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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): JULY 30, 1998
MEDIAONE GROUP, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
A DELAWARE CORPORATION COMMISSION FILE NUMBER IRS EMPLOYER
IDENTIFICATION
NO.
(STATE OF INCORPORATION) 1-8611 84-0926774
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188 INVERNESS DRIVE WEST
ENGLEWOOD, COLORADO 80112
(Address of principal executive offices)
(303) 858-3000
(Registrant's telephone number, including area code)
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ITEM 7. EXHIBITS
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EXHIBIT DESCRIPTION
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1-A Underwriting Agreement, dated as of July 30, 1998, by and among MediaOne Group, Inc., Lehman
Brothers, Inc., Morgan Stanley & Co. Incorporated and Goldman Sachs & Co.
4-A Form of Third Supplemental Indenture between MediaOne Group, Inc. and The First National Bank of
Chicago, as Trustee.
4-B Form of PIES of MediaOne Group, Inc. (attached as Exhibit A to the Form of the Third Supplemental
Indenture between MediaOne Group, Inc. and The First National Bank of Chicago, as Trustee, filed
as Exhibit 4-A hereto)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has fully caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
MEDIAONE GROUP, INC.
By: /s/ STEPHEN E. BRILZ
-----------------------------------------
Stephen E. Brilz
ASSISTANT SECRETARY
Dated: July 31, 1998
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MEDIAONE GROUP, INC.
26,000,000 PIES-SM- (Premium Income Exchangeable Securities-SM-)*
6-1/4% Exchangeable Notes Due August 15, 2001
(Subject to Exchange into Shares of Common Stock,
par value $.01 per share, of AirTouch Communications, Inc.)
Underwriting Agreement
New York, New York
July 30, 1998
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
c/o Lehman Brothers Inc.
As Representatives of the several Underwriters,
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
MediaOne Group, Inc. (formerly known as US WEST, Inc.), a Delaware
corporation ("MediaOne Group"), proposes to sell to the underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, an aggregate of 26,000,000 PIES (Premium Income
Exchangeable Securities) consisting of its 6-1/4% Exchangeable Notes Due
August 15, 2001 (the "Underwritten PIES"), to be issued under an indenture (the
"Indenture") dated as of November 13, 1995 between MediaOne Group and
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* Plus an option to purchase from MediaOne Group, Inc. up to 3,900,000
additional PIES to cover over-allotments.
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The First National Bank of Chicago, as trustee (the "Trustee"), as amended to
the date hereof by the First Supplemental Indenture thereto dated as of
December 6, 1995, the Second Supplemental Indenture thereto dated as of May
8, 1996 and the Third Supplemental Indenture thereto dated as of August 5,
1998. In addition, the Underwriters will have an option to purchase up to
3,900,000 PIES (the "Option PIES" and, together with the Underwritten PIES,
the "PIES"). At maturity (including as a result of acceleration or
otherwise), the PIES will be mandatorily exchanged by MediaOne Group into
shares of Common Stock, par value $.01 per share (the "AirTouch Common
Stock"), of AirTouch Communications, Inc., a Delaware corporation
("AirTouch") (or, at MediaOne Group's option under the circumstances
described in the Final MediaOne Group Prospectus (as defined below), the cash
equivalent for all or part thereof and/or such other consideration as
permitted or required by the terms of the PIES) at the rate specified in the
Final MediaOne Group Prospectus.
In connection with the foregoing and pursuant to the Investment
Agreement dated April 6, 1998 between AirTouch and MediaOne Group (the
"Investment Agreement"), AirTouch has filed with the Commission a shelf
registration statement (including a base prospectus), pursuant to Rule 415
and has filed a preliminary prospectus pursuant to Rule 424 with respect to a
number of shares (the "Underwritten Shares") of AirTouch Common Stock offered
pursuant to the Underwritten PIES plus an additional number of shares (the
"Option Shares" and, together with the Underwritten Shares, the "Shares") of
AirTouch Common Stock offered pursuant to the Option PIES, for sale by
MediaOne Group as a selling stockholder (to the extent MediaOne Group shall
so elect to deliver AirTouch Common Stock at maturity to holders of the PIES
pursuant to the terms of the PIES), which registration statement is referred
to in Section 2 of this Agreement.
Certain terms used in this Agreement are defined in paragraph (a)(vi) of
Section 1 and paragraph (c) of Section 2.
1. REPRESENTATIONS AND WARRANTIES OF MEDIAONE GROUP. (a) MediaOne
Group represents and warrants to, and agrees with, each Underwriter and AirTouch
as set forth below in this Section 1.
