DELAWARE 75 ROCKEFELLER PLAZA 13-1388520
(STATE OR OTHER JURISDICTION NEW YORK, NY 10019 (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION) (212) 484-8000
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(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DELAWARE 75 ROCKEFELLER PLAZA 13-3527249
(STATE OR OTHER JURISDICTION NEW YORK, NY 10019 (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION) (212) 484-8000
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(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
GEORGIA ONE CNN CENTER 58-0950695
(STATE OR OTHER JURISDICTION ATLANTA, GEORGIA 30303 (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION) (404) 827-1700
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(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
COPIES TO:
WILLIAM P. ROGERS, JR., ESQ. LOUISE S. SAMS, ESQ.
CRAVATH, SWAINE & MOORE VICE PRESIDENT AND GENERAL COUNSEL
825 EIGHTH AVENUE TURNER BROADCASTING SYSTEM, INC.
NEW YORK, NEW YORK 10019 ONE CNN CENTER
(212) 474-1000 ATLANTA, GEORGIA 30303
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CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED DEBENTURE(1) OFFERING PRICE(1) FEE
6.95% Debentures Due 2028.............................. $500,000,000 100% $500,000,000 $0(2)
Guarantees of 6.95% Debentures Due 2028(3)............. $500,000,000 N/A N/A N/A(4)
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(footnotes on next page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
PURSUANT TO RULE 429 OF THE GENERAL RULES AND REGULATIONS UNDER THE
SECURITIES ACT OF 1933, THE PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT
IS A COMBINED PROSPECTUS WHICH ALSO RELATES TO REGISTRATION STATEMENT NOS.
333-37827 AND 333-32813, PREVIOUSLY FILED BY TIME WARNER COMPANIES, INC. AND
TIME WARNER INC. ON FORM S-3. THIS REGISTRATION STATEMENT ALSO CONSTITUTES A
POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT NOS. 333-37827 AND 333-32813,
AND SUCH POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY
WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION
8(c) OF THE SECURITIES ACT OF 1933.
(footnotes from previous page)
(1) Estimated solely for purposes of calculating the registration fee.
(2) Time Warner Companies, Inc. previously paid $287,879 of registration fees in connection with its Registration Statement on Form S-3 (File No. 333-37827), registering $950,000,000 of Debt Securities, none of which have been issued or sold. Pursuant to Rule 429, Time Warner Companies, Inc. is hereby applying $151,516 of those registration fees toward the payment in full of the registration fees due under this Registration Statement on Form S-4.
(3) Time Warner Inc. and Turner Broadcasting System, Inc. will irrevocably and unconditionally guarantee on an unsecured senior basis the 6.95% Debentures Due 2028 of Time Warner Companies, Inc.
(4) Pursuant to Rule 457(n), no separate fee is required to be paid in respect of guarantees of the 6.95% Debentures Due 2028, which are being registered concurrently.
SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1998
PROSPECTUS
Time Warner Companies, Inc., a Delaware corporation ('TWC'), hereby offers (the 'Exchange Offer'), upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Letter of Transmittal (the 'Letter of Transmittal'), to exchange up to $500,000,000 aggregate principal amount of its 6.95% Debentures Due 2028 (the 'Exchange Debentures') that have been registered under the Securities Act of 1933, as amended (the 'Securities Act'), pursuant to a Registration Statement (as defined herein) of which this Prospectus constitutes a part, for a like principal amount of its outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures' and, together with the Exchange Debentures, the 'Debentures') with the holders thereof. The terms of the Exchange Debentures are identical in all material respects to the Outstanding Debentures except for certain transfer restrictions and registration rights relating to the Outstanding Debentures and except that, if TWC has not filed a Registration Statement covering the Exchange Debentures, caused such registration statement to become effective and consummated the Exchange Offer or caused a Shelf Registration Statement (as defined herein) with respect to resales of the Outstanding Debentures to be declared effective within certain time periods, then Additional Interest (as defined herein) on the Outstanding Debentures will be payable until the consummation of the Exchange Offer or the effectiveness of the Shelf Registration Statement. The Outstanding Debentures were issued on January 12, 1998, pursuant to an offering (the 'Original Offering') exempt from registration under the Securities Act. The initial price of the Outstanding Debentures was 98.918% of the principal amount.
Interest on the Exchange Debentures is payable semi-annually on January 15 and July 15 of each year, commencing July 15, 1998, at a rate of 6.95% per annum. The Exchange Debentures are not redeemable prior to maturity and do not have the benefit of a sinking fund.
The Exchange Debentures will be unconditionally guaranteed (the 'Guarantees') by Time Warner Inc. and Turner Broadcasting System, Inc. (collectively, the 'Guarantors'). The Exchange Debentures and the Guarantees will be general, unsecured senior obligations of TWC and the Guarantors, respectively, ranking pari passu in right of payment with all existing and future unsecured unsubordinated obligations, and senior in right of payment to all existing and future subordinated indebtedness of TWC and the Guarantors, respectively.
TWC will accept for exchange any and all Outstanding Debentures that are validly tendered and not withdrawn on or prior to midnight, New York City time, on the date the Exchange Offer expires (the 'Expiration Date'), which will be , 1998 ( business days following the commencement of the Exchange Offer), unless the Exchange Offer is extended. Tenders of Outstanding Debentures may be withdrawn at any time prior to midnight, New York City time, on the Expiration Date. The Exchange Offer is not conditioned upon any minimum principal amount of Outstanding Debentures being tendered for exchange. Outstanding Debentures may be tendered only in integral multiples of $1,000. See 'The Exchange Offer.'
(cover continued on next page)
CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
(cover continued from previous page)
For each Outstanding Debenture accepted for exchange, the holder of such Outstanding Debenture will receive an Exchange Debenture having a principal amount equal to that of the surrendered Outstanding Debenture. Holders whose Outstanding Debentures are accepted for exchange will not receive accrued interest thereon on the date of exchange. Instead, interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor or, if no interest has been paid on the Outstanding Debentures, from January 12, 1998. See 'The Exchange Offer -- Interest on the Exchange Debentures.'
The Exchange Debentures are being offered hereunder in order to satisfy certain obligations of TWC contained in the Registration Rights Agreement (as defined herein). See 'The Exchange Offer -- Consequences of Exchanging Outstanding Debentures' for a discussion of TWC's belief, based on interpretations by the staff of the Securities and Exchange Commission (the 'Commission') as set forth in no-action letters issued to third parties, as to the transferability of the Exchange Debentures upon satisfaction of certain conditions. Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures where such Outstanding Debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities. TWC has agreed that for a period of 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any resale of Exchange Debentures. See 'Plan of Distribution.'
Holders whose Outstanding Debentures are not tendered and accepted in the
Exchange Offer will continue to hold such Outstanding Debentures and will be
entitled to all the rights and preferences and will be subject to the
limitations applicable thereto under the indenture governing the Outstanding
Debentures and the Exchange Debentures. FOLLOWING CONSUMMATION OF THE EXCHANGE
OFFER, THE HOLDERS OF OUTSTANDING DEBENTURES WILL CONTINUE TO BE SUBJECT TO THE
EXISTING RESTRICTIONS UPON TRANSFER THEREOF AND, EXCEPT AS PROVIDED HEREIN, TWC
WILL HAVE NO FURTHER OBLIGATION TO SUCH HOLDERS TO PROVIDE FOR THE REGISTRATION
UNDER THE SECURITIES ACT OF THE OUTSTANDING DEBENTURES HELD BY THEM.
There is no established trading market for the Exchange Debentures. TWC does not currently intend to list the Exchange Debentures on any securities exchange or to seek approval for quotation through any automated quotation system. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Debentures, or the ability of holders of the Exchange Debentures to sell their Exchange Debentures or the price at which such holders may be able to sell their Exchange Debentures. Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. (collectively, the 'Placement Agents') have advised TWC that they currently intend to make a market in the Exchange Debentures. The Placement Agents are not obligated to do so, however, and any market-making with respect to the Exchange Debentures may be discontinued at any time without notice.
TWC will pay all of the expenses incident to the Exchange Offer. In the event TWC terminates the Exchange Offer and does not accept for exchange any Outstanding Debentures, TWC will promptly return the Outstanding Debentures to the holders thereof. See 'The Exchange Offer.'
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH DEBENTURES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE 'PLAN OF DISTRIBUTION'.
TABLE OF CONTENTS
PAGE
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Available Information...................................................................................... 3
Information Incorporated by Reference...................................................................... 4
Prospectus Summary......................................................................................... 5
TWC and the Guarantors..................................................................................... 11
Certain Factors............................................................................................ 13
Selected Historical and Pro Forma Financial Information.................................................... 15
Ratio of Earnings to Fixed Charges......................................................................... 18
The Exchange Offer......................................................................................... 20
Use of Proceeds............................................................................................ 26
Description of the Debentures and the Guarantees........................................................... 27
Registration Rights Agreement for Outstanding Debentures................................................... 34
Holding Company Structure.................................................................................. 35
Certain United States Federal Income Tax Considerations.................................................... 36
Plan of Distribution....................................................................................... 37
Legal Matters.............................................................................................. 38
Experts.................................................................................................... 38
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Each of TWC and Turner Broadcasting System, Inc. ('TBS') is a wholly-owned
subsidiary of Time Warner Inc. ('TWI'). The principal executive offices of TWC
and TWI are located at 75 Rockefeller Plaza, New York, NY 10019, and the
telephone number of each is (212) 484-8000. TBS's principal executive offices
are located at One CNN Center, Atlanta, GA 30303 and its telephone number is
(404) 827-1700. TWI's common stock is listed on the New York Stock Exchange
under the symbol 'TWX.'
AVAILABLE INFORMATION
TWC and TBS are not required to file periodic reports and other information under the Securities Exchange Act of 1934 (the 'Exchange Act'). Instead, information with respect to TWC and TBS is provided, to the extent required by the Commission, in the required filings made by TWI. TWI is subject to the informational requirements of the Exchange Act and, in accordance therewith, files reports, proxy statements and other information with the Commission. Reports, proxy statements and other information filed by TWI with the Commission pursuant to the informational requirements of the Exchange Act may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's regional offices located at Seven World Trade Center, 13th Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661; and copies of such material may be obtained from the Public Reference Section of the Commission, Washington, D.C. 20549, at prescribed rates, or through the World Wide Web (http://www.sec.gov). Such reports, proxy statements and other information may also be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York, on which one or more of TWI's securities are listed.
This Prospectus constitutes a part of a Registration Statement filed by TWC, TWI and TBS with the Commission under the Securities Act. This Prospectus omits certain of the information contained in the Registration Statement in accordance with the rules and regulations of the Commission. Reference is hereby made to the Registration Statement and related exhibits for further information with respect to TWC, TWI and TBS and the Exchange Debentures. Statements contained herein concerning the provisions of any document are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an Exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission by TWI (File No. 001-12259) are incorporated by reference in this Prospectus:
(a) TWI's Annual Report on Form 10-K for the year ended December 31, 1996, as amended by Forms 10K/A dated March 27, 1997 and June 26, 1997 (as amended, 'TWI's 1996 Form 10-K');
(b) TWI's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997 (collectively, the 'TWI 10-Qs'); and
(c) TWI's Current Reports on Form 8-K dated March 21, 1997, October 15, 1997, October 27, 1997 and November 13, 1997 (collectively, the 'TWI 8-Ks').
All documents and reports subsequently filed by TWI pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the Exchange Offer shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of filing
of such documents.
Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.
TWC will furnish without charge to each person, including any beneficial
owner, to whom this Prospectus is delivered, upon the written or oral request of
such person, a copy of any or all the documents incorporated herein by
reference, other than exhibits to such documents unless such exhibits are
specifically incorporated by reference in such documents, and any other
documents specifically identified herein as incorporated by reference into this
Prospectus or into such other documents. Requests should be addressed to:
Shareholder Relations Department, Time Warner Inc., 75 Rockefeller Plaza, New
York, New York 10019; telephone: (212) 484-6971.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information included elsewhere in this Prospectus.
THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $500 million aggregate principal amount of Outstanding Debentures for an equal aggregate principal amount of Exchange Debentures. The Exchange Debentures are obligations of TWC entitled to the benefits of the Indenture relating to the Outstanding Debentures. The form and terms of the Exchange Debentures are the same as the form of the Outstanding Debentures except that the Exchange Debentures have been registered under the Securities Act, and following the completion of the Exchange Offer, the Exchange Debentures generally will not be entitled to a contingent increase in the interest rate otherwise provided under certain circumstances.
Securities Offered........................ Up to $500,000,000 aggregate principal amount of 6.95% Debentures Due
2028, which have been registered under the Securities Act. The
terms of the Exchange Debentures are identical in all material
respects to the Outstanding Debentures except for certain transfer
restrictions and registration rights relating to the Outstanding
Debentures and except that, if TWC has not filed a Registration
Statement covering the Exchange Debentures, caused such
registration statement to become effective and consummated the
Exchange Offer or caused a Shelf Registration Statement with
respect to resales of the Outstanding Debentures to be declared
effective within certain time periods, then Additional Interest on
the Outstanding Debentures will be payable until the consummation
of the Exchange Offer or the effectiveness of the Shelf
Registration Statement.
The Exchange Offer........................ $1,000 principal amount of Exchange Debentures will be issued in
exchange for each $1,000 principal amount of Outstanding Debentures
validly tendered pursuant to the Exchange Offer. As of the date
hereof, $500 million in aggregate principal amount of Outstanding
Debentures is outstanding. TWC will issue the Exchange Debentures
to tendering holders of Outstanding Debentures on or promptly after
the Expiration Date.
Expiration of Exchange Offer.............. Midnight, New York City time, on the Expiration Date, unless the
Exchange Offer is extended, in which case the term 'Expiration
Date' means the latest date and time to which the Exchange Offer is
extended. See 'The Exchange Offer -- Terms of the Exchange Offer;
Period for Tendering Outstanding Debentures.'
Conditions to the Exchange Offer.......... The Exchange Offer will not be subject to any conditions, other than
that (i) the Exchange Offer does not violate applicable law or any
applicable interpretation of the staff of the Commission and (ii)
there is no injunction, order or decree issued by any court or any
governmental agency that would prohibit, prevent or otherwise
materially impair the ability of TWC to proceed with the Exchange
Offer. There
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can be no assurance that any such conditions will not occur.
Holders of Outstanding Debentures will have certain rights against
TWC, TWI and TBS under the Registration Rights Agreement should
TWC, TWI and TBS fail to consummate the Exchange Offer. See 'The
Exchange Offer -- Certain Conditions to the Exchange Offer.'
Procedures for Tendering
Outstanding Debentures.................. Each holder of Outstanding Debentures wishing to accept the Exchange
Offer must complete, sign and date the Letter of Transmittal (or a
facsimile thereof or an Agent's Message (as defined below) in lieu
thereof), in accordance with the instructions contained herein and
therein, and mail or otherwise deliver such Letter of Transmittal
(or such facsimile or such Agent's Message), together with any other
required documentation, to The Chase Manhattan Bank in its capacity
as the Exchange Agent at the address set forth herein and therein.
See 'The Exchange Offer -- Procedures for Tendering.'
By executing the Letter of Transmittal or by causing an Agent's
message to be delivered, each holder will represent to TWC, TWI and
TBS that, among other things, (i) the Exchange Debentures acquired
pursuant to the Exchange Offer are being obtained in the ordinary
course of business of the person receiving such Exchange
Debentures, whether or not such person is the holder, (ii) neither
the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of
such Exchange Debentures and (iii) neither the holder nor any such
other person is an 'affiliate,' as defined in Rule 405 under the
Securities Act, of TWC, TWI or TBS, or, if an 'affiliate,' such
holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable.
The term 'Agent's Message' means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a confirmation
of the book-entry tender of their Outstanding Debentures into the
Exchange Agent's Account at DTC, which states that DTC has received
an express acknowledgment from the tendering participant, which
acknowledgment states that such participant has received and agrees
to be bound by, and makes the representations and warranties
contained in, the Letter of Transmittal and that TWC may enforce
the Letter of Transmittal against such participant.
Special Procedures for Beneficial
Holders................................. Any beneficial holder whose Outstanding Debentures are registered in
the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender in the Exchange Offer should
contact such registered holder promptly and instruct such
registered holder to tender on its behalf. If such beneficial
holder wishes to tender on its own behalf, such beneficial holder
must, prior to completing and executing the Letter of Transmittal
and delivering its Outstanding Debentures, either make appropriate
arrangements to register ownership of the Outstanding Debentures in
such holder's name or obtain a properly completed bond power from
the registered holder. See 'The Exchange Offer -- Procedures for
Tendering.'
Guaranteed Delivery Procedures............ Holders of Outstanding Debentures who wish to tender their
Outstanding Debentures and whose Outstanding Debentures are not
immediately available or who cannot deliver their Outstanding
Debentures (or who cannot complete the procedure for book-entry
transfer on a timely
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basis) and a properly completed Letter of Transmittal or any other
documents required by the Letter of Transmittal to the Exchange
Agent prior to the Expiration Date may tender their Outstanding
Debentures according to the guaranteed delivery procedures set
forth in 'The Exchange Offer -- Guaranteed Delivery Procedures.'
Withdrawal Rights......................... Tenders of Outstanding Debentures may be withdrawn at any time prior
to midnight, New York City time, on the Expiration Date. See 'The
Exchange Offer -- Withdrawal of Tenders.'
Acceptance of Outstanding Debentures and
Delivery of Exchange Debentures......... Subject to certain conditions (as summarized above in 'Conditions to
the Exchange Offer' and described more fully under 'The Exchange
Offer -- Certain Conditions to the Exchange Offer'), TWC will
accept for exchange any and all Outstanding Debentures which are
properly tendered in the Exchange Offer and not validly withdrawn
prior to midnight, New York City time, on the Expiration Date. The
Exchange Debentures issued pursuant to the Exchange Offer will be
delivered promptly following the Expiration Date. See 'The Exchange
Offer -- Terms of the Exchange Offer; Period for Tendering
Outstanding Debentures.'
Certain Tax Considerations................ The exchange pursuant to the Exchange Offer should not be a taxable
event for federal income tax purposes. See 'Certain United States
Federal Income Tax Considerations.'
Exchange Agent............................ The Chase Manhattan Bank, the Trustee under the Indenture (as defined
herein), is serving as exchange agent (the 'Exchange Agent') in
connection with the Exchange Offer. The address of the Exchange
Agent is: 55 Water Street, Room 234, North Building, New York, NY
10041, Attention: Carlos Esteves. For information with respect to
the Exchange Offer, the telephone number for the Exchange Agent is
(212) 638-0828 and the facsimile number for the Exchange Agent is
(212) 638-7375 or (212) 344-9367.
Use of Proceeds........................... There will be no cash proceeds payable to TWC, TWI or TBS from the
issuance of the Exchange Debentures pursuant to the Exchange Offer.
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CONSEQUENCES OF EXCHANGING OUTSTANDING DEBENTURES
Holders of Outstanding Debentures who do not exchange their Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer will continue to be subject to the provisions in the Indenture regarding transfer and exchange of the Outstanding Debentures and the restrictions on transfer of such Outstanding Debentures as set forth in the legend thereon as a consequence of the issuance of the Outstanding Debentures pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Outstanding Debentures may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. TWC does not currently anticipate that it will register Outstanding Debentures
under the Securities Act subsequent to the Exchange Offer. Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, TWC believes that Exchange Debentures issued pursuant to the Exchange Offer in exchange for Outstanding Debentures may be offered for resale, resold or otherwise transferred by holders thereof (other than any such holder which is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Debentures are acquired in the ordinary course of such holders' business and such holders have no arrangement with any person to participate in the distribution of such Exchange Debentures. However, TWC does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. Each holder, other than a broker-dealer, must acknowledge that (i) the Exchange Debentures received by such holder will be acquired in the ordinary course of its business, (ii) at the time of the consummation of the Exchange Offer such holder will have not engaged in, and does not intend to engage in, a distribution of Exchange Debentures and has no arrangement or understanding to participate in a distribution of Exchange Debentures and (iii) such holder is not an affiliate of TWC, TWI or TBS within the meaning of Rule 405 of the Securities Act or if it is such an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable. If any holder is an affiliate of TWC, TWI or TBS or is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the Exchange Debentures to be acquired pursuant to the Exchange Offer, such holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirement of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures, where such Outstanding Debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities. TWC, TWI and TBS have agreed that, for a period of 90 days after the Expiration Date, they will make this Prospectus available to any broker-dealer for use in connection with any such resale. See 'Plan of Distribution.' However, to comply with state securities laws, the Exchange Debentures may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with. The offer and sale of the Exchange Debentures to 'qualified institutional buyers' (as such term is defined under Rule 144A of the Securities Act) is generally exempt from registration or qualification under state securities laws. TWC, TWI and TBS currently do not intend to register or qualify the sale of the Exchange Debentures in any state where an exemption from registration or qualification is required and not available. See 'The Exchange Offer -- Consequences of Failure to Exchange and Requirements for Transfer for Exchange Debentures.'
SUMMARY DESCRIPTION OF THE EXCHANGE DEBENTURES
The terms of the Exchange Debentures are identical in all material respects to the terms of the Outstanding Debentures, except for certain transfer restrictions and registration rights relating to the Outstanding Debentures and except that, with respect to the Outstanding Debentures, if TWC has not filed a Registration Statement covering the Exchange Debentures, caused such registration statement to become effective and consummated the Exchange Offer or caused a Shelf Registration Statement with respect to resales of the Outstanding Debentures to be declared effective within certain time periods, then Additional Interest on the Outstanding Debentures will be payable until the consummation of the Exchange Offer or the effectiveness of the Shelf Registration Statement. See 'Registration Rights Agreement for Outstanding Debentures.' Holders whose Outstanding Debentures are accepted for exchange will not receive accrued interest thereon on the date of exchange. Instead, interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor, or if no interest has been paid on the Outstanding Debentures, from January 12, 1998. See 'The Exchange Offer -- Interest on the Exchange Debentures.'
Securities Offered........................ $500,000,000 aggregate principal amount of 6.95% Debentures Due 2028,
which have been registered under the Securities Act, issued by TWC.
Interest.................................. Interest on the Debentures is payable semiannually in cash on January
15 and July 15, commencing on July 15, 1998.
Redemption................................ The Debentures are not redeemable prior to maturity and do not have
the benefit of a sinking fund.
Guarantees................................ All payments with respect to the Debentures (including principal and
interest) are unconditionally guaranteed on an unsecured
unsubordinated basis by each of the Guarantors.
Ranking................................... The Debentures are senior indebtedness of TWC, ranking on a parity
with all other unsecured and unsubordinated indebtedness of TWC,
and each Guarantee is a senior obligation of the relevant
Guarantor, ranking on a parity with all other unsecured and
unsubordinated obligations of such Guarantor. See 'Description of
the Debentures and the Guarantees -- Ranking.'
Each of TWC and the Guarantors is a holding company and the
Debentures and the Guarantees are effectively subordinated to all
existing and future liabilities, including indebtedness, of the
consolidated and unconsolidated subsidiaries of TWC and the Guarantors,
respectively. As of September 30, 1997, such subsidiaries had an
aggregate of approximately $20 billion of outstanding liabilities,
including indebtedness. See 'Holding Company Structure.'
Certain Covenants......................... The Indenture contains certain covenants with respect to TWC for the
benefit of the holders of the Debentures, including, among other
things, covenants limiting the incurrence of liens, senior
indebtedness and merger, consolidation and certain sales of assets.
See 'Description of the Debentures and the
Guarantees -- Covenants.'
Book-Entry; Delivery and Form............. The Exchange Debentures will be represented by one permanent global
Exchange Debenture in definitive, fully registered form deposited
with a custodian for, and
|
registered in the name of a nominee of, The Depository Trust
Company ('DTC'). See 'Description of the Debentures and the
Guarantees -- Book-Entry; Delivery and Form.'
Absence of Public Market for the Exchange
Debentures.............................. The Exchange Debentures will be new securities for which there
currently is no market. Although the Placement Agents have informed
TWC that they currently intend to make a market in the Exchange
Debentures, they are not obligated to do so, and any such market
making may be discontinued at any time without notice. Accordingly,
there can be no assurance as to the development or liquidity of any
market for the Exchange Debentures. TWC does not intend to apply
for listing of the Exchange Debentures on any securities exchange
or for quotation through the National Association of Securities
Dealers Automated Quotation System.
Exchange Offer; Registration
Rights.................................. Pursuant to the Registration Rights Agreement, TWC, TWI and TBS have
agreed to file, at their cost, a registration statement with
respect to the Exchange Offer. The Registration Statement of which
this Prospectus is a part constitutes the registration statement
for the Exchange Offer. See 'Registration Rights Agreement for
Outstanding Debentures.'
|
USE OF PROCEEDS
There will be no cash proceeds to TWC, TWI or TBS from the Exchange Offer. For a description of the use of proceeds from the Original Offering, see 'Use of Proceeds'.
CERTAIN FACTORS
For a description of certain factors that should be considered by holders who tender their Outstanding Debentures in the Exchange Offer, see 'Certain Factors'.
TWC AND THE GUARANTORS
TWI, together with its consolidated subsidiaries, including TWC and TBS, and unconsolidated subsidiaries, is the world's leading media and entertainment company and has interests in four fundamental areas of business: Entertainment, consisting principally of interests in filmed entertainment, television production, television broadcasting, recorded music and music publishing; Cable Networks, consisting principally of interests in cable television programming; Publishing, consisting principally of interests in magazine publishing, book publishing and direct marketing; and Cable, consisting principally of interests in cable television systems. Each of TWC, TBS and TWI is a holding company that derives its operating income and cash flow from its subsidiaries and investments. The assets of TWI consist primarily of its investments in TWC and TBS. The assets of TWC consist primarily of its investments in its consolidated and unconsolidated subsidiaries, including Time Warner Entertainment Company, L.P. ('TWE'). The assets of TBS consist primarily of investments in its consolidated and unconsolidated subsidiaries. The ability of TWC to service its indebtedness and other liabilities, including the Debentures, and the ability of TWI and TBS to service their respective indebtedness and other liabilities, including the Guarantees, are dependent primarily upon the earnings and cash flow of their respective consolidated and unconsolidated subsidiaries and the distribution or other payment to them of such earnings and cash flow. See 'Holding Company Structure.'
TWI became the parent of TWC and TBS on October 10, 1996 upon the merger of TWC and TBS with separate subsidiaries of TWI (the 'TBS Transaction'), as more fully described below. In connection therewith, TWI changed its name to Time Warner Inc. from TW Inc. and TWC changed its name from Time Warner Inc. to Time Warner Companies, Inc.
TWE was formed as a Delaware limited partnership in 1992 to own and operate substantially all of the business of Warner Bros., Home Box Office and the cable television businesses owned and operated by TWC prior to such date. TWC and certain of its wholly owned subsidiaries own general and limited partnership interests aggregating 74.49% of the pro rata priority capital ('Series A Capital') and residual equity capital ('Residual Capital') of TWE and 100% of the senior priority capital and junior priority capital of TWE. The remaining 25.51% limited partnership interests in the Series A Capital and Residual Capital of TWE are held by a subsidiary of U S West, Inc. TWC does not consolidate TWE and certain related companies (the 'Entertainment Group') for financial reporting purposes.
TBS TRANSACTION
On October 10, 1996, pursuant to an Amended and Restated Agreement and Plan of Merger dated as of September 22, 1995, as amended, among TWC, TWI, TBS and certain of their wholly owned subsidiaries, among other things: (a) each of TWC and TBS became a wholly owned subsidiary of TWI through a merger with a subsidiary of TWI, (b) each outstanding share of common stock of TWC, other than shares held directly or indirectly by TWC, was converted into one share of common stock of TWI, (c) each outstanding share of preferred stock of TWC was converted into one share of a substantially identical series of preferred stock of TWI, (d) each outstanding share of common stock of TBS, other than shares held directly or indirectly by TWC or TWI or in the treasury of TBS, was converted into the right to receive 0.75 shares of common stock of TWI and (e) each outstanding share of preferred stock of TBS, other than shares held directly or indirectly by TWC or TWI, was converted into the right to receive 4.8 shares of common stock of TWI. Additional information on the TBS Transaction is set forth in Note 2 to TWI's consolidated financial statements included in TWI's 1996 Form 10-K, which is incorporated by reference herein.
RECIPROCAL GUARANTEES OF EXISTING INDEBTEDNESS
In order to integrate TBS into TWI's operating structure and simplify the credit structure of TWI, TWC and TBS such that the financial risks associated with investing in the indebtedness of any one of the three companies are substantially equivalent to investing in the indebtedness of any of the other companies, TWI, TWC and TBS have entered into the following guarantees of outstanding publicly traded indebtedness ('Outstanding Securities') of TWC and TBS:
TWI, as primary obligor and not merely as surety, has irrevocably and unconditionally guaranteed (the 'Downstream Guarantees') (a) the full and punctual payment of principal of and interest on the Outstanding Securities of each of TWC and TBS when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of TWC and TBS under the Outstanding Securities of TWC and TBS and the indentures relating to the Outstanding Securities (including the obligations to the respective trustees) and (b) the full and punctual performance within applicable grace periods of all other obligations of TWC and TBS under the Outstanding Securities and the respective indentures.
Each of TWC and TBS, as primary obligor and not merely as surety, has irrevocably and unconditionally guaranteed (the 'Cross Guarantees') (a) the full and punctual payment of principal of and interest on the Outstanding Securities of the other party when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the other party under the Outstanding Securities of such other party and the indentures relating to such Outstanding Securities (including the obligations to the respective trustees) and (b) the full and punctual performance within applicable grace periods of all other obligations of the other party under the Outstanding Securities and the respective indentures. The maximum aggregate amount of the Cross Guarantee by TBS shall not exceed the maximum amount that can be guaranteed by TBS without rendering such guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. In addition, it is expected that each of TWC and TBS will fully and unconditionally guarantee any publicly traded debt securities issued by TWI in the future (as of the date of this Registration Statement, TWI does not have any publicly traded indebtedness other than the Downstream Guarantees).
CERTAIN FACTORS
Prospective holders of the Exchange Debentures should consider carefully the following factors as well as the other information and data included in this Prospectus before tendering their Outstanding Debentures in the Exchange Offer.
LACK OF PUBLIC MARKET FOR THE EXCHANGE DEBENTURES
The Outstanding Debentures are currently owned by a small number of beneficial owners. The Outstanding Debentures have not been registered under the Securities Act and are subject to significant restrictions on resale. To the extent that Outstanding Debentures are tendered and accepted in the Exchange Offer, the trading market for the remaining untendered Outstanding Debentures could be adversely affected. The Exchange Debentures will be a new issue of securities for which there is currently no trading market, and there can be no assurance regarding the future development of a market for the Exchange Debentures, or the ability of holders of the Exchange Debentures to sell their Exchange Debentures or the price at which such holders may be able to sell their Exchange Debentures. Although the Placement Agents have informed TWC that they currently intend to make a market in the Exchange Debentures, they are not obligated to do so, and any such market making may be discontinued at any time without notice. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Debentures. TWC does not intend to apply for listing of the Exchange Debentures on any securities exchange or for quotation through the National Association of Securities Dealers Automated Quotation System. If the Exchange Debentures are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar securities and other factors, including general economic conditions and the financial condition and performance of, and prospects for, TWC, TWI and TBS.
EXCHANGE OFFER PROCEDURES
Issuance of the Exchange Debentures in exchange for Outstanding Debentures pursuant to the Exchange Offer will be made only after a timely receipt by TWC of Outstanding Debentures, a properly completed and duly executed Letter of Transmittal and all other required documents or an Agent's Message in lieu thereof. Therefore, holders of the Outstanding Debentures desiring to tender their Outstanding Debentures in exchange for Exchange Debentures should allow sufficient time to ensure timely delivery. TWC is under no duty to give notification of defects or irregularities with respect to the tenders of Outstanding Debentures for exchange. Outstanding Debentures that are not tendered or are tendered but not accepted will, following the consummation of the Exchange Offer, continue to be subject to the existing restrictions on transfer thereof. In addition, any holder of Outstanding Debentures who tenders in the Exchange Offer for the purpose of participating in a distribution of the Exchange Debentures may be deemed to have received restricted securities and, if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Debentures for its own account in exchange for Outstanding Debentures, where the Outstanding Debentures were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those Exchange Debentures. See 'Plan of Distribution.'
CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE DEBENTURES
Holders of Outstanding Debentures who do not exchange their Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer will continue to be subject to the provisions in the Indenture regarding transfer and exchange of the Outstanding Debentures and the restrictions on transfer of such Outstanding Debentures as set forth in the legend thereon as a consequence of the issuance of the Outstanding Debentures pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Outstanding Debentures may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. TWC does not currently anticipate that it will register Outstanding Debentures
under the Securities Act subsequent to the Exchange Offer. Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, TWC believes that Exchange Debentures issued pursuant to the Exchange Offer in exchange for Outstanding Debentures may be offered for resale, resold or otherwise transferred by holders thereof (other than any such holder which is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Debentures are acquired in the ordinary course of such holders' business and such holders have no arrangement with any person to participate in the distribution of such Exchange Debentures. However, TWC does not intend to request the Commission to consider, and the Commission has not considered, the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the Commission would make a similar determination with respect to the Exchange Offer as in such other circumstances. Each holder, other than a broker-dealer, must acknowledge that (i) the Exchange Debentures received by such holder will be acquired in the ordinary course of its business, (ii) at the time of the consummation of the Exchange Offer, such holder will have not engaged in, and does not intend to engage in, a distribution of Exchange Debentures and has no arrangement or understanding to participate in a distribution of Exchange Debentures and (iii) such holder is not an affiliate of TWC, TWI or TBS within the meaning of Rule 405 of the Securities Act or if it is such an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act, to the extent applicable. If any holder is an affiliate of TWC, TWI or TBS or is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the Exchange Debentures to be acquired pursuant to the Exchange Offer, such holder (i) could not rely on the applicable interpretations of the staff of the Commission and (ii) must comply with the registration and prospectus delivery requirement of the Securities Act in connection with any resale transaction. Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures, where such Outstanding Debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities. TWC has agreed that, for a period of 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See 'Plan of Distribution.' However, to comply with state securities laws, the Exchange Debentures may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with. The offer and sale of the Exchange Debentures to 'qualified institutional buyers' (as such term is defined under Rule 144A of the Securities Act) is generally exempt from registration or qualification under state securities laws. TWC currently does not intend to register or qualify the sale of the Exchange Debentures in any state where an exemption from registration or qualification is required and not available. See 'The Exchange Offer -- Consequences of Failure to Exchange and Requirements for Transfer for Exchange Debentures.'
SELECTED HISTORICAL AND
PRO FORMA FINANCIAL INFORMATION
TWI SELECTED FINANCIAL INFORMATION
The selected historical and pro forma financial information of TWI set forth below has been derived from and should be read in conjunction with the consolidated financial statements and other financial information of TWI contained in (i) TWI's 1996 Form 10-K, (ii) the TWI 10-Qs and (iii) the TWI 8-Ks, each of which is incorporated by reference herein. Capitalized terms are as defined and described in such consolidated financial statements and in TWI's Current Report on Form 8-K dated November 13, 1997.
