-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NPnt/Wqwoxu69X6oiscL1CJVqUfVImybGHr5McGKSzV2IhVKR7Q5GWKLNBLWHdYy lvhW1lbDQF/mhjGbYFgScg== 0000889812-98-003046.txt : 19990101 0000889812-98-003046.hdr.sgml : 19990101 ACCESSION NUMBER: 0000889812-98-003046 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 10 REFERENCES 429: 033-75144 FILED AS OF DATE: 19981231 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIME WARNER ENTERTAINMENT CO L P CENTRAL INDEX KEY: 0000893657 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 133666692 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-70015 FILM NUMBER: 98779494 BUSINESS ADDRESS: STREET 1: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2124848000 MAIL ADDRESS: STREET 1: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN TELEVISION & COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000005910 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 132922502 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-70015-01 FILM NUMBER: 98779495 BUSINESS ADDRESS: STREET 1: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2033280600 MAIL ADDRESS: STREET 1: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARNER COMMUNICATIONS INC CENTRAL INDEX KEY: 0000104650 STANDARD INDUSTRIAL CLASSIFICATION: PHONOGRAPH RECORDS & PRERECORDED AUDIO TAPES & DISKS [3652] IRS NUMBER: 132696809 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-70015-02 FILM NUMBER: 98779496 BUSINESS ADDRESS: STREET 1: 75 ROCKEFELLER PLZ STREET 2: C/O TIME WARNER ENTERTAINMENT CO L P CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2124848000 MAIL ADDRESS: STREET 1: 75 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10019 S-3 1 REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1998 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ TIME WARNER ENTERTAINMENT COMPANY, L.P. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 13-3666692 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION DELAWARE 13-2922502 WARNER COMMUNICATIONS INC. DELAWARE 13-2696809 (EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
75 ROCKEFELLER PLAZA NEW YORK, NEW YORK 10019 (212) 484-8000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) PETER R. HAJE, ESQ. 75 ROCKEFELLER PLAZA NEW YORK, NEW YORK 10019 (212) 484-7580 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ Copies To: WILLIAM P. ROGERS, JR. FAITH D. GROSSNICKLE, ESQ. CRAVATH, SWAINE & MOORE SHEARMAN & STERLING 825 EIGHTH AVENUE 599 LEXINGTON AVENUE NEW YORK, NEW YORK 10019 (212) 848-8015 (212) 474-1270
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this Registration Statement as determined by market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans please check the following box: / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box: /x/ If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /__________________ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /__________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED AGGREGATE TITLE OF EACH CLASS AGGREGATE AMOUNT TO MAXIMUM OFFERING OFFERING AMOUNT OF OF SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER UNIT(2) PRICE(2) REGISTRATION FEE Debt Securities...................... $1(3) 100% $1(3) $0(4) Guarantees of Debt Securities(5)..... $1 N/A N/A N/A(6)
(footnotes on next page) THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. PURSUANT TO RULE 429 OF THE GENERAL RULES AND REGULATIONS UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS WHICH ALSO RELATES TO REGISTRATION STATEMENT NO. 33-75144 PREVIOUSLY FILED BY TIME WARNER ENTERTAINMENT COMPANY, L.P., AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION, WARNER COMMUNICATIONS INC. AND OTHER CO-REGISTRANTS ON FORM S-3. THIS REGISTRATION STATEMENT ALSO CONSTITUTES A POST-EFFECTIVE AMENDMENT TO REGISTRATION STATEMENT NO. 33-75144, AND SUCH POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION 8(C) OF THE SECURITIES ACT OF 1933. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (footnotes from previous page) (1) United States dollars or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies. (2) Estimated solely for purposes of calculating the registration fee. (3) Represents the aggregate principal amount plus, if any Debt Securities are issued at an original issue discount, such principal amount as shall result in an aggregate initial offering price of $1. (4) Time Warner Entertainment Company, L.P., a co-registrant on this Registration Statement on Form S-3, is carrying forward pursuant to Rule 429 under the Securities Act of 1933 $2,000,000,000 of Debt Securities previously registered on its Registration Statement on Form S-3 (File No. 33-75144) none of which has been issued or sold and for which it has paid $689,655 of registration fees. (5) Each of American Television and Communications Corporation and Warner Communications Inc. will irrevocably and unconditionally guarantee on an unsecured senior basis its guaranteed percentage of Debt Securities of Time Warner Entertainment Company, L.P. (6) Pursuant to Rule 457(n), no separate fee is required to be paid in respect of guarantees of the Debt Securities which are being registered concurrently. i THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION DATED DECEMBER 31, 1998 PROSPECTUS TIME WARNER ENTERTAINMENT COMPANY, L.P. Debt Securities Pursuant to a "shelf" registration statement of which this Prospectus is a part, Time Warner Entertainment Company, L.P. may offer unsecured notes, debentures or other debt having a total initial public offering price of up to $2,000,000,000. Under this shelf process, we may sell the debt securities from time to time in one or more separate offerings, in amounts, at prices and on terms to be determined at the time of sale. This Prospectus provides a general description of the debt securities we may offer. Each time we sell a particular series of debt securities, we will provide a Prospectus Supplement that will contain the specific terms of the series being offered. Unless otherwise specified in the Prospectus Supplement, the debt securities will be senior securities of Time Warner Entertainment Company, L.P. and will be guaranteed by its general partners, Warner Communications Inc. and American Television and Communications Corporation. The Prospectus Supplement may also add, update or change information contained in this Prospectus. You should read both this Prospectus and the Prospectus Supplement together with the additional information described under the heading "Where You Can Find More Information." ------------------------ NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ THE DATE OF THIS PROSPECTUS IS , 1998 TABLE OF CONTENTS
PROSPECTUS PAGE - ----------------------------------------------------------------------------------------------- ----- Where You Can Find More Information............................................................ 2 Ownership Structure of the Company............................................................. 3 The Company.................................................................................... 4 The General Partners........................................................................... 4 Use of Proceeds................................................................................ 5 Ratio of Earnings to Fixed Charges............................................................. 5 Description of the Debt Securities............................................................. 7 Description of the Credit Agreement............................................................ 14 Description of Outstanding Debt Securities..................................................... 15 Global Securities.............................................................................. 15 Plan of Distribution........................................................................... 16 Legal Opinions................................................................................. 17 Experts........................................................................................ 17
------------------------ WHERE YOU CAN FIND MORE INFORMATION Time Warner Entertainment Company, L.P. ("TWE" or the "Company") and its General Partners (as defined below) are currently subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, under the terms of the Indenture (as defined below), if the Company is not required by Section 13 or 15(d) of the Exchange Act to file reports with the Securities and Exchange Commission (the "SEC"), then, so long as any securities issued under the Indenture remain outstanding, the Company will be required to provide to the holders of the Debt Securities quarterly financial reports (containing unaudited financial statements of the Company) for the first three quarters of each year and annual financial reports (containing audited financial statements of the Company) for each year, in each case comparable to that which the Company would be required to file with the SEC if it had a class of debt securities listed on a national securities exchange, except that if the SEC has informed the Company that it can file less financial information than otherwise required by Section 13 or 15(d) of the Exchange Act or that the periodic filings made by an affiliate of the Company will satisfy the Company's filing requirement, then, so long as any securities issued under the Indenture remain outstanding, the Company will be required to provide to the holders of the Debt Securities only such information filed by the Company or that affiliate. This Prospectus (the "Prospectus") is part of a Registration Statement on Form S-3 (the "Registration Statement") that the Company and the General Partners have filed with the SEC. You can inspect and copy the Registration Statement, as well as reports and other information filed by the Company or the General Partners, at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices at Seven World Trade Center, 13th Floor, New York, New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 at prescribed rates. You may obtain information about the operation of the SEC's public reference facilities by calling the SEC at 1-800-SEC-0330. The SEC also maintains a site on the World Wide Web (http://www.sec.gov), that contains reports and other information regarding registrants (like the Company) that file electronically. This Prospectus provides you with a general description of the debt securities that the Company may offer (the "Debt Securities"). Each time the Company sells Debt Securities, it will provide a Prospectus Supplement (the "Prospectus Supplement") that will contain specific information about the terms of that offering. The Prospectus Supplement may also add, update or change information contained in this Prospectus. You should read both this Prospectus and any Prospectus Supplement, together with the additional information that is incorporated by reference, as described below. You should also read the documents filed as exhibits with the Registration Statement or otherwise filed by the Company with the SEC. The rules and regulations of the SEC allow the Company to refer you to the information currently filed by the Company and the General Partners with the SEC by incorporating such documents in this Prospectus by reference to those documents. The information incorporated by reference is an important part of this Prospectus, and documents that the Company or the General Partners file later with the SEC will automatically update and replace this information. We incorporate by reference the documents listed below and any future filings made by 2 the Company or the General Partners with the SEC (File No. 001-12878) under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until we sell all of the securities that we have registered: o Annual Report on Form 10-K for the fiscal year ended December 31, 1997 of the Company and the General Partners. o Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and September 30, 1998 of the Company and the General Partners. Upon your request and at no cost to you, the Company will provide to each person, including any beneficial owner, to whom this Prospectus and the accompanying Prospectus Supplement are delivered, a copy of any or all of the documents incorporated herein by reference, other than exhibits to such documents unless such exhibits are specifically incorporated by reference in such documents. You may request such information in writing or by telephone. Requests should be addressed to: Investor Relations, Time Warner Entertainment Company, L.P., 75 Rockefeller Plaza, New York, New York 10019 (telephone number: (212) 484-6971). OWNERSHIP STRUCTURE OF THE COMPANY ------------------ |TIME WARNER INC.| ------------------ | 100%(1) | ----------------------------- | | 100% | | | | -------------------- | | TIME WARNER | | | GENERAL AND | | | LIMITED PARTNERS | | -------------------- | | ----------------- | | |------| MEDIAONE | ------------ 74.49%(2) | |LIMITED PARTNER| | TWI CABLE| | 25.51%(2) ----------------- ------------ | | | ------------------------------ - ------------- 1.4%(3) | TIME WARNER | | ADVANCE/ | | | ENTERTAINMENT COMPANY, L.P.| | NEWHOUSE |--- | ------------------------------ - ------------- | | | 33.3% | ------------------------------- (3) | | | | | 65.3%(3) | | | | 100% --------------- | | TWE-A/N | | | PARTNERSHIP | | | (CABLE) | --------------------------------- --------------- | | | --------------- ------------------ --------------- | TIME WARNER | | CABLE NETWORKS | | FILMED | | CABLE | | HBO | |ENTERTAINMENT| | | | | | WARNER BROS.| --------------- ------------------ --------------- - ------------------ 1/ Subsidiaries of Time Warner Inc. directly or indirectly own 100% of the capital stock of each of the Time Warner General and Limited Partners. 2/ Pro rata priority capital and residual equity interests. In addition, the Time Warner General Partners own 100% of the priority capital interests senior and junior to the pro rata priority capital interests. (See Note 8 to TWE's consolidated financial statements.) 3/ Direct or indirect common equity interests. In addition, TWI Cable Inc. ("TWI Cable") indirectly owns preferred partnership interests. 3 THE COMPANY Because the following is a summary of the business of the Company, it does not contain all the information that may be important to investors. You should read it together with the detailed information and financial statements referred to herein. The Company is engaged principally in three fundamental areas of business: ENTERTAINMENT--includes principally interests in: o filmed entertainment o television production o television broadcasting CABLE NETWORKS--includes principally interests in: o pay cable television programming CABLE--includes principally interests in: o cable television systems The Time Warner Cable division of the Company also manages substantially all of the cable television systems owned by Time Warner Inc. ("Time Warner"), and the combined cable television operations are conducted under the name of Time Warner Cable. The Company was formed as a Delaware limited partnership in 1992 and has, since its capitalization on June 30, 1992 (the "TWE Capitalization"), owned and operated substantially all of the business of Warner Bros., Home Box Office and the cable television business, and certain other businesses, owned and operated by Time Warner at that date. Certain wholly owned subsidiaries of Time Warner are the general partners (the "General Partners") of TWE and subsidiaries of Time Warner, including the General Partners, collectively own general and limited partnership interests in TWE consisting of 74.49% of the pro rata priority capital ("Series A Capital") and residual equity capital ("Residual Capital"), and 100% of the senior priority capital ("Senior Capital") and junior priority capital ("Series B Capital"). The remaining 25.51% limited partnership interests in the Series A Capital and Residual Capital of TWE are held by a subsidiary of MediaOne Group, Inc. ("MediaOne"), formerly US WEST, Inc. In 1995, TWE formed a cable television joint venture with the Advance/Newhouse Partnership ("Advance/Newhouse") known as the TWE-A/N Partnership, which owns cable television systems serving approximately 5.5 million subscribers at September 30, 1998. The equity interests in the TWE-A/N Partnership are owned 65.3% by TWE, the managing partner, 33.3% by Advance/Newhouse and 1.4% by TWI Cable. On October 10, 1996, Time Warner completed the acquisition of Turner Broadcasting System, Inc. ("TBS"), thereby acquiring the remaining approximately 80% interest in TBS that Time Warner did not already own (the "TBS Transaction"). As a result of the TBS Transaction, a new parent company with the name "Time Warner Inc." replaced the old parent company of the same name and the old parent company, which changed its name to Time Warner Companies, Inc. ("TWC"), and TBS became separate, wholly owned subsidiaries of the new parent company. The assets of TWC consist primarily of investments in its consolidated and unconsolidated subsidiaries, including TWE. The principal executive offices of TWE are located at 75 Rockefeller Plaza, New York, New York 10019 (telephone number: (212) 484-8000). THE GENERAL PARTNERS At the time of the TWE Capitalization, thirteen direct or indirect wholly owned subsidiaries of Time Warner contributed the assets and liabilities or the rights to the cash flows of substantially all of Time Warner's Warner Bros., Home Box Office and cable television businesses to TWE for general partnership interests. During late 1993 through 1994, nine of the thirteen original general partners were merged or dissolved into the other four, and in 1997 two additional companies were merged into the remaining two. As a result, as of December 31, 1997, 4 Warner Communications Inc. ("WCI", a subsidiary of TWC) and American Television and Communications Corporation ("ATC", a subsidiary of TWC) are the two remaining general partners of TWE. They have succeeded to the general partnership interests of all of the other former general partners. Except as otherwise set forth in the Prospectus Supplement, each General Partner will unconditionally guarantee its Guaranteed Percentage (as set forth under "Description of the Debt Securities--Guarantees") of TWE's obligations with respect to the Debt Securities. The Indenture under which the Debt Securities will be issued contains no restrictions on the financial condition or operations of the General Partners. The principal assets of the General Partners currently are, in addition to their interests in TWE: WCI's ownership of substantially all of the Warner Music Group, which produces and distributes recorded music and owns and administers music copyrights; WCI's 50% interest in DC Comics, a New York general partnership which is 50% owned by the Company; WCI's 37.25% interest in Time Warner Entertainment Japan Inc., a corporation organized under the laws of Japan ("TWE Japan"); certain securities of TBS which in the aggregate represent an equity interest of approximately 10.6% in TBS; 7.66% of the common stock of TWC; and combined equity interests of 29% in Time Warner Telecom LLC ("TW Telecom"), a competitive local exchange carrier. TWE does not have any ownership interest in the business or assets of the General Partners. The mailing address and telephone number of the principal executive offices of WCI and ATC are 75 Rockefeller Plaza, New York, New York 10019 (telephone number: (212) 484-8000) and 290 Harbor Drive, Stamford, Connecticut 06902 (telephone number: (203) 328-0600), respectively. USE OF PROCEEDS Except as otherwise set forth in the Prospectus Supplement accompanying this Prospectus, the net proceeds to TWE from the sale of Debt Securities will be used to repay indebtedness of TWE. RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges for each of TWE and WCI are set forth below for the periods indicated. The ratio of earnings to fixed charges of TWE for the nine months ended September 30, 1998 reflects the transfer of cable television systems (or interests therein) serving approximately 650,000 subscribers to the TWE-A/N Partnership by a subsidiary of Time Warner, subject to approximately $1 billion of debt, in exchange for common and preferred partnership interests, as well as certain related transactions. The ratio of earnings to fixed charges of TWE for 1995 reflects (a) the consolidation by TWE of the TWE-A/N Partnership resulting from the formation of such partnership, effective as of April 1, 1995, and (b) the consolidation of Paragon Communications ("Paragon"), a cable television partnership, effective as of July 6, 1995. The ratio of earnings to fixed charges of TWE for 1993 gives effect to (a) the admission of MediaOne as an additional limited partner of TWE as of September 15, 1993 and (b) the issuance of $2.6 billion of TWE debentures during 1993 to reduce indebtedness under the former TWE credit agreement. The ratio of earnings to fixed charges of WCI for 1995 reflects a recapitalization of WCI, in which TWC made a $2.642 billion capital contribution to WCI (consisting of a $2.5 billion subordinated reset note receivable due from WCI and $142 million of cash) and WCI used the cash proceeds to repay certain obligations to TWC. The ratio of earnings to fixed charges of WCI for 1993 reflects (a) the payment by WCI of a $3 billion special dividend to TWC in the form of a subordinated reset note due 2008, (b) the prepayment of $500 million of principal of such note using borrowings under its revolving credit agreement with TWC and (c) the repurchase 5 or redemption by WCI of all of its publicly-held senior and subordinated debentures using capital contributed by TWC.
NINE MONTHS ENDED SEPTEMBER 30, YEARS ENDED DECEMBER 31, -------------------------------- -------------------------------------- 1998 1997 1997 1996 1995 1994 1993 --------------- --------------- ---- ---- ---- ----- ----- TWE.............................................. 2.4x 2.6x 2.6x 1.8x 1.6x 1.4x 1.4x WCI.............................................. 2.2x 2.4x 3.1x 1.9x 1.7x 1.4x 1.7x
The ratio of earnings to fixed charges is not presented for ATC, the only General Partner other than WCI, because it has no independent business operations, nor does it have significant amounts of debt or other liabilities. The financial position and results of operations of ATC are principally derived from its investment in TWE and, to a lesser extent, its investment in TWC, TBS and TW Telecom. For purposes of computing the ratio of earnings to fixed charges for each company: Earnings equals the sum of: (a) pretax income; (b) interest expense, including previously capitalized interest amortized to expense and the portion of rents representative of an interest factor for each company and its majority-owned subsidiaries; (c) the proportionate share of the items included in (b) above for each company's 50%-owned investees; (d) preferred stock dividend requirements of majority-owned subsidiaries; (e) minority interest in the income of majority-owned subsidiaries that have fixed charges; and (f) the amount of undistributed losses (net of undistributed income) of each company's less-than-50% owned investees. This earnings calculation includes significant noncash charges for depreciation and amortization. Fixed charges equals the sum of: (x) interest expense, including interest capitalized and the portion of rents representative of an interest factor for each company and its majority-owned subsidiaries; (y) the proportionate share of the items included in (x) above for each company's 50%-owned investees; and (z) preferred stock dividend requirements of majority-owned subsidiaries. 6 DESCRIPTION OF THE DEBT SECURITIES GENERAL This section describes the general terms of the Debt Securities. The Prospectus Supplement relating to any Debt Securities to be offered will describe the terms in greater detail, and may, in certain cases, provide information that differs from this Prospectus. If the information in the Prospectus Supplement differs from this Prospectus, investors should rely on information in the Prospectus Supplement with respect to the particular Debt Securities being offered. The Debt Securities will be issued from time to time in one or more series under an Indenture (the "Indenture") among TWE, WCI, ATC and The Bank of New York, as Trustee (the "Trustee"). Summaries of certain provisions of the Indenture follow. These summaries are not complete and are qualified in their entirety by reference to the Indenture, including the definitions in the Indenture of certain terms. All article and section references below are to articles and sections of the Indenture, a copy of which is an Exhibit to the Registration Statement of which this Prospectus is a part. The referenced articles and sections of the Indenture and such defined terms are incorporated by reference in this Prospectus. The Indenture does not limit the amount of Debt Securities which may be issued under it and Debt Securities may be issued under it up to the aggregate principal amount authorized from time to time by the Company. Reference is made to the Prospectus Supplement for the following terms of each series of Debt Securities in respect of which this Prospectus is being delivered: o the designation, date, aggregate principal amount, currency or currency unit of payment if other than United States dollars and authorized denominations of such Debt Securities; o the initial public offering price or prices of the Debt Securities and any discounts or commissions paid to underwriters, dealers or agents; o the date or dates on which such Debt Securities will mature (which may be fixed or extendible); o the annual rate or rates of interest, if any (or manner of calculation); o the dates on which such interest will be payable; o the terms of any mandatory or optional redemption (including any sinking, purchase or analogous fund) and any purchase at the option of holders (including whether any such purchase may be paid in cash or other securities or property); o whether such Debt Securities are to be issued in the form of Global Securities (as defined below) and, if so, the identity of the Depository (as defined below) with respect to such Global Securities; o the terms, if any, on which such Debt Securities may be exchanged for other securities of TWE or other issuers; o any other terms applicable to such Debt Securities. All of the Debt Securities will be registered securities, without coupons, and in denominations of $1,000 and any integral multiple of $1,000. No service charge will be made for any registration, transfer or exchange of the Debt Securities, but TWE may require payment of a sum sufficient to cover any tax or other governmental charge in connection therewith. GUARANTEES Except as otherwise set forth in the Prospectus Supplement, each General Partner will unconditionally guarantee the percentage (its "Guaranteed Percentage") of TWE's obligations with respect to the Debt Securities set forth opposite its name in the table below (the "Guarantees"). Each General Partner has also guaranteed its Guaranteed Percentage of TWE's obligations under its Credit Agreement dated as of November 10, 1997 among TWE, the TWE-A/N Partnership, Time Warner, TWC, TBS, TWI Cable and Chase Manhattan Bank and the 7 lending banks party thereto (the "Credit Agreement"), TWE's commercial paper and the Outstanding Debt Securities.
