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TIME WARNER INC.
$592,783,525
8-7/8% Subordinated Debentures due 2025
FIRST SUPPLEMENTAL INDENTURE
Dated as of December 5, 1995
Chemical Bank,
a New York banking corporation,
Trustee
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions .................................................. 2
SECTION 1.02. Other Definitions ............................................ 3
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act .............................................. 4
SECTION 1.04. Rules of Construction ........................................ 4
ARTICLE II
General Terms and Conditions of the Debentures
SECTION 2.01. Designation and Principal Amount ............................. 5
SECTION 2.02. Maturity ..................................................... 5
SECTION 2.03. Form and Payment ............................................. 5
SECTION 2.04. Global Debenture ............................................. 6
SECTION 2.05. Interest ..................................................... 7
ARTICLE III
Redemption; Distribution
SECTION 3.01. Optional Redemption .......................................... 9
SECTION 3.02. Special Event Redemption
or Distribution ............................................ 9
SECTION 3.03. No Sinking Fund .............................................. 11
ARTICLE IV
Extension of Interest Payment Period
SECTION 4.01. Extension of Interest Payment
Period ..................................................... 11
SECTION 4.02. Notice of Extension .......................................... 12
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ARTICLE V
Expenses
SECTION 5.01. Payment of Expenses .......................................... 13
ARTICLE VI
Covenants
SECTION 6.01. Listing on an Exchange ....................................... 13
SECTION 6.02. Limitation on Dividends;
Transactions with Affiliates ............................... 14
SECTION 6.03. Covenants as to Trust ........................................ 15
ARTICLE VII
Original Issue of Debentures
SECTION 7.01. Original Issue of Debentures ................................. 15
ARTICLE VIII
Miscellaneous
SECTION 8.01. Ratification of Indenture .................................... 15
SECTION 8.02. Trustee Not Responsible for
Recitals ................................................... 16
SECTION 8.03. Governing Law ................................................ 16
SECTION 8.04. Separability ................................................. 16
SECTION 8.05. Counterparts ................................................. 16
SECTION 8.06. Successors ................................................... 16
SECTION 8.07. Assignment ................................................... 16
SECTION 8.08. Tax Characterization ......................................... 17
FIRST SUPPLEMENTAL INDENTURE dated as of December 5,
1995, between TIME WARNER INC., a Delaware corporation (the
"Company"), and Chemical Bank, a New York banking corporation,
as trustee (the "Trustee") under the Indenture dated as of
December 5, 1995 between the Company and the Trustee (the
"Indenture").
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its securities to be known
as its 8-7/8% Subordinated Debentures due December 31, 2025, the form and
substance of such Debentures and the terms, provisions and conditions thereof to
be set forth as provided in the Indenture and this First Supplemental Indenture;
WHEREAS, Time Warner Capital I, a Delaware statutory business trust
(the "Trust"), has offered to the public $575,000,000 aggregate liquidation
amount of its 8-7/8% Preferred Trust Securities (the "Preferred Securities"),
representing undivided beneficial interests in the assets of the Trust and
proposes to invest the proceeds from such offering along with the proceeds of
the sale of Common Securities to the Company in $592,783,525 aggregate principal
amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary to make
this First Supplemental Indenture a valid instrument in accordance with its
terms and to make the Debentures, when executed by the Company and authenticated
and delivered by the Trustee, the valid obligations of the Company have been
performed, and the execution and delivery of this First Supplemental Indenture
has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and acceptance of
the Debentures by the Holders thereof, and
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for the purpose of setting forth, as provided in the Indenture, the form and
substance of the Debentures and the terms, provisions and conditions thereof,
the Company covenants and agrees with the Trustee as follows:
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions. Capitalized terms used but not defined
herein have the meanings assigned to them in the Indenture. The following terms
have the following meanings.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York, New York, are permitted or
required by any applicable law to close.
"Common Securities" means the securities issued by the Trust
representing undivided beneficial interests in the assets of the Trust, having
the terms set forth in Exhibit C to the Declaration.
"Company" means the party named as such in this First Supplemental
Indenture until a successor replaces it pursuant to the applicable provisions of
the Indenture, and thereafter means the successor.
