EXHIBIT 4.9
================================================================================
TIME WARNER INC.
$[ ] Subordinated Debentures
due [ ], 2025
FIRST SUPPLEMENTAL INDENTURE
Dated as of [ ], 1995
Chemical Bank,
a New York banking corporation,
Trustee
================================================================================
FIRST SUPPLEMENTAL INDENTURE dated as of [ ], 1995,
between TIME WARNER INC., a Delaware corporation (the "Company"),
and Chemical Bank, a New York banking corporation, as trustee
(the "Trustee") under the Indenture dated as of [ ], 1995
between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its __% Subordinated Debentures due 2025 (the "Debentures"), the form and
substance of such Debentures and the terms, provisions and conditions thereof to
be set forth as provided in the Indenture and this First Supplemental Indenture;
WHEREAS, Time Warner Capital [ ], a Delaware statutory business trust
(the "Trust"), has offered to the public $[ ] aggregate liquidation amount of
its ___% Preferred Trust Securities (the "Preferred Securities"), representing
undivided beneficial interests in the assets of the Trust and proposes to invest
the proceeds from such offering in $[ ] aggregate principal amount of the
Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary to make
this First Supplemental Indenture a valid instrument in accordance with its
terms and to make the Debentures, when executed by the Company and authenticated
and delivered by the Trustee, the valid obligations of the Company have been
performed, and the execution and delivery of this First Supplemental Indenture
has been duly authorized in all respects;
2
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions. Capitalized terms used but not defined
------------
herein have the meanings assigned to them in the Indenture. The following terms
have the following meanings.
"Common Securities" means the securities issued by the Trust
representing undivided beneficial interests in the assets of the Trust, having
the terms set forth in Exhibit C to the Declaration.
"Company" means the party named as such in this First Supplemental
Indenture until a successor replaces it pursuant to the applicable provisions of
this Indenture, and thereafter means the successor.
"Debentures" means the Debentures issued under this First Supplemental
Indenture substantially in the form of Exhibit A hereto as amended or
supplemented from time to time.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of [ ], 1995, among the trustees of the Trust named therein,
the Company as Sponsor, and the holders from time to time of the Preferred
Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Debentureholder" means the Person in whose name a
Debenture is registered on the Registrar's books. All references to Holders of
a particular Principal Amount of the Debentures mean Holders of the relevant
Principal Amount of the Debentures at the time outstanding.
"Nasdaq" means The Nasdaq Stock Market.
3
"NYSE" means the New York Stock Exchange, Inc.
"Officer" means the Chairman of the Board or any Co-Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer or any Co-
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, any Assistant
Controller, the Secretary or any Assistant Secretary of the Company.
"Trust Officer" means any officer or assistant officer of the Trustee
with direct responsibility for the administration of this First Supplemental
Indenture and the Indenture.
"Trust Securities" means the Common Securities and the Preferred
Securities.
"Underwriting Agreement" means the underwriting agreement entered into
among the Company, the Trust, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and [ ],
as co-representatives, with respect to, among other things, the Preferred
Securities.
SECTION 1.02. Other Definitions. The following terms have the
------------------
meanings given to them in the Declaration (including the Exhibits thereto) as in
effect on the date hereof: (i) Clearing Agency; (ii) Delaware Trustee; (iii)
Distribution; (iv) Guarantee; (v) No Recognition Opinion; (vi) Property Trustee;
(vii) Preferred Security Certificate; (viii) Regular Trustees; (ix) Special
Event; (x) Tax Event; and (xi) Trust.
The following terms are defined in the relevant Section of this First
Supplemental Indenture as set forth below.