GUARANTEED GENERAL PARTNER PERCENTAGE - -------------------------------------------------------------------------------------------- ---------- Warner Communications Inc. ................................................................. 59.27% American Television and Communications Corporation.......................................... 40.73 ------ 100.00% ------ ------
In the event of a bankruptcy or dissolution of a General Partner, TWE has agreed to cause a corporate entity to guarantee the Guaranteed Percentage of the Debt Securities previously guaranteed by such General Partner. The Indenture contains no restrictions on the financial condition or operations of the General Partners or any corporate entity substituted therefor. The guarantees by the General Partners of the Debt Securities will rank on a parity with all other unsecured and unsubordinated obligations for money borrowed of the General Partners including the guarantees by the General Partners of TWE's obligations under the Credit Agreement, TWE's commercial paper and the Outstanding Debt Securities. THE DEBT SECURITIES WILL NOT BE, AND TWE'S OBLIGATIONS UNDER THE CREDIT AGREEMENT, TWE'S COMMERCIAL PAPER AND THE OUTSTANDING DEBT SECURITIES ARE NOT, GUARANTEED BY TIME WARNER, TWC OR TBS. RANKING The Debt Securities will be senior unsecured obligations of TWE and rank on a parity with all other unsecured and unsubordinated obligations for money borrowed of TWE including indebtedness of TWE under the Credit Agreement, TWE's commercial paper and the Outstanding Debt Securities. The rights of holders of the Debt Securities to participate in the distribution of the assets of any subsidiary of TWE upon such subsidiary's liquidation or reorganization will be subject to the prior claims of such subsidiary's creditors. At September 30, 1998, TWE's subsidiaries did not have any material indebtedness for money borrowed. The Trustee and each holder of Debt Securities will have no recourse against either General Partner except to the extent of the guarantee of the Debt Securities provided by such General Partner. EXISTING INDEBTEDNESS AND LIENS At September 30, 1998, TWE's total outstanding indebtedness was approximately $7.4 billion, consisting principally of the following: o $3.2 billion outstanding under the Credit Agreement, including approximately $1 billion borrowed by the TWE-A/N Partnership under the Credit Agreement which is not guaranteed by TWE or the General Partners. o $365 million of outstanding commercial paper backed by the Credit Agreement. o $3.8 billion aggregate principal amount of its outstanding senior notes and debentures (the "Outstanding Debt Securities"). Indebtedness of TWE under the Credit Agreement, TWE's commercial paper and the Outstanding Debt Securities, none of which is secured, will rank on a parity with the Debt Securities. The Indenture does not limit the ability of the Company to incur additional indebtedness. The Credit Agreement imposes limits on the incurrence of total debt; however, the Credit Agreement may be amended or terminated without the consent of the holders of the Debt Securities. See "Description of the Credit Agreement." Based on the Company's outstanding borrowings under the Credit Agreement at September 30, 1998, aggregate annual principal debt service of the Company during any of the next five years consists of $4.2 billion due in 2002, principally relating to the expiration of the Credit Agreement. At September 30, 1998, the General Partners had no material unsecured and unsubordinated obligations for money borrowed other than the guarantees by the General Partners of TWE's indebtedness under the Credit 8 Agreement, TWE's commercial paper and the Outstanding Debt Securities. The guarantees by the General Partners of TWE's obligations under the Debt Securities will rank on a parity with all other unsecured and unsubordinated obligations for money borrowed of the General Partners. At September 30, 1998, TWE's total outstanding unsubordinated indebtedness secured by liens was approximately $19 million. For a discussion of the limitations on the creation of additional liens imposed by the Indenture and the Credit Agreement, see "--Restrictive Covenants--Limitation on Liens", below and "Description of the Credit Agreement." At September 30, 1998, the total outstanding unsubordinated indebtedness of the General Partners that was secured by liens was approximately $10 million. RESTRICTIVE COVENANT Except as otherwise set forth in the Prospectus Supplement, the Debt Securities will be subject to the following covenant: Limitation on Liens. The Indenture provides that neither TWE nor any Material Subsidiary of TWE will incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness for money borrowed that is secured by a lien on any asset owned on the execution date of the Indenture or thereafter acquired by it unless TWE makes or causes the Debt Securities also to be secured by such lien equally and ratably with (or prior to) the other indebtedness thereby secured for so long as such other indebtedness is secured. The foregoing restriction does not apply to the following: (i) liens existing as of the date of the Indenture; (ii) liens created by Subsidiaries of TWE to secure indebtedness of such Subsidiaries to TWE or to one or more other Subsidiaries of TWE; (iii) liens affecting property of a Person existing at the time it becomes a Subsidiary of TWE or at the time it merges into or consolidates with TWE or a Subsidiary of TWE or at the time of a sale, lease or other disposition of all or substantially all of the properties of such Person to TWE or its Subsidiaries; provided that such liens do not extend to or cover any property or assets of TWE or any Subsidiary of TWE other than the property or assets acquired in such transaction and any improvements on such property or assets; (iv) liens on property existing at the time of its acquisition or incurred to secure payment of all or a part of its purchase price or to secure indebtedness incurred prior to, at the time of, or within one year after its acquisition for the purpose of financing all or part of its purchase price; provided that in each case such liens shall not extend to or cover any property or assets of TWE or any Subsidiary of TWE other than the property or assets acquired and any improvements on such property or assets; (v) liens on property to secure all or part of the cost of improvements or construction thereon or indebtedness incurred to provide funds for such purpose in a principal amount not exceeding the cost of such improvements or construction, provided that such liens do not extend to or cover any property or assets of TWE or any Subsidiary of TWE other than the property or assets improved or constructed and any improvements or construction thereon; (vi) liens consisting of or relating to the sale, transfer or financing of motion pictures, video and television programs, sound recordings, books ("Works") or rights with respect thereto to or with so-called tax shelter groups or other third-party investors in connection with the financing of such Works or rights with respect thereto to or with so-called tax shelter groups or other third-party investors in the ordinary course of business and the granting to TWE or any of its Subsidiaries of rights to distribute such Works; provided, however, that no such lien shall attach to any asset or right of TWE or its Subsidiaries, other than (x) Works or rights which were sold, transferred to or financed by the tax shelter group or third-party investors in question or the proceeds from such transactions and (y) equity interests of any Subsidiary of TWE substantially all of the assets of which consist of such Works or rights; (vii) liens on shares of stock, indebtedness or other securities of a Person that is not a Subsidiary of TWE; 9 (viii) liens on satellite transponders and all property rights therein and the products, revenues and proceeds therefrom which secure obligations incurred in connection with the acquisition, utilization or operation of such satellite transponders or the refinancing of any such obligations; (ix) liens on capital leases entered into after the date of the Indenture provided that such liens extend only to the property or assets that are the subject of such capital leases; (x) other liens arising in connection with indebtedness for money borrowed of TWE and its Subsidiaries (other than indebtedness of TWE or its Subsidiaries under a senior credit facility) in an aggregate principal amount for TWE and its Subsidiaries not exceeding (at the time such lien is issued, created or assumed) the greater of (A) 10% of the Consolidated Net Worth of TWE and (B) $500 million; and (xi) any extensions, renewal or replacement of any lien referred to in the foregoing clauses (i) through (x) inclusive, or of any indebtedness secured thereby, provided that the principal amount of indebtedness secured thereby does not exceed the principal amount of indebtedness so secured at the time of such extension, renewal or replacement, or at the time the lien was issued, created or assumed or otherwise permitted, and that such extension, renewal or replacement lien is limited to all or part of substantially the same property which secured the lien extended, renewed or replaced (plus improvements on such property). Waiver of Certain Covenants. TWE may omit in any particular instance to comply with any term, provision or condition set forth in certain covenants with respect to the Debt Securities of any series if before the time for such compliance the holders of at least a majority in principal amount of all series of the outstanding Debt Securities affected, all voting as one class, either waive such compliance in such instance or generally waive compliance with such term, provision or condition. Such waiver shall only extend to or affect such term, provision or condition to the extent so expressly waived, and, until such waiver is effective, the obligations of TWE and the duties of the Trustee in respect of any such term, provision or condition will remain in full force and effect. The Indenture does not contain provisions which would give holders of the Debt Securities the right to require TWE to repurchase their Debt Securities in the event of a change in control or a decline in the credit rating of TWE's debt securities for any reason, including as a result of a takeover, recapitalization or similar restructuring or substantial leveraging. It also does not restrict the ability of TWE to make distributions or purchase or redeem partnership interests from partners. CERTAIN DEFINITIONS The following are certain of the terms defined in the Indenture: "Consolidated Net Worth" means, with respect to any Person, at the date of any determination, the consolidated stockholders' or owners' equity of the holders of capital stock or partnership interests of such Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP consistently applied. "GAAP" means generally accepted accounting principles as such principles are in effect as of the date of the Indenture. "Material Subsidiary" means any Person that is a Subsidiary of TWE if at the end of the most recent fiscal quarter of TWE, the aggregate amount, determined in accordance with GAAP consistently applied, of securities of, loans and advances to, and other investments in, such Person held by TWE and its other Subsidiaries exceeded 10% of the Consolidated Net Worth of TWE. "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Subsidiary" means, with respect to any Person, any corporation more than 50% of the voting stock of which is owned directly or indirectly by such Person, and any partnership, association, joint venture or other entity in which such Person owns more than 50% of the equity interests or has the power to elect a majority of the Board of Directors or other governing body. 10 EVENTS OF DEFAULT The following are Events of Default under the Indenture with respect to any series of Debt Securities: (i) failure to pay principal of any Debt Security of such series when due; (ii) failure to pay interest on any Debt Security of such series when due, continued for 30 days; (iii) failure by TWE to perform any covenant of TWE in the Indenture, continued for 30 days after written notice from the Trustee or the holders of at least 25% in principal amount of the Debt Securities of such series as provided in the Indenture; (iv) failure to pay when due upon final maturity, or upon acceleration, the principal amount of any indebtedness of TWE or any Material Subsidiary in excess of $50 million, if such indebtedness is not discharged, or such acceleration annulled, within 60 days after written notice from the Trustee or the holders of at least 25% in principal amount of the Debt Securities of such series as provided in the Indenture; and (v) certain events of bankruptcy, insolvency or reorganization of TWE. If an Event of Default with respect to the Debt Securities of any series shall occur and be continuing, either the Trustee or the holders of at least 25% in principal amount of the Debt Securities of such series outstanding may declare the principal amount of the Debt Securities of such series and the interest accrued thereon to be due and payable immediately. However, at any time after a declaration of acceleration with respect to any series of Debt Securities has been made but before a judgment or decree based on such acceleration has been obtained, the holders of a majority in principal amount of the Debt Securities of such series outstanding may, under certain circumstances, rescind and annul such acceleration. For information as to waiver of defaults, see "--Modification and Waiver." The Indenture provides that, subject to the duty of the Trustee during a default to act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders, unless such holders shall have offered to the Trustee reasonable security or indemnity. Subject to such provisions for security or indemnification of the Trustee, the holders of a majority in principal amount of the Debt Securities of any series outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Debt Securities of such series. TWE and any Person that is at such time a guarantor of the Debt Securities will be required to furnish annually to the Trustee a statement as to any default by TWE or such Person of its obligations under the Indenture. MODIFICATION AND WAVIER TWE and the Trustee may, without the consent of the holders of the Debt Securities, enter into indentures supplemental to the Indenture for, among others, one or more of the following purposes: (i) to evidence the succession of another Person to TWE, WCI or ATC, and the assumption by such successor of TWE's, WCI's or ATC's obligations under the Indenture and the Debt Securities of any series or the related Guarantees; (ii) to add covenants of TWE, WCI or ATC, or surrender any rights of TWE, WCI or ATC, for the benefit of the holders of Debt Securities of any or all series; (iii) to cure any ambiguity, or correct any inconsistency in the Indenture; (iv) to evidence and provide for the acceptance of any successor Trustee with respect to one or more series of Debt Securities or to facilitate the administration of the trusts thereunder by one or more trustees in accordance with the Indenture; (v) to establish the form or terms of any series of Debt Securities; (vi) to provide any additional Events of Default; 11 (vii) to add new general partner guarantors or to reflect the merger or consolidation of any General Partner, provided that the successor of such General Partner guarantees such General Partner's Guaranteed Percentage of TWE's obligations under the Debt Securities; and (viii) to evidence the succession of new obligors and the extinguishment of the obligations of the Company and the guarantors pursuant to the provisions described below under "--Redemption or Assumption Upon Dissolution of TWE." The Indenture contains provisions permitting TWE and the Trustee, with the consent of the holders of a majority in principal amount of the outstanding Debt Securities of all series to be affected voting as a single class, to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the Indenture or modifying the rights of the holders of the Debt Securities of such series to be affected, except that such supplemental indenture may not, without the consent of each holder of affected Debt Securities, among other things, change the fixed maturity of any affected Debt Securities, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or amend or modify the terms of either Guarantee in a manner adverse to the holders of such Debt Securities or reduce the aforesaid percentage of Debt Securities of any series the consent of the holders of which is required for the execution of any such supplemental indenture. The holders of a majority in principal amount of the outstanding Debt Securities of any series may on behalf of the holders of all Debt Securities of such series waive any past default under the Indenture with respect to the Debt Securities of such series, except a default in the payment of the principal of or interest on any Debt Security of such series or in respect of a provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Debt Security of such series. CONSOLIDATION, MERGER AND SALE OF ASSETS TWE may not consolidate with or merge into, or convey, transfer or lease all or substantially all of its assets to, any Person, unless (i) TWE is the continuing Person in any such merger or consolidation, or the Person (if other than TWE) which is the continuing Person in any such merger or consolidation or which acquires all or substantially all of the assets of TWE is a corporation, partnership or trust organized under the laws of the United States or any state or the District of Columbia and expressly assumes TWE's obligations under the Debt Securities and the Indenture and (ii) immediately after such transaction, TWE or such other Person, as the case may be, is not in default in the performance of any covenants or conditions contained in the Indenture or the Debt Securities. DEFEASANCE The Indenture provides that, at TWE's option, (i) TWE and the General Partners will be discharged from any and all obligations in respect of the Debt Securities of any series (except for certain obligations of TWE to register the transfer or exchange of Debt Securities of such series, replace stolen, lost or mutilated Debt Securities of such series and to hold moneys for payment in trust) ("defeasance") or (ii) TWE need not comply with certain provisions of the Indenture ("covenant defeasance") with respect to the Debt Securities of any series if, in each case, TWE deposits, in trust with the Trustee, money or U.S. Government Obligations or a combination thereof which, through the payment of interest thereon and principal thereof in accordance with their terms, will provide money in an amount sufficient to pay all the principal of, premium, if any, and interest on the Debt Securities of such series on the dates such payments are due in accordance with the terms of the Debt Securities of such series through the stated maturity or, at TWE's option, any redemption date occurring prior thereto (provided that TWE gives notice of redemption). As a condition to defeasance or covenant defeasance with respect to the Debt Securities of any series, TWE is required to deliver to the Trustee an opinion of counsel to the effect that the deposit and related defeasance would not cause the holders of the Debt Securities of such series to recognize income, gain or loss for federal income tax purposes. Such opinion, in the case of defeasance, must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable United States federal income tax laws occurring after the date of the Indenture. 12 REDEMPTION OR ASSUMPTION UPON DISSOLUTION OF TWE If TWE dissolves (other than in connection with (a) the reconstitution of TWE as a corporation, (b) the occurrence of a transaction that is permitted by the "Consolidation, Merger and Sale of Assets" covenant described above or (c) a case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or similar law), it will, at its option, either: (1) redeem all of the Debt Securities concurrently with or prior to the effectiveness of such dissolution upon not less than 30 (or 15 if provided for in a resolution of TWE establishing the relevant series) days' nor more than 60 days' notice, at a redemption price equal to the greater of (i) 100% of the principal amount of the Debt Securities to be redeemed, plus accrued interest thereon to (but excluding) the redemption date, and (ii) the Make-Whole Amount (as defined below) with respect to such Debt Securities; or (2) provided that immediately after such transaction neither TWE nor the Eligible Affiliate that assumes TWE's obligations under the Debt Securities as described below is in default in the performance of any covenants or conditions contained in the Indenture or the Debt Securities, concurrently with or prior to the effectiveness of such dissolution (i) cause an entity that controls or is under common control with TWE immediately prior to such dissolution (which shall be a corporation, partnership or trust, organized and validly existing under the laws of the United States of America, any state or the District of Columbia) (an "Eligible Affiliate") to expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, premium, if any, and interest on all of the Debt Securities and the performance or observance of every covenant of the Indenture on the part of TWE to be performed or observed; and (ii) cause an Eligible Affiliate that has outstanding indebtedness that was sold under the Securities Act ("Public Debt") and files reports under Section 13(a) or 15(d) of the Securities Act (a "Public Issuer") to provide, by way of assumption or guarantee (including, if appropriate, the guarantees of other Eligible Affiliates), substantially the same credit support as is provided for the Public Debt of such Public Issuer. If TWE's obligations under the Debt Securities are assumed by an Eligible Affiliate pursuant to this clause (2), TWE, at its option, may provide for the termination of the Guarantees provided by the General Partners. "Make-Whole Amount" means, on any date when TWE redeems any series of Debt Securities, the sum of the present value of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate with respect to such series of Debt Securities, plus a spread (specified in basis points and set forth in the terms of such series of Debt Securities), plus accrued and unpaid interest on the principal amount being redeemed to the date of redemption. "Treasury Rate" means, with respect to any redemption date and a series of Debt Securities, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue for such series of Debt Securities (if no maturity is within three months before or after the Remaining Life for such series of Debt Securities, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue for such series of Debt Securities shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue for such series of Debt Securities, calculated using a price for the Comparable Treasury Issue for such series of Debt Securities (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date and for such series of Debt Securities. The Treasury Rate will be calculated on the third Business Day preceding the redemption date. "Comparable Treasury Issue" means, in relation to a particular series of Debt Securities to be redeemed, the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term ("Remaining Life") of such series of Debt Securities that would be utilized, at the time of 13 selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Debt Securities. "Comparable Treasury Price" means (i) the average of five Reference Treasury Dealer Quotations for such redemption date with respect to a series of Debt Securities, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations. "Independent Investment Banker" means an independent investment banking institution of national standing appointed by TWE. "Reference Treasury Dealer" means any Primary Treasury Dealer selected by the Independent Investment Banker after consultation with TWE. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date for a series of Debt Securities, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for such series of Debt Securities (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. THE TRUSTEE The Bank of New York is the Trustee under the Indenture. The Trustee is a depository for funds and performs other services for, and transacts other banking business with, the Company in the normal course of business. GOVERNING LAW The Indenture will be governed by, and construed in accordance with, the laws of the State of New York. DESCRIPTION OF THE CREDIT AGREEMENT The Credit Agreement is a revolving credit facility pursuant to which TWE may borrow up to $7.5 billion, the TWE-A/N Partnership may borrow up to $2 billion and Time Warner, TWC, TBS and TWI Cable may borrow in the aggregate up to $6 billion, subject in each case to the aggregate borrowing limit of $7.5 billion under the Credit Agreement and certain other limitations and adjustments thereunder. The Credit Agreement contains certain covenants applicable to TWE, including restrictions on the incurrence of indebtedness and financial ratios relating to (i) maximum levels of net total indebtedness to cash flow (5.0 to 1) and (ii) minimum levels of "cash flow" to fixed charges (2.5 to 1). Certain other covenants impose restrictions on indebtedness of subsidiaries of TWE and the creation of certain liens. The Credit Agreement imposes no limitations on TWE's ability to make acquisitions, investments or cash distributions to its partners, subject to compliance with the financial ratios described above. Generally, an event of default under the Credit Agreement includes: (i) the occurrence of a payment default under the Credit Agreement; (ii) the failure of TWE, or any other borrower under the Credit Agreement, to observe certain covenants contained in the Credit Agreement; (iii) any representation of TWE, or any other borrower under the Credit Agreement, in the Credit Agreement or related documents proving to have been materially false when made; (iv) the occurrence of a payment default under any indebtedness (other than indebtedness under the Credit Agreement) of Time Warner, TWE, or any other borrower under the Credit Agreement, or certain of their respective subsidiaries, in excess of $10 million individually or $50 million in the aggregate beyond the applicable grace period; 14 (v) the occurrence of an event of default under any indebtedness (other than indebtedness under the Credit Agreement) of Time Warner, TWE, or any other borrower under the Credit Agreement, or certain of their respective subsidiaries, permitting acceleration of indebtedness in excess of $10 million individually or $50 million in the aggregate thereunder, and the default continues beyond any applicable grace period; (vi) certain events of bankruptcy with respect to or the dissolution or liquidation of Time Warner, TWE, or any other borrower under the Credit Agreement, or certain of their respective subsidiaries or the General Partners; (vii) the failure to pay any amount in excess of $25 million to the Pension Benefit Guaranty Corporation in connection with any pension plan or certain other ERISA defaults; (viii) the entering of a judgment against Time Warner, TWE, or any other borrower under the Credit Agreement, any General Partner or any of their Material Subsidiaries in excess of $20 million individually or $50 million in the aggregate at any one time if such judgment has not been paid, vacated or stayed pending appeal within 60 days; and (ix) the occurrence of a "change in control" (as defined in the Credit Agreement) with respect to Time Warner, TWE or any other borrower under the Credit Agreement. Each of the General Partners has guaranteed its Guaranteed Percentage of TWE's obligations under the Credit Agreement. See "Description of the Debt Securities--Guarantees." TWE has a commercial paper facility and issues commercial paper from time to time. At September 30, 1998, commercial paper outstanding was approximately $365 million. Each of the General Partners has guaranteed its Guaranteed Percentage of TWE's outstanding commercial paper. DESCRIPTION OF OUTSTANDING DEBT SECURITIES TWE has $3.8 billion aggregate principal amount of Outstanding Debt Securities. The Outstanding Debt Securities are unsecured and unsubordinated obligations of the Company issued under an indenture, dated as of April 30, 1992, as amended, among the Company, Time Warner, the subsidiaries of Time Warner that are parties thereto and The Bank of New York, as trustee. The Outstanding Debt Securities are generally subject to the same covenants under the Indenture as are the Debt Securities except that Outstanding Debt Securities are subject to the following covenants to which the Debt Securities are not subject: (i) a limitation on the issuance of senior indebtedness by TWE, (ii) a limitation on the ability of TWE and Time Warner (and certain of their subsidiaries) to grant certain guarantees, and (iii) limitations on certain restricted payments following an Event of Default or TWE's failure to pay interest when due with respect to Outstanding Debt Securities. In addition, TWE does not have the right to provide for the assumption of the Outstanding Debt Securities by an entity that controls or is under common control with TWE in the event of the dissolution of TWE under the circumstances provided for in paragraph (2) under "Description of the Debt Securities--Redemption or Assumption Upon Dissolution of TWE." GLOBAL SECURITIES Unless otherwise specified in a Prospectus Supplement for a particular series, each series of Debt Securities will be issued in whole or in part in global form (the "Global Securities") that will be deposited with, or on behalf of, a depository (the "Depository") identified in the Prospectus Supplement relating to such series. Global Securities will be registered in the name of the Depository, which will be the sole direct holder of the Global Securities. ANY PERSON WISHING TO OWN A DEBT SECURITY MUST DO SO INDIRECTLY THROUGH AN ACCOUNT WITH A BROKER, BANK OR OTHER FINANCIAL INSTITUTION THAT, IN TURN, HAS AN ACCOUNT WITH THE DEPOSITORY. SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES TWE's obligations with respect to the Debt Securities, as well as the obligations of the Trustee, run only to Persons who are registered as holders of Debt Securities. For example, once TWE makes payment to the registered holder, TWE has no further responsibility for that payment even if that recipient is legally required to pass the payment along to an individual investor but does not do so. As an indirect holder, an investor's rights 15 relating to a Global Security will be governed by the account rules of the investor's financial institution and of the Depository, as well as general laws relating to debt securities transfers. An investor should be aware that when Debt Securities are issued in the form of Global Securities: o the investor cannot have Debt Securities registered in his or her own name. o the investor cannot receive physical certificates for his or her interest in the Debt Securities. o the investor must look to his or her own bank or brokerage firm for payments on the Debt Securities and protection of his or her legal rights relating to the Debt Securities. o the investor may not be able to sell interests in the Debt Securities to some insurance companies and other institutions that are required by law to hold the physical certificates of Debt Securities that they own. o the Depository's policies will govern payments, transfers, exchange and other matters relating to the investor's interest in the Global Security. TWE and the Trustee have no responsibility for any aspect of the Depository's actions or for its records of ownership interests in the Global Security. TWE and the Trustee also do not supervise the Depository in any way. o the Depository will usually require that interests in a Global Security be purchased or sold within its system using same-day funds. SPECIAL SITUATIONS WHEN THE GLOBAL SECURITY WILL BE TERMINATED In a few special situations described below, the Global Security will terminate and interests in it will be exchanged for physical certificates representing Debt Securities. After that exchange, the choice of whether to hold Debt Securities directly or indirectly through an account at the investor's bank or brokerage firm will be up to the investor. In that event, investors must consult their own banks or brokers to find out how to have their interests in Debt Securities transferred to their own names, so that they will be direct holders. The special situations for termination of a Global Security are: o when the Depository notifies TWE that it is unwilling, unable or no longer qualified to continue as Depository (unless a replacement Depository is named). o when an Event of Default on the Debt Securities has occurred and has not been cured. o when and if TWE decides to terminate a Global Security. The Prospectus Supplement may list situations for terminating a Global Security that would apply only to the particular series of Debt Securities covered by the Prospectus Supplement. When a Global Security terminates, the Depository (and not TWE or the Trustee) is responsible for deciding the names of the institutions that will be the initial direct holders. Unless otherwise provided in the Prospectus Supplement, Debt Securities that are represented by a Global Security will be issued in denominations of $1,000 and any integral multiple thereof, and will be issued in registered form only, without coupons. PLAN OF DISTRIBUTION TWE may sell the Debt Securities to one or more underwriters or dealers for public offering and sale by them or may sell the Debt Securities to investors directly or through agents. Any underwriters or agents will be identified and their compensation described in a Prospectus Supplement. TWE (directly or through agents) may sell, and the underwriters resell, the Debt Securities in one or more transactions, including negotiated transactions, at a fixed public offering price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. In connection with the sale of Debt Securities, the underwriters or agents may receive compensation from TWE or from purchasers of the Debt Securities for whom they may act as agents. The underwriters may sell Debt Securities to or through dealers, who may also receive compensation from purchasers of the Debt Securities for 16 whom they may act as agents. Compensation may be in the form of discounts, concessions or commissions. Underwriters, dealers and agents that participate in the distribution of the Debt Securities may be underwriters as defined in the Securities Act of 1933 (the "Act"), and any discounts or commissions received by them from us and any profit on the resale of the Debt Securities by them may be treated as underwriting discounts and commissions under the Act. TWE will indemnify the underwriters and agents against certain civil liabilities, including liabilities under the Act. Underwriters, dealers and agents may engage in transactions with, or perform services for, TWE or its affiliates in the ordinary course of their businesses. LEGAL OPINIONS Certain legal matters in connection with the Debt Securities will be passed upon for the Company by Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York and for the Underwriters, if any, named in a Prospectus Supplement, by Shearman & Sterling, 599 Lexington Avenue, New York, New York. EXPERTS Ernst & Young LLP, independent auditors, have audited the consolidated financial statements and schedules of the Company, WCI and ATC included in Annual Report on Form 10-K for the year ended December 31, 1997 of the Company, WCI and ATC, as set forth in their reports, which are incorporated herein by reference. Such consolidated financial statements are incorporated by reference in reliance on their reports, given on their authority as experts in accounting and auditing. 17 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following statement sets forth the estimated amounts of expenses, other than underwriting discounts, to be borne by the registrant in connection with the distribution of the Debt Securities. Trustees' fees.............................................. $ 5,000 Printing and engraving expenses............................. 250,000 Rating agency fees.......................................... 250,000 Accounting fees and expenses................................ 100,000 Legal fees and expenses..................................... 200,000 Miscellaneous expenses...................................... 25,000 ---------- Total expenses......................................... $ 830,000 ---------- ----------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. TWE is a Delaware limited partnership. Section 17-108 of the Delaware Revised Uniform Limited Partnership Act provides that subject to such standards and restrictions, if any, as are set forth in its partnership agreement, a limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever. Section 12.8 of the TWE Partnership Agreement provides that the Company shall indemnify, defend and hold harmless each Representative and officer of the Company from any personal liability he or she may incur by reason of his or her action on behalf of the Company to the fullest extent permitted as if the Company were a Delaware corporation. TWE's obligations under Section 12.8 of the TWE Partnership Agreement are expressly non-recourse to the general partners of TWE. ATC and WCI are Delaware corporations as is Time Warner, the ultimate parent of TWE and the General Partners. Subsection (b)(7) of Section 102 of the Delaware General Corporation Law (the "DGCL"), enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for violations of the director's fiduciary duty, except (i) for any breach of the directors' duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director derived an improper personal benefit. Subsection (a) of Section 145 of the DGCL empowers a corporation to indemnify any director or officer, or former director or officer, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding provided that such director or officer acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, provided further that such director or officer had no reasonable cause to believe his conduct was unlawful. Subsection (b) of Section 145 empowers a corporation to indemnify any director or officer, or former director or officer, who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorney's fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit provided that II-1 such director or officer acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification may be made in respect to any claim, issue or matter as to which such director or officer shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or that court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such director or officer is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Section 145 further provides that to the extent a director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to in subsections (a) and (b) or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorney's fees) actually and reasonably incurred by him in connection therewith; that indemnification and advancement of expenses provided for, by, or granted pursuant to, Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled, and empowers the corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liabilities under Section 145. Generally, the By-Laws of WCI and ATC provide for indemnification of the officers and directors of WCI and ATC to the fullest extent permitted by applicable law. In addition Article VI of the Certificate of Incorporation of ATC provides for the elimination of liability of directors to the extent permitted by applicable law. Article VI of Time Warner's By-Laws requires indemnification to the fullest extent permitted under applicable law of any person who is or was a director or officer of Time Warner or who is or was involved or threatened to be made so involved in any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person is or was serving as a director, officer or employee of Time Warner or any predecessor of Time Warner or was serving at the request of Time Warner as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, which would include TWE and the General Partners. Time Warner's Directors' and Officers' Liability and Reimbursement Insurance Policy is designed to reimburse Time Warner for any payments made by it pursuant to the foregoing indemnification. Such policy has coverage of $50 million. ITEM 16. EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------ --------------------------------------------------------------------------------------------------------- 1 Proposed form of Debt Securities Underwriting Agreement. 4.1 Proposed form of Indenture among Time Warner Entertainment Company, L.P. ("TWE"), Warner Communications Inc., American Television and Communications Corporation and the Bank of New York, as Trustee. 4.2 Form of Debt Security. 5 Opinion of Cravath, Swaine & Moore. 10.1 Credit Agreement dated as of November 10, 1997 among Time Warner Inc., Time Warner Companies, Inc., TWE, Turner Broadcasting System, Inc., Time Warner Entertainment-Advance/Newhouse Partnership and TWI Cable, Inc., as Credit Parties, The Chase Manhattan Bank, as Administrative Agent, Bank of America National Trust and Savings Association, BONY and Morgan Guaranty Trust Company of New York, as Documentation and Syndication Agents and Chase Securities Inc., as Arranger (incorporated herein by reference to Exhibit 10.26 to Time Warner Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).*
II-2
EXHIBIT NUMBER DESCRIPTION ---- --------------------------------------------------------------------------------------------------------- 12.1 Statement regarding the computation of the ratio of earnings to fixed charges for TWE. 12.2 Statement regarding the computation of the ratio of earnings to fixed charges for Warner Communications Inc. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Cravath, Swaine & Moore (included in Exhibit 5). 24 Power of Attorney. 25 Statement of Eligibility and Qualification on Form T-1 of The Bank of New York (bound separately).
- ------------------ * Incorporated by Reference II-3 ITEM 17. UNDERTAKINGS. A. Undertaking Pursuant to Rule 415 The undersigned registrants hereby undertake: (a) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act, that are incorporated by reference in the Registration Statement; (b) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (c) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. Undertaking Regarding Filings Incorporating Subsequent Exchange Act Documents by Reference The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of any of the registrants' annual reports pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. Undertaking in Respect of Indemnification Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 15 above, or otherwise, the registrants have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceedings) is asserted by such officer, director or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether or not such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, EACH OF THE REGISTRANTS CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON DECEMBER 31, 1998. TIME WARNER ENTERTAINMENT COMPANY, L.P. By: WARNER COMMUNICATIONS INC. As General Partner By: /s/ JOHN A. LABARCA __________________________________ John A. LaBarca Vice President and Controller AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION WARNER COMMUNICATIONS INC. By: /s/ JOHN A. LABARCA __________________________________ John A. LaBarca Vice President and Controller PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON DECEMBER 31, 1998.
SIGNATURE TITLE - ------------------------------------------ --------------------------------------------------------- * Chairman of the Board and Chief Executive Officer of each - ------------------------------------------ Registrant and Director of WCI and ATC (Principal Gerald M. Levin Executive Officer) * Executive Vice President and Chief Financial Officer of - ------------------------------------------ TWE, and Senior Vice President and Chief Financial Richard J. Bressler Officer and Director of WCI and ATC (Principal Financial Officer) /s/ JOHN A. LABARCA Senior Vice President and Controller of TWE, and Vice - ------------------------------------------ President and Controller of WCI and ATC (Principal John A. LaBarca Accounting Officer) * Director of WCI and ATC - ------------------------------------------ Richard D. Parsons * Director of WCI and ATC - ------------------------------------------ Peter R. Haje *By: /s/ THOMAS W. MCENERNEY -------------------------------------- Attorney-in-Fact
II-5 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------ ------------------------------------------------------------------------------------ 1 -- Proposed form of Debt Securities Underwriting Agreement. 4.1 -- Proposed form of Indenture among Time Warner Entertainment Company, L.P. ("TWE"), Warner Communications Inc., American Television and Communications Corporation and the Bank of New York, as Trustee. 4.2 -- Form of Debt Security. 5 -- Opinion of Cravath, Swaine & Moore. 10.1 -- Credit Agreement dated as of November 10, 1997 among Time Warner Inc., Time Warner Companies, Inc., TWE, Turner Broadcasting System, Inc., Time Warner Entertainment-Advance/Newhouse Partnership and TWI Cable, Inc., as Credit Parties, The Chase Manhattan Bank, as Administrative Agent, Bank of America National Trust and Savings Association, BONY and Morgan Guaranty Trust Company of New York, as Documentation and Syndication Agents and Chase Securities Inc., as Arranger (incorporated herein by reference to Exhibit 10.26 to Time Warner Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).* 12.1 -- Statement regarding the computation of the ratio of earnings to fixed charges for TWE. 12.2 -- Statement regarding the computation of the ratio of earnings to fixed charges for Warner Communications Inc. 23.1 -- Consent of Ernst & Young LLP. 23.2 -- Consent of Cravath, Swaine & Moore. (included in Exhibit 5). 24 -- Power of Attorney. 25 -- Statement of Eligibility and Qualification on Form T-1 of The Bank of New York (bound separately).
