<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 10, 2000
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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U S WEST COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
4811
(Primary Standard Industrial
Classification Code Number)
COLORADO
(State or other jurisdiction of
incorporation or organization)
84-0273800
(I.R.S. Employer
Identification Number)
1801 CALIFORNIA STREET
DENVER, COLORADO 80202
(303) 672-2700
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
THOMAS O. MCGIMPSEY, ESQ.
U S WEST COMMUNICATIONS, INC.
1801 CALIFORNIA STREET, SUITE 5100
DENVER, COLORADO 80202
(303) 672-2700
(Name, address, including zip code, and telephone number of agent for service)
COPIES TO:
DENNIS J. BLOCK, ESQ.
CADWALADER, WICKERSHAM & TAFT
100 MAIDEN LANE
NEW YORK, NEW YORK 10038
(212) 504-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instructions G, check the following box: / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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. / /
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CALCULATION OF REGISTRATION FEE CHART
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT* OFFERING PRICE* REGISTRATION FEE
<S> <C> <C> <C> <C>
7.20% Notes issued by U S WEST
Communications, Inc............ $750,000,000 100% $750,000,000 $198,000
</TABLE>
* Estimated solely for the purpose of calculating the registration fee.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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.
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<PAGE>
THIS PROSPECTUS, DATED MARCH 10, 2000, IS
SUBJECT TO COMPLETION AND AMENDMENT
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.
<PAGE>
PROSPECTUS
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-92523 and 333-92523-01
[LOGO]
U S WEST COMMUNICATIONS, INC.
Offer to exchange all of our Outstanding
$750,000,000 7.20% Notes due November 1, 2004
for
$750,000,000 7.20% Notes due November 1, 2004
which have been registered under the Securities Act of 1933
Our offer to exchange old 7.20% Notes for new 7.20% Notes which have been
registered under the Securities Act of 1933, will be open until 5:00 p.m. New
York City Time, on , 2000, unless we extend the offer.
If the anticipated merger of our parent company, U S WEST, Inc. ("U S WEST"),
with Qwest Communications International Inc. ("Qwest") is consummated, our
parent company will be merged with and into Qwest, with Qwest being the
surviving corporation. Neither U S WEST prior to the merger nor Qwest after the
merger will be guaranteeing the payment of principal, premium, if any, or
interest on the 7.20% Notes. See "RECENT DEVELOPMENTS--MERGER WITH QWEST" on
page 8.
YOU SHOULD CAREFULLY REVIEW THE RISK FACTORS BEGINNING ON PAGE 7 OF THIS
PROSPECTUS.
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT
US WHICH IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS. YOU CAN OBTAIN
DOCUMENTS CONTAINING THIS INFORMATION THROUGH US OR THE SECURITIES AND EXCHANGE
COMMISSION. DOCUMENTS INCORPORATED BY REFERENCE ARE AVAILABLE FROM US WITHOUT
CHARGE, EXCLUDING ALL EXHIBITS, UNLESS WE HAVE SPECIFICALLY INCORPORATED BY
REFERENCE AN EXHIBIT IN THIS PROSPECTUS. YOU MAY OBTAIN DOCUMENTS INCORPORATED
BY REFERENCE IN THIS PROSPECTUS BY REQUESTING THEM IN WRITING OR BY TELEPHONE
FROM: INVESTOR RELATIONS, U S WEST, INC., 1801 CALIFORNIA STREET, DENVER,
COLORADO 80202, TELEPHONE NUMBER (303) 896-1277. SEE "WHERE YOU CAN FIND MORE
INFORMATION."
If you would like to request documents from us, please do so by ,
2000 to receive them before the exchange offer expires.
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 , 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Forward-Looking Information May Prove Inaccurate............ 1
Where You Can Find More Information......................... 2
Prospectus Summary.......................................... 3
Risk Factors................................................ 7
U S WEST Communications, Inc................................ 7
Recent Developments......................................... 8
The Exchange Offer.......................................... 9
Use of Proceeds............................................. 16
Capitalization of U S WEST Communications, Inc.............. 17
Ratio of Earnings to Fixed Charges.......................... 17
Description of New 7.20% Notes.............................. 18
Registration Rights......................................... 27
Certain U.S. Federal Tax Considerations..................... 30
Plan of Distribution........................................ 33
Legal Matters............................................... 34
Experts..................................................... 34
</TABLE>
i
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FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE
Some of the information presented in this prospectus or incorporated by
reference herein constitutes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Although we believe that
our expectations are based on reasonable assumptions within the bounds of our
knowledge of our businesses and operations, there can be no assurance that
actual results will not differ materially from our expectations. Factors that
could cause actual results to differ from expectations include:
- greater than anticipated competition from new entrants into the local
exchange, intraLATA toll, wireless, data and directories markets, causing
loss of customers and increased price competition;
- changes in demand for our products and services, including optional custom
calling features;
- higher than anticipated employee levels, capital expenditures and
operating expenses (such as costs associated with interconnection);
- the loss of significant customers;
- pending and future state and federal regulatory changes affecting the
telecommunications industry, including changes that could have an impact
on the competitive environment and service pricing in the local exchange
market;
- acceleration of the deployment of additional services and/or advanced new
services to customers, such as broadband data and wireless (including the
purchase of spectrum licenses), which would require substantial
expenditure of financial and other resources;
- changes in economic conditions in the various markets served by our
operations;
- higher than anticipated start-up costs associated with new business
opportunities;
- delays in our ability to begin offering interLATA long-distance services;
- timing, cost and consumer acceptance of broadband services, including
telephony, data, video and wireless services;
- delays in the development of anticipated technologies or the failure of
such technologies to perform according to expectations; and
- timing and completion of the recently announced merger of our parent
company with Qwest and the subsequent integration of the businesses of the
two companies. See "RECENT DEVELOPMENTS--MERGER WITH QWEST."
To the extent that this prospectus contains forward-looking information
regarding Qwest, please see the forward-looking information safe harbor
statements contained in documents Qwest has filed with the Securities and
Exchange Commission (the "SEC" or the "Commission").
You should not construe these cautionary statements as an exhaustive list or as
any admission by us regarding the adequacy of our disclosures. We cannot always
predict or determine after the fact what factors would cause actual results to
differ materially from those indicated by our forward-looking statements or
other statements. In addition, you are urged to consider statements that include
the terms "believes," "belief," "expects," "plans," "objectives," "anticipates,"
"intends," or the like to be uncertain and forward-looking. All cautionary
statements should be read as being applicable to all forward-looking statements
wherever they appear.
We do not undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this prospectus might not occur.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, and other information with the
SEC. You may read and copy any document we file at the SEC's public reference
rooms at 450 Fifth Street, N.W., Washington, D.C., 20549, and in New York, New
York, and Chicago, Illinois. For further information on the public reference
rooms, please call the SEC at 1-800-SEC-0330. Our SEC filings are also available
to the public from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus certain
information that we file with the SEC, which means that we can disclose
important information to you by referring to that information in this
prospectus. Information incorporated by reference is considered a part of this
prospectus, and later information filed with the SEC will automatically update
and supersede previous information. We incorporate by reference the documents
listed below and any future filings (including filings made after the date on
which the registration statement was initially filed with the SEC and before the
registration statement becomes effective) made by us with the SEC under
Sections 13(a), 13(c), 14, 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"):
- Our Annual Report on Form 10-K for the year ended December 31, 1999, filed
March 3, 2000.
You may obtain a copy of these filings, at no cost, by writing or telephoning
us, or by contacting Investor Relations through an e-mail link on U S WEST's
(our parent company's) web page, at:
Investor Relations
U S WEST, Inc.
1801 California Street
Denver, Colorado 80202
(303) 896-1277
http://www.uswest.com
You should rely only on the information in this prospectus or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. We are not making any offer of these debt securities in
any state where the offer is not permitted. You should not assume that the
information contained in this prospectus is accurate as of any date other than
the date on the front page of this prospectus.
2
<PAGE>
PROSPECTUS SUMMARY
WHO WE ARE
U S WEST Communications, Inc. (the "Company" or "U S WEST Communications" which
may be referred to as "we," "us," or "our") is a wholly owned subsidiary of
U S WEST, Inc. ("U S WEST"). We are a Colorado corporation and our principal
executive offices are located at 1801 California Street, Denver, Colorado 80202,
telephone number (303) 672-2700.
We provide communications services to more than 25 million residential and
business customers in our 14 state region (the "Region"). The Region includes
the states of Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New
Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. We are
organized on the basis of our products and services and operate in three
segments: retail services, wholesale services and network services. For
additional information, please refer to the documents we have incorporated by
reference. See "WHERE YOU CAN FIND MORE INFORMATION."
THE EXCHANGE OFFER
On November 1, 1999, we issued $750,000,000 aggregate principal amount of 7.20%
Notes (the "old 7.20% Notes") to certain initial purchasers in a transaction
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"). The terms of the new 7.20% Notes ("new 7.20%
Notes") and the old 7.20% Notes are substantially identical in all material
respects, except that the new 7.20% Notes will be freely transferable by the
holders, except as otherwise provided in this prospectus.
We are offering to exchange $1,000 principal amount of new 7.20% Notes (together
with the old 7.20% Notes, the "7.20% Notes") in exchange for each $1,000
principal amount of old 7.20% Notes (the "exchange offer").
The new 7.20% Notes issued in the exchange offer may be offered for resale or
resold by holders without having to comply with the registration and prospectus
delivery requirements of the Securities Act, provided that:
- the new 7.20% Notes are acquired in the ordinary course of the holders'
business and the holders have no arrangement with any person to engage in
a distribution of new 7.20% Notes, and
- the holders are not "affiliates" of us or broker-dealers who purchased old
7.20% Notes directly from us to resell under Rule 144A or any other
available exemption under the Securities Act.
Each holder, other than a broker-dealer, must acknowledge that it is not engaged
in and does not intend to engage in a distribution of the new 7.20% Notes and
has no arrangement to participate in a distribution of new 7.20% Notes. Each
broker-dealer that receives new 7.20% Notes for its own account in the exchange
offer must acknowledge that it will comply with the prospectus delivery
requirements of the Securities Act in connection with any resale of the new
7.20% Notes. Broker-dealers who acquired old 7.20% Notes directly from us and
not as a result of market-making activities
3
<PAGE>
or other trading activities may not participate in the exchange offer and must
comply with the prospectus delivery requirements of the Securities Act in order
to resell the old 7.20% Notes.
<TABLE>
<S> <C>
EXPIRATION DATE........................ The exchange offer will expire at 5:00 p.m., New York City
time, on , 2000, or a later date and time to
which we extend it (the "expiration date").
WITHDRAWAL............................. The tender of the old 7.20% Notes in the exchange offer
may be withdrawn at any time prior to 5:00 p.m., New York
City time, on , 2000, or a later date and time to
which we extend the offer.
INTEREST ON THE NEW 7.20% NOTES AND THE
OLD 7.20% NOTES...................... Interest on the new 7.20% Notes will accrue from the date
of the original issuance of the old 7.20% Notes or from
the date of the last periodic payment of interest on the
old 7.20% Notes, whichever is later. No additional
interest will be paid on the old 7.20% Notes tendered and
accepted for exchange. However, old 7.20% Notes which are
not tendered or accepted for exchange will continue to
accrue interest.
PROCEDURES FOR TENDERING OLD 7.20%
NOTES................................ To accept the exchange offer, you must complete, sign and
date a copy of the letter of transmittal and mail or
otherwise deliver it, together with the old 7.20% Notes
and any other required documentation, to the exchange
agent at the address set forth in this prospectus. Persons
holding the old 7.20% Notes through the Depository Trust
Company and wishing to accept the exchange offer must do
so under the Depository Trust Company's automated tender
offer program. Under this program, each tendering
participant will agree to be bound by the letter of
transmittal.
EXCHANGE AGENT......................... Our exchange agent is Bank One Trust Company, National
Association.
FEDERAL INCOME TAX CONSIDERATIONS...... In the opinion of our counsel, the exchange of old 7.20%
Notes for new 7.20% Notes in the exchange offer will not
be a taxable exchange for United States federal income tax
purposes.
EFFECT OF NOT TENDERING................ Old 7.20% Notes that are not tendered or that are tendered
but not accepted will continue to be subject to the
existing restrictions on transfer. We will have no further
obligation to register the old 7.20% Notes under the
Securities Act.
</TABLE>
4
<PAGE>
THE NEW 7.20% NOTES
Some of the terms and conditions described below are subject to important
limitations and exceptions. The "DESCRIPTION OF NEW 7.20% NOTES" section of this
prospectus beginning on page 18 contains a more detailed description of the
terms and conditions of the new 7.20% Notes.
<TABLE>
<S> <C>
ISSUER................................. U S WEST Communications, Inc., a Colorado corporation.
SECURITIES OFFERED..................... $750,000,000 principal amount of new 7.20% Notes due 2004.
MATURITY............................... November 1, 2004.
INTEREST RATE.......................... 7.20% per annum, calculated using a 360-day year of twelve
30 day months.
INTEREST PAYMENT DATES................. Interest on the 7.20% Notes is payable semi-annually in
arrears commencing May 1, 2000 and each May 1 and
November 1 thereafter until maturity.
RANKING................................ The new 7.20% Notes will rank equally with all of our
other unsecured and unsubordinated indebtedness. As of
December 31, 1999, we had approximately $7.092 billion of
debt outstanding.
Neither U S WEST prior to the merger nor Qwest after the
merger will be guaranteeing the payment of principal,
premium, if any, or interest on the 7.20% Notes.
OPTIONAL REDEMPTION.................... We can redeem the 7.20% Notes at any time at a redemption
price determined as described under "DESCRIPTION OF NEW
7.20% NOTES--OPTIONAL REDEMPTION" on page 19.
</TABLE>
RISK FACTORS
We urge you to carefully review the risk factors beginning on page 7 for a
discussion of factors you should consider before exchanging your old 7.20% Notes
for new 7.20% Notes.
5
<PAGE>
SELECTED FINANCIAL DATA FOR THE COMPANY
(DOLLARS IN MILLIONS)
The following table sets forth our summary historical financial information. The
summary historical financial data below should be read in conjunction with our
consolidated financial statements and notes thereto, included in our Form 10-K
for the year ended December 31, 1999. See "WHERE YOU CAN FIND MORE INFORMATION."
The summary historical financial data at December 31, 1999, 1998, 1997 and 1996
and for each of the four years ended December 31, 1999, have been derived from
our consolidated financial statements, which have been audited by Arthur
Andersen LLP, independent public accountants. The summary historical financial
data at December 31, 1995 and for the year ended December 31, 1995, has been
derived from our consolidated financial statements, which have been audited by
PricewaterhouseCoopers LLP, independent accountants. See "EXPERTS."
<TABLE>
<CAPTION>
YEAR ENDED OR AS OF
DECEMBER 31,
----------------------------------------------------
1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Operating revenues............................. $11,464 $10,871 $10,083 $ 9,831 $ 9,284
Operating income(1)............................ 2,960 2,618 2,336 2,400 2,225
Interest expense............................... 403 386 374 414 386
Net income(2).................................. 1,562 1,335 1,252 1,267 1,211
BALANCE SHEET DATA:
Total assets................................... 19,978 17,578 17,008 16,632 16,350
Total debt..................................... 7,092 5,943 5,516 6,209 6,406
Total equity................................... 4,720 4,463 4,400 4,060 3,746
OPERATING DATA:
EBIDTA(3)...................................... 5,253 4,756 4,439 4,501 4,247
Capital expenditures........................... 4,027 2,797 2,605 2,779 2,714
Ratio of earnings to fixed charges............. 5.91 5.55 5.33 4.95 4.86
Telephone network access lines in service
(thousands)................................... 17,009 16,601 16,033 15,424 14,795
Billed access minutes of use (millions)
Interstate................................... 61,854 58,927 55,362 52,039 47,801
Intrastate................................... 13,022 12,366 11,729 10,451 9,504
Telephone company employees.................... 46,352 46,310 43,749 45,427 47,934
Telephone company employees per ten thousand
access lines.................................. 27.3 27.9 27.3 29.5 32.4
</TABLE>
- ------------------------------
(1) Operating income for the first nine months of 1998 and fiscal 1998 includes
Separation (as defined below) expenses of $94 and an asset impairment charge
of $35. 1997 operating income includes a $225 regulatory charge related
primarily to a rate reduction order in the State of Washington. 1996
operating income includes the current effects of $24 from adopting Statement
of Financial Accounting Standards ("SFAS") No. 121.
(2) Net income for the first nine months of 1998 and fiscal 1998 includes
Separation expenses of $68 and an asset impairment charge of $21. 1997 net
income includes a $152 regulatory charge related primarily to a rate
reduction order in the State of Washington, a gain of $48 on the sales of
certain rural telephone exchanges, and a gain of $32 on the sale of our
investment in Bell Communications Research, Inc. 1996 net income includes a
gain of $36 on the sales of certain rural telephone exchanges and the
cumulative and current effects of $34 and $15, respectively, from adopting
SFAS No. 121. 1995 net income includes a gain of $85 on the sales of certain
rural telephone exchanges, an extraordinary charge of $8 for early
extinguishment of debt and $8 for costs associated with the November 1995
recapitalization.
(3) Earnings before interest, taxes, depreciation, amortization, and other
("EBITDA"). We consider EBITDA an important indicator of the operational
strength and performance of our business. EBITDA, however, should not be
considered as an alternative to operating or net income as an indicator of
the performance of our business or as an alternative to cash flows from
operating activities as a measure of liquidity, in each case determined in
accordance with generally accepted accounting principles.
6
<PAGE>
RISK FACTORS
You should carefully consider the following discussion of risks, and the other
information included or incorporated by reference in this prospectus in
evaluating us and our business before participating in the exchange offer:
RISK FACTORS RELATED TO THE EXCHANGE
Holders of old 7.20% Notes who do not exchange their old 7.20% Notes for new
7.20% Notes will continue to be subject to the restrictions on transfer of the
old 7.20% Notes, as set forth in the legends on the old 7.20% Notes. The old
7.20% Notes may not be offered or sold unless they are registered under the
Securities Act or are exempt from registration. See "THE EXCHANGE OFFER."
CREDIT RATINGS
After U S WEST announced on May 17, 1999 that it had entered into an agreement
and plan of merger with Global Crossing Ltd., a Bermuda company ("Global
Crossing") (as described under "RECENT DEVELOPMENTS" below), the ratings
assigned to our senior unsecured indebtedness were placed under review with
implications for possible downgrade by Moody's Investors Services, Inc.
("Moody's") and Standard & Poor's Ratings Services ("Standard & Poor's").
Duff & Phelps Credit Rating Co. ("Duff & Phelps") reaffirmed our
pre-announcement rating.
On January 20, 2000, Standard & Poor's announced a change in their methodology
for analyzing ratings on United States based telephone operating companies and
their respective parent companies. As a result of this change in methodology,
the rating on our senior debt was lowered from A+ to A, and remains under review
for possible downgrade. Our parent company's proposed merger with Qwest is not
expected to be consummated before mid-2000 and it is possible that our ratings
will remain under review until the merger is consummated.
The current credit ratings for our senior unsecured indebtedness are as follows:
<TABLE>
<CAPTION>
MOODY'S STANDARD & POOR'S DUFF & PHELPS
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<S> <C> <C>
A2 A AA-
</TABLE>
OTHER RISKS
We may decide to accelerate the deployment of additional services and/or
advanced new services to customers, such as broadband data and wireless
(including the purchase of spectrum licenses), which would require substantial
expenditure of financial and other resources. Such acceleration could have a
material adverse effect on our financial condition or results of operations.
U S WEST COMMUNICATIONS, INC.
We are incorporated under the laws of the State of Colorado and have our
principal offices at 1801 California Street, Denver, Colorado 80202, telephone
number (303) 672-2700. We are a wholly owned subsidiary of U S WEST.
On June 12, 1998, our former parent corporation, which has subsequently been
renamed MediaOne Group, Inc., separated its media business and communications
business into two publicly traded companies (the "Separation"). The media
business is conducted through MediaOne Group, Inc. and the communications
business, including the domestic directory business, is conducted through
U S WEST and its subsidiaries.
We provide communications services to more than 25 million residential and
business customers in our 14 state region (the "Region"). The Region includes
the states of Arizona, Colorado, Idaho, Iowa,
7
<PAGE>
Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota,
Utah, Washington and Wyoming. We are organized on the basis of our products and
services and operate in three segments: retail services, wholesale services and
network services.
RECENT DEVELOPMENTS
MERGER WITH QWEST
On July 18, 1999, U S WEST, our parent company, and Qwest entered into an
Agreement and Plan of Merger (the "Qwest Merger Agreement"), a copy of which is
attached to U S WEST's Current Report on Form 8-K filed with the SEC on
July 21, 1999. U S WEST and Qwest are independent companies and will continue to
remain independent until the completion of the merger. Upon completion of the
merger, holders of U S WEST common stock will receive, for each share of
U S WEST common stock, subject to the collar and the cash option described in
the Qwest Merger Agreement, shares of Qwest common stock having a value of $69.
The merger is subject to the approval of the Federal Communications Commission
("FCC") and other state regulatory reviews. For further information regarding
our parent company's anticipated merger with Qwest and the risks associated
therewith, please refer to U S WEST's Schedule 14A filed with the SEC on
September 17, 1999.
Prior to the execution of the Qwest Merger Agreement, U S WEST entered into a
termination agreement with Global Crossing, terminating the agreement and plan
of merger, dated as of May 16, 1999, between U S WEST and Global Crossing. A
copy of the termination agreement is attached to U S WEST's Current Report on
Form 8-K filed with the SEC on July 21, 1999.
QWEST
Qwest is a broadband, Internet communications services company with a
high-capacity fiber optic communications network. Qwest's communications
services business offers Internet and multimedia services as well as traditional
voice communications services. Its Internet and multimedia services include
services related to the transmission of image, data and voice information. Qwest
provides services to business customers, governmental agencies and consumers in
domestic and international markets. Qwest also provides wholesale services to
other communications providers, including Internet service providers and other
data service companies.
Qwest is subject to the reporting requirements of the Exchange Act and, in
accordance therewith, is required to file reports and other information with the
SEC relating to its business, financial condition and other matters. Such
information may be examined and copies may be obtained from the SEC as described
under "WHERE YOU CAN FIND MORE INFORMATION." Such information should also be on
file at the office of the New York Stock Exchange, 20 Broad Street, New York,
New York 10005.
The information contained in this section of the prospectus regarding Qwest has
been derived from the publicly available documents described in the preceding
paragraph. We have not independently verified the accuracy or completeness of
the Qwest information, and we make no representation or warranty, express or
implied, regarding the Qwest information contained in this prospectus.
8
<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
We originally issued and sold the old 7.20% Notes on November 1, 1999 in an
offering exempt from registration under the Securities Act in reliance upon the
exemptions provided by Section 4(2), Rule 144A and Regulation S of the
Securities Act. Accordingly, the old 7.20% Notes may not be transferred in the
United States unless registered or unless an exemption from the registration
requirements of the Securities Act and applicable state securities laws is
available.
As a condition to the sale of the old 7.20% Notes, we and the initial purchasers
of the old 7.20% Notes (the "initial purchasers") entered into a registration
rights agreement dated as of October 26, 1999 (the "Registration Rights
Agreement"). In the Registration Rights Agreement, we agreed that we would use
our reasonable best efforts to:
- file with the SEC a registration statement under the Securities Act with
respect to the new 7.20% Notes within 150 calendar days of November 1,
1999 (or by March 30, 2000),
- cause a registration statement to be declared effective under the
Securities Act within 180 calendar days after November 1, 1999 (or by
April 29, 2000),
- keep the exchange offer open for not less than 30 calendar days (or longer
if required by applicable law) after the date that notice of the exchange
offer is mailed to the holders of the old 7.20% Notes, and
- consummate the exchange offer within 225 calendar days of November 1, 1999
(or by June 13, 2000).
We have filed a copy of the Registration Rights Agreement as an exhibit to the
registration statement of which this prospectus is a part. The registration
statement satisfies certain of our obligations under the Registration Rights
Agreement.
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD 7.20% NOTES
This prospectus and the accompanying letter of transmittal together make up the
exchange offer. On the terms and subject to the conditions set forth in this
prospectus and the letter of transmittal, we will accept for exchange any old
7.20% Notes that are properly tendered on or before the expiration date unless
they are withdrawn as permitted below. We will issue $1,000 principal amount at
maturity of new 7.20% Notes in exchange for each $1,000 principal amount at
maturity of outstanding old 7.20% Notes surrendered in the exchange offer.
Holders of the old 7.20% Notes may tender some or all of their old 7.20% Notes,
however, old 7.20% Notes may be exchanged only in integral multiples of $1,000.
The form and terms of the new 7.20% Notes are the same as the form and terms of
the old 7.20% Notes except that the exchange will be registered under the
Securities Act and the new 7.20% Notes will not bear legends restricting their
transfer.
The new 7.20% Notes will evidence the same debt as the old 7.20% Notes and will
be issued under the same indenture.
The exchange offer is not conditioned upon any minimum principal amount of old
7.20% Notes being tendered. As of the date of this prospectus, an aggregate of
$750,000,000 in principal amount at maturity of the old 7.20% Notes is
outstanding. This prospectus is first being sent on or about , 2000, to
all holders of old 7.20% Notes known to us.
Holders of the old 7.20% Notes do not have any appraisal or dissenters' rights
under the indenture in connection with the exchange offer.
9
<PAGE>
We may, at any time or from time to time, extend the period of time during which
the exchange offer is open and delay acceptance for exchange of any old 7.20%
Notes, by giving written notice of the extension to the holders as described
below. During the extension, all old 7.20% Notes previously tendered will remain
subject to the exchange offer and may be accepted for exchange by us. Any old
7.20% Notes not accepted for exchange for any reason will be returned without
expense to the tendering holder as promptly as practicable after the expiration
of the exchange offer.
We reserve the right to amend or terminate the exchange offer if any of the
conditions of the exchange offer are not met. The conditions of the exchange
offer are specified below under "--CONDITIONS OF THE EXCHANGE OFFER." We will
give written notice of any extension, amendment, nonacceptance or termination to
the holders of the old 7.20% Notes as promptly as practicable. Any extension to
be issued by means of a press release or other public announcement will be
issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.
PROCEDURES FOR TENDERING OLD 7.20% NOTES
The tender of old 7.20% Notes by a holder as set forth below and the acceptance
by us will create a binding agreement between the tendering holder and us upon
the terms and subject to the conditions set forth in this prospectus and in the
accompanying letter of transmittal. Except as set forth below, a holder who
wishes to tender old 7.20% Notes for exchange must send a completed and signed
letter of transmittal, including all other documents required by the letter of
transmittal, to the exchange agent at one of the addresses set forth below under
"--EXCHANGE AGENT" on or before the expiration date. In addition, either:
- the exchange agent must receive before the expiration date certificates
for the old 7.20% Notes along with the letter of transmittal,
- the exchange agent must receive confirmation before the expiration date of
a book-entry transfer of the old 7.20% Notes into the exchange agent's
account at The Depository Trust Company ("DTC") as described below, or
- the holder must comply with the guaranteed delivery procedures described
below.
The method of delivery of old 7.20% Notes, letters of transmittal and all other
required documents, including delivery through DTC, is at the election and risk
of the holders. If the delivery is by mail, we recommend that holders use
registered mail, properly insured, with return receipt requested. In all cases,
holders should allow sufficient time to assure timely delivery. Holders should
not send letters of transmittal or old 7.20% Notes to us.
Some beneficial ownership of old 7.20% Notes is registered in the name of a
broker, dealer, commercial bank, trustee or other nominee. If one of those
beneficial owners wishes to tender, the beneficial owner should contact the
registered holder of the old 7.20% Notes promptly and instruct the registered
holder to tender on the beneficial owner's behalf. If one of those beneficial
owners wishes to tender on its own behalf, then before completing and signing
the letter of transmittal and delivering its old 7.20% Notes, the beneficial
owner must either register ownership of the old 7.20% Notes in the beneficial
owner's name or obtain a properly completed power of attorney from the
registered holder of old 7.20% Notes. The transfer of record ownership may take
considerable time. If the letter of transmittal is signed by a person other than
the registered holder of the old 7.20% Notes, the old 7.20% Notes must be
endorsed or accompanied by appropriate powers of attorney. In either case, the
letter of transmittal must be signed exactly as the name of the registered
holder appears on the old 7.20% Notes.
10
<PAGE>
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed unless the old 7.20% Notes surrendered for exchange are tendered:
- by a registered holder of the old 7.20% Notes who has not completed the
box entitled "SPECIAL REGISTRATION INSTRUCTIONS" or "SPECIAL DELIVERY
INSTRUCTIONS" on the letter of transmittal, or
- for the account of a firm or other entity identified in Rule 17Ad-15 under
the Exchange Act as an eligible guarantor institution. Eligible guarantor
institutions include:
- a member of a registered national securities exchange, or
- a member of the National Association of Securities Dealers, Inc., or
- a commercial bank or trust company having an office or correspondent in
the United States.
If signatures on a letter of transmittal or a notice of withdrawal are required
to be guaranteed, the guarantees must be by an eligible guarantor institution.
If old 7.20% Notes are registered in the name of a person other than a signer of
the letter of transmittal, the old 7.20% Notes surrendered for exchange must be
endorsed by the registered holder with the signature guaranteed by an eligible
guarantor institution. Alternatively, the old 7.20% Notes may be accompanied by
a written assignment, signed by the registered holder with the signature
guaranteed by an eligible guarantor institution.
All questions as to the validity, form, eligibility, time of receipt and
acceptance of old 7.20% Notes tendered for exchange will be determined by us in
our sole discretion, and our determination shall be final and binding. We
reserve the absolute right to reject any tenders of any old 7.20% Notes not
properly tendered or any old 7.20% Notes whose acceptance might, in our judgment
or the judgment of our counsel, be unlawful. We also reserve the absolute right
to waive any defects or irregularities or conditions of the exchange offer as to
any old 7.20% Notes either before or after the expiration date. The
interpretation of the terms and conditions of the exchange offer as to any old
7.20% Notes either before or after the expiration date by us will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of old 7.20% Notes for exchange must be cured within a
reasonable period of time as we shall determine. Neither we, the exchange agent
nor any other person shall be under any duty to give notification of any defect
or irregularity with respect to any tender of old 7.20% Notes for exchange. Any
old 7.20% Notes received by the exchange agent that are not properly tendered
and as to which the defects or irregularities have not been cured or waived will
be returned by the exchange agent to the tendering holders, unless otherwise
provided in the letter of transmittal, as soon as practicable.
If the letter of transmittal or any old 7.20% Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, those persons should so indicate when signing. Unless waived by us,
those persons must submit proper evidence satisfactory to us of their authority
to act.
