii) neither
the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of
such Exchange Debentures and (iii) neither the holder nor any such
other person is an 'affiliate,' as defined in Rule 405 under the
Securities Act, of TWC, TWI or TBS, or, if an 'affiliate,' such
holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
The term 'Agent's Message' means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a confirmation
of the book-entry tender of their Outstanding Debentures into the
Exchange Agent's Account at DTC, which states that DTC has received
an express acknowledgment from the tendering participant, which
acknowledgment states that such participant has received and agrees
to be bound by, and makes the representations and warranties
contained in, the Letter of Transmittal and that TWC may enforce
the Letter of Transmittal against such participant.
Special Procedures for Beneficial
Holders................................. Any beneficial holder whose Outstanding Debentures are registered in
the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender in the Exchange Offer should
contact such registered holder promptly and instruct such
registered holder to tender on its behalf. If such beneficial
holder wishes to tender on its own behalf, such beneficial holder
must, prior to completing and executing the Letter of Transmittal
and delivering its Outstanding Debentures, either make appropriate
arrangements to register ownership of the Outstanding Debentures in
such holder's name or obtain a properly completed bond power from
the registered holder. See 'The Exchange Offer -- Procedures for
Tendering.'
Guaranteed Delivery Procedures............ Holders of Outstanding Debentures who wish to tender their
Outstanding Debentures and whose Outstanding Debentures are not
immediately available or who cannot deliver their Outstanding
Debentures (or who cannot complete the procedure for book-entry
transfer on a timely
</TABLE>
6
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<PAGE>
<TABLE>
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basis) and a properly completed Letter of Transmittal or any other
documents required by the Letter of Transmittal to the Exchange
Agent prior to the Expiration Date may tender their Outstanding
Debentures according to the guaranteed delivery procedures set
forth in 'The Exchange Offer -- Guaranteed Delivery Procedures.'
Withdrawal Rights......................... Tenders of Outstanding Debentures may be withdrawn at any time prior
to midnight, New York City time, on the Expiration Date. See 'The
Exchange Offer -- Withdrawal of Tenders.'
Acceptance of Outstanding Debentures and
Delivery of Exchange Debentures......... Subject to certain conditions (as summarized above in 'Conditions to
the Exchange Offer' and described more fully under 'The Exchange
Offer -- Certain Conditions to the Exchange Offer'), TWC will
accept for exchange any and all Outstanding Debentures which are
properly tendered in the Exchange Offer and not validly withdrawn
prior to midnight, New York City time, on the Expiration Date. The
Exchange Debentures issued pursuant to the Exchange Offer will be
delivered promptly following the Expiration Date. See 'The Exchange
Offer -- Terms of the Exchange Offer; Period for Tendering
Outstanding Debentures.'
Certain Tax Considerations................ The exchange pursuant to the Exchange Offer should not be a taxable
event for federal income tax purposes. See 'Certain United States
Federal Income Tax Considerations.'
Exchange Agent............................ The Chase Manhattan Bank, the Trustee under the Indenture (as defined
herein), is serving as exchange agent (the 'Exchange Agent') in
connection with the Exchange Offer. The address of the Exchange
Agent is: 55 Water Street, Room 234, North Building, New York, NY
10041, Attention: Carlos Esteves. For information with respect to
the Exchange Offer, the telephone number for the Exchange Agent is
(212) 638-0828 and the facsimile number for the Exchange Agent is
(212) 638-7375 or (212) 344-9367.
Use of Proceeds........................... There will be no cash proceeds payable to TWC, TWI or TBS from the
issuance of the Exchange Debentures pursuant to the Exchange Offer.
</TABLE>
CONSEQUENCES OF EXCHANGING OUTSTANDING DEBENTURES
Holders of Outstanding Debentures who do not exchange their Outstanding
Debentures for Exchange Debentures pursuant to the Exchange Offer will continue
to be subject to the provisions in the Indenture regarding transfer and exchange
of the Outstanding Debentures and the restrictions on transfer of such
Outstanding Debentures as set forth in the legend thereon as a consequence of
the issuance of the Outstanding Debentures pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities Act
and applicable state securities laws. In general, the Outstanding Debentures may
not be offered or sold, unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. TWC does not currently
anticipate that it will register Outstanding Debentures
7
<PAGE>
<PAGE>
under the Securities Act subsequent to the Exchange Offer. Based on
interpretations by the staff of the Commission, as set forth in no-action
letters issued to third parties, TWC believes that Exchange Debentures issued
pursuant to the Exchange Offer in exchange for Outstanding Debentures may be
offered for resale, resold or otherwise transferred by holders thereof (other
than any such holder which is an 'affiliate' of TWC, TWI or TBS within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such Exchange Debentures are acquired in the ordinary course of such
holders' business and such holders have no arrangement with any person to
participate in the distribution of such Exchange Debentures. However, TWC does
not intend to request the Commission to consider, and the Commission has not
considered, the Exchange Offer in the context of a no-action letter and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer as in such other circumstances.
Each holder, other than a broker-dealer, must acknowledge that (i) the Exchange
Debentures received by such holder will be acquired in the ordinary course of
its business, (ii) at the time of the consummation of the Exchange Offer such
holder will have not engaged in, and does not intend to engage in, a
distribution of Exchange Debentures and has no arrangement or understanding to
participate in a distribution of Exchange Debentures and (iii) such holder is
not an affiliate of TWC, TWI or TBS within the meaning of Rule 405 of the
Securities Act or if it is such an affiliate, that it will comply with the
registration and prospectus delivery requirements of the Securities Act, to the
extent applicable. If any holder is an affiliate of TWC, TWI or TBS or is
engaged in or intends to engage in or has any arrangement or understanding with
respect to the distribution of the Exchange Debentures to be acquired pursuant
to the Exchange Offer, such holder (i) could not rely on the applicable
interpretations of the staff of the Commission and (ii) must comply with the
registration and prospectus delivery requirement of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives
Exchange Debentures for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Debentures. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an 'underwriter' within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Debentures
received in exchange for Outstanding Debentures, where such Outstanding
Debentures were acquired by such broker-dealer as a result of market-making
activities or other trading activities. TWC, TWI and TBS have agreed that, for a
period of 90 days after the Expiration Date, they will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
'Plan of Distribution.' However, to comply with state securities laws, the
Exchange Debentures may not be offered or sold in any state unless they have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with. The offer and
sale of the Exchange Debentures to 'qualified institutional buyers' (as such
term is defined under Rule 144A of the Securities Act) is generally exempt from
registration or qualification under state securities laws. TWC, TWI and TBS
currently do not intend to register or qualify the sale of the Exchange
Debentures in any state where an exemption from registration or qualification is
required and not available. See 'The Exchange Offer -- Consequences of Failure
to Exchange and Requirements for Transfer for Exchange Debentures.'
8
<PAGE>
<PAGE>
SUMMARY DESCRIPTION OF THE EXCHANGE DEBENTURES
The terms of the Exchange Debentures are identical in all material respects
to the terms of the Outstanding Debentures, except for certain transfer
restrictions and registration rights relating to the Outstanding Debentures and
except that, with respect to the Outstanding Debentures, if TWC has
not filed a Registration Statement covering the Exchange Debentures, caused such
registration statement to become effective and consummated the Exchange Offer or
caused a Shelf Registration Statement with respect to resales of the Outstanding
Debentures to be declared effective within certain time periods, then Additional
Interest on the Outstanding Debentures will be payable until the consummation of
the Exchange Offer or the effectiveness of the Shelf Registration Statement. See
'Registration Rights Agreement for Outstanding Debentures.' Holders whose
Outstanding Debentures are accepted for exchange will not receive accrued
interest thereon on the date of exchange. Instead, interest on the Exchange
Debentures will accrue from the last interest payment date on which interest was
paid on the Outstanding Debentures surrendered in exchange therefor, or if no
interest has been paid on the Outstanding Debentures, from January 12, 1998. See
'The Exchange Offer -- Interest on the Exchange Debentures.'
<TABLE>
<S> <C>
Securities Offered........................ $500,000,000 aggregate principal amount of 6.95% Debentures Due 2028,
which have been registered under the Securities Act, issued by TWC.
Interest.................................. Interest on the Debentures is payable semiannually in cash on January
15 and July 15, commencing on July 15, 1998.
Redemption................................ The Debentures are not redeemable prior to maturity and do not have
the benefit of a sinking fund.
Guarantees................................ All payments with respect to the Debentures (including principal and
interest) are unconditionally guaranteed on an unsecured
unsubordinated basis by each of the Guarantors.
Ranking................................... The Debentures are senior indebtedness of TWC, ranking on a parity
with all other unsecured and unsubordinated indebtedness of TWC,
and each Guarantee is a senior obligation of the relevant
Guarantor, ranking on a parity with all other unsecured and
unsubordinated obligations of such Guarantor. See 'Description of
the Debentures and the Guarantees -- Ranking.'
Each of TWC and the Guarantors is a holding company and the
Debentures and the Guarantees are effectively subordinated to all
existing and future liabilities, including indebtedness, of the
consolidated and unconsolidated subsidiaries of TWC and the Guarantors,
respectively. As of September 30, 1997, such subsidiaries had an
aggregate of approximately $20 billion of outstanding liabilities,
including indebtedness. See 'Holding Company Structure.'
Certain Covenants......................... The Indenture contains certain covenants with respect to TWC for the
benefit of the holders of the Debentures, including, among other
things, covenants limiting the incurrence of liens, senior
indebtedness and merger, consolidation and certain sales of assets.
See 'Description of the Debentures and the
Guarantees -- Covenants.'
Book-Entry; Delivery and Form............. The Exchange Debentures will be represented by one permanent global
Exchange Debenture in definitive, fully registered form deposited
with a custodian for, and
</TABLE>
9
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<PAGE>
<TABLE>
<S> <C>
registered in the name of a nominee of, The Depository Trust
Company ('DTC'). See 'Description of the Debentures and the
Guarantees -- Book-Entry; Delivery and Form.'
Absence of Public Market for the Exchange
Debentures.............................. The Exchange Debentures will be new securities for which there
currently is no market. Although the Placement Agents have informed
TWC that they currently intend to make a market in the Exchange
Debentures, they are not obligated to do so, and any such market
making may be discontinued at any time without notice. Accordingly,
there can be no assurance as to the development or liquidity of any
market for the Exchange Debentures. TWC does not intend to apply
for listing of the Exchange Debentures on any securities exchange
or for quotation through the National Association of Securities
Dealers Automated Quotation System.
Exchange Offer; Registration
Rights.................................. Pursuant to the Registration Rights Agreement, TWC, TWI and TBS have
agreed to file, at their cost, a registration statement with
respect to the Exchange Offer. The Registration Statement of which
this Prospectus is a part constitutes the registration statement
for the Exchange Offer. See 'Registration Rights Agreement for
Outstanding Debentures.'
</TABLE>
USE OF PROCEEDS
There will be no cash proceeds to TWC, TWI or TBS from the Exchange Offer.
For a description of the use of proceeds from the Original Offering, see 'Use of
Proceeds'.
CERTAIN FACTORS
For a description of certain factors that should be considered by holders
who tender their Outstanding Debentures in the Exchange Offer, see 'Certain
Factors'.
10
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<PAGE>
TWC AND THE GUARANTORS
TWI, together with its consolidated subsidiaries, including TWC and TBS,
and unconsolidated subsidiaries, is the world's leading media and entertainment
company and 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 TWC, TBS and TWI is a holding company that
derives its operating income and cash flow from its subsidiaries and
investments. The assets of TWI 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 TWC to service its
indebtedness and other liabilities, including the Debentures, and the ability of
TWI and TBS to service their respective indebtedness and other liabilities,
including the Guarantees, are 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. See
'Holding Company Structure.'
TWI became the parent of TWC and TBS on October 10, 1996 upon the merger of
TWC and TBS with separate subsidiaries of TWI (the 'TBS Transaction'), as more
fully described below. In connection therewith, TWI 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 TWC, TWI, TBS and
certain of their wholly owned subsidiaries, among other things: (a) each of TWC
and TBS became a wholly owned subsidiary of TWI through a merger with a
subsidiary of TWI, (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 TWI, (c) each outstanding share of preferred stock of TWC was
converted into one share of a substantially identical series of preferred stock
of TWI, (d) each outstanding share of common stock of TBS, other than shares
held directly or indirectly by TWC or TWI or in the treasury of TBS, was
converted into the right to receive 0.75 shares of common stock of TWI and (e)
each outstanding share of preferred stock of TBS, other than shares held
directly or indirectly by TWC or TWI, was converted into the right to receive
4.8 shares of common stock of TWI. Additional information on the TBS Transaction
is set forth in Note 2 to TWI's consolidated financial statements included in
TWI's 1996 Form 10-K, which is incorporated by reference herein.
RECIPROCAL GUARANTEES OF EXISTING INDEBTEDNESS
In order to integrate TBS into TWI's operating structure and simplify the
credit structure of TWI, 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 investing in the indebtedness of any of the other
companies, TWI, TWC and TBS have entered into the following guarantees of
outstanding publicly traded indebtedness ('Outstanding Securities') of TWC and
TBS:
11
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<PAGE>
TWI, 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 the 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. In addition, it is expected that each of TWC and TBS will
fully and unconditionally guarantee any publicly traded debt securities issued
by TWI in the future (as of the date of this Registration Statement, TWI does
not have any publicly traded indebtedness other than the Downstream Guarantees).
12
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<PAGE>
CERTAIN FACTORS
Prospective holders of the Exchange Debentures should consider carefully
the following factors as well as the other information and data included in this
Prospectus before tendering their Outstanding Debentures in the Exchange Offer.
LACK OF PUBLIC MARKET FOR THE EXCHANGE DEBENTURES
The Outstanding Debentures are currently owned by a small number of
beneficial owners. The Outstanding Debentures have not been registered under the
Securities Act and are subject to significant restrictions on resale. To the
extent that Outstanding Debentures are tendered and accepted in the Exchange
Offer, the trading market for the remaining untendered Outstanding Debentures
could be adversely affected. The Exchange Debentures will be a new issue of
securities for which there is currently no trading market, and there can be no
assurance regarding the future development of a market for the Exchange
Debentures, or the ability of holders of the Exchange Debentures to sell their
Exchange Debentures or the price at which such holders may be able to sell their
Exchange Debentures. Although the Placement Agents have informed TWC that they
currently intend to make a market in the Exchange Debentures, they are not
obligated to do so, and any such market making may be discontinued at any time
without notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the Exchange Debentures. TWC does not intend to
apply for listing of the Exchange Debentures on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System. If the Exchange Debentures are traded after their initial
issuance, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities and
other factors, including general economic conditions and the financial condition
and performance of, and prospects for, TWC, TWI and TBS.
EXCHANGE OFFER PROCEDURES
Issuance of the Exchange Debentures in exchange for Outstanding Debentures
pursuant to the Exchange Offer will be made only after a timely receipt by TWC
of Outstanding Debentures, a properly completed and duly executed Letter of
Transmittal and all other required documents or an Agent's Message in lieu
thereof. Therefore, holders of the Outstanding Debentures desiring to tender
their Outstanding Debentures in exchange for Exchange Debentures should allow
sufficient time to ensure timely delivery. TWC is under no duty to give
notification of defects or irregularities with respect to the tenders of
Outstanding Debentures for exchange. Outstanding Debentures that are not
tendered or are tendered but not accepted will, following the consummation
of the Exchange Offer, continue to be subject to the existing restrictions
on transfer thereof. In addition, any holder of Outstanding Debentures who
tenders in the Exchange Offer for the purpose of participating in a distribution
of the Exchange Debentures may be deemed to have received restricted securities
and, if so, will be required to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. Each broker-dealer that receives Exchange Debentures for its
own account in exchange for Outstanding Debentures, where the Outstanding
Debentures were acquired by the broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of those Exchange
Debentures. See 'Plan of Distribution.'
CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE
DEBENTURES
Holders of Outstanding Debentures who do not exchange their Outstanding
Debentures for Exchange Debentures pursuant to the Exchange Offer will continue
to be subject to the provisions in the Indenture regarding transfer and exchange
of the Outstanding Debentures and the restrictions on transfer of such
Outstanding Debentures as set forth in the legend thereon as a consequence of
the issuance of the Outstanding Debentures pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities Act
and applicable state securities laws. In general, the Outstanding Debentures may
not be offered or sold, unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. TWC does not currently
anticipate that it will register Outstanding Debentures
13
<PAGE>
<PAGE>
under the Securities Act subsequent to the Exchange Offer. Based on
interpretations by the staff of the Commission, as set forth in no-action
letters issued to third parties, TWC believes that Exchange Debentures issued
pursuant to the Exchange Offer in exchange for Outstanding Debentures may be
offered for resale, resold or otherwise transferred by holders thereof (other
than any such holder which is an 'affiliate' of TWC, TWI or TBS within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such Exchange Debentures are acquired in the ordinary course of such
holders' business and such holders have no arrangement with any person to
participate in the distribution of such Exchange Debentures. However, TWC does
not intend to request the Commission to consider, and the Commission has not
considered, the Exchange Offer in the context of a no-action letter and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer as in such other circumstances.
Each holder, other than a broker-dealer, must acknowledge that (i) the Exchange
Debentures received by such holder will be acquired in the ordinary course of
its business, (ii) at the time of the consummation of the Exchange Offer, such
holder will have not engaged in, and does not intend to engage in, a
distribution of Exchange Debentures and has no arrangement or understanding to
participate in a distribution of Exchange Debentures and (iii) such holder is
not an affiliate of TWC, TWI or TBS within the meaning of Rule 405 of the
Securities Act or if it is such an affiliate, that it will comply with the
registration and prospectus delivery requirements of the Securities Act, to the
extent applicable. If any holder is an affiliate of TWC, TWI or TBS or is
engaged in or intends to engage in or has any arrangement or understanding with
respect to the distribution of the Exchange Debentures to be acquired pursuant
to the Exchange Offer, such holder (i) could not rely on the applicable
interpretations of the staff of the Commission and (ii) must comply with the
registration and prospectus delivery requirement of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives
Exchange Debentures for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Debentures. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an 'underwriter' within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Debentures
received in exchange for Outstanding Debentures, where such Outstanding
Debentures were acquired by such broker-dealer as a result of market-making
activities or other trading activities. TWC has agreed that, for a period of 90
days after the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See 'Plan of
Distribution.' However, to comply with state securities laws, the Exchange
Debentures may not be offered or sold in any state unless they have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with. The offer and sale of the
Exchange Debentures to 'qualified institutional buyers' (as such term is defined
under Rule 144A of the Securities Act) is generally exempt from registration or
qualification under state securities laws. TWC currently does not intend to
register or qualify the sale of the Exchange Debentures in any state where an
exemption from registration or qualification is required and not available. See
'The Exchange Offer -- Consequences of Failure to Exchange and Requirements for
Transfer for Exchange Debentures.'
14
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<PAGE>
SELECTED HISTORICAL AND
PRO FORMA FINANCIAL INFORMATION
TWI SELECTED FINANCIAL INFORMATION
The selected historical and pro forma financial information of TWI set
forth below has been derived from and should be read in conjunction with the
consolidated financial statements and other financial information of TWI
contained in (i) TWI's 1996 Form 10-K, (ii) the TWI 10-Qs and (iii) the TWI
8-Ks, each of which is incorporated by reference herein. Capitalized terms are
as defined and described in such consolidated financial statements and in TWI's
Current Report on Form 8-K dated November 13, 1997.
The selected historical financial information for 1996 reflects (a) the
acquisition of the remaining 80% interest in TBS that was not already owned by
TWI (the 'TBS Transaction'), including the assumption of approximately $2.8
billion of indebtedness, (b) 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 and (c) the acquisition of Cablevision
Industries Corporation and related companies, including the assumption or
incurrence of approximately $2 billion of indebtedness. The selected historical
financial information for 1995 reflects (a) the acquisitions 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 selected historical financial information 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 selected
historical financial information for 1992 reflects the capitalization of TWE on
June 30, 1992, using the purchase method of accounting for business
combinations.
Per common share amounts and average common shares have been restated to
give effect to the four-for-one common stock split that occurred on September
10, 1992.
15
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<PAGE>
TIME WARNER INC.
SELECTED HISTORICAL AND
PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------------------- -------------------------------------------------------
PRO PRO
FORMA(a) HISTORICAL FORMA(a) HISTORICAL
-------- --------------- -------- --------------------------------------------
1997 1997 1996 1996 1996 1995 1994 1993 1992
-------- ------ ------ -------- ------- ------ ------ ------ -------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT INFORMATION
Revenues...................................... $9,412 $9,458 $6,364 $12,761 $10,064 $8,067 $7,396 $6,581 $13,070
Depreciation and amortization................. 890 935 677 1,187 988 559 437 424 1,172
Business segment operating income(b).......... 761 802 464 901 966 697 713 591 1,343
Equity in pretax income of
Entertainment Group(c)...................... 517 522 270 268 290 256 176 281 --
Interest and other, net....................... 845 904 854 1,186 1,174 877 724 718 882
Income (loss) before extraordinary item....... 62 54 (215) (269 ) (156) (124) (91) (164) 86
Net income (loss)(d).......................... 38 30 (250) (304 ) (191) (166) (91) (221) 86
Net loss applicable to common shares (after
preferred dividends)........................ (200) (208) (430) (612 ) (448) (218) (104) (339) (542)
Per share of common stock:
Net loss(d)............................... $(0.35) $(0.37) $(1.11) $ (1.08 ) $ (1.04) $(0.57) $(0.27) $(0.90) $(1.46)
Dividends................................. $ 0.27 $ 0.27 $ 0.27 $ 0.36 $ 0.36 $ 0.36 $ 0.35 $ 0.31 $ 0.265
Average common shares......................... 564.4 564.4 388.7 567.3 431.2 383.8 378.9 374.7 371.0
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------- DECEMBER 31,
-----------------------------------------------
PRO
FORMA(a) HISTORICAL HISTORICAL
-------- ---------- -----------------------------------------------
1997 1997 1996 1995 1994 1993 1992
-------- ---------- ------- ------- ------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET INFORMATION
Total assets............................................. $33,537 $ 34,538 $35,064 $22,132 $16,716 $16,892 $27,366
Debt due within one year................................. 8 8 11 34 355 120 171
Long-term debt........................................... 11,472 12,493 12,713 9,907 8,839 9,291 10,068
Borrowings against future stock option proceeds.......... 303 303 488 -- -- -- --
Company-obligated mandatorily redeemable preferred
securities of subsidiaries holding solely subordinated
notes and debentures of subsidiaries of TWI(e)......... 949 949 949 949 -- -- --
Series M exchangeable preferred stock.................... 1,809 1,809 1,672 -- -- -- --
Shareholders' equity:
Preferred stock liquidation preference............... 3,559 3,559 3,559 2,994 140 140 6,532
Equity applicable to common stock.................... 5,971 5,971 5,943 673 1,008 1,230 1,635
Total shareholders' equity....................... 9,530 9,530 9,502 3,667 1,148 1,370 8,167
Total capitalization..................................... 24,071 25,092 25,335 14,557 10,342 10,781 18,406
</TABLE>
- ------------
(a) The selected pro forma financial information as of and for the nine months
ended September 30, 1997 and for the year ended December 31, 1996 gives
effect to (i) the agreed-upon transfer by a wholly owned subsidiary of TWI
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 TBS
Transaction and (b) certain debt refinancings, as if such transactions had
occurred at such date, with respect to balance sheet information, or at the
beginning of such periods with respect to operating statement information.
(b) Business segment operating income for the year ended December 31, 1995
includes $85 million in losses relating to certain businesses and joint
ventures owned by the Music division which were restructured or closed.
(footnotes continued on next page)
16
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<PAGE>
(footnotes continued from previous page)
(c) TWI's equity in the pre-tax income of the Entertainment Group for the nine
months ended September 30, 1997 includes a $250 million pre-tax gain
relating to the sale of TWE's interest in E! Entertainment Television, Inc.
(d) The net income for the nine months ended September 30, 1997 and 1996
includes extraordinary losses on the retirement of debt of $24 million
($.04 per common share) and $35 million ($.09 per common share). The net
loss for the year ended December 31, 1996 includes an extraordinary loss on
the retirement of debt of $35 million ($.09 per common share). The net loss
for the year ended December 31, 1995 includes an extraordinary loss on the
retirement of debt of $42 million ($.11 per common share). The net loss for
the year ended December 31, 1993 includes an extraordinary loss on the
retirement of debt of $57 million ($.15 per common share) and an unusual
charge of $70 million ($.19 per common share) from the effect of the new
income tax law on TWI's deferred income tax liability.
(e) Includes $374 million of preferred securities that were redeemed in
December 1997 for all of TWI's interest in Hasbro, Inc.
ENTERTAINMENT GROUP SELECTED FINANCIAL INFORMATION.
The selected historical and pro forma financial information of the
Entertainment Group set forth below has been derived from and should be read in
conjunction with (i) the consolidated financial statements and other financial
information of TWI and TWE contained in the TWI's 1996 Form 10-K and the TWI
10-Qs and (ii) the consolidated financial statements and other financial
information of TWI and the Entertainment Group contained in the TWI 8-Ks, which
are incorporated herein by reference. Capitalized terms are as defined and
described in such consolidated financial statements and in TWI's Current Report
on Form 8-K dated November 13, 1997. The selected historical financial
information for 1995 reflects the consolidation by TWE of TWE-A/N resulting
from the formation of such partnership, effective as of April 1, 1995, and the
consolidation of Paragon Communications effective as of July 6, 1995. The
selected historical financial information gives effect to the consolidation of
Six Flags Entertainment Corporation ('SFEC') effective as of January 1, 1993 as
a result of an increase in TWE's ownership of SFEC from 50% to 100% in
September 1993 and the subsequent deconsolidation of SFEC resulting from the
disposition by TWE of a 51% interest in SFEC effective as of June 23, 1995.
17
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<PAGE>
ENTERTAINMENT GROUP
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------------- -----------------------------------------------------------
PRO PRO
FORMA(a) HISTORICAL FORMA(a) HISTORICAL
-------- ---------------- -------- -----------------------------------------------
1997 1997 1996 1996 1996 1995 1994 1993 1992
-------- ------ ------ -------- ------- ------ ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT INFORMATION
Revenues..................... $8,236 $8,190 $7,817 $10,899 $10,861 $9,629 $8,509 $7,963 $6,761
Depreciation and
amortization............... 1,072 1,027 908 1,302 1,244 1,060 959 909 788
Business segment operating
income..................... 1,031 990 845 1,128 1,090 992 852 905 814
Interest and other, net(b)... 211 157 369 603 524 539 616 564 531
Income before extraordinary
item....................... 482 487 221 198 220 170 136 217 173
Net income(c)................ 482 487 221 198 220 146 136 207 173
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
---------------------- ---------------------------------------------------
PRO
FORMA(a) HISTORICAL HISTORICAL
-------- ---------- ---------------------------------------------------
1997 1997 1996 1995 1994 1993 1992
-------- ---------- ------- ------- ------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET INFORMATION
Total assets.............................. $21,640 $ 20,388 20,027 $18,960 $18,992 $18,202 $15,886
Debt due within one year.................. 8 8 7 47 32 24 7
Long-term debt............................ 7,278 6,257 5,676 6,137 7,160 7,125 7,171
Preferred stock of a subsidiary holding
solely a mortgage note of its parent.... 237 237 -- -- -- -- --
Time Warner General Partners' Senior
Capital................................. 1,096 1,096 1,543 1,426 1,663 1,536 --
Partners' capital......................... 6,471 6,471 6,681 6,576 6,491 6,228 6,483
</TABLE>
- ------------
(a) The selected pro forma financial information as of and for the nine months
ended September 30, 1997 and for the year ended December 31, 1996 gives
effect to the TWE-A/N Transfers as if such transactions occurred at such
date, with respect to balance sheet information, and at the beginning of
such periods, with respect to operating statement information.
(b) Interest and other, net, for the nine months ended September 30, 1997
includes a $250 million gain relating to the sale of TWE's interest in E!
Entertainment Television, Inc.
(c) The net income for the years ended December 31, 1995 and 1993 include
extraordinary loss on the retirement of debt of $24 million and $10
million, respectively.
RATIO OF EARNINGS TO FIXED CHARGES
The historical ratios of earnings to fixed charges for each of TWI, TWC and
TBS and the pro forma ratios of earnings to fixed charges for each of TWI 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 TWI 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 TWI'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 TWI 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
18
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<PAGE>
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 TWI only, (c) the TBS Transaction, including
the assumption of approximately $2.8 billion of indebtedness.