"Debentures" means the Debentures issued under this First
Supplemental Indenture substantially in the form of Exhibit A hereto as amended
or supplemented from time to time.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of December 5, 1995, among the trustees of the Trust named therein, the
Company as Sponsor, and the holders from time to time of the Preferred
Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" or "Debentureholder" means the Person in whose name a
Debenture is registered on the Registrar's books. All references to Holders of a
particular principal amount of the Debentures mean Holders of the relevant
principal amount of the Debentures at the time outstanding.
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"Nasdaq" means The Nasdaq Stock Market.
"NYSE" means the New York Stock Exchange, Inc.
"Officer" means the Chairman of the Board or any Co-Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer or any
Co-Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, any
Assistant Controller, the Secretary or any Assistant Secretary of the Company.
"PERCS" means the $1.24 Preferred Exchangeable Redemption Cumulative
Securities issued by Time Warner Financing Trust.
"Subordinated Notes" means 4% Subordinated Notes due December 23,
1997, issued by the Company.
"Trust Officer" means any officer or assistant officer of the
Trustee with direct responsibility for the administration of this First
Supplemental Indenture and the Indenture.
"Trust Securities" means the Common Securities and the Preferred
Securities.
"Underwriting Agreement" means the underwriting agreement entered
into among the Company, the Trust, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated and Bear, Xxxxxxx & Co. Inc., as
co-representatives, with respect to, among other things, the Preferred
Securities.
SECTION 1.02. Other Definitions. The following terms have the
meanings given to them in the Declaration (including the Exhibits thereto) as in
effect on the date hereof: (i) Delaware Trustee; (ii) Distribution; (iii) Global
Certificate; (iv) Guarantee; (v) Property Trustee; (vi) Preferred Security
Certificate; (vii) Regular Trustees; (viii) Special Event; and (iv) Tax Event.
The following terms are defined in the relevant Section of this
First Supplemental Indenture as set forth below.
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Defined in
Term Section
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"Additional Interest"............................................ 2.05
"Compounded Interest"............................................ 4.01
"Coupon Rate" ................................................... 2.05
"Deferred Interest".............................................. 4.01
"Extension Period"............................................... 4.01
"Global Debenture"............................................... 2.04
"Interest Payment Date".......................................... 2.05
"Ministerial Action"............................................. 3.02
"Non-Book-Entry Preferred
Securities"...................................................... 2.04
"No Recognition Opinion"......................................... 3.02
"Optional Redemption Date"....................................... 3.01
"Special Redemption Date"........................................ 3.02
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this First Supplemental Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this First
Supplemental Indenture. The following TIA terms used in this First Supplemental
Indenture have the following meanings:
"indenture securities" means the Debentures.
"indenture security holder" means a Holder or Debentureholder.
"indenture to be qualified" means this First Supplemental Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this First Supplemental Indenture that
are defined by the TIA, defined by TIA reference to another statute or defined
by Commission rule have the meanings assigned to them.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
(6) a reference to a Section or Article is to a Section or Article
of this First Supplemental Indenture.
ARTICLE II
General Terms and Conditions of the Debentures
SECTION 2.01. Designation and Principal Amount. There is hereby
authorized a series of Securities designated as "8-7/8% Subordinated Debentures
due December 31, 2025". The Debentures shall be limited to an aggregate
principal amount for all Debentures equal to $592,783,525, such amount being the
sum of (i) the aggregate liquidation amount of the Preferred Securities and (ii)
the proceeds received by the Trust upon issuance of the Common Securities to the
Company. The aggregate principal amount of Debentures outstanding at any time
may not exceed such amount except as provided in Section 3.06 of the Indenture.
SECTION 2.02. Maturity. The Debentures shall mature on December 31,
2025 (the "Maturity Date").
SECTION 2.03. Form and Payment. Except as provided in Section 2.04,
the Debentures shall be issued in fully-registered certificated form without
interest coupons. Principal and interest on the Debentures issued in
certificated form will be payable, the transfer of such Debentures will be
registrable and such Debentures will be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the Trustee; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the Holder at such address as shall appear in the Security
Register. Notwithstanding the foregoing, so long as the Holder of any Debentures
is the Property Trustee, the payment of the principal of and
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interest (including Compounded Interest and Additional Interest, if any) on such
Debentures held by the Property Trustee will be made at such place and to such
account as may be designated by the Property Trustee.