By tendering, each holder will represent to us:
- that it is not an "affiliate," as defined in Rule 405 of the Securities
Act, of us, or if it is an affiliate, it will comply with the registration
and prospectus delivery requirements of the Securities Act to the extent
applicable,
- that it is not a broker-dealer tendering Registrable Securities (as
defined in the Registration Rights Agreement described herein) acquired
directly from us,
- that it is acquiring the new 7.20% Notes in the ordinary course of its
business, and
- at the time of the closing of the exchange offer it has no arrangement or
understanding to participate in the distribution, within the meaning of
the Securities Act, of the new 7.20% Notes.
11
<PAGE>
If the holder is a broker-dealer that will receive new 7.20% Notes for its own
account in exchange for old 7.20% Notes that were acquired as a result of
market-making activities or other trading activities, the holder may be deemed
to be an "underwriter" within the meaning of the Securities Act. Such holder
will be required to acknowledge in the letter of transmittal that it will
deliver a prospectus in connection with any resale of the new 7.20% Notes.
However, by so acknowledging and by delivering a prospectus, the holder will not
be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
ACCEPTANCE OF OLD 7.20% NOTES FOR EXCHANGE; DELIVERY OF NEW 7.20% NOTES
Upon satisfaction or waiver of all of the conditions to the exchange offer, we
will accept, promptly after the expiration date, all old 7.20% Notes properly
tendered and will issue the new 7.20% Notes promptly after acceptance of the old
7.20% Notes. See "--CONDITIONS OF THE EXCHANGE OFFER" below. We will be deemed
to have accepted properly tendered old 7.20% Notes for exchange when we have
given oral or written notice to the exchange agent.
For each old 7.20% Note validly tendered to us, the holder of the old 7.20% Note
will receive a new 7.20% Note having a principal amount equal to the principal
amount of the tendered old 7.20% Note. The new 7.20% Notes will bear interest at
the same rate and on the same terms as the old 7.20% Notes. Consequently,
interest on the new 7.20% Notes will accrue at a rate of 7.20% per annum and
will be payable semiannually in arrears on May 1, 2000, and each May 1 and
November 1 thereafter until maturity. Interest on each new 7.20% Note will
accrue from the last interest payment date on which interest was paid on the
surrendered old 7.20% Note or, if no interest has been paid on such old 7.20%
Note, from the date of the original issuance thereof.
The issuance of new 7.20% Notes for old 7.20% Notes that are accepted for
exchange in the exchange offer will be made only after timely receipt by the
exchange agent of certificates for the old 7.20% Notes or a timely book-entry
confirmation of the old 7.20% Notes into the exchange agent's account at the
book-entry transfer facility, a completed and signed letter of transmittal and
all other required documents. If any tendered old 7.20% Notes are not accepted
for any reason set forth in the terms and conditions of the exchange offer, or
if old 7.20% Notes are submitted for a greater amount than the holder desires to
exchange, the unaccepted or non-exchanged old 7.20% Notes will be returned
without expense to the tendering holder as promptly as practicable after the
exchange offer expires or terminates. In the case of old 7.20% Notes tendered by
book-entry procedures described below, the non-exchanged old 7.20% Notes will be
credited to an account maintained with the book-entry transfer facility.
CONDITIONS OF THE EXCHANGE OFFER
We will not be required to accept for exchange any old 7.20% Notes and may
terminate or amend the exchange offer prior to the expiration date, if we
determine that we are not permitted to effect the exchange offer because of:
- any changes in law, or applicable interpretations by the SEC, or
- any action or proceeding is instituted or threatened in any court or
governmental agency with respect to the exchange offer.
If we determine that any of the conditions are not satisfied, we may refuse to
accept any old 7.20% Notes and return all tendered old 7.20% Notes to the
tendering holders or extend the exchange offer and retain all old 7.20% Notes
tendered prior to the expiration date, subject to the rights of holders to
withdraw such old 7.20% Notes or waive such unsatisfied conditions with respect
to the exchange offer and accept all properly tendered old 7.20% Notes which
have not been withdrawn. If such waiver or amendment constitutes a material
change to the exchange offer, we will promptly disclose such waiver or amendment
by means of a prospectus supplement that will be distributed to the registered
holders of the old 7.20% Notes and we will extend the exchange offer to the
extent required by Rule 14e-1 under the Exchange Act.
12
<PAGE>
Holders may have certain rights and remedies against us under the Registration
Rights Agreement if we fail to close the exchange offer, whether or not the
conditions stated above occur. These conditions are not intended to modify those
rights or remedies. See "REGISTRATION RIGHTS."
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account for the old 7.20%
Notes at the book-entry transfer facility for the exchange offer within two
business days after the date of this prospectus, and any financial institution
that is a participant in the book-entry transfer facility's systems may make
book-entry delivery of old 7.20% Notes by causing the book-entry transfer
facility to transfer the old 7.20% Notes into the exchange agent's account at
the book-entry transfer facility in accordance with the book-entry transfer
facility's procedures for transfer. However, although delivery of old 7.20%
Notes may be effected through book-entry transfer at the book-entry transfer
facility, the letter of transmittal or facsimile, or an agent's message, with
any required signature guarantees and any other required documents, must be
received by the exchange agent at one of the addresses set forth below under
"--EXCHANGE AGENT" on or before the expiration date or the guaranteed delivery
procedures described below must be complied with.
The term "agent's message" means a message, transmitted by DTC to the exchange
agent and forming a part of a book-entry confirmation, which states that DTC has
received an express acknowledgment from the tendering participant stating that
the participant has received and agrees to be bound by the terms of the letter
of transmittal, and that we may enforce the letter of transmittal against the
participant.
GUARANTEED DELIVERY PROCEDURES
If a registered holder wishes to tender his old 7.20% Notes and the old 7.20%
Notes are not immediately available, or time will not permit the holder's old
7.20% Notes or other required documents to reach the exchange agent before the
expiration date, or the procedure for book-entry transfer cannot be completed on
time, the old 7.20% Notes may nevertheless be exchanged if:
- the tender is made through an eligible guarantor institution,
- before the expiration date, the exchange agent has received from the
eligible guarantor institution an agent's message with respect to
guaranteed delivery or a completed and signed letter of transmittal, or a
facsimile, and a notice of guaranteed delivery, substantially in the form
provided by us. Delivery may be made by facsimile transmission, mail or
hand delivery. The letter of transmittal and notice of guaranteed delivery
must set forth the name and address of the holder of the old 7.20% Notes
and the amount of the old 7.20% Notes being tendered, state that the
tender is being made and guarantee that within five trading days on the
New York Stock Exchange ("NYSE") after the date of signing of the notice
of guaranteed delivery, the certificates for all physically tendered old
7.20% Notes, in proper form for transfer, or a book-entry confirmation,
and any other documents required by the letter of transmittal, will be
deposited by the eligible guarantor institution with the exchange agent,
and
- the certificates for all physically tendered old 7.20% Notes, in proper
form for transfer, or a book-entry confirmation and all other documents
required by the letter of transmittal, are received by the exchange agent
within five NYSE trading days after the date of signing the notice of
guaranteed delivery.
WITHDRAWAL RIGHTS
Tenders of old 7.20% Notes may be withdrawn at any time prior to the close of
business on the expiration date.
13
<PAGE>
For a withdrawal to be effective, a written notice of withdrawal must be
received by the exchange agent at one of the addresses set forth below under
"--EXCHANGE AGENT." Notice may be sent by facsimile transmission, mail or hand
delivery. Any notice of withdrawal must:
- specify the name of the person who tendered the old 7.20% Notes to be
withdrawn,
- identify the old 7.20% Notes to be withdrawn, including the amount of the
old 7.20% Notes,
- where certificates for old 7.20% Notes have been transmitted, specify the
name in which the old 7.20% Notes are registered, if different from that
of the withdrawing holder, and
- state that such holder of the old 7.20% Notes is withdrawing his election
to have such old 7.20% Notes tendered.
If certificates for old 7.20% Notes have been delivered or otherwise identified
to the exchange agent, then, prior to the release of the certificates the
withdrawing holder must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by an eligible guarantor institution unless the holder is an eligible
guarantor institution. If old 7.20% Notes have been tendered under the procedure
for book-entry transfer described above, any notice of withdrawal must specify
the name and number of the account at the book-entry transfer facility to be
credited with the withdrawn old 7.20% Notes and otherwise comply with the
procedures of the facility. We will determine all questions as to the validity,
form, eligibility and time of receipt of the notices, and our determination
shall be final and binding on all parties. Any old 7.20% Notes so withdrawn will
be deemed not to have been validly tendered for exchange for purposes of the
exchange offer. Any old 7.20% Notes that have been tendered for exchange but
that are not exchanged for any reason will be returned to the holder without
cost to the holder as soon as practicable after withdrawal, rejection of tender
or termination of the exchange offer. In the case of old 7.20% Notes tendered by
book-entry transfer into the exchange agent's account at the book-entry transfer
facility under the book-entry transfer procedures described above, the old 7.20%
Notes will be credited to an account with the book-entry transfer facility
specified by the holder. Properly withdrawn old 7.20% Notes may be re-tendered
by following one of the procedures described under "--PROCEDURES FOR TENDERING
OLD 7.20% NOTES" above at any time on or before the expiration date.
EXCHANGE AGENT
Bank One Trust Company, National Association has been appointed as the exchange
agent for the exchange offer. All signed letters of transmittal should be
directed to the exchange agent at the addresses set forth below. Questions and
requests for assistance, requests for additional copies of this
14
<PAGE>
prospectus or of the letter of transmittal and requests for notices of
guaranteed delivery should be directed to the exchange agent addressed as
follows:
<TABLE>
<S> <C>
By Mail: By Hand, Overnight Mail or Courier:
Bank One Trust Company, National Association Bank One Trust Company, National Association
Attention: Exchanges Attention: Exchanges
Global Corporate Trust Services Global Corporate Trust Services
1 Bank One Plaza, Mail Suite IL 1-0122 One North State Street, 9th Floor
Chicago, IL 60670-0122 Chicago, IL 60602
or or
Bank One Trust Company, National Association Bank One Trust Company, National Association
Attention: Exchanges Attention: Exchanges
Global Corporate Trust Services Global Corporate Trust Services
14 Wall Street, 8th Floor 14 Wall Street, 8th Floor
New York, NY 10005 New York, NY 10005
</TABLE>
For information call:
(800) 524-9472
Fax: 312-407-8853
E-mail: [email protected]
Delivery of a letter of transmittal to an address other than as set forth above
or transmission of instructions via facsimile other than as set forth above does
not constitute a valid delivery of the letter of transmittal.
FEES AND EXPENSES
We will not make any payment to brokers, dealers or others soliciting
acceptances of the exchange offer and holders who tender old 7.20% Notes will
not be required to pay brokerage commissions or fees.
We will pay the expenses that will be incurred in connection with the exchange
offer. We estimate the expenses will be approximately $320,000.
ACCOUNTING TREATMENT
For accounting purposes, we will recognize no gain or loss as a result of the
exchange offer. The expenses of the exchange offer will be amortized over the
term of the new 7.20% Notes.
TRANSFER TAXES
Holders who instruct us to register new 7.20% Notes in the name of a person
other than the registered tendering holder will be responsible for paying any
applicable transfer tax, as will holders who request that old 7.20% Notes not
tendered or not accepted in the exchange offer be returned to a person other
than the registered tendering holder. In all other cases, no transfer taxes will
be due.
REGULATORY MATTERS
We are not aware of any governmental or regulatory approvals that are required
in order to complete the exchange offer.
15
<PAGE>
CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the exchange offer is voluntary. Old 7.20% Notes that are not
exchanged for new 7.20% Notes will remain outstanding, continue to accrue
interest and will be restricted securities. Accordingly, those old 7.20% Notes
may only be transferred:
- to a person who the seller reasonably believes is a qualified
institutional buyer under Rule 144A under the Securities Act,
- in an offshore transaction under Rule 903 or Rule 904 of Regulation S
under the Securities Act, or
- under Rule 144 under the Securities Act (if available);
and in accordance with all applicable securities laws of the states of the
United States. Following the consummation of the exchange offer, we will have no
further obligation to such holders to provide for registration under the
Securities Act, except that under certain circumstances, we are required to file
a shelf registration statement under the Securities Act. See "REGISTRATION
RIGHTS."
PAYMENT OF ADDITIONAL INTEREST UPON REGISTRATION DEFAULTS
If we fail to meet our obligations to complete the exchange offer or file a
shelf registration statement, additional interest will accrue on the 7.20%
Notes. For additional information regarding payments of additional interest,
please see "REGISTRATION RIGHTS."
USE OF PROCEEDS
We will not receive any proceeds from the issuance of the new 7.20% Notes or the
closing of the exchange offer.
16
<PAGE>
CAPITALIZATION OF U S WEST COMMUNICATIONS, INC.
The following table sets forth, at December 31, 1999 our consolidated historical
capitalization. The table should be read in conjunction with our historical
financial statements and notes thereto included in the documents incorporated by
reference herein. See "WHERE YOU CAN FIND MORE INFORMATION."
<TABLE>
<CAPTION>
AUDITED
AT DECEMBER 31, 1999
---------------------
(DOLLARS IN MILLIONS)
<S> <C>
Short-term debt............................................. $ 1,684
=======
Long-term debt.............................................. $ 5,408
Total shareowner's equity(1)................................ 4,720
-------
Total capitalization........................................ $11,812
=======
</TABLE>
- ------------------------------
(1) We have issued one share of common stock to our parent company, U S WEST.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for each
of the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------
1995 1996 1997 1998 1999
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
4.86 4.95 5.33 5.55 5.91
</TABLE>
In determining these ratios, we have computed "earnings" by adding income before
income taxes, extraordinary items and cumulative effect of change in accounting
principle and fixed charges. "Fixed charges" consist of interest on indebtedness
and the portion of rentals representative of the interest factor.
17
<PAGE>
DESCRIPTION OF NEW 7.20% NOTES
GENERAL
The new 7.20% Notes will be issued as a separate series of debt securities
("Debt Securities") under an indenture dated as of October 15, 1999, as
supplemented and amended from time to time (the "Indenture"), between us and
Bank One Trust Company, NA (the "Trustee"). The new 7.20% Notes and the old
7.20% Notes are considered together to be a single series for all purposes under
the Indenture. The following summaries of the material provisions of the
Indenture do not purport to be complete and are subject to and are qualified in
their entirety by reference to all of the provisions of the Indenture, which
provisions of the Indenture are incorporated herein by reference. Capitalized
and other terms not otherwise defined herein shall have the meanings given to
them in the Indenture. You may obtain a copy of the Indenture from us upon
request. See "WHERE YOU CAN FIND MORE INFORMATION."
The Indenture does not limit the aggregate principal amount of Debt Securities
which may be issued under it and provides that Debt Securities may be issued
from time to time in one or more series. As of the date of this prospectus, the
principal amount of Debt Securities outstanding under the Indenture is
$750 million.
Since the new 7.20% Notes will not constitute a separate series of Debt
Securities under the Indenture, holders of old 7.20% Notes who do not exchange
such old 7.20% Notes for new 7.20% Notes will vote together as a separate series
of Debt Securities with holders of such new 7.20% Notes of that series for all
relevant purposes under the Indenture. In that regard, the Indenture requires
that certain actions by the holders under such old 7.20% Notes (including
acceleration following an Event of Default) must be taken, and certain rights
must be exercised, by specified minimum percentages of the aggregate principal
amount of the outstanding notes of that series. In determining whether holders
of the requisite percentage in principal amount of the notes of that series have
given any notice, consent or waiver or taken any other action permitted under
the Indenture, any old 7.20% Notes which remain outstanding after the exchange
offer will be aggregated with the new 7.20% Notes and the holders of the old
7.20% Notes and the new 7.20% Notes will each vote together as a single series
for all purposes. Accordingly, all references in this section will be deemed to
mean, at any time after the exchange offer is consummated, the requisite
percentage in aggregate principal amount of the old 7.20% Notes and the new
7.20% Notes.
The 7.20% Notes initially will be limited to $750,000,000 aggregate principal
amount. We may "reopen" any series of debt securities and issue additional
securities of that series. The 7.20% Notes will be issued only in registered
form, without coupons, in denominations of $1,000 and integral multiples
thereof. The 7.20% Notes are our unsecured obligations and rank equally with all
of our other unsecured and unsubordinated indebtedness.
The 7.20% Notes will bear interest at the rate of 7.20% per annum from
November 1, 1999, or from the most recent interest payment date to which
interest has been paid or duly provided for, payable semiannually in arrears on
May 1, 2000, and each May 1 and November 1 thereafter until maturity (each, an
"Interest Payment Date"), to the persons in whose names the 7.20% Notes are
registered at the close of business on the April 15 or October 15, as the case
may be, immediately preceding such Interest Payment Date. Interest will be
calculated on the basis of a 360-day year of twelve 30-day months. If any
Interest Payment Date, maturity date or redemption date is a Legal Holiday in
New York, New York, the required payment shall be made on the next succeeding
day that is not a Legal Holiday as if it were made on the date such payment was
due and no interest shall accrue on the amount so payable for the period from
and after such Interest Payment Date, maturity date or redemption date, as the
case may be, to such next succeeding day. "Legal Holiday" means a Saturday, a
Sunday or a day on which banking institutions in The City of New York are not
required to be open.
18
<PAGE>
The 7.20% Notes will mature and the principal amount will be payable on
November 1, 2004. The 7.20% Notes will not have the benefit of any sinking fund.
The Trustee, through its corporate trust office in the Borough of Manhattan in
The City of New York (in such capacity, the "Paying Agent") will act as our
paying agent with respect to the 7.20% Notes. Payments of principal, premium, if
any, and interest on the 7.20% Notes will be made by us through the Paying Agent
to DTC. See "--BOOK-ENTRY ONLY; DELIVERY AND FORM."
The principal of, premium, if any, and interest on the 7.20% Notes will be
payable in U.S. dollars or in such other coin or currency of the United States
of America as at the time of payment is legal tender for the payment of public
and private debts. No service charge will be made for any registration of,
transfer or exchange of 7.20% Notes, but we may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The 7.20% Notes may be presented for registration of transfer or
exchange at the office of the Paying Agent in the Borough of Manhattan in the
City of New York, or at any other office or agency maintained by us or the
Paying Agent for such purpose.
OPTIONAL REDEMPTION
The 7.20% Notes will be redeemable at our option, in whole at any time or in
part from time to time, on at least 15 days but not more than 60 days prior
written notice mailed to the registered holders thereof, at a redemption price
equal to the greater of (i) 100% of the principal amount of the 7.20% Notes to
be redeemed or (ii) the sum, as determined by the Quotation Agent (as defined
below), of the present values of the principal amount of the 7.20% Notes to be
redeemed and the remaining scheduled payments of interest thereon from the
redemption date to November 1, 2004 (the "Remaining Life") discounted from their
respective scheduled payment dates to the redemption date on a semiannual basis
(assuming a 360-day year consisting of 30-day months) at the Treasury Rate (as
defined below) plus 15 basis points, plus, in either case, accrued interest
thereon to the date of redemption.
If money sufficient to pay the redemption price of and accrued interest on all
of the 7.20% Notes (or portions thereof) to be redeemed on the redemption date
is deposited with the Trustee or Paying Agent on or before the redemption date
and certain other conditions are satisfied, then on and after such redemption
date, interest will cease to accrue on such 7.20% Notes (or such portion
thereof) called for redemption.
"Comparable Treasury Issue" means the United States Treasury security selected
by the Quotation Agent as having a maturity comparable to the Remaining Life
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 with the Remaining Life.
"Comparable Treasury Price" means, with respect to any redemption date, the
average of two Reference Treasury Dealer Quotations for such redemption date.
"Quotation Agent" means the Reference Treasury Dealer appointed by us.
"Reference Treasury Dealer" means each of Salomon Smith Barney Inc. and Chase
Securities Inc., and their successors; provided, however, that if any of the
foregoing shall cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), we shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
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writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per annum
equal to the semiannual yield to maturity of the Comparable Treasury Issue,
calculated on the third business day preceding such redemption date using a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such redemption
date.
We may at any time, and from time to time, purchase the 7.20% Notes at any price
or prices in the open market or otherwise.
BOOK-ENTRY ONLY; DELIVERY AND FORM
The new 7.20% Notes will initially be issued in the form of global securities
held in book-entry form. The new 7.20% Notes will be deposited with the Trustee
as custodian for DTC and DTC or its nominee will initially be the sole
registered holder of the new 7.20% Notes. Except as set forth below, a global
security may not be transferred except as a whole by DTC to a nominee of DTC or
by a nominee of DTC to DTC. Investors may elect to hold interests in the global
securities directly through DTC (in the United States), Clearstream Banking
Luxembourg ("Clearstream Luxembourg") or Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System ("Euroclear"), as the
case may be, if they are participants in such systems, or indirectly through
organizations that are participants in such systems. Clearstream Luxembourg and
Euroclear will hold interests on behalf of their participants through customers'
securities accounts in Clearstream Luxembourg and Euroclear's names on the books
of their respective depositaries, which are participants in DTC. Citibank N.A.
will act as depository for Clearstream Luxembourg and Chase Manhattan Bank New
York will act as depositary for Euroclear (in such capacities, the "U.S.
Depositaries").
When a global security is issued, DTC or its nominee will credit, on its
internal system, the accounts of persons holding through it with the principal
amounts of the individual beneficial interest represented by the global security
purchased by those persons in the offering of the new 7.20% Notes. The accounts
were initially designated by the initial purchasers of the old 7.20% Notes with
respect to old 7.20% Notes sold by the initial purchasers.
Only participants that have accounts with DTC or persons that hold interests
through participants can own beneficial interests in a global security.
Ownership of beneficial interests by participants in a global security will be
shown on records maintained by DTC or its nominee for the global security, and
that ownership interest will be transferred only through those records.
Ownership of beneficial interests in the global security by persons that hold
through participants will be shown on records maintained by the participant, and
the transfer of that ownership interest within the participant will occur only
through the participant's records.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of the securities in definitive form. Those limits and
laws may make it more difficult to transfer beneficial interests in a global
security. We will make payments on the new 7.20% Notes represented by any global
security to DTC or its nominee as the sole registered owner and the sole holder
of the new 7.20% Notes represented by the global security. Neither we nor the
Trustee, any agent of ours or the initial purchasers will have any
responsibility for any aspect of DTC's reports relating to beneficial ownership
interests in a global security representing any new 7.20% Notes or for reviewing
any of DTC's records relating to the beneficial ownership interests. DTC has
advised us that upon receipt of any payment on any global security, DTC will
immediately credit, on its book-entry registration and transfer system, the
accounts of participants with payments in amounts proportionate to their
beneficial interests in the principal or face amount of the global security.
Payments of interest and principal of global securities held through Clearstream
Banking or Euroclear will be credited to the cash accounts
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of Clearstream Banking participants or Euroclear participants, as the case may
be, in accordance with the relevant system's rules and procedures. We expect
that payments by participants to owners of beneficial interests in a global
security held through those participants will be governed by standing
instructions and customary practices as is now the case with securities held for
customer accounts registered in "street name" and will be the sole
responsibility of the participants subject to any statutory or regulatory
requirements as may be in effect from time to time.
So long as DTC or its nominee is the registered owner of the global security,
DTC or its nominee will be considered the sole owner or holder of the new 7.20%
Notes represented by the global security for the purposes of receiving payment
on the new 7.20% Notes, receiving notices and for all other purposes under the
Indenture and the new 7.20% Notes. Except as provided above, owners of
beneficial interests in a global security will not be entitled to receive
physical delivery of certificated new 7.20% Notes and will not be considered the
holders of the global security for any purposes under the Indenture.
Accordingly, each person owning a beneficial interest in a global security must
rely on the procedures of DTC and, if the person is not a participant, on the
procedures of the participant through which the person owns its interest, to
exercise any rights of a holder under the global security or the Indenture. We
understand that under existing industry practices, if we request any action of
holders or an owner of a beneficial interest in a global security wants to take
any action that a holder is entitled to take under the Indenture, DTC would
authorize the participants holding the beneficial interest to take that action,
and the participants would authorize beneficial owners owning through the
participants to take the action on the instructions of beneficial owners owning
through them.
DTC has advised us that it will take any action permitted to be taken by a
holder of new 7.20% Notes only at the direction of a participant to whose
account with DTC interests in the global security are credited and only as to
the portion of the aggregate principal amount of the new 7.20% Notes as to which
the participant has given that direction. DTC has advised us that DTC is a
limited-purpose trust company organized under the Banking Law of the State of
New York, a "banking organization" within the meaning of New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the Exchange Act. DTC was created to hold the securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in the securities through electronic
book-entry changes in accounts of the participants. This eliminates the need for
physical movement of securities certificates. DTC's participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of whom own DTC. Access to DTC's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant.
CERTIFICATED NEW 7.20% NOTES
New 7.20% Notes represented by a global security are exchangeable for
certificated new 7.20% Notes only if:
- DTC notifies us that it is unwilling or unable to continue as a depository
for the global security or if at any time DTC ceases to be a registered
clearing agency, and a successor depository is not appointed by us within
90 days,
- we notify the Trustee that the global security will be so transferable,
registrable and exchangeable, or
- an event of default with respect to the new 7.20% Notes has occurred and
is continuing.
Any global security that is exchangeable for certificated new 7.20% Notes under
the preceding sentence will be transferred to, and registered and exchanged for,
certificated new 7.20% Notes in authorized denominations and registered in names
that DTC or its nominee holding the global security may direct.
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Subject to the foregoing, a global security is not exchangeable, except for a
global security of the same denomination to be registered in the name of DTC or
its nominee. If a global security becomes exchangeable for certificated new
7.20% Notes:
- certificated new 7.20% Notes will be issued only in fully registered form
in denominations of $1,000 or integral multiples,
- payments will be made and transfers will be registered at the office or
agency of us maintained for that purpose, and
- no service charge will be made for any issuance of the certificated new
7.20% Notes, although we may require payment to cover any tax or
governmental charge imposed.
DTC management is aware that some computer applications, systems, and the like
for processing data ("Systems") that are dependent upon calendar dates,
including dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community (the "Industry") that it has developed and is implementing a program
so that its Systems, as the same relate to the timely payment of distributions
(including principal and income payments) to security holders, book-entry
deliveries, and settlement of trades within DTC ("DTC Services"), continue to
function appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. Additionally, DTC's plan includes a
testing phase, which is expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent upon
other parties, including but not limited to issuers and their agents, as well as
DTC's direct and indirect participants and third party vendors from whom DTC
licenses software and hardware, and third party vendors on whom DTC relies for
information or the provision of services, including telecommunication and
electrical utility service providers, among others. DTC has informed the
Industry that it is contacting (and will continue to contact) third party
vendors from whom DTC acquires services to: (i) impress upon them the importance
of such services being Year 2000 compliant; and (ii) determine the extent of
their efforts for Year 2000 remediation (and, as appropriate, testing) of their
services. In addition, DTC is in the process of developing such contingency
plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for informational purposes only and is not intended to
serve as a representation, warranty, or contract modification of any kind.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Settlement for the new 7.20% Notes represented by the global securities will be
made in immediately available funds. We will make all payments of principal and
interest on the 7.20% Notes in immediately available funds.
The new 7.20% Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the new 7.20% Notes will
therefore be required by DTC to settle in immediately available funds.
Secondary market trading between Clearstream Banking participants and/or
Euroclear participants will occur in the ordinary way in accordance with the
applicable rules and operating procedures of Clearstream Luxembourg and
Euroclear and will be settled using the procedures applicable to conventional
eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly through
DTC and persons holding directly or indirectly through Clearstream Banking or
Euroclear participants will be effected in accordance with DTC's rules on behalf
of the relevant European international clearing system by its U.S Depositary.
Such cross-market transactions will require delivery of instructions to the
relevant
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European international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to its
U.S. Depositary to take action to effect final settlement on its behalf by
delivering or receiving the 7.20% Notes in DTC, and making or receiving payment
in accordance with normal procedures for same-day funds settlement applicable to
DTC. Clearstream Luxembourg participants and Euroclear participants may not
deliver instructions directly to DTC.
Because of time-zone differences, credits of the 7.20% Notes received in
Clearstream Luxembourg or Euroclear as a result of a transaction with a DTC
participant will be made during subsequent securities settlement processing and
will be credited the business day following the DTC settlement date. Such
credits or any transactions in such 7.20% Notes settled during such processing
will be reported to the relevant Euroclear or Clearstream Luxembourg
participants on such business day. Cash received in Clearstream Luxembourg or
Euroclear as a result of sales of 7.20% Notes by or through a Clearstream
Banking participant or a Euroclear participant to a DTC participant will be
received with value on the DTC settlement date but will be available in the
relevant Clearstream Luxembourg or Euroclear cash account only as of the
business day following settlement in DTC.
Although DTC, Clearstream Luxembourg and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of interests in the global
securities among participants of DTC, Clearstream Luxembourg and Euroclear, they
are under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither we or the Trustee will
have any responsibility for the performance by DTC, Clearstream Luxembourg and
Euroclear, or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
CERTAIN COVENANTS
Other than as described below under "--LIMITATION ON LIENS," the Indenture does
not contain any provisions that would limit our ability to incur indebtedness or
that would afford holders of 7.20% Notes protection in the event of a sudden and
significant decline in our credit quality or a takeover, recapitalization or
highly leveraged or similar transaction involving us. Accordingly, we could in
the future enter into transactions that could increase the amount of
indebtedness outstanding at that time or otherwise adversely affect our capital
structure or credit rating. See "RISK FACTORS."
LIMITATION ON LIENS
The Indenture contains a covenant that if we mortgage, pledge or otherwise
subject to any lien all or some of our property or assets, we will secure the
7.20% Notes, any other outstanding Debt Securities and any of our other
obligations which may then be outstanding and entitled to the benefit of a
covenant similar in effect to such covenant, equally and proportionally with the
indebtedness or obligations secured by such mortgage, pledge or lien, for as
long as any such indebtedness or obligation is so secured. This covenant does
not apply:
- to the creation, extension, renewal or refunding of (a) mortgages or liens
created or existing at the time property is acquired, (b) mortgages or
liens created within 180 days after property is acquired, or
(c) mortgages or liens securing the cost of construction or improvement of
property, or
- to the making of any deposit or pledge to secure public or statutory
obligations or with any governmental agency at any time required by law in
order to qualify us to conduct all or some part of our business or in
order to entitle us to maintain self-insurance or to obtain the benefits
of any law relating to workmen's compensation, unemployment insurance, old
age pensions or other social security, or with any court, board,
commission or governmental agency as security incident to the proper
conduct of any proceeding before it.
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The Indenture does not prevent any other entity from mortgaging, pledging or
subjecting to any lien any of its property or assets, whether or not acquired
from us (Section 4.03).
AMENDMENT AND WAIVER
With the written consent of the holders of more than 50% of the principal amount
of the outstanding Debt Securities of each series that will be affected (with
each series voting as a class), we and the Trustee may amend or supplement the
Indenture or modify the rights of the holders of Debt Securities of that series.