The historical ratio of earnings to fixed charges of each of TWI 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 TWI 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 TWI and TWC
for the nine months ended September 30, 1997 and the year ended December 31,
1996 give effect to (i) the TWE-A/N Transfers and (ii) with respect to 1996
only, (a) the Preferred Stock Refinancing and certain other debt refinancings
and (b) with respect to TWI 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 TWI'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>
TWI..................................... 1.4x 1.4 x 1.0 x 1.1x 1.1 x 1.1 x 1.1 x 1.1 x 1.4 x
TWC..................................... 1.4x 1.4 x 1.0 x 1.2x 1.1 x 1.1 x 1.1 x 1.1 x 1.4 x
</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
------------------ ----------------- ------------------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
TBS...................... 1.8x 1.6x $(44) 1.7 x 1.3 x 1.6 x 1.4 x
</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 TWI, TWC and TBS and their respective
majority-owned subsidiaries, (iii) TWI'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
TWI'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 TWI, TWC and TBS and their respective
majority-owned subsidiaries, (ii) TWI'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 TWI 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 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 TWI for the nine
months ended September 30, 1997
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<PAGE>
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 TWI 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.
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OUTSTANDING DEBENTURES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal, TWC will accept for exchange
Outstanding Debentures which are properly tendered on or prior to the Expiration
Date and not withdrawn as permitted below. As used herein, the term 'Expiration
Date' means midnight, New York City time, on , 1998; provided,
however, that if TWC, in its sole discretion, has extended the period of time
for which the Exchange Offer is open, the term 'Expiration Date' means the
latest time and date to which the Exchange Offer is extended.
As of the date of this Prospectus, $500 million aggregate principal amount
of the Outstanding Debentures is outstanding. This Prospectus, together with the
Letter of Transmittal, is first being sent on or about , 1998, to
all holders of Outstanding Debentures known to TWC. TWC's obligation to accept
Outstanding Debentures for exchange pursuant to the Exchange Offer is subject to
certain conditions as set forth below under 'Certain Conditions to the Exchange
Offer.'
TWC expressly reserves the right, at any time or from time to time, to
extend the period of time during which the Exchange Offer remains open, and
thereby delay acceptance for exchange of any Outstanding Debentures, by giving
oral or written notice of such extension in the manner described below. During
any such extension, all Outstanding Debentures previously tendered will remain
subject to the Exchange Offer and may be accepted for exchange by TWC. Any
Outstanding Debentures not accepted for exchange for any reason will be returned
without expense to the tendering holder thereof as promptly as practicable after
the expiration or termination of the Exchange Offer.
Outstanding Debentures tendered in the Exchange Offer must be in
denominations of principal amounts of $1,000 and any integral multiples thereof.
TWC expressly reserves the right to amend or terminate the Exchange Offer,
and not to accept for exchange any Outstanding Debentures not theretofore
accepted for exchange, upon the occurrence of any of the events specified below
under ' -- Certain Conditions to the Exchange Offer.' TWC will give oral or
written notice of any extension, amendment, non-acceptance or termination to the
holders of the Outstanding Debentures as promptly as practicable, such notice in
the case of any extension to be issued by means of press release or other public
announcement no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date.
INTEREST ON THE EXCHANGE DEBENTURES
Interest on the Exchange Debentures will be payable semiannually on January
15 and July 15 of each year, commencing on July 15, 1998, at the rate of 6.95%
per annum. Interest on the Exchange Debentures will accrue from the last
interest payment date on which interest was paid on the Outstanding Debentures
surrendered in exchange therefor, or if no interest has been paid on the
Outstanding Debentures, from January 12, 1998.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the
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<PAGE>
<PAGE>
Outstanding Debentures and any other required documents, to the Exchange Agent
prior to midnight, New York City time, on the Expiration Date (unless such
tender is being effected pursuant to the procedure for book-entry transfer
described below).
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility system may make book-entry delivery of the Outstanding
Debentures by causing DTC to transfer such Outstanding Debentures into the
Exchange Agent's account and to deliver an Agents Message on or prior
to the Expiration Date in accordance with DTC's procedures for such transfer
and delivery. If delivery of Outstanding Debentures is effected through
book-entry transfer into the Exchange Agent's account at DTC and an Agent's
Message is not delivered, the Letter of Transmittal (or facsimile thereof), with
any required signature guarantees and any other required documents must be
transmitted to and received or confirmed by the Exchange Agent at its addresses
set forth herein under ' -- Exchange Agent' prior to midnight, New York City
time, on the Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH
ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term 'Agents Message' means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a confirmation of the
book-entry tender of their Outstanding Debentures into the Exchange Agent's
Account at DTC, which states that DTC has received an express acknowledgment
from the tendering participant, which acknowledgment states that such
participant has received and agrees to be bound by, and makes the
representations and warranties contained in, the Letter of Transmittal and
that TWC may enforce the Letter of Transmittal against such participant.
The tender (as set forth above) by a holder of Outstanding Debentures will
constitute an agreement between such holder and TWC in accordance with the terms
and subject to the conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its address
set forth herein. Holders may also request that their respective brokers,
dealers, commercial banks, trust companies or nominees effect such tender for
the holders.
The method of delivery of Outstanding Debentures, the Letter of Transmittal
and all other required documents to the Exchange Agent is at the election and
risk of the holders. Instead of delivery by mail, it is recommended that holders
use an overnight or hand delivery service. In all cases, sufficient time should
be allowed to assure timely delivery. NO LETTER OF TRANSMITTAL OR OUTSTANDING
DEBENTURES SHOULD BE SENT TO TWC.
Only a holder of Outstanding Debentures may tender such Outstanding
Debentures in the Exchange Offer. The term 'holder' with respect to the Exchange
Offer means any person in whose name Outstanding Debentures are registered on
the books of TWC or any other person who has obtained a properly completed bond
power from the registered holder, or any person whose Outstanding Debentures are
held of record by DTC who desires to deliver such Outstanding Debentures by
book-entry transfer at DTC.
Any beneficial holder whose Outstanding Debentures are registered in the
name of his broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender should contact such registered holder promptly and instruct
such registered holder to tender on his behalf. If such beneficial holder wishes
to tender on his own behalf, such beneficial holder must, prior to completing
and executing the Letter of Transmittal and delivering his Outstanding
Debentures, either make appropriate arrangements to register ownership of the
Outstanding Debentures in such holder's name or obtain a properly completed bond
power from the registered holder. The transfer of record ownership may take
considerable time.
21
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<PAGE>
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an 'eligible guarantor institution' within the meaning of Rule
17Ad-15 under the Exchange Act (an 'Eligible Institution') unless the
Outstanding Debentures tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled 'Special Issuance
Instructions' or 'Special Delivery Instructions' on the Letter of Transmittal or
(ii) for the account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Outstanding Debentures listed therein, such Outstanding
Debentures must be endorsed or accompanied by appropriate bond powers which
authorize such person to tender the Outstanding Debentures on behalf of the
registered holder, in either case signed as the name of the registered holder or
holders appears on the Outstanding Debentures.
If the Letter of Transmittal or any Outstanding Debentures or bond powers
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by
TWC, evidence satisfactory to TWC of their authority to so act must be submitted
with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Outstanding Debentures will
be determined by TWC in its sole discretion, which determination will be final
and binding. TWC reserves the absolute right to reject any and all Outstanding
Debentures not properly tendered or any Outstanding Debentures TWC's acceptance
of which would, in the opinion of counsel for TWC, be unlawful. TWC also
reserves the absolute right to waive any irregularities or conditions of tender
as to particular Outstanding Debentures. TWC's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Outstanding Debentures
must be cured within such time as TWC shall determine. Neither TWC, the Exchange
Agent nor any other person shall be under any duty to give notification of
defects or irregularities with respect to tenders of Outstanding Debentures nor
shall any of them incur any liability for failure to give such notification.
Tenders of Outstanding Debentures will not be deemed to have been made until
such irregularities have been cured or waived. Any Outstanding Debentures
received by the Exchange Agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned
without cost by the Exchange Agent to the tendering holder of such Outstanding
Debentures unless otherwise provided in the Letter of Transmittal as soon as
practicable following the Expiration Date.
In addition, TWC reserves the right in its sole discretion to (a) purchase
or make offers for any Outstanding Debentures that remain outstanding subsequent
to the Expiration Date, or, as set forth under ' -- Certain Conditions to the
Exchange Offer,' to terminate the Exchange Offer and (b) to the extent permitted
by applicable law, purchase Outstanding Debentures in the open market, in
privately negotiated transactions or otherwise. The terms of any such purchases
or offers may differ from the terms of the Exchange Offer.
By tendering, each holder of Outstanding Debentures will represent to TWC
that, among other things, the Exchange Debentures acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of business of the
person receiving such Exchange Debentures, whether or not such person is the
holder, that neither the holder nor any other person has an arrangement or
understanding with any person to participate in the distribution of the Exchange
Debentures and that neither the holder nor any such other person is an
'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the
Securities Act or, if an affiliate, such holder or such other person will comply
with the registration and prospectus delivery requirements of the Securities Act
to the extent applicable.
ACCEPTANCE OF OUTSTANDING DEBENTURES FOR EXCHANGE; DELIVERY OF EXCHANGE
DEBENTURES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
TWC will accept, promptly after the Expiration Date, all Outstanding Debentures
properly tendered and will issue the
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Exchange Debentures promptly, after acceptance of the Outstanding Debentures.
See ' -- Certain Conditions to the Exchange Offer.'
For purposes of the Exchange Offer, TWC shall be deemed to have accepted
properly tendered Outstanding Debentures for exchange when, as and if TWC has
given oral or written notice thereof to the Exchange Agent, with written
confirmation of any oral notice to be given promptly thereafter.
For each Outstanding Debenture accepted for exchange, the holder of such
Outstanding Debenture will receive an Exchange Debenture having a principal
amount equal to that of the surrendered Outstanding Debenture. Interest on the
Exchange Debentures will be payable semiannually on January 15 and July 15 of
each year, commencing on July 15, 1998, at the rate of 6.95% per annum. Interest
on the Exchange Debentures will accrue from the last interest payment date on
which interest was paid on the Outstanding Debentures surrendered in exchange
therefor, or if no interest has been paid on the Outstanding Debentures, from
January 12, 1998.
In all cases, issuance of Exchange Debentures for Outstanding Debentures
that are accepted for exchange pursuant to the Exchange Offer will be made only
after timely receipt by the Exchange Agent of certificates for such Outstanding
Debentures or a timely Book-Entry Confirmation of such Outstanding Debentures
into the Exchange Agent's account at the Book-Entry Transfer Facility, a
properly completed and duly executed Letter of Transmittal and all other
required documents. If any tendered Outstanding Debentures are not accepted for
any reason set forth in the terms and conditions of the Exchange Offer or if
Outstanding Debentures are submitted for a greater principal amount than the
holder desired to exchange, such unaccepted or non-exchanged Outstanding
Debentures will be returned without expense to the tendering holder thereof (or,
in the case of Outstanding Debentures tendered by book-entry transfer into the
Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the
book-entry procedures described below, such non-exchanged Outstanding Debentures
will be credited to an account maintained with such Book-Entry Transfer
Facility) as promptly as practicable after the expiration or termination of the
Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Outstanding Debentures at the Book-Entry Transfer Facility for purposes
of the Exchange Offer within two business days after the date of this
Prospectus, and any financial institution that is a participant in the Book-
Entry Transfer Facility's systems may make book-entry delivery of Outstanding
Debentures by causing the Book-Entry Transfer Facility to transfer such
Outstanding Debentures into the Exchange Agent's account at the Book-Entry
Transfer Facility in accordance with such Book-Entry Transfer Facility's
procedures for transfer. However, although delivery of Outstanding Debentures
may be effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof or an Agent's Message in lieu
thereof), with any required signature guarantees and any other required
documents, must, in any case, be transmitted to and received by the Exchange
Agent at one of the addresses set forth below, under ' -- Exchange Agent' on or
prior to the Expiration Date or the guaranteed delivery procedures described
below must be complied with.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Outstanding Debentures and who cannot
deliver their Outstanding Debentures, the Letter of Transmittal, or any other
required documents to the Exchange Agent prior to the Expiration Date, or if
such holder cannot complete the procedure for book-entry transfer on a timely
basis, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder of the Outstanding
Debentures, the certificate number or numbers of such Outstanding
Debentures and the principal amount of Outstanding Debentures tendered,
stating that the tender is being made thereby, and
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<PAGE>
guaranteeing that, within five business days after the Expiration Date, the
Letter of Transmittal (or facsimile thereof), together with the
certificate(s) representing the Outstanding Debentures to be tendered in
proper form for transfer and any other documents required by the Letter of
Transmittal, will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), together with the certificate(s) representing all
tendered Outstanding Debentures in proper form for transfer (or
confirmation of a book-entry transfer into the Exchange Agent's account at
DTC of Outstanding Debentures delivered electronically) and all other
documents required by the Letter of Transmittal are received by the
Exchange Agent within five business days after the Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Outstanding Debentures may
be withdrawn at any time prior to midnight, New York City time, on the
Expiration Date.
To withdraw a tender of Outstanding Debentures in the Exchange Offer, a
facsimile transmission or letter notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to midnight, New York City
time, on the Expiration Date. Any such notice of withdrawal must (i) specify the
name of the person having deposited the Outstanding Debentures to be withdrawn
(the 'Depositor'), (ii) include a statement that the Depositor is withdrawing
its election to have Outstanding Debentures exchanged, and identify the
Outstanding Debentures to be withdrawn (including the certificate number or
numbers and principal amount of such Outstanding Debentures), (iii) be signed by
the Depositor in the same manner as the original signature on the Letter of
Transmittal by which such Outstanding Debentures were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to permit the Trustee with respect to the Outstanding Debentures to
register the transfer of such Outstanding Debentures into the name of the
Depositor withdrawing the tender and (iv) specify the name in which any such
Outstanding Debentures are to be registered, if different from that of the
Depositor. All questions as to the validity, form and eligibility (including
time of receipt) for such withdrawal notices will be determined by TWC, whose
determination shall be final and binding on all parties. Any Outstanding
Debentures so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer and no Exchange Debentures will be issued with
respect thereto unless the Outstanding Debentures so withdrawn are validly
retendered. Any Outstanding Debentures which have been tendered but which are
not accepted for exchange will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Outstanding Debentures may
be re-tendered by following one of the procedures described above under
' -- Procedures for Tendering' at any time prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
The Exchange Offer is not subject to any conditions, other than that (i)
the Exchange Offer does not violate applicable law or any applicable
interpretation of the staff of the Commission and (ii) there is no injunction,
order or decree issued by any court or any governmental agency that would
prohibit, prevent or otherwise materially impair the ability of TWC to proceed
with the Exchange Offer. There can be no assurance that any such condition will
not occur. Holders of Outstanding Debentures will have certain rights against
TWC under the Registration Rights Agreement should TWC fail to consummate the
Exchange Offer.
If TWC determines that it may terminate the Exchange Offer, as set forth
above, TWC may (i) refuse to accept any Outstanding Debentures and return any
Outstanding Debentures that have been tendered to the holders thereof, (ii)
extend the Exchange Offer and retain all Outstanding Debentures tendered prior
to the Expiration Date, subject to the rights of such holders of tendered
Outstanding Debentures to withdraw their tendered Outstanding Debentures, or
(iii) waive such termination event with respect to the Exchange Offer and accept
all properly tendered Outstanding Debentures that have not been withdrawn. If
such waiver constitutes a material change in the Exchange Offer, TWC will
disclose such change by means of a supplement to this Prospectus that will be
24
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<PAGE>
distributed to each registered holder of Outstanding Debentures, and TWC will
extend the Exchange Offer for a period of five to ten business days, depending
upon the significance of the waiver and the manner of disclosure to the
registered holders of the Outstanding Debentures, if the Exchange Offer would
otherwise expire during such period.
EXCHANGE AGENT
The Chase Manhattan Bank, the Trustee under the Indenture, has been
appointed as Exchange Agent for the Exchange Offer. Questions and requests for
assistance and inquiries for additional copies of this Prospectus or of the
Letter of Transmittal should be directed to the Exchange Agent addressed as
follows:
By Mail, Hand or Overnight Courier Facsimile Transmission Number
55 Water Street (212) 638-7375
Room 234, North Building or (212) 344-9367
New York, NY 10041 (For Eligible
Attention: Institutions Only)
Carlos Esteves Confirm by Telephone
(If by Mail, Registered or (212) 638-0828
Certified Mail Recommended)
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
TWC will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by TWC and are estimated to be $150,000.
TRANSFER TAXES
Holders who tender their Outstanding Debentures for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that holders
who instruct TWC to register Exchange Debentures in the name of, or request that
Outstanding Debentures not tendered or not accepted in the Exchange Offer be
returned to, a person other than the registered tendering holder will be
responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE
DEBENTURES
Holders of Outstanding Debentures who do not exchange their Outstanding
Debentures for Exchange Debentures pursuant to the Exchange Offer will continue
to be subject to the provisions in the Indenture regarding transfer and exchange
of the Outstanding Debentures and the restrictions on transfer of such
Outstanding Debentures as set forth in the legend thereon as a consequence of
the issuance of the Outstanding Debentures pursuant to exemptions from, or in
transactions not subject to, the registration requirements of the Securities Act
and applicable state securities laws. In general, the Outstanding Debentures may
not be offered or sold, unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. TWC does not currently
anticipate that it will register Outstanding Debentures under the Securities Act
subsequent to the Exchange Offer. Based on interpretations by the staff of the
Commission, as set forth in no-action letters issued to third parties, TWC
believes that Exchange Debentures issued pursuant to the Exchange Offer in
exchange for Outstanding Debentures may be offered for resale, resold or
otherwise transferred by holders thereof (other than any such holder which
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is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Debentures are
acquired in the ordinary course of such holders' business and such holders have
no arrangement with any person to participate in the distribution of such
Exchange Debentures. However, TWC does not intend to request the Commission to
consider, and the Commission has not considered, the Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the Commission would make a similar determination with respect to the Exchange
Offer as in such other circumstances. Each holder, other than a broker-dealer,
must acknowledge that (i) the Exchange Debentures received by such holder will
be acquired in the ordinary course of its business, (ii) at the time of the
consummation of the Exchange Offer such holder will have not engaged in, and
does not intend to engage in, a distribution of Exchange Debentures and has no
arrangement or understanding to participate in a distribution of Exchange
Debentures and (iii) such holder is not an affiliate of TWC, TWI or TBS within
the meaning of Rule 405 of the Securities Act or if it is such an affiliate,
that it will comply with the registration and prospectus delivery requirements
of the Securities Act, to the extent applicable. If any holder is an affiliate
of TWC, TWI or TBS or is engaged in or intends to engage in or has any
arrangement or understanding with respect to the distribution of the Exchange
Debentures to be acquired pursuant to the Exchange Offer, such holder (i) could
not rely on the applicable interpretations of the staff of the Commission and
(ii) must comply with the registration and prospectus delivery requirement of
the Securities Act in connection with any resale transaction. Each broker-dealer
that receives Exchange Debentures for its own account pursuant to the Exchange
Offer must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Debentures. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an 'underwriter' within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Debentures
received in exchange for Outstanding Debentures, where such Outstanding
Debentures were acquired by such broker-dealer as a result of market-making
activities or other trading activities. TWC has agreed that, for a period of 90
days after the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See 'Plan of
Distribution.' However, to comply with state securities laws, the Exchange
Debentures may not be offered or sold in any state unless they have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with. The offer and sale of the
Exchange Debentures to 'qualified institutional buyers' (as such term is defined
under Rule 144A of the Securities Act) is generally exempt from registration or
qualification under state securities laws. TWC currently does not intend to
register or qualify the sale of the Exchange Debentures in any state where an
exemption from registration or qualification is required and not available.
USE OF PROCEEDS
There will be no cash proceeds to TWC, TWI or TBS from the Exchange Offer.
The Exchange Offer is intended to satisfy certain of TWC's, TWI's and TBS's
obligations under the Placement Agreement and the Registration Rights Agreement.
In consideration for issuing the Exchange Debentures contemplated in this
Prospectus, TWC will receive Outstanding Debentures in like principal amount,
the form and terms of which are the same as the form and terms of the Exchange
Debentures (which they replace), except as otherwise described herein. The
Outstanding Debentures surrendered in exchange for Exchange Debentures will be
retired and canceled and cannot be reissued. Accordingly, issuance of the
Exchange Debentures will not result in any increase or decrease in the
indebtedness of TWC, TWI or TBS.
The net proceeds of the Original Offering were approximately $490.2
million. The net proceeds from the Original Offering were used by TWC to redeem
its 7.45% Notes due 1998, and prior to such use, to reduce short-term borrowings
of TWC and its affiliates.
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DESCRIPTION OF THE DEBENTURES AND THE GUARANTEES
The Outstanding Debentures were, and the Exchange Debentures will be,
issued under an Indenture, dated as of January 15, 1993, as supplemented from
time to time (such Indenture, as so supplemented being called the 'Indenture')
among TWC, TWI, TBS and The Chase Manhattan Bank (formerly known as Chemical
Bank) (the 'Trustee'), as Trustee. The following summary of certain provisions
of the Indenture and the Debentures does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of the Indenture, including the definitions of certain terms therein and those
terms made a part thereof by the Trust Indenture Act of 1939, as amended (the
'Trust Indenture Act'). Copies of the Indenture and the Debentures are available
upon request from TWC. Whenever particular defined terms of the Indenture not
otherwise defined herein are referred to, such defined terms are incorporated
herein by reference. For definitions of certain capitalized terms used in the
following summary, see ' -- Certain Definitions.' Section references are to the
Indenture unless otherwise indicated.
GENERAL
The Debentures bear interest at an annual rate of 6.95%, payable
semiannually on January 15 and July 15 of each year, commencing July 15, 1998
(each an 'Interest Payment Date'), to Holders of record at the close of business
on the December 15 or June 15 next preceding each such Interest Payment Date.
The Debentures are issuable only in registered form, without coupons, in
denominations of $1,000 and integral multiples thereof. To the extent described
under ' -- Book Entry; Delivery and Form' below, the principal of and interest
on the Debentures will be payable and the transfer of the Debentures will be
registrable through DTC. (Sections 305 and 202, Form of Debenture and the Fifth
Supplemental Indenture, dated as of January 12, 1998 (the 'Fifth Supplemental
Indenture'), among TWC, TWI, TBS and the Trustee) TWC will not charge a service
charge for any registration of transfer or exchange of Debentures; however, TWC
may require payment by a Holder of a sum sufficient to cover any tax, assessment
or other governmental charge payable in connection therewith. (Section 305) The
Trustee shall authenticate and deliver Debentures in accordance with the
Indenture and the procedures for dating, due execution by TWC and book-entry
transfer set forth therein. (Section 303)
For each Outstanding Debenture accepted for exchange, the Holder thereof
will receive an Exchange Debenture having a principal amount equal to that of
the surrendered Outstanding Debenture.
The terms of the Exchange Debentures are identical in all material respects
to the terms of the Outstanding Debentures, except for certain transfer
restrictions and registration rights relating to the Outstanding Debentures and
except that, with respect to the Outstanding Debentures, if TWC has not filed
a Registration Statement covering the Exchange Debentures, caused such
registration statement to become effective and consummated a registered
exchange offer for the Outstanding Debentures or caused a Shelf Registration
Statement with respect to resales of the Outstanding Debentures to be declared
effective within certain time periods, then Additional Interest on the
Outstanding Debentures will be payable until the consummation of
a registered exchange offer or the effectiveness of the Shelf Registration
Statement. See 'Registration Rights Agreement for Outstanding Debentures.'
All Outstanding Debentures and Exchange Debentures will be treated as a
single class of securities for all purposes under the Indenture.
TERMS OF THE DEBENTURES
The Debentures are limited to $500,000,000 aggregate principal amount. The
Debentures will mature on January 15, 2028, and are not redeemable prior to
maturity and do not have the benefit of a sinking fund.
GUARANTEES
Each of the Guarantors, as primary obligor and not merely as surety, has
guaranteed to each Holder of the Debentures, and to the Trustee and its
successors and assigns, (i) the full and punctual
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payment of principal of and interest on the Debentures when due, whether at
maturity, by acceleration or otherwise, and all other monetary obligations of
TWC under the Indenture (including obligations to the Trustee) and the
Debentures and (ii) the full and punctual performance within applicable grace
periods of all other obligations of TWC under the Indenture and the Debentures.
The Guarantees constitute a guarantee of payment, performance and compliance and
not merely of collection. The obligation of each to make any payments may be
satisfied by causing TWC to make such payments. Further, each Guarantor has
agreed to pay any and all costs and expenses (including reasonable attorneys'
fees) incurred by the Trustee or any Holder of Debentures in enforcing any of
their respective rights under the Guarantees. (Section 2 of the Second
Supplemental Indenture dated as of October 10, 1996, among TWC, TWI and the
Trustee, and Section 2 of the Fourth Supplemental Indenture dated as of December
17, 1997 (the 'Fourth Supplemental Indenture'), among TWC, TWI, TBS and the
Trustee) The maximum aggregate amount of the 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.
RANKING
The Debentures are senior indebtedness of TWC, ranking on a parity with all
other unsecured and unsubordinated indebtedness of TWC, and each Guarantee is a
senior obligation of the relevant Guarantor, ranking on a parity with all other
unsecured and unsubordinated obligations of such Guarantor. Each of TWC and the
Guarantors is a holding company and the Debentures and the Guarantees will be
effectively subordinated to all existing and future liabilities, including
indebtedness, of the subsidiaries of TWC and the Guarantors, respectively. See
'Holding Company Structure.'
COVENANTS
Limitation on Liens. The Indenture provides that neither TWC nor any
Material Subsidiary of TWC 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 TWC makes or
causes to be made effective provision whereby the Debentures 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 TWC to secure indebtedness of
such Subsidiaries to TWC or to one or more other Subsidiaries of TWC;
(iii) liens affecting property of a person existing at the time it
becomes a Subsidiary of TWC or at the time it merges into or consolidates
with TWC or a Subsidiary of TWC or at the time of a sale, lease or other
disposition of all or substantially all of the properties of such person to
TWC 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
TWC or any of its Subsidiaries of rights to distribute such motion
pictures, video and television programming, sound recordings or books;
provided, however, that no
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such lien shall attach to any asset or right of TWC 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;
(viii) other liens arising in connection with indebtedness of TWC and
its Subsidiaries in an aggregate principal amount for TWC 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 TWC and (B)
$500 million; and
(ix) any extensions, renewal or replacement of any lien referred to in
the foregoing clauses (i) through (viii) 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 1006)
Limitation on Senior Debt. The Indenture provides that TWC 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 TWC
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 1007)
Other than the restrictions in the Indenture on liens and incurrence of
Senior Debt described above, the Indenture and the Debentures do not contain any
covenants or other provisions designed to afford Holders of Debentures
protection in the event of a recapitalization or highly leveraged transaction
involving TWC.
Limitation on Merger, Consolidation and Certain Sales of Assets. The
Indenture provides that neither TWC nor the Guarantors 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 TWC, the successor assumes TWC's obligations under the Indenture and the
Debentures on the same terms and conditions and (ii) in the case of each
Guarantor, the successor assumes such Guarantor's obligations under the
Indenture and its Guarantee on the same terms and conditions and (c) immediately
after giving effect to such transactions, there is no default under the
Indenture. (Sections 801 and 802, as amended by the Third Supplemental Indenture
dated as of December 31, 1996 (the 'Third Supplemental Indenture'), among TWC,
TWI and the Trustee and the Fourth Supplemental Indenture)
CERTAIN DEFINITIONS
The following are certain of the terms defined in the Indenture:
'Consolidated Cash Flow' means, with respect to TWC, for any period,
the net income of TWC 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 TWC, there shall be included, in respect of each
other Person that is accounted for by TWC on the equity method (as
determined in accordance with GAAP), TWC's proportionate amount of such
other Person's and its Subsidiaries' consolidated net income, depreciation,
amortization, other noncash charges which
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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 TWC, for any
period, cash interest expense of TWC 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 TWC, there shall be
included, in respect of each other Person that is accounted for by TWC on
the equity method (as determined in accordance with GAAP), TWC'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 TWC, at the date of
any determination, the consolidated stockholders' equity of TWC 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.
'Material Subsidiary' means, with respect to TWC, any Person that is a
Subsidiary if at the end of the most recent fiscal quarter of TWC, 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 TWC and its other Subsidiaries exceeded 10% of TWC's
Consolidated Net Worth.
'Person' means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision 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.