SECTION 2.04. Global Debenture. (a) In the event the Company causes,
pursuant to Section 3.02 or otherwise, the Debentures held by the Property
Trustee to be distributed to holders of the Trust Securities;
(i) if all the Preferred Securities are held in book-entry-only
form in the form of one or more Global Certificates, the
Debentures in certificated form shall be presented to the
Trustee by the Property Trustee in exchange for one or more
global Debentures in an aggregate principal amount equal to
the aggregate principal amount of the outstanding Debentures
(each, a "Global Debenture"), to be registered in the name of
the Depository, or its nominee, and delivered by the Trustee
to the Depository in exchange for one or more Global
Certificate or Certificates held by the Depository for
crediting to the accounts of its participants pursuant to the
instructions of the Regular Trustees. The Company upon any
such presentation shall execute a Global Debenture in such
aggregate principal amount and deliver the same to the Trustee
for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture. Payments on
the Debentures issued as a Global Debenture will be made to
the Depository; and
(ii) if any Preferred Securities are held in non- book-entry
certificated form, (A) the Debentures in certificated form and
(B) the register of holders of the Preferred Securities shall
be presented to the Trustee by the Property Trustee and each
Preferred Security Certificate which represents Preferred
Securities (including Preferred Securities registered in the
name of the Depository or its nominee) ("Non-Book-Entry
Preferred Securities") will be deemed to represent Debentures
presented to the Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate
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liquidation amount of the Non-Book-Entry Preferred Securities
(and the Trustee shall register such holders of such Preferred
Securities as the registered holders of such Debentures) until
such Preferred Security Certificate is presented to the
Trustee for registration of transfer or exchange at which time
such Preferred Security Certificate will be canceled and a
Debenture registered in the name of the holder (or the
transferee thereof) of such Preferred Security Certificate
with an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security Certificate
canceled will be executed by the Company and delivered to the
Trustee for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture. Upon
surrender of such Preferred Security Certificate and the
concurrent issue of such Debentures, Debentures represented by
such Preferred Security Certificate that were presented by the
Property Trustee to the Trustee will be deemed to have been
canceled.
(b) A Global Debenture shall be exchangeable for Debentures
registered in the names of Persons other than the Depository or its nominee only
if (i) the Depository notifies the Company that it is unwilling or unable to
continue as a depository for such Global Debenture and no successor depository
shall have been appointed, (ii) the Depository, at any time, ceases to be a
clearing agency registered under the Exchange Act at any time the Depository is
required to be so registered to act as such Depository and no successor
depository shall have been appointed, or (iii) the Company in its sole
discretion determines that such Global Debenture shall be so exchangeable. Any
Global Debenture that is exchangeable pursuant to the preceding sentence shall
be exchangeable for Debentures registered in such names as the Depository shall
direct.
SECTION 2.05. Interest. (a) Each Debenture will bear interest at the
rate of 8-7/8% per annum (the "Coupon Rate") from and including the original
date of issuance to but excluding the date the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable (subject to
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the provisions of Article 4) quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each, an "Interest Payment Date"),
commencing on December 31, 1995, to the Person in whose name such Debenture or
any predecessor Debenture is registered, at the close of business on the regular
record date for such interest installment, which, in respect of any Debenture of
which the Property Trustee is the Holder or a Global Debenture, shall be the
close of business on the Business Day next preceding that Interest Payment Date.
Notwithstanding the foregoing sentence, if the Preferred Securities are no
longer in book-entry only form or if pursuant to the Indenture and this First
Supplemental Indenture the Debentures have been distributed to holders of Trust
Securities and are not represented by a Global Debenture, the record date for
such interest installment shall be March 15, June 15, September 15 and December
15, as the case may be, next preceding the applicable Interest Payment Date.