(i) MediaOne Group has filed with the Commission registration
statements (file number 33-62451, 333-57187 and 333-59587) on Form
S-3, including a basic prospectus, for the registration under the
Securities Act of 1933, as amended (the "Act"), of the offering and
sale of the PIES. MediaOne Group may have filed one or more amendments
thereto, and may have used a Preliminary Final MediaOne Group
Prospectus, each of which has previously been furnished to you and to
AirTouch. Such registration statement, as so amended, has become
effective. MediaOne Group will next file with the Commission pursuant
to Rules 415 and 424(b)(2) or (5) a final supplement to the form of
prospectus included in such registration statement relating to the
PIES and the offering thereof. As filed, such final prospectus
supplement, except to the extent the Representatives (and, as to
modifications to AirTouch Furnished Information, AirTouch) shall agree
in writing to a modification, shall be in all substantive respects in
the form
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furnished to you and AirTouch prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic MediaOne Group Prospectus and any Preliminary
Final MediaOne Group Prospectus) as MediaOne Group has advised you and
AirTouch, prior to the Execution Time, will be included or made
therein.
(ii) On the MediaOne Group Effective Date, the MediaOne
Group Registration Statement did or will, and when the Final MediaOne
Group Prospectus is first filed in accordance with Rule 424(b) and on
the Closing Date (as hereinafter defined), the Final MediaOne Group
Prospectus (and any supplement thereto) will, conform in all material
respects with the applicable requirements of the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
respective rules thereunder; on the MediaOne Group Effective Date, the
MediaOne Group Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; on the MediaOne Group Effective
Date and on the Closing Date the Indenture did or will comply in all
material respects with the applicable requirements of the Trust
Indenture Act and the rules thereunder; and, on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final MediaOne
Group Prospectus (together with any supplement thereto) will not
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that MediaOne Group makes no
representations or warranties as to (A) that part of the MediaOne
Group Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (B) the information contained in or omitted from the
MediaOne Group Registration Statement or the Final MediaOne Group
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to MediaOne Group by
or on behalf of any Underwriter through the Representatives
specifically for inclusion in the MediaOne Group Registration
Statement or the Final MediaOne Group Prospectus (or any supplement
thereto) or (C) the information contained in or omitted from the Final
MediaOne Group Prospectus (or any supplement thereto) in reliance upon
and in conformity with AirTouch Furnished Information.
(iii) Subsequent to the respective dates as of which
information is presented in the MediaOne Group Registration Statement
and the Final MediaOne Group Prospectus, except as otherwise stated
therein, there has been no material adverse change or any development
involving a prospective material adverse change in the financial
condition or results of operations of MediaOne Group and its
subsidiaries taken as a whole ("MediaOne Material Adverse Effect").
(iv) To the knowledge of MediaOne Group, the representations
and warranties of AirTouch contained in Section 2 of this Agreement
are (i) in cases where such representations and warranties are
qualified as to materiality, true and correct and (ii) in
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all other cases, true and correct in all material respects.
(v) MediaOne Group has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange
Act or otherwise, in stabilization or manipulation of the price of any
security of AirTouch to facilitate the sale or resale of the PIES or
the Shares and has not effected any sales of AirTouch Common Stock
which, if effected by the issuer, would be required to be disclosed in
response to Item 701 of Regulation S-K.
(vi) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Commission" shall mean the
Securities and Exchange Commission. "MediaOne Group Effective Date"
shall mean each date that the MediaOne Group Registration Statement
and any post-effective amendment or amendments thereto became or
become effective. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto.
"Basic MediaOne Group Prospectus" shall mean the prospectus referred
to in paragraph (a) (i) of this Section 1 contained in the MediaOne
Group Registration Statement at the MediaOne Group Effective Date.
"Preliminary Final MediaOne Group Prospectus" shall mean any
preliminary prospectus supplement to the Basic MediaOne Group
Prospectus which describes the PIES and the offering thereof, is used
prior to filing the Final MediaOne Group Prospectus and is filed,
together with the Basic MediaOne Group Prospectus and the Preliminary
AirTouch Prospectus, pursuant to Rule 424(b). "Final MediaOne Group
Prospectus" shall mean the prospectus supplement relating to the PIES
that is first filed pursuant to Rule 424(b) after the Execution Time
together with the Basic MediaOne Group Prospectus and the Final
AirTouch Prospectus. "MediaOne Group Registration Statement" shall
mean the registration statement referred to in paragraph (a) (i) of
this Section 1, including incorporated documents, exhibits and
financial statements, as amended at the Execution Time and, in the
event any post-effective amendment thereto becomes effective prior to
the Closing Date shall also mean such registration statement as so
amended. Such term shall include any Rule 430A Information deemed to
be included therein at the MediaOne Group Effective Date as provided
by Rule 430A. "Rule 415," "Rule 424," "Rule 430A," "Regulation S-K"
and "Regulation S-X" refer to such rules or regulation under the Act.