Such majority of holders may also waive compliance by us with any provision of
the Indenture, any supplemental indenture or the Debt Securities of any such
series except a default in the payment of principal or interest. However,
without the consent of the holder of each Debt Security affected, an amendment
or waiver may not (Section 9.02):
- reduce the amount of Debt Securities whose holders must consent to an
amendment or waiver,
- change the rate or the time for payment of interest,
- change the principal or the fixed maturity,
- waive a default in the payment of principal, premium, if any, or interest,
- make any Debt Security payable in a different currency, or
- make any change in the provisions of the Indenture concerning (a) waiver
of existing defaults (Section 6.04), (b) rights of holders of Debt
Securities to receive payment (Section 6.07), or (c) amendments and
waivers with consent of holders of Debt Securities (Section 9.02(a), third
sentence).
We and the Trustee may amend or supplement the Indenture without the consent of
any holder of any of the Debt Securities to (Section 9.01):
- cure any ambiguity, defect or inconsistency in the Indenture or the Debt
Securities,
- provide for the assumption of all of our obligations under the Debt
Securities and the Indenture by any corporation in connection with a
merger, consolidation or transfer or lease of our property and assets
substantially as an entirety,
- provide for uncertificated Debt Securities in addition to or instead of
certificated Debt Securities,
- add to the covenants made by us for the benefit of the holders of any
series of Debt Securities (and if such covenants are to be for the benefit
of less than all series of Debt Securities, stating that such covenants
are included solely for the benefit of such series) or to surrender any
right or power conferred upon us,
- add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication and delivery of the Debt Securities, as set forth in the
Indenture,
- make any change that does not adversely affect the rights of any holder of
Debt Securities in any material respect,
- provide for the issuance of and establish the form and terms and
conditions of a series of Debt Securities or to establish the form of any
certifications required to be furnished pursuant to the terms of the
Indenture or any series of Debt Securities or to add to the rights of the
holders of any series of Debt Securities, or
- secure any Debt Securities as provided under the heading "--LIMITATION ON
LIENS."
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CONSOLIDATION, MERGER AND SALE OF ASSETS
We may, without the consent of the holders of the 7.20% Notes or any other
outstanding Debt Securities, consolidate with, merge into or be merged into, or
transfer or lease our property and assets substantially as an entirety to
another entity. However, we may only do this if:
- the successor entity is a corporation and assumes by supplemental
indenture all of our obligations under the 7.20% Notes, any other
outstanding Debt Securities and the Indenture, and
- after giving effect to the transaction, no Default or Event of Default has
occurred and is continuing.
After that time, all of our obligations under the 7.20% Notes, any other
outstanding Debt Securities and the Indenture terminate (Section 5.01).
EVENTS OF DEFAULT
Any one of the following is an Event of Default with respect to any series of
Debt Securities, including the 7.20% Notes (Section 6.01):
- if we default in the payment of interest on the Debt Securities of such
series, and such default continues for 90 days,
- if we default in the payment of the principal of any Debt Security of such
series when the same becomes due and payable at maturity, upon redemption,
or otherwise,
- if we fail to comply with any of our other agreements in the Debt
Securities of such series, in the Indenture or in any supplemental
indenture under which the Debt Securities of such series were issued,
which failure continues for 90 days after we receive notice from the
Trustee or the holders of at least 25% in principal amount of all of the
outstanding Debt Securities of that series, and
- if certain events of bankruptcy or insolvency occur with respect to us.
If an Event of Default with respect to the Debt Securities of any series occurs
and is continuing, the Trustee or the holders of at least 25% in principal
amount of all of the outstanding Debt Securities of that series may declare the
principal (or, if the Debt Securities of that 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 Debt Securities of that series to be due and
payable. When such declaration is made, such principal (or, in the case of
original issue discount securities, such specified amount) will be immediately
due and payable (Section 6.02). The holders of a majority in principal amount of
Debt Securities of that series may rescind such declaration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived (other than nonpayment of
principal or interest that has become due solely as a result of acceleration).
Holders of Debt Securities may not enforce the Indenture or the Debt Securities,
except as provided in the Indenture (Section 6.06). The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Debt
Securities (Section 7.01(e)). Subject to certain limitations, the holders of
more than 50% in principal amount of the Debt Securities of each series affected
(with each series voting as a class) may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power of the Trustee (Section 6.05). The Trustee may withhold from
holders of Debt Securities notice of any continuing default (except a default in
the payment of principal or interest) if it determines in good faith that
withholding notice is in their interests (Section 7.05).
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SATISFACTION AND DISCHARGE
We may terminate all of our obligations under the 7.20% Notes and the Indenture
with respect to the 7.20% Notes or any installment of interest on the 7.20%
Notes if we irrevocably deposit in trust with the Trustee money or U.S.
Government Obligations sufficient to pay, when due, principal and interest on
the 7.20% Notes to maturity or redemption or such installment of interest, as
the case may be, and if all other conditions set forth in the 7.20% Notes are
met (Section 8.01).
GOVERNING LAW
The Indenture and the 7.20% Notes will be governed by, and construed in
accordance with, the laws of the State of New York, applicable to agreements
made and to be performed wholly within such jurisdiction.
CONCERNING THE TRUSTEE AND THE PAYING AGENT
We and certain of our affiliates maintain banking and other business
relationships in the ordinary course of business with Bank One Trust Company,
National Association. In addition, Bank One Trust Company, National Association
and certain of its affiliates serve as trustee, authenticating agent, or paying
agent with respect to certain Debt Securities previously issued by us and our
affiliates.
OTHER INDEBTEDNESS
Qwest has issued indebtedness that is currently outstanding under various
indentures, Qwest's indentures contain restrictive covenants limiting its, and
its subsidiaries', ability to pay dividends, make investments, create liens,
sell assets, enter into transactions with affiliates, borrow money, refinance
debt and engage in mergers and consolidations. If the merger with Qwest is
consummated, we will become a wholly-owned subsidiary of Qwest since our parent
company, U S WEST, will be merged with and into Qwest with Qwest surviving. As
such, we will be subject to some of the restrictive covenants contained in the
Qwest indentures. We do not believe that these restrictive covenants will have a
material adverse effect on our ability to finance our operations should the
merger be consummated. See "RECENT DEVELOPMENTS--MERGER WITH QWEST."
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REGISTRATION RIGHTS
Based on an interpretation by the staff of the SEC ("the Staff") set forth in
Morgan Stanley & Co. Incorporated, SEC No-Action Letter (available June 5,
1991), Exxon Capital Holdings Corporation, SEC No-Action Letter (available
May 13, 1988) and similar letters, and subject to the immediately following
sentence, we believe that the new 7.20% Notes to be issued pursuant to the
exchange offer may be offered for resale, resold and otherwise transferred by
the holders thereof (other than holders who are broker-dealers) without further
compliance with the registration and prospectus delivery provisions of the
Securities Act. However, any purchaser of old 7.20% Notes who is an affiliate of
us or who intends to participate in the exchange offer for the purpose of
distributing the new 7.20% Notes, or any broker-dealer who purchased the old
7.20% Notes from us for resale pursuant to Rule 144A or any other available
exemption under the Securities Act:
- will not be able to rely on the interpretations of the Staff set forth in
the above-mentioned no-action letters,
- will not be entitled to tender such old 7.20% Notes in the exchange offer,
and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or transfer of the old
7.20% Notes unless such sale or transfer is made pursuant to an exemption
from such requirements.
We do not intend to seek our own no-action letter, and there can be no assurance
that the Staff would make a similar determination with respect to the new 7.20%
Notes as it has in such no-action letters to third parties. Each holder of the
old 7.20% Notes (other than certain specified holders) who wishes to exchange
the old 7.20% Notes for new 7.20% Notes in the exchange offer will be required
to represent that:
- it is not an affiliate of us,
- it is not a broker-dealer tendering Registrable Securities (as defined in
the Registration Rights Agreement) acquired directly from us,
- the Notes to be exchanged for new 7.20% Notes in the exchange offer were
acquired in the ordinary course of its business, and
- at the time of the exchange offer, it has no arrangement or understanding
with any person to participate in the distribution (within the meaning of
the Securities Act) of the new 7.20% Notes.
In addition, in connection with any resale of new 7.20% Notes, any broker-dealer
who acquired the new 7.20% Notes for its own account as a result of
market-making or other trading activities (a "Participating Broker-Dealer") and
who receives new 7.20% notes in exchange for such old 7.20% notes pursuant to
the exchange offer, may be deemed to be an "underwriter" within the meaning of
the Securities Act and must deliver a prospectus meeting the requirements of the
Securities Act. The SEC has taken the position that Participating Broker-Dealers
may fulfill their prospectus delivery requirements with respect to the new 7.20%
Notes other than a resale of an unsold allotment from the original sale thereof,
with the prospectus contained in the registration statement filed in connection
with the exchange offer (the "Exchange Offer Registration Statement"). Under the
Registration Rights Agreement, we are required to allow Participating
Broker-Dealers and other persons, if any, subject to similar prospectus delivery
requirements to use the prospectus contained in the Exchange Offer Registration
Statement in connection with the resale of such new 7.20% Notes for a period of
225 calendar days from the issuance of the new 7.20% Notes.
If:
- because of any change in law or in currently prevailing interpretations of
the Staff, we are not permitted to effect the exchange offer,
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- the exchange offer is not consummated within 225 calendar days of
November 1, 1999, or
- in the case of any holder that participates in the exchange offer, such
holder does not receive new 7.20% Notes on the date of the exchange that
may be sold without restriction under state and federal securities laws
(other than due solely to the status of such holder as our affiliate
within the meaning of the Securities Act or as a broker-dealer),
then in each case, we will promptly deliver to the holders written notice
thereof; and at our sole expense:
- as promptly as practicable (but in no event more than 90 days after so
required or requested pursuant to the Registration Rights Agreement), file
a shelf registration statement covering resales of the old 7.20% Notes
(the "Shelf Registration Statement"),
- use our reasonable best efforts to cause the Shelf Registration Statement
to be declared effective under the Securities Act as soon as practicable,
and
- use our reasonable best efforts to keep effective the Shelf Registration
Statement until the earlier of two years (or, if Rule 144(k) is amended to
provide a shorter restrictive period, such shorter period) after the
closing date or such time as all of the applicable old 7.20% Notes have
been sold thereunder.
We will, if a Shelf Registration Statement is filed, provide to each holder
copies of the prospectus that is a part of the Shelf Registration Statement,
notify each such holder when the Shelf Registration Statement for the old 7.20%
Notes has become effective and take certain other actions as are required to
permit unrestricted resales of the old 7.20% Notes. A holder that sells old
7.20% Notes pursuant to the Shelf Registration Statement will be required to be
named as a selling security holder in the related prospectus, to provide
information related thereto and to deliver such prospectus to purchasers, will
be subject to certain of the civil liability provisions under the Securities Act
in connection with such sales and will be bound by the provisions of the
Registration Rights Agreement that are applicable to such a holder (including
certain indemnification rights and obligations). We have no obligation to
include in the Shelf Registration Statement holders who do not deliver such
information to us.
If we fail to comply with certain provisions of the Registration Rights
Agreement, in each case as described below, then a special interest premium (the
"Special Interest Premium") shall become payable in respect of the old 7.20%
Notes.
If:
- the Exchange Offer Registration Statement is not filed with the SEC on or
prior to the 150th calendar day following November 1, 1999 (or by
March 30, 2000),
- the Exchange Offer Registration Statement is not declared effective on or
prior to the 180th calendar day following November 1, 1999 (or by
April 29, 2000), or
- the exchange offer is not consummated or the Shelf Registration Statement
is not declared effective on or prior to the 225th calendar day following
November 1, 1999 (or by June 13, 2000);
the Special Interest Premium shall accrue in respect of the old 7.20% Notes,
from and including the next calendar day following each of (a) such 150-day
period in the case of the first bullet listed above, (b) such 180-day period in
the second bullet listed above and (c) such 225-day period in the case of the
third bullet listed above, in each case at a rate equal to 0.25% per annum.
The aggregate amount of the Special Interest Premium in respect of each of the
old 7.20% Notes, payable pursuant to the above provisions, will in no event
exceed 0.25% per annum. If the Exchange Offer Registration Statement is not
declared effective on or prior to the 225th calendar day following November 1,
1999 and we shall request holders of old 7.20% Notes to provide the information
called for by the Registration Rights Agreement for inclusion in the Shelf
Registration Statement, the old
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7.20% Notes owned by holders who do not deliver such information to us when
required pursuant to the Registration Rights Agreement will not be entitled to
any Special Interest Premium for any day after the 225th day following
November 1, 1999.
Upon:
- filing of the Exchange Offer Registration Statement after the 150-day
period described above,
- effectiveness of the Exchange Offer Registration Statement after the
180-day period described above, or
- consummation of the exchange offer or the effectiveness of a Shelf
Registration Statement, as the case may be, after the 225-day period
described above,
the interest rate on the old 7.20% Notes from the day of such filing,
effectiveness or consummation, as the case may be, will be reduced to the
original interest rate set forth on the cover page of this prospectus for the
old 7.20% Notes.
If a Shelf Registration Statement is declared effective pursuant to the
foregoing paragraphs, and if we fail to keep such Shelf Registration Statement
continuously (a) effective or (b) useable for resales for the period required by
the Registration Rights Agreement due to certain circumstances relating to
pending corporate developments, public filings with the SEC and similar events,
or because the prospectus contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and such failure continues
for more than 60 days (whether or not consecutive) in any twelve-month period
(the 61st day being referred to as the "Default Day"), then from the Default Day
until the earlier of:
- the date that the Shelf Registration Statement is again deemed effective
or is usable,
- the date that is the second anniversary of the closing date (or, if
Rule 144(k) is amended to provide a shorter restrictive period, such
shorter period), or
- the date as of which all of the new 7.20% Notes are sold pursuant to the
Shelf Registration Statement,
the Special Interest Premium in respect of the old 7.20% Notes shall accrue at a
rate equal to 0.25% per annum.
If we fail to keep the Shelf Registration Statement continuously effective or
useable for resales pursuant to the preceding paragraph, we shall give the
holders notice to suspend the sale of the old 7.20% Notes and shall extend the
relevant period referred to above during which we are required to keep effective
the Shelf Registration Statement (or the period during which Participating
Broker-Dealers are entitled to use the prospectus included in the Exchange Offer
Registration Statement in connection with the resale of new 7.20% Notes) by the
number of days during the period from and including the date of the giving of
such notice to and including the date when holders shall have received copies of
the supplemented or amended prospectus necessary to permit resales of the old
7.20% Notes or to and including the date on which we have given notice that the
sale of the old 7.20% Notes may be resumed, as the case may be.
Each old 7.20% Note contains a legend to the effect that the holder thereof, by
its acceptance thereof, will be deemed to have agreed to be bound by the
provisions of the Registration Rights Agreement.
The Registration Rights Agreement is governed by, and construed in accordance
with, the laws of the State of New York. This summary of certain provisions of
the Registration Rights Agreement does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all the provisions of the
Registration Rights Agreement, a form of which is available upon request to us.
In addition, the information set forth above concerning certain interpretations
and positions taken by the Staff is not intended to constitute legal advice, and
prospective investors should consult their own legal advisors with respect to
such matters.
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CERTAIN U.S. FEDERAL TAX CONSIDERATIONS
The following discussion summarizes certain U.S. federal tax consequences of an
exchange of old 7.20% Notes for new 7.20% Notes in the exchange offer and the
purchase, beneficial ownership and disposition of new 7.20% Notes. For purposes
of this summary, a "U.S. Holder" means a beneficial owner of an old 7.20% or a
new 7.20% Note that is for U.S. federal income tax purposes:
- an individual who is a citizen or resident of the United States;
- a corporation, partnership or other business entity created or organized
under the laws of the United States or any state thereof (including the
District of Columbia);
- an estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
- a trust with respect to which a court within the United States is able to
exercise primary supervision over its administration, and one or more
United States persons have the authority to control all of its substantial
decisions.
An individual may, subject to certain exceptions, be deemed to be a resident of
the United States by reason of being present in the United States for at least
31 days in the calendar year and for an aggregate of at least 183 days during a
three-year period ending in the current calendar year (counting for such
purposes all the days present in the current year, one-third of the days present
in the immediately preceding year, and one-sixth of the days present in the
second preceding year). A "Non-U.S. Holder" is a beneficial owner of an old
7.20% Note or a new 7.20% Note that is not a U.S. Holder.
This summary is based on interpretations of the Internal Revenue Code of 1986,
as amended (the "Code"), regulations issued thereunder, and rulings and
decisions currently in effect (or in some cases proposed), all of which are
subject to change. Any such change may be applied retroactively and may
adversely affect the federal tax consequences described herein. This summary
addresses only holders that own old 7.20% Notes or will own new 7.20% Notes as
capital assets and not as part of a "straddle" or a "conversion transaction" for
U.S. federal income tax purposes or as part of some other integrated investment.
This summary does not discuss all of the tax consequences that may be relevant
to particular investors or to investors subject to special treatment under the
U.S. federal income tax laws (such as life insurance companies, tax-exempt
entities, regulated investment companies, securities dealers, and investors
whose functional currency is not the U.S. dollar). Persons considering the
exchange of their old 7.20% Notes for new 7.20% Notes and persons considering
the purchase of new 7.20% Notes should consult their tax advisors concerning the
application of U.S. federal tax laws to their particular situations as well as
any consequences of the exchange of the old 7.20% Notes for new 7.20% Notes and
of the purchase, beneficial ownership and disposition of new 7.20% Notes arising
under the laws of any state or other taxing jurisdiction.
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER TO U.S. HOLDERS AND
NON-U.S. HOLDERS
The exchange of old 7.20% Notes for new 7.20% Notes pursuant to the exchange
offer will not be a taxable event for U.S. federal income tax purposes. U.S.
Holders and Non-U.S. Holders will not recognize any taxable gain or loss as a
result of such exchange and will have the same tax basis and holding period in
the new 7.20% Notes as they had in the old 7.20% Notes immediately before the
exchange.
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U.S. FEDERAL INCOME TAX CONSEQUENCES TO U.S. HOLDERS
TREATMENT OF INTEREST. Stated interest on the new 7.20% Notes will be taxable
to U.S. Holders as ordinary interest income as the interest accrues or is paid
in accordance with the holder's regular method of accounting.
MARKET DISCOUNT. If a U.S. Holder acquires a new 7.20% Note for an amount that
is less than its principal amount by more than a DE MINIMIS amount (generally
0.25% of the principal amount multiplied by the number of remaining whole years
to maturity), the amount of the difference will be treated as "market discount."
In the event a U.S. Holder acquires a new 7.20% Note with market discount,
unless the U.S. Holder elects to include such market discount in income as it
accrues, a U.S. Holder will be required to treat any principal payment on, and
any gain on the sale, exchange, retirement or other disposition (including a
gift) of, a new 7.20% Note as ordinary income to the extent of any accrued
market discount that has not previously been included in income. In general,
market discount on the new 7.20% Notes will accrue ratably over the remaining
term of the new 7.20% Notes or, at the election of the U.S. Holder, under a
constant yield method. In addition, a U.S. Holder could be required to defer the
deduction of all or a portion of the interest paid on any indebtedness incurred
or continued to purchase or carry a new 7.20% Note unless the U.S. Holder elects
to include market discount in income currently. Such an election applies to all
debt instruments held by a taxpayer and may not be revoked without the consent
of the Internal Revenue Service (the "IRS").
AMORTIZATION OF BOND PREMIUM. A U.S. Holder that purchases a new 7.20% Note for
an amount in excess of its stated principal amount will be considered to have
purchased the Note at a premium. The U.S. Holder may elect to amortize such
premium (as an offset to interest income), using a constant yield method, over
the remaining term of the new 7.20% Note (or to an earlier call date if it
results in a smaller amount of amortizable bond premium). Such election, once
made, generally applies to all debt instruments held or subsequently acquired by
the U.S. Holder on or after the first day of the first taxable year to which
such election applies and may be revoked only with the consent of the IRS. A
U.S. Holder that elects to amortize such premium must reduce its tax basis in
the related 7.20% Note by the amount of the premium amortized during its holding
period. If a U.S. Holder does not elect to amortize the premium, the amount of
such premium will be included in the U.S. Holder's tax basis for purposes of
computing gain or loss in connection with a taxable disposition of the new 7.20%
Note.
SALE OR OTHER DISPOSITION OF NEW 7.20% NOTES
In general, upon the sale, retirement or other taxable disposition of a new
7.20% Note, a U.S. Holder will recognize taxable gain or loss equal to the
difference between (i) the amount of the cash and the fair market value of any
property received on the sale, retirement or other taxable disposition (not
including any amount attributable to accrued but unpaid interest or accrued
market discount not previously included in income) and (ii) the U.S. Holder's
adjusted tax basis in the new 7.20% Note. A U.S. Holder's adjusted tax basis in
a new 7.20% Note generally will be equal to the cost of the Note to such U.S.
Holder, increased by the amount of any market discount previously included in
income by the U.S. Holder and reduced by the amount of any payments received by
the U.S. Holder, other than payments of qualified stated interest, and by the
amount of amortizable bond premium taken into account. Subject to the discussion
of market discount above, gain or loss realized on the sale, retirement or other
taxable disposition of a new 7.20% Note will be capital gain or loss.
U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES TO NON-U.S. HOLDERS OF OWNERSHIP
OF NEW 7.20% NOTES
For purposes of the following summary, interest and gain on the sale, exchange
or other disposition of a new 7.20% Note will be considered "U.S. trade or
business income" if such income or gain is:
- effectively connected with the conduct of a trade or business in the
United States; or
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- in the case of a treaty resident, attributable to a permanent
establishment (or, in the case of an individual, to a fixed base) in the
United States.
TREATMENT OF INTEREST. A Non-U.S. Holder that is not subject to U.S. federal
income tax as a result of any direct or indirect connection to the United States
other than its ownership of a new 7.20% Note will not be subject to U.S. federal
income or withholding tax in respect of interest income on the new 7.20% Note
if:
- the interest is not U.S. trade or business income;
- the Non-U.S. Holder provides an appropriate statement on IRS Form W-8 or
Form W-8BEN, together with all appropriate attachments, signed under
penalties of perjury, identifying the Non-U.S. Holder and stating, among
other things, that the Non-U.S. Holder is not a United States person for
U.S. federal income tax purposes; and
- the Non-U.S. Holder is not a "10-percent shareholder" or a "related
controlled foreign corporation" with respect to the Company as specially
defined for U.S. federal income tax purposes.
If a new 7.20% Note is held through a securities clearing organization or
certain other financial institutions, the organization or institution may
provide a signed statement to eliminate withholding tax. However, in such case,
the signed statement must be accompanied by a copy of the IRS Form W-8 or Form
W-8BEN or the substitute form provided by the beneficial owner to the
organization or institution. For interest paid with respect to a new 7.20% Note
after December 31, 2000, a Non-U.S. Holder that is treated as a partnership for
U.S. federal tax purposes generally will be required to provide an IRS Form
W-8IMY and to attach an appropriate certification by each beneficial owner of
the Non-U.S. Holder (including in certain cases, such beneficial owner's
beneficial owners). Prospective investors, including foreign partnerships and
their partners, should consult their tax advisors regarding these possible
additional reporting requirements.
To the extent these conditions are not met, a 30% withholding tax will apply to
interest income on the new 7.20% Note, unless an income tax treaty reduces or
eliminates such tax or unless the interest is U.S. trade or business income with
respect to such Non-U.S. Holder and the Non-U.S. Holder provides an appropriate
statement to that effect. In the latter case, such Non-U.S. Holder generally
will be subject to U.S. federal income tax with respect to all income from the
new 7.20% Notes at regular rates applicable to U.S. taxpayers. Additionally, in
such event, Non-U.S. Holders that are corporations could be subject to a branch
profits tax on such income.
TREATMENT OF DISPOSITIONS OF NEW 7.20% NOTES. In general, a Non-U.S. Holder
will not be subject to U.S. federal income tax on any amount received (other
than amounts in respect of accrued but unpaid interest) upon retirement or
disposition of a new 7.20% Note unless such Non-U.S. Holder is an individual
present in the United States for 183 days or more in the taxable year of the
sale, exchange or other disposition and certain other requirements are met, or
unless the gain is U.S. trade or business income. In the latter event, Non-U.S.
Holders generally will be subject to U.S. federal income tax with respect to
such gain at regular rates applicable to U.S. taxpayers. Additionally, in such
event, Non-U.S. Holders that are corporations could be subject to a branch
profits tax on such gain.
TREATMENT OF NEW 7.20% NOTES FOR U.S. FEDERAL ESTATE TAX PURPOSES. An
individual Non-U.S. Holder (who is not domiciled in the United States for U.S.
federal estate tax purposes at the time of death) will not be subject to U.S.
federal estate tax in respect of a new 7.20% Note, so long as the Non-U.S.
Holder is not a "10-percent shareholder" with respect to the Company as
specially defined for U.S. federal income tax purposes and payments of interest
on such new 7.20% Note would not have been considered U.S. trade or business
income at the time of such Non-U.S. Holder's death.
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U.S. INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX FOR NON-U.S.
HOLDERS
Under certain circumstances, the Code requires "information reporting" annually
to the IRS and to each holder of new 7.20% Notes, and "backup withholding" at a
rate of 31% with respect to certain payments made on or with respect to the new
7.20% Notes. Backup withholding generally does not apply with respect to certain
holders of new 7.20% Notes, including corporations, tax-exempt organizations,
qualified pension and profit sharing trusts and individual retirement accounts.
A Non-U.S. Holder that provides an IRS Form W-8 or Form W-8BEN, together with
all appropriate attachments, signed under penalties of perjury, identifying the
Non-U.S. Holder and stating that the Non-U.S. Holder is not a United States
person, will not be subject to IRS reporting requirements and U.S. backup
withholding. With respect to interest paid after December 31, 2000, IRS Forms
W-8BEN will generally be required from the beneficial owners of interests in a
Non-U.S. Holder that is treated as a partnership for U.S. federal income tax
purposes.
The payment of the proceeds on the disposition of a new 7.20% Note to or through
the U.S. office of a broker generally will be subject to information reporting
and backup withholding at a rate of 31% unless the Non-U.S. Holder either
certifies its status as a Non-U.S. Holder under penalties of perjury on IRS
Form W-8 or Form W-8BEN (as described above) or otherwise establishes an
exemption. The payment of the proceeds on the disposition of a new 7.20% Note by
a Non-U.S. Holder to or through a non-U.S. office of a non-U.S. broker will not
be subject to backup withholding or information reporting unless the non-U.S.
broker is a "U.S. related person" (as defined below). The payment of proceeds on
the disposition of a new 7.20% Note by a Non-U.S. Holder to or through a
non-U.S. office of a U.S. broker or a U.S. related person generally will not be
subject to backup withholding but will be subject to information reporting
unless the Non-U.S. Holder certifies its status as a Non-U.S. Holder under
penalties of perjury or the broker has certain documentary evidence in its files
as to the Non-U.S. Holder's foreign status and the broker has no actual
knowledge to the contrary.
For this purpose, a "U.S. related person" is:
- a "controlled foreign corporation" as specially defined for U.S. federal
income tax purposes;
- a foreign person 50% or more of whose gross income from all sources for
the three-year period ending with the close of its taxable year preceding
the payment (or for such part of the period that the broker has been in
existence) is derived from activities that are effectively connected with
the conduct of a U.S. trade or business; or
- for payments made after December 31, 2000, a foreign partnership if at any
time during its tax year one or more of its partners are United States
persons who, in the aggregate, hold more than 50% of the income or capital
interest of the partnership or if, at any time during its taxable year,
the partnership is engaged in the conduct of a U.S. trade or business.
Backup withholding is not an additional tax and may be refunded (or credited
against the Non-U.S. Holder's U.S. federal income tax liability, if any),
provided that certain required information is furnished. The information
reporting requirements may apply regardless of whether withholding is required.
Copies of the information returns reporting such interest and withholding also
may be made available to the tax authorities in the country in which a Non-U.S.
Holder is a resident under the provisions of an applicable income tax treaty or
agreement.
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives new 7.20% Notes for its own
account in the exchange offer must acknowledge that it acquired the old 7.20%
Notes for its own account as a result of market-making or other trading
activities and must agree that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of the new
7.20% Notes. The letter of
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transmittal states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "REGISTRATION
RIGHTS." A Participating Broker-Dealer may use this prospectus, as it may be
amended or supplemented from time to time, in connection with resales of new
7.20% Notes received in exchange for old 7.20% Notes where the old 7.20% Notes
were acquired as a result of market-making activities or other trading
activities. Under the Registration Rights Agreement, we have agreed that for a
period of 225 calendar days after the expiration date, we will make this
prospectus, as amended or supplemented, available to any Participating
Broker-Dealer for use in connection with any resale of new 7.20% Notes.
We will not receive any proceeds from any sale of the new 7.20% Notes by any
Participating Broker-Dealer. New 7.20% Notes received by Participating
Broker-Dealers for their own account in the exchange offer may be sold from time
to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the new 7.20% Notes
or a combination of the methods of resale, at market prices prevailing at the
time of resale, at prices related to the prevailing market prices or negotiated
prices. Any resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer and/or the purchasers of
the new 7.20% Notes. Any Participating Broker-Dealer that resells new 7.20%
Notes that were received by it for its own account in the exchange offer and any
broker or dealer that participates in a distribution of the new 7.20% Notes may
be deemed to be an "underwriter" within the meaning of the Securities Act and
any profit on any resale of new 7.20% Notes and any commissions or concessions
received by those persons may be deemed to be underwriting compensation under
the Securities Act. The letter of transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
For a period of 225 calendar days after closing of the exchange offer, we will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any Participating Broker-Dealer that requests
the documents in the letter of transmittal. We have agreed to pay all expenses
incident to our performance of, or compliance with, the Registration Rights
Agreement and all expenses incident to the exchange offer, including the
expenses of one counsel for the holders of the old 7.20% Notes but excluding
commissions or concessions of any brokers or dealers, and will indemnify the
holders, including any broker-dealers, and certain parties related to the
holders against certain liabilities, including liabilities under the Securities
Act.
We have not entered into any arrangements or understandings with any person to
distribute the new 7.20% Notes to be received in the exchange offer.
LEGAL MATTERS
Certain legal matters with respect to the 7.20% Notes will be passed upon for us
by Cadwalader, Wickersham & Taft, New York, New York, and by Thomas O.
McGimpsey, Senior Attorney and Assistant Secretary of U S WEST Communications.
Cadwalader, Wickersham & Taft, New York, New York is also passing on certain
federal income tax matters in connection with the 7.20% Notes.
