<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TIME WARNER ENTERTAINMENT COMPANY, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3666692
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
<TABLE>
<S> <C> <C>
AMERICAN TELEVISION AND
COMMUNICATIONS CORPORATION DELAWARE 13-2922502
WARNER COMMUNICATIONS INC. DELAWARE 13-2696809
(EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
75 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019
(212) 484-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
PETER R. HAJE, ESQ.
75 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019
(212) 484-7580
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies To:
<TABLE>
<S> <C>
WILLIAM P. ROGERS, JR. FAITH D. GROSSNICKLE, ESQ.
CRAVATH, SWAINE & MOORE SHEARMAN & STERLING
825 EIGHTH AVENUE 599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10019 (212) 848-8015
(212) 474-1270
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans please check the following box: / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: /x/
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /__________________
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /__________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED AGGREGATE
TITLE OF EACH CLASS AGGREGATE AMOUNT TO MAXIMUM OFFERING OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER UNIT(2) PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities...................... $1(3) 100% $1(3) $0(4)
Guarantees of Debt Securities(5)..... $1 N/A N/A N/A(6)
</TABLE>
(footnotes on next page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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 NO.
33-75144 PREVIOUSLY FILED BY TIME WARNER ENTERTAINMENT COMPANY, L.P., AMERICAN
TELEVISION AND COMMUNICATIONS CORPORATION, WARNER COMMUNICATIONS INC. AND OTHER
CO-REGISTRANTS ON FORM S-3. THIS REGISTRATION STATEMENT ALSO CONSTITUTES A
POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT NO. 33-75144, 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(footnotes from previous page)
(1) United States dollars or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies.
(2) Estimated solely for purposes of calculating the registration fee.
(3) Represents the aggregate principal amount plus, if any Debt Securities are
issued at an original issue discount, such principal amount as shall result
in an aggregate initial offering price of $1.
(4) Time Warner Entertainment Company, L.P., a co-registrant on this
Registration Statement on Form S-3, is carrying forward pursuant to
Rule 429 under the Securities Act of 1933 $2,000,000,000 of Debt Securities
previously registered on its Registration Statement on Form S-3 (File
No. 33-75144) none of which has been issued or sold and for which it has
paid $689,655 of registration fees.
(5) Each of American Television and Communications Corporation and Warner
Communications Inc. will irrevocably and unconditionally guarantee on an
unsecured senior basis its guaranteed percentage of Debt Securities of Time
Warner Entertainment Company, L.P.
(6) Pursuant to Rule 457(n), no separate fee is required to be paid in respect
of guarantees of the Debt Securities which are being registered
concurrently.
i
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED DECEMBER 31, 1998
PROSPECTUS
TIME WARNER ENTERTAINMENT COMPANY, L.P.
Debt Securities
Pursuant to a "shelf" registration statement of which this Prospectus is a
part, Time Warner Entertainment Company, L.P. may offer unsecured notes,
debentures or other debt having a total initial public offering price of up to
$2,000,000,000. Under this shelf process, we may sell the debt securities from
time to time in one or more separate offerings, in amounts, at prices and on
terms to be determined at the time of sale.
This Prospectus provides a general description of the debt securities we
may offer. Each time we sell a particular series of debt securities, we will
provide a Prospectus Supplement that will contain the specific terms of the
series being offered. Unless otherwise specified in the Prospectus Supplement,
the debt securities will be senior securities of Time Warner Entertainment
Company, L.P. and will be guaranteed by its general partners, Warner
Communications Inc. and American Television and Communications Corporation.
The Prospectus Supplement may also add, update or change information
contained in this Prospectus. You should read both this Prospectus and the
Prospectus Supplement together with the additional information described under
the heading "Where You Can Find More Information."
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS PAGE
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<S> <C>
Where You Can Find More Information............................................................ 2
Ownership Structure of the Company............................................................. 3
The Company.................................................................................... 4
The General Partners........................................................................... 4
Use of Proceeds................................................................................ 5
Ratio of Earnings to Fixed Charges............................................................. 5
Description of the Debt Securities............................................................. 7
Description of the Credit Agreement............................................................ 14
Description of Outstanding Debt Securities..................................................... 15
Global Securities.............................................................................. 15
Plan of Distribution........................................................................... 16
Legal Opinions................................................................................. 17
Experts........................................................................................ 17
</TABLE>
------------------------
WHERE YOU CAN FIND MORE INFORMATION
Time Warner Entertainment Company, L.P. ("TWE" or the "Company") and its
General Partners (as defined below) are currently subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In addition, under the terms of the Indenture (as defined below), if the
Company is not required by Section 13 or 15(d) of the Exchange Act to file
reports with the Securities and Exchange Commission (the "SEC"), then, so long
as any securities issued under the Indenture remain outstanding, the Company
will be required to provide to the holders of the Debt Securities quarterly
financial reports (containing unaudited financial statements of the Company) for
the first three quarters of each year and annual financial reports (containing
audited financial statements of the Company) for each year, in each case
comparable to that which the Company would be required to file with the SEC if
it had a class of debt securities listed on a national securities exchange,
except that if the SEC has informed the Company that it can file less financial
information than otherwise required by Section 13 or 15(d) of the Exchange Act
or that the periodic filings made by an affiliate of the Company will satisfy
the Company's filing requirement, then, so long as any securities issued under
the Indenture remain outstanding, the Company will be required to provide to the
holders of the Debt Securities only such information filed by the Company or
that affiliate.
This Prospectus (the "Prospectus") is part of a Registration Statement on
Form S-3 (the "Registration Statement") that the Company and the General
Partners have filed with the SEC. You can inspect and copy the Registration
Statement, as well as reports and other information filed by the Company or the
General Partners, at the public reference facilities maintained by the SEC at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's
regional offices at Seven World Trade Center, 13th Floor, New York, New York
10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 at prescribed rates. You may obtain information about the
operation of the SEC's public reference facilities by calling the SEC at
1-800-SEC-0330. The SEC also maintains a site on the World Wide Web
(http://www.sec.gov), that contains reports and other information regarding
registrants (like the Company) that file electronically.
This Prospectus provides you with a general description of the debt
securities that the Company may offer (the "Debt Securities"). Each time the
Company sells Debt Securities, it will provide a Prospectus Supplement (the
"Prospectus Supplement") that will contain specific information about the terms
of that offering. The Prospectus Supplement may also add, update or change
information contained in this Prospectus. You should read both this Prospectus
and any Prospectus Supplement, together with the additional information that is
incorporated by reference, as described below. You should also read the
documents filed as exhibits with the Registration Statement or otherwise filed
by the Company with the SEC.
The rules and regulations of the SEC allow the Company to refer you to the
information currently filed by the Company and the General Partners with the SEC
by incorporating such documents in this Prospectus by reference to those
documents. The information incorporated by reference is an important part of
this Prospectus, and documents that the Company or the General Partners file
later with the SEC will automatically update and replace this information. We
incorporate by reference the documents listed below and any future filings made
by
2
<PAGE>
the Company or the General Partners with the SEC (File No. 001-12878) under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until we sell all of the
securities that we have registered:
o Annual Report on Form 10-K for the fiscal year ended December 31,
1997 of the Company and the General Partners.
o Quarterly Reports on Form 10-Q for the quarters ended March 31,
1998, June 30, 1998 and September 30, 1998 of the Company and the
General Partners.
Upon your request and at no cost to you, the Company will provide to each
person, including any beneficial owner, to whom this Prospectus and the
accompanying Prospectus Supplement are delivered, a copy of any or all of the
documents incorporated herein by reference, other than exhibits to such
documents unless such exhibits are specifically incorporated by reference in
such documents. You may request such information in writing or by telephone.
Requests should be addressed to: Investor Relations, Time Warner Entertainment
Company, L.P., 75 Rockefeller Plaza, New York, New York 10019 (telephone number:
(212) 484-6971).
OWNERSHIP STRUCTURE OF THE COMPANY
------------------
|TIME WARNER INC.|
------------------
|
100%(1)
|
-----------------------------
| |
100% |
| |
| --------------------
| | TIME WARNER |
| | GENERAL AND |
| | LIMITED PARTNERS |
| --------------------
| | -----------------
| | |------| MEDIAONE |
------------ 74.49%(2) | |LIMITED PARTNER|
| TWI CABLE| | 25.51%(2) -----------------
------------ | |
| ------------------------------
- ------------- 1.4%(3) | TIME WARNER |
| ADVANCE/ | | | ENTERTAINMENT COMPANY, L.P.|
| NEWHOUSE |--- | ------------------------------
- ------------- | | |
33.3% | -------------------------------
(3) | | |
| | 65.3%(3) |
| | | 100%
--------------- |
| TWE-A/N | |
| PARTNERSHIP | |
| (CABLE) | ---------------------------------
--------------- | | |
--------------- ------------------ ---------------
| TIME WARNER | | CABLE NETWORKS | | FILMED |
| CABLE | | HBO | |ENTERTAINMENT|
| | | | | WARNER BROS.|
--------------- ------------------ ---------------
- ------------------
1/ Subsidiaries of Time Warner Inc. directly or indirectly own 100% of the
capital stock of each of the Time Warner General and Limited Partners.
2/ Pro rata priority capital and residual equity interests. In addition, the
Time Warner General Partners own 100% of the priority capital interests
senior and junior to the pro rata priority capital interests. (See Note 8 to
TWE's consolidated financial statements.)
3/ Direct or indirect common equity interests. In addition, TWI Cable Inc. ("TWI
Cable") indirectly owns preferred partnership interests.
3
<PAGE>
THE COMPANY
Because the following is a summary of the business of the Company, it does
not contain all the information that may be important to investors. You should
read it together with the detailed information and financial statements referred
to herein.
The Company is engaged principally in three fundamental areas of business:
ENTERTAINMENT--includes principally interests in:
o filmed entertainment
o television production
o television broadcasting
CABLE NETWORKS--includes principally interests in:
o pay cable television programming
CABLE--includes principally interests in:
o cable television systems
The Time Warner Cable division of the Company also manages substantially
all of the cable television systems owned by Time Warner Inc. ("Time Warner"),
and the combined cable television operations are conducted under the name of
Time Warner Cable.
The Company was formed as a Delaware limited partnership in 1992 and has,
since its capitalization on June 30, 1992 (the "TWE Capitalization"), owned and
operated substantially all of the business of Warner Bros., Home Box Office and
the cable television business, and certain other businesses, owned and operated
by Time Warner at that date. Certain wholly owned subsidiaries of Time Warner
are the general partners (the "General Partners") of TWE and subsidiaries of
Time Warner, including the General Partners, collectively own general and
limited partnership interests in TWE consisting of 74.49% of the pro rata
priority capital ("Series A Capital") and residual equity capital ("Residual
Capital"), and 100% of the senior priority capital ("Senior Capital") and junior
priority capital ("Series B Capital"). The remaining 25.51% limited partnership
interests in the Series A Capital and Residual Capital of TWE are held by a
subsidiary of MediaOne Group, Inc. ("MediaOne"), formerly US WEST, Inc.
In 1995, TWE formed a cable television joint venture with the
Advance/Newhouse Partnership ("Advance/Newhouse") known as the TWE-A/N
Partnership, which owns cable television systems serving approximately
5.5 million subscribers at September 30, 1998. The equity interests in the
TWE-A/N Partnership are owned 65.3% by TWE, the managing partner, 33.3% by
Advance/Newhouse and 1.4% by TWI Cable.
On October 10, 1996, Time Warner completed the acquisition of Turner
Broadcasting System, Inc. ("TBS"), thereby acquiring the remaining approximately
80% interest in TBS that Time Warner did not already own (the "TBS
Transaction"). As a result of the TBS Transaction, a new parent company with the
name "Time Warner Inc." replaced the old parent company of the same name and the
old parent company, which changed its name to Time Warner Companies, Inc.
("TWC"), and TBS became separate, wholly owned subsidiaries of the new parent
company. The assets of TWC consist primarily of investments in its consolidated
and unconsolidated subsidiaries, including TWE.
The principal executive offices of TWE are located at 75 Rockefeller Plaza,
New York, New York 10019 (telephone number: (212) 484-8000).
THE GENERAL PARTNERS
At the time of the TWE Capitalization, thirteen direct or indirect wholly
owned subsidiaries of Time Warner contributed the assets and liabilities or the
rights to the cash flows of substantially all of Time Warner's Warner Bros.,
Home Box Office and cable television businesses to TWE for general partnership
interests. During late 1993 through 1994, nine of the thirteen original general
partners were merged or dissolved into the other four, and in 1997 two
additional companies were merged into the remaining two. As a result, as of
December 31, 1997,
4
<PAGE>
Warner Communications Inc. ("WCI", a subsidiary of TWC) and American Television
and Communications Corporation ("ATC", a subsidiary of TWC) are the two
remaining general partners of TWE. They have succeeded to the general
partnership interests of all of the other former general partners. Except as
otherwise set forth in the Prospectus Supplement, each General Partner will
unconditionally guarantee its Guaranteed Percentage (as set forth under
"Description of the Debt Securities--Guarantees") of TWE's obligations with
respect to the Debt Securities. The Indenture under which the Debt Securities
will be issued contains no restrictions on the financial condition or operations
of the General Partners.
The principal assets of the General Partners currently are, in addition to
their interests in TWE: WCI's ownership of substantially all of the Warner Music
Group, which produces and distributes recorded music and owns and administers
music copyrights; WCI's 50% interest in DC Comics, a New York general
partnership which is 50% owned by the Company; WCI's 37.25% interest in Time
Warner Entertainment Japan Inc., a corporation organized under the laws of Japan
("TWE Japan"); certain securities of TBS which in the aggregate represent an
equity interest of approximately 10.6% in TBS; 7.66% of the common stock of TWC;
and combined equity interests of 29% in Time Warner Telecom LLC ("TW Telecom"),
a competitive local exchange carrier. TWE does not have any ownership interest
in the business or assets of the General Partners.
The mailing address and telephone number of the principal executive offices
of WCI and ATC are 75 Rockefeller Plaza, New York, New York 10019 (telephone
number: (212) 484-8000) and 290 Harbor Drive, Stamford, Connecticut 06902
(telephone number: (203) 328-0600), respectively.
USE OF PROCEEDS
Except as otherwise set forth in the Prospectus Supplement accompanying
this Prospectus, the net proceeds to TWE from the sale of Debt Securities will
be used to repay indebtedness of TWE.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of TWE and WCI are set
forth below for the periods indicated.
The ratio of earnings to fixed charges of TWE for the nine months ended
September 30, 1998 reflects the transfer of cable television systems (or
interests therein) serving approximately 650,000 subscribers to the TWE-A/N
Partnership by a subsidiary of Time Warner, subject to approximately $1 billion
of debt, in exchange for common and preferred partnership interests, as well as
certain related transactions.
The ratio of earnings to fixed charges of TWE for 1995 reflects (a) the
consolidation by TWE of the TWE-A/N Partnership resulting from the formation of
such partnership, effective as of April 1, 1995, and (b) the consolidation of
Paragon Communications ("Paragon"), a cable television partnership, effective as
of July 6, 1995.
The ratio of earnings to fixed charges of TWE for 1993 gives effect to
(a) the admission of MediaOne as an additional limited partner of TWE as of
September 15, 1993 and (b) the issuance of $2.6 billion of TWE debentures during
1993 to reduce indebtedness under the former TWE credit agreement.
The ratio of earnings to fixed charges of WCI for 1995 reflects a
recapitalization of WCI, in which TWC made a $2.642 billion capital contribution
to WCI (consisting of a $2.5 billion subordinated reset note receivable due from
WCI and $142 million of cash) and WCI used the cash proceeds to repay certain
obligations to TWC.
The ratio of earnings to fixed charges of WCI for 1993 reflects (a) the
payment by WCI of a $3 billion special dividend to TWC in the form of a
subordinated reset note due 2008, (b) the prepayment of $500 million of
principal of such note using borrowings under its revolving credit agreement
with TWC and (c) the repurchase
5
<PAGE>
or redemption by WCI of all of its publicly-held senior and subordinated
debentures using capital contributed by TWC.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------------------------- --------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------------- --------------- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
TWE.............................................. 2.4x 2.6x 2.6x 1.8x 1.6x 1.4x 1.4x
WCI.............................................. 2.2x 2.4x 3.1x 1.9x 1.7x 1.4x 1.7x
</TABLE>
The ratio of earnings to fixed charges is not presented for ATC, the only
General Partner other than WCI, because it has no independent business
operations, nor does it have significant amounts of debt or other liabilities.
The financial position and results of operations of ATC are principally derived
from its investment in TWE and, to a lesser extent, its investment in TWC, TBS
and TW Telecom.
For purposes of computing the ratio of earnings to fixed charges for each
company:
Earnings equals the sum of:
(a) pretax income;
(b) interest expense, including previously capitalized interest amortized
to expense and the portion of rents representative of an interest
factor for each company and its majority-owned subsidiaries;
(c) the proportionate share of the items included in (b) above for each
company's 50%-owned investees;
(d) preferred stock dividend requirements of majority-owned subsidiaries;
(e) minority interest in the income of majority-owned subsidiaries that
have fixed charges; and
(f) the amount of undistributed losses (net of undistributed income) of
each company's less-than-50% owned investees.
This earnings calculation includes significant noncash charges for
depreciation and amortization.
Fixed charges equals the sum of:
(x) interest expense, including interest capitalized and the portion of
rents representative of an interest factor for each company and its
majority-owned subsidiaries;
(y) the proportionate share of the items included in (x) above for each
company's 50%-owned investees; and
(z) preferred stock dividend requirements of majority-owned subsidiaries.
6
<PAGE>
DESCRIPTION OF THE DEBT SECURITIES
GENERAL
This section describes the general terms of the Debt Securities. The
Prospectus Supplement relating to any Debt Securities to be offered will
describe the terms in greater detail, and may, in certain cases, provide
information that differs from this Prospectus. If the information in the
Prospectus Supplement differs from this Prospectus, investors should rely on
information in the Prospectus Supplement with respect to the particular Debt
Securities being offered.
The Debt Securities will be issued from time to time in one or more series
under an Indenture (the "Indenture") among TWE, WCI, ATC and The Bank of New
York, as Trustee (the "Trustee"). Summaries of certain provisions of the
Indenture follow. These summaries are not complete and are qualified in their
entirety by reference to the Indenture, including the definitions in the
Indenture of certain terms. All article and section references below are to
articles and sections of the Indenture, a copy of which is an Exhibit to the
Registration Statement of which this Prospectus is a part. The referenced
articles and sections of the Indenture and such defined terms are incorporated
by reference in this Prospectus.
The Indenture does not limit the amount of Debt Securities which may be
issued under it and Debt Securities may be issued under it up to the aggregate
principal amount authorized from time to time by the Company.
Reference is made to the Prospectus Supplement for the following terms of
each series of Debt Securities in respect of which this Prospectus is being
delivered:
o the designation, date, aggregate principal amount, currency or currency
unit of payment if other than United States dollars and authorized
denominations of such Debt Securities;
o the initial public offering price or prices of the Debt Securities and
any discounts or commissions paid to underwriters, dealers or agents;
o the date or dates on which such Debt Securities will mature (which may be
fixed or extendible);
o the annual rate or rates of interest, if any (or manner of calculation);
o the dates on which such interest will be payable;
o the terms of any mandatory or optional redemption (including any sinking,
purchase or analogous fund) and any purchase at the option of holders
(including whether any such purchase may be paid in cash or other
securities or property);
o whether such Debt Securities are to be issued in the form of Global
Securities (as defined below) and, if so, the identity of the Depository
(as defined below) with respect to such Global Securities;
o the terms, if any, on which such Debt Securities may be exchanged for
other securities of TWE or other issuers;
o any other terms applicable to such Debt Securities.
All of the Debt Securities will be registered securities, without coupons,
and in denominations of $1,000 and any integral multiple of $1,000. No service
charge will be made for any registration, transfer or exchange of the Debt
Securities, but TWE may require payment of a sum sufficient to cover any tax or
other governmental charge in connection therewith.
GUARANTEES
Except as otherwise set forth in the Prospectus Supplement, each General
Partner will unconditionally guarantee the percentage (its "Guaranteed
Percentage") of TWE's obligations with respect to the Debt Securities set forth
opposite its name in the table below (the "Guarantees"). Each General Partner
has also guaranteed its Guaranteed Percentage of TWE's obligations under its
Credit Agreement dated as of November 10, 1997 among TWE, the TWE-A/N
Partnership, Time Warner, TWC, TBS, TWI Cable and Chase Manhattan Bank and the
7
<PAGE>
lending banks party thereto (the "Credit Agreement"), TWE's commercial paper and
the Outstanding Debt Securities.
<TABLE>
<CAPTION>
GUARANTEED
GENERAL PARTNER PERCENTAGE
- -------------------------------------------------------------------------------------------- ----------
<S> <C>
Warner Communications Inc. ................................................................. 59.27%
American Television and Communications Corporation.......................................... 40.73
------
100.00%
------
------
</TABLE>
In the event of a bankruptcy or dissolution of a General Partner, TWE has
agreed to cause a corporate entity to guarantee the Guaranteed Percentage of the
Debt Securities previously guaranteed by such General Partner. The Indenture
contains no restrictions on the financial condition or operations of the General
Partners or any corporate entity substituted therefor.
The guarantees by the General Partners of the Debt Securities will rank on
a parity with all other unsecured and unsubordinated obligations for money
borrowed of the General Partners including the guarantees by the General
Partners of TWE's obligations under the Credit Agreement, TWE's commercial paper
and the Outstanding Debt Securities.
THE DEBT SECURITIES WILL NOT BE, AND TWE'S OBLIGATIONS UNDER THE CREDIT
AGREEMENT, TWE'S COMMERCIAL PAPER AND THE OUTSTANDING DEBT SECURITIES ARE NOT,
GUARANTEED BY TIME WARNER, TWC OR TBS.
RANKING
The Debt Securities will be senior unsecured obligations of TWE and rank on
a parity with all other unsecured and unsubordinated obligations for money
borrowed of TWE including indebtedness of TWE under the Credit Agreement, TWE's
commercial paper and the Outstanding Debt Securities. The rights of holders of
the Debt Securities to participate in the distribution of the assets of any
subsidiary of TWE upon such subsidiary's liquidation or reorganization will be
subject to the prior claims of such subsidiary's creditors. At September 30,
1998, TWE's subsidiaries did not have any material indebtedness for money
borrowed. The Trustee and each holder of Debt Securities will have no recourse
against either General Partner except to the extent of the guarantee of the Debt
Securities provided by such General Partner.
EXISTING INDEBTEDNESS AND LIENS
At September 30, 1998, TWE's total outstanding indebtedness was
approximately $7.4 billion, consisting principally of the following:
o $3.2 billion outstanding under the Credit Agreement, including
approximately $1 billion borrowed by the TWE-A/N Partnership under
the Credit Agreement which is not guaranteed by TWE or the General
Partners.
o $365 million of outstanding commercial paper backed by the Credit
Agreement.
o $3.8 billion aggregate principal amount of its outstanding senior
notes and debentures (the "Outstanding Debt Securities").
Indebtedness of TWE under the Credit Agreement, TWE's commercial paper and
the Outstanding Debt Securities, none of which is secured, will rank on a parity
with the Debt Securities. The Indenture does not limit the ability of the
Company to incur additional indebtedness. The Credit Agreement imposes limits on
the incurrence of total debt; however, the Credit Agreement may be amended or
terminated without the consent of the holders of the Debt Securities. See
"Description of the Credit Agreement." Based on the Company's outstanding
borrowings under the Credit Agreement at September 30, 1998, aggregate annual
principal debt service of the Company during any of the next five years consists
of $4.2 billion due in 2002, principally relating to the expiration of the
Credit Agreement.
At September 30, 1998, the General Partners had no material unsecured and
unsubordinated obligations for money borrowed other than the guarantees by the
General Partners of TWE's indebtedness under the Credit
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Agreement, TWE's commercial paper and the Outstanding Debt Securities. The
guarantees by the General Partners of TWE's obligations under the Debt
Securities will rank on a parity with all other unsecured and unsubordinated
obligations for money borrowed of the General Partners.
At September 30, 1998, TWE's total outstanding unsubordinated indebtedness
secured by liens was approximately $19 million. For a discussion of the
limitations on the creation of additional liens imposed by the Indenture and the
Credit Agreement, see "--Restrictive Covenants--Limitation on Liens", below and
"Description of the Credit Agreement." At September 30, 1998, the total
outstanding unsubordinated indebtedness of the General Partners that was secured
by liens was approximately $10 million.
RESTRICTIVE COVENANT
Except as otherwise set forth in the Prospectus Supplement, the Debt
Securities will be subject to the following covenant:
Limitation on Liens. The Indenture provides that neither TWE nor any
Material Subsidiary of TWE will incur, create, issue, assume, guarantee or
otherwise become liable for any indebtedness for money borrowed that is secured
by a lien on any asset owned on the execution date of the Indenture or
thereafter acquired by it unless TWE makes or causes the Debt Securities also to
be secured by such lien equally and ratably with (or prior to) the other
indebtedness thereby secured for so long as such other indebtedness is 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 TWE to secure indebtedness of
such Subsidiaries to TWE or to one or more other Subsidiaries of TWE;
(iii) liens affecting property of a Person existing at the time it
becomes a Subsidiary of TWE or at the time it merges into or consolidates
with TWE or a Subsidiary of TWE or at the time of a sale, lease or other
disposition of all or substantially all of the properties of such Person to
TWE or its Subsidiaries; provided that such liens do not extend to or cover
any property or assets of TWE or any Subsidiary of TWE other than the
property or assets acquired in such transaction and any improvements on
such property or assets;
(iv) liens on property existing at the time of its acquisition or
incurred to secure payment of all or a part of its purchase price or to
secure indebtedness incurred prior to, at the time of, or within one year
after its acquisition for the purpose of financing all or part of its
purchase price; provided that in each case such liens shall not extend to
or cover any property or assets of TWE or any Subsidiary of TWE other than
the property or assets acquired and any improvements on such property or
assets;
(v) liens on 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, provided that such liens do not extend to or
cover any property or assets of TWE or any Subsidiary of TWE other than the
property or assets improved or constructed and any improvements or
construction thereon;
(vi) liens consisting of or relating to the sale, transfer or
financing of motion pictures, video and television programs, sound
recordings, books ("Works") or rights with respect thereto to or with
so-called tax shelter groups or other third-party investors in connection
with the financing of such Works or rights with respect thereto to or with
so-called tax shelter groups or other third-party investors in the ordinary
course of business and the granting to TWE or any of its Subsidiaries of
rights to distribute such Works; provided, however, that no such lien shall
attach to any asset or right of TWE or its Subsidiaries, other than (x)
Works or rights which were sold, transferred to or financed by the tax
shelter group or third-party investors in question or the proceeds from
such transactions and (y) equity interests of any Subsidiary of TWE
substantially all of the assets of which consist of such Works or rights;
(vii) liens on shares of stock, indebtedness or other securities of a
Person that is not a Subsidiary of TWE;
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(viii) liens on satellite transponders and all property rights therein
and the products, revenues and proceeds therefrom which secure obligations
incurred in connection with the acquisition, utilization or operation of
such satellite transponders or the refinancing of any such obligations;
(ix) liens on capital leases entered into after the date of the
Indenture provided that such liens extend only to the property or assets
that are the subject of such capital leases;
(x) other liens arising in connection with indebtedness for money
borrowed of TWE and its Subsidiaries (other than indebtedness of TWE or its
Subsidiaries under a senior credit facility) in an aggregate principal
amount for TWE 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 TWE and (B) $500 million; and
(xi) any extensions, renewal or replacement of any lien referred to in
the foregoing clauses (i) through (x) inclusive, or of any indebtedness
secured thereby, provided that the principal amount of indebtedness secured
thereby does 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 is limited to all or part of
substantially the same property which secured the lien extended, renewed or
replaced (plus improvements on such property).
Waiver of Certain Covenants. TWE may omit in any particular instance to
comply with any term, provision or condition set forth in certain covenants with
respect to the Debt Securities of any series if before the time for such
compliance the holders of at least a majority in principal amount of all series
of the outstanding Debt Securities affected, all voting as one class, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition. Such waiver shall only extend to or affect such
term, provision or condition to the extent so expressly waived, and, until such
waiver is effective, the obligations of TWE and the duties of the Trustee in
respect of any such term, provision or condition will remain in full force and
effect.
The Indenture does not contain provisions which would give holders of the
Debt Securities the right to require TWE to repurchase their Debt Securities in
the event of a change in control or a decline in the credit rating of TWE's debt
securities for any reason, including as a result of a takeover, recapitalization
or similar restructuring or substantial leveraging. It also does not restrict
the ability of TWE to make distributions or purchase or redeem partnership
interests from partners.