Defined in
Term Section
---- ----------
"Additional Interest"............... 2.05
"Compounded Interest"............... 4.01
"Coupon Rate"....................... 2.05
"Deferred Interest"................. 4.01
"Extended Interest Payment Period".. 4.01
"Global Debenture".................. 2.04
"Interest Payment Date"............. 2.05
4
"Ministerial Action"................ 3.02
"Non-Book-Entry Preferred
Securities"......................... 2.04
"No Recognition Opinion"............ 3.02
"Optional Redemption Date".......... 3.01
"90-day Period"..................... 3.02
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
---------------------------------------------------
Whenever this First Supplemental Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this First
Supplemental Indenture. The following TIA terms used in this First Supplemental
Indenture have the following meanings:
"indenture securities" means the Debentures.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this First Supplemental Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this First Supplemental Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
Commission rule have the meanings assigned to them.
SECTION 1.04. Rules of Construction. Unless the context otherwise
----------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
5
(5) provisions apply to successive events and transactions.
(6) a reference to a Section or Article is to a Section or Article of
this First Supplemental Indenture.
ARTICLE II
General Terms and Conditions of the Debentures
----------------------------------------------
SECTION 2.01. Designation and Principal Amount. There is hereby
---------------------------------
authorized a series of Securities designated as "[ ]% Subordinated Debentures
due 2025". The Debentures shall be limited to an aggregate principal amount for
all Debentures equal to $[ ], such amount being the sum of (i) the aggregate
liquidation amount of the Preferred Securities and (ii) the proceeds received by
the Trust upon issuance of the Common Securities to the Company. The aggregate
principal amount of Debentures outstanding at any time may not exceed that
amount except as provided in Section 3.06 of the Indenture.
SECTION 2.02. Maturity. The Debentures shall mature on [ ],
---------
2025 (the "Maturity Date").
SECTION 2.03. Form and Payment. Except as provided in Section 2.04,
-----------------
the Debentures shall be issued in fully registered certificated form without
interest coupons. Principal and interest on the Debentures issued in
certificated form will be payable, the transfer of such Debentures will be
registrable and such Debentures will be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the Trustee; provided,
--------
however, that payment of interest may be made at the option of the Company by
- -------
check mailed to the Holder at such address as shall appear in the Security
Register. Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Property Trustee, the payment of the principal of and interest
(including Compounded Interest [and Additional Interest], if any) on such
Debentures held by the Property Trustee will be made at such place and to such
account as may be designated by the Property Trustee.
6
SECTION 2.04. Global Debenture. (a) In the event the Company
-----------------
causes, pursuant to Section 3.03 or otherwise, the Debentures held by the
Property Trustee to be distributed to holders of the Trust Securities;
(i) except as provided in paragraph (ii) of this Section 2.04, the
Debentures in certificated form shall be presented to the Trustee
by the Property Trustee in exchange for one or more global
Debentures in an aggregate principal amount equal to the
aggregate principal amount of the outstanding Debentures (each, a
"Global Debenture"), to be registered in the name of the
Depositary, or its nominee, and delivered by the Trustee to the
Depositary for crediting to the accounts of its participants
pursuant to the instructions of the Regular Trustees. The
Company upon any such presentation shall execute a Global
Debenture in such aggregate principal amount and deliver the same
to the Trustee for authentication and delivery in accordance with
the Indenture and this First Supplemental Indenture. Payments on
the Debentures issued as a Global Debenture will be made to the
Depositary; and
(ii) to the extent any Preferred Securities are held in non-book-entry
certificated form, any Preferred Security Certificate which
represents Preferred Securities other than Preferred Securities
held by the Clearing Agency or its nominee ("Non-Book-Entry
Preferred Securities") will be deemed to represent beneficial
interests in Debentures presented to the Trustee by the Property
Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non-Book-Entry Preferred
Securities until such Preferred Security Certificate is presented
to the Regular Trustees for transfer or reissuance at which time
such Preferred Security Certificate will be canceled and a
Debenture registered in the name of the holder (or the transferee
thereof) of such Preferred Security Certificate with an aggregate
principal amount equal to the aggregate liquidation
7
amount of the Preferred Security Certificate canceled will be
executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and
this First Supplemental Indenture. On issue of such Debentures,
Debentures with an equivalent aggregate principal amount that
were presented by the Property Trustee to the Trustee will be
deemed to have been canceled.