EXPERTS
Our financial statements and schedules as of December 31, 1999 and 1998 and for
each of the three years in the period ended December 31, 1999 included in our
Annual Report on Form 10-K filed March 3, 2000, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, which are incorporated by reference in this prospectus and in
the registration statement in reliance upon the authority of said firm as
experts in giving said reports.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Bylaws provide that the Registrant shall indemnify an
indemnified representative against any liability incurred in connection with any
proceeding in which the indemnified representative may be involved as a party or
otherwise, by reason of the fact that such person is or was serving in an
indemnified capacity, except to the extent that any such indemnification against
a particular liability is expressly prohibited by applicable law or where a
judgment or other final adjudication adverse to the indemnified representative
establishes, or where the Registrant determines, that his or her acts or
omissions (i) were in breach of such person's duty of loyalty to the Registrant
or its shareholders, (ii) were not in good faith or involved intentional
misconduct or a knowing violation of law, or (iii) resulted in receipt by such
person of an improper personal benefit. The rights granted by the Bylaws shall
not be deemed exclusive of any other rights to which those seeking
indemnification, contribution, or advancement of expenses may be entitled under
any statute, certificate or articles of incorporation, agreement, contract of
insurance, vote of shareholders or disinterested directors, or otherwise. The
rights of indemnification and advancement of expenses provided by or granted
pursuant to the Bylaws shall continue as to a person who has ceased to be an
indemnified representative in respect of matters arising prior to such time and
shall inure to the benefit of the heirs, executors, administrators, and personal
representatives of such a person.
The directors and officers of the Registrant are covered by insurance
policies indemnifying them against certain liabilities, including certain
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act") which might be incurred by them in such capacities and against
which they cannot be indemnified by the Company.
The agents, dealers or underwriters who executed the agreements filed as
Exhibit 1 to this registration statement agreed to indemnify our directors and
their officers who signed the registration statement against certain liabilities
which might arise under the Securities Act with respect to information furnished
to us by or on behalf of any such indemnifying party.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibits identified in parentheses below are on file with the Commission and
are incorporated herein by reference to such previous filings. All other
exhibits are provided as part of this electronic transmission.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<S> <C>
1-A Purchase Agreement, dated October 26, 1999, among U S WEST
Communications, Inc., Salomon Smith Barney Inc., ABN AMRO
Incorporated, Banc of America Securities LLC and Chase
Securities Inc., as representatives of the initial
purchasers named therein.
(2-A) Articles of Merger including the Plan of Merger between The
Mountain States Telephone and Telegraph Company (renamed
U S WEST Communications, Inc.) and Northwestern Bell
Telephone Company. (Exhibit 2-A to Form SE filed on
January 8, 1991, File No. 1-3040).
(2-B) Articles of Merger including the Plan of Merger between The
Mountain States Telephone and Telegraph Company (renamed
U S WEST Communications, Inc.) and Pacific Northwest Bell
Telephone Company. (Exhibit 2-B to Form SE filed on
January 8, 1991, File No. 1-3040).
(3-A) Restated Articles of Incorporation of the Registrant.
(Exhibit 3-A to Form 10-K/A filed on April 13, 1998, File
No. 1-3040).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<S> <C>
(3-B) Bylaws of the Registrant, as amended. (Exhibit 3-B to
Form 10-K/A filed on April 13, 1998, File No. 1-3040).
(4-A.3) Registration Rights Agreement, dated October 26, 1999,
between U S WEST Communications, Inc. and the initial
purchasers named therein (Exhibit 4a to Form 10-K for the
period ended December 31, 1999, File No. 1-3040).
4-B Form of Letter of Transmittal.
(4-C) Indenture dated as of October 15, 1999 by and between
U S WEST Communications, Inc. and Bank One Trust Company,
NA as Trustee (Exhibit 4b to Form 10-K for the period ended
December 31, 1999, File No. 1-3040). The form or forms of
debt securities with respect to each particular series of
debt securities registered hereunder will be filed as an
exhibit to a Current Report on Form 8-K of U S WEST
Communications, Inc. and incorporated herein by reference.
5-A.1 Opinion of Cadwalader, Wickersham & Taft with respect to
legality of the securities being registered.
5-A.2 Opinion of Thomas O. McGimpsey, Senior Attorney and
Assistant Secretary of U S WEST Communications, Inc., with
respect to legality of the securities being registered.
8 Opinion of Cadwalader, Wickersham & Taft with respect to
certain tax matters (included in Exhibit 5-A.1).
(10-A) Reorganization and Divestiture Agreement dated as of
November 1, 1983, between American Telephone and Telegraph
Company, U S WEST Inc., and certain of their affiliated
companies, including The Mountain States Telephone and
Telegraph Company, Northwestern Bell Telephone Company,
Pacific Northwest Bell Telephone Company and NewVector
Communications, Inc. (Exhibit 10-A to Form 10-K for the
period ended December 31, 1983, File No. 1-3040).
(10-B) Shared Network Facilities Agreement dated as of January 1,
1984, between American Telephone and Telegraph Company, AT&T
Communications of the Midwest, Inc. and The Mountain States
Telephone and Telegraph Company (Exhibit 10-B to Form 10-K
for the period ended December 31, 1983, File No. 1-3040).
(10-C) Agreement Concerning Termination of the Standard Supply
Contract effective December 31, 1983, between American
Telephone and Telegraph Company, Western Electric Company,
Incorporated, The Mountain States Telephone and Telegraph
Company and Central Services Organization (Exhibit 10-D to
Form 10-K for the period ended December 31, 1983, File
No. 1-3040).
(10-D) Agreement Concerning Certain Centrally Developed Computer
Systems effective December 31, 1983, between American
Telephone and Telegraph Company, Western Electric Company,
Incorporated, The Mountain States Telephone and Telegraph
Company and Central Services Organization (Exhibit 10-E to
Form 10-K for the period ended December 31, 1983, File
No. 1-3040).
(10-E) Agreement Concerning Patents, Technical Information and
Copyrights effective December 31, 1983, between American
Telephone and Telegraph Company and U S WEST, Inc.
(Exhibit 10-F to Form 10-K for the period ended
December 31, 1983, File No. 1-3040).
(10-F) Agreement Concerning Liabilities, Tax Matters and
Termination of Certain Agreements dated as of November 1,
1983, between American Telephone and Telegraph Company,
U S WEST, Inc., The Mountain States Telephone and Telegraph
Company and certain of their affiliates (Exhibit 10-G to
Form 10-K for the period ended December 31, 1983, File
No. 1-3040).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<S> <C>
(10-G) Agreement Concerning Trademarks, Trade Names and Service
Marks effective December 31, 1983, between American
Telephone and Telegraph Company, American Information
Technologies Corporation, Bell Atlantic Corporation,
BellSouth Corporation, Cincinnati Bell, Inc., NYNEX
Corporation, Pacific Telesis Group, The Southern New England
Telephone Company, Southwestern Bell Corporation and
U S WEST, Inc. (Exhibit 10-I to Form 10-K for the period
ended December 31, 1984, File No. 1-3040).
(10-H) Shareholders' Agreement dated as of January 1, 1988, between
Ameritech Services, Inc., Bell Atlantic Management Services,
Inc., BellSouth Services, Incorporated, NYNEX Service
Company, Pacific Bell, Southwestern Bell Telephone Company,
The Mountain States Telephone and Telegraph Company,
Northwestern Bell Telephone Company and Pacific Northwest
Bell Telephone Company (Exhibit 10-H to Form SE dated
March 5, 1992, File No. 1-3040).
(10-I) Form of Agreement for Purchase and Sale of Telephone
Exchanges, dated as of June 16, 1999, between Citizens
Utilities Company and U S WEST Communications, Inc.
(Exhibit 99-B to Form 8-K dated June 17, 1999, File
No. 1-3040).
(10-J) 364-Day $800 Million Credit Agreement, dated May 19, 1999,
with The Banks Listed Therein and Morgan Guaranty Trust
Company of New York, as administrative agent. (Exhibit 10-J
to Form 10-Q for the period ended June 30, 1999, File
No. 1-3040).
(10-K) Amendment No. 1 to Credit Agreement dated as of June 11,
1999, to the 364-Day $800 Million Credit Agreement, dated as
of May 19, 1998, among U S WEST Communications, Inc.,
U S WEST, Inc., the Banks listed on the signature pages
thereto and Morgan Guaranty Trust Company of New York, as
administrative agent. (Exhibit 10-K to Form 10-Q for the
period ended June 30, 1999, File No. 1-3040).
12 Computation of Ratio of Earnings to Fixed Charges.
(21) Subsidiaries of the Registrant (Exhibit 21 to U S WEST, Inc.
Form 10-K for the year ended December 31, 1999).
23-A Consent of Arthur Andersen LLP.
23-B Consent of Cadwalader, Wickersham & Taft (included in
Exhibit 5-A.1).
24 Powers of Attorney.
25 Statement of Eligibility of Trustee (Form T-1).
</TABLE>
ITEM 22. UNDERTAKINGS.
(a) The undersigned hereby undertakes:
(1) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) under the Securities Act, the issuer undertakes that such
reoffering prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2) That every prospectus (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet the requirements of section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415 under the Securities Act, will be filed as a part
of an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes 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.
II-3
<PAGE>
(b) 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 foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
(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
registrant 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 director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(c) The undersigned hereby undertakes to respond to requests for information
that is incorporated by reference into the prospectus pursuant to Items 4,
10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(d) The undersigned hereby undertakes to supply by means of a post-effective
amendment all information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
(e) The undersigned hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) 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.
(f) The undersigned hereby undertakes:
(1) 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 percent 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.
(2) 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
II-4
<PAGE>
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) 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.
(4) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by us pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed part of the registration statement as of
the time it was declared effective.
(5) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus 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.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Denver, State of
Colorado, on the 10th day of March, 2000.
<TABLE>
<S> <C> <C>
U S WEST COMMUNICATIONS, INC.
By: /s/ THOMAS O. MCGIMPSEY
-----------------------------------------
Thomas O. McGimpsey
ASSISTANT SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
PRINCIPAL EXECUTIVE OFFICER:
<TABLE>
<C> <S>
/s/ SOLOMON D. TRUJILLO
------------------------------------------- President and Chief Executive Officer
Solomon D. Trujillo
PRINCIPAL FINANCIAL OFFICER AND ACCOUNTING OFFICER:
/s/ ALLAN R. SPIES
------------------------------------------- Vice President and Chief Financial Officer
Allan R. Spies
CONTROLLER:
/s/ JANET K. COOPER
------------------------------------------- Vice President--Finance and Controller
Janet K. Cooper
DIRECTORS:
/s/ SOLOMON D. TRUJILLO
------------------------------------------- Director
Solomon D. Trujillo
/s/ ALLAN R. SPIES
------------------------------------------- Director
Allan R. Spies
/s/ JANET K. COOPER
------------------------------------------- Director
Janet K. Cooper
</TABLE>
Dated: March 10, 2000
II-6
<PAGE>
EXHIBIT INDEX(1)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<S> <C>
1-A Purchase Agreement, dated October 26, 1999, among U S WEST
Communications, Inc., Salomon Smith Barney Inc., ABN AMRO
Incorporated, Banc of America Securities LLC and Chase
Securities Inc., as representatives of the initial
purchasers named therein.
(2-A) Articles of Merger including the Plan of Merger between The
Mountain States Telephone and Telegraph Company (renamed
U S WEST Communications, Inc.) and Northwestern Bell
Telephone Company. (Exhibit 2-A to Form SE filed on
January 8, 1991, File No. 1-3040).
(2-B) Articles of Merger including the Plan of Merger between The
Mountain States Telephone and Telegraph Company (renamed
U S WEST Communications, Inc.) and Pacific Northwest Bell
Telephone Company. (Exhibit 2-B to Form SE filed on
January 8, 1991, File No. 1-3040).
(3-A) Restated Articles of Incorporation of the Registrant.
(Exhibit 3-A to Form 10-K/A filed on April 13, 1998, File
No. 1-3040).
(3-B) Bylaws of the Registrant, as amended. (Exhibit 3-B to
Form 10-K/A filed on April 13, 1998, File No. 1-3040).
(4-A.3) Registration Rights Agreement, dated October 26, 1999,
between U S WEST Communications, Inc. and the initial
purchasers named therein (Exhibit 4a to Form 10-K for the
period ended December 31, 1999, File No. 1-3040).
4-B Form of Letter of Transmittal.
(4-C) Indenture dated as of October 15, 1999 by and between
U S WEST Communications, Inc. and Bank One Trust Company,
NA as Trustee (Exhibit 4b to Form 10-K for the period ended
December 31, 1999, File No. 1-3040). The form or forms of
debt securities with respect to each particular series of
debt securities registered hereunder will be filed as an
exhibit to a Current Report on Form 8-K of U S WEST
Communications, Inc. and incorporated herein by reference.
5-A.1 Opinion of Cadwalader, Wickersham & Taft with respect to
legality of the securities being registered.
5-A.2 Opinion of Thomas O. McGimpsey, Senior Attorney and
Assistant Secretary of U S WEST Communications, Inc., with
respect to legality of the securities being registered.
8 Opinion of Cadwalader, Wickersham & Taft with respect to
certain tax matters (included in Exhibit 5-A.1).
(10-A) Reorganization and Divestiture Agreement dated as of
November 1, 1983, between American Telephone and Telegraph
Company, U S WEST Inc., and certain of their affiliated
companies, including The Mountain States Telephone and
Telegraph Company, Northwestern Bell Telephone Company,
Pacific Northwest Bell Telephone Company and NewVector
Communications, Inc. (Exhibit 10-A to Form 10-K for the
period ended December 31, 1983, File No. 1-3040).
(10-B) Shared Network Facilities Agreement dated as of January 1,
1984, between American Telephone and Telegraph Company, AT&T
Communications of the Midwest, Inc. and The Mountain States
Telephone and Telegraph Company (Exhibit 10-B to Form 10-K
for the period ended December 31, 1983, File No. 1-3040).
</TABLE>
- ------------------------
(1) Exhibits identified in parentheses are on file with the Commission and are
incorporated herein by reference to such previous filings. All other
exhibits are provided as part of this electronic transmission.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<S> <C>
(10-C) Agreement Concerning Termination of the Standard Supply
Contract effective December 31, 1983, between American
Telephone and Telegraph Company, Western Electric Company,
Incorporated, The Mountain States Telephone and Telegraph
Company and Central Services Organization (Exhibit 10-D to
Form 10-K for the period ended December 31, 1983, File
No. 1-3040).
(10-D) Agreement Concerning Certain Centrally Developed Computer
Systems effective December 31, 1983, between American
Telephone and Telegraph Company, Western Electric Company,
Incorporated, The Mountain States Telephone and Telegraph
Company and Central Services Organization (Exhibit 10-E to
Form 10-K for the period ended December 31, 1983, File
No. 1-3040).
(10-E) Agreement Concerning Patents, Technical Information and
Copyrights effective December 31, 1983, between American
Telephone and Telegraph Company and U S WEST, Inc.
(Exhibit 10-F to Form 10-K for the period ended
December 31, 1983, File No. 1-3040).
(10-F) Agreement Concerning Liabilities, Tax Matters and
Termination of Certain Agreements dated as of November 1,
1983, between American Telephone and Telegraph Company,
U S WEST, Inc., The Mountain States Telephone and Telegraph
Company and certain of their affiliates (Exhibit 10-G to
Form 10-K for the period ended December 31, 1983, File
No. 1-3040).
(10-G) Agreement Concerning Trademarks, Trade Names and Service
Marks effective December 31, 1983, between American
Telephone and Telegraph Company, American Information
Technologies Corporation, Bell Atlantic Corporation,
BellSouth Corporation, Cincinnati Bell, Inc., NYNEX
Corporation, Pacific Telesis Group, The Southern New England
Telephone Company, Southwestern Bell Corporation and
U S WEST, Inc. (Exhibit 10-I to Form 10-K for the period
ended December 31, 1984, File No. 1-3040).
(10-H) Shareholders' Agreement dated as of January 1, 1988, between
Ameritech Services, Inc., Bell Atlantic Management Services,
Inc., BellSouth Services, Incorporated, NYNEX Service
Company, Pacific Bell, Southwestern Bell Telephone Company,
The Mountain States Telephone and Telegraph Company,
Northwestern Bell Telephone Company and Pacific Northwest
Bell Telephone Company (Exhibit 10-H to Form SE dated
March 5, 1992, File No. 1-3040).
(10-I) Form of Agreement for Purchase and Sale of Telephone
Exchanges, dated as of June 16, 1999, between Citizens
Utilities Company and U S WEST Communications, Inc.
(Exhibit 99-B to Form 8-K dated June 17, 1999, File
No. 1-3040).
(10-J) 364-Day $800 Million Credit Agreement, dated May 19, 1999,
with The Banks Listed Therein and Morgan Guaranty Trust
Company of New York, as administrative agent. (Exhibit 10-J
to Form 10-Q for the period ended June 30, 1999, File
No. 1-3040).
(10-K) Amendment No. 1 to Credit Agreement dated as of June 11,
1999, to the 364-Day $800 Million Credit Agreement, dated as
of May 19, 1998, among U S WEST Communications, Inc.,
U S WEST, Inc., the Banks listed on the signature pages
thereto and Morgan Guaranty Trust Company of New York, as
administrative agent. (Exhibit 10-K to Form 10-Q for the
period ended June 30, 1999, File No. 1-3040).
12 Computation of Ratio of Earnings to Fixed Charges.
(21) Subsidiaries of the Registrant (Exhibit 21 to
U S WEST, Inc. Form 10-K for the year ended December 31,
1999).
23-A Consent of Arthur Andersen LLP.
23-B Consent of Cadwalader, Wickersham & Taft (included in
Exhibit 5-A.1).
24 Powers of Attorney.
25 Statement of Eligibility of Trustee (Form T-1).
</TABLE>
<PAGE>
PURCHASE AGREEMENT
U S WEST COMMUNICATIONS, INC.
$750,000,000
7.20% NOTES DUE NOVEMBER 1, 2004
October 26, 1999
Salomon Smith Barney Inc.
ABN AMRO Incorporated
Banc of America Securities LLC
Chase Securities Inc.
As Representatives of the several
Initial Purchasers named in Schedule I hereto
c/o Salomon Smith Barney Inc.
7 World Trade Center
New York, New York 10048
Dear Sir/Madam:
U S WEST Communications, Inc., a Colorado corporation (the "COMPANY"),
confirms its agreement with the several Initial Purchasers listed in Schedule I
hereto (the "INITIAL PURCHASERS") for whom Salomon Smith Barney Inc., ABN AMRO
Incorporated, Banc of America Securities LLC and Chase Securities Inc. are
acting as representatives (the "REPRESENTATIVES"), with respect to the issue and
sale by the Company and the purchase by the Initial Purchasers, acting severally
and not jointly, of the respective principal amounts set forth in Schedule I of
$750,000,000 aggregate principal amount of the Company's 7.20% Notes due
November 1, 2004 (the "SECURITIES"). The Securities will be issued under an
Indenture dated as of October 15, 1999 (the "INDENTURE"), between the Company
and Bank One Trust Company, NA, as trustee (the "TRUSTEE").
The Securities will have the benefit of a Registration Rights Agreement,
dated as of October 26, 1999 (the "REGISTRATION RIGHTS Agreement"), among the
Company and the Initial Purchasers, pursuant to which the Company has agreed,
for the benefit of the Initial Purchasers and their respective direct and
indirect transferees and assigns, to file a registration statement with the
Securities and Exchange Commission (the "COMMISSION") registering the Securities
or the Exchange Securities (as defined in the Registration Rights Agreement)
under the Securities Act of 1933, as amended (the "SECURITIES ACT") subject to
the terms and conditions therein specified.
<PAGE>
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Securities Act, in reliance upon
exemptions therefrom.
Section 1. In connection with the sale of the Securities, the Company has
prepared and delivered to each Initial Purchaser copies of the preliminary
offering memorandum dated October 22, 1999 (the "PRELIMINARY OFFERING
MEMORANDUM") and has prepared and will deliver to each Initial Purchaser, on the
date hereof or the next succeeding day, copies of a final offering memorandum
dated the date hereof (the "FINAL OFFERING MEMORANDUM"), each for use by such
Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities. "OFFERING MEMORANDUM" means, with respect to any
date or time referred to in this Agreement, the most recent offering memorandum
(whether the Preliminary Offering Memorandum or the Final Offering Memorandum,
or any amendment or supplement to either such document), including any exhibits
thereto and the documents incorporated by reference therein, which has been
prepared and delivered by the Company to the Initial Purchasers in connection
with their solicitation of purchases of, or offering of, the Securities.
SECTION 2. SECTION 1. PURCHASE AND OFFERING. The Company hereby agrees with
the Initial Purchasers as follows:
(a) The Company agrees to issue and sell the Securities to the several
Initial Purchasers as hereinafter provided, and each Initial Purchaser, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective principal amount of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto at a price (the
"PURCHASE PRICE") equal to 99.21% of their principal amount.
Section 3. (b) The Company understands that the Initial Purchasers intend
(i) to offer privately pursuant to Rule 144A and pursuant to Regulation S under
the Securities Act ("REGULATION S") their respective portions of the Securities
as soon after this Agreement has become effective as in the judgment of the
Initial Purchasers is advisable and (ii) initially to offer the Securities upon
the terms set forth in the Offering Memorandum.
(c) The Company confirms that it has authorized the Initial Purchasers,
subject to the restrictions set forth below, to distribute copies of the
Offering Memorandum in connection with the offering of the Securities.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS. Each
Initial Purchaser hereby severally makes to the Company the following
representations and agreements:
(i) it is a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act; and
(ii) (A) it will not solicit offers for, or offer to sell, the Securities
by any form of general solicitation or general advertising (as those terms are
used in Regulation D under the Securities Act ("REGULATION D")) and (B) it will
solicit offers for the Securities only from, and will offer the Securities only
to, persons who it reasonably believes to be (x) in the case of offers
2
<PAGE>
inside the United States, "qualified institutional buyers" within the meaning of
Rule 144A under the Securities Act and (y) in the case of offers outside the
United States, to persons other than U.S. persons ("FOREIGN PURCHASERS", which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)) that, in each case, in purchasing the Securities are deemed
to have represented and agreed as provided in the Offering Memorandum;
With respect to offers and sales outside the United States, as described in
clause (ii)(B)(y) above, each Initial Purchaser hereby severally represents and
agrees with the Company that:
(i) it understands that no action has been or will be taken by the
Company that would permit a public offering of the Securities, or
possession or distribution of the Offering Memorandum or any other offering
or publicity material relating to the Securities, in any country or
jurisdiction where action for that purpose is required;
(ii) it will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or
has in its possession or distributes the Offering Memorandum or any such
other material, in all cases at its own expense;
(iii) it understands that the Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Rule 144A under the Securities Act or pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act;
(iv) it has offered the Securities and will offer and sell the
Securities (x) as part of its distribution at any time and (y) otherwise
until 40 days after the later of the commencement of the offering of the
Securities and the Closing Date (as defined herein), only in accordance
with Rule 903 of Regulation S. Accordingly, neither such Initial Purchaser,
nor any of its Affiliates, nor any persons acting on its behalf has engaged
or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities, and such Initial Purchaser,
its Affiliates and any such persons have complied and will comply with the
offering restrictions requirement of Regulation S;
(v) it agrees that, at or prior to confirmation of sales of the
Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise prior to 40 days after the closing of the offering, except
in either case in accordance with Regulation S (or Rule 144A,
3
<PAGE>
if available) under the Securities Act. Terms used above have the
meaning given to them by Regulation S"; and
(vi) it agrees that (i) it has not offered or sold Securities and,
prior to six months after the issue date of such Securities, will not offer
or sell any such Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995, (ii) it has complied and will comply with all applicable provisions
of the Financial Services Act 1986 with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United
Kingdom, and (iii) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection
with an issue of Securities to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements)(Exemptions) Order 1996 (as amended) or is a person to whom
such document may otherwise lawfully be issued or passed on.
Terms used in this Section 2 and not otherwise defined in this Agreement
have the meanings given to them by Regulation S.
SECTION 4. SECTION 3. PAYMENT. Payment for the Securities shall be made by
wire transfer in immediately available funds to the account specified by the
Company to the Representatives at 9:00 A.M., New York City time, on November 1,
1999, or at such other time on the same or such other date, not later than the
tenth Business Day after such date, as the Representatives and the Company may
agree upon in writing. The time and date of such payment are referred to herein
as the "CLOSING DATE". As used herein, the term "BUSINESS DAY" means any day
other than a day on which banks are permitted or required to be closed in New
York City.
Payment for the Securities shall be made against delivery (x) with respect
to Securities to be resold to "qualified institutional buyers" by the Initial
Purchasers, to the nominee of The Depository Trust Company for the respective
accounts of the several Initial Purchasers of the Securities of one or more
global notes (collectively, the "RESTRICTED GLOBAL NOTES") representing such
Securities and (y) with respect to Securities to be resold to foreign purchasers
by the Initial Purchasers, to the nominee of The Depository Trust Company for
the respective accounts of the several Initial Purchasers of the Securities of
one or more Regulation S global notes (collectively, the "REGULATION S GLOBAL
NOTES" and, together with the Restricted Global Notes, the "GLOBAL NOTES")
representing such Securities, with any transfer taxes payable in connection with
the transfer to the Initial Purchasers of the Securities duly paid by the
Company. The Global Notes will be made available for inspection by the Initial
Purchasers at the office of Brown & Wood LLP, One World Trade Center, New York,
New York 10048 not later than 1:00 P.M., New York City time, on the Business Day
prior to the Closing Date.
4
<PAGE>
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the several Initial Purchasers as
follows:
(a) the Offering Memorandum (other than the information concerning Qwest
contained under the caption "Recent Developments-Merger with Qwest-Qwest", as to
which no representation is made) will not, in the form used by the Initial
Purchasers to confirm sales of the Securities and as of the Closing Date,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at such dates, not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with written information furnished to the
Company by any Initial Purchaser, or on behalf of any Initial Purchaser by the
Representatives, specifically for use therein;
(b) the documents incorporated by reference in the Offering Memorandum (the
"INCORPORATED DOCUMENTS"), when they were filed with the Commission, conformed
in all material respects to the requirements of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and any further documents so filed and incorporated by reference
in the Offering Memorandum, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act,
and will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(c) the financial statements of the Company, together with the related
schedules and notes thereto, included and incorporated by reference in the
Offering Memorandum, present fairly the financial position of the Company and
its consolidated subsidiaries at the dates indicated and the statement of
operations, shareowner's equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved;
(d) since the respective dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (A) there has been no
material adverse change in the financial condition or results of operations of
the Company and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT"), and (B) there have been no transactions entered into by the Company or
any of its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries, taken as a
whole;
(e) this Agreement has been duly authorized, executed and delivered by the
Company;
(f) the Indenture has been duly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and delivery by the
Trustee) constitutes the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
5
<PAGE>
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law);
(g) the Registration Rights Agreement has been duly authorized by the
Company and, when executed and delivered by the Company, will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and except that enforcement of
rights to indemnification and contribution contained therein may be limited by
applicable federal or state laws or the public policy underlying such laws;
(h) the Securities have been duly authorized by the Company and, at the
Closing Date, will have been duly executed by the Company and, when
authenticated, issued and delivered in the manner provided for in the Indenture
and delivered against payment of the purchase price therefor as provided in this
Agreement, will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and will be in the form contemplated by, and entitled to the benefits of,
the Indenture;
(i) the Exchange Securities have been duly authorized by the Company and,
when authenticated, issued and delivered in the manner provided for in the
Indenture and issued and delivered in exchange for the Securities in the manner
contemplated in the Registration Rights Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture;
(j) the Securities, the Exchange Securities, the Indenture and the
Registration Rights Agreement will conform in all material respects to the
respective statements relating thereto contained in the Offering Memorandum;
(k) the execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein (including, without limitation, the issuance and
sale of the Securities) and compliance by the
6
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Company with its obligations hereunder and thereunder have been duly authorized
by all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below) under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries pursuant to,
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any of its subsidiaries is
subject (collectively, "AGREEMENTS AND INSTRUMENTS") (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not result in
a Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or bylaws of the Company or any of its subsidiaries
or, to the best knowledge of the Company, any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations. As used herein, a "REPAYMENT EVENT" means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
of the Company or any of its subsidiaries (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any such subsidiary;
(l) except as disclosed in the Offering Memorandum, there is not pending
or, to the knowledge of the Company, threatened any action, suit, proceeding,
inquiry or investigation to which the Company or any of its subsidiaries is a
party or to which the assets, properties or operations of the Company or any of
its subsidiaries is subject, before or by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect or which might reasonably be expected to materially and
adversely affect the assets, properties or operations of the Company and its
subsidiaries, taken as a whole, or the consummation of the transactions
contemplated by this Agreement or the Indenture or the performance by the
Company of its obligations hereunder or thereunder;
(m) the Company and its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, "GOVERNMENTAL
LICENSES") issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect;
(n) none of the Company or any of its affiliates (as defined in Rule 501(b)
of Regulation D) has directly, or through any agent, sold, offered for sale,
solicited offers to buy or otherwise
7
<PAGE>
negotiated in respect of, any security (as defined in the Securities Act) which
is or will be integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the offering contemplated
by the Offering Memorandum;
(o) none of the Company, any affiliate of the Company or any person acting
on its or their behalf has offered or sold the Securities by means of any
general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act, or by means of any directed selling efforts within the
meaning of Rule 902 under the Securities Act, and the Company, any affiliate of
the Company and any person acting on its or their behalf has complied with and
will implement the "offering restrictions" requirements of Regulation S;
(p) the Securities satisfy the requirements set forth in Rule 144A(d)(3)
under the Securities Act;
(q) assuming the accuracy of the representations of the Initial Purchasers
contained in Section 2 hereof, it is not necessary in connection with the offer,
sale and delivery of the Securities in the manner contemplated by this Agreement
to register the Securities under the Securities Act or to qualify an indenture
under the Trust Indenture Act of 1939 (the "TRUST INDENTURE Act"); and
(r) none of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the sale of the Securities)
will violate or result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder, including, without limitation, Regulations T,
U, and X of the Board of Governors of the Federal Reserve System.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and agrees with
the several Initial Purchasers as follows:
(i) to deliver to the Initial Purchasers as many copies of the Offering
Memorandum (including all amendments and supplements thereto) as the Initial
Purchasers may reasonably request;
(ii) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Representatives a copy of the proposed amendment
or supplement for review and not to distribute any such proposed amendment or
supplement to which the Representatives reasonably object;
(c) if, at any time prior to the earlier of (i) three months from the date
of the Offering Memorandum and (ii) notice by the Representatives to the Company
of the completion of the initial placement of the Securities, any event shall
occur as a result of which the Offering Memorandum as then amended or
supplemented would include an 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 is
necessary to amend or supplement the Offering Memorandum to comply with law,
forthwith to prepare and furnish, at the expense of the Company, to the Initial
Purchasers and to the dealers (whose names and
8
<PAGE>
addresses the Representatives will furnish to the Company) to which Securities
may have been sold by the Initial Purchasers on behalf of the Initial Purchasers
and to any other dealers upon request, such amendments or supplements to the
Offering Memorandum as may be necessary to correct such statement or omission or
to effect compliance with law;
(d) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Securities; PROVIDED that the
Company shall not be required to file a general consent to service of process in
any jurisdiction;
(e) during the period of two years after the date hereof, to furnish to the
Initial Purchasers, as soon as practicable after the end of each fiscal year, a
copy of the Company's annual report to shareholders, if any, for such year, and
to furnish to the Initial Purchasers and to counsel to the Initial Purchasers,
(i) as soon as available, a copy of each report of the Company filed with the
Commission under the Exchange Act or mailed to stockholders, and (ii) from time
to time, such other non-confidential information concerning the Company as the
Initial Purchasers may reasonably request;
(f) during the period beginning on the date hereof and continuing to and
including the Business Day following the Closing Date, not to, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of, any of its senior debt securities having a maturity of one year or
more without the prior written consent of the Representatives;
(g) to use the net proceeds received by the Company from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Memorandum under the caption "Use of Proceeds";
(h) if requested by the Representatives, to use its best efforts to cause
the Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(i) to make available to the holders of the Securities no later than 90
days after the end of each fiscal year an annual report (including a balance
sheet and statements of income, shareowner's equity and cash flows of the
Company and its consolidated subsidiaries certified by independent public
accountants) and, no later than 45 days after the end of each of the first three
quarters of each fiscal year (beginning with the fiscal quarter ending after the
date of the Offering Memorandum), consolidated summary financial information of
the Company and its subsidiaries of such quarter in reasonable detail;
(j) during the period of two years after the Closing Date, the Company will
not, and will not permit any of its "affiliates" (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by any of them;
9
<PAGE>
(k) whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder and
under the Registration Rights Agreement, including without limiting the
generality of the foregoing, all fees, costs and expenses (i) of the Company's
counsel, accountants and other advisors and agents, as well as the fees and
disbursements of the Trustee and its counsel, (ii) incident to the preparation,
issuance, execution, authentication and delivery of the Securities, including
any expenses of the Trustee, (iii) incident to the preparation, printing and
distribution of the Offering Memorandum (including all exhibits, amendments and
supplements thereto), (iv) incurred in connection with the registration or
qualification and determination of eligibility for investment of the Securities
under the laws of such jurisdictions as the Representatives may designate
(including reasonable fees of counsel for the Initial Purchasers and their
disbursements) and the printing of memoranda relating thereto, (v) in connection
with the approval for trading of the Securities on any securities exchange or
inter-dealer quotation system (as well as in connection with the designation of
the Securities as PORTAL securities, if so requested), (vi) in connection with
the printing (including word processing and duplication costs) and delivery of
this Agreement, the Indenture, any Preliminary and Supplemental Blue Sky
Memoranda and any Legal Investment Survey and the furnishing to Initial
Purchasers and dealers of copies of the Offering Memorandum, including mailing
and shipping, as herein provided and, (vii) payable to rating agencies in
connection with the rating of the Securities, if applicable;
(l) while the Securities remain outstanding and are "restricted securities"
within the meaning of Rule 144(a)(3) and cannot be sold without restriction
under Rule 144(k) under the Securities Act, the Company will, during any period
in which the Company is not subject to Section 13 or 15(d) under the Exchange
Act or is not complying with the reporting requirements thereof, make available
to the purchasers and any holder of Securities in connection with any sale
thereof and any prospective purchaser of Securities and securities analysts, in
each case upon request, the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Securities Act (or any successor
thereto);
(m) the Company will not take any action prohibited by Regulation M under
the Exchange Act, in connection with the distribution of the Securities
contemplated hereby;
(n) none of the Company, any of its affiliates (as defined in Rule 501(b)
under the Securities Act) or any person acting on behalf of the Company or such
affiliate will solicit any offer to buy or offer or sell the Securities by means
of any form of general solicitation or general advertising, including: (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio; and
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising;
(o) none of the Company, any of its affiliates (as defined in Rule
144(a)(1) under the Securities Act) or any person acting on behalf of any of the
foregoing will engage in any directed selling efforts with respect to the
Securities within the meaning of Regulation S under the Securities Act; and
10
<PAGE>
(p) none of the Company, any of its affiliates (as defined in Regulation
501(b) of Regulation D under the Securities Act) or any person acting on behalf
of the Company or such affiliate will sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) which will be integrated with the sale of the Securities in a
manner which would require the registration under the Securities Act of the
Securities and the Company will take all action that is appropriate or necessary
to assure that its offerings of other securities will not be integrated for
purposes of the Securities Act with the offering contemplated hereby.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the several Initial Purchasers to purchase and pay for the
Securities on the Closing Date are subject to the accuracy of the
representations and warranties on the part of the Company contained herein, to
the accuracy of the statements of the officers of the Company made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(s) On the date of this Agreement and on the Closing Date, the
Representatives shall have received executed copies of letters of Arthur
Andersen LLP, addressed to the Company and the Representatives, substantially in
the forms previously approved by the Representatives.