(b) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and will include the
first day but exclude the last day of such period. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such 30-day month and will include
the first day but exclude the last day of such period. In the event that any
date on which interest or principal is payable on the Debentures is not a
Business Day, then payment of interest or principal payable on such date will be
made on the next succeeding day which is a Business Day (without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on such date.
(c) If at any time while the Property Trustee is the Holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee
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after paying such taxes, duties, assessments or other governmental charges will
be equal to the amounts the Trust and the Property Trustee would have received
had no such taxes, duties, assessments or other government charges been imposed.
ARTICLE III
Redemption; Distribution
SECTION 3.01. Optional Redemption. The Company, subject to the
provisions of Article XIII of the Indenture, shall have the right to redeem the
Debentures, in whole or in part, from time to time, on or after December 31,
2000, upon not less than 20 nor more than 45 Business Days' written notice to
the Holders (such date of redemption an "Optional Redemption Date"), at a
redemption price equal to 100% of the principal amount of Debentures to be
redeemed, plus an amount equal to all accrued and unpaid interest thereon, if
any, to but excluding the Optional Redemption Date.
If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities from any national securities exchange or
other self-regulatory organization (including Nasdaq) on which the Preferred
Securities are then listed, the Company shall not effect such partial redemption
and may only redeem the Debentures in whole.
SECTION 3.02. Special Event Redemption or Distribution. (a) If, at
any time, a Special Event shall occur and be continuing, the Company shall elect
to either:
(A) direct the Regular Trustees to dissolve the Trust and cause
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of, and accrued and unpaid interest equal to accrued
and unpaid Distributions on, and having the same record date for payment
as, the Trust Securities outstanding at such time, to be distributed by
the Regular Trustees to the holders of the Trust Securities pro rata
according to the aggregate liquidation amount of the Trust Securities held
by such holder in relation to the aggregate liquidation amount of all
Trust Securities outstanding in liquidation of such holders' interests in
the Trust, within 90 days following the occurrence of such Special Event,
provided, however,
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that in the case of the occurrence of a Tax Event, as a condition of any
such dissolution and distribution, the Regular Trustees shall have
received an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion
may rely on any then applicable published revenue ruling of the Internal
Revenue Service, to the effect that the holders of the Preferred
Securities will not recognize any gain or loss for United States Federal
income tax purposes as a result of the dissolution of the Trust and
distribution of Debentures;
(B) redeem the Debentures in whole (and not in part), upon not less
than 20 nor more than 45 Business Days' notice, within 90 days following
the occurrence of such Special Event (except as provided below), at a
redemption price equal to 100% of the principal amount of Debentures to be
redeemed, plus an amount equal to all accrued and unpaid interest thereon,
if any, to but excluding the redemption date, in which case the Trust
shall redeem pro rata in cash all Trust Securities at a price per Trust
Security of $25, plus an amount equal to all accrued and unpaid
distributions on such Trust Security to but excluding the date of such
redemption (the "Special Redemption Date"); or
(C) in the case of a Tax Event, allow the Debentures and the Trust
Securities to remain outstanding and indemnify the Trust for all taxes
payable by it as a result of such Tax Event;
provided that, if at the time there is available to the Trust the opportunity to
eliminate such Special Event, within 90 days following the occurrence of such
Special Event (the "90-Day Period"), by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure, that has no adverse effect on the Trust, the Company or the holders of
the Trust Securities (a "Ministerial Action"), the Trust will pursue such
Ministerial Action in lieu of dissolution or redemption; provided further, that
the Company shall have no right to redeem the Debentures or direct the Regular
Trustees to dissolve the Trust while the Regular Trustees are pursuing such
Ministerial Action unless the Special Event shall not have been so eliminated by
the 85th day following the occurrence thereof, in which case the Company shall
be permitted to direct the Regular Trustees or to provide notice to the Holders
of the redemption of the
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Debentures; and provided further, that if dissolution of the Trust and
distribution of the Debentures to the holders of the Trust Securities would
eliminate the condition causing the Special Event and all other conditions to
such dissolution and distribution have been satisfied, the Company will not be
permitted to redeem the Debentures. References herein and in the Indenture to
"Redemption Date" shall refer to the Optional Redemption Date or the Special
Redemption Date, as the case may be.