DEFEASANCE
The Indenture provides that TWC (and to the extent applicable, the
Guarantors), at its option, (a) will be Discharged from any and all obligations
in respect of the Debentures (except in each case for certain obligations to
register the transfer or exchange of the Debentures, replace stolen, lost or
mutilated Debentures, maintain paying agencies and hold moneys for payment in
trust) or (b) need not comply with the covenants described above under
'Covenants' and certain Events of Default (other than those arising out of the
failure to pay interest or principal on the Debentures and certain events of
bankruptcy, insolvency and reorganization) will no longer constitute Events of
Default with respect to
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such Debentures, in each case if TWC deposits with the applicable Trustee, in
trust, money or the equivalent in securities of the government which issued the
currency in which the Debentures 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
Debentures. To exercise any such option, TWC 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 Debentures 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 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, TWC is required to deliver to the
Trustee an Officers' Certificate stating that such deposit was not made by TWC
with the intent of preferring the Holders of the Debentures over other creditors
of TWC or with the intent of defeating, hindering, delaying or defrauding
creditors of TWC or others. (Article 4, as amended by the Third Supplemental
Indenture and the Fourth Supplemental Indenture)
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that, if an Event of Default specified therein with
respect to the Debentures shall have happened and be continuing, either the
Trustee or the Holders of 25% in aggregate principal amount of the Debentures
(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
Debentures to be due and payable. (Section 502)
Events of Default in respect of the Debentures are defined in the Indenture
as being: (i) default for 30 days in payment of any interest installment with
respect to the Debentures; (ii) default in payment of principal of, or premium,
if any, on, or any sinking fund or analogous payment with respect to, the
Debentures when due at their stated maturity, by declaration or acceleration,
when called for redemption or otherwise; (iii) default for 90 days after notice
to TWC (or the Guarantors, if applicable) by the Trustee thereunder or by
Holders of 25% in aggregate principal amount of the Debentures in the
performance of any covenant pertaining to the Debentures; (iv) failure to pay
when due, upon final maturity or upon acceleration, the principal amount of any
indebtedness for money borrowed of TWC in excess of $50 million, if such
indebtedness is not discharged, or such acceleration annulled, within 60 days
after written notice; and (v) certain events of bankruptcy, insolvency and
reorganization with respect to either Guarantor, TWC or any Material Subsidiary
of TWC which is organized under the laws of the United States or any political
sub-division thereof. (Section 501, as amended by the Third Supplemental
Indenture and the Fourth Supplemental Indenture, and Form of Debenture)
The Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default with respect to the Debentures, give to the
Holders of the Debentures 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 Debentures, 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 Debentures. 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 602)
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 Debentures before proceeding to
exercise any right or power under the Indenture at the request of Holders of the
Debentures. (Section 603)
The Indenture provides that the Holders of a majority in aggregate
principal amount of the outstanding Debentures 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 512)
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The Indenture includes a covenant that TWC will file annually with the
Trustee a certificate of no default or specifying any default that exists.
(Section 1004)
In certain cases, the Holders of a majority in principal amount of the
outstanding Debentures may on behalf of the Holders of all Debentures waive any
past default or Event of Default with respect to the Debentures or compliance
with certain provisions of the Indenture, 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 Debentures. (Sections 513 and 1008)
MODIFICATION OF THE INDENTURE
TWC and the Trustee may, without the consent of the Holders of the
Debentures or any other series of 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 TWC or either
Guarantor, and the assumption by such successor of TWC or such Guarantor's
obligations under the Indenture and the Debt Securities of any series or the
Guarantees relating thereto; (ii) to add covenants of TWC and either Guarantor,
or surrender any rights of TWC or either Guarantor, 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 901, as amended by the Third Supplemental Indenture
and the Fourth Supplemental Indenture)
The Indenture contains provisions permitting TWC and the Trustee
thereunder, with the consent of the Holders of a majority in principal amount of
the outstanding Debt Securities of each series to be affected, 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 TWC in respect of a conversion of any convertible
Debt Securities 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 902)
THE TRUSTEE
The Chase Manhattan Bank, formerly known as Chemical 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 and the
Guarantors in the normal course of business. Chase Securities Inc., one of the
Placement Agents, is an affiliate of the Trustee.
GOVERNING LAW
The Indenture will be governed by, and construed in accordance with, the
laws of the State of New York.
BOOK-ENTRY; DELIVERY AND FORM
The Exchange Debentures will be represented by one or more permanent global
Exchange Debentures in definitive, fully registered form without interest
coupons (collectively, the 'Global Exchange Debenture') and will be deposited
with the Trustee as custodian for, and registered in the name of a nominee of,
DTC.
Ownership of beneficial interests in the Global Exchange Debenture will be
limited to persons who have accounts with DTC ('participants') or persons who
hold interests through participants. Ownership of beneficial interests in the
Global Exchange Debenture will be shown on, and the transfer of that
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ownership will be effected only through, records maintained by DTC or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants).
So long as DTC, or its nominee, is the registered owner or holder of the
Global Exchange Debenture, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Exchange Debentures represented by
the Global Exchange Debenture for all purposes under the Indenture and the
Exchange Debentures. No beneficial owner of an interest in the Global Exchange
Debenture will be able to transfer that interest except in accordance with DTC's
applicable procedures, in addition to those provided for under the Indenture.
Payments of the principal of, and interest on, the Global Exchange
Debenture will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. Neither TWC, the Trustee nor any Paying Agent 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
Exchange Debenture or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
TWC expects that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of the Global Exchange Debenture, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Exchange
Debenture as shown on the records of DTC or its nominee. TWC also expects that
payments by participants to owners of beneficial interests in such Global
Exchange Debenture 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 registered in the names of nominees for such
customers. Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds.
TWC expects that DTC will take any action permitted to be taken by a Holder
of Exchange Debentures (including the presentation of Exchange Debentures for
exchange as described below) only at the direction of one or more participants
to whose account the DTC interests in the Global Exchange Debenture is credited
and only in respect of such portion of the aggregate principal amount of
Exchange Debentures as to which such participant or participants has or have
given such direction. However, if there is an Event of Default under the
Exchange Debentures, DTC will exchange the Global Exchange Debenture for
definitive Exchange Debentures in certificated form, which it will distribute to
its participants.
TWC understands that: DTC is a limited purpose trust company organized
under the laws of the State of New York, a 'banking organization' within the
meaning of New York Banking Law, a member of the Federal Reserve System, a
'clearing corporation' within the meaning of the Uniform Commercial Code and a
'Clearing Agency' registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participants and
facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of certificates
and certain other organizations. Indirect access to the DTC system is available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly ('indirect participants').
Although DTC is expected to follow the foregoing procedures in order to
facilitate transfers of interests in the Global Exchange Debenture among
participants of DTC, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. Neither
TWC nor the Trustee will have any responsibility for the performance by DTC or
its respective participants or indirect participants of its respective
obligations under the rules and procedures governing its operations.
If DTC is at any time unwilling or unable to continue as a depositary for
the Global Exchange Debenture and a successor depositary is not appointed by TWC
within 90 days, TWC will issue definitive Exchange Debentures in certificated
form in exchange for the Global Exchange Debenture.
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SAME-DAY SETTLEMENT AND PAYMENT
So long as DTC continues to make its Settlement System available to TWC,
all payments of principal of and interest on the Debentures will be made by TWC
in immediately available funds.
REGISTRATION RIGHTS AGREEMENT FOR OUTSTANDING DEBENTURES
Holders of Exchange Debentures are not entitled to any registration rights
with respect to the Exchange Debentures. TWC, TWI and TBS have agreed, pursuant
to the Registration Rights Agreement (the 'Registration Rights Agreement') with
the Placement Agents, for the benefit of the holders of the Outstanding
Debentures, that TWC, TWI and TBS will file with the Commission and use its
reasonable best efforts to cause to become effective a registration statement
(the 'Registration Statement') with respect to the Exchange Debentures identical
in all material respects to the Outstanding Debentures and, upon becoming
effective, to offer the Holders of the Outstanding Debentures the opportunity to
exchange their Outstanding Debentures for the Exchange Debentures. The
Registration Rights Agreement provides that in the event that TWC, TWI and TBS
are not permitted to effect such Exchange Offer, TWC, TWI and TBS will instead
file a registration statement covering resales by the Holders of Outstanding
Debentures (a 'Shelf Registration Statement') and will use their reasonable best
efforts to cause such Shelf Registration Statement to become effective and to
keep such Shelf Registration Statement effective for two years from January 12,
1998 (the 'Closing Date'). TWC is required, in the event a Shelf Registration
Statement is filed, to provide to each Holder of the Outstanding Debentures
copies of the prospectus and notify each such Holder when the Shelf Registration
Statement has become effective. A Holder that sells Outstanding Debentures
pursuant to a Shelf Registration Statement generally will be required to be
named as a selling security holder in the related prospectus and to deliver a
current prospectus to purchasers, and will be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales.
Under the Registration Rights Agreement, TWC, TWI and TBS have agreed to
use their reasonable best efforts to: (i) file the Registration Statement or a
Shelf Registration Statement with the Commission, (ii) have such Registration
Statement or Shelf Registration Statement declared effective by the Commission
within 180 days after the Closing Date and (iii) commence the Exchange Offer and
issue the Exchange Debentures in exchange for all Outstanding Debentures validly
tendered in accordance with the terms of the Exchange Offer prior to the close
of the Exchange Offer, or, in the alternative, cause such Shelf Registration
Statement to remain effective for two years from the Closing Date.
If TWC, TWI and TBS fail to comply with the above provisions, additional
interest (the 'Additional Interest') on the Outstanding Debentures would be
assessed as follows:
(i) If the Registration Statement or Shelf Registration Statement is
not filed within 150 days following the Closing Date, then commencing on
the 151st day after the Closing Date, Additional Interest shall be accrued
on the Outstanding Debentures over and above the accrued interest at a rate
of .50% per annum; or
(ii) If a Registration Statement or Shelf Registration Statement is
filed pursuant to (i) above and is not declared effective within 180 days
following the Closing Date, then commencing on the 181st day after the
Closing Date, Additional Interest shall be accrued on the Outstanding
Debentures over and above the accrued interest at a rate of .50% per annum;
or
(iii) If either (A) TWC has not exchanged Exchange Debentures for all
Outstanding Debentures validly tendered in accordance with the terms of the
Exchange Offer on or prior to 45 days after the date on which the
Registration Statement was declared effective, or (B) if applicable, the
Shelf Registration Statement has been declared effective but such Shelf
Registration Statement ceases to be effective at any time prior to two
years from the Closing Date, then Additional Interest shall be accrued on
the Outstanding Debentures over and above the accrued interest at a rate of
.50% per annum immediately following the (x) 46th day after such effective
date, in the case of (A) above, or (y) the day such Shelf Registration
Statement ceases to be effective in the case of (B) above;
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provided, however, that the Additional Interest rate on the Outstanding
Debentures may not exceed .50% per annum; and, provided, further, that (1) upon
the filing of the Registration Statement or Shelf Registration Statement (in the
case of (i) above), (2) upon the effectiveness of the Registration Statement or
Shelf Registration Statement (in the case of (ii) above), or (3) upon the
exchange of Exchange Debentures for all Outstanding Debentures tendered or upon
the effectiveness of the Shelf Registration Statement which had ceased to remain
effective prior to two years from the Closing Date (in the case of (iii) above),
Additional Interest on the Outstanding Debentures as a result of such clause
(i), (ii) or (iii) shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i), (ii) or
(iii) above will be payable in cash, on the same original payment dates of the
Outstanding Debentures. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount of
the Outstanding Debentures, multiplied by a fraction, the numerator of which is
the number of days such Additional Interest rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
If TWC, TWI and TBS effect the Exchange Offer, TWC, TWI and TBS will be
entitled to close the Exchange Offer provided that TWC has accepted all
Outstanding Debentures theretofore validly tendered in accordance with the terms
of the Exchange Offer. The consummation of the Exchange Offer will satisfy the
obligations of TWC, TWI and TBS under the Registration Rights Agreement.
Outstanding Debentures not tendered in the Exchange Offer shall bear interest at
the same rates in effect at the time of issuance of the Outstanding Debentures.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which is filed as an exhibit to the Registration Statement
of which this Prospectus constitutes a part.
HOLDING COMPANY STRUCTURE
Each of TWC, TWI and TBS is a holding company, the assets of which consist
primarily of investments in its respective consolidated and unconsolidated
subsidiaries. The assets of TWI 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 TWC, TWI and TBS have
been incurred by subsidiaries. TWE, which is not consolidated with either the
TWC or TWI for financial reporting purposes, also has substantial indebtedness
and other liabilities. The rights of TWC and the Guarantors and the rights of
their creditors, including Holders of Debentures, to participate in the
distribution of assets of any person in which TWC 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 TWC or the
Guarantors may be a creditor with recognized claims against such person (in
which case the claims of TWC 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 TWC or the
Guarantors). Accordingly, the Holders of the Debentures may be deemed to be
effectively subordinated to such claims. As of September 30, 1997, the
consolidated and unconsolidated subsidiaries of TWC and Guarantors had an
aggregate of approximately $20 billion of outstanding liabilities, including
indebtedness.
Each of TWC's and the Guarantors' ability to service its indebtedness and
other obligations, including the Debentures and the Guarantees, respectively,
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 TWC and TWI.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of the principal United States
federal income tax consequences to holders of Outstanding Debentures who
exchange their Outstanding Debentures for Exchange Debentures pursuant
to the Exchange Offer. This discussion is based on currently existing
provisions of the Internal Revenue Code of 1986, as amended (the 'Code'),
existing, temporary and proposed Treasury regulations promulgated thereunder,
and administrative and judicial interpretations thereof, all as in effect or
proposed on the date hereof and all of which are subject to change, possibly
with retroactive effect, or different interpretations. This discussion
is limited to holders of Outstanding Debentures who hold the Debentures as
capital assets, within the meaning of section 1221 of the Code. Moreover, this
discussion is for general information only and does not address all of the
tax consequences that may be relevant to holders of Outstanding Debentures
and Exchange Debentures in light of their personal circumstances or to certain
types of holders of Outstanding Debentures and Exchange Debentures (such as
certain financial institutions, insurance companies, tax-exempt entities,
dealers in securities or persons who have hedged the risk of owning a
Debenture). In addition, this discussion does not address any tax consequences
arising under the laws of any state, locality or foreign jurisdiction, or any
estate or gift tax considerations.
EXCHANGE OFFER
The exchange of Outstanding Debentures for Exchange Debentures pursuant
to the Exchange Offer should not be treated as an exchange or other taxable
event for United States Federal income tax purposes. Accordingly, there should
be no United States Federal income tax consequences to holders who exchange
Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer
and any such holder should have the same adjusted tax basis and holding period
in the Exchange Debentures as it had in the Outstanding Debentures immediately
before the exhange.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Debentures for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Debentures. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Debentures received in
exchange for Outstanding Debentures where such Outstanding Debentures were
acquired as a result of market-making activities or other trading activities.
TWC has agreed that for a period of 90 days after the Expiration Date, it will
make this Prospectus, as amended or supplemented, available to any broker-dealer
for use in connection with any such resales.
TWC will not receive any proceeds from any sale of Exchange Debentures by
broker-dealers or any other holder of Exchange Debentures. Exchange Debentures
received by broker-dealers for their own account pursuant to the Exchange Offer
may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Debentures or a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Debentures. Any
broker-dealer that resells Exchange Debentures that were received by it for its
own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Debentures may be deemed to be
an 'underwriter' within the meaning of the Securities Act and any profit on any
such resale of Exchange Debentures and any commissions or concessions received
by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by
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delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an 'underwriter' within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date, TWC will promptly send
additional copies of this Prospectus and any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents in the Letter of
Transmittal. TWC has agreed to pay all expenses incident to the Exchange Offer
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the Debentures (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
By acceptance of this Exchange Offer, each broker-dealer that receives
Exchange Debentures for its own account pursuant to the Exchange Offer agrees
that, in the case that TWC is required to file a Shelf Registration Statement,
on receipt of notice from TWC (i) that TWC is suspending the availability of the
Shelf Registration Statement or (ii) of the happening of any event which makes
any statement in the Shelf Registration Statement or the related prospectus
untrue in any material respect or which requires the making of any changes in
the Shelf Registration Statement or the related prospectus in order to make the
statements therein not misleading (which notice TWC agrees to deliver promptly
to the broker-dealer), the broker-dealer will suspend use of such prospectus
until TWC has amended or supplemented the prospectus to correct the misstatement
or omission and has furnished copies of the amended or supplemental prospectus
to the broker-dealer. If TWC shall give any such notice to suspend the use of
the prospectus, it shall extend the 90-day period referred to above by the
number of days during the period from and including the date of the giving of
the notice to and including when broker-dealers shall have received copies of
the supplemented or amended prospectus necessary to permit resales of the
Exchange Debentures.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the Exchange
Debentures in connection with the Exchange Offer are being passed upon for TWC
and the Guarantors by Cravath, Swaine & Moore, New York, New York.
EXPERTS
The consolidated financial statements and schedules of TWI and TWE
appearing in TWI'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 TWI'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 TWI'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 TWI'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,
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incorporated by reference in this Prospectus from TWI'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 in connection with
the offer made by this Prospectus, and, if given or made, such other information
or representations must not be relied upon as having been authorized by TWC, TWI
or TBS or by any underwriter, dealer or agent. This Prospectus does 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
nor any sale of or offer to sell the Debentures offered hereby shall, under any
circumstances, create an implication that there has been no change in the
affairs of TWC, TWI or TBS or that the information herein is correct as of any
time after the date hereof. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any of the Debentures offered hereby in any
State to any person to whom it is unlawful to make such offer or solicitation in
such State.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
TWI 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 TWI'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 TWI 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 TWI or TWC or any predecessor of TWI or TWC or
was serving at the request of TWI 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 TWI 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 TWI'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, TWI's and TWC's By-laws and Section 1, Article X
of TWI's and Article VIII of TWC's Restated Certificate of Incorporation, as
applicable.
The Directors' and Officers' Liability and Reimbursement Insurance Policy
of TWI 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.
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.
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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 TWI 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 TWI, (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 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<S> <C>
4.1 -- Indenture, dated as of January 15, 1993, between TWC (formerly known as Time Warner Inc.) and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to TWI's Registration
Statement on Form S-3 (File No. 33-57030) filed with the Commission on January 14, 1993)*
4.2 -- Second Supplemental Indenture, dated as of October 10, 1996, among TWI, TWC and The Chase Manhattan Bank,
as Trustee (filed as Exhibit 4.1 to TWI's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996).*
4.3 -- Third Supplemental Indenture, dated as of December 31, 1996, among TWI, TWC and The Chase Manhattan Bank,
as Trustee (filed as Exhibit 4.10 to TWI's Annual Report on Form 10-K for the year ended December 31,
1996).*
4.4 -- Fourth Supplemental Indenture, dated as of December 17, 1997, among TWI, TWC, TBS and The Chase Manhattan
Bank, as Trustee.**
4.5 -- Fifth Supplemental Indenture, dated as of January 12, 1998, among TWI, TWC, TBS and The Chase Manhattan
Bank, as Trustee.**
4.6 -- Form of 6.95% Debenture due 2028 (included in Exhibit 4.5).
4.7 -- Placement Agreement, dated January 6, 1998, among TWC, the Guarantors and Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.P. Morgan Securities Inc.**
4.8 -- Registration Rights Agreement, dated January 12, 1998, among TWC, the Guarantors and Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.P. Morgan Securities Inc.**
5 -- Opinion of Cravath, Swaine & Moore.**
12 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWI.**
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 TWI.**
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 TWC, TWI
and TBS.**
</TABLE>
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<TABLE>
<S> <C>
99.1 -- Form of Letter of Transmittal.**
99.2 -- Form of Notice of Guaranteed Delivery.**
99.3 -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.**
99.4 -- Form of Letter to Clients.**
</TABLE>
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* Incorporated by reference.
** Filed herewith.
ITEM 22. UNDERTAKINGS.
(a) 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.
(b) 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 20 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 their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(c) The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the Registration Statement through the date
of responding to the request.
(d) The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
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-4 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 February 5, 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 February 5, 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
* (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>
*
.........................................
(DONALD S. PERKINS)
*
.........................................
(RAYMOND S. TROUBH)
*
.........................................
(R. E. TURNER)
*
.........................................
(FRANCIS T. VINCENT, JR.)
*By: /s/ JOHN A. LABARCA
.........................................
(ATTORNEY-IN-FACT)
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-4 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 February 5, 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 February 5, 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
* (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-4 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 February 5, 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 February 5, 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
* (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
- ------ -------------------------------------------------------------------------------------------------- ----
<S> <C> <C>
4.1 -- Indenture, dated as of January 15, 1993, between TWC (formerly known as Time Warner Inc.) and The
Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to TWI's
Registration Statement on Form S-3 (File No. 33-57030) filed with the Commission on January 14,
1993)*
4.2 -- Second Supplemental Indenture, dated as of October 10, 1996, among TWI, TWC and The Chase
Manhattan Bank, as Trustee (filed as Exhibit 4.1 to TWI's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996).*
4.3 -- Third Supplemental Indenture, dated as of December 31, 1996, among TWI, TWC and The Chase
Manhattan Bank, as Trustee (filed as Exhibit 4.10 to TWI's Annual Report on Form 10-K for the year
ended December 31, 1996).*
4.4 -- Fourth Supplemental Indenture, dated as of December 17, 1997, among TWI, TWC, TBS and The Chase
Manhattan Bank, as Trustee.**
4.5 -- Fifth Supplemental Indenture, dated as of January 12, 1998, among TWI, TWC, TBS and The Chase
Manhattan Bank, as Trustee.**
4.6 -- Form of 6.95% Debenture due 2028 (included in Exhibit 4.5).
4.7 -- Placement Agreement, dated January 6, 1998, among TWC, the Guarantors and Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and J.P. Morgan Securities Inc.**
4.8 -- Registration Rights Agreement, dated January 12, 1998, among TWC, the Guarantors and Morgan
Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc.**
5 -- Opinion of Cravath, Swaine & Moore.**
12 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWI.**
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 TWI.**
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
TWC, TWI and TBS.**
99.1 -- Form of Letter of Transmittal.**
99.2 -- Form of Notice of Guaranteed Delivery.**
99.3 -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.**
99.4 -- Form of Letter to Clients.**
</TABLE>
- ------------
* Incorporated by reference.
** Filed herewith.
<PAGE>
<PAGE>
EXECUTION COPY
FOURTH SUPPLEMENTAL INDENTURE (this "Fourth
Supplemental Indenture") dated as of December 17,
1997, among TIME WARNER COMPANIES, INC., a Delaware
corporation formerly known as Time Warner, Inc. (the
"Company"), TIME WARNER INC., a Delaware corporation
formerly known as TW Inc. ("TWI"), TURNER
BROADCASTING SYSTEM, INC., a Georgia corporation
("TBS"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as successor trustee (the
"Trustee").
WHEREAS the Company has executed and delivered to the Trustee
an Indenture (the "Original Indenture"), dated as of January 15, 1993, providing
for the issuance and sale by the Company from time to time of its senior debt
securities (the "Securities"), which term shall include any Securities issued
under the Indenture (as defined below) after the date hereof, as amended by the
First Supplemental Indenture, dated as of June 15, 1993, between the Company and
the Trustee (the "First Supplemental Indenture"), the Second Supplemental
Indenture, dated as of October 10, 1996, among the Company, TWI and the Trustee
(the "Second Supplemental Indenture") and the Third Supplemental Indenture,
dated as of December 31, 1996 among the Company, TWI and the Trustee (the "Third
Supplemental Indenture") (the Original Indenture, as amended by the First
Supplemental Indenture, Second Supplemental Indenture and Third Supplemental
Indenture is herein called the "Indenture");
WHEREAS TWI has, by way of the Second Supplemental Indenture,
unconditionally guaranteed the obligations of the Company under the Indenture
(the "TWI Guarantee") and has, by way of the Third Supplemental Indenture,
extended to the Holders of Securities certain rights and privileges in
connection with the TWI Guarantee; and
WHEREAS Section 901(5) of the Indenture permits the Company,
when authorized by a resolution of the Board of Directors of the Company, and
the Trustee, at any time and from time to time, to enter into one or more
indentures supplemental to the Indenture, in form satisfactory to the Trustee,
for the purpose of adding to the rights of the Holders of the Securities;
WHEREAS Section 901(7) of the Indenture permits
the Company, when authorized by a resolution of the Board of
<PAGE>
<PAGE>
2
Directors of the Company, and the Trustee, at any time and from time to time to
enter into one or more indentures supplemental to the Indenture, in form
satisfactory to the Trustee, for the purpose of adding additional Events of
Default in respect of the Securities;
WHEREAS the Company proposes in and by this Fourth
Supplemental Indenture to supplement and amend the Indenture in certain respects
as it applies to Securities issued thereunder and TBS desires to unconditionally
and irrevocably guarantee 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
the Indenture (including obligations to the Trustee) and the Securities, and the
full and punctual performance within applicable grace periods of all other
obligations of the Company under the Indenture and the Securities (the "TBS
Guarantee") and to extend to the Holders of Securities certain rights and
privileges in connection with the guarantee of the Securities by TBS;
WHEREAS the Company, TWI and TBS have requested that the
Trustee execute and deliver this Fourth Supplemental Indenture and all
requirements necessary make this Fourth Supplemental Indenture a valid
instrument in accordance with its terms and to make the TBS Guarantee the valid
obligation of TBS, and the execution and delivery of this Fourth Supplemental
Indenture has been duly authorized in all respects.
NOW THEREFORE, the Company, TWI, TBS and the Trustee hereby
agree that the following Sections of this Fourth Supplemental Indenture
supplement the Indenture with respect to Securities issued thereunder:
SECTION 1. Definitions. (a) Capitalized terms used herein and
not defined herein have the meanings ascribed to such terms in the Indenture.
(b) Article I, Section 101, of the Indenture is hereby
supplemented to add the following definitions:
"TWI" means Time Warner Inc., a Delaware corporation formerly
known as TW Inc. and formerly defined in both the Second Supplemental
Indenture and Third Supplemental Indenture as the "Guarantor".
"TBS" means Turner Broadcasting System, Inc., a
Georgia corporation.
<PAGE>
<PAGE>
3
(c) All references to the Guarantor in the Second Supplemental
Indenture and Third Supplemental Indenture are deemed to be references to TWI.
SECTION 2. The TBS Guarantee. (a) TBS irrevocably and
unconditionally guarantees, to each Holder of Securities (including each Holder
of Securities issued under the Indenture after the date of this Fourth
Supplemental 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 the 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 the Indenture and the Securities.
(b) TBS further agrees that the TBS Guarantee constitutes a
guarantee of payment, performance and compliance and not merely of collection.
(c) The obligation of TBS to make any payment hereunder may be
satisfied by causing the Company to make such payment.
(d) TBS 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 TBS Guarantee.
(e) Any term or provision of this Fourth Supplemental
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
TBS Guarantee shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Fourth Supplemental Indenture, as it relates to TBS,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally.
SECTION 3. Amendment to Defeasance upon Deposit of Funds or
Government Obligations. Section 403 of Article 4 of the Indenture is hereby
supplemented and amended by adding the following sentence after the sentence
following clause (5) and before the definition of "Discharged" in Section 403 of
Article 4 of the Indenture:
"If the Company, at its option, with respect to a series of
Securities, satisfies the applicable conditions pursuant to either
clause (a) or (b) above,
<PAGE>
<PAGE>
4
then (x), in the event the Company satisfies the conditions to clause
(a) and elects clause (a) to be applicable, TBS shall be deemed to have
paid and discharged the entire indebtedness represented by, and
obligations under, the TBS 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, TBS 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
301 to be subject to this provision), and clause (5)(ii) of Section 501
(and any other Events of Default applicable to such series of
Securities that are determined pursuant to Section 301 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."
SECTION 4. Amendments to the Events of Default and Remedies.
(a) Clause (5) of Section 501 of Article Five of the Indenture is hereby amended
by adding thereto at the end thereof the following:
"(iii) default in the performance, or breach, of any covenant
or warranty of TBS in this Indenture (as it may be supplemented from
time to time) 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 (as so supplemented) 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
TBS by the Trustee or to TBS 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 or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or".
(b) Clause (6) of Section 501 of Article Five of the Indenture
is hereby amended by adding thereto at the end thereof the following:
<PAGE>
<PAGE>
5
"(iii) the entry of an order for relief against TBS 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 TBS 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 TBS 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 TBS or of any substantial
part of its properties, 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".
(c) Clause (7) of Section 501 of Article Five of the Indenture
is hereby amended by adding thereto at the end thereof the following:
"(iii) the consent by TBS 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 TBS or of any substantial part of its properties
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 TBS
in furtherance of any such action; or".
SECTION 5. Amendments to Article Eight. (a) The introductory
clause and clause (1) of Section 801 of Article Eight of the Indenture is hereby
supplemented and amended to read in its entirety as follows:
"Section 801. Consolidation, Merger, Conveyance or Transfer on
Certain Terms. None of the Company, TWI or TBS shall consolidate with
or merge into any other corporation 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 corporation formed by
such consolidation or into which
<PAGE>
<PAGE>
6
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 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 TWI or TBS, the
corporation formed by such consolidation or into which TWI or TBS is
merged or the Person which acquires by conveyance or transfer the
properties and assets of TWI or TBS 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 TWI or TBS to be performed or observed;"
(b) Section 802 of Article Eight of the Indenture is
supplemented and amended to read in its entirety as follows:
"Section 802. Successor Person Substituted. Upon any
consolidation or merger, or any conveyance or transfer of the
properties and assets of the Company, TWI or TBS substantially as an
entirety in accordance with Section 801, the successor person formed by
such consolidation or into which the Company, TWI or TBS 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, TWI or TBS, as the case may be, under this Indenture with the
same effect as if such successor had been named as the Company, TWI or
TBS herein, as the case may be. In the event of any such conveyance or
transfer, the predecessor as the Company, TWI or TBS, as the case may
be, 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."
