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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 4, 1997
REGISTRATION NO. 333-
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TIME WARNER INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-3527249
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
------------------------
ALSO CONSTITUTES A POST-EFFECTIVE AMENDMENT TO
FORM S-3 REGISTRATION STATEMENT OF
TIME WARNER COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-1388520
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
75 ROCKEFELLER PLAZA
NEW YORK, N.Y. 10019
(212) 484-8000
(ADDRESS, INCLUDING EACH ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PETER R. HAJE
EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
TIME WARNER INC.
75 ROCKEFELLER PLAZA, NEW YORK, N.Y. 10019
(212) 484-8000
(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
CRAVATH, SWAINE & MOORE SHEARMAN & STERLING
WORLDWIDE PLAZA 599 LEXINGTON AVENUE
825 EIGHTH AVENUE, NEW YORK, N.Y. 10019-7415 NEW YORK, N.Y. 10022
(212) 474-1270 (212) 848-8015
</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, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box: [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If 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 MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AGGREGATE AMOUNT TO BE AGGREGATE OFFERING AGGREGATE OFFERING
TO BE REGISTERED REGISTERED(1) PRICE PER UNIT(2) PRICE(2)
<S> <C> <C> <C>
Debt Securities................................. $449,418,500(3) 100% $449,418,500(3)
Guarantee of Debt Securities(4)................. $449,418,500 N/A N/A
<CAPTION>
TITLE OF EACH CLASS OF SECURITIES AMOUNT OF
TO BE REGISTERED REGISTRATION FEE
<S> <C>
Debt Securities................................. $136,188
Guarantee of Debt Securities(4)................. N/A(5)
</TABLE>
(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) If any Debt Securities are issued at an original issue discount, then plus
such greater principal amount as shall result in an aggregate initial
offering price of $449,418,500.
(4) Time Warner Inc. will irrevocably and unconditionally guarantee on an
unsecured senior basis Debt Securities of Time Warner Companies, Inc.
(5) Pursuant to Rule 457(n), no separate fee is required to be paid in respect
of guarantees of the Debt Securities which are being registered
concurrently.
------------------------
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 STATEMENTS NOS.
33-50237 AND 333-17171, PREVIOUSLY FILED BY TIME WARNER COMPANIES, INC. AND TIME
WARNER INC. ON FORM S-3. THIS REGISTRATION STATEMENT ALSO CONSTITUTES A
POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENTS NOS. 33-50237 AND 333-17171,
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>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 4, 1997
PROSPECTUS
TIME WARNER COMPANIES, INC.
DEBT SECURITIES
UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC.
Time Warner Companies, Inc. (the 'Issuer') may offer from time to time,
together or separately, unsecured notes, debentures or other evidences of
indebtedness ('Debt Securities'), having an aggregate initial public offering
price not to exceed $1,000,000,000 (including the U.S. dollar equivalent of
securities for which the initial public offering price is denominated in one or
more foreign currencies or composite currencies). The Debt Securities may be
offered in one or more series, in amounts, at prices and on terms determined at
the time of sale and set forth in a supplement to this Prospectus (a 'Prospectus
Supplement').
The Debt Securities will be irrevocably, fully and unconditionally
guaranteed (the 'Guarantee') on an unsecured basis by Time Warner Inc. (the
'Guarantor'). The Issuer is a wholly owned subsidiary of the Guarantor. The
Guarantor is a holding company that derives its operating income and cash flow
from the Issuer and Turner Broadcasting System, Inc. ('TBS'), a wholly owned
subsidiary of the Guarantor. The assets of the Guarantor consist primarily of
its investments in the Issuer and TBS, and the assets of the Issuer consist
primarily of its investments in its consolidated and unconsolidated
subsidiaries. The Guarantor and its consolidated and unconsolidated subsidiaries
are collectively referred to as the 'Company'.
Unless otherwise specified in an accompanying Prospectus Supplement, the
Debt Securities and the Guarantee will be senior securities of the Issuer and
the Guarantor, respectively, ranking equally with all other unsubordinated and
unsecured indebtedness and other obligations of the Issuer and the Guarantor,
respectively.
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be set forth in an accompanying Prospectus
Supplement, including, where applicable, the specific designation, aggregate
principal amount, currency, denomination, maturity (which may be fixed or
extendible), priority, interest rate (or manner of calculation thereof), if any,
time of payment of interest, if any, terms for any redemption, terms for any
repayment at the option of the holder, terms for any sinking fund payments, the
initial public offering price, special provisions relating to Debt Securities in
bearer form, provisions regarding original issue discount securities, additional
covenants and any other specific terms of such Debt Securities.
The Prospectus Supplement will also contain information, where applicable,
about certain United States Federal income tax considerations relating to, and
any listing on a securities exchange of, the Debt Securities covered by the
Prospectus Supplement.
The Debt Securities may be issued only in registered form, including in the
form of one or more global securities ('Global Securities'), unless otherwise
set forth in the Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Debt Securities may be offered directly, through agents designated from
time to time or through dealers or underwriters. If any agents of the Issuer or
the Guarantor or any dealers or underwriters are involved in the offering of the
Debt Securities in respect of which this Prospectus is being delivered, the
names of such agents, dealers or underwriters and any applicable commissions or
discounts will be set forth in the Prospectus Supplement. The net proceeds to
the Issuer from such sale will also be set forth in the Prospectus Supplement.
------------------------
The date of this Prospectus is , 1997.
<PAGE>
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH SECURITIES,
AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE 'PLAN OF DISTRIBUTION'.
------------------------
AVAILABLE INFORMATION
The Guarantor is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the 'Commission'). The Issuer is not
required to file periodic reports and other information under the Exchange Act.
Instead, information with respect to the Issuer is provided, to the extent
required by the Commission, in the required filings made by the Guarantor.
Reports, proxy statements and other information filed by the Guarantor with the
Commission pursuant to the informational requirements of the Exchange Act may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Commission's regional offices located at Seven World Trade Center, 13th
Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street
(Suite 1400), Chicago, Illinois 60661; and copies of such material may be
obtained from the Public Reference Section of the Commission, Washington, D.C.
20549, at prescribed rates, or through the World Wide Web (http://www.sec.gov).
Such reports, proxy statements and other information may also be inspected at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York, on which one or more of the Guarantor's securities are listed.
This Prospectus constitutes a part of a Registration Statement filed by the
Issuer and the Guarantor with the Commission under the Securities Act of 1933,
as amended (the 'Securities Act'). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the rules
and regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Issuer, the Guarantor and the Debt Securities. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission by the Guarantor (File
No. 001-12259) are incorporated by reference in this Prospectus:
(a) the Guarantor's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by Forms 10K/A dated March 27, 1997 and June
26, 1997 (as amended, the 'Guarantor's 1996 Form 10-K');
(b) the Guarantor's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997; and
(c) the Guarantor's Current Report on Form 8-K dated March 21, 1997.
All documents and reports subsequently filed by the Guarantor pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus or any Prospectus Supplement to the extent that
a statement contained herein or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein modifies or
supersedes
2
<PAGE>
<PAGE>
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus or any Prospectus Supplement.
The Issuer will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus and the accompanying Prospectus
Supplement are delivered, upon the written or oral request of such person, a
copy of any or all the documents incorporated herein by reference, other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference in such documents, and any other documents specifically identified
herein as incorporated by reference into the Registration Statement to which
this Prospectus relates or into such other documents. Requests should be
addressed to: Shareholder Relations Department, Time Warner Inc., 75 Rockefeller
Plaza, New York, New York 10019; telephone: (212) 484-6971.
THE COMPANY
The Company, the world's leading media and entertainment company, has
interests in four fundamental areas of business: Entertainment, consisting
principally of interests in filmed entertainment, television production,
television broadcasting, theme parks, recorded music and music publishing; Cable
Networks, consisting principally of interests in cable television programming
and sports franchises; Publishing, consisting principally of interests in
magazine publishing, book publishing and direct marketing; and Cable, consisting
principally of interests in cable television systems. Each of the Issuer and the
Guarantor is a holding company that derives its operating income and cash flow
from its subsidiaries and investments. The assets of the Guarantor consist
primarily of its investments in the Issuer and TBS, and the assets of the Issuer
consist primarily of its investments in its consolidated and unconsolidated
subsidiaries, including Time Warner Entertainment Company, L.P. ('TWE'). The
ability of the Issuer and the Guarantor to service their respective indebtedness
and other liabilities, including the Debt Securities, is dependent primarily
upon the earnings and cash flow of their respective consolidated and
unconsolidated subsidiaries and the distribution or other payment of such
earnings and cash flow to the Issuer and the Guarantor. See 'Holding Company
Structure'.
The Guarantor became the parent of the Issuer and TBS on October 10, 1996
upon the merger of the Issuer and TBS with separate subsidiaries of the
Guarantor (the 'TBS Transaction'), as more fully described below. In connection
therewith, the Guarantor changed its name to Time Warner Inc. from TW Inc. and
the Issuer changed its name from Time Warner Inc. to Time Warner Companies, Inc.
TWE was formed as a Delaware limited partnership in 1992 to own and operate
substantially all of the business of Warner Bros., Home Box Office and the cable
television businesses owned and operated by the Issuer prior to such date. The
Issuer and certain of its wholly owned subsidiaries own general and limited
partnership interests in 74.49% of the pro rata priority capital ('Series A
Capital') and residual equity capital ('Residual Capital') of TWE and 100% of
the senior priority capital ('Senior Capital') and junior priority capital
('Series B Capital') of TWE. The remaining 25.51% limited partnership interests
in the Series A Capital and Residual Capital of TWE are held by a subsidiary of
U S WEST, Inc. The Issuer does not consolidate TWE and certain related companies
(the 'Entertainment Group') for financial reporting purposes. The subsidiaries
of the Issuer that own general partnership interests in TWE are collectively
referred to herein as the 'Time Warner General Partners'.
TBS TRANSACTION
On October 10, 1996, pursuant to an Amended and Restated Agreement and Plan
of Merger dated as of September 22, 1995, as amended (the 'Merger Agreement'),
among the Issuer, the Guarantor, TBS and certain of their wholly owned
subsidiaries, among other things: (a) each of the Issuer and TBS became a wholly
owned subsidiary of the Guarantor through a merger with a subsidiary of the
Guarantor, (b) each outstanding share of common stock, par value $1.00 per
share, of the Issuer, other than shares held directly or indirectly by the
Issuer, was converted into one share of common stock of the Guarantor, (c) each
outstanding share of preferred stock of the Issuer was converted into one share
of a substantially identical series of preferred stock of the Guarantor, (d)
each outstanding share of common stock of TBS, other than shares held directly
or indirectly by the Issuer or the Guarantor or in the treasury of TBS, was
converted into the right to receive 0.75 shares of common stock of the
3
<PAGE>
<PAGE>
Guarantor and (e) each outstanding share of preferred stock of TBS, other than
shares held directly or indirectly by the Issuer or the Guarantor, was converted
into the right to receive 4.8 shares of common stock of the Guarantor.
Additional information on the TBS Transaction is set forth in Note 2 to the
Guarantor's consolidated financial statements included in the Guarantor's 1996
Form 10-K, which is incorporated by reference herein.
Immediately following the TBS Transaction, the Guarantor, as primary
obligor and not merely as surety, irrevocably and unconditionally guaranteed (a)
the full and punctual payment of principal of and interest on all outstanding
publicly traded indebtedness ('Outstanding Securities') of each of the Issuer
and TBS when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Issuer and TBS under the
Outstanding Securities of the Issuer and TBS and the indentures relating to the
Outstanding Securities (including the obligations to the respective trustees)
and (b) the full and punctual performance within applicable grace periods of all
other obligations of the Issuer and TBS under the Outstanding Securities and the
respective indentures. The guarantee of the Outstanding Securities constitutes a
guarantee of payment, performance and compliance and not merely of collection.
The obligation of the Guarantor to make any payment pursuant to the guarantee
may be satisfied by causing the respective issuer to make such payment. Further,
the Guarantor agreed to pay any and all costs and expenses (including reasonable
attorney's fees) incurred by any trustee or holder of Outstanding Securities in
enforcing any of their respective rights under the guarantee of the Outstanding
Securities.