(b) A Global Debenture shall be exchangeable for Debentures
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Debenture and no successor depositary
shall have been appointed, (ii) the Depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the Depositary
is required to be so registered to act as such Depositary and no successor
depositary shall have been appointed, or (iii) the Company in its sole
discretion determines that such Global Debenture shall be so exchangeable. Any
Global Debenture that is exchangeable pursuant to the preceding sentence shall
be exchangeable for Debentures registered in such names as the Depositary shall
direct.
SECTION 2.05. Interest. (a) Each Debenture will bear interest at
---------
the rate of __% per annum (the "Coupon Rate") from the original date of issuance
until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Coupon Rate,
compounded quarterly, payable (subject to the provisions of Article 4) quarterly
in arrears on [March 30, June 30, September 30 and December 30] of each year
(each, an "Interest Payment Date"), commencing on ____________, 1995 to the
Person in whose name such Debenture or any predecessor Debenture is registered,
at the close of business on the regular record date for such interest
installment, which, in respect of any Debenture of which the Property Trustee is
the Holder or a Global Debenture, shall be the close of business on the March
15, June 15, September 15 and December 15, as the case may be, next preceding
that Interest Payment Date. Notwithstanding the foregoing sentence, if the
Preferred Securities are no longer in book-entry only form or if pursuant to the
Indenture and this First Supplemental
8
Indenture the Debentures are not represented by a Global Debenture, the Company
may select a regular record date for such interest installment which shall be
any date at least one Business Day before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such 30-day month. In the event
that any date on which interest is payable on the Debentures is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on such date.
[(c) If at any time while the Property Trustee is the Holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges will be equal to the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.
ARTICLE III
Redemption; Distribution
------------------------
SECTION 3.01. Optional Redemption. The Company, subject to the
--------------------
provisions of Article 13 of the Indenture, shall have the right to redeem the
Debentures, in whole or in part, from time to time, on or after [ ],
2000, upon not less than 20 nor more than 45 Business Days' written notice to
the Holders (such date of redemption an
9
"Optional Redemption Date"), at a redemption price equal to 100% of the
principal amount of Debentures to be redeemed, plus cash in an amount equal to
all accrued and unpaid interest, if any, to but excluding the Optional
Redemption Date.
If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities from any national securities exchange or
other self-regulatory organization (including Nasdaq) on which the Preferred
Securities are then listed, the Company shall not effect such partial redemption
and may only redeem the Debentures in whole.
SECTION 3.02. Special Event Redemption or Distribution. (a) (i) If,
-----------------------------------------
at any time, a Special Event shall occur and be continuing, the Company shall
elect to either:
(A) direct the Regular Trustees to dissolve the Trust and cause
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of, and accrued and unpaid interest equal to accrued and
unpaid Distributions on, and having the same record date for payment as,
the Trust Securities outstanding at such time, to be distributed by the
Regular Trustee to the holders of the Trust Securities pro rata according
to the aggregate liquidation amount of the Trust Securities held by such
holder in relation to the aggregate liquidation amount of all Trust
Securities outstanding in liquidation of such holders' interests in the
Trust, within 90 days following the occurrence of such Special Event,
provided, however, that in the case of the occurrence of a Tax Event, as a
-------- -------
condition of any such dissolution and distribution, the Regular Trustees
shall have received an opinion of nationally recognized independent tax
counsel experienced in such matters (a "No Recognition Opinion"), which
opinion may rely on any then applicable published revenue ruling of the
Internal Revenue Service, to the effect that the holders of the Preferred
Securities will not recognize any gain or loss for United States Federal
income tax purposes as a result of the dissolution of the Trust and
distribution of Debentures;
10
(B) to redeem the Debentures in accordance with the Indenture and this
First Supplemental Indenture; or
(C) in the case of a Tax Event, allow the Debentures and the Trust
Securities to remain outstanding and indemnify the Trust for all taxes
payable by it as a result of such change in law or interpretation;
provided that, if and as long as at the time there is available to the Trust the
- --------
opportunity to eliminate, within 90 days following the occurrence of such
Special Event (the "90-Day Period"), the Special Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure that has no adverse effect on the Trust,