SECTION 6. Supplemental Indentures. Clauses (1) and (2) of
Section 901 of Article Nine of the Indenture are
<PAGE>
<PAGE>
7
supplemented and amended to read in their entirety as follows:
"(1) to evidence the succession of another corporation or
Person to the Company, TWI or TBS, and the assumption by any such
successor of the respective covenants of the Company, TWI or TBS herein
and in the Securities contained; or
"(2) to add to the covenants of the Company, TWI or TBS, or to
surrender any right or power herein conferred upon the Company, TWI or
TBS, for the benefit of the Holders of the Securities of any or all
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".
SECTION 7. This Fourth Supplemental Indenture. This Fourth
Supplemental Indenture shall be construed as supplemental to the Indenture and
shall form a part of it, and the Indenture is hereby incorporated by reference
herein and each is hereby ratified, approved and confirmed.
SECTION 8. GOVERNING LAW. THIS FOURTH SUPPLEMENTAL INDENTURE
SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
SECTION 9. Counterparts. This Fourth Supplemental Indenture
may be executed in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but one
instrument.
SECTION 10. Headings. The headings of this Fourth Supplemental
Indenture are for reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 11. Trustee Not Responsible for Recitals. The recitals
herein contained are made by the Company, TWI and TBS, and not by the Trustee,
and the Trustee assumes no responsibility for the correctness thereof. The
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Fourth Supplemental Indenture.
SECTION 12. Separability. In case any one or more of the
provisions contained in this Fourth Supplemental Indenture or in the Securities
shall for any reason be held
<PAGE>
<PAGE>
8
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of the
Fourth Supplemental Indenture or of the Securities, but this Fourth Supplemental
Indenture and the Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
<PAGE>
<PAGE>
9
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be duly executed by their respective authorized
officers as of the date first written above.
TIME WARNER COMPANIES, INC.,
by /s/ Thomas W. McEnerney
------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TIME WARNER INC.,
by /s/ Thomas W. McEnerney
------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TURNER BROADCASTING SYSTEM, INC.,
by /s/ Thomas W. McEnerney
-------------------------------
Name: Thomas W. McEnerney
Title: Vice President
THE CHASE MANHATTAN BANK, as
Trustee,
by /s/ Richard Lorenzen
-------------------------------
Name: Richard Lorenzen
Title: Senior Trust Officer
<PAGE>
<PAGE>
EXECUTION COPY
FIFTH SUPPLEMENTAL INDENTURE (this "Fifth
Supplemental Indenture") dated as of January 12, 1998,
among TIME WARNER COMPANIES, INC., a Delaware corporation
formerly known as Time Warner, Inc. (the "Company"), TIME
WARNER INC., a Delaware corporation formerly known as TW
Inc. ("TWI"), TURNER BROADCASTING SYSTEM, INC., a Georgia
corporation ("TBS"), and THE CHASE MANHATTAN BANK, a New
York banking corporation, as trustee (the "Trustee").
WHEREAS the Company has executed and delivered to the Trustee an
Indenture (the "Original Indenture"), dated as of January 15, 1993, providing
for the issuance and sale by the Company from time to time of its senior debt
securities (the "Securities"), which term shall include any Securities issued
under the Indenture (as defined below) after the date hereof, as amended by the
First Supplemental Indenture, dated as of June 15, 1993, between the Company and
the Trustee (the "First Supplemental Indenture"), the Second Supplemental
Indenture, dated as of October 10, 1996, among the Company, TWI and the Trustee
(the "Second Supplemental Indenture"), the Third Supplemental Indenture, dated
as of December 31, 1996, among the Company, TWI and the Trustee (the "Third
Supplemental Indenture") and the Fourth Supplemental Indenture, dated as of
December 17, 1997, among the Company, TWI, TBS and the Trustee (the "Fourth
Supplemental Indenture") (the Original Indenture, as amended by the First
Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture and the Fourth Supplemental Indenture is herein called
the "Indenture");
WHEREAS Section 901(5) of the Indenture permits the Company, when
authorized by a resolution of the Board of Directors of the Company, and the
Trustee, at any time and from time to time, to enter into one or more indentures
supplemental to the Indenture, in form satisfactory to the Trustee, for the
purpose of establishing any form of Security, as provided in Article Two of the
Indenture, providing for the issuance of any series of Securities as provided in
Article Three of the Indenture and/or adding to the rights of the Holders of the
Securities of any series;
<PAGE>
<PAGE>
2
WHEREAS the Company proposes in and by this Fifth Supplemental
Indenture to supplement and amend the Indenture in certain respects to establish
a series of Securities issued pursuant to the Indenture designated as the 6.95%
Debentures Due 2028 limited in aggregate principal amount to $500,000,000 (the
Debentures and the Exchange Debentures (both as defined herein) together shall
constitute one series of Securities for purposes of the Indenture); and
WHEREAS the Company, TWI and TBS have requested that the Trustee
execute and deliver this Fifth Supplemental Indenture and have certified that
all requirements necessary to make this Fifth Supplemental Indenture a valid
instrument in accordance with its terms have been satisfied, and that the
execution and delivery of this Fifth Supplemental Indenture has been duly
authorized in all respects.
NOW THEREFORE, the Company, TWI, TBS and the Trustee hereby agree
that the following sections of this Fifth Supplemental Indenture supplement and
amend the Indenture with respect to that series of Securities which consists of
Debentures:
SECTION 1. Definitions. (a) Capitalized terms used herein and
not defined herein have the meanings ascribed to such terms in the Indenture.
(b) Section 101 of Article One of the Indenture is hereby
supplemented, solely with respect to that series of Securities which consists of
Debentures, to add the following definitions:
"Agent Members" has the meaning provided in Section 206.
"Debentures" means the series of Securities issued pursuant to
this Indenture designated as the 6.95% Debentures Due 2028 and limited in
aggregate principal amount to $500,000,000.
"Debentures Closing Date" means January 12, 1998.
"Exchange Debentures" means any Debentures to be issued pursuant
to this Indenture in connection with an Exchange Offer (as defined in the
Registration Rights Agreement) pursuant to the Registration Rights Agreement and
this Indenture.
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3
"Global Debentures" has the meaning provided in Section 202.
"Guarantors" means Time Warner Inc., a Delaware corporation, and
Turner Broadcasting System, Inc., a Georgia corporation.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Non-U.S. Person" means a Person who is not a "U.S. person" (as
defined in Regulation S).
"Offshore Global Debentures" has the meaning provided in the
Section 202.
"Offshore Physical Debentures" has the meaning provided the
Section 202.
"Physical Debentures" has the meaning provided in Section 202.
"Private Placement Legend" means the legend initially set forth
on the Debentures in the form set forth in Section 205(a).
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated January 12, 1998, among the Company, TWI, TBS and Morgan
Stanley & Co. Incorporated, Bear, Stearns & Co. Incorporated, Chase Securities
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc. (the "Placement Agents").
"Registration Statement" means the Registration Statement as
defined and described in the Registration Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Rule 144A" means rule 144A under the Securities Act.
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4
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" has the meaning provided in the
Registration Rights Agreement.
"U.S. Global Debentures" has the meaning provided in Section 202.
"U.S. Physical Debentures" has the meaning provided in Section
202.
SECTION 2. Creation of Series of Securities. Pursuant to Section
301 of the Indenture, there is hereby created a new series of Securities
designated as the "6.95% Debentures Due 2028" limited in aggregate principal
amount to $500,000,000. The Debentures shall include the Exchange Debentures,
which together shall constitute one series of Securities for purposes of the
Indenture. Certain of the terms of this series of Securities shall be
established by Board Resolution, and the interest rate on the Debentures could
increase by 0.50% per annum under certain circumstances, as provided for in the
Registration Rights Agreement.
SECTION 3. Amendments to Article Two. (a) Section 202 of Article
Two of the Indenture is hereby supplemented and amended, solely with respect to
that series of Securities which consists of Debentures, by adding thereto at the
end thereof the following:
"The Debentures shall be substantially in the form annexed hereto
as Exhibit A. The terms and provisions contained in the form of the Debentures
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Company, TWI, TBS and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Debentures offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Debentures in
registered form, substantially in the form set forth in Exhibit A (the "U.S.
Global Debentures"), deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
herein provided. The aggregate principal amount of the U.S. Global Debentures
may
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5
from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository or its nominee, as
hereinafter provided.
Debentures offered and sold in offshore transactions in reliance
on Regulation S shall be issued initially in the form of one or more permanent
global Debentures in registered form substantially in the form set forth in
Exhibit A (the "Offshore Global Debentures") deposited with the Trustee, as
custodian of the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Offshore Global Debentures may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository
or its nominee, as hereinafter provided.
Debentures offered and sold in reliance on Regulation D under the
Securities Act shall be issued in the form of permanent certificated Debentures
in registered form in substantially the form set forth in Exhibit A (the "U.S.
Physical Debentures"). Debentures issued pursuant to Section 206 in exchange for
interests in the Offshore Global Debentures shall be in the form of permanent
certificated Debentures in registered form substantially in the form set forth
in Exhibit A (the "Offshore Physical Debentures").
The Offshore Physical Debentures and U.S. Physical Debentures are
sometimes collectively referred to herein as the "Physical Debentures". The
U.S. Global Debentures and the Offshore Global Debentures are sometimes
collectively referred to herein as the "Global Debentures."
(b) Article Two of the Indenture is hereby supplemented and
amended, solely with respect to that series of Securities which consists of
Debentures, by adding thereto at the end thereof the following new Section 205:
"Section 205. Restrictive Legends. (a) Unless and until a
Debenture is exchanged for an Exchange Debenture in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, (i) each
U.S. Global Debenture and each U.S. Physical Debenture shall bear the legend set
forth below on the face thereof and (ii) each Offshore Physical Debenture and
each Offshore Global Debenture shall bear the legend set forth below on the face
thereof until at least the 41st day after the Debentures
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6
Closing Date and receipt by the Company and the Trustee of a certificate
substantially in the form of Exhibit B hereto.
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THIS DEBENTURE IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THE DEBENTURES, RESELL OR OTHERWISE TRANSFER THIS
DEBENTURE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS DEBENTURE
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES AT
THE TIME OF TRANSFER OF LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THIS DEBENTURE WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THE DEBENTURES, THE HOLDER MUST CHECK THE APPROPRIATE BOX
SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER
AND SUBMIT THIS DEBENTURE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR, THE
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<PAGE>
7
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE
COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) Each Global Debenture, whether or not an Exchange Debenture,
shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL DEBENTURE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL DEBENTURE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 207 OF THE INDENTURE."
(c) Article Two of the Indenture is hereby supplemented and
amended, solely with respect to that series of Securities which consists of
Debentures, by adding thereto at the end thereof the following new Section 206:
<PAGE>
<PAGE>
8
"Section 206. Book-Entry Provisions for Global Debentures.
(a) The U.S. Global Debentures and Offshore Global Debentures initially shall
(i) be registered in the name of the Depository for such Global Debentures
or the nominee of such Depository, (ii) be delivered to the Trustee as custodian
for such Depository and (iii) bear legends as set forth in Section 205.
Members of, or participants in, the Depository (the "Agent
Members") shall have no rights under this Indenture with respect to any Global
Debenture held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Debenture and the Depository may be treated by
the Company, TWI, TBS, the Trustee and any agent of the Company, TWI, TBS or the
Trustee as the absolute owner of such Global Debenture for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, TWI, TBS, the Trustee or any agent of the Company, TWI, TBS, or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Debenture.
(b) Transfers of a Global Debenture shall be limited to transfers
of such Global Debenture in whole, but not in part, to the Depository, its
successor or their respective nominees. Interests of beneficial owners in a
Global Debenture may be transferred in accordance with the rules and procedures
of the Depository and the provisions of Section 207. In addition, U.S. Physical
Debentures and Offshore Physical Debentures shall be transferred to all
beneficial owners in exchange for their beneficial interests in the U.S. Global
Debentures or the Offshore Global Debentures, respectively, if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the U.S. Global Debentures or the Offshore Global Debentures, as
the case may be, and a successor depository is not appointed by the Company
within 90 days of such notice or (ii) an Event of Default has occurred and is
continuing and the Security Registrar has received a request to the foregoing
effect from the Depository.
(c) Any beneficial interest in one of the Global Debentures that
is transferred to a Person who takes delivery in the form of an interest in
the other Global Debenture will, upon transfer, cease to be an interest in
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<PAGE>
9
such Global Debenture and become an interest in the other Global Debenture and,
accordingly, will thereafter be subject to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Debenture for as long as it remains such an interest.
(d) In connection with any transfer of a portion of the
beneficial interests in a U.S. Global Debenture or Offshore Global Debenture to
beneficial owners pursuant to paragraph (b) of this Section, the Security
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of the U.S. Global Debentures or Offshore Global Debentures, as
the case may be, in an amount equal to the principal amount of the beneficial
interest in such Global Debentures to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more U.S.
Physical Debentures or Offshore Physical Debentures, as the case may be, of like
tenor and amount.
(e) In connection with the transfer of the entire U.S. Global
Debenture or Offshore Global Debenture to beneficial owners pursuant to
paragraph (b) of this Section, the U.S. Global Debenture or Offshore Global
Debenture, as the case may be, shall be deemed to be surrendered to the Trustee
for cancelation, and the Company shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the Depository
in exchange for its beneficial interest in the U.S. Global Debenture or Offshore
Global Debenture, as the case may be, an equal aggregate principal amount of
U.S. Physical Debentures or Offshore Physical Debentures, as the case may be, of
authorized denominations.
(f) Any U.S. Physical Debenture delivered in exchange for an
interest in the U.S. Global Debenture pursuant to paragraph (b), (d) or (e) of
this Section shall, except as otherwise provided by paragraph (e) of Section
207, bear the legend regarding transfer restrictions applicable to the U.S.
Physical Debenture set forth in Section 205.
(g) Any Offshore Physical Debenture delivered in exchange for an
interest in the Offshore Global Debenture pursuant to paragraph (b), (d) or (e)
of this Section shall, except as otherwise provided by paragraph (e) of Section
207, bear the legend regarding transfer restrictions
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<PAGE>
10
applicable to the Offshore Physical Debenture set forth in Section 205.
(h) The registered holder of a Global Debenture may grant proxies
and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Debentures.
(i) Beneficial owners of interests in a U.S. Global Debenture may
receive U.S. Physical Debentures (which shall bear the Private Placement Legend
if required by Section 205) in accordance with the procedures of the Depository.
In connection with the execution, authentication and delivery of such U.S.
Physical Debentures, the Security Registrar shall reflect on its books and
records a decrease in the principal amount of the relevant U.S. Global Debenture
equal to the principal amount of such U.S. Physical Debentures and the Company
shall execute and the Trustee shall authenticate and deliver one or more U.S.
Physical Debentures having an equal aggregate principal amount."
(d) Article Two of the Indenture is hereby supplemented and
amended, solely with respect to that series of Securities which consists of
Debentures, by adding thereto at the end thereof the following new Section 207:
"Section 207. Special Transfer Provisions. Unless and until a
Debenture is exchanged for an Exchange Debenture in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Debenture to any Institutional Accredited Investor which
is not a QIB (excluding Non-U.S. Persons):
(i) The Security Registrar shall register the transfer of any
Debenture, whether or not such Debenture bears the Private Placement
Legend, if (x) the requested transfer is after the time period referred
to in Rule 144(k) under the Securities Act as in effect with respect to
such transfer or (y) the proposed transferee has delivered to the
Security Registrar (A) a certificate substantially in the form
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11
of Exhibit C hereto and (B) if the aggregate principal amount of the
Debentures being transferred is less than $100,000 at the time of such
transfer, an opinion of counsel acceptable to the Company that such
transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Debenture, upon receipt by the
Security Registrar of (x) the documents, if any, required by paragraph
(i) and (y) instructions given in accordance with the Depository's and
the Security Registrar's procedures, the Security Registrar shall
reflect on its books and records the date and a decrease in the
principal amount of the U.S. Global Debenture in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Debenture
to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Debentures of like
tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Physical
Debenture, an interest in a U.S. Global Debenture or an interest in an Offshore
Global Debenture prior to the removal of the Private Placement Legend to a QIB
(excluding Non-U.S. Persons):
(i) If the Debenture to be transferred consists of (x) either (A)
an interest in a Offshore Global Debenture prior to the removal of the
Private Placement Legend or (B) U.S. Physical Debentures, the Security
Registrar shall register the transfer if such transfer is being made
by a proposed transferor who has checked the box provided for on the
form of Debenture stating, or has otherwise advised the Company and
the Security Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Debenture
stating, or has otherwise advised the Company and the Security
Registrar in writing, that it is purchasing the Debenture for its own
account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as
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12
it has requested pursuant to Rule 144A or has determined not to request
such information and that is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A or (y) an interest in the U.S. Global
Debentures, the transfer of such interest may be effected only through
the book entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the
Debenture to be transferred consists of U.S. Physical Debentures, upon
receipt by the Security Registrar of the documents referred to in clause
(i) and instructions given in accordance with the Depository's and the
Security Registrar's procedures, the Security Registrar shall reflect on
its books and records the date and an increase in the principal amount
of the U.S. Global Debentures in an amount equal to the principal amount
of the U.S. Physical Debentures to be transferred, and the Trustee shall
cancel the U.S. Physical Debentures so transferred.
(c) Transfers of Interests in the Offshore Global Debentures or
Offshore Physical Debentures. The following provisions shall apply with respect
to any transfer of interests in the Offshore Global Debentures or Offshore
Physical Debentures:
(i) prior to the removal of the Private Placement Legend from an
Offshore Global Debenture or Offshore Physical Debenture pursuant to
Section 205, the Security Registrar shall refuse to register such
transfer unless such transfer complies with Section 207(b) or
Section 207(d), as the case may be; and
(ii) after such removal, the Security Registrar shall register
the transfer of any such Debenture without requiring any additional
certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Debenture to a Non-U.S.
Person:
(i) The Security Registrar shall register any proposed transfer
to any Non-U.S. Person if the Debenture to be transferred is a U.S.
Physical Debenture or an interest in the U.S. Global Debenture
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13
only upon receipt of a certificate substantially in the form of
Exhibit D from the proposed transferor.
(ii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in a U.S. Global Debenture, upon receipt by the
Security Registrar of (x) the documents required by paragraph (i) and
(y) instructions in accordance with the Depository's and the Security
Registrar's procedures, the Security Registrar shall reflect on its
books and records the date and a decrease in the principal amount of
such U.S. Global Debenture in an amount equal to the principal amount of
the beneficial interest in the U.S. Global Debenture to be transferred,
and (b) if the proposed transferee is an Agent Member, upon receipt by
the Security Registrar of instructions given in accordance with the
Depository's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Offshore Global Debenture in an
amount equal to the principal amount of the U.S. Physical Debentures or
the U.S. Global Debentures, as the case may be, to be transferred, and
the Trustee shall cancel the Physical Debenture, if any, so transferred
or decrease the amount of the U.S. Global Debenture.
(e) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Debentures not bearing the Private Placement Legend,
the Security Registrar shall deliver Debentures that do not bear the Private
Placement Legend. Upon the registration of transfer, exchange or replacement of
Debentures bearing the Private Placement Legend, the Security Registrar shall
deliver only Debentures that bear the Private Placement Legend unless either (i)
the circumstances contemplated by paragraphs (a)(i)(x) or (c)(ii) of this
Section 207 exist or (ii) there is delivered to the Security Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(f) General. By its acceptance of any Debenture bearing the
Private Placement Legend, each Holder of such a Debenture acknowledges the
restrictions on transfer of such Debenture set forth in this Indenture and in
the Private
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<PAGE>
14
Placement Legend and agrees that it will transfer such Debenture only as
provided in this Indenture. The Security Registrar shall not register a transfer
of any Debenture unless such transfer complies with the restrictions on transfer
of such Debenture set forth in this Indenture. In connection with any transfer
of Debentures, each Holder agrees by its acceptance of the Debentures to furnish
the Security Registrar or the Company such certifications, legal opinions or
other information as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that
the Security Registrar shall not be required to determine (but may conclusively
rely on a determination made by the Company with respect to) the sufficiency of
any such certifications, legal opinions or other information.
The Security Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 305 or
this Section 207 in accordance with its customary procedures. The Company shall
have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Security Registrar."
SECTION 4. Amendment to Article Three. The third paragraph of
Section 305 of Article Three of the Indenture is hereby supplemented and
amended, solely with respect to that series of Securities which consists of
Debentures, to read in its entirety as follows:
"Subject to Sections 204 and 207, 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 of like tenor and terms (including an
exchange of Debentures for Exchange Debentures), 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; provided,
that no exchanges of Debentures for Exchange Debentures shall occur
until a Registration Statement shall have been declared effective by the
Commission (confirmed in an Officers'
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15
Certificate delivered to the Trustee) and that any Debentures that are
exchanged for Exchange Debentures shall be canceled by the Trustee."
SECTION 5. This Fifth Supplemental Indenture. This Fifth
Supplemental Indenture and the Exhibits hereto shall be construed as
supplemental to the Indenture and shall form a part of it, and the Indenture is
hereby incorporated by reference herein and each is hereby ratified, approved
and confirmed.
SECTION 6. GOVERNING LAW. THIS FIFTH SUPPLEMENTAL INDENTURE SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Counterparts. This Fifth Supplemental Indenture may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but one
instrument.
SECTION 8. Headings. The headings of this Fifth Supplemental
Indenture are for reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 9. Trustee Not Responsible for Recitals. The recitals
herein contained are made by the Company, TWI and TBS, and not by the Trustee,
and the Trustee assumes no responsibility for the correctness thereof. The
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Fifth Supplemental Indenture.
SECTION 10. Separability. In case any one or more of the
provisions contained in this Fifth Supplemental Indenture or in the Securities
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of the Fifth Supplemental Indenture or of the Securities, but
this Fifth Supplemental Indenture and
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<PAGE>
16
the Securities shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Supplemental Indenture to be duly executed by their respective authorized
officers as of the date first written above.
TIME WARNER COMPANIES, INC.,
by /s/ Thomas W. McEnerney
------------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TIME WARNER INC.,
by /s/ Thomas W. McEnerney
----------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TURNER BROADCASTING SYSTEM, INC.,
by /s/ Thomas W. McEnerney
----------------------------------
Name: Thomas W. McEnerney
Title: Vice President
THE CHASE MANHATTAN BANK, as
Trustee,
by /s/ Richard Lorenzen
---------------------------------
Name: Richard Lorenzen
Title: Senior Trust Officer
<PAGE>
<PAGE>
EXHIBIT A
[FORM OF FACE OF DEBENTURE]
TIME WARNER COMPANIES, INC.
6.95% Debenture Due 2028
[CUSIP] [CINS] [ ]
No. $[ ]
TIME WARNER COMPANIES, INC., a Delaware corporation (the
"Company", which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to [ ], or its registered
assigns, the principal sum of [ ] Dollars ($[ ]) on January 15, 2028.
Interest Payment Dates: January 15 and July 15,
commencing July 15, 1998.
Regular Record Dates: December 15 and June 15.
Reference is hereby made to the further provisions of this
Debenture set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture dated as of January 15, 1993 (the
"Original Indenture"), as amended by the First Supplemental Indenture, dated as
of June 15, 1993 (the "First Supplemental Indenture"), the Second Supplemental
Indenture, dated as of October 10, 1996 (the "Second Supplemental Indenture"),
the Third Supplemental Indenture, dated as of December 31, 1996 (the "Third
Supplemental Indenture") the Fourth Supplemental Indenture, dated as of December
17, 1997 (the "Fourth Supplemental Indenture") and the Fifth Supplemental
Indenture, dated as of January 12, 1998 (the "Fifth Supplemental Indenture")
(the Original Indenture, as amended by the First Supplemental Indenture, the
Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth
Supplemental Indenture and the Fifth Supplemental Indenture is herein called the
"Indenture"). This Debenture is one of the series of Securities of the Company
issued pursuant to the Indenture and is designated as the 6.95% Debentures Due
2028 (hereinafter referred to as the "Debentures"), limited in aggregate
principal amount to $500,000,000.
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IN WITNESS WHEREOF, the Company has caused this Debenture to be
signed manually or by facsimile by its duly authorized officers.
Date: TIME WARNER COMPANIES, INC.
By: _________________________
Vice President
[SEAL]
Attest:
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Assistant Secretary
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:
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Authorized Officer
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[FORM OF REVERSE SIDE OF DEBENTURE]
TIME WARNER COMPANIES, INC.
6.95% Debenture Due 2028
1. Principal and Interest.
The Company promises to pay interest on the principal amount of
this Debenture semiannually on January 15 and July 15 of each year beginning
July 15, 1998, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, in like coin or currency, at the rate per annum
specified in the title hereof. The interest so payable, and punctually paid or
duly provided for, on any January 15 or July 15 will, except as provided in the
Indenture, be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on the December
15 or June 15 next preceding the interest payment dated (herein called the
"Regular Record Date") whether or not a Business Day, and may, at the option of
the Company, be paid by check mailed to the registered address of such Person.
Any such interest which is payable, but is not so punctually paid or duly
provided for, shall forthwith cease to be payable to the registered Holder on
such Regular Record Date and may be paid either to the Person in whose name this
Debenture (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Debentures
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed and upon such notice
as may be required by such exchange, if such manner of payment shall be deemed
practicable by the Trustee, all as more fully provided in the Indenture. See
paragraph 12 below for a description of circumstances under which Additional
Interest may accrue on this Debenture.
2. Paying Agent and Registrar.
Initially, the Trustee will be the Paying Agent and the Security
Registrar with respect to this Debenture. The Company reserves the right at any
time to vary or
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terminate the appointment of any Paying Agent or Security Registrar, to appoint
additional or other Paying Agents and other Security Registrars and to approve
any change in the office through which any Paying Agent or Security Registrar
acts; provided that there will at all times be a Paying Agent in The City of
New York.
3. Indenture; Limitations.
This Debenture is one of the duly authorized issue of senior
debentures, notes, bonds or other evidences of indebtedness of the Company, of
the series herein specified, all issued or to be issued under and pursuant to
the Indenture, to which reference is hereby made for a statement of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee and any agent of the Trustee, any Paying Agent, the Company and the
Holders of the Securities and the terms upon which the Securities are issued and
are to be authenticated and delivered.
The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may
have different conversion prices or exchange provisions (if any), may be subject
to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any), may be subject to different
covenants and Events of Default and may otherwise vary as provided or permitted
in the Indenture. This Debenture is one of the series of Securities of the
Company issued pursuant to the Indenture and is designated as the 6.95%
Debentures Due 2028, limited in aggregate principal amount to $500,000,000.
4. Redemption.
The Debentures of this series are not redeemable prior to the
stated maturity of the principal hereof and will not be subject to any sinking
fund.
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5. Denominations; Transfer; Exchange.
The Debentures are issuable in registered form without coupons,
in denominations of $1,000 and integral multiples thereof. Debentures may be
exchanged for a like aggregate principal amount of Debentures of other
authorized denominations at the office or agency of the Company in the Borough
of Manhattan, The City of New York, and in the manner and subject to the
limitations provided in the Indenture.
Upon due presentment for registration of transfer of this
Debenture at the office or agency of the Company in the Borough of Manhattan,
The City of New York, a new Debenture or Debentures of authorized denominations
for a like aggregate principal amount will be issued to the transferee in
exchange therefor, subject to the limitations provided in the Indenture.
No service charge shall be made for any such transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax, assessment or other governmental charge payable in connection therewith.
Subject to the provisions of the Indenture, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Debenture is registered as the owner hereof for all purposes,
whether or not this Debenture is overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.
6. Amendment; Supplement; Waiver.
The Indenture permits, with certain exceptions as therein
provided, the Company and the Trustee, without the consent of the Holders of the
Debentures or any other series of Securities, to 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 Company or
either Guarantor, and the assumption by such successor of the Company or such
Guarantor's obligations under the Indenture and the Securities of any series;
(ii) to add covenants of the Company and either Guarantor, or surrender any
rights of the Company or either Guarantor, for the benefit of the Holders of
Securities of any or all series; (iii) to cure any ambiguity, or correct
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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
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 Securities; and (vi) to provide any additional Events of
Default.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of a majority in principal amount of
the outstanding Securities of each series to be affected, 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
Securities of such series to be affected, except that no such supplemental
indenture may, without the consent of all of the Holders of affected Securities,
among other things, change the fixed maturity of any Securities or reduce the
aforesaid percentage of Securities of any series the consent of the Holders of
which is required for any such supplemental indenture.
The Indenture also permits the Holders of a majority in principal
amount of the Securities at the time Outstanding of each series on behalf of the
Holders of all Securities of such series to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults and their
consequences with respect to such series under the Indenture. Any such consent
or waiver by the Holder of this Debenture shall be conclusive and binding upon
such Holder and upon all future Holders of this Debenture and of any Debenture
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Debenture or such other Debentures.
7. Restrictive Covenants.
The Indenture imposes certain limitations on (i) the ability of
the Company and its Subsidiaries to Incur additional Senior Debt, (ii) the
ability of the Company and its Material Subsidiaries to suffer to exist or incur
Liens, and (iii) the ability of the Company or the Guarantors to merge,
consolidate or transfer substantially all of their assets.
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8. Defaults and Remedies.