- ------------------ * Incorporated by Reference. EX-1 2 FORM OF UNDERWRITING AGREEMENT TIME WARNER ENTERTAINMENT COMPANY, L.P. AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION WARNER COMMUNICATIONS INC. Form of Underwriting Agreement [----------------, ----] New York, New York To the Representatives named in Schedule I hereto of the Underwriters named in Schedule II hereto Dear Sirs: Time Warner Entertainment Company, L.P., a Delaware limited partnership (the "Company"), proposes to sell to the underwriters named in Schedule II hereto (the "Underwriters"), for whom you (the "Representatives") are acting as representatives, the principal amount of its securities identified in Schedule I hereto (the "Debt Securities"), to be issued under an indenture (as from time to time amended or supplemented, the "Indenture") dated as of [_______________, ____], among the Company, American Television and Communications Corporation, a Delaware corporation ("ATC"), Warner Communications Inc., a Delaware corporation ("WCI", and, together with ATC, the "Guarantors") and The Bank of New York, as trustee (the "Trustee"), providing for the issuance of debt securities in one or more series, all of which will be entitled to the benefit of the Guarantees referred to below. Pursuant to the Indenture, each of ATC and WCI, as primary obligor and not merely as surety, has agreed to irrevocably and unconditionally guarantee (together, the "Guarantees"; and together with the Debt Securities, the "Securities"), to each holder of Debt Securities and to the Trustee, (i) the full and punctual payment of principal of and interest on the Debt Securities up to the amount of the Guaranteed Percentage (as defined in the Indenture) when due, whether at maturity, by 2 acceleration, by redemption or otherwise, and all other monetary obligations of the Company under the Indenture and the Debt Securities. If the firm or firms listed in Schedule II hereto include only the firm or firms listed in Schedule I hereto, then the terms "Underwriters" and "Representatives", as used herein, shall each be deemed to refer to such firm or firms. The Company was formed as a limited partnership in 1992 pursuant to an Agreement of Limited Partnership, dated as of October 29, 1991, as amended on February 11, 1992 and June 23, 1992, among Time Warner Companies, Inc. ("TWCI") and certain of its subsidiaries, ITOCHU Corporation ("ITOCHU") and Toshiba Corporation ("Toshiba"), and as further amended by an Amendment Agreement, dated as of September 14, 1993, among ITOCHU, Toshiba, TWCI, US West, Inc. and certain of their respective subsidiaries (as amended, the "TWE Partnership Agreement"). Capitalized terms used herein without definition have the respective meanings specified therefor in the Indenture or the Registration Statement (as defined below). 1. Representations and Warranties. Each of the Company, ATC and WCI represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 1. Certain terms used in this Section 1 are defined in paragraph (q) hereof. (a) If the offering of the Securities is a Delayed Offering (as specified in Schedule I hereto), paragraph (i) below is applicable and, if the offering of the Securities is a Non-Delayed Offering (as so specified), paragraph (ii) below is applicable. (i) The Company and the Guarantors meet the requirements for the use of Form S-3 under the Securities Act of 1933, as amended (the "Act"), and have filed with the Securities and Exchange Commission (the "Commission") a registration statement (the file number of which is set forth in Schedule I hereto) on such Form, including a basic prospectus, for registration under the Act of the offering and sale of the Securities. The Company and the Guarantors may have filed one or more amendments thereto, and may have used a Preliminary Final Prospectus, each of which has previously been furnished to you. Such registration statement, as so amended, and any post-effective amendment thereto, has become effective. The offering of the Securities is a Delayed Offering and, although the Basic Prospectus may not include all the information with respect to the Securities and the offering thereof required by the Act and the rules thereunder to be included in the Final Prospectus, the Basic Prospectus includes all such information required by the Act and the rules thereunder to be included therein as of the Effective Date. The Company and the Guarantors will next file with the Commission pursuant to Rules 415 and 424(b)(2) or (5) a final supplement to the form of prospectus included in such registration statement relating to the Securities and the offering thereof. As filed, such final prospectus supplement shall include all required information with respect to the Securities and the offering thereof and, except to the extent the Representatives shall agree in writing 3 to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Basic Prospectus and any Preliminary Final Prospectus) as the Company and the Guarantors have advised you, prior to the Execution Time, will be included or made therein. (ii) The Company and the Guarantors meet the requirements for the use of Form S-3 under the Act and have filed with the Commission a registration statement (the file number of which is set forth in Schedule I hereto) on such Form, including a basic prospectus, for registration under the Act of the offering and sale of the Securities. The Company and the Guarantors may have filed one or more amendments thereto, including a Preliminary Final Prospectus, each of which has previously been furnished to you. The Company and the Guarantors will next file with the Commission either (x) a final prospectus supplement relating to the Securities in accordance with Rules 430A and 424(b)(1) or (4), or (y) prior to the Effective Date of such registration statement, an amendment to such registration statement, including the form of final prospectus supplement. In the case of clause (x), the Company and the Guarantors have included in such registration statement, as amended at the Effective Date, all information (other than Rule 430A Information) required by the Act and the rules thereunder to be included in the Final Prospectus with respect to the Securities and the offering thereof. As filed, such final prospectus supplement or such amendment and form of final prospectus supplement shall contain all Rule 430A Information, together with all other such required information, with respect to the Securities and the offering thereof and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Basic Prospectus and any Preliminary Final Prospectus) as the Company and the Guarantors have advised you, prior to the Execution Time, will be included or made therein. (b) On the Effective Date, the Registration Statement did or will, and when the Final Prospectus is first filed (if required) in accordance with Rule 424(b) and on the Closing Date, the Final Prospectus (and any supplement thereto) will, comply in all material respects with the applicable requirements of the Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the respective rules thereunder; on the Effective Date, the Registration Statement did not or will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; on the Effective Date and on the Closing 4 Date the Indenture did or will comply in all material respects with the requirements of the Trust Indenture Act and the rules thereunder; and, on the Effective Date, the Final Prospectus, if not filed pursuant to Rule 424(b), did not or will not, and on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus (together with any supplement thereto) will not, include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company and the Guarantors make no representations or warranties as to (i) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification (Form T-l) under the Trust Indenture Act of the Trustee or (ii) the information contained in or omitted from the Registration Statement or the Final Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company or either Guarantor by or on behalf of any Underwriter through the Representatives specifically for inclusion in the Registration Statement or the Final Prospectus (or any supplement thereto). (c) (1) The Company is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware, with full power and authority under such laws to own its properties and conduct its business as described in the Basic Prospectus, and any amendment or supplement thereto, and to enter into and perform its obligations under this Agreement; and the Company is duly qualified to transact business as a foreign partnership and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (2) Each of ATC and WCI is validly existing as a corporation in good standing under the laws of the State of Delaware, with full corporate power and authority under such laws to own its properties and conduct its business as described in the Basic Prospectus, and any amendment or supplement thereto, and to enter into and perform its obligations under this Agreement; and each of ATC and WCI is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on ATC and its subsidiaries or WCI and its subsidiaries, in each case considered as one enterprise. (d) Each of the Company's significant subsidiaries, as such term is defined in Rule 1-02(w) of Regulation S-X under the Act, is validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with full power and authority under such laws to own its properties and conduct its business as described in 5 the Basic Prospectus, and any amendment or supplement thereto, and is duly qualified to transact business as a foreign corporation or partnership and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (e) The Company's equity capitalization is as set forth in the Basic Prospectus, and any amendment or supplement thereto. (f) There is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company, ATC or WCI or any of their respective subsidiaries of a character required to be disclosed in the Registration Statement which is not adequately disclosed in the Basic Prospectus, and any amendment or supplement thereto, and there is no franchise, contract or other document of a character required to be described in the Registration Statement or Basic Prospectus, and any amendment or supplement thereto, or to be filed as an exhibit, which is not described or filed as required. (g) This Agreement has been duly authorized, executed and delivered by each of the Company, ATC and WCI. (h) No consent, approval, authorization or order of any court or governmental agency or body is required for the authorization, issuance, sale and delivery of the Securities by the Company and the Guarantors or the consummation of the transactions contemplated by this Agreement or in any Delayed Delivery Contracts, except such as have been obtained under the Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters and such other approvals as have been obtained. (i) Except as otherwise disclosed in the Basic Prospectus, neither the Company nor any of its significant subsidiaries, as such term is defined in Rule 1-02(w) of Regulation S-X under the Act, is in violation of its certificate of limited partnership or certificate of incorporation, as applicable, or in default of the performance or observance of any obligation, agreement, covenant or condition contained in the TWE certificate of limited partnership or the TWE Partnership Agreement, except for such violations or defaults that in the aggregate would not have a material adverse effect on the condition (financial or otherwise), results of operations, earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise. The execution and delivery of this Agreement and the Indenture by the Company, ATC and WCI, the issuance, sale and delivery of Debt Securities by the Company, the issuance and delivery of their respective Guarantees by ATC and WCI, the consummation by the 6 Company, ATC and WCI of the transactions contemplated in this Agreement, the Indenture and the Registration Statement and compliance by the Company, ATC and WCI with the terms of this Agreement or any Delayed Delivery Contracts do not and will not result in any violation of the TWE certificate of limited partnership or the TWE Partnership Agreement by the Company or the certificate of incorporation or By-laws of ATC and WCI, and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, ATC or WCI, under (i) any indenture, mortgage or loan agreement, or any other agreement or instrument, to which the Company, ATC or WCI is a party or by which any of them may be bound or to which any of their properties may be subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company, ATC or WCI, respectively, and their respective subsidiaries, considered as one enterprise), (ii) any existing applicable law, rule or regulation (except for such conflicts, breaches, liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company, ATC or WCI, respectively, and their respective subsidiaries, considered as one enterprise, and other than the securities or blue sky laws of various jurisdictions), or (iii) any judgment, order or decree of any government, governmental instrumentality or court having jurisdiction over the Company, ATC or WCI or any of their properties. (j) The documents incorporated by reference in the Basic Prospectus, and any amendment or supplement thereto, as of the dates they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act. (k) The Securities conform in all material respects to the description thereof contained in the Basic Prospectus, and any amendment or supplement thereto; if any of the Securities are to be listed on any stock exchange, authorization therefor has been given, subject to official notice of issuance and evidence of satisfactory distribution, or the Company and the Guarantors have no reason to believe that such Securities will not be authorized for listing, subject to official notice of issuance and evidence of satisfactory distribution. (l) The Indenture has been duly authorized by the Company, has been duly qualified under the Trust Indenture Act, and, at the Closing Date, will have been duly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Trustee, will, at the Closing Date, constitute a legal, valid and binding instrument enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and subject as to 7 enforceability to general principles of equity, regardless of whether considered in a proceeding in equity or at law); and the Debt Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement, in the case of the Underwriters' Securities, or by the purchasers thereof pursuant to Delayed Delivery Contracts, in the case of any Contract Securities, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and subject as to enforceability to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (m) The Indenture has been duly authorized by each of ATC and WCI and, at the Closing Date, will have been duly executed and delivered by each of ATC and WCI and, assuming due authorization, execution and delivery by the Trustee, will, at the Closing Date, constitute a legal, valid and binding instrument enforceable against each of ATC and WCI in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and subject as to enforceability to general principles of equity, regardless of whether considered in a proceeding in equity or at law). (n) Each Delayed Delivery Contract that has been executed by the Company, ATC and WCI has been duly authorized, executed and delivered by the Company, ATC and WCI, respectively, and, assuming the due authorization, execution and delivery by the purchaser thereunder, is a valid and binding obligation of the Company, ATC and WCI enforceable against the Company, ATC and WCI, respectively, in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and subject as to enforceability to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (o) Each firm of independent accountants, which is reporting upon certain audited or reviewed financial statements and schedules included or incorporated by reference in the Registration Statement, are independent auditors with respect to the financial statements covered by the audit or review of such firm, in accordance with the provisions of the Exchange Act and the Act and the respective applicable published rules and regulations thereunder. (p) The consolidated financial statements and the related notes of each of the Company, ATC and WCI and any other person included or incorporated by reference in the Registration Statement present fairly in accordance with generally accepted accounting principles the consolidated financial position of each of the Company, ATC 8 and WCI and any such other person as of the dates indicated and the consolidated results of operations of each of the Company, ATC and WCI and any such other person and cash flows of each of the Company and ATC and WCI for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as otherwise noted therein and subject, in the case of interim statements, to normal year-end audit adjustments. The financial statement schedules included or incorporated by reference in the Registration Statement present fairly in accordance with generally accepted accounting principles the information required to be stated therein. Any pro forma financial statements of the Company, ATC or WCI and other pro forma financial information included or incorporated by reference in the Registration Statement present fairly the information shown therein. Such pro forma financial statements and other pro forma financial information, to the extent required, have been prepared in accordance with applicable rules and guidelines of the Commission, if any, with respect thereto, have been properly compiled on the pro forma bases described therein, and, in the opinion of the Company, ATC and WCI, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. (q) The terms which follow, when used in this Agreement, shall have the meanings indicated. The term "Effective Date" shall mean each date that the Registration Statement and any post-effective amendment or amendments thereto became or become effective and each date after the date hereof on which a document incorporated by reference in the Registration Statement is filed. "Execution Time" shall mean the date and time that this Agreement is executed and delivered by the parties hereto. "Basic Prospectus" shall mean the prospectus referred to in paragraph (a) above contained in the Registration Statement at the Effective Date including, in the case of a Non-Delayed Offering, any Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean any preliminary prospectus supplement to the Basic Prospectus which describes the Securities and the offering thereof and is used prior to filing of the Final Prospectus. "Final Prospectus" shall mean the prospectus supplement relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time, together with the Basic Prospectus or, if, in the case of a Non-Delayed Offering, no filing pursuant to Rule 424(b) is required, shall mean the form of final prospectus relating to the Securities, including the Basic Prospectus, included in the Registration Statement at the Effective Date. The registration statement (File No. 333-______) filed by the Company on Form S-3 with the Securities and Exchange Commission (which also constitutes post-effective Amendment No. 1 to Registration Statement File No. 33-75144), together with Registration Statement File No. 33-75144, as amended on the date Registration Statement File No. 333-______ became effective, including the exhibits and financial statements thereto and the documents incorporated by reference therein, is herein collectively referred to as the "Registration Statement." Such term shall include any Rule 430A Information deemed to 9 be included therein at the Effective Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer to such rules or regulation under the Act. "Rule 430A Information" means information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A. All references in this Agreement to the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be; all references in this Agreement to financial statements and schedules and other information that is "contained", "included" or "stated" in the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that are or are deemed to be incorporated by reference in the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be deemed to mean and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. A "Non-Delayed Offering" shall mean an offering of securities which is intended to commence promptly after the effective date of a registration statement, with the result that, pursuant to Rules 415 and 430A, all information (other than Rule 430A Information) with respect to the securities so offered must be included in such registration statement at the effective date thereof. A "Delayed Offering" shall mean an offering of securities pursuant to Rule 415 which does not commence promptly after the effective date of a registration statement, with the result that only information required pursuant to Rule 415 need be included in such registration statement at the effective date thereof with respect to the securities so offered. Whether the offering of the Securities is a Non-Delayed Offering or a Delayed Offering shall be set forth in Schedule I hereto. (r) None of the Company, ATC or WCI is an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended. 2. Purchase and Sale. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company at the purchase price for the Debt Securities set forth in Schedule I hereto, the principal 10 amount of Debt Securities set forth opposite such Underwriter's name in Schedule II hereto, except that, if Schedule I hereto provides for the sale of Debt Securities pursuant to delayed delivery arrangements, the respective principal amounts of Debt Securities to be purchased by the Underwriters shall be as set forth in Schedule II hereto less the respective amounts of Contract Securities determined as provided below. Debt Securities to be purchased by the Underwriters are herein sometimes called the "Underwriters' Securities" and Debt Securities to be purchased pursuant to Delayed Delivery Contracts as hereinafter provided are herein called "Contract Securities". If so provided in Schedule I hereto, the Underwriters are authorized to solicit offers to purchase Debt Securities from the Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts"), substantially in the form of Schedule III hereto but with such changes therein as the Company, ATC or WCI may authorize or approve. The Underwriters will endeavor to make such arrangements and, as compensation therefor, the Company will pay to the Representatives, for the account of the Underwriters, on the Closing Date, the percentage set forth in Schedule I hereto of the principal amount of the Debt Securities for which Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be with institutional investors, including commercial and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions. The Company and the Guarantors will enter into Delayed Delivery Contracts in all cases where sales of Contract Securities arranged by the Underwriters have been approved by the Company but, except as the Company may otherwise agree, each such Delayed Delivery Contract must be for not less than the minimum principal amount set forth in Schedule I hereto and the aggregate principal amount of Contract Securities may not exceed the maximum aggregate principal amount set forth in Schedule I hereto. The Underwriters will not have any responsibility in respect of the validity or performance of Delayed Delivery Contracts. The principal amount of Debt Securities to be purchased by each Underwriter as set forth in Schedule II hereto shall be reduced by an amount which shall bear the same proportion to the total principal amount of Contract Securities as the principal amount of Debt Securities set forth opposite the name of such Underwriter bears to the aggregate principal amount set forth in Schedule II hereto, except to the extent that you determine that such reduction shall be otherwise than in such proportion and so advise the Company in writing; provided, however, that the total principal amount of Debt Securities to be purchased by all Underwriters shall be the aggregate principal amount set forth in Schedule II hereto less the aggregate principal amount of Contract Securities. 3. Delivery and Payment. Delivery of and payment for the Underwriters' Securities shall be made on the date and at the time specified in Schedule I hereto, which date and time may be postponed to a date not later than five business days after such specified date by agreement between the Representatives, acting jointly and without regard to any agreement among underwriters, and the Company or as provided in Section 8 hereof (such date and time of delivery and payment for the Underwriters' Securities being herein called the "Closing Date"). Delivery of the Underwriters' Securities shall be made to the Representatives for the respective 11 accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer and payable in same day funds (unless another form of payment is specified in Schedule I hereto). Delivery of the Underwriters' Securities shall be made at such location as the Representatives shall reasonably designate on the Closing Date and payment for the Securities shall be made at the office specified in Schedule I hereto. Certificates for the Underwriters' Securities shall be registered in such names and in such denominations as the Representatives may request not less than one full business day in advance of the Closing Date. The Company agrees to have the Underwriters' Securities available for inspection, checking and packaging by the Representatives in New York, New York, not later than 1:00 p.m. on the business day prior to the Closing Date. Delivery and payment for the Contract Securities shall be as provided in the applicable Delayed Delivery Contract. 4. Agreements. The Company and the Guarantors agree with the several Underwriters that: (a) Each of the Company, ATC and WCI will use its best efforts to cause the Registration Statement, if not effective at the Execution Time, and any amendment thereto, to become effective. Prior to the termination of the offering of the Securities, none of the Company, ATC and WCI will file any amendment to the Registration Statement or supplement (including the Final Prospectus or any Preliminary Final Prospectus) to the Basic Prospectus unless the Company or a Guarantor has furnished you a copy for your review prior to filing or will file any such proposed amendment or supplement to which you reasonably object on a timely basis (other than filings of periodic reports pursuant to Section 13(a) under the Exchange Act). Subject to the foregoing sentence, the Company and the Guarantors will cause the Final Prospectus, properly completed, and any supplement thereto to be filed with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Representatives of such timely filing. The Company, ATC and WCI will promptly advise the Representatives (i) when the Registration Statement, if not effective at the Execution Time, and any amendment thereto, shall have become effective, (ii) when the Final Prospectus, and any supplement thereto, shall have been filed with the Commission pursuant to Rule 424(b), (iii) when, prior to termination of the offering of each series of Securities, any amendment to the Registration Statement shall have been filed or become effective, (iv) of any request by the Commission for any amendment to the Registration Statement or supplement to the Final Prospectus or for any additional information relating to the offering of the Securities, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any 12 proceeding for that purpose and (vi) of the receipt by the Company, ATC or WCI of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. Each of the Company, ATC and WCI will use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (b) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event occurs as a result of which the Final Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Final Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, the Company and the Guarantors promptly will prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 4, an amendment or supplement which will correct such statement or omission or effect such compliance. (c) As soon as practicable, the Company and the Guarantors will make generally available to their respective security holders and to the Representatives an earnings statement or statements of each of the Company, ATC and WCI and their respective subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (d) If and to the extent specified in Schedule I, each of the Company, ATC and WCI will use its reasonable best efforts to cause the Securities to be duly authorized for listing on the New York Stock Exchange and to be registered under the Exchange Act. (e) For a period of three years after the Closing Date, the Company will furnish to you and, upon request, to each Underwriter, copies of all annual reports, quarterly reports and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by the Commission, and such other documents, reports and information as shall be furnished by the Company to its public stockholders generally. (f) The proceeds of the offering of the Securities will be applied as set forth in the Final Prospectus. (g) The Company, ATC or WCI will furnish to the Representatives and counsel for the Underwriters, without charge, copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act, as many copies of any Preliminary Final Prospectus 13 and the Final Prospectus and any supplement thereto as the Representatives may reasonably request. (h) The Company and the Guarantors will pay and bear all costs and expenses incident to the performance of their obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits), as originally filed and as amended, any preliminary prospectus supplements and the Basic Prospectus, the Preliminary Final Prospectus and the Final Prospectus and any amendments or supplements thereto, and the cost of furnishing copies thereof to the Underwriters, (ii) the preparation, printing and distribution of this Agreement, the Indenture, the Securities, any Delayed Delivery Contracts, and the blue sky survey, (iii) the delivery of the Securities to the Underwriters, (iv) the fees and disbursements of the Company's and the Guarantors' counsel and the accountants required hereby to provide "comfort letters", (v) the qualification of the Securities under the applicable securities laws in accordance with Section 4(i) and any filing for review of the offering with the National Association of Securities Dealers, Inc., including filing fees and fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the blue sky survey, (vi) any fees charged by rating agencies for rating the Securities, (vii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee, in connection with the Indenture and the Securities, (viii) any expenses and listing fees in connection with the listing of the Securities, (ix) the cost and charges of any transfer agent or registrar and (x) the costs of qualifying the Securities with The Depository Trust Company. (i) The Company and the Guarantors will arrange for the qualification of each series of Securities for distribution, offering and sale under the laws of such jurisdictions as the Representatives may designate, will maintain such qualifications in effect so long as required for the distribution of such series of Securities and will arrange for the determination of the legality of the Securities for purchase by institutional investors; provided, however, that none of the Company, ATC or WCI shall be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 4(i), (ii) file any general consent to service of process or (iii) subject itself to taxation in any such jurisdiction if it is not so subject. (j) Until the Closing Date or such other date as may be specified in Schedule I, none of the Company, ATC or WCI (and, if so specified in Schedule I, Time Warner Inc. and/or other additional parties) will, without the consent of the managing underwriter specified in Schedule I, offer, sell or contract to sell, or announce the offering of, any debt securities designed or intended to be traded or distributed in the public or private securities markets; provided, however, that the foregoing shall not prohibit (i) the Company, ATC, WCI, Time Warner Inc. or such additional parties from issuing 14 long-term debt as all or part of the consideration in any merger or acquisition and/or in connection with the settlement of any litigation, (ii) the Company, ATC, WCI, Time Warner Inc. or such additional parties from filing with the Commission a "shelf" registration statement for the offering of securities under Rule 415 of the Act (or any similar rule that may be adopted by the Commission) or amending any existing shelf registration statement provided that such securities are not issued until the business day following the Closing Date or such other date as may be specified in Schedule I or (iii) any of the foregoing from issuing commercial paper. 5. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Underwriters' Securities shall be subject to the accuracy in all material respects of the representations and warranties on the part of the Company and the Guarantors contained herein as of the Execution Time and the Closing Date, to the accuracy in all material respects of the statements of the Company and the Guarantors made in any certificates pursuant to the provisions hereof, to the performance by each of the Company, ATC and WCI of its obligations hereunder, to the due execution and delivery of the Indenture, to the absence of any event or condition which would give you the right to terminate this Agreement and to the following additional conditions: (a) If the Registration Statement has not become effective prior to the Execution Time, unless the Representatives agree in writing to a later time, the Registration Statement will become effective not later than (i) 6:00 p.m. New York City time, on the date of determination of the public offering price, if such determination occurred at or prior to 3:00 p.m. New York City time on such date or (ii) 12:00 noon on the business day following the day on which the public offering price was determined, if such determination occurred after 3:00 p.m. New York City time on such date; if filing of the Final Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the Final Prospectus, and any such supplement, shall have been filed in the manner and within the time period required by Rule 424(b); and at the Closing Date no stop order suspending the effectiveness of the Registration Statement shall have been issued under the Act or proceedings therefor initiated or threatened by the Commission. (b) At the Closing Date, the Company shall have furnished to you the opinion of Peter R. Haje, General Counsel to the Company, dated the Closing Date, substantially in the form of Exhibit A hereto. (c) At the Closing Date, the Company shall have furnished to you the opinion and statement of Cravath, Swaine & Moore, counsel to the Company and the Guarantors, each dated the Closing Date, substantially in the form of Exhibit B and Exhibit C hereto, respectively. 15 (d) The Representatives shall have received from Shearman & Sterling, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to the issuance and sale of the Securities, the Indenture, any Delayed Delivery Contracts, the Registration Statement, the Final Prospectus (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Company and the Guarantors shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (e) (1) The Company shall have furnished to the Representatives a certificate of the Company, signed by any two officers who are an Executive or Senior Vice President of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Final Prospectus, any supplement to the Final Prospectus and this Agreement and that: (i) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date; (ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the Company's knowledge, threatened; and (iii) since the date of the most recent financial statements included in the Final Prospectus (exclusive of any supplement thereto), there has been no material adverse change in the condition (financial or otherwise), earnings, or business prospects of the Company and its subsidiaries, considered as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Final Prospectus (exclusive of any supplement thereto). (2) ATC shall have furnished to the Representatives a certificate of ATC, signed by any two officers who are an Executive or Senior Vice President of ATC, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Final Prospectus, any supplement to the Final Prospectus and this Agreement and that the representations and warranties of ATC in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and ATC has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date. 16 (3) WCI shall have furnished to the Representatives a certificate of WCI, signed by any two officers who are Vice Presidents of WCI, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Final Prospectus, any supplement to the Final Prospectus and this Agreement and that the representations and warranties of WCI in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and WCI has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date. (f) At the Closing Date, and, if specified in Schedule I, at the Execution Time, Ernst & Young LLP shall have furnished to the Representatives a letter or letters, dated respectively as of the Closing Date and the Execution Time, in form and substance satisfactory to the Representatives, confirming that they are independent auditors with respect to the Company, ATC and WCI within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder and stating in effect that: (i) in their opinion the audited financial statements and financial statement schedules of the Company, ATC and WCI included or incorporated in the Registration Statement and the Final Prospectus comply in form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations; (ii) on the basis of a reading of the latest unaudited financial statements (including the notes thereto) made available by the Company, ATC and WCI and their respective consolidated subsidiaries; carrying out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of the minutes of the meetings of the general partners and the Board of Representatives of the Company and the meetings of the stockholders and directors of ATC and WCI and their respective consolidated subsidiaries; and inquiries of certain officials of the Company, ATC and WCI who have responsibility for financial and accounting matters of the Company, ATC and WCI and their respective consolidated subsidiaries as to transactions and events subsequent to the date of the most recent audited financial statements in or incorporated in the Final Prospectus, and such other inquiries and procedures as may be specified in such letter, nothing came to their attention which caused them to believe that: (1) any of such unaudited financial statements included or incorporated in the Registration Statement and the Final Prospectus do not comply in form in all material respects with applicable accounting 17 requirements of the Act and the Exchange Act and with the published rules and regulations of the Commission with respect to financial statements included or incorporated in quarterly reports on Form 10-Q under the Exchange Act; or said unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated in the Registration Statement and the Final Prospectus; or (2) with respect to the period subsequent to the date of the most recent unaudited financial statements in or incorporated in the Registration Statement and the Final Prospectus, there were any increases, at a specified date not more than five business days prior to the date of the letter, in the long-term debt of the Company, ATC and WCI and their respective consolidated subsidiaries or any decreases in partners' or stockholders' equity or the consolidated partnership interests of the Company or the capital stock of ATC and WCI as compared with the amounts shown on the most recent consolidated balance sheet included or incorporated in the Registration Statement and the Final Prospectus for such entities, or for the period from the date of the most recent unaudited financial statements included or incorporated in the Registration Statement and the Final Prospectus for such entities to such specified date there were any decreases, as compared with the corresponding period in the preceding year, in revenues, income before income taxes (or any increase in the loss before income taxes) or net income (or any increase in net loss), except in all instances for decreases or increases disclosed in the Final Prospectus; (iii) they are unable to and do not express any opinion on the pro forma adjustments to the financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus or on the pro forma adjustments applied to the historical amounts included or incorporated by reference in the Registration Statement and the Final Prospectus; however, for purposes of such letter they have: (1) read the pro forma adjustments to such financial statements; (2) made inquiries of certain officials of the Company, ATC and WCI who have responsibility for financial and accounting matters about the basis for their determination of the pro forma adjustments to such financial statements and whether such pro forma adjustments comply 18 as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X; and (3) proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts included or incorporated by reference in the Registration Statement and the Final Prospectus; and on the basis of such procedures, and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that the pro forma adjustments to the financial statements included or incorporated by reference in the Registration Statement and the Final Prospectus do not comply as to form in all material respects with the applicable requirements of Rule 11-02 of Regulation S-X and that such pro forma adjustments have not been properly applied to the historical amounts in the compilation of such financial statements; and (iv) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its subsidiaries) set forth in the Registration Statement and the Final Prospectus and in Exhibits 12.1 and 12.2 to the Registration Statement agrees with the accounting records of the Company and its subsidiaries, ATC and its subsidiaries or WCI and its subsidiaries, as the case may be, excluding any questions of legal interpretation. (g) At the Closing Date and, if and to the extent specified in Schedule I, at the Execution Time, each other firm of independent accountants who audited or reviewed financial statements included or incorporated by reference in the Registration Statement shall have furnished to the Representatives a letter or letters, dated respectively as of the Closing Date and the Execution Time, in form and substance satisfactory to the Representatives, confirming that they are independent auditors with respect to the financial statements audited or reviewed by them within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder and to the same effect as the letter or letters of Ernst & Young LLP as described in Section 5(f)(i) and 5(f)(ii)(1) hereto. (h) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus (exclusive of any supplement thereto), there shall not have been (i) any decrease or increase specified in the letter or letters referred to in paragraph (f) of this Section 5 or (ii) any change, or any development involving a prospective change, in 19 or affecting the business (including the results of operations or management) or properties of the Company and its subsidiaries the effect of which, in any case referred to in clause (i) or (ii) above, is, in the reasonable judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of any series of Securities as contemplated by the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus (exclusive of any supplement thereto). (i) Subsequent to the Execution Time, (i) there shall not have been any downgrade in the credit ratings of any of the Company's, ATC's or WCI's debt securities by Moody's Investor Service, Inc. or Standard & Poor's Ratings Group, and (ii) none of the Company, ATC or WCI shall have been placed under special surveillance, with negative implications, by Moody's Investor Service, Inc. or Standard & Poor's Ratings Group. (j) Prior to the Closing Date, the Company and the Guarantors shall have furnished to the Representatives such further information, certificates and documents as the Representatives may reasonably request. (k) The Company shall have accepted the Delayed Delivery Contracts in any case where sales of Contract Securities arranged by the Underwriters have been approved by the Company. If any of the conditions specified in this Section 5 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be cancelled at, or at any time prior to, the Closing Date by the Representatives and such cancellation shall be without liability of any party to any other party, except to the extent provided in Sections 4 and 6. Notice of such cancellation shall be given to the Company, ATC or WCI in writing or by telephone or telegraph confirmed in writing. 