CERTAIN DEFINITIONS
The following are certain of the terms defined in the Indenture:
"Consolidated Net Worth" means, with respect to any Person, at the
date of any determination, the consolidated stockholders' or owners' equity
of the holders of capital stock or partnership interests of such Person and
its Subsidiaries, determined on a consolidated basis in accordance with
GAAP consistently applied.
"GAAP" means generally accepted accounting principles as such
principles are in effect as of the date of the Indenture.
"Material Subsidiary" means any Person that is a Subsidiary of TWE if
at the end of the most recent fiscal quarter of TWE, 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 TWE
and its other Subsidiaries exceeded 10% of the Consolidated Net Worth of
TWE.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"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.
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EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to any
series of Debt Securities:
(i) failure to pay principal of any Debt Security of such series when
due;
(ii) failure to pay interest on any Debt Security of such series when
due, continued for 30 days;
(iii) failure by TWE to perform any covenant of TWE in the Indenture,
continued for 30 days after written notice from the Trustee or the holders
of at least 25% in principal amount of the Debt Securities of such series
as provided in the Indenture;
(iv) failure to pay when due upon final maturity, or upon
acceleration, the principal amount of any indebtedness of TWE or any
Material Subsidiary in excess of $50 million, if such indebtedness is not
discharged, or such acceleration annulled, within 60 days after written
notice from the Trustee or the holders of at least 25% in principal amount
of the Debt Securities of such series as provided in the Indenture; and
(v) certain events of bankruptcy, insolvency or reorganization of TWE.
If an Event of Default with respect to the Debt Securities of any series
shall occur and be continuing, either the Trustee or the holders of at least 25%
in principal amount of the Debt Securities of such series outstanding may
declare the principal amount of the Debt Securities of such series and the
interest accrued thereon to be due and payable immediately. However, at any time
after a declaration of acceleration with respect to any series of Debt
Securities has been made but before a judgment or decree based on such
acceleration has been obtained, the holders of a majority in principal amount of
the Debt Securities of such series outstanding may, under certain circumstances,
rescind and annul such acceleration. For information as to waiver of defaults,
see "--Modification and Waiver."
The Indenture provides that, subject to the duty of the Trustee during a
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders, unless such holders shall have
offered to the Trustee reasonable security or indemnity. Subject to such
provisions for security or indemnification of the Trustee, the holders of a
majority in principal amount of the Debt Securities of any series outstanding
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Debt Securities of such
series.
TWE and any Person that is at such time a guarantor of the Debt Securities
will be required to furnish annually to the Trustee a statement as to any
default by TWE or such Person of its obligations under the Indenture.
MODIFICATION AND WAVIER
TWE and the Trustee may, without the consent of the holders of the Debt
Securities, enter into indentures supplemental to the Indenture for, among
others, one or more of the following purposes:
(i) to evidence the succession of another Person to TWE, WCI or ATC,
and the assumption by such successor of TWE's, WCI's or ATC's obligations
under the Indenture and the Debt Securities of any series or the related
Guarantees;
(ii) to add covenants of TWE, WCI or ATC, or surrender any rights of
TWE, WCI or ATC, 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;
(vi) to provide any additional Events of Default;
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(vii) to add new general partner guarantors or to reflect the merger
or consolidation of any General Partner, provided that the successor of
such General Partner guarantees such General Partner's Guaranteed
Percentage of TWE's obligations under the Debt Securities; and
(viii) to evidence the succession of new obligors and the
extinguishment of the obligations of the Company and the guarantors
pursuant to the provisions described below under "--Redemption or
Assumption Upon Dissolution of TWE."
The Indenture contains provisions permitting TWE and the Trustee, with the
consent of the holders of a majority in principal amount of the outstanding Debt
Securities of all series to be affected voting as a single class, to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Indenture or modifying the rights of the holders of the
Debt Securities of such series to be affected, except that such supplemental
indenture may not, without the consent of each holder of affected Debt
Securities, among other things, change the fixed maturity of any affected Debt
Securities, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or amend or modify the terms of either
Guarantee in a manner adverse to the holders of such Debt Securities or reduce
the aforesaid percentage of Debt Securities of any series the consent of the
holders of which is required for the execution of any such supplemental
indenture.
The holders of a majority in principal amount of the outstanding Debt
Securities of any series may on behalf of the holders of all Debt Securities of
such series waive any past default under the Indenture with respect to the Debt
Securities of such series, except a default in the payment of the principal of
or interest on any Debt Security of such series or in respect of a provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Debt Security of such series.
CONSOLIDATION, MERGER AND SALE OF ASSETS
TWE may not consolidate with or merge into, or convey, transfer or lease
all or substantially all of its assets to, any Person, unless (i) TWE is the
continuing Person in any such merger or consolidation, or the Person (if other
than TWE) which is the continuing Person in any such merger or consolidation or
which acquires all or substantially all of the assets of TWE is a corporation,
partnership or trust organized under the laws of the United States or any state
or the District of Columbia and expressly assumes TWE's obligations under the
Debt Securities and the Indenture and (ii) immediately after such transaction,
TWE or such other Person, as the case may be, is not in default in the
performance of any covenants or conditions contained in the Indenture or the
Debt Securities.
DEFEASANCE
The Indenture provides that, at TWE's option, (i) TWE and the General
Partners will be discharged from any and all obligations in respect of the Debt
Securities of any series (except for certain obligations of TWE to register the
transfer or exchange of Debt Securities of such series, replace stolen, lost or
mutilated Debt Securities of such series and to hold moneys for payment in
trust) ("defeasance") or (ii) TWE need not comply with certain provisions of the
Indenture ("covenant defeasance") with respect to the Debt Securities of any
series if, in each case, TWE deposits, in trust with the Trustee, money or U.S.
Government Obligations 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 of, premium, if
any, and interest on the Debt Securities of such series on the dates such
payments are due in accordance with the terms of the Debt Securities of such
series through the stated maturity or, at TWE's option, any redemption date
occurring prior thereto (provided that TWE gives notice of redemption). As a
condition to defeasance or covenant defeasance with respect to the Debt
Securities of any series, TWE is required to deliver to the Trustee an opinion
of counsel to the effect that the deposit and related defeasance would not cause
the holders of the Debt Securities of such series to recognize income, gain or
loss for federal income tax purposes. Such opinion, in the case of defeasance,
must refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable United States federal income tax laws occurring after the
date of the Indenture.
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REDEMPTION OR ASSUMPTION UPON DISSOLUTION OF TWE
If TWE dissolves (other than in connection with (a) the reconstitution of
TWE as a corporation, (b) the occurrence of a transaction that is permitted by
the "Consolidation, Merger and Sale of Assets" covenant described above or
(c) a case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or similar law), it will, at its option, either:
(1) redeem all of the Debt Securities concurrently with or prior to the
effectiveness of such dissolution upon not less than 30 (or 15 if provided for
in a resolution of TWE establishing the relevant series) days' nor more than
60 days' notice, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Debt Securities to be redeemed, plus accrued interest
thereon to (but excluding) the redemption date, and (ii) the Make-Whole Amount
(as defined below) with respect to such Debt Securities; or
(2) provided that immediately after such transaction neither TWE nor the
Eligible Affiliate that assumes TWE's obligations under the Debt Securities as
described below is in default in the performance of any covenants or conditions
contained in the Indenture or the Debt Securities, concurrently with or prior to
the effectiveness of such dissolution (i) cause an entity that controls or is
under common control with TWE immediately prior to such dissolution (which shall
be a corporation, partnership or trust, organized and validly existing under the
laws of the United States of America, any state or the District of Columbia) (an
"Eligible Affiliate") to expressly assume, by a supplemental indenture, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of, premium, if any, and interest on all of
the Debt Securities and the performance or observance of every covenant of the
Indenture on the part of TWE to be performed or observed; and (ii) cause an
Eligible Affiliate that has outstanding indebtedness that was sold under the
Securities Act ("Public Debt") and files reports under Section 13(a) or 15(d) of
the Securities Act (a "Public Issuer") to provide, by way of assumption or
guarantee (including, if appropriate, the guarantees of other Eligible
Affiliates), substantially the same credit support as is provided for the Public
Debt of such Public Issuer. If TWE's obligations under the Debt Securities are
assumed by an Eligible Affiliate pursuant to this clause (2), TWE, at its
option, may provide for the termination of the Guarantees provided by the
General Partners.
"Make-Whole Amount" means, on any date when TWE redeems any series of Debt
Securities, the sum of the present value of the remaining scheduled payments of
principal and interest thereon (exclusive of interest accrued to the date of
redemption) discounted to the date of redemption on a semiannual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Treasury Rate with
respect to such series of Debt Securities, plus a spread (specified in basis
points and set forth in the terms of such series of Debt Securities), plus
accrued and unpaid interest on the principal amount being redeemed to the date
of redemption.
"Treasury Rate" means, with respect to any redemption date and a series of
Debt Securities, (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue for such series
of Debt Securities (if no maturity is within three months before or after the
Remaining Life for such series of Debt Securities, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue for such
series of Debt Securities shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight line basis, rounding
to the nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue for such series of Debt Securities,
calculated using a price for the Comparable Treasury Issue for such series of
Debt Securities (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date and for such series of Debt
Securities. The Treasury Rate will be calculated on the third Business Day
preceding the redemption date.
"Comparable Treasury Issue" means, in relation to a particular series of
Debt Securities to be redeemed, the United States Treasury security selected by
an Independent Investment Banker as having a maturity comparable to the
remaining term ("Remaining Life") of such series of Debt Securities that would
be utilized, at the time of
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selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Debt Securities.
"Comparable Treasury Price" means (i) the average of five Reference
Treasury Dealer Quotations for such redemption date with respect to a series of
Debt Securities, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer
than five such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Independent Investment Banker" means an independent investment banking
institution of national standing appointed by TWE.
"Reference Treasury Dealer" means any Primary Treasury Dealer selected by
the Independent Investment Banker after consultation with TWE.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date for a series of Debt
Securities, the average, as determined by the Independent Investment Banker, of
the bid and asked prices for the Comparable Treasury Issue for such series of
Debt Securities (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Trustee is a
depository for funds and performs other services for, and transacts other
banking business with, the Company in the normal course of business.
GOVERNING LAW
The Indenture will be governed by, and construed in accordance with, the
laws of the State of New York.
DESCRIPTION OF THE CREDIT AGREEMENT
The Credit Agreement is a revolving credit facility pursuant to which TWE
may borrow up to $7.5 billion, the TWE-A/N Partnership may borrow up to
$2 billion and Time Warner, TWC, TBS and TWI Cable may borrow in the aggregate
up to $6 billion, subject in each case to the aggregate borrowing limit of
$7.5 billion under the Credit Agreement and certain other limitations and
adjustments thereunder.
The Credit Agreement contains certain covenants applicable to TWE,
including restrictions on the incurrence of indebtedness and financial ratios
relating to (i) maximum levels of net total indebtedness to cash flow (5.0 to 1)
and (ii) minimum levels of "cash flow" to fixed charges (2.5 to 1). Certain
other covenants impose restrictions on indebtedness of subsidiaries of TWE and
the creation of certain liens. The Credit Agreement imposes no limitations on
TWE's ability to make acquisitions, investments or cash distributions to its
partners, subject to compliance with the financial ratios described above.
Generally, an event of default under the Credit Agreement includes:
(i) the occurrence of a payment default under the Credit Agreement;
(ii) the failure of TWE, or any other borrower under the Credit
Agreement, to observe certain covenants contained in the Credit Agreement;
(iii) any representation of TWE, or any other borrower under the
Credit Agreement, in the Credit Agreement or related documents proving to
have been materially false when made;
(iv) the occurrence of a payment default under any indebtedness (other
than indebtedness under the Credit Agreement) of Time Warner, TWE, or any
other borrower under the Credit Agreement, or certain of their respective
subsidiaries, in excess of $10 million individually or $50 million in the
aggregate beyond the applicable grace period;
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(v) the occurrence of an event of default under any indebtedness
(other than indebtedness under the Credit Agreement) of Time Warner, TWE,
or any other borrower under the Credit Agreement, or certain of their
respective subsidiaries, permitting acceleration of indebtedness in excess
of $10 million individually or $50 million in the aggregate thereunder, and
the default continues beyond any applicable grace period;
(vi) certain events of bankruptcy with respect to or the dissolution
or liquidation of Time Warner, TWE, or any other borrower under the Credit
Agreement, or certain of their respective subsidiaries or the General
Partners;
(vii) the failure to pay any amount in excess of $25 million to the
Pension Benefit Guaranty Corporation in connection with any pension plan or
certain other ERISA defaults;
(viii) the entering of a judgment against Time Warner, TWE, or any
other borrower under the Credit Agreement, any General Partner or any of
their Material Subsidiaries in excess of $20 million individually or $50
million in the aggregate at any one time if such judgment has not been
paid, vacated or stayed pending appeal within 60 days; and
(ix) the occurrence of a "change in control" (as defined in the Credit
Agreement) with respect to Time Warner, TWE or any other borrower under the
Credit Agreement.
Each of the General Partners has guaranteed its Guaranteed Percentage of
TWE's obligations under the Credit Agreement. See "Description of the Debt
Securities--Guarantees."
TWE has a commercial paper facility and issues commercial paper from time
to time. At September 30, 1998, commercial paper outstanding was approximately
$365 million. Each of the General Partners has guaranteed its Guaranteed
Percentage of TWE's outstanding commercial paper.
DESCRIPTION OF OUTSTANDING DEBT SECURITIES
TWE has $3.8 billion aggregate principal amount of Outstanding Debt
Securities. The Outstanding Debt Securities are unsecured and unsubordinated
obligations of the Company issued under an indenture, dated as of April 30,
1992, as amended, among the Company, Time Warner, the subsidiaries of Time
Warner that are parties thereto and The Bank of New York, as trustee. The
Outstanding Debt Securities are generally subject to the same covenants under
the Indenture as are the Debt Securities except that Outstanding Debt Securities
are subject to the following covenants to which the Debt Securities are not
subject: (i) a limitation on the issuance of senior indebtedness by TWE, (ii) a
limitation on the ability of TWE and Time Warner (and certain of their
subsidiaries) to grant certain guarantees, and (iii) limitations on certain
restricted payments following an Event of Default or TWE's failure to pay
interest when due with respect to Outstanding Debt Securities. In addition, TWE
does not have the right to provide for the assumption of the Outstanding Debt
Securities by an entity that controls or is under common control with TWE in
the event of the dissolution of TWE under the circumstances provided for in
paragraph (2) under "Description of the Debt Securities--Redemption or
Assumption Upon Dissolution of TWE."
GLOBAL SECURITIES
Unless otherwise specified in a Prospectus Supplement for a particular
series, each series of Debt Securities will be issued in whole or in part in
global form (the "Global Securities") that will be deposited with, or on behalf
of, a depository (the "Depository") identified in the Prospectus Supplement
relating to such series. Global Securities will be registered in the name of the
Depository, which will be the sole direct holder of the Global Securities. ANY
PERSON WISHING TO OWN A DEBT SECURITY MUST DO SO INDIRECTLY THROUGH AN ACCOUNT
WITH A BROKER, BANK OR OTHER FINANCIAL INSTITUTION THAT, IN TURN, HAS AN ACCOUNT
WITH THE DEPOSITORY.
SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES
TWE's obligations with respect to the Debt Securities, as well as the
obligations of the Trustee, run only to Persons who are registered as holders of
Debt Securities. For example, once TWE makes payment to the registered holder,
TWE has no further responsibility for that payment even if that recipient is
legally required to pass the payment along to an individual investor but does
not do so. As an indirect holder, an investor's rights
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relating to a Global Security will be governed by the account rules of the
investor's financial institution and of the Depository, as well as general laws
relating to debt securities transfers.
An investor should be aware that when Debt Securities are issued in the
form of Global Securities:
o the investor cannot have Debt Securities registered in his or her
own name.
o the investor cannot receive physical certificates for his or her
interest in the Debt Securities.
o the investor must look to his or her own bank or brokerage firm for
payments on the Debt Securities and protection of his or her legal
rights relating to the Debt Securities.
o the investor may not be able to sell interests in the Debt
Securities to some insurance companies and other institutions that
are required by law to hold the physical certificates of Debt
Securities that they own.
o the Depository's policies will govern payments, transfers, exchange
and other matters relating to the investor's interest in the Global
Security. TWE and the Trustee have no responsibility for any aspect
of the Depository's actions or for its records of ownership
interests in the Global Security. TWE and the Trustee also do not
supervise the Depository in any way.
o the Depository will usually require that interests in a Global
Security be purchased or sold within its system using same-day
funds.
SPECIAL SITUATIONS WHEN THE GLOBAL SECURITY WILL BE TERMINATED
In a few special situations described below, the Global Security will
terminate and interests in it will be exchanged for physical certificates
representing Debt Securities. After that exchange, the choice of whether to hold
Debt Securities directly or indirectly through an account at the investor's bank
or brokerage firm will be up to the investor. In that event, investors must
consult their own banks or brokers to find out how to have their interests in
Debt Securities transferred to their own names, so that they will be direct
holders.
The special situations for termination of a Global Security are:
o when the Depository notifies TWE that it is unwilling, unable or no
longer qualified to continue as Depository (unless a replacement
Depository is named).
o when an Event of Default on the Debt Securities has occurred and has
not been cured.
o when and if TWE decides to terminate a Global Security.
The Prospectus Supplement may list situations for terminating a Global
Security that would apply only to the particular series of Debt Securities
covered by the Prospectus Supplement. When a Global Security terminates, the
Depository (and not TWE or the Trustee) is responsible for deciding the names of
the institutions that will be the initial direct holders. Unless otherwise
provided in the Prospectus Supplement, Debt Securities that are represented by a
Global Security will be issued in denominations of $1,000 and any integral
multiple thereof, and will be issued in registered form only, without coupons.
PLAN OF DISTRIBUTION
TWE may sell the Debt Securities to one or more underwriters or dealers for
public offering and sale by them or may sell the Debt Securities to investors
directly or through agents. Any underwriters or agents will be identified and
their compensation described in a Prospectus Supplement.
TWE (directly or through agents) may sell, and the underwriters resell, the
Debt Securities in one or more transactions, including negotiated transactions,
at a fixed public offering price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices.
In connection with the sale of Debt Securities, the underwriters or agents
may receive compensation from TWE or from purchasers of the Debt Securities for
whom they may act as agents. The underwriters may sell Debt Securities to or
through dealers, who may also receive compensation from purchasers of the Debt
Securities for
16
<PAGE>
whom they may act as agents. Compensation may be in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that participate in
the distribution of the Debt Securities may be underwriters as defined in the
Securities Act of 1933 (the "Act"), and any discounts or commissions received by
them from us and any profit on the resale of the Debt Securities by them may be
treated as underwriting discounts and commissions under the Act.
TWE will indemnify the underwriters and agents against certain civil
liabilities, including liabilities under the Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, TWE or its affiliates in the ordinary course of their
businesses.
LEGAL OPINIONS
Certain legal matters in connection with the Debt Securities will be passed
upon for the Company by Cravath, Swaine & Moore, 825 Eighth Avenue, New York,
New York and for the Underwriters, if any, named in a Prospectus Supplement, by
Shearman & Sterling, 599 Lexington Avenue, New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and schedules of the Company, WCI and ATC included in
Annual Report on Form 10-K for the year ended December 31, 1997 of the Company,
WCI and ATC, as set forth in their reports, which are incorporated herein by
reference. Such consolidated financial statements are incorporated by reference
in reliance on their reports, given on their authority as experts in accounting
and auditing.
17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following statement sets forth the estimated amounts of expenses, other
than underwriting discounts, to be borne by the registrant in connection with
the distribution of the Debt Securities.
<TABLE>
<S> <C>
Trustees' fees.............................................. $ 5,000
Printing and engraving expenses............................. 250,000
Rating agency fees.......................................... 250,000
Accounting fees and expenses................................ 100,000
Legal fees and expenses..................................... 200,000
Miscellaneous expenses...................................... 25,000
----------
Total expenses......................................... $ 830,000
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
TWE is a Delaware limited partnership. Section 17-108 of the Delaware
Revised Uniform Limited Partnership Act provides that subject to such standards
and restrictions, if any, as are set forth in its partnership agreement, a
limited partnership may, and shall have the power to, indemnify and hold
harmless any partner or other person from and against any and all claims and
demands whatsoever.
Section 12.8 of the TWE Partnership Agreement provides that the Company
shall indemnify, defend and hold harmless each Representative and officer of the
Company from any personal liability he or she may incur by reason of his or her
action on behalf of the Company to the fullest extent permitted as if the
Company were a Delaware corporation. TWE's obligations under Section 12.8 of the
TWE Partnership Agreement are expressly non-recourse to the general partners of
TWE.
ATC and WCI are Delaware corporations as is Time Warner, the ultimate
parent of TWE and the General Partners. Subsection (b)(7) of Section 102 of the
Delaware General Corporation Law (the "DGCL"), enables a corporation in its
original certificate of incorporation or an amendment thereto to eliminate or
limit the personal liability of a director to the corporation or its
stockholders for monetary damages for violations of the director's fiduciary
duty, except (i) for any breach of the directors' duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the DGCL (providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemptions) or
(iv) for any transaction from which a director derived an improper personal
benefit.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding provided that such
director or officer acted in good faith in a manner reasonably believed to be
in, or not opposed to, the best interests of the corporation, and, with respect
to any criminal action or proceeding, provided further that such director or
officer had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorney's fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit
provided that
II-1
<PAGE>
such director or officer acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation,
except that no indemnification may be made in respect to any claim, issue or
matter as to which such director or officer shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or that court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
of the circumstances of the case, such director or officer is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsections (a) and (b) or in the defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorney's
fees) actually and reasonably incurred by him in connection therewith; that
indemnification and advancement of expenses provided for, by, or granted
pursuant to, Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled, and empowers the corporation to
purchase and maintain insurance on behalf of any person who is or was a director
or officer of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him or incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.
Generally, the By-Laws of WCI and ATC provide for indemnification of the
officers and directors of WCI and ATC to the fullest extent permitted by
applicable law. In addition Article VI of the Certificate of Incorporation of
ATC provides for the elimination of liability of directors to the extent
permitted by applicable law.
Article VI of Time Warner's By-Laws requires indemnification to the fullest
extent permitted under applicable law of any person who is or was a director or
officer of Time Warner or 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 Time Warner or any predecessor
of Time Warner or was serving at the request of Time Warner as a director,
officer or employee of another corporation, partnership, joint venture, trust or
other enterprise, which would include TWE and the General Partners.
Time Warner's Directors' and Officers' Liability and Reimbursement
Insurance Policy is designed to reimburse Time Warner for any payments made by
it pursuant to the foregoing indemnification. Such policy has coverage of
$50 million.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ---------------------------------------------------------------------------------------------------------
<S> <C>
1 Proposed form of Debt Securities Underwriting Agreement.
4.1 Proposed form of Indenture among Time Warner Entertainment Company, L.P. ("TWE"), Warner Communications
Inc., American Television and Communications Corporation and the Bank of New York, as Trustee.
4.2 Form of Debt Security.
5 Opinion of Cravath, Swaine & Moore.
10.1 Credit Agreement dated as of November 10, 1997 among Time Warner Inc., Time Warner Companies, Inc., TWE,
Turner Broadcasting System, Inc., Time Warner Entertainment-Advance/Newhouse Partnership and TWI Cable,
Inc., as Credit Parties, The Chase Manhattan Bank, as Administrative Agent, Bank of America National
Trust and Savings Association, BONY and Morgan Guaranty Trust Company of New York, as Documentation and
Syndication Agents and Chase Securities Inc., as Arranger (incorporated herein by reference to
Exhibit 10.26 to Time Warner Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).*
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
---- ---------------------------------------------------------------------------------------------------------
<S> <C>
12.1 Statement regarding the computation of the ratio of earnings to fixed charges for TWE.
12.2 Statement regarding the computation of the ratio of earnings to fixed charges for Warner Communications
Inc.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Cravath, Swaine & Moore (included in Exhibit 5).
24 Power of Attorney.
25 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York (bound separately).
</TABLE>
- ------------------
* Incorporated by Reference
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
A. Undertaking Pursuant to Rule 415
The undersigned registrants hereby undertake:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act, that are incorporated by
reference in the Registration Statement;
(b) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(c) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Undertaking Regarding Filings Incorporating Subsequent Exchange Act
Documents by Reference
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of any of the
registrants' annual reports pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Undertaking in Respect of Indemnification
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or otherwise,
the registrants have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceedings) 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 of whether or not 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.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, EACH OF THE
REGISTRANTS CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON DECEMBER 31,
1998.
TIME WARNER ENTERTAINMENT COMPANY,
L.P.
By: WARNER COMMUNICATIONS INC.
As General Partner
By: /s/ JOHN A. LABARCA
__________________________________
John A. LaBarca
Vice President and Controller
AMERICAN TELEVISION AND COMMUNICATIONS
CORPORATION
WARNER COMMUNICATIONS INC.
By: /s/ JOHN A. LABARCA
__________________________________
John A. LaBarca
Vice President and Controller
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES
INDICATED ON DECEMBER 31, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ ---------------------------------------------------------
<S> <C>
* Chairman of the Board and Chief Executive Officer of each
- ------------------------------------------ Registrant and Director of WCI and ATC (Principal
Gerald M. Levin Executive Officer)
* Executive Vice President and Chief Financial Officer of
- ------------------------------------------ TWE, and Senior Vice President and Chief Financial
Richard J. Bressler Officer and Director of WCI and ATC (Principal Financial
Officer)
/s/ JOHN A. LABARCA Senior Vice President and Controller of TWE, and Vice
- ------------------------------------------ President and Controller of WCI and ATC (Principal
John A. LaBarca Accounting Officer)
* Director of WCI and ATC
- ------------------------------------------
Richard D. Parsons
* Director of WCI and ATC
- ------------------------------------------
Peter R. Haje
*By: /s/ THOMAS W. MCENERNEY
--------------------------------------
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<S> <C>
1 -- Proposed form of Debt Securities Underwriting Agreement.
4.1 -- Proposed form of Indenture among Time Warner Entertainment Company,
L.P. ("TWE"), Warner Communications Inc., American Television and
Communications Corporation and the Bank of New York, as Trustee.
4.2 -- Form of Debt Security.
5 -- Opinion of Cravath, Swaine & Moore.
10.1 -- Credit Agreement dated as of November 10, 1997 among Time Warner Inc., Time
Warner Companies, Inc., TWE, Turner Broadcasting System, Inc., Time Warner
Entertainment-Advance/Newhouse Partnership and TWI Cable, Inc., as Credit
Parties, The Chase Manhattan Bank, as Administrative Agent, Bank of America
National Trust and Savings Association, BONY and Morgan Guaranty Trust Company
of New York, as Documentation and Syndication Agents and Chase Securities
Inc., as Arranger (incorporated herein by reference to Exhibit 10.26 to Time
Warner Inc.'s Annual Report on Form 10-K for the year ended December 31,
1997).*
12.1 -- Statement regarding the computation of the ratio of earnings to fixed charges
for TWE.
12.2 -- Statement regarding the computation of the ratio of earnings to fixed charges
for Warner Communications Inc.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Cravath, Swaine & Moore. (included in Exhibit 5).
24 -- Power of Attorney.
25 -- Statement of Eligibility and Qualification on Form T-1 of The Bank of New York
(bound separately).
</TABLE>
- ------------------
* Incorporated by Reference.
<PAGE>
TIME WARNER ENTERTAINMENT COMPANY, L.P.
AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION
WARNER COMMUNICATIONS INC.
Form of Underwriting Agreement
[----------------, ----]
New York, New York
To the Representatives
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Time Warner Entertainment Company, L.P., a Delaware limited
partnership (the "Company"), proposes to sell to the underwriters named in
Schedule II hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, the principal amount of its securities identified
in Schedule I hereto (the "Debt Securities"), to be issued under an indenture
(as from time to time amended or supplemented, the "Indenture") dated as of
[_______________, ____], among the Company, American Television and
Communications Corporation, a Delaware corporation ("ATC"), Warner
Communications Inc., a Delaware corporation ("WCI", and, together with ATC, the
"Guarantors") and The Bank of New York, as trustee (the "Trustee"), providing
for the issuance of debt securities in one or more series, all of which will be
entitled to the benefit of the Guarantees referred to below. Pursuant to the
Indenture, each of ATC and WCI, as primary obligor and not merely as surety, has
agreed to irrevocably and unconditionally guarantee (together, the "Guarantees";
and together with the Debt Securities, the "Securities"), to each holder of Debt
Securities and to the Trustee, (i) the full and punctual payment of principal of
and interest on the Debt Securities up to the amount of the Guaranteed
Percentage (as defined in the Indenture) when due, whether at maturity, by
<PAGE>
2
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under the Indenture and the Debt Securities. If the firm or firms
listed in Schedule II hereto include only the firm or firms listed in Schedule I
hereto, then the terms "Underwriters" and "Representatives", as used herein,
shall each be deemed to refer to such firm or firms.