The Indenture provides that, if an Event of Default specified
therein with respect to the Debentures shall have happened and be continuing,
either the Trustee or the Holders of 25% in aggregate principal amount of the
Debentures (or 25% in aggregate principal amount of all outstanding Securities
under the Indenture, in the case of certain Events of Default affecting all
series of Securities under the Indenture) may declare the principal of all the
Debentures to be due and payable.
Events of Default in respect of the Debentures are provided in
the Indenture and include: (i) default for 30 days in payment of any interest
installment with respect to the Debentures; (ii) default in payment of principal
of, or premium, if any, on, or any sinking fund or analogous payment with
respect to, the Debentures 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 Company (or the Guarantors, if applicable) by the Trustee
thereunder or by Holders of 25% in aggregate principal amount of the Debentures
in the performance of any covenant pertaining to the Debentures; (iv) failure to
pay when due, upon final maturity or upon acceleration, the principal amount of
any indebtedness for money borrowed of the Company in excess of $50 million, if
such indebtedness is not discharged, or such acceleration annulled, within 60
days after written notice; and (v) certain events of bankruptcy, insolvency and
reorganization with respect to either Guarantor, the Company or any Material
Subsidiary of the Company which is organized under the laws of the United States
or any political sub-division thereof.
The Indenture provides that the Holders of a majority in
aggregate principal amount of the outstanding Debentures 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.
The Indenture includes a covenant that the Company will file
annually with the Trustee a certificate of no default or specifying any default
that exists.
In certain cases, as provided in the Indenture, the Holders of a
majority in principal amount of the
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outstanding Debentures may on behalf of the Holders of all Debentures of such
series waive any past default or Event of Default with respect to the Debentures
of such series or compliance with certain provisions of the Indenture, 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 Debentures.
9. Debenture Guarantee.
The Company's obligations under the Debentures are fully,
unconditionally and irrevocably guaranteed under the Indenture by each of Time
Warner Inc., a Delaware corporation, and Turner Broadcasting System, Inc., a
Georgia corporation.
10. Authentication.
This Debenture shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on the other side
of this Debenture.
11. Defeasance.
The Indenture provides that the Company (and to the extent
applicable, the Guarantors), at its option, (a) will be Discharged from any and
all obligations in respect of the Debentures (except in each case for certain
obligations to register the transfer or exchange of the Debentures, replace
stolen, lost or mutilated Debentures, maintain paying agencies and hold moneys
for payment in trust) or (b) need not comply with the covenants described above
under "Restrictive Covenants" and certain Events of Default (other than those
arising out of the failure to pay interest or principal on the Debentures and
certain events of bankruptcy, insolvency and reorganization) will no longer
constitute Events of Default with respect to such Debentures, in each case if
the Company deposits with the Trustee, in trust, money or the equivalent in
securities of the government which issued the currency in which the Debentures
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
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are due in accordance with the terms of such Debentures. To exercise
any such option, the Company 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 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 Company is required to deliver to the Trustee
an Officers' Certificate stating that such deposit 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.
12. Exchange Offer; Registration Rights. [To be included in Debentures other
than (x) Exchange Debentures and (y) Debentures sold pursuant to a Shelf
Registration Statement.]
Pursuant to a Registration Rights Agreement among the Company,
the Guarantors and the Placement Agents, the Company and the Guarantors will
file with the Commission and use their reasonable best efforts to cause to
become effective a registration statement (the "Registration Statement") with
respect to an issue of Debentures identical in all material respects to the
Debentures (the "Exchange Debentures") and, upon becoming effective, to offer
the Holders of the Debentures the opportunity to exchange their Debentures for
the Exchange Debentures (the "Exchange Offer"). In the event that due to a
change in current interpretations by the Commission, the Company and the
Guarantors are not permitted to effect such Exchange Offer, the Company and the
Guarantors will instead file a registration statement covering resales by the
holders of Debentures (a "Shelf Registration Statement") and will use their
reasonable best efforts to cause such Shelf Registration Statement to become
effective and to keep such Shelf Registration Statement effective for two years
from the Debentures Closing Date. The Company and the Guarantors shall, in the
event a Shelf Registration Statement is filed, provide to each Holder of the
Debentures copies of the prospectus and notify each such Holder when the Shelf
Registration Statement has become effective. A Holder that sells Debentures
pursuant to a Shelf Registration Statement
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generally will be required to be named as a selling security holder in the
related prospectus and to deliver a current prospectus to purchasers, and will
be subject to certain of the civil liability provisions under the Securities Act
in connection with such sales. The Exchange Debentures will be issued (i) under
the Indenture or (ii) under an indenture substantially similar to the Indenture,
which, in either event, will provide that the Exchange Debentures will not be
subject to the transfer restrictions described in the Indenture.
Pursuant to the Registration Rights Agreement, the Company and
the Guarantors will use their reasonable best efforts to: (i) file the
Registration Statement or a Shelf Registration Statement with the Commission,
(ii) have such Registration Statement or Shelf Registration Statement
declared effective by the Commission within 180 days after the Debentures
Closing Date and (iii) commence the Exchange Offer and issue the Exchange
Debentures in exchange for all Debentures validly tendered in accordance with
the terms of the Exchange Offer prior to the close of the Exchange Offer, or, in
the alternative, cause such Shelf Registration Statement to remain effective for
two years from the Debentures Closing Date.
If the Company and the Guarantors fail to comply with the above
provisions, additional interest (the "Additional Interest") shall accrue on this
Debenture as follows:
(i) If the Registration Statement or Shelf Registration Statement
is not filed within 150 days following the Debentures Closing
Date, then commencing on the 151st day after the Debentures
Closing Date, Additional Interest shall accrue on the outstanding
principal amount of this Debenture over and above the interest
accruing at the rate specified on the face of this Debenture at a
rate of .50% per annum; or
(ii) If a Registration Statement or Shelf Registration Statement
is not declared effective within 180 days following the
Debentures Closing Date, then commencing on the 181st day after
the Debentures Closing Date, Additional Interest shall accrue on
the outstanding principal amount of this Debenture over and above
the interest accruing at
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the rate specified on the face of this Debenture at a rate of
.50% annum; or
(iii) If either (A) the Company has not exchanged Exchange
Debentures for all Debentures validly tendered in accordance with
the terms of the Exchange Offer on or prior to 45 days after the
date on which the Registration Statement was declared effective,
or (B) if applicable, the Shelf Registration Statement has been
declared effective but such Shelf Registration Statement ceases
to be effective at any time prior to two years from the
Debentures Closing Date, then Additional Interest shall accrue on
the outstanding principal amount of this Debenture over and above
the interest accruing at the rate specified on the face of this
Debenture at a rate of .50% per annum immediately following the
(x) 46th day after such effective date, in the case of (A) above,
or (y) the day such Shelf Registration Statement ceases to be
effective in the case of(B) above;
provided, however, that the Additional Interest rate on this Debenture shall not
exceed .50% per annum; and, provided, further, that (1) upon the filing of the
Registration Statement or Shelf Registration Statement (in the case of (i)
above), (2) upon the effectiveness of the Registration Statement or Shelf
Registration Statement (in the case of (ii) above), or (3) upon the exchange of
Exchange Debentures for all Debentures tendered or upon the effectiveness of the
Shelf Registration Statement which had ceased to remain effective prior to two
years from the Debentures Closing Date (in the case of (iii) above), Additional
Interest on this Debenture as a result of such clause (i), (ii) or (iii) shall
cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i),
(ii) or (iii) above will be payable in cash, on the same original payment dates
as other interest due on this Debenture. The amount of Additional Interest due
on this Debenture will be determined by multiplying the applicable Additional
Interest rate by the outstanding principal amount of this Debenture, multiplied
by a fraction, the numerator of which is the number of days such Additional
Interest rate was applicable during such period
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(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
If the Company and the Guarantors effect the Exchange Offer, the
Company and the Guarantors will be entitled to close the Exchange Offer provided
that the Company has accepted all Debentures theretofore validly tendered in
accordance with the terms of the Exchange Offer. Debentures not tendered in the
Exchange Offer shall bear interest at the same rates in effect at the time of
issuance of the Debentures.
13. Obligation To Pay Interest Absolute.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal and any
premium of and any interest on this Debenture at the place, rate and respective
times and in the coin or currency herein and in the Indenture prescribed.
14. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Debenture, by acceptance thereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company and each of the Guarantors
to the extent provided therein.
15. Governing Law.
THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
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The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Time Warner
Companies, Inc., 75 Rockefeller Plaza, New York, New York 10019, Attention of
Manager, Shareholder Relations.
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[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
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Please print or typewrite name and address including zip code of assignee
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the within Debenture and all rights thereunder, hereby irrevocably constituting
and appointing ------------------- attorney to transfer said Debenture on the
books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL DEBENTURES OTHER THAN EXCHANGE DEBENTURES,
UNLEGENDED OFFSHORE GLOBAL DEBENTURES AND
UNLEGENDED OFFSHORE PHYSICAL DEBENTURES]
In connection with any transfer of this Debenture occurring prior to the
date which is the earlier of (i) the date the shelf registration statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[ ](a) this Debenture is being transferred in compliance with the
exemption from registration under the Securities Act of 1933
provided by Rule 144A thereunder.
or
[ ](b) this Debenture is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Debenture and the Indenture.
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If none of the foregoing boxes is checked, the Trustee or other Security
Registrar shall not be obligated to register this Debenture in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 207 of the Indenture
shall have been satisfied.
Date:
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NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Debenture for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933 and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
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NOTICE: To be executed by an executive
officer
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EXHIBIT B
Form of Certificate
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The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Administration
Re: Time Warner Companies, Inc. (the "Company")
$500,000,000 6.95% Debentures Due 2028 (the
"Debentures")
Ladies and Gentlemen:
This letter relates to U.S. $________ principal amount of
Debentures represented by a Debenture (the "Legended Debenture") which bears a
legend outlining restrictions upon transfer of such Legended Debenture. Pursuant
to Section 205 of the Indenture dated as of January 15, 1993, as supplemented
and amended (the "Indenture"), relating to the Debentures, we hereby certify
that we are (or we will hold such securities on behalf of) a person outside the
United States to whom the Debentures could be transferred in accordance with
Rule 904 of Regulation S promulgated under the U.S. Securities Act of 1933.
Accordingly, you are hereby requested to exchange the legended certificate for
an unlegended certificate representing an identical principal amount of
Debentures, all in the manner provided for in the Indenture.
You, the Company, Time Warner Inc. and Turner Broadcasting
System, Inc. are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Name of Holder]
By: ____________________
Authorized Signature
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EXHIBIT C
Form of Certificate to be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
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The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Administration
Re: Time Warner Companies, Inc. (the "Company")
$500,000,000 6.95% Debentures Due 2028 (the
"Debentures")
Ladies and Gentlemen:
In connection with our proposed purchase of $__________ aggregate
principal amount of the Debentures, we confirm that:
1. We understand that any subsequent transfer of the Debentures
is subject to certain restrictions and conditions set forth in the Indenture
dated as of January 15, 1993, as supplemented and amended (the "Indenture"),
relating to the Debentures, and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Debentures except in compliance
with, such restrictions and conditions and the Securities Act of 1933 (the
"Securities Act").
2. We understand that the offer and sale of the Debentures have
not been registered under the Securities Act, and that the Debentures may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Debentures, we will do so only (A) to the
Company and Time Warner Inc. and Turner Broadcasting System, Inc. (the
"Guarantors"), or any subsidiary thereof, (B) in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined therein),
(C) to an institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter, (D) outside the United States in accordance with Rule 904
of Regulation S under the Securities Act, (E) pursuant to the
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exemption from registration provided by Rule 144 under the Securities Act, or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Debentures
from us a notice advising such purchaser that resales of the Debentures are
restricted as stated herein.
3. We understand that, on any proposed resale of any Debentures,
we will be required to furnish to you and the Company such certification, legal
opinions and other information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Debentures purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Debentures
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring the Debentures purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You, the Company and the Guarantors are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
----------------------------------
Authorized Signature
C-2
<PAGE>
<PAGE>
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------,-----
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Administration
Re: Time Warner Companies, Inc. (the "Company")
$500,000,000 6.95% Debentures Due 2028 (the
"Debentures")
Ladies and Gentlemen:
In connection with our proposed sale of U.S.$_____ aggregate
principal amount of the Debentures, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of 1933
and, accordingly, we represent that:
(1) the offer of the Debentures was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You, the Company, Time Warner Inc. and Turner Broadcasting
System, Inc. are entitled to rely upon this letter and are irrevocably
authorized to produce this letter
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<PAGE>
or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------
Authorized Signature
D-2
<PAGE>
<PAGE>
TIME WARNER INC.
TIME WARNER COMPANIES, INC.
TURNER BROADCASTING SYSTEM, INC.
Placement Agreement
January 6, 1998
New York, New York
To the Representatives
named in Schedule I
hereto of the Placement Agents
named in Schedule II hereto
Ladies and Gentlemen:
Time Warner Companies, Inc., a Delaware corporation (the "Company"),
proposes to sell to the initial purchasers named in Schedule II hereto (the
"Placement Agents"), 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
supplemented, the "Indenture") dated as of January 15, 1993, between the Company
and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the
"Trustee"), as supplemented by a First Supplemental Indenture dated as of June
15, 1993 between the Company and the Trustee, a Second Supplemental Indenture
dated as of October 10, 1996, among the Company, TWI (as defined below) and the
Trustee, a Third Supplemental Indenture dated as of December 31, 1996, among the
Company, TWI and the Trustee, a Fourth Supplemental Indenture dated as of
December 17, 1997 among the Company, TWI, TBS (as defined below) and the Trustee
and a Fifth Supplemental Indenture to be dated as of January 12, 1998 among the
Company, TWI, TBS and 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. Time Warner Inc., a Delaware corporation ("TWI"),
became the parent of the Company and Turner Broadcasting System, Inc., a Georgia
corporation ("TBS" and, together with TWI, the "Guarantors"), upon the merger of
the Company and TBS with separate subsidiaries of TWI. Each of TWI and TBS, as
primary obligor and not merely as surety has or will agree to irrevocably and
unconditionally guarantee (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 and all other payment obligations of the Company under
the Indenture and the Debt Securities and (ii) the full and punctual performance
within
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2
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 "Placement Agents" and "Representatives", as used herein, shall each be
deemed to refer to such firm or firms. Capitalized terms used herein without
definition have the respective meanings specified in the Offering Memorandum
referred to below.
The Debt Securities will be offered and sold to you without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance on an exemption therefrom. The Company has prepared an offering
memorandum dated January 6, 1998 (such offering memorandum, together with any
documents incorporated by reference therein, being hereinafter referred to as
the "Offering Memorandum"), setting forth information regarding the Company and
the Securities. The Company hereby confirms that it has authorized the use of
the Offering Memorandum in connection with the offering and resale of the
Securities by the Placement Agents.
The Company understands that you propose to make an offering of the
Securities only on the terms and in the manner set forth in the Offering
Memorandum and Section 2(e) hereof, as soon as you deem advisable after this
Agreement has been executed and delivered, (i) to persons in the United States
whom you reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, as such
rule may be amended from time to time ("Rule 144A"), in transactions under Rule
144A, (ii) to a limited number of other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Securities
Act ("Accredited Investors")) in private sales exempt from registration under
the Securities Act in minimum denominations of $100,000 and/or (iii) to non-U.S.
persons outside the United States to whom you reasonably believe offers and
sales of the Debt Securities may be made in reliance upon Regulation S under the
Securities Act ("Regulation S"), in transactions meeting the requirements of
Regulation S.
The holders of the Securities will be entitled to the benefits of the
Registration Rights Agreement, substantially in the form attached hereto as
Exhibit D (the "Registration Rights Agreement"), pursuant to which the Company
will file a registration statement or registration statements (each, a
"Registration Statement") with the Commission registering the Securities and/or
the Exchange Securities (as defined in the Registration Rights Agreement) under
the Securities Act.
1. Representations and Warranties. Each of the Company and the
Guarantors represents and warrants to, and agrees with, each Placement Agent as
set forth below in this Section 1.
(a) (i) As of the date of the Offering Memorandum and at all times
subsequent thereto up to the Closing Date referred to below, neither the
Offering Memorandum nor any amendment or supplement thereto will include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements
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3
therein, in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing by you (the "Offering Memorandum Purchase
Letter") to the Company expressly for use in the Offering Memorandum or any
amendment or supplement thereto.
(ii) Each preliminary prospectus filed as part of a Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424(a) under the Securities Act, will comply at the time
it is filed in all material respects with the requirements of the
Securities Act and the rules and regulations of the Commission thereunder
(the "Securities Act Regulations") and, on the effective date of the
Registration Statement and at all times subsequent thereto (in the case of
an exchange offer, up to the date on which the exchange offer is closed
(the "Exchange Date") and, in the case of a shelf registration statement or
other registration statement used in connection with sales or resales of
Securities or Exchange Securities, for so long as such Registration
Statement is effective), (x) such Registration Statement, at the time it
becomes effective, and the final Prospectus contained therein (the
"Prospectus") and any amendments or supplements thereto will comply in all
material respects with the requirements of the Securities Act and the
Securities Act Regulations; (y) neither such Registration Statement (at the
time it becomes effective) nor any amendment or supplement thereto,
including the documents incorporated by reference therein, will contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and (z) neither the Prospectus nor any other offering
materials nor any amendments or supplements thereto, including the
documents incorporated by reference therein, will include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except that this representation
and warranty does not apply to statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by you (the "Registration Statement Purchase Letter") expressly for use in
a Registration Statement or Prospectus (or any amendments or supplements
thereto) or any other offering materials.
(b) Any documents filed by the Company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are incorporated by
reference (in whole or in part) in the Offering Memorandum or that are
incorporated by reference (in whole or in part) in a Registration
Statement, 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
and the rules and regulations of the Commission thereunder (the "Exchange
Act Regulations").
(c) When the Debt Securities are issued and delivered pursuant to this
Agreement, such securities will not be of the same class (within the
meaning of Rule 144A) as securities of the Company which are listed on a
national securities exchange
<PAGE>
<PAGE>
4
registered under Section 6 of the Exchange Act or quoted in a U.S.
automated interdealer quotation system.
(d) TWI is subject to Section 13 or 15(d) of the Exchange Act.
(e) Neither the Company nor any of its affiliates (as defined in Rule
501(b) under the Securities Act) has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or
will be integrated with the sale of the Debt Securities in a manner that
would require the registration of the Debt Securities under the Securities
Act.
(f) Neither the Company nor any person (other than the Placement
Agents or their affiliates, as to whom the Company makes no representation)
acting on its behalf has engaged, in connection with the offering of the
Securities, (A) in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or (B) in any
directed selling efforts within the meaning of Rule 903 under the
Securities Act and the Commissions' Release No. 33-6863.
(g) Assuming that the representations and warranties of the Placement
Agents in Section 2(b) are true, correct and complete and assuming
compliance by the Placement Agents with their covenants in Section 2(b), it
is not necessary in connection with the offer, sale and delivery of the
Securities to the Placement Agents in the manner contemplated by this
Agreement to register the Securities under the Securities Act or to qualify
any indenture in respect of the Securities under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
(h) (1) Each of the Company and TWI 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 Offering Memorandum, and to
enter into and perform its obligations under this Agreement and the
Registration Rights Agreement; and each of the Company, TWI 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
TWI 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 Offering Memorandum, and to enter into and perform its
obligations under this Agreement and the Registration Rights Agreement.
<PAGE>
<PAGE>
5
(i) Each of TWI's significant subsidiaries, as such term is defined in
Rule 1-02(w) of Regulation S-X under the Securities 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
Offering Memorandum, 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 TWI and its subsidiaries, considered as
one enterprise.
(j) TWI's authorized equity capitalization is as set forth in the
Offering Memorandum; all of the outstanding capital stock of the Company
and TBS is owned, directly or indirectly, by TWI, free and clear of all
liens, encumbrances, equities or claims.
(k) 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, TWI or TBS or any of their respective
subsidiaries of a character required to be disclosed in the Offering
Memorandum which is not adequately disclosed therein, and there is no
franchise, contract or other document of a character required to be
described in the Offering Memorandum, which is not described as required.
(l) This Agreement has been duly authorized, executed and delivered by
each of the Company, TWI and TBS.
(m) Assuming that the representations and warranties of each of the
Placement Agents in Section 2(b) are true, correct and complete and that
the representations and warranties of each subsequent transferee that is an
Accredited Investor (as set forth in the certificate required to be
executed and delivered by each such subsequent transferee) are true,
correct and complete, and assuming compliance by each of the Placement
Agents with its covenants in Section 2(b), no consent, approval,
authorization or order of, giving of notice to, or registration with, or
taking of any other action in respect of, any federal, state or foreign
governmental authority or agency 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 the Registration Rights Agreement (except for the registration
of the Securities or the Exchange Securities pursuant to the Registration
Rights Agreement under the Securities Act and the registration of the
Securities and the Exchange Securities under state securities laws).
(n) The execution and delivery of this Agreement, the Indenture and
the Registration Rights Agreement by the Company, TWI and TBS, the
issuance, sale and delivery of the Debt Securities by the Company and the
consummation by the Company, TWI and TBS of the transactions contemplated
in this Agreement, the
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<PAGE>
6
Indenture and the Registration Rights Agreement and compliance by the
Company, TWI and TBS with the terms of this Agreement or the Registration
Rights Agreement do not and will not result in any violation of the
Certificate of Incorporation, as amended, or By-laws, as amended, of the
Company, TWI and 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, TWI and TBS under (i) any
material agreement or instrument, to which the Company, TWI 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 TWI 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 TWI 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, TWI or TBS or any of their properties.
(o) The Securities conform in all material respects to the description
thereof contained in the Offering Memorandum.
(p) The Indenture has been duly authorized, executed and delivered by
the Company 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 Placement Agents pursuant to this
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 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.
(q) The Indenture has been duly authorized, executed and delivered by
each of TWI and TBS and constitutes a legal, valid and binding instrument
enforceable against each of TWI 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
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7
enforceability to general principles of equity, regardless of whether
considered in a proceeding in equity or at law).
(r) At the Closing Date referred to below, the Registration Rights
Agreement will have been duly authorized, executed and delivered by the
Company, TWI and TBS and will constitute the valid and legally binding
obligation of the Company, TWI and TBS, enforceable against the Company,
TWI and TBS in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or conveyance or other similar laws affecting
enforcement of creditors' rights generally, except as enforcement thereof
is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and except
as any rights to indemnity and contribution may be limited by federal and
state securities laws and public policy considerations underlying such
laws. The Registration Rights Agreement will conform in all material
respects to the description thereof contained in the Offering Memorandum
and will conform in all material respects to the description thereof, if
any, to be contained in the Registration Statement and Prospectus.
(s) Each firm of independent accountants, which is reporting upon
certain audited or reviewed financial statements and schedules included or
incorporated by reference in the Offering Memorandum, 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 Securities Act and the respective applicable published rules and
regulations thereunder.
(t) The consolidated financial statements and the related notes of
each of TWI, TWE and any other person included or incorporated by reference
in the Offering Memorandum (including the supplementary summary unaudited
financial information of the Company and TBS) present fairly in accordance
with generally accepted accounting principles the consolidated financial
position of each of the Company, TWI, TBS, TWE and any such other person as
of the dates indicated and the consolidated results of operations of each
of the Company, TWI, TBS, TWE and any such other person and cash flows of
each of TWI 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 Offering Memorandum
present fairly in accordance with generally accepted accounting principles
the information required to be stated therein. Any pro forma financial
statements of the Company, TWI, TBS or TWE and other pro forma financial
information included or incorporated by reference in the Offering
Memorandum 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
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8
forma bases described therein, and, in the opinion of the Company, TWI,
TBS and TWE, 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.
(u) Neither the Company, TWI nor 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, Sale and Resale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, each
of the Company, TWI and TBS agrees to sell to each Placement Agent, and each
Placement Agent agrees, severally and not jointly, to purchase from the Company,
TWI and TBS, at the purchase price for the Securities set forth in Schedule I
hereto, the principal amount of Securities set forth opposite such Placement
Agent's name in Schedule II hereto.
(b) The Placement Agents have advised the Company, TWI and TBS that
they propose to offer the Securities for resale upon the terms and
conditions set forth in this Agreement and in the Offering Memorandum. Each
Placement Agent hereby represents and warrants to, and agrees with, the
Company that it (i) is a Qualified Institutional Buyer, (ii) has not
solicited offers for, or offered or sold, and will not solicit offers for,
or offer or sell, the Securities by means of any form of general
solicitation or general advertising or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act, or with
respect to Securities sold in reliance on Regulation S, by means of any
directed selling efforts within the meaning of Rule 903 under the
Securities Act and the Commission's Release No. 33-6863, and (iii) has
solicited and will solicit offers for the Securities only from, and have
offered and will offer, sell or deliver the Securities, as part of its
initial offering, only to (A) persons in the United States whom it
reasonably believes to be Qualified Institutional Buyers or, if any such
person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has
represented to it that each such account is a Qualified Institutional
Buyer, to whom notice has been given that such sale or delivery is being
made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A, (B) a limited number of other institutional investors whom it
reasonably believes to be Accredited Investors in private sales exempt from
registration under the Securities Act in minimum denominations of $100,000
and (C) non-U.S. persons outside the United States to whom it reasonably
believes offers and sales of the Securities may be made in reliance upon
Regulation S under the Securities Act, in transactions meeting the
requirements of Regulation S; provided that, with respect to clause (B) and
clause (C) above each such transfer of Securities is effected by the
delivery to such purchaser of Securities in definitive form and registered
in its name (or its nominee's name) on the books maintained by the Transfer
Agent. Each Placement Agent agrees to deliver, at the Closing Date, a
letter to the Company, TWI and TBS confirming its compliance with the
foregoing requirements.
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9
Promptly following the occurrence thereof, the Placement Agents
will advise the Company, TWI and TBS of the date on which they and their
affiliates first ceased to hold Securities acquired as part of the initial
distribution thereof.
(c) On or prior to the Closing Date, each Placement Agent shall
deliver to the Company the Offering Memorandum Purchase Letter. If any
Placement Agent participates in the preparation of a Registration
Statement, such Placement Agent shall deliver the Registration Statement
Purchaser Letter on or prior to the effective date of such Registration
Statement.
3. Delivery and Payment. Delivery of and payment for the 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 placement agents, and the Company (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Placement Agents against payment by
the several Placement Agents through the Representatives of the purchase price
thereof to or upon the order of the Company by certified or official bank check
or checks drawn on or by a New York Clearing House bank and payable in
immediately available funds. Delivery of the Debt 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 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 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
Placement Agents that:
(a) The Company, TWI or TBS will deliver to the Representatives, as of
the date of the Offering Memorandum, such number of copies of the Offering
Memorandum, as it may then be amended or supplemented, as they may
reasonably request.
(b) None of the Company, TWI or TBS will at any time make any
amendment or supplement to the Offering Memorandum (other than amendments
of or supplements to any documents incorporated by reference in the
Offering Memorandum or the filing of subsequent documents under the
Exchange Act), of which the Representatives shall not have previously been
advised and furnished a copy, or to which the Representatives or their
counsel shall reasonably object. The Company shall not file any document
under the Exchange Act before the completion of the offering of
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10
the Securities by the Placement Agents if such document would be
incorporated by reference in the Offering Memorandum and if the filing of
such document would cause the Offering Memorandum, as amended or
supplemented by the filing of such document, to contain an untrue statement
of a material fact or to omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(c) If at any time prior to completion of the distribution of the
Securities by the Placement Agents to purchasers who are not affiliates of
such Placement Agents any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Offering Memorandum in
order that the Offering Memorandum will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company, TWI and
TBS will promptly prepare such amendment or supplement as may be necessary
to correct such untrue statement or omission and furnish to the Placement
Agents such number of copies as they may reasonably request.
(d) Notwithstanding any provision of paragraph (b) or paragraph (c) of
this Section 4 to the contrary, however, the obligations of the Company,
TWI and TBS under paragraph (b) and paragraph (c) of this Section 4 shall
terminate on the earliest to occur of (i) 180 days after the date of the
Offering Memorandum (exclusive of any days during which use of the Offering
Memorandum is suspended as set forth below) and (ii) the date upon which
the Placement Agents and their affiliates first cease to hold Securities
acquired as part of the initial distribution thereof; provided, however,
that the Company, TWI and TBS shall, if requested by an Placement Agent,
amend or supplement the Offering Memorandum as provided in paragraph (c) of
this Section 4 after such 180-day period (but in no event beyond the date
on which an Exchange Offer is consummated pursuant to the Registration
Rights Agreement) so long as an Placement Agent shall have agreed to
reimburse the Company, TWI and TBS for their reasonable expenses in
connection therewith. In addition, after 30 days from the date hereof, the
Company shall not be required to amend or supplement the Offering
Memorandum pursuant to paragraph (b) or paragraph (c) of this Section 4 in
the event that, and for so long as (A) an event occurs and is continuing as
a result of which the Offering Memorandum as then amended or supplemented
would, in the Company's good faith judgment, contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
under which they are made, and (B) the Company determines in its good faith
judgment that the disclosure of such event at such time would materially
adversely affect the interests of the Company. The Company, TWI and TBS
agree to notify the Representatives to suspend use of the Offering
Memorandum as promptly as practicable after the occurrence of such an
event, and the Placement Agents hereby agree to suspend use of the Offering
Memorandum until the Company has amended or supplemented the Offering
Memorandum to correct such misstatement or omission. At such time as such
public disclosure is otherwise made or the Company
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11
determines in its good faith judgment that the disclosure in the Offering
Memorandum of an event described above would no longer materially adversely
affect the Company or that such disclosure is not necessary, the Company
agrees promptly to notify the Representatives of such determination, to
amend or supplement the Offering Memorandum if necessary to correct any
untrue statement or omission therein and to furnish the Placement Agents
such numbers of copies of the Offering Memorandum, as so amended or
supplemented, as they may reasonably request.