"Rule 430A Information" means information with respect to the PIES (or
the Shares) and the offering thereof permitted to be omitted from the
MediaOne Group Registration Statement (or the AirTouch Registration
Statement) when it becomes effective pursuant to Rule 430A. "MediaOne
Group Furnished Information" means the information furnished in
writing by or on behalf of MediaOne Group for inclusion in the
Preliminary AirTouch Prospectus or the Final AirTouch Prospectus;
AirTouch and the Underwriters acknowledge that the statements set
forth in the first two sentences of the first paragraph on the cover
page, in the first sentence of the second paragraph on the cover page,
under the caption "Summary --The Offering of the PIES," in the last
sentence of the paragraph, under the caption "Risk Factors -- Impact
of the PIES on the Market for the Common Stock" and in the first
paragraph under the caption "Selling Stockholder" in any Preliminary
AirTouch Prospectus or the Final AirTouch Prospectus constitute the
only such information. Any reference herein to the MediaOne Group
Registration Statement,
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the Basic MediaOne Group Prospectus, any Preliminary Final MediaOne
Group Prospectus or the Final MediaOne Group Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the MediaOne Group Effective Date or the
issue date of the Basic MediaOne Group Prospectus, any Preliminary
Final MediaOne Group Prospectus or the Final MediaOne Group
Prospectus, as the case may be; and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the MediaOne
Group Registration Statement, the Basic MediaOne Group Prospectus, any
Preliminary Final MediaOne Group Prospectus or the Final MediaOne
Group Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the MediaOne Group Effective
Date, or the issue date of any Preliminary Final MediaOne Group
Prospectus or the Final MediaOne Group Prospectus, as the case may be,
deemed to be incorporated therein by reference.
(b) (i) Neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated hereby will conflict with, result
in a breach or violation of, or constitute a default under, (a) the articles of
incorporation, by-laws or other governing documents of MediaOne Group or
MediaOne of Delaware, Inc. (the "MediaOne Group Subsidiary") or (b) any material
agreement, indenture or other instrument, to which any of them is a party or by
which any of them is bound, or to which any of their properties is subject
(except in the case of this clause (b) for such conflicts, breaches, violations
and defaults that would not result in a MediaOne Material Adverse Effect) and
(ii) the performance by MediaOne Group of its obligations hereunder will not
(A) to the best knowledge of MediaOne Group, violate in any material respect any
law, rule, administrative regulation or decree of any court, governmental
agency, regulatory body or other governmental body, or any arbitrator having
jurisdiction over MediaOne Group or the MediaOne Group Subsidiary or any of
their respective properties, or (B) result in the creation or imposition of any
material lien, charge, claim or encumbrance upon any property or asset of
MediaOne Group or the MediaOne Group Subsidiary (except for such liens, charges
and encumbrances that would not have a MediaOne Material Adverse Effect).
Except for permits and similar authorizations required under the Act and the
securities or "Blue Sky" laws of certain jurisdictions and for such permits and
authorizations which have been obtained, no consent, approval, authorization or
order of any court, governmental agency, regulatory body or other governmental
body or financial institution is required in connection with the consummation by
MediaOne Group of the transactions contemplated by this Agreement. There are no
significant subsidiaries (as defined in Rule 1-02 under Regulation S-X) of
MediaOne Group other than the MediaOne Group Subsidiary.
(c) This Agreement has been duly authorized, executed and delivered
by MediaOne Group.
(d) No action, suit or proceeding by or before any court or any
governmental agency, regulatory body or other governmental body or any
arbitrator involving MediaOne Group or any its subsidiaries, or any of their
respective properties is pending or threatened that (i) may have a material
adverse effect on the performance of this Agreement by MediaOne Group or the
consummation by MediaOne Group of any of the transactions contemplated hereby or
(ii) may
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have a MediaOne Group Material Adverse Effect (except, in the case of
this clause (ii) for those that have been disclosed in the Final MediaOne Group
Prospectus).
In respect of the MediaOne Group Furnished Information MediaOne Group
makes the same representations and warranties to AirTouch as MediaOne Group
makes to each Underwriter under paragraph (a)(ii) of this Section 1.
2. REPRESENTATIONS AND WARRANTIES OF AIRTOUCH. AirTouch represents
and warrants to, and agrees with, each Underwriter and MediaOne Group as set
forth below in this Section 2.