The Company was formed as a limited partnership in 1992
pursuant to an Agreement of Limited Partnership, dated as of October 29, 1991,
as amended on February 11, 1992 and June 23, 1992, among Time Warner Companies,
Inc. ("TWCI") and certain of its subsidiaries, ITOCHU Corporation ("ITOCHU") and
Toshiba Corporation ("Toshiba"), and as further amended by an Amendment
Agreement, dated as of September 14, 1993, among ITOCHU, Toshiba, TWCI, US West,
Inc. and certain of their respective subsidiaries (as amended, the "TWE
Partnership Agreement"). Capitalized terms used herein without definition have
the respective meanings specified therefor in the Indenture or the Registration
Statement (as defined below).
1. Representations and Warranties. Each of the Company, ATC
and WCI represents and warrants to, and agrees with, each Underwriter as set
forth below in this Section 1. Certain terms used in this Section 1 are defined
in paragraph (q) hereof.
(a) If the offering of the Securities is a Delayed Offering
(as specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Securities is a Non-Delayed Offering (as so
specified), paragraph (ii) below is applicable.
(i) The Company and the Guarantors meet the
requirements for the use of Form S-3 under the Securities Act
of 1933, as amended (the "Act"), and have filed with the
Securities and Exchange Commission (the "Commission") a
registration statement (the file number of which is set forth
in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering and
sale of the Securities. The Company and the Guarantors may
have filed one or more amendments thereto, and may have used a
Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so
amended, and any post-effective amendment thereto, has become
effective. The offering of the Securities is a Delayed
Offering and, although the Basic Prospectus may not include
all the information with respect to the Securities and the
offering thereof required by the Act and the rules thereunder
to be included in the Final Prospectus, the Basic Prospectus
includes all such information required by the Act and the
rules thereunder to be included therein as of the Effective
Date. The Company and the Guarantors will next file with the
Commission pursuant to Rules 415 and 424(b)(2) or (5) a final
supplement to the form of prospectus included in such
registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus supplement
shall include all required information with respect to the
Securities and the offering thereof and, except to the extent
the Representatives shall agree in writing
<PAGE>
3
to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond
that contained in the Basic Prospectus and any Preliminary
Final Prospectus) as the Company and the Guarantors have
advised you, prior to the Execution Time, will be included or
made therein.
(ii) The Company and the Guarantors meet the
requirements for the use of Form S-3 under the Act and have
filed with the Commission a registration statement (the file
number of which is set forth in Schedule I hereto) on such
Form, including a basic prospectus, for registration under the
Act of the offering and sale of the Securities. The Company
and the Guarantors may have filed one or more amendments
thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company and
the Guarantors will next file with the Commission either (x) a
final prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b)(1) or (4), or (y) prior
to the Effective Date of such registration statement, an
amendment to such registration statement, including the form
of final prospectus supplement. In the case of clause (x), the
Company and the Guarantors have included in such registration
statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the
rules thereunder to be included in the Final Prospectus with
respect to the Securities and the offering thereof. As filed,
such final prospectus supplement or such amendment and form of
final prospectus supplement shall contain all Rule 430A
Information, together with all other such required
information, with respect to the Securities and the offering
thereof and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the
Company and the Guarantors have advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the respective
rules thereunder; on the Effective Date, the Registration Statement did
not or will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading; on the
Effective Date and on the Closing
<PAGE>
4
Date the Indenture did or will comply in all material respects with the
requirements of the Trust Indenture Act and the rules thereunder; and,
on the Effective Date, the Final Prospectus, if not filed pursuant to
Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company and the Guarantors make no representations or
warranties as to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility and Qualification (Form
T-l) under the Trust Indenture Act of the Trustee or (ii) the
information contained in or omitted from the Registration Statement or
the Final Prospectus (or any supplement thereto) in reliance upon and
in conformity with information furnished in writing to the Company or
either Guarantor by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(c) (1) The Company is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of
Delaware, with full power and authority under such laws to own its
properties and conduct its business as described in the Basic
Prospectus, and any amendment or supplement thereto, and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified to transact business as a foreign partnership and is in
good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to
so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise.
(2) Each of ATC and WCI is validly existing as a corporation
in good standing under the laws of the State of Delaware, with full
corporate power and authority under such laws to own its properties and
conduct its business as described in the Basic Prospectus, and any
amendment or supplement thereto, and to enter into and perform its
obligations under this Agreement; and each of ATC and WCI 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 ATC and its subsidiaries or WCI and its subsidiaries, in each case
considered as one enterprise.
(d) Each of the Company's significant subsidiaries, as such
term is defined in Rule 1-02(w) of Regulation S-X under the Act, is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with full power and
authority under such laws to own its properties and conduct its
business as described in
<PAGE>
5
the Basic Prospectus, and any amendment or supplement thereto, and is
duly qualified to transact business as a foreign corporation or
partnership and is in good standing in each other jurisdiction in which
it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(e) The Company's equity capitalization is as set forth in the
Basic Prospectus, and any amendment or supplement thereto.
(f) There is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body
or any arbitrator involving the Company, ATC or WCI or any of their
respective subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Basic
Prospectus, and any amendment or supplement thereto, and there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Basic Prospectus, and any
amendment or supplement thereto, or to be filed as an exhibit, which is
not described or filed as required.
(g) This Agreement has been duly authorized, executed and
delivered by each of the Company, ATC and WCI.
(h) No consent, approval, authorization or order of any court
or governmental agency or body is required for the authorization,
issuance, sale and delivery of the Securities by the Company and the
Guarantors or the consummation of the transactions contemplated by this
Agreement or in any Delayed Delivery Contracts, except such as have
been obtained under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other
approvals as have been obtained.
(i) Except as otherwise disclosed in the Basic Prospectus,
neither the Company nor any of its significant subsidiaries, as such
term is defined in Rule 1-02(w) of Regulation S-X under the Act, is in
violation of its certificate of limited partnership or certificate of
incorporation, as applicable, or in default of the performance or
observance of any obligation, agreement, covenant or condition
contained in the TWE certificate of limited partnership or the TWE
Partnership Agreement, except for such violations or defaults that in
the aggregate would not have a material adverse effect on the condition
(financial or otherwise), results of operations, earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise. The execution and delivery of this
Agreement and the Indenture by the Company, ATC and WCI, the issuance,
sale and delivery of Debt Securities by the Company, the issuance and
delivery of their respective Guarantees by ATC and WCI, the
consummation by the
<PAGE>
6
Company, ATC and WCI of the transactions contemplated in this
Agreement, the Indenture and the Registration Statement and compliance
by the Company, ATC and WCI with the terms of this Agreement or any
Delayed Delivery Contracts do not and will not result in any violation
of the TWE certificate of limited partnership or the TWE Partnership
Agreement by the Company or the certificate of incorporation or By-laws
of ATC and WCI, 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, ATC or WCI,
under (i) any indenture, mortgage or loan agreement, or any other
agreement or instrument, to which the Company, ATC or WCI is a party or
by which any of them may be bound or to which any of their properties
may be subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company, ATC or WCI, respectively,
and their respective subsidiaries, considered as one enterprise), (ii)
any existing applicable law, rule or regulation (except for such
conflicts, breaches, liens, charges or encumbrances that would not have
a material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company, ATC or
WCI, respectively, and their respective 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, ATC or WCI or any of their properties.
(j) The documents incorporated by reference in the Basic
Prospectus, and any amendment or supplement thereto, as of the dates
they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act.
(k) The Securities conform in all material respects to the
description thereof contained in the Basic Prospectus, and any
amendment or supplement thereto; if any of the Securities are to be
listed on any stock exchange, authorization therefor has been given,
subject to official notice of issuance and evidence of satisfactory
distribution, or the Company and the Guarantors have no reason to
believe that such Securities will not be authorized for listing,
subject to official notice of issuance and evidence of satisfactory
distribution.
(l) The Indenture has been duly authorized by the Company, has
been duly qualified under the Trust Indenture Act, and, at the Closing
Date, will have been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery by the Trustee,
will, at the Closing Date, constitute 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
<PAGE>
7
enforceability to general principles of equity, regardless of whether
considered in a proceeding in equity or at law); and the Debt
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to this
Agreement, in the case of the Underwriters' Securities, or by the
purchasers thereof pursuant to Delayed Delivery Contracts, in the case
of any Contract Securities, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to enforceability
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.
(m) The Indenture has been duly authorized by each of ATC and
WCI and, at the Closing Date, will have been duly executed and
delivered by each of ATC and WCI and, assuming due authorization,
execution and delivery by the Trustee, will, at the Closing Date,
constitute a legal, valid and binding instrument enforceable against
each of ATC and WCI in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or other laws affecting creditors' rights generally from time to time
in effect and subject as to enforceability to general principles of
equity, regardless of whether considered in a proceeding in equity or
at law).
(n) Each Delayed Delivery Contract that has been executed by
the Company, ATC and WCI has been duly authorized, executed and
delivered by the Company, ATC and WCI, respectively, and, assuming the
due authorization, execution and delivery by the purchaser thereunder,
is a valid and binding obligation of the Company, ATC and WCI
enforceable against the Company, ATC and WCI, respectively, in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and subject as to enforceability to general
principles of equity, regardless of whether considered in a proceeding
in equity or at law.
(o) Each firm of independent accountants, which is reporting
upon certain audited or reviewed financial statements and schedules
included or incorporated by reference in the Registration Statement,
are independent auditors with respect to the financial statements
covered by the audit or review of such firm, in accordance with the
provisions of the Exchange Act and the Act and the respective
applicable published rules and regulations thereunder.
(p) The consolidated financial statements and the related
notes of each of the Company, ATC and WCI and any other person included
or incorporated by reference in the Registration Statement present
fairly in accordance with generally accepted accounting principles the
consolidated financial position of each of the Company, ATC
<PAGE>
8
and WCI and any such other person as of the dates indicated and the
consolidated results of operations of each of the Company, ATC and WCI
and any such other person and cash flows of each of the Company and ATC
and WCI for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except
as otherwise noted therein and subject, in the case of interim
statements, to normal year-end audit adjustments. The financial
statement schedules included or incorporated by reference in the
Registration Statement present fairly in accordance with generally
accepted accounting principles the information required to be stated
therein. Any pro forma financial statements of the Company, ATC or WCI
and other pro forma financial information included or incorporated by
reference in the Registration Statement present fairly the information
shown therein. Such pro forma financial statements and other pro forma
financial information, to the extent required, have been prepared in
accordance with applicable rules and guidelines of the Commission, if
any, with respect thereto, have been properly compiled on the pro forma
bases described therein, and, in the opinion of the Company, ATC and
WCI, the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(q) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective and each date after
the date hereof on which a document incorporated by reference in the
Registration Statement is filed. "Execution Time" shall mean the date
and time that this Agreement is executed and delivered by the parties
hereto. "Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean
any preliminary prospectus supplement to the Basic Prospectus which
describes the Securities and the offering thereof and is used prior to
filing of the Final Prospectus. "Final Prospectus" shall mean the
prospectus supplement relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no
filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities, including the Basic
Prospectus, included in the Registration Statement at the Effective
Date. The registration statement (File No. 333-______) filed by the
Company on Form S-3 with the Securities and Exchange Commission (which
also constitutes post-effective Amendment No. 1 to Registration
Statement File No. 33-75144), together with Registration Statement File
No. 33-75144, as amended on the date Registration Statement File No.
333-______ became effective, including the exhibits and financial
statements thereto and the documents incorporated by reference therein,
is herein collectively referred to as the "Registration Statement."
Such term shall include any Rule 430A Information deemed to
<PAGE>
9
be included therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to such
rules or regulation under the Act. "Rule 430A Information" means
information with respect to the Securities and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. All references in this Agreement to
the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; all references in this Agreement
to financial statements and schedules and other information that is
"contained", "included" or "stated" in the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus (and all other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information that are or are deemed to be incorporated by reference in
the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to mean and include
the filing of any document under the Exchange Act after the Effective
Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus,
as the case may be, deemed to be incorporated therein by reference. A
"Non-Delayed Offering" shall mean an offering of securities which is
intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect
to the securities so offered must be included in such registration
statement at the effective date thereof. A "Delayed Offering" shall
mean an offering of securities pursuant to Rule 415 which does not
commence promptly after the effective date of a registration statement,
with the result that only information required pursuant to Rule 415
need be included in such registration statement at the effective date
thereof with respect to the securities so offered. Whether the offering
of the Securities is a Non-Delayed Offering or a Delayed Offering shall
be set forth in Schedule I hereto.
(r) None of the Company, ATC or WCI is an "investment company"
or an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company at the purchase price
for the Debt Securities set forth in Schedule I hereto, the principal
<PAGE>
10
amount of Debt Securities set forth opposite such Underwriter's name in Schedule
II hereto, except that, if Schedule I hereto provides for the sale of Debt
Securities pursuant to delayed delivery arrangements, the respective principal
amounts of Debt Securities to be purchased by the Underwriters shall be as set
forth in Schedule II hereto less the respective amounts of Contract Securities
determined as provided below. Debt Securities to be purchased by the
Underwriters are herein sometimes called the "Underwriters' Securities" and Debt
Securities to be purchased pursuant to Delayed Delivery Contracts as hereinafter
provided are herein called "Contract Securities".
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Debt Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts"),
substantially in the form of Schedule III hereto but with such changes therein
as the Company, ATC or WCI may authorize or approve. The Underwriters will
endeavor to make such arrangements and, as compensation therefor, the Company
will pay to the Representatives, for the account of the Underwriters, on the
Closing Date, the percentage set forth in Schedule I hereto of the principal
amount of the Debt Securities for which Delayed Delivery Contracts are made.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. The Company and the
Guarantors will enter into Delayed Delivery Contracts in all cases where sales
of Contract Securities arranged by the Underwriters have been approved by the
Company but, except as the Company may otherwise agree, each such Delayed
Delivery Contract must be for not less than the minimum principal amount set
forth in Schedule I hereto and the aggregate principal amount of Contract
Securities may not exceed the maximum aggregate principal amount set forth in
Schedule I hereto. The Underwriters will not have any responsibility in respect
of the validity or performance of Delayed Delivery Contracts. The principal
amount of Debt Securities to be purchased by each Underwriter as set forth in
Schedule II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the principal
amount of Debt Securities set forth opposite the name of such Underwriter bears
to the aggregate principal amount set forth in Schedule II hereto, except to the
extent that you determine that such reduction shall be otherwise than in such
proportion and so advise the Company in writing; provided, however, that the
total principal amount of Debt Securities to be purchased by all Underwriters
shall be the aggregate principal amount set forth in Schedule II hereto less the
aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwriters' Securities shall be made on the date and at the time specified in
Schedule I hereto, which date and time may be postponed to a date not later than
five business days after such specified date by agreement between the
Representatives, acting jointly and without regard to any agreement among
underwriters, and the Company or as provided in Section 8 hereof (such date and
time of delivery and payment for the Underwriters' Securities being herein
called the "Closing Date"). Delivery of the Underwriters' Securities shall be
made to the Representatives for the respective
<PAGE>
11
accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to or upon the order
of the Company by wire transfer and payable in same day funds (unless another
form of payment is specified in Schedule I hereto). Delivery of the
Underwriters' Securities shall be made at such location as the Representatives
shall reasonably designate on the Closing Date and payment for the Securities
shall be made at the office specified in Schedule I hereto. Certificates for the
Underwriters' Securities shall be registered in such names and in such
denominations as the Representatives may request not less than one full business
day in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities
available for inspection, checking and packaging by the Representatives in New
York, New York, not later than 1:00 p.m. on the business day prior to the
Closing Date.
Delivery and payment for the Contract Securities shall be as
provided in the applicable Delayed Delivery Contract.
4. Agreements. The Company and the Guarantors agree with the
several Underwriters that:
(a) Each of the Company, ATC and WCI will use its best efforts
to cause the Registration Statement, if not effective at the Execution
Time, and any amendment thereto, to become effective. Prior to the
termination of the offering of the Securities, none of the Company, ATC
and WCI will file any amendment to the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus unless the Company or a Guarantor
has furnished you a copy for your review prior to filing or will file
any such proposed amendment or supplement to which you reasonably
object on a timely basis (other than filings of periodic reports
pursuant to Section 13(a) under the Exchange Act). Subject to the
foregoing sentence, the Company and the Guarantors will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company,
ATC and WCI will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the Final
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424(b), (iii) when, prior to termination of
the offering of each series of Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv)
of any request by the Commission for any amendment to the Registration
Statement or supplement to the Final Prospectus or for any additional
information relating to the offering of the Securities, (v) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any
<PAGE>
12
proceeding for that purpose and (vi) of the receipt by the Company, ATC
or WCI of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. Each of
the Company, ATC and WCI will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company and the Guarantors promptly
will prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 4, an amendment or supplement
which will correct such statement or omission or effect such
compliance.
(c) As soon as practicable, the Company and the Guarantors
will make generally available to their respective security holders and
to the Representatives an earnings statement or statements of each of
the Company, ATC and WCI and their respective subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) If and to the extent specified in Schedule I, each of the
Company, ATC and WCI will use its reasonable best efforts to cause the
Securities to be duly authorized for listing on the New York Stock
Exchange and to be registered under the Exchange Act.
(e) For a period of three years after the Closing Date, the
Company will furnish to you and, upon request, to each Underwriter,
copies of all annual reports, quarterly reports and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company
to its public stockholders generally.
(f) The proceeds of the offering of the Securities will be
applied as set forth in the Final Prospectus.
(g) The Company, ATC or WCI will furnish to the
Representatives and counsel for the Underwriters, without charge,
copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of any Preliminary Final Prospectus
<PAGE>
13
and the Final Prospectus and any supplement thereto as the
Representatives may reasonably request.
(h) The Company and the Guarantors will pay and bear all costs
and expenses incident to the performance of their obligations under
this Agreement, including (i) the preparation, printing and filing of
the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, any preliminary
prospectus supplements and the Basic Prospectus, the Preliminary Final
Prospectus and the Final Prospectus and any amendments or supplements
thereto, and the cost of furnishing copies thereof to the Underwriters,
(ii) the preparation, printing and distribution of this Agreement, the
Indenture, the Securities, any Delayed Delivery Contracts, and the blue
sky survey, (iii) the delivery of the Securities to the Underwriters,
(iv) the fees and disbursements of the Company's and the Guarantors'
counsel and the accountants required hereby to provide "comfort
letters", (v) the qualification of the Securities under the applicable
securities laws in accordance with Section 4(i) and any filing for
review of the offering with the National Association of Securities
Dealers, Inc., including filing fees and fees and disbursements of
counsel for the Underwriters in connection therewith and in connection
with the blue sky survey, (vi) any fees charged by rating agencies for
rating the Securities, (vii) the fees and expenses of the Trustee,
including the fees and disbursements of counsel for the Trustee, in
connection with the Indenture and the Securities, (viii) any expenses
and listing fees in connection with the listing of the Securities, (ix)
the cost and charges of any transfer agent or registrar and (x) the
costs of qualifying the Securities with The Depository Trust Company.
(i) The Company and the Guarantors will arrange for the
qualification of each series of Securities for distribution, offering
and sale under the laws of such jurisdictions as the Representatives
may designate, will maintain such qualifications in effect so long as
required for the distribution of such series of Securities and will
arrange for the determination of the legality of the Securities for
purchase by institutional investors; provided, however, that none of
the Company, ATC or WCI shall be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 4(i),
(ii) file any general consent to service of process or (iii) subject
itself to taxation in any such jurisdiction if it is not so subject.
(j) Until the Closing Date or such other date as may be
specified in Schedule I, none of the Company, ATC or WCI (and, if so
specified in Schedule I, Time Warner Inc. and/or other additional
parties) will, without the consent of the managing underwriter
specified in Schedule I, offer, sell or contract to sell, or announce
the offering of, any debt securities designed or intended to be traded
or distributed in the public or private securities markets; provided,
however, that the foregoing shall not prohibit (i) the Company, ATC,
WCI, Time Warner Inc. or such additional parties from issuing
<PAGE>
14
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, ATC, WCI, Time Warner Inc. or such additional parties
from filing with the Commission a "shelf" registration statement for
the offering of securities under Rule 415 of the Act (or any similar
rule that may be adopted by the Commission) or amending any existing
shelf registration statement provided that such securities are not
issued until the business day following the Closing Date or such other
date as may be specified in Schedule I or (iii) any of the foregoing
from issuing commercial paper.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwriters' Securities shall
be subject to the accuracy in all material respects of the representations and
warranties on the part of the Company and the Guarantors contained herein as of
the Execution Time and the Closing Date, to the accuracy in all material
respects of the statements of the Company and the Guarantors made in any
certificates pursuant to the provisions hereof, to the performance by each of
the Company, ATC and WCI of its obligations hereunder, to the due execution and
delivery of the Indenture, to the absence of any event or condition which would
give you the right to terminate this Agreement and to the following additional
conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 p.m. New York City time, on the date
of determination of the public offering price, if such determination
occurred at or prior to 3:00 p.m. New York City time on such date or
(ii) 12:00 noon on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 p.m. New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424(b);
and at the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings therefor initiated or threatened by the Commission.
(b) At the Closing Date, the Company shall have furnished to
you the opinion of Peter R. Haje, General Counsel to the Company, dated
the Closing Date, substantially in the form of Exhibit A hereto.
(c) At the Closing Date, the Company shall have furnished to
you the opinion and statement of Cravath, Swaine & Moore, counsel to
the Company and the Guarantors, each dated the Closing Date,
substantially in the form of Exhibit B and Exhibit C hereto,
respectively.
<PAGE>
15
(d) The Representatives shall have received from Shearman &
Sterling, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, any Delayed Delivery Contracts, the
Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company and the Guarantors shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(e) (1) The Company shall have furnished to the
Representatives a certificate of the Company, signed by any two
officers who are an Executive or Senior Vice President of the Company,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company
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;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or otherwise), earnings, or
business prospects of the Company and its subsidiaries,
considered as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of
any supplement thereto).
(2) ATC shall have furnished to the Representatives a
certificate of ATC, signed by any two officers who are an Executive or
Senior Vice President of ATC, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the
Registration Statement, the Final Prospectus, any supplement to the
Final Prospectus and this Agreement and that the representations and
warranties of ATC 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 ATC 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.
<PAGE>
16
(3) WCI shall have furnished to the Representatives a
certificate of WCI, signed by any two officers who are Vice Presidents
of WCI, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that the representations and warranties of WCI 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 WCI has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date.
(f) At the Closing Date, and, if specified in Schedule I, at
the Execution Time, Ernst & Young LLP shall have furnished to the
Representatives a letter or letters, dated respectively as of the
Closing Date and the Execution Time, in form and substance satisfactory
to the Representatives, confirming that they are independent auditors
with respect to the Company, ATC and WCI within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules of the Company, ATC and WCI
included or incorporated in the Registration Statement and the
Final Prospectus comply in form in all material respects with
the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements (including the notes thereto)
made available by the Company, ATC and WCI 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 general partners and the Board of
Representatives of the Company and the meetings of the
stockholders and directors of ATC and WCI and their respective
consolidated subsidiaries; and inquiries of certain officials
of the Company, ATC and WCI who have responsibility for
financial and accounting matters of the Company, ATC and WCI
and their respective consolidated subsidiaries as to
transactions and events subsequent to the date of the most
recent audited financial statements in or incorporated in the
Final Prospectus, and such other inquiries and procedures as
may be specified in such letter, nothing came to their
attention which caused them to believe that:
(1) any of such unaudited financial
statements included or incorporated in the
Registration Statement and the Final Prospectus do
not comply in form in all material respects with
applicable accounting
<PAGE>
17
requirements of the Act and the Exchange Act and
with the published rules and regulations of the
Commission with respect to financial statements
included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; or said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or incorporated
in the Registration Statement and the Final
Prospectus; or
(2) with respect to the period subsequent to
the date of the most recent unaudited financial
statements in or incorporated in the Registration
Statement and the Final Prospectus, there were any
increases, at a specified date not more than five
business days prior to the date of the letter, in the
long-term debt of the Company, ATC and WCI and their
respective consolidated subsidiaries or any decreases
in partners' or stockholders' equity or the
consolidated partnership interests of the Company or
the capital stock of ATC and WCI as compared with the
amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration
Statement and the Final Prospectus for such entities,
or for the period from the date of the most recent
unaudited financial statements included or
incorporated in the Registration Statement and the
Final Prospectus for such entities to such specified
date there were any decreases, as compared with the
corresponding period in the preceding year, in
revenues, income before income taxes (or any increase
in the loss before income taxes) or net income (or
any increase in net loss), except in all instances
for decreases or increases disclosed in the Final
Prospectus;
(iii) they are unable to and do not express any
opinion on the pro forma adjustments to the financial
statements included or incorporated by reference in the
Registration Statement and the Final Prospectus or on the pro
forma adjustments applied to the historical amounts included
or incorporated by reference in the Registration Statement and
the Final Prospectus; however, for purposes of such letter
they have:
(1) read the pro forma adjustments to
such financial statements;
(2) made inquiries of certain officials of
the Company, ATC and WCI 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
<PAGE>
18
as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of
Regulation S-X; and
(3) proved the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts included or incorporated by
reference in the Registration Statement and the Final
Prospectus; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that the pro forma
adjustments to the financial statements included or
incorporated by reference in the Registration Statement and
the Final Prospectus do not comply as to form in all material
respects with the applicable requirements of Rule 11-02 of
Regulation S-X and that such pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of such financial statements; and
(iv) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibits 12.1 and
12.2 to the Registration Statement agrees with the accounting
records of the Company and its subsidiaries, ATC and its
subsidiaries or WCI and its subsidiaries, as the case may be,
excluding any questions of legal interpretation.
(g) At the Closing Date and, if and to the extent specified in
Schedule I, at the Execution Time, each other firm of independent
accountants who audited or reviewed financial statements included or
incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter or letters, dated
respectively as of the Closing Date and the Execution Time, in form and
substance satisfactory to the Representatives, confirming that they are
independent auditors with respect to the financial statements audited
or reviewed by them within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations
thereunder and to the same effect as the letter or letters of Ernst &
Young LLP as described in Section 5(f)(i) and 5(f)(ii)(1) hereto.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any decrease or increase specified in the letter or letters referred to
in paragraph (f) of this Section 5 or (ii) any change, or any
development involving a prospective change, in
<PAGE>
19
or affecting the business (including the results of operations or
management) or properties of the Company and its subsidiaries the
effect of which, in any case referred to in clause (i) or (ii) above,
is, in the reasonable judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of any series of Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Final Prospectus (exclusive of any supplement thereto).
(i) Subsequent to the Execution Time, (i) there shall not have
been any downgrade in the credit ratings of any of the Company's, ATC's
or WCI's debt securities by Moody's Investor Service, Inc. or Standard
& Poor's Ratings Group, and (ii) none of the Company, ATC or WCI shall
have been placed under special surveillance, with negative
implications, by Moody's Investor Service, Inc. or Standard & Poor's
Ratings Group.
(j) Prior to the Closing Date, the Company and the Guarantors
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
(k) The Company shall have accepted the Delayed Delivery
Contracts in any case where sales of Contract Securities arranged by
the Underwriters have been approved by the Company.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be cancelled at, or at any time prior to, the Closing Date by the
Representatives and such cancellation shall be without liability of any party to
any other party, except to the extent provided in Sections 4 and 6. Notice of
such cancellation shall be given to the Company, ATC or WCI in writing or by
telephone or telegraph confirmed in writing.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company, ATC
or WCI to perform any agreement herein or comply with any provision hereof other
than by reason of a default by any of the Underwriters, the Company and the
Guarantors will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
<PAGE>
20
7. Indemnification and Contribution. (a) Each of the Company,
ATC and WCI agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that none of the Company, ATC or WCI
will be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon (i) any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company, ATC and WCI by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein or (ii) that part of the
Registration Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee. This
indemnity agreement will be in addition to any liability which the Company, ATC
or WCI may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless each of the Company, ATC and WCI, each of their respective directors,
each of their respective officers who signs the Registration Statement, and each
person who controls the Company, ATC or WCI within the meaning of either the Act
or the Exchange Act, to the same extent as the foregoing indemnity from the
Company, ATC and WCI to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company, ATC and WCI
by or on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. Each of the Company, ATC and WCI acknowledges that the
statements set forth in the last paragraph of the cover page, the first and
third paragraphs under the heading "Underwriters" and, if Schedule I hereto
provides for sales of Securities pursuant to delayed delivery arrangements, in
the last sentence under the heading "Delayed Delivery Arrangements" in any
Preliminary Final Prospectus or the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in the documents referred to in the foregoing indemnity, and you, as
the Representatives, confirm that such statements are correct.