(e) The Company will use its best efforts in cooperation with the
Representatives to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions as they
may designate, if any, and to maintain such qualifications in effect for so
long as required for the initial distribution of the Securities by the
Placement Agents; provided, however, that the Company shall not be
obligated 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(e), (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. The Company will file such statements and reports as
may be required by the laws of each jurisdiction in which the Securities
have been qualified as above provided.
(f) For a period of three years after the Closing Date, the Company
TWI, TBS and TWE will furnish to the Representatives 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 each of the Company, TWI, TBS and TWE to its public
stockholders generally.
(g) Neither the Company, TWI, TBS nor any person (other than the
Placement Agents or their affiliates, as to whom the Company makes no
representation) acting on its behalf will solicit any offer to buy or offer
or sell the Securities by means of any form of general solicitation or
general advertising (within the meaning of Rule 502(c) under the Securities
Act) or by means of any directed selling efforts (as defined under
Regulation S and the Commission's written releases related thereto).
(h) Neither the Company, TWI, TBS nor any of their affiliates (as
defined in Rule 501(b) of the Securities Act) will offer, sell or solicit
offers to buy or otherwise negotiate in respect of any security (as defined
in the Securities Act) which will be integrated with the sale of the
Securities in a manner that would require the registration of the
Securities under the Securities Act.
(i) During the period from the Closing Date to the earlier of (i) two
years after the Closing Date, or (ii) the date of effectiveness of a
registration statement with respect to the Securities as contemplated in
the Registration Rights Agreement, none of the Company, TWI or TBS will,
and will not permit any of its "affiliates" (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities that have been
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12
reacquired by them, except for Securities purchased by the Company, TWI or
TBS or any of their affiliates and resold in a transaction registered under
the Securities Act.
(j) From and after the Closing Date, the Company will, so long as the
Securities are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, either (i) file reports
and other information with the Commission under Section 13 or 15(d) of the
Exchange Act, or (ii) in the event it is not subject to Section 13 or 15(d)
of the Exchange Act, furnish to holders of Securities and prospective
purchasers of Securities designated by such holders, upon request of such
holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act to permit
compliance with Rule 144A in connection with resales of the Securities.
(k) The Company will use its best efforts in cooperation with the
Representatives to permit the Debt Securities to be eligible for clearance
and settlement through The Depository Trust Company.
(l) Each Debt Security will bear the following legend until, in the
opinion of counsel to the Company, such legend is no longer advisable
because such Debt Security is no longer subject to the restrictions on
transfer described therein:
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS DEBENTURE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATIONS UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE DEBENTURES, RESELL OR
OTHERWISE TRANSFER THIS DEBENTURE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS DEBENTURE (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER
IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES
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13
AT THE TIME OF TRANSFER OF LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND, IN CONNECTION WITH ANY TRANSFER OF THIS DEBENTURE WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE DEBENTURES THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS DEBENTURE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATIONS UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISIONS REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
DEBENTURE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(m) The proceeds of the offering of the Securities will be applied as
set forth in the Offering Memorandum.
(n) 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 and printing of the Offering
Memorandum (including financial statements) and any amendments or
supplements thereto, and the cost of furnishing copies thereof to the
Placement Agents, (ii) the preparation, printing and distribution of this
Agreement, the Indenture, the Securities and the Registration
Rights Agreement, (iii) the preparation, printing and delivery of the
Securities to the Placement Agents, (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(e) 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 Placement Agents in
connection therewith and in connection with the preparation of a Blue
Sky Survey, (vi) any fees charged by rating agencies for rating
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14
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) the cost and charges of any transfer
agent or registrar and (ix) the costs of qualifying the Securities with The
Depositary Trust Company.
(o) Until the Closing Date or such other date as may be specified in
Schedule I, none of the Company, TWI or TBS (and if so specified in
Schedule I or TWE) will, without the consent of Morgan Stanley & Co.
Incorporated, 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, TWI, 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, TWI, 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 Placement Agents. The
obligations of the Placement Agents to purchase the 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 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, TWI 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) The Registration Rights Agreement shall have been duly executed
and delivered by the Company and the Guarantors, the Indenture shall have
been duly authorized by the Company and the Guarantors, all covenants and
agreements contained herein to be performed on the part of the Company and
the Guarantors and all conditions contained herein to be fulfilled or
complied with by the Company and the Guarantors at or prior to such Closing
Date shall have been duly performed, fulfilled or complied with in all
material respects and no event shall have occurred and no condition shall
exist which would give you the right to terminate this Agreement.
(b) At the Closing Date, the Company shall have furnished to you the
opinion of Peter R. Haje, General Counsel to TWI, 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
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<PAGE>
15
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 Placement Agents, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Debt Securities,
the Indenture, the Registration Rights Agreement, the Offering Memorandum
(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
Offering Memorandum and this Agreement and that the representations and
warranties of the Company 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 the Company 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.
(2) TWI shall have furnished to the Representatives a certificate of
TWI, signed by any two officers who are an Executive or Senior Vice
President of TWI, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Offering Memorandum and this
Agreement and that:
(i) the representations and warranties of the Company, TWI 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 each of the Company, and TWI 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; and
(ii) since the date of the most recent financial statements
included in the Offering Memorandum, there has been no material
adverse change in the condition (financial or otherwise), earnings, or
business prospects of TWI and its subsidiaries, considered as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Offering
Memorandum.
(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 Offering Memorandum 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
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<PAGE>
16
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, Ernst & Young LLP shall have furnished to the
Representatives a letter or letters, dated respectively as of the Closing
Date, in form and substance satisfactory to the Representatives, confirming
that they are independent auditors with respect to the Company, TWI, TBS
and TWE within the meaning of the Securities 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 TWI and TWE (including the
supplementary summary unaudited financial information of the Company
and TBS) included or incorporated in the Offering Memorandum comply in
form in all material respects with the applicable accounting
requirements of the Securities 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 the Company and TBS) made available
by TWI, the Company, 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 forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and executive,
finance and audit committees of TWI and TWE and their respective
consolidated subsidiaries; and inquiries of certain officials of TWI,
the Company, TBS and TWE who have responsibility for financial and
accounting matters of TWI, the Company, 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 Offering Memorandum, 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 Offering Memorandum do not comply in form in
all material respects with applicable accounting requirements of
the Securities 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 Offering Memorandum; or
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17
(2) with respect to the period subsequent to the date of the
most recent unaudited financial statements in or incorporated in
the Offering Memorandum, 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 TWI, 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 TWI, TWE and the Entertainment
Group as compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated in the
Offering Memorandum, for such entities, or for the period from
the date of the most recent unaudited financial statements
included or incorporated in the Offering Memorandum, for 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 Offering
Memorandum;
(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 Offering Memorandum, or on the pro
forma adjustments applied to the historical amounts included or
incorporated by reference in the Offering Memorandum; 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 TWI, the Company,
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 Offering Memorandum; 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 Offering Memorandum do not comply as to form in all material
respects with the applicable requirements of Rule 11-02 of
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18
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 Offering Memorandum agrees with the accounting records of
the Company and its subsidiaries, TWI and its subsidiaries, TBS and
its subsidiaries or TWE and its subsidiaries, as the case may be,
excluding any questions of legal interpretation.
(g) At the Closing Date, each other firm of independent accountants
who audited or reviewed financial statements included or incorporated by
reference in the Offering Memorandum shall have furnished to the
Representatives a letter or letters, dated respectively as of the Closing
Date, 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 Securities 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 dates as of which information is given in the
Offering Memorandum, 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, TWI and
its subsidiaries, TBS and its subsidiaries, TWE 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 the Securities as contemplated by the Offering Memorandum.
(i) Subsequent to the date hereof, (i) there shall not have been any
downgrade in the credit ratings of any of the Company's, TWI's or TBS's
debt securities by Moody's Investor Service, Inc. or Standard & Poor's
Ratings Group, and (ii) none of the Company, TWI 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.
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19
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 Placement Agents, this
Agreement and all obligations of the Placement Agents hereunder may be canceled
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, TWI or TBS in writing or by telephone or telegraph
confirmed in writing.
6. Reimbursement of Placement Agents' Expenses. If the sale of the
Debt Securities provided for herein is not consummated because any condition to
the obligations of the Placement Agents set forth in Section 5 hereof is not
satisfied or because of any refusal, inability or failure on the part of the
Company, TWI or TBS to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Placement Agents, the
Company and the Guarantors will reimburse the Placement Agents 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, TWI and
TBS agrees to indemnify and hold harmless each Placement Agent, the directors,
officers, employees and agents of each Placement Agent and each person who
controls any Placement Agent within the meaning of either the Securities 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
Securities 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 Offering Memorandum, 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, TWI 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 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, TWI and TBS
by or on behalf of any Placement Agent through the Representatives specifically
for inclusion therein. This indemnity agreement will be in addition to any
liability which the Company, TWI or TBS may otherwise have.
(b) Each Placement Agent severally agrees to indemnify and hold
harmless each of the Company, TWI and TBS, each of their respective directors,
officers and each person who controls the Company, TWI or TBS within the meaning
of either the Securities
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20
Act or the Exchange Act, to the same extent as the foregoing indemnity from the
Company, TWI and TBS to each Placement Agent, but only with reference to written
information relating to such Placement Agent furnished to the Company, TWI or
TBS by or on behalf of such Placement Agent 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 Placement Agent may otherwise have. Each of the Company, TWI and TBS
acknowledges that the statements set forth in the last paragraph of the cover
page and the first and fifth paragraphs under the heading "Private Placement" in
the Offering Memorandum constitute the only information furnished in writing by
or on behalf of the several Placement Agents 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 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
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21
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, TWI, TBS and the Placement Agents
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 Placement Agents may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company, TWI and TBS, on one hand, and by the Placement Agents, on the other
hand, from the offering of the Securities; provided, however, that in no case
shall any Placement Agent (except as may be provided in any agreement among
underwriters relating to the offering of the Debt Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable to
the Debt Securities purchased by such Placement Agent hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company, TWI, TBS and the Placement Agents 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 Placement Agents
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
Placement Agents shall be deemed to be equal to the total underwriting discounts
and commissions. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company, TWI, or TBS or the Placement Agents. The Company, the Guarantors and
the Placement Agents 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
Securities 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 Placement Agent within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Placement Agent shall have the same rights to contribution as such
Placement Agent, and each person who controls the Company, TWI or TBS within the
meaning of either the Securities Act or the Exchange Act, each director,
officer, employee and agent of the Company, TWI or TBS shall have the same
rights to contribution as the Company and the Guarantor, subject in each case to
the applicable terms and conditions of this paragraph (d).
8. Default by an Placement Agent. If any one or more Placement Agents
shall fail on the Closing Date to purchase and pay for any of the Debt
Securities agreed to be purchased by such Placement Agent or Placement Agents
hereunder and such failure to
<PAGE>
<PAGE>
22
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Placement Agents shall be
obligated severally to take up and pay for (in the respective proportions for
each of the Debt Securities which such Placement Agent 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 Placement Agents) the Debt Securities which the
defaulting Placement Agent or Placement Agents agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of Debt
Securities which the defaulting Placement Agent or Placement Agents agreed but
failed to purchase shall exceed 10% of the aggregate amount of Debt Securities
set forth in Schedule II hereto, the remaining Placement Agents shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Debt Securities, and if such nondefaulting Placement Agents do not purchase
all of the Debt Securities, this Agreement will terminate without liability to
any nondefaulting Placement Agent or the Company and the Guarantors. In the
event of a default by any Placement Agent 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
Offering Memorandum, or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Placement Agent
of its liability, if any, to the Company, the Guarantors and any nondefaulting
Placement Agent 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, TWI
or TBS prior to delivery of and payment for the Debt Securities, if prior to
such time (i) trading in the TWI's common stock or any of the Company's or the
TWI'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
Offering Memorandum. 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.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company TWI or TBS or any of their respective officers and of the Placement
Agents 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
Placement Agent or the Company, TWI or TBS or any of the officers, directors or
controlling persons referred to in Section 7 hereof, and will survive delivery
of
<PAGE>
<PAGE>
23
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, TWI or TBS, will be mailed,
delivered or telegraphed and confirmed to it care of TWI 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 between the
Company, TWI, TBS and each of the Placement Agents.
Very truly yours,
TIME WARNER INC.
By /s/ Frederick C. Yeager
-------------------------------
Name: Frederick C. Yeager
Title: Vice President
TIME WARNER COMPANIES, INC.
By /s/ Frederick C. Yeager
-------------------------------
Name: Frederick C. Yeager
Title: Vice President
TURNER BROADCASTING SYSTEM, INC.
By /s/ Frederick C. Yeager
-------------------------------
Name: Frederick C. Yeager
Title: Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED
J. P. MORGAN SECURITIES INC.
By /s/ Michael Fusco
----------------------------
Name: Michael Fusco
Title: Vice President
<PAGE>
<PAGE>
SCHEDULE I
<TABLE>
<S> <C>
Placement Agreement: Dated January 6, 1998
Representatives: Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
Chase Securities Inc.
Merrill Lynch, Pierce, Fenner & Smith,Incorporated
J. P. Morgan Securities Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
</TABLE>
Title, Purchase Price and Description of Debt Securities:
<TABLE>
<S> <C>
Title: 6.95% Debentures Due 2028
Principal amount: $500,000,000
Interest rate: 6.95%
Interest payment dates: January 15 and July 15
Date of maturity: January 15, 2028
Purchase price (include
accrued interest or
amortization, if any): 98.043%
Initial public offering price: 98.918%
Sinking fund provisions: None
Redemption provisions: Not redeemable
Other provisions: None
Closing Date, Time and Location: January 12, 1998 at 10:00 A.M. at the
offices of Shearman & Sterling, 599
Lexington Avenue, New York, New York 10022
</TABLE>
<PAGE>
<PAGE>
SCHEDULE II
$500,000,000 6.95% Debentures due 2028:
<TABLE>
<CAPTION>
Principal
Amount
to
Placement Agents be Purchased
- ---------------- -------------
<S> <C>
Morgan Stanley & Co. Incorporated...................... $100,000,000
Bear, Stearns & Co. Inc................................ $100,000,000
Chase Securities Inc................................... $100,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated..... $100,000,000
J.P. Morgan Securities Inc............................. $100,000,000
-----------
Total.............................................. $500,000,000
===========
</TABLE>
<PAGE>
<PAGE>
EXHIBIT A
FORM OF OPINION OF PETER R. HAJE, ESQ.
(i) each of the Company, TWI 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 Offering Memorandum and each of the Company, TWI 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
TWI and its subsidiaries, considered as one enterprise;
(ii) each of TWI's significant subsidiaries, as such term is defined
in Rule 1-02(w) of Regulation S-X under the Securities 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
Offering Memorandum, 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
TWI and its subsidiaries, considered as one enterprise;
(iii) TWI's authorized equity capitalization is as set forth in the
Offering Memorandum; all of the outstanding capital stock of the Company
and TBS is owned, directly or indirectly, by TWI, free and clear of all
liens, encumbrances, equities or claims;
(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 either the Company,
TWI or TBS or any of their respective subsidiaries of a character required
to be disclosed in the Offering Memorandum or that is likely to result in
any material adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of TWI and its subsiaries,
considered as one enterprise, which is not adequately disclosed in the
Offering Memorandum;
(v) the Indenture, the Placement Agreement, the Fourth Supplemental
Indenture, the Fifth Supplemental Indenture and the Registration Rights
Agreement have been duly authorized, executed and delivered by each of the
Company, TWI and TBS; and the Fourth Supplemental Indenture, the Fifth
Supplemental Indenture and the Registration Rights Agreement, assuming due
authorization thereof by the Trustee or the Placement Agents, as
applicable, constitute legal, valid and binding obligations of each of the
Company, TWI and TBS, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar 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
<PAGE>
<PAGE>
A-2
or at law and except as any rights to indemnity and contribution may be
limited by federal and state securities laws and public policy
considerations underlying such laws;
(vi) the Debt Securities have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Placement Agents pursuant to
the Placement 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 and other similar 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;
(vii) the execution and delivery of the Placement Agreement, the
Indenture and the Registration Rights Agreement by the Company, TWI and
TBS, the issuance, sale and delivery of the Debt Securities by the Company
and the consummation by the Company, TWI and TBS of the transactions
contemplated in the Placement Agreement, the Indenture and the Registration
Rights Agreement and compliance by the Company, TWI and TBS with the terms
of the Placement Agreement or the Registration Rights Agreement do not and
will not result in any violation of the Certificate of Incorporation, as
amended, or By-laws, as amended, of the Company, TWI and 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, TWI and TBS under any agreement or instrument, to which the
Company, TWI 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 TWI 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 TWI 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,
TWI or TBS or any of their properties;
(viii) any documents filed by the Company under the Securities
Exchange Act of 1934, as amended, that are incorporated by reference (in
whole or in part) in the Offering Memorandum or that are incorporated by
reference (in whole or in part) in a Registration Statement, 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 and the rules
and regulations of the Commission thereunder; and
<PAGE>
<PAGE>
A-3
(ix) no consent, approval, authorization or order of, giving of notice
to, or registration with, or taking of any other action in respect of, any
federal or state governmental authority or agency is required for the
consummation of the transactions contemplated in the Placement Agreement or
the issuance, sale and delivery of the Securities, except such as may be
required under the Securities Act and under the blue sky laws of any
jurisdiction in connection with the purchase and resale of the Securities
by the Placement Agents.
In addition, such counsel shall also state as follows: As General Counsel,
I have reviewed and participated in the preparation of the Offering Memorandum,
including the documents incorporated by reference therein. In examining the
Offering Memorandum, I have necessarily assumed the correctness and completeness
of the statements made or included therein by the Company, TWI and TBS and take
no responsibility therefor. However, in the course of the preparation by the
Company, TWI and TBS of the Offering Memorandum, I have participated in
conferences with certain officers of, and accountants for, the Company, TWI and
TBS with respect thereto, and my examination of the Offering Memorandum and my
discussions in the above-mentioned conferences did not disclose any information
which gave me reason to believe that the Offering Memorandum (except for the
financial statements and other financial or statistical data included therein or
omitted therefrom, as to which I express no opinion), 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 Placement Agents; and
(B) as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company, TWI or TBS and public
officials.
<PAGE>
<PAGE>
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & MOORE
(i) each of the Company and TWI 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 Offering Memorandum;
(ii) the Securities conform in all material respects to the
description thereof contained in the Offering Memorandum;
(iii) the Indenture has been duly authorized, executed and delivered
by each of the Company and TWI and, assuming due authorization, execution
and delivery by TBS and the Trustee, constitutes a legal, valid and binding
instrument enforceable against each of the Company, TWI and TBS in
accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and 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 by the Company and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Placement Agents pursuant to the Placement
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 and
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);
(iv) the Securities are eligible for resale by the Placement Agents
and by subsequent transferees to persons who constitute Qualified
Institutional Buyers under Rule 144A under the Securities Act in accordance
with the provisions of such rule; assuming (i) the accuracy of, and
compliance with, the representations, warranties and covenants of the
Company, TWI and TBS in Sections 1(c), (e), (f) and (u) of the Placement
Agreement, (ii) the accuracy of, and compliance with, the representations,
warranties and covenants of the Placement Agents in Section 2(b) of the
Placement Agreement, (iii) the accuracy of the representations and
warranties of each of the purchasers to whom the Placement Agents initially
resell the Securities, as specified in Section 2(b) of the Placement
Agreement (and as set forth in the certificate, if any, required to be
executed and delivered by each such subsequent transferee) and (iv) the
compliance by the Placement Agents with the offering and transfer
procedures and restrictions described in the Offering Memorandum, (x) it is
not necessary in
<PAGE>
<PAGE>
B-2
connection with the offer, sale and delivery of the Securities or in
connection with the initial resale of such Securities in the manner
contemplated by the Placement Agreement and the Offering Memorandum to
register the Securities under the Securities Act, and (y) no consent,
approval, authorization or order of, giving of notice to, or registration
with, or taking of any other action in respect of, any federal or New York
State governmental authority or agency is required for the authorization,
issuance, sale and delivery of the Securities by the Company, TWI and TBS
or the consummation of the transactions contemplated by the Placement
Agreement or the Registration Rights Agreement (except for the registration
of the Securities or the Exchange Securities pursuant to the Registration
Rights Agreement under the Securities Act and the registration of the
Securities and the Exchange Securities uner state securities laws), in
either case, it being understood that no opinion is expressed as to any
subsequent resale of any Securities; and
(v) the Placement Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company and TWI.
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 State of Delaware; provided that we express no opinion
with respect to (a) the Communications Act of 1934, as amended, or Federal or
state energy, utility or environmental laws and, in each case, the rules and
regulations promulgated thereunder, including the rules and regulations
promulgated by the Federal Communications Commission or (b) any matter relating
to any statute, ordinance, license, franchise, approval, authorization, or
permit of any governmental authority applicable to the construction, ownership
or operation of any cable television system or any component thereof, including
the reception and transmission of signals by microwave or, with respect to the
matters described in the foregoing clauses (a) and (b), the impact thereof on
the Company, TWI or TBS, including with respect to the transactions contemplated
by the Placement Agreement and the Offering Memorandum. 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 Offering Memorandum, 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 Offering
Memorandum, 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
the Offering Memorandum (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), as of its date or as of 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 make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
<PAGE>
<PAGE>
B-4
EXHIBIT D
<PAGE>
<PAGE>
EXHIBIT D
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated January 12, 1998
among
TIME WARNER COMPANIES, INC.
TIME WARNER INC.
TURNER BROADCASTING SYSTEM, INC.
and
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
AND
J. P. MORGAN SECURITIES INC.
- --------------------------------------------------------------------------------
D-1
<PAGE>
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into January 12, 1998, among TIME WARNER COMPANIES INC., a
Delaware corporation (the "Company"), TIME WARNER INC., a Delaware corporation
("TWI"), TURNER BROADCASTING SYSTEM, INC., a Georgia corporation ("TBS") and
MORGAN STANLEY & CO. INCORPORATED, BEAR, STEARNS & CO. INC., CHASE
SECURITIES INC., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and J. P. MORGAN SECURITIES INC. (each a "Placement Agent" and collectively the
"Placement Agents").
This Agreement is made pursuant to the Placement Agreement,
dated as of January 6, 1998, among the Company, TWI, TBS and the Placement
Agents (the "Placement Agreement"), which provides for the sale by the Company
to the Placement Agents of an aggregate principal amount of $500,000,000 of
6.95% Debentures Due 2028 unconditionally guaranteed by TWI and TBS (the
"Debentures"). In order to induce the Placement Agents to enter into the
Placement Agreement, each of the Company, TWI and TBS has agreed to provide to
the Placement Agents and their direct and indirect transferees the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Placement Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended
from time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Closing Date" shall mean the Closing Date as defined in the
Placement Agreement.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"Exchange Offer" shall mean the exchange offer by the Company
of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.
"Exchange Offer Registration" shall mean a registration under
the 1933 Act effected pursuant to an Exchange Offer Registration
Statement.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such
registration statement, in each case including
D-2
<PAGE>
<PAGE>
the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchange Securities" shall mean the debentures of the Company
containing terms identical to the Debentures (except that interest
thereon shall accrue from the last date on which (x) interest was paid
on the Debentures or (y) if no such interest has been paid, from the
date on which the Debentures are issued, and except that such Exchange
Securities shall bear no legend with respect to, and shall be free
from, restrictions on transfer), to be offered to Holders of Debentures
in exchange for Debentures pursuant to the Exchange Offer.
"Holder" shall mean any Placement Agent, for so long as it
owns any Registrable Securities, and each of its successors, assigns
and direct and indirect transferees who become beneficial owners of
Registrable Securities.
"Indenture" shall mean the Indenture relating to the
Debentures as the same may be amended from time to time in accordance
with the terms thereof.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Placement Agent" shall have the meaning set forth in the
preamble.
"Placement Agreement" shall have the meaning set forth in the
preamble.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by
a Shelf Registration Statement, and by all other amendments and
supplements to a prospectus, including post-effective amendments, and
in each case including all material incorporated by reference therein.
"Registrable Securities" shall mean the Securities; provided,
however, that the Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Securities shall
have been declared effective under the 1933 Act and such Securities
shall have been disposed of pursuant to such Registration Statement,
(ii) such Securities have been sold to the public pursuant to Rule
144(k) (or any similar provision then in force, but not Rule 144A)
under the 1933 Act, (iii) such Securities shall have ceased to be
outstanding or (iv) upon the consummation of the Exchange Offer but
only with respect to Securities held by a Holder that is eligible to
receive freely tradeable Exchange Securities in connection with the
Exchange Offer.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers,
D-3
<PAGE>
<PAGE>
Inc. registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities
or blue sky laws (including reasonable fees and disbursements
of counsel for any underwriters or Holders in connection with
blue sky qualification of any of the Exchange Securities or
Registrable Securities), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing
and distributing any Registration Statement, any Prospectus,
any amendments or supplements thereto, any underwriting
agreements, securities sales agreements and other documents
relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees and (v) the fees and
disbursements of counsel for the Company and of the
independent public accountants of the Company, including the
expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance,
but excluding fees of counsel to the underwriters or the
Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder; provided, however, that
the Company will pay the reasonable fees and disbursements of
one counsel for the Placement Agents and Holders with respect
to all Shelf Registration Statements.
"Registration Statement" shall mean any registration statement
of the Company which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and
all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall mean the 6.95% Debentures Due 2028
unconditionally guaranteed by TWI and TBS.
"Shelf Registration" shall mean a registration effected
pursuant to a Shelf Registration Statement.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company which covers Registrable
Securities on an appropriate form under Rule 415 under the 1933 Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference
therein; and, in the event that the Company is not eligible to file a
"shelf" registration statement under Rule 415 to register Registrable
Securities held by any Holder who is ineligible to receive freely
tradeable Exchange Securities in the Exchange Offer, "Shelf
Registration Statement" shall mean any Registration Statement with
respect to such Registrable Securities on an appropriate form,
including an Exchange Offer Registration Statement.
"Trustee" shall mean the trustee with respect to the
Debentures under the Indenture.
2. Registration Under the 1933 Act.
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(a) Exchange Offer Registration. To the extent not prohibited
by any applicable law or applicable interpretation of the Staff of the SEC, each
of the Company, TWI and TBS shall use its best efforts to cause to be filed with
the SEC within 150 days of the Closing Date the Exchange Offer Registration
Statement covering the offer by the Company to the Holders to exchange
Registrable Securities (other than Registrable Securities held by any affiliate
of the Company or by a Placement Agent or other distribution participant
constituting an unsold allotment) for Exchange Securities, and shall use its
best efforts to have such Exchange Offer Registration Statement declared
effective by the SEC within 180 days after the date hereof and to have such
Exchange Offer Registration Statement remain effective until the closing of the
Exchange Offer. The Company shall commence the Exchange Offer promptly after the
Exchange Offer Registration Statement has been declared effective by the SEC by
mailing the related exchange offer Prospectus and accompanying documents to each
Holder stating, in addition to such other disclosures as are required by
applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Securities
validly tendered will be accepted for exchange;
(ii) the date of acceptance for exchange (which shall be a
period of at least 45 days from the date such notice is mailed, or
longer if required by applicable law) (the "Exchange Date");
(iii) that any Registrable Security not tendered will remain
outstanding and continue to accrue interest but will not retain any
rights under this Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Security
exchanged pursuant to the Exchange Offer will be required to surrender
such Registrable Security, together with the enclosed letters of
transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) specified in the notice
prior to the close of business on the Exchange Date; and
(v) that Holders will be entitled to withdraw their election,
not later than the close of business on the Exchange Date, by sending
to the institution and at the address (located in the Borough of
Manhattan, The City of New York) specified in the notice a telegram,
telex, facsimile transmission or letter setting forth the name of such
Holder, the aggregate principal amount of Registrable Securities
delivered for exchange and a statement that such Holder is withdrawing
his election to have such Registrable Securities exchanged.
As soon as practicable after the Exchange Date, the Company
shall:
(i) accept for exchange Registrable Securities or portions
thereof tendered and not validly withdrawn pursuant to the Exchange
Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted
for exchange by the Company and issue, and cause the Trustee to
promptly authenticate and mail to each Holder, a new Exchange Security,
as the case may be, equal in principal amount to the principal amount
of the Registrable Securities surrendered by such Holder.