the Company or the holders of the Trust Securities (a "Ministerial Action"), the
Company shall not be permitted to redeem the Debentures; provided further, that
----------------
the Company shall have no right to redeem the Debentures or direct the Regular
Trustees to dissolve the Trust while the Regular Trustees are pursuing such
Ministerial Action unless the Special Event shall not have been so eliminated by
the 85th day following the occurrence thereof, in which case the Company shall
be permitted to direct the Regular Trustees or to provide notice to the holders
of the redemption of the Debentures; provided further, that if dissolution of
----------------
the Trust and distribution of the Debentures to the holders of the Trust
Securities would eliminate the condition causing the Special Event and all other
conditions to such dissolution and distribution have been satisfied, the Company
will not be permitted to redeem the Debentures at the Special Redemption Price;
and provided further, that the Company shall not be permitted to direct the
----------------
Regular Trustees to dissolve the Trust and distribute the Debentures to the
holders of the Trust Securities upon the occurrence of the condition described
in clause (2) in the definition of "Tax Event" if, after giving effect to such
dissolution and distribution, the Company would not be permitted to deduct a
greater percentage of the interest payable on the Debentures than it had been
permitted to deduct for United States Federal income tax purposes prior to the
occurrence of such Tax Event.
(ii) In the event the Company shall elect to redeem the Debentures in
accordance with (and subject to) paragraph (i) above upon the occurrence and
continuation of a Special Event, the Company shall be entitled to so redeem
11
the Debentures in whole (but not in part), upon not less than 20 nor more than
45 Business Days' written notice to the Holders, within the 90-Day Period (such
date of redemption a "Special Redemption Date") at a redemption price equal to
100% of the principal amount of Debentures to be redeemed, plus cash in an
amount equal to all accrued and unpaid interest on the Debentures to but
excluding the Special Redemption Date. References herein and in the Indenture
to "Redemption Date" shall refer to the Optional Redemption Date or the Special
Redemption Date, as the case may be.
(b) Upon the distribution of Debentures to holders of Preferred
Securities as a result of the occurrence of a Special Event, subject to
applicable law (including, without limitation, United States Federal securities
laws), the Company or any of its Affiliates may at any time and from time to
time purchase outstanding Debentures by tender, in the open market or by private
agreement.
SECTION 3.03. No Sinking Fund. The Debentures are not entitled to
----------------
the benefits of any sinking fund.
ARTICLE IV
Extension of Interest Payment Period
------------------------------------
SECTION 4.01. Extension of Interest Payment Period. The Company
-------------------------------------
shall have the right, at any time during the term of the Debentures, from time
to time to defer payments of interest by extending the interest payment period
of such Debentures for up to 20 consecutive quarters (the "Extended Interest
Payment Period"). To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.01, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period the Company shall pay all interest accrued and unpaid on the
Debentures, including any [Additional Interest and] Compounded Interest
("Deferred Interest") that shall be payable, to the Holders of the Debentures in
whose names the Debentures are registered in the Security Register on the first
record date after the end of the Extended Interest Payment Period. Before the
12
termination of any Extended Interest Payment Period, the Company may further
extend such period, provided that such period together with all such further
--------
extensions thereof shall not exceed 20 consecutive quarters. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof.
SECTION 4.02. Notice of Extension. (a) If the Property Trustee is
--------------------
the only registered Holder of the Debentures at the time the Company selects an
Extended Interest Payment Period, the Company shall give written notice to the
Regular Trustees, the Property Trustee and the Trustee of its selection of such
Extended Interest Payment Period one Business Day before the earlier of (a) the
next succeeding date on which Distributions on the Trust Securities issued by
the Trust are payable, or (b) the date the Trust is required to give notice of
the record date of the date such Distributions are payable to the NYSE or other
applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Property Trustee is not the only Holder of the Debentures
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the Holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period 10 Business Days before the
earlier of (i) the next succeeding Interest Payment Date, or (ii) the date the
Company is required to give notice of the record or payment date of such
interest payment to the NYSE or other applicable self-regulatory organization or
to Holders of the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.02 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.01.