(b) Upon the distribution of Debentures to holders of Preferred
Securities as a result of the occurrence of a Special Event, subject to
applicable law (including, without limitation, United States Federal securities
laws), the Company or any of its Affiliates may at any time and from time to
time purchase outstanding Debentures by tender, in the open market or by private
agreement.
SECTION 3.03. No Sinking Fund. The Debentures are not entitled to
the benefits of any sinking fund.
ARTICLE IV
Extension of Interest Payment Period
SECTION 4.01. Extension of Interest Payment Period. The Company
shall have the right, at any time, and from time to time, during the term of the
Debentures, to defer payments of interest by extending the interest payment
period for a period not exceeding 20 consecutive quarters (an "Extension
Period"), at the end of which Extension Period the Company shall calculate and
pay all interest then accrued and unpaid together with interest thereon
compounded quarterly at the rate specified for the Debentures to the extent
permitted by applicable law ("Compound Interest"); provided that, during any
such Extension Period or an extension period or other deferral of interest
feature under any debt security of the Company that ranks pari passu with the
Debentures, (a) the Company shall not declare or pay dividends on, make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to an of its capital stock and (b) the Company shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem the Debentures or any debt securities issued by the Company
that rank pari passu with or junior to the Debentures; provided, however, that
the foregoing restrictions do not apply to (i) any interest
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or dividend payment by the Company, where the interest or dividend is paid by
way of the issuance of securities that rank junior to the Debentures, (ii) any
payments of interest, principal or premium, if any, on, or repayment, repurchase
or redemption of, the Subordinated Notes and (iii) any payments or distributions
with respect to, or redemptions, purchases or acquisitions of, or any payments
in liquidation of, the PERCS (including any of the foregoing with respect to the
guarantee agreement entered into by the Company for the benefit of the holders
of the PERCS). Prior to the termination of any such Extension Period, the
Company may further defer payments of interest by extending the interest payment
period; provided, however, that such Extension Period, including all such
previous and further extensions, may not exceed 20 consecutive quarters. Upon
the termination of any Extension Period and the payment of all amounts then due,
the Company may commence a new Extension Period for up to 20 consecutive
quarters, subject to the terms set forth in this Section 4.01. No interest shall
be due and payable during an Extension Period, except at the end thereof.
SECTION 4.02. Notice of Extension. (a) If the Property Trustee is
the only registered Holder of the Debentures at the time the Company selects an
Extension Period, the Company shall give written notice to the Regular Trustees,
the Property Trustee and the Trustee of its selection of such Extension Period
one Business Day before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities issued by the Trust are payable or (ii)
the date the Regular Trustees are required to give notice to the NYSE (or other
applicable self-regulatory organization).
(b) If the Property Trustee is not the only Holder of the Debentures
at the time the Company selects an Extension Period, the Company shall give the
Holders of the Debentures and the Trustee written notice of its selection of
such Extension Period 10 Business Days before the earlier of (i) the next
succeeding Interest Payment Date, or (ii) the date the Company is required to
give notice of the record or payment date of such interest payment to the NYSE
or other applicable self-regulatory organization or to Holders of the
Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.02 shall be counted as one of the 20 quarters
permitted in the maximum Extension Period permitted under Section 4.01.
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ARTICLE V
Expenses
SECTION 5.01. Payment of Expenses. In connection with the offering,
sale and issuance of the Debentures to the Property Trustee in connection with
the sale of the Trust Securities by the Trust, the Company shall:
(a) pay for all costs and expenses relating to the offering, sale
and issuance of the Debentures, including commissions to the underwriters
payable pursuant to the Underwriting Agreement and compensation of the
Trustee under the Indenture in accordance with the provisions of Section
6.07 of the Indenture;
(b) pay for all debts, obligations, costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and issuance of the Trust
Securities (including commissions to the underwriters in connection
therewith), the fees and expenses of the Property Trustee, the Regular
Trustees and the Delaware Trustee, the costs and expenses relating to the
operation, maintenance and dissolution of the Trust and the enforcement by
the Property Trustee of the rights of the holders of Preferred Securities,
including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and
other telecommunications expenses and costs and expenses incurred in
connection with the acquisition, financing and disposition of Trust
assets); and
(c) pay any and all taxes and all liabilities, costs and expenses
with respect to such taxes of the Trust.