<PAGE>
21
(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
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, ATC, WCI and the Underwriters
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in
<PAGE>
22
connection with investigating or defending same) (collectively "Losses") to
which the Company, the Guarantors and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company, ATC and WCI on one hand, and by the Underwriters, on
the other hand, from the offering of the Securities; provided, however, that
in no case shall any Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the Securities) be responsible
for any amount in excess of the underwriting discount or commission applicable
to the Securities purchased by such Underwriter hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company, ATC, WCI and the Underwriters shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Guarantors and of the Underwriters in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company and the Guarantors shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company, ATC or WCI or the Underwriters. The Company, the Guarantors and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
\fraudulent misrepresentation. For purposes of this Section 7, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company, ATC or WCI within the meaning of either the Act or the Exchange
Act, each officer of the Company, ATC or WCI who shall have signed the
Registration Statement and each director of the Company, ATC or WCI shall have
the same rights to contribution as the Company and the Guarantors, subject in
each case to the applicable terms and conditions of this paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters
shall fail on the Closing Date to purchase and pay for any of the Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions for
each of the Debt Securities which such Underwriter failed to purchase which the
amount of the Debt Securities set forth opposite their names in Schedule II
hereto bears to the aggregate amount of such Debt Securities set forth opposite
the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Securities which the defaulting
<PAGE>
23
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all of the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the Company
and the Guarantors. In the event of a default by any Underwriter as set forth in
this Section 8, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company, the Guarantors and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representatives, by notice given to the
Company, ATC or WCI prior to delivery of and payment for the Securities, if
prior to such time (i) trading in the Company's common stock or any of the
Company's, ATC's or WCI's debt securities shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
such Exchange shall have been suspended or limited or minimum or maximum prices
shall have been established on such Exchange, or maximum ranges for prices for
securities have been required, by such Exchange or by order of the Commission or
any other governmental authority, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there shall
have occurred any new outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets of the United States is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to proceed
with the offering or delivery of a series of Securities as contemplated by the
Final Prospectus (exclusive of any supplement thereto). If this Agreement is
terminated pursuant to this Section, such termination shall be without liability
of any party to any other party, except to the extent provided in Sections 4 and
6.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, ATC or WCI or any of their respective officers and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company, ATC or WCI, or any of the officers, directors or controlling
persons referred to in Section 7 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 6 and 7 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them, at the address specified
in Schedule I hereto; or, if sent to the Company, ATC
<PAGE>
24
or WCI, will be mailed, delivered or telegraphed and confirmed to it care of the
Company at 75 Rockefeller Plaza, New York, New York 10019, attention of General
Counsel.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business
day" means any day on which the New York Stock Exchange is open for trading.
15. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, ATC, WCI and the several Underwriters.
Very truly yours,
TIME WARNER ENTERTAINMENT
COMPANY, L.P.
By
-------------------------
Name:
Title:
AMERICAN TELEVISION AND
COMMUNICATIONS CORPORATION
By
-------------------------
Name:
Title:
WARNER COMMUNICATIONS INC.
By
-------------------------
Name:
Title:
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the date
specified in Schedule I hereto.
[_______________________]
By: [____________________]
By ________________________
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE>
SCHEDULE I
Underwriting Agreement: Dated [___________, ____]
Registration Statement: No. 333-
Representative(s):
[Managing Underwriter:]
Title, Purchase Price and Description of Securities:
Securities:
Title:
Principal amount:
Interest rate:
Interest payment dates:
Date of maturity:
Purchase price (include accrued
interest or amortization, if
any):
Initial public offering price:
Sinking fund provisions:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Type of funds payable at Closing: [Federal or other immediately
available funds]
Type of Offering: [Delayed Offering or Non-Delayed
Offering]
<PAGE>
Delayed Delivery Arrangements:
Fee:
Minimum principal amount of each contract:
Minimum aggregate principal amount of all contracts:
Maximum aggregate principal amount of all contracts:
Listing requirements:
Comfort letter at Execution Time: [Yes/No]
Time Warner Inc. and/or other additional parties subject to
Section 4(j): [Yes/No]
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Principal
Amount to
Underwriters be Purchased
------------ ------------
<S> <C>
$
Total.................................................... $
============
</TABLE>
<PAGE>
SCHEDULE III
Delayed Delivery Contract
[______________, ______]
[Insert name and address of lead
Representative]
Dear Sirs:
The undersigned hereby agrees to purchase from Time Warner
Entertainment Company, L.P. (the "Company"), and the Company agrees to sell to
the undersigned, on _____________, ______ (the "Delivery Date"),
$________________ principal amount of the Company's _____________________ (the
"Securities") offered by the Company's Prospectus dated ____________, _______,
and related Prospectus Supplement dated __________, _____, receipt of a copy of
which is hereby acknowledged, at a purchase price of ____% of the principal
amount thereof, plus [accrued interest] [amortization of original issue
discount], if any, thereon from ____________, _____ to the date of payment and
delivery, and on the further terms and conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned
shall be made on or before 11:00 a.m., New York City time, on the Delivery Date
to or upon the order of the Company in New York Clearing House (next day) funds,
at your office or at such other place as shall be agreed between the Company and
the undersigned, upon delivery to the undersigned of the Securities in
definitive fully registered form and in such authorized denominations and
registered in such names as the undersigned may request by written communication
addressed to the Company not less than five full business days prior to the
Delivery Date. If no request is received, the Securities will be registered in
the name of the undersigned and issued in a denomination equal to the aggregate
principal amount of Securities to be purchased by the undersigned on the
Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Securities on the Delivery Date, and the obligation of the Company
to sell and deliver Securities on the Delivery Date, shall be subject to the
conditions (and neither party shall incur any liability by reason of the failure
thereof) that (1) the purchase of Securities to be made by the undersigned,
which purchase the undersigned represents is not prohibited on the date hereof,
shall not on the Delivery Date be prohibited under the laws of the jurisdiction
to which the undersigned is subject, and (2) the Company, on or before the
Delivery Date, shall have sold to certain underwriters (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Underwriting Agreement referred to in the Prospectus and Prospectus Supplement
mentioned above. Promptly after completion of such sale to the Underwriters, the
<PAGE>
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith. The obligation of
the undersigned to take delivery of and make payment for the Securities, and the
obligation of the Company to cause the Securities to be sold and delivered,
shall not be affected by the failure of any purchaser to take delivery of and
make payment for the Securities pursuant to other contracts similar to this
contract.
By the execution hereof, the undersigned represents and
warrants to the Company that (1) its investment in the Securities is not, as of
the date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and that govern such instrument, (2) all necessary
corporate action for the due execution and delivery of this contract and the
payment for and purchase of the Securities has been taken by it and no further
authorization or approval of any governmental or other regulatory authority is
required for such execution, delivery, payment or purchase and (3) upon the
acceptance by the Company and the mailing or delivery of a copy as provided
below, this contract will constitute a valid and binding agreement of the
undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other
similar contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this contract is
acceptable to the Company, it is required that he Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a binding contract
between the Company and the undersigned, as of the date first above written,
when such counterpart is so mailed or delivered.
<PAGE>
This agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Very truly yours,
-----------------------------------
(Name of Purchaser)
By: _______________________________
(Signature and Title of
Officer)
-----------------------------------
(Address)
Accepted:
TIME WARNER ENTERTAINMENT
COMPANY, L.P.
By: ____________________________
(Authorized Signatory)
AMERICAN TELEVISION AND
COMMUNICATIONS CORPORATION
By: ____________________________
(Authorized Signatory)
WARNER COMMUNICATIONS INC.
By: ____________________________
(Authorized Signatory)
<PAGE>
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows: (Please print.)
Telephone No.
Name (including area code)
---- ---------------------
<PAGE>
EXHIBIT A
FORM OF OPINION OF PETER R. HAJE, ESQ.
(i) the Company is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of
Delaware, with full power and authority under such laws to own its
properties and conduct its business as described in the Basic
Prospectus, and any amendment or supplement thereto, and the Company,
is duly qualified to transact business as a foreign partnership and is
in good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to
so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise;
(ii) each of ATC and WCI is validly existing as a corporation
in good standing under the laws of the State of Delaware, with full
corporate power and authority under such laws to own its properties and
conduct its business as described in the Basic Prospectus, and any
amendment or supplement thereto, and each of ATC and WCI 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 ATC and its subsidiaries or WCI and its subsidiaries, in each case
considered as one enterprise;
(iii) each of the Company's significant subsidiaries, as such
term is defined in Rule 1-02(w) of Regulation S-X under the Act, is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with full power and
authority under such laws to own its properties and conduct its
business as described in the Basic Prospectus, and any amendment or
supplement thereto, and is duly qualified to transact business as a
foreign corporation or partnership and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on the Company
and its subsidiaries, considered as one enterprise;
(iv) the Company's equity capitalization is as set forth
in the Final Prospectus;
(v) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company, ATC or WCI, or any of their respective subsidiaries, of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or
<PAGE>
A-2
other document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as an
exhibit, which is not described or filed as required;
(vi) no authorization, approval, consent, order or license of
any government, governmental instrumentality, agency or body or court
(other than such as has been obtained under the Act and such as may be
required under the securities or blue sky laws of various
jurisdictions) is required for the authorization, issuance, sale and
delivery of the Securities by the Company, ATC and WCI and the
consummation by the Company, ATC and WCI of the transactions
contemplated by the Underwriting Agreement;
(vii) the Indenture and the Underwriting Agreement have been
duly authorized, executed and delivered by each of the Company, ATC and
WCI;
(viii) the execution and delivery of the Underwriting
Agreement and the Indenture by the Company, ATC and WCI, the issuance,
sale and delivery of the Debt Securities by the Company, the issuance
and delivery of their respective guarantees by ATC and WCI, and the
consummation by the Company, ATC and WCI of the transactions
contemplated in the Underwriting Agreement, the Indenture and the
Registration Statement and compliance by the Company, ATC and WCI with
the terms of the Underwriting Agreement or any Delayed Delivery
Contracts do not and will not result in any violation of the
certificate of limited partnership of the Company, the Agreement of
Limited Partnership, as amended, of the Company or of the
certificate of incorporation or by-laws of ATC or WCI 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, ATC or WCI under (i) any indenture, mortgage or
loan agreement, or any other agreement or instrument known to such
counsel, to which the Company, ATC or WCI is a party or by which any of
them may be bound or to which any of their properties may be subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as
one enterprise), (ii) any existing applicable law, rule or regulation
(except for such conflicts, breaches, liens, charges or encumbrances
that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, and other than the securities or blue sky laws of various
jurisdictions), or (iii) any judgment, order or decree of any
government, governmental instrumentality or court having jurisdiction
over the Company, ATC or WCI or any of their properties.
(ix) the documents incorporated by reference in the Final
Prospectus (except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as to which
such counsel need express no opinion), as of the dates
<PAGE>
A-3
they were filed with the Commission, complied as to form in all
material respects with the requirements of the Securities Exchange Act
of 1934, as amended.
In addition, such counsel shall also state as follows: As
General Counsel, I have reviewed and participated in the preparation of the
Registration Statement and the Final Prospectus, including the documents
incorporated by reference therein. In examining the Registration Statement and
Final Prospectus, I have necessarily assumed the correctness and completeness of
the statements made or included therein by the Company and the Guarantors and
take no responsibility therefor. However, in the course of the preparation by
the Company and the Guarantors of the Registration Statement and the Final
Prospectus, I have participated in conferences with certain officers of, and
accountants for, the Company and the Guarantors with respect thereto, and my
examination of the Registration Statement and Final Prospectus and my
discussions in the above-mentioned conferences did not disclose any information
which gave me reason to believe that the Registration Statement (except for the
financial statements and other financial or statistical data included therein or
omitted therefrom, as to which I express no opinion) at the time it became
effective included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, not misleading
or that the Final Prospectus (except as aforesaid), at its issue date or on the
date of this opinion, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
United States, the State of New York and the General Corporation Law of the
State of Delaware, to the extent such counsel deems proper and specified in such
opinion, upon the opinion of other counsel of good standing whom such counsel
believes to be reliable and who are satisfactory to counsel for the
Underwriters; and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company, ATC or WCI and
public officials.
<PAGE>
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & MOORE
(i) Based solely upon a certificate from the Secretary of
State of Delaware the Company is validly existing as a limited partnership in
good standing under the laws of the State of Delaware, with full power and
authority to own its properties and conduct its business as described in the
Basic Prospectus, and any amendment or supplement thereto;
(ii) Based solely upon a certificate from the Secretary of
State of Delaware each of ATC and WCI 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
Basic Prospectus, and any amendment or supplement thereto;
(iii) the Securities conform in all material respects to
the description thereof contained in the Prospectus;
(iv) the Indenture has been duly authorized, executed and
delivered by each of the Company, ATC and WCI, has been duly qualified under the
Trust Indenture Act of 1939, and, assuming due authorization, execution and
delivery by the Trustee, constitutes a legal, valid and binding obligation of
the Company, ATC and WCI, enforceable against the Company, ATC and WCI in
accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether considered in
a proceeding in equity or at law); and the Debt Securities have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters
pursuant to the Underwriting Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting creditors' rights generally from time
to time in effect and subject to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law);
(v) the Registration Statement (as defined in the
Underwriting Agreement) became effective under the Securities Act on
[_____________], 199[_]; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated; and
<PAGE>
B-2
(vi) the Underwriting Agreement has been duly authorized,
executed and delivered by the each of the Company, ATC and WCI;
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.
<PAGE>
EXHIBIT C
FORM OF SIDE LETTER OF CRAVATH, SWAINE & MOORE
Although we have made certain inquiries and investigations in
connection with the preparation of the Registration Statement and the
Prospectus, the limitations inherent in the role of outside counsel are such
that we cannot and do not assume responsibility for the accuracy or completeness
of the statements made in the Registration Statement and Prospectus, except
insofar as such statements relate to us and except to the extent set forth in
paragraph (ii) of our opinion to you dated the date hereof. Subject to the
foregoing, we hereby advise you that our work in connection with this matter did
not disclose any information that gave us reason to believe that: (i) the
Registration Statement, at the time the Registration Statement became effective,
or the Prospectus, as of the date hereof, (except in each case the financial
statements and other information of an accounting, statistical or financial
nature included therein, and the Statement of Eligibility (Form T-1) included as
an exhibit to the Registration Statement, as to which we do not express any
view) were not appropriately responsive in all material respects to the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder; or (ii) the Registration Statement, at the time the
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus, at its issue date and at the date hereof, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to made the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case except
for the financial statements and other information of an accounting, statistical
or financial nature included therein, as to which we do not express any view).
<PAGE>
Exhibit 4.1
[Draft--12/31/98]
- --------------------------------------------------------------------------------
TIME WARNER ENTERTAINMENT COMPANY, L.P.,
WARNER COMMUNICATIONS INC.,
as Guarantor
AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION,
as Guarantor
and
THE BANK OF NEW YORK,
Trustee
INDENTURE
Dated as of
-----------------
Providing for Issuance of Senior Securities in Series
- --------------------------------------------------------------------------------
<PAGE>
Table Showing Reflection in Indenture of Certain Provisions
of Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990
--------------------
Reflected in Indenture
TIA Section
ss.310(a)(1).................................................... 6.09
(a)(2).................................................... 6.09
(a)(3).................................................... Not Applicable
(a)(4).................................................... Not Applicable
(a)(5).................................................... 6.09
(b)....................................................... 6.08
ss.311(a)....................................................... 6.13(a)
(b)....................................................... 6.13(b)
(b)(2).................................................... 7.03(a)
.......................................................... 7.03(b)
ss.312(a)....................................................... 7.01
.......................................................... 7.02(a)
(b)....................................................... 7.03(b)
(c)....................................................... 7.02(c)
ss.313(a)....................................................... 7.03(a)
(b)....................................................... 7.03(b)
(c)....................................................... 7.03(a)
.......................................................... 7.03(b)
(d)....................................................... 7.03(c)
ss.314(a)(1).................................................... 7.04
(a)(2).................................................... 7.04
(a)(3).................................................... 7.04
(a)(4).................................................... 10.04
(b)....................................................... Not Applicable
(c)(1).................................................... 1.02
(c)(2).................................................... 1.02
(c)(3).................................................... Not Applicable
(d)....................................................... Not Applicable
(e)....................................................... 1.02
ss.315(a)....................................................... 6.01(a)
.......................................................... 6.01(c)
(b)....................................................... 6.02
.......................................................... 7.03(a)
(c)....................................................... 6.01(b)
(d)....................................................... 6.01
<PAGE>
2
(d)(1).................................................... 6.01(a)
(d)(2).................................................... 6.01(c)(2)
(d)(3).................................................... 6.01(c)(3)
(e)....................................................... 5.14
ss.316(a)....................................................... 1.01
(a)(1)(A)................................................. 5.02
.......................................................... 5.12
(a)(1)(B)................................................. 5.13
(a)(2).................................................... Not Applicable
(b)....................................................... 5.08
(c)....................................................... 1.04(d)
ss.317(a)(1).................................................... 5.03
(a)(2).................................................... 5.04
(b)....................................................... 10.03
ss. 318(a)...................................................... 1.07
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Recitals of the Company............................................................ 1
Agreements of the Parties.......................................................... 1
<CAPTION>
ARTICLE I
Definitions and Other Provisions of General Application
<S> <C> <C>
SECTION 1.01. Definitions........................................................ 1
SECTION 1.02. Compliance Certificates and
Opinions........................................................ 12
SECTION 1.03. Form of Documents Delivered to
Trustee......................................................... 13
SECTION 1.04. Acts of Securityholders............................................ 14
SECTION 1.05. Notices, etc., to Trustee and
Company......................................................... 16
SECTION 1.06. Notices to Securityholders; Waiver................................. 16
SECTION 1.07. Conflict with Trust Indenture Act.................................. 17
SECTION 1.08. Effect of Headings and Table of
Contents........................................................ 17
SECTION 1.09. Successors and Assigns............................................. 17
SECTION 1.10. Separability Clause................................................ 17
SECTION 1.11. Benefits of Indenture.............................................. 17
SECTION 1.12. Governing Law...................................................... 18
SECTION 1.13. Counterparts....................................................... 18
SECTION 1.14. Judgment Currency.................................................. 18
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally.................................................... 19
SECTION 2.02. Forms of Securities................................................ 19
SECTION 2.03. Form of Trustee's Certificate of
Authentication.................................................. 19
SECTION 2.04. Securities Issuable in the Form of a
Global Security................................................. 20
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE III
The Securities
<S> <C> <C>
SECTION 3.01 General Title; General Limitations;
Issuable in Series; Terms of
Particular Series............................................... 22
SECTION 3.02 Denominations...................................................... 26
SECTION 3.03. Execution, Authentication and
Delivery and Dating............................................. 26
SECTION 3.04. Temporary Securities............................................... 28
SECTION 3.05. Registration, Transfer and
Exchange........................................................ 29
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen
Securities...................................................... 30
SECTION 3.07. Payment of Interest; Interest Rights
Preserved....................................................... 31
SECTION 3.08. Persons Deemed Owners.............................................. 33
SECTION 3.09. Cancelation........................................................ 33
SECTION 3.10. Computation of Interest............................................ 34
SECTION 3.11. Delayed Issuance of Securities..................................... 34
SECTION 3.12. CUSIP Numbers...................................................... 34
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Termination of Obligations ........................................ 35
SECTION 4.02. Defeasance and Discharge
of Indenture....................................................... 36
SECTION 4.03. Defeasance of Certain Obligations.................................. 39
SECTION 4.04. Application of Trust Money......................................... 41
SECTION 4.05. Reinstatement..................................................... 41
ARTICLE V
Remedies
SECTION 5.01. Events of Default.................................................. 42
SECTION 5.02. Acceleration of Maturity; Rescission
and Annulment................................................... 44
SECTION 5.03. Collection of Indebtedness and Suits
for Enforcement by Trustee...................................... 45
SECTION 5.04. Trustee May File Proofs of Claim................................... 47
SECTION 5.05. Trustee May Enforce Claims Without
Possession of Securities........................................ 48
SECTION 5.06. Application of Money Collected..................................... 48
SECTION 5.07. Limitation on Suits................................................ 48
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5.08. Unconditional Right of Securityholders
To Receive Principal, Premium and
Interest........................................................ 49
SECTION 5.09. Restoration of Rights and Remedies................................. 50
SECTION 5.10. Rights and Remedies Cumulative..................................... 50
SECTION 5.11. Delay or Omission Not Waiver....................................... 50
SECTION 5.12. Control by Securityholders......................................... 50
SECTION 5.13. Waiver of Past Defaults............................................ 51
SECTION 5.14. Undertaking for Costs.............................................. 51
SECTION 5.15. Waiver of Stay or Extension Laws................................... 52
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities................................ 52
SECTION 6.02. Notice of Defaults................................................. 54
SECTION 6.03. Certain Rights of Trustee.......................................... 54
SECTION 6.04. Not Responsible for Recitals or
Issuance of Securities.......................................... 56
SECTION 6.05. May Hold Securities................................................ 56
SECTION 6.06. Money Held in Trust................................................ 56
SECTION 6.07. Compensation and Reimbursement..................................... 56
SECTION 6.08. Disqualification; Conflicting
Interests....................................................... 57
SECTION 6.09. Corporate Trustee Required;
Eligibility..................................................... 57
SECTION 6.10. Resignation and Removal............................................ 58
SECTION 6.11. Acceptance of Appointment by
Successor.......................................................... 60
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business.......................................... 61
SECTION 6.13. Preferential Collection of Claims
Against Company................................................. 62
SECTION 6.14. Appointment of Authenticating Agent................................ 66
SECTION 6.15. Trustee's Application for
Instructions from the Company.................................... 68
ARTICLE VII
Securityholders' Lists and Reports by Trustee and Company
SECTION 7.01. Company To Furnish Trustee Names and
Addresses of Securityholders.................................... 69
SECTION 7.02. Preservation of Information;
Communications to Securityholders............................... 69
SECTION 7.03. Reports by Trustee................................................. 71
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 7.04. Reports by Company................................................. 71
SECTION 7.05. Tax Reporting...................................................... 72
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. The Company May Consolidate, Etc.,
Only on Certain Terms........................................... 72
SECTION 8.02 Successor Substituted.............................................. 73
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without
Consent of Securityholders...................................... 74
SECTION 9.02. Supplemental Indentures with Consent
of Securityholders.............................................. 76
SECTION 9.03. Execution of Supplemental Indentures............................... 78
SECTION 9.04. Effect of Supplemental Indentures.................................. 78
SECTION 9.05. Conformity with Trust Indenture Act................................ 78
SECTION 9.06. Reference in Securities to
Supplemental Indentures......................................... 78
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and
Interest........................................................ 78
SECTION 10.02. Maintenance of Office or Agency.................................... 79
SECTION 10.03. Money for Security Payments To Be Held
in Trust........................................................ 79
SECTION 10.04. Statement as to Compliance......................................... 81
SECTION 10.05. Legal Existence.................................................... 81
SECTION 10.06. Maintenance of Properties.......................................... 82
SECTION 10.07. Payment of Taxes and Other Claims.................................. 82
SECTION 10.08. Limitation on Liens................................................ 82
SECTION 10.09. Waiver of Certain Covenants........................................ 85
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
ARTICLE XI
Redemption of Securities
Page
<S> <C> <C>
SECTION 11.01. Applicability of Article........................................... 85
SECTION 11.02. Election To Redeem; Notice to Trustee.............................. 86
SECTION 11.03. Selection by Trustee of Securities To Be Redeemed.................. 86
SECTION 11.04. Optional Redemption, or Assumption................................. 87
SECTION 11.05. Notice of Redemption............................................... 88
SECTION 11.06. Deposit of Redemption Price........................................ 89
SECTION 11.07. Securities Payable on Redemption Date.............................. 90
SECTION 11.08. Securities Redeemed in Part........................................ 90
SECTION 11.09. Provisions with Respect to Any Sinking
Funds........................................................... 90
ARTICLE XII
Guarantees
SECTION 12.01. Guarantees......................................................... 92
</TABLE>
v
<PAGE>
1
THIS INDENTURE between TIME WARNER
ENTERTAINMENT COMPANY, L.P., a Delaware limited
partnership (hereinafter called the "Company")
having its principal office at 75 Rockefeller
Plaza, New York, New York 10019, WARNER
COMMUNICATIONS INC., a Delaware corporation
("WCI"), AMERICAN TELEVISION AND COMMUNICATIONS
CORPORATION, a Delaware corporation ("ATC" and
together with WCI, the "General Partners"), and THE
BANK OF NEW YORK, a New York banking corporation,
trustee (hereinafter called the "Trustee"), is made
and entered into as of the day of
, .
Recitals of the Company
The Company has duly authorized the execution and delivery
of this Indenture to provide for the issuance of its unsecured debentures,
notes, bonds or other evidences of indebtedness, to be issued in one or more
fully registered series.
All things necessary to make this Indenture a valid
agreement of the Company and the General Partners in accordance with its
terms, have been done.
Agreements of the Parties
To set forth or to provide for the establishment of the
terms and conditions upon which the Securities are and are to be
authenticated, issued and delivered, and in consideration of the premises and
the purchase of Securities by the Holders thereof, it is mutually covenanted
and agreed as follows, for the equal and proportionate benefit of all Holders
of the Securities or of a series thereof, as the case may be:
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions. For all purposes of this Indenture
and of any indenture supplemental hereto,
<PAGE>
2
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act or by Commission rule under the Trust Indenture
Act, either directly or by reference therein, have the meanings
assigned to them herein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with GAAP and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles and any
accounting rules or interpretations promulgated by the Commission as
are generally accepted in the United States of America at the date of
this Indenture; and
(4) all references in this instrument to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this instrument as
originally executed. The words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article VI, are defined
in that Article.
"Act", when used with respect to any Securityholder, has the
meaning specified in Section 1.04.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
<PAGE>
3
"ATC" means American Television and Communications
Corporation, a Delaware corporation that is a subsidiary of TWI (as defined
below) and a general partner of the Company, until a successor shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "ATC" shall mean such successor.
"Authenticating Agent" means any Person authorized by the
Trustee to authenticate Securities under Section 6.14.
"Board of Directors" means (i) the Board of Representatives of
the Company, (ii) any duly authorized committee of such Board, (iii) the
Managing General Partners (as defined in the Agreement of Limited Partnership of
the Company dated as of October 29, 1991, as amended), acting together, (iv) any
committee of officers of the Company or (v) any officer of the Company acting,
in the case of (iv) or (v), pursuant to authority granted by such Board of the
Company, any committee of such Board or the Managing General Partners.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means, with respect to any series of
Securities, unless otherwise specified in a Board Resolution and an Officer's
Certificate with respect to a particular series of Securities, each day which
is not a Saturday, Sunday or other day on which banking institutions in the
pertinent Place or Places of Payment or the city in which the Corporate Trust
Office is located are authorized or required by law or executive order to be
closed.
"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor.
"Company Request", "Company Order" and "Company Consent"
mean a written request, order or consent, respectively, signed in the name of
the Company by its Chairman of the Board, President or a Vice President, and
by
<PAGE>
4
its Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to a Responsible Officer of
the Trustee.
"Comparable Treasury Issue" means, in relation to a
particular series of Securities to be redeemed, the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term ("Remaining Life") of such series of
Securities that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such Securities.
"Comparable Treasury Price" means (i) the average of five
Reference Treasury Dealer Quotations for such redemption date with respect to
a series of Securities, after excluding the highest and lowest Reference
Treasury Dealer Quotations, or (ii) if the Independent Investment Banker
obtains fewer than five such Reference Treasury Dealer Quotations, the average
of all such quotations.
"Consolidated Net Worth" means, with respect to any Person,
at the date of any determination, the consolidated stockholders' or owners'
equity of the holders of capital stock or partnership interests of such Person
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP consistently applied.
"Corporate Trust Office" means the principal office of the
Trustee in the Borough of Manhattan, The City of New York at which at any
particular time its corporate trust business shall be principally administered
which office at the date hereof is located at 101 Barclay Street, Floor 21
West, New York, New York 10286, Attn: Corporate Trust Administration.
"Defaulted Interest" has the meaning specified in
Section 3.07.
"Depository" means, unless otherwise specified by the
Company pursuant to either Section 2.04 or 3.01, with respect to Securities of
any series issuable or issued as a Global Security, The Depository Trust
Company, New York, New York, or any successor thereto registered as a clearing
agency under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation.
"Eligible Affiliate" has the meaning specified in Section
11.04.
<PAGE>
5
"Event of Default" has the meaning specified in Article V.
"Federal Bankruptcy Act" has the meaning specified
in Section 5.01(6).
"GAAP" means generally accepted accounting principles as
such principles are in effect as of the date of this Indenture.
"General Partners" means WCI and ATC.