ARTICLE V
Expenses
--------
13
SECTION 5.01. Payment of Expenses. In connection with the offering,
--------------------
sale and issuance of the Debentures to the Property Trustee in connection with
the sale of the Trust Securities by the Trust, the Company shall:
(a) pay for all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters
payable pursuant to the Underwriting Agreement [and the Pricing Agreement]
and compensation of the Trustee under the Indenture in accordance with the
provisions of Section 6.07 of the Indenture;
(b) pay for all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and
expenses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation, maintenance and dissolution of the
Trust and the enforcement by the Property Trustee of the rights of the
holders of Preferred Securities, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing and disposition of
Trust assets); and
(c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
ARTICLE VI
Covenants
---------
SECTION 6.01. Listing on an Exchange. If the Debentures are to be
-----------------------
issued as a Global Debenture in connection with the distribution of the
Debentures to the holders of the Preferred Securities issued by the Trust upon a
Special Event, the Company will use its best efforts to
14
list such Debentures on the NYSE or on such other exchange as the Preferred
Securities are then listed.
SECTION 6.02. Limitation on Dividends; Transactions with Affiliates.
-----------------------------------------------------
(a) If (i) there shall have occurred any event that would constitute an Event
of Default or (ii) the Company shall be in default with respect of its payment
or any other obligations under the Guarantee, then (A) the Company shall not,
and shall cause any subsidiary of the Company that is not a wholly-owned
subsidiary of the Company not to, declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or the capital
stock of any such subsidiary, and (B) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company which rank pari passu with or junior to
such Securities, provided that the foregoing restriction in paragraph (A) does
not apply to any [interest or] dividends paid by the Company or any of its
subsidiaries where the [interest or] dividend is [paid by way of the issuance of
securities that rank pari passu with, or junior to, the securities on which such
interest or dividend is being paid].
(b) If the Company shall have given notice of its election to defer
payments of interest on such Securities by extending the interest payment period
as provided in this First Supplemental Indenture and such period, or any
extension thereof, shall be continuing, then (A) the Company shall not and shall
cause any subsidiary of the Company not to, declare or pay any dividend or, make
any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or the capital
stock of any such subsidiary, and (B) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company which rank pari passu with or junior to
such Securities, provided that the foregoing restriction in paragraph (A) does
--------
not apply to any [interest or] dividends paid by the Company or any of its
subsidiaries where the [interest or] dividend is [paid by way of the issuance of
securities that rank pari passu with, or junior to, the securities on which such
interest or dividend is being paid].
SECTION 6.03. Covenants as to Trust. For so long as the Preferred
---------------------
Securities remain outstanding, the Company
15
will (i) maintain 100% direct or indirect ownership of the Common Securities;
provided, however, that any permitted successor of the Company under the
- -------- -------
Indenture may succeed to the Company's ownership of the Common Securities, and
(ii) use its reasonable efforts to cause the Trust (a) to remain a statutory
business trust, except in connection with a distribution of Securities as
provided in the Declaration, the redemption of all of the Trust Securities and
in connection with certain mergers, consolidations or amalgamation permitted by
the Declaration, and (b) otherwise continue to be treated as a grantor trust for
United States Federal income tax purposes.
ARTICLE VII
Original Issue of Debentures
----------------------------
SECTION 7.01. Original Issue of Debentures. Debentures in the
-----------------------------
aggregate principal amount of $________ may, upon execution of this First
Supplemental Indenture, be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
said Debentures to or upon the written order of the Company, signed by its
Chairman, its President, or any Vice President and its Treasurer or an Assistant
Treasurer, without any further action by the Company.
ARTICLE VIII
Miscellaneous
-------------
SECTION 8.01. Ratification of Indenture. The Indenture, as
--------------------------
supplemented by this First Supplemental Indenture, is in all respects ratified
and confirmed, and this First Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.