ARTICLE VI
Covenants
SECTION 6.01. Listing on an Exchange. If the Debentures are to be
issued as a Global Debenture in connection with the distribution of the
Debentures to the
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holders of the Preferred Securities issued by the Trust upon a Special Event,
the Company will use its reasonable best efforts to list such Debentures on the
NYSE or on such other national securities exchange (or other self-regulatory
organization (including Nasdaq)) as the Preferred Securities are then listed.
SECTION 6.02. Limitation on Dividends; Transactions with Affiliates.
(a) If (i) there shall have occurred any event that would constitute an Event of
Default or (ii) the Company shall be in default in respect of its payment or any
other obligations under the Guarantee, then (A) the Company shall not declare or
pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock, and (B) the Company shall not make any payment of interest,
principal or premium, if any, on, or repay, repurchase or redeem, any debt
securities issued by the Company which rank pari passu with or junior to the
Debentures; provided, however, that foregoing restrictions shall not apply to
(i) any interest or dividend payments by the Company, where the interest or
dividend is paid by way of the issuance of securities that rank junior to the
Debentures, (ii) any payments of interest, principal or premium, if any, on, or
repayment, repurchase or redemption of, the Subordinated Notes and (iii) any
payments or distributions with respect to, or redemptions, purchases or
acquisitions of, or any payments in liquidation of, the PERCS (including any of
the foregoing with respect to the guarantee agreement entered into by the
Company for the benefit of the holders of the PERCS).
(b) If the Company shall have given notice of an Extension Period,
or any extension thereof shall be continuing, then (A) the Company shall not
declare or pay any dividend, or make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock, and (B) the Company shall not make any payment of interest,
principal or premium, if any, on, or repay, repurchase or redeem, the Debentures
or any debt securities issued by the Company which rank pari passu with or
junior to the Debentures; provided, however, that foregoing restrictions shall
not apply to (i) any interest or dividend payments by the Company, where the
interest or dividend is paid by way of the issuance of securities that rank
junior to the Debentures, (ii) any payments of interest, principal or premium,
if any, on, or repayment, repurchase or redemption of, the Subordinated Notes
and (iii) any payments or
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distributions with respect to, or redemptions, purchases or acquisitions of, or
any payments in liquidation of, the PERCS (including any of the foregoing with
respect to the guarantee agreement entered into by the Company for the benefit
of the holders of the PERCS).
SECTION 6.03. Covenants as to Trust. For so long as the Preferred
Securities remain outstanding, the Company will (i) maintain 100% direct or
indirect ownership of the Common Securities; provided, however, that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of the Common Securities, and (ii) use its reasonable best
efforts to cause the Trust (a) to remain a statutory business trust, except in
connection with a distribution of Securities as provided in the Declaration, the
redemption of all of the Trust Securities and in connection with certain
mergers, consolidations or amalgamation permitted by the Declaration, and (b)
otherwise continue to be treated as a grantor trust for United States Federal
income tax purposes.
ARTICLE VII
Original Issue of Debentures
SECTION 7.01. Original Issue of Debentures. Debentures in the
aggregate principal amount of $592,783,525 may, upon execution of this First
Supplemental Indenture, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
said Debentures to or upon the written order of the Company, signed by its
Chairman, its President, or any Vice President and its Treasurer or an Assistant
Treasurer, without any further action by the Company.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Ratification of Indenture. The Indenture, as
supplemented by this First Supplemental Indenture, is in all respects ratified
and confirmed, and this First Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.
16
SECTION 8.02. Trustee Not Responsible for Recitals. The recitals
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this First Supplemental
Indenture.
SECTION 8.03. Governing Law. This First Supplemental Indenture and
each Debenture shall be deemed to be a contract made under the internal laws of
the State of New York, and for all purposes shall be construed in accordance
with the laws of said State.