The selected historical financial information for 1996 reflects (a) the acquisition of the remaining 80% interest in TBS that was not already owned by TWI (the 'TBS Transaction'), including the assumption of approximately $2.8 billion of indebtedness, (b) the use of approximately $1.55 billion of net proceeds from the issuance of 1.6 million shares of Series M exchangeable preferred stock, having an aggregate liquidation preference of $1.6 billion, to reduce outstanding indebtedness and (c) the acquisition of Cablevision Industries Corporation and related companies, including the assumption or incurrence of approximately $2 billion of indebtedness. The selected historical financial information for 1995 reflects (a) the acquisitions of KBLCOM Incorporated and Summit Communications Group, Inc., including the assumption or incurrence of approximately $1.3 billion of indebtedness and (b) the exchange by Toshiba Corporation and ITOCHU Corporation of their direct and indirect interests in TWE. The selected historical financial information for 1993 reflects the issuance of $6.1 billion of long-term debt and the use of $500 million of cash and equivalents for the exchange or redemption of preferred stock having an aggregate liquidation preference of $6.4 billion. The selected historical financial information for 1992 reflects the capitalization of TWE on June 30, 1992, using the purchase method of accounting for business combinations.
Per common share amounts and average common shares have been restated to give effect to the four-for-one common stock split that occurred on September 10, 1992.
TIME WARNER INC.
SELECTED HISTORICAL AND
PRO FORMA FINANCIAL INFORMATION
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------------------- -------------------------------------------------------
PRO PRO
FORMA(a) HISTORICAL FORMA(a) HISTORICAL
-------- --------------- -------- --------------------------------------------
1997 1997 1996 1996 1996 1995 1994 1993 1992
-------- ------ ------ -------- ------- ------ ------ ------ -------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
OPERATING STATEMENT INFORMATION
Revenues...................................... $9,412 $9,458 $6,364 $12,761 $10,064 $8,067 $7,396 $6,581 $13,070
Depreciation and amortization................. 890 935 677 1,187 988 559 437 424 1,172
Business segment operating income(b).......... 761 802 464 901 966 697 713 591 1,343
Equity in pretax income of
Entertainment Group(c)...................... 517 522 270 268 290 256 176 281 --
Interest and other, net....................... 845 904 854 1,186 1,174 877 724 718 882
Income (loss) before extraordinary item....... 62 54 (215) (269 ) (156) (124) (91) (164) 86
Net income (loss)(d).......................... 38 30 (250) (304 ) (191) (166) (91) (221) 86
Net loss applicable to common shares (after
preferred dividends)........................ (200) (208) (430) (612 ) (448) (218) (104) (339) (542)
Per share of common stock:
Net loss(d)............................... $(0.35) $(0.37) $(1.11) $ (1.08 ) $ (1.04) $(0.57) $(0.27) $(0.90) $(1.46)
Dividends................................. $ 0.27 $ 0.27 $ 0.27 $ 0.36 $ 0.36 $ 0.36 $ 0.35 $ 0.31 $ 0.265
Average common shares......................... 564.4 564.4 388.7 567.3 431.2 383.8 378.9 374.7 371.0
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SEPTEMBER 30,
--------------------- DECEMBER 31,
-----------------------------------------------
PRO
FORMA(a) HISTORICAL HISTORICAL
-------- ---------- -----------------------------------------------
1997 1997 1996 1995 1994 1993 1992
-------- ---------- ------- ------- ------- ------- -------
(IN MILLIONS)
BALANCE SHEET INFORMATION
Total assets............................................. $33,537 $ 34,538 $35,064 $22,132 $16,716 $16,892 $27,366
Debt due within one year................................. 8 8 11 34 355 120 171
Long-term debt........................................... 11,472 12,493 12,713 9,907 8,839 9,291 10,068
Borrowings against future stock option proceeds.......... 303 303 488 -- -- -- --
Company-obligated mandatorily redeemable preferred
securities of subsidiaries holding solely subordinated
notes and debentures of subsidiaries of TWI(e)......... 949 949 949 949 -- -- --
Series M exchangeable preferred stock.................... 1,809 1,809 1,672 -- -- -- --
Shareholders' equity:
Preferred stock liquidation preference............... 3,559 3,559 3,559 2,994 140 140 6,532
Equity applicable to common stock.................... 5,971 5,971 5,943 673 1,008 1,230 1,635
Total shareholders' equity....................... 9,530 9,530 9,502 3,667 1,148 1,370 8,167
Total capitalization..................................... 24,071 25,092 25,335 14,557 10,342 10,781 18,406
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(a) The selected pro forma financial information as of and for the nine months ended September 30, 1997 and for the year ended December 31, 1996 gives effect to (i) the agreed-upon transfer by a wholly owned subsidiary of TWI of cable television systems serving an aggregate of approximately 667,000 subscribers to the Time Warner Entertainment-Advance/Newhouse Partnership ('TWE-A/N'), a partnership currently owned 66.7% by TWE and 33.3% by the Advance/Newhouse Partnership, subject to approximately $1 billion of debt, in exchange for common and preferred partnership interests therein, as well as certain related transactions (the 'TWE-A/N Transfers'), pursuant to an agreement entered into by such subsidiary on October 27, 1997 with TWE-A/N and each of its partners and (ii) with respect to 1996 only, (a) the TBS Transaction and (b) certain debt refinancings, as if such transactions had occurred at such date, with respect to balance sheet information, or at the beginning of such periods with respect to operating statement information.
(b) Business segment operating income for the year ended December 31, 1995 includes $85 million in losses relating to certain businesses and joint ventures owned by the Music division which were restructured or closed.
(footnotes continued on next page)
(footnotes continued from previous page)
(c) TWI's equity in the pre-tax income of the Entertainment Group for the nine months ended September 30, 1997 includes a $250 million pre-tax gain relating to the sale of TWE's interest in E! Entertainment Television, Inc.
(d) The net income for the nine months ended September 30, 1997 and 1996 includes extraordinary losses on the retirement of debt of $24 million ($.04 per common share) and $35 million ($.09 per common share). The net loss for the year ended December 31, 1996 includes an extraordinary loss on the retirement of debt of $35 million ($.09 per common share). The net loss for the year ended December 31, 1995 includes an extraordinary loss on the retirement of debt of $42 million ($.11 per common share). The net loss for the year ended December 31, 1993 includes an extraordinary loss on the retirement of debt of $57 million ($.15 per common share) and an unusual charge of $70 million ($.19 per common share) from the effect of the new income tax law on TWI's deferred income tax liability.
(e) Includes $374 million of preferred securities that were redeemed in December 1997 for all of TWI's interest in Hasbro, Inc.
ENTERTAINMENT GROUP SELECTED FINANCIAL INFORMATION.
The selected historical and pro forma financial information of the Entertainment Group set forth below has been derived from and should be read in conjunction with (i) the consolidated financial statements and other financial information of TWI and TWE contained in the TWI's 1996 Form 10-K and the TWI 10-Qs and (ii) the consolidated financial statements and other financial information of TWI and the Entertainment Group contained in the TWI 8-Ks, which are incorporated herein by reference. Capitalized terms are as defined and described in such consolidated financial statements and in TWI's Current Report on Form 8-K dated November 13, 1997. The selected historical financial information for 1995 reflects the consolidation by TWE of TWE-A/N resulting from the formation of such partnership, effective as of April 1, 1995, and the consolidation of Paragon Communications effective as of July 6, 1995. The selected historical financial information gives effect to the consolidation of Six Flags Entertainment Corporation ('SFEC') effective as of January 1, 1993 as a result of an increase in TWE's ownership of SFEC from 50% to 100% in September 1993 and the subsequent deconsolidation of SFEC resulting from the disposition by TWE of a 51% interest in SFEC effective as of June 23, 1995.
ENTERTAINMENT GROUP
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------------- -----------------------------------------------------------
PRO PRO
FORMA(a) HISTORICAL FORMA(a) HISTORICAL
-------- ---------------- -------- -----------------------------------------------
1997 1997 1996 1996 1996 1995 1994 1993 1992
-------- ------ ------ -------- ------- ------ ------ ------ ------
(IN MILLIONS)
OPERATING STATEMENT INFORMATION
Revenues..................... $8,236 $8,190 $7,817 $10,899 $10,861 $9,629 $8,509 $7,963 $6,761
Depreciation and
amortization............... 1,072 1,027 908 1,302 1,244 1,060 959 909 788
Business segment operating
income..................... 1,031 990 845 1,128 1,090 992 852 905 814
Interest and other, net(b)... 211 157 369 603 524 539 616 564 531
Income before extraordinary
item....................... 482 487 221 198 220 170 136 217 173
Net income(c)................ 482 487 221 198 220 146 136 207 173
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SEPTEMBER 30, DECEMBER 31,
---------------------- ---------------------------------------------------
PRO
FORMA(a) HISTORICAL HISTORICAL
-------- ---------- ---------------------------------------------------
1997 1997 1996 1995 1994 1993 1992
-------- ---------- ------- ------- ------- ------- -------
(IN MILLIONS)
BALANCE SHEET INFORMATION
Total assets.............................. $21,640 $ 20,388 20,027 $18,960 $18,992 $18,202 $15,886
Debt due within one year.................. 8 8 7 47 32 24 7
Long-term debt............................ 7,278 6,257 5,676 6,137 7,160 7,125 7,171
Preferred stock of a subsidiary holding
solely a mortgage note of its parent.... 237 237 -- -- -- -- --
Time Warner General Partners' Senior
Capital................................. 1,096 1,096 1,543 1,426 1,663 1,536 --
Partners' capital......................... 6,471 6,471 6,681 6,576 6,491 6,228 6,483
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(a) The selected pro forma financial information as of and for the nine months ended September 30, 1997 and for the year ended December 31, 1996 gives effect to the TWE-A/N Transfers as if such transactions occurred at such date, with respect to balance sheet information, and at the beginning of such periods, with respect to operating statement information.
(b) Interest and other, net, for the nine months ended September 30, 1997 includes a $250 million gain relating to the sale of TWE's interest in E! Entertainment Television, Inc.
(c) The net income for the years ended December 31, 1995 and 1993 include extraordinary loss on the retirement of debt of $24 million and $10 million, respectively.
RATIO OF EARNINGS TO FIXED CHARGES
The historical ratios of earnings to fixed charges for each of TWI, TWC and TBS and the pro forma ratios of earnings to fixed charges for each of TWI and TWC are set forth below for the periods indicated. For periods in which earnings before fixed charges were insufficient to cover fixed charges, the dollar amount of coverage deficiency (in millions), instead of the ratio, is disclosed. The ratios of earnings to fixed charges of TWI and TWC for all periods after 1992 reflect the deconsolidation of the Entertainment Group, principally TWE, effective January 1, 1993.
The ratios of earnings to fixed charges of TBS for all post-merger periods have been adjusted to reflect TWI's basis of accounting. The ratios of earnings to fixed charges (or coverage deficiencies) of TBS for all pre-merger periods are reflected at TBS's historical cost basis of accounting. Certain reclassifications have been made to TBS's ratios of earnings to fixed charges for pre-merger periods to conform to the post-merger presentation.
The historical ratio of earnings to fixed charges of each of TWI and TWC for 1996 reflects (a) the use of approximately $1.55 billion of net proceeds from the issuance of 1.6 million shares of Series M exchangeable preferred stock, having an aggregate liquidation preference of $1.6 billion to reduce
outstanding indebtedness (the 'Preferred Stock Refinancing'), (b) the acquisition of Cablevision Industries Corporation and related companies, including the assumption or incurrence of approximately $2 billion of indebtedness and, with respect to TWI only, (c) the TBS Transaction, including the assumption of approximately $2.8 billion of indebtedness.
The historical ratio of earnings to fixed charges of each of TWI and TWC for 1995 reflects (a) the acquisition of KBLCOM Incorporated and Summit Communications Group, Inc., including the assumption or incurrence of approximately $1.3 billion of indebtedness and (b) the exchange by Toshiba Corporation and ITOCHU Corporation of their direct and indirect interests in TWE.
The historical ratio of earnings to fixed charges of each of TWI and TWC for 1993 reflects the issuance of $6.1 billion of long-term debt and the use of $500 million of cash and equivalents for the exchange or redemption of preferred stock having an aggregate liquidation preference of $6.4 billion. The historical ratio of earnings to fixed charges for 1992 reflects the capitalization of TWE on June 30, 1992 and associated refinancings, and the acquisition of the 18.7% minority interest in American Television and Communications Corporation as of June 30, 1992, using the purchase method of accounting for business combinations.
The pro forma ratios of earnings to fixed charges for each of TWI and TWC for the nine months ended September 30, 1997 and the year ended December 31, 1996 give effect to (i) the TWE-A/N Transfers and (ii) with respect to 1996 only, (a) the Preferred Stock Refinancing and certain other debt refinancings and (b) with respect to TWI only, the TBS Transaction, as if such transactions had occurred at the beginning of such periods. The pro forma information presented below should be read in conjunction with the pro forma consolidated condensed financial statements contained in TWI's Current Report on Form 8-K dated November 13, 1997 and incorporated herein by reference. Such pro forma amounts are presented for informational purposes only and are not necessarily indicative of the actual ratios that would have occurred if such transactions had been consummated as of the dates indicated, nor are they necessarily indicative of future results.
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------------- -------------------------------------------------
PRO FORMA PRO FORMA
1997 1997 1996 1996 1996 1995 1994 1993 1992
--------- ---- ---- --------- ---- ---- ---- ---- ----
TWI..................................... 1.4x 1.4 x 1.0 x 1.1x 1.1 x 1.1 x 1.1 x 1.1 x 1.4 x
TWC..................................... 1.4x 1.4 x 1.0 x 1.2x 1.1 x 1.1 x 1.1 x 1.1 x 1.4 x
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NINE MONTHS THREE MONTHS NINE MONTHS YEARS ENDED DECEMBER 31,
ENDED ENDED ENDED ----------------------------
SEPTEMBER 30, 1997 DECEMBER 31, 1996 SEPTEMBER 30, 1996 1995 1994 1993 1992
------------------ ----------------- ------------------ ---- ---- ---- ----
TBS...................... 1.8x 1.6x $(44) 1.7 x 1.3 x 1.6 x 1.4 x
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For purposes of computing the ratio of earnings to fixed charges, earnings
were calculated by adding (i) pretax income, (ii) interest expense, including
previously capitalized interest amortized to expense and the portion of rents
representative of an interest factor for TWI, TWC and TBS and their respective
majority-owned subsidiaries, (iii) TWI's, TWC's and TBS's respective
proportionate share of the items included in (ii) above for their 50%-owned
companies, (iv) preferred stock dividend requirements of majority-owned
subsidiaries, (v) minority interest in the income of majority-owned subsidiaries
that have fixed charges and (vi) the amount of undistributed losses of each of
TWI's, TWC's and TBS's less than 50%-owned companies. Fixed charges consist of
(i) interest expense, including interest capitalized and the portion of rents
representative of an interest factor for TWI, TWC and TBS and their respective
majority-owned subsidiaries, (ii) TWI's, TWC's and TBS's respective
proportionate share of such items for their 50%-owned companies and (iii)
preferred stock dividend requirements of majority-owned subsidiaries. Earnings
as defined include significant noncash charges for depreciation and
amortization. Historical fixed charges of TWI and TWC for the nine months ended
September 30, 1997 and 1996 and the years ended December 31, 1996, 1995 and 1994
include noncash interest expense of $73 million, $68 million, $91 million, $176
million and $219 million, respectively, principally relating to TWC's Liquid
Yield Option Notes due 2012 and 2013 and, in 1995 and 1994 only, TWC's
Redeemable Reset Notes due 2002. Historical fixed charges of TWI for the nine
months ended September 30, 1997
and the year ended December 31, 1996 include an additional $2 million and $5 million, respectively, in noncash interest expense relating to TBS's zero coupon convertible notes due 2007. Pro forma fixed charges of TWI for the year ended December 31, 1996 similarly include an additional $14 million in noncash interest expense relating to TBS's zero coupon convertible notes due 2007 for the period prior to the consummation of the TBS Transaction. Historical fixed charges of TBS include noncash interest expense of $2 million, $5 million, $14 million, $18 million, $17 million, $29 million and $34 million for the nine months ended September 30, 1997, the three months ended December 31, 1996 and the nine months ended September 30, 1996 and the years ended December 31, 1995, 1994, 1993 and 1992, respectively.
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OUTSTANDING DEBENTURES
Upon the terms and subject to the conditions set forth in this Prospectus and in the accompanying Letter of Transmittal, TWC will accept for exchange Outstanding Debentures which are properly tendered on or prior to the Expiration Date and not withdrawn as permitted below. As used herein, the term 'Expiration Date' means midnight, New York City time, on , 1998; provided, however, that if TWC, in its sole discretion, has extended the period of time for which the Exchange Offer is open, the term 'Expiration Date' means the latest time and date to which the Exchange Offer is extended.
As of the date of this Prospectus, $500 million aggregate principal amount of the Outstanding Debentures is outstanding. This Prospectus, together with the Letter of Transmittal, is first being sent on or about , 1998, to all holders of Outstanding Debentures known to TWC. TWC's obligation to accept Outstanding Debentures for exchange pursuant to the Exchange Offer is subject to certain conditions as set forth below under 'Certain Conditions to the Exchange Offer.'
TWC expressly reserves the right, at any time or from time to time, to extend the period of time during which the Exchange Offer remains open, and thereby delay acceptance for exchange of any Outstanding Debentures, by giving oral or written notice of such extension in the manner described below. During any such extension, all Outstanding Debentures previously tendered will remain subject to the Exchange Offer and may be accepted for exchange by TWC. Any Outstanding Debentures not accepted for exchange for any reason will be returned without expense to the tendering holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer.
Outstanding Debentures tendered in the Exchange Offer must be in denominations of principal amounts of $1,000 and any integral multiples thereof.
TWC expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Outstanding Debentures not theretofore accepted for exchange, upon the occurrence of any of the events specified below under ' -- Certain Conditions to the Exchange Offer.' TWC will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the Outstanding Debentures as promptly as practicable, such notice in the case of any extension to be issued by means of press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.
INTEREST ON THE EXCHANGE DEBENTURES
Interest on the Exchange Debentures will be payable semiannually on January 15 and July 15 of each year, commencing on July 15, 1998, at the rate of 6.95% per annum. Interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor, or if no interest has been paid on the Outstanding Debentures, from January 12, 1998.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal, and mail or otherwise deliver such Letter of Transmittal or such facsimile, together with the
Outstanding Debentures and any other required documents, to the Exchange Agent prior to midnight, New York City time, on the Expiration Date (unless such tender is being effected pursuant to the procedure for book-entry transfer described below).
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility system may make book-entry delivery of the Outstanding
Debentures by causing DTC to transfer such Outstanding Debentures into the
Exchange Agent's account and to deliver an Agents Message on or prior
to the Expiration Date in accordance with DTC's procedures for such transfer
and delivery. If delivery of Outstanding Debentures is effected through
book-entry transfer into the Exchange Agent's account at DTC and an Agent's
Message is not delivered, the Letter of Transmittal (or facsimile thereof), with
any required signature guarantees and any other required documents must be
transmitted to and received or confirmed by the Exchange Agent at its addresses
set forth herein under ' -- Exchange Agent' prior to midnight, New York City
time, on the Expiration Date. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH
ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term 'Agents Message' means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a confirmation of the book-entry tender of their Outstanding Debentures into the Exchange Agent's Account at DTC, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, the Letter of Transmittal and that TWC may enforce the Letter of Transmittal against such participant.
The tender (as set forth above) by a holder of Outstanding Debentures will constitute an agreement between such holder and TWC in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal.
Delivery of all documents must be made to the Exchange Agent at its address set forth herein. Holders may also request that their respective brokers, dealers, commercial banks, trust companies or nominees effect such tender for the holders.
The method of delivery of Outstanding Debentures, the Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the holders. Instead of delivery by mail, it is recommended that holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. NO LETTER OF TRANSMITTAL OR OUTSTANDING DEBENTURES SHOULD BE SENT TO TWC.
Only a holder of Outstanding Debentures may tender such Outstanding Debentures in the Exchange Offer. The term 'holder' with respect to the Exchange Offer means any person in whose name Outstanding Debentures are registered on the books of TWC or any other person who has obtained a properly completed bond power from the registered holder, or any person whose Outstanding Debentures are held of record by DTC who desires to deliver such Outstanding Debentures by book-entry transfer at DTC.
Any beneficial holder whose Outstanding Debentures are registered in the name of his broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on his behalf. If such beneficial holder wishes to tender on his own behalf, such beneficial holder must, prior to completing and executing the Letter of Transmittal and delivering his Outstanding Debentures, either make appropriate arrangements to register ownership of the Outstanding Debentures in such holder's name or obtain a properly completed bond power from the registered holder. The transfer of record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an 'eligible guarantor institution' within the meaning of Rule
17Ad-15 under the Exchange Act (an 'Eligible Institution') unless the
Outstanding Debentures tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled 'Special Issuance
Instructions' or 'Special Delivery Instructions' on the Letter of Transmittal or
(ii) for the account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered holder of any Outstanding Debentures listed therein, such Outstanding Debentures must be endorsed or accompanied by appropriate bond powers which authorize such person to tender the Outstanding Debentures on behalf of the registered holder, in either case signed as the name of the registered holder or holders appears on the Outstanding Debentures.
If the Letter of Transmittal or any Outstanding Debentures or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by TWC, evidence satisfactory to TWC of their authority to so act must be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of the tendered Outstanding Debentures will be determined by TWC in its sole discretion, which determination will be final and binding. TWC reserves the absolute right to reject any and all Outstanding Debentures not properly tendered or any Outstanding Debentures TWC's acceptance of which would, in the opinion of counsel for TWC, be unlawful. TWC also reserves the absolute right to waive any irregularities or conditions of tender as to particular Outstanding Debentures. TWC's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Debentures must be cured within such time as TWC shall determine. Neither TWC, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Outstanding Debentures nor shall any of them incur any liability for failure to give such notification. Tenders of Outstanding Debentures will not be deemed to have been made until such irregularities have been cured or waived. Any Outstanding Debentures received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost by the Exchange Agent to the tendering holder of such Outstanding Debentures unless otherwise provided in the Letter of Transmittal as soon as practicable following the Expiration Date.
In addition, TWC reserves the right in its sole discretion to (a) purchase or make offers for any Outstanding Debentures that remain outstanding subsequent to the Expiration Date, or, as set forth under ' -- Certain Conditions to the Exchange Offer,' to terminate the Exchange Offer and (b) to the extent permitted by applicable law, purchase Outstanding Debentures in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers may differ from the terms of the Exchange Offer.
By tendering, each holder of Outstanding Debentures will represent to TWC that, among other things, the Exchange Debentures acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such Exchange Debentures, whether or not such person is the holder, that neither the holder nor any other person has an arrangement or understanding with any person to participate in the distribution of the Exchange Debentures and that neither the holder nor any such other person is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the Securities Act or, if an affiliate, such holder or such other person will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable.
ACCEPTANCE OF OUTSTANDING DEBENTURES FOR EXCHANGE; DELIVERY OF EXCHANGE DEBENTURES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer, TWC will accept, promptly after the Expiration Date, all Outstanding Debentures properly tendered and will issue the
Exchange Debentures promptly, after acceptance of the Outstanding Debentures. See ' -- Certain Conditions to the Exchange Offer.'
For purposes of the Exchange Offer, TWC shall be deemed to have accepted properly tendered Outstanding Debentures for exchange when, as and if TWC has given oral or written notice thereof to the Exchange Agent, with written confirmation of any oral notice to be given promptly thereafter.
For each Outstanding Debenture accepted for exchange, the holder of such Outstanding Debenture will receive an Exchange Debenture having a principal amount equal to that of the surrendered Outstanding Debenture. Interest on the Exchange Debentures will be payable semiannually on January 15 and July 15 of each year, commencing on July 15, 1998, at the rate of 6.95% per annum. Interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor, or if no interest has been paid on the Outstanding Debentures, from January 12, 1998.
In all cases, issuance of Exchange Debentures for Outstanding Debentures that are accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of certificates for such Outstanding Debentures or a timely Book-Entry Confirmation of such Outstanding Debentures into the Exchange Agent's account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal and all other required documents. If any tendered Outstanding Debentures are not accepted for any reason set forth in the terms and conditions of the Exchange Offer or if Outstanding Debentures are submitted for a greater principal amount than the holder desired to exchange, such unaccepted or non-exchanged Outstanding Debentures will be returned without expense to the tendering holder thereof (or, in the case of Outstanding Debentures tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry procedures described below, such non-exchanged Outstanding Debentures will be credited to an account maintained with such Book-Entry Transfer Facility) as promptly as practicable after the expiration or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect to the Outstanding Debentures at the Book-Entry Transfer Facility for purposes of the Exchange Offer within two business days after the date of this Prospectus, and any financial institution that is a participant in the Book- Entry Transfer Facility's systems may make book-entry delivery of Outstanding Debentures by causing the Book-Entry Transfer Facility to transfer such Outstanding Debentures into the Exchange Agent's account at the Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for transfer. However, although delivery of Outstanding Debentures may be effected through book-entry transfer at the Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile thereof or an Agent's Message in lieu thereof), with any required signature guarantees and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent at one of the addresses set forth below, under ' -- Exchange Agent' on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Outstanding Debentures and who cannot deliver their Outstanding Debentures, the Letter of Transmittal, or any other required documents to the Exchange Agent prior to the Expiration Date, or if such holder cannot complete the procedure for book-entry transfer on a timely basis, may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder of the Outstanding Debentures, the certificate number or numbers of such Outstanding Debentures and the principal amount of Outstanding Debentures tendered, stating that the tender is being made thereby, and
guaranteeing that, within five business days after the Expiration Date, the Letter of Transmittal (or facsimile thereof), together with the certificate(s) representing the Outstanding Debentures to be tendered in proper form for transfer and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Institution with the Exchange Agent; and
(c) Such properly completed and executed Letter of Transmittal (or facsimile thereof), together with the certificate(s) representing all tendered Outstanding Debentures in proper form for transfer (or confirmation of a book-entry transfer into the Exchange Agent's account at DTC of Outstanding Debentures delivered electronically) and all other documents required by the Letter of Transmittal are received by the Exchange Agent within five business days after the Expiration Date.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Outstanding Debentures may be withdrawn at any time prior to midnight, New York City time, on the Expiration Date.
To withdraw a tender of Outstanding Debentures in the Exchange Offer, a facsimile transmission or letter notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to midnight, New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Outstanding Debentures to be withdrawn (the 'Depositor'), (ii) include a statement that the Depositor is withdrawing its election to have Outstanding Debentures exchanged, and identify the Outstanding Debentures to be withdrawn (including the certificate number or numbers and principal amount of such Outstanding Debentures), (iii) be signed by the Depositor in the same manner as the original signature on the Letter of Transmittal by which such Outstanding Debentures were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to permit the Trustee with respect to the Outstanding Debentures to register the transfer of such Outstanding Debentures into the name of the Depositor withdrawing the tender and (iv) specify the name in which any such Outstanding Debentures are to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time of receipt) for such withdrawal notices will be determined by TWC, whose determination shall be final and binding on all parties. Any Outstanding Debentures so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no Exchange Debentures will be issued with respect thereto unless the Outstanding Debentures so withdrawn are validly retendered. Any Outstanding Debentures which have been tendered but which are not accepted for exchange will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Outstanding Debentures may be re-tendered by following one of the procedures described above under ' -- Procedures for Tendering' at any time prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
The Exchange Offer is not subject to any conditions, other than that (i) the Exchange Offer does not violate applicable law or any applicable interpretation of the staff of the Commission and (ii) there is no injunction, order or decree issued by any court or any governmental agency that would prohibit, prevent or otherwise materially impair the ability of TWC to proceed with the Exchange Offer. There can be no assurance that any such condition will not occur. Holders of Outstanding Debentures will have certain rights against TWC under the Registration Rights Agreement should TWC fail to consummate the Exchange Offer.
If TWC determines that it may terminate the Exchange Offer, as set forth
above, TWC may (i) refuse to accept any Outstanding Debentures and return any
Outstanding Debentures that have been tendered to the holders thereof, (ii)
extend the Exchange Offer and retain all Outstanding Debentures tendered prior
to the Expiration Date, subject to the rights of such holders of tendered
Outstanding Debentures to withdraw their tendered Outstanding Debentures, or
(iii) waive such termination event with respect to the Exchange Offer and accept
all properly tendered Outstanding Debentures that have not been withdrawn. If
such waiver constitutes a material change in the Exchange Offer, TWC will
disclose such change by means of a supplement to this Prospectus that will be
distributed to each registered holder of Outstanding Debentures, and TWC will extend the Exchange Offer for a period of five to ten business days, depending upon the significance of the waiver and the manner of disclosure to the registered holders of the Outstanding Debentures, if the Exchange Offer would otherwise expire during such period.
EXCHANGE AGENT
The Chase Manhattan Bank, the Trustee under the Indenture, has been appointed as Exchange Agent for the Exchange Offer. Questions and requests for assistance and inquiries for additional copies of this Prospectus or of the Letter of Transmittal should be directed to the Exchange Agent addressed as follows:
By Mail, Hand or Overnight Courier Facsimile Transmission Number
55 Water Street (212) 638-7375
Room 234, North Building or (212) 344-9367
New York, NY 10041 (For Eligible
Attention: Institutions Only)
Carlos Esteves Confirm by Telephone
(If by Mail, Registered or (212) 638-0828
Certified Mail Recommended)
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DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
TWC will not make any payments to brokers, dealers or other persons soliciting acceptances of the Exchange Offer.
The cash expenses to be incurred in connection with the Exchange Offer will be paid by TWC and are estimated to be $150,000.
TRANSFER TAXES
Holders who tender their Outstanding Debentures for exchange will not be obligated to pay any transfer taxes in connection therewith, except that holders who instruct TWC to register Exchange Debentures in the name of, or request that Outstanding Debentures not tendered or not accepted in the Exchange Offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE AND REQUIREMENTS FOR TRANSFER OF EXCHANGE DEBENTURES
Holders of Outstanding Debentures who do not exchange their Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer will continue to be subject to the provisions in the Indenture regarding transfer and exchange of the Outstanding Debentures and the restrictions on transfer of such Outstanding Debentures as set forth in the legend thereon as a consequence of the issuance of the Outstanding Debentures pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the Outstanding Debentures may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. TWC does not currently anticipate that it will register Outstanding Debentures under the Securities Act subsequent to the Exchange Offer. Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties, TWC believes that Exchange Debentures issued pursuant to the Exchange Offer in exchange for Outstanding Debentures may be offered for resale, resold or otherwise transferred by holders thereof (other than any such holder which
is an 'affiliate' of TWC, TWI or TBS within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Debentures are
acquired in the ordinary course of such holders' business and such holders have
no arrangement with any person to participate in the distribution of such
Exchange Debentures. However, TWC does not intend to request the Commission to
consider, and the Commission has not considered, the Exchange Offer in the
context of a no-action letter and there can be no assurance that the staff of
the Commission would make a similar determination with respect to the Exchange
Offer as in such other circumstances. Each holder, other than a broker-dealer,
must acknowledge that (i) the Exchange Debentures received by such holder will
be acquired in the ordinary course of its business, (ii) at the time of the
consummation of the Exchange Offer such holder will have not engaged in, and
does not intend to engage in, a distribution of Exchange Debentures and has no
arrangement or understanding to participate in a distribution of Exchange
Debentures and (iii) such holder is not an affiliate of TWC, TWI or TBS within
the meaning of Rule 405 of the Securities Act or if it is such an affiliate,
that it will comply with the registration and prospectus delivery requirements
of the Securities Act, to the extent applicable. If any holder is an affiliate
of TWC, TWI or TBS or is engaged in or intends to engage in or has any
arrangement or understanding with respect to the distribution of the Exchange
Debentures to be acquired pursuant to the Exchange Offer, such holder (i) could
not rely on the applicable interpretations of the staff of the Commission and
(ii) must comply with the registration and prospectus delivery requirement of
the Securities Act in connection with any resale transaction. Each broker-dealer
that receives Exchange Debentures for its own account pursuant to the Exchange
Offer must acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Debentures. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an 'underwriter' within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Debentures
received in exchange for Outstanding Debentures, where such Outstanding
Debentures were acquired by such broker-dealer as a result of market-making
activities or other trading activities. TWC has agreed that, for a period of 90
days after the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See 'Plan of
Distribution.' However, to comply with state securities laws, the Exchange
Debentures may not be offered or sold in any state unless they have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with. The offer and sale of the
Exchange Debentures to 'qualified institutional buyers' (as such term is defined
under Rule 144A of the Securities Act) is generally exempt from registration or
qualification under state securities laws. TWC currently does not intend to
register or qualify the sale of the Exchange Debentures in any state where an
exemption from registration or qualification is required and not available.
USE OF PROCEEDS
There will be no cash proceeds to TWC, TWI or TBS from the Exchange Offer.
The Exchange Offer is intended to satisfy certain of TWC's, TWI's and TBS's obligations under the Placement Agreement and the Registration Rights Agreement. In consideration for issuing the Exchange Debentures contemplated in this Prospectus, TWC will receive Outstanding Debentures in like principal amount, the form and terms of which are the same as the form and terms of the Exchange Debentures (which they replace), except as otherwise described herein. The Outstanding Debentures surrendered in exchange for Exchange Debentures will be retired and canceled and cannot be reissued. Accordingly, issuance of the Exchange Debentures will not result in any increase or decrease in the indebtedness of TWC, TWI or TBS.
The net proceeds of the Original Offering were approximately $490.2 million. The net proceeds from the Original Offering were used by TWC to redeem its 7.45% Notes due 1998, and prior to such use, to reduce short-term borrowings of TWC and its affiliates.
DESCRIPTION OF THE DEBENTURES AND THE GUARANTEES
The Outstanding Debentures were, and the Exchange Debentures will be, issued under an Indenture, dated as of January 15, 1993, as supplemented from time to time (such Indenture, as so supplemented being called the 'Indenture') among TWC, TWI, TBS and The Chase Manhattan Bank (formerly known as Chemical Bank) (the 'Trustee'), as Trustee. The following summary of certain provisions of the Indenture and the Debentures does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended (the 'Trust Indenture Act'). Copies of the Indenture and the Debentures are available upon request from TWC. Whenever particular defined terms of the Indenture not otherwise defined herein are referred to, such defined terms are incorporated herein by reference. For definitions of certain capitalized terms used in the following summary, see ' -- Certain Definitions.' Section references are to the Indenture unless otherwise indicated.