The Issuer's and the Guarantor's principal executive offices are located at
75 Rockefeller Plaza, New York, New York 10019.
RATIO OF EARNINGS TO FIXED CHARGES
The historical and pro forma ratios of earnings to fixed charges for the
Issuer and the Guarantor are set forth below for the periods indicated. For
periods in which earnings before fixed charges were insufficient to cover fixed
charges, the dollar amount of coverage deficiency (in millions), instead of the
ratio, is disclosed. The ratios of earnings to fixed charges (or coverage
deficiencies) for all periods after 1992 reflect the deconsolidation of the
Entertainment Group, principally TWE, effective January 1, 1993.
The historical ratio of earnings to fixed charges (or coverage deficiency)
of the Guarantor for 1996 reflects (a) the TBS Transaction, including the
assumption of approximately $2.8 billion of indebtedness, (b) the use of
approximately $1.55 billion of net proceeds from the issuance of 1.6 million
shares of Series M exchangeable preferred stock, having an aggregate liquidation
preference of $1.6 billion to reduce outstanding indebtedness (the 'Preferred
Stock Refinancing') and (c) the acquisition of Cablevision Industries
Corporation and related companies, including the assumption or incurrence of
approximately $2 billion of indebtedness.
The historical ratio of earnings to fixed charges for 1995 reflects (a) the
acquisition of KBLCOM Incorporated and Summit Communications Group, Inc.,
including the assumption or incurrence of approximately $1.3 billion of
indebtedness and (b) the exchange by Toshiba Corporation and ITOCHU Corporation
of their direct and indirect interests in TWE.
The historical ratio of earnings to fixed charges for 1993 reflects the
issuance of $6.1 billion of long-term debt and the use of $500 million of cash
and equivalents for the exchange or redemption of preferred stock having an
aggregate liquidation preference of $6.4 billion. The historical ratio of
earnings to fixed charges for 1992 reflects the capitalization of TWE on June
30, 1992 and associated refinancings, and the acquisition of the 18.7% minority
interest in American Television and Communications Corporation as of June 30,
1992, using the purchase method of accounting for business combinations.
The pro forma ratios of earnings to fixed charges for each of the Issuer
and the Guarantor for the year ended December 31, 1996 give effect to (a) the
Preferred Stock Refinancing and certain other debt refinancings and (b) with
respect to the Guarantor only, the TBS Transaction, as if such transactions had
occurred at the beginning of 1996. The pro forma information presented below
should be read in conjunction with the pro forma consolidated condensed
financial statements contained in the
4
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Guarantor's Current Report on Form 8-K dated March 21, 1997 and incorporated
herein by reference. Such pro forma amounts are presented for informational
purposes only and are not necessarily indicative of the actual ratio or coverage
deficiency that would have occurred if such transactions had been consummated as
of the dates indicated, nor are they necessarily indicative of future results.
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEARS ENDED DECEMBER 31,
MARCH 31, -------------------------------------------------
---------------------------------------- PRO FORMA
1997 1996 1996 1996 1995 1994 1993 1992
------------------ ------------------ --------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuer............................. 1.8x $(76) 1.2x 1.1x 1.1x 1.1x 1.1x 1.4x
Guarantor.......................... 1.7x * 1.1x 1.1x * * * *
</TABLE>
- ------------
*In connection with the TBS Transaction that occurred on October 10, 1996, the
Guarantor, formerly a wholly owned subsidiary of the Issuer, acquired each
outstanding share of capital stock of the Issuer (other than shares held
directly or indirectly by the Issuer) and became the parent of the Issuer.
Accordingly, the historical ratios of earnings to fixed charges (or coverage
deficiencies) of the Issuer and the Guarantor are the same for all periods
prior to such date because the Issuer is treated for financial reporting
purposes as the predecessor of the Guarantor.
For purposes of computing the ratio of earnings to fixed charges, earnings
were calculated by adding (i) pretax income, (ii) interest expense, including
previously capitalized interest amortized to expense and the portion of rents
representative of an interest factor for the Guarantor and the Issuer and their
respective majority-owned subsidiaries, (iii) the Guarantor's and the Issuer's
respective proportionate share of the items included in (ii) above for their
50%-owned companies, (iv) preferred stock dividend requirements of
majority-owned subsidiaries, (v) minority interest in the income of
majority-owned subsidiaries that have fixed charges and (vi) the amount of
undistributed losses of each of the Issuer's and the Guarantor's less than
50%-owned companies. Fixed charges consist of (i) interest expense, including
interest capitalized and the portion of rents representative of an interest
factor for the Guarantor and the Issuer and their respective majority-owned
subsidiaries, (ii) the Guarantor's and the Issuer's respective proportionate
share of such items for their 50%-owned companies and (iii) preferred stock
dividend requirements of majority-owned subsidiaries. Earnings as defined
include significant noncash charges for depreciation and amortization.
Historical fixed charges of the Issuer and the Guarantor for the three months
ended March 31, 1997 and 1996 and the years ended December 31, 1996, 1995 and
1994 include noncash interest expense of $24 million, $22 million, $91 million,
$176 million and $219 million, respectively, principally relating to the
Issuer's Liquid Yield Option Notes due 2012 and 2013 and, in 1995 and 1994 only,
the Issuer's Redeemable Reset Notes due 2002. Historical fixed charges of the
Guarantor for the three months ended March 31, 1997 and the year ended December
31, 1996 include an additional $2 million and $5 million, respectively, in
noncash interest expense relating to TBS's zero coupon convertible notes due
2007. Pro forma fixed charges of the Guarantor for the year ended December 31,
1996 similarly include an additional $14 million in noncash interest expense
relating to TBS's zero coupon convertible notes due 2007 for the period prior to
the consummation of the TBS Transaction.
USE OF PROCEEDS
Except as otherwise set forth in the Prospectus Supplement, the net
proceeds to the Issuer from the sale of Debt Securities will be used to
repurchase, redeem or otherwise repay indebtedness of the Company. Additional
information on the use of net proceeds from the sale of any particular Debt
Securities will be set forth in the Prospectus Supplement relating to such Debt
Securities.
DESCRIPTION OF THE DEBT SECURITIES AND THE GUARANTEE
GENERAL
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of any Debt Securities
and the extent, if any, to which such general provisions will not apply to such
Debt Securities will be described in the Prospectus Supplement relating to such
Debt Securities.
The Debt Securities will be issued from time to time in series under an
Indenture dated as of January 15, 1993, as supplemented from time to time (such
Indenture, as so supplemented being called
5
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<PAGE>
the 'Indenture'), between the Issuer and The Chase Manhattan Bank (formerly
known as Chemical Bank) (the 'Trustee'), as Trustee. The statements set forth
below are brief summaries of certain provisions contained in the Indenture,
which summaries do not purport to be complete and are qualified in their
entirety by reference to the Indenture, a copy of which is an exhibit to the
Registration Statement of which this Prospectus is a part. Numerical references
in parentheses below are to articles or sections of the Indenture, unless
otherwise indicated. Wherever defined terms are used but not defined herein,
such terms shall have the meanings assigned to them in the Indenture, it being
intended that such referenced articles and sections of the Indenture and such
defined terms shall be incorporated herein by reference.
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and Debt Securities may be issued thereunder up to the
aggregate principal amount which may be authorized from time to time by the
Issuer. Any such limit applicable to a particular series will be specified in
the Prospectus Supplement relating to that series.
Reference is made to the Prospectus Supplement for the following terms of
each series of Debt Securities in respect to which this Prospectus is being
delivered: (i) the designation, date, aggregate principal amount, currency or
currency unit of payment and authorized denominations of such Debt Securities;
(ii) the date or dates on which such Debt Securities will mature (which may be
fixed or extendible); (iii) the rate or rates (or manner of calculation
thereof), if any, per annum at which such Debt Securities will bear interest;
(iv) the dates, if any, on which such interest will be payable, (v) the terms of
any mandatory or optional redemption (including any sinking, purchase or
analogous fund) and any purchase at the option of holders (including whether any
such purchase may be paid in cash, common stock or other securities or
property); (vi) whether such Debt Securities are to be issued in the form of
Global Securities and, if so, the identity of the Depository with respect to
such Global Securities; and (vii) any other specific terms.
Unless otherwise set forth in the Prospectus Supplement, interest on
outstanding Debt Securities will be paid to holders of record on the date which
is 15 days prior to the date such interest is to be paid. Unless otherwise
specified in the Prospectus Supplement, Debt Securities will be issued in fully
registered form only and in denominations of $1,000 and integral multiples
thereof. Unless otherwise specified in the Prospectus Supplement, the principal
amount of the Debt Securities will be payable at the corporate trust office of
the Trustee in New York, New York. The Debt Securities may be presented for
transfer or exchange at such office unless otherwise specified in the Prospectus
Supplement, subject to the limitations provided in the Indenture, without any
service charge, but the Issuer may require payment of a sum sufficient to cover
any tax or other governmental charges payable in connection therewith. (Section
305)
GUARANTEE
The Guarantor, as primary obligor and not merely as surety, will
irrevocably and unconditionally guarantee (the 'Guarantee'), to each Holder of
Debt Securities, and to the Trustee and its successors and assigns, (i) the full
and punctual payment of principal of and interest on the Debt Securities when
due, whether at maturity, by acceleration, by redemption or otherwise, and all
other monetary obligations of the Issuer under the Indenture (including
obligations to the Trustee) and the Debt Securities and (ii) the full and
punctual performance within applicable grace periods of all other obligations of
the Issuer under the Indenture and the Debt Securities. The Guarantee
constitutes a guarantee of payment, performance and compliance and not merely of
collection. The obligation of the Guarantor to make any payments may be
satisfied by causing the Issuer to make such payments. Further, the Guarantor
agrees to pay any and all costs and expenses (including reasonable attorneys'
fees) incurred by the Trustee or any Holder of Debt Securities in enforcing any
of their respective rights under the Guarantee. (Section 2 of the Second
Supplemental Indenture dated as of October 10, 1996 among the Issuer, the
Guarantor and the Trustee).
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RANKING
Unless otherwise specified in a Prospectus Supplement for a particular
series of Debt Securities, all series of Debt Securities will be senior
indebtedness of the Issuer and will be direct, unsecured obligations of the
Issuer, ranking on a parity with all other unsecured and unsubordinated
indebtedness of the Issuer, and the Guarantee will be a senior obligation of the
Guarantor and will be a direct unsecured obligation of the Guarantor, ranking on
a parity with all other unsecured and unsubordinated obligations of the
Guarantor. Each of the Issuer and the Guarantor is a holding company and the
Debt Securities and the Guarantee will be effectively subordinated to all
existing and future liabilities, including indebtedness, of the subsidiaries of
the Issuer and the Guarantor, respectively. See 'Holding Company Structure'.
CERTAIN COVENANTS
Limitation on Liens. The Indenture provides that neither the Issuer nor any
Material Subsidiary of the Issuer shall incur, create, issue, assume, guarantee
or otherwise become liable for any indebtedness for money borrowed that is
secured by a lien on any asset now owned or hereafter acquired by it unless the
Issuer makes or causes to be made effective provision whereby the Debt
Securities will be secured by such lien equally and ratably with (or prior to)
all other indebtedness thereby secured so long as any such indebtedness shall be
secured. The foregoing restriction does not apply to the following:
(i) liens existing as of the date of the Indenture;
(ii) liens created by Subsidiaries of the Issuer to secure
indebtedness of such Subsidiaries to the Issuer or to one or more other
Subsidiaries of the Issuer;
(iii) liens affecting property of a person existing at the time it
becomes a Subsidiary of the Issuer or at the time it merges into or
consolidates with the Issuer or a Subsidiary of the Issuer or at the time
of a sale, lease or other disposition of all or substantially all of the
properties of such person to the Issuer or its Subsidiaries;
(iv) liens on property existing at the time of the acquisition thereof
or incurred to secure payment of all or a part of the purchase price
thereof or to secure Indebtedness incurred prior to, at the time of, or
within one year after the acquisition thereof for the purpose of financing
all or part of the purchase price thereof;
(v) liens on any property to secure all or part of the cost of
improvements or construction thereon or indebtedness incurred to provide
funds for such purpose in a principal amount not exceeding the cost of such
improvements or construction;
(vi) liens consisting of or relating to the sale, transfer or
financing of motion pictures, video and television programs, sound
recordings, books or rights with respect thereto or with so-called tax
shelter groups or other third-party investors in connection with the
financing of such motion pictures, video and television programming, sound
recordings or books in the ordinary course of business and the granting to
the Issuer or any of its Subsidiaries of rights to distribute such motion
pictures, video and television programming, sound recordings or books;
provided, however, that no such lien shall attach to any asset or right of
the Issuer or its Subsidiaries (other than the motion pictures, video and
television programming, sound recordings, books or rights which were sold,
transferred to or financed by the tax shelter group or third-party
investors in question or the proceeds arising therefrom);
(vii) liens on shares of stock, indebtedness or other securities of a
Person that is not a Subsidiary;
(viii) other liens arising in connection with indebtedness of the
Issuer and its Subsidiaries in an aggregate principal amount for the Issuer
and its Subsidiaries not exceeding at the time such lien is issued, created
or assumed the greater of (A) 10% of the Consolidated Net Worth of the
Issuer and (B) $500 million; and
(ix) any extensions, renewal or replacement of any lien referred to in
the foregoing clauses (i) through (viii) inclusive, or of any indebtedness
secured thereby; provided that the principal amount of indebtedness secured
thereby shall not exceed the principal amount of indebtedness so secured
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at the time of such extension, renewal or replacement, or at the time the
lien was issued, created or assumed or otherwise permitted, and that such
extension, renewal or replacement lien shall be limited to all or part of
substantially the same property which secured the lien extended, renewed or
replaced (plus improvements on such property). (Section 1006)
Limitation on Senior Debt. The Indenture provides that the Issuer will not,
and will not permit any of its Subsidiaries to, incur, create, issue, assume,
guarantee or otherwise become directly or indirectly liable for (collectively,
'incur') any Senior Debt, if after giving effect to such incurrence of Senior
Debt, determined on a pro forma basis as if such incurrence had occurred on the
first day of the Test Period, the Consolidated Cash Flow Coverage Ratio for the
Issuer and its Subsidiaries for the Test Period would be less than 1.5 to 1;
provided, however, that the foregoing restrictions will not apply to TWE or any
of its Subsidiaries to the extent that the application of such restrictions
would be prohibited under, or cause a violation of, TWE's bank credit agreement
as in effect from time to time or any successor or replacement credit agreement.