(b) The Representatives shall have received an opinion or opinions, dated
the Closing Date, of Cadwalader, Wickersham & Taft, counsel for the Company, to
the effect that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Colorado and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
(ii) The execution, delivery and performance of the Indenture by the
Company have been duly authorized by all necessary corporate action on the
part of the Company. The Indenture has been duly and validly executed and
delivered by the Company and (assuming the due authorization, execution and
delivery thereof by the Trustee), constitutes the legal, valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditor's rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(iii) The Securities, when duly executed and authenticated in the
manner contemplated in the Indenture and issued and delivered to the
Initial Purchasers against payment therefor in accordance with the
provisions hereof, will constitute legal, valid and binding obligations of
the Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and similar
11
<PAGE>
laws affecting creditor's rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(iv) The Exchange Securities have been duly authorized by the Company
and, when duly executed in the manner contemplated in the Indenture and
issued and delivered in exchange for the Securities in the manner
contemplated in the Registration Rights Agreement, will constitute legal,
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditor's rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity), and
will be in the form contemplated by, and entitled to the benefits of, the
Indenture.
(v) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all necessary corporate action on the
part of the Company; and this Agreement has been duly and validly executed
and delivered by the Company.
(vi) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company, and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditor's rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in
a proceeding at law or in equity), and except that enforcement of rights to
indemnification and contribution contained therein may be limited by
applicable federal or state laws or the public policy underlying such laws.
(vii) No consent, approval, authorization or other action by, or
filing or registration with, any federal governmental authority is required
in connection with the execution and delivery by the Company of the
Indenture or the issuance and sale of the Securities to the Initial
Purchasers pursuant to the terms of this Agreement, except such as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Initial Purchasers.
(viii) The statements in the Offering Memorandum under the headings
"Description of Notes", "Exchange Offer; Registration Rights" and "Notice
to Investors" insofar as such statements constitute a summary of certain
provisions of the documents referred to therein, are accurate in all
material respects.
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<PAGE>
(ix) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(x) Based upon the representations, warranties and agreements of the
Company in Sections 4(n), 4(o), 5(n) 5(o) and 5(p) of this Agreement and of
the Initial Purchasers in Section 2 of this Agreement and on the truth and
accuracy of the representations and agreements deemed to be made by the
Company and the purchasers of the Securities contained in the Offering
Memorandum, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers under this Agreement
or in connection with the initial resale of such Securities by the Initial
Purchasers in accordance with Section 2 of this Agreement to register the
Securities under the Securities Act or to qualify the Indenture under the
Trust Indenture Act; provided, however, that such counsel need not express
any opinion with respect to the conditions under which the Securities may
be further resold.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
the Company and of public officials. Such counsel may also rely as to matters of
Colorado law upon the opinion referred to in Section 6(d) without independent
verification.
In addition, such counsel shall state that it has participated in
conferences with representatives of the Company and with the Representatives and
their counsel, at which conferences the contents of the Offering Memorandum and
related matters were discussed; such counsel has not independently verified and
are not passing upon and assume no responsibility for the accuracy, completeness
or fairness of the statements contained in the Offering Memorandum and the
limitations inherent in the examination made by such counsel and the nature and
extent of such counsel's participation in such conferences are such that such
counsel is unable to assume, and does not assume, any responsibility for the
accuracy, completeness or fairness of such statements; however, based upon such
counsel's participation in the aforesaid conferences, no facts have come to its
attention which lead it to believe that the Incorporated Documents (except as to
the financial statements and the notes thereto, and the other financial,
statistical and accounting data included or incorporated by reference therein or
omitted therefrom, as to which such counsel need express no belief), when they
were filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder or that the Offering Memorandum (except as to the
financial statements and the notes thereto, and the other financial, statistical
and accounting data included or incorporated by reference therein or omitted
therefrom), as of its issue date or at the Closing Date, contained or contains
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.
Such opinion may state that it does not address the impact on the opinions
contained therein of any litigation or ruling relating to the divestiture by
American Telephone and Telegraph Company of ownership of its operating telephone
companies (the "DIVESTITURE").
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<PAGE>
(c) The Representatives shall have received from Initial Purchasers'
Counsel an opinion, dated the Closing Date, with respect to the validity of the
Indenture and the Securities, and such other related matters as the Initial
Purchasers may reasonably request. In rendering such opinion, such counsel may
rely as to matters of Colorado law upon the opinion referred to in Section 6(d)
without independent verification.
(d) The Representatives shall have received an opinion or opinions, dated
the Closing Date, of the corporate counsel of the Company, to the effect that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Colorado and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
(ii) The execution, delivery and performance of the Indenture by the
Company have been duly authorized by all necessary corporate action on the
part of the Company. The Indenture has been duly and validly executed and
delivered by the Company and (assuming the due authorization, execution and
delivery thereof by the Trustee), constitutes the legal, valid and binding
agreement of the Company enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditor's rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
(iii) The Securities, when duly executed and authenticated in the
manner contemplated in the Indenture and issued and delivered to the
Initial Purchasers against payment therefor in accordance with the
provisions hereof, will constitute legal, valid and binding obligations of
the Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and similar laws affecting creditor's rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
(iv) The Exchange Securities have been duly authorized by the Company
and, when duly executed in the manner contemplated in the Indenture and
issued and delivered in exchange for the Securities in the manner
contemplated in the Registration Rights Agreement, will constitute legal,
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditor's rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good
14
<PAGE>
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(v) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all necessary corporate action on the
part of the Company; and this Agreement has been duly and validly executed
and delivered by the Company.
(vi) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company, and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditor's rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in
a proceeding at law or in equity), and except that enforcement of rights to
indemnification and contribution contained therein may be limited by
applicable federal or state laws or the public policy underlying such laws.
(vii) To the best of his knowledge, neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws and no default by
the Company or any of its subsidiaries exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument that is described or referred to in the
Offering Memorandum.
(viii) All state regulatory consents, approvals, authorizations or
other orders (except as to the state securities or Blue Sky laws, as to
which such counsel need express no opinion) legally required for the
execution of the Indenture and the issuance and sale of the Securities to
the Initial Purchasers pursuant to the terms of this Agreement have been
obtained; provided that such counsel may rely on opinions of local counsel
satisfactory to said counsel.
(ix) The enforceability and the legal, valid and binding nature of the
respective agreements and obligations of the Company set forth in the
Indenture, the Registration Rights Agreement, the Securities and the
Exchange Securities (collectively, the "AGREEMENTS") are not affected by,
and the performance of the obligations set forth in such Agreements, the
issuance and sale of the Securities and the consummation of the
transactions contemplated by such Agreements are not prevented or
restricted by, any action, suit, proceeding, order or ruling relating to or
issued or arising as a result of, the Divestiture.
(x) To the best of such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation to which
the Company or any of its subsidiaries is a party or to which the assets,
properties or operations of the Company or any of its subsidiaries is
subject, before or by any court or governmental agency or body,
15
<PAGE>
domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect or which might reasonably be expected to materially
and adversely affect the assets, properties or operations thereof or the
consummation of the transactions contemplated by this Agreement, the
Registration Rights Agreement or the Indenture or the performance by the
Company of its obligations hereunder or thereunder.
In rendering such opinion, such counsel may rely as to matters of New York
law upon the opinion referred to in Section 6(b) without independent
verification.
(e) The Representatives shall have received a certificate, on and as of the
Closing Date, of the President or any Vice President and the Treasurer or any
Assistant Treasurer of the Company in which such officers shall state that, to
the best of their knowledge after reasonable investigation, the representations
and warranties of the Company in this Agreement are true and correct as if made
at and as of the Closing Date, that the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and that, subsequent to the date of the
Offering Memorandum, there has been no material adverse change in the financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, except as set forth in or contemplated by the Offering Memorandum.
(f) The Initial Purchasers shall have received prior to the Closing Date a
copy of the Registration Rights Agreement, in the form and substance
satisfactory to the Initial Purchasers, duly executed by the Company, and the
Registration Rights Agreement shall be in full force and effect at the Closing
Date;
The Company will furnish the Initial Purchasers with such conformed copies
of such opinions, certificates, letters and documents as they reasonably
request.
In case any of the conditions specified above in this Section 6 shall not
have been fulfilled, this Agreement may be terminated by the Representatives by
delivering written notice of termination to the Company. Any such termination
shall be without liability of any party to any other party except to the extent
provided in Sections 5(k), 8 and 9 hereof.
SECTION 7. CONDITION OF THE OBLIGATIONS OF THE COMPANY. The obligation of
the Company to sell and deliver the Securities are subject to the following
conditions precedent:
(a) Concurrently with or prior to the delivery of the Securities to each
Initial Purchaser, the Company shall receive the full purchase price specified
in Schedule I hereto to be paid for the Securities.
(b) The written information furnished to the Company by any Initial
Purchaser, or on behalf of any Initial Purchaser by the Representatives,
specifically for use in the Offering Memorandum as contemplated by Section 2 and
Section 8(b) shall be true and accurate in all material respects.
16
<PAGE>
In case any of the conditions specified above in this Section 7 shall not
have been fulfilled, this Agreement may be terminated by the Company by
delivering written notice of termination to the Representatives. Any such
termination shall be without liability of any party to any other party except to
the extent provided in Sections 5(k), 8 and 9 hereof.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify
and hold harmless each Initial Purchaser against any losses, claims, damages or
liabilities, joint or several, to which such Initial Purchaser may become
subject, as incurred, under the Securities Act 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 any
material fact contained in the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment 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, in
the light of the circumstances under which they were made, not misleading, and
will reimburse each Initial Purchaser, as incurred, for any legal or other
expenses reasonably incurred by such Initial Purchaser in connection with
investigating or defending any such loss, claim, damage, liability or action or
amounts paid in settlement of any litigation or investigation or proceeding
related thereto if such settlement is effected with the written consent of the
Company; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Initial
Purchaser, or on behalf of any Initial Purchaser by the Representatives,
specifically for use therein.
(b) Each Initial Purchaser will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, as incurred, under the Securities Act 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 any material fact contained in the Preliminary Offering Memorandum or the
Final Offering Memorandum or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by any Initial Purchaser, or on behalf of such Initial Purchaser by the
Representatives, specifically for use therein, and will reimburse the Company,
as incurred, for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such loss, claim, damage,
liability or action.
(c) Promptly after receipt by an indemnified party under this Section 8 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 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it
17
<PAGE>
from any liability which it may have to any indemnified party otherwise than
under this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. The indemnifying party or parties shall not be liable
under this Agreement with respect to any settlement made by any indemnified
party or parties without prior written consent by the indemnifying party or
parties to such settlement.
(d) If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Initial Purchasers on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Initial Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total discounts and commissions
received by the Initial Purchasers. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Initial Purchaser shall be required to contribute any amount
in excess of the amount by which the total price at which the Securities
purchased by it were offered exceeds the amount of any damages which such
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations
in this subsection (d) to contribute are several in proportion to the
18
<PAGE>
respective principal amount of the Securities set forth opposite their names in
Schedule I hereto, and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Initial Purchaser within the meaning of the Securities Act or the Exchange Act;
and the obligations of the Initial Purchasers under this Section 8 shall be in
addition to any liability which the respective Initial Purchasers may otherwise
have and shall extend, upon the same terms and conditions and to each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act.
SECTION 9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Initial Purchasers
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Initial Purchaser, the Company or of any of their
officers or directors or any controlling person, and will survive delivery of
and payment for the Securities. If the purchase of the Securities by the Initial
Purchasers is not consummated for any reason other than a default by one or more
of the Initial Purchasers, the Company shall remain responsible for the expenses
to be paid or reimbursed by them pursuant to Section 5(k), the respective
obligations of the Company and the Initial Purchasers pursuant to Section 8
shall remain in effect, and the Company will reimburse the Representatives for
the reasonable out-of-pocket expenses of the Initial Purchasers, not exceeding
$75,000, and for the fees and disbursements of Initial Purchasers' Counsel, the
Initial Purchasers agreeing to pay such expenses, fees and disbursements in any
other event. In no event will the Company be liable to any of the Initial
Purchasers for damages on account of loss of anticipated profits.
SECTION 10. NOTICES. All communications hereunder will be in writing and,
if sent to the Initial Purchasers will be mailed, delivered or telecopied and
confirmed to the them c/o Salomon Smith Barney Inc., 7 World Trade Center, New
York, New York 10048, Attention: Syndicate Department, or, if sent to the
Company, will be mailed, delivered or telecopied and confirmed to it at 1801
California Street, Denver, Colorado 80202, Attention: Treasurer.
SECTION 11. 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 8, and no other
person will have any right or obligation hereunder.
SECTION 12. GOVERNING LAW. The validity and interpretation of this
Agreement shall be governed by the laws of the State of New York.
SECTION 13. DEFAULT BY INITIAL PURCHASERS. If, on the Closing Date any one
or more of the Initial Purchasers shall fail or refuse to purchase Securities
which it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Securities which such defaulting Initial Purchaser
or Initial Purchasers agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of the Securities to be purchased on
such date, the other Initial Purchasers shall be obligated severally in the
proportions that the principal
19
<PAGE>
amount of Securities set forth opposite their respective names in Schedule I
bears to the aggregate principal amount of Securities set forth opposite the
names of all such non-defaulting Initial Purchasers, or in such other
proportions as the Initial Purchasers may specify, to purchase the Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase on such date; PROVIDED that in no event shall the
principal amount of Securities that any Initial Purchaser has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 13 by an amount in
excess of one-tenth of such principal amount of Securities without the written
consent of such Initial Purchaser. If, on the Closing Date any Initial Purchaser
or Initial Purchasers shall fail or refuse to purchase Securities which it or
they have agreed to purchase hereunder on such date, and the aggregate principal
amount of Securities with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Securities to be purchased on
such date, and arrangements satisfactory to the Initial Purchasers and the
Company for the purchase of such Securities are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Initial Purchaser or the Company. In any such case either the
Initial Purchasers or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Offering Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
Nothing contained in this Section 13 shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company for damages caused by its
default. If other Initial Purchasers are obligated or agree to purchase the
Securities of a defaulting or withdrawing Initial Purchaser, either the
Representatives or the Company may postpone the Closing Date for up to seven
full business days in order to effect any changes that in the opinion of counsel
for the Company or Initial Purchasers' Counsel may be necessary in the Offering
Memorandum or in any other document or arrangement.
SECTION 14. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company,
if after the execution and delivery of this Agreement and prior to the Closing
Date (i) there has been, since the respective dates as of which information is
given in the Offering Memorandum, any change in the financial condition of the
Company and its subsidiaries, taken as a whole, or in the earnings, affairs or
business prospects of the Company and its subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, the effect of which
is, in the judgment of the Representatives, so material and adverse as to make
it impracticable to market the Securities or enforce contracts for the sale
thereof, (ii) trading in the Company's securities shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (iii) a banking moratorium
shall have been declared either by federal or New York State authorities, (iv)
there shall have occurred any material adverse change in the financial markets
of the United States or any outbreak or material escalation of hostilities or
other calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities
20
<PAGE>
or enforce contracts for the sale thereof, or (v) any rating of any debt
securities of the Company shall have been lowered by Moody's Investors Services,
Inc. ("MOODY'S") or Standard & Poor's Ratings Services ("S&P") or either Moody's
or S&P shall have publicly announced that it has any such debt securities under
consideration for possible downgrade.
SECTION 15. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
21
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement among the Company and the Initial Purchasers in
accordance with its terms.
Very truly yours,
U S WEST COMMUNICATIONS INC.
By: /s/ Sean P. Foley
-----------------------------
Name:
Title:
The foregoing Purchase Agreement is
hereby confirmed and accepted as of
the date first above written.
SALOMON SMITH BARNEY INC.
ABN AMRO INCORPORATED
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
By: Salomon Smith Barney Inc.
By: /s/ Alan B. Mitchell
---------------------------
Authorize Signatory
For themselves and as Representatives
of the other Initial Purchasers named
in Schedule I hereto
22
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal
Amount
of
Name of Initial Purchaser Notes
- ------------------------- ---------
<S> <C>
Salomon Smith Barney Inc. ................... $444,150,000
ABN AMRO Incorporated ....................... 79,200,000
Banc of America Securities LLC .............. 79,200,000
Chase Securities Inc. ....................... 79,200,000
The Williams Capital Group, L.P. ............ 11,700,000
McDonald Investment Inc. .................... 8,850,000
U.S. Bancorp Piper Jaffray .................. 8,850,000
Utendahl Capital Partners ................... 8,850,000
BNP Capital Markets, LLC .................... 7,500,000
Commerzbank Capital Markets Corporation ..... 7,500,000
RBC Dominion Securities Corporation ......... 7,500,000
TD Securities USA, Inc. ..................... 7,500,000
------------
Total ....................................... $750,000,000
</TABLE>
Sch I-1
<PAGE>
LETTER OF TRANSMITTAL
U S WEST COMMUNICATIONS, INC.
OFFER TO EXCHANGE
7.20% NOTES DUE NOVEMBER 1, 2004
FOR ANY AND ALL
OUTSTANDING 7.20% NOTES DUE NOVEMBER 1, 2004
PURSUANT TO THE PROSPECTUS DATED MARCH , 2000
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
APRIL , 2000, UNLESS THE EXCHANGE OFFER IS EXTENDED.
THE EXCHANGE AGENT (THE "EXCHANGE AGENT") FOR THE EXCHANGE OFFER IS:
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
<TABLE>
<S> <C>
BY MAIL: BY HAND, OVERNIGHT MAIL OR COURIER:
Bank One Trust Company, National Association Bank One Trust Company, National Association
Attention: Exchanges Attention: Exchanges
Global Corporate Trust Services Global Corporate Trust Services
1 Bank One Plaza, One North State Street,
Mail Suite 1L 1-0122 9(th) Floor
Chicago, IL 60670-0122 Chicago, IL 60602
or or
Bank One Trust Company, National Association Bank One Trust Company, National Association
Attention: Exchanges Attention: Exchanges
Global Corporate Trust Services Global Corporate Trust Services
14 Wall Street, 8(th) Floor 14 Wall Street, 8(th) Floor
New York, NY 10005 New York, NY 10005
BY FACSIMILE: FOR INFORMATION OR CONFIRMATION
(312) 407-8853 BY TELEPHONE:
Attention: Exchanges (800) 524-9472
</TABLE>
FOR QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR OTHER INFORMATION, YOU
MAY CONTACT THE EXCHANGE AGENT.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR TRANSMISSION TO A FACSIMILE
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS AT THE RISK OF
THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. YOU SHOULD READ THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE YOU COMPLETE THIS
LETTER OF TRANSMITTAL.
The undersigned acknowledges that he or she has received the Prospectus
dated March , 2000 (the "Prospectus") of U S WEST Communications, Inc. (the
"Company"), and this Letter of Transmittal and the instructions hereto (the
"Letter of Transmittal"), which together constitute the Company's offer (the
"Exchange Offer") to exchange $1,000 principal amount of each of its 7.20% Notes
due November 1, 2004 (the "New Notes") the offering of which has been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement of which the Prospectus is a part, for each $1,000
principal amount of its outstanding 7.20% Notes due November 1, 2004 (the "Old
Notes"), of which $750,000,000 aggregate principal amount is outstanding, upon
the terms and subject to the conditions set forth in the Prospectus. The term
"Expiration Date" shall mean
<PAGE>
5:00 p.m., New York City time, on April , 2000, unless the Company, in its
sole discretion, extends the Exchange Offer, in which case the term shall mean
the latest date and time to which the Exchange Offer is extended by the Company.
Capitalized terms used but not defined herein have the meaning given to them in
the Prospectus.
This Letter of Transmittal is to be used if either (1) certificates
representing Old Notes are to be physically delivered to the Exchange Agent
herewith by Holders (as defined below), (2) tender of Old Notes is to be made by
book-entry transfer to an account maintained by the Exchange Agent at The
Depository Trust Company ("DTC"), pursuant to the procedures set forth in "The
Exchange Offer--Procedures for Tendering Old 7.20% Notes" in the Prospectus by
any financial institution that is a participant in DTC and whose name appears on
a security position listing as the owner of Old Notes or (3) tender of Old Notes
is to be made according to the guaranteed delivery procedures set forth in the
Prospectus under "The Exchange Offer--Guaranteed Delivery Procedures." Delivery
of this Letter of Transmittal and any other required documents must be made to
the Exchange Agent.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "Holder" as used herein means any person in whose name Old Notes
are registered on the books of the Company or any other person who has obtained
a properly completed bond power from the registered holder.
All Holders of Old Notes who wish to tender their Old Notes must, prior to
the Expiration Date: (1) complete, sign, and deliver this Letter of Transmittal,
or a facsimile thereof, to the Exchange Agent, in person or to the address set
forth above; and (2) tender (and not withdraw) his or her Old Notes or, if a
tender of Old Notes is to be made by book-entry transfer to the account
maintained by the Exchange Agent at DTC, confirm such book-entry transfer (a
"Book-Entry Confirmation"), in each case in accordance with the procedures for
tendering described in the Instructions to this Letter of Transmittal. Holders
of Old Notes whose certificates are not immediately available, or who are unable
to deliver their certificates or Book-Entry Confirmation and all other documents
required by this Letter of Transmittal to be delivered to the Exchange Agent on
or prior to the Expiration Date, must tender their Old Notes according to the
guaranteed delivery procedures set forth under the caption "The Exchange
Offer--Guaranteed Delivery Procedures" in the Prospectus. (See Instruction 2.)
Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of the Old Notes validly tendered and not withdrawn and
the issuance of the New Notes will be made promptly following the Expiration
Date. For the purposes of the Exchange Offer, the Company shall be deemed to
have accepted for exchange validly tendered Old Notes when, as and if the
Company has given written notice thereof to the Exchange Agent.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED IN THIS LETTER OF
TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR
ADDITIONAL COPIES OF THE PROSPECTUS, THIS LETTER OF TRANSMITTAL AND THE NOTICE
OF GUARANTEED DELIVERY MAY BE DIRECTED TO THE EXCHANGE AGENT. SEE INSTRUCTION
12.
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD NOTES
MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY AND COMPLY WITH ALL OF
ITS TERMS.
2
<PAGE>
List below the Old Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, the Certificate Numbers and Principal
Amounts should be listed on a separate signed schedule, attached hereto. The
minimum permitted tender is $1,000 in principal amount of each of the 7.20%
Notes due November 1, 2004. All other tenders must be in integral multiples of
$1,000.
BOX I
<TABLE>
<S> <C> <C>
DESCRIPTION OF 7.20% NOTES DUE NOVEMBER 1, 2004
(A) (B)
AGGREGATE PRINCIPAL
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)* CERTIFICATE AMOUNT TENDERED (IF
(PLEASE FILL IN, IF BLANK) NUMBER(S) LESS THAN ALL)**
Total Principal
Amount of Old Notes
* Need not be completed by book-entry Holders.
** Need not be completed by Holders who wish to tender all Old Notes listed.
</TABLE>
3
<PAGE>
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
<TABLE>
<S> <C>
BOX II BOX III
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6) (SEE INSTRUCTIONS 4, 5 AND 6)
To be completed ONLY if certificates for To be completed ONLY if certificates for Old
Old Notes in a principal amount not Notes in a principal amount not tendered, or
tendered, or New Notes issued in exchange New Notes issued in exchange for Old Notes
for Old Notes accepted for exchange, are to accepted for exchange, are to be delivered
be issued in the name of someone other than to someone other than the undersigned.
the undersigned.
Issue certificate(s) to: Deliver certificate(s) to:
Name: ---------------------------------- NAME:
(PLEASE PRINT) --------------------------------------------
(PLEASE PRINT)
- -------------------------------------------- --------------------------------------------
(PLEASE PRINT) (PLEASE PRINT)
Address: --------------------------------- Address: ---------------------------------
---------------------------------------- --------------------------------------------
(INCLUDING ZIP CODE) (INCLUDING ZIP CODE)
---------------------------------------- --------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY
NUMBER) NUMBER)
</TABLE>
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF (TOGETHER WITH THE
CERTIFICATE(S) FOR OLD NOTES OR A CONFIRMATION OF BOOK-ENTRY TRANSFER
OF SUCH OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS) OR, IF GUARANTEED
DELIVERY PROCEDURES ARE TO BE COMPLIED WITH, A NOTICE OF GUARANTEED
DELIVERY, MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE
EXPIRATION DATE.
/ / CHECK HERE IF OLD NOTES ARE BEING DELIVERED BY DTC TO AN ACCOUNT MAINTAINED
BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
--------------------------------------------------------------
/ / The Depository Trust Company
Account Number
--------------------------------------------------------------------------
Transaction Code Number
------------------------------------------------------------------
Holders whose Old Notes are not immediately available or who cannot deliver
their Old Notes and all other documents required hereby to the Exchange
Agent on or prior to the Expiration Date may tender their Old Notes
according to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer--Guaranteed Delivery Procedures." (See
Instruction 2.)
4
<PAGE>
/ / CHECK HERE IF OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Holder(s)
-------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-------------------------------------------
Name of Institution which Guaranteed Delivery
-----------------------------------------------
Transaction Code Number
------------------------------------------------------------------
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO:
Name:
----------------------------------------------------------------------------
Address:
----------------------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that
it is acquiring the New Notes in the ordinary course of its business, it has no
arrangement or understanding with any person, nor does it intend to engage in,
the distribution (as that term is interpreted by the SEC) of New Notes and it is
not an affiliate (as that term is interpreted by the SEC) of the Company, or if
it is an affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. If the undersigned
is a broker-dealer that will receive New Notes for its own account in exchange
for Old Notes that were acquired as a result of market-making activities or
other trading activities, it acknowledges that it will deliver a prospectus in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a prospectus, the undersigned will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
5
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to U S WEST Communications, Inc. (the "Company") the principal
amount of Old Notes indicated above.