SECTION 8.02. Trustee Not Responsible for Recitals. The recitals
-------------------------------------
herein contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this First Supplemental
Indenture.
16
SECTION 8.03. Governing Law. This First Supplemental Indenture and
--------------
each Debenture shall be deemed to be a contract made under the internal laws of
the State of New York, and for all purposes shall be construed in accordance
with the laws of said State.
SECTION 8.04. Separability. In case any one or more of the
-------------
provisions contained in this First Supplemental Indenture or in the Debentures
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this First Supplemental Indenture or of the Debentures, but
this First Supplemental Indenture and the Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 8.05. Counterparts. This First Supplemental Indenture may be
-------------
executed in any number of counterparts each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 8.06. Successors. All agreements of the Company in this
-----------
First Supplemental Indenture and the Debentures shall bind its successor. All
agreements of the Trustee in this First Supplemental Indenture shall bind its
successor.
SECTION 8.07. Assignment. The Company will have the right at all
-----------
times to assign any of its rights or obligations under this First Supplemental
Indenture and the Debentures to a direct or indirect wholly owned subsidiary of
the Company, provided that, in the event of any such assignment, the Company
--------
will remain jointly and severally liable for all such obligations. Subject to
the foregoing, this First Supplemental Indenture will be binding upon and inure
to the benefit of the parties thereto and their respective successors and
assigns. This First Supplemental Indenture may not otherwise be assigned by the
parties hereto.
SECTION 8.08. Tax Characterization. The Company, the Trustee and
---------------------
each Holder of a Debenture (by acceptance thereof) agrees to treat the
Debentures as debt instruments for United States Federal, state and local income
and franchise tax purposes and agrees not to take any contrary position before
any taxing authority or on any tax return.
17
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
TIME WARNER INC.,
by
------------------------------------
Name:
Title:
[Seal]
Attest:
- ----------------------------
Title: Assistant
Secretary
CHEMICAL BANK,
by
------------------------------------
Name:
Title:
[Seal]
Attest:
- ----------------------------
Title: [ ]
18
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of ____, 1995, before me personally came _______ to be
known, who, being by me duly sworn, did depose and say that he is the ________
of Time Warner Inc., one of the corporations described in and which executed the
above instrument; that he knows the corporate seal of said corporation; that the
seal affixed to the said instrument is such corporation seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
--------------------------------
Notary Public
[Notarial Seal] Commission Expires
19
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of _______________, 1995, before me personally came
__________ to be known, who, being by me duly sworn, did depose and say that he
is the ________ of [Chemical Bank], one of the corporations described in and
which executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to the said instrument is such corporation
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
----------------------------------
Notary Public
[Notarial Seal] Commission Expires
EXHIBIT A
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter referred
to and is registered in the name of a Depository or a nominee of a Depository.
This Debenture is exchangeable for Debentures registered in the name of a person
other than the Depository or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
Registered $ _____________
No. ___________ CUSIP No. ______
TIME WARNER INC.
___% SUBORDINATED DEBENTURE DUE 2025
TIME WARNER INC., a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ________, or registered assigns,
the principal sum of _______________ DOLLARS on ____________, 2025, and to pay
interest on said principal sum from _____, 1995, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on [March 31, June 30, September 30 and December
31] of each year commencing ____________, 1995, at the rate of ___ % per
2
annum until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum compounded quarterly.
The amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on this Debenture is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Debenture (or one or more Predecessor Debentures, as
defined in said Indenture) is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the business day next preceding such Interest Payment Date. [IF PURSUANT TO
THE PROVISIONS OF THE INDENTURE OR THIS FIRST SUPPLEMENTAL INDENTURE THE
DEBENTURES ARE NO LONGER REPRESENTED BY A GLOBAL DEBENTURE--which shall be the
close of business on the ____th business day next preceding such Interest
Payment Date.] Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holders on
such regular record date and may be paid to the Person in whose name this
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered Holders
of this series of Debentures not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Debentures may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and
the interest on this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at
-------- -------
3
the option of the Company by check mailed to the registered Holder at such
address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of this Debenture is the Property Trustee, the
payment of the principal of (and premium, if any) and interest on this Debenture
will be made at such place and to such account as may be designated by the
Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such actions as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her attorney-in-
fact for any and all such purposes. Each Holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained in the Indenture by each holder of Senior
Indebtedness, whether now outstanding or hereafter incurred, and waives reliance
by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
Unless the Certificate of Authentication hereon has been executed by
the Trustee referred to on the reverse side hereof, this Debenture shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
4
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated____________________
TIME WARNER INC.