(Section 1007)
Other than the restrictions in the Indenture on liens and incurrence of
Senior Debt described above, the Indenture and the Debt Securities do not
contain any covenants or other provisions designed to afford Holders of Debt
Securities protection in the event of a recapitalization or highly leveraged
transaction involving the Issuer.
Limitation on Merger, Consolidation and Certain Sales of Assets. The
Indenture provides that neither the Issuer nor the Guarantor will merge or
consolidate with or into, or convey or transfer its property substantially as an
entirety to, any Person unless (a) the successor is organized and existing under
the laws of the United States or any State or the District of Columbia, (b) (i)
in the case of the Issuer, the successor assumes the Issuer's obligations under
the Indenture and the Debt Securities on the same terms and conditions and (ii)
in the case of the Guarantor, the successor assumes the Guarantor's obligations
under the Indenture and the Guarantee on the same terms and conditions and (c)
immediately after giving effect to such transactions, there is no default under
the Indenture. (Sections 801 and 802, as amended by the Third Supplemental
Indenture dated as of December 31, 1996 (the 'Third Supplemental Indenture'),
among the Issuer, the Guarantor and the Trustee.)
Any additional covenants of the Issuer or the Guarantor pertaining to a
series of Debt Securities will be set forth in a Prospectus Supplement relating
to such series of Debt Securities.
CERTAIN DEFINITIONS
The following are certain of the terms defined in the Indenture:
'Consolidated Cash Flow' means, with respect to the Issuer, for any
period, the net income of the Issuer and its Subsidiaries as determined on
a consolidated basis in accordance with GAAP consistently applied, plus the
sum of depreciation, amortization, other noncash charges which reduce net
income, income tax expense and interest expense, in each case to the extent
deducted in determining such net income, and excluding extraordinary gains
or losses. Notwithstanding the foregoing, for purposes of determining the
Consolidated Cash Flow of the Issuer, there shall be included, in respect
of each other Person that is accounted for by the Issuer on the equity
method (as determined in accordance with GAAP), the Issuer's proportionate
amount of such other Person's and its Subsidiaries' consolidated net
income, depreciation, amortization, other noncash charges which reduce net
income, income tax expense and interest expense, in each case to the extent
deducted in determining such other Person's net income, excluding
extraordinary gains and losses.
'Consolidated Cash Flow Coverage Ratio' means, for any period, the
ratio for such period of Consolidated Cash Flow to Consolidated Interest
Expense. In determining the Consolidated Cash Flow Coverage Ratio, effect
shall be given to the application of the proceeds of Senior Debt whose
incurrence is being tested to the extent such proceeds are to be used to
repay or refinance other Senior Debt.
'Consolidated Interest Expense' means, with respect to the Issuer, for
any period, cash interest expense of the Issuer and its Subsidiaries on
Senior Debt for such period other than the amount amortized during such
period in respect of all fees paid in connection with the incurrence
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of such Senior Debt, such expense to be determined on a consolidated basis
in accordance with GAAP consistently applied. Notwithstanding the
foregoing, for purposes of determining the Consolidated Interest Expense of
the Issuer, there shall be included, in respect of each other Person that
is accounted for by the Issuer on the equity method (as determined in
accordance with GAAP), the Issuer's proportionate amount of the cash
interest expense of such other Person and its Subsidiaries on Senior Debt
for the relevant period other than the amount amortized during such period
in respect of all fees paid in connection with the incurrence of such
Senior Debt, such expense to be determined on a consolidated basis in
accordance with GAAP consistently applied.
'Consolidated Net Worth' means, with respect to the Issuer, at the
date of any determination, the consolidated stockholders' equity of the
Issuer and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP consistently applied.
'GAAP' means generally accepted accounting principles as such
principles are in effect as of the date of the Indenture.
'Material Subsidiary' means, with respect to the Issuer, any Person
that is a Subsidiary if at the end of the most recent fiscal quarter of the
Issuer, the aggregate amount, determined in accordance with GAAP
consistently applied, of securities of, loans and advances to, and other
investments in, such Person held by the Issuer and its other Subsidiaries
exceeded 10% of the Issuer's Consolidated Net Worth.
'Person' means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
'Senior Debt' means, with respect to any Person, all indebtedness of
such Person in respect of money borrowed, determined in accordance with
GAAP consistently applied, other than indebtedness as to which the
instrument governing such indebtedness provides that such indebtedness is,
or which is in effect, subordinated or junior in right of payment to any
other indebtedness of such Person.
'Subsidiary' means, with respect to any Person, any corporation more
than 50% of the voting stock of which is owned directly or indirectly by
such Person, and any partnership, association, joint venture or other
entity in which such Person owns more than 50% of the equity interests or
has the power to elect a majority of the board of directors or other
governing body.
'Test Period' means, with respect to any date, the period consisting
of the most recent four full fiscal quarters for which financial
information is generally available.
DEFEASANCE
The Indenture provides that the Issuer (and to the extent applicable, the
Guarantor), at its option, (a) will be Discharged from any and all obligations
in respect of any series of Debt Securities (except in each case for certain
obligations to register the transfer or exchange of Debt Securities, replace
stolen, lost or mutilated Debt Securities, maintain paying agencies and hold
moneys for payment in trust) or (b) need not comply with the covenants described
above under 'Certain Covenants' and any other restrictive covenants described in
a Prospectus Supplement relating to such series of Debt Securities, and certain
Events of Default (other than those arising out of the failure to pay interest
or principal on the Debt Securities of a particular series and certain events of
bankruptcy, insolvency and reorganization) will no longer constitute Events of
Default with respect to such series of Debt Securities, in each case if the
Issuer deposits with the applicable Trustee, in trust, money or the equivalent
in securities of the government which issued the currency in which the Debt
Securities are denominated or government agencies backed by the full faith and
credit of such government, or a combination thereof, which through the payment
of interest thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal (including any
mandatory sinking fund payments) of, and interest on, such series on the dates
such payments are due in accordance with the terms of such series. To exercise
any such option, the Issuer is required, among other things, to deliver to the
Trustee an opinion of counsel to the effect that (i) the deposit and related
defeasance would not cause the Holders of such series to recognize income, gain
or loss for Federal
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income tax purposes and, in the case of a Discharge pursuant to clause (a),
accompanied by a ruling to such effect received from or published by the United
States Internal Revenue Service and (ii) the creation of the defeasance trust
will not violate the Investment Company Act of 1940, as amended. In addition,
the Issuer is required to deliver to the Trustee an Officers' Certificate
stating that such deposit was not made by the Issuer with the intent of
preferring the Holders over other creditors of the Issuer or with the intent of
defeating, hindering, delaying or defrauding creditors of the Issuer or others.
(Article 4, as amended by the Third Supplemental Indenture.)
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that, if an Event of Default specified therein with
respect to any series of Debt Securities issued thereunder shall have happened
and be continuing, either the Trustee thereunder or the Holders of 25% in
aggregate principal amount of the outstanding Debt Securities of such series (or
25% in aggregate principal amount of all outstanding Debt Securities under the
Indenture, in the case of certain Events of Default affecting all series of Debt
Securities under the Indenture) may declare the principal of all the Debt
Securities of such series to be due and payable. (Section 502)
Events of Default in respect of any series are defined in the Indenture as
being: (i) default for 30 days in payment of any interest installment with
respect to such series; (ii) default in payment of principal of, or premium, if
any, on, or any sinking fund or analogous payment with respect to, Debt
Securities of such series when due at their stated maturity, by declaration or
acceleration, when called for redemption or otherwise; (iii) default for 90 days
after notice to the Issuer (or the Guarantor, if applicable) by the Trustee
thereunder or by Holders of 25% in aggregate principal amount of the outstanding
Debt Securities of such series in the performance of any covenant pertaining to
Debt Securities of such series; (iv) failure to pay when due, upon final
maturity or upon acceleration, the principal amount of any indebtedness for
money borrowed of the Issuer in excess of $50 million, if such indebtedness is
not discharged, or such acceleration annulled, within 60 days after written
notice; and (v) certain events of bankruptcy, insolvency and reorganization with
respect to the Guarantor, the Issuer or any Material Subsidiary of the Issuer
which is organized under the laws of the United States or any political
sub-division thereof. (Section 501, as amended by the Third Supplemental
Indenture, and Form of Security.)
Any additions, deletions or other changes to the Events of Default which
will be applicable to a series of Debt Securities will be described in the
Prospectus Supplement relating to such series of Debt Securities.
The Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default with respect to the Debt Securities of any
series, give to the Holders of the Debt Securities of such series notice of all
uncured and unwaived defaults known to it; provided that, except in the case of
default in the payment of principal of, premium, if any, or interest, if any, on
any of the Debt Securities of such series, the Trustee thereunder will be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the Holders of the Debt
Securities of such series. The term 'default' for the purpose of this provision
means the happening of any of the Events of Default specified above, except that
any grace period or notice requirement is eliminated. (Section 602)
The Indenture contains provisions entitling the Trustee, subject to the
duty of the Trustee during an Event of Default to act with the required standard
of care, to be indemnified by the Holders of the Debt Securities before
proceeding to exercise any right or power under the Indenture at the request of
Holders of the Debt Securities. (Section 603)
The Indenture provides that the Holders of a majority in aggregate
principal amount of the outstanding Debt Securities of any series may direct the
time, method and place of conducting proceedings for remedies available to the
Trustee or exercising any trust or power conferred on the Trustee in respect of
such series, subject to certain conditions. (Section 512)
The Indenture includes a covenant that the Issuer will file annually with
the Trustee a certificate of no default or specifying any default that exists.
(Section 1004)
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In certain cases, the Holders of a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of such series waive any past default or Event of Default with
respect to the Debt Securities of such series or compliance with certain
provisions of the Indenture, except, among other things, a default not
theretofore cured in payment of the principal of, or premium, if any, or
interest, if any, on any of the Debt Securities of such series. (Sections 513
and 1008)
MODIFICATION OF THE INDENTURE
The Issuer and the Trustee may, without the consent of the Holders of the
Debt Securities, enter into indentures supplemental to the Indenture for, among
others, one or more of the following purposes: (i) to evidence the succession of
another Person to the Issuer or the Guarantor, and the assumption by such
successor of the Issuer's or the Guarantor's obligations under the Indenture and
the Debt Securities of any series; (ii) to add covenants of the Issuer and the
Guarantor, or surrender any rights of the Issuer or the Guarantor, for the
benefit of the Holders of Debt Securities of any or all series; (iii) to cure
any ambiguity, or correct any inconsistency in the Indenture; (iv) to evidence
and provide for the acceptance of any successor Trustee with respect to one or
more series of Debt Securities or to facilitate the administration of the trusts
thereunder by one or more trustees in accordance with the Indenture; (v) to
establish the form or terms of any series of Debt Securities; and (vi) to
provide any additional Events of Default. (Section 901, as amended by the Third
Supplemental Indenture.)