"Global Security", when used with respect to any series of
Securities issued hereunder, means a Security which is executed by the Company
and authenticated and delivered by the Trustee to the Depository or pursuant
to the Depository's instruction, all in accordance with this Indenture and an
indenture supplemental hereto, if any, or Board Resolution and pursuant to a
Company Request, which shall be registered in the name of the Depository or
its nominee and which shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, all of the Outstanding Securities
of such series or any portion thereof, in either case having the same terms,
including, without limitation, the same original issue date, date or dates on
which principal is due, and interest rate or method of determining interest.
"Guarantee" has the meaning specified in Section 12.01(a).
"Guaranteed Percentage" has the meaning specified
in Section 12.01(a).
"Guarantors" has the meaning specified in
Section 12.01(a).
"Holder", when used with respect to any Security,
means a Securityholder.
"Indenture" or "this Indenture" means this instrument as
originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of particular series
of Securities established as contemplated by Section 3.01.
<PAGE>
6
"Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the Company.
"Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
series of Securities, means the Stated Maturity of any installment of interest
on those Securities.
"Make-Whole Amount" means, on any date when the Company
shall redeem any series of Securities, the sum of the present value of the
remaining scheduled payments of principal and interest thereon (exclusive of
interest accrued to the date of redemption) discounted to the date of
redemption on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate with respect to such series of Securities,
plus a spread (specified in basis points and set forth in the terms of such
series of Securities), plus accrued and unpaid interest on the principal
amount being redeemed to the date of redemption.
"Material Subsidiary" means any Person that is a Subsidiary of
the Company if at the end of the most recent fiscal quarter of the Company,
the aggregate amount, determined in accordance with GAAP consistently applied,
of securities of, loans and advances to, and other investments in, such Person
held by the Company and its other Subsidiaries exceeded 10% of the Company's
Consolidated Net Worth.
"Maturity", when used with respect to any Securities, means
the date on which the principal of any such Security becomes due and payable
as therein or herein provided, whether on a Repayment Date, at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"NYSE" shall mean the New York Stock Exchange,
Inc.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller,
the Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee. Wherever this Indenture requires that an Officers' Certificate be
signed also by an engineer or an accountant
<PAGE>
7
or other expert, such engineer, accountant or other expert (except as otherwise
expressly provided in this Indenture) may be in the employ of the Company, and
shall be acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may (except as otherwise expressly provided in this Indenture) be an employee
of or of counsel to the Company, which is delivered to a Responsible Officer
of the Trustee.
"Original Issue Discount Security" means (i) any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity thereof, and
(ii) any other security which is issued with "original issue discount" within
the meaning of Section 1273(a) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"Outstanding", when used with respect to Securities or
Securities of any series, means, as of the date of determination, all such
Securities theretofore authenticated and delivered under this Indenture,
except:
(i) such Securities theretofore canceled by the
Trustee or delivered to the Trustee for cancelation;
(ii) such Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent in trust for the Holders of such
Securities; provided that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been
made; and
(iii) such Securities in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to
this Indenture, or which shall have been paid pursuant to the terms
of Section 3.06 (except with respect to any such Security as to which
proof satisfactory to the Trustee is presented that such Security is
held by a Person in whose hands such Security is a legal, valid and
binding obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, (i) the principal amount of
any
<PAGE>
8
Original Issue Discount Security that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable as of the date
of the taking of such action upon a declaration of acceleration of the Maturity
thereof, and (ii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding. In determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer assigned to the Corporate Trust Department of the Trustee knows to be
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or such other obligor shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
to act as owner with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities on
behalf of the Company. The Company initially authorizes the Trustee to act as
Paying Agent for the Securities on its behalf. The Company may at any time and
from time to time authorize one or more Persons to act as Paying Agent in
addition to or in place of the Trustee with respect to any series of
Securities issued under this Indenture.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment" means with respect to any series of
Securities issued hereunder the city or political subdivision so designated
with respect to the series of Securities in question in accordance with the
provisions of Section 3.01.
"Predecessor Securities" of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.06 in
lieu of a lost, destroyed or stolen Security
<PAGE>
9
shall be deemed to evidence the same debt as the lost, destroyed or stolen
Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security
to be redeemed, means the price specified in the Security at which it is to be
redeemed pursuant to this Indenture.
"Reference Treasury Dealer" means any Primary Treasury Dealer
selected by the Independent Investment Banker after consultation with the
Company.
"Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date for a series of
Securities, the average, as determined by the Independent Investment Banker,
of the bid and asked prices for the Comparable Treasury Issue for such series
of Securities (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
"Regular Record Date" for the interest payable on any
Security on any Interest Payment Date means the date specified in such
Security as the Regular Record Date.
"Repayment Date", when used with respect to any Security to
be repaid, means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to
be repaid, means the price at which it is to be repaid pursuant to such
Security.
"Required Currency", when used with respect to any Security,
has the meaning set forth in Section 1.14.
"Responsible Officer" shall mean, when used with respect to
the Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of such person's knowledge of and familiarity
with the particular subject and who shall have
<PAGE>
10
direct responsibility for the administration of this Indenture.
"Security" or "Securities" means any unsecured note or
notes, bond or bonds, debenture or debentures, or any other evidences of
indebtedness, as the case may be, of any series authenticated and delivered
from time to time under this Indenture.
"Security Register" shall have the meaning specified in
Section 3.05.
"Security Registrar" means the Person who keeps the Security
Register specified in Section 3.05. The Company initially appoints the Trustee
to act as Security Registrar for the Securities on its behalf. The Company may
at any time and from time to time authorize any Person to act as Security
Registrar in place of the Trustee with respect to any series of Securities
issued under this Indenture.
"Securityholder" means a Person in whose name a security is
registered in the Security Register.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, any
corporation more than 50% of the voting stock of which is owned directly or
indirectly by such Person, and any partnership, association, joint venture or
other entity in which such Person owns more than 50% of the equity interests
or has the power to elect a majority of the board of directors or other
governing body.
"Treasury Rate" means, with respect to any redemption date
and a series of Securities, (i) the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption
<PAGE>
11
"Treasury Constant Maturities," for the maturity corresponding to the Comparable
Treasury Issue for such series of Securities (if no maturity is within three
months before or after the Remaining Life for such series of Securities, yields
for the two published maturities most closely corresponding to the Comparable
Treasury Issue for such series of Securities shall be determined and the
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue for
such series of Securities, calculated using a price for the Comparable Treasury
Issue for such series of Securities (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date and for
such series of Securities. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as in force at the date as of which this instrument was executed;
provided, however, that, in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" or "TIA" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the Trustee in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean and include each Person who is then a Trustee hereunder.
If at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"TWI" means Time Warner Inc., a Delaware corporation.
"U.S. Government Obligations" means securities that are (i)
non-callable direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (ii) non-callable
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America.
<PAGE>
12
"Vice President" when used with respect to the Company or
the Trustee means any vice president, whether or not designated by a number or
a word or words added before or after the title "vice president", including,
without limitation, an assistant vice president.
"Voting Stock", as applied to the stock of any corporation,
means stock of any class or classes (however designated) having by the terms
thereof ordinary voting power to elect a majority of the members of the board
of directors (or other governing body) of such corporation other than stock
having such power only by reason of the happening of a contingency.
"WCI" means Warner Communications Inc., a Delaware
corporation that is a subsidiary of TWI and a general partner of the Company,
until a successor shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter "WCI" shall mean such successor.
"Works" means motion pictures, video, television,
interactive or multi-media programming, audio-visual works, sound recordings,
books and other literary or written material, any software, copyright or other
intellectual property related thereto, acquired directly or indirectly after
the date of this Indenture by purchase, business combination, production,
creation or otherwise, any component of the foregoing or rights with respect
thereto, and all improvements thereon, products and proceeds thereof and
revenues derived therefrom.
"Yield to Maturity" means the yield to maturity on a series
of Securities, calculated by the Company at the time of issuance of such
series of Securities, or, if applicable, at the most recent redetermination of
interest on such series, in accordance with accepted financial practice.
SECTION 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any (including
any covenants compliance with which constitutes a condition precedent),
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
Counsel all such conditions precedent, if any (including any covenants
compliance with which constitutes a condition precedent), have been complied
with, except that in the case of any such application or request as to which
<PAGE>
13
the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture (other than annual
statements of compliance provided pursuant to Section 10.04) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons may certify or give an opinion as to the other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an
<PAGE>
14
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such Counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 1.04. Acts of Securityholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Securityholders or
Securityholders of any series may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing or may be embodied in or
evidenced by an electronic transmission which identifies the documents
containing the proposal on which such consent is requested and certifies such
Securityholders' consent thereto and agreement to be bound thereby; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Company. If any Securities are denominated in
coin or currency other than that of the United States, then for the purposes of
determining whether the Holders of the requisite principal amount of Securities
have taken any action as herein described, the principal amount of such
Securities shall be deemed to be that amount of United States dollars that could
be obtained for such principal amount on the basis of the spot rate of exchange
into United States dollars for the currency in which such Securities are
denominated (as evidenced to the Trustee by an Officers' Certificate) as of the
date the taking of such action by the Holders of such requisite principal amount
is evidenced to the Trustee as provided in the immediately preceding sentence.
If any Securities are Original Issue Discount Securities, then for the purposes
of determining whether the Holders of the requisite principal amount of
Securities have taken any action as herein described, the principal amount of
such Original Issue Discount Securities shall be deemed to be the amount of the
principal thereof that would be due and payable upon a declaration of
acceleration of the Maturity thereof as of the date the taking of such action by
the Holders of such requisite principal amount is evidenced to the Trustee as
provided in the first sentence of this
<PAGE>
15
Section 1.04(a). Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by an officer of a corporation or a
member of a partnership, on behalf of such corporation or partnership, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The ownership of Securities shall be proved by the
Security Register.
(d) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, by Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other action, but
the Company shall have no obligation to do so. Such record date shall be the
later of 10 days prior to the first solicitation of such action or the date of
the most recent list of Holders furnished to the Trustee pursuant to Section
7.01. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action may be given before or
after the record date, but only the Holders of record at the close of business
on the record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Securities
outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for
that purpose the Securities outstanding shall be computed as of the record
date; provided that no such authorization, agreement or consent by the Holders
on the record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after
the record date, and that no such authorization, agreement or consent may be
<PAGE>
16
amended, withdrawn or revoked once given by a Holder, unless the Company shall
provide for such amendment, withdrawal or revocation in conjunction with such
solicitation of authorizations, agreements or consents or unless and to the
extent required by applicable law.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind the
Holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof, in respect of anything done or
suffered to be done by the Trustee or the Company in reliance thereon whether
or not notation of such action is made upon such Security.
SECTION 1.05. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Securityholders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(1) the Trustee by any Securityholder or by the Company shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration; or
(2) the Company by the Trustee or by any Securityholder
shall be sufficient for every purpose hereunder (except as provided
in Section 5.01(4) and (5) or, in the case of a request for
repayment, as specified in the Security carrying the right to
repayment) if in writing and mailed, first-class postage prepaid, to
the Company addressed to it at the address of its principal office
specified in the first paragraph of this instrument, Attention:
Treasurer, or at any other address previously furnished in writing to
the Trustee by the Company.
SECTION 1.06. Notices to Securityholders; Waiver. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Securityholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
<PAGE>
17
Securityholder shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Securityholders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or otherwise, it shall be impractical to
mail notice of any event to any Securityholder when such notice is required to
be given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
SECTION 1.07. Conflict with Trust Indenture Act. If and to the
extent that any provision hereof limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, any of Sections 310 to 318, inclusive, of the
Trust Indenture Act, such imposed duties or incorporated provision shall
control.
SECTION 1.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and
agreements in this Indenture by the Company and the Guarantors shall bind their
respective successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture
or in any Securities, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar and the Holders of Securities (or such of
them as may be affected thereby), any
<PAGE>
18
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law. This Indenture shall be construed
in accordance with and governed by the laws of the State of New York.
SECTION 1.13. Counterparts. This instrument may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 1.14. Judgment Currency. The Company agrees, to the
fullest extent that it may effectively do so under applicable law, that (a) if
for the purpose of obtaining judgment in any court it is necessary to convert
the sum due in respect of the principal of, or premium or interest, if any, on
the Securities of any series (the "Required Currency") into a currency in which
a judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in the City of New York the Required Currency with the
Judgment Currency on the New York Banking Day preceding that on which a final
unappealable judgment is given and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture. For purposes of the foregoing, "New York Banking
Day" means any day except a Saturday, Sunday or a legal holiday in the City of
New York or a day on which banking institutions in the City of New York are
authorized or required by law or executive order to close.
<PAGE>
19
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may be required to comply with the rules of any securities exchange, or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. Any portion of
the text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities, subject, with respect to the Securities of any series, to the
rules of any securities exchange on which such Securities are listed.
SECTION 2.02. Forms of Securities. Each Security shall be in
one of the forms approved from time to time by or pursuant to a Board
Resolution, or established in one or more indentures supplemental hereto. Prior
to the delivery of a Security to the Trustee for authentication in any form
approved by or pursuant to a Board Resolution, the Company shall deliver to the
Trustee the Board Resolution by or pursuant to which such form of Security has
been approved, which Board Resolution shall have attached thereto a true and
correct copy of the form of Security which has been approved thereby or, if a
Board Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.
SECTION 2.03. Form of Trustee's Certificate of Authentication.
The form of Trustee's Certificate of Authentication for any Security issued
pursuant to this Indenture shall be substantially as follows:
<PAGE>
20
This Security, together with any Guarantees referred to
herein, is one of the Securities described in the within-mentioned Indenture.
Dated:
-----------------------
The Bank of New York,
------------------------------
As Trustee
By
---------------------------
Authorized Signatory
SECTION 2.04. Securities Issuable in the Form of a Global
Security. (a) If the Company shall establish pursuant to Sections 2.02 and 3.01
that the Securities of a particular series are to be issued in whole or in part
in the form of one or more Global Securities, then the Company shall execute and
the Trustee or its agent shall, in accordance with Section 3.03 and the Company
Order delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Order, (ii) shall be registered in the name of the Depository for such
Global Security or Securities or its nominee, (iii) shall be delivered by the
Trustee or its agent to the Depository or pursuant to the Depository's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depository to Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of the nominee of
the Depository or in such other name as is requested by an authorized
representative of the Depository (and any payment is made to the nominee of the
Depository or to such other entity as is requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, the nominee of the Depository, has an interest herein."
(b) Notwithstanding any other provision of this Section 2.04
or of Section 3.05, and subject to the provisions of paragraph (c) below, unless
the terms of a
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21
Global Security expressly permit such Global Security to be exchanged in whole
or in part for individual Securities, a Global Security may be transferred, in
whole but not in part and in the manner provided in Section 3.05, only to a
nominee of the Depository for such Global Security, or to the Depository, or a
successor Depository for such Global Security selected or approved by the
Company, or to a nominee of such successor Depository.
(c) (i) If at any time the Depository for a Global Security
notifies the Company that it is unwilling or unable to continue as Depository
for such Global Security or if at any time the Depository for the Securities for
such series shall no longer be eligible or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, the
Company shall appoint a successor Depository with respect to such Global
Security. If a successor Depository for such Global Security is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such ineligibility, the Company will execute, and the Trustee or its
agent, upon receipt of a Company Request for the authentication and delivery of
individual Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the Company
will execute, and the Trustee, upon receipt of a Company Request for the
authentication and delivery of individual Securities of such series in exchange
in whole or in part for such Global Security, will authenticate and deliver
individual Securities of such series of like tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such Global
Security or Securities representing such series or portion thereof in exchange
for such Global Security or Securities.
(iii) If specified by the Company pursuant to Sections 2.02
and 3.02 with respect to Securities issued or issuable in the form of a Global
Security, the Depository for such Global Security may surrender such Global
Security in exchange in whole or in part for individual Securities of such
series of like tenor and terms in definitive form on such terms as are
acceptable to the Company and such
<PAGE>
22
Depository. Thereupon the Company shall execute, and the Trustee or its agent
shall authenticate and deliver, without service charge, (1) to each Person
specified by such Depository a new Security or Securities of the same series
of like tenor and terms and of any authorized denomination as requested by
such Person in aggregate principal amount equal to and in exchange for such
Person's beneficial interest as specified by such Depository in the Global
Security; and (2) to such Depository a new Global Security of like tenor and
terms and in an authorized denomination equal to the difference, if any,
between the principal amount of the surrendered Global Security and the
aggregate principal amount of Securities delivered to Holders thereof.
(iv) In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of a
Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depository for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or the
Security Registrar. The Trustee or the Security Registrar shall deliver at its
Corporate Trust Office such Securities to the Persons in whose names such
Securities are so registered.
ARTICLE III
The Securities
SECTION 3.01. General Title; General Limitations; Issuable in
Series; Terms of Particular Series. The aggregate principal amount of Securities
which may be authenticated and delivered and Outstanding under this Indenture is
not limited.
The Securities may be issued in one or more series as from
time to time may be authorized by the Board of Directors. There shall be
established in or pursuant to a Board Resolution or in a supplemental indenture,
subject to
<PAGE>
23
Section 3.11, prior to the issuance of Securities of any such series:
(1) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of any
other series);
(2) the Person to whom any interest on a Security of such
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(3) the date or dates on which the principal of the
Securities of such series is payable;
(4) the rate or rates at which the Securities of such series
shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any
interest payable on any Interest Payment Date;
(5) the place or places where the principal of and any
premium and interest on Securities of such series shall be payable;
(6) the period or periods within which, the Redemption Price
or Prices or the Repayment Price or Prices, as the case may be, at
which and the terms and conditions upon which Securities of such
series may be redeemed or repaid, as the case may be, in whole or in
part, at the option of the Company or the Holder;
(7) the obligation, if any, of the Company to purchase
Securities of such series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which Securities of such series shall be purchased,
in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of such
series shall be issuable;
(9) provisions, if any, with regard to the conversion or
exchange of the Securities of such series, at the option of the
Holders thereof or the
<PAGE>
24
Company, as the case may be, for or into new Securities of a different
series or other securities;
(10) if other than U.S. dollars, the currency or currencies
or units based on or related to currencies in which the Securities of
such series shall be denominated and in which payments of principal
of, and any premium and interest on, such Securities shall or may be
payable;
(11) if the principal of (and premium, if any) or interest,
if any, on the Securities of such series are to be payable, at the
election of the Company or a Holder thereof, in a coin or currency
(including a composite currency) other than that in which the
Securities are stated to be payable, the period or periods within
which, and the terms and conditions upon which, such election may be
made;
(12) if the amount of payments of principal of (and premium,
if any) or interest, if any, on the Securities of such series may be
determined with reference to an index based on a coin or currency
(including a composite currency) other than that in which the
Securities are stated to be payable, the manner in which such amounts
shall be determined;
(13) any limit upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of such series pursuant to Section 3.04,
3.05, 3.06, 9.06 and 11.08 and except for any Securities which,
pursuant to Section 3.03, are deemed never to have been authenticated
and delivered hereunder);
(14) provisions, if any, with regard to the exchange of
Securities of such series, at the option of the Holders thereof, for
other Securities of the same series of the same aggregate principal
amount or of a different authorized series or different authorized
denomination or denominations, or both;
(15) provisions, if any, with regard to the appointment by
the Trustee of an Authenticating Agent in one or more places other
than the location of the office of the Trustee with power to act on
behalf of the Trustee and subject to its direction in the
authentication and delivery of the Securities of any
<PAGE>
25
one or more series in connection with such transactions as shall be
specified in the provisions of this Indenture or in or pursuant to
such Board Resolution or supplemental indenture;
(16) the portion of the principal amount of Securities of
the series, if other than the principal amount thereof, which shall
be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 5.02 or provable in bankruptcy pursuant to
Section 5.04;
(17) any Event of Default with respect to the Securities of
such series, if not set forth herein, and any additions, deletions or
other changes to the Events of Default set forth herein that shall be
applicable to the Securities of such series;
(18) any covenant solely for the benefit of the Securities
of such series and any additions, deletions or other changes to the
provisions of Article X or Section 1.01 or any definitions relating
to such Article that would otherwise be applicable to the Securities
of such series;
(19) if Section 4.03 of this Indenture shall not be
applicable to the Securities of such series and if Section 4.03 shall
be applicable to any covenant or Event of Default established in or
pursuant to a Board Resolution or in a supplemental indenture as
described above that has not already been established herein;
(20) if the Securities of such series shall be issued in
whole or in part in the form of a Global Security or Securities, the
terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for other individual
Securities; and the Depository for such Global Security or
Securities; and
(21) any other terms of such series;
all upon such terms as may be determined in or pursuant to such Board
Resolution or supplemental indenture with respect to such series.
The form of the Securities of each series shall be
established pursuant to the provisions of this Indenture in or pursuant to the
Board Resolution or in the supplemental indenture creating such series. The
Securities of each series shall be distinguished from the Securities of each
<PAGE>
26
other series in such manner as the Board of Directors may determine.
Unless otherwise provided with respect to Securities of a
particular series, the Securities of any series may only be issuable in
registered form, without coupons.
Any terms or provisions in respect of the Securities of any
series issued under this Indenture may be determined pursuant to this Section
by providing for the method by which such terms or provisions shall be
determined.
SECTION 3.02. Denominations. The Securities of each series
shall be issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
SECTION 3.03. Execution, Authentication and Delivery and
Dating. The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President, one of its Vice Presidents or its
Treasurer under its corporate seal reproduced thereon (which may be by
facsimile) and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication; and the Trustee shall, upon Company
Order, authenticate and deliver such Securities as in this Indenture provided
and not otherwise.
Prior to any such authentication and delivery, the Trustee
shall be entitled to receive, in addition to any Officers' Certificate and
Opinion of Counsel required to be
<PAGE>
27
furnished to the Trustee pursuant to Section 1.02, and the Board Resolution
and any certificate relating to the issuance of the series of Securities
required to be furnished pursuant to Section 2.02, an Opinion of Counsel
stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority
hereunder for the Trustee to authenticate and deliver such
Securities;
(2) the form and terms of such Securities have been
established in conformity with the provisions of this Indenture;
(3) all laws and requirements with respect to the execution
and delivery by the Company of such Securities have been complied
with, the Company has the corporate power to issue such Securities
and such Securities have been duly authorized and delivered by the
Company and, assuming due authentication and delivery by the Trustee,
constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws and legal principles affecting
creditors' rights generally from time to time in effect and to
general equitable principles, whether applied in an action at law or
in equity) and entitled to the benefits of this Indenture, equally
and ratably with all other Securities, if any, of such series
Outstanding;
(4) the Indenture is qualified under the Trust Indenture
Act; and
(5) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered
and constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms (subject, as to enforcement of
remedies, to
<PAGE>
28
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
and legal principles affecting creditors' rights generally from time to time
in effect and to general equitable principles, whether applied in an action at
law or in equity).
The Trustee shall not be required to authenticate such
Securities if the issue thereof will adversely affect the Trustee's own
rights, duties or immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any
series, all Securities shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancelation as provided in Section 3.09, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and, upon receipt
of the documents required by Section 3.03, together with a Company Order, the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the
Company will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency
<PAGE>
29
of the Company in a Place of Payment, without charge to the Holder; and upon
surrender for cancelation of any one or more temporary Securities the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of such series of
authorized denominations and of like tenor and terms. Until so exchanged the
temporary Securities of such series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.
SECTION 3.05. Registration, Transfer and Exchange. The Company
shall keep or cause to be kept a register or registers (herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities, or of Securities of a particular series, and of transfers of
Securities or of Securities of such series. Any such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time. At all reasonable times the information contained in
such register or registers shall be available for inspection by the Trustee at
the office or agency to be maintained by the Company as provided in Section
10.02. There shall be only one Security Register per series of Securities.
Subject to Section 2.04, upon surrender for registration of
transfer of any Security of any series at the office or agency of the Company
maintained for such purpose in a Place of Payment, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of such series of any
authorized denominations, of a like aggregate principal amount and Stated
Maturity and of like tenor and terms.
Subject to Section 2.04, at the option of the Holder,
Securities of any series may be exchanged for other Securities of such series
of any authorized denominations, of a like aggregate principal amount and
Stated Maturity and of like tenor and terms, upon surrender of the Securities
to be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Securityholder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the legal and valid obligations of the
Company, evidencing the same debt,
<PAGE>
30
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed, by the Holder
thereof or his attorney duly authorized in writing.
Unless otherwise provided in the Security to be registered
for transfer or exchange, no service charge shall be made on any
Securityholder for any registration of transfer or exchange of Securities, but
the Company may (unless otherwise provided in such Security) require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.04, 9.06 or 11.08 not
involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security of any series during a period beginning
at the opening of business 15 days before the day of the mailing of a notice
of redemption of Securities of such series selected for redemption under
Section 11.03 and ending at the close of business on the date of such mailing,
or (ii) to register the transfer of or exchange any Security so selected for
redemption in whole or in part.
None of the Company, the Trustee, any agent of the Trustee,
any Paying Agent or the Security Registrar will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen
Securities. If (i) any mutilated Security is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and (ii) there is delivered to the
Company and the Trustee such Security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its written request the
<PAGE>
31
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Security, a new Security of like tenor,
series, Stated Maturity and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of the same series duly
issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided with respect to such Security pursuant to Section
3.01, interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of his having
been such Holder; and, except as hereinafter provided, such Defaulted Interest
may be paid by the Company, at its
<PAGE>
32
election in each case, as provided in Clause (1) or Clause (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names any such Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Security and the date of
the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 nor less than 10 days prior
to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first class postage
prepaid, to the Holder of each such Security at his address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Securities (or their respective Predecessor
Securities) are registered on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and
upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
<PAGE>
33
If any installment of interest the Stated Maturity of which
is on or prior to the Redemption Date for any Security called for redemption
pursuant to Article XI is not paid or duly provided for on or prior to the
Redemption Date in accordance with the foregoing provisions of this Section,
such interest shall be payable as part of the Redemption Price of such
Securities.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 3.08. Persons Deemed Owners. The Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
any Security is registered as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any), and (subject to Section
3.07) interest on, such Security and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the
Security Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
SECTION 3.09. Cancelation. All Securities surrendered for
payment, conversion, redemption, registration of transfer, exchange or credit
against a sinking fund shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and, if not already canceled, shall be
promptly canceled by it. The Company may at any time deliver to the Trustee for
cancelation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Security shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. The Trustee
shall dispose of all canceled Securities in accordance with its standard
procedures and deliver a certificate of such disposition to the Company.
<PAGE>
34
SECTION 3.10. Computation of Interest. Unless otherwise
provided as contemplated in Section 3.01, interest on the Securities shall be
calculated on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. Delayed Issuance of Securities. Notwithstanding
any contrary provision herein, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary for the Company to
deliver to the Trustee an Officers' Certificate, Board Resolution, supplemental
indenture, opinion of counsel or Company Order otherwise required pursuant to
Sections 1.02, 2.02, 3.01 and 3.03 at or prior to the time of authentication of
each Security of such series if such documents are delivered to the Trustee or
its agent at or prior to the authentication upon original issuance of the first
Security of such series to be issued; provided that any subsequent request by
the Company to the Trustee to authenticate Securities of such series upon
original issuance shall constitute a representation and warranty by the Company
that as of the date of such request, the statements made in the Officers'
Certificate or other certificates delivered pursuant to Sections 1.02 and 2.02
shall be true and correct as if made on such date.
A Company Order, Officers' Certificate or Board Resolution
or supplemental indenture delivered by the Company to the Trustee in the
circumstances set forth in the preceding paragraph may provide that Securities
which are the subject thereof will be authenticated and delivered by the
Trustee or its agent on original issue from time to time in the aggregate
principal amount, if any, established for such series pursuant to such
procedures acceptable to the Trustee as may be specified from time to time by
Company Order upon the telephonic, electronic or written order of Persons
designated in such Company Order, Officers' Certificate, supplemental
indenture or Board Resolution (any such telephonic or electronic instructions
to be promptly confirmed in writing by such Persons) and that such Persons are
authorized to determine, consistent with such Company Order, Officers'
Certificate, supplemental indenture or Board Resolution, such terms and
conditions of said Securities as are specified in such Company Order,
Officers' Certificate, supplemental indenture or Board Resolution.