(a) AirTouch meets the requirements for use of Form S-3 under the Act
and has filed with the Commission a registration statement (file number
333-56645) on such Form, including a basic prospectus, for the registration
under the Act of the offering and sale of the Shares. AirTouch may have
filed one or more amendments thereto, and may have filed a Preliminary
Final AirTouch Prospectus, each of which has previously been furnished to
you and to MediaOne Group. AirTouch will next file with the Commission
pursuant to Rules 415 and 424(b) a final prospectus with respect to the
Shares and the offering thereof. As filed, such final prospectus or
supplement, except to the extent the Representatives (and, as to
modifications to MediaOne Group Furnished Information, MediaOne Group)
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you and MediaOne Group prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond
that contained in the Preliminary Final AirTouch Prospectus) as AirTouch
has advised you and MediaOne Group, prior to the Execution Time, will be
included or made therein.
(b) On the AirTouch Effective Date, the AirTouch Registration
Statement did or will and when the Final AirTouch Prospectus is first filed
in accordance with Rule 424(b) and on the Closing Date, the Final AirTouch
Prospectus (and any supplement thereto) will, conform in all material
respects with the applicable requirements of the Act, the Exchange Act and
the respective rules thereunder; on the AirTouch Effective Date, the
AirTouch Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; and, on the date of any filing pursuant to Rule 424(b) and on
the Closing Date, the Final AirTouch Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that AirTouch makes no
representations or warranties as to the information contained in or omitted
from the AirTouch Registration Statement or the Final AirTouch Prospectus
(or any supplement thereto) in reliance upon and in conformity with
(i) information furnished to AirTouch by or on behalf of any Underwriter
through the Representatives for use in connection with the preparation of
the AirTouch Registration Statement or the Final AirTouch Prospectus (or
any supplement thereto) or (ii) the MediaOne Group Furnished Information.
On the date of any filing
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thereof pursuant to Rule 424(b) and on the Closing Date, the Final
MediaOne Group Prospectus (together with any supplement thereto) will not
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that AirTouch makes no representations or warranties
as to the information contained in or omitted from the Final MediaOne
Group Prospectus (or any supplement thereto), other than information
contained in or omitted from the Final MediaOne Group Prospectus (or any
supplement thereto) in reliance upon and in conformity with AirTouch
Furnished Information.
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "AirTouch Effective Date" shall mean each
date that the AirTouch Registration Statement and any post-effective
amendment or amendments thereto became or become effective. "Preliminary
Final AirTouch Prospectus" shall mean any preliminary prospectus filed by
AirTouch pursuant to Rule 424(b) which describes the Shares and the
offering thereof and is used prior to filing the Final AirTouch
Prospectus. "Final AirTouch Prospectus" shall mean the prospectus
relating to the Shares that is first filed by AirTouch pursuant to Rule
424(b) after the Execution Time. "AirTouch Registration Statement" shall
mean the registration statement referred to in paragraph (a) of this
Section 2 including incorporated documents, exhibits and financial
statements, as amended at the Execution Time and, in the event any
post-effective amendment thereto becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended. Such
term shall include any Rule 430A Information deemed to be included
therein at the AirTouch Effective Date as provided by Rule 430A.
"AirTouch Furnished Information" means information furnished in writing
by or on behalf of AirTouch for inclusion in the Preliminary Final
MediaOne Prospectus or the Final MediaOne Prospectus; MediaOne Group and
the Underwriters acknowledge that the geographical map of AirTouch's
cellular network appearing on the fold-out inside cover page and the
statements set forth under the caption "Risk Factors -- Potential Future
Issuances of AirTouch Common Stock" (excluding the last sentence thereof)
and under the caption "AirTouch Communications, Inc." in any Preliminary
Final MediaOne Prospectus or the Final MediaOne Group Prospectus, and the
statements set forth in any Preliminary Final AirTouch Prospectus or the
Final AirTouch Prospectus (other than the MediaOne Group Furnished
Information contained therein and other than information furnished to
AirTouch by or on behalf of any Underwriter through the Representatives
for use in connection with the preparation of the AirTouch Registration
Statement or the Final AirTouch Prospectus (or any supplement thereto))
constitute the only such information. Any reference herein to the
AirTouch Registration Statement, any Preliminary Final AirTouch
Prospectus or the Final AirTouch Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act on or before
the AirTouch Effective Date or the issue date of the and Preliminary
Final AirTouch Prospectus or the Final AirTouch Prospectus, as the case
may be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the AirTouch Registration Statement, any
Preliminary Final AirTouch Prospectus or the Final AirTouch Prospectus
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shall be deemed to refer to and include the filing of any document under
the Exchange Act after the AirTouch Effective Date, or the issue date of
any Preliminary Final AirTouch Prospectus or the Final AirTouch
Prospectus, as the case may be, deemed to be incorporated therein by
reference. The term "Material Adverse Effect" shall mean a material
adverse change or any development involving a prospective material
adverse change in the financial condition or results of operations of
AirTouch and its consolidated subsidiaries, taken as a whole.