Subject to and effective upon the acceptance for exchange of the principal
amount of Old Notes tendered hereby in accordance with this Letter of
Transmittal, the undersigned sells, assigns and transfers to, or upon the order
of, the Company all right, title and interest in and to the Old Notes tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as its agent and attorney-in-fact (with full knowledge that the Exchange
Agent also acts as the agent of the Company and as Trustee under the Indenture
for the Old Notes and the New Notes) with respect to the tendered Old Notes with
full power of substitution (such power of attorney being deemed an irrevocable
power coupled with an interest), subject only to the right of withdrawal
described in the Prospectus, to (1) deliver certificates for such Old Notes to
the Company or transfer ownership of such Old Notes on the account books
maintained by DTC, together, in either such case, with all accompanying
evidences of transfer and authenticity to, or upon the order of, the Company and
(2) present such Old Notes for transfer on the books of the Company and receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Old Notes, all in accordance with the terms of the Exchange Offer.
The undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretative advice given by the staff of the SEC to third
parties in connection with transactions similar to the Exchange Offer, so that
the New Notes issued pursuant to the Exchange Offer in exchange for the Old
Notes may be offered for resale, resold and otherwise transferred by holders
thereof (other than a broker-dealer who purchased such Old Notes directly from
the Company for resale pursuant to Rule 144A, Regulation S or any other
available exemption under the Securities Act or a person that is an "affiliate"
of the Company within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such New Notes are acquired in the ordinary course
of such holders' business and such holders are not participating, do not intend
to participate and have no arrangement or understanding with any person to
participate, in the distribution of such New Notes.
The undersigned represents and warrants that (1) the New Notes acquired
pursuant to the Exchange Offer are being acquired in the ordinary course of
business of the person receiving New Notes (which shall be the undersigned
unless otherwise indicated in the box entitled "Special Delivery Instructions"
above) (the "Recipient"), (2) neither the undersigned nor the Recipient (if
different) is engaged in, intends to engage in or has any arrangement or
understanding with any person to participate in the distribution (as that term
is interpreted by the SEC) of such New Notes, and (3) neither the undersigned
nor the Recipient (if different) is an "affiliate" of the Company as defined in
Rule 405 under the Securities Act, or if it is an affiliate, it will comply with
the registration and prospectus delivery requirements of the Securities Act to
the extent applicable.
If the undersigned is a broker-dealer, the undersigned further
(1) represents that it acquired Old Notes for the undersigned's own account as a
result of market-making activities or other trading activities, (2) represents
that it has not entered into any arrangement or understanding with the Company
or any "affiliate" of the Company (within the meaning of Rule 405 under the
Securities Act) to distribute the New Notes to be received in the Exchange Offer
and (3) acknowledges that it will deliver a prospectus meeting the requirements
of the Securities Act (for which purposes, the delivery of the Prospectus, as
the same may be hereafter supplemented or amended, shall be sufficient) in
connection
6
<PAGE>
with any resale of New Notes received in the Exchange Offer. Such a
broker-dealer will not be deemed, solely by reason of such acknowledgment and
prospectus delivery, to admit that it is an "underwriter" within the meaning of
the Securities Act.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, assign and transfer the Old Notes
tendered hereby and to acquire New Notes issuable upon the exchange of such
tendered Old Notes, and that, when the same are accepted for exchange, the
Company will acquire good and unencumbered title thereto, free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim. The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed to be necessary or desirable by the
Exchange Agent or the Company in order to complete the exchange, assignment and
transfer of tendered Old Notes or transfer of ownership of such Old Notes on the
account books maintained by a book-entry transfer facility.
The undersigned agrees that acceptance of any tendered Old Notes by the
Company and the issuance of New Notes in exchange therefor shall constitute
performance in full by the Company of its obligations under the Registration
Rights Agreement (as defined in the Prospectus) and that, upon the issuance of
the New Notes, the Company will have no further obligations or liabilities
thereunder for the registration of the Old Notes or the New Notes.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering Old 7.20% Notes" in the Prospectus and in the instructions hereto will
constitute a binding agreement between the undersigned, the Company and the
Exchange Agent in accordance with the terms and subject to the conditions of the
Exchange Offer.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "The Exchange Offer--Conditions of the Exchange
Offer." The undersigned recognizes that as a result of these conditions, as more
particularly set forth in the Prospectus, the Company may not be required to
exchange any of the Old Notes tendered hereby. If any tendered Old Notes are not
accepted for exchange pursuant to the Exchange Offer for any reason,
certificates for any such unaccepted Old Notes will be returned (except as noted
below with respect to lenders through DTC), at the Company's cost and expense,
to the undersigned at the address shown below or at a different address as may
be indicated herein under "Special Delivery Instructions" as promptly as
practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding on the undersigned's heirs, personal
representatives, successors and assigns. This tender may be withdrawn only in
accordance with the procedures set forth in this Letter of Transmittal.
By acceptance of the Exchange Offer, each broker-dealer that receives New
Notes pursuant to the Exchange Offer hereby acknowledges and agrees that upon
the receipt of notice by the Company of the happening of any event that makes
any statement in the Prospectus untrue in any material respect or that requires
the making of any changes in the Prospectus in order to make the statements
therein not misleading (which notice the Company agrees to deliver promptly to
such broker-dealer), such broker-dealer will suspend use of the Prospectus until
the Company has amended or supplemented the Prospectus to correct such
misstatement or omission and has furnished copies of the amended or supplemented
prospectus to such broker-dealer.
Unless otherwise indicated under "Special Registration Instructions," please
issue the certificates representing the New Notes issued in exchange for the Old
Notes accepted for exchange and return any certificates for Old Notes not
tendered or not exchanged, in the name(s) of the undersigned (or, in
7
<PAGE>
either such event in the case of Old Notes tendered by DTC, by credit to the
account at DTC). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please send the certificates representing the New Notes issued in
exchange for the Old Notes accepted for exchange and any certificates for Old
Notes not tendered or not exchanged (and accompanying documents, as appropriate)
to the undersigned at the address shown below the undersigned's signature(s),
unless, in either event, tender is being made through DTC. In the event that
both "Special Registration Instructions" and "Special Delivery Instructions" are
completed, please issue the certificates representing the New Notes issued in
exchange for the Old Notes accepted for exchange in the name(s) of, and return
any certificates for Old Notes not tendered or not exchanged to, the person(s)
so indicated. The undersigned understands that the Company has no obligations
pursuant to the "Special Registration Instructions" or "Special Delivery
Instructions" to transfer any Old Notes from the name of the registered
Holder(s) thereof if the Company does not accept for exchange any of the Old
Notes so tendered.
Holders who wish to tender the Old Notes and (1) whose Old Notes are not
immediately available or (2) who cannot deliver their Old Notes, this Letter of
Transmittal or any other documents required hereby to the Exchange Agent prior
to the Expiration Date, may tender their Old Notes according to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The Exchange
Offer--Guaranteed Delivery Procedures." See Instruction 1 regarding the
completion of the Letter of Transmittal.
8
<PAGE>
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
AND WHETHER OR NOT TENDER IS TO BE MADE
PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES
This Letter of Transmittal must be signed by the registered holder(s) as
their name(s) appear on the Old Notes or, if tendered by a participant in DTC,
exactly as such participant's name appears on a security listing as the owner of
Old Notes, or by person(s) authorized to become registered holder(s) by a
properly completed bond power from the registered holder(s), a copy of which
must be transmitted with this Letter of Transmittal. If Old Notes to which this
Letter of Transmittal relate are held of record by two or more joint holders,
then all such holders must sign this Letter of Transmittal. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
then such person must (1) set forth his or her full title below and (2) unless
waived by the Company, submit evidence satisfactory to the Company of such
person's authority so to act. (See Instruction 4.)
<TABLE>
<S> <C>
X ---------------------------------------- Date: -------------------------------------
X ---------------------------------------- Date: -------------------------------------
Signature(s) of Holder(s) or
Authorized Signatory
Name(s): ---------------------------------- Address: ----------------------------------
Name(s): ---------------------------------- Address: ----------------------------------
Please Print Including Zip Code
Capacity: ---------------------------------- Telephone Number: ------------------------
Including Area Code
Social Security No. -------------------------
</TABLE>
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
9
<PAGE>
BOX IV
SIGNATURE GUARANTEE (SEE INSTRUCTION 1)
CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION
- --------------------------------------------------------------------------------
(NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES)
- --------------------------------------------------------------------------------
(FIRM ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NO. (INCLUDING AREA CODE))
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
- --------------------------------------------------------------------------------
(PRINTED NAME)
- --------------------------------------------------------------------------------
(TITLE)
Date:
- -------------------------------------
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. GUARANTEE OF SIGNATURES.
Signatures on this Letter of Transmittal need not be guaranteed if (a) this
Letter of Transmittal is signed by the registered holder(s) of the Old Notes
tendered herewith and such holder(s) have not completed the box set forth herein
entitled "Special Registration Instructions" or the box entitled "Special
Delivery Instructions" or (b) such Old Notes are tendered for the account of a
member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States (each, an "Eligible
Institution"). (See Instruction 6.) Otherwise, all signatures on this Letter of
Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by
an Eligible Institution. All signatures on bond powers and endorsements on
certificates must also be guaranteed by an Eligible Institution.
2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES.
Unless the Exchange Agent has received a properly transmitted Agent's
Message (as defined below), certificates for all physically delivered Old Notes
or confirmation of any book-entry transfer to the Exchange Agent at DTC of Old
Notes tendered by book-entry transfer, as well as, in each case (including cases
where tender is effected by book-entry transfer), a properly completed and duly
executed copy of this Letter of Transmittal or facsimile hereof and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City
time, on the Expiration Date. The method of delivery of the tendered Old Notes,
this Letter of Transmittal and all other required documents to the Exchange
Agent is at the election and risk of the Holder and the delivery will be deemed
made only when actually received by the Exchange Agent. If Old Notes are sent by
mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery. No Letter of Transmittal or Old Notes should be sent to the Company.
10
<PAGE>
The Exchange Agent will make a request to establish an account with respect
to the Old Notes at DTC for purposes of the Exchange Offer within two
business days after the date of the Prospectus, and any financial institution
that is a participant in DTC may make book-entry delivery of Old Notes by
causing DTC to transfer such Old Notes into the appropriate Exchange Agent's
account at DTC in accordance with DTC's procedures for transfer. However,
although delivery of Old Notes may be effected through book-entry transfer at
DTC, the Letter of Transmittal, with any required signature guarantees or an
Agent's Message (as defined in the next paragraph) in connection with a
book-entry transfer and any other required documents, must, in any case, be
transmitted to and received by the Exchange Agent at the address specified on
the cover page of the Letter of Transmittal on or prior to the Expiration Date
or the guaranteed delivery procedures described below must be complied with.
A Holder may tender Old Notes that are held through DTC by transmitting its
acceptance through DTC's Automated Tender Offer Program, for which the
transaction will be eligible, and DTC will then edit and verify the acceptance
and send an Agent's Message to the Exchange Agent for its acceptance. The term
"Agent's Message" means a message transmitted by DTC to, and received by, the
Exchange Agent and forming part of the Book-Entry Confirmation, which states
that DTC has received an express acknowledgment from each participant in DTC
tendering the Old Notes and that such participant has received the Letter of
Transmittal and agrees to be bound by the terms of the Letter of Transmittal and
the Company may enforce such agreement against such participant.
Holders who wish to tender their Old Notes and (1) whose Old Notes are not
immediately available, or (2) who cannot deliver their Old Notes, this Letter of
Transmittal or any other documents required hereby to the Exchange Agent on or
prior to the Expiration Date or comply with book-entry transfer procedures on a
timely basis must tender their Old Notes according to the guaranteed delivery
procedures set forth in the Prospectus. See "The Exchange Offer--Guaranteed
Delivery Procedures." Pursuant to such procedure: (1) such tender must be made
by or through an Eligible Institution and (2) on or prior to the Expiration
Date, the Exchange Agent must have received from the Eligible Institution either
an Agent's Message with respect to guaranteed delivery or (a) a properly
completed and duly executed Notice of Guaranteed Delivery (by facsimile
transmission, overnight courier, mail or hand delivery) setting forth the name
and address of the Holder of the Old Notes, the certificate number or numbers of
such Old Notes and the principal amount of Old Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within five New York Stock
Exchange trading days after the date of signing of the Notice of Guaranteed
Delivery, this Letter of Transmittal (or facsimile hereof) together with the
certificate(s) representing the Old Notes and any other required documents will
be deposited by the Eligible Institution with the Exchange Agent; and (b) such
properly completed and executed Letter of Transmittal (or facsimile hereof), as
well as all other documents required by this Letter of Transmittal and the
certificate(s) representing all tendered Old Notes in proper form for transfer
(or a confirmation of book-entry transfer of such Old Notes into the Exchange
Agent's or the Luxembourg Exchange Agent's account at DTC), must be received by
the Exchange Agent within five New York Stock Exchange trading days after the
date of signing of the Notice of Guaranteed Delivery, all in the manner provided
in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures." Any Holder who wishes to tender his or her Old Notes pursuant to
the guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York
City time, on the Expiration Date. Upon request to the Exchange Agent, a Notice
of Guaranteed Delivery will be sent to Holders who wish to tender their Old
Notes according to the guaranteed delivery procedures set forth above.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes, and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. All tendering Holders, by execution of this Letter of
Transmittal (or facsimile thereof), shall waive any right to receive notice of
the acceptance of the Old Notes for exchange. The Company reserves the absolute
right to reject any and all Old Notes
11
<PAGE>
not properly tendered or any Old Notes the Company's acceptance of which might,
in the Company's judgment or the judgment of the Company's counsel, be unlawful.
The Company also reserves the right to waive any irregularities or conditions of
the Exchange Offer as to particular Old Notes. The Company's interpretation of
the terms and conditions of the Exchange Offer (including the instructions in
this Letter of Transmittal) shall be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Old Notes
must be cured within such time as the Company shall determine, Neither the
Company, the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Old Notes,
nor shall any of them incur any liability for failure to give such notification.
Tenders of Old Notes, will not be deemed to have been made until such defects or
irregularities have been cured to the Company's satisfaction or waived. Any Old
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holders pursuant to the
Company's determination, unless otherwise provided in this Letter of
Transmittal, as soon as practicable following the Expiration Date. The Exchange
Agent has no fiduciary duties to the Holders with respect to the Exchange Offer
and is acting solely on the basis of directions of the Company.
3. INADEQUATE SPACE.
If the space provided is inadequate, the certificate numbers and/or the
number of Old Notes should be listed on a separate signed schedule attached
hereto.
4. TENDER BY HOLDER.
Only a Holder of Old Notes may tender such Old Notes in the Exchange Offer.
Any beneficial owner of Old Notes who is not the registered Holder and who
wishes to tender should arrange with such registered Holder to execute and
deliver this Letter of Transmittal on such beneficial owner's behalf or must,
prior to completing and executing this Letter of Transmittal and delivering his
or her Old Notes, either make appropriate arrangements to register ownership of
the Old Notes in such beneficial owner's name or obtain a properly complete bond
power from the registered Holder or properly endorsed certificates representing
such Old Notes.
5. PARTIAL TENDERS; WITHDRAWALS.
Tenders of Old Notes will be accepted only in integral multiples of $1,000.
If less than the entire principal amount of any Old Notes is tendered, the
tendering Holder should fill in the principal amount tendered in the third
column (B) of the box entitled "Description of 7.20% Notes due November 1, 2004"
above. The entire principal amount of any Old Notes delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated. If the
entire principal amount of all Old Notes is not tendered, then Old Notes for the
principal amount of Old Notes not tendered and a certificate or certificates
representing New Notes issued in exchange for any Old Notes accepted will be
sent to the Holder at his or her registered address, unless a different address
is provided in the "Special Delivery Instructions" box above on this Letter of
Transmittal or unless tender is made through DTC, promptly after the Old Notes
are accepted for exchange.
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date. To
withdraw a tender of Old Notes in the Exchange Offer, a written notice (sent by
facsimile transmission, mail or hand delivery) of withdrawal must be received by
the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York
City time, on the Expiration Date. Any such notice of withdrawal must
(1) specify the name of the person having deposited the Old Notes to be
withdrawn (the "Depositor"), (2) identify the Old Notes to be withdrawn
(including the certificate number or numbers and principal amount of such Old
Notes, or, in the case of Old Notes transferred by book-entry transfer, the name
and number of the account at
12
<PAGE>
DTC to be credited), (3) be signed by the Depositor in the same manner as the
original signature on the Letter of Transmittal by which such Old Notes were
tendered (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Exchange Agent with respect to the
Old Notes register the transfer of such Old Notes into the name of the person
withdrawing the tender, (4) specify the name in which any such Old Notes are to
be registered, if different from that of the Depositor and (5) state that the
Depositor is withdrawing the election to have such Old Notes tendered. All
questions as to the validity, form and eligibility (including time of receipt)
of such notices will be determined by the Company, whose determination shall be
final and binding on all parties. Any Old Notes so withdrawn will be deemed not
to have been validly tendered for purposes of the Exchange Offer and no New
Notes will be issued with respect thereto unless the Old Notes so withdrawn are
validly retendered. Any Old Notes which have been tendered but which are not
accepted for exchange by the Company will be returned to the Holder thereof
without cost to such Holder as soon as practicable after withdrawal, rejection
of tender or termination of the Exchange Offer. In the case of Old Notes
tendered by book-entry transfer into the Exchange Agent's account at DTC, the
Old Notes will be credited to an account with DTC specified by the Holder.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described in the Prospectus under "The Exchange Offer--Procedures for
Tendering Old 7.20% Notes" at any time prior to the Expiration Date.
6. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder(s) of the Old Notes tendered hereby, the signature must
correspond with the name(s) as written on the face of the Old Note without
alteration, enlargement or any change whatsoever. If any of the Old Notes
tendered hereby are owned of record by two or more joint owners, all such owners
must sign this Letter of Transmittal.
If a number of Old Notes registered in different names are tendered, it will
be necessary to complete, sign and submit as many copies of this Letter of
Transmittal as there are different registrations of Old Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders (which term, for the purposes described herein,
shall include a book-entry transfer facility whose name appears on a security
listing as the owner of the Old Notes) of Old Notes tendered and the certificate
or certificates for New Notes issued in exchange therefor is to be issued (or
any untendered principal amount of Old Notes to be reissued) to the registered
Holder, then such Holder need not and should not endorse any tendered Old Notes,
nor provide a separate bond power. In any other case, such Holder must either
properly endorse the Old Notes tendered or transmit a properly completed
separate bond power with this Letter of Transmittal with the signatures on the
endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder or Holders of any Old Notes listed, such Old
Notes must be endorsed or accompanied by appropriate bond powers in each case
signed as the name of the registered Holder or Holders appears on the Old Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsement on Old Notes or signatures on bond powers required by this
Instruction 6 must be guaranteed by an Eligible Institution.
13
<PAGE>
7. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering Holders should indicate, in the applicable box or boxes, the name
and address to which New Notes or substitute Old Notes for principal amounts not
tendered or not accepted for exchange are to be issued or sent, if different
from the name and address of the person signing this Letter of Transmittal. In
the case of issuance in a different name, the taxpayer identification or social
security number of the person named must also be indicated.
8. U.S. BACKUP TAX WITHHOLDING AND INTERNAL REVENUE SERVICE FORM W-9.
Under the federal income tax laws, payments that may be made by the Company
on account of New Notes issued pursuant to the Exchange Offer may be subject to
backup withholding at the rate of 31%. In order to avoid such backup
withholding, each tendering Holder should complete and sign the Substitute Form
W-9 included in this Letter of Transmittal and either (a) provide the correct
taxpayer identification number ("TIN") and certify, under penalties of perjury,
that the TIN provided is correct and that (1) the Holder has not been notified
by the Internal Revenue Service (the "IRS") that the Holder is subject to backup
withholding as a result of failure to report all interest or dividends or
(2) the IRS has notified the Holder that the Holder is no longer subject to
backup withholding; or (b) provide an adequate basis for exemption. If the
tendering Holder has not been issued a TIN and has applied for one, or intends
to apply for one in the near future, such Holder should write "Applied For" in
the space provided for the TIN in Part I of the Substitute Form W-9, sign and
date the Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer
Identification Number. If "Applied For" is written in Part I, the Company (or
the Exchange Agent under the Indenture governing the New Notes) shall retain 31%
of payments made to the tendering Holder during the 60-day period following the
date of the Substitute Form W-9. If the Holder furnishes the Exchange Agent or
the Company with its TIN within 60 days after the date of the Substitute
Form W-9, the Company or the Exchange Agent shall remit such amounts retained
during the 60-day period to the Holder and no further amounts shall be retained
or withheld from payments made to the Holder thereafter. If, however, the Holder
has not provided the Exchange Agent or the Company with its TIN within such
60-day period, the Company or the Exchange Agent shall remit such previously
retained amounts to the IRS as backup withholding. In general, if a Holder is an
individual, the TIN is the social security number of such individual. If the
Exchange Agent or the Company are not provided with the correct TIN, the Holder
may be subject to a $50 penalty imposed by the IRS. Certain Holders (including,
among others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, such Holder must submit a
statement (generally, IRS Form W-8), signed under penalties of perjury,
attesting to that individual's exempt status. For further information concerning
backup withholding and instructions for completing the Substitute Form W-9
(including how to obtain a taxpayer identification number if you do not have one
and how to complete the Substitute Form W-9 if Old Notes are registered in more
than one name), consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9. Failure to complete the Substitute
Form W-9 will not, by itself, cause Old Notes to be deemed invalidly tendered,
but may require the Company or the Exchange Agent to withhold 31% of the amount
of any payments made on account of New Notes. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of a
person subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
9. TRANSFER TAXES.
Holders who tender their Old Notes for exchange will not be obligated to pay
any transfer taxes in connection therewith. If, however, certificates
representing New Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be registered in the
14
<PAGE>
name of, any person other than the registered Holder of the Old Notes tendered
hereby, or if tendered Old Notes are registered in the name of a person other
than the person signing this Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered Holder or on any other persons) will be payable by the tendering
Holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with this Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering Holder. See the Prospectus under
"The Exchange Offer--Transfer Taxes."
Except as provided in this Instruction 9, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
10. WAIVER OF CONDITIONS.
The Company reserves the right, in its sole discretion, to amend, waive or
modify specified conditions in the Exchange Offer in the case of any Old Notes
tendered.
11. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.
Any tendering Holder whose Old Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated herein for
further instructions.
12. REQUESTS FOR ASSISTANCE, COPIES.
Requests for assistance and requests for additional copies of the Prospectus
or this Letter of Transmittal may be directed to the Exchange Agent at the
address specified in the Prospectus. Holders may also contact their broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
15
<PAGE>
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
CERTIFICATE SURRENDERED OLD NOTES TENDERED OLD NOTES ACCEPTED
<S> <C> <C>
</TABLE>
Received
- ----------------------
Accepted by
- -------------------
Checked by
- --------------------
Delivery Prepared by
- -----------
Checked by
- --------------------
Date
- -------------------------
16
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: BANK ONE TRUST COMPANY, N.A.
<TABLE>
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification ------------------------
FORM W-9 Number ("TIN"). Enter your TIN Social Security Number
DEPARTMENT OF THE in the appropriate box. For or
TREASURY INTERNAL individuals, this is your Social ------------------------
REVENUE SERVICE Security Number (SSN). For sole Employer Identification
REQUEST FOR TAXPAYER proprietors, see the Number
IDENTIFICATION NUMBER Instructions in the enclosed
AND CERTIFICATION Guidelines. For other entities,
it is your Employer
Identification Number (EIN). If
you do not have a number, see
how to get a TIN in the enclosed
Guidelines.
PART II--For Payees exempt for backup withholding. See Part II of
instructions in the enclosed Guidelines. NOTE: If the account is
in more than one name, see the chart on Page 2 of the enclosed
guidelines on whose number to enter.
PART III--CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY
THAT:
(1) the number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to be
issued to me).
(2) I am not subject to backup withholding because: (a) I am
exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup withholding.
Signature ------------------- Date ----------------------
CERTIFICATION INSTRUCTIONS--You must cross out item 2 above if you have been notified by the IRS
that you are currently subject to backup withholding because of underreporting interest of
dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage
interest paid, the acquisition or abandonment of secured property, cancellation of debt,
contributions to an individual retirement arrangement (IRA), and general payments other than
interest and dividends, you are not required to sign the Certification, but you must provide your
correct TIN.
</TABLE>
17
<PAGE>
CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a Taxpayer Identification Number
has not been issued to me, and that I mailed or delivered an application to
receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office (or I intend to mail or
deliver an application in the near future). I understand that if I do not
provide a Taxpayer Identification Number to the payor, 31% of all payments made
to me on account of the New Notes shall be retained until I provide a Taxpayer
Identification Number within 60 days, such retained amounts shall be remitted to
the Internal Revenue Service as backup withholding and 31% of all reportable
payments made to me thereafter will be withheld and remitted to the Internal
Revenue Service until I provide a Taxpayer Identification Number.
Signature
- ------------------------------------------------- Date
- ------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE NEW NOTES. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
18
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
7.20% NOTES DUE NOVEMBER 1, 2004
OF
U S WEST COMMUNICATIONS, INC.
As set forth in the Prospectus dated March , 2000 (the "Prospectus") of
U S WEST Communications, Inc. (the "Company") and in the Letter of Transmittal
(the "Letter of Transmittal"), this form or a form substantially equivalent to
this form must be used to accept the Exchange Offer (as defined below) if the
certificates for the outstanding 7.20% Notes due November 1, 2004 (the "Old
Notes") of the Company and all other documents required by the Letter of
Transmittal cannot be delivered to the Exchange Agent (as defined below) by the
expiration of the Exchange Offer or compliance with book-entry transfer
procedures cannot be effected on a timely basis. Such form may be delivered by
hand or transmitted by facsimile transmission, mail or overnight courier to the
Exchange Agent no later than the Expiration Date, and must include a signature
guarantee by an eligible guarantor institution as set forth below.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON APRIL ,
2000 (THE "EXPIRATION DATE"), UNLESS EXTENDED. TENDERS OF 7.20% NOTES DUE
NOVEMBER 1, 2004 MAY ONLY BE WITHDRAWN UNDER THE CIRCUMSTANCES DESCRIBED IN
THE PROSPECTUS AND THE LETTER OF TRANSMITTAL.
TO: BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION (THE PRINCIPAL "EXCHANGE
AGENT"):
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
<TABLE>
<CAPTION>
<S> <C>
BY MAIL: BY HAND, OVERNIGHT MAIL OR COURIER:
Bank One Trust Company, National Association Bank One Trust Company, National Association
Attention: Exchanges Attention: Exchanges
Global Corporate Trust Services Global Corporate Trust Services
1 Bank One Plaza, One North State Street,
Mail Suite 1L 1-0122 9(th) Floor
Chicago, IL 60670-0122 Chicago, IL 60602
or or
Bank One Trust Company, National Association Bank One Trust Company, National Association
Attention: Exchanges Attention: Exchanges
Global Corporate Trust Services Global Corporate Trust Services
14 Wall Street, 8(th) Floor 14 Wall Street, 8(th) Floor
New York, NY 10005 New York, NY 10005
BY FACSIMILE: FOR INFORMATION OR CONFIRMATION
(312) 407-8853 BY TELEPHONE:
Attention: Exchanges (800) 524-9472
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR TRANSMISSION TO A FACSIMILE
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS AT THE RISK OF
THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. YOU SHOULD READ THE INSTRUCTIONS
ACCOMPANYING THE LETTER OF TRANSMITTAL CAREFULLY BEFORE YOU COMPLETE THIS
GUARANTEED DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an eligible guarantor institution under the instructions thereto,
such signature must appear in the applicable space provided on the Letter of
Transmittal for Guarantee of Signature(s).
<PAGE>
Ladies and Gentlemen:
The undersigned acknowledges receipt of the Prospectus and the related
Letter of Transmittal which describes the Company's offer (the "Exchange Offer")
to exchange $1,000 in principal amount of new 7.20% Notes due November 1, 2004
(the "New Notes") for each $1,000 in principal amount of Old Notes.
The undersigned hereby tenders to the Company the aggregate principal amount
of Old Notes set forth below on the terms and conditions set forth in the
Prospectus and the related Letter of Transmittal pursuant to the guaranteed
delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery
Procedures" section in the Prospectus and the accompanying Letter of
Transmittal.
The undersigned understands that no withdrawal of a tender of Old Notes may
be made after 5:00 p.m., New York City time, on the Expiration Date. The
undersigned understands that for a withdrawal of a tender of Old Notes to be
effective, a written notice of withdrawal that complies with the requirements of
the Exchange Offer must be timely received by the Exchange Agent at its address
specified on the cover of this Notice of Guaranteed Delivery prior to
5:00 p.m., New York City time, on the Expiration Date.
The undersigned understands that the exchange of Old Notes for New Notes
pursuant to the Exchange Offer will be made only after timely receipt by the
Exchange Agent of (1) such Old Notes (or book-entry confirmation of the transfer
of such Old Notes into the Exchange Agent's account at The Depository Trust
Company ("DTC")) and (2) a Letter of Transmittal (or facsimile thereof) with
respect to such Old Notes, properly completed and duly executed, with any
required signature guarantees, this Notice of Guaranteed Delivery and any other
documents required by the Letter of Transmittal or a properly transmitted
Agent's Message. The term "Agent's Message" means a message transmitted by DTC
to, and received by, the Exchange Agent and forming part of the confirmation of
a book-entry transfer, which states that DTC has received an express
acknowledgment from a participant in DTC tendering the Old Notes and that such
participant has received the Letter of Transmittal and agrees to be bound by the
terms of the Letter of Transmittal and the Company may enforce such agreement
against such participant.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding on the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
2
<PAGE>
PLEASE COMPLETE
<TABLE>
<S> <C>
If Old Notes will be delivered by book-entry
transfer at DTC, insert Depository Account
Principal Amount of Old Notes Tendered: No.:
- ------------------------------------------- -------------------------------------------
Certificate No.(s) of Old Notes (if
available):
- -------------------------------------------
</TABLE>
3
<PAGE>
PLEASE SIGN AND PRINT NAME(S) AND ADDRESS(ES)
<TABLE>
<S> <C>
Signature(s) of Registered Holder(s) or Name(s) of Registered Holder(s)
Authorized Signatory:
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
Date: Address(es): -------------------------------
- ------------------------------------------- -------------------------------------------
Area Code and Telephone No.:
-------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Old Notes exactly as its (their) name(s) appear on certificates for
Old Notes or on a security position listing as the owner of Old Notes, or by
person(s) authorized to become registered holder(s) by endorsements and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person must
provide the following information.
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DO NOT SEND OLD NOTES WITH THIS FORM. OLD NOTES SHOULD BE SENT TO THE EXCHANGE
AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL.
4
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or a correspondent in the United States, or
otherwise an "eligible guarantor institution" within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), hereby (1) represents that each holder of Old Notes on whose
behalf this tender is being made "own(s)" the Old Notes covered hereby within
the meaning of Rule 13d-3 under the Exchange Act (2) represents that such tender
of Old Notes complies with Rule 14e-4 of the Exchange Act and (3) guarantees
that, within five New York Stock Exchange trading days after the date of signing
of the Notice of Guaranteed Delivery, a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof), together with certificates
representing the Old Notes covered hereby in proper form for transfer (or
confirmation of the book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC, pursuant to the procedure for book-entry transfer set
forth in the Prospectus) and required documents will be deposited by the
undersigned with the Exchange Agent.