The Indenture contains provisions permitting the Issuer and the Trustee
thereunder, with the consent of the Holders of a majority in principal amount of
the outstanding Debt Securities of each series to be affected, to execute
supplemental indentures adding any provisions to or changing or eliminating any
of the provisions of the Indenture or modifying the rights of the Holders of the
Debt Securities of such series to be affected, except that no such supplemental
indenture may, without the consent of the Holders of affected Debt Securities,
among other things, change the fixed maturity of any Debt Securities, or reduce
the principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon, or reduce the number of shares of any common stock or other
securities to be delivered by the Issuer in respect of a conversion of any
convertible Debt Securities or reduce the aforesaid percentage of Debt
Securities of any series the consent of the Holders of which is required for any
such supplemental indenture. (Section 902)
THE TRUSTEE
The Chase Manhattan Bank, formerly known as Chemical Bank, is the Trustee
under the Indenture. The Trustee is a depository for funds and performs other
services for, and transacts other banking business with, the Company in the
normal course of business.
GOVERNING LAW
The Indenture will be governed by, and construed in accordance with, the
laws of the State of New York.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depository (the 'Depository') identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depository for such Global Security to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by the Depository or any nominee of such Depository to a successor
Depository or any nominee of such successor.
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The specific terms of the depository arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. Unless otherwise specified in the Prospectus Supplement, the Issuer
anticipates that the following provisions will apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ('Participants'). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Issuer if such Debt Securities are offered and sold
directly by the Issuer. Ownership of beneficial interests in a Global Security
will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in such Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depository or its nominee (with respect to
interests of Participants) and records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, pledge or transfer beneficial interests in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Debt Securities of
the series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Global Security must rely on the procedures of the
Depository for such Global Security and, if such person is not a Participant, on
the procedures of the Participant through which such person owns its interest,
to exercise any rights of a holder under the Indenture. The Issuer understands
that under existing industry practices, if the Issuer requests any action of
holders or if an owner of a beneficial interest in a Global Security desires to
give or take any action which a holder is entitled to give or take under the
Indenture, the Depository for such Global Security would authorize the
Participants holding the relevant beneficial interests to give or take such
action, and such Participants would authorize beneficial owners owning through
such Participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Payments of principal of and any premium and any interest on individual
Debt Securities represented by a Global Security registered in the name of a
Depository or its nominee will be made to the Depository or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. None of the Issuer, the Trustee, any paying agent or the
registrar for such Debt Securities will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Issuer expects that the Depository for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depository or its nominee. The Issuer also expects that payments by Participants
to owners of beneficial interests in such Global Security held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in 'street name'. Such payments will be the responsibility of
such Participants.
If a Depository for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depository and a successor depository is not
appointed by the Issuer within 90 days, the
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Issuer will issue individual Debt Securities of such series in exchange for the
Global Security representing such series of Debt Securities. In addition, the
Issuer may, at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities,
determine not to have any Debt Securities of such series represented by one or
more Global Securities and, in such event, will issue individual Debt Securities
of such series in exchange for the Global Security or Securities representing
such series of Debt Securities. Individual Debt Securities of such series so
issued will be issued in denominations, unless otherwise specified by the
Issuer, of $1,000 and integral multiples thereof. Any Debt Securities issued in
definitive form in exchange for a Global Security will be registered in such
name or names as the Depository shall instruct the Trustee. It is expected that
such instructions will be based upon directions received by the Depository from
Participants with respect to ownership of beneficial interests in such Global
Security.
HOLDING COMPANY STRUCTURE
Each of the Issuer and the Guarantor is a holding company, the assets of
which consist primarily of investments in its consolidated and unconsolidated
subsidiaries. The assets of the Guarantor consist primarily of its investment in
the Issuer and TBS, and the assets of the Issuer consist primarily of its
investments in its consolidated and unconsolidated subsidiaries, including TWE.
A substantial portion of the consolidated liabilities of the Issuer and the
Guarantor have been incurred by subsidiaries. TWE, which is not consolidated
with either the Issuer or the Guarantor for financial reporting purposes, also
has substantial indebtedness and other liabilities. The Issuer's and the
Guarantor's rights and the rights of their creditors, including Holders of Debt
Securities, to participate in the distribution of assets of any person in which
the Issuer or the Guarantor owns an equity interest (including any subsidiary
and TWE) upon such person's liquidation or reorganization will be subject to
prior claims of such person's creditors, including trade creditors, except to
the extent that the Issuer or the Guarantor may be a creditor with recognized
claims against such person (in which case the claims of the Issuer and the
Guarantor would still be subject to the prior claims of any secured creditor of
such person and of any holder of indebtedness of such person that is senior to
that held by the Issuer or the Guarantor). Accordingly, the Holders of Debt
Securities may be deemed to be effectively subordinated to such claims.
Each of the Issuer's and the Guarantor's ability to service its
indebtedness and other obligations, including the Debt Securities and the
Guarantee, and the ability of the Guarantor to pay dividends on its common and
preferred stock is dependent primarily upon the earnings and cash flow of their
respective consolidated and unconsolidated subsidiaries and the distribution or
other payment of such earnings and cash flow to the Issuer and the Guarantor.
The TWE Agreement of Limited Partnership and the respective bank credit
facilities of TBS and TWI Cable Inc. ('TWI Cable') (a subsidiary of the Issuer)
limit distributions and other transfers of funds to the Issuer and the
Guarantor. Generally, distributions by TWE, other than tax distributions, are
subject to restricted payments limitations and availability under certain
financial ratios applicable to TWE. As a result of the acquisitions by
subsidiaries of the Issuer of certain cable systems, certain subsidiaries of the
Issuer have outstanding indebtedness and bank credit facilities that contain
limitations on the ability of such subsidiaries to make distributions or other
payments to the Issuer. Generally, distributions by each of TBS and TWI Cable,
other than tax distributions, are subject to restricted payments limitations and
availability under certain financial ratios applicable to TBS and TWI Cable
under the respective bank credit facilities of which each is a borrower and
party thereto.
Additional information concerning the indebtedness of the Issuer and the
Guarantor and its subsidiaries will be set forth in the Prospectus Supplement.
PLAN OF DISTRIBUTION
The Issuer may sell the Debt Securities to one or more underwriters or
dealers for public offering and sale by them or may sell the Debt Securities to
investors directly or through agents. The Prospectus Supplement with respect to
the Debt Securities offered thereby describes the terms of the offering of such
Debt Securities and the method of distribution of the Debt Securities offered
thereby and identifies any firms acting as underwriters, dealers or agents in
connection therewith.
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The Debt Securities may be distributed from time to time in one or more
transactions at a fixed price or prices (which may be changed) or at prices
determined as specified in the Prospectus Supplement. In connection with the
sale of the Debt Securities, underwriters, dealers or agents may be deemed to
have received compensation from the Issuer in the form of underwriting discounts
or commissions and may also receive commissions from purchasers of the Debt
Securities for whom they may act as agent. Underwriters may sell the Debt
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters or
commissions from the purchasers for whom they may act as agent. Certain of the
underwriters, dealers or agents who participate in the distribution of the Debt
Securities may engage in other transactions with, and perform other services
for, the Issuer and the Guarantor in the ordinary course of business.
Any underwriting compensation paid by the Issuer to underwriters or agents
in connection with the offering of the Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to dealers, are set forth in
the Prospectus Supplement. Underwriters, dealers and agents participating in the
distribution of the Debt Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
the resale of the Debt Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters and their controlling
persons, dealers and agents may be entitled, under agreements entered into with
the Issuer, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
LEGAL OPINIONS
Certain legal matters in connection with the Debt Securities will be passed
upon for the Issuer and the Guarantor by Cravath, Swaine & Moore, Worldwide
Plaza, 825 Eighth Avenue, New York, New York and for the Underwriters, if any,
named in a Prospectus Supplement, by Shearman & Sterling, 599 Lexington Avenue,
New York, New York.
EXPERTS
The consolidated financial statements and schedules of the Guarantor and
TWE appearing in the Guarantor's 1996 Form 10-K and the combined financial
statements of the Time Warner Service Partnerships incorporated by reference
therein, have been audited by Ernst & Young LLP, Independent Auditors, as set
forth in their reports thereon included therein and incorporated herein by
reference. Such financial statements and schedules are incorporated herein by
reference in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements of Cablevision Industries Corporation
at December 31, 1995, and for the year then ended, incorporated by reference in
this Prospectus from the Guarantor's Current Report on Form 8-K dated March 21,
1997, have been audited by Ernst & Young LLP, Independent Auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such reports given upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Cablevision Industries Corporation
as of December 31, 1994, and for each of the two years in the period ended
December 31, 1994, incorporated by reference in this Prospectus from the
Guarantor's Current Report on Form 8-K dated March 21, 1997, have been audited
by Arthur Andersen LLP, Independent Public Accountants, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements have been incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The financial statements of Paragon Communications as of December 31, 1993
and 1994, and for each of the three years in the period ended December 31, 1994,
incorporated by reference in this Prospectus from the Guarantor's 1996 Form
10-K, and the consolidated financial statements of TBS, as of December 31, 1994
and 1995, and for the three years in the period ended December 31, 1995,
incorporated by reference in this Prospectus from the Guarantor's Current Report
on Form 8-K dated March 21, 1997, have been audited by Price Waterhouse LLP,
Independent Accountants, as set forth in
14
<PAGE>
<PAGE>
their reports thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such reports given upon the authority of such firm as experts in accounting and
auditing.
------------------------
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus or any
accompanying Prospectus Supplement in connection with the offer made by this
Prospectus or any Prospectus Supplement, and, if given or made, such other
information or representations must not be relied upon as having been authorized
by the Issuer, the Guarantor or by any underwriter, dealer or agent. This
Prospectus and any Prospectus Supplement do not constitute an offer to sell or a
solicitation of an offer to buy any securities other than those to which they
relate. Neither the delivery of this Prospectus and any accompanying Prospectus
Supplement nor any sale of or offer to sell the Debt Securities offered hereby
shall, under any circumstances, create an implication that there has been no
change in the affairs of the Issuer or the Guarantor, or that the information
herein is correct as of any time after the date hereof. This Prospectus and any
accompanying Prospectus Supplement do not constitute an offer to sell or a
solicitation of an offer to buy any of the Debt Securities offered hereby in any
State to any person to whom it is unlawful to make such offer or solicitation in
such State.
15
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following statement sets forth the estimated amounts of expenses, other
than underwriting, discounts, to be borne by the registrants in connection with
the distribution of the Debt Securities and the Guarantee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........................................ $ 308,345*
Trustees' fees............................................................................. 20,000
Printing and engraving expenses............................................................ 200,000
Rating agency fees......................................................................... 100,000
Accounting fees and expenses............................................................... 100,000
Legal fees and expenses.................................................................... 150,000
Miscellaneous expenses..................................................................... 21,655
-------------
Total expenses................................................................... $ 900,000
-------------
-------------
</TABLE>
- ------------
* Includes the registration fee for $550,581,500 of Debt Securities and
Guarantees of such Debt Securities which was previously paid.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the 'DGCL') provides
that a corporation may indemnify directors and officers as well as other
employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation -- a
'derivative action' ), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) actually and reasonably incurred
in connection with the defense or settlement of such action, and the statute
requires court approval before there can be any indemnification where the person
seeking indemnification has been found liable to the corporation. The statute
provides that it is not exclusive of other indemnification that may be granted
by a corporation's charter, by-laws, disinterested director vote, stockholder
vote, agreement or otherwise.
Each of the Issuer's and the Guarantor's By-Laws requires indemnification
to the fullest extent permitted under Delaware law of any person who is or was a
director or officer of the Issuer or the Guarantor who is or was involved or
threatened to be made so involved in any action, suit or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that
such person is or was serving as a director, officer or employee of the Issuer
or the Guarantor or any predecessor of the Issuer or the Guarantor or was
serving at the request of the Issuer or the Guarantor as a director, officer or
employee of any other enterprise.
Section 102(b)(7) of the DGCL permits a provision in the certificate of
incorporation of each corporation organized thereunder, such as the Issuer and
the Guarantor, eliminating or limiting, with certain exceptions, the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Section 1, Article X of each
of the Issuer's and the Guarantor's Certificate of Incorporation eliminates the
liability of directors to the extent permitted by Section 102(b)(7) of the DGCL.