SECTION 3.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption, if any, as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers
<PAGE>
35
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Termination of Obligations. Except as otherwise
provided in this Section 4.01, the Company and the Guarantors may terminate
their respective obligations under the Securities of any series, this Indenture
(with respect to such series) and the Guarantees if:
(i) all Securities of such series previously authenticated
and delivered (other than destroyed, lost or stolen Securities of
such series that have been replaced or Securities of such series that
are paid pursuant to Section 10.01 of this Indenture or Securities of
such series for whose payment money or securities have theretofore
been held in trust and thereafter repaid to the Company, as provided
in Section 10.03 of this Indenture) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by
it hereunder; or
(ii) (A) all Outstanding Securities of such series mature
within one year or all of them are to be called for redemption within
one year under arrangements satisfactory to the Trustee for giving
the notice of redemption, (B) the Company irrevocably deposits in
trust with the Trustee during such one-year period, under the terms
of an irrevocable trust agreement in form and substance satisfactory
to the Trustee, as trust funds solely for the benefit of the Holders
of such series for that purpose, money or U.S. Government Obligations
sufficient (in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee), without consideration of any
reinvestment of such interest, to pay principal, premium, if any, and
interest on the Securities of such series to maturity or redemption,
as the case may be, and to pay all other sums payable by it
hereunder, (C) no Event of Default shall have occurred and be
continuing on the date of such deposit, (D) such deposit will not
result in a breach or violation of, or constitute a default under,
this
<PAGE>
36
Indenture or any other agreement or instrument to which the Company
is a party or by which it is bound and (E) the Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, in
each case stating that all conditions precedent provided for herein
relating to the satisfaction and discharge of this Indenture have
been complied with.
With respect to the foregoing clause (i), the Company's
obligations under Section 6.07 and any obligations of the Guarantors with
respect to said section shall survive with respect to the Securities of such
series. With respect to the foregoing clause (ii), the Company's obligations
contained in Sections 3.03, 3.05, 3.06, 3.07, 4.05, 6.07, 6.10, 10.01 and
10.02 of this Indenture and any obligations of the Guarantors (with respect to
the Guarantees) with respect to said sections shall survive until the
Securities of such series are no longer Outstanding. Thereafter, only the
Company obligations contained in Sections 4.05 and 6.07 of this Indenture and
any obligations of the Guarantors (with respect to the Guarantees) with
respect to said sections shall survive with respect to the Securities of such
series. After any such irrevocable deposit, the Trustee upon request and at
the Company's expense shall acknowledge in writing the discharge of the
Company's and the Guarantors' obligations, if any, under the Securities of
such series, this Indenture (with respect to such series) and the Guarantees
except for those surviving obligations specified above.
SECTION 4.02. Defeasance and Discharge of Indenture. The
Company and the Guarantors will be deemed to have paid and will be discharged
from any and all obligations in respect of the Securities of any series and the
Guarantees on the 123rd day after the date of the deposit referred to in clause
(A) hereof, and the provisions of this Indenture will no longer be in effect
with respect to the Securities of such series, and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same, except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen Securities of such
series, (iii) rights of Holders of such series to receive payments of principal
thereof and interest thereon, (iv) the Company's obligations under Section
10.02, (v) the rights, obligations and immunities of the Trustee hereunder, (vi)
the Company's right of redemption, if any, with respect to any Securities of
such series pursuant to Article XI, in which case the Company may redeem the
Securities of such series in accordance with Article XI by complying with such
Article and depositing with the Trustee,
<PAGE>
37
in accordance with Section 11.06, an amount of money sufficient, together with
all amounts held in trust pursuant to Section 4.04 with respect to Securities
of such series, to pay the Redemption Price of all the Securities of such
series to be redeemed, and (vii) the rights of the Holders of such series as
beneficiaries of this Indenture with respect to the property so deposited with
the Trustee payable to all or any of them; provided that the following
conditions shall have been satisfied:
(A) with reference to this Section 4.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 6.09
of this Indenture) and conveyed all right, title and interest to the
Trustee for the benefit of the Holders of such series, under the terms
of an irrevocable trust agreement in form and substance satisfactory to
the Trustee, as trust funds in trust, specifically pledged to the
Trustee for the benefit of the Holders of such series as security for
payment of the principal of, premium, if any, and interest on the
Securities of such series, and dedicated solely to, the benefit of the
Holders of such series in and to (1) money in an amount, (2) U.S.
Government Obligations that, through the payment of interest, principal
and premium, if any, in respect thereof in accordance with their terms,
will provide, not later than one day before the due date of any payment
referred to in this clause (A), money in an amount or (3) a combination
thereof in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest
and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee, the
principal of, premium (including of applicable redemption premium), if
any, and interest on the Outstanding Securities of such series on the
dates such installments of interest or principal are due through the
Stated Maturity thereof, or in the event the Outstanding Securities may
be redeemed at the option of the Company and if the Company so elects,
a date on which such Outstanding Securities may be so redeemed
(provided that before such a deposit, the Company shall give to the
Trustee, in accordance with Section 11.02, a notice of its election to
redeem all of the Securities of such series on such redemption date in
accordance with Article XI); provided that the Trustee shall have been
irrevocably instructed to apply such
<PAGE>
38
money or the proceeds of such U.S. Government Obligations to the
payment of such principal, premium, if any, and interest with respect
to the Securities of such series;
(B) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which
it is bound;
(C) no Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on
the 123rd day after such date of deposit;
(D) the Company shall have delivered to the Trustee (1)
either (x) a ruling directed to the Trustee received from the
Internal Revenue Service to the effect that the Holders of Securities
of such series will not recognize income, gains or loss for federal
income tax purposes as a result of the Company's exercise of its
option under this Section 4.02 and will be subject to federal income
tax on the same amount and in the same manner and at the same times
as would have been the case if such option had not been exercised or
(y) an Opinion of Counsel to the same effect as the ruling described
in clause (x) above accompanied by a ruling to that effect published
by the Internal Revenue Service, unless there has been a change in
the applicable federal income tax law since the date of this
Indenture such that a ruling from the Internal Revenue Service is no
longer required and (2) an Opinion of Counsel, subject to such
qualifications, exceptions, assumptions and limitations as are
reasonably deemed necessary by such counsel and are reasonably
satisfactory to counsel for the Trustee, to the effect that the
creation of the defeasance trust does not violate the Investment
Company Act of 1940; and
(E) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, in each case stating
that all conditions precedent provided for herein relating to the
defeasance contemplated by this Section 4.02 have been complied with.
Notwithstanding the foregoing clause (A), prior to the end of the 123-day (or
one year) period referred to in clause (C) above, none of the Company's or any
Guarantor's obligations under this Indenture shall discharged.
<PAGE>
39
Subsequent to the end of such 123-day (or one year) period with respect to this
Section 4.02, the Company's obligations with respect to Securities of such
series in Sections 3.03, 3.05, 3.06, 3.07, 4.05, 6.07, 6.10, 10.01, and 10.02 of
this Indenture and any obligations of the Guarantors (with respect to the
Guarantees) with respect to said sections shall survive until there are no
Securities of such series Outstanding. Thereafter, only the Company's
obligations in Sections 4.05 and 6.07 of this Indenture and any obligations of
the Guarantors (with respect to the Guarantees) with respect to said sections
shall survive with respect to Securities of such series. If and when a ruling
from the Internal Revenue Service or an Opinion of Counsel referred to in clause
(D)(1) above is able to be provided specifically without regard to, and not in
reliance upon, the continuance of the Company's obligations with respect to
Securities of such series under Section 10.01 of this Indenture, then the
Company's and each Guarantor's obligations with respect to Securities of such
series under such Section 10.01 of this Indenture shall cease upon delivery to
the Trustee of such ruling or Opinion of Counsel and compliance with the other
conditions precedent provided for herein relating to the defeasance contemplated
by this Section 4.02.
After any such irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and each
Guarantor's obligations under the Securities and this Indenture (with respect
to such series) and the Guarantees except for those surviving obligations in
the immediately preceding paragraph.
SECTION 4.03. Defeasance of Certain Obligations. The Company
may omit to comply with any term, provision or condition set forth in clauses
(2) and (3) of Section 8.01 and Sections 10.06 through 10.11 of this Indenture,
and clauses (3), (4), (5), and (8) of Section 5.01 of this Indenture shall be
deemed not to be Events of Default, in each case with respect to the Outstanding
Securities of any series if:
(i) with reference to this Section 4.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section
6.09 of this Indenture) and conveyed all right, title and interest to
the Trustee for the benefit of the Holders of such series as security
for payment of the principal of, premium, if any, and interest on the
Securities of such series, and dedicated solely to, the benefit of the
Holders of such series in and to (A) money in an
<PAGE>
40
amount, (B) U.S. Government Obligations that, through the payment of
interest, principal and premium, if any, in respect thereof in
accordance with their terms, will provide, not later than one day
before the due date of any payment referred to in this clause (i),
money in an amount or (C) a combination thereof in an amount
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without
consideration of the reinvestment of such interest and after payment of
all federal, state and local taxes or other charges and assessments in
respect thereof payable by the Trustee, the principal of, premium
(including of applicable redemption premium), if any, and interest on
the Outstanding Securities of such series on the dates such
installments of interest or principal are due through the Stated
Maturity thereof, or in the event the Outstanding Securities may be
redeemed at the option of the Company and if the Company so elects, a
date on which such Outstanding Securities may be so redeemed (provided
that before such a deposit, the Company shall give to the Trustee, in
accordance with Section 11.02, a notice of its election to redeem all
of the Securities of such series on such redemption date in accordance
with Article XI); provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of such principal, premium, if any, and
interest with respect to the Securities of such series;
(ii) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which
it is bound;
(iii) no default or Event of Default shall have
occurred and be continuing on the date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of
Counsel, subject to such qualifications, exceptions, assumptions and
limitations as are reasonably deemed necessary by such counsel and
are reasonably satisfactory to counsel for the Trustee, to the effect
that (A) the creation of the defeasance trust does not violate the
Investment Company Act of 1940 and (B) the Holders of Securities of
such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance of
certain obligations and will be subject
<PAGE>
41
to federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit and
defeasance had not occurred; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 4.03 have been complied with.
SECTION 4.04. Application of Trust Money. Subject to the last
paragraph of Section 10.03 of this Indenture, the Trustee or Paying Agent shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
Section 4.01, 4.02 or 4.03 of this Indenture, as the case may be, and shall
apply the deposited money and the money from U.S. Government Obligations in
accordance with the Securities and this Indenture to the payment of principal of
and interest on the Securities; but such money need not be segregated from other
funds except to the extent required by law.
SECTION 4.05. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
Section 4.01, 4.02 or 4.03 of this Indenture, as the case may be, by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and the Guarantors' obligations under this Indenture
and the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 4.01, 4.02 or 4.03 of this Indenture, as the case
may be, until such time as the Trustee or Paying Agent is permitted to apply all
such money or U.S. Government Obligations in accordance with Section 4.01, 4.02
or 4.03 of this Indenture, as the case may be; provided that, if the Company has
made any payment of principal of or interest on any securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
<PAGE>
42
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever
used herein, means with respect to any series of Securities any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body), unless such event is either
inapplicable to a particular series or it is specifically deleted or modified in
or pursuant to the supplemental indenture or Board Resolution creating such
series of Securities or in the form of Security for such series:
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(3) default in the payment of any sinking or purchase fund
or analogous obligation when the same becomes due by the terms of the
Securities of such series; or
(4) default under any bond, debenture, note, guarantee or
other evidence of indebtedness for money borrowed by the Company or
any Material Subsidiary (including a default with respect to
Securities of any series other than such series) or under any
mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any indebtedness for money
borrowed by the Company or any Material Subsidiary (including this
Indenture), whether such indebtedness now exists or shall hereafter
be created, which default (i) shall constitute a failure to pay the
principal of such indebtedness having an outstanding principal amount
in excess of $50 million in the aggregate when due and payable at the
final (but not any interim) maturity thereof after the expiration of
any applicable grace period with respect thereto and the holders of
such indebtedness shall not have waived such default or (ii) shall
have resulted in such indebtedness having an outstanding principal
amount in
<PAGE>
43
excess of $50 million in the aggregate becoming or being declared due
and payable prior to the date on which it would otherwise have become
due and payable, in either case without such indebtedness having been
discharged, or such acceleration having been rescinded or annulled,
within a period of 60 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of such series, a written notice
specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(5) default in the performance, or breach, of any covenant
or warranty of the Company in this Indenture in respect of the
Securities of such series (other than a covenant or warranty in
respect of the Securities of such series a default in the performance
of which or the breach of which is elsewhere in this Section
specifically dealt with), all of such covenants and warranties in the
Indenture which are not expressly stated to be for the benefit of a
particular series of Securities being deemed in respect of the
Securities of all series for this purpose, and continuance of such
default or breach for a period of 30 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of such series, a
written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(6) the entry of an order for relief against the Company
under Title 11, United States Code (the "Federal Bankruptcy Act") by
a court having jurisdiction in the premises or a decree or order by a
court having jurisdiction in the premises adjudging the Company a
bankrupt or insolvent under any other applicable Federal or State
law, or the entry of a decree or order approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under the Federal
Bankruptcy Act or any other applicable Federal or State law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part
of its property, or ordering the winding up or liquidation
<PAGE>
44
of its affairs, and the continuance of any such decree
or order unstayed and in effect for a period of 60
consecutive days; or
(7) the consent by the Company to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Act or any other applicable Federal or
State law, or the consent by it to the filing of any such petition or
to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company in furtherance
of any such action; or
(8) any other Event of Default provided in the supplemental
indenture or Board Resolution under which such series of Securities
is issued or in the form of Security for such series.
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then and in each and every such
case either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of that series then Outstanding hereunder
(each such series acting as a separate class), by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the principal
amount (or, if the Securities of such series are original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of such series and all accrued
interest thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities of such series contained to the
contrary notwithstanding.
At any time after such a declaration of acceleration has
been made with respect to the Securities of any or all series, as the case may
be, and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders
of a majority in principal amount of the outstanding Securities of such
series, by written notice to the Company
<PAGE>
45
and the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company or the Guarantors has paid or deposited with
the Trustee a sum sufficient to pay:
(A) all overdue installments of interest on
the Securities of such series;
(B) the principal of (and premium, if any, on) any
Securities of such series which have become due otherwise
than by such declaration of acceleration, and interest
thereon at the rate or rates prescribed therefor by the
terms of the Securities of such series, to the extent that
payment of such interest is lawful;
(C) interest upon overdue installments of interest
at the rate or rates prescribed therefor by the terms of the
Securities of such series to the extent that payment of such
interest is lawful; and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel and all other amounts due the Trustee under Section
6.07; and
(2) all Events of Default with respect to such series of
Securities, other than the nonpayment of the principal of the
Securities of such series which have become due solely by such
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company and each Guarantor covenants that if:
(1) default is made in the payment of any installment of
interest on any Security of any series when such interest becomes due
and payable; or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof; or
<PAGE>
46
(3) default is made in the payment of any sinking or
purchase fund or analogous obligation when the same becomes due by
the terms of the Securities of any series;
and any such default continues for any period of grace provided with respect
to the Securities of such series, the Company and each Guarantor will, upon
demand of the Trustee, pay to it, for the benefit of the Holder of any such
Security (or the Holders of any such series in the case of clause (3) above),
the whole amount (for, in the case of each Guarantor, its Guaranteed
Percentage) then due and payable on any such Security (or on the Securities of
any such series in the case of clause (3) above) for principal (and premium,
if any) and interest, with interest, to the extent that payment of such
interest shall be legally enforceable, upon the overdue principal (and
premium, if any) and upon overdue installments of interest, at such rate or
rates as may be prescribed therefor by the terms of any such Security (or of
Securities of any such series in the case of clause (3) above); and, in
addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
and all other amounts due the Trustee under Section 6.07; provided, however,
that anything herein to the contrary notwithstanding, neither the Trustee nor
any Holder shall have any recourse against any Guarantor under this Indenture
or under the Securities, except as, and to the extent, set forth in the
Guarantees.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities
of such series and collect the money adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities, wherever situated.
If an Event of Default with respect to any series of
Securities occurs and is continuing, the Trustee may in its discretion proceed
to protect and enforce its rights and the rights of the Holders of Securities
of such series by such appropriate judicial proceedings against the Company
and/or any Guarantor as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power
<PAGE>
47
granted herein, or to enforce any other proper remedy. The Company and each
Guarantor acknowledges and agrees for the benefit of the Trustee and the
Holders that the Trustee may directly and simultaneously proceed against the
Company and each of the Guarantors.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim for the whole amount of
principal (or portion thereof determined pursuant to Section 3.01(16)
to be provable in bankruptcy) (and premium, if any) and interest
owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary and advisable in order to
have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee
under Section 6.07) and of the Securityholders allowed in such
judicial proceeding; and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder, any plan of
<PAGE>
48
reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any, Securityholder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel and any other amounts due the Trustee under Section 6.07, be for the
ratable benefit of the Holders of the Securities of the series in respect of
which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money
collected by the Trustee with respect to a series of Securities pursuant to this
Article shall be applied in the following order, at the date or dates fixed by
the Trustee and, in case of the distribution of such money on account of
principal (or premium, if any) or interest, upon presentation of the Securities
of such series and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.07.
SECOND: To the payment of the amounts then due and unpaid upon
the Securities of that series for principal (and premium, if any) and interest,
in respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and premium, if any) and
interest, respectively.
THIRD: The balance, if any, to the Company.
SECTION 5.07. Limitation on Suits. No Holder of any Security
of any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this
<PAGE>
49
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of, a continuing Event of Default with respect to Securities
of such series;
(2) the Holders of not less than 25% in principal amount of
the outstanding Securities of such series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to
be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
a majority in principal amount of the Outstanding Securities of such
series;
it being understood and intended that no one or more Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Securities of such series, or to obtain or
to seek to obtain priority or preference over any other such Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and proportionate benefit of all the Holders of all
Securities of such series.
SECTION 5.08. Unconditional Right of Securityholders To
Receive Principal, Premium and Interest. Notwithstanding any other provisions in
this Indenture, the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal of (and premium,
if any) and (subject to Section 3.07) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on the Redemption Date or Repayment Date, as the case
may be) and to institute suit for the enforcement of any such payment (including
enforcement of any Guarantee), and such right shall not be impaired without the
consent of such Holder; provided,
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however, that anything herein to the contrary notwithstanding, neither the
Trustee nor any Holder shall have any recourse against any Guarantor under
this Indenture or under the Securities, except as, and to the extent, set
forth in the Guarantees or in this Article V.
SECTION 5.09. Restoration of Rights and Remedies. If the
Trustee or any Securityholder has instituted any proceeding to enforce any right
or remedy under this Indenture or the Guarantees and such proceeding has been
discontinued or abandoned for any reason, then and in every such case the
Company, the Guarantors, the Trustee and the Securityholders shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder and thereunder, and thereafter all rights and
remedies of the Trustee and the Securityholders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Trustee or to the
Securityholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Securityholders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Securityholders, as the case
may be.
SECTION 5.12. Control by Securityholders. The Holders of a
majority in principal amount of the Outstanding Securities of any series shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Securities of such series, provided
that:
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(1) the Trustee shall have the right to decline to follow
any such direction if the Trustee, being advised by counsel,
determines that the action so directed may not lawfully be taken or
would conflict with this Indenture or if the Trustee in good faith
shall, by a Responsible Officer, determine that the proceedings so
directed would involve it in personal liability or be unjustly
prejudicial to the Holders not taking part in such direction, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default not theretofore cured:
(1) in the payment of the principal of (or premium, if any)
or interest on any Security of such series, or in the payment of any
sinking or purchase fund or analogous obligation with respect to the
Securities of such series, or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Security by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of
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52
this Section shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Securityholder, or group of Securityholders, holding in
the aggregate more than lot in principal amount of the Outstanding Securities
of any series to which the suit relates, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on an Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on or after the Redemption Date or Repayment Date, as the case may
be).
SECTION 5.15. Waiver of Stay or Extension Laws. The Company
and each Guarantor covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company and each Guarantor (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default with respect to any series of
Securities:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture with
respect to the Securities of such series, and no implied covenants or
obligations shall be read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on its part, the Trustee
may, with respect to Securities of such series, conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be
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53
under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to any series
of Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount
of the Outstanding Securities of any series relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities
of such series; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions
of this Section.
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SECTION 6.02. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to Securities of any series,
the Trustee shall transmit by mail to all Securityholders of such series, as
their names and addresses appear in the Security Register, notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any Security of
such series or in the payment of any sinking or purchase fund installment or
analogous obligation with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Securityholders of such series; and
provided, further, that in the case of any default of the character specified in
Section 5.01(5) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 6.03. Certain Rights of Trustee. Except as otherwise
provided in Section 6.01:
(a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document (whether
an original or facsimile thereof) believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
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55
prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its own
selection and the advice of such counsel or an Opinion of Counsel
shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Securityholders pursuant to this
Indenture, unless such Securityholders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) the Trustee shall not be charged with knowledge of any
default (as defined in Section 6.02) or Event of Default with respect
to the Securities of any series for which it is acting as Trustee
unless either (1) a Responsible Officer of the Trustee assigned to
the Corporate Trust Department of the Trustee (or any successor
division or department of the Trustee) shall have actual knowledge of
such default or Event of Default or (2) written notice of such
default or Event of Default shall have been given to the Trustee by
the Company or any other obligor on such Securities or by any Holder
of such Securities; and
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(i) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith, without negligence or wilful
misconduct, and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any
Authenticating Agent, any Paying Agent, the Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 6.08 and 6.13, may
otherwise deal with the Company or any Guarantor with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 6.06. Money Held in Trust. Subject to the provisions
of Section 10.03 hereof, all moneys in any currency or currency received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company
agrees:
(1) to pay to the Trustee from time to time such
compensation as agreed upon from time to time in writing for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any
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provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to fully indemnify the Trustee and any predecessor
Trustee for, and to hold it harmless against, any and all loss,
liability, claim, damage or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the
Company under this Section the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (and premium,
if any) or interest on particular Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(6) or (7), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any bankruptcy law.
The Company's obligations under this Section 6.07 and any
lien arising hereunder shall survive the resignation or removal of any
Trustee, the discharge of the Company's obligations pursuant to Article IV of
this Indenture and/or the termination of this Indenture.
SECTION 6.08. Disqualification; Conflicting Interests. The
Trustee for the Securities of any series issued hereunder shall be subject to
the provisions of Section 310(b) of the Trust Indenture Act during the period of
time provided for therein. In determining whether the Trustee has a conflicting
interest as defined in Section 310(b) of the Trust Indenture Act with respect to
the Securities of any series, there shall be excluded this Indenture with
respect to Securities of any particular series of Securities other than that
series. Nothing herein shall prevent the Trustee from filing with the Commission
the application referred to in the second to last paragraph of Section 310(b) of
the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee
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hereunder with respect to each series of Securities, which shall be either:
(i) a corporation organized and doing business under the
laws of the United States of America or of any State, authorized
under such laws to exercise corporate trust powers and subject to
supervision or examination by Federal or State authority, or
(ii) a corporation or other Person organized and doing
business under the laws of a foreign government that is permitted to
act as Trustee pursuant to a rule, regulation or order of the
Commission, authorized under such laws to exercise corporate trust
powers, and subject to supervision or examination by authority of
such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to
United States institutional trustees;
in either case having a combined capital and surplus of at least $50,000,000.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Person directly or indirectly controlling,
controlled by, or under common control with the Company shall serve as trustee
for the Securities of any series issued hereunder. If at any time the Trustee
with respect to any series of Securities shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect specified in Section 6.10.
SECTION 6.10. Resignation and Removal. (a) No resignation or
removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 6.11.
(b) The Trustee may resign with respect to any series of
Securities at any time by giving written notice thereof to the Company.
(c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the outstanding
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Securities of that series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act pursuant to Section 6.08 with respect to any
series of Securities after written request therefor by the Company or
by any Securityholder who has been a bona fide Holder of a Security
of that series for at least six months, unless the Trustee's duty to
resign is stayed in accordance with the provisions of Section 310(b)
of the Trust Indenture Act, or
(2) the Trustee shall cease to be eligible under Section
6.09 with respect to any series of Securities and shall fail to
resign after written request therefor by the Company or by any such
Securityholder, or
(3) the Trustee shall become incapable of acting with
respect to any series of Securities, or
(4) the Trustee shall be adjudged a bankrupt or insolvent or
a receiver of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (4), with
respect to all series, or (ii) subject to Section 5.14, any Securityholder who
has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee with respect to the series, or, in the case
of Clause (4), with respect to all series.
(e) If the Trustee shall resign, be removed or become
incapable of acting with respect to any series of Securities, or if a vacancy
shall occur in the office of the Trustee with respect to any series of
Securities for any cause, the Company, by Board Resolution, shall promptly
appoint a successor Trustee for that series of Securities. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after such resignation, removal or incapacity, the Trustee may
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petition at the expense of the Company any court of competent jurisdiction for
the appointment of a successor Trustee. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy, a
successor Trustee with respect to such series of Securities shall be appointed
by Act of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment, become the successor Trustee with respect to such series and
supersede the successor Trustee appointed by the Company with respect to such
series. If no successor Trustee with respect to such series shall have been so
appointed by the Company or the Securityholders of such series and accepted
appointment in the manner hereinafter provided, subject to Section 5.14, any
Securityholder who has been a bona fide Holder of a Security of that series
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of
a successor Trustee with respect to such series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to any series and each appointment of
a successor Trustee with respect to any series by mailing written notice of
such event by first-class mail, postage prepaid, to the Holders of Securities
of that series as their names and addresses appear in the Security Register.
Each notice shall include the name of the successor Trustee and the address of
its principal Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the predecessor Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the predecessor Trustee
shall become effective with respect to any series as to which it is resigning or
being removed as Trustee, and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the predecessor Trustee with respect to any such series; but, on
request of the Company or the successor Trustee, such predecessor Trustee shall,
upon payment of its reasonable charges, if any, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the predecessor Trustee, and shall duly assign, transfer and deliver
to such successor Trustee all property and money held by such predecessor
Trustee hereunder with respect to
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all or any such series, subject nevertheless to its lien, if any, provided for
in Section 6.07. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the predecessor Trustee and each successor Trustee with respect to
the Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the predecessor Trustee with respect to the Securities of any series
as to which the predecessor Trustee is not being succeeded shall continue to
be vested in the predecessor Trustee, and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be Trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee.
No successor Trustee with respect to any series of
Securities shall accept its appointment unless at the time of such acceptance
such successor Trustee shall be qualified and eligible with respect to that
series under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
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SECTION 6.13. Preferential Collection of Claims Against
Company. (a) Subject to Subsection (b) of this Section, if the Trustee shall be
or shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in
Subsection (c) of this Section):
(1) an amount equal to any and all reduction in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such three-month period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this Subsection, or from the
exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or against
the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the
beginning of such three-month period, or an amount equal to the
proceeds of any such property, if disposed of, subject, however, to
the rights, if any, of the Company and its other creditors in such
property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Company) who
is liable thereon, and (ii) the proceeds of the bona fide sale of any
such claim by the Trustee to a third Person, and (iii) distributions
made in cash, securities or other property in respect of claims filed
against the Company in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so held
prior to the beginning of such three-month period;
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(C) to realize, for its own account, but only to the extent
of the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three-month period and such property was received
as security therefor simultaneously with the creation thereof, and if
the Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to
believe that a default as defined in Subsection (c) of this Section
would occur within three months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C) or against the release of any property held as security
for such claim as provided in paragraph (B) or (C), as the case may
be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three-month period for property held
as security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Securityholders and the holders of other
indenture securities in such manner that the Trustee, the Securityholders and
the holders of other indenture securities realize, as a result of payments
from such special account and payments of dividends on claims filed against
the Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law, the same
percentage of their respective claims, figured before crediting to the claim
of the Trustee anything on account of the receipt by it from the Company of
the funds and property in such special account and before crediting to the
respective claims of the Trustee and the Securityholders and the holders of
other indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law, but after crediting
thereon receipts on account of the indebtedness represented by their
respective claims from all sources other than from
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such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such distribution is
made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustee and
the Securityholders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held
in such special account and proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the distributions
to be made to the Trustee and the Securityholders and the holders of other
indenture securities with respect to their respective claims, in which extent
it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for
any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to
apply the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the
beginning of such three-month period shall be subject to the provisions of
this Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such
three-month period, it shall be subject to the provisions of this Subsection
if and only if the following conditions exist:
(i) the receipt of property or reduction of claim, which
would have given rise to the obligation to account, if such Trustee
had continued as Trustee, occurred after the beginning of such
three-month period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
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65
(b) There shall be excluded from the operation of Subsection
(a) of this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction, or by this Indenture, for the
purpose of preserving any property which shall at any time be subject
to the lien of this Indenture or of discharging tax liens or other
prior liens or encumbrances thereon, if notice of such advances and
of the circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent,
registrar, custodian, paying agent, fiscal agent or depository, or
other similar capacity;
(4) an indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of goods
or securities sold in a cash transaction as defined in Subsection (c)
of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable.
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66
(2) The term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section, and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account.
(3) The term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks or bankers and payable upon
demand.
(4) The term "self-liquidating paper" means any draft, bill
of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company for the purpose of financing
the purchase, processing, manufacturing, shipment, storage or sale of
goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares
or merchandise or the receivables or proceeds arising from the sale
of the goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with
the Company arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the
Securities.