GENERAL
The Debentures bear interest at an annual rate of 6.95%, payable semiannually on January 15 and July 15 of each year, commencing July 15, 1998 (each an 'Interest Payment Date'), to Holders of record at the close of business on the December 15 or June 15 next preceding each such Interest Payment Date. The Debentures are issuable only in registered form, without coupons, in denominations of $1,000 and integral multiples thereof. To the extent described under ' -- Book Entry; Delivery and Form' below, the principal of and interest on the Debentures will be payable and the transfer of the Debentures will be registrable through DTC. (Sections 305 and 202, Form of Debenture and the Fifth Supplemental Indenture, dated as of January 12, 1998 (the 'Fifth Supplemental Indenture'), among TWC, TWI, TBS and the Trustee) TWC will not charge a service charge for any registration of transfer or exchange of Debentures; however, TWC may require payment by a Holder of a sum sufficient to cover any tax, assessment or other governmental charge payable in connection therewith. (Section 305) The Trustee shall authenticate and deliver Debentures in accordance with the Indenture and the procedures for dating, due execution by TWC and book-entry transfer set forth therein. (Section 303)
For each Outstanding Debenture accepted for exchange, the Holder thereof will receive an Exchange Debenture having a principal amount equal to that of the surrendered Outstanding Debenture.
The terms of the Exchange Debentures are identical in all material respects to the terms of the Outstanding Debentures, except for certain transfer restrictions and registration rights relating to the Outstanding Debentures and except that, with respect to the Outstanding Debentures, if TWC has not filed a Registration Statement covering the Exchange Debentures, caused such registration statement to become effective and consummated a registered exchange offer for the Outstanding Debentures or caused a Shelf Registration Statement with respect to resales of the Outstanding Debentures to be declared effective within certain time periods, then Additional Interest on the Outstanding Debentures will be payable until the consummation of a registered exchange offer or the effectiveness of the Shelf Registration Statement. See 'Registration Rights Agreement for Outstanding Debentures.'
All Outstanding Debentures and Exchange Debentures will be treated as a single class of securities for all purposes under the Indenture.
TERMS OF THE DEBENTURES
The Debentures are limited to $500,000,000 aggregate principal amount. The Debentures will mature on January 15, 2028, and are not redeemable prior to maturity and do not have the benefit of a sinking fund.
GUARANTEES
Each of the Guarantors, as primary obligor and not merely as surety, has guaranteed to each Holder of the Debentures, and to the Trustee and its successors and assigns, (i) the full and punctual
payment of principal of and interest on the Debentures when due, whether at maturity, by acceleration or otherwise, and all other monetary obligations of TWC under the Indenture (including obligations to the Trustee) and the Debentures and (ii) the full and punctual performance within applicable grace periods of all other obligations of TWC under the Indenture and the Debentures. The Guarantees constitute a guarantee of payment, performance and compliance and not merely of collection. The obligation of each to make any payments may be satisfied by causing TWC to make such payments. Further, each Guarantor has agreed to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Holder of Debentures in enforcing any of their respective rights under the Guarantees. (Section 2 of the Second Supplemental Indenture dated as of October 10, 1996, among TWC, TWI and the Trustee, and Section 2 of the Fourth Supplemental Indenture dated as of December 17, 1997 (the 'Fourth Supplemental Indenture'), among TWC, TWI, TBS and the Trustee) The maximum aggregate amount of the Guarantee by TBS shall not exceed the maximum amount that can be guaranteed by TBS without rendering such Guarantee voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.
RANKING
The Debentures are senior indebtedness of TWC, ranking on a parity with all other unsecured and unsubordinated indebtedness of TWC, and each Guarantee is a senior obligation of the relevant Guarantor, ranking on a parity with all other unsecured and unsubordinated obligations of such Guarantor. Each of TWC and the Guarantors is a holding company and the Debentures and the Guarantees will be effectively subordinated to all existing and future liabilities, including indebtedness, of the subsidiaries of TWC and the Guarantors, respectively. See 'Holding Company Structure.'
COVENANTS
Limitation on Liens. The Indenture provides that neither TWC nor any Material Subsidiary of TWC shall incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness for money borrowed that is secured by a lien on any asset now owned or hereafter acquired by it unless TWC makes or causes to be made effective provision whereby the Debentures will be secured by such lien equally and ratably with (or prior to) all other indebtedness thereby secured so long as any such indebtedness shall be secured. The foregoing restriction does not apply to the following:
(i) liens existing as of the date of the Indenture;
(ii) liens created by Subsidiaries of TWC to secure indebtedness of such Subsidiaries to TWC or to one or more other Subsidiaries of TWC;
(iii) liens affecting property of a person existing at the time it becomes a Subsidiary of TWC or at the time it merges into or consolidates with TWC or a Subsidiary of TWC or at the time of a sale, lease or other disposition of all or substantially all of the properties of such person to TWC or its Subsidiaries;
(iv) liens on property existing at the time of the acquisition thereof or incurred to secure payment of all or a part of the purchase price thereof or to secure indebtedness incurred prior to, at the time of, or within one year after the acquisition thereof for the purpose of financing all or part of the purchase price thereof;
(v) liens on any property to secure all or part of the cost of improvements or construction thereon or indebtedness incurred to provide funds for such purpose in a principal amount not exceeding the cost of such improvements or construction;
(vi) liens consisting of or relating to the sale, transfer or financing of motion pictures, video and television programs, sound recordings, books or rights with respect thereto or with so-called tax shelter groups or other third-party investors in connection with the financing of such motion pictures, video and television programming, sound recordings or books in the ordinary course of business and the granting to TWC or any of its Subsidiaries of rights to distribute such motion pictures, video and television programming, sound recordings or books; provided, however, that no
such lien shall attach to any asset or right of TWC or its Subsidiaries (other than the motion pictures, video and television programming, sound recordings, books or rights which were sold, transferred to or financed by the tax shelter group or third-party investors in question or the proceeds arising therefrom);
(vii) liens on shares of stock, indebtedness or other securities of a Person that is not a Subsidiary;
(viii) other liens arising in connection with indebtedness of TWC and its Subsidiaries in an aggregate principal amount for TWC and its Subsidiaries not exceeding at the time such lien is issued, created or assumed the greater of (A) 10% of the Consolidated Net Worth of TWC and (B) $500 million; and
(ix) any extensions, renewal or replacement of any lien referred to in the foregoing clauses (i) through (viii) inclusive, or of any indebtedness secured thereby; provided that the principal amount of indebtedness secured thereby shall not exceed the principal amount of indebtedness so secured at the time of such extension, renewal or replacement, or at the time the lien was issued, created or assumed or otherwise permitted, and that such extension, renewal or replacement lien shall be limited to all or part of substantially the same property which secured the lien extended, renewed or replaced (plus improvements on such property). (Section 1006)
Limitation on Senior Debt. The Indenture provides that TWC will not, and
will not permit any of its Subsidiaries to, incur, create, issue, assume,
guarantee or otherwise become directly or indirectly liable for (collectively,
'incur') any Senior Debt, if after giving effect to such incurrence of Senior
Debt, determined on a pro forma basis as if such incurrence had occurred on the
first day of the Test Period, the Consolidated Cash Flow Coverage Ratio for TWC
and its Subsidiaries for the Test Period would be less than 1.5 to 1; provided,
however, that the foregoing restrictions will not apply to TWE or any of its
Subsidiaries to the extent that the application of such restrictions would be
prohibited under, or cause a violation of, TWE's bank credit agreement as in
effect from time to time or any successor or replacement credit agreement.
(Section 1007)
Other than the restrictions in the Indenture on liens and incurrence of Senior Debt described above, the Indenture and the Debentures do not contain any covenants or other provisions designed to afford Holders of Debentures protection in the event of a recapitalization or highly leveraged transaction involving TWC.
Limitation on Merger, Consolidation and Certain Sales of Assets. The Indenture provides that neither TWC nor the Guarantors will merge or consolidate with or into, or convey or transfer its property substantially as an entirety to, any Person unless (a) the successor is organized and existing under the laws of the United States or any State or the District of Columbia, (b) (i) in the case of TWC, the successor assumes TWC's obligations under the Indenture and the Debentures on the same terms and conditions and (ii) in the case of each Guarantor, the successor assumes such Guarantor's obligations under the Indenture and its Guarantee on the same terms and conditions and (c) immediately after giving effect to such transactions, there is no default under the Indenture. (Sections 801 and 802, as amended by the Third Supplemental Indenture dated as of December 31, 1996 (the 'Third Supplemental Indenture'), among TWC, TWI and the Trustee and the Fourth Supplemental Indenture)
CERTAIN DEFINITIONS
The following are certain of the terms defined in the Indenture:
'Consolidated Cash Flow' means, with respect to TWC, for any period, the net income of TWC and its Subsidiaries as determined on a consolidated basis in accordance with GAAP consistently applied, plus the sum of depreciation, amortization, other noncash charges which reduce net income, income tax expense and interest expense, in each case to the extent deducted in determining such net income, and excluding extraordinary gains or losses. Notwithstanding the foregoing, for purposes of determining the Consolidated Cash Flow of TWC, there shall be included, in respect of each other Person that is accounted for by TWC on the equity method (as determined in accordance with GAAP), TWC's proportionate amount of such other Person's and its Subsidiaries' consolidated net income, depreciation, amortization, other noncash charges which
reduce net income, income tax expense and interest expense, in each case to the extent deducted in determining such other Person's net income, excluding extraordinary gains and losses.
'Consolidated Cash Flow Coverage Ratio' means, for any period, the ratio for such period of Consolidated Cash Flow to Consolidated Interest Expense. In determining the Consolidated Cash Flow Coverage Ratio, effect shall be given to the application of the proceeds of Senior Debt whose incurrence is being tested to the extent such proceeds are to be used to repay or refinance other Senior Debt.
'Consolidated Interest Expense' means, with respect to TWC, for any period, cash interest expense of TWC and its Subsidiaries on Senior Debt for such period other than the amount amortized during such period in respect of all fees paid in connection with the incurrence of such Senior Debt, such expense to be determined on a consolidated basis in accordance with GAAP consistently applied. Notwithstanding the foregoing, for purposes of determining the Consolidated Interest Expense of TWC, there shall be included, in respect of each other Person that is accounted for by TWC on the equity method (as determined in accordance with GAAP), TWC's proportionate amount of the cash interest expense of such other Person and its Subsidiaries on Senior Debt for the relevant period other than the amount amortized during such period in respect of all fees paid in connection with the incurrence of such Senior Debt, such expense to be determined on a consolidated basis in accordance with GAAP consistently applied.
'Consolidated Net Worth' means, with respect to TWC, at the date of any determination, the consolidated stockholders' equity of TWC and its Subsidiaries, determined on a consolidated basis in accordance with GAAP consistently applied.
'GAAP' means generally accepted accounting principles as such principles are in effect as of the date of the Indenture.
'Material Subsidiary' means, with respect to TWC, any Person that is a Subsidiary if at the end of the most recent fiscal quarter of TWC, the aggregate amount, determined in accordance with GAAP consistently applied, of securities of, loans and advances to, and other investments in, such Person held by TWC and its other Subsidiaries exceeded 10% of TWC's Consolidated Net Worth.
'Person' means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
'Senior Debt' means, with respect to any Person, all indebtedness of such Person in respect of money borrowed, determined in accordance with GAAP consistently applied, other than indebtedness as to which the instrument governing such indebtedness provides that such indebtedness is, or which is in effect, subordinated or junior in right of payment to any other indebtedness of such Person.
'Subsidiary' means, with respect to any Person, any corporation more than 50% of the voting stock of which is owned directly or indirectly by such Person, and any partnership, association, joint venture or other entity in which such Person owns more than 50% of the equity interests or has the power to elect a majority of the board of directors or other governing body.
'Test Period' means, with respect to any date, the period consisting of the most recent four full fiscal quarters for which financial information is generally available.
DEFEASANCE
The Indenture provides that TWC (and to the extent applicable, the Guarantors), at its option, (a) will be Discharged from any and all obligations in respect of the Debentures (except in each case for certain obligations to register the transfer or exchange of the Debentures, replace stolen, lost or mutilated Debentures, maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with the covenants described above under 'Covenants' and certain Events of Default (other than those arising out of the failure to pay interest or principal on the Debentures and certain events of bankruptcy, insolvency and reorganization) will no longer constitute Events of Default with respect to
such Debentures, in each case if TWC deposits with the applicable Trustee, in
trust, money or the equivalent in securities of the government which issued the
currency in which the Debentures are denominated or government agencies backed
by the full faith and credit of such government, or a combination thereof, which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient to pay all the principal
(including any mandatory sinking fund payments) of, and interest on, such series
on the dates such payments are due in accordance with the terms of such
Debentures. To exercise any such option, TWC is required, among other things, to
deliver to the Trustee an opinion of counsel to the effect that (i) the deposit
and related defeasance would not cause the Holders of such Debentures to
recognize income, gain or loss for Federal income tax purposes and, in the case
of a Discharge pursuant to clause (a), accompanied by a ruling to such effect
received from or published by the United States Internal Revenue Service and
(ii) the creation of the defeasance trust will not violate the Investment
Company Act of 1940, as amended. In addition, TWC is required to deliver to the
Trustee an Officers' Certificate stating that such deposit was not made by TWC
with the intent of preferring the Holders of the Debentures over other creditors
of TWC or with the intent of defeating, hindering, delaying or defrauding
creditors of TWC or others. (Article 4, as amended by the Third Supplemental
Indenture and the Fourth Supplemental Indenture)
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that, if an Event of Default specified therein with respect to the Debentures shall have happened and be continuing, either the Trustee or the Holders of 25% in aggregate principal amount of the Debentures (or 25% in aggregate principal amount of all outstanding Debt Securities under the Indenture, in the case of certain Events of Default affecting all series of Debt Securities under the Indenture) may declare the principal of all the Debentures to be due and payable. (Section 502)
Events of Default in respect of the Debentures are defined in the Indenture as being: (i) default for 30 days in payment of any interest installment with respect to the Debentures; (ii) default in payment of principal of, or premium, if any, on, or any sinking fund or analogous payment with respect to, the Debentures when due at their stated maturity, by declaration or acceleration, when called for redemption or otherwise; (iii) default for 90 days after notice to TWC (or the Guarantors, if applicable) by the Trustee thereunder or by Holders of 25% in aggregate principal amount of the Debentures in the performance of any covenant pertaining to the Debentures; (iv) failure to pay when due, upon final maturity or upon acceleration, the principal amount of any indebtedness for money borrowed of TWC in excess of $50 million, if such indebtedness is not discharged, or such acceleration annulled, within 60 days after written notice; and (v) certain events of bankruptcy, insolvency and reorganization with respect to either Guarantor, TWC or any Material Subsidiary of TWC which is organized under the laws of the United States or any political sub-division thereof. (Section 501, as amended by the Third Supplemental Indenture and the Fourth Supplemental Indenture, and Form of Debenture)
The Indenture provides that the Trustee thereunder will, within 90 days after the occurrence of a default with respect to the Debentures, give to the Holders of the Debentures notice of all uncured and unwaived defaults known to it; provided that, except in the case of default in the payment of principal of, premium, if any, or interest, if any, on any of the Debentures, the Trustee thereunder will be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interests of the Holders of the Debentures. The term 'default' for the purpose of this provision means the happening of any of the Events of Default specified above, except that any grace period or notice requirement is eliminated. (Section 602)
The Indenture contains provisions entitling the Trustee, subject to the duty of the Trustee during an Event of Default to act with the required standard of care, to be indemnified by the Holders of the Debentures before proceeding to exercise any right or power under the Indenture at the request of Holders of the Debentures. (Section 603)
The Indenture provides that the Holders of a majority in aggregate principal amount of the outstanding Debentures may direct the time, method and place of conducting proceedings for remedies available to the Trustee or exercising any trust or power conferred on the Trustee in respect of such series, subject to certain conditions. (Section 512)
The Indenture includes a covenant that TWC will file annually with the
Trustee a certificate of no default or specifying any default that exists.
(Section 1004)
In certain cases, the Holders of a majority in principal amount of the outstanding Debentures may on behalf of the Holders of all Debentures waive any past default or Event of Default with respect to the Debentures or compliance with certain provisions of the Indenture, except, among other things, a default not theretofore cured in payment of the principal of, or premium, if any, or interest, if any, on any of the Debentures. (Sections 513 and 1008)
MODIFICATION OF THE INDENTURE
TWC and the Trustee may, without the consent of the Holders of the Debentures or any other series of Debt Securities, enter into indentures supplemental to the Indenture for, among others, one or more of the following purposes: (i) to evidence the succession of another Person to TWC or either Guarantor, and the assumption by such successor of TWC or such Guarantor's obligations under the Indenture and the Debt Securities of any series or the Guarantees relating thereto; (ii) to add covenants of TWC and either Guarantor, or surrender any rights of TWC or either Guarantor, for the benefit of the Holders of Debt Securities of any or all series; (iii) to cure any ambiguity, or correct any inconsistency in the Indenture; (iv) to evidence and provide for the acceptance of any successor Trustee with respect to one or more series of Debt Securities or to facilitate the administration of the trusts thereunder by one or more trustees in accordance with the Indenture; (v) to establish the form or terms of any series of Debt Securities; and (vi) to provide any additional Events of Default. (Section 901, as amended by the Third Supplemental Indenture and the Fourth Supplemental Indenture)
The Indenture contains provisions permitting TWC and the Trustee thereunder, with the consent of the Holders of a majority in principal amount of the outstanding Debt Securities of each series to be affected, to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the Indenture or modifying the rights of the Holders of the Debt Securities of such series to be affected, except that no such supplemental indenture may, without the consent of the Holders of affected Debt Securities, among other things, change the fixed maturity of any Debt Securities, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce the number of shares of any common stock or other securities to be delivered by TWC in respect of a conversion of any convertible Debt Securities or reduce the aforesaid percentage of Debt Securities of any series the consent of the Holders of which is required for any such supplemental indenture. (Section 902)
THE TRUSTEE
The Chase Manhattan Bank, formerly known as Chemical Bank, is the Trustee under the Indenture. The Trustee is a depository for funds and performs other services for, and transacts other banking business with, the Company and the Guarantors in the normal course of business. Chase Securities Inc., one of the Placement Agents, is an affiliate of the Trustee.
GOVERNING LAW
The Indenture will be governed by, and construed in accordance with, the laws of the State of New York.
BOOK-ENTRY; DELIVERY AND FORM
The Exchange Debentures will be represented by one or more permanent global Exchange Debentures in definitive, fully registered form without interest coupons (collectively, the 'Global Exchange Debenture') and will be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC.
Ownership of beneficial interests in the Global Exchange Debenture will be limited to persons who have accounts with DTC ('participants') or persons who hold interests through participants. Ownership of beneficial interests in the Global Exchange Debenture will be shown on, and the transfer of that
ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants).
So long as DTC, or its nominee, is the registered owner or holder of the Global Exchange Debenture, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Exchange Debentures represented by the Global Exchange Debenture for all purposes under the Indenture and the Exchange Debentures. No beneficial owner of an interest in the Global Exchange Debenture will be able to transfer that interest except in accordance with DTC's applicable procedures, in addition to those provided for under the Indenture.
Payments of the principal of, and interest on, the Global Exchange Debenture will be made to DTC or its nominee, as the case may be, as the registered owner thereof. Neither TWC, the Trustee nor any Paying Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Exchange Debenture or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
TWC expects that DTC or its nominee, upon receipt of any payment of principal or interest in respect of the Global Exchange Debenture, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Exchange Debenture as shown on the records of DTC or its nominee. TWC also expects that payments by participants to owners of beneficial interests in such Global Exchange Debenture held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds.
TWC expects that DTC will take any action permitted to be taken by a Holder of Exchange Debentures (including the presentation of Exchange Debentures for exchange as described below) only at the direction of one or more participants to whose account the DTC interests in the Global Exchange Debenture is credited and only in respect of such portion of the aggregate principal amount of Exchange Debentures as to which such participant or participants has or have given such direction. However, if there is an Event of Default under the Exchange Debentures, DTC will exchange the Global Exchange Debenture for definitive Exchange Debentures in certificated form, which it will distribute to its participants.
TWC understands that: DTC is a limited purpose trust company organized under the laws of the State of New York, a 'banking organization' within the meaning of New York Banking Law, a member of the Federal Reserve System, a 'clearing corporation' within the meaning of the Uniform Commercial Code and a 'Clearing Agency' registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates and certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly ('indirect participants').
Although DTC is expected to follow the foregoing procedures in order to facilitate transfers of interests in the Global Exchange Debenture among participants of DTC, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither TWC nor the Trustee will have any responsibility for the performance by DTC or its respective participants or indirect participants of its respective obligations under the rules and procedures governing its operations.
If DTC is at any time unwilling or unable to continue as a depositary for the Global Exchange Debenture and a successor depositary is not appointed by TWC within 90 days, TWC will issue definitive Exchange Debentures in certificated form in exchange for the Global Exchange Debenture.
SAME-DAY SETTLEMENT AND PAYMENT
So long as DTC continues to make its Settlement System available to TWC, all payments of principal of and interest on the Debentures will be made by TWC in immediately available funds.
REGISTRATION RIGHTS AGREEMENT FOR OUTSTANDING DEBENTURES
Holders of Exchange Debentures are not entitled to any registration rights with respect to the Exchange Debentures. TWC, TWI and TBS have agreed, pursuant to the Registration Rights Agreement (the 'Registration Rights Agreement') with the Placement Agents, for the benefit of the holders of the Outstanding Debentures, that TWC, TWI and TBS will file with the Commission and use its reasonable best efforts to cause to become effective a registration statement (the 'Registration Statement') with respect to the Exchange Debentures identical in all material respects to the Outstanding Debentures and, upon becoming effective, to offer the Holders of the Outstanding Debentures the opportunity to exchange their Outstanding Debentures for the Exchange Debentures. The Registration Rights Agreement provides that in the event that TWC, TWI and TBS are not permitted to effect such Exchange Offer, TWC, TWI and TBS will instead file a registration statement covering resales by the Holders of Outstanding Debentures (a 'Shelf Registration Statement') and will use their reasonable best efforts to cause such Shelf Registration Statement to become effective and to keep such Shelf Registration Statement effective for two years from January 12, 1998 (the 'Closing Date'). TWC is required, in the event a Shelf Registration Statement is filed, to provide to each Holder of the Outstanding Debentures copies of the prospectus and notify each such Holder when the Shelf Registration Statement has become effective. A Holder that sells Outstanding Debentures pursuant to a Shelf Registration Statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a current prospectus to purchasers, and will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales.
Under the Registration Rights Agreement, TWC, TWI and TBS have agreed to use their reasonable best efforts to: (i) file the Registration Statement or a Shelf Registration Statement with the Commission, (ii) have such Registration Statement or Shelf Registration Statement declared effective by the Commission within 180 days after the Closing Date and (iii) commence the Exchange Offer and issue the Exchange Debentures in exchange for all Outstanding Debentures validly tendered in accordance with the terms of the Exchange Offer prior to the close of the Exchange Offer, or, in the alternative, cause such Shelf Registration Statement to remain effective for two years from the Closing Date.
If TWC, TWI and TBS fail to comply with the above provisions, additional interest (the 'Additional Interest') on the Outstanding Debentures would be assessed as follows:
(i) If the Registration Statement or Shelf Registration Statement is not filed within 150 days following the Closing Date, then commencing on the 151st day after the Closing Date, Additional Interest shall be accrued on the Outstanding Debentures over and above the accrued interest at a rate of .50% per annum; or
(ii) If a Registration Statement or Shelf Registration Statement is filed pursuant to (i) above and is not declared effective within 180 days following the Closing Date, then commencing on the 181st day after the Closing Date, Additional Interest shall be accrued on the Outstanding Debentures over and above the accrued interest at a rate of .50% per annum; or
(iii) If either (A) TWC has not exchanged Exchange Debentures for all Outstanding Debentures validly tendered in accordance with the terms of the Exchange Offer on or prior to 45 days after the date on which the Registration Statement was declared effective, or (B) if applicable, the Shelf Registration Statement has been declared effective but such Shelf Registration Statement ceases to be effective at any time prior to two years from the Closing Date, then Additional Interest shall be accrued on the Outstanding Debentures over and above the accrued interest at a rate of .50% per annum immediately following the (x) 46th day after such effective date, in the case of (A) above, or (y) the day such Shelf Registration Statement ceases to be effective in the case of (B) above;
provided, however, that the Additional Interest rate on the Outstanding
Debentures may not exceed .50% per annum; and, provided, further, that (1) upon
the filing of the Registration Statement or Shelf Registration Statement (in the
case of (i) above), (2) upon the effectiveness of the Registration Statement or
Shelf Registration Statement (in the case of (ii) above), or (3) upon the
exchange of Exchange Debentures for all Outstanding Debentures tendered or upon
the effectiveness of the Shelf Registration Statement which had ceased to remain
effective prior to two years from the Closing Date (in the case of (iii) above),
Additional Interest on the Outstanding Debentures as a result of such clause
(i), (ii) or (iii) shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i), (ii) or
(iii) above will be payable in cash, on the same original payment dates of the
Outstanding Debentures. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount of
the Outstanding Debentures, multiplied by a fraction, the numerator of which is
the number of days such Additional Interest rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months), and the denominator of which is 360.
If TWC, TWI and TBS effect the Exchange Offer, TWC, TWI and TBS will be entitled to close the Exchange Offer provided that TWC has accepted all Outstanding Debentures theretofore validly tendered in accordance with the terms of the Exchange Offer. The consummation of the Exchange Offer will satisfy the obligations of TWC, TWI and TBS under the Registration Rights Agreement. Outstanding Debentures not tendered in the Exchange Offer shall bear interest at the same rates in effect at the time of issuance of the Outstanding Debentures.
The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a copy of which is filed as an exhibit to the Registration Statement of which this Prospectus constitutes a part.
HOLDING COMPANY STRUCTURE
Each of TWC, TWI and TBS is a holding company, the assets of which consist primarily of investments in its respective consolidated and unconsolidated subsidiaries. The assets of TWI consist primarily of its investment in TWC and TBS. The assets of TWC consist primarily of its investments in its consolidated and unconsolidated subsidiaries, including TWE. Although the assets of TBS consist primarily of investments in its consolidated and unconsolidated subsidiaries, TBS also directly owns certain assets that are used in the operation of WTBS, a television station in Atlanta, Georgia and TBS, a copyright-paid cable programming service and certain retail stores that together represent less than 5% of the consolidated assets of TBS at December 31, 1996. A substantial portion of the consolidated liabilities of TWC, TWI and TBS have been incurred by subsidiaries. TWE, which is not consolidated with either the TWC or TWI for financial reporting purposes, also has substantial indebtedness and other liabilities. The rights of TWC and the Guarantors and the rights of their creditors, including Holders of Debentures, to participate in the distribution of assets of any person in which TWC or the Guarantors owns an equity interest (including any subsidiary and TWE) upon such person's liquidation or reorganization will be subject to prior claims of such person's creditors, including trade creditors, except to the extent that TWC or the Guarantors may be a creditor with recognized claims against such person (in which case the claims of TWC and the Guarantors would still be subject to the prior claims of any secured creditor of such person and of any holder of indebtedness of such person that is senior to that held by TWC or the Guarantors). Accordingly, the Holders of the Debentures may be deemed to be effectively subordinated to such claims. As of September 30, 1997, the consolidated and unconsolidated subsidiaries of TWC and Guarantors had an aggregate of approximately $20 billion of outstanding liabilities, including indebtedness.
Each of TWC's and the Guarantors' ability to service its indebtedness and other obligations, including the Debentures and the Guarantees, respectively, and the ability of each of them to pay dividends on its common and/or preferred stock is dependent primarily upon the earnings and cash flow of their respective consolidated and unconsolidated subsidiaries and the distribution or other payment to them of such earnings and cash flow. The TWE Agreement of Limited Partnership and its bank credit facilities limit distributions and other transfers of funds to TWC and TWI.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of the principal United States federal income tax consequences to holders of Outstanding Debentures who exchange their Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer. This discussion is based on currently existing provisions of the Internal Revenue Code of 1986, as amended (the 'Code'), existing, temporary and proposed Treasury regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect or proposed on the date hereof and all of which are subject to change, possibly with retroactive effect, or different interpretations. This discussion is limited to holders of Outstanding Debentures who hold the Debentures as capital assets, within the meaning of section 1221 of the Code. Moreover, this discussion is for general information only and does not address all of the tax consequences that may be relevant to holders of Outstanding Debentures and Exchange Debentures in light of their personal circumstances or to certain types of holders of Outstanding Debentures and Exchange Debentures (such as certain financial institutions, insurance companies, tax-exempt entities, dealers in securities or persons who have hedged the risk of owning a Debenture). In addition, this discussion does not address any tax consequences arising under the laws of any state, locality or foreign jurisdiction, or any estate or gift tax considerations.
EXCHANGE OFFER
The exchange of Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer should not be treated as an exchange or other taxable event for United States Federal income tax purposes. Accordingly, there should be no United States Federal income tax consequences to holders who exchange Outstanding Debentures for Exchange Debentures pursuant to the Exchange Offer and any such holder should have the same adjusted tax basis and holding period in the Exchange Debentures as it had in the Outstanding Debentures immediately before the exhange.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Debentures. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Debentures received in exchange for Outstanding Debentures where such Outstanding Debentures were acquired as a result of market-making activities or other trading activities. TWC has agreed that for a period of 90 days after the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resales.
TWC will not receive any proceeds from any sale of Exchange Debentures by broker-dealers or any other holder of Exchange Debentures. Exchange Debentures received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Debentures or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such Exchange Debentures. Any broker-dealer that resells Exchange Debentures that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Debentures may be deemed to be an 'underwriter' within the meaning of the Securities Act and any profit on any such resale of Exchange Debentures and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date, TWC will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. TWC has agreed to pay all expenses incident to the Exchange Offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Debentures (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
By acceptance of this Exchange Offer, each broker-dealer that receives Exchange Debentures for its own account pursuant to the Exchange Offer agrees that, in the case that TWC is required to file a Shelf Registration Statement, on receipt of notice from TWC (i) that TWC is suspending the availability of the Shelf Registration Statement or (ii) of the happening of any event which makes any statement in the Shelf Registration Statement or the related prospectus untrue in any material respect or which requires the making of any changes in the Shelf Registration Statement or the related prospectus in order to make the statements therein not misleading (which notice TWC agrees to deliver promptly to the broker-dealer), the broker-dealer will suspend use of such prospectus until TWC has amended or supplemented the prospectus to correct the misstatement or omission and has furnished copies of the amended or supplemental prospectus to the broker-dealer. If TWC shall give any such notice to suspend the use of the prospectus, it shall extend the 90-day period referred to above by the number of days during the period from and including the date of the giving of the notice to and including when broker-dealers shall have received copies of the supplemented or amended prospectus necessary to permit resales of the Exchange Debentures.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the Exchange Debentures in connection with the Exchange Offer are being passed upon for TWC and the Guarantors by Cravath, Swaine & Moore, New York, New York.
EXPERTS
The consolidated financial statements and schedules of TWI and TWE appearing in TWI's 1996 Form 10-K and the combined financial statements of the Time Warner Service Partnerships incorporated by reference therein, have been audited by Ernst & Young LLP, Independent Auditors, as set forth in their reports thereon included therein and incorporated herein by reference. Such financial statements and schedules are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Cablevision Industries Corporation at December 31, 1995, and for the year then ended, incorporated by reference in this Prospectus from TWI's Current Report on Form 8-K dated November 13, 1997, have been audited by Ernst & Young LLP, Independent Auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Cablevision Industries Corporation as of December 31, 1994, and for each of the two years in the period ended December 31, 1994, incorporated by reference in this Prospectus from TWI's Current Report on Form 8-K dated November 13, 1997, have been audited by Arthur Andersen LLP, Independent Public Accountants, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements have been incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.
The financial statements of Paragon Communications as of December 31, 1993 and 1994, and for each of the three years in the period ended December 31, 1994, incorporated by reference in this Prospectus from TWI's 1996 Form 10-K, and the consolidated financial statements of TBS, as of December 31, 1994 and 1995, and for the three years in the period ended December 31, 1995,
incorporated by reference in this Prospectus from TWI's Current Report on Form 8-K dated November 13, 1997, have been audited by Price Waterhouse LLP, Independent Accountants, as set forth in their reports thereon included therein and incorporated herein by reference. Such financial statements are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing.
No person is authorized to give any information or to make any representations other than those contained in this Prospectus in connection with the offer made by this Prospectus, and, if given or made, such other information or representations must not be relied upon as having been authorized by TWC, TWI or TBS or by any underwriter, dealer or agent. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than those to which they relate. Neither the delivery of this Prospectus nor any sale of or offer to sell the Debentures offered hereby shall, under any circumstances, create an implication that there has been no change in the affairs of TWC, TWI or TBS or that the information herein is correct as of any time after the date hereof. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the Debentures offered hereby in any State to any person to whom it is unlawful to make such offer or solicitation in such State.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
TWI and TWC
Section 145 of the Delaware General Corporation law (the 'DGCL') provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation -- a 'derivative action'), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceedings, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation's charter, by-laws, disinterested director vote, stockholder vote, agreement or otherwise.
Each of TWI's and TWC's By-laws require indemnification to the fullest extent permitted under Delaware law of any person who is or was a director or officer of TWI who is or was involved or threatened to be made so involved in any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person is or was serving as a director, officer or employee of TWI or TWC or any predecessor of TWI or TWC or was serving at the request of TWI or TWC as a director, officer or employee of any other enterprise.
Section 102(b)(7) of the DGCL permits a provision in the certificate of incorporation of each corporation organized thereunder, such as TWI and TWC, eliminating or limiting, with certain exceptions, the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Section 1, Article X of TWI's and Article VIII of TWC's Restated Certificate of Incorporation eliminates the liability of directors to the extent permitted by Section 102(b)(7) of the DGCL.
The foregoing statements are subject to the detailed provisions of Sections 145 and 102(b)(7) of the DGCL, TWI's and TWC's By-laws and Section 1, Article X of TWI's and Article VIII of TWC's Restated Certificate of Incorporation, as applicable.
The Directors' and Officers' Liability and Reimbursement Insurance Policy of TWI is designed to reimburse each of the registrants for any payments made by each pursuant to the foregoing indemnification. The policy has coverage of $50,000,000.
TBS
TBS's By-laws provide for indemnification of directors and officers of TBS against expenses (including attorneys' fees), judgments, fines, settlements and other amounts actually incurred in connection with any proceeding arising by reason of the fact that such person is or was an officer or director of TBS.
TBS's By-laws provide for indemnification of directors and officers of TBS in connection with or resulting from any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, in which he or she may become involved by reason of his or her being or having been a director or officer, or by reason of any action taken or not taken in his or her capacity as such director or officer or as a member of any committee appointed by the Board of Directors of TBS to act for, in the interest of, or on behalf of TBS provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of TBS and, in addition, with respect to any criminal action or proceeding, did not have reasonable cause to believe that his or her conduct was unlawful.