The foregoing statements are subject to the detailed provisions of Sections
145 and 102(b)(7) of the DGCL, each of the Issuer's and the Guarantor's By-laws
and Section 1, Article X of each of the Issuer's and the Guarantor's Certificate
of Incorporation, as applicable.
II-1
<PAGE>
<PAGE>
The Directors' and Officers' Liability and Reimbursement Insurance Policy
of the Guarantor is designed to reimburse each of the registrants for any
payments made by each pursuant to the foregoing indemnification. The policy has
coverage of $50,000,000.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
(1) -- Proposed form of Underwriting Agreement.**
(4.1) -- Indenture dated as of June 15, 1993 between the Issuer and The Chase Manhattan Bank (formerly known as
Chemical Bank), as Trustee (filed as Exhibit 4.1 to the Issuer's Registration Statement on Form S-3 (File
No. 33-57030) filed with the Commission on January 14, 1993).*
(4.2) -- Form of Senior Security (filed as Exhibit 4.4 to the Issuer's Registration Statement on Form S-3 (File
No. 33-53148) filed with the Commission on October 9, 1992).*
(4.3) -- Second Supplemental Indenture dated as of October 10, 1996 among the Issuer, the Guarantor and The Chase
Manhattan Bank, as Trustee (filed as Exhibit 4.1 to the Issuer's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996).*
(4.4) -- Third Supplemental Indenture dated as of December 31, 1996 among the Issuer, the Guarantor and The Chase
Manhattan Bank, as Trustee (filed as Exhibit 4.10 to the Guarantor's Annual Report on Form 10-K for the
year ended December 31, 1996).*
(5) -- Opinion of Cravath, Swaine & Moore.**
(12) -- Statement regarding the computation of the ratio of earnings to fixed charges.**
(23.1) -- Consent of Ernst & Young LLP, Independent Auditors.**
(23.2) -- Consent of Counsel (included in Exhibit (5)).
(23.3) -- Consent of Arthur Andersen LLP, Independent Public Accountants.**
(23.4) -- Consent of Price Waterhouse LLP, Independent Accountants.**
(23.5) -- Consent of Price Waterhouse LLP, Independent Accountants.**
(24.1) -- Power of Attorney of the Issuer (filed as Exhibit 24.1 to the Registration Statement on Form S-3 (File
No. 333-17171) filed with the Commission on December 3, 1996).*
(24.2) -- Power of Attorney of the Guarantor (filed as Exhibit 24.2 to the Registration Statement on Form S-3
(File No. 333-17171) filed with the Commission on December 3, 1996).*
(25) -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect to the
Issuer and the Guarantor (bound separately).**
</TABLE>
- ------------
* Incorporated by reference.
** Filed herewith.
ITEM 17. UNDERTAKINGS
A. Undertakings Pursuant to Rule 415
The undersigned registrants hereby undertake:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the 'Calculation of
Registration Fee' table in the effective registration statement; and
II-2
<PAGE>
<PAGE>
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrants
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement;
(b) that, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(c) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Undertaking Regarding Filings Incorporating Subsequent Exchange Act Documents
by Reference
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of any of the
registrants' annual reports pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Undertaking in Respect of Indemnification
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described in Item 15 above, or otherwise,
the registrants have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
officer, director or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether or not such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment to
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 August 4, 1997.
TIME WARNER COMPANIES, INC.
By: /S/ JOHN A. LABARCA
...................................
JOHN A. LABARCA
SENIOR VICE PRESIDENT AND CONTROLLER
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below on August 4, 1997 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<C> <S>
(i) Principal Executive Officer
* Chairman and Chief Executive Officer
.........................................
GERALD M. LEVIN
(ii) Principal Financial Officer
* Director, Senior Vice President and
......................................... Chief Financial Officer
RICHARD J. BRESSLER
(iii) Principal Accounting Officer
/S/ JOHN A. LABARCA Senior Vice President and Controller
.........................................
JOHN A. LABARCA
(iv) Directors
*
.........................................
PETER R. HAJE
*
.........................................
RICHARD D. PARSONS
*By: /S/ JOHN A. LABARCA
.........................................
(ATTORNEY-IN-FACT)
</TABLE>
II-4
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on August 4, 1997.
TIME WARNER INC.
By: /S/ JOHN A. LABARCA
...................................
JOHN A. LABARCA
SENIOR VICE PRESIDENT AND CONTROLLER
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below on August 4, 1997 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<C> <S>
(i) Principal Executive Officer
* Director, Chairman of the Board and
.......................................... Chief Executive Officer
(GERALD M. LEVIN)
(ii) Principal Financial Officer
* Senior Vice President and Chief Financial Officer
..........................................
(RICHARD J. BRESSLER)
(iii) Principal Accounting Officer
/s/ JOHN A. LABARCA Senior Vice President and Controller
..........................................
(JOHN A. LABARCA)
(iv) Directors
*
.........................................
(MERV ADELSON)
*
.........................................
(J. CARTER BACOT)
.........................................
(STEPHEN F. BOLLENBACH)
*
.........................................
(BEVERLY SILLS GREENOUGH)
.........................................
(GERALD GREENWALD)
*
.........................................
(CARLA A. HILLS)
*
.........................................
(REUBEN MARK)
</TABLE>
II-5
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------------------ ---------------------------------------------------------------------
<C> <S>
*
.........................................
(MICHAEL A. MILES)
*
.........................................
(RICHARD D. PARSONS)
*
.........................................
(DONALD S. PERKINS)
*
.........................................
(RAYMOND S. TROUBH)
*
.........................................
(R. E. TURNER)
*
.........................................
(FRANCIS T. VINCENT, JR.)
</TABLE>
*By: /S/ JOHN A. LABARCA
........................
(ATTORNEY-IN-FACT)
II-6
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------- ---------------------------------------------------------------------------------------------------- ----
<S> <C> <C>
(1) -- Proposed form of Underwriting Agreement.**.......................................................
(4.1) -- Indenture dated as of June 15, 1993 between the Issuer and The Chase Manhattan Bank (formerly
known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to the Issuer's Registration Statement
on Form S-3 (File No. 33-57030) filed with the Commission on January 14, 1993)*...................
(4.2) -- Form of Senior Security (filed as Exhibit 4.4 to the Issuer's Registration Statement on Form S-3
(File No. 33-53148) filed with the Commission on October 9, 1992)*................................
(4.3) -- Second Supplemental Indenture dated as of October 10, 1996 among the Issuer, the Guarantor and
The Chase Manhattan Bank, as Trustee (filed as Exhibit 4.1 to the Issuer's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996)*..............................................
(4.4) -- Third Supplemental Indenture dated as of December 31, 1996 among the Issuer, the Guarantor and
The Chase Manhattan Bank, as Trustee (filed as Exhibit 4.10 to the Guarantor's Annual Report on
Form 10-K for the year ended December 31, 1996)*..................................................
(5) -- Opinion of Cravath, Swaine & Moore**.............................................................
(12) -- Statement regarding the computation of the ratio of earnings to fixed charges**..................
(23.1) -- Consent of Ernst & Young LLP, Independent Auditors**.............................................
(23.2) -- Consent of Counsel (included in Exhibit (5)).....................................................
(23.3) -- Consent of Arthur Andersen LLP, Independent Public Accountants**.................................
(23.4) -- Consent of Price Waterhouse LLP, Independent Accountants**.......................................
(23.5) -- Consent of Price Waterhouse LLP, Independent Accountants**.......................................
(24.1) -- Power of Attorney of the Issuer (filed as Exhibit 24.1 to the Registration Statement on Form S-3
(File No. 333-17171) filed with the Commission on December 3, 1996)*..............................
(24.2) -- Power of Attorney of the Guarantor (filed as Exhibit 24.2 to the Registration Statement on Form
S-3 (File No. 333-17171) filed with the Commission on December 3, 1996)*..........................
(25) -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect
to the Issuer and the Guarantor (bound separately)**..............................................
</TABLE>
- ------------
* Incorporated by reference.
** Filed herewith.
<PAGE>
<PAGE>
TIME WARNER INC.
TIME WARNER COMPANIES, INC.
Underwriting Agreement
[________], 1997
New York, New York
To the Representatives
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Time Warner Companies, Inc., a Delaware corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of [the securities] identified in Schedule
I hereto (the "Debt Securities"), to be issued under an indenture (as
supplemented, the "Indenture") dated as of January 15, 1993, between the Company
and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the
"Trustee"), as supplemented by a Second Supplemental Indenture dated as of
October 10, 1996 and a Third Supplemental Indenture dated as of December 31,
1996, among the Company, the Guarantor and the Trustee, providing for the
issuance of debt securities in one or more series, all of which will be entitled
to the benefit of the Guarantee referred to below. Time Warner Inc., a Delaware
corporation (the "Guarantor"), became the parent of the Company and Turner
Broadcasting System, Inc., a Georgia corporation ("TBS"), upon the merger of the
Company and TBS with separate subsidiaries of the Guarantor. Immediately
following such merger, the Guarantor, as primary obligor and not merely as
surety, agreed to irrevocably and unconditionally guarantee (the "Guarantee";
and together with the Debt Securities, the "Securities"), to each holder of Debt
Securities and to the Trustee, (i) the full and punctual payment of principal of
and interest on the Debt Securities when due and all
<PAGE>
<PAGE>
2
other payment obligations of the Company under the Indenture and the Debt
Securities and (ii) the full and punctual performance within applicable grace
periods of all other obligations of the Company under the Indenture and the Debt
Securities. If the firm or firms listed in Schedule II hereto include only the
firm or firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives", as used herein, shall each be deemed to refer to such firm or
firms.
1. Representations and Warranties. Each of the Company and the
Guarantor 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 Guarantor 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 Guarantor may have
filed one or more amendments thereto, and may have used a
Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so
amended, has become effective. The offering of the Securities
is a Delayed Offering and, although the Basic Prospectus may
not include all the information with respect to the Securities
and the offering thereof required by the Act and the rules
thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the Act
and the rules thereunder to be included therein as of the
Effective Date. The Company and the Guarantor will next file
with the Commission pursuant to Rules 415 and 424(b)(2) or (5)
a final supplement to the form of prospectus included in such
registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus supplement
shall include all required information with respect to the
Securities and the offering thereof and, except to the extent
the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company and
<PAGE>
<PAGE>
3
the Guarantor have advised you, prior to the Execution Time,
will be included or made therein.
(ii) The Company and the Guarantor 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 Guarantor 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 Guarantor will next file with the Commission either (x) a
final prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b)(1) or (4), or (y) prior
to the effectiveness of such registration statement, an
amendment to such registration statement, including the form
of final prospectus supplement. In the case of clause (x), the
Company and the Guarantor 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 Guarantor have advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the respective
rules thereunder; on the Effective Date, the Registration Statement did
not or will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading; on the
Effective Date and on the Closing Date the Indenture did or will comply
in all material respects with the requirements of the Trust Indenture
Act and the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or
<PAGE>
<PAGE>
4
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 Guarantor
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 the 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) Each of the Company and the Guarantor is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority under such laws to
own its properties and conduct its business as described in the Basic
Prospectus, and any amendment or supplement thereto, and to enter into
and perform its obligations under this Agreement; and each of the
Company and the Guarantor 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 either the Company and its
subsidiaries or the Guarantor and its subsidiaries, in each case
considered as one enterprise.
(d) Each of the Company's and the Guarantor'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 either the
Company and its subsidiaries or the Guarantor and its subsidiaries, in
each case considered as one enterprise.
(e) The Guarantor's authorized equity capitalization is as set
forth in the Basic Prospectus, and any amendment or supplement thereto.
<PAGE>
<PAGE>
5
(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 or the Guarantor 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 and the Guarantor.