The undersigned acknowledges that it must deliver the Letter of Transmittal
and Old Notes tendered hereby to the Exchange Agent within the time period set
forth above and the failure to do so could result in financial loss to the
undersigned.
- --------------------------------------------------------------------------------
Name of Firm
- --------------------------------------------------------------------------------
Address
Area Code and Telephone No:
- ------------------------------------------------------------
- --------------------------------------
Authorized Signature
- --------------------------------------
Title
Name:
- --------------------------------------
(Please Type or Print)
Dated:
- --------------------------------------
PLEASE DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
5
<PAGE>
OFFER TO EXCHANGE
U S WEST COMMUNICATIONS, INC.
7.20% NOTES DUE NOVEMBER 1, 2004
FOR ANY AND ALL
OUTSTANDING 7.20% NOTES DUE NOVEMBER 1, 2004
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON APRIL ,
2000, UNLESS EXTENDED. TENDERS OF 7.20% NOTES DUE NOVEMBER 1, 2004 MAY ONLY BE
WITHDRAWN UNDER THE CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS AND THE LETTER
OF TRANSMITTAL.
To: Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
U S WEST Communications, Inc. (the "Company") hereby offers to exchange (the
"Exchange Offer"), upon and subject to the terms and conditions set forth in the
Prospectus dated March , 2000 (the "Prospectus") and the enclosed Letter of
Transmittal (the "Letter of Transmittal"), up to $750,000,000 aggregate
principal amount of new 7.20% Notes due November 1, 2004, which will be freely
transferable (the "New Notes"), for any and all outstanding 7.20% Notes due
November 1, 2004, which have certain transfer restrictions (the "Old Notes").
The Exchange Offer is intended to satisfy certain obligations of the Company
contained in the Registration Rights Agreement dated October 26, 1999, between
the Company and the initial purchasers of the Old Notes.
We are requesting that you contact your clients for whom you hold Old Notes
regarding the Exchange Offer. For your information and for forwarding to your
clients for whom you hold Old Notes registered in your name or in the name of
your nominee, or who hold Old Notes registered in their own names, we are
enclosing the following documents:
1. Prospectus dated March , 2000;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if certificates for Old Notes are not immediately available or time will
not permit all required documents to reach the principal exchange agent,
Bank One Trust Company, National Association (the "Exchange Agent") prior
to the Expiration Date (as defined below) or if the procedure for
book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account you
hold Old Notes registered in your name or the name of your nominee, with
space provided for obtaining such clients' instructions with regard to
the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to the Exchange Agent for the Old Notes.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON APRIL , 2000 (THE "EXPIRATION DATE"), UNLESS
EXTENDED BY THE COMPANY. ANY OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER
MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly completed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents, must be sent to the Exchange Agent
and certificates representing the Old Notes must be delivered to the Exchange
Agent, all in accordance with the instructions set forth in the Letter of
Transmittal and the Prospectus.
1
<PAGE>
If holders of Old Notes wish to tender, but it is impracticable for them to
forward their certificates for Old Notes prior to the expiration of the Exchange
Offer or to comply with the book-entry transfer procedures on a timely basis, a
tender may be effected by following the guaranteed delivery procedures described
in the Prospectus under "The Exchange Offer--Guaranteed Delivery Procedures."
Any inquiries you may have with respect to the Exchange Offer or requests
for additional copies of the enclosed materials should be directed to the
Exchange Agent for the Old Notes, at its address and telephone numbers set forth
on the front of the Letter of Transmittal.
Very truly yours,
U S WEST Communications, Inc.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
OTHER PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU
OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF
EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS
EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
2
<PAGE>
OFFER TO EXCHANGE
U S WEST COMMUNICATIONS, INC.
7.20% NOTES DUE NOVEMBER 1, 2004 WHICH HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FOR ANY AND ALL
OUTSTANDING 7.20% NOTES DUE NOVEMBER 1, 2004
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON APRIL ,
2000, UNLESS EXTENDED. TENDERS OF 7.20% NOTES DUE NOVEMBER 1, 2004 MAY ONLY BE
WITHDRAWN UNDER THE CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS AND THE LETTER
OF TRANSMITTAL.
To Our Clients:
Enclosed for your consideration is a Prospectus dated March , 2000 (the
"Prospectus") and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of U S WEST
Communications, Inc. (the "Company") to exchange up to $750,000,000 aggregate
principal amount of new 7.20% Notes due November 1, 2004, which will be freely
transferable (the "New Notes"), for any and all outstanding 7.20% Notes due
November 1, 2004, which have certain transfer restrictions (the "Old Notes"),
upon the terms and subject to the conditions described in the Prospectus and the
related Letter of Transmittal. The Exchange Offer is intended to satisfy certain
obligations of the Company contained in the Registration Rights Agreement dated
October 26, 1999, between the Company and the initial purchasers of the Old
Notes.
This material is being forwarded to you as the beneficial owner of the Old
Notes carried by us for your account but not registered in your name. A TENDER
OF SUCH OLD NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Old Notes held by us for your account, pursuant to the terms and
conditions set forth in the enclosed Prospectus and Letter of Transmittal.
Please forward your instructions to us as promptly as possible in order to
permit us to tender the Old Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
New York City time, on April , 2000 (the "Expiration Date"), unless extended
by the Company. Any Old Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time before 5:00 p.m., New York City time, on the Expiration
Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Old Notes.
2. The Exchange Offer is subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offer--Conditions of
the Exchange Offer."
3. The Exchange Offer expires at 5:00 p.m., New York City time, on the
Expiration Date, unless extended by the Company.
If you wish to have us tender your Old Notes, please so instruct us by
completing, executing and returning to us the instruction form on the back of
this letter.
THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY AND MAY
NOT BE USED DIRECTLY BY YOU TO TENDER OLD NOTES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of this letter and the enclosed
materials referred to therein relating to the Exchange Offer made by the Company
with respect to the Old Notes.
This will instruct you to tender the Old Notes held by you for the account
of the undersigned, upon and subject to terms and conditions set forth in the
Prospectus and the related Letter of Transmittal.
Please tender the Old Notes held by you for the account of the undersigned
as indicated below:
<TABLE>
<CAPTION>
AGGREGATE PRINCIPAL AMOUNT OF OLD NOTES
---------------------------------------
<S> <C>
7.20% Notes due November 1, 2004............. -------------------------------------------
/ / Please do not tender any Old Notes held
by you for the account of the
undersigned.
Dated: , 2000 -------------------------------------------
-------------------------------------------
Signature(s)
-------------------------------------------
-------------------------------------------
-------------------------------------------
Please print name(s) here
-------------------------------------------
-------------------------------------------
Address(es)
-------------------------------------------
Area Code(s) and Telephone Number(s)
-------------------------------------------
Tax Identification or Social Security No(s).
</TABLE>
NONE OF THE OLD NOTES HELD BY US FOR YOUR ACCOUNT WILL BE TENDERED UNLESS WE
RECEIVE WRITTEN INSTRUCTIONS FROM YOU TO DO SO. UNLESS A SPECIFIC CONTRARY
INSTRUCTION IS GIVEN IN THE SPACE PROVIDED, YOUR SIGNATURE(S) HEREON SHALL
CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL THE OLD NOTES HELD BY US FOR YOUR
ACCOUNT.
2
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY
NUMBER OF:
<CAPTION>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF:
- -------------------------------------------------------------------------------
1. An individual's account The individual
<C> <S> <C> <C>
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, the first
individual on the
account(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. (a) The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also
trustee)
(b) So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or
trustee unless the legal
entity itself is not
designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in The partnership
the name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
State or local government,
school district, or prison)
that receives agricultural
program payments
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
- -------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following (Section references are to the Internal Revenue Code):
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600
or more and is paid in the course of the payer's trade or business and
you have not provided your correct taxpayer identification number to the
payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free government bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding.
FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO
THE PAYER.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A, and 6050N, and the regulations under those sections.
PRIVACY ACT NOTICE. Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of tax returns. Payers must be given
the numbers whether or not recipients are required to file a tax return. Payers
must generally withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends or
patronage dividends in gross income, such failure is strong evidence of
negligence. If negligence is shown, you will be subject to a penalty of 20%
on any portion of an underpayment attributable to that failure.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT 5A-1
CADWALADER
CADWALADER, WICKERSHAM & TAFT
<TABLE>
<S> <C>
100 Maiden Lane New York
New York, NY 10038 Washington
Tel: 212 504-6000 Charlotte
Fax: 212 504-6666 London
</TABLE>
March 10, 2000
U S WEST Communications, Inc.
1801 California Street
Denver, Colorado 80202
Re: Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as special counsel to U S WEST Communications, Inc., a Colorado
corporation ("Communications") in connection with the preparation and filing by
Communications with the Securities and Exchange Commission (the "Commission") of
a Preliminary Prospectus, dated March 10, 2000 (the "Prospectus") included in a
Registration Statement on Form S-4 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
registration by Communications of $750,000,000 aggregate principal amount of its
7.20% Notes due November 1, 2004 (the "Securities"). The Registration Statement
also relates to the offer by Communications to exchange the Securities for all
of its outstanding $750,000,000 aggregate principal amount of 7.20% Notes due
November 1, 2004 (the "Old Notes"), previously issued pursuant to the Purchase
Agreement, dated October 26, 1999 and filed as an exhibit to the Registration
Statement. The Securities will be issued pursuant to the terms of the
Registration Rights Agreement, dated as of October 26, 1999 among Communications
and the initial purchasers party thereto (the "Registration Rights Agreement")
and filed as an exhibit to the Registration Statement.
In rendering the opinions set forth below, we have examined and relied upon,
among other things, (a) the Registration Statement, including the Prospectus
constituting a part thereof, (b) the Indenture, dated as of October 15, 1999
(the "Indenture"), between Communications and Bank One Trust Company, NA, as
trustee (the "Trustee"), filed as an exhibit to the Registration Statement,
(c) the Registration Rights Agreement, (d) the Old Notes, (e) the forms of
Securities and (f) originals, copies or specimens, certified or otherwise
identified to our satisfaction, of such certificates, corporate and public
records, agreements and instruments and other documents as we have deemed
appropriate as a basis for the opinions expressed below. In such examination we
have assumed the genuineness of all signatures, the authenticity of all
documents, agreements and instruments submitted to us as originals, the
conformity to original documents, agreements and instruments of all documents,
agreements and instruments submitted to us as copies or specimens, the
authenticity of the originals of such documents, agreements and instruments
submitted to us as copies or specimens, and the accuracy of the matters set
forth in the documents, agreements and instruments we reviewed. As to any facts
material to such opinions that were not known to us, we have relied upon
statements and representations of officers and other representatives of
Communications. Except as expressly set forth herein, we have not undertaken any
independent investigation (including, without limitation, conducting any review,
search or investigation of any public files, records or dockets) to determine
the existence or absence of the facts that are material to our opinions, and no
inference as to our knowledge concerning such facts should be drawn from our
reliance on the representations of Communications in connection with the
preparation and delivery of this letter. In addition, we have assumed that the
Securities will be
<PAGE>
executed and delivered in substantially the form in which they are filed as
exhibits to the Registration Statement.
We express no opinion concerning the laws of any jurisdiction other than the
laws of the State of New York and the federal tax laws of the United States with
respect to the opinion set forth in paragraph 2 below. With respect to the
matters set forth in paragraph 1 below covered by the laws of the State of
Colorado, we have relied on the opinion of Thomas O. McGimpsey, Senior Attorney
and Secretary of Communications.
Based upon and subject to the qualifications set forth herein, we are of the
opinion that:
1. The Securities, when duly executed and authenticated in the manner
contemplated in the Indenture and issued and delivered in exchange for the
Old Notes as contemplated in the Prospectus, will be legally issued and will
constitute binding agreements of Communications, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
receivership or other laws relating to or affecting creditors' rights
generally, and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
2. The statements made in the Prospectus under the caption "Certain U.S.
Federal Tax Considerations," insofar as such statements purport to summarize
certain federal income tax laws of the United States or legal conclusions
with respect thereto, have been reviewed by us and constitute a fair summary
of the principal U.S. federal tax consequences of the purchase, ownership
and disposition of the Securities. All such statements are based upon
current law, which is subject to change, possibly with retroactive effect.
Further, there can be no assurance that the Internal Revenue Service will
not take a contrary position.
We assume no obligation to update or supplement this letter to reflect any
facts, circumstances, laws, rules or regulations, or any changes thereto, or any
court or other authority or body decisions or governmental or regulatory
authority determinations which may hereafter occur or come to our attention.
We hereby consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to the reference to this Firm in the Prospectus
constituting a part of the Registration Statement under the caption "Legal
Matters," without admitting that we are "experts" within the meaning of the
Securities Act or the rules and regulations of the Commission issued thereunder
with respect to any part of the Registration Statement, including this exhibit.
Very truly yours,
Cadwalader, Wickersham & Taft
<PAGE>
EXHIBIT 5-A.2
March 10, 2000
U S WEST Communications, Inc.
1801 California Street
Denver, CO 80202
Re: U S WEST Communications, Inc.
Form S-4 Registration Statement for Exchange Offer
Gentlemen and Ladies:
As counsel to U S WEST Communications, Inc. ("USWC" or the "Registrant"), I have
examined the Registration Statement on Form S-4 filed contemporaneously herewith
(the "Registration Statement") with the Securities and Exchange Commission (the
"Commission"), in connection with the registration under the Securities Act of
1933, as amended, of $750,000,000 of USWC's 7.20% Notes due November 1, 2004
(the "New Notes") to be exchanged for its outstanding 7.20% Notes due
November 1, 2004 (the "Old Notes"). I have examined the Indenture, dated as of
October 15, 1999, by and between USWC and Bank One Trust Company, National
Association, as trustee, under which the New Notes are to be issued (the
"Indenture"), and such other documents, certificates and matters of fact as I
have deemed necessary for purposes of this opinion. I am familiar with the
proceedings taken and proposed to be taken by the Registrant in connection with
the proposed authorization, issuance and exchange of New Notes for Old Notes.
I am also familiar with the opinion of Cadwalader, Wickersham & Taft, qualified
to practice in New York, concerning the validity, legality, and binding effect
of the Old Notes and New Notes under New York law, upon which opinion I relied
in delivering my opinion pursuant to Section 6(d) of the Purchase Agreement,
which has been filed as an exhibit to the Registration Statement.
Based upon the foregoing, and in reliance thereon, it is my opinion that,
subject to the terms of the New Notes being otherwise in compliance with then
applicable law, when the New Notes have been duly authorized, executed,
authenticated and delivered in accordance with the terms of the Registration
Rights Agreement, which has been filed as an exhibit to the Registration
Statement, and the applicable resolutions of the Board of Directors of the
Registrant, and any legally required consents, approvals, authorizations, and
other orders of the Commission or any other judicial or regulatory authorities
to be obtained, and, to the extent applicable, the articles of incorporation and
bylaws of the Registrant and the Indenture, the New Notes will constitute
legally issued and binding obligations of USWC, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally, and except that the remedies of specific
performance and injunctive and other forms of equitable relief are subject to
certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. I hereby consent to the filing of this
opinion as an exhibit to the Registration Statement, and I further consent to
the use of my name under the caption "Legal Matters" in the Prospectus forming a
part of the Registration Statement.
Very truly yours,
/s/ Thomas O. McGimpsey
--------------------------------------
Thomas O. McGimpsey
<PAGE>
EXHIBIT 12
U S WEST COMMUNICATIONS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
(IN MILLIONS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income before taxes................................. $2,520 $2,150 $2,018 $2,001 $1,917
Interest expense (net of amounts capitalized)....... 403 386 374 414 386
Interest factor on rentals ( 1/3)................... 78 56 67 54 60
------ ------ ------ ------ ------
Earnings available for fixed charges................ $3,001 $2,592 $2,459 $2,469 $2,363
====== ====== ====== ====== ======
Interest expense.................................... $ 430 $ 411 $ 394 $ 445 $ 426
Interest factor on rentals ( 1/3)................... 78 56 67 54 60
------ ------ ------ ------ ------
Fixed charges....................................... $ 508 $ 467 $ 461 $ 499 $ 486
====== ====== ====== ====== ======
Ratio of earnings to fixed charges.................. 5.91 5.55 5.33 4.95 4.86
====== ====== ====== ====== ======
</TABLE>
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this U S WEST Communications, Inc. (the "Company") Registration
Statement on Form S-4 of our report dated January 26, 2000, on the consolidated
balance sheets of the Company as of December 31, 1999 and 1998, and the related
consolidated statements of income, stockholder's equity and cash flows for each
of the three years in the period ended December 31, 1999, included in the
Company's Form 10-K dated March 3, 2000 and to all references to our Firm
included in this Registration Statement.
Denver, Colorado,
March 10, 2000.
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, U S WEST, Communications, Inc., a Colorado corporation (hereinafter
referred to as the "Company"), proposes to file with the Securities and Exchange
Commission, under the provisions of the Securities Act of 1933, an exchange
offer Registration Statement on Form S-4, (the "Registration Statement") for the
exchange of $750,000,000 of debt securities issued by U S WEST
Communications, Inc.; and
WHEREAS, each of the undersigned is an Officer or Director, or both, of the
Company as indicated below each signature;
NOW, THEREFORE, each of the undersigned constitutes and appoints ALLAN R. SPIES
AND THOMAS O. MCGIMPSEY, as attorney for him and in his name, place, and stead,
and in his capacity as an Officer or Director, or both, of the Company, to
execute and file such Registration Statement, and thereafter to execute and file
any amended registration statement or statements or supplements thereto, hereby
giving and granting to said attorney full power and authority to do and perform
all and every act and thing whatsoever requisite and necessary to be done in and
about the premises as fully, to all intents and purposes, as he might or could
do if personally present at the doing thereof, hereby ratifying and confirming
all that said attorneys may or shall lawfully do, or cause to be done, by virtue
hereof.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney
this 8th day of March, 2000.
<TABLE>
<S> <C> <C>
By: /s/ SOLOMON D. TRUJILLO
-----------------------------------------
Solomon D. Trujillo
PRESIDENT AND CHIEF EXECUTIVE OFFICER AND
DIRECTOR
By: /s/ ALLAN R. SPIES
-----------------------------------------
Allan R. Spies
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
AND DIRECTOR
By: /s/ JANET K. COOPER
-----------------------------------------
Janet K. Cooper
VICE PRESIDENT--FINANCE AND CONTROLLER AND
DIRECTOR
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) __
------------------------
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 31-0838515
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
100 EAST BROAD STREET, COLUMBUS, OHIO 43271-0181
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
100 EAST BROAD STREET
COLUMBUS, OHIO 43271-0181
ATTN: STEVEN M. WAGNER, DIRECTOR, (312) 407-1819
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
U S WEST COMMUNICATIONS, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
COLORADO 84-0273800
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1801 CALIFORNIA STREET
DENVER, COLORADO 80202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in effect.
2. A copy of the certificate of authority of the trustee to commence
business.
3. A copy of the authorization of the trustee to exercise corporate
trust powers.
4. A copy of the existing by-laws of the trustee.
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, Bank One Trust Company, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 6th day of March, 2000.
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
TRUSTEE
BY /s/ STEVEN M. WAGNER
---------------------
STEVEN M. WAGNER
DIRECTOR
<PAGE>
EXHIBIT 1
A COPY OF THE ARTICLES OF ASSOCIATION OF THE
TRUSTEE NOW IN EFFECT
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
FIRST. The title of this Association shall be BANK ONE TRUST COMPANY,
National Association.
SECOND. The main office of the Association shall be in the City of Columbus,
County of Franklin, State of Ohio.
The business of the Association will be limited to the fiduciary powers and
the support of activities incidental to the exercise of those powers. The
Association will not expand or alter its business beyond that stated in this
article without the prior approval of the Comptroller of the Currency.
THIRD. The Board of Directors of this Association shall consist of not less
than five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association, or of a holding company owning the Association, with an
aggregate par, fair market or equity value of not less than $1,000, as of
either (i) the date of purchase, (ii) the date the person became a director,
or (iii) the date of that person's most recent election to the Board of
Directors, whichever is more recent. Any combination of common or preferred
stock of the Association or holding company may be used.
Any vacancy in the Board of Directors may be filled by action of a majority
of the remaining directors between meetings of shareholders. The Board of
Directors may not increase the number of directors between meetings of
shareholders to a number which: (1) exceeds by more than two the number of
directors last elected by shareholders where the number was 15 or less; or
(2) exceeds by more than four the number of directors last elected by
shareholders where the number was 16 or more, but in no event shall the
number of directors exceed 25.
Terms of directors, including directors selected to fill vacancies, shall
expire at the next regular meeting of shareholders at which directors are
elected, unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.
<PAGE>
Honorary or advisory members of the Board of Directors, without voting power
or power of final decision in matters concerning the business of the
Association, may be appointed by resolution of a majority of the full Board
of Directors, or by resolution of shareholders at any annual or special
meeting. Honorary or advisory directors shall not be counted to determine the
number of directors of the Association or the presence of a quorum in
connection with any board action, and shall not be required to own qualifying
shares.
FOURTH. There shall be an annual meeting of the shareholders to elect
directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place
the Board of Directors may designate, on the day of each year specified
therefor in the Bylaws or, if that day falls on a legal holiday in the state
in which the Association is located, on the next following banking day. If no
election is held on the day fixed or in the event of a legal holiday on the
following banking day, an election may be held on any subsequent day within
60 days of the day fixed, to be designated by the Board of Directors or, if
the directors fail to fix the day, by shareholders representing two-thirds of
the shares issued and outstanding. In all cases at least 10 days advance
notice of the meeting shall be given to the shareholders by first class mail.
In all elections of directors, the number of votes each common shareholder
may cast will be determined by multiplying the number of shares such
shareholder owns by the number of directors to be elected. Those votes may be
cumulated and cast for a single candidate or may be distributed among two or
more candidates in the manner selected by the shareholder. On all other
questions, each common shareholder shall be entitled to one vote for each
share of stock held by such shareholder. If the issuance of preferred stock
with voting rights has been authorized by a vote of shareholders owning a
majority of the common stock of the association, preferred shareholders will
have cumulative voting rights and will be included within the same class as
common shareholders, for purposes of elections of directors.
A director may resign at any time by delivering written notice to the Board
of Directors, its chairperson, or to the Association, which resignation shall
be effective when the notice is delivered unless the notice specifies a later
effective date.
A director may be removed by shareholders at a meeting called to remove him
or her, when notice of the meeting stating that the purpose or one of the
purposes is to remove him or her is provided, if there is a failure to
fulfill one of the affirmative requirements for qualification, or for cause,
provided, however, that a director may not be removed if the number of votes
sufficient to elect him or her under cumulative voting is voted against his
or her removal.
FIFTH. The authorized amount of capital stock of this Association shall be
eighty thousand shares of common stock of the par value of ten dollars
($10.00) each; but said capital stock may be increased or decreased from time
to time, according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the Association
shall have any preemptive or preferential right of subscription to any shares
of any class of stock of the Association, whether now or hereafter
authorized, or to any obligations convertible into stock of the Association,
issued or sold, nor any right of subscription to any thereof other than such,
if any, as the Board of Directors, in its discretion, may from time to time
<PAGE>
determine and at such price as the Board of Directors may from time to time
fix. Unless otherwise specified in the Articles of Association or required by
law, (1) all matters requiring shareholder action, including amendments to
the Articles of Association, must be approved by shareholders owning a
majority voting interest in the outstanding voting stock, and (2) each
shareholder shall be entitled to one vote per share.
Unless otherwise specified in the Articles of Association or required by law,
all shares of voting stock shall be voted together as a class on any matters
requiring shareholder approval. If a proposed amendment would affect two or
more classes or series in the same or a substantially similar way, all the
classes or series so affected must vote together as a single voting group on
the proposed amendment.
Shares of the same class or series may be issued as a dividend on a pro rata
basis and without consideration. Shares of another class or series may be
issued as share dividends in respect of a class or series of stock if
approved by a majority of the votes entitled to be cast by the class or
series to be issued unless there are no outstanding shares of the class or
series to be issued. Unless otherwise provided by the Board of Directors, the
record date for determining shareholders entitled to a share dividend shall
be the date the Board of Directors authorizes the share dividend.
Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to
the shareholders, provided that in no event may a record date be more than 70
days before the meeting.
If a shareholder is entitled to fractional shares pursuant to preemptive
rights, a stock dividend, consolidation or merger, reverse stock split or
otherwise, the Association may: (a) issue fractional shares or; (b) in lieu
of the issuance of fractional shares, issue script or warrants entitling the
holder to receive a full share upon surrendering enough script or warrants to
equal a full share; (c) if there is an established and active market in the
Association's stock, make reasonable arrangements to provide the shareholder
with an opportunity to realize a fair price through sale of the fraction, or
purchase of the additional fraction required for a full share; (d) remit the
cash equivalent of the fraction to the shareholder; or (e) sell full shares
representing all the fractions at public auction or to the highest bidder
after having solicited and received sealed bids from at least three licensed
stock brokers, and distribute the proceeds pro rata to shareholders who
otherwise would be entitled to the fractional shares. The holder of a
fractional share is entitled to exercise the rights for shareholder,
including the right to vote, to receive dividends, and to participate in the
assets of the Association upon liquidation, in proportion to the fractional
interest. The holder of script or warrants is not entitled to any of these
rights unless the script or warrants explicitly provide for such rights. The
script or warrants may be subject to such additional conditions as: (1) that
the script or warrants will become void if not exchanged for full shares
before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and
the proceeds paid to scriptholders.
<PAGE>
The Association, at any time and from time to time, may authorize and issue
debt obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated,
which may be issued by the Association without the approval of shareholders,
do not carry voting rights on any issue, including an increase or decrease in
the aggregate number of the securities, or the exchange or reclassification
of all or part of securities into securities of another class or series.
SIXTH. The Board of Directors shall appoint one of its members president of
this Association, and one of its members chairperson of the board and shall
have the power to appoint one or more vice presidents, a secretary who shall
keep minutes of the directors' and shareholders' meetings and be responsible
for authenticating the records of the Association, and such other officers
and employees as may be required to transact the business of this
Association. A duly appointed officer may appoint one or more officers or
assistant officers if authorized by the Board of Directors in accordance with
the Bylaws. The Board of Directors shall have the power to:
(1) Define the duties of the officers, employees, and agents of the
Association.
(2) Delegate the performance of its duties, but not the responsibility for
its duties, to the officers, employees, and agents of the Association.
(3) Fix the compensation and enter into employment contracts with its
officers and employees upon reasonable terms and conditions consistent
with applicable law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the penalty
thereof.
(6) Ratify written policies authorized by the Association's management or
committees of the board.
(7) Regulate the manner in which any increase or decrease of the capital of
the Association shall be made, provided that nothing herein shall
restrict the power of shareholders to increase or decrease the capital
of the association in accordance with law, and nothing shall raise or
lower from two-thirds the percentage for shareholder approval to
increase or reduce the capital.
(8) Manage and administer the business and affairs of the Association.
(9) Adopt initial Bylaws, not inconsistent with law or the Articles of
Association, for managing the business and regulating the affairs of
the Association.
(10) Amend or repeal Bylaws, except to the extent that the Articles of
Association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally perform all acts that are legal for a Board of Directors to
perform.
<PAGE>
SEVENTH. The Board of Directors shall have the power to change the location
of the main office of this Association to any other place within the limits
of the City of Columbus, State of Ohio, without the approval of the
shareholders; and shall have the power to change the location of the main
office of this Association to any other place outside the limits of the City
of Columbus, State of Ohio, but not more than thirty miles beyond such
limits, with the affirmative vote of shareholders owning two-thirds of the
stock of the Association, subject to receipt of a certificate of approval
from the Comptroller of the Currency. The Board of Directors shall have the
power to establish or change the location of any branch or branches of the
Association to any other location permitted under applicable law without the
approval of the shareholders, subject to approval by the Office of the
Comptroller of the Currency. The Board of Directors shall have the power to
establish or change the location of any nonbranch office or facility of the
Association without the approval of the shareholders.
EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.
NINTH. The Board of Directors of this Association, or any shareholders
owning, in the aggregate, not less than 20 percent of the stock of this
Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the Bylaws or the laws of the United States, or waived
by shareholders, a notice of the time, place, and purpose of every annual and
special meeting of the shareholders shall be given by first-class mail,
postage prepaid, mailed at least 10, and no more than 60, days prior to the
date of the meeting to each shareholder of record at his/her address as shown
upon the books of this Association. Unless otherwise provided by the Bylaws,
any action requiring approval of shareholders must be effected at a duly
called annual or special meeting.
TENTH. The Association shall provide indemnification as set forth below:
Every person who is or was a Director, officer or employee of the Association
or of any other corporation which he served as a Director, officer or
employee at the request of the Association as part of his regularly assigned
duties may be indemnified by the Association in accordance with the
provisions of this Article against all liability (including, without
limitation, judgments, fines, penalties, and settlements) and all reasonable
expenses (including, without limitation, attorneys' fees and investigative
expenses) that may be incurred or paid by him in connection with any claim,
action, suit or proceeding, whether civil, criminal or administrative (all
referred to hereafter in this Article as "Claims") or in connection with any
appeal relating thereto in which he may become involved as a party or
otherwise or with which he may be threatened by reason of his being or having
been a Director, officer or employee of the Association or such other
corporation, or by reason of any action taken or omitted by him in his
capacity as such Director, officer or employee, whether or not he continues
to be such at the time such liability or expenses are incurred; PROVIDED that
nothing contained in this Article shall be construed to permit
indemnification of any such person who is adjudged guilty of, or liable for,
willful misconduct, gross neglect of duty or criminal acts, unless, at the
time such indemnification is sought, such indemnification in such instance is
permissible under applicable law and regulations, including published rulings
of the Comptroller of the Currency or other appropriate
<PAGE>
supervisory or regulatory authority; and PROVIDED FURTHER that there shall be
no indemnification of Directors, officers, or employees against expenses,
penalties, or other payments incurred in an administrative proceeding or
action instituted by an appropriate regulatory agency which proceeding or
action results in a final order assessing civil money penalties or requiring
affirmative action by an individual or individuals in the form of payments to
the Association.