II-1
Indemnification is mandatory in the case of a director or officer who is wholly successful on the merits or otherwise with respect to any claim, action, suit or proceeding of the character described above. In other cases, the determination whether to indemnify a director or officer is made by a majority of disinterested directors, a majority of disinterested shareholders, or independent legal counsel selected by any Judge of the United States District Court for the Northern District of Georgia, Atlanta Division, at the request of either TBS or the person seeking indemnification.
TBS's Articles of Incorporation provide that a director of TWI will not be personally liable to TBS or its shareholders for monetary damages for breach of duty of care or other duty as a director, except for liability (i) for any appropriation, in violation of the director's duties, of any business opportunity of TWI, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) for making a distribution in violation of Section 14-2-831 of the Georgia Business Corporation Code or (iv) for any transaction from which the director derived an improper personal benefit.
TBS has insurance to indemnify its directors and officers, subject to the limits contained in those policies, from those liabilities in respect of which such indemnification insurance is permitted under the laws of the State of Georgia.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
4.1 -- Indenture, dated as of January 15, 1993, between TWC (formerly known as Time Warner Inc.) and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to TWI's Registration
Statement on Form S-3 (File No. 33-57030) filed with the Commission on January 14, 1993)*
4.2 -- Second Supplemental Indenture, dated as of October 10, 1996, among TWI, TWC and The Chase Manhattan Bank,
as Trustee (filed as Exhibit 4.1 to TWI's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996).*
4.3 -- Third Supplemental Indenture, dated as of December 31, 1996, among TWI, TWC and The Chase Manhattan Bank,
as Trustee (filed as Exhibit 4.10 to TWI's Annual Report on Form 10-K for the year ended December 31,
1996).*
4.4 -- Fourth Supplemental Indenture, dated as of December 17, 1997, among TWI, TWC, TBS and The Chase Manhattan
Bank, as Trustee.**
4.5 -- Fifth Supplemental Indenture, dated as of January 12, 1998, among TWI, TWC, TBS and The Chase Manhattan
Bank, as Trustee.**
4.6 -- Form of 6.95% Debenture due 2028 (included in Exhibit 4.5).
4.7 -- Placement Agreement, dated January 6, 1998, among TWC, the Guarantors and Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.P. Morgan Securities Inc.**
4.8 -- Registration Rights Agreement, dated January 12, 1998, among TWC, the Guarantors and Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and J.P. Morgan Securities Inc.**
5 -- Opinion of Cravath, Swaine & Moore.**
12 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWI.**
12.1 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWC.**
12.2 -- Statement regarding the computation of the ratio of earnings to fixed charges of TBS.**
23.1 -- Consent of Ernst & Young LLP, Independent Auditors.**
23.2 -- Consent of Counsel (included in Exhibit 5).**
23.3 -- Consent of Arthur Andersen LLP, Independent Public Accountants.**
23.4 -- Consent of Price Waterhouse LLP, Independent Accountants.**
23.5 -- Consent of Price Waterhouse LLP, Independent Accountants.**
24.1 -- Power of Attorney of TWI.**
24.2 -- Power of Attorney of TWC.**
24.3 -- Power of Attorney of TBS.**
25 -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect to TWC, TWI
and TBS.**
|
II-2
99.1 -- Form of Letter of Transmittal.** 99.2 -- Form of Notice of Guaranteed Delivery.** 99.3 -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.** 99.4 -- Form of Letter to Clients.** |
* Incorporated by reference.
** Filed herewith.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of any of the registrants' annual reports pursuant to section 13(a) or section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions described in Item 20 above, or otherwise, the registrants have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such officer, director or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(c) The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.
(d) The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on February 5, 1998.
TIME WARNER INC.
By: /s/ JOHN A. LABARCA
.................................
NAME: JOHN A. LABARCA
TITLE: SENIOR VICE PRESIDENT AND
CONTROLLER
|
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below on February 5, 1998 by the following persons in the capacities indicated.
SIGNATURES TITLE
------------------------------------------ ---------------------------------------------------------------------
* (i) Director, Chairman of the Board and Chief Executive Officer
.........................................
(GERALD M. LEVIN)
* (ii) Senior Vice President and Chief Financial Officer
.........................................
(RICHARD J. BRESSLER)
/S/ JOHN A. LABARCA (iii) Senior Vice President and Controller
.........................................
(JOHN A. LABARCA)
* (iv) Directors
.........................................
(MERV ADELSON)
*
.........................................
(J. CARTER BACOT)
*
.........................................
(STEPHEN F. BOLLENBACH)
*
.........................................
(BEVERLY SILLS GREENOUGH)
*
.........................................
(GERALD GREENWALD)
*
.........................................
(CARLA A. HILLS)
*
.........................................
(REUBEN MARK)
*
.........................................
(MICHAEL A. MILES)
*
.........................................
(RICHARD D. PARSONS)
|
II-4
*
.........................................
(DONALD S. PERKINS)
*
.........................................
(RAYMOND S. TROUBH)
*
.........................................
(R. E. TURNER)
*
.........................................
(FRANCIS T. VINCENT, JR.)
*By: /s/ JOHN A. LABARCA
.........................................
(ATTORNEY-IN-FACT)
|
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on February 5, 1998.
TIME WARNER COMPANIES, INC.
By: /s/ JOHN A. LABARCA
.................................
NAME: JOHN A. LABARCA
TITLE: SENIOR VICE PRESIDENT AND
CONTROLLER
|
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below on February 5, 1998 by the following persons in the capacities indicated.
SIGNATURES TITLE
------------------------------------------ ---------------------------------------------------------------------
* (i) Chairman and Chief Executive Officer
.........................................
(GERALD M. LEVIN)
* (ii) Director, Senior Vice President and Chief Financial Officer
.........................................
(RICHARD J. BRESSLER)
/S/ JOHN A. LABARCA (iii) Senior Vice President and Controller
.........................................
(JOHN A. LABARCA)
* (iv) Directors
.........................................
(PETER R. HAJE)
*
.........................................
(RICHARD D. PARSONS)
*By: /s/ JOHN A. LABARCA
.........................................
(ATTORNEY-IN-FACT)
|
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on February 5, 1998.
TURNER BROADCASTING SYSTEM, INC.
By: /s/ PETER R. HAJE
.................................
NAME: PETER R. HAJE
TITLE: VICE PRESIDENT
|
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below on February 5, 1998 by the following persons in the capacities indicated.
SIGNATURES TITLE
------------------------------------------ ---------------------------------------------------------------------
* (i) President and Chief Executive Officer and Chairman of the Board
.........................................
(TERENCE F. MCGUIRK)
* (ii) Executive Vice President, Chief Financial and Administrative
......................................... Officer
(WAYNE H. PACE)
* (iii) Vice President, Controller and Chief Accounting Officer
.........................................
(LANDEL C. HOBBS)
* (iv) Directors
.........................................
(R. E. TURNER)
*
.........................................
(W. THOMAS JOHNSON)
*
.........................................
(RICHARD D. PARSONS)
*
.........................................
(ROBERT SHAYE)
*
.........................................
(JEFFREY L. BEWKES)
*
.........................................
(GERALD M. LEVIN)
*By: /s/ PETER R. HAJE
........................................
(ATTORNEY-IN-FACT)
|
II-7
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT PAGE
------ -------------------------------------------------------------------------------------------------- ----
4.1 -- Indenture, dated as of January 15, 1993, between TWC (formerly known as Time Warner Inc.) and The
Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (filed as Exhibit 4.1 to TWI's
Registration Statement on Form S-3 (File No. 33-57030) filed with the Commission on January 14,
1993)*
4.2 -- Second Supplemental Indenture, dated as of October 10, 1996, among TWI, TWC and The Chase
Manhattan Bank, as Trustee (filed as Exhibit 4.1 to TWI's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996).*
4.3 -- Third Supplemental Indenture, dated as of December 31, 1996, among TWI, TWC and The Chase
Manhattan Bank, as Trustee (filed as Exhibit 4.10 to TWI's Annual Report on Form 10-K for the year
ended December 31, 1996).*
4.4 -- Fourth Supplemental Indenture, dated as of December 17, 1997, among TWI, TWC, TBS and The Chase
Manhattan Bank, as Trustee.**
4.5 -- Fifth Supplemental Indenture, dated as of January 12, 1998, among TWI, TWC, TBS and The Chase
Manhattan Bank, as Trustee.**
4.6 -- Form of 6.95% Debenture due 2028 (included in Exhibit 4.5).
4.7 -- Placement Agreement, dated January 6, 1998, among TWC, the Guarantors and Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and J.P. Morgan Securities Inc.**
4.8 -- Registration Rights Agreement, dated January 12, 1998, among TWC, the Guarantors and Morgan
Stanley & Co. Incorporated, Bear, Stearns & Co. Inc., Chase Securities Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc.**
5 -- Opinion of Cravath, Swaine & Moore.**
12 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWI.**
12.1 -- Statement regarding the computation of the ratio of earnings to fixed charges of TWC.**
12.2 -- Statement regarding the computation of the ratio of earnings to fixed charges of TBS.**
23.1 -- Consent of Ernst & Young LLP, Independent Auditors.**
23.2 -- Consent of Counsel (included in Exhibit 5).**
23.3 -- Consent of Arthur Andersen LLP, Independent Public Accountants.**
23.4 -- Consent of Price Waterhouse LLP, Independent Accountants.**
23.5 -- Consent of Price Waterhouse LLP, Independent Accountants.**
24.1 -- Power of Attorney of TWI.**
24.2 -- Power of Attorney of TWC.**
24.3 -- Power of Attorney of TBS.**
25 -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank with respect to
TWC, TWI and TBS.**
99.1 -- Form of Letter of Transmittal.**
99.2 -- Form of Notice of Guaranteed Delivery.**
99.3 -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.**
99.4 -- Form of Letter to Clients.**
|
* Incorporated by reference.
** Filed herewith.
EXECUTION COPY
FOURTH SUPPLEMENTAL INDENTURE (this "Fourth
Supplemental Indenture") dated as of December 17,
1997, among TIME WARNER COMPANIES, INC., a Delaware
corporation formerly known as Time Warner, Inc. (the
"Company"), TIME WARNER INC., a Delaware corporation
formerly known as TW Inc. ("TWI"), TURNER
BROADCASTING SYSTEM, INC., a Georgia corporation
("TBS"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as successor trustee (the
"Trustee").
WHEREAS the Company has executed and delivered to the Trustee an Indenture (the "Original Indenture"), dated as of January 15, 1993, providing for the issuance and sale by the Company from time to time of its senior debt securities (the "Securities"), which term shall include any Securities issued under the Indenture (as defined below) after the date hereof, as amended by the First Supplemental Indenture, dated as of June 15, 1993, between the Company and the Trustee (the "First Supplemental Indenture"), the Second Supplemental Indenture, dated as of October 10, 1996, among the Company, TWI and the Trustee (the "Second Supplemental Indenture") and the Third Supplemental Indenture, dated as of December 31, 1996 among the Company, TWI and the Trustee (the "Third Supplemental Indenture") (the Original Indenture, as amended by the First Supplemental Indenture, Second Supplemental Indenture and Third Supplemental Indenture is herein called the "Indenture");
WHEREAS TWI has, by way of the Second Supplemental Indenture, unconditionally guaranteed the obligations of the Company under the Indenture (the "TWI Guarantee") and has, by way of the Third Supplemental Indenture, extended to the Holders of Securities certain rights and privileges in connection with the TWI Guarantee; and
WHEREAS Section 901(5) of the Indenture permits the Company, when authorized by a resolution of the Board of Directors of the Company, and the Trustee, at any time and from time to time, to enter into one or more indentures supplemental to the Indenture, in form satisfactory to the Trustee, for the purpose of adding to the rights of the Holders of the Securities;
WHEREAS Section 901(7) of the Indenture permits the Company, when authorized by a resolution of the Board of
Directors of the Company, and the Trustee, at any time and from time to time to enter into one or more indentures supplemental to the Indenture, in form satisfactory to the Trustee, for the purpose of adding additional Events of Default in respect of the Securities;
WHEREAS the Company proposes in and by this Fourth Supplemental Indenture to supplement and amend the Indenture in certain respects as it applies to Securities issued thereunder and TBS desires to unconditionally and irrevocably guarantee the full and punctual payment of principal of and interest on the Securities when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Company under the Indenture (including obligations to the Trustee) and the Securities, and the full and punctual performance within applicable grace periods of all other obligations of the Company under the Indenture and the Securities (the "TBS Guarantee") and to extend to the Holders of Securities certain rights and privileges in connection with the guarantee of the Securities by TBS;
WHEREAS the Company, TWI and TBS have requested that the Trustee execute and deliver this Fourth Supplemental Indenture and all requirements necessary make this Fourth Supplemental Indenture a valid instrument in accordance with its terms and to make the TBS Guarantee the valid obligation of TBS, and the execution and delivery of this Fourth Supplemental Indenture has been duly authorized in all respects.
NOW THEREFORE, the Company, TWI, TBS and the Trustee hereby agree that the following Sections of this Fourth Supplemental Indenture supplement the Indenture with respect to Securities issued thereunder:
SECTION 1. Definitions. (a) Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Indenture.
(b) Article I, Section 101, of the Indenture is hereby supplemented to add the following definitions:
"TWI" means Time Warner Inc., a Delaware corporation formerly known as TW Inc. and formerly defined in both the Second Supplemental Indenture and Third Supplemental Indenture as the "Guarantor".
"TBS" means Turner Broadcasting System, Inc., a Georgia corporation.
(c) All references to the Guarantor in the Second Supplemental Indenture and Third Supplemental Indenture are deemed to be references to TWI.
SECTION 2. The TBS Guarantee. (a) TBS irrevocably and unconditionally guarantees, to each Holder of Securities (including each Holder of Securities issued under the Indenture after the date of this Fourth Supplemental Indenture) and to the Trustee and its successors and assigns, (i) the full and punctual payment of principal of and interest on the Securities when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Company under the Indenture (including obligations to the Trustee) and the Securities and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Company under the Indenture and the Securities.
(b) TBS further agrees that the TBS Guarantee constitutes a guarantee of payment, performance and compliance and not merely of collection.
(c) The obligation of TBS to make any payment hereunder may be satisfied by causing the Company to make such payment.
(d) TBS also agrees to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Holder of Securities in enforcing any of their respective rights under the TBS Guarantee.
(e) Any term or provision of this Fourth Supplemental Indenture to the contrary notwithstanding, the maximum aggregate amount of the TBS Guarantee shall not exceed the maximum amount that can be hereby guaranteed without rendering this Fourth Supplemental Indenture, as it relates to TBS, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.
SECTION 3. Amendment to Defeasance upon Deposit of Funds or Government Obligations. Section 403 of Article 4 of the Indenture is hereby supplemented and amended by adding the following sentence after the sentence following clause (5) and before the definition of "Discharged" in Section 403 of Article 4 of the Indenture:
"If the Company, at its option, with respect to a series of Securities, satisfies the applicable conditions pursuant to either clause (a) or (b) above,
then (x), in the event the Company satisfies the conditions to clause
(a) and elects clause (a) to be applicable, TBS shall be deemed to have
paid and discharged the entire indebtedness represented by, and
obligations under, the TBS Guarantee of the Securities of such series
and to have satisfied all the obligations under this Indenture relating
to the Securities of such series and (y) in either case, TBS shall
cease to be under any obligation to comply with any term, provision or
condition set forth in Article Eight (and any other covenants
applicable to such Securities that are determined pursuant to Section
301 to be subject to this provision), and clause (5)(ii) of Section 501
(and any other Events of Default applicable to such series of
Securities that are determined pursuant to Section 301 to be subject to
this provision) shall be deemed not to be an Event of Default with
respect to such series of Securities at any time thereafter."
SECTION 4. Amendments to the Events of Default and Remedies.
(a) Clause (5) of Section 501 of Article Five of the Indenture is hereby amended
by adding thereto at the end thereof the following:
"(iii) default in the performance, or breach, of any covenant or warranty of TBS in this Indenture (as it may be supplemented from time to time) in respect of the Securities of such series (other than a covenant or warranty in respect of the Securities of such series a default in the performance of which or the breach of which is elsewhere in this Section specifically dealt with), all of such covenants and warranties in the Indenture (as so supplemented) which are not expressly stated to be for the benefit of a particular series of Securities being deemed in respect of the Securities of all series for this purpose, and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to TBS by the Trustee or to TBS and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or".
(b) Clause (6) of Section 501 of Article Five of the Indenture is hereby amended by adding thereto at the end thereof the following:
"(iii) the entry of an order for relief against TBS under Title 11, United States Code (the "Federal Bankruptcy Act") by a court having jurisdiction in the premises or a decree or order by a court having jurisdiction in the premises adjudging TBS a bankrupt or insolvent under any other applicable Federal or State law, or the entry of a decree or order approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of TBS under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of TBS or of any substantial part of its properties, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; or".
(c) Clause (7) of Section 501 of Article Five of the Indenture is hereby amended by adding thereto at the end thereof the following:
"(iii) the consent by TBS to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Act or any other applicable Federal or State law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of TBS or of any substantial part of its properties or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by TBS in furtherance of any such action; or".
SECTION 5. Amendments to Article Eight. (a) The introductory clause and clause (1) of Section 801 of Article Eight of the Indenture is hereby supplemented and amended to read in its entirety as follows:
"Section 801. Consolidation, Merger, Conveyance or Transfer on Certain Terms. None of the Company, TWI or TBS shall consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person, unless:
(1)(a) In the case of the Company, the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer the properties and assets of the Company substantially as an entirety shall be organized and existing under the laws of the United States of America or any State or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture (as supplemented from time to time) on the part of the Company to be performed or observed; (b) in the case of TWI or TBS, the corporation formed by such consolidation or into which TWI or TBS is merged or the Person which acquires by conveyance or transfer the properties and assets of TWI or TBS substantially as an entirety shall be organized and existing under the laws of the United States of America or any State or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the performance of every covenant of this Indenture (as supplemented from time to time) on the part of TWI or TBS to be performed or observed;"
(b) Section 802 of Article Eight of the Indenture is supplemented and amended to read in its entirety as follows:
"Section 802. Successor Person Substituted. Upon any consolidation or merger, or any conveyance or transfer of the properties and assets of the Company, TWI or TBS substantially as an entirety in accordance with Section 801, the successor person formed by such consolidation or into which the Company, TWI or TBS is merged or to which such conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company, TWI or TBS, as the case may be, under this Indenture with the same effect as if such successor had been named as the Company, TWI or TBS herein, as the case may be. In the event of any such conveyance or transfer, the predecessor as the Company, TWI or TBS, as the case may be, shall be discharged from all obligations and covenants under this Indenture and the Securities and may be dissolved, wound up or liquidated at any time thereafter."
SECTION 6. Supplemental Indentures. Clauses (1) and (2) of
Section 901 of Article Nine of the Indenture are
supplemented and amended to read in their entirety as follows:
"(1) to evidence the succession of another corporation or Person to the Company, TWI or TBS, and the assumption by any such successor of the respective covenants of the Company, TWI or TBS herein and in the Securities contained; or
"(2) to add to the covenants of the Company, TWI or TBS, or to surrender any right or power herein conferred upon the Company, TWI or TBS, for the benefit of the Holders of the Securities of any or all series (and if such covenants or the surrender of such right or power are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included or such surrenders are expressly being made solely for the benefit of one or more specified series); or".
SECTION 7. This Fourth Supplemental Indenture. This Fourth Supplemental Indenture shall be construed as supplemental to the Indenture and shall form a part of it, and the Indenture is hereby incorporated by reference herein and each is hereby ratified, approved and confirmed.
SECTION 8. GOVERNING LAW. THIS FOURTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 9. Counterparts. This Fourth Supplemental Indenture may be executed in two or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument.
SECTION 10. Headings. The headings of this Fourth Supplemental Indenture are for reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 11. Trustee Not Responsible for Recitals. The recitals herein contained are made by the Company, TWI and TBS, and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fourth Supplemental Indenture.
SECTION 12. Separability. In case any one or more of the provisions contained in this Fourth Supplemental Indenture or in the Securities shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of the Fourth Supplemental Indenture or of the Securities, but this Fourth Supplemental Indenture and the Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed by their respective authorized officers as of the date first written above.
TIME WARNER COMPANIES, INC.,
by /s/ Thomas W. McEnerney ------------------------------ Name: Thomas W. McEnerney Title: Vice President |
TIME WARNER INC.,
by /s/ Thomas W. McEnerney ------------------------------ Name: Thomas W. McEnerney Title: Vice President |
TURNER BROADCASTING SYSTEM, INC.,
by /s/ Thomas W. McEnerney ------------------------------- Name: Thomas W. McEnerney Title: Vice President |
THE CHASE MANHATTAN BANK, as
Trustee,
by /s/ Richard Lorenzen ------------------------------- Name: Richard Lorenzen Title: Senior Trust Officer |
EXECUTION COPY
FIFTH SUPPLEMENTAL INDENTURE (this "Fifth Supplemental Indenture") dated as of January 12, 1998, among TIME WARNER COMPANIES, INC., a Delaware corporation formerly known as Time Warner, Inc. (the "Company"), TIME WARNER INC., a Delaware corporation formerly known as TW Inc. ("TWI"), TURNER BROADCASTING SYSTEM, INC., a Georgia corporation ("TBS"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee (the "Trustee").
WHEREAS the Company has executed and delivered to the Trustee an Indenture (the "Original Indenture"), dated as of January 15, 1993, providing for the issuance and sale by the Company from time to time of its senior debt securities (the "Securities"), which term shall include any Securities issued under the Indenture (as defined below) after the date hereof, as amended by the First Supplemental Indenture, dated as of June 15, 1993, between the Company and the Trustee (the "First Supplemental Indenture"), the Second Supplemental Indenture, dated as of October 10, 1996, among the Company, TWI and the Trustee (the "Second Supplemental Indenture"), the Third Supplemental Indenture, dated as of December 31, 1996, among the Company, TWI and the Trustee (the "Third Supplemental Indenture") and the Fourth Supplemental Indenture, dated as of December 17, 1997, among the Company, TWI, TBS and the Trustee (the "Fourth Supplemental Indenture") (the Original Indenture, as amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture is herein called the "Indenture");
WHEREAS Section 901(5) of the Indenture permits the Company, when authorized by a resolution of the Board of Directors of the Company, and the Trustee, at any time and from time to time, to enter into one or more indentures supplemental to the Indenture, in form satisfactory to the Trustee, for the purpose of establishing any form of Security, as provided in Article Two of the Indenture, providing for the issuance of any series of Securities as provided in Article Three of the Indenture and/or adding to the rights of the Holders of the Securities of any series;
WHEREAS the Company proposes in and by this Fifth Supplemental Indenture to supplement and amend the Indenture in certain respects to establish a series of Securities issued pursuant to the Indenture designated as the 6.95% Debentures Due 2028 limited in aggregate principal amount to $500,000,000 (the Debentures and the Exchange Debentures (both as defined herein) together shall constitute one series of Securities for purposes of the Indenture); and
WHEREAS the Company, TWI and TBS have requested that the Trustee execute and deliver this Fifth Supplemental Indenture and have certified that all requirements necessary to make this Fifth Supplemental Indenture a valid instrument in accordance with its terms have been satisfied, and that the execution and delivery of this Fifth Supplemental Indenture has been duly authorized in all respects.
NOW THEREFORE, the Company, TWI, TBS and the Trustee hereby agree that the following sections of this Fifth Supplemental Indenture supplement and amend the Indenture with respect to that series of Securities which consists of Debentures:
SECTION 1. Definitions. (a) Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Indenture.
(b) Section 101 of Article One of the Indenture is hereby supplemented, solely with respect to that series of Securities which consists of Debentures, to add the following definitions:
"Agent Members" has the meaning provided in Section 206.
"Debentures" means the series of Securities issued pursuant to this Indenture designated as the 6.95% Debentures Due 2028 and limited in aggregate principal amount to $500,000,000.
"Debentures Closing Date" means January 12, 1998.
"Exchange Debentures" means any Debentures to be issued pursuant to this Indenture in connection with an Exchange Offer (as defined in the Registration Rights Agreement) pursuant to the Registration Rights Agreement and this Indenture.
"Global Debentures" has the meaning provided in Section 202.
"Guarantors" means Time Warner Inc., a Delaware corporation, and Turner Broadcasting System, Inc., a Georgia corporation.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Non-U.S. Person" means a Person who is not a "U.S. person" (as defined in Regulation S).
"Offshore Global Debentures" has the meaning provided in the
Section 202.
"Offshore Physical Debentures" has the meaning provided the
Section 202.
"Physical Debentures" has the meaning provided in Section 202.
"Private Placement Legend" means the legend initially set forth on the Debentures in the form set forth in Section 205(a).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement, dated January 12, 1998, among the Company, TWI, TBS and Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Incorporated, Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. (the "Placement Agents").
"Registration Statement" means the Registration Statement as defined and described in the Registration Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Rule 144A" means rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" has the meaning provided in the Registration Rights Agreement.
"U.S. Global Debentures" has the meaning provided in Section 202.
"U.S. Physical Debentures" has the meaning provided in Section 202.
SECTION 2. Creation of Series of Securities. Pursuant to Section 301 of the Indenture, there is hereby created a new series of Securities designated as the "6.95% Debentures Due 2028" limited in aggregate principal amount to $500,000,000. The Debentures shall include the Exchange Debentures, which together shall constitute one series of Securities for purposes of the Indenture. Certain of the terms of this series of Securities shall be established by Board Resolution, and the interest rate on the Debentures could increase by 0.50% per annum under certain circumstances, as provided for in the Registration Rights Agreement.
SECTION 3. Amendments to Article Two. (a) Section 202 of Article Two of the Indenture is hereby supplemented and amended, solely with respect to that series of Securities which consists of Debentures, by adding thereto at the end thereof the following:
"The Debentures shall be substantially in the form annexed hereto as Exhibit A. The terms and provisions contained in the form of the Debentures annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a part of this Indenture. To the extent applicable, the Company, TWI, TBS and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.
Debentures offered and sold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global Debentures in registered form, substantially in the form set forth in Exhibit A (the "U.S. Global Debentures"), deposited with the Trustee, as custodian for the Depository, duly executed by the Company and authenticated by the Trustee as herein provided. The aggregate principal amount of the U.S. Global Debentures may
from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository or its nominee, as hereinafter provided.
Debentures offered and sold in offshore transactions in reliance on Regulation S shall be issued initially in the form of one or more permanent global Debentures in registered form substantially in the form set forth in Exhibit A (the "Offshore Global Debentures") deposited with the Trustee, as custodian of the Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Offshore Global Debentures may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository or its nominee, as hereinafter provided.
Debentures offered and sold in reliance on Regulation D under the Securities Act shall be issued in the form of permanent certificated Debentures in registered form in substantially the form set forth in Exhibit A (the "U.S. Physical Debentures"). Debentures issued pursuant to Section 206 in exchange for interests in the Offshore Global Debentures shall be in the form of permanent certificated Debentures in registered form substantially in the form set forth in Exhibit A (the "Offshore Physical Debentures").
The Offshore Physical Debentures and U.S. Physical Debentures are sometimes collectively referred to herein as the "Physical Debentures". The U.S. Global Debentures and the Offshore Global Debentures are sometimes collectively referred to herein as the "Global Debentures."
(b) Article Two of the Indenture is hereby supplemented and amended, solely with respect to that series of Securities which consists of Debentures, by adding thereto at the end thereof the following new Section 205:
"Section 205. Restrictive Legends. (a) Unless and until a Debenture is exchanged for an Exchange Debenture in connection with an effective Registration Statement pursuant to the Registration Rights Agreement, (i) each U.S. Global Debenture and each U.S. Physical Debenture shall bear the legend set forth below on the face thereof and (ii) each Offshore Physical Debenture and each Offshore Global Debenture shall bear the legend set forth below on the face thereof until at least the 41st day after the Debentures
Closing Date and receipt by the Company and the Trustee of a certificate substantially in the form of Exhibit B hereto.
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS DEBENTURE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE DEBENTURES, RESELL OR OTHERWISE TRANSFER THIS DEBENTURE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS DEBENTURE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES AT THE TIME OF TRANSFER OF LESS THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS DEBENTURE WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE DEBENTURES, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS DEBENTURE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) Each Global Debenture, whether or not an Exchange Debenture, shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL DEBENTURE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL DEBENTURE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 207 OF THE INDENTURE."
(c) Article Two of the Indenture is hereby supplemented and amended, solely with respect to that series of Securities which consists of Debentures, by adding thereto at the end thereof the following new Section 206:
"Section 206. Book-Entry Provisions for Global Debentures.
(a) The U.S. Global Debentures and Offshore Global Debentures initially shall
(i) be registered in the name of the Depository for such Global Debentures
or the nominee of such Depository, (ii) be delivered to the Trustee as custodian
for such Depository and (iii) bear legends as set forth in Section 205.
Members of, or participants in, the Depository (the "Agent Members") shall have no rights under this Indenture with respect to any Global Debenture held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Debenture and the Depository may be treated by the Company, TWI, TBS, the Trustee and any agent of the Company, TWI, TBS or the Trustee as the absolute owner of such Global Debenture for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, TWI, TBS, the Trustee or any agent of the Company, TWI, TBS, or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Debenture.
(b) Transfers of a Global Debenture shall be limited to transfers of such Global Debenture in whole, but not in part, to the Depository, its successor or their respective nominees. Interests of beneficial owners in a Global Debenture may be transferred in accordance with the rules and procedures of the Depository and the provisions of Section 207. In addition, U.S. Physical Debentures and Offshore Physical Debentures shall be transferred to all beneficial owners in exchange for their beneficial interests in the U.S. Global Debentures or the Offshore Global Debentures, respectively, if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for the U.S. Global Debentures or the Offshore Global Debentures, as the case may be, and a successor depository is not appointed by the Company within 90 days of such notice or (ii) an Event of Default has occurred and is continuing and the Security Registrar has received a request to the foregoing effect from the Depository.
(c) Any beneficial interest in one of the Global Debentures that is transferred to a Person who takes delivery in the form of an interest in the other Global Debenture will, upon transfer, cease to be an interest in
such Global Debenture and become an interest in the other Global Debenture and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Debenture for as long as it remains such an interest.
(d) In connection with any transfer of a portion of the beneficial interests in a U.S. Global Debenture or Offshore Global Debenture to beneficial owners pursuant to paragraph (b) of this Section, the Security Registrar shall reflect on its books and records the date and a decrease in the principal amount of the U.S. Global Debentures or Offshore Global Debentures, as the case may be, in an amount equal to the principal amount of the beneficial interest in such Global Debentures to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more U.S. Physical Debentures or Offshore Physical Debentures, as the case may be, of like tenor and amount.
(e) In connection with the transfer of the entire U.S. Global Debenture or Offshore Global Debenture to beneficial owners pursuant to paragraph (b) of this Section, the U.S. Global Debenture or Offshore Global Debenture, as the case may be, shall be deemed to be surrendered to the Trustee for cancelation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in the U.S. Global Debenture or Offshore Global Debenture, as the case may be, an equal aggregate principal amount of U.S. Physical Debentures or Offshore Physical Debentures, as the case may be, of authorized denominations.
(f) Any U.S. Physical Debenture delivered in exchange for an interest in the U.S. Global Debenture pursuant to paragraph (b), (d) or (e) of this Section shall, except as otherwise provided by paragraph (e) of Section 207, bear the legend regarding transfer restrictions applicable to the U.S. Physical Debenture set forth in Section 205.
(g) Any Offshore Physical Debenture delivered in exchange for an interest in the Offshore Global Debenture pursuant to paragraph (b), (d) or (e) of this Section shall, except as otherwise provided by paragraph (e) of Section 207, bear the legend regarding transfer restrictions
applicable to the Offshore Physical Debenture set forth in Section 205.
(h) The registered holder of a Global Debenture may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Debentures.
(i) Beneficial owners of interests in a U.S. Global Debenture may receive U.S. Physical Debentures (which shall bear the Private Placement Legend if required by Section 205) in accordance with the procedures of the Depository. In connection with the execution, authentication and delivery of such U.S. Physical Debentures, the Security Registrar shall reflect on its books and records a decrease in the principal amount of the relevant U.S. Global Debenture equal to the principal amount of such U.S. Physical Debentures and the Company shall execute and the Trustee shall authenticate and deliver one or more U.S. Physical Debentures having an equal aggregate principal amount."
(d) Article Two of the Indenture is hereby supplemented and amended, solely with respect to that series of Securities which consists of Debentures, by adding thereto at the end thereof the following new Section 207:
"Section 207. Special Transfer Provisions. Unless and until a Debenture is exchanged for an Exchange Debenture in connection with an effective Registration Statement pursuant to the Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The following provisions shall apply with respect to the registration of any proposed transfer of a Debenture to any Institutional Accredited Investor which is not a QIB (excluding Non-U.S. Persons):
(i) The Security Registrar shall register the transfer of any Debenture, whether or not such Debenture bears the Private Placement Legend, if (x) the requested transfer is after the time period referred to in Rule 144(k) under the Securities Act as in effect with respect to such transfer or (y) the proposed transferee has delivered to the Security Registrar (A) a certificate substantially in the form
of Exhibit C hereto and (B) if the aggregate principal amount of the Debentures being transferred is less than $100,000 at the time of such transfer, an opinion of counsel acceptable to the Company that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Debenture, upon receipt by the
Security Registrar of (x) the documents, if any, required by paragraph
(i) and (y) instructions given in accordance with the Depository's and
the Security Registrar's procedures, the Security Registrar shall
reflect on its books and records the date and a decrease in the
principal amount of the U.S. Global Debenture in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Debenture
to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Debentures of like
tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a U.S. Physical Debenture, an interest in a U.S. Global Debenture or an interest in an Offshore Global Debenture prior to the removal of the Private Placement Legend to a QIB (excluding Non-U.S. Persons):
(i) If the Debenture to be transferred consists of (x) either (A) an interest in a Offshore Global Debenture prior to the removal of the Private Placement Legend or (B) U.S. Physical Debentures, the Security Registrar shall register the transfer if such transfer is being made by a proposed transferor who has checked the box provided for on the form of Debenture stating, or has otherwise advised the Company and the Security Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Debenture stating, or has otherwise advised the Company and the Security Registrar in writing, that it is purchasing the Debenture for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request such information and that is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A or (y) an interest in the U.S. Global Debentures, the transfer of such interest may be effected only through the book entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the
Debenture to be transferred consists of U.S. Physical Debentures, upon
receipt by the Security Registrar of the documents referred to in clause
(i) and instructions given in accordance with the Depository's and the
Security Registrar's procedures, the Security Registrar shall reflect on
its books and records the date and an increase in the principal amount
of the U.S. Global Debentures in an amount equal to the principal amount
of the U.S. Physical Debentures to be transferred, and the Trustee shall
cancel the U.S. Physical Debentures so transferred.