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If the Company, TWI and TBS effect the Exchange Offer, the
Company, TWI and TBS will be entitled to close the Exchange Offer in accordance
with the terms hereof provided that the Company has accepted all Debentures
theretofore validly tendered in accordance with the terms of the Exchange Offer.
Each of the Company, TWI and TBS shall use its best efforts to
complete the Exchange Offer as provided above and shall comply with the
applicable requirements of the 1933 Act, the 1934 Act and other applicable laws
in connection with the Exchange Offer. The Exchange Offer shall not be subject
to any conditions, other than that (i) the Exchange Offer does not violate
applicable law or any applicable interpretation of the Staff of the SEC and (ii)
there is no injunction, order or decree issued by any court or any governmental
agency that would prohibit, prevent or otherwise materially impair the ability
of the Company to proceed with the Exchange Offer. The Company shall inform the
Placement Agents of the names and addresses of the Holders to whom the Exchange
Offer is made, and the Placement Agents shall have the right to contact such
Holders and otherwise facilitate the tender of Registrable Securities in the
Exchange Offer.
For a period of 90 days after the Exchange Date, each of the
Company, TWI and TBS shall also use its best efforts to make available a
prospectus meeting the requirements of the 1933 Act which may be the Prospectus
contained in the Exchange Offer Registration Statement or the Prospectus
contained in a Shelf Registration Statement, as such Registration Statements may
be amended or supplemented from time to time, to holders which are
broker-dealers (and which identify themselves as such) in connection with
resales of Exchange Securities received in exchange for Registrable Securities,
where such Registrable Securities were acquired by such broker-dealers as a
result of market-making or other trading activities; provided that each holder
which is a broker-dealer agrees that, upon receipt of notice from the Company of
the occurrence of any event which makes any statement in the Prospectus untrue
in any material respect or which requires the making of any changes in the
Prospectus in order to make the statements therein not misleading (which notice
the Company agrees to deliver promptly to such broker-dealer), such
broker-dealer will suspend use of the Prospectus until the Company has amended
or supplemented the Prospectus to correct such misstatement or omission and has
furnished copies of the amended or supplemented Prospectus to such
broker-dealer. If the Company shall give any such notice to suspend the use of
the Prospectus, it shall extend the 90-day period referred to above by the
number of days during the period from and including the date of the giving of
such notice to and including the date when broker-dealers shall have received
copies of the supplemented or amended Prospectus necessary to permit resales of
the Exchange Securities.
In the event that, at the Exchange Date, any of the Placement
Agents shall not have sold all of the Registrable Securities initially purchased
from the Company by such Placement Agent to unaffiliated investors, upon such
Placement Agent's request (made within 10 days after the Exchange Date), each of
the Company, TWI and TBS will use its best efforts to file promptly, or if so
requested by any Placement Agent, on a later date (which date shall not exceed
the date that is six months after the Exchange Date), a Shelf Registration
Statement or a post-effective amendment to the Exchange Offer Registration
Statement, if acceptable to the SEC, to register all such Registrable Securities
for all such Placement Agents. The Company will keep such Shelf Registration
Statement or other Registration Statement effective and make available to such
Placement Agents a Prospectus meeting the requirements of the 1933 Act for a
period of 120 days, provided that each such Placement Agent agrees that, upon
receipt of notice from the Company of the happening of any event which makes any
statement
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in the Prospectus untrue in any material respect or which requires the making of
any changes in the Prospectus in order to make the statements therein not
misleading (which notice the Company agrees to deliver promptly to such
Placement Agents), such Placement Agent will suspend use of the Prospectus until
the Company has amended or supplemented the Prospectus to correct such
misstatement or omission and has furnished copies of the amended or supplemented
Prospectus to such Placement Agent. If the Company shall give any such notice to
suspend the use of the Prospectus, it shall extend the 120-day period referred
to above by the number of days during the period from and including the date of
the giving of such notice to and including the date when Placement Agents shall
have received copies of the supplemented or amended Prospectus necessary to
permit sales of their Securities.
(b) Shelf Registration. In the event that the Company
determines that the Exchange Offer Registration provided in Section 2(a) above
is not available or may not be consummated because it would violate applicable
law or the applicable interpretations of the Staff of the SEC, or in the event
the Exchange Offer is not for any other reason consummated within 225 days of
the Closing Date, each of the Company, TWI and TBS shall use its best efforts to
cause to be filed as soon as practicable after such determination or date, as
the case may be, a Shelf Registration Statement providing for the sale by all
Holders of all of the Registrable Securities (including sales or resales by
broker-dealers of Registrable Securities acquired by such broker-dealers as a
result of market-making or other trading activities, and sales or resales by the
Placement Agents of Registrable Securities initially purchased from the Company
by such Placement Agents and not previously sold to unaffiliated investors) and
to have such Shelf Registration Statement declared effective by the SEC. Each of
the Company, TWI and TBS agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective until the second anniversary of
the Closing Date or such shorter period which will terminate when all of the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement. Each of the Company, TWI and
TBS further agrees, if necessary, to supplement or amend the Shelf Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement
or by the 1933 Act or by any other rules and regulations thereunder for shelf
registration, and each of the Company, TWI and TBS agrees to furnish to the
Holders of Registrable Securities copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) or Section 2(b),
except that the Placement Agents shall pay any registration fee required in
connection with the registration of Registrable Securities which constitute an
unsold allotment, and except that each Holder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to a Shelf
Registration Statement, and each Holder shall pay all expenses of its counsel;
provided, however, that the Company will pay the reasonable fees and
disbursements of one counsel for the Placement Agents and Holders with respect
to all Shelf Registration Statements.
(d) Effective Registration Statement. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration
Statement pursuant to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC; provided, however,
that, if, after it has been declared effective, the offering of Registrable
Securities pursuant to a Shelf Registration Statement is interfered with
by any stop order, injunction or other order or requirement of the SEC or any
other governmental agency
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or court, such Registration Statement will be deemed not to have become
effective during the period of such interference until the offering of
Registrable Securities pursuant to such Registration Statement may legally
resume.
If the Company, TWI and TBS fail to comply with the above
provisions, additional interest (the "Additional Interest") shall be assessed as
follows:
(i) If the Exchange Offer Registration Statement or Shelf
Registration Statement is not filed within 150 days following the
Closing Date, then commencing on the 151st day after the Closing Date,
Additional Interest shall be accrued on the Debentures over and above
the accrued interest at a rate of .50% per annum; or
(ii) If an Exchange Offer Registration Statement or Shelf
Registration Statement is filed pursuant to (i) above and is not
declared effective within 180 days following the Closing Date, then
commencing on the 181st day after the Closing Date, Additional Interest
shall be accrued on the Debentures over and above the accrued interest
at a rate of .50% per annum; or
(iii) If either (A) the Company has not exchanged Exchange
Debentures for all Debentures validly tendered in accordance with the
terms of the Exchange Offer on or prior to 45 days after the date on
which the Exchange Offer Registration Statement was declared effective,
or (B) if applicable, the Shelf Registration Statement has been
declared effective but such Shelf Registration Statement ceases to be
effective at any time prior to two years from the Closing Date, then
Additional Interest shall be accrued on the Debentures over and above
the accrued interest at a rate of .50% per annum immediately following
the (x) 46th day after such effective date, in the case of (A) above,
or (y) the day such Shelf Registration Statement ceases to be effective
in the case of (B) above:
provided, however, that the Additional Interest rate on the Debentures may not
exceed .50% per annum; and, provided, further, that (1) upon the filing of the
Exchange Offer Registration Statement or Shelf Registration Statement (in the
case of (i) above), (2) upon the effectiveness of the Exchange Offer
Registration Statement or Shelf Registration Statement (in the case of (ii)
above), or (3) upon the exchange of Exchange Debentures for all Debentures
tendered or upon the effectiveness of the Shelf Registration Statement which had
ceased to remain effective prior to two years from the Closing Date (in the case
of (iii) above), Additional Interest on the Debentures as a result of such
clause (i), (ii) or (iii) shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses
(i), (ii) or (iii) above will be payable in cash, on the same original payment
dates of the Debentures. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount of
the Debentures, multiplied by a fraction, the numerator of which is the number
of days such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
3. Registration Procedures.
In connection with the obligations of the Company with respect
to the Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the
Company shall:
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(a) prepare and file with the SEC a Registration Statement on
the appropriate form under the 1933 Act, which form shall (x) be
selected by the Company, (y) in the case of a Shelf Registration, be
available for the sale of the Registrable Securities by the applicable
selling Holders under Section 2(a) or Section 2(b), as the case may be,
and (z) comply as to form in all material respects with the
requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith and use its best
efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
applicable period, cause each Prospectus to be supplemented by any
required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the 1933 Act;
(c) in the case of a Shelf Registration, furnish to the
applicable selling Holders of Registrable Securities under Section 2(a)
or Section 2(b), as the case may be, and to the underwriters of an
underwritten offering of Registrable Securities, if any, without
charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other
documents as each such Holder or underwriter may reasonably request, in
order to facilitate the public sale or other disposition of the
Registrable Securities;
(d) use its best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder of Registrable Securities
covered by a Registration Statement shall reasonably request in writing
by the time the applicable Registration Statement is declared effective
by the SEC, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company
shall not be required to (i) qualify as a foreign partnership, or
corporation, as the case may be, or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 3(d), (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;
(e) in the case of a Shelf Registration, notify the applicable
selling Holders of Registrable Securities promptly and, if requested by
such Holder, confirm such advice in writing (i) when a Registration
Statement has become effective and when any post-effective amendments
and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for amendments and supplements to
a Registration Statement and Prospectus or for additional information
after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the
initiation of any formal proceedings for that purpose, (iv) if, between
the effective date of a Registration Statement and the closing of any
sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, in each
case relating to the offering or the registration thereof, cease to be
true and correct in all material respects or if the Company receives
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any notification with respect to the suspension of the qualification of
the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose and (v) of the happening
of any event during the period a Shelf Registration Statement is
effective which makes any statement made in such Shelf Registration
Statement or the related Prospectus untrue in any material respect or
which requires the making of any changes in such Registration Statement
or Prospectus in order to make the statements therein not misleading;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment;
(g) in the case of a Shelf Registration (other than a Shelf
Registration to permit Holders which are broker-dealers to deliver a
Prospectus in connection with any resale of Exchange Securities),
furnish to each Holder of Registrable Securities, without charge, at
least one conformed copy of each Registration Statement and any
post-effective amendment thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration (other than a Shelf
Registration to permit Holders which are broker-dealers to deliver a
Prospectus in connection with any resale of Exchange Securities), or a
post-effective amendment to an Exchange Offer Registration Statement or
other Registration Statement covering a sale by the Placement Agents of
any unsold allotment, cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation, exchange and delivery
of certificates representing Registrable Securities to be sold and not
bearing any legends with respect to transfer restrictions and enable
such Registrable Securities to be in such denominations (consistent
with the provisions of the Indenture and registered in such names as
the selling Holders may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence
of any event contemplated by Section 3(e)(v) hereof, use its best
efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided that the Company shall not be required
to amend or supplement the Shelf Registration Statement, any related
Prospectus or any document incorporated therein by reference in the
event that, and for so long as, (A) an event occurs and is continuing
as a result of which the Shelf Registration Statement, any related
Prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the Company's good faith judgment,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in light of the circumstances under which they are made, and
(B) the Company determines in its good faith judgment that the
disclosure of such event at such time would materially adversely affect
the interests of the Company. The Company agrees to notify you to
suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and you hereby agree to
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suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission.
At such time as such public disclosure is otherwise made or the Company
determines in its good faith judgment that the disclosure in the
Prospectus of an event described above would no longer materially
adversely affect the Company or its equityholders or that such
disclosure is not necessary, the Company agrees promptly to notify you
of such determination, to amend or supplement the Prospectus if
necessary to correct any untrue statement or omission therein and to
furnish you such numbers of copies of the Prospectus as so amended or
supplemented as you may reasonably request;
(j) in the case of a Shelf Registration, or a post-effective
amendment to an Exchange Offer Registration Statement or other
Registration Statement covering a sale by the Placement Agents of any
unsold allotment, (x) a reasonable time prior to the filing in the case
of any Registration Statement, any Prospectus, any amendment to a
Registration Statement or amendment or supplement to a Prospectus or
upon filing in the case of any document which is to be incorporated by
reference into a Registration Statement or a Prospectus after initial
filing of a Registration Statement, provide copies of such document to
the Placement Agents on behalf of the Holders or to the Placement
Agents on their own behalf, as the case may be, and make such of the
representatives of the Company as shall be reasonably requested by the
Holders of Registrable Securities in the case of a Shelf Registration
pursuant to Section 2(b), or the Placement Agents on behalf of the
Holders or to the Placement Agents on their own behalf, as the case may
be, available for discussion of such document and (y) use its best
efforts to provide the Placement Agents, if the Placement Agents so
request, with a "comfort letter" from Ernst and Young (or such other
independent auditors of the Company at such time) and other appropriate
accountants, dated the effective date of any Shelf Registration
Statement or of any post-effective amendment (other than an Exchange
Offer Registration Statement) covering such matters and in such form as
is consistent with market practice with respect to underwriters'
"comfort letters" at such time;
(k) obtain a CUSIP number and, if applicable, a CINS number
for all Exchange Securities, or Registrable Securities, as the case may
be, not later than the effective date of a Registration Statement; and
(l) prior to the issuance of the Debentures, cause the
Indenture to be qualified under the Trust Indenture Act of 1939, as
amended (the "TIA"), in connection with the registration of the
Exchange Securities, or Registrable Securities, as the case may be,
cooperate with the Trustee and the Holders to effect such changes to
the Indenture as may be required for the Indenture to be so qualified
in accordance with the terms of the TIA and execute, and use its best
efforts to cause the Trustee to execute, all documents as may be
required to effect such changes and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner.
In the case of a Shelf Registration Statement, the Company may
(as a condition to such Holder's participation in the Shelf Registration)
require each Holder of Registrable Securities to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Securities as the Company may from time to time reasonably
request in writing.
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In the case of a Shelf Registration Statement, each Holder (as
a condition to such Holder's participation in such Shelf Registration) agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 3(e)(v) hereof, such Holder will forthwith
discontinue disposition of Registrable Securities pursuant to a Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(i) hereof, and, if so directed by
the Company, such Holder will deliver to the Company (at its expense) all copies
in its possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities current at
the time of receipt of such notice. If the Company shall give any such notice to
suspend the disposition of Registrable Securities pursuant to a Registration
Statement, the Company shall extend the period during which the Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and including the date of the giving of such
notice to and including the date when the Holders shall have received copies of
the supplemented or amended Prospectus necessary to resume such dispositions.
4. Indemnification; Contribution.
(a) Each of the Company, TWI and TBS shall jointly and
severally indemnify and hold harmless each of the Placement Agents, each Holder
and each Person, if any, who controls any Holder within the meaning of Section
15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which
Exchange Securities or Registrable Securities were registered under the
1933 Act, including all documents incorporated therein by reference, or
by the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (other than in connection with a settlement
described in Section 4(a)(ii) below);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including, subject to the provisions of subsection (c), reasonable
fees and disbursements of counsel chosen by any Holder or any
underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expenses are not paid under subparagraph (i) or subparagraph (ii)
above;
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provided, however, that none of the Company, TWI or TBS shall be liable in any
such case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by the Placement Agents, such
Holder or underwriter expressly for use in the Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).
(b) The Placement Agents and (as a condition to such Holder's
participation in such registration) each Holder severally agrees to indemnify
and hold harmless the Company, TWI, TBS, the Placement Agents, each underwriter
and the other selling Holders, and each of their respective directors and
officers (including each officer of the Company (and any guarantor of the
Securities or the Registrable Securities) who signed the Registration
Statement), and each Person, if any, who controls the Company, TWI, TBS, the
Placement Agents, any underwriter or any other selling Holder within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in any Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by the Placement Agents or such selling Holder expressly for use in such
Registration Statement (or any amendment thereto) or such Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give reasonably prompt notice
to each indemnifying party of any action or proceeding commenced against it in
respect of which indemnity may be sought hereunder, but failure so to notify an
indemnifying party shall not relieve it from any liability which it may have
otherwise than under this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. In no event shall
the indemnifying parties be liable for the fees and expenses of more than one
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 4 is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Company, TWI, TBS, the Placement Agents and the Holders shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity agreement incurred by the Company,
TWI, TBS, the Placement Agents and the Holders; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. As between the Company, TWI,
TBS, the Placement Agents and the Holders, such parties shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect (i) the relative benefits received by the Company, TWI
and TBS on the one hand and the Placement Agents and the Holders on the other
hand, from the offering of the Exchange Securities or Registrable Securities
included in such offering and (ii) the relative fault of the Company, TWI and
TBS on the one hand and the Placement Agents and the Holders on the other, with
respect to the statements or omissions which resulted in such loss, liability,
claim, damage or expense, or action in respect thereof, as well as any other
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relevant equitable considerations. The Company, TWI, TBS, the Placement Agents
and the Holders of the Registrable Securities agree that it would not be just
and equitable if contribution pursuant to this Section 4 were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the relevant equitable considerations. For purposes of this Section
4, each Person, if any, who controls the Placement Agents or a Holder within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution
as the Placement Agents or such Holder, and each director of the Company, each
officer of the Company who signed a Registration Statement, and each Person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company.
5. Miscellaneous.
(a) No Inconsistent Agreements. Neither the Company, TWI nor
TBS has entered into nor will such entities on or after the date of this
Agreement enter into any agreement which is inconsistent with the rights granted
to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of other issued and outstanding securities of such
parties under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
excluding the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; provided, however, that no amendment, modification or
supplement or waiver or consents to the departure with respect to the provisions
of Section 4 hereof shall be effective as against any Holder of Registrable
Securities unless consented to in writing by such Holder of Registrable
Securities.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 5(c), which address initially is, with respect to the Placement Agents,
the address set forth in the Placement Agreement; and (ii) if to the Company,
TWI or TBS initially at the Company's address set forth in the Placement
Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 5(c).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the person giving the same to the Trustee or
the Transfer Agent, as the case may be.
D-14
<PAGE>
<PAGE>
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Placement Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
(e) Third Party Beneficiary. The Placement Agents shall be
third party beneficiaries to the agreements made hereunder between the Company,
TWI and TBS on the one hand, and the Holders, on the other hand, and shall have
the right to enforce such agreements directly to the extent they deem such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
D-15
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
TIME WARNER INC.
By /s/ Thomas W. McEnerney
-------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TIME WARNER COMPANIES, INC.
By /s/ Thomas W. McEnerney
-------------------------------
Name: Thomas W. McEnerney
Title: Vice President
TURNER BROADCASTING SYSTEM, INC.
By /s/ Thomas W. McEnerney
-------------------------------
Name: Thomas W. McEnerney
Title: Vice President
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J. P. MORGAN SECURITIES INC.
By: MORGAN STANLEY & CO. INCORPORATED
By /s/ Michael Fusco
----------------------------
Name: Michael Fusco
Title: Vice President
D-16
<PAGE>
<PAGE>
[Letterhead of]
CRAVATH, SWAINE & MOORE
February 5, 1998
$500,000,000
6.95% DEBENTURES DUE 2028
OF TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC. AND
TURNER BROADCASTING SYSTEM, INC.
Ladies and Gentlemen:
We have acted as counsel for Time Warner Companies, Inc., a
Delaware corporation ("TWC"), Time Warner Inc., a Delaware corporation ("TWI")
and Turner Broadcasting System, Inc., a Georgia corporation ("TBS" and, together
with TWI, the "Guarantors") in connection with the Registration Statement on
Form S-4 (the "Registration Statement") being filed by TWC 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)
$500,000,000 aggregate principal amount of TWC's 6.95% Debentures Due 2028 (the
"Exchange Debentures") and (ii) the guarantees of the Exchange Debentures by the
Guarantors (the "Guarantees"). The Exchange Debentures and the Guarantees will
be issued under an Indenture dated as of January 15, 1993, as supplemented from
time to time, including the Fifth Supplemental Indenture dated as of January 12,
1998 (as so supplemented, the "Indenture"), among TWC, as issuer, TWI and TBS,
as guarantors, and the Chase Manhattan Bank, as trustee (the "Trustee"), in
exchange for $500,000,000 aggregate principal amount of 6.95% Debentures Due
2028 (the "Outstanding Debentures"), pursuant to an exchange offer (the
"Exchange Offer"). The Outstanding Debentures were originally issued in a
transaction exempt from the registration requirements of the Securities Act.
In that connection, we have examined originals, or
copies certified or otherwise identified to our
<PAGE>
<PAGE>
2
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 TWC, TWI and TBS,
(b) the By-laws, as amended, of each of TWC, TWI and TBS, (c) the Indenture, (d)
the form of the Exchange Debentures, (e) the Resolutions of the Board of
Directors of each of TWC, TWI and TBS authorizing the registration of the
Exchange Debentures and the Guarantees and (f) certain resolutions adopted by
the Board of Directors of each of TWC, TWI and TBS.
Based on the foregoing, we are of opinion as follows:
1. The Indenture has been duly authorized, executed and
delivered by each of TWC, the Guarantors and the Trustee. The Indenture
constitutes a legal, valid and binding obligation of TWC and the Guarantors,
enforceable against TWC and the Guarantors in accordance with its terms (subject
to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer 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 such enforceability is considered in a proceeding
in equity or at law).
2. The Exchange Debentures have been duly authorized by TWC
and, when executed and authenticated in accordance with the provisions of the
Indenture and delivered in exchange for the Outstanding Debentures pursuant to
the Exchange Offer, and the Guarantees related thereto will constitute legal,
valid and binding obligations of TWC and the Guarantors, respectively,
enforceable against TWC and the Guarantors, respectively, in accordance with
their respective terms and entitled to the benefits of the Indenture (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other 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 such enforceability is considered in a proceeding in equity or at
law).
The opinion set forth in paragraph 1 above is qualified to the
extent we have assumed the due execution and delivery of the Indenture by the
Trustee pursuant to appropriate corporate authority.
We are admitted to practice in the State of
New York, and we express no opinion as to matters governed
<PAGE>
<PAGE>
3
by any laws other than the laws of the State of New York, the State of Delaware
and the Federal laws of the United States of America. In particular, our opinion
set forth above, 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
February 5, 1998, of Louise S. Sams, Esq., 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 hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. We also consent to the use of our name under the
caption "Legal Opinions" in the Prospectus contained in 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,
/s/ Cravath, Swaine & Moore
Time Warner Companies, Inc.
Time Warner Inc.
Turner Broadcasting System, Inc.
75 Rockefeller Plaza
New York, NY 10019
<PAGE>
<PAGE>
EXHIBIT 12
TIME WARNER INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- ----------------------------------------------------
PRO PRO
FORMA HISTORICAL FORMA HISTORICAL
------- --------------- ------- ------------------------------------------
1997(a) 1997 1996 1996(a) 1996 1995 1994 1993 1992
------- ------ ------ ------- ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 373 $ 360 $ (172) $ (117 ) $ 4 $ 2 $ 89 $ 81 $ 320
Interest expense.......... 742 792 688 1,011 968 877 769 698 729
Amortization of
capitalized interest.... 17 17 1 19 6 2 2 -- 19
Portion of rents
representative of an
interest factor......... 63 63 43 86 63 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 719 682 594 844 801 691 665 663 97
Undistributed losses of
less than 50% owned
companies............... 16 16 24 46 52 117 82 47 56
------- ------ ------ ------- ------ ------ ------ ------ ------
Total earnings........ $1,984 $1,984 $1,232 $1,961 $1,966 $1,757 $1,659 $1,543 $1,306
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
Fixed charges:
Interest expense.......... $ 742 $ 792 $ 688 $1,011 $ 968 $ 877 $ 769 $ 698 $ 729
Capitalized interest...... 17 17 1 23 7 4 2 -- 15
Portion of rents
representative of an
interest factor......... 63 63 43 86 63 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 504 457 446 668 607 697 668 664 81
------- ------ ------ ------- ------ ------ ------ ------ ------
Total fixed charges... $1,380 $1,383 $1,232 $1,860 $1,717 $1,646 $1,491 $1,416 $ 910
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
Ratio of earnings to fixed
charges..................... 1.4 x 1.4x 1.0x 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 TWI 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 TWI'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, YEAR ENDED DECEMBER 31,
------------------------- ----------------------------------------------------
PRO PRO
FORMA HISTORICAL FORMA HISTORICAL
------- --------------- ------- ------------------------------------------
1997(a) 1997 1996 1996(a) 1996 1995 1994 1993 1992
------- ------ ------ ------- ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 282 $ 269 $ (172) $ 45 $ (15) $ 2 $ 89 $ 81 $ 320
Interest expense.......... 643 693 688 805 908 877 769 698 729
Amortization of
capitalized interest.... 1 1 1 2 2 2 2 -- 19
Portion of rents
representative of an
interest factor......... 41 41 43 55 55 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 719 682 594 844 801 691 665 663 97
Undistributed losses of
less than 50% owned
companies............... 10 10 24 50 50 117 82 47 56
------- ------ ------ ------- ------ ------ ------ ------ ------
Total earnings........ $1,750 $1,750 $1,232 $1,873 $1,873 $1,757 $1,659 $1,543 $1,306
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
Fixed charges:
Interest expense.......... $ 643 $ 693 $ 688 $ 805 $ 908 $ 877 $ 769 $ 698 $ 729
Capitalized interest...... -- -- 1 1 1 4 2 -- 15
Portion of rents
representative of an
interest factor......... 41 41 43 55 55 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 504 457 446 668 607 697 668 664 81
------- ------ ------ ------- ------ ------ ------ ------ ------
Total fixed charges... $1,242 $1,245 $1,232 $1,601 $1,643 $1,646 $1,491 $1,416 $ 910
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
Ratio of earnings to fixed
charges..................... 1.4 x 1.4x 1.0x 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 TWI'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 YEAR ENDED DECEMBER 31,
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, ----------------------------
1997 1996 1996 1995 1994 1993 1992
------------- ------------- ------------- ---- ---- ---- ----
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 143 $ 42 $ (42) $173 $ 79 $121 $100
Interest expense.......... 153 60 141 209 219 195 201
Amortization of
capitalized interest.... 15 5 13 11 7 -- --
Portion of rents
representative of an
interest factor......... 23 8 23 31 30 26 22
Adjustment for partially
owned subsidiaries and
50% owned companies..... -- -- -- -- -- -- 9
Undistributed losses of
less than 50% owned
companies............... 6 2 1 16 15 16 --
----- ----- ----- ---- ---- ---- ----
Total earnings........ $ 340 $ 117 $ 136 $440 $350 $358 $332
----- ----- ----- ---- ---- ---- ----
----- ----- ----- ---- ---- ---- ----
Fixed charges:
Interest expense.......... $ 153 $ 60 $ 141 $209 $219 $195 $201
Capitalized interest...... 16 6 16 15 14 -- --
Portion of rents
representative of an
interest factor......... 23 8 23 31 30 26 22
Adjustment for partially
owned subsidiaries and
50% owned companies..... -- -- -- -- -- -- 9
----- ----- ----- ---- ---- ---- ----
Total fixed charges... $ 192 $ 74 $ 180 $255 $263 $221 $232
----- ----- ----- ---- ---- ---- ----
----- ----- ----- ---- ---- ---- ----
Ratio of earnings to fixed
charges
(deficiency in the coverage
of fixed charges by earnings
before fixed charges)(a).... 1.8x 1.6x $ (44) 1.7x 1.3x 1.6x 1.4x
----- ----- ----- ---- ---- ---- ----
----- ----- ----- ---- ---- ---- ----
</TABLE>
- ------------
(a) TBS became a wholly owned subsidiary of TWI on October 10, 1996 through a
merger with a subsidiary of TWI 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-4 and related Prospectus of Time Warner
Companies Inc. ('TWC') for the registration of $500,000,0000 of Debt Securities
of TWC unconditionally guaranteed by Time Warner Inc. ('TWI') 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 TWI 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 TWI's
Annual Report on Form 10-K for the year ended December 31, 1996, as amended by
TWI'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 TWI'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
February 3, 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-4 for the registration under the Securities Act
of 1933, as amended, of Debt Securities of Time Warner Companies, Inc.
unconditionally guaranteed by Time Warner Inc., and Turner Broadcasting System,
Inc.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
February 3, 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-4 of Time Warner Companies, Inc. ('TWC') related to the
registration of Debt Securities of TWC unconditionally guaranteed by Time Warner
Inc. ('TWI') 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 TWI'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
February 3, 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-4 of Time Warner
Companies, Inc. ('TWC') related to the registration of Debt Securities of TWC
unconditionally guaranteed by Time Warner 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
February 3, 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-4 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 registration under the
provisions of the Securities Act of 1933, as amended, of guarantees of up to
$500 million aggregate principal amount of debt securities issuable by Time
Warner Companies, Inc., a Delaware corporation ('TWC'), in exchange for
outstanding debt securities of TWC in an aggregate principal amount of $500
million, 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, 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 15th 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>
(iv) Directors:
<TABLE>
<S> <C>
/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-4 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 registration
under the provisions of the Securities Act of 1933, as amended, of up to $500
million aggregate principal amount of debt securities issuable by the
Corporation, in exchange for outstanding debt securities of the Corporation in
an aggregate principal amount of $500 million, 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, 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 3rd day of February, 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, EXECUTIVE 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 one or more
Registration Statements on Form S-4 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 registration under the provisions of the Securities Act of
1933, as amended, of guarantees of up to $500 million aggregate principal amount
of debt securities issuable by Time Warner Companies, Inc., a Delaware
corporation ('TWC'), in exchange for outstanding debt securities of TWC in an
aggregate principal amount of $500 million, 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, 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 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)
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)
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 4th day of February, 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>
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
EXCHANGE OFFER FOR ALL OUTSTANDING
6.95% DEBENTURES DUE 2028
OF
TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC.