SECTION 8.04. Separability. In case any one or more of the
provisions contained in this First Supplemental Indenture or in the Debentures
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 this First Supplemental Indenture or of the Debentures, but
this First Supplemental Indenture and the Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 8.05. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 8.06. Successors. All agreements of the Company in this
First Supplemental Indenture and the Debentures shall bind its successor. All
agreements of the Trustee in this First Supplemental Indenture shall bind its
successor.
SECTION 8.07. Assignment. The Company will have the right at all
times to assign any of its rights or obligations under this First Supplemental
Indenture and the Debentures to a direct or indirect wholly owned subsidiary of
the Company, provided that, in the event of any such assignment, the Company
will remain jointly and severally liable for all such obligations. Subject to
the foregoing, this First Supplemental Indenture will be binding upon and inure
to the benefit of the parties thereto and their respective successors and
assigns. This First Supplemental Indenture may not otherwise be assigned by the
parties hereto.
17
SECTION 8.08. Tax Characterization. The Company, the Trustee and
each Holder of a Debenture (by acceptance thereof) agrees to treat the
Debentures as debt instruments for United States Federal, state and local income
and franchise tax purposes and agrees not to take any contrary position before
any taxing authority or on any tax return.
18
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
TIME WARNER INC.,
by
-----------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Vice President
Attest:
----------------------------
Name:
Title:
CHEMICAL BANK,
by
-----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Trust
Officer
Attest:
----------------------------
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of __________, 1995, before me personally came
__________________ to be known, who, being by me duly sworn, did depose and say
that he is the __________________ of Time Warner Inc., one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said instrument
is such corporation seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
---------------------------------
Notary Public
[Notarial Seal] Commission Expires
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of _______________, 1995, before me personally came
____________________ to be known, who, being by me duly sworn, did depose and
say that he is the __________________ of Chemical Bank, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said instrument
is such corporation seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
---------------------------------
Notary Public
[Notarial Seal] Commission Expires
EXHIBIT A
(FORM OF FACE OF DEBENTURE)
No. ___________
TIME WARNER INC.
8-7/8% SUBORDINATED DEBENTURE DUE DECEMBER 31, 2025
TIME WARNER INC., a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to , or registered assigns, the
principal sum of DOLLARS on December 31, 2025, and to pay interest on said
principal sum from December 5, 1995, or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, quarterly (subject to deferral as set forth herein)
in arrears on March 31, June 30, September 30 and December 31 of each year
commencing December 31, 1995, at the rate of 8- 7/8% per annum until the
principal hereof shall have become due and payable, and on any overdue principal
and premium, if any, and (without duplication and to the extent that payment of
such interest is enforceable under law) on any overdue installment of interest
at the same rate per annum compounded quarterly. The amount of interest payable
on any Interest Payment Date shall be computed on the basis of a 360-day year of
twelve 30-day months and include the first day but exclude the last day of such
period. In the event that any date on which interest or principal is payable on
this Debenture is not a Business Day, then payment of interest or principal
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. The interest installment
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, 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 regular record date for such interest installment,
which, if this Debenture is a Global Security or is registered in the name of
the Property Trustee, shall be the close of business on the Business Day next
preceding
2
such Interest Payment Date, or otherwise shall be the close of business on March
15, June 15, September 15 and December 15, as the case may be, next preceding
the applicable Interest Payment Date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid 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 to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
registered Holders of this series 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, all as more fully provided in the Indenture. The principal of (and
premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of this Debenture is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Debenture will be made at such place and to such account as may
be designated by the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such actions as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained in the Indenture by each holder of Senior
Indebtedness, whether now outstanding or hereafter incurred, and waives reliance
by each such holder upon said provisions.
3
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated
---------------
TIME WARNER INC.
by
----------------------------
Name:
Title:
Attest:
By
--------------------
Secretary
4
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
CHEMICAL BANK
---------------------- -----------------------
as Trustee or as Authentication Agent
By By
-------------------- ---------------------
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures
(designated as the 8-7/8% Subordinated Debentures due December 31, 2025) of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of December 5, 1995, duly executed and delivered
between the Company and Chemical Bank, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of December 5, 1995,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Debentures. By the terms of the Indenture, the Debentures are
issuable in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Debentures is limited in aggregate principal amount as specified in said First
Supplemental Indenture.