(c) Transfers of Interests in the Offshore Global Debentures or Offshore Physical Debentures. The following provisions shall apply with respect to any transfer of interests in the Offshore Global Debentures or Offshore Physical Debentures:
(i) prior to the removal of the Private Placement Legend from an
Offshore Global Debenture or Offshore Physical Debenture pursuant to
Section 205, the Security Registrar shall refuse to register such
transfer unless such transfer complies with Section 207(b) or
Section 207(d), as the case may be; and
(ii) after such removal, the Security Registrar shall register the transfer of any such Debenture without requiring any additional certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following provisions shall apply with respect to any transfer of a Debenture to a Non-U.S. Person:
(i) The Security Registrar shall register any proposed transfer to any Non-U.S. Person if the Debenture to be transferred is a U.S. Physical Debenture or an interest in the U.S. Global Debenture
only upon receipt of a certificate substantially in the form of Exhibit D from the proposed transferor.
(ii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in a U.S. Global Debenture, upon receipt by the
Security Registrar of (x) the documents required by paragraph (i) and
(y) instructions in accordance with the Depository's and the Security
Registrar's procedures, the Security Registrar shall reflect on its
books and records the date and a decrease in the principal amount of
such U.S. Global Debenture in an amount equal to the principal amount of
the beneficial interest in the U.S. Global Debenture to be transferred,
and (b) if the proposed transferee is an Agent Member, upon receipt by
the Security Registrar of instructions given in accordance with the
Depository's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Offshore Global Debenture in an
amount equal to the principal amount of the U.S. Physical Debentures or
the U.S. Global Debentures, as the case may be, to be transferred, and
the Trustee shall cancel the Physical Debenture, if any, so transferred
or decrease the amount of the U.S. Global Debenture.
(e) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Debentures not bearing the Private Placement Legend,
the Security Registrar shall deliver Debentures that do not bear the Private
Placement Legend. Upon the registration of transfer, exchange or replacement of
Debentures bearing the Private Placement Legend, the Security Registrar shall
deliver only Debentures that bear the Private Placement Legend unless either (i)
the circumstances contemplated by paragraphs (a)(i)(x) or (c)(ii) of this
Section 207 exist or (ii) there is delivered to the Security Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(f) General. By its acceptance of any Debenture bearing the Private Placement Legend, each Holder of such a Debenture acknowledges the restrictions on transfer of such Debenture set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Debenture only as provided in this Indenture. The Security Registrar shall not register a transfer of any Debenture unless such transfer complies with the restrictions on transfer of such Debenture set forth in this Indenture. In connection with any transfer of Debentures, each Holder agrees by its acceptance of the Debentures to furnish the Security Registrar or the Company such certifications, legal opinions or other information as either of them may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act; provided that the Security Registrar shall not be required to determine (but may conclusively rely on a determination made by the Company with respect to) the sufficiency of any such certifications, legal opinions or other information.
The Security Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 305 or this Section 207 in accordance with its customary procedures. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Security Registrar."
SECTION 4. Amendment to Article Three. The third paragraph of
Section 305 of Article Three of the Indenture is hereby supplemented and
amended, solely with respect to that series of Securities which consists of
Debentures, to read in its entirety as follows:
"Subject to Sections 204 and 207, at the option of the Holder, Securities of any series may be exchanged for other Securities of such series of any authorized denominations, of a like aggregate principal amount and Stated Maturity and of like tenor and terms (including an exchange of Debentures for Exchange Debentures), upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Securityholder making the exchange is entitled to receive; provided, that no exchanges of Debentures for Exchange Debentures shall occur until a Registration Statement shall have been declared effective by the Commission (confirmed in an Officers'
Certificate delivered to the Trustee) and that any Debentures that are exchanged for Exchange Debentures shall be canceled by the Trustee."
SECTION 5. This Fifth Supplemental Indenture. This Fifth Supplemental Indenture and the Exhibits hereto shall be construed as supplemental to the Indenture and shall form a part of it, and the Indenture is hereby incorporated by reference herein and each is hereby ratified, approved and confirmed.
SECTION 6. GOVERNING LAW. THIS FIFTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Counterparts. This Fifth Supplemental Indenture may be executed in two or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument.
SECTION 8. Headings. The headings of this Fifth Supplemental Indenture are for reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 9. Trustee Not Responsible for Recitals. The recitals herein contained are made by the Company, TWI and TBS, and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fifth Supplemental Indenture.
SECTION 10. Separability. In case any one or more of the provisions contained in this Fifth Supplemental Indenture or in the Securities shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of the Fifth Supplemental Indenture or of the Securities, but this Fifth Supplemental Indenture and
the Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed by their respective authorized officers as of the date first written above.
TIME WARNER COMPANIES, INC.,
by /s/ Thomas W. McEnerney ------------------------------------ Name: Thomas W. McEnerney Title: Vice President |
TIME WARNER INC.,
by /s/ Thomas W. McEnerney ---------------------------------- Name: Thomas W. McEnerney Title: Vice President |
TURNER BROADCASTING SYSTEM, INC.,
by /s/ Thomas W. McEnerney ---------------------------------- Name: Thomas W. McEnerney Title: Vice President |
THE CHASE MANHATTAN BANK, as
Trustee,
by /s/ Richard Lorenzen --------------------------------- Name: Richard Lorenzen Title: Senior Trust Officer |
EXHIBIT A
[FORM OF FACE OF DEBENTURE]
TIME WARNER COMPANIES, INC.
6.95% Debenture Due 2028
[CUSIP] [CINS] [ ]
No. $[ ]
TIME WARNER COMPANIES, INC., a Delaware corporation (the "Company", which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to [ ], or its registered assigns, the principal sum of [ ] Dollars ($[ ]) on January 15, 2028.
Interest Payment Dates: January 15 and July 15, commencing July 15, 1998.
Regular Record Dates: December 15 and June 15.
Reference is hereby made to the further provisions of this Debenture set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture dated as of January 15, 1993 (the "Original Indenture"), as amended by the First Supplemental Indenture, dated as of June 15, 1993 (the "First Supplemental Indenture"), the Second Supplemental Indenture, dated as of October 10, 1996 (the "Second Supplemental Indenture"), the Third Supplemental Indenture, dated as of December 31, 1996 (the "Third Supplemental Indenture") the Fourth Supplemental Indenture, dated as of December 17, 1997 (the "Fourth Supplemental Indenture") and the Fifth Supplemental Indenture, dated as of January 12, 1998 (the "Fifth Supplemental Indenture") (the Original Indenture, as amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture and the Fifth Supplemental Indenture is herein called the "Indenture"). This Debenture is one of the series of Securities of the Company issued pursuant to the Indenture and is designated as the 6.95% Debentures Due 2028 (hereinafter referred to as the "Debentures"), limited in aggregate principal amount to $500,000,000.
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed manually or by facsimile by its duly authorized officers.
Date: TIME WARNER COMPANIES, INC.
By: _________________________
Vice President
|
[SEAL]
Attest:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
[FORM OF REVERSE SIDE OF DEBENTURE]
TIME WARNER COMPANIES, INC.
6.95% Debenture Due 2028
1. Principal and Interest.
The Company promises to pay interest on the principal amount of this Debenture semiannually on January 15 and July 15 of each year beginning July 15, 1998, at the office or agency of the Company in the Borough of Manhattan, The City of New York, in like coin or currency, at the rate per annum specified in the title hereof. The interest so payable, and punctually paid or duly provided for, on any January 15 or July 15 will, except as provided in the Indenture, be paid to the Person in whose name this Debenture (or one or more Predecessor Securities) is registered at the close of business on the December 15 or June 15 next preceding the interest payment dated (herein called the "Regular Record Date") whether or not a Business Day, and may, at the option of the Company, be paid by check mailed to the registered address of such Person. Any such interest which is payable, but is not so punctually paid or duly provided for, shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may be paid either to the Person in whose name this Debenture (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Debentures not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Debentures may be listed and upon such notice as may be required by such exchange, if such manner of payment shall be deemed practicable by the Trustee, all as more fully provided in the Indenture. See paragraph 12 below for a description of circumstances under which Additional Interest may accrue on this Debenture.
2. Paying Agent and Registrar.
Initially, the Trustee will be the Paying Agent and the Security Registrar with respect to this Debenture. The Company reserves the right at any time to vary or
terminate the appointment of any Paying Agent or Security Registrar, to appoint additional or other Paying Agents and other Security Registrars and to approve any change in the office through which any Paying Agent or Security Registrar acts; provided that there will at all times be a Paying Agent in The City of New York.
3. Indenture; Limitations.
This Debenture is one of the duly authorized issue of senior debentures, notes, bonds or other evidences of indebtedness of the Company, of the series herein specified, all issued or to be issued under and pursuant to the Indenture, to which reference is hereby made for a statement of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee and any agent of the Trustee, any Paying Agent, the Company and the Holders of the Securities and the terms upon which the Securities are issued and are to be authenticated and delivered.
The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may have different conversion prices or exchange provisions (if any), may be subject to different redemption provisions (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as provided or permitted in the Indenture. This Debenture is one of the series of Securities of the Company issued pursuant to the Indenture and is designated as the 6.95% Debentures Due 2028, limited in aggregate principal amount to $500,000,000.
4. Redemption.
The Debentures of this series are not redeemable prior to the stated maturity of the principal hereof and will not be subject to any sinking fund.
5. Denominations; Transfer; Exchange.
The Debentures are issuable in registered form without coupons, in denominations of $1,000 and integral multiples thereof. Debentures may be exchanged for a like aggregate principal amount of Debentures of other authorized denominations at the office or agency of the Company in the Borough of Manhattan, The City of New York, and in the manner and subject to the limitations provided in the Indenture.
Upon due presentment for registration of transfer of this Debenture at the office or agency of the Company in the Borough of Manhattan, The City of New York, a new Debenture or Debentures of authorized denominations for a like aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture.
No service charge shall be made for any such transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax, assessment or other governmental charge payable in connection therewith.
Subject to the provisions of the Indenture, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Debenture is registered as the owner hereof for all purposes, whether or not this Debenture is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
6. Amendment; Supplement; Waiver.
The Indenture permits, with certain exceptions as therein
provided, the Company and the Trustee, without the consent of the Holders of the
Debentures or any other series of Securities, to enter into indentures
supplemental to the Indenture for, among others, one or more of the following
purposes: (i) to evidence the succession of another Person to the Company or
either Guarantor, and the assumption by such successor of the Company or such
Guarantor's obligations under the Indenture and the Securities of any series;
(ii) to add covenants of the Company and either Guarantor, or surrender any
rights of the Company or either Guarantor, for the benefit of the Holders of
Securities of any or all series; (iii) to cure any ambiguity, or correct
any inconsistency in the Indenture; (iv) to evidence and provide for the acceptance of any successor Trustee with respect to one or more series of Securities or to facilitate the administration of the trusts thereunder by one or more trustees in accordance with the Indenture; (v) to establish the form or terms of any series of Securities; and (vi) to provide any additional Events of Default.
The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of a majority in principal amount of the outstanding Securities of each series to be affected, to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the Indenture or modifying the rights of the Holders of the Securities of such series to be affected, except that no such supplemental indenture may, without the consent of all of the Holders of affected Securities, among other things, change the fixed maturity of any Securities or reduce the aforesaid percentage of Securities of any series the consent of the Holders of which is required for any such supplemental indenture.
The Indenture also permits the Holders of a majority in principal amount of the Securities at the time Outstanding of each series on behalf of the Holders of all Securities of such series to waive compliance by the Company with certain provisions of the Indenture and certain past defaults and their consequences with respect to such series under the Indenture. Any such consent or waiver by the Holder of this Debenture shall be conclusive and binding upon such Holder and upon all future Holders of this Debenture and of any Debenture issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Debenture or such other Debentures.
7. Restrictive Covenants.
The Indenture imposes certain limitations on (i) the ability of the Company and its Subsidiaries to Incur additional Senior Debt, (ii) the ability of the Company and its Material Subsidiaries to suffer to exist or incur Liens, and (iii) the ability of the Company or the Guarantors to merge, consolidate or transfer substantially all of their assets.
8. Defaults and Remedies.
The Indenture provides that, if an Event of Default specified therein with respect to the Debentures shall have happened and be continuing, either the Trustee or the Holders of 25% in aggregate principal amount of the Debentures (or 25% in aggregate principal amount of all outstanding Securities under the Indenture, in the case of certain Events of Default affecting all series of Securities under the Indenture) may declare the principal of all the Debentures to be due and payable.
Events of Default in respect of the Debentures are provided in the Indenture and include: (i) default for 30 days in payment of any interest installment with respect to the Debentures; (ii) default in payment of principal of, or premium, if any, on, or any sinking fund or analogous payment with respect to, the Debentures when due at their Stated Maturity, by declaration or acceleration, when called for redemption or otherwise; (iii) default for 90 days after notice to the Company (or the Guarantors, if applicable) by the Trustee thereunder or by Holders of 25% in aggregate principal amount of the Debentures in the performance of any covenant pertaining to the Debentures; (iv) failure to pay when due, upon final maturity or upon acceleration, the principal amount of any indebtedness for money borrowed of the Company in excess of $50 million, if such indebtedness is not discharged, or such acceleration annulled, within 60 days after written notice; and (v) certain events of bankruptcy, insolvency and reorganization with respect to either Guarantor, the Company or any Material Subsidiary of the Company which is organized under the laws of the United States or any political sub-division thereof.
The Indenture provides that the Holders of a majority in aggregate principal amount of the outstanding Debentures may direct the time, method and place of conducting proceedings for remedies available to the Trustee or exercising any trust or power conferred on the Trustee in respect of such series, subject to certain conditions.
The Indenture includes a covenant that the Company will file annually with the Trustee a certificate of no default or specifying any default that exists.
In certain cases, as provided in the Indenture, the Holders of a majority in principal amount of the
outstanding Debentures may on behalf of the Holders of all Debentures of such series waive any past default or Event of Default with respect to the Debentures of such series or compliance with certain provisions of the Indenture, except, among other things, a default not theretofore cured in payment of the principal of, or premium, if any, or interest, if any, on any of the Debentures.
9. Debenture Guarantee.
The Company's obligations under the Debentures are fully, unconditionally and irrevocably guaranteed under the Indenture by each of Time Warner Inc., a Delaware corporation, and Turner Broadcasting System, Inc., a Georgia corporation.
10. Authentication.
This Debenture shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Debenture.
11. Defeasance.
The Indenture provides that the Company (and to the extent applicable, the Guarantors), at its option, (a) will be Discharged from any and all obligations in respect of the Debentures (except in each case for certain obligations to register the transfer or exchange of the Debentures, replace stolen, lost or mutilated Debentures, maintain paying agencies and hold moneys for payment in trust) or (b) need not comply with the covenants described above under "Restrictive Covenants" and certain Events of Default (other than those arising out of the failure to pay interest or principal on the Debentures and certain events of bankruptcy, insolvency and reorganization) will no longer constitute Events of Default with respect to such Debentures, in each case if the Company deposits with the Trustee, in trust, money or the equivalent in securities of the government which issued the currency in which the Debentures are denominated or government agencies backed by the full faith and credit of such government, or a combination thereof, which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient to pay all the principal (including any mandatory sinking fund payments) of, and interest on, such series on the dates such payments
are due in accordance with the terms of such Debentures. To exercise any such option, the Company is required, among other things, to deliver to the Trustee an opinion of counsel to the effect that (i) the deposit and related defeasance would not cause the Holders of such series to recognize income, gain or loss for Federal income tax purposes and, in the case of a Discharge pursuant to clause (a), accompanied by a ruling to such effect received from or published by the United States Internal Revenue Service and (ii) the creation of the defeasance trust will not violate the Investment Company Act of 1940, as amended. In addition, the Company is required to deliver to the Trustee an Officers' Certificate stating that such deposit was not made by the Company with the intent of preferring the Holders over other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others.
12. Exchange Offer; Registration Rights. [To be included in Debentures other than (x) Exchange Debentures and (y) Debentures sold pursuant to a Shelf Registration Statement.]
Pursuant to a Registration Rights Agreement among the Company, the Guarantors and the Placement Agents, the Company and the Guarantors will file with the Commission and use their reasonable best efforts to cause to become effective a registration statement (the "Registration Statement") with respect to an issue of Debentures identical in all material respects to the Debentures (the "Exchange Debentures") and, upon becoming effective, to offer the Holders of the Debentures the opportunity to exchange their Debentures for the Exchange Debentures (the "Exchange Offer"). In the event that due to a change in current interpretations by the Commission, the Company and the Guarantors are not permitted to effect such Exchange Offer, the Company and the Guarantors will instead file a registration statement covering resales by the holders of Debentures (a "Shelf Registration Statement") and will use their reasonable best efforts to cause such Shelf Registration Statement to become effective and to keep such Shelf Registration Statement effective for two years from the Debentures Closing Date. The Company and the Guarantors shall, in the event a Shelf Registration Statement is filed, provide to each Holder of the Debentures copies of the prospectus and notify each such Holder when the Shelf Registration Statement has become effective. A Holder that sells Debentures pursuant to a Shelf Registration Statement
generally will be required to be named as a selling security holder in the related prospectus and to deliver a current prospectus to purchasers, and will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales. The Exchange Debentures will be issued (i) under the Indenture or (ii) under an indenture substantially similar to the Indenture, which, in either event, will provide that the Exchange Debentures will not be subject to the transfer restrictions described in the Indenture.
Pursuant to the Registration Rights Agreement, the Company and
the Guarantors will use their reasonable best efforts to: (i) file the
Registration Statement or a Shelf Registration Statement with the Commission,
(ii) have such Registration Statement or Shelf Registration Statement
declared effective by the Commission within 180 days after the Debentures
Closing Date and (iii) commence the Exchange Offer and issue the Exchange
Debentures in exchange for all Debentures validly tendered in accordance with
the terms of the Exchange Offer prior to the close of the Exchange Offer, or, in
the alternative, cause such Shelf Registration Statement to remain effective for
two years from the Debentures Closing Date.
If the Company and the Guarantors fail to comply with the above provisions, additional interest (the "Additional Interest") shall accrue on this Debenture as follows:
(i) If the Registration Statement or Shelf Registration Statement is not filed within 150 days following the Debentures Closing Date, then commencing on the 151st day after the Debentures Closing Date, Additional Interest shall accrue on the outstanding principal amount of this Debenture over and above the interest accruing at the rate specified on the face of this Debenture at a rate of .50% per annum; or
(ii) If a Registration Statement or Shelf Registration Statement is not declared effective within 180 days following the Debentures Closing Date, then commencing on the 181st day after the Debentures Closing Date, Additional Interest shall accrue on the outstanding principal amount of this Debenture over and above the interest accruing at
the rate specified on the face of this Debenture at a rate of .50% annum; or
(iii) If either (A) the Company has not exchanged Exchange
Debentures for all Debentures validly tendered in accordance with
the terms of the Exchange Offer on or prior to 45 days after the
date on which the Registration Statement was declared effective,
or (B) if applicable, the Shelf Registration Statement has been
declared effective but such Shelf Registration Statement ceases
to be effective at any time prior to two years from the
Debentures Closing Date, then Additional Interest shall accrue on
the outstanding principal amount of this Debenture over and above
the interest accruing at the rate specified on the face of this
Debenture at a rate of .50% per annum immediately following the
(x) 46th day after such effective date, in the case of (A) above,
or (y) the day such Shelf Registration Statement ceases to be
effective in the case of(B) above;
provided, however, that the Additional Interest rate on this Debenture shall not exceed .50% per annum; and, provided, further, that (1) upon the filing of the Registration Statement or Shelf Registration Statement (in the case of (i) above), (2) upon the effectiveness of the Registration Statement or Shelf Registration Statement (in the case of (ii) above), or (3) upon the exchange of Exchange Debentures for all Debentures tendered or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective prior to two years from the Debentures Closing Date (in the case of (iii) above), Additional Interest on this Debenture as a result of such clause (i), (ii) or (iii) shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i),
(ii) or (iii) above will be payable in cash, on the same original payment dates
as other interest due on this Debenture. The amount of Additional Interest due
on this Debenture will be determined by multiplying the applicable Additional
Interest rate by the outstanding principal amount of this Debenture, multiplied
by a fraction, the numerator of which is the number of days such Additional
Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360.
If the Company and the Guarantors effect the Exchange Offer, the Company and the Guarantors will be entitled to close the Exchange Offer provided that the Company has accepted all Debentures theretofore validly tendered in accordance with the terms of the Exchange Offer. Debentures not tendered in the Exchange Offer shall bear interest at the same rates in effect at the time of issuance of the Debentures.
13. Obligation To Pay Interest Absolute.
No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal and any premium of and any interest on this Debenture at the place, rate and respective times and in the coin or currency herein and in the Indenture prescribed.
14. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Debenture, by acceptance thereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including, without limitation, the obligations of the Holders with respect to a registration and the indemnification of the Company and each of the Guarantors to the extent provided therein.
15. Governing Law.
THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to Time Warner Companies, Inc., 75 Rockefeller Plaza, New York, New York 10019, Attention of Manager, Shareholder Relations.
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL DEBENTURES OTHER THAN EXCHANGE DEBENTURES,
UNLEGENDED OFFSHORE GLOBAL DEBENTURES AND
UNLEGENDED OFFSHORE PHYSICAL DEBENTURES]
In connection with any transfer of this Debenture occurring prior to the date which is the earlier of (i) the date the shelf registration statement is declared effective or (ii) the end of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that without utilizing any general solicitation or general advertising that:
[Check One]
[ ](a) this Debenture is being transferred in compliance with the exemption from registration under the Securities Act of 1933 provided by Rule 144A thereunder.
or
[ ](b) this Debenture is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Debenture and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Security Registrar shall not be obligated to register this Debenture in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 207 of the Indenture shall have been satisfied.
Date:
------------------------ -----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
|
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Debenture for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933 and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated:
----------------------- -----------------------------------------
NOTICE: To be executed by an executive
officer
|
EXHIBIT B
Form of Certificate
------------, ----
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Administration
Re: Time Warner Companies, Inc. (the "Company") $500,000,000 6.95% Debentures Due 2028 (the "Debentures")
Ladies and Gentlemen:
This letter relates to U.S. $________ principal amount of Debentures represented by a Debenture (the "Legended Debenture") which bears a legend outlining restrictions upon transfer of such Legended Debenture. Pursuant to Section 205 of the Indenture dated as of January 15, 1993, as supplemented and amended (the "Indenture"), relating to the Debentures, we hereby certify that we are (or we will hold such securities on behalf of) a person outside the United States to whom the Debentures could be transferred in accordance with Rule 904 of Regulation S promulgated under the U.S. Securities Act of 1933. Accordingly, you are hereby requested to exchange the legended certificate for an unlegended certificate representing an identical principal amount of Debentures, all in the manner provided for in the Indenture.
You, the Company, Time Warner Inc. and Turner Broadcasting System, Inc. are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By: ____________________ Authorized Signature
EXHIBIT C
Form of Certificate to be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-------------, ----
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Administration
Re: Time Warner Companies, Inc. (the "Company") $500,000,000 6.95% Debentures Due 2028 (the "Debentures")
Ladies and Gentlemen:
In connection with our proposed purchase of $__________ aggregate principal amount of the Debentures, we confirm that:
1. We understand that any subsequent transfer of the Debentures is subject to certain restrictions and conditions set forth in the Indenture dated as of January 15, 1993, as supplemented and amended (the "Indenture"), relating to the Debentures, and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Debentures except in compliance with, such restrictions and conditions and the Securities Act of 1933 (the "Securities Act").
2. We understand that the offer and sale of the Debentures have
not been registered under the Securities Act, and that the Debentures may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Debentures, we will do so only (A) to the
Company and Time Warner Inc. and Turner Broadcasting System, Inc. (the
"Guarantors"), or any subsidiary thereof, (B) in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined therein),
(C) to an institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter, (D) outside the United States in accordance with Rule 904
of Regulation S under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act, or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Debentures from us a notice advising such purchaser that resales of the Debentures are restricted as stated herein.
3. We understand that, on any proposed resale of any Debentures, we will be required to furnish to you and the Company such certification, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Debentures purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Debentures and any accounts for which we are acting are each able to bear the economic risk of our or its investment.
5. We are acquiring the Debentures purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion.
You, the Company and the Guarantors are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------,-----
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Administration
Re: Time Warner Companies, Inc. (the "Company") $500,000,000 6.95% Debentures Due 2028 (the "Debentures")
Ladies and Gentlemen:
In connection with our proposed sale of U.S.$_____ aggregate principal amount of the Debentures, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the Securities Act of 1933 and, accordingly, we represent that:
(1) the offer of the Debentures was not made to a person in the United States;
(2) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the registration requirements of the U.S. Securities Act of 1933.
You, the Company, Time Warner Inc. and Turner Broadcasting System, Inc. are entitled to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
TIME WARNER INC.
TIME WARNER COMPANIES, INC.
TURNER BROADCASTING SYSTEM, INC.
Placement Agreement
January 6, 1998
New York, New York
To the Representatives
named in Schedule I
hereto of the Placement Agents
named in Schedule II hereto
Ladies and Gentlemen:
Time Warner Companies, Inc., a Delaware corporation (the "Company"), proposes to sell to the initial purchasers named in Schedule II hereto (the "Placement Agents"), for whom you (the "Representatives") are acting as representatives, the principal amount of the securities identified in Schedule I hereto (the "Debt Securities"), to be issued under an indenture (as supplemented, the "Indenture") dated as of January 15, 1993, between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee (the "Trustee"), as supplemented by a First Supplemental Indenture dated as of June 15, 1993 between the Company and the Trustee, a Second Supplemental Indenture dated as of October 10, 1996, among the Company, TWI (as defined below) and the Trustee, a Third Supplemental Indenture dated as of December 31, 1996, among the Company, TWI and the Trustee, a Fourth Supplemental Indenture dated as of December 17, 1997 among the Company, TWI, TBS (as defined below) and the Trustee and a Fifth Supplemental Indenture to be dated as of January 12, 1998 among the Company, TWI, TBS and the Trustee providing for the issuance of debt securities in one or more series, all of which will be entitled to the benefit of the Guarantees referred to below. Time Warner Inc., a Delaware corporation ("TWI"), became the parent of the Company and Turner Broadcasting System, Inc., a Georgia corporation ("TBS" and, together with TWI, the "Guarantors"), upon the merger of the Company and TBS with separate subsidiaries of TWI. Each of TWI and TBS, as primary obligor and not merely as surety has or will agree to irrevocably and unconditionally guarantee (the "Guarantees"; and together with the Debt Securities, the "Securities"), to each holder of Debt Securities and to the Trustee, (i) the full and punctual payment of principal of and interest on the Debt Securities when due and all other payment obligations of the Company under the Indenture and the Debt Securities and (ii) the full and punctual performance within
applicable grace periods of all other obligations of the Company under the Indenture and the Debt Securities. If the firm or firms listed in Schedule II hereto include only the firm or firms listed in Schedule I hereto, then the terms "Placement Agents" and "Representatives", as used herein, shall each be deemed to refer to such firm or firms. Capitalized terms used herein without definition have the respective meanings specified in the Offering Memorandum referred to below.
The Debt Securities will be offered and sold to you without being registered under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on an exemption therefrom. The Company has prepared an offering memorandum dated January 6, 1998 (such offering memorandum, together with any documents incorporated by reference therein, being hereinafter referred to as the "Offering Memorandum"), setting forth information regarding the Company and the Securities. The Company hereby confirms that it has authorized the use of the Offering Memorandum in connection with the offering and resale of the Securities by the Placement Agents.
The Company understands that you propose to make an offering of the Securities only on the terms and in the manner set forth in the Offering Memorandum and Section 2(e) hereof, as soon as you deem advisable after this Agreement has been executed and delivered, (i) to persons in the United States whom you reasonably believe to be qualified institutional buyers ("Qualified Institutional Buyers") as defined in Rule 144A under the Securities Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A, (ii) to a limited number of other institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Securities Act ("Accredited Investors")) in private sales exempt from registration under the Securities Act in minimum denominations of $100,000 and/or (iii) to non-U.S. persons outside the United States to whom you reasonably believe offers and sales of the Debt Securities may be made in reliance upon Regulation S under the Securities Act ("Regulation S"), in transactions meeting the requirements of Regulation S.
The holders of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit D (the "Registration Rights Agreement"), pursuant to which the Company will file a registration statement or registration statements (each, a "Registration Statement") with the Commission registering the Securities and/or the Exchange Securities (as defined in the Registration Rights Agreement) under the Securities Act.
1. Representations and Warranties. Each of the Company and the Guarantors represents and warrants to, and agrees with, each Placement Agent as set forth below in this Section 1.
(a) (i) As of the date of the Offering Memorandum and at all times subsequent thereto up to the Closing Date referred to below, neither the Offering Memorandum nor any amendment or supplement thereto will include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; except that this representation and warranty does not apply to statements or omissions made in reliance upon and in conformity with information furnished in writing by you (the "Offering Memorandum Purchase Letter") to the Company expressly for use in the Offering Memorandum or any amendment or supplement thereto.
(ii) Each preliminary prospectus filed as part of a Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424(a) under the Securities Act, will comply at the time it is filed in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission thereunder (the "Securities Act Regulations") and, on the effective date of the Registration Statement and at all times subsequent thereto (in the case of an exchange offer, up to the date on which the exchange offer is closed (the "Exchange Date") and, in the case of a shelf registration statement or other registration statement used in connection with sales or resales of Securities or Exchange Securities, for so long as such Registration Statement is effective), (x) such Registration Statement, at the time it becomes effective, and the final Prospectus contained therein (the "Prospectus") and any amendments or supplements thereto will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations; (y) neither such Registration Statement (at the time it becomes effective) nor any amendment or supplement thereto, including the documents incorporated by reference therein, will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (z) neither the Prospectus nor any other offering materials nor any amendments or supplements thereto, including the documents incorporated by reference therein, will include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that this representation and warranty does not apply to statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by you (the "Registration Statement Purchase Letter") expressly for use in a Registration Statement or Prospectus (or any amendments or supplements thereto) or any other offering materials.
(b) Any documents filed by the Company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference (in whole or in part) in the Offering Memorandum or that are incorporated by reference (in whole or in part) in a Registration Statement, as of the dates they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder (the "Exchange Act Regulations").
(c) When the Debt Securities are issued and delivered pursuant to this Agreement, such securities will not be of the same class (within the meaning of Rule 144A) as securities of the Company which are listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S. automated interdealer quotation system.
(d) TWI is subject to Section 13 or 15(d) of the Exchange Act.
(e) Neither the Company nor any of its affiliates (as defined in Rule 501(b) under the Securities Act) has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will be integrated with the sale of the Debt Securities in a manner that would require the registration of the Debt Securities under the Securities Act.
(f) Neither the Company nor any person (other than the Placement Agents or their affiliates, as to whom the Company makes no representation) acting on its behalf has engaged, in connection with the offering of the Securities, (A) in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) in any directed selling efforts within the meaning of Rule 903 under the Securities Act and the Commissions' Release No. 33-6863.
(g) Assuming that the representations and warranties of the Placement Agents in Section 2(b) are true, correct and complete and assuming compliance by the Placement Agents with their covenants in Section 2(b), it is not necessary in connection with the offer, sale and delivery of the Securities to the Placement Agents in the manner contemplated by this Agreement to register the Securities under the Securities Act or to qualify any indenture in respect of the Securities under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(h) (1) Each of the Company and TWI is validly existing as a corporation in good standing under the laws of the State of Delaware with full corporate power and authority under such laws to own its properties and conduct its business as described in the Offering Memorandum, and to enter into and perform its obligations under this Agreement and the Registration Rights Agreement; and each of the Company, TWI and TBS is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on TWI and its subsidiaries, considered as one enterprise.
(2) TBS is validly existing as a corporation in good standing under the laws of the State of Georgia, with full corporate power and authority under such laws to own its properties and conduct its business as described in the Offering Memorandum, and to enter into and perform its obligations under this Agreement and the Registration Rights Agreement.
(i) Each of TWI's significant subsidiaries, as such term is defined in Rule 1-02(w) of Regulation S-X under the Securities Act, is validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with full power and authority under such laws to own its properties and conduct its business as described in the Offering Memorandum, and is duly qualified to transact business as a foreign corporation or partnership and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on TWI and its subsidiaries, considered as one enterprise.
(j) TWI's authorized equity capitalization is as set forth in the Offering Memorandum; all of the outstanding capital stock of the Company and TBS is owned, directly or indirectly, by TWI, free and clear of all liens, encumbrances, equities or claims.
(k) There is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company, TWI or TBS or any of their respective subsidiaries of a character required to be disclosed in the Offering Memorandum which is not adequately disclosed therein, and there is no franchise, contract or other document of a character required to be described in the Offering Memorandum, which is not described as required.
(l) This Agreement has been duly authorized, executed and delivered by each of the Company, TWI and TBS.
(m) Assuming that the representations and warranties of each of the Placement Agents in Section 2(b) are true, correct and complete and that the representations and warranties of each subsequent transferee that is an Accredited Investor (as set forth in the certificate required to be executed and delivered by each such subsequent transferee) are true, correct and complete, and assuming compliance by each of the Placement Agents with its covenants in Section 2(b), no consent, approval, authorization or order of, giving of notice to, or registration with, or taking of any other action in respect of, any federal, state or foreign governmental authority or agency is required for the authorization, issuance, sale and delivery of the Securities by the Company and the Guarantors or the consummation of the transactions contemplated by this Agreement or the Registration Rights Agreement (except for the registration of the Securities or the Exchange Securities pursuant to the Registration Rights Agreement under the Securities Act and the registration of the Securities and the Exchange Securities under state securities laws).
(n) The execution and delivery of this Agreement, the Indenture and the Registration Rights Agreement by the Company, TWI and TBS, the issuance, sale and delivery of the Debt Securities by the Company and the consummation by the Company, TWI and TBS of the transactions contemplated in this Agreement, the
Indenture and the Registration Rights Agreement and compliance by the Company, TWI and TBS with the terms of this Agreement or the Registration Rights Agreement do not and will not result in any violation of the Certificate of Incorporation, as amended, or By-laws, as amended, of the Company, TWI and TBS and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, TWI and TBS under (i) any material agreement or instrument, to which the Company, TWI or TBS is a party or by which any of them may be bound or to which any of their properties may be subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of TWI and its subsidiaries, considered as one enterprise), (ii) any existing applicable law, rule or regulation (except for such conflicts, breaches, liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of TWI and its subsidiaries, considered as one enterprise, and other than the securities or blue sky laws of various jurisdictions), or (iii) any judgment, order or decree of any government, governmental instrumentality or court having jurisdiction over the Company, TWI or TBS or any of their properties.
(o) The Securities conform in all material respects to the description thereof contained in the Offering Memorandum.
(p) The Indenture has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Trustee, constitutes a legal, valid and binding instrument enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and subject as to enforceability to general principles of equity, regardless of whether considered in a proceeding in equity or at law); and the Debt Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Placement Agents pursuant to this Agreement will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and subject as to enforceability to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(q) The Indenture has been duly authorized, executed and delivered by each of TWI and TBS and constitutes a legal, valid and binding instrument enforceable against each of TWI and TBS in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and subject as to
enforceability to general principles of equity, regardless of whether considered in a proceeding in equity or at law).