AND
TURNER BROADCASTING SYSTEM, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON
, 1998, UNLESS EXTENDED (THE 'EXPIRATION DATE'). TENDERS MAY BE
WITHDRAWN PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
DELIVERY TO: THE CHASE MANHATTAN BANK, EXCHANGE AGENT
<TABLE>
<S> <C>
By Mail, Hand or Overnight Courier Facsimile Transmission Number
55 Water Street (212) 638-7375 or
Room 234, North Building (212) 344-9367
New York, NY 10041 (FOR ELIGIBLE
Attention: Carlos Esteves INSTITUTIONS ONLY)
(IF BY MAIL, REGISTERED OR Confirm by Telephone
CERTIFIED MAIL RECOMMENDED) (212) 638-0828
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus, dated , 1998 (the 'Prospectus'), of Time Warner
Companies, Inc., a Delaware corporation ('TWC'), and this Letter of Transmittal
(the 'Letter'), which together constitute TWC's offer (the 'Exchange Offer') to
exchange an aggregate principal amount of up to $500,000,000 of its 6.95%
Debentures Due 2028 (the 'Exchange Debentures'), for a like principal amount of
its issued and outstanding 6.95% Debentures Due 2028 (the 'Outstanding
Debentures') with the holders thereof. The Exchange Debentures will be
unconditionally guaranteed by Time Warner Inc. and Turner Broadcasting System,
Inc.
For each Outstanding Debenture accepted for exchange, the holder of such
Outstanding Debenture will receive an Exchange Debenture having a principal
amount equal to that of the surrendered Outstanding Debenture. Interest on the
Exchange Debentures will accrue from the last interest payment date on which
interest was paid on the Outstanding Debentures surrendered in exchange
therefor, or if no interest has been paid on the Outstanding Debentures, from
January 12, 1998. Holders of Outstanding Debentures whose Outstanding Debentures
are accepted for exchange will not receive any payment in respect of interest on
such Outstanding Debentures otherwise payable on any interest payment date the
record date for which occurs on or after consummation of the Exchange Offer.
Consequently, holders who tender their Outstanding Debentures for Exchange
Debentures will receive the same interest payment on July 15, 1998 (the first
interest payment date with respect to the Outstanding Debentures and the
Exchange Debentures) that they would have received had they not accepted the
Exchange Offer.
This Letter is to be completed by a holder of Outstanding Debentures either
if certificates are to be forwarded herewith or if a tender of certificates for
Outstanding Debentures, if available, is to be made by book-entry transfer to
the account maintained by the Exchange Agent at The Depository Trust Company
(the 'Book-Entry Transfer Facility') pursuant to the procedures set forth in
'The Exchange Offer -- Book-Entry Transfer' section of the
<PAGE>
<PAGE>
Prospectus and an Agent's Message is NOT delivered. Tenders by book-entry
transfer may also be made by delivering an Agent's Message in lieu of this
Letter. The term 'Agent's Message' means a message, transmitted by the
Book-Entry Transfer Facility to and received by the Exchange Agent and forming a
part of a Book-Entry Confirmation (as defined below), which states that the
Book-Entry Transfer Facility has received an express acknowledgment from the
tendering participant, which acknowledgment states that such participant has
received and agrees to be bound by, and makes the representations and warranties
contained in, this Letter and that TWC may enforce this Letter against such
participant.
Holders of Outstanding Debentures whose certificates are not
immediately available, or who are unable to deliver their certificates or
confirmation of the book-entry tender of their Outstanding Debentures into the
Exchange Agent's account at the Book-Entry Transfer Facility (the 'Book-Entry
Confirmation') and all other documents required by this Letter to the Exchange
Agent on or prior to the Expiration Date, must tender their Outstanding
Debentures according to the guaranteed delivery procedures set forth in 'The
Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus. See
Instruction 1. Delivery of documents to the Book-Entry Transfer Facility does
not constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
List below the Outstanding Debentures to which this Letter relates. If the
space provided below is inadequate, the certificate numbers and principal amount
of Outstanding Debentures should be listed on a separate signed schedule affixed
hereto.
<TABLE>
<CAPTION>
DESCRIPTION OF OUTSTANDING DEBENTURES
<S> <C> <C> <C>
1 2 3
AGGREGATE
PRINCIPAL
AMOUNT OF PRINCIPAL
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE OUTSTANDING AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBER(S)* DEBENTURE(S) TENDERED
------------------------------------------
------------------------------------------
------------------------------------------
Total
</TABLE>
* Need not be completed if Outstanding Debentures are being tendered by
book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to
have tendered ALL of the Outstanding Debentures represented by the
Outstanding Debentures indicated in column 2. See Instruction 2.
Outstanding Debentures tendered hereby must be in denominations
of principal amount of $1,000 and any integral multiple thereof.
See Instruction 1.
[ ] CHECK HERE IF TENDERED OUTSTANDING DEBENTURES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH
THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ______________________________________________
Account Number ________________________ Transaction Code Name ______________
By crediting the Outstanding Debentures to the Exchange Agent's account at
the Book-Entry Transfer Facility's Automated Tender Offer Program ('ATOP') and
by complying with applicable ATOP procedures with respect to the Exchange Offer,
including transmitting to the Exchange Agent a computer-generated message (an
'Agent's Message') in which the holder of the Outstanding Debentures
acknowledges and agrees to be bound by the terms of, and makes the
representations and warranties contained in, this Letter, the participant in the
Book-Entry Transfer Facility confirms on behalf of itself and the beneficial
owners of such Outstanding Debentures all provisions of this Letter (including
all representations and warranties) applicable to it and such beneficial owner
as fully as if it had completed the information required herein and executed and
transmitted this Letter to the Exchange Agent.
2
<PAGE>
<PAGE>
[ ] CHECK HERE IF TENDERED OUTSTANDING DEBENTURES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which guaranteed delivery ______________________________
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number ___________________________ Transaction Code Name ___________
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
___________________________________________________________________
3
<PAGE>
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Outstanding Debentures not
exchanged and/or Exchange Debentures are to be issued in the name of and
sent to someone other than the person or persons whose signature(s)
appear(s) on this Letter above, or if Outstanding Debentures delivered by
book-entry transfer which are not accepted for exchange are to be returned
by credit to an account maintained at the Book-Entry Transfer Facility
other than the account indicated above.
Issue: Exchange Debentures and/or Outstanding Debentures to:
Name(s) __________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address __________________________________________________________________
__________________________________________________________________________
(ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
[ ] Credit unexchanged Outstanding Debentures delivered by book-entry
transfer to the Book-Entry Transfer Facility account set forth below.
__________________________________________________________________________
(BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER, IF APPLICABLE)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Outstanding Debentures not
exchanged and/or Exchange Debentures are to be sent to someone other than
the person or persons whose signature(s) appear(s) on this letter above or
to such person or persons at an address other than shown in the box
entitled 'Description of Outstanding Debentures' on this Letter above.
Mail: Exchange Debentures and/or Outstanding Debentures to:
Name(s) __________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address __________________________________________________________________
__________________________________________________________________________
(ZIP CODE)
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES FOR
OUTSTANDING DEBENTURES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED
DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE
AGENT PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
4
<PAGE>
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
<TABLE>
<S> <C>
Dated: ------------------, 1998
X------------------------------- --------------------, 1998
X------------------------------- --------------------, 1998
SIGNATURE(S) OF OWNER DATE
</TABLE>
Area Code and Telephone Number ______________________________________
If a holder is tendering any Outstanding Debentures, this
Letter must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Outstanding Debentures
or by any person(s) authorized to become registered holder(s) by
endorsements and documents transmitted herewith. If signature is
by a trustee, executor, administrator, guardian, officer or
other person acting in a fiduciary or representative capacity,
please set forth full title. See Instruction 3.
Name(s): _______________________________________________________
________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity: ______________________________________________________
Address: _______________________________________________________
______________________________________________________
(INCLUDING ZIP CODE)
SIGNATURE OF GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: _______________________________________
(AUTHORIZED SIGNATURE)
________________________________________________________________
(TITLE)
________________________________________________________________
(NAME AND FIRM)
Dated: ___________________________________________________, 1998
5
<PAGE>
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to TWC the aggregate principal amount of Outstanding
Debentures indicated above. Subject to, and effective upon, the acceptance for
exchange of the Outstanding Debentures tendered hereby, the undersigned hereby
sells, assigns and transfers to, or upon the order of, TWC all rights, title and
interest in and to such Outstanding Debentures as are being tendered hereby.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Outstanding
Debentures tendered hereby and that TWC will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claim when the same are accepted by TWC. The
undersigned hereby further represents that any Exchange Debentures acquired in
exchange for Outstanding Debentures tendered hereby will have been acquired in
the ordinary course of business of the person receiving such Exchange
Debentures, whether or not such person is the undersigned, that neither the
holder of such Outstanding Debentures nor any such other person has an
arrangement or understanding with any person to participate in the distribution
of such Exchange Debentures and that neither the holder of such Outstanding
Debentures nor any such other person is an 'affiliate,' as defined in Rule 405
under the Securities Act of 1933, as amended (the 'Securities Act'), of TWC, TWI
or TBS.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the 'Commission') that the Exchange Debentures issued in exchange
for the Outstanding Debentures pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than any such
holder that is an 'affiliate' of TWC within the meaning of Rule 405 under the
Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Exchange
Debentures are acquired in the ordinary course of such holders' business and
such holders have no arrangements with any person to participate in the
distribution of such Exchange Debentures. If the undersigned is not a
broker-dealer, the undersigned represents that it is not engaged in, and does
not intend to engage in, a distribution of Exchange Debentures. If the
undersigned is a broker-dealer that will receive Exchange Debentures for its own
account in exchange for Outstanding Debentures, it represents that the
Outstanding Debentures to be exchanged for the Exchange Debentures were acquired
by it as a result of market-making activities or other trading activities and
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Debentures; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
'underwriter' within the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by TWC to be necessary or desirable to complete the sale,
assignment and transfer of the Outstanding Debentures tendered hereby. All
authority conferred or agreed to be conferred in this Letter and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned. This tender may be
withdrawn only in accordance with the procedures set forth in 'The Exchange
Offer -- Withdrawal of Tenders' section of the Prospectus.
Unless otherwise indicated herein in the box entitled 'Special Issuance
Instructions' above, please deliver the Exchange Debentures (and, if applicable,
substitute certificates representing Outstanding Debentures for any Outstanding
Debentures not exchanged) in the name of the undersigned or, in the case of a
book-entry delivery of Outstanding Debentures, please credit the account
indicated above maintained at the Book-Entry Transfer Facility. Similarly,
unless otherwise indicated under the box entitled 'Special Delivery
Instructions' above, please send the Exchange Debentures (and, if applicable,
substitute certificates representing Outstanding Debentures for any Outstanding
Debentures not exchanged) to the undersigned at the address shown above in the
box entitled 'Description of Outstanding Debentures.'
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED 'DESCRIPTION OF OUTSTANDING
DEBENTURES' ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
OUTSTANDING DEBENTURES AS SET FORTH IN SUCH BOX ABOVE.
6
<PAGE>
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
FOR THE 6.95% DEBENTURES DUE 2028
IN EXCHANGE FOR THE 6.95% DEBENTURES DUE 2028 OF TIME WARNER COMPANIES, INC.
1. DELIVERY OF THIS LETTER AND DEBENTURES; TENDER BY BOOK-ENTRY TRANSFER IN LIEU
OF THIS LETTER; GUARANTEED DELIVERY PROCEDURES.
This letter is to be completed by debentureholders either if (1)
certificates are to be forwarded herewith or (2) tenders are to be made
pursuant to the procedures for delivery by book-entry transfer set forth in
'The Exchange Offer -- Book-Entry Transfer' section of the Prospectus and an
Agent's Message is NOT delivered. Tenders by book-entry transfer may also be
made by delivering an Agent's Message in lieu of this Letter of Transmittal. The
term 'Agent's Message' means a message, transmitted by the Book-Entry Transfer
Facility to and received by the Exchange Agent and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the tendering participant, which
acknowledgment states that such participant has received and agrees to be bound
by, and makes the representations and warranties contained in, the Letter of
Transmittal and that TWC may enforce the Letter of Transmittal against such
participant.
Certificates for all physically tendered Outstanding Debentures, or
Book-Entry Confirmation, as the case may be, as well as a properly completed and
duly executed Letter (or manually signed facsimile hereof or an Agent's Message
in lieu thereof) and any other documents required by this Letter, must be
received by the Exchange Agent at the address set forth herein or prior to the
Expiration Date, or the tendering holder must comply with the guaranteed
delivery procedures set forth below. Outstanding Debentures tendered hereby
must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
Debentureholders whose certificates for Outstanding Debentures are not
immediately available or who cannot deliver their certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date, or
who cannot complete the procedure for book-entry transfer on a timely basis, may
tender their Outstanding Debentures pursuant to the guaranteed delivery
procedures set forth in 'The Exchange Offer -- Guaranteed Delivery Procedures'
section of the Prospectus. Pursuant to such procedures, (i) such tender must be
made through an Eligible Institution, (ii) prior to Midnight, New York City
time, on the Expiration Date, the Exchange Agent must receive from such Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by TWC (by facsimile transmission,
mail or hand delivery), setting forth the name and address of the holder of
Outstanding Debentures, the certificate number of numbers of such Outstanding
Debentures and the principal amount of Outstanding Debentures tendered, stating
that the tender is being made thereby and guaranteeing that within three New
York Stock Exchange ('NYSE') trading days after the date of execution of the
Notice of Guaranteed Delivery, the certificates for all physically tendered
Outstanding Debentures, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, together with a properly completed and duly
executed Letter (or a facsimile thereof or an Agent's Message in lieu thereof),
with any required signature guarantees and any other documents required by the
Letter will be deposited by the Eligible Institution with the Exchange Agent,
and (iii) the certificates for all physically tendered Outstanding Debentures,
in proper form for transfer, or Book-Entry Confirmation, as the case may be,
together with a properly completed and duly executed Letter (or a facsimile
thereof or an Agent's Message in lieu thereof) with any required signature
guarantees and all other documents required by this Letter, are received by the
Exchange Agent within three NYSE trading days after the date of execution of the
Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Outstanding Debentures and all
other required documents is at the election and risk of the tendering holders,
but the delivery will be deemed made only when actually received or confirmed by
the Exchange Agent. If Outstanding Debentures are sent by mail, it is suggested
that the mailing be made sufficiently in advance of the Expiration Date to
permit delivery to the Exchange Agent prior to midnight, New York City time, on
the Expiration Date.
See 'The Exchange Offer' section of the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO DEBENTUREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER).
If less than all of the Outstanding Debentures evidenced by a submitted
certificate are to be tendered, the tendering holder(s) should fill in the
aggregate principal amount of Outstanding Debentures to be tendered in the box
above entitled 'Description of Outstanding Debentures -- Principal Amount
Tendered.' A reissued certificate representing the balance of nontendered
Outstanding Debentures will be sent to such tendering holder, unless
7
<PAGE>
<PAGE>
otherwise provided in the appropriate box on this Letter, promptly after the
Expiration Date. ALL OF THE OUTSTANDING DEBENTURES DELIVERED TO THE EXCHANGE
AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter is signed by the registered holder of the Outstanding
Debentures tendered hereby, the signature must correspond exactly with the name
as written on the face of the certificate without any change whatsoever.
If any tendered Outstanding Debentures are owned of record by two or more
joint owners, all of such owners must sign this Letter.
If any tendered Outstanding Debentures are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter as there are different registrations of
certificates.
When this Letter is signed by the registered holder or holders of the
Outstanding Debentures specified herein and tendered hereby, no endorsements of
certificates or separate bond powers are required. If, however, the Exchange
Debentures are to be issued, or any untendered Outstanding Debentures are to be
reissued, to a person other than the registered holder, then endorsements of any
certificates transmitted hereby or separate bond powers are required. Signatures
on such certificate(s) must be guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.
If this Letter or any certificates or bond powers are signed by trustees,
executors, administration, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
person should so indicate when signing, and, unless waived by TWC, proper
evidence satisfactory to TWC of their authority to so act must be submitted.
ENDORSEMENTS ON CERTIFICATES FOR OUTSTANDING DEBENTURES OR SIGNATURES ON
BOND POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS
A MEMBER OF A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR
TRUST COMPANY HAVING AN OFFICER OR CORRESPONDENT IN THE UNITED STATES (AN
'ELIGIBLE INSTITUTION').
SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE
INSTITUTION, PROVIDED THE OUTSTANDING DEBENTURES ARE TENDERED: (I) BY A
REGISTERED HOLDER OF OUTSTANDING DEBENTURES (WHICH TERM, FOR PURPOSES OF THE
EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY
SYSTEM WHOSE NAME APPEARS ON A SECURITY POSITION LISTING AS THE HOLDER OF SUCH
OUTSTANDING DEBENTURES) WHO HAS NOT COMPLETED THE BOX ENTITLED 'SPECIAL ISSUANCE
INSTRUCTIONS' OR 'SPECIAL DELIVERY INSTRUCTIONS' ON THIS LETTER, OR (II) FOR THE
ACCOUNT OF AN ELIGIBLE INSTITUTION.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Outstanding Debentures should indicate in the
applicable box the name and address to which Exchange Debentures issued pursuant
to the Exchange Offer and/or substitute certificates evidencing Outstanding
Debentures not exchanged are to be issued or sent, if different from the name or
address of the person signing this Letter. In the case of issuance in a
different name, the employer identification or social security number of the
person named must also be indicated. Debentureholders tendering Outstanding
Debentures by book-entry transfer may request that Outstanding Debentures not
exchanged be credited to such account maintained at the Book-Entry Transfer
Facility as such noteholder may designate hereon. If no such instructions are
given, such Outstanding Debentures not exchanged will be returned to the name or
address of the person signing this Letter.
8
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5. TRANSFER TAXES.
TWC will pay all transfer taxes, if any, applicable to the transfer of
Outstanding Debentures to it or its order pursuant to the Exchange Offer. If
however, Exchange Debentures and/or substitute Outstanding Debentures not
exchanged are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the Outstanding Debentures
tendered hereby, or if tendered Outstanding Debentures are registered in the
name of any person other than the person signing this Letter, or if a transfer
tax is imposed for any reason other than the transfer of Outstanding Debentures
to TWC or its order pursuant to the Exchange Offer, the amount of any such
transfer taxes (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted herewith, the amount of such
transfer taxes will be billed directly to such tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 5, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE OUTSTANDING DEBENTURES SPECIFIED IN
THIS LETTER.
6. WAIVER OF CONDITIONS.
TWC reserves the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
7. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Outstanding Debentures, by execution of this
Letter or an Agent's Message in lieu thereof, shall waive any right to receive
notice of the acceptance of their Outstanding Debentures for exchange.
8. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING DEBENTURES.
Any holder whose Outstanding Debentures have been mutilated, lost, stolen
or destroyed should contact the Exchange Agent at the address indicated above
for further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, may be directed to the
Exchange Agent, at the address and telephone number indicated above.
9
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NOTICE OF GUARANTEED DELIVERY FOR
TIME WARNER COMPANIES, INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Time Warner Companies, Inc. ('TWC') made pursuant to the
Prospectus, dated , 1998 (the 'Prospectus'), if certificates for
Outstanding Debentures of TWC are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach TWC prior to midnight, New York City
time, on the Expiration Date of the Exchange Offer. Such form may be delivered
or transmitted by facsimile transmission, mail or hand delivery to The Chase
Manhattan Bank (the 'Exchange Agent') as set forth below. Capitalized terms not
defined herein are defined in the Prospectus.
DELIVERY TO: THE CHASE MANHATTAN BANK, EXCHANGE AGENT
<TABLE>
<S> <C>
By Mail, Hand or Overnight Courier Facsimile Transmission Number
55 Water Street (212) 638-7375 or
Room 234, North Building (212) 344-9367
New York, NY 10041 (FOR ELIGIBLE
Attention: Carlos Esteves INSTITUTIONS ONLY)
(IF BY MAIL, REGISTERED OR Confirm by Telephone
CERTIFIED MAIL RECOMMENDED) (212) 638-0828
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to TWC the
principal amount of Outstanding Debentures set forth below, pursuant to the
guaranteed delivery procedure described in 'The Exchange Offer -- Guaranteed
Delivery Procedures' section of the Prospectus.
<TABLE>
<S> <C>
Principal Amount of Outstanding Debentures Tendered:* If Outstanding Debentures will be delivered by book-entry
$____________________________________ transfer to The Depository Trust Company provide account
Certificate Nos. (if available): number.
____________________________________________________
Total Principal Amount Represented by Outstanding Account Number_____________________
Debentures Certificate(s):
$___________________________________
</TABLE>
- ------------
* Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
<PAGE>
<PAGE>
PLEASE SIGN HERE
x------------------------------------------------------ Date ------------------
Signature(s) of Owner(s) or Authorized Signatory
Area Code and Telephone Number: _______________________________________________
Must be signed by the holder(s) of Outstanding Debentures as their name(s)
appear(s) on certificates for Outstanding Debentures or on a security position
listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): --------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Capacity:
Address(es):-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program, hereby guarantees
that the certificates representing the principal amount of Outstanding
Debentures tendered hereby in proper form for transfer, or timely confirmation
of the book-entry transfer of such Outstanding Debentures into the Exchange
Agent's account at The Depository Trust Company pursuant to the procedures set
forth in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the
Prospectus, together with one or more properly completed and duly executed
Letters of Transmittal (or facsimile thereof or Agent's Message in lieu thereof)
and any required signature guarantee and any other documents required by the
Letter of Transmittal, will be received by the Exchange Agent at the address set
forth above, no later than three New York Stock Exchange trading days after the
Expiration Date.
<TABLE>
<S> <C>
- -------------------------------------------------------- ---------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
- -------------------------------------------------------- ---------------------------------------
ADDRESS TITLE
- ------------------------------------------------------- Name:----------------------------------
ZIP CODE (PLEASE TYPE OR PRINT)
Area Code and Tel. No.--------------------------------- Dated:---------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING DEBENTURES WITH THIS FORM.
CERTIFICATES FOR OUTSTANDING DEBENTURES SHOULD BE SENT ONLY WITH A COPY OF
YOUR EXECUTED LETTER OF TRANSMITTAL.
2
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<PAGE>
EXCHANGE OFFER FOR ALL OUTSTANDING
6.95% DEBENTURES DUE 2028
OF
TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC.
AND
TURNER BROADCASTING SYSTEM, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
TO: BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Time Warner Companies, Inc. ('TWC') is offering, upon and subject to the
terms and conditions set forth in the Prospectus, dated , 1998
(the 'Prospectus'), and the enclosed Letter of Transmittal (the 'Letter of
Transmittal'), to exchange (the 'Exchange Offer') its 6.95% Debentures Due 2028,
for its outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures').
The Exchange Offer is being made in order to satisfy certain obligations of TWC
contained in the Registration Rights Agreement dated January 12, 1998, by and
among TWC and the other signatories thereto.
We are requesting that you contact your clients for whom you hold
Outstanding Debentures regarding the Exchange Offer. For your information and
for forwarding to your clients for whom you hold Outstanding Debentures
registered in your name or in the name of your nominee, or who hold Outstanding
Debentures registered in their own names, we are enclosing the following
documents:
1. Prospectus dated , 1998;
2. The Letter of Transmittal for your use and for the information of
your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offer if certificates for Outstanding Debentures are not immediately
available or time will not permit all required documents to reach the
Exchange Agent prior to the Expiration Date (as defined below) or if the
procedure for book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose
accounts you hold Outstanding Debentures registered in your name or the
name of your nominee, with space provided for obtaining such clients'
instructions with regard to the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to The Chase Manhattan Bank, the
Exchange Agent for the Outstanding Debentures.
YOUR PROMPT ACTION IS REQUESTED, THE EXCHANGE OFFER WILL EXPIRE AT
MIDNIGHT, NEW YORK CITY TIME, ON, , 1998 UNLESS EXTENDED BY TWC (THE
'EXPIRATION DATE'). OUTSTANDING DEBENTURES TENDERED PURSUANT TO THE EXCHANGE
OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof or an Agent's Message in
lieu thereof), with any required signature guarantees and any other required
documents, should be sent to the Exchange Agent and certificates representing
the Outstanding Debentures should be delivered to the Exchange Agent, all in
accordance with the instructions set forth in the Letter of Transmittal and the
Prospectus.
If holders of Outstanding Debentures wish to tender, but it is
impracticable for them to forward their certificates for Outstanding Debentures
prior to the expiration of the Exchange Offer or to comply with the book-entry
transfer procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under 'The Exchange
Offer -- Guaranteed Delivery Procedures'.
<PAGE>
<PAGE>
TWC will, upon request, reimburse brokers, dealers, commercial banks and
trust companies for reasonable and necessary costs and expenses incurred by them
in forwarding the Prospectus and the related documents to the beneficial owners
of Outstanding Debentures held by them as nominee or in a fiduciary capacity.
TWC will pay or cause to be paid all stock transfer taxes applicable to the
exchange of Outstanding Debentures pursuant to the Exchange Offer, except as set
forth in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to The Chase
Manhattan Bank, the Exchange Agent for the Outstanding Debentures, at its
address and telephone number set forth on the front of the Letter of
Transmittal.
Very truly yours,
TIME WARNER COMPANIES, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF TWC OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM
WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE
PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
2
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<PAGE>
EXCHANGE OFFER FOR ALL OUTSTANDING
6.95% DEBENTURES DUE 2028
OF
TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC.
AND
TURNER BROADCASTING SYSTEM, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated , 1998
(the 'Prospectus'), and the related Letter of Transmittal (the 'Letter of
Transmittal'), relating to the Offer (the 'Exchange Offer') of Time Warner
Companies, Inc. ('TWC') to exchange its 6.95% Debentures Due 2028 (the 'Exchange
Debentures') for its outstanding 6.95% Debentures Due 2028 (the 'Outstanding
Debentures'), upon the terms and subject to the conditions described in the
Prospectus and the Letter of Transmittal. The Exchange Offer is being made in
order to satisfy certain obligations of TWC contained in the Registration Rights
Agreement dated January 12, 1998, by and among TWC and the other signatories
thereto.
This material is being forwarded to you as the beneficial owner of the
Outstanding Debentures carried by us in your account but not registered in your
name. A TENDER OF SUCH OUTSTANDING DEBENTURES MAY ONLY BE MADE BY US AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Outstanding Debentures held by us for your account, pursuant to
the terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Outstanding Debentures on your behalf in
accordance with the provisions of the Exchange Offer. The Exchange Offer will
expire at midnight, New York City time, on , 1998, unless extended
by TWC. Any Outstanding Debentures tendered pursuant to the Exchange Offer may
be withdrawn at any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Outstanding Debentures.
2. The Exchange Offer is subject to certain conditions set forth in
the Prospectus in the section captioned 'The Exchange Offer -- Certain
Conditions to the Exchange Offer'.
3. Any transfer taxes incident to the transfer of Outstanding
Debentures from the holder to TWC will be paid by TWC, except as otherwise
provided in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at midnight, New York City time, on
, 1998, unless extended by TWC.
If you wish to have us tender your Outstanding Debentures, please so
instruct us by completing, executing and returning to us the instruction
form on the back of this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO
YOU FOR INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER
OUTSTANDING DEBENTURES.
<PAGE>
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Time Warner
Companies, Inc. with respect to its Outstanding Debentures.
This will instruct you to tender the Outstanding Debentures held by you for
the account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal.
Please tender the Outstanding Debentures held by you for my account as
indicated below:
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL AMOUNT OF OUTSTANDING DEBENTURES
------------------------------------------------------
<S> <C>
6.95% Debentures due 2028---------------------------- --------------------------------------------------------
[ ] Please do not tender any Outstanding Debentures
held by you for my account.
Dated:--------------------------------------- , 1998 --------------------------------------------------------
SIGNATURE(S)
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
PLEASE PRINT NAME(S) HERE
--------------------------------------------------------
--------------------------------------------------------
ADDRESS(ES)
--------------------------------------------------------
--------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
--------------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NO(S).
</TABLE>
None of the Outstanding Debentures held by us for your account will be
tendered unless we receive written instructions from you to do so. Unless a
specific contrary instruction is given in the space provided, your signature(s)
hereon shall constitute an instruction to us to tender all the Outstanding
Debentures held by us for your account.
2
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