Upon the occurrence and continuation of a Special Event, the Company
will have the right to elect under certain circumstances to (a) dissolve the
Trust and cause the Debentures to be distributed pro rata to holders of the
5
Trust Securities, (b) redeem the Debentures at a redemption price equal to 100%
of their principal amount together with any accrued and unpaid interest thereon
(the "Redemption Price") or (c) in the case of a Tax Event, allow the Debentures
to remain outstanding and indemnify the Trust for any taxes payable by it as a
result of such Tax Event. The Redemption Price shall be paid on the date of such
redemption or at such earlier date as the Company determines.
The Company shall have the right to redeem this Debenture at the
option of the Company, without premium or penalty, in whole or in part from time
to time on or after December 31, 2000 (an "Optional Redemption"), at a
redemption price equal to 100% of the principal amount plus any accrued and
unpaid interest to but excluding the date of such redemption (the "Optional
Redemption Price"). Any redemption pursuant to this paragraph will be made upon
not less than 20 nor more than 45 Business Days notice, at the Optional
Redemption Price. If the Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Debentures will be redeemed pro rata or
by lot or by any other method utilized by the Trustee.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Debentures of
any series, or reduce the principal amount thereof, or reduce
6
the rate or extend the time of payment of interest thereon, without the consent
of the Holder of each Debenture so affected, or (ii) reduce the aforesaid
percentage of Debentures, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each
Debenture then outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Debentures of any series at the time outstanding affected thereby, on behalf
of all of the Holders of the Debentures of such series, to waive any past
default in the performance of any of the covenants contained in the Indenture,
or established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or premium, if
any, or interest on any of the Debentures of such series. Any such consent or
waiver by the registered Holder of this Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Debenture and of any Debenture issued in
exchange hereof or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
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 of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
The Company shall have the right at any time, and from time to time,
during the term of the Debentures to defer payments of interest by extending the
interest payment period for a period not exceeding 20 consecutive quarters (the
"Extension Period"), at the end of which Extension Period, the Company shall pay
all interest then accrued and unpaid together with interest thereon compounded
quarterly at the rate specified for the Debentures to the extent permitted by
law ("Compound Interest"); provided that, during any such Extension Period or an
extension period or other deferral of interest feature under any debt security
of the Company that ranks pari passu with the Debentures, (a) the Company shall
not declare or pay dividends on, make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to any of
its capital stock and (b) the Company shall not make any
7
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem the Debentures or any debt securities issued by the Company that rank
pari passu with or junior to the Debentures; provided, however, that, the
foregoing restrictions do not apply to (i) any interest or dividend payment by
the Company, where the interest or dividend is paid by way of the issuance of
securities that rank junior to the Debentures, (ii) any payments of interest,
principal or premium, if any, on, or repayment, repurchase or redemption of, the
Company's 4% Subordinated Notes due December 23, 1997 and (iii) any payments or
distributions with respect to, or redemptions, purchases or acquisitions of, or
any payments in liquidation of, the $1.24 Preferred Exchangeable Redemption
Cumulative Securities ("PERCS") issued by Time Warner Financing Trust (including
any of the foregoing with respect to the guarantee agreement entered into by the
Company for the benefit of the holders of the PERCS). Prior to the termination
of any such Extension Period, the Company may further defer payments of interest
by extending the interest payment period; provided, however, that such Extension
Period, including all such previous and further extensions, may not exceed 20
consecutive quarters. Upon the termination of any Extension Period and the
payment of all amounts then due, the Company may commence a new Extension Period
for up to 20 consecutive quarters, subject to the terms set forth in this
section. No interest shall be due and payable during an Extension Period, except
at the end thereof.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this Debenture
for registration of transfer at the office or agency of the Company in the City
and State of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
8
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Security Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Debentures are issuable only in registered form without coupons
in denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures of
this series are exchangeable for a like aggregate principal amount of Debentures
of this series of a different authorized denomination, as requested by the
Holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