(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
Guarantor 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) (1) The execution and delivery of this Agreement and the
Indenture by the Company, the issuance, sale and delivery of the Debt
Securities and the consummation by the Company of the transactions
contemplated in this Agreement, the Indenture and the Registration
Statement and compliance by the Company with the terms of this
Agreement or any Delayed Delivery Contracts do not and will not result
in any violation of the Restated Certificate of Incorporation, as
amended, or By-laws, as amended, of the Company, 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 under (i) that certain Amended and Restated
Credit Agreement (the "TWE Credit Agreement"), dated as of June 30,
1995, among Time Warner Entertainment Company, L.P., a Delaware limited
partnership ("TWE"), the Time Warner Entertainment-Advance/Newhouse
Partnership, a New York general partnership, TWI Cable Inc., a Delaware
corporation and a wholly owned subsidiary of the Company, and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Administrative
Agent, the Agents and the Banks named therein, that certain Credit
Agreement (the "TWC Credit Agreement"), dated as of May 23, 1996, among
the Guarantor (as successor and permitted assign of the Company), The
Chase Manhattan Bank (formerly known as Chemical Bank), as
Administrative Agent, and the lenders named therein, or any indenture,
mortgage or loan agreement, or any
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6
other agreement or instrument, to which the Company is a party or by
which it may be bound or to which any of its 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 either the Company and its subsidiaries or the
Guarantor and its subsidiaries, in each case 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 either the Company and its subsidiaries or the Guarantor
and its subsidiaries, in each case 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 or any of
its properties.
(2) The execution and delivery of this Agreement and the
Indenture by the Guarantor, the issuance, sale and delivery of the
Guarantee and the consummation by the Guarantor of the transactions
contemplated in this Agreement, the Indenture and the Registration
Statement and compliance by the Guarantor with the terms of this
Agreement or any Delayed Delivery Contracts do not and will not result
in any violation of the Certificate of Incorporation, as amended, or
By-laws, as amended, of the Guarantor, 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
Guarantor under (i) the TWC Credit Agreement or any indenture, mortgage
or loan agreement, or any other agreement or instrument, to which the
Guarantor is a party or by which it may be bound or to which any of its
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 either the Company
and its subsidiaries or the Guarantor and its subsidiaries, in each
case 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 either the Company and its subsidiaries or the
Guarantor and its subsidiaries, in each case 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 Guarantor or any of its 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
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7
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 Guarantor have no reason to
believe that such Securities will not be authorized for listing,
subject to official notice of issuance and evidence of satisfactory
distribution.
(l) The Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and, assuming due authorization, execution and delivery
by the Trustee, constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and subject as to enforceability
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law); and the Securities have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, in the case of the
Underwriters' Securities, or by the purchasers thereof pursuant to
Delayed Delivery Contracts, in the case of any Contract Securities,
will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or other laws affecting creditors' rights generally from time to time
in effect and subject as to enforceability to general principles of
equity, regardless of whether considered in a proceeding in equity or
at law.
(m) The Indenture has been duly authorized, executed and
delivered by the Guarantor and constitutes a legal, valid and binding
instrument enforceable against the Guarantor 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 and the Guarantor has been duly authorized, executed and
delivered by the Company and the Guarantor, respectively, and, assuming
the due authorization, execution and delivery by the purchaser
thereunder, is a valid and binding obligation
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8
of the Company and the Guarantor enforceable against the Company and
the Guarantor, 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, the Guarantor, TWE 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,
the Guarantor, TWE and any such other person as of the dates indicated
and the consolidated results of operations and cash flows of each of
the Company, the Guarantor, TWE and any such other person 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 or the Guarantor 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 and the
Guarantor, 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
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<PAGE>
9
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. "Registration Statement"
shall mean the registration statement referred to in paragraph (a)
above, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined), shall
also mean such registration statement as so amended. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule
430A" and "Regulation S-K" refer to such rules or regulation under the
Act. "Rule 430A Information" means information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
All references in this Agreement to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Exchange Act on or before the Effective Date of
the Registration Statement or the issue date of the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, as the case
may be; all references in this Agreement to financial statements and
schedules and other information that is "contained", "included" or
"stated" in the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that are or
are deemed to be incorporated by reference in the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or
the Final Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement,
the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to mean and include the filing of any
document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as
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<PAGE>
10
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) Neither the Company nor the Guarantor 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, each of
the Company and the Guarantor agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Guarantor, at the purchase price for the Securities set forth in Schedule I
hereto, the principal amount of Securities set forth opposite such Underwriter's
name in Schedule II hereto, except that, if Schedule I hereto provides for the
sale of Securities pursuant to delayed delivery arrangements, the respective
principal amounts of 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. Securities to be purchased by the
Underwriters are herein sometimes called the "Underwriters' Securities" and
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 Securities from the Company and the
Guarantor pursuant to delayed delivery contracts ("Delayed Delivery Contracts"),
substantially in the form of Schedule III hereto but with such changes therein
as the Company or the Guarantor 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 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 Guarantor will
enter into Delayed Delivery Contracts in all cases where sales of Contract
Securities arranged by the Underwriters have been approved by the
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11
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 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 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 and the Guarantor in writing; provided,
however, that the total principal amount of Securities to be purchased by all
Underwriters shall be the aggregate principal amount set forth in Schedule II
hereto less the aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwriters' Securities shall be made on the date and at the time specified in
Schedule I hereto, which date and time may be postponed to a date not later than
five business days after such specified date by agreement between the
Representatives, acting jointly and without regard to any agreement among
underwriters, and the Company or as provided in Section 8 hereof (such date and
time of delivery and payment for the Underwriters' Securities being herein
called the "Closing Date"). Delivery of the Underwriters' Securities shall be
made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by certified or official bank check or checks drawn on or by a New York
Clearing House bank and payable in next day funds (unless another form of
payment is specified in Schedule I hereto). Delivery of the Underwriters'
Securities shall be made at such location as the Representatives shall
reasonably designate on the Closing Date and payment for the Securities shall be
made at the office specified in Schedule I hereto. Certificates for the
Underwriters' Securities shall be registered in such names and in such
denominations as the Representatives may request not less than one full business
day in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities
available for inspection, checking and packaging by the Representatives in New
York, New York, not later than 1:00 PM on the business day prior to the Closing
Date.
4. Agreements. The Company and the Guarantor agree with the
several Underwriters that:
(a) Each of the Company and the Guarantor will use its best
efforts to cause the Registration Statement, if not effective at the
Execution Time, and any
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12
amendment thereto, to become effective. Prior to the termination of the
offering of the Securities, neither the Company nor the Guarantor 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 the Guarantor has furnished
you a copy for your review prior to filing and neither 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 Guarantor 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
or the Guarantor will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective, (ii) when the Final
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424(b), (iii) when, prior to termination of
the offering of each series of Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv)
of any request by the Commission for any amendment to the Registration
Statement or supplement to the Final Prospectus or for any additional
information relating to the offering of the Securities, (v) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (vi) of the receipt
by the Company or the Guarantor 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 and the Guarantor 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, in the opinion of counsel for you or counsel for
the Company and the Guarantor, 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 Guarantor
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 Guarantor will
make generally available to their respective security holders and to
the Representatives an
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13
earnings statement or statements of each of the Company and the
Guarantor 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 and the Guarantor will use its 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
Guarantor 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
Guarantor 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 or the Guarantor will furnish to the
Representatives and counsel for the Underwriters, without charge,
copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of any Preliminary Final Prospectus
and the Final Prospectus and any supplement thereto as the
Representatives may reasonably request.
(h) The Company and the Guarantor will pay and bear all costs
and expenses incident to the performance of their obligations under
this Agreement, including (i) the preparation, printing and filing of
the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, any preliminary
prospectus supplements and the Basic Prospectus, the Preliminary Final
Prospectus and the Final Prospectus and any amendments or supplements
thereto, and the cost of furnishing copies thereof to the Underwriters,
(ii) the preparation, printing and distribution of this Agreement, the
Indenture, the Securities, any Delayed Delivery Contracts, the Blue Sky
Survey and the Legal Investment Survey, (iii) the delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the
Company's and the Guarantor's counsel and the accountants required
hereby to provide "comfort letters", (v) the qualification of the
Securities under the applicable securities laws in accordance with
Section 4(i) and any filing for review of the offering with the
National Association of Securities Dealers, Inc., including filing fees
and fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the Blue Sky Survey and the
Legal Investment Survey, (vi)
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14
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 Depositary Trust Company.
(i) The Company and the Guarantor 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 neither
the Company nor the Guarantor shall not 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 or the Guarantor (and if
so specified in Schedule I, TBS or TWE) will, without the consent of
the managing underwriter specified in Schedule I, offer, sell or
contract to sell, or announce the offering of, any debt securities
designed or intended to be traded or distributed in the public or
private securities markets; provided, however, that the foregoing shall
not prohibit (i) the Company, the Guarantor, TBS or TWE from issuing
long-term debt as all or part of the consideration in any merger or
acquisition and/or in connection with the settlement of any litigation,
(ii) the Company, the Guarantor, TBS or TWE from filing with the
Commission a "shelf" registration statement for the offering of
securities under Rule 415 of the Act (or any similar rule that may be
adopted by the Commission) or amending any existing shelf registration
statement provided that such securities are not issued until the
business day following the Closing Date or such other date as may be
specified in Schedule I or (iii) any of the foregoing from issuing
commercial paper.
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15
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 Guarantor 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 Guarantor made in any
certificates pursuant to the provisions hereof, to the performance by each of
the Company and the Guarantor of its obligations hereunder, to the due execution
and delivery of the Indenture, to the absence of any event or condition which
would give you the right to terminate this Agreement and to the following
additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
12:00 Noon on the business day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424(b);
and at the Closing Date no stop order suspending the effectiveness of
the 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 and
the Guarantor, 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 Guarantor, each dated the Closing Date,
substantially in the form of Exhibit B and Exhibit C hereto,
respectively.
(d) The Representatives shall have received from Shearman &
Sterling, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, any Delayed Delivery Contracts, the
Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company and the Guarantor shall have
furnished to such counsel
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16
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,
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) The Guarantor shall have furnished to the Representatives
a certificate of the Guarantor, signed by any two officers who are an
Executive or Senior Vice President of the Guarantor, 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
Guarantor and 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 each
of the Guarantor 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;
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17
(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 Guarantor'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 either the Company and its subsidiaries
or the Guarantor and its subsidiaries, in each case 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).
(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, the Guarantor and TWE within the meaning
of the Act and the Exchange Act and the respective applicable published
rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules of the Company, the
Guarantor and TWE included or incorporated in the Registration
Statement and the Final Prospectus comply in form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements (including the notes thereto)
made available by the Company, the Guarantor and TWE and their
respective consolidated subsidiaries; carrying out certain
specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and executive,
finance and audit committees of the Company, the Guarantor and
TWE and their respective consolidated subsidiaries; and
inquiries of certain officials of the Company, the Guarantor
and TWE who have responsibility for financial and accounting
matters of the Company, the Guarantor and TWE and their
respective consolidated subsidiaries as to transactions and
events subsequent to the date of the most recent audited
financial statements in or incorporated in the Final
Prospectus, and such other inquiries and procedures
<PAGE>
<PAGE>
18
as may be specified in such letter, nothing came to their
attention which caused them to believe that:
(1) any of such unaudited financial
statements included or incorporated in the
Registration Statement and the Final Prospectus do
not comply in form in all material respects with
applicable accounting requirements of the Act and the
Exchange Act and with the published rules and
regulations of the Commission with respect to
financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange
Act; or said unaudited financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated in the
Registration Statement and the Final Prospectus; or
(2) with respect to the period subsequent to
the date of the most recent unaudited financial
statements in or incorporated in the Registration
Statement and the Final Prospectus, there were any
increases, at a specified date not more than five
business days prior to the date of the letter, in the
long-term debt of the Company, the Guarantor, TWE and
certain related unconsolidated subsidiaries (together
with TWE, the "Entertainment Group") and their
respective consolidated subsidiaries or any decreases
in stockholders' equity or the consolidated capital
stock of the Company, the Guarantor, TWE and the
Entertainment Group as compared with the amounts
shown on the most recent consolidated balance sheet
included or incorporated in the Registration
Statement and the Final Prospectus for such entities,
or for the period from the date of the most recent
unaudited financial statements included or
incorporated in the Registration Statement and the
Final Prospectus for such entities to such specified
date there were any decreases, as compared with the
corresponding period in the preceding year, in
revenues, income before income taxes (or any increase
in the loss before income taxes) or net income (or
any increase in net loss), except in all instances
for decreases or increases disclosed in the Final
Prospectus;
(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:
<PAGE>
<PAGE>
19
(1) read the pro forma adjustments to such
financial statements;
(2) made inquiries of certain officials of
the Company and the Guarantor who have responsibility
for financial and accounting matters about the basis
for their determination of the pro forma adjustments
to such financial statements and whether such pro
forma adjustments comply as to form in all material
respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X; and
(3) proved the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts included or incorporated by
reference in the Registration Statement and the Final
Prospectus; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that the pro forma
adjustments to the financial statements included or
incorporated by reference in the Registration Statement and
the Final Prospectus do not comply as to form in all material
respects with the applicable requirements of Rule 11-02 of
Regulation S-X and that such pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of such financial statements; and
(iv) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibit 12 to the
Registration Statement agrees with the accounting records of
the Company and its subsidiaries or the Guarantor 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
<PAGE>
<PAGE>
20
the Act and the Exchange Act and the respective applicable published
rules and regulations thereunder and to the same effect as the letter
or letters of Ernst & Young LLP as described in Section 5(f)(i) and
5(f)(ii)(1) hereto.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any decrease or increase specified in the letter or letters referred to
in paragraph (f) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting the
business (including the results of operations or management) or
properties of the Guarantor and its subsidiaries or 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 or the
Guarantor's debt securities by Moody's Investor Service, Inc. or
Standard & Poor's Ratings Group, and (ii) neither the Company nor the
Guarantor 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 Guarantor
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 canceled at, or at any time prior to, the Closing Date by the
Representatives and such cancellation shall be without liability of any party to
any other party, except to the extent provided in Sections 4 and 6. Notice of
such cancellation shall be given to the Company or the Guarantor in writing or
by telephone or telegraph confirmed in writing.