6. Reimbursement of Underwriters' Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 5 hereof is not satisfied or because of any refusal, inability or failure on the part of the Company, ATC or WCI to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company and the Guarantors will reimburse the Underwriters severally upon demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. 20 7. Indemnification and Contribution. (a) Each of the Company, ATC and WCI agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Securities as originally filed or in any amendment thereof, or in the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that none of the Company, ATC or WCI will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon (i) any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company, ATC and WCI by or on behalf of any Underwriter through the Representatives specifically for inclusion therein or (ii) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the Trustee. This indemnity agreement will be in addition to any liability which the Company, ATC or WCI may otherwise have. (b) Each Underwriter severally agrees to indemnify and hold harmless each of the Company, ATC and WCI, each of their respective directors, each of their respective officers who signs the Registration Statement, and each person who controls the Company, ATC or WCI within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company, ATC and WCI to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company, ATC and WCI by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. Each of the Company, ATC and WCI acknowledges that the statements set forth in the last paragraph of the cover page, the first and third paragraphs under the heading "Underwriters" and, if Schedule I hereto provides for sales of Securities pursuant to delayed delivery arrangements, in the last sentence under the heading "Delayed Delivery Arrangements" in any Preliminary Final Prospectus or the Final Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the documents referred to in the foregoing indemnity, and you, as the Representatives, confirm that such statements are correct. 21 (c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party (it being understood, however, that in connection with such action, the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, representing the indemnified parties who are parties to such action or actions), (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company, ATC, WCI and the Underwriters agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in 22 connection with investigating or defending same) (collectively "Losses") to which the Company, the Guarantors and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company, ATC and WCI on one hand, and by the Underwriters, on the other hand, from the offering of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company, ATC, WCI and the Underwriters shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Guarantors and of the Underwriters in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company and the Guarantors shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses), and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Final Prospectus. Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company, ATC or WCI or the Underwriters. The Company, the Guarantors and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such \fraudulent misrepresentation. For purposes of this Section 7, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company, ATC or WCI within the meaning of either the Act or the Exchange Act, each officer of the Company, ATC or WCI who shall have signed the Registration Statement and each director of the Company, ATC or WCI shall have the same rights to contribution as the Company and the Guarantors, subject in each case to the applicable terms and conditions of this paragraph (d). 8. Default by an Underwriter. If any one or more Underwriters shall fail on the Closing Date to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions for each of the Debt Securities which such Underwriter failed to purchase which the amount of the Debt Securities set forth opposite their names in Schedule II hereto bears to the aggregate amount of such Debt Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate amount of Securities which the defaulting 23 Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule II hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all of the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the Company and the Guarantors. In the event of a default by any Underwriter as set forth in this Section 8, the Closing Date shall be postponed for such period, not exceeding seven days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Final Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company, the Guarantors and any nondefaulting Underwriter for damages occasioned by its default hereunder. 9. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company, ATC or WCI prior to delivery of and payment for the Securities, if prior to such time (i) trading in the Company's common stock or any of the Company's, ATC's or WCI's debt securities shall have been suspended by the Commission or the New York Stock Exchange or trading in securities generally on such Exchange shall have been suspended or limited or minimum or maximum prices shall have been established on such Exchange, or maximum ranges for prices for securities have been required, by such Exchange or by order of the Commission or any other governmental authority, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any new outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other calamity or crisis the effect of which on financial markets of the United States is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the offering or delivery of a series of Securities as contemplated by the Final Prospectus (exclusive of any supplement thereto). If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party, except to the extent provided in Sections 4 and 6. 10. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company, ATC or WCI or any of their respective officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company, ATC or WCI, or any of the officers, directors or controlling persons referred to in Section 7 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 6 and 7 hereof shall survive the termination or cancellation of this Agreement. 11. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telegraphed and confirmed to them, at the address specified in Schedule I hereto; or, if sent to the Company, ATC 24 or WCI, will be mailed, delivered or telegraphed and confirmed to it care of the Company at 75 Rockefeller Plaza, New York, New York 10019, attention of General Counsel. 12. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 7 hereof, and no other person will have any right or obligation hereunder. 13. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York. 14. Business Day. For purposes of this Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. 15. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company, ATC, WCI and the several Underwriters. Very truly yours, TIME WARNER ENTERTAINMENT COMPANY, L.P. By ------------------------- Name: Title: AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION By ------------------------- Name: Title: WARNER COMMUNICATIONS INC. By ------------------------- Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date specified in Schedule I hereto. [_______________________] By: [____________________] By ________________________ Name: Title: For themselves and the other several Underwriters, if any, named in Schedule II to the foregoing Agreement. SCHEDULE I Underwriting Agreement: Dated [___________, ____] Registration Statement: No. 333- Representative(s): [Managing Underwriter:] Title, Purchase Price and Description of Securities: Securities: Title: Principal amount: Interest rate: Interest payment dates: Date of maturity: Purchase price (include accrued interest or amortization, if any): Initial public offering price: Sinking fund provisions: Redemption provisions: Other provisions: Closing Date, Time and Location: Type of funds payable at Closing: [Federal or other immediately available funds] Type of Offering: [Delayed Offering or Non-Delayed Offering] Delayed Delivery Arrangements: Fee: Minimum principal amount of each contract: Minimum aggregate principal amount of all contracts: Maximum aggregate principal amount of all contracts: Listing requirements: Comfort letter at Execution Time: [Yes/No] Time Warner Inc. and/or other additional parties subject to Section 4(j): [Yes/No] SCHEDULE II
Principal Amount to Underwriters be Purchased ------------ ------------ $ Total.................................................... $ ============
SCHEDULE III Delayed Delivery Contract [______________, ______] [Insert name and address of lead Representative] Dear Sirs: The undersigned hereby agrees to purchase from Time Warner Entertainment Company, L.P. (the "Company"), and the Company agrees to sell to the undersigned, on _____________, ______ (the "Delivery Date"), $________________ principal amount of the Company's _____________________ (the "Securities") offered by the Company's Prospectus dated ____________, _______, and related Prospectus Supplement dated __________, _____, receipt of a copy of which is hereby acknowledged, at a purchase price of ____% of the principal amount thereof, plus [accrued interest] [amortization of original issue discount], if any, thereon from ____________, _____ to the date of payment and delivery, and on the further terms and conditions set forth in this contract. Payment for the Securities to be purchased by the undersigned shall be made on or before 11:00 a.m., New York City time, on the Delivery Date to or upon the order of the Company in New York Clearing House (next day) funds, at your office or at such other place as shall be agreed between the Company and the undersigned, upon delivery to the undersigned of the Securities in definitive fully registered form and in such authorized denominations and registered in such names as the undersigned may request by written communication addressed to the Company not less than five full business days prior to the Delivery Date. If no request is received, the Securities will be registered in the name of the undersigned and issued in a denomination equal to the aggregate principal amount of Securities to be purchased by the undersigned on the Delivery Date. The obligation of the undersigned to take delivery of and make payment for Securities on the Delivery Date, and the obligation of the Company to sell and deliver Securities on the Delivery Date, shall be subject to the conditions (and neither party shall incur any liability by reason of the failure thereof) that (1) the purchase of Securities to be made by the undersigned, which purchase the undersigned represents is not prohibited on the date hereof, shall not on the Delivery Date be prohibited under the laws of the jurisdiction to which the undersigned is subject, and (2) the Company, on or before the Delivery Date, shall have sold to certain underwriters (the "Underwriters") such principal amount of the Securities as is to be sold to them pursuant to the Underwriting Agreement referred to in the Prospectus and Prospectus Supplement mentioned above. Promptly after completion of such sale to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. The obligation of the undersigned to take delivery of and make payment for the Securities, and the obligation of the Company to cause the Securities to be sold and delivered, shall not be affected by the failure of any purchaser to take delivery of and make payment for the Securities pursuant to other contracts similar to this contract. By the execution hereof, the undersigned represents and warrants to the Company that (1) its investment in the Securities is not, as of the date hereof, prohibited under the laws of any jurisdiction to which the undersigned is subject and that govern such instrument, (2) all necessary corporate action for the due execution and delivery of this contract and the payment for and purchase of the Securities has been taken by it and no further authorization or approval of any governmental or other regulatory authority is required for such execution, delivery, payment or purchase and (3) upon the acceptance by the Company and the mailing or delivery of a copy as provided below, this contract will constitute a valid and binding agreement of the undersigned in accordance with its terms. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. It is understood that acceptance of this contract and other similar contracts is in the Company's sole discretion and, without limiting the foregoing, need not be on a first come, first served basis. If this contract is acceptable to the Company, it is required that he Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned, as of the date first above written, when such counterpart is so mailed or delivered. This agreement shall be governed by and construed in accordance with the laws of the State of New York. Very truly yours, ----------------------------------- (Name of Purchaser) By: _______________________________ (Signature and Title of Officer) ----------------------------------- (Address) Accepted: TIME WARNER ENTERTAINMENT COMPANY, L.P. By: ____________________________ (Authorized Signatory) AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION By: ____________________________ (Authorized Signatory) WARNER COMMUNICATIONS INC. By: ____________________________ (Authorized Signatory) PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING The name and telephone number of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed is as follows: (Please print.) Telephone No. Name (including area code) ---- --------------------- EXHIBIT A FORM OF OPINION OF PETER R. HAJE, ESQ. (i) the Company is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware, with full power and authority under such laws to own its properties and conduct its business as described in the Basic Prospectus, and any amendment or supplement thereto, and the Company, is duly qualified to transact business as a foreign partnership and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise; (ii) each of ATC and WCI is validly existing as a corporation in good standing under the laws of the State of Delaware, with full corporate power and authority under such laws to own its properties and conduct its business as described in the Basic Prospectus, and any amendment or supplement thereto, and each of ATC and WCI is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on ATC and its subsidiaries or WCI and its subsidiaries, in each case considered as one enterprise; (iii) each of the Company's significant subsidiaries, as such term is defined in Rule 1-02(w) of Regulation S-X under the Act, is validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with full power and authority under such laws to own its properties and conduct its business as described in the Basic Prospectus, and any amendment or supplement thereto, and is duly qualified to transact business as a foreign corporation or partnership and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise; (iv) the Company's equity capitalization is as set forth in the Final Prospectus; (v) to the best knowledge of such counsel, there is no pending or threatened action, suit or proceeding before any court or governmental agency, authority or body or any arbitrator involving the Company, ATC or WCI, or any of their respective subsidiaries, of a character required to be disclosed in the Registration Statement which is not adequately disclosed in the Final Prospectus, and there is no franchise, contract or A-2 other document of a character required to be described in the Registration Statement or Final Prospectus, or to be filed as an exhibit, which is not described or filed as required; (vi) no authorization, approval, consent, order or license of any government, governmental instrumentality, agency or body or court (other than such as has been obtained under the Act and such as may be required under the securities or blue sky laws of various jurisdictions) is required for the authorization, issuance, sale and delivery of the Securities by the Company, ATC and WCI and the consummation by the Company, ATC and WCI of the transactions contemplated by the Underwriting Agreement; (vii) the Indenture and the Underwriting Agreement have been duly authorized, executed and delivered by each of the Company, ATC and WCI; (viii) the execution and delivery of the Underwriting Agreement and the Indenture by the Company, ATC and WCI, the issuance, sale and delivery of the Debt Securities by the Company, the issuance and delivery of their respective guarantees by ATC and WCI, and the consummation by the Company, ATC and WCI of the transactions contemplated in the Underwriting Agreement, the Indenture and the Registration Statement and compliance by the Company, ATC and WCI with the terms of the Underwriting Agreement or any Delayed Delivery Contracts do not and will not result in any violation of the certificate of limited partnership of the Company, the Agreement of Limited Partnership, as amended, of the Company or of the certificate of incorporation or by-laws of ATC or WCI and do not and will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, ATC or WCI under (i) any indenture, mortgage or loan agreement, or any other agreement or instrument known to such counsel, to which the Company, ATC or WCI is a party or by which any of them may be bound or to which any of their properties may be subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise), (ii) any existing applicable law, rule or regulation (except for such conflicts, breaches, liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise, and other than the securities or blue sky laws of various jurisdictions), or (iii) any judgment, order or decree of any government, governmental instrumentality or court having jurisdiction over the Company, ATC or WCI or any of their properties. (ix) the documents incorporated by reference in the Final Prospectus (except for the financial statements and other financial or statistical data included therein or omitted therefrom, as to which such counsel need express no opinion), as of the dates A-3 they were filed with the Commission, complied as to form in all material respects with the requirements of the Securities Exchange Act of 1934, as amended. In addition, such counsel shall also state as follows: As General Counsel, I have reviewed and participated in the preparation of the Registration Statement and the Final Prospectus, including the documents incorporated by reference therein. In examining the Registration Statement and Final Prospectus, I have necessarily assumed the correctness and completeness of the statements made or included therein by the Company and the Guarantors and take no responsibility therefor. However, in the course of the preparation by the Company and the Guarantors of the Registration Statement and the Final Prospectus, I have participated in conferences with certain officers of, and accountants for, the Company and the Guarantors with respect thereto, and my examination of the Registration Statement and Final Prospectus and my discussions in the above-mentioned conferences did not disclose any information which gave me reason to believe that the Registration Statement (except for the financial statements and other financial or statistical data included therein or omitted therefrom, as to which I express no opinion) at the time it became effective included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, not misleading or that the Final Prospectus (except as aforesaid), at its issue date or on the date of this opinion, included or includes any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the United States, the State of New York and the General Corporation Law of the State of Delaware, to the extent such counsel deems proper and specified in such opinion, upon the opinion of other counsel of good standing whom such counsel believes to be reliable and who are satisfactory to counsel for the Underwriters; and (B) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company, ATC or WCI and public officials. EXHIBIT B FORM OF OPINION OF CRAVATH, SWAINE & MOORE (i) Based solely upon a certificate from the Secretary of State of Delaware the Company is validly existing as a limited partnership in good standing under the laws of the State of Delaware, with full power and authority to own its properties and conduct its business as described in the Basic Prospectus, and any amendment or supplement thereto; (ii) Based solely upon a certificate from the Secretary of State of Delaware each of ATC and WCI is a corporation validly existing in good standing under the laws of the State of Delaware, with full corporate power and authority to own its properties and conduct its business as described in the Basic Prospectus, and any amendment or supplement thereto; (iii) the Securities conform in all material respects to the description thereof contained in the Prospectus; (iv) the Indenture has been duly authorized, executed and delivered by each of the Company, ATC and WCI, has been duly qualified under the Trust Indenture Act of 1939, and, assuming due authorization, execution and delivery by the Trustee, constitutes a legal, valid and binding obligation of the Company, ATC and WCI, enforceable against the Company, ATC and WCI in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law); and the Debt Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting creditors' rights generally from time to time in effect and subject to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law); (v) the Registration Statement (as defined in the Underwriting Agreement) became effective under the Securities Act on [_____________], 199[_]; any required filing of the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated; and B-2 (vi) the Underwriting Agreement has been duly authorized, executed and delivered by the each of the Company, ATC and WCI; We are admitted to practice in the State of New York, and we express no opinion as to any matters governed by any law other than the law of the State of New York, the Federal law of the United States of America and the General Corporation Law of the State of Delaware. EXHIBIT C FORM OF SIDE LETTER OF CRAVATH, SWAINE & MOORE Although we have made certain inquiries and investigations in connection with the preparation of the Registration Statement and the Prospectus, the limitations inherent in the role of outside counsel are such that we cannot and do not assume responsibility for the accuracy or completeness of the statements made in the Registration Statement and Prospectus, except insofar as such statements relate to us and except to the extent set forth in paragraph (ii) of our opinion to you dated the date hereof. Subject to the foregoing, we hereby advise you that our work in connection with this matter did not disclose any information that gave us reason to believe that: (i) the Registration Statement, at the time the Registration Statement became effective, or the Prospectus, as of the date hereof, (except in each case the financial statements and other information of an accounting, statistical or financial nature included therein, and the Statement of Eligibility (Form T-1) included as an exhibit to the Registration Statement, as to which we do not express any view) were not appropriately responsive in all material respects to the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder; or (ii) the Registration Statement, at the time the Registration Statement became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus, at its issue date and at the date hereof, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to made the statements therein, in the light of the circumstances under which they were made, not misleading (in each case except for the financial statements and other information of an accounting, statistical or financial nature included therein, as to which we do not express any view). EX-4.1 3 INDENTURE Exhibit 4.1 [Draft--12/31/98] - -------------------------------------------------------------------------------- TIME WARNER ENTERTAINMENT COMPANY, L.P., WARNER COMMUNICATIONS INC., as Guarantor AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION, as Guarantor and THE BANK OF NEW YORK, Trustee INDENTURE Dated as of ----------------- Providing for Issuance of Senior Securities in Series - -------------------------------------------------------------------------------- Table Showing Reflection in Indenture of Certain Provisions of Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 -------------------- Reflected in Indenture TIA Section ss.310(a)(1).................................................... 6.09 (a)(2).................................................... 6.09 (a)(3).................................................... Not Applicable (a)(4).................................................... Not Applicable (a)(5).................................................... 6.09 (b)....................................................... 6.08 ss.311(a)....................................................... 6.13(a) (b)....................................................... 6.13(b) (b)(2).................................................... 7.03(a) .......................................................... 7.03(b) ss.312(a)....................................................... 7.01 .......................................................... 7.02(a) (b)....................................................... 7.03(b) (c)....................................................... 7.02(c) ss.313(a)....................................................... 7.03(a) (b)....................................................... 7.03(b) (c)....................................................... 7.03(a) .......................................................... 7.03(b) (d)....................................................... 7.03(c) ss.314(a)(1).................................................... 7.04 (a)(2).................................................... 7.04 (a)(3).................................................... 7.04 (a)(4).................................................... 10.04 (b)....................................................... Not Applicable (c)(1).................................................... 1.02 (c)(2).................................................... 1.02 (c)(3).................................................... Not Applicable (d)....................................................... Not Applicable (e)....................................................... 1.02 ss.315(a)....................................................... 6.01(a) .......................................................... 6.01(c) (b)....................................................... 6.02 .......................................................... 7.03(a) (c)....................................................... 6.01(b) (d)....................................................... 6.01 2 (d)(1).................................................... 6.01(a) (d)(2).................................................... 6.01(c)(2) (d)(3).................................................... 6.01(c)(3) (e)....................................................... 5.14 ss.316(a)....................................................... 1.01 (a)(1)(A)................................................. 5.02 .......................................................... 5.12 (a)(1)(B)................................................. 5.13 (a)(2).................................................... Not Applicable (b)....................................................... 5.08 (c)....................................................... 1.04(d) ss.317(a)(1).................................................... 5.03 (a)(2).................................................... 5.04 (b)....................................................... 10.03 ss. 318(a)...................................................... 1.07 TABLE OF CONTENTS
Page ---- Recitals of the Company............................................................ 1 Agreements of the Parties.......................................................... 1 ARTICLE I Definitions and Other Provisions of General Application SECTION 1.01. Definitions........................................................ 1 SECTION 1.02. Compliance Certificates and Opinions........................................................ 12 SECTION 1.03. Form of Documents Delivered to Trustee......................................................... 13 SECTION 1.04. Acts of Securityholders............................................ 14 SECTION 1.05. Notices, etc., to Trustee and Company......................................................... 16 SECTION 1.06. Notices to Securityholders; Waiver................................. 16 SECTION 1.07. Conflict with Trust Indenture Act.................................. 17 SECTION 1.08. Effect of Headings and Table of Contents........................................................ 17 SECTION 1.09. Successors and Assigns............................................. 17 SECTION 1.10. Separability Clause................................................ 17 SECTION 1.11. Benefits of Indenture.............................................. 17 SECTION 1.12. Governing Law...................................................... 18 SECTION 1.13. Counterparts....................................................... 18 SECTION 1.14. Judgment Currency.................................................. 18 ARTICLE II Security Forms SECTION 2.01. Forms Generally.................................................... 19 SECTION 2.02. Forms of Securities................................................ 19 SECTION 2.03. Form of Trustee's Certificate of Authentication.................................................. 19 SECTION 2.04. Securities Issuable in the Form of a Global Security................................................. 20
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Page ---- ARTICLE III The Securities SECTION 3.01 General Title; General Limitations; Issuable in Series; Terms of Particular Series............................................... 22 SECTION 3.02 Denominations...................................................... 26 SECTION 3.03. Execution, Authentication and Delivery and Dating............................................. 26 SECTION 3.04. Temporary Securities............................................... 28 SECTION 3.05. Registration, Transfer and Exchange........................................................ 29 SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities...................................................... 30 SECTION 3.07. Payment of Interest; Interest Rights Preserved....................................................... 31 SECTION 3.08. Persons Deemed Owners.............................................. 33 SECTION 3.09. Cancelation........................................................ 33 SECTION 3.10. Computation of Interest............................................ 34 SECTION 3.11. Delayed Issuance of Securities..................................... 34 SECTION 3.12. CUSIP Numbers...................................................... 34 ARTICLE IV Satisfaction and Discharge SECTION 4.01. Termination of Obligations ........................................ 35 SECTION 4.02. Defeasance and Discharge of Indenture....................................................... 36 SECTION 4.03. Defeasance of Certain Obligations.................................. 39 SECTION 4.04. Application of Trust Money......................................... 41 SECTION 4.05. Reinstatement..................................................... 41 ARTICLE V Remedies SECTION 5.01. Events of Default.................................................. 42 SECTION 5.02. Acceleration of Maturity; Rescission and Annulment................................................... 44 SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee...................................... 45 SECTION 5.04. Trustee May File Proofs of Claim................................... 47 SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities........................................ 48 SECTION 5.06. Application of Money Collected..................................... 48 SECTION 5.07. Limitation on Suits................................................ 48
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Page ---- SECTION 5.08. Unconditional Right of Securityholders To Receive Principal, Premium and Interest........................................................ 49 SECTION 5.09. Restoration of Rights and Remedies................................. 50 SECTION 5.10. Rights and Remedies Cumulative..................................... 50 SECTION 5.11. Delay or Omission Not Waiver....................................... 50 SECTION 5.12. Control by Securityholders......................................... 50 SECTION 5.13. Waiver of Past Defaults............................................ 51 SECTION 5.14. Undertaking for Costs.............................................. 51 SECTION 5.15. Waiver of Stay or Extension Laws................................... 52 ARTICLE VI The Trustee SECTION 6.01. Certain Duties and Responsibilities................................ 52 SECTION 6.02. Notice of Defaults................................................. 54 SECTION 6.03. Certain Rights of Trustee.......................................... 54 SECTION 6.04. Not Responsible for Recitals or Issuance of Securities.......................................... 56 SECTION 6.05. May Hold Securities................................................ 56 SECTION 6.06. Money Held in Trust................................................ 56 SECTION 6.07. Compensation and Reimbursement..................................... 56 SECTION 6.08. Disqualification; Conflicting Interests....................................................... 57 SECTION 6.09. Corporate Trustee Required; Eligibility..................................................... 57 SECTION 6.10. Resignation and Removal............................................ 58 SECTION 6.11. Acceptance of Appointment by Successor.......................................................... 60 SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.......................................... 61 SECTION 6.13. Preferential Collection of Claims Against Company................................................. 62 SECTION 6.14. Appointment of Authenticating Agent................................ 66 SECTION 6.15. Trustee's Application for Instructions from the Company.................................... 68 ARTICLE VII Securityholders' Lists and Reports by Trustee and Company SECTION 7.01. Company To Furnish Trustee Names and Addresses of Securityholders.................................... 69 SECTION 7.02. Preservation of Information; Communications to Securityholders............................... 69 SECTION 7.03. Reports by Trustee................................................. 71
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SECTION 7.04. Reports by Company................................................. 71 SECTION 7.05. Tax Reporting...................................................... 72 ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease SECTION 8.01. The Company May Consolidate, Etc., Only on Certain Terms........................................... 72 SECTION 8.02 Successor Substituted.............................................. 73 ARTICLE IX Supplemental Indentures SECTION 9.01. Supplemental Indentures Without Consent of Securityholders...................................... 74 SECTION 9.02. Supplemental Indentures with Consent of Securityholders.............................................. 76 SECTION 9.03. Execution of Supplemental Indentures............................... 78 SECTION 9.04. Effect of Supplemental Indentures.................................. 78 SECTION 9.05. Conformity with Trust Indenture Act................................ 78 SECTION 9.06. Reference in Securities to Supplemental Indentures......................................... 78 ARTICLE X Covenants SECTION 10.01. Payment of Principal, Premium and Interest........................................................ 78 SECTION 10.02. Maintenance of Office or Agency.................................... 79 SECTION 10.03. Money for Security Payments To Be Held in Trust........................................................ 79 SECTION 10.04. Statement as to Compliance......................................... 81 SECTION 10.05. Legal Existence.................................................... 81 SECTION 10.06. Maintenance of Properties.......................................... 82 SECTION 10.07. Payment of Taxes and Other Claims.................................. 82 SECTION 10.08. Limitation on Liens................................................ 82 SECTION 10.09. Waiver of Certain Covenants........................................ 85
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ARTICLE XI Redemption of Securities Page SECTION 11.01. Applicability of Article........................................... 85 SECTION 11.02. Election To Redeem; Notice to Trustee.............................. 86 SECTION 11.03. Selection by Trustee of Securities To Be Redeemed.................. 86 SECTION 11.04. Optional Redemption, or Assumption................................. 87 SECTION 11.05. Notice of Redemption............................................... 88 SECTION 11.06. Deposit of Redemption Price........................................ 89 SECTION 11.07. Securities Payable on Redemption Date.............................. 90 SECTION 11.08. Securities Redeemed in Part........................................ 90 SECTION 11.09. Provisions with Respect to Any Sinking Funds........................................................... 90 ARTICLE XII Guarantees SECTION 12.01. Guarantees......................................................... 92