SECTION 6.14. Appointment of Authenticating Agent. At any time
when any of the Securities remain Outstanding, the Trustee, with the approval of
the Company, may appoint an Authenticating Agent or Agents with respect to one
or more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon original issuance,
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.06, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of
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67
the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as an Authenticating Agent, having a combined capital
and surplus of not less than $50,000,000 and, if other than the Company
itself, subject to supervision or examination by Federal or State authority.
If such Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and, if other than the Company, to the
Company. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent and, if
other than the Company, to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee, with the approval of the Company, may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, as their names and addresses
appear in the Security
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68
Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 6.07.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This Security, together with any Guarantees referred to
herein, is one of the Securities described in the within-mentioned Indenture.
Dated:
---------------------------
The Bank of New York,
---------------------------------
As Trustee
By
------------------------------
Authorized Signatory
SECTION 6.15. Trustee's Application for Instructions from the
Company. Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
ten Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
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69
ARTICLE VII
Securityholders' Lists and Reports by
Trustee and Company
SECTION 7.01. Company To Furnish Trustee Names and Addresses
of Securityholders. The Company will furnish or cause to be furnished to the
Trustee:
(1) semi-annually, not more than 15 days after December 15
and June 15 in each year in such form as the Trustee may reasonably
require, a list of the names and addresses of the Holders of
Securities of each series as of such December 15 and June 15, as
applicable, and
(2) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a series, no such list need be furnished with
respect to such series of Securities.
SECTION 7.02. Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Securities received by
the Trustee in its capacity as Security Registrar, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 7.01 upon receipt of a
new list so furnished.
(b) If three or more Holders of Securities of any series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security of such series for a period of at least six months preceding the date
of such application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the
Holders of all Securities with respect to their rights under this Indenture or
under such Securities and is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the
Trustee shall,
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within five Business Days after the receipt of such application, at its
election, either:
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section
7.02(a), or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or all Securities, as the case
may be, whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 7.02(a), and as
to the approximate cost of mailing to such Securityholders the form
of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of
such applicants, mail to each Holder of a Security of such series or to all
Securityholders, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with Section
7.02(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless, within five days after such tender,
the Trustee shall mail to such applicants and file with the Commission,
together with a copy of the material to be mailed, a written statement to the
effect that, in the opinion of the Trustee, such mailing would be contrary to
the best interests of the Holders of Securities of such series or all
Securityholders, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more
of such objections, the Commission shall find, after notice and opportunity
for hearing, that all the objections so sustained have been met and shall
enter an order so declaring, the Trustee shall mail copies of such material to
all Securityholders of such series or all Securityholders, as the case may be,
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or duty
to such applicants respecting their application.
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71
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with Section 7.02(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section
7.02(b).
SECTION 7.03. Reports by Trustee. (a) Within 60 days after
December 15 of each year commencing with the first December 15 after the
issuance of Securities, the Trustee shall transmit by mail, at the Company's
expense, to all Holders as their names and addresses appear in the Security
Register, as provided in Trust Indenture Act 313(c), a brief report dated as of
December 15 in accordance with and with respect to the matters required by Trust
Indenture Act Section 313(a).
(b) The Trustee shall transmit by mail, at the Company's
expense, to all Holders as their names and addresses appear in the Security
Register, as provided in Trust Indenture Act 313(c), a brief report in
accordance with and with respect to the matters required by Trust Indenture
Act Section 313(b).
(c) A copy of each such report shall, at the time of such
transmission to Holders, be furnished to the Company and, in accordance with
Trust Indenture Act Section 313(d), be filed by the Trustee with each stock
exchange upon which the Securities are listed, and also with the Commission.
SECTION 7.04. Reports by Company. The Company shall file with
the Trustee, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission. The Company also shall comply with the
other provisions of Trust Indenture Act Section 314(a). In addition, if the
Company is not required by Section 13 or 15(d) of the Securities Exchange Act of
1934 to file reports with the Commission, so long as any Securities remain
outstanding, the Company shall cause quarterly reports (containing unaudited
financial statements) for the first three quarters of each fiscal year
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72
and annual reports (containing audited financial statements and an opinion
thereon by the Company's independent certified public accountants) for each
fiscal year, in each case that it would be required to file under Section 13
of the Securities Exchange Act of 1934 if it had a class of debt securities
listed on a national securities exchange, to be mailed to the Holders at their
addresses appearing in the Security Register within 15 days of when such
reports would have been required to be filed under Section 13 of the
Securities Exchange Act of 1934, except that if the Company has obtained
approval of the Commission to file less information than otherwise required by
Section 13 or 15(d) of the Securities Exchange Act of 1934 or to have its
filing requirements under such Sections be satisfied by filings made with the
Commission by another entity, the Company shall instead cause such information
as is filed with the Commission by the Company or with respect to the Company
to be mailed to the Holders in the same manner and time period described in
this sentence. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 7.05. Tax Reporting. The Company shall provide to the
Trustee on a timely basis such information as the Trustee requires to enable the
Trustee to prepare and file any form required to be submitted by the Company
with the Internal Revenue Service and the Holders relating to original issue
discount, including, without limitation, Form 1099-OID or any successor form.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. The Company May Consolidate, Etc., Only on
Certain Terms. The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease all or substantially all of its properties
and assets to any Person unless:
(1) the Company shall be the continuing Person or, if the
Company shall consolidate with or merge into another Person or
convey, transfer or lease all or substantially all of its properties
and assets to any
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73
Person, the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or
transfer, or which leases, all or substantially all of the properties
and assets of the Company shall be a corporation, partnership or
trust, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal (and
premium, if any) and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or a Subsidiary of the Company as a result of such transaction as
having been incurred by the Company or such Subsidiary at the time of
such transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing;
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Company or any of its Subsidiaries would become subject to a lien
that would not be permitted by this Indenture, the Company or such
successor Person, as the case may be, shall take or cause to be taken
such steps as shall be necessary effectively to secure the Securities
equally and ratably with (or prior to) all indebtedness secured
thereby in accordance with Section 10.08 of this Indenture; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article
and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 8.02. Successor Substituted. Upon any consolidation of
the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of all or substantially all of the properties and
assets of
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74
the Company in accordance with Section 8.01, the successor Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made, shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as
the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Securityholders. Without the consent of the Holders of any Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation or
Person to the Company or any Guarantor, and the assumption by any
such successor of the respective covenants of the Company or any
Guarantor herein and in the Securities contained, including, but not
limited to, any such succession and assumption occurring upon a
conversion by the Company from a partnership to a corporation; or
(2) to add to the covenants of the Company or any Guarantor,
or to surrender any right or power herein conferred upon the Company
or any Guarantor, for the benefit of the Holders of the Securities of
any or all series (and if such covenants or the surrender of such
right or power are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
or such surrenders are expressly being made solely for the benefit of
one or more specified series); or
(3) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
pursuant to this clause (3) shall not
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75
adversely affect the interests of the Holders of Securities of any
series in any material respect; or
(4) to add to this Indenture such provisions as may be
expressly permitted by the TIA, excluding, however, the provisions
referred to in Section 316(a)(2) of the TIA as in effect at the date
as of which this instrument was executed or any corresponding
provision in any similar federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in
Article II and to provide for the issuance of any series of
Securities as provided in Article III and to set forth the terms
thereof, and/or to add to the rights of the Holders of the Securities
of any series; or
(6) to evidence and provide for the acceptance of
appointment by another corporation as a successor Trustee hereunder
with respect to one or more series of Securities and to add to or
change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to Section U6.11; or
(7) to add any additional Events of Default in respect of
the Securities of any or all series (and if such additional Events of
Default are to be in respect of less than all series of Securities,
stating that such Events of Default are expressly being included
solely for the benefit of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as
well as fully registered form; or
(9) to add new guarantors; or
(10) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities,
provided that any such addition, change or elimination (i) shall
neither (A) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit
of such provision nor (B) modify the rights of the Holder of any such
Security with respect to such provision or (ii) shall become
effective only when there is not such Security Outstanding; or
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76
(11) to secure the Securities of any series pursuant to
Section 10.08 or otherwise or to guarantee any series; or
(12) to evidence the succession of new obligors and the
extinguishment of the obligations of the Company and the Guarantors
pursuant to Section 11.04.
No supplemental indenture for the purposes identified in
Clauses (2), (3), (5) or (7) above may be entered into if to do so would
adversely affect the rights of the Holders of Outstanding Securities of any
series in any material respect.
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders. With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of all series affected by such
supplemental indenture or indentures (acting as one class), by Act of said
Holders delivered to the Company and the Trustee (in accordance with Section
1.04 hereof), the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of the Securities of each such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(1) change the Maturity of the principal of, or the Stated
Maturity of any premium on, or any installment of interest on, any
Security, or reduce the principal amount thereof or the interest or
any premium thereon, or change the method of computing the amount of
principal thereof or interest thereon on any date or change any Place
of Payment where, or the coin or currency in which, any Security or
any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after
the Maturity or the Stated Maturity, as the case may be, thereof (or,
in the case of redemption or repayment, on or after the Redemption
Date or the Repayment Date, as the case may be), or alter the
provisions of this Indenture so as to affect adversely the terms, if
any, of conversion of any Securities into other securities; or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent
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77
of whose Holders is required for any such supplemental indenture, or
the consent of whose Holders is required for any waiver of compliance
with certain provisions of this Indenture or certain defaults
hereunder and their consequences, provided for in this Indenture; or
(3) modify any of the provisions of this Section, Section
5.13 or Section 10.09, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby;
(4) impair or adversely affect the right of any Holder to
institute suit for the enforcement of any payment on, or with respect
to, the Securities of any series on or after the Stated Maturity of
such Securities (or in the case of redemption, on or after the
Redemption Date);
(5) amend or modify Section 12.01 of this Indenture in any
manner adverse to the rights of the Holders of the Outstanding
Securities of any series.
For purposes of this Section 9.02, if the Securities of any
series are issuable upon the exercise of warrants, each holder of an
unexercised and unexpired warrant with respect to such series shall be deemed
to be a Holder of Outstanding Securities of such series in the amount issuable
upon the exercise of such warrant. For such purposes, the ownership of any
such warrant shall be determined by the Company in a manner consistent with
customary commercial practices. The Trustee for such series shall be entitled
to rely on an Officers' Certificate as to the principal amount of Securities
of such series in respect of which consents shall have been executed by
holders of such warrants.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of Holders of Securities of any
other series.
It shall not be necessary for any Act of Securityholders
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
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78
SECTION 9.03. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby to the extent provided therein.
SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of TIA as then in effect.
SECTION 9.06. Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest.
With respect to each series of Securities, the Company will duly and punctually
pay the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture.
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79
SECTION 10.02. Maintenance of Office or Agency. The Company
will maintain an office or agency in each Place of Payment where Securities may
be presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served and where
any Securities with conversion privileges may be presented and surrendered for
conversion. The Company will give prompt written notice to the Trustee of the
location, and of any change in the location, of such office or agency. If at any
time the Company shall fail to maintain such office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Unless otherwise set forth in, or pursuant to, a Board
Resolution or Indenture supplemental hereto with respect to a series of
Securities, the Company hereby initially designates as the Place of Payment
for each series of Securities the Borough of Manhattan, the City and State of
New York, and initially appoints the Trustee at its Corporate Trust Office as
the Company's office or agency for each such purpose in such city.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 10.03. Money for Security Payments To Be Held in
Trust. If the Company shall at any time act as its own Paying Agent for any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on, any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its action or
failure to act.
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Whenever the Company shall have one or more Paying Agents
for any series of Securities, it will, on or prior to each due date of the
principal of (and premium, if any) or interest on, any Securities of such
series, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal (and premium, if any) or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the
Trustee for any series of Securities to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of principal of
(and premium, if any) or interest on Securities of such series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided; and
(2) at any time during the continuance of any default by the
Company (or any other obligor upon the Securities of such series) in
the making of any such payment of principal (and premium, if any) or
interest on the Securities of such series, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent in respect of each and every series of Securities as to
which it seeks to discharge this Indenture or, if for any other purpose, all
sums so held in trust by the Company in respect of all Securities, such sums
to be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any
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Security of any series and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall
be paid to the Company on Company Request, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Security shall
thereafter as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease. The Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 10.04. Statement as to Compliance. The Company and
each Guarantor will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company, a written statement signed by the principal
executive officer, principal financial officer or principal accounting officer
of the Company stating whether or not to the best knowledge of the signers
thereof the Company or such Guarantor is in default in the performance and
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company or such Guarantor shall be in default, specifying
all such defaults and the nature and status thereof of which they may have
knowledge.
SECTION 10.05. Legal Existence. Subject to Article VIII and
Section 11.04, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights (pursuant to
its charter, partnership certificate and agreement and any statute) and material
franchises (other than franchises relating to the ownership and operation of
cable television systems); provided, however, that the Company shall not be
required to preserve any such right or franchise if the Board of Directors or
general partners of such Person shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders. In
the event of a bankruptcy or dissolution of a Guarantor, the Company shall cause
another corporate entity to guarantee the portion of the Securities,
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if any, guaranteed by such Guarantor immediately prior to such bankruptcy or
dissolution.
SECTION 10.06. Maintenance of Properties. The Company will
cause all properties used or useful in the conduct of its business or the
business of any of its Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
of its Subsidiaries and not disadvantageous in any material respect to the
Holders.
SECTION 10.07. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all material taxes, assessments and governmental charges
levied or imposed upon the Company or any of its Subsidiaries or upon the
income, profits or property of the Company or any such Subsidiaries, and (2) all
material lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Company or any such Subsidiaries;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith and, with
respect to taxes and assessments, by appropriate proceedings.
SECTION 10.08. Limitation on Liens. Neither the Company nor
any Material Subsidiary of the Company shall incur, create, issue, assume,
guarantee or otherwise become liable for any indebtedness for money borrowed
that is secured by a lien on any asset now owned or hereafter acquired by it
unless the Company makes or causes the Securities also to be secured by such
lien equally and ratably with (or prior to) the other indebtedness thereby
secured so long as such other indebtedness is secured. If the Company or any of
its Subsidiaries shall be required to secure the Guarantees or any Securities
pursuant to this Section 10.08, (i) the Company will promptly deliver to the
Trustee an Officers' Certificate stating that this covenant has been complied
with and (ii) the Trustee is hereby
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authorized to enter into an indenture supplemental hereto and to take such
action, if any, as it may deem advisable to enable it to enforce the rights of
the Holders of the Securities so secured. The foregoing restriction does not
apply to the following:
(i) liens existing as of the date this Indenture;
(ii) liens created by Subsidiaries of the Company to secure
indebtedness of such Subsidiaries to the Company or to one or more
other Subsidiaries of the Company;
(iii) liens affecting property of a Person existing at the
time it becomes a Subsidiary of the Company or at the time it merges
into or consolidates with the Company or a Subsidiary of the Company
or at the time of a sale, lease or other disposition of all or
substantially all of the properties of such Person to the Company or
its Subsidiaries; provided that such liens do not extend to or cover
any property or assets of the Company or any Subsidiary of the
Company other than the property or assets acquired in such
transaction and any improvements on such property or assets;
(iv) liens on property existing at the time of its
acquisition or incurred to secure payment of all or a part of its
purchase price or to secure indebtedness incurred prior to, at the
time of, or within one year after its acquisition for the purpose of
financing all or part of its purchase price; provided that in each
case such liens shall not extend to or cover any property or assets
of the Company or any Subsidiary of the Company other than the
property or assets acquired and any improvements on such property or
assets;
(v) liens on 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; provided that such
liens do not extend to or cover any property or assets of the Company
or any Subsidiary of the Company other than the property or assets
improved or constructed and any improvements or construction thereon;
(vi) liens consisting of or relating to the sale, transfer
or financing of motion pictures, video and television programs, sound
recordings, books or rights with respect thereto to or with so-called
tax shelter
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groups or other third-party investors in connection with the
financing of such motion pictures, video and television programming,
sound recordings or books in the ordinary course of business and the
granting to the Company or any of its Subsidiaries of rights to
distribute such motion pictures, video and television programming,
sound recordings or books; provided, however, that no such lien shall
attach to any asset or right of the Company or its Subsidiaries
(other than 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 and other than equity
interests of any Subsidiary of the Company substantially all of the
assets of which consist of such motion pictures, video and television
programming, sound recordings, books or rights);
(vii) liens on shares of stock, indebtedness or
other securities of a Person that is not a Subsidiary
of the Company;
(viii) liens on satellite transponders and all property
rights therein and the products, revenues and proceeds therefrom
which secure obligations incurred in connection with the acquisition,
utilization or operation of such satellite transponders or the
refinancing of any such obligations;
(ix) liens on capital leases entered into after the date of
the Indenture provided that such liens extend only to the property or
assets that are the subject of such capital leases;
(x) other liens arising in connection with indebtedness for
money borrowed of the Company and its Subsidiaries (other than
indebtedness of the Company or its Subsidiaries under a senior credit
facility) in an aggregate principal amount for the Company and its
Subsidiaries not exceeding (at the time such lien is issued, created
or assumed) the greater of (A) 10% of the Consolidated Net Worth of
the Company and (B) $500 million; and
(xi) any extensions, renewal or replacement of any lien
referred to in the foregoing clauses (i) through (x) inclusive, or of
any indebtedness secured thereby; provided that the principal amount
of indebtedness secured thereby does not exceed the principal amount
of indebtedness so secured at the time
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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 is limited to all or part of
substantially the same property which secured the lien extended,
renewed or replaced (plus improvements on such property).
SECTION 10.09. Waiver of Certain Covenants. The Company may
omit in respect of any series of Securities, in any particular instance, to
comply with any covenant or condition set forth in Section 10.08 or set forth in
a Board Resolution or supplemental indenture with respect to the Securities of
such series, unless otherwise specified in such Board Resolution or supplemental
indenture, if before or after the time for such compliance the Holders of not
less than a majority in principal amount of the Outstanding Securities of all
series affected by such waiver (voting as one class) shall, by Act of such
Securityholders delivered to the Company and the Trustee (in accordance with
Section 1.04 hereof), either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect. Nothing in this Section 10.09
shall permit the waiver of compliance with any covenant or condition set forth
in such Board Resolution or supplemental indenture which, if in the form of an
indenture supplemental hereto, would not be permitted by Section 9.02 without
the consent of the Holder of each Outstanding Security affected thereby.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Applicability of Article. The Company may
reserve the right to redeem and pay before Stated Maturity all or any part of
the Securities of any series, either by optional redemption, sinking or purchase
fund or analogous obligation or otherwise, by provision therefor in the form of
Security for such series established and approved pursuant to Section 2.02 and
on such terms as are specified in such form or in the indenture supplemental
hereto with respect to Securities of such series as provided in Section 3.01.
Redemption of Securities of any series shall be made in accordance with the
terms of such
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Securities and, to the extent that this Article does not conflict with such
terms, the succeeding Sections of this Article. Notwithstanding anything to
the contrary in this Indenture, except in the case of redemption pursuant to a
sinking fund, the Trustee shall not make any payment in connection with the
redemption of Securities until the close of business on the Redemption Date.
SECTION 11.02. Election To Redeem; Notice to Trustee. The
election of the Company to redeem any Securities redeemable at the election of
the Company shall be evidenced by, or pursuant to authority granted by, a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Securities of any series, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities of such series and the Tranche (as defined
in Section 11.03) to be redeemed.
In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction or condition.
SECTION 11.03. Selection by Trustee of Securities To Be
Redeemed. If less than all the Securities of like tenor and terms of any series
(a "Tranche") are to be redeemed, the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such Tranche not previously called for
redemption, by such method as the Trustee customarily utilizes and which may
include provision for the selection for redemption of portions of the principal
of Securities of such Tranche of a denomination larger than the minimum
authorized denomination for Securities of that series. Unless otherwise provided
in the terms of a particular series of Securities, the portions of the principal
of Securities so selected for partial redemption shall be equal to the minimum
authorized denomination of the Securities of such series, or an integral
multiple thereof, and the principal amount which remains outstanding shall not
be less than the minimum authorized denomination for Securities of such series.
If less than all the Securities of unlike tenor and terms of a
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series are to be redeemed, the particular Tranche of Securities to be redeemed
shall be selected by the Company.
If any convertible Security selected for partial redemption
is converted in part before the termination of the conversion right with
respect to the portion of the Security so selected, the converted portion of
such Security shall be deemed (so far as may be) to be the portion selected
for redemption.
Upon any redemption of fewer than all the Securities of a
series or Tranche, the Company and the Trustee may treat as Outstanding any
Securities surrendered for conversion during the period of fifteen days next
preceding the mailing of a notice of redemption, and need not treat as
Outstanding any Security authenticated and delivered during such period in
exchange for the unconverted portion of any Security converted in part during
such period.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Security
selected for partial redemption, the principal amount thereof to be redeemed.
Securities shall be excluded from eligibility for selection
for redemption if they are identified by registration and certificate number
in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 60 days prior to the Redemption Date as
being owned of record and beneficially by, and not pledged or hypothecated by
either, (a) the Company or (b) an entity specifically identified in such
written statement as being an Affiliate of the Company.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal of such Security which has been or is to
be redeemed.
SECTION 11.04. Optional Redemption or Assumption If the
Company dissolves (other than in connection with (a) the reconstitution of the
Company as a corporation, (b) the occurrence of a transaction that is permitted
by Section 8.01 of this Indenture or (c) a case or proceeding under any
applicable federal or state bankruptcy, insolvency,
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reorganization or similar law), it shall, at its option either:
(1) redeem all of the Outstanding Securities concurrently
with or prior to the effectiveness of such dissolution, with notice of such
redemption being given, and such redemption being effected, in the manner
specified in this Article 11, at a Redemption Price equal to the greater of
(i) 100% of the principal amount of the Securities to be redeemed, plus
accrued interest thereon to (but excluding) the Redemption Date, and (ii) the
Make-Whole Amount (as defined herein) with respect to such Securities; or
(2) provided that immediately after such transaction no
default or Event or Default would exist and be continuing, concurrently with or
prior to the effectiveness of such dissolution (i) cause an entity that controls
or is under common control with the Company immediately prior to such
dissolution (which shall be a corporation, partnership or trust, organized and
validly existing under the laws of the United States of America, any state or
the District of Columbia) (an "Eligible Affiliate") to expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of,
premium, if any, and interest on all of the Securities and the performance or
observance of every covenant of the Indenture on the part of the Company to be
performed or observed; and (ii) cause an Eligible Affiliate that has outstanding
indebtedness that was sold under the Securities Act ("Public Debt") and files
reports under Section 13(a) or 15(d) of the Securities Act (a "Public Issuer")
to provide, by way of assumption or guarantee (including, if appropriate, the
guarantees of other Eligible Affiliates), substantially the same credit support
as is provided for the Public Debt of such Public Issuer. If the Company
dissolves without having elected either option (1) or option (2) in this Section
11.04, the Company shall be deemed to have elected option (1). If the Company
has its obligations under the Securities assumed by an Eligible Affiliate
pursuant to this Section 11.04, the Company, at its option, may provide for
termination of the Guarantees provided by the General Partners pursuant to
Article XII.
SECTION 11.05. Notice of Redemption. Notice of redemption
shall be given by first-class mail, postage prepaid, mailed not less than 30 (or
15 if so provided in the Board Resolution establishing the relevant series) nor
more than 60 days prior to the Redemption Date, to each holder of Securities to
be redeemed, at his address appearing in the Security Register.
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All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the respective principal amounts) of the Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security, and that interest, if
any, thereon shall cease to accrue from and after said date;
(5) the place where such Securities are to be surrendered
for payment of the Redemption Price, which shall be the office or
agency of the Company in the Place of Payment;
(6) that the redemption is on account of a sinking or
purchase fund, or other analogous obligation, if that be the case;
and
(7) if such Securities are convertible into securities, the
conversion price and the date on which the right to convert such
Securities into securities will terminate.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. In the
case of redemption of Securities pursuant to Section 11.04 of this Indenture,
notice of redemption provided for in this Section 11.05 may be revoked by the
Company at any time prior to such redemption, whereupon such previously given
notice shall be of no force or effect. The Company shall give the Trustee
written notice at least two days prior to any such revocation.
SECTION 11.06. Deposit of Redemption Price. On or prior to any
Redemption Date and subject to Section 11.10, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.03) an amount of
money sufficient to pay the Redemption Price of all the Securities which are to
be redeemed on that date. If any Security to be redeemed is converted into
securities, any money so deposited with the
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Trustee or a Paying Agent shall be paid to the Company upon Company Request or,
if then so segregated and held in trust by the Company, shall be discharged from
such trust.
SECTION 11.07. Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Securities so to be redeemed
shall, subject to Section 11.10, on the Redemption Date, become due and payable
at the Redemption Price therein specified and from and after such date (unless
the Company shall default in the payment of the Redemption Price) such
Securities shall cease to bear interest and any rights to convert such
Securities shall terminate. Upon surrender of such Securities for redemption in
accordance with the notice and subject to Section 11.10, such Securities shall
be paid by the Company at the Redemption Price. Unless otherwise provided with
respect to such Securities pursuant to Section 3.01, installments of interest
the Stated Maturity of which is on or prior to the Redemption Date shall be
payable to the Holders of such Securities registered as such on the relevant
Regular Record Dates according to their terms and the provisions of Section
3.07.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security, or as
otherwise provided in such Security.
SECTION 11.08. Securities Redeemed in Part. Any Security which
is to be redeemed only in part shall be surrendered at the office or agency of
the Company in the Place of Payment with respect to that series (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and Stated Maturity and of like tenor and terms, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
of the Security so surrendered.
SECTION 11.09. Provisions with Respect to Any Sinking Funds.
Unless the form or terms of any series of Securities shall provide otherwise, in
lieu of making all or any part of any mandatory sinking fund payment with
respect to such series of Securities in cash, the Company may at its option (1)
deliver to the Trustee for cancelation any
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Securities of such series theretofore acquired by the Company or converted by
the Holder thereof into other securities, or (2) receive credit for any
Securities of such series (not previously so credited) acquired by the Company
(including by way of optional redemption (pursuant to the sinking fund or
otherwise but not by way of mandatory sinking fund redemption) or converted by
the Holder thereof into other securities and theretofore delivered to the
Trustee for cancelation, and if it does so then (i) Securities so delivered or
credited shall be credited at the applicable sinking fund Redemption Price with
respect to Securities of such series, and (ii) on or before the 60th day next
preceding each sinking fund Redemption Date with respect to such series of
Securities, the Company will deliver to the Trustee (A) an Officers' Certificate
specifying the portions of such sinking fund payment to be satisfied by payment
of cash and by delivery or credit of Securities of such series acquired by the
Company or converted by the Holder thereof, and (B) such Securities, to the
extent not previously surrendered. Such Officers' Certificate shall also state
the basis for such credit and that the Securities for which the Company elects
to receive credit have not been previously so credited and were not acquired by
the Company through operation of the mandatory sinking fund, if any, provided
with respect to such Securities and shall also state that no Event of Default
with respect to Securities of such series has occurred and is continuing. All
Securities so delivered to the Trustee shall be canceled by the Trustee and no
Securities shall be authenticated in lieu thereof.
If the sinking fund payment or payments (mandatory or
optional) with respect to any series of Securities made in cash plus any
unused balance of any preceding sinking fund payments with respect to
Securities of such series made in cash shall exceed $50,000 (or a lesser sum
if the Company shall so request), unless otherwise provided by the terms of
such series of Securities, that cash shall be applied by the Trustee on the
sinking fund Redemption Date with respect to Securities of such series next
following the date of such payment to the redemption of Securities of such
series at the applicable sinking fund Redemption Price with respect to
Securities of such series, together with accrued interest, if any, to the date
fixed for redemption, with the effect provided in Section 11.07. The Trustee
shall select, in the manner provided in Section 11.03, for redemption on such
sinking fund Redemption Date a sufficient principal amount of Securities of
such series to utilize that cash and shall thereupon cause notice of
redemption of the Securities of such series for the sinking fund to be given
in the manner provided in Section 11.05 (and with the effect provided in
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Section 11.07) for the redemption of Securities in part at the option of the
Company. Any sinking fund moneys not so applied or allocated by the Trustee to
the redemption of Securities of such series shall be added to the next cash
sinking fund payment with respect to Securities of such series received by the
Trustee and, together with such payment, shall be applied in accordance with
the provisions of this Section 11.09. Any and all sinking fund moneys with
respect to Securities of any series held by the Trustee at the Maturity of
Securities of such series, and not held for the payment or redemption of
particular Securities of such series, shall be applied by the Trustee,
together with other moneys, if necessary, to be deposited sufficient for the
purpose, to the payment of the principal of the Securities of such series at
Maturity.
On or before each sinking fund Redemption Date provided with
respect to Securities of any series, the Company shall pay to the Trustee in
cash a sum equal to all accrued interest, if any, to the date fixed for
redemption on Securities to be redeemed on such sinking fund Redemption Date
pursuant to this Section 11.09.