(r) At the Closing Date referred to below, the Registration Rights Agreement will have been duly authorized, executed and delivered by the Company, TWI and TBS and will constitute the valid and legally binding obligation of the Company, TWI and TBS, enforceable against the Company, TWI and TBS in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or other similar laws affecting enforcement of creditors' rights generally, except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and except as any rights to indemnity and contribution may be limited by federal and state securities laws and public policy considerations underlying such laws. The Registration Rights Agreement will conform in all material respects to the description thereof contained in the Offering Memorandum and will conform in all material respects to the description thereof, if any, to be contained in the Registration Statement and Prospectus.
(s) Each firm of independent accountants, which is reporting upon certain audited or reviewed financial statements and schedules included or incorporated by reference in the Offering Memorandum, are independent auditors with respect to the financial statements covered by the audit or review of such firm, in accordance with the provisions of the Exchange Act and the Securities Act and the respective applicable published rules and regulations thereunder.
(t) The consolidated financial statements and the related notes of each of TWI, TWE and any other person included or incorporated by reference in the Offering Memorandum (including the supplementary summary unaudited financial information of the Company and TBS) present fairly in accordance with generally accepted accounting principles the consolidated financial position of each of the Company, TWI, TBS, TWE and any such other person as of the dates indicated and the consolidated results of operations of each of the Company, TWI, TBS, TWE and any such other person and cash flows of each of TWI and TWE for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as otherwise noted therein and subject, in the case of interim statements, to normal year-end audit adjustments. The financial statement schedules included or incorporated by reference in the Offering Memorandum present fairly in accordance with generally accepted accounting principles the information required to be stated therein. Any pro forma financial statements of the Company, TWI, TBS or TWE and other pro forma financial information included or incorporated by reference in the Offering Memorandum present fairly the information shown therein. Such pro forma financial statements and other pro forma financial information, to the extent required, have been prepared in accordance with applicable rules and guidelines of the Commission, if any, with respect thereto, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the Company, TWI, TBS and TWE, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein.
(u) Neither the Company, TWI nor TBS is an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended.
2. Purchase, Sale and Resale. (a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, each of the Company, TWI and TBS agrees to sell to each Placement Agent, and each Placement Agent agrees, severally and not jointly, to purchase from the Company, TWI and TBS, at the purchase price for the Securities set forth in Schedule I hereto, the principal amount of Securities set forth opposite such Placement Agent's name in Schedule II hereto.
(b) The Placement Agents have advised the Company, TWI and TBS that they propose to offer the Securities for resale upon the terms and conditions set forth in this Agreement and in the Offering Memorandum. Each Placement Agent hereby represents and warrants to, and agrees with, the Company that it (i) is a Qualified Institutional Buyer, (ii) has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act, or with respect to Securities sold in reliance on Regulation S, by means of any directed selling efforts within the meaning of Rule 903 under the Securities Act and the Commission's Release No. 33-6863, and (iii) has solicited and will solicit offers for the Securities only from, and have offered and will offer, sell or deliver the Securities, as part of its initial offering, only to (A) persons in the United States whom it reasonably believes to be Qualified Institutional Buyers or, if any such person is buying for one or more institutional accounts for which such person is acting as fiduciary or agent, only when such person has represented to it that each such account is a Qualified Institutional Buyer, to whom notice has been given that such sale or delivery is being made in reliance on Rule 144A, and, in each case, in transactions under Rule 144A, (B) a limited number of other institutional investors whom it reasonably believes to be Accredited Investors in private sales exempt from registration under the Securities Act in minimum denominations of $100,000 and (C) non-U.S. persons outside the United States to whom it reasonably believes offers and sales of the Securities may be made in reliance upon Regulation S under the Securities Act, in transactions meeting the requirements of Regulation S; provided that, with respect to clause (B) and clause (C) above each such transfer of Securities is effected by the delivery to such purchaser of Securities in definitive form and registered in its name (or its nominee's name) on the books maintained by the Transfer Agent. Each Placement Agent agrees to deliver, at the Closing Date, a letter to the Company, TWI and TBS confirming its compliance with the foregoing requirements.
Promptly following the occurrence thereof, the Placement Agents will advise the Company, TWI and TBS of the date on which they and their affiliates first ceased to hold Securities acquired as part of the initial distribution thereof.
(c) On or prior to the Closing Date, each Placement Agent shall deliver to the Company the Offering Memorandum Purchase Letter. If any Placement Agent participates in the preparation of a Registration Statement, such Placement Agent shall deliver the Registration Statement Purchaser Letter on or prior to the effective date of such Registration Statement.
3. Delivery and Payment. Delivery of and payment for the Securities shall be made on the date and at the time specified in Schedule I hereto, which date and time may be postponed to a date not later than five business days after such specified date by agreement between the Representatives, acting jointly and without regard to any agreement among placement agents, and the Company (such date and time of delivery and payment for the Securities being herein called the "Closing Date"). Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Placement Agents against payment by the several Placement Agents through the Representatives of the purchase price thereof to or upon the order of the Company by certified or official bank check or checks drawn on or by a New York Clearing House bank and payable in immediately available funds. Delivery of the Debt Securities shall be made at such location as the Representatives shall reasonably designate on the Closing Date and payment for the Securities shall be made at the office specified in Schedule I hereto. Certificates for the Securities shall be registered in such names and in such denominations as the Representatives may request not less than one full business day in advance of the Closing Date.
The Company agrees to have the Securities available for inspection, checking and packaging by the Representatives in New York, New York, not later than 1:00 PM on the business day prior to the Closing Date.
4. Agreements. The Company and the Guarantors agree with the several Placement Agents that:
(a) The Company, TWI or TBS will deliver to the Representatives, as of the date of the Offering Memorandum, such number of copies of the Offering Memorandum, as it may then be amended or supplemented, as they may reasonably request.
(b) None of the Company, TWI or TBS will at any time make any amendment or supplement to the Offering Memorandum (other than amendments of or supplements to any documents incorporated by reference in the Offering Memorandum or the filing of subsequent documents under the Exchange Act), of which the Representatives shall not have previously been advised and furnished a copy, or to which the Representatives or their counsel shall reasonably object. The Company shall not file any document under the Exchange Act before the completion of the offering of
the Securities by the Placement Agents if such document would be incorporated by reference in the Offering Memorandum and if the filing of such document would cause the Offering Memorandum, as amended or supplemented by the filing of such document, to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(c) If at any time prior to completion of the distribution of the Securities by the Placement Agents to purchasers who are not affiliates of such Placement Agents any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Offering Memorandum in order that the Offering Memorandum will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Company, TWI and TBS will promptly prepare such amendment or supplement as may be necessary to correct such untrue statement or omission and furnish to the Placement Agents such number of copies as they may reasonably request.
(d) Notwithstanding any provision of paragraph (b) or paragraph (c) of this Section 4 to the contrary, however, the obligations of the Company, TWI and TBS under paragraph (b) and paragraph (c) of this Section 4 shall terminate on the earliest to occur of (i) 180 days after the date of the Offering Memorandum (exclusive of any days during which use of the Offering Memorandum is suspended as set forth below) and (ii) the date upon which the Placement Agents and their affiliates first cease to hold Securities acquired as part of the initial distribution thereof; provided, however, that the Company, TWI and TBS shall, if requested by an Placement Agent, amend or supplement the Offering Memorandum as provided in paragraph (c) of this Section 4 after such 180-day period (but in no event beyond the date on which an Exchange Offer is consummated pursuant to the Registration Rights Agreement) so long as an Placement Agent shall have agreed to reimburse the Company, TWI and TBS for their reasonable expenses in connection therewith. In addition, after 30 days from the date hereof, the Company shall not be required to amend or supplement the Offering Memorandum pursuant to paragraph (b) or paragraph (c) of this Section 4 in the event that, and for so long as (A) an event occurs and is continuing as a result of which the Offering Memorandum as then amended or supplemented would, in the Company's good faith judgment, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances under which they are made, and (B) the Company determines in its good faith judgment that the disclosure of such event at such time would materially adversely affect the interests of the Company. The Company, TWI and TBS agree to notify the Representatives to suspend use of the Offering Memorandum as promptly as practicable after the occurrence of such an event, and the Placement Agents hereby agree to suspend use of the Offering Memorandum until the Company has amended or supplemented the Offering Memorandum to correct such misstatement or omission. At such time as such public disclosure is otherwise made or the Company
determines in its good faith judgment that the disclosure in the Offering Memorandum of an event described above would no longer materially adversely affect the Company or that such disclosure is not necessary, the Company agrees promptly to notify the Representatives of such determination, to amend or supplement the Offering Memorandum if necessary to correct any untrue statement or omission therein and to furnish the Placement Agents such numbers of copies of the Offering Memorandum, as so amended or supplemented, as they may reasonably request.
(e) The Company will use its best efforts in cooperation with the Representatives to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions as they may designate, if any, and to maintain such qualifications in effect for so long as required for the initial distribution of the Securities by the Placement Agents; provided, however, that the Company shall not be obligated to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 4(e), (ii) file any general consent to service of process or (iii) subject itself to taxation in any such jurisdiction if it is not so subject. The Company will file such statements and reports as may be required by the laws of each jurisdiction in which the Securities have been qualified as above provided.
(f) For a period of three years after the Closing Date, the Company TWI, TBS and TWE will furnish to the Representatives copies of all annual reports, quarterly reports and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by the Commission, and such other documents, reports and information as shall be furnished by each of the Company, TWI, TBS and TWE to its public stockholders generally.
(g) Neither the Company, TWI, TBS nor any person (other than the Placement Agents or their affiliates, as to whom the Company makes no representation) acting on its behalf will solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation or general advertising (within the meaning of Rule 502(c) under the Securities Act) or by means of any directed selling efforts (as defined under Regulation S and the Commission's written releases related thereto).
(h) Neither the Company, TWI, TBS nor any of their affiliates (as defined in Rule 501(b) of the Securities Act) will offer, sell or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) which will be integrated with the sale of the Securities in a manner that would require the registration of the Securities under the Securities Act.
(i) During the period from the Closing Date to the earlier of (i) two years after the Closing Date, or (ii) the date of effectiveness of a registration statement with respect to the Securities as contemplated in the Registration Rights Agreement, none of the Company, TWI or TBS will, and will not permit any of its "affiliates" (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been
reacquired by them, except for Securities purchased by the Company, TWI or TBS or any of their affiliates and resold in a transaction registered under the Securities Act.
(j) From and after the Closing Date, the Company will, so long as the Securities are outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, either (i) file reports and other information with the Commission under Section 13 or 15(d) of the Exchange Act, or (ii) in the event it is not subject to Section 13 or 15(d) of the Exchange Act, furnish to holders of Securities and prospective purchasers of Securities designated by such holders, upon request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to permit compliance with Rule 144A in connection with resales of the Securities.
(k) The Company will use its best efforts in cooperation with the Representatives to permit the Debt Securities to be eligible for clearance and settlement through The Depository Trust Company.
(l) Each Debt Security will bear the following legend until, in the opinion of counsel to the Company, such legend is no longer advisable because such Debt Security is no longer subject to the restrictions on transfer described therein:
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS DEBENTURE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATIONS UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE DEBENTURES, RESELL OR
OTHERWISE TRANSFER THIS DEBENTURE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS DEBENTURE (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER
IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES
AT THE TIME OF TRANSFER OF LESS THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND, IN CONNECTION WITH ANY TRANSFER OF THIS DEBENTURE WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE DEBENTURES THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS DEBENTURE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISIONS REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS DEBENTURE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(m) The proceeds of the offering of the Securities will be applied as set forth in the Offering Memorandum.
(n) The Company and the Guarantors will pay and bear all costs and
expenses incident to the performance of their obligations under this
Agreement, including (i) the preparation and printing of the Offering
Memorandum (including financial statements) and any amendments or
supplements thereto, and the cost of furnishing copies thereof to the
Placement Agents, (ii) the preparation, printing and distribution of this
Agreement, the Indenture, the Securities and the Registration
Rights Agreement, (iii) the preparation, printing and delivery of the
Securities to the Placement Agents, (iv) the fees and disbursements of
the Company's and the Guarantors' counsel and the accountants required
hereby to provide "comfort letters", (v) the qualification of the
Securities under the applicable securities laws in accordance with
Section 4(e) and any filing for review of the offering with the
National Association of Securities Dealers, Inc., including filing fees
and fees and disbursements of counsel for the Placement Agents in
connection therewith and in connection with the preparation of a Blue
Sky Survey, (vi) any fees charged by rating agencies for rating
the Securities, (vii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee, in connection with the Indenture and the Securities, (viii) the cost and charges of any transfer agent or registrar and (ix) the costs of qualifying the Securities with The Depositary Trust Company.
(o) Until the Closing Date or such other date as may be specified in Schedule I, none of the Company, TWI or TBS (and if so specified in Schedule I or TWE) will, without the consent of Morgan Stanley & Co. Incorporated, offer, sell or contract to sell, or announce the offering of, any debt securities designed or intended to be traded or distributed in the public or private securities markets; provided, however, that the foregoing shall not prohibit (i) the Company, TWI, TBS or TWE from issuing long-term debt as all or part of the consideration in any merger or acquisition and/or in connection with the settlement of any litigation, (ii) the Company, TWI, TBS or TWE from filing with the Commission a "shelf" registration statement for the offering of securities under Rule 415 of the Act (or any similar rule that may be adopted by the Commission) or amending any existing shelf registration statement provided that such securities are not issued until the business day following the Closing Date or such other date as may be specified in Schedule I or (iii) any of the foregoing from issuing commercial paper.
5. Conditions to the Obligations of the Placement Agents. The obligations of the Placement Agents to purchase the Securities shall be subject to the accuracy in all material respects of the representations and warranties on the part of the Company and the Guarantors contained herein as of the Closing Date, to the accuracy in all material respects of the statements of the Company and the Guarantors made in any certificates pursuant to the provisions hereof, to the performance by each of the Company, TWI and TBS of its obligations hereunder, to the due execution and delivery of the Indenture, to the absence of any event or condition which would give you the right to terminate this Agreement and to the following additional conditions:
(a) The Registration Rights Agreement shall have been duly executed and delivered by the Company and the Guarantors, the Indenture shall have been duly authorized by the Company and the Guarantors, all covenants and agreements contained herein to be performed on the part of the Company and the Guarantors and all conditions contained herein to be fulfilled or complied with by the Company and the Guarantors at or prior to such Closing Date shall have been duly performed, fulfilled or complied with in all material respects and no event shall have occurred and no condition shall exist which would give you the right to terminate this Agreement.
(b) At the Closing Date, the Company shall have furnished to you the opinion of Peter R. Haje, General Counsel to TWI, dated the Closing Date, substantially in the form of Exhibit A hereto.
(c) At the Closing Date, the Company shall have furnished to you the opinion and statement of Cravath, Swaine & Moore, counsel to the Company and the
Guarantors, each dated the Closing Date, substantially in the form of Exhibit B and Exhibit C hereto, respectively.
(d) The Representatives shall have received from Shearman & Sterling, counsel for the Placement Agents, such opinion or opinions, dated the Closing Date, with respect to the issuance and sale of the Debt Securities, the Indenture, the Registration Rights Agreement, the Offering Memorandum (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Company and the Guarantors shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(e) (1) The Company shall have furnished to the Representatives a certificate of the Company, signed by any two officers who are an Executive or Senior Vice President of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Offering Memorandum and this Agreement and that the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.
(2) TWI shall have furnished to the Representatives a certificate of TWI, signed by any two officers who are an Executive or Senior Vice President of TWI, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Offering Memorandum and this Agreement and that:
(i) the representations and warranties of the Company, TWI and TBS in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date each of the Company, and TWI and TBS has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements included in the Offering Memorandum, there has been no material adverse change in the condition (financial or otherwise), earnings, or business prospects of TWI and its subsidiaries, considered as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Offering Memorandum.
(3) TBS shall have furnished to the Representatives a certificate of TBS, signed by any two officers who are Vice Presidents of TBS, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Offering Memorandum and this Agreement and that the representations and warranties of TBS in this Agreement are true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date and TBS has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.
(f) At the Closing Date, Ernst & Young LLP shall have furnished to the Representatives a letter or letters, dated respectively as of the Closing Date, in form and substance satisfactory to the Representatives, confirming that they are independent auditors with respect to the Company, TWI, TBS and TWE within the meaning of the Securities Act and the Exchange Act and the respective applicable published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and financial statement schedules of TWI and TWE (including the supplementary summary unaudited financial information of the Company and TBS) included or incorporated in the Offering Memorandum comply in form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial statements (including the notes thereto and the supplementary summary unaudited financial information of the Company and TBS) made available by TWI, the Company, TBS and TWE and their respective consolidated subsidiaries; carrying out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of the minutes of the meetings of the stockholders, directors and executive, finance and audit committees of TWI and TWE and their respective consolidated subsidiaries; and inquiries of certain officials of TWI, the Company, TBS and TWE who have responsibility for financial and accounting matters of TWI, the Company, TBS and TWE and their respective consolidated subsidiaries as to transactions and events subsequent to the date of the most recent audited financial statements in or incorporated in the Offering Memorandum, and such other inquiries and procedures as may be specified in such letter, nothing came to their attention which caused them to believe that:
(1) any of such unaudited financial statements included or incorporated in the Offering Memorandum do not comply in form in all material respects with applicable accounting requirements of the Securities Act and the Exchange Act and with the published rules and regulations of the Commission with respect to financial statements included or incorporated in quarterly reports on Form 10-Q under the Exchange Act; or said unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated in the Offering Memorandum; or
(2) with respect to the period subsequent to the date of the most recent unaudited financial statements in or incorporated in the Offering Memorandum, there were any increases, at a specified date not more than five business days prior to the date of the letter, in the long-term debt of TWI, TWE and certain related unconsolidated subsidiaries (together with TWE, the "Entertainment Group") and their respective consolidated subsidiaries or any decreases in stockholders' equity or the consolidated capital stock of TWI, TWE and the Entertainment Group as compared with the amounts shown on the most recent consolidated balance sheet included or incorporated in the Offering Memorandum, for such entities, or for the period from the date of the most recent unaudited financial statements included or incorporated in the Offering Memorandum, for such specified date there were any decreases, as compared with the corresponding period in the preceding year, in revenues, income before income taxes (or any increase in the loss before income taxes) or net income (or any increase in net loss), except in all instances for decreases or increases disclosed in the Offering Memorandum;
(iii) they are unable to and do not express any opinion on the pro forma adjustments to the financial statements included or incorporated by reference in the Offering Memorandum, or on the pro forma adjustments applied to the historical amounts included or incorporated by reference in the Offering Memorandum; however, for purposes of such letter they have:
(1) read the pro forma adjustments to such financial statements;
(2) made inquiries of certain officials of TWI, the Company, TBS and TWE who have responsibility for financial and accounting matters about the basis for their determination of the pro forma adjustments to such financial statements and whether such pro forma adjustments comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X; and
(3) proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts included or incorporated by reference in the Offering Memorandum; and
on the basis of such procedures, and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that the pro forma adjustments to the financial statements included or incorporated by reference in the Offering Memorandum do not comply as to form in all material respects with the applicable requirements of Rule 11-02 of
Regulation S-X and that such pro forma adjustments have not been properly applied to the historical amounts in the compilation of such financial statements; and
(iv) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its subsidiaries) set forth in the Offering Memorandum agrees with the accounting records of the Company and its subsidiaries, TWI and its subsidiaries, TBS and its subsidiaries or TWE and its subsidiaries, as the case may be, excluding any questions of legal interpretation.
(g) At the Closing Date, each other firm of independent accountants who audited or reviewed financial statements included or incorporated by reference in the Offering Memorandum shall have furnished to the Representatives a letter or letters, dated respectively as of the Closing Date, in form and substance satisfactory to the Representatives, confirming that they are independent auditors with respect to the financial statements audited or reviewed by them within the meaning of the Securities Act and the Exchange Act and the respective applicable published rules and regulations thereunder and to the same effect as the letter or letters of Ernst & Young LLP as described in Section 5(f)(i) and 5(f)(ii)(1) hereto.
(h) Subsequent to the dates as of which information is given in the
Offering Memorandum, there shall not have been (i) any decrease or increase
specified in the letter or letters referred to in paragraph (f) of this
Section 5 or (ii) any change, or any development involving a prospective
change, in or affecting the business (including the results of operations
or management) or properties of the Company and its subsidiaries, TWI and
its subsidiaries, TBS and its subsidiaries, TWE and its subsidiaries the
effect of which, in any case referred to in clause (i) or (ii) above, is,
in the reasonable judgment of the Representatives, so material and adverse
as to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Offering Memorandum.
(i) Subsequent to the date hereof, (i) there shall not have been any downgrade in the credit ratings of any of the Company's, TWI's or TBS's debt securities by Moody's Investor Service, Inc. or Standard & Poor's Ratings Group, and (ii) none of the Company, TWI or TBS shall have been placed under special surveillance, with negative implications, by Moody's Investor Service, Inc. or Standard & Poor's Ratings Group.
(j) Prior to the Closing Date, the Company and the Guarantors shall have furnished to the Representatives such further information, certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 5 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and counsel for the Placement Agents, this Agreement and all obligations of the Placement Agents hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives and such cancellation shall be without liability of any party to any other party, except to the extent provided in Sections 4 and 6. Notice of such cancellation shall be given to the Company, TWI or TBS in writing or by telephone or telegraph confirmed in writing.
6. Reimbursement of Placement Agents' Expenses. If the sale of the Debt Securities provided for herein is not consummated because any condition to the obligations of the Placement Agents set forth in Section 5 hereof is not satisfied or because of any refusal, inability or failure on the part of the Company, TWI or TBS to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Placement Agents, the Company and the Guarantors will reimburse the Placement Agents severally upon demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) Each of the Company, TWI and TBS agrees to indemnify and hold harmless each Placement Agent, the directors, officers, employees and agents of each Placement Agent and each person who controls any Placement Agent within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that none of the Company, TWI or TBS will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company, TWI and TBS by or on behalf of any Placement Agent through the Representatives specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company, TWI or TBS may otherwise have.
(b) Each Placement Agent severally agrees to indemnify and hold harmless each of the Company, TWI and TBS, each of their respective directors, officers and each person who controls the Company, TWI or TBS within the meaning of either the Securities
Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company, TWI and TBS to each Placement Agent, but only with reference to written information relating to such Placement Agent furnished to the Company, TWI or TBS by or on behalf of such Placement Agent through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Placement Agent may otherwise have. Each of the Company, TWI and TBS acknowledges that the statements set forth in the last paragraph of the cover page and the first and fifth paragraphs under the heading "Private Placement" in the Offering Memorandum constitute the only information furnished in writing by or on behalf of the several Placement Agents for inclusion in the documents referred to in the foregoing indemnity, and you, as the Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party (it being understood, however, that in
connection with such action, the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
representing the indemnified parties who are parties to such action or actions),
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company, TWI, TBS and the Placement Agents agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which the Company, the Guarantors and one or more of the Placement Agents may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company, TWI and TBS, on one hand, and by the Placement Agents, on the other hand, from the offering of the Securities; provided, however, that in no case shall any Placement Agent (except as may be provided in any agreement among underwriters relating to the offering of the Debt Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Debt Securities purchased by such Placement Agent hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company, TWI, TBS and the Placement Agents shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Guarantors and of the Placement Agents in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company and the Guarantors shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses), and benefits received by the Placement Agents shall be deemed to be equal to the total underwriting discounts and commissions. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company, TWI, or TBS or the Placement Agents. The Company, the Guarantors and the Placement Agents agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls an Placement Agent within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of an Placement Agent shall have the same rights to contribution as such Placement Agent, and each person who controls the Company, TWI or TBS within the meaning of either the Securities Act or the Exchange Act, each director, officer, employee and agent of the Company, TWI or TBS shall have the same rights to contribution as the Company and the Guarantor, subject in each case to the applicable terms and conditions of this paragraph (d).
8. Default by an Placement Agent. If any one or more Placement Agents shall fail on the Closing Date to purchase and pay for any of the Debt Securities agreed to be purchased by such Placement Agent or Placement Agents hereunder and such failure to
purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Placement Agents shall be obligated severally to take up and pay for (in the respective proportions for each of the Debt Securities which such Placement Agent failed to purchase which the amount of the Debt Securities set forth opposite their names in Schedule II hereto bears to the aggregate amount of such Debt Securities set forth opposite the names of all the remaining Placement Agents) the Debt Securities which the defaulting Placement Agent or Placement Agents agreed but failed to purchase; provided, however, that in the event that the aggregate amount of Debt Securities which the defaulting Placement Agent or Placement Agents agreed but failed to purchase shall exceed 10% of the aggregate amount of Debt Securities set forth in Schedule II hereto, the remaining Placement Agents shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Debt Securities, and if such nondefaulting Placement Agents do not purchase all of the Debt Securities, this Agreement will terminate without liability to any nondefaulting Placement Agent or the Company and the Guarantors. In the event of a default by any Placement Agent as set forth in this Section 8, the Closing Date shall be postponed for such period, not exceeding seven days, as the Representatives shall determine in order that the required changes in the Offering Memorandum, or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Placement Agent of its liability, if any, to the Company, the Guarantors and any nondefaulting Placement Agent for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company, TWI or TBS prior to delivery of and payment for the Debt Securities, if prior to such time (i) trading in the TWI's common stock or any of the Company's or the TWI's or TBS's debt securities shall have been suspended by the Commission or the New York Stock Exchange or trading in securities generally on such Exchange shall have been suspended or limited or minimum or maximum prices shall have been established on such Exchange, or maximum ranges for prices for securities have been required, by such Exchange or by order of the Commission or any other governmental authority, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any new outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other calamity or crisis the effect of which on financial markets of the United States is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the offering or delivery of a series of Securities as contemplated by the Offering Memorandum. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party, except to the extent provided in Sections 4 and 6.
10. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company TWI or TBS or any of their respective officers and of the Placement Agents set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Placement Agent or the Company, TWI or TBS or any of the officers, directors or controlling persons referred to in Section 7 hereof, and will survive delivery of
and payment for the Securities. The provisions of Sections 6 and 7 hereof shall survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telegraphed and confirmed to them, at the address specified in Schedule I hereto; or, if sent to the Company, TWI or TBS, will be mailed, delivered or telegraphed and confirmed to it care of TWI at 75 Rockefeller Plaza, New York, New York 10019, attention of General Counsel.
12. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 7 hereof, and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York.
14. Business Day. For purposes of this Agreement, "business day" means any day on which the New York Stock Exchange is open for trading.
15. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company, TWI, TBS and each of the Placement Agents.
Very truly yours,
TIME WARNER INC.
By /s/ Frederick C. Yeager
-------------------------------
Name: Frederick C. Yeager
Title: Vice President
|
TIME WARNER COMPANIES, INC.
By /s/ Frederick C. Yeager
-------------------------------
Name: Frederick C. Yeager
Title: Vice President
|
TURNER BROADCASTING SYSTEM, INC.
By /s/ Frederick C. Yeager
-------------------------------
Name: Frederick C. Yeager
Title: Vice President
|
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED
J. P. MORGAN SECURITIES INC.
By /s/ Michael Fusco ---------------------------- Name: Michael Fusco Title: Vice President |
SCHEDULE I
Placement Agreement: Dated January 6, 1998
Representatives: Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
Chase Securities Inc.
Merrill Lynch, Pierce, Fenner & Smith,Incorporated
J. P. Morgan Securities Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
|
Title, Purchase Price and Description of Debt Securities:
Title: 6.95% Debentures Due 2028
Principal amount: $500,000,000
Interest rate: 6.95%
Interest payment dates: January 15 and July 15
Date of maturity: January 15, 2028
Purchase price (include
accrued interest or
amortization, if any): 98.043%
Initial public offering price: 98.918%
Sinking fund provisions: None
Redemption provisions: Not redeemable
Other provisions: None
Closing Date, Time and Location: January 12, 1998 at 10:00 A.M. at the
offices of Shearman & Sterling, 599
Lexington Avenue, New York, New York 10022
|
SCHEDULE II
$500,000,000 6.95% Debentures due 2028:
Principal
Amount
to
Placement Agents be Purchased
---------------- -------------
Morgan Stanley & Co. Incorporated...................... $100,000,000
Bear, Stearns & Co. Inc................................ $100,000,000
Chase Securities Inc................................... $100,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated..... $100,000,000
J.P. Morgan Securities Inc............................. $100,000,000
-----------
Total.............................................. $500,000,000
===========
|
EXHIBIT A
FORM OF OPINION OF PETER R. HAJE, ESQ.
(i) each of the Company, TWI and TBS is validly existing as a corporation in good standing under the laws of the jurisdiction in which it is chartered or organized, with full corporate power and authority under such laws to own its properties and conduct its business as described in the Offering Memorandum and each of the Company, TWI and TBS is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on TWI and its subsidiaries, considered as one enterprise;
(ii) each of TWI's significant subsidiaries, as such term is defined in Rule 1-02(w) of Regulation S-X under the Securities Act, is validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with full power and authority under such laws to own its properties and conduct its business as described in the Offering Memorandum, and any amendment or supplement thereto, and is duly qualified to transact business as a foreign corporation or partnership and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on TWI and its subsidiaries, considered as one enterprise;
(iii) TWI's authorized equity capitalization is as set forth in the Offering Memorandum; all of the outstanding capital stock of the Company and TBS is owned, directly or indirectly, by TWI, free and clear of all liens, encumbrances, equities or claims;
(iv) to the best knowledge of such counsel, there is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving either the Company, TWI or TBS or any of their respective subsidiaries of a character required to be disclosed in the Offering Memorandum or that is likely to result in any material adverse change in the condition (financial or otherwise), earnings, business affairs or business prospects of TWI and its subsiaries, considered as one enterprise, which is not adequately disclosed in the Offering Memorandum;
(v) the Indenture, the Placement Agreement, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture and the Registration Rights Agreement have been duly authorized, executed and delivered by each of the Company, TWI and TBS; and the Fourth Supplemental Indenture, the Fifth Supplemental Indenture and the Registration Rights Agreement, assuming due authorization thereof by the Trustee or the Placement Agents, as applicable, constitute legal, valid and binding obligations of each of the Company, TWI and TBS, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect and subject as to enforceability to general principles of equity, regardless of whether considered in a proceeding in equity
or at law and except as any rights to indemnity and contribution may be limited by federal and state securities laws and public policy considerations underlying such laws;
(vi) the Debt Securities have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Placement Agents pursuant to the Placement Agreement will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect and subject as to enforceability to general principles of equity, regardless of whether considered in a proceeding in equity or at law;
(vii) the execution and delivery of the Placement Agreement, the Indenture and the Registration Rights Agreement by the Company, TWI and TBS, the issuance, sale and delivery of the Debt Securities by the Company and the consummation by the Company, TWI and TBS of the transactions contemplated in the Placement Agreement, the Indenture and the Registration Rights Agreement and compliance by the Company, TWI and TBS with the terms of the Placement Agreement or the Registration Rights Agreement do not and will not result in any violation of the Certificate of Incorporation, as amended, or By-laws, as amended, of the Company, TWI and TBS and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, TWI and TBS under any agreement or instrument, to which the Company, TWI or TBS is a party or by which any of them may be bound or to which any of their properties may be subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of TWI and its subsidiaries, considered as one enterprise), (ii) any existing applicable law, rule or regulation (except for such conflicts, breaches, liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of TWI and its subsidiaries, considered as one enterprise, and other than the securities or blue sky laws of various jurisdictions), or (iii) any judgment, order or decree of any government, governmental instrumentality or court having jurisdiction over the Company, TWI or TBS or any of their properties;
(viii) any documents filed by the Company under the Securities Exchange Act of 1934, as amended, that are incorporated by reference (in whole or in part) in the Offering Memorandum or that are incorporated by reference (in whole or in part) in a Registration Statement, as of the dates they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder; and
(ix) no consent, approval, authorization or order of, giving of notice to, or registration with, or taking of any other action in respect of, any federal or state governmental authority or agency is required for the consummation of the transactions contemplated in the Placement Agreement or the issuance, sale and delivery of the Securities, except such as may be required under the Securities Act and under the blue sky laws of any jurisdiction in connection with the purchase and resale of the Securities by the Placement Agents.
In addition, such counsel shall also state as follows: As General Counsel, I have reviewed and participated in the preparation of the Offering Memorandum, including the documents incorporated by reference therein. In examining the Offering Memorandum, I have necessarily assumed the correctness and completeness of the statements made or included therein by the Company, TWI and TBS and take no responsibility therefor. However, in the course of the preparation by the Company, TWI and TBS of the Offering Memorandum, I have participated in conferences with certain officers of, and accountants for, the Company, TWI and TBS with respect thereto, and my examination of the Offering Memorandum and my discussions in the above-mentioned conferences did not disclose any information which gave me reason to believe that the Offering Memorandum (except for the financial statements and other financial or statistical data included therein or omitted therefrom, as to which I express no opinion), at its issue date or on the date of this opinion, included or includes any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the United States, the State of New York and the General Corporation Law of the State of Delaware, to the extent such counsel deems proper and specified in such opinion, upon the opinion of other counsel of good standing whom such counsel believes to be reliable and who are satisfactory to counsel for the Placement Agents; and (B) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company, TWI or TBS and public officials.
EXHIBIT B
FORM OF OPINION OF CRAVATH, SWAINE & MOORE
(i) each of the Company and TWI is a corporation validly existing in good standing under the laws of the State of Delaware, with full corporate power and authority to own its properties and conduct its business as described in the Offering Memorandum;
(ii) the Securities conform in all material respects to the description thereof contained in the Offering Memorandum;
(iii) the Indenture has been duly authorized, executed and delivered by each of the Company and TWI and, assuming due authorization, execution and delivery by TBS and the Trustee, constitutes a legal, valid and binding instrument enforceable against each of the Company, TWI and TBS in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law); and the Debt Securities have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Placement Agents pursuant to the Placement Agreement, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law);
(iv) the Securities are eligible for resale by the Placement Agents and by subsequent transferees to persons who constitute Qualified Institutional Buyers under Rule 144A under the Securities Act in accordance with the provisions of such rule; assuming (i) the accuracy of, and compliance with, the representations, warranties and covenants of the Company, TWI and TBS in Sections 1(c), (e), (f) and (u) of the Placement Agreement, (ii) the accuracy of, and compliance with, the representations, warranties and covenants of the Placement Agents in Section 2(b) of the Placement Agreement, (iii) the accuracy of the representations and warranties of each of the purchasers to whom the Placement Agents initially resell the Securities, as specified in Section 2(b) of the Placement Agreement (and as set forth in the certificate, if any, required to be executed and delivered by each such subsequent transferee) and (iv) the compliance by the Placement Agents with the offering and transfer procedures and restrictions described in the Offering Memorandum, (x) it is not necessary in
connection with the offer, sale and delivery of the Securities or in connection with the initial resale of such Securities in the manner contemplated by the Placement Agreement and the Offering Memorandum to register the Securities under the Securities Act, and (y) no consent, approval, authorization or order of, giving of notice to, or registration with, or taking of any other action in respect of, any federal or New York State governmental authority or agency is required for the authorization, issuance, sale and delivery of the Securities by the Company, TWI and TBS or the consummation of the transactions contemplated by the Placement Agreement or the Registration Rights Agreement (except for the registration of the Securities or the Exchange Securities pursuant to the Registration Rights Agreement under the Securities Act and the registration of the Securities and the Exchange Securities uner state securities laws), in either case, it being understood that no opinion is expressed as to any subsequent resale of any Securities; and
(v) the Placement Agreement and the Registration Rights Agreement have been duly authorized, executed and delivered by the Company and TWI.