v 1 THIS INDENTURE between TIME WARNER ENTERTAINMENT COMPANY, L.P., a Delaware limited partnership (hereinafter called the "Company") having its principal office at 75 Rockefeller Plaza, New York, New York 10019, WARNER COMMUNICATIONS INC., a Delaware corporation ("WCI"), AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION, a Delaware corporation ("ATC" and together with WCI, the "General Partners"), and THE BANK OF NEW YORK, a New York banking corporation, trustee (hereinafter called the "Trustee"), is made and entered into as of the day of , . Recitals of the Company The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of its unsecured debentures, notes, bonds or other evidences of indebtedness, to be issued in one or more fully registered series. All things necessary to make this Indenture a valid agreement of the Company and the General Partners in accordance with its terms, have been done. Agreements of the Parties To set forth or to provide for the establishment of the terms and conditions upon which the Securities are and are to be authenticated, issued and delivered, and in consideration of the premises and the purchase of Securities by the Holders thereof, it is mutually covenanted and agreed as follows, for the equal and proportionate benefit of all Holders of the Securities or of a series thereof, as the case may be: ARTICLE I Definitions and Other Provisions of General Application SECTION 1.01. Definitions. For all purposes of this Indenture and of any indenture supplemental hereto, 2 except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act or by Commission rule under the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them herein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles and any accounting rules or interpretations promulgated by the Commission as are generally accepted in the United States of America at the date of this Indenture; and (4) all references in this instrument to designated "Articles", "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as originally executed. The words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article VI, are defined in that Article. "Act", when used with respect to any Securityholder, has the meaning specified in Section 1.04. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. 3 "ATC" means American Television and Communications Corporation, a Delaware corporation that is a subsidiary of TWI (as defined below) and a general partner of the Company, until a successor shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "ATC" shall mean such successor. "Authenticating Agent" means any Person authorized by the Trustee to authenticate Securities under Section 6.14. "Board of Directors" means (i) the Board of Representatives of the Company, (ii) any duly authorized committee of such Board, (iii) the Managing General Partners (as defined in the Agreement of Limited Partnership of the Company dated as of October 29, 1991, as amended), acting together, (iv) any committee of officers of the Company or (v) any officer of the Company acting, in the case of (iv) or (v), pursuant to authority granted by such Board of the Company, any committee of such Board or the Managing General Partners. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means, with respect to any series of Securities, unless otherwise specified in a Board Resolution and an Officer's Certificate with respect to a particular series of Securities, each day which is not a Saturday, Sunday or other day on which banking institutions in the pertinent Place or Places of Payment or the city in which the Corporate Trust Office is located are authorized or required by law or executive order to be closed. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor. "Company Request", "Company Order" and "Company Consent" mean a written request, order or consent, respectively, signed in the name of the Company by its Chairman of the Board, President or a Vice President, and by 4 its Treasurer, an Assistant Treasurer, Controller, an Assistant Controller, Secretary or an Assistant Secretary, and delivered to a Responsible Officer of the Trustee. "Comparable Treasury Issue" means, in relation to a particular series of Securities to be redeemed, the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term ("Remaining Life") of such series of Securities that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Securities. "Comparable Treasury Price" means (i) the average of five Reference Treasury Dealer Quotations for such redemption date with respect to a series of Securities, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations. "Consolidated Net Worth" means, with respect to any Person, at the date of any determination, the consolidated stockholders' or owners' equity of the holders of capital stock or partnership interests of such Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP consistently applied. "Corporate Trust Office" means the principal office of the Trustee in the Borough of Manhattan, The City of New York at which at any particular time its corporate trust business shall be principally administered which office at the date hereof is located at 101 Barclay Street, Floor 21 West, New York, New York 10286, Attn: Corporate Trust Administration. "Defaulted Interest" has the meaning specified in Section 3.07. "Depository" means, unless otherwise specified by the Company pursuant to either Section 2.04 or 3.01, with respect to Securities of any series issuable or issued as a Global Security, The Depository Trust Company, New York, New York, or any successor thereto registered as a clearing agency under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation. "Eligible Affiliate" has the meaning specified in Section 11.04. 5 "Event of Default" has the meaning specified in Article V. "Federal Bankruptcy Act" has the meaning specified in Section 5.01(6). "GAAP" means generally accepted accounting principles as such principles are in effect as of the date of this Indenture. "General Partners" means WCI and ATC. "Global Security", when used with respect to any series of Securities issued hereunder, means a Security which is executed by the Company and authenticated and delivered by the Trustee to the Depository or pursuant to the Depository's instruction, all in accordance with this Indenture and an indenture supplemental hereto, if any, or Board Resolution and pursuant to a Company Request, which shall be registered in the name of the Depository or its nominee and which shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series or any portion thereof, in either case having the same terms, including, without limitation, the same original issue date, date or dates on which principal is due, and interest rate or method of determining interest. "Guarantee" has the meaning specified in Section 12.01(a). "Guaranteed Percentage" has the meaning specified in Section 12.01(a). "Guarantors" has the meaning specified in Section 12.01(a). "Holder", when used with respect to any Security, means a Securityholder. "Indenture" or "this Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 3.01. 6 "Independent Investment Banker" means an independent investment banking institution of national standing appointed by the Company. "Interest", when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "Interest Payment Date", when used with respect to any series of Securities, means the Stated Maturity of any installment of interest on those Securities. "Make-Whole Amount" means, on any date when the Company shall redeem any series of Securities, the sum of the present value of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate with respect to such series of Securities, plus a spread (specified in basis points and set forth in the terms of such series of Securities), plus accrued and unpaid interest on the principal amount being redeemed to the date of redemption. "Material Subsidiary" means any Person that is a Subsidiary of the Company if at the end of the most recent fiscal quarter of the Company, the aggregate amount, determined in accordance with GAAP consistently applied, of securities of, loans and advances to, and other investments in, such Person held by the Company and its other Subsidiaries exceeded 10% of the Company's Consolidated Net Worth. "Maturity", when used with respect to any Securities, means the date on which the principal of any such Security becomes due and payable as therein or herein provided, whether on a Repayment Date, at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "NYSE" shall mean the New York Stock Exchange, Inc. "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. Wherever this Indenture requires that an Officers' Certificate be signed also by an engineer or an accountant 7 or other expert, such engineer, accountant or other expert (except as otherwise expressly provided in this Indenture) may be in the employ of the Company, and shall be acceptable to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may (except as otherwise expressly provided in this Indenture) be an employee of or of counsel to the Company, which is delivered to a Responsible Officer of the Trustee. "Original Issue Discount Security" means (i) any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof, and (ii) any other security which is issued with "original issue discount" within the meaning of Section 1273(a) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder. "Outstanding", when used with respect to Securities or Securities of any series, means, as of the date of determination, all such Securities theretofore authenticated and delivered under this Indenture, except: (i) such Securities theretofore canceled by the Trustee or delivered to the Trustee for cancelation; (ii) such Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent in trust for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) such Securities in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, or which shall have been paid pursuant to the terms of Section 3.06 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a Person in whose hands such Security is a legal, valid and binding obligation of the Company). In determining whether the Holders of the requisite principal amount of such Securities Outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of any 8 Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date of the taking of such action upon a declaration of acceleration of the Maturity thereof, and (ii) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding. In determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer assigned to the Corporate Trust Department of the Trustee knows to be owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right to act as owner with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any Securities on behalf of the Company. The Company initially authorizes the Trustee to act as Paying Agent for the Securities on its behalf. The Company may at any time and from time to time authorize one or more Persons to act as Paying Agent in addition to or in place of the Trustee with respect to any series of Securities issued under this Indenture. "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment" means with respect to any series of Securities issued hereunder the city or political subdivision so designated with respect to the series of Securities in question in accordance with the provisions of Section 3.01. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.06 in lieu of a lost, destroyed or stolen Security 9 shall be deemed to evidence the same debt as the lost, destroyed or stolen Security. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price specified in the Security at which it is to be redeemed pursuant to this Indenture. "Reference Treasury Dealer" means any Primary Treasury Dealer selected by the Independent Investment Banker after consultation with the Company. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date for a series of Securities, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue for such series of Securities (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. "Regular Record Date" for the interest payable on any Security on any Interest Payment Date means the date specified in such Security as the Regular Record Date. "Repayment Date", when used with respect to any Security to be repaid, means the date fixed for such repayment pursuant to such Security. "Repayment Price", when used with respect to any Security to be repaid, means the price at which it is to be repaid pursuant to such Security. "Required Currency", when used with respect to any Security, has the meaning set forth in Section 1.14. "Responsible Officer" shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject and who shall have 10 direct responsibility for the administration of this Indenture. "Security" or "Securities" means any unsecured note or notes, bond or bonds, debenture or debentures, or any other evidences of indebtedness, as the case may be, of any series authenticated and delivered from time to time under this Indenture. "Security Register" shall have the meaning specified in Section 3.05. "Security Registrar" means the Person who keeps the Security Register specified in Section 3.05. The Company initially appoints the Trustee to act as Security Registrar for the Securities on its behalf. The Company may at any time and from time to time authorize any Person to act as Security Registrar in place of the Trustee with respect to any series of Securities issued under this Indenture. "Securityholder" means a Person in whose name a security is registered in the Security Register. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.07. "Stated Maturity" when used with respect to any Security or any installment of principal thereof or interest thereon means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "Subsidiary" means, with respect to any Person, any corporation more than 50% of the voting stock of which is owned directly or indirectly by such Person, and any partnership, association, joint venture or other entity in which such Person owns more than 50% of the equity interests or has the power to elect a majority of the board of directors or other governing body. "Treasury Rate" means, with respect to any redemption date and a series of Securities, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption 11 "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue for such series of Securities (if no maturity is within three months before or after the Remaining Life for such series of Securities, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue for such series of Securities shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue for such series of Securities, calculated using a price for the Comparable Treasury Issue for such series of Securities (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date and for such series of Securities. The Treasury Rate shall be calculated on the third Business Day preceding the redemption date. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that, in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" or "TIA" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trustee" means the Person named as the Trustee in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean and include each Person who is then a Trustee hereunder. If at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "TWI" means Time Warner Inc., a Delaware corporation. "U.S. Government Obligations" means securities that are (i) non-callable direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) non-callable obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America. 12 "Vice President" when used with respect to the Company or the Trustee means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president", including, without limitation, an assistant vice president. "Voting Stock", as applied to the stock of any corporation, means stock of any class or classes (however designated) having by the terms thereof ordinary voting power to elect a majority of the members of the board of directors (or other governing body) of such corporation other than stock having such power only by reason of the happening of a contingency. "WCI" means Warner Communications Inc., a Delaware corporation that is a subsidiary of TWI and a general partner of the Company, until a successor shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "WCI" shall mean such successor. "Works" means motion pictures, video, television, interactive or multi-media programming, audio-visual works, sound recordings, books and other literary or written material, any software, copyright or other intellectual property related thereto, acquired directly or indirectly after the date of this Indenture by purchase, business combination, production, creation or otherwise, any component of the foregoing or rights with respect thereto, and all improvements thereon, products and proceeds thereof and revenues derived therefrom. "Yield to Maturity" means the yield to maturity on a series of Securities, calculated by the Company at the time of issuance of such series of Securities, or, if applicable, at the most recent redetermination of interest on such series, in accordance with accepted financial practice. SECTION 1.02. Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any (including any covenants compliance with which constitutes a condition precedent), provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such Counsel all such conditions precedent, if any (including any covenants compliance with which constitutes a condition precedent), have been complied with, except that in the case of any such application or request as to which 13 the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than annual statements of compliance provided pursuant to Section 10.04) shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 1.03. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons may certify or give an opinion as to the other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an 14 officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such Counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 1.04. Acts of Securityholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Securityholders or Securityholders of any series may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders in person or by an agent duly appointed in writing or may be embodied in or evidenced by an electronic transmission which identifies the documents containing the proposal on which such consent is requested and certifies such Securityholders' consent thereto and agreement to be bound thereby; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Company. If any Securities are denominated in coin or currency other than that of the United States, then for the purposes of determining whether the Holders of the requisite principal amount of Securities have taken any action as herein described, the principal amount of such Securities shall be deemed to be that amount of United States dollars that could be obtained for such principal amount on the basis of the spot rate of exchange into United States dollars for the currency in which such Securities are denominated (as evidenced to the Trustee by an Officers' Certificate) as of the date the taking of such action by the Holders of such requisite principal amount is evidenced to the Trustee as provided in the immediately preceding sentence. If any Securities are Original Issue Discount Securities, then for the purposes of determining whether the Holders of the requisite principal amount of Securities have taken any action as herein described, the principal amount of such Original Issue Discount Securities shall be deemed to be the amount of the principal thereof that would be due and payable upon a declaration of acceleration of the Maturity thereof as of the date the taking of such action by the Holders of such requisite principal amount is evidenced to the Trustee as provided in the first sentence of this 15 Section 1.04(a). Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness to such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by an officer of a corporation or a member of a partnership, on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The ownership of Securities shall be proved by the Security Register. (d) If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, by Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do so. Such record date shall be the later of 10 days prior to the first solicitation of such action or the date of the most recent list of Holders furnished to the Trustee pursuant to Section 7.01. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after the record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Securities outstanding have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action, and for that purpose the Securities outstanding shall be computed as of the record date; provided that no such authorization, agreement or consent by the Holders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date, and that no such authorization, agreement or consent may be 16 amended, withdrawn or revoked once given by a Holder, unless the Company shall provide for such amendment, withdrawal or revocation in conjunction with such solicitation of authorizations, agreements or consents or unless and to the extent required by applicable law. (e) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Company in reliance thereon whether or not notation of such action is made upon such Security. SECTION 1.05. Notices, etc., to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Securityholders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: (1) the Trustee by any Securityholder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration; or (2) the Company by the Trustee or by any Securityholder shall be sufficient for every purpose hereunder (except as provided in Section 5.01(4) and (5) or, in the case of a request for repayment, as specified in the Security carrying the right to repayment) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument, Attention: Treasurer, or at any other address previously furnished in writing to the Trustee by the Company. SECTION 1.06. Notices to Securityholders; Waiver. Where this Indenture or any Security provides for notice to Securityholders of any event, such notice shall be sufficiently given (unless otherwise herein or in such Security expressly provided) if in writing and mailed, first-class postage prepaid, to each Securityholder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Securityholders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular 17 Securityholder shall affect the sufficiency of such notice with respect to other Securityholders. Where this Indenture or any Security provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Securityholders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or otherwise, it shall be impractical to mail notice of any event to any Securityholder when such notice is required to be given pursuant to any provision of this Indenture, then any method of notification as shall be satisfactory to the Trustee and the Company shall be deemed to be a sufficient giving of such notice. SECTION 1.07. Conflict with Trust Indenture Act. If and to the extent that any provision hereof limits, qualifies or conflicts with the duties imposed by, or with another provision (an "incorporated provision") included in this Indenture by operation of, any of Sections 310 to 318, inclusive, of the Trust Indenture Act, such imposed duties or incorporated provision shall control. SECTION 1.08. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 1.09. Successors and Assigns. All covenants and agreements in this Indenture by the Company and the Guarantors shall bind their respective successors and assigns, whether so expressed or not. SECTION 1.10. Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in any Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any Authenticating Agent or Paying Agent, the Security Registrar and the Holders of Securities (or such of them as may be affected thereby), any 18 benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 1.12. Governing Law. This Indenture shall be construed in accordance with and governed by the laws of the State of New York. SECTION 1.13. Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. SECTION 1.14. Judgment Currency. The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of, or premium or interest, if any, on the Securities of any series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in the City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding that on which a final unappealable judgment is given and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a legal holiday in the City of New York or a day on which banking institutions in the City of New York are authorized or required by law or executive order to close. 19 ARTICLE II Security Forms SECTION 2.01. Forms Generally. The Securities shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be required to comply with the rules of any securities exchange, or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. Any portion of the text of any Security may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Security. The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities, subject, with respect to the Securities of any series, to the rules of any securities exchange on which such Securities are listed. SECTION 2.02. Forms of Securities. Each Security shall be in one of the forms approved from time to time by or pursuant to a Board Resolution, or established in one or more indentures supplemental hereto. Prior to the delivery of a Security to the Trustee for authentication in any form approved by or pursuant to a Board Resolution, the Company shall deliver to the Trustee the Board Resolution by or pursuant to which such form of Security has been approved, which Board Resolution shall have attached thereto a true and correct copy of the form of Security which has been approved thereby or, if a Board Resolution authorizes a specific officer or officers to approve a form of Security, a certificate of such officer or officers approving the form of Security attached thereto. Any form of Security approved by or pursuant to a Board Resolution must be acceptable as to form to the Trustee, such acceptance to be evidenced by the Trustee's authentication of Securities in that form or a certificate signed by a Responsible Officer of the Trustee and delivered to the Company. SECTION 2.03. Form of Trustee's Certificate of Authentication. The form of Trustee's Certificate of Authentication for any Security issued pursuant to this Indenture shall be substantially as follows: 20 This Security, together with any Guarantees referred to herein, is one of the Securities described in the within-mentioned Indenture. Dated: ----------------------- The Bank of New York, ------------------------------ As Trustee By --------------------------- Authorized Signatory SECTION 2.04. Securities Issuable in the Form of a Global Security. (a) If the Company shall establish pursuant to Sections 2.02 and 3.01 that the Securities of a particular series are to be issued in whole or in part in the form of one or more Global Securities, then the Company shall execute and the Trustee or its agent shall, in accordance with Section 3.03 and the Company Order delivered to the Trustee or its agent thereunder, authenticate and deliver, such Global Security or Securities, which (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the Outstanding Securities of such series to be represented by such Global Security or Securities, or such portion thereof as the Company shall specify in a Company Order, (ii) shall be registered in the name of the Depository for such Global Security or Securities or its nominee, (iii) shall be delivered by the Trustee or its agent to the Depository or pursuant to the Depository's instruction and (iv) shall bear a legend substantially to the following effect: "Unless this certificate is presented by an authorized representative of the Depository to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of the nominee of the Depository or in such other name as is requested by an authorized representative of the Depository (and any payment is made to the nominee of the Depository or to such other entity as is requested by an authorized representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, the nominee of the Depository, has an interest herein." (b) Notwithstanding any other provision of this Section 2.04 or of Section 3.05, and subject to the provisions of paragraph (c) below, unless the terms of a 21 Global Security expressly permit such Global Security to be exchanged in whole or in part for individual Securities, a Global Security may be transferred, in whole but not in part and in the manner provided in Section 3.05, only to a nominee of the Depository for such Global Security, or to the Depository, or a successor Depository for such Global Security selected or approved by the Company, or to a nominee of such successor Depository. (c) (i) If at any time the Depository for a Global Security notifies the Company that it is unwilling or unable to continue as Depository for such Global Security or if at any time the Depository for the Securities for such series shall no longer be eligible or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, the Company shall appoint a successor Depository with respect to such Global Security. If a successor Depository for such Global Security is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company will execute, and the Trustee or its agent, upon receipt of a Company Request for the authentication and delivery of individual Securities of such series in exchange for such Global Security, will authenticate and deliver, individual Securities of such series of like tenor and terms in an aggregate principal amount equal to the principal amount of the Global Security in exchange for such Global Security. (ii) The Company may at any time and in its sole discretion determine that the Securities of any series or portion thereof issued or issuable in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities. In such event the Company will execute, and the Trustee, upon receipt of a Company Request for the authentication and delivery of individual Securities of such series in exchange in whole or in part for such Global Security, will authenticate and deliver individual Securities of such series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of such Global Security or Securities representing such series or portion thereof in exchange for such Global Security or Securities. (iii) If specified by the Company pursuant to Sections 2.02 and 3.02 with respect to Securities issued or issuable in the form of a Global Security, the Depository for such Global Security may surrender such Global Security in exchange in whole or in part for individual Securities of such series of like tenor and terms in definitive form on such terms as are acceptable to the Company and such 22 Depository. Thereupon the Company shall execute, and the Trustee or its agent shall authenticate and deliver, without service charge, (1) to each Person specified by such Depository a new Security or Securities of the same series of like tenor and terms and of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest as specified by such Depository in the Global Security; and (2) to such Depository a new Global Security of like tenor and terms and in an authorized denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities delivered to Holders thereof. (iv) In any exchange provided for in any of the preceding three paragraphs, the Company will execute and the Trustee or its agent will authenticate and deliver individual Securities in definitive registered form in authorized denominations. Upon the exchange of the entire principal amount of a Global Security for individual Securities, such Global Security shall be canceled by the Trustee or its agent. Except as provided in the preceding paragraph, Securities issued in exchange for a Global Security pursuant to this Section shall be registered in such names and in such authorized denominations as the Depository for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee or the Security Registrar. The Trustee or the Security Registrar shall deliver at its Corporate Trust Office such Securities to the Persons in whose names such Securities are so registered. ARTICLE III The Securities SECTION 3.01. General Title; General Limitations; Issuable in Series; Terms of Particular Series. The aggregate principal amount of Securities which may be authenticated and delivered and Outstanding under this Indenture is not limited. The Securities may be issued in one or more series as from time to time may be authorized by the Board of Directors. There shall be established in or pursuant to a Board Resolution or in a supplemental indenture, subject to 23 Section 3.11, prior to the issuance of Securities of any such series: (1) the title of the Securities of such series (which shall distinguish the Securities of such series from Securities of any other series); (2) the Person to whom any interest on a Security of such series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (3) the date or dates on which the principal of the Securities of such series is payable; (4) the rate or rates at which the Securities of such series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any interest payable on any Interest Payment Date; (5) the place or places where the principal of and any premium and interest on Securities of such series shall be payable; (6) the period or periods within which, the Redemption Price or Prices or the Repayment Price or Prices, as the case may be, at which and the terms and conditions upon which Securities of such series may be redeemed or repaid, as the case may be, in whole or in part, at the option of the Company or the Holder; (7) the obligation, if any, of the Company to purchase Securities of such series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of such series shall be purchased, in whole or in part, pursuant to such obligation; (8) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of such series shall be issuable; (9) provisions, if any, with regard to the conversion or exchange of the Securities of such series, at the option of the Holders thereof or the 24 Company, as the case may be, for or into new Securities of a different series or other securities; (10) if other than U.S. dollars, the currency or currencies or units based on or related to currencies in which the Securities of such series shall be denominated and in which payments of principal of, and any premium and interest on, such Securities shall or may be payable; (11) if the principal of (and premium, if any) or interest, if any, on the Securities of such series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency (including a composite currency) other than that in which the Securities are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made; (12) if the amount of payments of principal of (and premium, if any) or interest, if any, on the Securities of such series may be determined with reference to an index based on a coin or currency (including a composite currency) other than that in which the Securities are stated to be payable, the manner in which such amounts shall be determined; (13) any limit upon the aggregate principal amount of the Securities of such series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 3.04, 3.05, 3.06, 9.06 and 11.08 and except for any Securities which, pursuant to Section 3.03, are deemed never to have been authenticated and delivered hereunder); (14) provisions, if any, with regard to the exchange of Securities of such series, at the option of the Holders thereof, for other Securities of the same series of the same aggregate principal amount or of a different authorized series or different authorized denomination or denominations, or both; (15) provisions, if any, with regard to the appointment by the Trustee of an Authenticating Agent in one or more places other than the location of the office of the Trustee with power to act on behalf of the Trustee and subject to its direction in the authentication and delivery of the Securities of any 25 one or more series in connection with such transactions as shall be specified in the provisions of this Indenture or in or pursuant to such Board Resolution or supplemental indenture; (16) the portion of the principal amount of Securities of the series, if other than the principal amount thereof, which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.02 or provable in bankruptcy pursuant to Section 5.04; (17) any Event of Default with respect to the Securities of such series, if not set forth herein, and any additions, deletions or other changes to the Events of Default set forth herein that shall be applicable to the Securities of such series; (18) any covenant solely for the benefit of the Securities of such series and any additions, deletions or other changes to the provisions of Article X or Section 1.01 or any definitions relating to such Article that would otherwise be applicable to the Securities of such series; (19) if Section 4.03 of this Indenture shall not be applicable to the Securities of such series and if Section 4.03 shall be applicable to any covenant or Event of Default established in or pursuant to a Board Resolution or in a supplemental indenture as described above that has not already been established herein; (20) if the Securities of such series shall be issued in whole or in part in the form of a Global Security or Securities, the terms and conditions, if any, upon which such Global Security or Securities may be exchanged in whole or in part for other individual Securities; and the Depository for such Global Security or Securities; and (21) any other terms of such series; all upon such terms as may be determined in or pursuant to such Board Resolution or supplemental indenture with respect to such series. The form of the Securities of each series shall be established pursuant to the provisions of this Indenture in or pursuant to the Board Resolution or in the supplemental indenture creating such series. The Securities of each series shall be distinguished from the Securities of each 26 other series in such manner as the Board of Directors may determine. Unless otherwise provided with respect to Securities of a particular series, the Securities of any series may only be issuable in registered form, without coupons. Any terms or provisions in respect of the Securities of any series issued under this Indenture may be determined pursuant to this Section by providing for the method by which such terms or provisions shall be determined. SECTION 3.02. Denominations. The Securities of each series shall be issuable in such denominations and currency as shall be provided in the provisions of this Indenture or in or pursuant to the Board Resolution or the supplemental indenture creating such series. In the absence of any such provisions with respect to the Securities of any series, the Securities of that series shall be issuable only in fully registered form in denominations of $1,000 and any integral multiple thereof. SECTION 3.03. Execution, Authentication and Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman of the Board, its President, one of its Vice Presidents or its Treasurer under its corporate seal reproduced thereon (which may be by facsimile) and attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication; and the Trustee shall, upon Company Order, authenticate and deliver such Securities as in this Indenture provided and not otherwise. Prior to any such authentication and delivery, the Trustee shall be entitled to receive, in addition to any Officers' Certificate and Opinion of Counsel required to be 27 furnished to the Trustee pursuant to Section 1.02, and the Board Resolution and any certificate relating to the issuance of the series of Securities required to be furnished pursuant to Section 2.02, an Opinion of Counsel stating that: (1) all instruments furnished to the Trustee conform to the requirements of the Indenture and constitute sufficient authority hereunder for the Trustee to authenticate and deliver such Securities; (2) the form and terms of such Securities have been established in conformity with the provisions of this Indenture; (3) all laws and requirements with respect to the execution and delivery by the Company of such Securities have been complied with, the Company has the corporate power to issue such Securities and such Securities have been duly authorized and delivered by the Company and, assuming due authentication and delivery by the Trustee, constitute legal, valid and binding obligations of the Company enforceable in accordance with their terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other laws and legal principles affecting creditors' rights generally from time to time in effect and to general equitable principles, whether applied in an action at law or in equity) and entitled to the benefits of this Indenture, equally and ratably with all other Securities, if any, of such series Outstanding; (4) the Indenture is qualified under the Trust Indenture Act; and (5) such other matters as the Trustee may reasonably request; and, if the authentication and delivery relates to a new series of Securities created by an indenture supplemental hereto, also stating that all laws and requirements with respect to the form and execution by the Company of the supplemental indenture with respect to that series of Securities have been complied with, the Company has corporate power to execute and deliver any such supplemental indenture and has taken all necessary corporate action for those purposes and any such supplemental indenture has been executed and delivered and constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms (subject, as to enforcement of remedies, to 28 applicable bankruptcy, reorganization, insolvency, moratorium or other laws and legal principles affecting creditors' rights generally from time to time in effect and to general equitable principles, whether applied in an action at law or in equity). The Trustee shall not be required to authenticate such Securities if the issue thereof will adversely affect the Trustee's own rights, duties or immunities under the Securities and this Indenture. Unless otherwise provided in the form of Security for any series, all Securities shall be dated the date of their authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancelation as provided in Section 3.09, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. SECTION 3.04. Temporary Securities. Pending the preparation of definitive Securities of any series, the Company may execute, and, upon receipt of the documents required by Section 3.03, together with a Company Order, the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency 29 of the Company in a Place of Payment, without charge to the Holder; and upon surrender for cancelation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of such series of authorized denominations and of like tenor and terms. Until so exchanged the temporary Securities of such series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series. SECTION 3.05. Registration, Transfer and Exchange. The Company shall keep or cause to be kept a register or registers (herein sometimes referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities, or of Securities of a particular series, and of transfers of Securities or of Securities of such series. Any such register shall be in written form or in any other form capable of being converted into written form within a reasonable time. At all reasonable times the information contained in such register or registers shall be available for inspection by the Trustee at the office or agency to be maintained by the Company as provided in Section 10.02. There shall be only one Security Register per series of Securities. Subject to Section 2.04, upon surrender for registration of transfer of any Security of any series at the office or agency of the Company maintained for such purpose in a Place of Payment, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of such series of any authorized denominations, of a like aggregate principal amount and Stated Maturity and of like tenor and terms. Subject to Section 2.04, at the option of the Holder, Securities of any series may be exchanged for other Securities of such series of any authorized denominations, of a like aggregate principal amount and Stated Maturity and of like tenor and terms, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Securityholder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the legal and valid obligations of the Company, evidencing the same debt, 30 and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed, by the Holder thereof or his attorney duly authorized in writing. Unless otherwise provided in the Security to be registered for transfer or exchange, no service charge shall be made on any Securityholder for any registration of transfer or exchange of Securities, but the Company may (unless otherwise provided in such Security) require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04, 9.06 or 11.08 not involving any transfer. The Company shall not be required (i) to issue, register the transfer of or exchange any Security of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the date of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part. None of the Company, the Trustee, any agent of the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If (i) any mutilated Security is surrendered to the Trustee, or the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii) there is delivered to the Company and the Trustee such Security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its written request the 31 Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Security, a new Security of like tenor, series, Stated Maturity and principal amount, bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 3.07. Payment of Interest; Interest Rights Preserved. Unless otherwise provided with respect to such Security pursuant to Section 3.01, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered Holder on the relevant Regular Record Date by virtue of his having been such Holder; and, except as hereinafter provided, such Defaulted Interest may be paid by the Company, at its 32 election in each case, as provided in Clause (1) or Clause (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names any such Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to the Holder of each such Security at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee. 33 If any installment of interest the Stated Maturity of which is on or prior to the Redemption Date for any Security called for redemption pursuant to Article XI is not paid or duly provided for on or prior to the Redemption Date in accordance with the foregoing provisions of this Section, such interest shall be payable as part of the Redemption Price of such Securities. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 3.08. Persons Deemed Owners. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any), and (subject to Section 3.07) interest on, such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. SECTION 3.09. Cancelation. All Securities surrendered for payment, conversion, redemption, registration of transfer, exchange or credit against a sinking fund shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and, if not already canceled, shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancelation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. No Security shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. The Trustee shall dispose of all canceled Securities in accordance with its standard procedures and deliver a certificate of such disposition to the Company. 34 SECTION 3.10. Computation of Interest. Unless otherwise provided as contemplated in Section 3.01, interest on the Securities shall be calculated on the basis of a 360-day year of twelve 30-day months. SECTION 3.11. Delayed Issuance of Securities. Notwithstanding any contrary provision herein, if all Securities of a series are not to be originally issued at one time, it shall not be necessary for the Company to deliver to the Trustee an Officers' Certificate, Board Resolution, supplemental indenture, opinion of counsel or Company Order otherwise required pursuant to Sections 1.02, 2.02, 3.01 and 3.03 at or prior to the time of authentication of each Security of such series if such documents are delivered to the Trustee or its agent at or prior to the authentication upon original issuance of the first Security of such series to be issued; provided that any subsequent request by the Company to the Trustee to authenticate Securities of such series upon original issuance shall constitute a representation and warranty by the Company that as of the date of such request, the statements made in the Officers' Certificate or other certificates delivered pursuant to Sections 1.02 and 2.02 shall be true and correct as if made on such date. A Company Order, Officers' Certificate or Board Resolution or supplemental indenture delivered by the Company to the Trustee in the circumstances set forth in the preceding paragraph may provide that Securities which are the subject thereof will be authenticated and delivered by the Trustee or its agent on original issue from time to time in the aggregate principal amount, if any, established for such series pursuant to such procedures acceptable to the Trustee as may be specified from time to time by Company Order upon the telephonic, electronic or written order of Persons designated in such Company Order, Officers' Certificate, supplemental indenture or Board Resolution (any such telephonic or electronic instructions to be promptly confirmed in writing by such Persons) and that such Persons are authorized to determine, consistent with such Company Order, Officers' Certificate, supplemental indenture or Board Resolution, such terms and conditions of said Securities as are specified in such Company Order, Officers' Certificate, supplemental indenture or Board Resolution. SECTION 3.12. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption, if any, as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers 35 either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. ARTICLE IV Satisfaction and Discharge SECTION 4.01. Termination of Obligations. Except as otherwise provided in this Section 4.01, the Company and the Guarantors may terminate their respective obligations under the Securities of any series, this Indenture (with respect to such series) and the Guarantees if: (i) all Securities of such series previously authenticated and delivered (other than destroyed, lost or stolen Securities of such series that have been replaced or Securities of such series that are paid pursuant to Section 10.01 of this Indenture or Securities of such series for whose payment money or securities have theretofore been held in trust and thereafter repaid to the Company, as provided in Section 10.03 of this Indenture) have been delivered to the Trustee for cancellation and the Company has paid all sums payable by it hereunder; or (ii) (A) all Outstanding Securities of such series mature within one year or all of them are to be called for redemption within one year under arrangements satisfactory to the Trustee for giving the notice of redemption, (B) the Company irrevocably deposits in trust with the Trustee during such one-year period, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, as trust funds solely for the benefit of the Holders of such series for that purpose, money or U.S. Government Obligations sufficient (in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee), without consideration of any reinvestment of such interest, to pay principal, premium, if any, and interest on the Securities of such series to maturity or redemption, as the case may be, and to pay all other sums payable by it hereunder, (C) no Event of Default shall have occurred and be continuing on the date of such deposit, (D) such deposit will not result in a breach or violation of, or constitute a default under, this 36 Indenture or any other agreement or instrument to which the Company is a party or by which it is bound and (E) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with. With respect to the foregoing clause (i), the Company's obligations under Section 6.07 and any obligations of the Guarantors with respect to said section shall survive with respect to the Securities of such series. With respect to the foregoing clause (ii), the Company's obligations contained in Sections 3.03, 3.05, 3.06, 3.07, 4.05, 6.07, 6.10, 10.01 and 10.02 of this Indenture and any obligations of the Guarantors (with respect to the Guarantees) with respect to said sections shall survive until the Securities of such series are no longer Outstanding. Thereafter, only the Company obligations contained in Sections 4.05 and 6.07 of this Indenture and any obligations of the Guarantors (with respect to the Guarantees) with respect to said sections shall survive with respect to the Securities of such series. After any such irrevocable deposit, the Trustee upon request and at the Company's expense shall acknowledge in writing the discharge of the Company's and the Guarantors' obligations, if any, under the Securities of such series, this Indenture (with respect to such series) and the Guarantees except for those surviving obligations specified above. SECTION 4.02. Defeasance and Discharge of Indenture. The Company and the Guarantors will be deemed to have paid and will be discharged from any and all obligations in respect of the Securities of any series and the Guarantees on the 123rd day after the date of the deposit referred to in clause (A) hereof, and the provisions of this Indenture will no longer be in effect with respect to the Securities of such series, and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same, except as to (i) rights of registration of transfer and exchange, (ii) substitution of apparently mutilated, defaced, destroyed, lost or stolen Securities of such series, (iii) rights of Holders of such series to receive payments of principal thereof and interest thereon, (iv) the Company's obligations under Section 10.02, (v) the rights, obligations and immunities of the Trustee hereunder, (vi) the Company's right of redemption, if any, with respect to any Securities of such series pursuant to Article XI, in which case the Company may redeem the Securities of such series in accordance with Article XI by complying with such Article and depositing with the Trustee, 37 in accordance with Section 11.06, an amount of money sufficient, together with all amounts held in trust pursuant to Section 4.04 with respect to Securities of such series, to pay the Redemption Price of all the Securities of such series to be redeemed, and (vii) the rights of the Holders of such series as beneficiaries of this Indenture with respect to the property so deposited with the Trustee payable to all or any of them; provided that the following conditions shall have been satisfied: (A) with reference to this Section 4.02, the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of Section 6.09 of this Indenture) and conveyed all right, title and interest to the Trustee for the benefit of the Holders of such series, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, as trust funds in trust, specifically pledged to the Trustee for the benefit of the Holders of such series as security for payment of the principal of, premium, if any, and interest on the Securities of such series, and dedicated solely to, the benefit of the Holders of such series in and to (1) money in an amount, (2) U.S. Government Obligations that, through the payment of interest, principal and premium, if any, in respect thereof in accordance with their terms, will provide, not later than one day before the due date of any payment referred to in this clause (A), money in an amount or (3) a combination thereof in an amount sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, without consideration of the reinvestment of such interest and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee, the principal of, premium (including of applicable redemption premium), if any, and interest on the Outstanding Securities of such series on the dates such installments of interest or principal are due through the Stated Maturity thereof, or in the event the Outstanding Securities may be redeemed at the option of the Company and if the Company so elects, a date on which such Outstanding Securities may be so redeemed (provided that before such a deposit, the Company shall give to the Trustee, in accordance with Section 11.02, a notice of its election to redeem all of the Securities of such series on such redemption date in accordance with Article XI); provided that the Trustee shall have been irrevocably instructed to apply such 38 money or the proceeds of such U.S. Government Obligations to the payment of such principal, premium, if any, and interest with respect to the Securities of such series; (B) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (C) no Event of Default shall have occurred and be continuing on the date of such deposit or during the period ending on the 123rd day after such date of deposit; (D) the Company shall have delivered to the Trustee (1) either (x) a ruling directed to the Trustee received from the Internal Revenue Service to the effect that the Holders of Securities of such series will not recognize income, gains or loss for federal income tax purposes as a result of the Company's exercise of its option under this Section 4.02 and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised or (y) an Opinion of Counsel to the same effect as the ruling described in clause (x) above accompanied by a ruling to that effect published by the Internal Revenue Service, unless there has been a change in the applicable federal income tax law since the date of this Indenture such that a ruling from the Internal Revenue Service is no longer required and (2) an Opinion of Counsel, subject to such qualifications, exceptions, assumptions and limitations as are reasonably deemed necessary by such counsel and are reasonably satisfactory to counsel for the Trustee, to the effect that the creation of the defeasance trust does not violate the Investment Company Act of 1940; and (E) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance contemplated by this Section 4.02 have been complied with. Notwithstanding the foregoing clause (A), prior to the end of the 123-day (or one year) period referred to in clause (C) above, none of the Company's or any Guarantor's obligations under this Indenture shall discharged. 39 Subsequent to the end of such 123-day (or one year) period with respect to this Section 4.02, the Company's obligations with respect to Securities of such series in Sections 3.03, 3.05, 3.06, 3.07, 4.05, 6.07, 6.10, 10.01, and 10.02 of this Indenture and any obligations of the Guarantors (with respect to the Guarantees) with respect to said sections shall survive until there are no Securities of such series Outstanding. Thereafter, only the Company's obligations in Sections 4.05 and 6.07 of this Indenture and any obligations of the Guarantors (with respect to the Guarantees) with respect to said sections shall survive with respect to Securities of such series. If and when a ruling from the Internal Revenue Service or an Opinion of Counsel referred to in clause (D)(1) above is able to be provided specifically without regard to, and not in reliance upon, the continuance of the Company's obligations with respect to Securities of such series under Section 10.01 of this Indenture, then the Company's and each Guarantor's obligations with respect to Securities of such series under such Section 10.01 of this Indenture shall cease upon delivery to the Trustee of such ruling or Opinion of Counsel and compliance with the other conditions precedent provided for herein relating to the defeasance contemplated by this Section 4.02. After any such irrevocable deposit, the Trustee upon request shall acknowledge in writing the discharge of the Company's and each Guarantor's obligations under the Securities and this Indenture (with respect to such series) and the Guarantees except for those surviving obligations in the immediately preceding paragraph. SECTION 4.03. Defeasance of Certain Obligations. The Company may omit to comply with any term, provision or condition set forth in clauses (2) and (3) of Section 8.01 and Sections 10.06 through 10.11 of this Indenture, and clauses (3), (4), (5), and (8) of Section 5.01 of this Indenture shall be deemed not to be Events of Default, in each case with respect to the Outstanding Securities of any series if: (i) with reference to this Section 4.03, the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee (or another trustee satisfying the requirements of Section 6.09 of this Indenture) and conveyed all right, title and interest to the Trustee for the benefit of the Holders of such series as security for payment of the principal of, premium, if any, and interest on the Securities of such series, and dedicated solely to, the benefit of the Holders of such series in and to (A) money in an 40 amount, (B) U.S. Government Obligations that, through the payment of interest, principal and premium, if any, in respect thereof in accordance with their terms, will provide, not later than one day before the due date of any payment referred to in this clause (i), money in an amount or (C) a combination thereof in an amount sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, without consideration of the reinvestment of such interest and after payment of all federal, state and local taxes or other charges and assessments in respect thereof payable by the Trustee, the principal of, premium (including of applicable redemption premium), if any, and interest on the Outstanding Securities of such series on the dates such installments of interest or principal are due through the Stated Maturity thereof, or in the event the Outstanding Securities may be redeemed at the option of the Company and if the Company so elects, a date on which such Outstanding Securities may be so redeemed (provided that before such a deposit, the Company shall give to the Trustee, in accordance with Section 11.02, a notice of its election to redeem all of the Securities of such series on such redemption date in accordance with Article XI); provided that the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of such principal, premium, if any, and interest with respect to the Securities of such series; (ii) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (iii) no default or Event of Default shall have occurred and be continuing on the date of such deposit; (iv) the Company has delivered to the Trustee an Opinion of Counsel, subject to such qualifications, exceptions, assumptions and limitations as are reasonably deemed necessary by such counsel and are reasonably satisfactory to counsel for the Trustee, to the effect that (A) the creation of the defeasance trust does not violate the Investment Company Act of 1940 and (B) the Holders of Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance of certain obligations and will be subject 41 to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and (v) the Company has delivered to the Trustee an Officers' Certificate and Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance contemplated by this Section 4.03 have been complied with. SECTION 4.04. Application of Trust Money. Subject to the last paragraph of Section 10.03 of this Indenture, the Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 4.01, 4.02 or 4.03 of this Indenture, as the case may be, and shall apply the deposited money and the money from U.S. Government Obligations in accordance with the Securities and this Indenture to the payment of principal of and interest on the Securities; but such money need not be segregated from other funds except to the extent required by law. SECTION 4.05. Reinstatement. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 4.01, 4.02 or 4.03 of this Indenture, as the case may be, by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and the Guarantors' obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 4.01, 4.02 or 4.03 of this Indenture, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 4.01, 4.02 or 4.03 of this Indenture, as the case may be; provided that, if the Company has made any payment of principal of or interest on any securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. 42 ARTICLE V Remedies SECTION 5.01. Events of Default. "Event of Default", wherever used herein, means with respect to any series of Securities any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), unless such event is either inapplicable to a particular series or it is specifically deleted or modified in or pursuant to the supplemental indenture or Board Resolution creating such series of Securities or in the form of Security for such series: (1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or (2) default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or (3) default in the payment of any sinking or purchase fund or analogous obligation when the same becomes due by the terms of the Securities of such series; or (4) default under any bond, debenture, note, guarantee or other evidence of indebtedness for money borrowed by the Company or any Material Subsidiary (including a default with respect to Securities of any series other than such series) or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company or any Material Subsidiary (including this Indenture), whether such indebtedness now exists or shall hereafter be created, which default (i) shall constitute a failure to pay the principal of such indebtedness having an outstanding principal amount in excess of $50 million in the aggregate when due and payable at the final (but not any interim) maturity thereof after the expiration of any applicable grace period with respect thereto and the holders of such indebtedness shall not have waived such default or (ii) shall have resulted in such indebtedness having an outstanding principal amount in 43 excess of $50 million in the aggregate becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, in either case without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of 60 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default and requiring the Company to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder; or (5) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture in respect of the Securities of such series (other than a covenant or warranty in respect of the Securities of such series a default in the performance of which or the breach of which is elsewhere in this Section specifically dealt with), all of such covenants and warranties in the Indenture which are not expressly stated to be for the benefit of a particular series of Securities being deemed in respect of the Securities of all series for this purpose, and continuance of such default or breach for a period of 30 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (6) the entry of an order for relief against the Company under Title 11, United States Code (the "Federal Bankruptcy Act") by a court having jurisdiction in the premises or a decree or order by a court having jurisdiction in the premises adjudging the Company a bankrupt or insolvent under any other applicable Federal or State law, or the entry of a decree or order approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under the Federal Bankruptcy Act or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or ordering the winding up or liquidation 44 of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (7) the consent by the Company to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Act or any other applicable Federal or State law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or (8) any other Event of Default provided in the supplemental indenture or Board Resolution under which such series of Securities is issued or in the form of Security for such series. SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then and in each and every such case either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of that series then Outstanding hereunder (each such series acting as a separate class), by notice in writing to the Company (and to the Trustee if given by Holders), may declare the principal amount (or, if the Securities of such series are original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all the Securities of such series and all accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Securities of such series contained to the contrary notwithstanding. At any time after such a declaration of acceleration has been made with respect to the Securities of any or all series, as the case may be, and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the outstanding Securities of such series, by written notice to the Company 45 and the Trustee, may rescind and annul such declaration and its consequences if: (1) the Company or the Guarantors has paid or deposited with the Trustee a sum sufficient to pay: (A) all overdue installments of interest on the Securities of such series; (B) the principal of (and premium, if any, on) any Securities of such series which have become due otherwise than by such declaration of acceleration, and interest thereon at the rate or rates prescribed therefor by the terms of the Securities of such series, to the extent that payment of such interest is lawful; (C) interest upon overdue installments of interest at the rate or rates prescribed therefor by the terms of the Securities of such series to the extent that payment of such interest is lawful; and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due the Trustee under Section 6.07; and (2) all Events of Default with respect to such series of Securities, other than the nonpayment of the principal of the Securities of such series which have become due solely by such acceleration, have been cured or waived as provided in Section 5.13. No such rescission shall affect any subsequent default or impair any right consequent thereon. SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company and each Guarantor covenants that if: (1) default is made in the payment of any installment of interest on any Security of any series when such interest becomes due and payable; or (2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof; or 46 (3) default is made in the payment of any sinking or purchase fund or analogous obligation when the same becomes due by the terms of the Securities of any series; and any such default continues for any period of grace provided with respect to the Securities of such series, the Company and each Guarantor will, upon demand of the Trustee, pay to it, for the benefit of the Holder of any such Security (or the Holders of any such series in the case of clause (3) above), the whole amount (for, in the case of each Guarantor, its Guaranteed Percentage) then due and payable on any such Security (or on the Securities of any such series in the case of clause (3) above) for principal (and premium, if any) and interest, with interest, to the extent that payment of such interest shall be legally enforceable, upon the overdue principal (and premium, if any) and upon overdue installments of interest, at such rate or rates as may be prescribed therefor by the terms of any such Security (or of Securities of any such series in the case of clause (3) above); and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due the Trustee under Section 6.07; provided, however, that anything herein to the contrary notwithstanding, neither the Trustee nor any Holder shall have any recourse against any Guarantor under this Indenture or under the Securities, except as, and to the extent, set forth in the Guarantees. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon the Securities of such series and collect the money adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated. If an Event of Default with respect to any series of Securities occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings against the Company and/or any Guarantor as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power 47 granted herein, or to enforce any other proper remedy. The Company and each Guarantor acknowledges and agrees for the benefit of the Trustee and the Holders that the Trustee may directly and simultaneously proceed against the Company and each of the Guarantors. SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceedings or otherwise: (i) to file and prove a claim for the whole amount of principal (or portion thereof determined pursuant to Section 3.01(16) to be provable in bankruptcy) (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary and advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due the Trustee under Section 6.07) and of the Securityholders allowed in such judicial proceeding; and (ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Securityholder to make such payment to the Trustee and in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder, any plan of 48 reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any, Securityholder in any such proceeding. SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities of any series may be prosecuted and enforced by the Trustee without the possession of any of the Securities of such series or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel and any other amounts due the Trustee under Section 6.07, be for the ratable benefit of the Holders of the Securities of the series in respect of which such judgment has been recovered. SECTION 5.06. Application of Money Collected. Any money collected by the Trustee with respect to a series of Securities pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities of such series and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 6.07. SECOND: To the payment of the amounts then due and unpaid upon the Securities of that series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively. THIRD: The balance, if any, to the Company. SECTION 5.07. Limitation on Suits. No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this 49 Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (1) such Holder has previously given written notice to the Trustee of, a continuing Event of Default with respect to Securities of such series; (2) the Holders of not less than 25% in principal amount of the outstanding Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of such series; it being understood and intended that no one or more Holders of Securities of such series shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Securities of such series, or to obtain or to seek to obtain priority or preference over any other such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and proportionate benefit of all the Holders of all Securities of such series. SECTION 5.08. Unconditional Right of Securityholders To Receive Principal, Premium and Interest. Notwithstanding any other provisions in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption or repayment, on the Redemption Date or Repayment Date, as the case may be) and to institute suit for the enforcement of any such payment (including enforcement of any Guarantee), and such right shall not be impaired without the consent of such Holder; provided, 50 however, that anything herein to the contrary notwithstanding, neither the Trustee nor any Holder shall have any recourse against any Guarantor under this Indenture or under the Securities, except as, and to the extent, set forth in the Guarantees or in this Article V. SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any Securityholder has instituted any proceeding to enforce any right or remedy under this Indenture or the Guarantees and such proceeding has been discontinued or abandoned for any reason, then and in every such case the Company, the Guarantors, the Trustee and the Securityholders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder and thereunder, and thereafter all rights and remedies of the Trustee and the Securityholders shall continue as though no such proceeding had been instituted. SECTION 5.10. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Trustee or to the Securityholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Securityholders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Securityholders, as the case may be. SECTION 5.12. Control by Securityholders. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Securities of such series, provided that: 51 (1) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, determines that the action so directed may not lawfully be taken or would conflict with this Indenture or if the Trustee in good faith shall, by a Responsible Officer, determine that the proceedings so directed would involve it in personal liability or be unjustly prejudicial to the Holders not taking part in such direction, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default not theretofore cured: (1) in the payment of the principal of (or premium, if any) or interest on any Security of such series, or in the payment of any sinking or purchase fund or analogous obligation with respect to the Securities of such series, or (2) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 5.14. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of 52 this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding in the aggregate more than lot in principal amount of the Outstanding Securities of any series to which the suit relates, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on an Security on or after the respective Stated Maturities expressed in such Security (or, in the case of redemption or repayment, on or after the Redemption Date or Repayment Date, as the case may be). SECTION 5.15. Waiver of Stay or Extension Laws. The Company and each Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and each Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VI The Trustee SECTION 6.01. Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default with respect to any series of Securities: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture with respect to the Securities of such series, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may, with respect to Securities of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be 53 under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default with respect to any series of Securities has occurred and is continuing, the Trustee shall exercise with respect to the Securities of such series such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. 54 SECTION 6.02. Notice of Defaults. Within 90 days after the occurrence of any default hereunder with respect to Securities of any series, the Trustee shall transmit by mail to all Securityholders of such series, as their names and addresses appear in the Security Register, notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on any Security of such series or in the payment of any sinking or purchase fund installment or analogous obligation with respect to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Securityholders of such series; and provided, further, that in the case of any default of the character specified in Section 5.01(5) with respect to Securities of such series no such notice to Securityholders of such series shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default", with respect to Securities of any series, means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. SECTION 6.03. Certain Rights of Trustee. Except as otherwise provided in Section 6.01: (a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document (whether an original or facsimile thereof) believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically 55 prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel of its own selection and the advice of such counsel or an Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Securityholders pursuant to this Indenture, unless such Securityholders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (h) the Trustee shall not be charged with knowledge of any default (as defined in Section 6.02) or Event of Default with respect to the Securities of any series for which it is acting as Trustee unless either (1) a Responsible Officer of the Trustee assigned to the Corporate Trust Department of the Trustee (or any successor division or department of the Trustee) shall have actual knowledge of such default or Event of Default or (2) written notice of such default or Event of Default shall have been given to the Trustee by the Company or any other obligor on such Securities or by any Holder of such Securities; and 56 (i) the Trustee shall not be liable for any action taken, suffered or omitted by it in good faith, without negligence or wilful misconduct, and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. SECTION 6.04. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. SECTION 6.05. May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, the Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company or any Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. SECTION 6.06. Money Held in Trust. Subject to the provisions of Section 10.03 hereof, all moneys in any currency or currency received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. SECTION 6.07. Compensation and Reimbursement. The Company agrees: (1) to pay to the Trustee from time to time such compensation as agreed upon from time to time in writing for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any 57 provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to fully indemnify the Trustee and any predecessor Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company under this Section the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) or interest on particular Securities. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.01(6) or (7), the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy law. The Company's obligations under this Section 6.07 and any lien arising hereunder shall survive the resignation or removal of any Trustee, the discharge of the Company's obligations pursuant to Article IV of this Indenture and/or the termination of this Indenture. SECTION 6.08. Disqualification; Conflicting Interests. The Trustee for the Securities of any series issued hereunder shall be subject to the provisions of Section 310(b) of the Trust Indenture Act during the period of time provided for therein. In determining whether the Trustee has a conflicting interest as defined in Section 310(b) of the Trust Indenture Act with respect to the Securities of any series, there shall be excluded this Indenture with respect to Securities of any particular series of Securities other than that series. Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the second to last paragraph of Section 310(b) of the Trust Indenture Act. SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee 58 hereunder with respect to each series of Securities, which shall be either: (i) a corporation organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers and subject to supervision or examination by Federal or State authority, or (ii) a corporation or other Person organized and doing business under the laws of a foreign government that is permitted to act as Trustee pursuant to a rule, regulation or order of the Commission, authorized under such laws to exercise corporate trust powers, and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees; in either case having a combined capital and surplus of at least $50,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Neither the Company nor any Person directly or indirectly controlling, controlled by, or under common control with the Company shall serve as trustee for the Securities of any series issued hereunder. If at any time the Trustee with respect to any series of Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect specified in Section 6.10. SECTION 6.10. Resignation and Removal. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 6.11. (b) The Trustee may resign with respect to any series of Securities at any time by giving written notice thereof to the Company. (c) The Trustee may be removed with respect to any series of Securities at any time by Act of the Holders of a majority in principal amount of the outstanding 59 Securities of that series, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with Section 310(b) of the Trust Indenture Act pursuant to Section 6.08 with respect to any series of Securities after written request therefor by the Company or by any Securityholder who has been a bona fide Holder of a Security of that series for at least six months, unless the Trustee's duty to resign is stayed in accordance with the provisions of Section 310(b) of the Trust Indenture Act, or (2) the Trustee shall cease to be eligible under Section 6.09 with respect to any series of Securities and shall fail to resign after written request therefor by the Company or by any such Securityholder, or (3) the Trustee shall become incapable of acting with respect to any series of Securities, or (4) the Trustee shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Trustee, with respect to the series, or in the case of Clause (4), with respect to all series, or (ii) subject to Section 5.14, any Securityholder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to the series, or, in the case of Clause (4), with respect to all series. (e) If the Trustee shall resign, be removed or become incapable of acting with respect to any series of Securities, or if a vacancy shall occur in the office of the Trustee with respect to any series of Securities for any cause, the Company, by Board Resolution, shall promptly appoint a successor Trustee for that series of Securities. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after such resignation, removal or incapacity, the Trustee may 60 petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee. If, within one year after such resignation, removal or incapacity, or the occurrence of such vacancy, a successor Trustee with respect to such series of Securities shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee with respect to such series and supersede the successor Trustee appointed by the Company with respect to such series. If no successor Trustee with respect to such series shall have been so appointed by the Company or the Securityholders of such series and accepted appointment in the manner hereinafter provided, subject to Section 5.14, any Securityholder who has been a bona fide Holder of a Security of that series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to any series and each appointment of a successor Trustee with respect to any series by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Securities of that series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee and the address of its principal Corporate Trust Office. SECTION 6.11. Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the predecessor Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the predecessor Trustee shall become effective with respect to any series as to which it is resigning or being removed as Trustee, and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the predecessor Trustee with respect to any such series; but, on request of the Company or the successor Trustee, such predecessor Trustee shall, upon payment of its reasonable charges, if any, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the predecessor Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such predecessor Trustee hereunder with respect to 61 all or any such series, subject nevertheless to its lien, if any, provided for in Section 6.07. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the predecessor Trustee and each successor Trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of any series as to which the predecessor Trustee is not being succeeded shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be Trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee. No successor Trustee with respect to any series of Securities shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible with respect to that series under this Article. SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. 62 SECTION 6.13. Preferential Collection of Claims Against Company. (a) Subject to Subsection (b) of this Section, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company within three months prior to a default, as defined in Subsection (c) of this Section, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the Holders of the Securities and the holders of other indenture securities (as defined in Subsection (c) of this Section): (1) an amount equal to any and all reduction in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such three-month period and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this Subsection, or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and (2) all property received by the Trustee in respect of any claim as such creditor, either as security therefor, or in satisfaction or composition thereof, or otherwise, after the beginning of such three-month period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the Company and its other creditors in such property or such proceeds. Nothing herein contained, however, shall affect the right of the Trustee: (A) to retain for its own account (i) payments made on account of any such claim by any Person (other than the Company) who is liable thereon, and (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third Person, and (iii) distributions made in cash, securities or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law; (B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such three-month period; 63 (C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such three-month period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default as defined in Subsection (c) of this Section would occur within three months; or (D) to receive payment on any claim referred to in paragraph (B) or (C) or against the release of any property held as security for such claim as provided in paragraph (B) or (C), as the case may be, to the extent of the fair value of such property. For the purposes of paragraphs (B), (C) and (D), property substituted after the beginning of such three-month period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any pre-existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim. If the Trustee shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned between the Trustee, the Securityholders and the holders of other indenture securities in such manner that the Trustee, the Securityholders and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee and the Securityholders and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from 64 such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or proceedings for reorganization pursuant to the Federal Bankruptcy Act or applicable State law, whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership or proceedings for reorganization is pending shall have jurisdiction (i) to apportion between the Trustee and the Securityholders and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee and the Securityholders and the holders of other indenture securities with respect to their respective claims, in which extent it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any Trustee which has resigned or been removed after the beginning of such three-month period shall be subject to the provisions of this Subsection as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such three-month period, it shall be subject to the provisions of this Subsection if and only if the following conditions exist: (i) the receipt of property or reduction of claim, which would have given rise to the obligation to account, if such Trustee had continued as Trustee, occurred after the beginning of such three-month period; and (ii) such receipt of property or reduction of claim occurred within three months after such resignation or removal. 65 (b) There shall be excluded from the operation of Subsection (a) of this Section a creditor relationship arising from: (1) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; (2) advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advances and of the circumstances surrounding the making thereof is given to the Securityholders at the time and in the manner provided in this Indenture; (3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depository, or other similar capacity; (4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in Subsection (c) of this Section; (5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; or (6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper as defined in Subsection (c) of this Section. (c) For the purposes of this Section only: (1) The term "default" means any failure to make payment in full of the principal of or interest on any of the Securities or upon the other indenture securities when and as such principal or interest becomes due and payable. 66 (2) The term "other indenture securities" means securities upon which the Company is an obligor outstanding under any other indenture (i) under which the Trustee is also trustee, (ii) which contains provisions substantially similar to the provisions of this Section, and (iii) under which a default exists at the time of the apportionment of the funds and property held in such special account. (3) The term "cash transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand. (4) The term "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. (5) The term "Company" means any obligor upon the Securities. SECTION 6.14. Appointment of Authenticating Agent. At any time when any of the Securities remain Outstanding, the Trustee, with the approval of the Company, may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issuance, exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.06, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of 67 the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as an Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and, if other than the Company itself, subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and, if other than the Company, to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and, if other than the Company, to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee, with the approval of the Company, may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security 68 Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.07. If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication in the following form: This Security, together with any Guarantees referred to herein, is one of the Securities described in the within-mentioned Indenture. Dated: --------------------------- The Bank of New York, --------------------------------- As Trustee By ------------------------------ Authorized Signatory SECTION 6.15. Trustee's Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than ten Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted. 69 ARTICLE VII Securityholders' Lists and Reports by Trustee and Company SECTION 7.01. Company To Furnish Trustee Names and Addresses of Securityholders. The Company will furnish or cause to be furnished to the Trustee: (1) semi-annually, not more than 15 days after December 15 and June 15 in each year in such form as the Trustee may reasonably require, a list of the names and addresses of the Holders of Securities of each series as of such December 15 and June 15, as applicable, and (2) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that if and so long as the Trustee shall be the Security Registrar for Securities of a series, no such list need be furnished with respect to such series of Securities. SECTION 7.02. Preservation of Information; Communications to Securityholders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders of Securities contained in the most recent list furnished to the Trustee as provided in Section 7.01 and the names and addresses of Holders of Securities received by the Trustee in its capacity as Security Registrar, if so acting. The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished. (b) If three or more Holders of Securities of any series (hereinafter referred to as "applicants") apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security of such series for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders of Securities of such series or with the Holders of all Securities with respect to their rights under this Indenture or under such Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, 70 within five Business Days after the receipt of such application, at its election, either: (i) afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 7.02(a), or (ii) inform such applicants as to the approximate number of Holders of Securities of such series or all Securities, as the case may be, whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 7.02(a), and as to the approximate cost of mailing to such Securityholders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder of a Security of such series or to all Securityholders, as the case may be, whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 7.02(a), a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless, within five days after such tender, the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the Holders of Securities of such series or all Securityholders, as the case may be, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all Securityholders of such series or all Securityholders, as the case may be, with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. 71 (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Securities in accordance with Section 7.02(b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 7.02(b). SECTION 7.03. Reports by Trustee. (a) Within 60 days after December 15 of each year commencing with the first December 15 after the issuance of Securities, the Trustee shall transmit by mail, at the Company's expense, to all Holders as their names and addresses appear in the Security Register, as provided in Trust Indenture Act 313(c), a brief report dated as of December 15 in accordance with and with respect to the matters required by Trust Indenture Act Section 313(a). (b) The Trustee shall transmit by mail, at the Company's expense, to all Holders as their names and addresses appear in the Security Register, as provided in Trust Indenture Act 313(c), a brief report in accordance with and with respect to the matters required by Trust Indenture Act Section 313(b). (c) A copy of each such report shall, at the time of such transmission to Holders, be furnished to the Company and, in accordance with Trust Indenture Act Section 313(d), be filed by the Trustee with each stock exchange upon which the Securities are listed, and also with the Commission. SECTION 7.04. Reports by Company. The Company shall file with the Trustee, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. The Company also shall comply with the other provisions of Trust Indenture Act Section 314(a). In addition, if the Company is not required by Section 13 or 15(d) of the Securities Exchange Act of 1934 to file reports with the Commission, so long as any Securities remain outstanding, the Company shall cause quarterly reports (containing unaudited financial statements) for the first three quarters of each fiscal year 72 and annual reports (containing audited financial statements and an opinion thereon by the Company's independent certified public accountants) for each fiscal year, in each case that it would be required to file under Section 13 of the Securities Exchange Act of 1934 if it had a class of debt securities listed on a national securities exchange, to be mailed to the Holders at their addresses appearing in the Security Register within 15 days of when such reports would have been required to be filed under Section 13 of the Securities Exchange Act of 1934, except that if the Company has obtained approval of the Commission to file less information than otherwise required by Section 13 or 15(d) of the Securities Exchange Act of 1934 or to have its filing requirements under such Sections be satisfied by filings made with the Commission by another entity, the Company shall instead cause such information as is filed with the Commission by the Company or with respect to the Company to be mailed to the Holders in the same manner and time period described in this sentence. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 7.05. Tax Reporting. The Company shall provide to the Trustee on a timely basis such information as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders relating to original issue discount, including, without limitation, Form 1099-OID or any successor form. ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease SECTION 8.01. The Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of its properties and assets to any Person unless: (1) the Company shall be the continuing Person or, if the Company shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of its properties and assets to any 73 Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Company shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal (and premium, if any) and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or a Subsidiary of the Company as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; (3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, properties or assets of the Company or any of its Subsidiaries would become subject to a lien that would not be permitted by this Indenture, the Company or such successor Person, as the case may be, shall take or cause to be taken such steps as shall be necessary effectively to secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby in accordance with Section 10.08 of this Indenture; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION 8.02. Successor Substituted. Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of all or substantially all of the properties and assets of 74 the Company in accordance with Section 8.01, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE IX Supplemental Indentures SECTION 9.01. Supplemental Indentures Without Consent of Securityholders. Without the consent of the Holders of any Securities, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another corporation or Person to the Company or any Guarantor, and the assumption by any such successor of the respective covenants of the Company or any Guarantor herein and in the Securities contained, including, but not limited to, any such succession and assumption occurring upon a conversion by the Company from a partnership to a corporation; or (2) to add to the covenants of the Company or any Guarantor, or to surrender any right or power herein conferred upon the Company or any Guarantor, for the benefit of the Holders of the Securities of any or all series (and if such covenants or the surrender of such right or power are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included or such surrenders are expressly being made solely for the benefit of one or more specified series); or (3) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (3) shall not 75 adversely affect the interests of the Holders of Securities of any series in any material respect; or (4) to add to this Indenture such provisions as may be expressly permitted by the TIA, excluding, however, the provisions referred to in Section 316(a)(2) of the TIA as in effect at the date as of which this instrument was executed or any corresponding provision in any similar federal statute hereafter enacted; or (5) to establish any form of Security, as provided in Article II and to provide for the issuance of any series of Securities as provided in Article III and to set forth the terms thereof, and/or to add to the rights of the Holders of the Securities of any series; or (6) to evidence and provide for the acceptance of appointment by another corporation as a successor Trustee hereunder with respect to one or more series of Securities and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to Section U6.11; or (7) to add any additional Events of Default in respect of the Securities of any or all series (and if such additional Events of Default are to be in respect of less than all series of Securities, stating that such Events of Default are expressly being included solely for the benefit of one or more specified series); or (8) to provide for the issuance of Securities in coupon as well as fully registered form; or (9) to add new guarantors; or (10) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is not such Security Outstanding; or 76 (11) to secure the Securities of any series pursuant to Section 10.08 or otherwise or to guarantee any series; or (12) to evidence the succession of new obligors and the extinguishment of the obligations of the Company and the Guarantors pursuant to Section 11.04. No supplemental indenture for the purposes identified in Clauses (2), (3), (5) or (7) above may be entered into if to do so would adversely affect the rights of the Holders of Outstanding Securities of any series in any material respect. SECTION 9.02. Supplemental Indentures with Consent of Securityholders. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of all series affected by such supplemental indenture or indentures (acting as one class), by Act of said Holders delivered to the Company and the Trustee (in accordance with Section 1.04 hereof), the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of the Securities of each such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby: (1) change the Maturity of the principal of, or the Stated Maturity of any premium on, or any installment of interest on, any Security, or reduce the principal amount thereof or the interest or any premium thereon, or change the method of computing the amount of principal thereof or interest thereon on any date or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Maturity or the Stated Maturity, as the case may be, thereof (or, in the case of redemption or repayment, on or after the Redemption Date or the Repayment Date, as the case may be), or alter the provisions of this Indenture so as to affect adversely the terms, if any, of conversion of any Securities into other securities; or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent 77 of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences, provided for in this Indenture; or (3) modify any of the provisions of this Section, Section 5.13 or Section 10.09, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; (4) impair or adversely affect the right of any Holder to institute suit for the enforcement of any payment on, or with respect to, the Securities of any series on or after the Stated Maturity of such Securities (or in the case of redemption, on or after the Redemption Date); (5) amend or modify Section 12.01 of this Indenture in any manner adverse to the rights of the Holders of the Outstanding Securities of any series. For purposes of this Section 9.02, if the Securities of any series are issuable upon the exercise of warrants, each holder of an unexercised and unexpired warrant with respect to such series shall be deemed to be a Holder of Outstanding Securities of such series in the amount issuable upon the exercise of such warrant. For such purposes, the ownership of any such warrant shall be determined by the Company in a manner consistent with customary commercial practices. The Trustee for such series shall be entitled to rely on an Officers' Certificate as to the principal amount of Securities of such series in respect of which consents shall have been executed by holders of such warrants. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of Holders of Securities of any other series. It shall not be necessary for any Act of Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. 78 SECTION 9.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby to the extent provided therein. SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of TIA as then in effect. SECTION 9.06. Reference in Securities to Supplemental Indentures. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities. ARTICLE X Covenants SECTION 10.01. Payment of Principal, Premium and Interest. With respect to each series of Securities, the Company will duly and punctually pay the principal of (and premium, if any) and interest on such Securities in accordance with their terms and this Indenture. 79 SECTION 10.02. Maintenance of Office or Agency. The Company will maintain an office or agency in each Place of Payment where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange, where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served and where any Securities with conversion privileges may be presented and surrendered for conversion. The Company will give prompt written notice to the Trustee of the location, and of any change in the location, of such office or agency. If at any time the Company shall fail to maintain such office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee its agent to receive all such presentations, surrenders, notices and demands. Unless otherwise set forth in, or pursuant to, a Board Resolution or Indenture supplemental hereto with respect to a series of Securities, the Company hereby initially designates as the Place of Payment for each series of Securities the Borough of Manhattan, the City and State of New York, and initially appoints the Trustee at its Corporate Trust Office as the Company's office or agency for each such purpose in such city. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. SECTION 10.03. Money for Security Payments To Be Held in Trust. If the Company shall at any time act as its own Paying Agent for any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on, any of the Securities of such series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its action or failure to act. 80 Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, on or prior to each due date of the principal of (and premium, if any) or interest on, any Securities of such series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal (and premium, if any) or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent other than the Trustee for any series of Securities to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of principal of (and premium, if any) or interest on Securities of such series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; and (2) at any time during the continuance of any default by the Company (or any other obligor upon the Securities of such series) in the making of any such payment of principal (and premium, if any) or interest on the Securities of such series, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture with respect to any series of Securities or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent in respect of each and every series of Securities as to which it seeks to discharge this Indenture or, if for any other purpose, all sums so held in trust by the Company in respect of all Securities, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any 81 Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease. The Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 10.04. Statement as to Compliance. The Company and each Guarantor will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, a written statement signed by the principal executive officer, principal financial officer or principal accounting officer of the Company stating whether or not to the best knowledge of the signers thereof the Company or such Guarantor is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company or such Guarantor shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. SECTION 10.05. Legal Existence. Subject to Article VIII and Section 11.04, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (pursuant to its charter, partnership certificate and agreement and any statute) and material franchises (other than franchises relating to the ownership and operation of cable television systems); provided, however, that the Company shall not be required to preserve any such right or franchise if the Board of Directors or general partners of such Person shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders. In the event of a bankruptcy or dissolution of a Guarantor, the Company shall cause another corporate entity to guarantee the portion of the Securities, 82 if any, guaranteed by such Guarantor immediately prior to such bankruptcy or dissolution. SECTION 10.06. Maintenance of Properties. The Company will cause all properties used or useful in the conduct of its business or the business of any of its Subsidiaries to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any of its Subsidiaries and not disadvantageous in any material respect to the Holders. SECTION 10.07. Payment of Taxes and Other Claims. The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all material taxes, assessments and governmental charges levied or imposed upon the Company or any of its Subsidiaries or upon the income, profits or property of the Company or any such Subsidiaries, and (2) all material lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any such Subsidiaries; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith and, with respect to taxes and assessments, by appropriate proceedings. SECTION 10.08. Limitation on Liens. Neither the Company nor any Material Subsidiary of the Company shall incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness for money borrowed that is secured by a lien on any asset now owned or hereafter acquired by it unless the Company makes or causes the Securities also to be secured by such lien equally and ratably with (or prior to) the other indebtedness thereby secured so long as such other indebtedness is secured. If the Company or any of its Subsidiaries shall be required to secure the Guarantees or any Securities pursuant to this Section 10.08, (i) the Company will promptly deliver to the Trustee an Officers' Certificate stating that this covenant has been complied with and (ii) the Trustee is hereby 83 authorized to enter into an indenture supplemental hereto and to take such action, if any, as it may deem advisable to enable it to enforce the rights of the Holders of the Securities so secured. The foregoing restriction does not apply to the following: (i) liens existing as of the date this Indenture; (ii) liens created by Subsidiaries of the Company to secure indebtedness of such Subsidiaries to the Company or to one or more other Subsidiaries of the Company; (iii) liens affecting property of a Person existing at the time it becomes a Subsidiary of the Company or at the time it merges into or consolidates with the Company or a Subsidiary of the Company or at the time of a sale, lease or other disposition of all or substantially all of the properties of such Person to the Company or its Subsidiaries; provided that such liens do not extend to or cover any property or assets of the Company or any Subsidiary of the Company other than the property or assets acquired in such transaction and any improvements on such property or assets; (iv) liens on property existing at the time of its acquisition or incurred to secure payment of all or a part of its purchase price or to secure indebtedness incurred prior to, at the time of, or within one year after its acquisition for the purpose of financing all or part of its purchase price; provided that in each case such liens shall not extend to or cover any property or assets of the Company or any Subsidiary of the Company other than the property or assets acquired and any improvements on such property or assets; (v) liens on property to secure all or part of the cost of improvements or construction thereon or indebtedness incurred to provide funds for such purpose in a principal amount not exceeding the cost of such improvements or construction; provided that such liens do not extend to or cover any property or assets of the Company or any Subsidiary of the Company other than the property or assets improved or constructed and any improvements or construction thereon; (vi) liens consisting of or relating to the sale, transfer or financing of motion pictures, video and television programs, sound recordings, books or rights with respect thereto to or with so-called tax shelter 84 groups or other third-party investors in connection with the financing of such motion pictures, video and television programming, sound recordings or books in the ordinary course of business and the granting to the Company or any of its Subsidiaries of rights to distribute such motion pictures, video and television programming, sound recordings or books; provided, however, that no such lien shall attach to any asset or right of the Company or its Subsidiaries (other than the motion pictures, video and television programming, sound recordings, books or rights which were sold, transferred to or financed by the tax shelter group or third-party investors in question or the proceeds arising therefrom and other than equity interests of any Subsidiary of the Company substantially all of the assets of which consist of such motion pictures, video and television programming, sound recordings, books or rights); (vii) liens on shares of stock, indebtedness or other securities of a Person that is not a Subsidiary of the Company; (viii) liens on satellite transponders and all property rights therein and the products, revenues and proceeds therefrom which secure obligations incurred in connection with the acquisition, utilization or operation of such satellite transponders or the refinancing of any such obligations; (ix) liens on capital leases entered into after the date of the Indenture provided that such liens extend only to the property or assets that are the subject of such capital leases; (x) other liens arising in connection with indebtedness for money borrowed of the Company and its Subsidiaries (other than indebtedness of the Company or its Subsidiaries under a senior credit facility) in an aggregate principal amount for the Company and its Subsidiaries not exceeding (at the time such lien is issued, created or assumed) the greater of (A) 10% of the Consolidated Net Worth of the Company and (B) $500 million; and (xi) any extensions, renewal or replacement of any lien referred to in the foregoing clauses (i) through (x) inclusive, or of any indebtedness secured thereby; provided that the principal amount of indebtedness secured thereby does not exceed the principal amount of indebtedness so secured at the time 85 of such extension, renewal or replacement, or at the time the lien was issued, created or assumed or otherwise permitted, and that such extension, renewal or replacement lien is limited to all or part of substantially the same property which secured the lien extended, renewed or replaced (plus improvements on such property). SECTION 10.09. Waiver of Certain Covenants. The Company may omit in respect of any series of Securities, in any particular instance, to comply with any covenant or condition set forth in Section 10.08 or set forth in a Board Resolution or supplemental indenture with respect to the Securities of such series, unless otherwise specified in such Board Resolution or supplemental indenture, if before or after the time for such compliance the Holders of not less than a majority in principal amount of the Outstanding Securities of all series affected by such waiver (voting as one class) shall, by Act of such Securityholders delivered to the Company and the Trustee (in accordance with Section 1.04 hereof), either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect. Nothing in this Section 10.09 shall permit the waiver of compliance with any covenant or condition set forth in such Board Resolution or supplemental indenture which, if in the form of an indenture supplemental hereto, would not be permitted by Section 9.02 without the consent of the Holder of each Outstanding Security affected thereby. ARTICLE XI Redemption of Securities SECTION 11.01. Applicability of Article. The Company may reserve the right to redeem and pay before Stated Maturity all or any part of the Securities of any series, either by optional redemption, sinking or purchase fund or analogous obligation or otherwise, by provision therefor in the form of Security for such series established and approved pursuant to Section 2.02 and on such terms as are specified in such form or in the indenture supplemental hereto with respect to Securities of such series as provided in Section 3.01. Redemption of Securities of any series shall be made in accordance with the terms of such 86 Securities and, to the extent that this Article does not conflict with such terms, the succeeding Sections of this Article. Notwithstanding anything to the contrary in this Indenture, except in the case of redemption pursuant to a sinking fund, the Trustee shall not make any payment in connection with the redemption of Securities until the close of business on the Redemption Date. SECTION 11.02. Election To Redeem; Notice to Trustee. The election of the Company to redeem any Securities redeemable at the election of the Company shall be evidenced by, or pursuant to authority granted by, a Board Resolution. In case of any redemption at the election of the Company of less than all of the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series and the Tranche (as defined in Section 11.03) to be redeemed. In the case of any redemption of Securities (i) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, or (ii) pursuant to an election of the Company which is subject to a condition specified in the terms of such Securities, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction or condition. SECTION 11.03. Selection by Trustee of Securities To Be Redeemed. If less than all the Securities of like tenor and terms of any series (a "Tranche") are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such Tranche not previously called for redemption, by such method as the Trustee customarily utilizes and which may include provision for the selection for redemption of portions of the principal of Securities of such Tranche of a denomination larger than the minimum authorized denomination for Securities of that series. Unless otherwise provided in the terms of a particular series of Securities, the portions of the principal of Securities so selected for partial redemption shall be equal to the minimum authorized denomination of the Securities of such series, or an integral multiple thereof, and the principal amount which remains outstanding shall not be less than the minimum authorized denomination for Securities of such series. If less than all the Securities of unlike tenor and terms of a 87 series are to be redeemed, the particular Tranche of Securities to be redeemed shall be selected by the Company. If any convertible Security selected for partial redemption is converted in part before the termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Upon any redemption of fewer than all the Securities of a series or Tranche, the Company and the Trustee may treat as Outstanding any Securities surrendered for conversion during the period of fifteen days next preceding the mailing of a notice of redemption, and need not treat as Outstanding any Security authenticated and delivered during such period in exchange for the unconverted portion of any Security converted in part during such period. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed. Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in a written statement signed by an authorized officer of the Company and delivered to the Trustee at least 60 days prior to the Redemption Date as being owned of record and beneficially by, and not pledged or hypothecated by either, (a) the Company or (b) an entity specifically identified in such written statement as being an Affiliate of the Company. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal of such Security which has been or is to be redeemed. SECTION 11.04. Optional Redemption or Assumption If the Company dissolves (other than in connection with (a) the reconstitution of the Company as a corporation, (b) the occurrence of a transaction that is permitted by Section 8.01 of this Indenture or (c) a case or proceeding under any applicable federal or state bankruptcy, insolvency, 88 reorganization or similar law), it shall, at its option either: (1) redeem all of the Outstanding Securities concurrently with or prior to the effectiveness of such dissolution, with notice of such redemption being given, and such redemption being effected, in the manner specified in this Article 11, at a Redemption Price equal to the greater of (i) 100% of the principal amount of the Securities to be redeemed, plus accrued interest thereon to (but excluding) the Redemption Date, and (ii) the Make-Whole Amount (as defined herein) with respect to such Securities; or (2) provided that immediately after such transaction no default or Event or Default would exist and be continuing, concurrently with or prior to the effectiveness of such dissolution (i) cause an entity that controls or is under common control with the Company immediately prior to such dissolution (which shall be a corporation, partnership or trust, organized and validly existing under the laws of the United States of America, any state or the District of Columbia) (an "Eligible Affiliate") to expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of, premium, if any, and interest on all of the Securities and the performance or observance of every covenant of the Indenture on the part of the Company to be performed or observed; and (ii) cause an Eligible Affiliate that has outstanding indebtedness that was sold under the Securities Act ("Public Debt") and files reports under Section 13(a) or 15(d) of the Securities Act (a "Public Issuer") to provide, by way of assumption or guarantee (including, if appropriate, the guarantees of other Eligible Affiliates), substantially the same credit support as is provided for the Public Debt of such Public Issuer. If the Company dissolves without having elected either option (1) or option (2) in this Section 11.04, the Company shall be deemed to have elected option (1). If the Company has its obligations under the Securities assumed by an Eligible Affiliate pursuant to this Section 11.04, the Company, at its option, may provide for termination of the Guarantees provided by the General Partners pursuant to Article XII. SECTION 11.05. Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 (or 15 if so provided in the Board Resolution establishing the relevant series) nor more than 60 days prior to the Redemption Date, to each holder of Securities to be redeemed, at his address appearing in the Security Register. 89 All notices of redemption shall state: (1) the Redemption Date; (2) the Redemption Price; (3) if less than all Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Securities to be redeemed; (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security, and that interest, if any, thereon shall cease to accrue from and after said date; (5) the place where such Securities are to be surrendered for payment of the Redemption Price, which shall be the office or agency of the Company in the Place of Payment; (6) that the redemption is on account of a sinking or purchase fund, or other analogous obligation, if that be the case; and (7) if such Securities are convertible into securities, the conversion price and the date on which the right to convert such Securities into securities will terminate. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. In the case of redemption of Securities pursuant to Section 11.04 of this Indenture, notice of redemption provided for in this Section 11.05 may be revoked by the Company at any time prior to such redemption, whereupon such previously given notice shall be of no force or effect. The Company shall give the Trustee written notice at least two days prior to any such revocation. SECTION 11.06. Deposit of Redemption Price. On or prior to any Redemption Date and subject to Section 11.10, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount of money sufficient to pay the Redemption Price of all the Securities which are to be redeemed on that date. If any Security to be redeemed is converted into securities, any money so deposited with the 90 Trustee or a Paying Agent shall be paid to the Company upon Company Request or, if then so segregated and held in trust by the Company, shall be discharged from such trust. SECTION 11.07. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, subject to Section 11.10, on the Redemption Date, become due and payable at the Redemption Price therein specified and from and after such date (unless the Company shall default in the payment of the Redemption Price) such Securities shall cease to bear interest and any rights to convert such Securities shall terminate. Upon surrender of such Securities for redemption in accordance with the notice and subject to Section 11.10, such Securities shall be paid by the Company at the Redemption Price. Unless otherwise provided with respect to such Securities pursuant to Section 3.01, installments of interest the Stated Maturity of which is on or prior to the Redemption Date shall be payable to the Holders of such Securities registered as such on the relevant Regular Record Dates according to their terms and the provisions of Section 3.07. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest from the Redemption Date at the rate borne by the Security, or as otherwise provided in such Security. SECTION 11.08. Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at the office or agency of the Company in the Place of Payment with respect to that series (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and Stated Maturity and of like tenor and terms, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. SECTION 11.09. Provisions with Respect to Any Sinking Funds. Unless the form or terms of any series of Securities shall provide otherwise, in lieu of making all or any part of any mandatory sinking fund payment with respect to such series of Securities in cash, the Company may at its option (1) deliver to the Trustee for cancelation any 91 Securities of such series theretofore acquired by the Company or converted by the Holder thereof into other securities, or (2) receive credit for any Securities of such series (not previously so credited) acquired by the Company (including by way of optional redemption (pursuant to the sinking fund or otherwise but not by way of mandatory sinking fund redemption) or converted by the Holder thereof into other securities and theretofore delivered to the Trustee for cancelation, and if it does so then (i) Securities so delivered or credited shall be credited at the applicable sinking fund Redemption Price with respect to Securities of such series, and (ii) on or before the 60th day next preceding each sinking fund Redemption Date with respect to such series of Securities, the Company will deliver to the Trustee (A) an Officers' Certificate specifying the portions of such sinking fund payment to be satisfied by payment of cash and by delivery or credit of Securities of such series acquired by the Company or converted by the Holder thereof, and (B) such Securities, to the extent not previously surrendered. Such Officers' Certificate shall also state the basis for such credit and that the Securities for which the Company elects to receive credit have not been previously so credited and were not acquired by the Company through operation of the mandatory sinking fund, if any, provided with respect to such Securities and shall also state that no Event of Default with respect to Securities of such series has occurred and is continuing. All Securities so delivered to the Trustee shall be canceled by the Trustee and no Securities shall be authenticated in lieu thereof. If the sinking fund payment or payments (mandatory or optional) with respect to any series of Securities made in cash plus any unused balance of any preceding sinking fund payments with respect to Securities of such series made in cash shall exceed $50,000 (or a lesser sum if the Company shall so request), unless otherwise provided by the terms of such series of Securities, that cash shall be applied by the Trustee on the sinking fund Redemption Date with respect to Securities of such series next following the date of such payment to the redemption of Securities of such series at the applicable sinking fund Redemption Price with respect to Securities of such series, together with accrued interest, if any, to the date fixed for redemption, with the effect provided in Section 11.07. The Trustee shall select, in the manner provided in Section 11.03, for redemption on such sinking fund Redemption Date a sufficient principal amount of Securities of such series to utilize that cash and shall thereupon cause notice of redemption of the Securities of such series for the sinking fund to be given in the manner provided in Section 11.05 (and with the effect provided in 92 Section 11.07) for the redemption of Securities in part at the option of the Company. Any sinking fund moneys not so applied or allocated by the Trustee to the redemption of Securities of such series shall be added to the next cash sinking fund payment with respect to Securities of such series received by the Trustee and, together with such payment, shall be applied in accordance with the provisions of this Section 11.09. Any and all sinking fund moneys with respect to Securities of any series held by the Trustee at the Maturity of Securities of such series, and not held for the payment or redemption of particular Securities of such series, shall be applied by the Trustee, together with other moneys, if necessary, to be deposited sufficient for the purpose, to the payment of the principal of the Securities of such series at Maturity. On or before each sinking fund Redemption Date provided with respect to Securities of any series, the Company shall pay to the Trustee in cash a sum equal to all accrued interest, if any, to the date fixed for redemption on Securities to be redeemed on such sinking fund Redemption Date pursuant to this Section 11.09. ARTICLE XII Guarantees SECTION 12.01. Guarantees. (a) Each of the General Partners (each, a "Guarantor") and each of their successors and assigns, hereby fully and unconditionally guarantees (each, a "Guarantee") to each Holder of the Securities upon which this Guarantee is referred to, and to the Trustee on behalf of each such Holder, the due and punctual payment of the percentage (its "Guaranteed Percentage") of the principal of (and premium, if any, on) and interest on such Security set forth on Exhibit A to this Indenture (as such Exhibit A may be amended as provided in this Indenture) and incorporated by reference herein, when and as the same shall become due and payable, whether at Stated Maturity, upon redemption or repayment, upon declaration of acceleration or otherwise, according to the terms of the Securities and of this Indenture. In case of the failure of the Company or any successor thereto punctually to pay any such principal, premium or interest, each of the General Partners, on the basis of the percentages referred to above, hereby agrees to immediately cause any such payment to be made punctually when and as the same shall become due and payable, whether at Stated Maturity, upon redemption or repayment, upon declaration of 93 acceleration or otherwise, as if such payment were made by the Company. (b) Each of the General Partners hereby agrees that as long as this Section 12.01 is in effect with respect to it pursuant to this Indenture, its obligations hereunder shall be unconditional and absolute, irrespective of the identity of the Company, the validity, regularity or enforceability of any such Security or this Indenture, the absence of any action to enforce the same, the granting of any waiver or consent by the Holder of any such Security with respect to any provisions thereof, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each of the General Partners hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding be brought first against the Company, protest, notice and all demands whatsoever, and covenants that as long as this Section 12.01 is in effect with respect to it pursuant to this Indenture, this Guarantee will not be discharged except by complete payment of the payment and other obligations contained in any such Security or in this Section 12.01. (c) Each of the General Partners acknowledges and agrees for the benefit of the Trustee and such Holders that the Trustee and such Holders (in the case of an Event of Default under Sections 5.01(1) or (2)) may directly and simultaneously proceed against such General Partner for the enforcement of this Guarantee or against the Company. The obligations of each General Partner hereunder are independent of the obligations of the Company under the Securities and this Indenture, and a separate action or actions may be brought and prosecuted against each General Partner hereunder whether or not (i) an action or proceeding is brought against the Company or any other General Partner, (ii) the Company or any other General Partner is joined in any such action or proceeding against such General Partner or (iii) the Trustee or such Holders have taken any action to collect or attempted to otherwise collect such obligations from the Company or any other General Partner or any other Person liable therefor. (d) Anything in this Section 12.01 to the contrary notwithstanding, the Guarantees are and shall be deemed to be Guarantees of payment, and not Guarantees of collection. 94 (e) If the Trustee or the Holder of any such Security is required by any court or otherwise to return to the Company or any custodian, receiver, liquidator, trustee, sequestrator or other similar official acting in relation to the Company, any amount paid to the Trustee or such Holder in respect of such Security, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each General Partner further agrees, to the fullest extent that it may lawfully do so, that, as between such General Partner, on the one hand, and such Holders and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article V for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition extant under any applicable bankruptcy law preventing such acceleration in respect of the obligations guaranteed hereby. (f) Each General Partner hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against the Company that arises from the existence, payment, performance or enforcement of each General Partner's obligations under this Guarantee, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, any right to participate in any claim or remedy of any Holder of any such Security or the Trustee on behalf of such Holder against the Company or any collateral which any such Holder or the Trustee on behalf of such Holder hereafter acquires, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any General Partner in violation of the preceding sentence at any time prior to the payment in full of all obligations and all other amounts payable hereunder, such amount shall be deemed to have been paid to such General Partner for the benefit of, and held in trust for the benefit of, any Holder of such Security and the Trustee on behalf of such Holder, and shall forthwith be paid to the Trustee for the benefit of such Holder to be credited and applied upon such guaranteed obligations, whether matured or unmatured, in accordance with the terms of this Indenture. Each General Partner acknowledges that the waiver set forth in this Section 12.01 is knowingly made. (g) No provision of this Section 12.01 or of this Indenture shall alter or impair the Guarantee of each 95 General Partner, which is absolute and unconditional, of the due and punctual payment of the percentage of (as set forth in Exhibit A to this Indenture and incorporated by reference herein, as such Exhibit A may be amended as provided in this Indenture) the principal of (and premium, if any) and interest on the Securities upon which this Guarantee is referred to. (h) If the Company has its obligations under the Securities assumed by an Eligible Affiliate pursuant to Section 11.04(2), the Guarantees provided for in this Article 12 may terminate if so provided in a supplemental indenture to this Indenture entered into in connection with the assumption of the Securities pursuant to Section 11.04(2). IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. TIME WARNER ENTERTAINMENT COMPANY, L.P., by Name: Title: Attest: Name: Title: WARNER COMMUNICATIONS INC., by Name: Title: Attest: Name: Title: AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION, by Name: Title: Attest: Name: Title: THE BANK OF NEW YORK, as Trustee by Name: Title: EXHIBIT A Percentage of principal of (and premium, if any) and interest on the Securities General Partners guaranteed. - ---------------- -------------------------- Warner Communications Inc. 59.27% American Television and Communications Corporation 40.73 ------- 100.00% EX-4.2 4 FORM OF SECURITY EXHIBIT 4.2 [FORM OF FACE OF SECURITY] [INSERT IF GLOBAL SECURITY -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [CEDE & CO.] OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO [CEDE & CO.] OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, [CEDE & CO.], HAS AN INTEREST HEREIN. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR INDIVIDUAL SECURITIES REGISTERED IN THE NAMES OF PARTICIPANTS IN DTC, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC OR BY A NOMINEE OF DTC TO DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.] No. $ TIME WARNER ENTERTAINMENT COMPANY, L.P., [ ]% Senior [Note] [Debenture] Due [ ] CUSIP: Time Warner Entertainment Company, L.P., a limited partnership duly organized and existing under the laws of the State of Delaware (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to) promises to pay to [Cede & Co.] or registered assigns, the principal sum of [ ] on [ ], at the office or agency of the Company in the Borough of Manhattan, the City and State of New York. This Security has the benefit of unconditional guarantees by Warner Communications Inc., a Delaware corporation ("WCI"), and American Television and Communications Corporation, a Delaware corporation ("ATC" and, together with WCI, the "Guarantors"), as more fully described on the reverse hereof. Interest Payment Dates: Record Dates: Additional provisions of this Security are set forth on the other side of this Security. Dated: TIME WARNER ENTERTAINMENT COMPANY, L.P. by ---------------------- [SEAL] Title: Executive Vice President Attest: - ------------------------- Assistant Secretary WARNER COMMUNICATIONS INC., as Guarantor, by ---------------------- [SEAL] Title: Vice President Attest: - ------------------------- Assistant Secretary AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION, as Guarantor, by ---------------------- [SEAL] Title: Vice President Attest: - ------------------------- Assistant Secretary 2 This Security, together with any Guarantees referred to herein, is one of the Securities described in the within-mentioned Indenture. Dated: The Bank of New York, As Trustee By ------------------------------------- Authorized Signatory 3 [FORM OF REVERSE SIDE OF SECURITIES] TIME WARNER ENTERTAINMENT COMPANY, L.P. [ ]% Senior [Note] [Debenture] Due [ ] This Security (as defined below) is one of the duly authorized issue of senior debentures, notes, bonds or other evidences of indebtedness (hereinafter called the "Debt Securities") of the Company of the series hereinafter specified, all issued or to be issued under and pursuant to the Indenture (the "Indenture") among the Company, WCI, ATC, and The Bank of New York, as Trustee (herein called the "Trustee"), to which reference is hereby made for a statement of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, and any agent of the Trustee, any Paying Agent, the Company, the Guarantors and the Holders of the Debt Securities, and the terms upon which the Debt Securities are issued and may be authenticated and delivered. The Debt Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may have different conversion prices or exchange provisions (if any), may be subject to different redemption provisions (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default and may otherwise vary as provided or permitted in the Indenture. This Security is one of the series of Debt Securities of the Company issued pursuant to the Indenture designated as the [ ]% Senior [Notes] [Debentures] due [ ] (the "Securities"), limited in aggregate principal amount to $[ ]. The Company promises to pay interest from [ ], on the principal amount of this Security semiannually on [ ] and [ ] of each year beginning [ ] at the office or agency of the Company in the Borough of Manhattan, The City of New York, in like coin or currency, at the rate per annum specified in the title hereof. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. [Each of the Guarantors fully and unconditionally guarantees (each, a "Guarantee") to each Holder of the Securities and to the Trustee on behalf of each such Holder, the due and punctual payment of the percentage (its 4 "Guaranteed Percentage") of the principal of (and premium, if any, on) and interest on such Security set forth on Exhibit A to the Indenture (as such Exhibit A may be amended as provided in the Indenture) and incorporated by reference herein, when and as the same shall become due and payable, whether at Stated Maturity, upon redemption or repayment, upon declaration of acceleration or otherwise, according to the terms of the Indenture. The Guarantees constitute guarantees of payment and not guarantees of collection. Reference is hereby made to the further provisions of the Guarantees set forth in the Indenture, which further provisions shall be incorporated herein by reference for all purposes and shall have the same effect as if fully set forth at this place.] The interest so payable, and punctually paid or duly provided for, on any [ ] or [ ] will, except as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the [ ] or [ ] next preceding the interest payment date (herein called the "Regular Record Date") whether or not a Business Day, and may, at the option of the Company, be paid by check mailed to the registered address of such Person. Any such interest which is payable, but is not so punctually paid or duly provided for, shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may be paid either to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Security may be listed and upon such notice as may be required by such exchange, if such manner of payment shall be deemed practicable by the Trustee, all as more fully provided in the Indenture. Initially, the Trustee will be the Paying Agent and Registrar with respect to this Security. The Company reserves the right at any time to vary or terminate the appointment of any Paying Agent or Registrar, to appoint additional or other Paying Agents and other Registrars and to approve any change in the office through which any Paying Agent or Registrar acts; provided that there will at all times be a Paying Agent in The City of New York. 5 [The Securities of this series are not redeemable prior to the stated maturity of the principal hereof and will not be subject to any sinking fund.] [The Company may, at its sole option, redeem at any time or from time to time all or any part of the outstanding Securities at the following redemption prices (expressed as percentages of principal amount), together in each case with an amount equal to the accrued and unpaid interest to the date fixed for redemption (hereinafter collectively referred to as the "Redemption Price"). 12-Month Percentage Period of Beginning on Principal [ ] Amount] [The Securities are also subject to redemption through the operation of the sinking fund as herein and in the Indenture provided at [100%] of the principal amount thereof together with accrued interest to the date fixed for redemption (the sinking fund redemption price). Notice of redemption of Securities for the sinking fund shall be given at least 30 and not more than 60 days prior to the date fixed for such redemption as provided in the Indenture.] [As and for a sinking fund for the retirement of the Securities and as long as any of the Securities remain outstanding and unpaid, the Company shall pay to the Trustee in cash (subject to the right to deliver certain Securities in credit therefor as provided in the Indenture), on or before [ ] in each year from [ ] to and including [ ] an amount sufficient to redeem $[ ] principal amount of the Securities (or such lesser amount equal to the principal amount then outstanding at the sinking fund redemption price).] [At its option the Company may pay into the sinking fund for the retirement of Securities on or before [ ] in each year from [ ] to and including [ ], in cash an amount sufficient to redeem an additional principal amount of the Securities up to but not to exceed $[ ] principal amount of the Securities at the sinking fund redemption price. To the extent that the right to such optional sinking fund payment is not exercised in any year, it shall not be cumulative or carried forward to any subsequent year.] 6 [Notice of the redemption will be mailed to Holders of Securities by first-class mail at least 30 and not more than 60 days prior to the date fixed for redemption. If fewer than all of the Securities are to be redeemed, the Trustee will select, not more than 60 days prior to the redemption date, the particular Securities or portions thereof for redemption from the outstanding Securities not previously called by such method as the Trustee deems fair and appropriate.] If the Company dissolves (other than in connection with (a) the reconstitution of the Company as a corporation, (b) the occurrence of a transaction that is permitted by Section 8.01 of the Indenture or (c) a case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or similar law), it shall, at its option, either (1) redeem all of the Debt Securities or (2) cause an Eligible Affiliate (as defined in the Indenture) to assume or guarantee the Debt Securities, in either case, on the terms set forth in the Indenture. If an Event of Default with respect to the Securities shall occur and be continuing, the principal of all the Securities and all accrued interest thereon may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee to enter into supplemental indentures to the Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the Holders of the Debt Securities of each series under the Indenture with the consent of the Holders of not less than a majority in principal amount of the Debt Securities at the time Outstanding of all series to be affected thereby (acting as one class). The Indenture also permits the Holders of a majority in principal amount of the Debt Securities at the time Outstanding of each series on behalf of the Holders of all Debt Securities of such series to waive compliance by the Company with certain provisions of the Indenture and certain past defaults and their consequences with respect to such series under the Indenture. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security or such other Securities. 7 No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal and any premium of and any interest on this Security at the place, rate and respective times and in the coin or currency prescribed herein and in the Indenture. As provided in the Indenture and subject to the satisfaction of certain conditions therein set forth, including the deposit of certain trust funds in trust, at the Company's option, either (i) the Company and the Guarantors shall be deemed to have paid and discharged the entire indebtedness represented by, and the obligations under, the Debt Securities of any series and to have satisfied all the obligations (with certain exceptions) under the Indenture relating to the Debt Securities and the Guarantees of such series or (ii) the Company and the Guarantors shall cease to be under any obligation to comply with any term, provision or condition of certain restrictive covenants or provisions set forth in any additions or changes to or deletions from covenants and Events of Default with respect to the Debt Securities and the Guarantees of such series. The Securities are issuable in registered form without coupons, in denominations of $1,000 and integral multiples thereof. Securities may be exchanged for a like aggregate principal amount of Securities of other authorized denominations at the office or agency of the Company in the Borough of Manhattan, The City of New York, and in the manner and subject to the limitations provided in the Indenture. Upon due presentment for registration of transfer of this Security at the office or agency of the Company in the Borough of Manhattan, The City of New York, a new Security or Securities of authorized denominations for a like aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax, assessment or other governmental charge payable in connection therewith. Subject to the provisions of the Indenture, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is 8 registered as the owner hereof for all purposes, whether or not this Security is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. Unless otherwise defined herein, all terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. THIS SECURITY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. Unless the certificate of authentication hereon has been manually executed by or on behalf of the Trustee under the Indenture, this Security shall not be entitled to any benefits under the Indenture, or be valid or obligatory for any purpose. The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture. Requests may be made to Time Warner Entertainment Company, L.P., 75 Rockefeller Plaza, New York, N.Y. 10019, Attention of Manager, Investor Relations. 9 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to - ------------------------------------------------ (Insert assignee's soc. sec. or tax ID no.) - ------------------------------------------------------------ - ------------------------------------------------------------ - ------------------------------------------------------------ (Print or type assignee's name, address and zip code) and irrevocably appoint _________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. - ------------------------------------------------------------ Date: Your Signature: -------------- ---------------------- - ------------------------------------------------------------ (Sign exactly as your name appears on the other side of this Security) 10 SIGNATURE GUARANTEE Signature Guarantee by: - ---------------------------------------- by: ------------------------------------ - ---------------------------------------- (Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements will include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.) EX-5 5 OPINION OF CRAVATH, SWAINE & MOORE EXHIBIT 5 [Letterhead of] CRAVATH, SWAINE & MOORE [New York Office] December 31, 1998 Time Warner Entertainment Company, L.P. American Television and Communications Corporation Warner Communications Inc. Ladies and Gentlemen: We have acted as counsel for Time Warner Entertainment Company, L.P., a Delaware limited partnership (the "Issuer"), American Television and Communications Corporation, a Delaware corporation ("ATC"), and Warner Communications Inc., a Delaware corporation ("WCI" and, together with ATC, the "Guarantors"), in connection with the Registration Statement on Form S-3 (the "Registration Statement") being filed by the Issuer and the Guarantors with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to (i) the debt securities of the Issuer (the "Debt Securities") and (ii) the guarantees of the Debt Securities by the Guarantors (the "Guarantees"). The Debt Securities will be issued under an Indenture (the "Indenture"), among the Issuer, the Guarantors and The Bank of New York (the "Trustee"), as Trustee, filed as Exhibit 4.1 to the Registration Statement. In connection with the foregoing, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including (a) the Certificate of Limited Partnership of the Issuer, as amended, (b) the Agreement of Limited Partnership of the Issuer, as amended, (c) the Admission Agreement, dated as of May 16, 1993, between the Issuer and U S West, as amended, (d), the Certificate of Incorporation, as amended, and By-laws of ATC, (e) the Restated Certificate of Incorporation, as amended, and By-laws, as amended, of WCI, (f) the Indenture, (g) the form of the Debt Security and (h) the 2 resolutions of the Managing General Partners of the Issuer and the resolutions of the Board of Directors of each Guarantor authorizing the registration of the Debt Securities and the Guarantee. Based upon the foregoing and subject to the qualifications hereinafter set forth, we are of opinion that: 1. Based solely on a certificate from the Secretary of State of the State of Delaware, the Issuer is a limited partnership validly existing and in good standing under the laws of the State of Delaware. 2. Based solely on a certificate from the Secretary of State of the State of Delaware, each Guarantor is a corporation validly existing and in good standing under the laws of the State of Delaware. 3. The Indenture has been duly authorized by the parties thereto and the Indenture, when executed and delivered, and the Debt Securities, when duly authorized, issued, authenticated and delivered in accordance with the terms of the Indenture, and the Guarantees related thereto, will constitute legal, valid and binding obligations of the Issuer and the Guarantors, respectively, entitled to the benefits of the Indenture and enforceable against the Issuer and the Guarantors, respectively, in accordance with their respective terms. The opinion set forth above in paragraph 3 is qualified to the extent we have assumed the due authorization of the Indenture by the Trustee. Our opinion set forth above in paragraph 3 is subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect. The enforceability of the Issuer's and the Guarantor's obligations is also subject to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether such enforceability is considered in a proceeding in equity or at law. We are aware that we are referred to under the heading "Legal Opinions" in the prospectus forming a part of the Registration Statement, and we hereby consent to such use of our name therein and the filing of this opinion as Exhibit 5 to the Registration Statement. In giving this 3 consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder. Very truly yours, /s/ Cravath, Swaine & Moore Time Warner Entertainment Company, L.P. American Television and Communications Corporation Warner Communications Inc. 75 Rockefeller Plaza New York, NY 10019 399A EX-12.1 6 STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES -- TWE EXHIBIT 12.1 TWE RATIO OF EARNINGS TO FIXED CHARGES (IN MILLIONS, EXCEPT RATIOS)
NINE MONTHS ENDED SEPTEMBER 30, YEARS ENDED DECEMBER 31, ---------------- ------------------------------------------ 1998 1997 1997 1996 1995 1994 1993 ------ ------ ------ ------ ------ ---- ---- Earnings: Income before income taxes and extraordinary items....................................... $ 490 $ 547 $ 722 $ 280 $ 183 $201 $272 Interest expense............................... 418 358 490 475 571 563 573 Amortization of capitalized interest........... 11 32 48 36 33 25 19 Portion of rents representative of an interest factor...................................... 52 52 72 68 58 47 39 Preferred stock dividend requirements of majority-owned subsidiaries................. 15 14 19 -- -- -- -- Adjustment for partially-owned subsidiaries and 50%-owned companies......................... 243 238 323 219 175 24 22 Undistributed (earnings) losses of less than 50%-owned companies......................... 37 1 (13) 21 76 58 14 ------ ------ ------ ------ ------ ---- ---- Total earnings............................ $1,266 $1,242 $1,661 $1,099 $1,096 $918 $939 ------ ------ ------ ------ ------ ---- ---- ------ ------ ------ ------ ------ ---- ---- Fixed Charges: Interest expense............................... $ 418 $ 358 $ 490 $ 475 $ 571 $563 $573 Capitalized interest........................... 3 32 33 39 33 25 20 Portion of rents representative of an interest factor...................................... 52 52 72 68 58 47 39 Preferred stock dividend requirements of majority-owned subsidiaries................. 15 14 19 -- -- -- -- Adjustment for partially-owned subsidiaries and 50%-owned companies......................... 45 14 22 22 27 24 22 ------ ------ ------ ------ ------ ---- ---- Total fixed charges....................... $ 533 $ 470 $ 636 $ 604 $ 689 $659 $654 ------ ------ ------ ------ ------ ---- ---- ------ ------ ------ ------ ------ ---- ---- Ratio of earnings to fixed charges............... 2.4x 2.6x 2.6x 1.8x 1.6x 1.4x 1.4x ------ ------ ------ ------ ------ ---- ---- ------ ------ ------ ------ ------ ---- ----
EX-12.2 7 STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES -- WCI EXHIBIT 12.2 WCI RATIO OF EARNINGS TO FIXED CHARGES (IN MILLIONS, EXCEPT RATIOS)
NINE MONTHS ENDED SEPTEMBER 30, YEARS ENDED DECEMBER 31, ---------------- ---------------------------------------------- 1998 1997 1997 1996 1995 1994 1993 ------ ------ ------ ------ ------ ------ ------ Earnings: Income before income taxes and extraordinary items..................... $ 387 $ 423 $1,026 $ 445 $ 427 $ 305 $ 436 Interest expense........................... 14 17 23 34 88 222 86 Portion of rents representative of an interest factor......................... 14 13 17 16 21 18 17 Adjustment for partially-owned subsidiaries and 50%-owned companies................. 673 658 898 685 736 721 751 Undistributed (earnings) losses of less than 50%-owned companies................ 5 6 (7) 13 29 (1) 11 ------ ------ ------ ------ ------ ------ ------ Total earnings........................ $1,093 $1,117 $1,957 $1,193 $1,301 $1,265 $1,301 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Fixed Charges: Interest expense........................... $ 14 $ 17 $ 23 $ 34 $ 88 $ 222 $ 86 Portion of rents representative of an interest factor......................... 14 13 17 16 21 18 17 Adjustment for partially-owned subsidiaries and 50%-owned companies................. 466 435 589 574 662 639 641 ------ ------ ------ ------ ------ ------ ------ Total fixed charges................... $ 494 $ 465 $ 629 $ 624 $ 771 $ 879 $ 744 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Ratio of earnings to fixed charges........... 2.2x 2.4x 3.1x 1.9x 1.7x 1.4x 1.7x ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
EX-23.1 8 CONSENT OF ERNST & YOUNG LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in Time Warner Entertainment Company, L.P.'s ("TWE") Registration Statement on Form S-3 pertaining to the registration of $1 of Debt Securities, which Registration Statement also carries forward pursuant to Rule 429 $2,000,000,000 of Debt Securities previously registered on TWE's Registration Statement on Form S-3 (File No. 33-75144), and to the incorporation by reference in the Registration Statement and related prospectus of our reports dated February 10, 1998, with respect to the consolidated financial statements and schedules of TWE, Warner Communications Inc. and American Television and Communications Corporation, included in TWE's Annual Report on Form 10-K for the year ended December 31, 1997, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP New York, New York December 23, 1998 EX-24 9 POWER OF ATTORNEY EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of Time Warner Entertainment Company, L.P. (the "Company") American Television and Communications Corporation ("ATC") and Warner Communications Inc. ("WCI") hereby constitutes and appoints CHRISTOPHER P. BOGART, RICHARD J. BRESSLER, PETER R. HAJE, JOHN A. LABARCA, GERALD M. LEVIN, THOMAS W. MCENERNEY AND RICHARD D. PARSONS and each of them, his true and lawful attorneys-in-fact and agents, with full power to act without the others, for him and in his name, place and stead, in any and all capacities, to sign one or more Registration Statements on Form S-3 or any other appropriate form and any and all amendments to any such Registration Statement (including post-effective amendments), to be filed with the Securities and Exchange Commission in connection with the "shelf" registration pursuant to Rule 415 under the provisions of the Securities Act of 1933, as amended, of up to $2.0 billion aggregate initial offering price of debt securities issued by the Company and guaranteed by ATC and WCI, with power where appropriate to affix thereto the seal of the Company, ATC and WCI and to attest said seal, and to file any such Registration Statement, including a form of prospectus, and any and all amendments and post-effective amendments to any such Registration Statement, and any subsequent registration statement filed by the Company, ATC and WCI pursuant to Rule 462(b) of the Securities Act of 1933, as amended, with all exhibits thereto, and any and all documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, each of the undersigned has hereunto set his name as of the 22nd day of December, 1998.
SIGNATURE TITLE - ------------------------------------------ --------------------------------------- /s/ GERALD M. LEVIN Chairman of the Board and Chief - ------------------------------------------ Executive Officer of the Company, WCI Gerald M. Levin and ATC (Principal Executive Officer) and Director of WCI and ATC /s/ RICHARD J. BRESSLER Executive Vice President and - ------------------------------------------ Chief Financial Officer of Richard J. Bressler the Company and Director and Senior Vice President and Chief Financial Officer of WCI and ATC (Principal Financial Officer) /s/ JOHN A. LABARCA Senior Vice President and - ------------------------------------------ Controller of the Company John A. LaBarca and Vice President and Controller of WCI and ATC (Principal Accounting Officer) /s/ PETER R. HAJE Director of WCI and ATC - ------------------------------------------ Peter R. Haje /s/ RICHARD D. PARSONS Director of WCI and ATC - ------------------------------------------ Richard D. Parsons
EX-25 10 FORM T-1 EXHIBIT 25 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) / / ------------------------ THE BANK OF NEW YORK (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) NEW YORK 13-5160382 (STATE OF INCORPORATION IF NOT (I.R.S. EMPLOYER A U.S. NATIONAL BANK) IDENTIFICATION NO.)
------------------------ 48 WALL STREET, NEW YORK, N.Y. 10286 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) ------------------------ TIME WARNER ENTERTAINMENT COMPANY, L.P. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 13-3666692 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
------------------------ AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 13-2922502 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
------------------------ WARNER COMMUNICATIONS INC. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 13-2696809 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
75 ROCKEFELLER PLAZA NEW YORK, NEW YORK 10019 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) ------------------------ DEBT SECURITIES (TITLE OF THE INDENTURE SECURITIES) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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.
NAME ADDRESS - --------------------------------------------------- --------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(D). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. 2 SIGNATURE PURSUANT TO THE REQUIREMENTS OF THE ACT, THE TRUSTEE, THE BANK OF NEW YORK, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF NEW YORK, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF NEW YORK, AND STATE OF NEW YORK, ON THE 16TH DAY OF DECEMBER, 1998. THE BANK OF NEW YORK By: /s/ THOMAS C. KNIGHT ------------------------------- Name: Thomas C. Knight Title: Assistant Vice President EXHIBIT 7 CONSOLIDATED REPORT OF CONDITION OF THE BANK OF NEW YORK OF 48 WALL STREET, NEW YORK, N.Y. 10286 AND FOREIGN AND DOMESTIC SUBSIDIARIES A member of the Federal Reserve System, at the close of business June 30, 1998, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS -------------- (IN THOUSANDS) ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.............................................. $ 7,301,241 Interest-bearing balances......................................................................... 1,385,944 Securities: Held-to-maturity securities..................................................................... 1,000,737 Available-for-sale securities................................................................... 4,240,655 Federal funds sold and Securities purchased under agreements to resell.......................... 971,453 Loans and lease financing receivables: Loans and leases, net of unearned income........................................................ 38,788,269 LESS: Allowance for loan and lease losses....................................................... 632,875 LESS: Allocated transfer risk reserve........................................................... 0 Loans and leases, net of unearned income, allowance, and reserve................................ 38,155,394 Assets held in trading accounts................................................................... 1,307,562 Premises and fixed assets (including capitalized leases).......................................... 670,445 Other real estate owned........................................................................... 13,598 Investments in unconsolidated subsidiaries and associated companies............................... 215,024 Customers' liability to this bank on acceptances outstanding...................................... 974,237 Intangible assets................................................................................. 1,102,625 Other assets...................................................................................... 1,944,777 ------------ Total assets...................................................................................... $ 59,283,692 ------------ ------------
DOLLAR AMOUNTS ------------ (IN THOUSANDS) LIABILITIES Deposits: In domestic offices............................................................................. $ 26,930,258 Noninterest-bearing............................................................................. 11,579,390 Interest-bearing................................................................................ 15,350,868 In foreign offices, Edge and Agreement subsidiaries, and IBFs................................... 16,117,854 Noninterest-bearing............................................................................. 187,464 Interest-bearing................................................................................ 15,930,390 Federal funds purchased and Securities sold under agreements to repurchase........................ 2,170,238 Demand notes issued to the U.S.Treasury........................................................... 300,000 Trading liabilities............................................................................... 1,310,867 Other borrowed money: With remaining maturity of one year or less..................................................... 2,549,479 With remaining maturity of more than one year through three years............................... 0 With remaining maturity of more than three years................................................ 46,654 Bank's liability on acceptances executed and outstanding.......................................... 983,398 Subordinated notes and debentures................................................................. 1,314,000 Other liabilities................................................................................. 2,295,520 ------------ Total liabilities................................................................................. 54,018,268 ------------ ------------ Equity capital: Common stock.................................................................................... 1,135,284 Surplus......................................................................................... 731,319 Undivided profits and capital reserves.......................................................... 3,385,227 Net unrealized holding gains (losses) on available-for-sale securities.......................... 51,233 Cumulative foreign currency translation adjustments............................................. ( 37,639) ------------ Total equity capital.............................................................................. 5,265,424 ------------ Total liabilities and equity capital.............................................................. $ 59,283,692 ------------ ------------
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot ) Thomas A. Renyi ) Directors Alan R. Griffith ) -----END PRIVACY-ENHANCED MESSAGE-----