<PAGE>
<PAGE>
21
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 or
the Guarantor 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 Guarantor will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
7. Indemnification and Contribution. (a) Each of the Company
and the Guarantor 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 neither the Company nor the
Guarantor 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 or the Guarantor 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 or
the Guarantor may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless each of the Company and the Guarantor, each of their respective
directors, each of their respective officers who signs the Registration
Statement, and each person who controls the Company or the Guarantor within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Guarantor to each Underwriter, but
only with reference to written information relating to such Underwriter
furnished to the
<PAGE>
<PAGE>
22
Company or the Guarantor 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 and the
Guarantor acknowledges that the statements set forth in the last paragraph of
the cover page, the first and third paragraphs under the heading "Underwriters"
and, if Schedule I hereto provides for sales of Securities pursuant to delayed
delivery arrangements, in the last sentence under the heading "Delayed Delivery
Arrangements" in any Preliminary Final Prospectus or the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Representatives, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party (it being
understood, however, that in connection with such action, the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, representing the indemnified parties who are
parties to such action or actions), (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a
<PAGE>
<PAGE>
23
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, the Guarantor and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company, the Guarantor 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 and the Guarantor, 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, the Guarantor 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 Guarantor 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 Guarantor 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 or the Guarantor or the Underwriters. The Company, the Guarantor 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
<PAGE>
<PAGE>
24
who controls the Company or the Guarantor within the meaning of either the Act
or the Exchange Act, each officer of the Company or the Guarantor who shall have
signed the Registration Statement and each director of the Company or the
Guarantor shall have the same rights to contribution as the Company and the
Guarantor, subject in each case to the applicable terms and conditions of this
paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters
shall fail on the Closing Date to purchase and pay for any of the Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions for
each of the Debt Securities which such Underwriter failed to purchase which the
amount of the Debt Securities set forth opposite their names in Schedule II
hereto bears to the aggregate amount of such Debt Securities set forth opposite
the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all of the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the Company
and the Guarantor. 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 Guarantor 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 or the Guarantor prior to delivery of and payment for the Securities, if
prior to such time (i) trading in the Guarantor's common stock or any of the
Company's or the Guarantor's debt securities shall have been suspended by the
Commission or the New York Stock Exchange or the Pacific Stock Exchange or
trading in securities generally on either of such Exchanges shall have been
suspended or limited or minimum or maximum prices shall have been established on
either of such Exchanges, or maximum ranges for prices for securities have been
required, by such Exchanges 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
<PAGE>
<PAGE>
25
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 or the Guarantor, 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 or the Guarantor 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 or the Guarantor, will be
mailed, delivered or telegraphed and confirmed to it care of the Guarantor at 75
Rockefeller Plaza, New York, New York 10019, attention of General Counsel.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business
day" means any day on which the New York Stock Exchange is open for trading.
15. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
<PAGE>
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
TIME WARNER INC.
By__________________________
Name:
Title:
TIME WARNER COMPANIES, INC.
By__________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
[_________]
By: [________]
By______________________________
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE>
<PAGE>
SCHEDULE I
Underwriting Agreement:
Registration Statement:
Representatives:
Title, Purchase Price and Description of Securities:
1. _______________________:
Title:
Principal amount:
Interest rate:
Interest payment dates:
Date of maturity:
Purchase price (include accrued
interest or amortization, if
any):
Initial public offering price:
Sinking fund provisions:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Type of funds payable at Closing: Immediately available funds
Type of Offering: Delayed Offering
Delayed Delivery Arrangements: Not Applicable
Listing requirements:
Comfort letter at Execution Time:
<PAGE>
<PAGE>
SCHEDULE II
[Name of Securities]:
Principal
Amount
to
Underwriters be Purchased
Total......................................
<PAGE>
<PAGE>
EXHIBIT A
FORM OF OPINION OF PETER R. HAJE, ESQ.
(i) each of the Company and the Guarantor is validly existing
as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate power and
authority under such laws to own its properties and conduct its
business as described in the Final Prospectus and each of the Company
and the Guarantor 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 either the Company and its
subsidiaries or the Guarantor and its subsidiaries, in each case
considered as one enterprise;
(ii) each of the Company's and the Guarantor'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 to enter into and perform its obligations under
this Agreement; and each of the Company and the Guarantor 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 either the Company and its subsidiaries or the
Guarantor and its subsidiaries, in each case considered as one
enterprise;
(iii) each of the Company's and the Guarantor's authorized
equity capitalization is as set forth in the Final Prospectus;
(iv) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving
either the Company or the Guarantor or any of their respective
subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not described
or filed as required;
<PAGE>
<PAGE>
A-2
(v) no authorization, approval, consent, order or license of
any government, governmental instrumentality, agency or body or court
(other than under the Act and the securities or blue sky laws of
various jurisdictions) is required for the authorization, issuance,
sale and delivery of the Securities by the Company and the Guarantor,
and the consummation by the Company and the Guarantor of the
transactions contemplated by the Underwriting Agreement;
(vi) the Indenture and the Underwriting Agreement have been
duly authorized, executed and delivered by each of the Company and the
Guarantor;
(vii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated by the Underwriting Agreement, 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 (specified in such opinion) as have been obtained;
(viii) the execution and delivery of the Underwriting
Agreement and the Indenture by the Company, the issuance, sale and
delivery of the Debt Securities and the consummation by the Company of
the transactions contemplated in the Underwriting Agreement, the
Indenture and the Registration Statement and compliance by the Company
with the terms of the Underwriting Agreement do not and will not result
in any violation of the Restated Certificate of Incorporation, as
amended, or By-laws, as amended, of the Company, 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 under (i) the TWE Credit Agreement or any
indenture, mortgage or loan agreement, or any other agreement or
instrument known to such counsel, to which the Company is a party or by
which it may be bound or to which any of its 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 or business prospects of
either the Company and its subsidiaries or the Guarantor and its
subsidiaries, in each case 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 or
business prospects of either the Company and its subsidiaries or the
Guarantor and its subsidiaries, in each case 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 or any of its properties; and
<PAGE>
<PAGE>
A-3
(ix) the execution and delivery of the Underwriting Agreement
and the Indenture by the Guarantor, the issuance, sale and delivery of
the Guarantee and the consummation by the Guarantor of the transactions
contemplated in the Underwriting Agreement, the Indenture and the
Registration Statement and compliance by the Guarantor with the terms
of the Underwriting Agreement or any Delayed Delivery Contracts do not
and will not result in any violation of the Certificate of
Incorporation, as amended, or By-laws, as amended, of the Guarantor,
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 Guarantor under (i) the TWC Credit Agreement
or any indenture, mortgage or loan agreement, or any other agreement or
instrument, to which the Guarantor is a party or by which it may be
bound or to which any of its 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 either
the Company and its subsidiaries or the Guarantor and its subsidiaries,
in each case 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 either the Company and its
subsidiaries or the Guarantor and its subsidiaries, in each case
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 Guarantor or any of its properties.
(x) the documents incorporated by reference in the Final
Prospectus (except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as to which
such counsel need express no opinion), as of the dates they were filed
with the Commission, complied as to form in all material respects with
the requirements of the Securities Exchange Act of 1934, as amended.
In addition, such counsel shall also state as follows: As
General Counsel, I have reviewed and participated in the preparation of the
Registration Statement and the Final Prospectus, including the documents
incorporated by reference therein. In examining the Registration Statement and
Final Prospectus, I have necessarily assumed the correctness and completeness of
the statements made or included therein by the Company and the Guarantor and
take no responsibility therefor. However, in the course of the preparation by
the Company and the Guarantor of the Registration Statement and the Final
Prospectus, I have participated in conferences with certain officers of, and
accountants for, the Company and the Guarantor 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
<PAGE>
<PAGE>
A-4
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 or the Guarantor
and public officials.
<PAGE>
<PAGE>
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & MOORE
(i) each of the Company and the Guarantor 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 Final Prospectus;
(ii) the Securities conform in all material respects to the
description thereof contained in the Prospectus;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust Indenture Act,
and, assuming due authorization, execution and delivery by the Trustee,
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other laws
affecting creditors' rights generally from time to time in effect and subject as
to enforceability to general principles of equity, regardless of whether such
enforceability is 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 laws affecting creditors' rights generally
from time to time in effect and subject as to enforceability to general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law;
(iv) the Indenture has been duly authorized, executed and
delivered by the Guarantor and constitutes a legal, valid and binding instrument
enforceable against the Guarantor 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 such enforceability is considered in a proceeding in
equity or at law);
(v) the Registration Statement has become effective under the
Act; 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 threatened;
<PAGE>
<PAGE>
B-2
(vi) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor;
(vii) the statements made in the Prospectus under "Description
of the Debt Securities and the Guarantee", to the extent that they
constitute matters of law or legal conclusions, have been reviewed by
us and fairly present the information discussed therein in all material
respects.
We are attorneys admitted to practice only in the State of New
York and, accordingly, do not express any opinion as to any laws other than the
laws of the State of New York, the Federal laws of the United States and the
General Corporation Law of the State of Delaware.
<PAGE>
<PAGE>
EXHIBIT C
FORM OF SIDE LETTER OF CRAVATH, SWAINE & MOORE
Although we have made certain inquiries and investigations in
connection with the preparation of the Registration Statement and the
Prospectus, the limitations inherent in the role of outside counsel are such
that we cannot and do not assume responsibility for the accuracy or completeness
of the statements made in the Registration Statement and Prospectus, except
insofar as such statements relate to us and except to the extent set forth in
paragraph (vii) and in the first sentence of paragraph (ii) of our opinion to
you dated the date hereof. Subject to the foregoing, we hereby advise you that
our work in connection with this matter did not disclose any information that
gave us reason to believe that the Registration Statement and the Prospectus
(except 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. Furthermore, subject to the
foregoing, we hereby advise you that our work in connection with this matter did
not disclose any information that gave us reason to believe that the
Registration Statement, at the time the Registration Statement became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, at its issue date and at the date
hereof, included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to made the statements
therein, in the light of the circumstances under which they were made, not
misleading (in each case except for the financial statements and other
information of an accounting, statistical or financial nature included therein,
as to which we do not express any view).
<PAGE>
<PAGE>
EXHIBIT 5
[Letterhead of]
CRAVATH, SWAINE & MOORE
August 4, 1997
Time Warner Inc.
Time Warner Companies, Inc.