by_____________________
Name:
Title:
Asset:
By____________________
Secretary
5
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in
the within-mentioned Indenture.
[CHEMICAL BANK]
_______________________ ______________________
as Trustee or as Authentication Agent
By_____________________ By______________________
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of ________, 1995, duly executed and delivered between
the Company and Chemical Bank, as Trustee (the "Trustee"), as supplemented by
the First Supplemental Indenture dated as of ________, 1995, between the Company
and the Trustee (the Indenture as so supplemented, the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Debentures. By the terms of the Indenture, the Debentures are issuable in
series that may vary as to amount, date of maturity, rate of interest and in
other respects as provided in the Indenture. This series of Debentures is
limited in aggregate principal amount as specified in said First Supplemental
Indenture.
Upon the occurrence and continuation of a Special Event in certain
circumstances, the Company will have the right to elect to (a) dissolve the
Trust and cause the Subordinated Debentures to be distributed to holders of the
Preferred Securities, (b) redeem the Debentures at a
6
redemption price equal to 100% of their principal amount together with any
interest accrued thereon (the "Redemption Price") or (c) in the case of a Tax
Event, allow the Subordinated Debentures to remain outstanding and indemnify the
Trust for any taxes payable by it as a result of such Tax Event. The Redemption
Price shall be paid on the date of such redemption or at such earlier date as
the Company determines. The Company shall have the right to redeem this
Debenture at the option of the Company, without premium or penalty, in whole or
in part of any time or after _____, 2000 (an "Optional Redemption"), at a
redemption price equal to 100% of the principal amount plus any accrued but
unpaid interest, to the date of such redemption (the "Optional Redemption
Price"). Any redemption pursuant to this paragraph will be made upon not less
than 20 nor more than 45 days' notice, at the Optional Redemption Price. If the
Debentures are only partially redeemed by the Company pursuant to an Optional
Redemption, the Debentures will be redeemed pro rata or by lot or by any other
method utilized by the Trustee, provided that if, at the time of redemption, the
Debentures are registered as a Global Debenture, the Depository shall determine
by lot the principal amount of such Debentures held by each Debentureholder to
be redeemed.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancelation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures; provided,
--------
however, that no such supplemental indenture shall (i) extend the fixed maturity
- -------
of any Debentures of any series, or reduce the principal
7
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, without the consent of the Holder of each Debenture so affected, or
(ii) reduce the aforesaid percentage of Debentures, the Holders of which are
required to consent to any such supplemental indenture, without the consent of
the Holders of each Debenture then outstanding and affected thereby. The
Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Debentures of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the Debentures
of such series, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the Indenture
with respect to such series, and its consequences, except a default in the
payment of the principal of or premium, if any, or interest on any of the
Debentures of such series. Any such consent or waiver by the registered Holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange hereof or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Debentures from time to time to extend the interest payment period of such
Debentures to up to 20 consecutive quarters (an "Extended Interest Payment
Period"), at the end of which period the Company shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for the
Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and
8
unpaid interest and any additional amounts then due, the Company may commence a
new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this Debenture
for registration of transfer at the office or agency of the Company in the City
and State of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such
transfer, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Security Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The debentures of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof. This
Global Debenture is
9
exchangeable for Debentures in definitive form only under certain limited
circumstances set forth in the Indenture. Debentures of this series so issued
are issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Debentures of this series are
exchangeable for a like aggregate principal amount of Debentures of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.