ARTICLE XII
Guarantees
SECTION 12.01. Guarantees. (a) Each of the General Partners
(each, a "Guarantor") and each of their successors and assigns, hereby fully and
unconditionally guarantees (each, a "Guarantee") to each Holder of the
Securities upon which this Guarantee is referred to, and to the Trustee on
behalf of each such Holder, the due and punctual payment of the percentage (its
"Guaranteed Percentage") of the principal of (and premium, if any, on) and
interest on such Security set forth on Exhibit A to this Indenture (as such
Exhibit A may be amended as provided in this Indenture) and incorporated by
reference herein, when and as the same shall become due and payable, whether at
Stated Maturity, upon redemption or repayment, upon declaration of acceleration
or otherwise, according to the terms of the Securities and of this Indenture. In
case of the failure of the Company or any successor thereto punctually to pay
any such principal, premium or interest, each of the General Partners, on the
basis of the percentages referred to above, hereby agrees to immediately cause
any such payment to be made punctually when and as the same shall become due and
payable, whether at Stated Maturity, upon redemption or repayment, upon
declaration of
<PAGE>
93
acceleration or otherwise, as if such payment were made by the Company.
(b) Each of the General Partners hereby agrees that as long
as this Section 12.01 is in effect with respect to it pursuant to this
Indenture, its obligations hereunder shall be unconditional and absolute,
irrespective of the identity of the Company, the validity, regularity or
enforceability of any such Security or this Indenture, the absence of any
action to enforce the same, the granting of any waiver or consent by the
Holder of any such Security with respect to any provisions thereof, the
recovery of any judgment against the Company or any action to enforce the
same, or any other circumstances which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each of the General Partners
hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding be brought first against the Company, protest, notice and
all demands whatsoever, and covenants that as long as this Section 12.01 is in
effect with respect to it pursuant to this Indenture, this Guarantee will not
be discharged except by complete payment of the payment and other obligations
contained in any such Security or in this Section 12.01.
(c) Each of the General Partners acknowledges and agrees for
the benefit of the Trustee and such Holders that the Trustee and such Holders
(in the case of an Event of Default under Sections 5.01(1) or (2)) may directly
and simultaneously proceed against such General Partner for the enforcement of
this Guarantee or against the Company. The obligations of each General Partner
hereunder are independent of the obligations of the Company under the Securities
and this Indenture, and a separate action or actions may be brought and
prosecuted against each General Partner hereunder whether or not (i) an action
or proceeding is brought against the Company or any other General Partner, (ii)
the Company or any other General Partner is joined in any such action or
proceeding against such General Partner or (iii) the Trustee or such Holders
have taken any action to collect or attempted to otherwise collect such
obligations from the Company or any other General Partner or any other Person
liable therefor.
(d) Anything in this Section 12.01 to the contrary
notwithstanding, the Guarantees are and shall be deemed to be Guarantees of
payment, and not Guarantees of collection.
<PAGE>
94
(e) If the Trustee or the Holder of any such Security is
required by any court or otherwise to return to the Company or any custodian,
receiver, liquidator, trustee, sequestrator or other similar official acting
in relation to the Company, any amount paid to the Trustee or such Holder in
respect of such Security, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each General Partner
further agrees, to the fullest extent that it may lawfully do so, that, as
between such General Partner, on the one hand, and such Holders and the
Trustee, on the other hand, the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article V for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition extant
under any applicable bankruptcy law preventing such acceleration in respect of
the obligations guaranteed hereby.
(f) Each General Partner hereby irrevocably waives any claim
or other rights which it may now or hereafter acquire against the Company that
arises from the existence, payment, performance or enforcement of each General
Partner's obligations under this Guarantee, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of any Holder
of any such Security or the Trustee on behalf of such Holder against the
Company or any collateral which any such Holder or the Trustee on behalf of
such Holder hereafter acquires, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any General Partner in violation of the preceding sentence at
any time prior to the payment in full of all obligations and all other amounts
payable hereunder, such amount shall be deemed to have been paid to such
General Partner for the benefit of, and held in trust for the benefit of, any
Holder of such Security and the Trustee on behalf of such Holder, and shall
forthwith be paid to the Trustee for the benefit of such Holder to be
credited and applied upon such guaranteed obligations, whether matured or
unmatured, in accordance with the terms of this Indenture. Each General
Partner acknowledges that the waiver set forth in this Section 12.01 is
knowingly made.
(g) No provision of this Section 12.01 or of this Indenture
shall alter or impair the Guarantee of each
<PAGE>
95
General Partner, which is absolute and unconditional, of the due and punctual
payment of the percentage of (as set forth in Exhibit A to this Indenture and
incorporated by reference herein, as such Exhibit A may be amended as provided
in this Indenture) the principal of (and premium, if any) and interest on the
Securities upon which this Guarantee is referred to.
(h) If the Company has its obligations under the Securities
assumed by an Eligible Affiliate pursuant to Section 11.04(2), the Guarantees
provided for in this Article 12 may terminate if so provided in a supplemental
indenture to this Indenture entered into in connection with the assumption of
the Securities pursuant to Section 11.04(2).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
TIME WARNER ENTERTAINMENT
COMPANY, L.P.,
by
Name:
Title:
Attest:
Name:
Title:
WARNER COMMUNICATIONS INC.,
by
Name:
Title:
Attest:
Name:
Title:
AMERICAN TELEVISION AND
COMMUNICATIONS CORPORATION,
by
Name:
Title:
Attest:
Name:
Title:
<PAGE>
THE BANK OF NEW YORK, as
Trustee
by
Name:
Title:
<PAGE>
EXHIBIT A
Percentage of principal of
(and premium, if any) and
interest on the Securities
General Partners guaranteed.
- ---------------- --------------------------
Warner Communications Inc. 59.27%
American Television and
Communications Corporation 40.73
-------
100.00%
<PAGE>
EXHIBIT 4.2
[FORM OF FACE OF SECURITY]
[INSERT IF GLOBAL SECURITY -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF [CEDE & CO.] OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO [CEDE & CO.] OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, [CEDE & CO.], HAS
AN INTEREST HEREIN. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
INDIVIDUAL SECURITIES REGISTERED IN THE NAMES OF PARTICIPANTS IN DTC, THIS
CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC OR BY A NOMINEE OF
DTC TO DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY.]
No. $
TIME WARNER ENTERTAINMENT COMPANY, L.P.,
[ ]% Senior [Note] [Debenture] Due [ ]
CUSIP:
Time Warner Entertainment Company, L.P., a limited
partnership duly organized and existing under the laws of the State of
Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to) promises to pay to [Cede &
Co.] or registered assigns, the principal sum of [ ] on [ ], at the office or
agency of the Company in the Borough of Manhattan, the City and State of New
York. This Security has the benefit of unconditional guarantees by Warner
Communications Inc., a Delaware corporation ("WCI"), and American Television
and Communications Corporation, a Delaware corporation ("ATC" and, together
with WCI, the "Guarantors"), as more fully described on the reverse hereof.
Interest Payment Dates:
Record Dates:
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
TIME WARNER ENTERTAINMENT COMPANY, L.P.
by
----------------------
[SEAL] Title: Executive Vice
President
Attest:
- -------------------------
Assistant Secretary
WARNER COMMUNICATIONS INC.,
as Guarantor,
by
----------------------
[SEAL] Title: Vice President
Attest:
- -------------------------
Assistant Secretary
AMERICAN TELEVISION AND
COMMUNICATIONS CORPORATION,
as Guarantor,
by
----------------------
[SEAL] Title: Vice President
Attest:
- -------------------------
Assistant Secretary
<PAGE>
2
This Security, together with any Guarantees referred to
herein, is one of the Securities described in the within-mentioned Indenture.
Dated:
The Bank of New York,
As Trustee
By
-------------------------------------
Authorized Signatory
<PAGE>
3
[FORM OF REVERSE SIDE OF SECURITIES]
TIME WARNER ENTERTAINMENT COMPANY, L.P.
[ ]% Senior [Note] [Debenture] Due [ ]
This Security (as defined below) is one of the duly
authorized issue of senior debentures, notes, bonds or other evidences of
indebtedness (hereinafter called the "Debt Securities") of the Company of the
series hereinafter specified, all issued or to be issued under and pursuant to
the Indenture (the "Indenture") among the Company, WCI, ATC, and The Bank of
New York, as Trustee (herein called the "Trustee"), 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, the Guarantors and the Holders of the Debt
Securities, and the terms upon which the Debt Securities are issued and may be
authenticated and delivered.
The Debt 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 Security is one of the series of Debt
Securities of the Company issued pursuant to the Indenture designated as the [
]% Senior [Notes] [Debentures] due [ ] (the "Securities"), limited in
aggregate principal amount to $[ ].
The Company promises to pay interest from [ ], on the
principal amount of this Security semiannually on [ ] and [ ] of each year
beginning [ ] 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. Interest shall be computed on the basis
of a 360-day year of twelve 30-day months.
[Each of the Guarantors fully and unconditionally guarantees
(each, a "Guarantee") to each Holder of the Securities and to the Trustee on
behalf of each such Holder, the due and punctual payment of the percentage
(its
<PAGE>
4
"Guaranteed Percentage") of the principal of (and premium, if any, on) and
interest on such Security set forth on Exhibit A to the Indenture (as such
Exhibit A may be amended as provided in the Indenture) and incorporated by
reference herein, when and as the same shall become due and payable, whether
at Stated Maturity, upon redemption or repayment, upon declaration of
acceleration or otherwise, according to the terms of the Indenture. The
Guarantees constitute guarantees of payment and not guarantees of collection.
Reference is hereby made to the further provisions of the Guarantees set forth
in the Indenture, which further provisions shall be incorporated herein by
reference for all purposes and shall have the same effect as if fully set
forth at this place.]
The interest so payable, and punctually paid or duly
provided for, on any [ ] or [ ] will, except as provided in the Indenture, be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the [ ] or [ ] next
preceding the interest payment date (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 Security (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 Securities 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 Security 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.
Initially, the Trustee will be the Paying Agent and
Registrar with respect to this Security. The Company reserves the right at any
time to vary or terminate the appointment of any Paying Agent or Registrar, to
appoint additional or other Paying Agents and other Registrars and to approve
any change in the office through which any Paying Agent or Registrar acts;
provided that there will at all times be a Paying Agent in The City of New
York.
<PAGE>
5
[The Securities of this series are not redeemable prior to
the stated maturity of the principal hereof and will not be subject to any
sinking fund.]
[The Company may, at its sole option, redeem at any time or
from time to time all or any part of the outstanding Securities at the
following redemption prices (expressed as percentages of principal amount),
together in each case with an amount equal to the accrued and unpaid interest
to the date fixed for redemption (hereinafter collectively referred to as the
"Redemption Price").
12-Month Percentage
Period of
Beginning on Principal
[ ] Amount]
[The Securities are also subject to redemption through the
operation of the sinking fund as herein and in the Indenture provided at
[100%] of the principal amount thereof together with accrued interest to the
date fixed for redemption (the sinking fund redemption price). Notice of
redemption of Securities for the sinking fund shall be given at least 30 and
not more than 60 days prior to the date fixed for such redemption as provided
in the Indenture.]
[As and for a sinking fund for the retirement of the
Securities and as long as any of the Securities remain outstanding and unpaid,
the Company shall pay to the Trustee in cash (subject to the right to deliver
certain Securities in credit therefor as provided in the Indenture), on or
before [ ] in each year from [ ] to and including [ ] an amount sufficient to
redeem $[ ] principal amount of the Securities (or such lesser amount equal to
the principal amount then outstanding at the sinking fund redemption price).]
[At its option the Company may pay into the sinking fund for
the retirement of Securities on or before [ ] in each year from [ ] to and
including [ ], in cash an amount sufficient to redeem an additional principal
amount of the Securities up to but not to exceed $[ ] principal amount of the
Securities at the sinking fund redemption price. To the extent that the right
to such optional sinking fund payment is not exercised in any year, it shall
not be cumulative or carried forward to any subsequent year.]
<PAGE>
6
[Notice of the redemption will be mailed to Holders of
Securities by first-class mail at least 30 and not more than 60 days prior to
the date fixed for redemption. If fewer than all of the Securities are to be
redeemed, the Trustee will select, not more than 60 days prior to the
redemption date, the particular Securities or portions thereof for redemption
from the outstanding Securities not previously called by such method as the
Trustee deems fair and appropriate.]
If the Company dissolves (other than in connection with (a)
the reconstitution of the Company as a corporation, (b) the occurrence of a
transaction that is permitted by Section 8.01 of the Indenture or (c) a case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or similar law), it shall, at its option, either (1) redeem all
of the Debt Securities or (2) cause an Eligible Affiliate (as defined in the
Indenture) to assume or guarantee the Debt Securities, in either case, on the
terms set forth in the Indenture.
If an Event of Default with respect to the Securities shall
occur and be continuing, the principal of all the Securities and all accrued
interest thereon may be declared due and payable in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the Company and the Trustee to enter into supplemental indentures to
the Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of modifying
in any manner the rights of the Holders of the Debt Securities of each series
under the Indenture with the consent of the Holders of not less than a
majority in principal amount of the Debt Securities at the time Outstanding of
all series to be affected thereby (acting as one class). The Indenture also
permits the Holders of a majority in principal amount of the Debt Securities
at the time Outstanding of each series on behalf of the Holders of all Debt
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 Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security 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 Security
or such other Securities.
<PAGE>
7
No reference herein to the Indenture and no provision of
this Security 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 Security at the place, rate and respective
times and in the coin or currency prescribed herein and in the Indenture.
As provided in the Indenture and subject to the satisfaction
of certain conditions therein set forth, including the deposit of certain
trust funds in trust, at the Company's option, either (i) the Company and the
Guarantors shall be deemed to have paid and discharged the entire indebtedness
represented by, and the obligations under, the Debt Securities of any series
and to have satisfied all the obligations (with certain exceptions) under the
Indenture relating to the Debt Securities and the Guarantees of such series or
(ii) the Company and the Guarantors shall cease to be under any obligation to
comply with any term, provision or condition of certain restrictive covenants
or provisions set forth in any additions or changes to or deletions from
covenants and Events of Default with respect to the Debt Securities and the
Guarantees of such series.
The Securities are issuable in registered form without
coupons, in denominations of $1,000 and integral multiples thereof. Securities
may be exchanged for a like aggregate principal amount of Securities 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
Security at the office or agency of the Company in the Borough of Manhattan,
The City of New York, a new Security or Securities 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 registration of
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 Security is
<PAGE>
8
registered as the owner hereof for all purposes, whether or not this Security
is overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Unless otherwise defined herein, all terms used in this
Security which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
THIS SECURITY SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Unless the certificate of authentication hereon has been
manually executed by or on behalf of the Trustee under the Indenture, this
Security shall not be entitled to any benefits under the Indenture, or be
valid or obligatory for any purpose.
The Company will furnish to any Holder upon written request
and without charge to the Holder a copy of the Indenture. Requests may be made
to Time Warner Entertainment Company, L.P., 75 Rockefeller Plaza, New York,
N.Y. 10019, Attention of Manager, Investor Relations.
<PAGE>
9
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- ------------------------------------------------
(Insert assignee's soc. sec. or tax ID no.)
- ------------------------------------------------------------
- ------------------------------------------------------------
- ------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
- ------------------------------------------------------------
Date: Your Signature:
-------------- ----------------------
- ------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Security)
<PAGE>
10
SIGNATURE GUARANTEE
Signature Guarantee by:
- ----------------------------------------
by:
------------------------------------
- ----------------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements will include membership or
participation in the Securities Transfer
Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may
be determined by the Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.)
<PAGE>
EXHIBIT 5
[Letterhead of]
CRAVATH, SWAINE & MOORE
[New York Office]
December 31, 1998
Time Warner Entertainment Company, L.P.
American Television and Communications Corporation
Warner Communications Inc.
Ladies and Gentlemen:
We have acted as counsel for Time Warner Entertainment
Company, L.P., a Delaware limited partnership (the "Issuer"), American
Television and Communications Corporation, a Delaware corporation ("ATC"), and
Warner Communications Inc., a Delaware corporation ("WCI" and, together with
ATC, the "Guarantors"), in connection with the Registration Statement on Form
S-3 (the "Registration Statement") being filed by the Issuer and the
Guarantors with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to (i) the debt securities of the Issuer (the "Debt Securities") and
(ii) the guarantees of the Debt Securities by the Guarantors (the
"Guarantees"). The Debt Securities will be issued under an Indenture (the
"Indenture"), among the Issuer, the Guarantors and The Bank of New York (the
"Trustee"), as Trustee, filed as Exhibit 4.1 to the Registration Statement.
In connection with the foregoing, we have examined originals,
or copies certified or otherwise identified to our satisfaction, of such
documents, corporate records and other instruments as we have deemed necessary
or appropriate for the purposes of this opinion, including (a) the Certificate
of Limited Partnership of the Issuer, as amended, (b) the Agreement of Limited
Partnership of the Issuer, as amended, (c) the Admission Agreement, dated as of
May 16, 1993, between the Issuer and U S West, as amended, (d), the Certificate
of Incorporation, as amended, and By-laws of ATC, (e) the Restated Certificate
of Incorporation, as amended, and By-laws, as amended, of WCI, (f) the
Indenture, (g) the form of the Debt Security and (h) the
<PAGE>
2
resolutions of the Managing General Partners of the Issuer and the resolutions
of the Board of Directors of each Guarantor authorizing the registration of
the Debt Securities and the Guarantee.
Based upon the foregoing and subject to the qualifications
hereinafter set forth, we are of opinion that:
1. Based solely on a certificate from the Secretary of State
of the State of Delaware, the Issuer is a limited partnership validly
existing and in good standing under the laws of the State of
Delaware.
2. Based solely on a certificate from the Secretary of State
of the State of Delaware, each Guarantor is a corporation validly
existing and in good standing under the laws of the State of
Delaware.
3. The Indenture has been duly authorized by the parties
thereto and the Indenture, when executed and delivered, and the Debt
Securities, when duly authorized, issued, authenticated and delivered
in accordance with the terms of the Indenture, and the Guarantees
related thereto, will constitute legal, valid and binding obligations
of the Issuer and the Guarantors, respectively, entitled to the
benefits of the Indenture and enforceable against the Issuer and the
Guarantors, respectively, in accordance with their respective terms.
The opinion set forth above in paragraph 3 is qualified to
the extent we have assumed the due authorization of the Indenture by the
Trustee.
Our opinion set forth above in paragraph 3 is subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally from
time to time in effect. The enforceability of the Issuer's and the Guarantor's
obligations is also subject to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and
fair dealing, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
We are aware that we are referred to under the heading
"Legal Opinions" in the prospectus forming a part of the Registration
Statement, and we hereby consent to such use of our name therein and the
filing of this opinion as Exhibit 5 to the Registration Statement. In giving
this
<PAGE>
3
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 Entertainment Company, L.P.
American Television and Communications Corporation
Warner Communications Inc.
75 Rockefeller Plaza
New York, NY 10019
399A
<PAGE>
EXHIBIT 12.1
TWE
RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------- ------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes and extraordinary
items....................................... $ 490 $ 547 $ 722 $ 280 $ 183 $201 $272
Interest expense............................... 418 358 490 475 571 563 573
Amortization of capitalized interest........... 11 32 48 36 33 25 19
Portion of rents representative of an interest
factor...................................... 52 52 72 68 58 47 39
Preferred stock dividend requirements of
majority-owned subsidiaries................. 15 14 19 -- -- -- --
Adjustment for partially-owned subsidiaries and
50%-owned companies......................... 243 238 323 219 175 24 22
Undistributed (earnings) losses of less than
50%-owned companies......................... 37 1 (13) 21 76 58 14
------ ------ ------ ------ ------ ---- ----
Total earnings............................ $1,266 $1,242 $1,661 $1,099 $1,096 $918 $939
------ ------ ------ ------ ------ ---- ----
------ ------ ------ ------ ------ ---- ----
Fixed Charges:
Interest expense............................... $ 418 $ 358 $ 490 $ 475 $ 571 $563 $573
Capitalized interest........................... 3 32 33 39 33 25 20
Portion of rents representative of an interest
factor...................................... 52 52 72 68 58 47 39
Preferred stock dividend requirements of
majority-owned subsidiaries................. 15 14 19 -- -- -- --
Adjustment for partially-owned subsidiaries and
50%-owned companies......................... 45 14 22 22 27 24 22
------ ------ ------ ------ ------ ---- ----
Total fixed charges....................... $ 533 $ 470 $ 636 $ 604 $ 689 $659 $654
------ ------ ------ ------ ------ ---- ----
------ ------ ------ ------ ------ ---- ----
Ratio of earnings to fixed charges............... 2.4x 2.6x 2.6x 1.8x 1.6x 1.4x 1.4x
------ ------ ------ ------ ------ ---- ----
------ ------ ------ ------ ------ ---- ----
</TABLE>
<PAGE>
EXHIBIT 12.2
WCI
RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------- ----------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes and
extraordinary items..................... $ 387 $ 423 $1,026 $ 445 $ 427 $ 305 $ 436
Interest expense........................... 14 17 23 34 88 222 86
Portion of rents representative of an
interest factor......................... 14 13 17 16 21 18 17
Adjustment for partially-owned subsidiaries
and 50%-owned companies................. 673 658 898 685 736 721 751
Undistributed (earnings) losses of less
than 50%-owned companies................ 5 6 (7) 13 29 (1) 11
------ ------ ------ ------ ------ ------ ------
Total earnings........................ $1,093 $1,117 $1,957 $1,193 $1,301 $1,265 $1,301
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
Fixed Charges:
Interest expense........................... $ 14 $ 17 $ 23 $ 34 $ 88 $ 222 $ 86
Portion of rents representative of an
interest factor......................... 14 13 17 16 21 18 17
Adjustment for partially-owned subsidiaries
and 50%-owned companies................. 466 435 589 574 662 639 641
------ ------ ------ ------ ------ ------ ------
Total fixed charges................... $ 494 $ 465 $ 629 $ 624 $ 771 $ 879 $ 744
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
Ratio of earnings to fixed charges........... 2.2x 2.4x 3.1x 1.9x 1.7x 1.4x 1.7x
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Time
Warner Entertainment Company, L.P.'s ("TWE") Registration Statement on Form S-3
pertaining to the registration of $1 of Debt Securities, which Registration
Statement also carries forward pursuant to Rule 429 $2,000,000,000 of Debt
Securities previously registered on TWE's Registration Statement on Form S-3
(File No. 33-75144), and to the incorporation by reference in the Registration
Statement and related prospectus of our reports dated February 10, 1998, with
respect to the consolidated financial statements and schedules of TWE, Warner
Communications Inc. and American Television and Communications Corporation,
included in TWE's Annual Report on Form 10-K for the year ended December 31,
1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
December 23, 1998
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of Time Warner Entertainment Company, L.P. (the "Company") American
Television and Communications Corporation ("ATC") and Warner Communications Inc.
("WCI") hereby constitutes and appoints CHRISTOPHER P. BOGART, RICHARD J.
BRESSLER, PETER R. HAJE, JOHN A. LABARCA, GERALD M. LEVIN, THOMAS W. MCENERNEY
AND RICHARD D. PARSONS and each of them, his true and lawful attorneys-in-fact
and agents, with full power to act without the others, for him and in his name,
place and stead, in any and all capacities, to sign one or more Registration
Statements on Form S-3 or any other appropriate form and any and all amendments
to any such Registration Statement (including post-effective amendments), to be
filed with the Securities and Exchange Commission in connection with the "shelf"
registration pursuant to Rule 415 under the provisions of the Securities Act of
1933, as amended, of up to $2.0 billion aggregate initial offering price of debt
securities issued by the Company and guaranteed by ATC and WCI, with power where
appropriate to affix thereto the seal of the Company, ATC and WCI and to attest
said seal, and to file any such Registration Statement, including a form of
prospectus, and any and all amendments and post-effective amendments to any such
Registration Statement, and any subsequent registration statement filed by the
Company, ATC and WCI pursuant to Rule 462(b) of the Securities Act of 1933, as
amended, with all exhibits thereto, and any and all documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he 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 name as of
the 22nd day of December, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ ---------------------------------------
<S> <C>
/s/ GERALD M. LEVIN Chairman of the Board and Chief
- ------------------------------------------ Executive Officer of the Company, WCI
Gerald M. Levin and ATC (Principal Executive Officer)
and Director of WCI and ATC
/s/ RICHARD J. BRESSLER Executive Vice President and
- ------------------------------------------ Chief Financial Officer of
Richard J. Bressler the Company and Director and
Senior Vice President and
Chief Financial Officer of WCI
and ATC (Principal Financial
Officer)
/s/ JOHN A. LABARCA Senior Vice President and
- ------------------------------------------ Controller of the Company
John A. LaBarca and Vice President and
Controller of WCI and ATC
(Principal Accounting Officer)
/s/ PETER R. HAJE Director of WCI and ATC
- ------------------------------------------
Peter R. Haje
/s/ RICHARD D. PARSONS Director of WCI and ATC
- ------------------------------------------
Richard D. Parsons
</TABLE>
<PAGE>
EXHIBIT 25
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 BANK OF NEW YORK
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEW YORK 13-5160382
(STATE OF INCORPORATION IF NOT (I.R.S. EMPLOYER
A U.S. NATIONAL BANK) IDENTIFICATION NO.)
</TABLE>
------------------------
48 WALL STREET,
NEW YORK, N.Y. 10286
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
------------------------
TIME WARNER ENTERTAINMENT COMPANY, L.P.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-3666692
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
------------------------
AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-2922502
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
------------------------
WARNER COMMUNICATIONS INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-2696809
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
75 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
------------------------
DEBT SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
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.
<TABLE>
<CAPTION>
NAME ADDRESS
- --------------------------------------------------- ---------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29
UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed
with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1
filed with Registration Statement No. 33-21672 and Exhibit 1 to Form
T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
2
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW YORK,
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 16TH DAY OF DECEMBER, 1998.
THE BANK OF NEW YORK
By: /s/ THOMAS C. KNIGHT
-------------------------------
Name: Thomas C. Knight
Title: Assistant Vice President
<PAGE>
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
THE BANK OF NEW YORK
OF 48 WALL STREET, NEW YORK, N.Y. 10286
AND FOREIGN AND DOMESTIC SUBSIDIARIES
A member of the Federal Reserve System, at the close of business June 30, 1998,
published 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
--------------
(IN THOUSANDS)
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.............................................. $ 7,301,241
Interest-bearing balances......................................................................... 1,385,944
Securities:
Held-to-maturity securities..................................................................... 1,000,737
Available-for-sale securities................................................................... 4,240,655
Federal funds sold and Securities purchased under agreements to resell.......................... 971,453
Loans and lease financing receivables:
Loans and leases, net of unearned income........................................................ 38,788,269
LESS: Allowance for loan and lease losses....................................................... 632,875
LESS: Allocated transfer risk reserve........................................................... 0
Loans and leases, net of unearned income, allowance, and reserve................................ 38,155,394
Assets held in trading accounts................................................................... 1,307,562
Premises and fixed assets (including capitalized leases).......................................... 670,445
Other real estate owned........................................................................... 13,598
Investments in unconsolidated subsidiaries and associated companies............................... 215,024
Customers' liability to this bank on acceptances outstanding...................................... 974,237
Intangible assets................................................................................. 1,102,625
Other assets...................................................................................... 1,944,777
------------
Total assets...................................................................................... $ 59,283,692
------------
------------
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
------------
(IN THOUSANDS)
LIABILITIES
<S> <C>
Deposits:
In domestic offices............................................................................. $ 26,930,258
Noninterest-bearing............................................................................. 11,579,390
Interest-bearing................................................................................ 15,350,868
In foreign offices, Edge and Agreement subsidiaries, and IBFs................................... 16,117,854
Noninterest-bearing............................................................................. 187,464
Interest-bearing................................................................................ 15,930,390
Federal funds purchased and Securities sold under agreements to repurchase........................ 2,170,238
Demand notes issued to the U.S.Treasury........................................................... 300,000
Trading liabilities............................................................................... 1,310,867
Other borrowed money:
With remaining maturity of one year or less..................................................... 2,549,479
With remaining maturity of more than one year through three years............................... 0
With remaining maturity of more than three years................................................ 46,654
Bank's liability on acceptances executed and outstanding.......................................... 983,398
Subordinated notes and debentures................................................................. 1,314,000
Other liabilities................................................................................. 2,295,520
------------
Total liabilities................................................................................. 54,018,268
------------
------------
Equity capital:
Common stock.................................................................................... 1,135,284
Surplus......................................................................................... 731,319
Undivided profits and capital reserves.......................................................... 3,385,227
Net unrealized holding gains (losses) on available-for-sale securities.......................... 51,233
Cumulative foreign currency translation adjustments............................................. ( 37,639)
------------
Total equity capital.............................................................................. 5,265,424
------------
Total liabilities and equity capital.............................................................. $ 59,283,692
------------
------------
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
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 Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