We are admitted to practice in the State of New York, and we express no opinion as to any matters governed by any law other than the law of the State of New York, the Federal law of the United States of America and the General Corporation Law of the State of Delaware; provided that we express no opinion with respect to (a) the Communications Act of 1934, as amended, or Federal or state energy, utility or environmental laws and, in each case, the rules and regulations promulgated thereunder, including the rules and regulations promulgated by the Federal Communications Commission or (b) any matter relating to any statute, ordinance, license, franchise, approval, authorization, or permit of any governmental authority applicable to the construction, ownership or operation of any cable television system or any component thereof, including the reception and transmission of signals by microwave or, with respect to the matters described in the foregoing clauses (a) and (b), the impact thereof on the Company, TWI or TBS, including with respect to the transactions contemplated by the Placement Agreement and the Offering Memorandum. In particular, we do not purport to pass on any matter governed by the laws of the State of Georgia.
EXHIBIT C
FORM OF SIDE LETTER OF CRAVATH, SWAINE & MOORE
Although we have made certain inquiries and investigations in connection with the preparation of the Offering Memorandum, the limitations inherent in the role of outside counsel are such that we cannot and do not assume responsibility for the accuracy or completeness of the statements made in the Offering Memorandum, except insofar as such statements relate to us and except to the extent set forth in paragraph (ii) of our opinion to you dated the date hereof. Subject to the foregoing, we hereby advise you that our work in connection with this matter did not disclose any information that gave us reason to believe that the Offering Memorandum (except for the financial statements and other information of an accounting, statistical or financial nature included therein, as to which we do not express any view), as of its date or as of the date hereof, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
Dated January 12, 1998
among
TIME WARNER COMPANIES, INC.
TIME WARNER INC.
TURNER BROADCASTING SYSTEM, INC.
and
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
AND
J. P. MORGAN SECURITIES INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into January 12, 1998, among TIME WARNER COMPANIES INC., a Delaware corporation (the "Company"), TIME WARNER INC., a Delaware corporation ("TWI"), TURNER BROADCASTING SYSTEM, INC., a Georgia corporation ("TBS") and MORGAN STANLEY & CO. INCORPORATED, BEAR, STEARNS & CO. INC., CHASE SECURITIES INC., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED and J. P. MORGAN SECURITIES INC. (each a "Placement Agent" and collectively the "Placement Agents").
This Agreement is made pursuant to the Placement Agreement, dated as of January 6, 1998, among the Company, TWI, TBS and the Placement Agents (the "Placement Agreement"), which provides for the sale by the Company to the Placement Agents of an aggregate principal amount of $500,000,000 of 6.95% Debentures Due 2028 unconditionally guaranteed by TWI and TBS (the "Debentures"). In order to induce the Placement Agents to enter into the Placement Agreement, each of the Company, TWI and TBS has agreed to provide to the Placement Agents and their direct and indirect transferees the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Placement Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from time to time.
"Closing Date" shall mean the Closing Date as defined in the Placement Agreement.
"Company" shall have the meaning set forth in the preamble and shall also include the Company's successors.
"Exchange Offer" shall mean the exchange offer by the Company of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933 Act effected pursuant to an Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including
the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
"Exchange Securities" shall mean the debentures of the Company containing terms identical to the Debentures (except that interest thereon shall accrue from the last date on which (x) interest was paid on the Debentures or (y) if no such interest has been paid, from the date on which the Debentures are issued, and except that such Exchange Securities shall bear no legend with respect to, and shall be free from, restrictions on transfer), to be offered to Holders of Debentures in exchange for Debentures pursuant to the Exchange Offer.
"Holder" shall mean any Placement Agent, for so long as it owns any Registrable Securities, and each of its successors, assigns and direct and indirect transferees who become beneficial owners of Registrable Securities.
"Indenture" shall mean the Indenture relating to the Debentures as the same may be amended from time to time in accordance with the terms thereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of outstanding Registrable Securities.
"Person" shall mean an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.
"Placement Agent" shall have the meaning set forth in the preamble.
"Placement Agreement" shall have the meaning set forth in the preamble.
"Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.
"Registrable Securities" shall mean the Securities; provided,
however, that the Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Securities shall
have been declared effective under the 1933 Act and such Securities
shall have been disposed of pursuant to such Registration Statement,
(ii) such Securities have been sold to the public pursuant to Rule
144(k) (or any similar provision then in force, but not Rule 144A)
under the 1933 Act, (iii) such Securities shall have ceased to be
outstanding or (iv) upon the consummation of the Exchange Offer but
only with respect to Securities held by a Holder that is eligible to
receive freely tradeable Exchange Securities in connection with the
Exchange Offer.
"Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers,
Inc. registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Exchange Securities or Registrable Securities), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees and (v) the fees and disbursements of counsel for the Company and of the independent public accountants of the Company, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, but excluding fees of counsel to the underwriters or the Holders and underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder; provided, however, that the Company will pay the reasonable fees and disbursements of one counsel for the Placement Agents and Holders with respect to all Shelf Registration Statements.
"Registration Statement" shall mean any registration statement of the Company which covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall mean the 6.95% Debentures Due 2028 unconditionally guaranteed by TWI and TBS.
"Shelf Registration" shall mean a registration effected pursuant to a Shelf Registration Statement.
"Shelf Registration Statement" shall mean a "shelf" registration statement of the Company which covers Registrable Securities on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein; and, in the event that the Company is not eligible to file a "shelf" registration statement under Rule 415 to register Registrable Securities held by any Holder who is ineligible to receive freely tradeable Exchange Securities in the Exchange Offer, "Shelf Registration Statement" shall mean any Registration Statement with respect to such Registrable Securities on an appropriate form, including an Exchange Offer Registration Statement.
"Trustee" shall mean the trustee with respect to the Debentures under the Indenture.
2. Registration Under the 1933 Act.
(a) Exchange Offer Registration. To the extent not prohibited by any applicable law or applicable interpretation of the Staff of the SEC, each of the Company, TWI and TBS shall use its best efforts to cause to be filed with the SEC within 150 days of the Closing Date the Exchange Offer Registration Statement covering the offer by the Company to the Holders to exchange Registrable Securities (other than Registrable Securities held by any affiliate of the Company or by a Placement Agent or other distribution participant constituting an unsold allotment) for Exchange Securities, and shall use its best efforts to have such Exchange Offer Registration Statement declared effective by the SEC within 180 days after the date hereof and to have such Exchange Offer Registration Statement remain effective until the closing of the Exchange Offer. The Company shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement has been declared effective by the SEC by mailing the related exchange offer Prospectus and accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this Registration Rights Agreement and that all Registrable Securities validly tendered will be accepted for exchange;
(ii) the date of acceptance for exchange (which shall be a period of at least 45 days from the date such notice is mailed, or longer if required by applicable law) (the "Exchange Date");
(iii) that any Registrable Security not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Registration Rights Agreement;
(iv) that Holders electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to surrender such Registrable Security, together with the enclosed letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice prior to the close of business on the Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not later than the close of business on the Exchange Date, by sending to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the aggregate principal amount of Registrable Securities delivered for exchange and a statement that such Holder is withdrawing his election to have such Registrable Securities exchanged.
As soon as practicable after the Exchange Date, the Company shall:
(i) accept for exchange Registrable Securities or portions thereof tendered and not validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee to promptly authenticate and mail to each Holder, a new Exchange Security, as the case may be, equal in principal amount to the principal amount of the Registrable Securities surrendered by such Holder.
If the Company, TWI and TBS effect the Exchange Offer, the Company, TWI and TBS will be entitled to close the Exchange Offer in accordance with the terms hereof provided that the Company has accepted all Debentures theretofore validly tendered in accordance with the terms of the Exchange Offer.
Each of the Company, TWI and TBS shall use its best efforts to complete the Exchange Offer as provided above and shall comply with the applicable requirements of the 1933 Act, the 1934 Act and other applicable laws in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that (i) the Exchange Offer does not violate applicable law or any applicable interpretation of the Staff of the SEC and (ii) there is no injunction, order or decree issued by any court or any governmental agency that would prohibit, prevent or otherwise materially impair the ability of the Company to proceed with the Exchange Offer. The Company shall inform the Placement Agents of the names and addresses of the Holders to whom the Exchange Offer is made, and the Placement Agents shall have the right to contact such Holders and otherwise facilitate the tender of Registrable Securities in the Exchange Offer.
For a period of 90 days after the Exchange Date, each of the Company, TWI and TBS shall also use its best efforts to make available a prospectus meeting the requirements of the 1933 Act which may be the Prospectus contained in the Exchange Offer Registration Statement or the Prospectus contained in a Shelf Registration Statement, as such Registration Statements may be amended or supplemented from time to time, to holders which are broker-dealers (and which identify themselves as such) in connection with resales of Exchange Securities received in exchange for Registrable Securities, where such Registrable Securities were acquired by such broker-dealers as a result of market-making or other trading activities; provided that each holder which is a broker-dealer agrees that, upon receipt of notice from the Company of the occurrence of any event which makes any statement in the Prospectus untrue in any material respect or which requires the making of any changes in the Prospectus in order to make the statements therein not misleading (which notice the Company agrees to deliver promptly to such broker-dealer), such broker-dealer will suspend use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to such broker-dealer. If the Company shall give any such notice to suspend the use of the Prospectus, it shall extend the 90-day period referred to above by the number of days during the period from and including the date of the giving of such notice to and including the date when broker-dealers shall have received copies of the supplemented or amended Prospectus necessary to permit resales of the Exchange Securities.
In the event that, at the Exchange Date, any of the Placement Agents shall not have sold all of the Registrable Securities initially purchased from the Company by such Placement Agent to unaffiliated investors, upon such Placement Agent's request (made within 10 days after the Exchange Date), each of the Company, TWI and TBS will use its best efforts to file promptly, or if so requested by any Placement Agent, on a later date (which date shall not exceed the date that is six months after the Exchange Date), a Shelf Registration Statement or a post-effective amendment to the Exchange Offer Registration Statement, if acceptable to the SEC, to register all such Registrable Securities for all such Placement Agents. The Company will keep such Shelf Registration Statement or other Registration Statement effective and make available to such Placement Agents a Prospectus meeting the requirements of the 1933 Act for a period of 120 days, provided that each such Placement Agent agrees that, upon receipt of notice from the Company of the happening of any event which makes any statement
in the Prospectus untrue in any material respect or which requires the making of any changes in the Prospectus in order to make the statements therein not misleading (which notice the Company agrees to deliver promptly to such Placement Agents), such Placement Agent will suspend use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to such Placement Agent. If the Company shall give any such notice to suspend the use of the Prospectus, it shall extend the 120-day period referred to above by the number of days during the period from and including the date of the giving of such notice to and including the date when Placement Agents shall have received copies of the supplemented or amended Prospectus necessary to permit sales of their Securities.
(b) Shelf Registration. In the event that the Company determines that the Exchange Offer Registration provided in Section 2(a) above is not available or may not be consummated because it would violate applicable law or the applicable interpretations of the Staff of the SEC, or in the event the Exchange Offer is not for any other reason consummated within 225 days of the Closing Date, each of the Company, TWI and TBS shall use its best efforts to cause to be filed as soon as practicable after such determination or date, as the case may be, a Shelf Registration Statement providing for the sale by all Holders of all of the Registrable Securities (including sales or resales by broker-dealers of Registrable Securities acquired by such broker-dealers as a result of market-making or other trading activities, and sales or resales by the Placement Agents of Registrable Securities initially purchased from the Company by such Placement Agents and not previously sold to unaffiliated investors) and to have such Shelf Registration Statement declared effective by the SEC. Each of the Company, TWI and TBS agrees to use its best efforts to keep the Shelf Registration Statement continuously effective until the second anniversary of the Closing Date or such shorter period which will terminate when all of the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement. Each of the Company, TWI and TBS further agrees, if necessary, to supplement or amend the Shelf Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the 1933 Act or by any other rules and regulations thereunder for shelf registration, and each of the Company, TWI and TBS agrees to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) or Section 2(b), except that the Placement Agents shall pay any registration fee required in connection with the registration of Registrable Securities which constitute an unsold allotment, and except that each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Securities pursuant to a Shelf Registration Statement, and each Holder shall pay all expenses of its counsel; provided, however, that the Company will pay the reasonable fees and disbursements of one counsel for the Placement Agents and Holders with respect to all Shelf Registration Statements.
(d) Effective Registration Statement. An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that, if, after it has been declared effective, the offering of Registrable Securities pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency
or court, such Registration Statement will be deemed not to have become effective during the period of such interference until the offering of Registrable Securities pursuant to such Registration Statement may legally resume.
If the Company, TWI and TBS fail to comply with the above provisions, additional interest (the "Additional Interest") shall be assessed as follows:
(i) If the Exchange Offer Registration Statement or Shelf Registration Statement is not filed within 150 days following the Closing Date, then commencing on the 151st day after the Closing Date, Additional Interest shall be accrued on the Debentures over and above the accrued interest at a rate of .50% per annum; or
(ii) If an Exchange Offer Registration Statement or Shelf Registration Statement is filed pursuant to (i) above and is not declared effective within 180 days following the Closing Date, then commencing on the 181st day after the Closing Date, Additional Interest shall be accrued on the Debentures over and above the accrued interest at a rate of .50% per annum; or
(iii) If either (A) the Company has not exchanged Exchange Debentures for all Debentures validly tendered in accordance with the terms of the Exchange Offer on or prior to 45 days after the date on which the Exchange Offer Registration Statement was declared effective, or (B) if applicable, the Shelf Registration Statement has been declared effective but such Shelf Registration Statement ceases to be effective at any time prior to two years from the Closing Date, then Additional Interest shall be accrued on the Debentures over and above the accrued interest at a rate of .50% per annum immediately following the (x) 46th day after such effective date, in the case of (A) above, or (y) the day such Shelf Registration Statement ceases to be effective in the case of (B) above:
provided, however, that the Additional Interest rate on the Debentures may not exceed .50% per annum; and, provided, further, that (1) upon the filing of the Exchange Offer Registration Statement or Shelf Registration Statement (in the case of (i) above), (2) upon the effectiveness of the Exchange Offer Registration Statement or Shelf Registration Statement (in the case of (ii) above), or (3) upon the exchange of Exchange Debentures for all Debentures tendered or upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective prior to two years from the Closing Date (in the case of (iii) above), Additional Interest on the Debentures as a result of such clause (i), (ii) or (iii) shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses
(i), (ii) or (iii) above will be payable in cash, on the same original payment
dates of the Debentures. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount of
the Debentures, multiplied by a fraction, the numerator of which is the number
of days such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
3. Registration Procedures.
In connection with the obligations of the Company with respect to the Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement on the appropriate form under the 1933 Act, which form shall (x) be selected by the Company, (y) in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the applicable selling Holders under Section 2(a) or Section 2(b), as the case may be, and (z) comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith and use its best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period, cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the 1933 Act;
(c) in the case of a Shelf Registration, furnish to the applicable selling Holders of Registrable Securities under Section 2(a) or Section 2(b), as the case may be, and to the underwriters of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as each such Holder or underwriter may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Securities;
(d) use its best efforts to register or qualify the Registrable Securities under all applicable state securities or "blue sky" laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement shall reasonably request in writing by the time the applicable Registration Statement is declared effective by the SEC, and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Company shall not be required to (i) qualify as a foreign partnership, or corporation, as the case may be, or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (ii) file any general consent to service of process or (iii) subject itself to taxation in any such jurisdiction if it is not so subject;
(e) in the case of a Shelf Registration, notify the applicable selling Holders of Registrable Securities promptly and, if requested by such Holder, confirm such advice in writing (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any formal proceedings for that purpose, (iv) if, between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, in each case relating to the offering or the registration thereof, cease to be true and correct in all material respects or if the Company receives
any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose and (v) of the happening of any event during the period a Shelf Registration Statement is effective which makes any statement made in such Shelf Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading;
(f) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment;
(g) in the case of a Shelf Registration (other than a Shelf Registration to permit Holders which are broker-dealers to deliver a Prospectus in connection with any resale of Exchange Securities), furnish to each Holder of Registrable Securities, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration (other than a Shelf Registration to permit Holders which are broker-dealers to deliver a Prospectus in connection with any resale of Exchange Securities), or a post-effective amendment to an Exchange Offer Registration Statement or other Registration Statement covering a sale by the Placement Agents of any unsold allotment, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation, exchange and delivery of certificates representing Registrable Securities to be sold and not bearing any legends with respect to transfer restrictions and enable such Registrable Securities to be in such denominations (consistent with the provisions of the Indenture and registered in such names as the selling Holders may reasonably request at least two business days prior to the closing of any sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any event contemplated by Section 3(e)(v) hereof, use its best efforts to prepare a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that the Company shall not be required to amend or supplement the Shelf Registration Statement, any related Prospectus or any document incorporated therein by reference in the event that, and for so long as, (A) an event occurs and is continuing as a result of which the Shelf Registration Statement, any related Prospectus or any document incorporated therein by reference as then amended or supplemented would, in the Company's good faith judgment, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which they are made, and (B) the Company determines in its good faith judgment that the disclosure of such event at such time would materially adversely affect the interests of the Company. The Company agrees to notify you to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and you hereby agree to
suspend use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission. At such time as such public disclosure is otherwise made or the Company determines in its good faith judgment that the disclosure in the Prospectus of an event described above would no longer materially adversely affect the Company or its equityholders or that such disclosure is not necessary, the Company agrees promptly to notify you of such determination, to amend or supplement the Prospectus if necessary to correct any untrue statement or omission therein and to furnish you such numbers of copies of the Prospectus as so amended or supplemented as you may reasonably request;
(j) in the case of a Shelf Registration, or a post-effective amendment to an Exchange Offer Registration Statement or other Registration Statement covering a sale by the Placement Agents of any unsold allotment, (x) a reasonable time prior to the filing in the case of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or upon filing in the case of any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Placement Agents on behalf of the Holders or to the Placement Agents on their own behalf, as the case may be, and make such of the representatives of the Company as shall be reasonably requested by the Holders of Registrable Securities in the case of a Shelf Registration pursuant to Section 2(b), or the Placement Agents on behalf of the Holders or to the Placement Agents on their own behalf, as the case may be, available for discussion of such document and (y) use its best efforts to provide the Placement Agents, if the Placement Agents so request, with a "comfort letter" from Ernst and Young (or such other independent auditors of the Company at such time) and other appropriate accountants, dated the effective date of any Shelf Registration Statement or of any post-effective amendment (other than an Exchange Offer Registration Statement) covering such matters and in such form as is consistent with market practice with respect to underwriters' "comfort letters" at such time;
(k) obtain a CUSIP number and, if applicable, a CINS number for all Exchange Securities, or Registrable Securities, as the case may be, not later than the effective date of a Registration Statement; and
(l) prior to the issuance of the Debentures, cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the registration of the Exchange Securities, or Registrable Securities, as the case may be, cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and execute, and use its best efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner.
In the case of a Shelf Registration Statement, the Company may
(as a condition to such Holder's participation in the Shelf Registration)
require each Holder of Registrable Securities to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Securities as the Company may from time to time reasonably
request in writing.
In the case of a Shelf Registration Statement, each Holder (as a condition to such Holder's participation in such Shelf Registration) agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(e)(v) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if so directed by the Company, such Holder will deliver to the Company (at its expense) all copies in its possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. If the Company shall give any such notice to suspend the disposition of Registrable Securities pursuant to a Registration Statement, the Company shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions.
4. Indemnification; Contribution.
(a) Each of the Company, TWI and TBS shall jointly and severally indemnify and hold harmless each of the Placement Agents, each Holder and each Person, if any, who controls any Holder within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) pursuant to which Exchange Securities or Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by reference, or by the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (other than in connection with a settlement described in Section 4(a)(ii) below);
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including, subject to the provisions of subsection (c), reasonable fees and disbursements of counsel chosen by any Holder or any underwriter), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expenses are not paid under subparagraph (i) or subparagraph (ii) above;
provided, however, that none of the Company, TWI or TBS shall be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Placement Agents, such Holder or underwriter expressly for use in the Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto).
(b) The Placement Agents and (as a condition to such Holder's participation in such registration) each Holder severally agrees to indemnify and hold harmless the Company, TWI, TBS, the Placement Agents, each underwriter and the other selling Holders, and each of their respective directors and officers (including each officer of the Company (and any guarantor of the Securities or the Registrable Securities) who signed the Registration Statement), and each Person, if any, who controls the Company, TWI, TBS, the Placement Agents, any underwriter or any other selling Holder within the meaning of Section 15 of the 1933 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in any Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by the Placement Agents or such selling Holder expressly for use in such Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give reasonably prompt notice to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying party shall not relieve it from any liability which it may have otherwise than under this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for the fees and expenses of more than one counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 4 is for any reason held to be unenforceable although applicable in accordance with its terms, the Company, TWI, TBS, the Placement Agents and the Holders shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the Company, TWI, TBS, the Placement Agents and the Holders; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. As between the Company, TWI, TBS, the Placement Agents and the Holders, such parties shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement in such proportion as shall be appropriate to reflect (i) the relative benefits received by the Company, TWI and TBS on the one hand and the Placement Agents and the Holders on the other hand, from the offering of the Exchange Securities or Registrable Securities included in such offering and (ii) the relative fault of the Company, TWI and TBS on the one hand and the Placement Agents and the Holders on the other, with respect to the statements or omissions which resulted in such loss, liability, claim, damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The Company, TWI, TBS, the Placement Agents and the Holders of the Registrable Securities agree that it would not be just and equitable if contribution pursuant to this Section 4 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the relevant equitable considerations. For purposes of this Section 4, each Person, if any, who controls the Placement Agents or a Holder within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Placement Agents or such Holder, and each director of the Company, each officer of the Company who signed a Registration Statement, and each Person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company.
5. Miscellaneous.
(a) No Inconsistent Agreements. Neither the Company, TWI nor TBS has entered into nor will such entities on or after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of other issued and outstanding securities of such parties under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement, excluding the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure; provided, however, that no amendment, modification or supplement or waiver or consents to the departure with respect to the provisions of Section 4 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder of Registrable Securities.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 5(c), which address initially is, with respect to the Placement Agents,
the address set forth in the Placement Agreement; and (ii) if to the Company,
TWI or TBS initially at the Company's address set forth in the Placement
Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 5(c).
All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall be concurrently delivered by the person giving the same to the Trustee or the Transfer Agent, as the case may be.
(d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Placement Agreement. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof.
(e) Third Party Beneficiary. The Placement Agents shall be third party beneficiaries to the agreements made hereunder between the Company, TWI and TBS on the one hand, and the Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent they deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder.
(f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
(i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
TIME WARNER INC.
By /s/ Thomas W. McEnerney ------------------------------- Name: Thomas W. McEnerney Title: Vice President |
TIME WARNER COMPANIES, INC.
By /s/ Thomas W. McEnerney ------------------------------- Name: Thomas W. McEnerney Title: Vice President |
TURNER BROADCASTING SYSTEM, INC.
By /s/ Thomas W. McEnerney ------------------------------- Name: Thomas W. McEnerney Title: Vice President |
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J. P. MORGAN SECURITIES INC.
By: MORGAN STANLEY & CO. INCORPORATED
By /s/ Michael Fusco ---------------------------- Name: Michael Fusco Title: Vice President |
[Letterhead of]
CRAVATH, SWAINE & MOORE
February 5, 1998
$500,000,000
6.95% DEBENTURES DUE 2028
OF TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC. AND
TURNER BROADCASTING SYSTEM, INC.
Ladies and Gentlemen:
We have acted as counsel for Time Warner Companies, Inc., a Delaware corporation ("TWC"), Time Warner Inc., a Delaware corporation ("TWI") and Turner Broadcasting System, Inc., a Georgia corporation ("TBS" and, together with TWI, the "Guarantors") in connection with the Registration Statement on Form S-4 (the "Registration Statement") being filed by TWC and the Guarantors with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to (i) $500,000,000 aggregate principal amount of TWC's 6.95% Debentures Due 2028 (the "Exchange Debentures") and (ii) the guarantees of the Exchange Debentures by the Guarantors (the "Guarantees"). The Exchange Debentures and the Guarantees will be issued under an Indenture dated as of January 15, 1993, as supplemented from time to time, including the Fifth Supplemental Indenture dated as of January 12, 1998 (as so supplemented, the "Indenture"), among TWC, as issuer, TWI and TBS, as guarantors, and the Chase Manhattan Bank, as trustee (the "Trustee"), in exchange for $500,000,000 aggregate principal amount of 6.95% Debentures Due 2028 (the "Outstanding Debentures"), pursuant to an exchange offer (the "Exchange Offer"). The Outstanding Debentures were originally issued in a transaction exempt from the registration requirements of the Securities Act.
In that connection, we have examined originals, or copies certified or otherwise identified to our
satisfaction, of such documents, corporate records and other instruments as we
have deemed necessary or appropriate for the purposes of this opinion, including
(a) the Certificate of Incorporation, as amended, of each of TWC, TWI and TBS,
(b) the By-laws, as amended, of each of TWC, TWI and TBS, (c) the Indenture, (d)
the form of the Exchange Debentures, (e) the Resolutions of the Board of
Directors of each of TWC, TWI and TBS authorizing the registration of the
Exchange Debentures and the Guarantees and (f) certain resolutions adopted by
the Board of Directors of each of TWC, TWI and TBS.
Based on the foregoing, we are of opinion as follows:
1. The Indenture has been duly authorized, executed and delivered by each of TWC, the Guarantors and the Trustee. The Indenture constitutes a legal, valid and binding obligation of TWC and the Guarantors, enforceable against TWC and the Guarantors in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether such enforceability is considered in a proceeding in equity or at law).
2. The Exchange Debentures have been duly authorized by TWC and, when executed and authenticated in accordance with the provisions of the Indenture and delivered in exchange for the Outstanding Debentures pursuant to the Exchange Offer, and the Guarantees related thereto will constitute legal, valid and binding obligations of TWC and the Guarantors, respectively, enforceable against TWC and the Guarantors, respectively, in accordance with their respective terms and entitled to the benefits of the Indenture (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether such enforceability is considered in a proceeding in equity or at law).
The opinion set forth in paragraph 1 above is qualified to the extent we have assumed the due execution and delivery of the Indenture by the Trustee pursuant to appropriate corporate authority.
We are admitted to practice in the State of New York, and we express no opinion as to matters governed
by any laws other than the laws of the State of New York, the State of Delaware and the Federal laws of the United States of America. In particular, our opinion set forth above, in so far as it involves matters of law of the State of Georgia, is qualified to the extent we have relied upon the opinion dated February 5, 1998, of Louise S. Sams, Esq., Vice President and General Counsel of TBS (the "Sams Opinion"), a copy of which has been delivered to you, and we have assumed, without independent investigation, the correctness of, and take no responsibility for, the Sams Opinion.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to the use of our name under the caption "Legal Opinions" in the Prospectus contained in the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Cravath, Swaine & Moore
Time Warner Companies, Inc.
Time Warner Inc.
Turner Broadcasting System, Inc.
75 Rockefeller Plaza
New York, NY 10019
|
EXHIBIT 12
TIME WARNER INC.
RATIO OF EARNINGS TO FIXED CHARGES
NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- ----------------------------------------------------
PRO PRO
FORMA HISTORICAL FORMA HISTORICAL
------- --------------- ------- ------------------------------------------
1997(a) 1997 1996 1996(a) 1996 1995 1994 1993 1992
------- ------ ------ ------- ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT RATIOS)
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 373 $ 360 $ (172) $ (117 ) $ 4 $ 2 $ 89 $ 81 $ 320
Interest expense.......... 742 792 688 1,011 968 877 769 698 729
Amortization of
capitalized interest.... 17 17 1 19 6 2 2 -- 19
Portion of rents
representative of an
interest factor......... 63 63 43 86 63 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 719 682 594 844 801 691 665 663 97
Undistributed losses of
less than 50% owned
companies............... 16 16 24 46 52 117 82 47 56
------- ------ ------ ------- ------ ------ ------ ------ ------
Total earnings........ $1,984 $1,984 $1,232 $1,961 $1,966 $1,757 $1,659 $1,543 $1,306
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
Fixed charges:
Interest expense.......... $ 742 $ 792 $ 688 $1,011 $ 968 $ 877 $ 769 $ 698 $ 729
Capitalized interest...... 17 17 1 23 7 4 2 -- 15
Portion of rents
representative of an
interest factor......... 63 63 43 86 63 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 504 457 446 668 607 697 668 664 81
------- ------ ------ ------- ------ ------ ------ ------ ------
Total fixed charges... $1,380 $1,383 $1,232 $1,860 $1,717 $1,646 $1,491 $1,416 $ 910
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
Ratio of earnings to fixed
charges..................... 1.4 x 1.4x 1.0x 1.1 x 1.1x 1.1x 1.1x 1.1x 1.4x
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
|
(a) The pro forma ratio of earnings to fixed charges for TWI for the nine months ended September 30, 1997 and the year ended December 31, 1996 gives effect to (i) the TWE-A/N Transfers and (ii) with respect to 1996 only, the TBS Transaction, the Preferred Stock Refinancing and certain other debt refinancings as if such transactions had occurred at the beginning of such periods. The pro forma information presented above should be read in conjunction with the pro forma consolidated condensed financial statements contained in TWI's Current Report on Form 8-K dated November 13, 1997 and incorporated herein by reference.
EXHIBIT 12.1
TIME WARNER COMPANIES, INC.
RATIO OF EARNINGS TO FIXED CHARGES
NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------- ----------------------------------------------------
PRO PRO
FORMA HISTORICAL FORMA HISTORICAL
------- --------------- ------- ------------------------------------------
1997(a) 1997 1996 1996(a) 1996 1995 1994 1993 1992
------- ------ ------ ------- ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT RATIOS)
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 282 $ 269 $ (172) $ 45 $ (15) $ 2 $ 89 $ 81 $ 320
Interest expense.......... 643 693 688 805 908 877 769 698 729
Amortization of
capitalized interest.... 1 1 1 2 2 2 2 -- 19
Portion of rents
representative of an
interest factor......... 41 41 43 55 55 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 719 682 594 844 801 691 665 663 97
Undistributed losses of
less than 50% owned
companies............... 10 10 24 50 50 117 82 47 56
------- ------ ------ ------- ------ ------ ------ ------ ------
Total earnings........ $1,750 $1,750 $1,232 $1,873 $1,873 $1,757 $1,659 $1,543 $1,306
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
Fixed charges:
Interest expense.......... $ 643 $ 693 $ 688 $ 805 $ 908 $ 877 $ 769 $ 698 $ 729
Capitalized interest...... -- -- 1 1 1 4 2 -- 15
Portion of rents
representative of an
interest factor......... 41 41 43 55 55 57 52 54 85
Preferred stock dividend
requirements of
majority-owned
subsidiaries............ 54 54 54 72 72 11 -- -- --
Adjustment for partially
owned subsidiaries and
50% owned companies..... 504 457 446 668 607 697 668 664 81
------- ------ ------ ------- ------ ------ ------ ------ ------
Total fixed charges... $1,242 $1,245 $1,232 $1,601 $1,643 $1,646 $1,491 $1,416 $ 910
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
Ratio of earnings to fixed
charges..................... 1.4 x 1.4x 1.0x 1.2 x 1.1x 1.1x 1.1x 1.1x 1.4x
------- ------ ------ ------- ------ ------ ------ ------ ------
------- ------ ------ ------- ------ ------ ------ ------ ------
|
(a) The pro forma ratio of earnings to fixed charges for TWC for the nine months ended September 30, 1997 and the year ended December 31, 1996 gives effect to (i) the TWE-A/N Transfers and (ii) with respect to 1996 only, the Preferred Stock Refinancing and certain other debt refinancings as if such transactions had occurred at the beginning of such periods. The pro forma information presented above should be read in conjunction with the pro forma consolidated condensed financial statements contained in TWI's Current Report on Form 8-K dated November 13, 1997 and incorporated herein by reference.
EXHIBIT 12.2
TURNER BROADCASTING SYSTEM, INC.
RATIO OF EARNINGS TO FIXED CHARGES
NINE MONTHS THREE MONTHS NINE MONTHS
ENDED ENDED ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, ----------------------------
1997 1996 1996 1995 1994 1993 1992
------------- ------------- ------------- ---- ---- ---- ----
(IN MILLIONS, EXCEPT RATIOS)
Earnings:
Net income (loss) before
income taxes and
extraordinary items..... $ 143 $ 42 $ (42) $173 $ 79 $121 $100
Interest expense.......... 153 60 141 209 219 195 201
Amortization of
capitalized interest.... 15 5 13 11 7 -- --
Portion of rents
representative of an
interest factor......... 23 8 23 31 30 26 22
Adjustment for partially
owned subsidiaries and
50% owned companies..... -- -- -- -- -- -- 9
Undistributed losses of
less than 50% owned
companies............... 6 2 1 16 15 16 --
----- ----- ----- ---- ---- ---- ----
Total earnings........ $ 340 $ 117 $ 136 $440 $350 $358 $332
----- ----- ----- ---- ---- ---- ----
----- ----- ----- ---- ---- ---- ----
Fixed charges:
Interest expense.......... $ 153 $ 60 $ 141 $209 $219 $195 $201
Capitalized interest...... 16 6 16 15 14 -- --
Portion of rents
representative of an
interest factor......... 23 8 23 31 30 26 22
Adjustment for partially
owned subsidiaries and
50% owned companies..... -- -- -- -- -- -- 9
----- ----- ----- ---- ---- ---- ----
Total fixed charges... $ 192 $ 74 $ 180 $255 $263 $221 $232
----- ----- ----- ---- ---- ---- ----
----- ----- ----- ---- ---- ---- ----
Ratio of earnings to fixed
charges
(deficiency in the coverage
of fixed charges by earnings
before fixed charges)(a).... 1.8x 1.6x $ (44) 1.7x 1.3x 1.6x 1.4x
----- ----- ----- ---- ---- ---- ----
----- ----- ----- ---- ---- ---- ----
|
(a) TBS became a wholly owned subsidiary of TWI on October 10, 1996 through a merger with a subsidiary of TWI in connection with the TBS Transaction. The ratios of earnings to fixed charges of TBS for all post-merger periods have been adjusted to reflect the Issuer's basis of accounting. The ratios of earnings to fixed charges (or coverage deficiencies) of TBS for all pre-merger periods are reflected at TBS's historical cost basis of accounting. Certain reclassifications have been made to TBS's ratios of earnings to fixed charges for pre-merger periods to conform to the post-merger presentation.