Ladies and Gentlemen:
We have acted as counsel for Time Warner Companies, Inc., a
Delaware corporation (the "Issuer"), and Time Warner Inc., a Delaware
corporation (the "Guarantor"), in connection with the Registration Statement on
Form S-3 (the "Registration Statement") being filed by the Issuer and the
Guarantor 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
guarantee of the Debt Securities by the Guarantor (the "Guarantee"). This
Registration Statement also constitutes a Post-Effective Amendment to the
Issuer's Registration Statements No. 33-50237 filed with the Commission on June
5, 1995 and No. 333-17171 filed with the Commission on December 3, 1996. The
Debt Securities will be issued under an Indenture dated as of January 15, 1993,
as amended by one or more supplements thereto (such Indenture, as so
supplemented being called the "Indenture"), between the Issuer and The Chase
Manhattan Bank (formerly known as Chemical Bank) (the "Trustee"), as Trustee,
filed as Exhibit 4.1 to the Issuer's Registration Statement No. 33-57030 with
the Commission on January 14, 1993 and incorporated by reference in 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 Restated
<PAGE>
<PAGE>
2
Certificate of Incorporation, as amended, of each of the Issuer and the
Guarantor, (b) the By-laws, as amended, of each of the Issuer and the Guarantor,
(c) the Indenture, (d) the Second Supplemental Indenture dated as of October
10, 1996, among the Issuer, the Guarantor and the Trustee (the "Second
Supplemental Indenture"), filed as Exhibit 4.1 to the Issuer's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996 and incorporated by
reference in the Registration Statement, (e) the Third Supplemental Indenture
dated as of December 31, 1996, among the Issuer, the Guarantor and the Trustee,
filed as Exhibit 4.10 to the Guarantor's Annual Report on Form 10-K for the year
ended December 31, 1996, (f) the form of the Debt Securities, (g) the
resolutions of the Board of Directors of each of the Issuer and the Guarantor
authorizing the registration of the Debt Securities and the Guarantee and (h)
certain resolutions adopted by the Board of Directors of each of the Issuer and
the Guarantor.
Based upon the foregoing and subject to the qualifications
hereinafter set forth, we are of opinion that:
1. The Issuer is a corporation validly existing
and in good standing under the laws of the State of
Delaware.
2. The Guarantor is a corporation validly
existing and in good standing under the laws of the
State of Delaware.
3. The Second Supplemental Indenture containing the Guarantee
has been duly authorized, executed, authenticated or countersigned
and delivered in accordance with the provisions of the Indenture
and constitutes legal, valid and binding obligation of the Guarantor,
entitled to the benefits of the Indenture and enforceable against the
the Guarantor in accordance with its terms.
The opinion set forth above in paragraph 3 is qualified to the
extent we have assumed the due execution and delivery of the Indenture and
the Second Supplemental Indenture by the Trustee and by the Issuer and the
Guarantor (pursuant, in the case of the Trustee, to appropriate corporate
authority).
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
<PAGE>
<PAGE>
3
Exhibit 5 to the Registration Statement. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act or the Rules and Regulations of
the Commission promulgated thereunder.
Very truly yours,
/s/ Cravath, Swaine & Moore
Time Warner Inc.
Time Warner Companies, Inc.
75 Rockefeller Plaza
New York, NY 10019
349A
<PAGE>
<PAGE>
EXHIBIT 12
TIME WARNER
RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
HISTORICAL (B)
------------------
PRO FORMA (A)
----------------------------- THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, 1996 ------------------
----------------------------- 1997
GUARANTOR ------------------
---------
ISSUER
------------------
ISSUER
-----------------
<S> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 23 $ (142) $228
Interest expense.......... 870 1,079 237
Amortization of
capitalized interest.... 2 19 --
Portion of rents
representative of an
interest factor......... 55 86 14
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 72 72 18
Adjustment for partially
owned subsidiaries and
50% owned companies..... 801 801 255
Undistributed losses of
less than 50% owned
companies............... 50 46 5
------ --------- -----
Total earnings........ $ 1,873 $ 1,961 $757
------ --------- -----
------ --------- -----
Fixed Charges:
Interest expense.......... $ 870 $ 1,079 $237
Capitalized interest...... 1 23 --
Portion of rents
representative of an
interest factor......... 55 86 14
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 72 72 18
Adjustment for partially
owned subsidiaries and
50% owned companies..... 607 607 150
------ --------- -----
Total fixed charges... $ 1,605 $ 1,867 $419
------ --------- -----
------ --------- -----
Ratio of earnings to fixed
charges (deficiency in the
coverage of fixed charges
by earnings before fixed
charges).................... 1.2x 1.1x 1.8x
------ --------- -----
------ --------- -----
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------
1996 1995 1994 1993 1992
1996 ------------------ ------ ------ ------ ------
------
GUARANTOR ISSUER GUARANTOR ISSUER ISSUER ISSUER ISSUER
------ ISSUER ------ --------- ------ ------ ------ ------
------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Net income (loss) before
income taxes and
extraordinary items.....$199 $(88) $ (15) $ 4 $ 2 $ 89 $ 81 $ 320
Interest expense.......... 278 247 908 968 877 769 698 729
Amortization of
capitalized interest.... 5 -- 2 6 2 2 -- 19
Portion of rents
representative of an
interest factor......... 21 14 55 63 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 18 18 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 255 148 801 801 691 665 663 97
Undistributed losses of
less than 50% owned
companies............... 7 18 50 52 117 82 47 56
------ ------ ------ --------- ------ ------ ------ ------
Total earnings........$783 $357 $1,873 $ 1,966 $1,757 $1,659 $1,543 $1,306
------ ------ ------ --------- ------ ------ ------ ------
------ ------ ------ --------- ------ ------ ------ ------
Fixed Charges:
Interest expense..........$278 $247 $ 908 $ 968 $ 877 $ 769 $ 698 $ 729
Capitalized interest...... 6 1 1 7 4 2 -- 15
Portion of rents
representative of an
interest factor......... 21 14 55 63 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 18 18 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 150 153 607 607 697 668 664 81
------ ------ ------ --------- ------ ------ ------ ------
Total fixed charges...$473 $433 $1,643 $ 1,717 $1,646 $1,491 $1,416 $ 910
------ ------ ------ --------- ------ ------ ------ ------
------ ------ ------ --------- ------ ------ ------ ------
Ratio of earnings to fixed
charges (deficiency in the
coverage of fixed charges
by earnings before fixed
charges).................... 1.7 x $(76) 1.1x 1.1x 1.1x 1.1x 1.1x 1.4x
------ ------ ------ --------- ------ ------ ------ ------
------ ------ ------ --------- ------ ------ ------ ------
</TABLE>
- ------------
(a) The pro forma ratio of earnings to fixed charges for each of the Issuer and
the Guarantor for the year ended December 31, 1996 give effect to (i) the
Preferred Stock Refinancing, as defined elsewhere herein, and certain other
debt refinancings and (ii) with respect to the Guarantor only, the TBS
Transaction, as if such transactions had occurred at the beginning of 1996.
(b) In connection with the TBS Transaction that occurred on October 10, 1996,
the Guarantor, formerly a wholly owned subsidiary of the Issuer, acquired
each outstanding share of capital stock of the Issuer (other than shares
held directly or indirectly by the Issuer) and became the parent of the
Issuer. Accordingly, the historical ratios of earnings to fixed charges (or
coverage deficiencies) of the Issuer and the Guarantor are the same for all
periods prior to such date because the Issuer is treated for financial
reporting purposes as the predecessor of the Guarantor.
<PAGE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the caption 'Experts' in the
Registration Statement on Form S-3 and related Prospectus of Time Warner Inc.
(the 'Guarantor') and Time Warner Companies, Inc. (the 'Issuer') for the
registration of $449,418,500 of Debt Securities of the Issuer unconditionally
guaranteed by the Guarantor, and to the incorporation by reference therein of
(i) our reports dated February 11, 1997, with respect to the consolidated
financial statements and schedules of the Guarantor and Time Warner
Entertainment Company, L.P., and our report dated March 3, 1995 with respect to
the combined financial statements of the Time Warner Service Partnerships,
incorporated by reference from the Guarantor's Annual Report on Form 10-K for
the year ended December 31, 1996, as amended by the Guarantor's Forms 10-K/A,
dated March 27, 1997 and June 26, 1997, and (ii) our report dated March 8, 1996,
with respect to the consolidated financial statements and schedule of
Cablevision Industries Corporation and Subsidiaries, from the Guarantor's
Current Report on Form 8-K dated March 21, 1997, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
New York, New York
August 4, 1997
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports and to all references to our Firm included in or made a part of this
Registration Statement on Form S-3 for the registration under the Securities Act
of 1933, as amended, of Debt Securities of Time Warner Companies, Inc.
unconditionally guaranteed by Time Warner Inc.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
August 4, 1997
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Time Warner Inc. and Time Warner Companies, Inc.
related to the registration of Debt Securities of Time Warner Companies, Inc.
unconditionally guaranteed by Time Warner Inc. of our report on the Paragon
Communications financial statements and schedule dated January 19, 1995, except
as to Note 6, which is as of January 27, 1995, which is incorporated by
reference in the Time Warner Inc. Annual Report on Form 10-K for the year ended
December 31, 1996. We also consent to the reference to us under the heading
'Experts' in such Registration Statement.
PRICE WATERHOUSE LLP
Denver, Colorado
August 4, 1997
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Time Warner Inc.
and Time Warner Companies, Inc. of our report dated February 5, 1996, which
appears on page 53 of Turner Broadcasting System, Inc.'s Annual Report to
Shareholders, which is incorporated by reference in Turner Broadcasting System,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995, which is
incorporated by reference from Time Warner Inc.'s Current Report on Form 8-K
dated March 21, 1997. We also consent to the incorporation by reference of our
report on the Financial Statement Schedule, which appears on page 43 of such
Annual Report on Form 10-K. We also consent to the reference to us under the
heading 'Experts' in such Prospectus.
PRICE WATERHOUSE LLP
Atlanta, Georgia
August 4, 1997
<PAGE>
<PAGE>
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
TIME WARNER COMPANIES, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-1388520
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
75 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019
(Address of principal executive offices) (Zip Code)
TIME WARNER INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-3527249
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
75 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019
(Address of principal executive offices) (Zip Code)
-------------------------------------------
DEBT SECURITIES AND GUARANTEES OF DEBT SECURITIES
(Title of the indenture securities)
-----------------------------------------------------
<PAGE>
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
(On July 14, 1996, in connection with the merger of Chemical Bank and The Chase
Manhattan Bank (National Association), Chemical Bank, the surviving corporation,
was renamed The Chase Manhattan Bank).
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 1st day of AUGUST, 1997.
THE CHASE MANHATTAN BANK
By /s/ R. Lorenzen
______________________________________
R. Lorenzen
Senior Trust Officer
- 3 -
<PAGE>
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................................ $ 11,721
Interest-bearing balances ........................................ 3,473
Securities:
Held to maturity securities .......................................... 2,965
Available for sale securities ........................................ 35,903
Federal Funds sold and securities purchased under
agreements to resell ............................................. 24,025
Loans and lease financing receivables:
Loans and leases, net of unearned income $123,957
Less: Allowance for loan and lease losses 2,853
Less: Allocated transfer risk reserve ... 13
--------
Loans and leases, net of unearned income,
allowance, and reserve ........................................... 121,091
Trading Assets ....................................................... 54,340
Premises and fixed assets (including capitalized
leases) .......................................................... 2,875
Other real estate owned .............................................. 302
Investments in unconsolidated subsidiaries and
associated companies ............................................. 139
Customers' liability to this bank on acceptances
outstanding ...................................................... 2,270
Intangible assets .................................................... 1,535
Other assets ......................................................... 10,283
------
TOTAL ASSETS ......................................................... $270,922
========
</TABLE>
- 4 -
<PAGE>
<PAGE>
<TABLE>
<S> <C>
LIABILITIES
Deposits
In domestic offices .............................................. $ 84,776
Noninterest-bearing ...................................... $32,492
Interest-bearing .......................................... 52,284
------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ........................................................ 69,171
Noninterest-bearing ........................................... $4,181
Interest-bearing ...........................................64,990
Federal funds purchased and securities sold under agree-
ments to repurchase .................................................. 32,885
Demand notes issued to the U.S. Treasury ............................. 1,000
Trading liabilities .................................................. 42,538
Other Borrowed money (includes mortgage indebtedness
and obligations under calitalized leases):
With a remaining maturity of one year or less .................... 4,431
With a remaining maturity of more than one year .................. 466
Bank's liability on acceptances executed and outstanding ............. 2,270
Subordinated notes and debentures .................................... 5,911
Other liabilities .................................................... 11,575
TOTAL LIABILITIES .................................................... 255,023
-------
EQUITY CAPITAL
Perpetual Preferred stock and related surplus 0
Common stock ......................................................... 1,211
Surplus (exclude all surplus related to preferred stock) ............ 10,283
Undivided profits and capital reserves ............................... 4,941
Net unrealized holding gains (Losses)
on available-for-sale securities ..................................... (552)
Cumulative foreign currency translation adjustments .................. 16
TOTAL EQUITY CAPITAL ................................................. 15,899
-------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ......................................... $270,922
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank,
do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE )DIRECTORS
WILLIAM B. HARRISON, JR.)
- 5 -