Every person who may be indemnified under the provisions of this Article and
who has been wholly successful on the merits with respect to any Claim shall
be entitled to indemnification as of right. Except as provided in the
preceding sentence, any indemnification under this Article shall be at the
sole discretion of the Board of Directors and shall be made only if the Board
of Directors or the Executive Committee acting by a quorum consisting of
Directors who are not parties to such Claim shall find or if independent
legal counsel (who may be the regular counsel of the Association) selected by
the Board of Directors or Executive Committee whether or not a disinterested
quorum exists shall render their opinion that in view of all of the
circumstances then surrounding the Claim, such indemnification is equitable
and in the best interests of the Association. Among the circumstances to be
taken into consideration in arriving at such a finding or opinion is the
existence or non-existence of a contract of insurance or indemnity under
which the Association would be wholly or partially reimbursed for such
indemnification, but the existence or non-existence of such insurance is not
the sole circumstance to be considered nor shall it be wholly determinative
of whether such indemnification shall be made. In addition to such finding or
opinion, no indemnification under this Article shall be made unless the Board
of Directors or the Executive Committee acting by a quorum consisting of
Directors who are not parties to such Claim shall find or if independent
legal counsel (who may be the regular counsel of the Association) selected by
the Board of Directors or Executive Committee whether or not a disinterested
quorum exists shall render their opinion that the Directors, officer or
employee acted in good faith in what he reasonably believed to be the best
interests of the Association or such other corporation and further in the
case of any criminal action or proceeding, that the Director, officer or
employee reasonably believed his conduct to be lawful. Determination of any
Claim by judgment adverse to a Director, officer or employee by settlement
with or without Court approval or conviction upon a plea of guilty or of NOLO
CONTENDERE or its equivalent shall not create a presumption that a Director,
officer or employee failed to meet the standards of conduct set forth in this
Article. Expenses incurred with respect to any Claim may be advanced by the
Association prior to the final disposition thereof upon receipt of an
undertaking satisfactory to the Association by or on behalf of the recipient
to repay such amount unless it is ultimately determined that he is entitled
to indemnification under this Article.
The rights of indemnification provided in this Article shall be in addition
to any rights to which any Director, officer or employee may otherwise be
entitled by contract or as a matter of law. Every person who shall act as a
Director, officer or employee of this Association shall be conclusively
presumed to be doing so in reliance upon the right of indemnification
provided for in this Article.
<PAGE>
ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of
a majority of the stock of this Association, unless the vote of the holders
of a greater amount of stock is required by law, and in that case by the vote
of the holders of such greater amount. The Association's Board of Directors
may propose one or more amendments to the Articles of Association for
submission to the shareholders.
<PAGE>
EXHIBIT 2
A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
TRUSTEE TO COMMENCE BUSINESS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody
and control of all records pertaining to the chartering of all National
Banking Associations.
2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter
No. 16235) is a National Banking Association formed under the laws of the
United States and is authorized thereunder to transact the business of
banking on the date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
15th day of September, 1999.
/s/ John D. Hawke, Jr.
---------------------------
Comptroller of the Currency
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EXHIBIT 3
A COPY OF THE AUTHORIZATION OF THE TRUSTEE
TO EXERCISE CORPORATE TRUST POWERS
CERTIFICATE
I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody
and control of all records pertaining to the chartering of all National
Banking Associations.
2. "Bank One Trust Company, National Association," Columbus, Ohio, (Charter
No. 16235) was granted, under the hand and seal of the Comptroller, the right
to act in all fiduciary capacities authorized under the provisions of the Act
of Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and
that the authority so granted remains in full force and effect on the date of
this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at the
Treasury Department in the City of
Washington and District of Columbia, this
15th day of September, 1999.
/s/ John D. Hawke, Jr.
---------------------------
Comptroller of the Currency
<PAGE>
EXHIBIT 4
A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE
BANK ONE TRUST COMPANY, National Association
BY-LAWS
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the shareholders
of the Bank for the election of Directors and for the transaction of such
business as may properly come before the meeting shall be held at its main
office, or other convenient place duly authorized by the Board of Directors,
on the same day upon which any regular or special Board meeting is held from
and including the first Monday of January to, and including, the fourth
Monday of February of each year, or on the next succeeding banking day, if
the day fixed falls on a legal holiday. If from any cause, an election of
Directors is not made on the day fixed for the regular meeting of the
shareholders or, in the event of a legal holiday, on the next succeeding
banking day, the Board of Directors shall order the election to be held on
some subsequent day, as soon thereafter as practicable, according to the
provisions of law; and notice thereof shall be given in the manner herein
provided for the annual meeting. Notice of such annual meeting shall be given
by or under the direction of the Secretary, or such other officer as may be
designated by the Chief Executive Officer, by first-class mail, postage
prepaid, to all shareholders of record of the Bank at their respective
addresses as shown upon the books of the Bank mailed not less than ten days
prior to the date fixed for such meeting.
SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of the
Bank may be called at any time by the Board of Directors or by any three or
more shareholders owning, in the aggregate, not less than ten percent of the
stock of the Bank. Notice of any special meeting of the shareholders called
by the Board of Directors, stating the time, place and purpose of the
meeting, shall be given by or under the direction of the Secretary, or such
other officer as is designated by the Chief Executive Officer, by first-class
mail, postage prepaid, to all shareholders of record of the Bank at their
respective addresses as shown upon the books of the Bank mailed not less than
ten days prior to the date fixed for such meeting. Any special meeting of
shareholders shall be conducted and its proceedings recorded in the manner
prescribed in these By-Laws for annual meetings of shareholders.
<PAGE>
SECTION 1.03. SECRETARY OF MEETING OF SHAREHOLDERS. The Board of Directors
may designate a person to be the secretary of the meeting of shareholders. In
the absence of a presiding officer, as designated by these By-Laws, the Board
of Directors may designate a person to act as the presiding officer. In the
event the Board of Directors fails to designate a person to preside at a
meeting of shareholders and a secretary of such meeting, the shareholders
present or represented shall elect a person to preside and a person to serve
as secretary of the meeting. The secretary of the meeting of shareholders
shall cause the returns made by the judges of election and other proceedings
to be recorded in the minute books of the Bank. The presiding officer shall
notify the Directors-elect of their election and to meet forthwith for the
organization of the new Board of Directors. The minutes of the meeting shall
be signed by the presiding officer and the secretary designated for the
meeting.
SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many
as three shareholders to be judges of the election, who shall hold and
conduct the same, and who shall, after the election has been held, notify, in
writing over their signatures, the secretary of the meeting of shareholders
of the result thereof and the names of the Directors elected; provided,
however, that upon failure for any reason of any judge or judges of election,
so appointed by the Directors, to serve, the presiding officer of the meeting
shall appoint other shareholders or their proxies to fill the vacancies. The
judges of election, at the request of the chairman of the meeting, shall act
as tellers of any other vote by ballot taken at such meeting, and shall
notify, in writing over their signature, the secretary of the Board of
Directors of the result thereof.
SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of
record, who is qualified to vote under the provisions of Federal Law, shall
have the right to vote the number of shares of record in such shareholder's
name for as many persons as there are Directors to be elected, or to cumulate
such shares as provided by Federal Law. In deciding all other questions at
meetings of shareholders, each shareholder shall be entitled to one vote on
each share of stock of record in such shareholder's name. Shareholders may
vote by proxy duly authorized in writing. All proxies used at the annual
meeting shall be secured for that meeting only, or any adjournment thereof,
and shall be dated, if not dated by the shareholder, as of the date of the
receipt thereof. No officer or employee of this Bank may act as proxy.
SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the
capital stock of the Bank, eligible to be voted, present either in person or
by proxy, shall constitute a quorum for the transaction of business at any
meeting of shareholders, but shareholders present at any meeting and
constituting less than a quorum may, without further notice, adjourn the
meeting from time to time until a quorum is obtained. A majority of the votes
cast shall decide every question or matter submitted to the shareholders at
any meeting, unless otherwise provided by law or by the Articles of
Association.
ARTICLE II
DIRECTORS
SECTION 2.01. QUALIFICATIONS. Each Director shall have the qualifications
prescribed by law. No person elected as a Director may exercise any of the
powers of office until such Director has taken the oath of such office.
SECTION 2.02. VACANCIES. Directors of the Bank shall hold office for one year
or until their successors are elected and qualified. Any vacancy in the Board
shall be filled by
<PAGE>
appointment of the remaining Directors, and any Director so appointed shall
hold office until the next election.
SECTION 2.03. ORGANIZATION MEETING. The Directors elected by the shareholders
shall meet for organization of the new Board of Directors at the time and
place fixed by the presiding officer of the annual meeting. If at the time
fixed for such meeting there is no quorum present, the Directors in
attendance may adjourn from time to time until a quorum is obtained. A
majority of the number of Directors elected by the shareholders shall
constitute a quorum for the transaction of business.
SECTION 2.04. REGULAR MEETINGS. The regular meetings of the Board of
Directors shall be held at such date, time and place as the Board may
previously designate, or should the Board fail to so designate, at such date,
time and place as the Chairman of the Board, Chief Executive Officer, or
President may fix. Whenever a quorum is not present, the Directors in
attendance shall adjourn the meeting to a time not later than the date fixed
by the By-Laws for the next succeeding regular meeting of the Board. Members
of the Board of Directors may participate in such meetings through use of
conference telephone or similar communications equipment, so long as all
members participating in such meetings can hear one another.
SECTION 2.05. SPECIAL MEETINGS. Special meetings of the Board of Directors
shall be held at the call of the Chairman of the Board, Chief Executive
Officer, or President, or at the request of two or more Directors. Any
special meeting may be held at such place and at such time as may be fixed in
the call. Written or oral notice shall be given to each Director not later
than the day next preceding the day on which the special meeting is to be
held, which notice may be waived in writing. The presence of a Director at
any meeting of the Board of Directors shall be deemed a waiver of notice
thereof by such Director. Whenever a quorum is not present, the Directors in
attendance shall adjourn the special meeting from day to day until a quorum
is obtained. Members of the Board of Directors may participate in such
meetings through use of conference telephone or similar communications
equipment, so long as all members participating in such meetings can hear one
another.
SECTION 2.06. QUORUM. A majority of the Directors shall constitute a quorum
at any meeting, except when otherwise provided by law; but a lesser number
may adjourn any meeting, from time-to-time, and the meeting may be held, as
adjourned, without further notice. When, however, less than a quorum as
herein defined, but at least one-third and not less than two of the
authorized number of Directors are present at a meeting of the Directors,
business of the Bank may be transacted and matters before the Board approved
or disapproved by the unanimous vote of the Directors present.
SECTION 2.07. COMPENSATION. Each member of the Board of Directors shall
receive such fees for attendance at Board and Board committee meetings and
such fees for service as a Director, irrespective of meeting attendance, as
from time to time are fixed by resolution of the Board; provided, however,
that payment hereunder shall not be made to a Director for meetings attended
and/or Board service which are not for the Bank's sole
<PAGE>
benefit and which are concurrent and duplicative with meetings attended or
Board service for an affiliate of the Bank for which the Director receives
payment; and provided further that fees hereunder shall not be paid in the
case of any Director in the regular employment of the Bank or of one of its
affiliates. Each member of the Board of Directors, whether or not such
Director is in the regular employment of the Bank or of one of its
affiliates, shall be reimbursed for travel expenses incident to attendance at
Board and Board committee meetings.
SECTION 2.08. EXECUTIVE COMMITTEE. There may be a standing committee of the
Board of Directors known as the Executive Committee which shall possess and
exercise, when the Board is not in session, all the powers of the Board that
may lawfully be delegated. The Executive Committee shall consist of at least
three Board members, one of whom shall be the Chairman of the Board, Chief
Executive Officer or the President. The other members of the Executive
Committee shall be appointed by the Chairman of the Board, the Chief
Executive Officer, or the President, with the approval of the Board, and who
shall continue as members of the Executive Committee until their successors
are appointed, provided, however, that any member of the Executive Committee
may be removed by the Board upon a majority vote thereof at any regular or
special meeting of the Board. The Chairman, Chief Executive Officer, or
President shall fill any vacancy in the Executive Committee by the
appointment of another Director, subject to the approval of the Board of
Directors. The Executive Committee shall meet at the call of the Chairman,
Chief Executive Officer, or President or any two members thereof at such time
or times and place as may be designated. In the event of the absence of any
member or members of the Executive Committee, the presiding member may
appoint a member or members of the Board to fill the place or places of such
absent member or members to serve during such absence. Two members of the
Executive Committee shall constitute a quorum. When neither the Chairman of
the Board, the Chief Executive Officer, nor President are present, the
Executive Committee shall appoint a presiding officer. The Executive
Committee shall report its proceedings and the action taken by it to the
Board of Directors.
SECTION 2.09. OTHER COMMITTEES. The Board of Directors may appoint such
special committees from time to time as are in its judgment necessary in the
interest of the Bank.
ARTICLE III
OFFICERS, MANAGEMENT STAFF AND EMPLOYEES
SECTION 3.01. OFFICERS AND MANAGEMENT STAFF. (a) The executive officers of
the Bank shall include a Chairman of the Board, Chief Executive Officer,
President, Chief Financial Officer, Secretary, Security Officer, and may
include one or more Senior Managing Directors or Managing Directors. The
Chairman of the Board, Chief Executive Officer, President, any Senior
Managing Director, any Managing Director, Chief Financial Officer, Secretary,
and Security Officer shall be elected by the Board. The Chairman of the
Board, Chief Executive Officer, and the President shall be elected by the
Board from their own number. Such officers as the Board shall elect from
their own number shall hold office from the date of their election as
officers until the organization meeting of the Board of Directors following
the next annual meeting of shareholders, provided, however, that such
officers may be relieved of their duties at any time by action of the Board
of Directors, in which event all the powers incident to their office shall
immediately terminate. The Chairman of the Board, Chief Executive Officer, or
the President shall preside at all meetings of shareholders and meetings of
the Board of Directors.
<PAGE>
(b) The management staff of the Bank shall include officers elected by the
Board, officers appointed by the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director,
the Chief Financial Officer, and such other persons in the employment of the
Bank who, pursuant to authorization by a duly authorized officer of the Bank,
perform management functions and have management responsibilities. Any two or
more offices may be held by the same person except that no person shall hold
the office of Chairman of the Board, Chief Executive Officer and/or President
and at the same time also hold the office of Secretary.
(c) Except as provided in the case of the elected officers who are members of
the Board, all officers and employees, whether elected or appointed, shall
hold office at the pleasure of the Board. Except as otherwise limited by law
or these By-Laws, the Board assigns to the Chairman of the Board, the Chief
Executive Officer, the President, any Senior Managing Director, any Managing
Director, the Chief Financial Officer, and/or each of their respective
designees the authority to control all personnel, including elected and
appointed officers and employees of the Bank, to employ or direct the
employment of such officers and employees as he or she may deem necessary,
including the fixing of salaries and the dismissal of such officers and
employees at pleasure, and to define and prescribe the duties and
responsibilities of all officers and employees of the Bank, subject to such
further limitations and directions as he or she may from time to time deem
appropriate.
(d) The Chairman of the Board, the Chief Executive Officer, the President,
any Senior Managing Director, any Managing Director, the Chief Financial
Officer, and any other officer of the Bank, to the extent that such officer
is authorized in writing by the Chairman of the Board, the Chief Executive
Officer, the President, any Senior Managing Director, any Managing Director,
or the Chief Financial Officer may appoint persons other than officers who
are in employment of the Bank to serve in management positions and in
connection therewith, the appointing officer may assign such title, salary,
responsibilities and functions as are deemed appropriate, provided, however,
that nothing contained herein shall be construed as placing any limitation on
the authority of the Chairman of the Board, the Chief Executive Officer, the
President, any Senior Managing Director, any Managing Director, or the Chief
Financial Officer as provided in this and other sections of these By-Laws.
(e) The Senior Managing Directors and the Managing Directors of the Bank
shall have general and active authority over the management of the business
of the Bank, shall see that all orders and resolutions of the Board of
Directors are carried into effect, and shall do or cause to be done all
things necessary or proper to carry on the business of the Bank in accordance
with provisions of applicable law and regulations. Each Senior Managing
Director and Managing Director shall perform all duties incident to his or
her office and such other and further duties, as may from time to time be
required by the Chief Executive Officer, the President, the Board of
Directors, or the shareholders. The specification of authority in these
By-Laws wherever and to whomever granted shall not be construed to limit in
any manner the general powers of delegation granted to a Senior Managing
Director or a Managing Director in conducting the business of the Bank. In
the absence of a Senior Managing Director or a Managing Director, such
officer as is designated by the Senior Managing Director or the Managing
Director shall be vested with all the powers and perform all the duties of
the Senior Managing Director or the Managing Director as defined by these
By-Laws.
<PAGE>
(f) Each Managing Director who is assigned oversight of one or more trust
service offices shall appoint a management committee known as the Investment
Management and Trust Committee consisting of the Managing Director of the
trust service offices and at least three other members who shall be capable
and experienced officers of the Bank appointed from time to time by the
Managing Director and who shall continue as members of the Investment
Management and Trust Committee until their successors are appointed,
provided, however, that any member of the Investment Management and Trust
Committee may be removed by the Managing Director as provided in this and
other sections of these By-Laws. The Managing Director shall fill any vacancy
in the Investment Management and Trust Committee by the appointment of
another capable and experienced officer of the Bank. Each Investment
Management and Trust Committee shall meet at such date, time and place as the
Managing Director shall fix. In the event of the absence of any member or
members of the Investment Management and Trust Committee, the Managing
Director may, in his or her discretion, appoint another officer of the Bank
to fill the place or places of such absent member or members to serve during
such absence. A majority of each Investment Management and Trust Committee
shall constitute a quorum. Each Investment Management and Trust Committee
shall carry out the policies of the Bank, as adopted by the Board of
Directors, which shall be formulated and executed in accordance with State
and Federal Law, Regulations of the Comptroller of the Currency, and sound
fiduciary principles. In carrying out the policies of the Bank, each
Investment Management and Trust Committee is hereby authorized to establish
management teams whose duties and responsibilities shall be specifically set
forth in the policies of the Bank. Each such management team shall report
such proceedings and the actions taken thereby to the Investment Management
and Trust Committee. Each Managing Director shall then report such
proceedings and the actions taken thereby to the Board of Directors.
SECTION 3.02. POWERS AND DUTIES OF MANAGEMENT STAFF. Pursuant to the
fiduciary powers granted to this Bank under the provisions of Federal Law and
Regulations of the Comptroller of the Currency, the Chairman of the Board,
the Chief Executive Officer, the President, the Senior Managing Directors,
the Managing Directors, the Chief Financial Officer, and those officers so
designated and authorized by the Chairman of the Board, the Chief Executive
Officer, the President, the Senior Managing Directors, the Managing
Directors, or the Chief Financial Officer are authorized for and on behalf of
the Bank, and to the extent permitted by law, to make loans and discounts; to
purchase or acquire drafts, notes, stocks, bonds, and other securities for
investment of funds held by the Bank; to execute and purchase acceptances; to
appoint, empower and direct all necessary agents and attorneys; to sign and
give any notice required to be given; to demand payment and/or to declare due
for any default any debt or obligation due or payable to the Bank upon demand
or authorized to be declared due; to foreclose any mortgages; to exercise any
option, privilege or election to forfeit, terminate, extend or renew any
lease; to authorize and direct any proceedings for the collection of any
money or for the enforcement of any right or obligation; to adjust, settle
and compromise all claims of every kind and description in favor of or
against the Bank, and to give receipts, releases and discharges therefor; to
borrow money and in connection therewith to make, execute and deliver notes,
bonds or other evidences of indebtedness; to pledge or hypothecate any
securities or any stocks, bonds, notes or any property real or personal held
or owned by the Bank, or to rediscount any notes or other obligations held or
owned by the Bank, whenever in his or her judgment it is reasonably necessary
for the operation of the Bank; and in furtherance of and in addition to the
powers hereinabove set forth to do all such acts and to take all such
proceedings as in his or her judgment are necessary and incidental to the
operation of the Bank.
SECTION 3.03. SECRETARY. The Secretary or such other officers as may be
designated by the Chief Executive Officer shall have supervision and control
of the records of the Bank
<PAGE>
and, subject to the direction of the Chief Executive Officer, shall undertake
other duties and functions usually performed by a corporate secretary. Other
officers may be designated by the Secretary as Assistant Secretary to perform
the duties of the Secretary.
SECTION 3.04. EXECUTION OF DOCUMENTS. Any member of the Bank's management
staff or any employee of the Bank designated as an officer on the Bank's
payroll system is hereby authorized for and on behalf of the Bank to sell,
assign, lease, mortgage, transfer, deliver and convey any real or personal
property, including shares of stock, bonds, notes, certificates of
indebtedness (including the assignment and redemption of registered United
States obligations) and all other forms of intangible property now or
hereafter owned by or standing in the name of the Bank, or its nominee, or
held by the Bank as collateral security, or standing in the name of the Bank,
or its nominee, in any fiduciary capacity or in the name of any principal for
whom this Bank may now or hereafter be acting under a power of attorney or as
agent, and to execute and deliver such partial releases from any discharges
or assignments of mortgages and assignments or surrender of insurance
policies, deeds, contracts, assignments or other papers or documents as may
be appropriate in the circumstances now or hereafter held by the Bank in its
own name, in a fiduciary capacity, or owned by any principal for whom this
Bank may now or hereafter be acting under a power of attorney or as agent;
provided, however, that, when necessary, the signature of any such person
shall be attested or witnessed in each case by another officer of the Bank.
Any member of the Bank's management staff or any employee of the Bank
designated as an officer on the Bank's payroll system is hereby authorized
for and on behalf of the Bank to execute any indemnity and fidelity bonds,
trust agreements, proxies or other papers or documents of like or different
character necessary, desirable or incidental to the appointment of the Bank
in any fiduciary capacity, the conduct of its business in any fiduciary
capacity, or the conduct of its other banking business; to sign and issue
checks, drafts, orders for the payment of money and certificates of deposit;
to sign and endorse bills of exchange, to sign and countersign foreign and
domestic letters of credit, to receive and receipt for payments of principal,
interest, dividends, rents, fees and payments of every kind and description
paid to the Bank, to sign receipts for money or other property acquired by or
entrusted to the Bank, to guarantee the genuineness of signatures on
assignments of stocks, bonds or other securities, to sign certifications of
checks, to endorse and deliver checks, drafts, warrants, bills, notes,
certificates of deposit and acceptances in all business transactions of the
Bank; also to foreclose any mortgage, to execute and deliver receipts for any
money or property; also to sign stock certificates for and on behalf of this
Bank as transfer agent or registrar, and to authenticate bonds, debentures,
land or lease trust certificates or other forms of security issued pursuant
to any indenture under which this Bank now or hereafter is acting as trustee
or in any other fiduciary capacity; to execute and deliver various forms of
documents or agreements necessary to effectuate certain investment strategies
for various fiduciary or custody customers of the Bank, including, without
limitation, exchange funds, options, both listed and over-the-counter,
commodities trading, futures trading, hedge funds, limited partnerships,
venture capital funds, swap or collar transactions and other similar
investment vehicles for which the Bank now or in the future may deem
appropriate for investment of fiduciary customers or in which non-fiduciary
customers may direct investment by the Bank.
<PAGE>
Without limitation on the foregoing, the Chief Executive Officer, Chairman of
the Board, or President of the Bank shall have the authority from time to
time to appoint officers of the Bank as Vice President for the sole purpose
of executing releases or other documents incidental to the conduct of the
Bank's business in any fiduciary capacity where required by state law or the
governing document. In addition, other persons in the employment of the Bank
or its affiliates may be authorized by the Chief Executive Officer, Chairman
of the Board, President, Senior Managing Directors, Managing Directors, or
Chief Financial Officer to perform acts and to execute the documents
described in the paragraph above, subject, however, to such limitations and
conditions as are contained in the authorization given to such person.
SECTION 3.05. PERFORMANCE BOND. All officers and employees of the Bank shall
be bonded for the honest and faithful performance of their duties for such
amount as may be prescribed by the Board of Directors.
ARTICLE IV
STOCKS AND STOCK CERTIFICATES
SECTION 4.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be
evidenced by certificates which shall bear the signature of the Chairman of
the Board, the Chief Executive Officer, or the President (which signature may
be engraved, printed or impressed), and shall be signed manually by the
Secretary, or any other officer appointed by the Chief Executive Officer for
that purpose. In case any such officer who has signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the Bank with
the same effect as if such officer had not ceased to be such at the time of
its issue. Each such certificate shall bear the corporate seal of the Bank,
shall recite on its face that stock represented thereby is transferable only
upon the books of the Bank when properly endorsed and shall recite such other
information as is required by law and deemed appropriate by the Board. The
corporate seal may be facsimile engraved or printed.
SECTION 4.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall
be transferable only upon the stock transfer books of the Bank and, except as
hereinafter provided, no transfer shall be made or new certificates issued
except upon the surrender for cancellation of the certificate or certificates
previously issued therefor. In the case of the loss, theft, or destruction of
any certificate, a new certificate may be issued in place of such certificate
upon the furnishing of an affidavit setting forth the circumstances of such
loss, theft, or destruction and indemnity satisfactory to the Chairman of the
Board, the Chief Executive Officer, or the President. The Board of Directors
or the Chairman of the Board, Chief Executive Officer, or the President may
authorize the issuance of a new certificate therefor without the furnishing
of indemnity. Stock transfer books, in which all transfers of stock shall be
recorded, shall be provided. The stock transfer books may be closed for a
reasonable period and under such conditions as the Board of Directors may at
<PAGE>
any time determine, for any meeting of shareholders, the payment of dividends
or any other lawful purpose. In lieu of closing the transfer books, the Board
of Directors may, in its discretion, fix a record date and hour constituting
a reasonable period prior to the day designated for the holding of any
meeting of the shareholders or the day appointed for the payment of any
dividend, or for any other purpose at the time as of which shareholders
entitled to notice of and to vote at any such meeting or to receive such
dividend or to be treated as shareholders for such other purpose shall be
determined, and only shareholders of record at such time shall be entitled to
notice of or to vote at such meeting or to receive such dividends or to be
treated as shareholders for such other purpose.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.01. SEAL. The seal of the Bank shall be circular in form with
"SEAL" in the center, and the name "BANK ONE TRUST COMPANY, National
Association" located clockwise around the upper half of the seal.
SECTION 5.02. MINUTE BOOK. The organization papers of this Bank, the Articles
of Association, the returns of judges of elections, the By-Laws and any
amendments thereto, the proceedings of all regular and special meetings of
the shareholders and of the Board of Directors, and reports of the committees
of the Board of Directors shall be recorded in the minute books of the Bank.
The minutes of each such meeting shall be signed by the presiding officer and
attested by the secretary of the meeting.
SECTION 5.03. CORPORATE POWERS. The corporate existence of the Bank shall
continue until terminated in accordance with the laws of the United States.
The purpose of the Bank shall be to carry on the general business of a
commercial bank trust department and to engage in such activities as are
necessary, incident, or related to such business. The Articles of Association
of the Bank shall not be amended, or any other provision added elsewhere in
the Articles expanding the powers of the Bank, without the prior approval of
the Comptroller of the Currency.
SECTION 5.04. AMENDMENT OF BY-LAWS. The By-Laws may be amended, altered or
repealed, at any regular or special meeting of the Board of Directors, by a
vote of a majority of the Directors.
<PAGE>
As amended April 24, 1991 Section 3.01 (Officers and Management Staff)
Section 3.02 (Chief Executive Officer)
Section 3.03 (Powers and Duties of Officers
and Management Staff)
Section 3.05 (Execution of Documents)
As amended January 27, 1995 Section 2.04 (Regular Meetings)
Section 2.05 (Special Meetings)
Section 3.01(f) (Officers and Management
Staff)
Section 3.03(e) (Powers and Duties of
Officers and Management Staff)
Section 5.01 (Seal)
Amended and restated in its entirety effective May 1, 1996
As amended August 1, 1996 Section 2.09 (Trust Examining Committee)
Section 2.10 (Other Committees)
As amended October 16, 1997 Section 3.01 (Officers and Management Staff)
Section 3.02 (Powers and Duties of Officers
and Management Staff)
Section 3.04 (Execution of Documents)
As amended January 1, 1998 Section 1.01 (Annual Meeting)
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 6, 2000
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between US WEST
Communications, Inc., and Bank One Trust Company, National Association, as
Trustee, the undersigned, in accordance with Section 321(b) of the Trust
Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
BY: /s/ STEVEN M. WAGNER
--------------------
STEVEN M. WAGNER
DIRECTOR
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/99 State #: 391581 FFIEC 032
Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-1
City, State Zip: Columbus, OH 43271 Transit #: 04400003
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
RCON BIL MIL THOU C300
---- ------------ ----
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCON
a. Noninterest-bearing balances and currency and coin(1).................... 0081 123,692 1.a
b. Interest-bearing balances(2)............................................. 0071 17,687 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)................ 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 5,860 2.b
3. Federal funds sold and securities purchased under agreements to resell...... 1350 364,813 3.
4. Loans and lease financing receivables: RCON
a. Loans and leases, net of unearned income (from Schedule RC-C)............ 2122 58,020 4.a
b. LESS: Allowance for loan and lease losses................................ 3123 10 4.b
c. LESS: Allocated transfer risk reserve.................................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCON
reserve (item 4.a minus 4.b and 4.c)..................................... 2125 58,010 4.d
5. Trading assets (from Schedule RD-D)......................................... 3545 0 5.
6. Premises and fixed assets (including capitalized leases).................... 2145 22,547 6.
7. Other real estate owned (from Schedule RC-M)................................ 2150 0 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).............................................. 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding................ 2155 0 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 27,151 10.
11. Other assets (from Schedule RC-F)........................................... 2160 141,759 11.
12. Total assets (sum of items 1 through 11).................................... 2170 761,519 12.
</TABLE>
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(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 12/31/99 State #: 391581 FFIEC 032
Address: 100 East Broad Street Vendor ID: D Cert #: 21377 Page RC-2
City, State Zip: Columbus, OH 43271 Transit #: 04400003
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C from
Schedule RC-E, part 1)................................................... 2200 589,846 13.a
(1) Noninterest-bearing(1)............................................... 6631 517,140 13.a1
(2) Interest-bearing..................................................... 6636 72,706 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).......................................
(1) Noninterest bearing..................................................
(2) Interest-bearing.....................................................
14. Federal funds purchased and securities sold under agreements to repurchase:. RCFD 2800 0 14
15. a. Demand notes issued to the U.S. Treasury................................. RCON 2840 0 15.a
b. Trading Liabilities(from Sechedule RC-D)................................. RCFD 3548 0 15.b
16. Other borrowed money: RCON
a. With original maturity of one year or less............................... 2332 0 16.a
b. With original maturity of more than one year............................ A547 0 16.b
c. With original maturity of more than three years......................... A548 0 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 0 18.
19. Subordinated notes and debentures........................................... 3200 0 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 63,244 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 653,090 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 800 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 45,157 25.
26. a. Undivided profits and capital reserves................................... 3632 62,458 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities... 8434 14 26.b
c. Accumulated net gains (losses) on cash flow hedges....................... 4336 0 26.c
27. Cumulative foreign currency translation adjustments.........................
28. Total equity capital (sum of items 23 through 27)........................... 3210 108,429 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)....................................... 3300 761,519 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the
statement below that best describes the most comprehensive
level of auditing work performed for the bank by independent Number
external auditors as of any date during 1996..........RCFD 6724... N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