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the caption 'Experts' in the Registration Statement on Form S-4 and related Prospectus of Time Warner Companies Inc. ('TWC') for the registration of $500,000,0000 of Debt Securities of TWC unconditionally guaranteed by Time Warner Inc. ('TWI') and Turner Broadcasting System, Inc. and to the incorporation by reference therein of (i) our reports dated February 11, 1997, with respect to the consolidated financial statements and schedules of TWI and Time Warner Entertainment Company, L.P., and our report dated March 3, 1995 with respect to the combined financial statements of the Time Warner Service Partnerships, incorporated by reference from TWI's Annual Report on Form 10-K for the year ended December 31, 1996, as amended by TWI's Forms 10-K/A dated March 27, 1997 and June 26, 1997, and (ii) our report dated March 8, 1996, with respect to the consolidated financial statements and schedule of Cablevision Industries Corporation and Subsidiaries, from TWI's Current Report on Form 8-K dated November 13, 1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
February 3, 1998
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports and to all references to our Firm included in or made a part of this Registration Statement on Form S-4 for the registration under the Securities Act of 1933, as amended, of Debt Securities of Time Warner Companies, Inc. unconditionally guaranteed by Time Warner Inc., and Turner Broadcasting System, Inc.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
February 3, 1998
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Time Warner Companies, Inc. ('TWC') related to the registration of Debt Securities of TWC unconditionally guaranteed by Time Warner Inc. ('TWI') and Turner Broadcasting System, Inc. of our report on the Paragon Communications financial statements and schedule dated January 19, 1995, except as to Note 6, which is as of January 27, 1995, which is incorporated by reference in TWI's Annual Report on Form 10-K for the year ended December 31, 1996. We also consent to the reference to us under the heading 'Experts' in such Registration Statement.
PRICE WATERHOUSE LLP
Denver, Colorado
February 3, 1998
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-4 of Time Warner Companies, Inc. ('TWC') related to the registration of Debt Securities of TWC unconditionally guaranteed by Time Warner Inc. and Turner Broadcasting System, Inc. of our report dated February 5, 1996, which appears on page 53 of Turner Broadcasting System, Inc.'s 1995 Annual Report to Shareholders, which is incorporated by reference in Turner Broadcasting System, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995, which is incorporated by reference in the Current Report on Form 8-K of Time Warner Inc. dated November 13, 1997, which is incorporated by reference in the Prospectus. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 43 of such Annual Report on Form 10-K. We also consent to the reference to us under the heading 'Experts' in such Prospectus.
PRICE WATERHOUSE LLP
Atlanta, Georgia
February 3, 1998
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of TIME WARNER INC., a Delaware corporation (the 'Corporation'),
hereby constitutes and appoints RICHARD J. BRESSLER, PETER R. HAJE, JOHN A.
LABARCA, GERALD M. LEVIN, PHILIP R. LOCHNER, JR. and RICHARD D. PARSONS, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power to act without the others, for him or her and in his or her name, place
and stead, in any and all capacities, to sign Registration Statements on Form
S-4 or other appropriate form and any and all amendments to such Registration
Statements (including post-effective amendments), to be filed with the
Securities and Exchange Commission in connection with the registration under the
provisions of the Securities Act of 1933, as amended, of guarantees of up to
$500 million aggregate principal amount of debt securities issuable by Time
Warner Companies, Inc., a Delaware corporation ('TWC'), in exchange for
outstanding debt securities of TWC in an aggregate principal amount of $500
million, with power where appropriate to affix thereto the corporate seal of the
Corporation and to attest said seal, and to file such Registration Statements,
including in each case a form of prospectus, and any and all amendments and
post-effective amendments to such Registration Statements, with all exhibits
thereto, and any and all documents in connection therewith, with the Securities
and Exchange Commission, hereby granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her name as of the 15th day of January, 1998.
(i) Principal Executive Officer:
/S/ GERALD M. LEVIN
.....................................................
GERALD M. LEVIN,
DIRECTOR, CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
(ii) Principal Financial Officer:
/S/ RICHARD J. BRESSLER
.....................................................
RICHARD J. BRESSLER,
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(iii) Principal Accounting Officer:
/S/ JOHN A. LABARCA
.....................................................
JOHN A. LABARCA,
SENIOR VICE PRESIDENT AND CONTROLLER
|
(iv) Directors:
/S/ MERV ADELSON /S/ J. CARTER BACOT
..................................................... ......................................................
MERV ADELSON, J. CARTER BACOT,
DIRECTOR DIRECTOR
/S/ STEPHEN F. BOLLENBACH /S/ BEVERLY SILLS GREENOUGH
..................................................... ......................................................
STEPHEN F. BOLLENBACH, BEVERLY SILLS GREENOUGH,
DIRECTOR DIRECTOR
/S/ GERALD GREENWALD /S/ CARLA A. HILLS
..................................................... ......................................................
GERALD GREENWALD, CARLA A. HILLS,
DIRECTOR DIRECTOR
/S/ REUBEN MARK /S/ MICHAEL A. MILES
..................................................... ......................................................
REUBEN MARK, MICHAEL A. MILES,
DIRECTOR DIRECTOR
/S/ RICHARD D. PARSONS /S/ DONALD S. PERKINS
..................................................... ......................................................
RICHARD D. PARSONS, DONALD S. PERKINS,
DIRECTOR AND PRESIDENT DIRECTOR
/S/ RAYMOND S. TROUBH /S/ R. E. TURNER
..................................................... ......................................................
RAYMOND S. TROUBH, R. E. TURNER,
DIRECTOR DIRECTOR
/S/ FRANCIS T. VINCENT, JR.
.....................................................
FRANCIS T. VINCENT, JR.,
DIRECTOR
|
EXHIBIT 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of TIME WARNER COMPANIES, INC., a Delaware corporation (the
'Corporation'), hereby constitutes and appoints RICHARD J. BRESSLER, PETER R.
HAJE, JOHN A. LABARCA, GERALD M. LEVIN, PHILIP R. LOCHNER, JR. and RICHARD D.
PARSONS, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power to act without the others, for him or her and in his or
her name, place and stead, in any and all capacities, to sign Registration
Statements on Form S-4 or other appropriate form and any and all amendments to
such Registration Statements (including post-effective amendments), to be filed
with the Securities and Exchange Commission in connection with the registration
under the provisions of the Securities Act of 1933, as amended, of up to $500
million aggregate principal amount of debt securities issuable by the
Corporation, in exchange for outstanding debt securities of the Corporation in
an aggregate principal amount of $500 million, with power where appropriate to
affix thereto the corporate seal of the Corporation and to attest said seal, and
to file such Registration Statements, including in each case a form of
prospectus, and any and all amendments and post-effective amendments to such
Registration Statements, with all exhibits thereto, and any and all documents in
connection therewith, with the Securities and Exchange Commission, hereby
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her name as of the 3rd day of February, 1998.
(i) Principal Executive Officer:
/S/ GERALD M. LEVIN
.................................................
GERALD M. LEVIN,
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
(ii) Principal Financial Officer:
/S/ RICHARD J. BRESSLER
.................................................
RICHARD J. BRESSLER,
DIRECTOR, EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(iii) Principal Accounting Officer:
/S/ JOHN A. LABARCA
.................................................
JOHN A. LABARCA,
SENIOR VICE PRESIDENT AND CONTROLLER
(iv) Directors:
/S/ PETER R. HAJE /S/ RICHARD D. PARSONS
..................................................... ......................................................
PETER R. HAJE, RICHARD D. PARSONS,
DIRECTOR DIRECTOR
|
EXHIBIT 24.3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of TURNER BROADCASTING SYSTEM, INC., a Georgia corporation (the 'Corporation'), hereby constitutes and appoints PETER R. HAJE, SPENCER B. HAYS, LANDEL C. HOBBS, THOMAS W. MCENERNEY, TERENCE F. MCGUIRK, WAYNE H. PACE and LOUISE S. SAMS, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power to act without the others, for him or her and in his or her name, place and stead, in any and all capacities, to sign one or more Registration Statements on Form S-4 or other appropriate form and any and all amendments to any such Registration Statements (including post-effective amendments), to be filed with the Securities and Exchange Commission, in connection with the registration under the provisions of the Securities Act of 1933, as amended, of guarantees of up to $500 million aggregate principal amount of debt securities issuable by Time Warner Companies, Inc., a Delaware corporation ('TWC'), in exchange for outstanding debt securities of TWC in an aggregate principal amount of $500 million, with power where appropriate to affix thereto the corporate seal of the Corporation and to attest said seal, and to file such Registration Statements, including in each case a form of prospectus, and any and all amendments and post-effective amendments to such Registration Statements, with all exhibits thereto, and any and all documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her name as of the 7th day of January, 1998.
(i) Principal Executive Officer:
/S/ TERENCE F. MCGUIRK
.................................................
TERENCE F. MCGUIRK,
DIRECTOR, PRESIDENT AND CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD
(ii) Principal Financial Officer:
/S/ WAYNE H. PACE
.................................................
WAYNE H. PACE,
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER
AND ADMINISTRATIVE OFFICER
(iii) Principal Accounting Officer:
/S/ LANDEL C. HOBBS
.................................................
LANDEL C. HOBBS,
VICE PRESIDENT, CONTROLLER AND
CHIEF ACCOUNTING OFFICER
|
(iv) Directors:
/S/ JEFFREY L. BEWKES /S/ RICHARD D. PARSONS
................................................. ......................................................
JEFFREY L. BEWKES, RICHARD D. PARSONS
DIRECTOR DIRECTOR
/S/ W. THOMAS JOHNSON /S/ ROBERT SHAYE
................................................. ......................................................
W. THOMAS JOHNSON, ROBERT SHAYE,
DIRECTOR DIRECTOR
/S/ GERALD M. LEVIN /S/ R. E. TURNER
................................................. ......................................................
GERALD M. LEVIN, R. E. TURNER,
DIRECTOR DIRECTOR
|
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
|
TIME WARNER COMPANIES, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-1388520
(State other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
75 ROCKEFELLER PLAZA 10019
NEW YORK, NEW YORK (Zip Code)
(Address of principal executive offices)
|
TIME WARNER INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-3527249
(State other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
75 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10019
(Address of principal executive Offices)
|
TURNER BROADCASTING SYSTEM, INC.
(Exact name of obligor as specified in its charter)
GEORGIA 58-0958695
(State other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
ONE CNN CENTER
ATLANTA, GEORGIA 30303
(Address of principal executive offices) (Zip Code)
-----------------------------------------
|
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.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 4th day of February, 1998.
THE CHASE MANHATTAN BANK
By /s/ R. Lorenzen
---------------------------
R. Lorenzen
Senior Trust Officer
|
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1997, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ......................................... $ 11,760
Interest-bearing balances ................................. 4,343
Securities:
Held to maturity securities ................................... 2,704
Available for sale securities ................................. 37,885
Federal funds sold and securities purchased under
agreements to resell ........................................ 27,358
Loans and lease financing receivables:
Loans and leases, net of unearned income ........ $127,370
Less: Allowance for loan and lease losses ....... 2,760
Less: Allocated transfer risk reserve ........... 13
--------
Loans and leases, net of unearned income,
allowance, and reserve .................................. 124,597
Trading Assets ................................................ 64,630
Premises and fixed assets (including capitalized
leases) .................................................... 2,925
Other real estate owned ....................................... 286
Investments in unconsolidated subsidiaries and
associated companies ....................................... 232
Customers' liability to this bank on acceptances
outstanding ................................................ 2,212
Intangible assets ............................................. 1,480
Other assets .................................................. 11,117
--------
TOTAL ASSETS .................................................. $291,529
========
|
LIABILITIES
Deposits
In domestic offices ........................................ $ 86,574
Noninterest-bearing ............................. $ 31,818
Interest-bearing ................................ 54,756
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .................................................. 69,887
Noninterest-bearing ............................. $ 3,777
Interest-bearing ................................ 66,110
Federal funds purchased and securities sold under
agreements to repurchase ....................................... 45,307
Demand notes issued to the U.S. Treasury ....................... 161
Trading liabilities ............................................ 47,406
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less .............. 4,578
With a remaining maturity of more than one year
through three years ................................. 261
With a remaining maturity of more than three years ....... 131
Bank's liability on acceptances executed and outstanding ....... 2,212
Subordinated notes and debentures .............................. 5,715
Other liabilities .............................................. 12,355
TOTAL LIABILITIES .............................................. 274,587
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus .................. 0
Common stock ................................................... 1,211
Surplus (exclude all surplus related to preferred stock) ...... 10,294
Undivided profits and capital reserves ......................... 5,414
Net unrealized holding gains (losses)
on available-for-sale securities ............................... 7
Cumulative foreign currency translation adjustments ............ 16
TOTAL EQUITY CAPITAL ........................................... 16,942
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................... $291,529
========
|
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
EXHIBIT 99.1
LETTER OF TRANSMITTAL
EXCHANGE OFFER FOR ALL OUTSTANDING
6.95% DEBENTURES DUE 2028
OF
TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC.
AND
TURNER BROADCASTING SYSTEM, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON
, 1998, UNLESS EXTENDED (THE 'EXPIRATION DATE'). TENDERS MAY BE
WITHDRAWN PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
DELIVERY TO: THE CHASE MANHATTAN BANK, EXCHANGE AGENT
By Mail, Hand or Overnight Courier Facsimile Transmission Number
55 Water Street (212) 638-7375 or
Room 234, North Building (212) 344-9367
New York, NY 10041 (FOR ELIGIBLE
Attention: Carlos Esteves INSTITUTIONS ONLY)
(IF BY MAIL, REGISTERED OR Confirm by Telephone
CERTIFIED MAIL RECOMMENDED) (212) 638-0828
|
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges that he or she has received and reviewed the Prospectus, dated , 1998 (the 'Prospectus'), of Time Warner Companies, Inc., a Delaware corporation ('TWC'), and this Letter of Transmittal (the 'Letter'), which together constitute TWC's offer (the 'Exchange Offer') to exchange an aggregate principal amount of up to $500,000,000 of its 6.95% Debentures Due 2028 (the 'Exchange Debentures'), for a like principal amount of its issued and outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures') with the holders thereof. The Exchange Debentures will be unconditionally guaranteed by Time Warner Inc. and Turner Broadcasting System, Inc.
For each Outstanding Debenture accepted for exchange, the holder of such Outstanding Debenture will receive an Exchange Debenture having a principal amount equal to that of the surrendered Outstanding Debenture. Interest on the Exchange Debentures will accrue from the last interest payment date on which interest was paid on the Outstanding Debentures surrendered in exchange therefor, or if no interest has been paid on the Outstanding Debentures, from January 12, 1998. Holders of Outstanding Debentures whose Outstanding Debentures are accepted for exchange will not receive any payment in respect of interest on such Outstanding Debentures otherwise payable on any interest payment date the record date for which occurs on or after consummation of the Exchange Offer. Consequently, holders who tender their Outstanding Debentures for Exchange Debentures will receive the same interest payment on July 15, 1998 (the first interest payment date with respect to the Outstanding Debentures and the Exchange Debentures) that they would have received had they not accepted the Exchange Offer.
This Letter is to be completed by a holder of Outstanding Debentures either if certificates are to be forwarded herewith or if a tender of certificates for Outstanding Debentures, if available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (the 'Book-Entry Transfer Facility') pursuant to the procedures set forth in 'The Exchange Offer -- Book-Entry Transfer' section of the
Prospectus and an Agent's Message is NOT delivered. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter. The term 'Agent's Message' means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation (as defined below), which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, this Letter and that TWC may enforce this Letter against such participant.
Holders of Outstanding Debentures whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Outstanding Debentures into the Exchange Agent's account at the Book-Entry Transfer Facility (the 'Book-Entry Confirmation') and all other documents required by this Letter to the Exchange Agent on or prior to the Expiration Date, must tender their Outstanding Debentures according to the guaranteed delivery procedures set forth in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus. See Instruction 1. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
List below the Outstanding Debentures to which this Letter relates. If the
space provided below is inadequate, the certificate numbers and principal amount
of Outstanding Debentures should be listed on a separate signed schedule affixed
hereto.
DESCRIPTION OF OUTSTANDING DEBENTURES
1 2 3
AGGREGATE
PRINCIPAL
AMOUNT OF PRINCIPAL
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE OUTSTANDING AMOUNT
(PLEASE FILL IN, IF BLANK) NUMBER(S)* DEBENTURE(S) TENDERED
------------------------------------------
------------------------------------------
------------------------------------------
Total
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* Need not be completed if Outstanding Debentures are being tendered by book-entry transfer. ** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Outstanding Debentures represented by the Outstanding Debentures indicated in column 2. See Instruction 2. Outstanding Debentures tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. See Instruction 1.
[ ] CHECK HERE IF TENDERED OUTSTANDING DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ______________________________________________ Account Number ________________________ Transaction Code Name ______________
By crediting the Outstanding Debentures to the Exchange Agent's account at the Book-Entry Transfer Facility's Automated Tender Offer Program ('ATOP') and by complying with applicable ATOP procedures with respect to the Exchange Offer, including transmitting to the Exchange Agent a computer-generated message (an 'Agent's Message') in which the holder of the Outstanding Debentures acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter, the participant in the Book-Entry Transfer Facility confirms on behalf of itself and the beneficial owners of such Outstanding Debentures all provisions of this Letter (including all representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter to the Exchange Agent.
[ ] CHECK HERE IF TENDERED OUTSTANDING DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________ Window Ticket Number (if any) ______________________________________________ Date of Execution of Notice of Guaranteed Delivery _________________________ Name of Institution which guaranteed delivery ______________________________ IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number ___________________________ Transaction Code Name ___________
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Outstanding Debentures not exchanged and/or Exchange Debentures are to be issued in the name of and sent to someone other than the person or persons whose signature(s) appear(s) on this Letter above, or if Outstanding Debentures delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above.
Issue: Exchange Debentures and/or Outstanding Debentures to:
Name(s) __________________________________________________________________
(PLEASE TYPE OR PRINT)
[ ] Credit unexchanged Outstanding Debentures delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below.
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Outstanding Debentures not exchanged and/or Exchange Debentures are to be sent to someone other than the person or persons whose signature(s) appear(s) on this letter above or to such person or persons at an address other than shown in the box entitled 'Description of Outstanding Debentures' on this Letter above.
Mail: Exchange Debentures and/or Outstanding Debentures to:
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES FOR OUTSTANDING DEBENTURES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
Dated: ------------------, 1998
X------------------------------- --------------------, 1998
X------------------------------- --------------------, 1998
SIGNATURE(S) OF OWNER DATE
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Area Code and Telephone Number ______________________________________
If a holder is tendering any Outstanding Debentures, this Letter must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Outstanding Debentures or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3.
Name(s): _______________________________________________________
Capacity: ______________________________________________________ Address: _______________________________________________________
SIGNATURE OF GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: _______________________________________
(AUTHORIZED SIGNATURE)
Dated: ___________________________________________________, 1998
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to TWC the aggregate principal amount of Outstanding Debentures indicated above. Subject to, and effective upon, the acceptance for exchange of the Outstanding Debentures tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, TWC all rights, title and interest in and to such Outstanding Debentures as are being tendered hereby.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Outstanding Debentures tendered hereby and that TWC will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by TWC. The undersigned hereby further represents that any Exchange Debentures acquired in exchange for Outstanding Debentures tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Debentures, whether or not such person is the undersigned, that neither the holder of such Outstanding Debentures nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Debentures and that neither the holder of such Outstanding Debentures nor any such other person is an 'affiliate,' as defined in Rule 405 under the Securities Act of 1933, as amended (the 'Securities Act'), of TWC, TWI or TBS.
The undersigned also acknowledges that this Exchange Offer is being made in reliance on an interpretation by the staff of the Securities and Exchange Commission (the 'Commission') that the Exchange Debentures issued in exchange for the Outstanding Debentures pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an 'affiliate' of TWC within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Debentures are acquired in the ordinary course of such holders' business and such holders have no arrangements with any person to participate in the distribution of such Exchange Debentures. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Debentures. If the undersigned is a broker-dealer that will receive Exchange Debentures for its own account in exchange for Outstanding Debentures, it represents that the Outstanding Debentures to be exchanged for the Exchange Debentures were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Debentures; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an 'underwriter' within the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional documents deemed by TWC to be necessary or desirable to complete the sale, assignment and transfer of the Outstanding Debentures tendered hereby. All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in 'The Exchange Offer -- Withdrawal of Tenders' section of the Prospectus.
Unless otherwise indicated herein in the box entitled 'Special Issuance Instructions' above, please deliver the Exchange Debentures (and, if applicable, substitute certificates representing Outstanding Debentures for any Outstanding Debentures not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Outstanding Debentures, please credit the account indicated above maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under the box entitled 'Special Delivery Instructions' above, please send the Exchange Debentures (and, if applicable, substitute certificates representing Outstanding Debentures for any Outstanding Debentures not exchanged) to the undersigned at the address shown above in the box entitled 'Description of Outstanding Debentures.'
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED 'DESCRIPTION OF OUTSTANDING DEBENTURES' ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OUTSTANDING DEBENTURES AS SET FORTH IN SUCH BOX ABOVE.
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
FOR THE 6.95% DEBENTURES DUE 2028
IN EXCHANGE FOR THE 6.95% DEBENTURES DUE 2028 OF TIME WARNER COMPANIES, INC.
1. DELIVERY OF THIS LETTER AND DEBENTURES; TENDER BY BOOK-ENTRY TRANSFER IN LIEU OF THIS LETTER; GUARANTEED DELIVERY PROCEDURES.
This letter is to be completed by debentureholders either if (1) certificates are to be forwarded herewith or (2) tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in 'The Exchange Offer -- Book-Entry Transfer' section of the Prospectus and an Agent's Message is NOT delivered. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu of this Letter of Transmittal. The term 'Agent's Message' means a message, transmitted by the Book-Entry Transfer Facility to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, the Letter of Transmittal and that TWC may enforce the Letter of Transmittal against such participant.
Certificates for all physically tendered Outstanding Debentures, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter (or manually signed facsimile hereof or an Agent's Message in lieu thereof) and any other documents required by this Letter, must be received by the Exchange Agent at the address set forth herein or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Outstanding Debentures tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof.
Debentureholders whose certificates for Outstanding Debentures are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Outstanding Debentures pursuant to the guaranteed delivery procedures set forth in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus. Pursuant to such procedures, (i) such tender must be made through an Eligible Institution, (ii) prior to Midnight, New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by TWC (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Outstanding Debentures, the certificate number of numbers of such Outstanding Debentures and the principal amount of Outstanding Debentures tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange ('NYSE') trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Outstanding Debentures, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter (or a facsimile thereof or an Agent's Message in lieu thereof), with any required signature guarantees and any other documents required by the Letter will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically tendered Outstanding Debentures, in proper form for transfer, or Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter (or a facsimile thereof or an Agent's Message in lieu thereof) with any required signature guarantees and all other documents required by this Letter, are received by the Exchange Agent within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Outstanding Debentures and all other required documents is at the election and risk of the tendering holders, but the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. If Outstanding Debentures are sent by mail, it is suggested that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to midnight, New York City time, on the Expiration Date.
See 'The Exchange Offer' section of the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO DEBENTUREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER).
If less than all of the Outstanding Debentures evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount of Outstanding Debentures to be tendered in the box above entitled 'Description of Outstanding Debentures -- Principal Amount Tendered.' A reissued certificate representing the balance of nontendered Outstanding Debentures will be sent to such tendering holder, unless
otherwise provided in the appropriate box on this Letter, promptly after the Expiration Date. ALL OF THE OUTSTANDING DEBENTURES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES.
If this Letter is signed by the registered holder of the Outstanding Debentures tendered hereby, the signature must correspond exactly with the name as written on the face of the certificate without any change whatsoever.
If any tendered Outstanding Debentures are owned of record by two or more joint owners, all of such owners must sign this Letter.
If any tendered Outstanding Debentures are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter as there are different registrations of certificates.
When this Letter is signed by the registered holder or holders of the Outstanding Debentures specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the Exchange Debentures are to be issued, or any untendered Outstanding Debentures are to be reissued, to a person other than the registered holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificate(s) must be guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered holder or holders of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the certificate(s) and signatures on such certificate(s) must be guaranteed by an Eligible Institution.
If this Letter or any certificates or bond powers are signed by trustees, executors, administration, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing, and, unless waived by TWC, proper evidence satisfactory to TWC of their authority to so act must be submitted.
ENDORSEMENTS ON CERTIFICATES FOR OUTSTANDING DEBENTURES OR SIGNATURES ON BOND POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS A MEMBER OF A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST COMPANY HAVING AN OFFICER OR CORRESPONDENT IN THE UNITED STATES (AN 'ELIGIBLE INSTITUTION').
SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE INSTITUTION, PROVIDED THE OUTSTANDING DEBENTURES ARE TENDERED: (I) BY A REGISTERED HOLDER OF OUTSTANDING DEBENTURES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME APPEARS ON A SECURITY POSITION LISTING AS THE HOLDER OF SUCH OUTSTANDING DEBENTURES) WHO HAS NOT COMPLETED THE BOX ENTITLED 'SPECIAL ISSUANCE INSTRUCTIONS' OR 'SPECIAL DELIVERY INSTRUCTIONS' ON THIS LETTER, OR (II) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Outstanding Debentures should indicate in the applicable box the name and address to which Exchange Debentures issued pursuant to the Exchange Offer and/or substitute certificates evidencing Outstanding Debentures not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Debentureholders tendering Outstanding Debentures by book-entry transfer may request that Outstanding Debentures not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such noteholder may designate hereon. If no such instructions are given, such Outstanding Debentures not exchanged will be returned to the name or address of the person signing this Letter.
5. TRANSFER TAXES.
TWC will pay all transfer taxes, if any, applicable to the transfer of Outstanding Debentures to it or its order pursuant to the Exchange Offer. If however, Exchange Debentures and/or substitute Outstanding Debentures not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Outstanding Debentures tendered hereby, or if tendered Outstanding Debentures are registered in the name of any person other than the person signing this Letter, or if a transfer tax is imposed for any reason other than the transfer of Outstanding Debentures to TWC or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 5, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE OUTSTANDING DEBENTURES SPECIFIED IN THIS LETTER.
6. WAIVER OF CONDITIONS.
TWC reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus.
7. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Outstanding Debentures, by execution of this Letter or an Agent's Message in lieu thereof, shall waive any right to receive notice of the acceptance of their Outstanding Debentures for exchange.
8. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING DEBENTURES.
Any holder whose Outstanding Debentures have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter, may be directed to the Exchange Agent, at the address and telephone number indicated above.
NOTICE OF GUARANTEED DELIVERY FOR
TIME WARNER COMPANIES, INC.
This form or one substantially equivalent hereto must be used to accept the Exchange Offer of Time Warner Companies, Inc. ('TWC') made pursuant to the Prospectus, dated , 1998 (the 'Prospectus'), if certificates for Outstanding Debentures of TWC are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach TWC prior to midnight, New York City time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to The Chase Manhattan Bank (the 'Exchange Agent') as set forth below. Capitalized terms not defined herein are defined in the Prospectus.
DELIVERY TO: THE CHASE MANHATTAN BANK, EXCHANGE AGENT
By Mail, Hand or Overnight Courier Facsimile Transmission Number
55 Water Street (212) 638-7375 or
Room 234, North Building (212) 344-9367
New York, NY 10041 (FOR ELIGIBLE
Attention: Carlos Esteves INSTITUTIONS ONLY)
(IF BY MAIL, REGISTERED OR Confirm by Telephone
CERTIFIED MAIL RECOMMENDED) (212) 638-0828
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DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE,
OR TRANSMISSION OF INSTRUCTION VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the accompanying Letter of Transmittal, the undersigned hereby tenders to TWC the principal amount of Outstanding Debentures set forth below, pursuant to the guaranteed delivery procedure described in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus.
Principal Amount of Outstanding Debentures Tendered:* If Outstanding Debentures will be delivered by book-entry $____________________________________ transfer to The Depository Trust Company provide account Certificate Nos. (if available): number. ____________________________________________________ Total Principal Amount Represented by Outstanding Account Number_____________________ Debentures Certificate(s): $___________________________________ |
PLEASE SIGN HERE
x------------------------------------------------------ Date ------------------ Signature(s) of Owner(s) or Authorized Signatory
Area Code and Telephone Number: _______________________________________________
Must be signed by the holder(s) of Outstanding Debentures as their name(s) appear(s) on certificates for Outstanding Debentures or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program, hereby guarantees that the certificates representing the principal amount of Outstanding Debentures tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such Outstanding Debentures into the Exchange Agent's account at The Depository Trust Company pursuant to the procedures set forth in 'The Exchange Offer -- Guaranteed Delivery Procedures' section of the Prospectus, together with one or more properly completed and duly executed Letters of Transmittal (or facsimile thereof or Agent's Message in lieu thereof) and any required signature guarantee and any other documents required by the Letter of Transmittal, will be received by the Exchange Agent at the address set forth above, no later than three New York Stock Exchange trading days after the Expiration Date.
-------------------------------------------------------- ---------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
-------------------------------------------------------- ---------------------------------------
ADDRESS TITLE
------------------------------------------------------- Name:----------------------------------
ZIP CODE (PLEASE TYPE OR PRINT)
Area Code and Tel. No.--------------------------------- Dated:---------------------------------
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NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING DEBENTURES WITH THIS FORM.
CERTIFICATES FOR OUTSTANDING DEBENTURES SHOULD BE SENT ONLY WITH A COPY OF
YOUR EXECUTED LETTER OF TRANSMITTAL.
EXCHANGE OFFER FOR ALL OUTSTANDING
6.95% DEBENTURES DUE 2028
OF
TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC.
AND
TURNER BROADCASTING SYSTEM, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
TO: BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Time Warner Companies, Inc. ('TWC') is offering, upon and subject to the terms and conditions set forth in the Prospectus, dated , 1998 (the 'Prospectus'), and the enclosed Letter of Transmittal (the 'Letter of Transmittal'), to exchange (the 'Exchange Offer') its 6.95% Debentures Due 2028, for its outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures'). The Exchange Offer is being made in order to satisfy certain obligations of TWC contained in the Registration Rights Agreement dated January 12, 1998, by and among TWC and the other signatories thereto.
We are requesting that you contact your clients for whom you hold Outstanding Debentures regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Outstanding Debentures registered in your name or in the name of your nominee, or who hold Outstanding Debentures registered in their own names, we are enclosing the following documents:
1. Prospectus dated , 1998;
2. The Letter of Transmittal for your use and for the information of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if certificates for Outstanding Debentures are not immediately available or time will not permit all required documents to reach the Exchange Agent prior to the Expiration Date (as defined below) or if the procedure for book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose accounts you hold Outstanding Debentures registered in your name or the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and
6. Return envelopes addressed to The Chase Manhattan Bank, the Exchange Agent for the Outstanding Debentures.
YOUR PROMPT ACTION IS REQUESTED, THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON, , 1998 UNLESS EXTENDED BY TWC (THE 'EXPIRATION DATE'). OUTSTANDING DEBENTURES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof or an Agent's Message in lieu thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent and certificates representing the Outstanding Debentures should be delivered to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus.
If holders of Outstanding Debentures wish to tender, but it is impracticable for them to forward their certificates for Outstanding Debentures prior to the expiration of the Exchange Offer or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under 'The Exchange Offer -- Guaranteed Delivery Procedures'.
TWC will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding the Prospectus and the related documents to the beneficial owners of Outstanding Debentures held by them as nominee or in a fiduciary capacity. TWC will pay or cause to be paid all stock transfer taxes applicable to the exchange of Outstanding Debentures pursuant to the Exchange Offer, except as set forth in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed materials, should be directed to The Chase Manhattan Bank, the Exchange Agent for the Outstanding Debentures, at its address and telephone number set forth on the front of the Letter of Transmittal.
Very truly yours,
TIME WARNER COMPANIES, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF TWC OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
EXCHANGE OFFER FOR ALL OUTSTANDING
6.95% DEBENTURES DUE 2028
OF
TIME WARNER COMPANIES, INC.
FULLY AND UNCONDITIONALLY GUARANTEED BY
TIME WARNER INC.
AND
TURNER BROADCASTING SYSTEM, INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated , 1998
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(the 'Prospectus'), and the related Letter of Transmittal (the 'Letter of Transmittal'), relating to the Offer (the 'Exchange Offer') of Time Warner Companies, Inc. ('TWC') to exchange its 6.95% Debentures Due 2028 (the 'Exchange Debentures') for its outstanding 6.95% Debentures Due 2028 (the 'Outstanding Debentures'), upon the terms and subject to the conditions described in the Prospectus and the Letter of Transmittal. The Exchange Offer is being made in order to satisfy certain obligations of TWC contained in the Registration Rights Agreement dated January 12, 1998, by and among TWC and the other signatories thereto.
This material is being forwarded to you as the beneficial owner of the Outstanding Debentures carried by us in your account but not registered in your name. A TENDER OF SUCH OUTSTANDING DEBENTURES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on your behalf the Outstanding Debentures held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Outstanding Debentures on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at midnight, New York City time, on , 1998, unless extended by TWC. Any Outstanding Debentures tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Outstanding Debentures.
2. The Exchange Offer is subject to certain conditions set forth in the Prospectus in the section captioned 'The Exchange Offer -- Certain Conditions to the Exchange Offer'.
3. Any transfer taxes incident to the transfer of Outstanding Debentures from the holder to TWC will be paid by TWC, except as otherwise provided in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at midnight, New York City time, on , 1998, unless extended by TWC.
If you wish to have us tender your Outstanding Debentures, please so instruct us by completing, executing and returning to us the instruction form on the back of this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OUTSTANDING DEBENTURES.
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by Time Warner Companies, Inc. with respect to its Outstanding Debentures.
This will instruct you to tender the Outstanding Debentures held by you for the account of the undersigned, upon and subject to the terms and conditions set forth in the Prospectus and the related Letter of Transmittal.
Please tender the Outstanding Debentures held by you for my account as indicated below:
AGGREGATE PRINCIPAL AMOUNT OF OUTSTANDING DEBENTURES
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6.95% Debentures due 2028---------------------------- --------------------------------------------------------
[ ] Please do not tender any Outstanding Debentures
held by you for my account.
Dated:--------------------------------------- , 1998 --------------------------------------------------------
SIGNATURE(S)
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PLEASE PRINT NAME(S) HERE
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ADDRESS(ES)
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AREA CODE AND TELEPHONE NUMBER
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TAX IDENTIFICATION OR SOCIAL SECURITY NO(S).
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None of the Outstanding Debentures held by us for your account will be tendered unless we receive written instructions from you to do so. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the Outstanding Debentures held by us for your account.