(d) Each of AirTouch and each of AirTouch Cellular, a California
corporation, AirTouch of Nevada, a Nevada corporation, AirTouch Cellular,
Inc., a Delaware corporation, and AirTouch International, a California
corporation, (each individually a "AirTouch Subsidiary" and collectively
the "AirTouch Subsidiaries") is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized. Each of AirTouch and the AirTouch Subsidiaries has been duly
incorporated and has full corporate power and authority to own its
properties and conduct its business as described in the Final AirTouch
Prospectus. Each of AirTouch and the AirTouch Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which the ownership or leasing of
its properties or the conduct of its business legally require such
qualification, except where the failure so to qualify or be in good
standing would not have a Material Adverse Effect.
(e) There are no options, warrants or other rights to subscribe
for, to purchase or to convert any obligations into or exchange any
securities for, any shares of capital stock of the Company pursuant to
the Company's articles of incorporation, by-laws or other governing
documents or any agreement or other instrument to which the Company or
any of the AirTouch Subsidiaries is a party or by which any of them may
be bound, except as disclosed in the Final AirTouch Prospectus. Neither
the filing of the AirTouch Registration Statement nor the offering or
sale of the Shares as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of AirTouch Common Stock or
other securities of AirTouch. The capitalization of AirTouch as of June
30, 1998 is as set forth in the AirTouch Final Prospectus and the
AirTouch Common Stock conforms to the description thereof contained in
the AirTouch Prospectus. All of the outstanding shares of capital stock
of each AirTouch Subsidiary have been duly authorized and validly issued,
are fully paid and nonassessable, and, except as otherwise set forth in
the AirTouch Final Prospectus, are owned by AirTouch, directly or through
wholly owned subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or transfer,
preemptive rights or any other claim of any third party.
(f) (i) None of the execution or delivery of this Agreement, the
sale of the Shares pursuant to the PIES, or the consummation by AirTouch
of the transactions contemplated hereby will conflict with, result in a
breach or violation of, or constitute a default under (A) the articles of
incorporation, by-laws or other governing documents of AirTouch or any of
the AirTouch Subsidiaries or (B) any material agreement, indenture or
other instrument, to which any of them is a party or by which any of them
is bound, or to which
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any of their properties is subject (except in the case of this clause (B)
for such conflicts, breaches, violations and defaults that would not
result in a Material Adverse Effect) and (ii) the performance by AirTouch
of its obligations hereunder will not violate in any material respect any
law, rule, administrative regulation or decree of any court, governmental
agency, regulatory body or other governmental body, or any arbitrator
having jurisdiction over AirTouch, the AirTouch Subsidiaries or any of
their respective properties, or result in the creation or imposition of
any material lien, charge, claim or encumbrance upon any property or
asset of AirTouch or any of the AirTouch Subsidiaries (except for such
liens, charges and encumbrances that would not have a Material Adverse
Effect). Except for permits and similar authorizations required under
the Act and the securities or "Blue Sky" laws of certain jurisdictions
and for such permits and authorizations which have been obtained, no
consent, approval, authorization or order of any court, governmental
agency, regulatory body or other governmental body or financial
institution is required in connection with the consummation by AirTouch
of the transactions contemplated by this Agreement.
(g) This Agreement has been duly authorized, executed and
delivered by AirTouch.
(h) No action, suit or proceeding by or before any court or any
governmental agency, regulatory body or other governmental body or any
arbitrator involving AirTouch or any its subsidiaries, or any of their
respective properties is pending or threatened that (i) may have a
material adverse effect on the performance of this Agreement by AirTouch
or the consummation by AirTouch of any of the transactions contemplated
hereby or (ii) may have a Material Adverse Effect (except, in the case of
this clause (ii) for those that have been disclosed in the Final AirTouch
Prospectus); and there is no franchise, contract or other document of a
character required to be described in the AirTouch Registration Statement
or Final AirTouch Prospectus, or to be filed as an exhibit, which is not
described or filed as required.
(i) AirTouch has not taken and shall not take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of AirTouch
Common Stock to facilitate the resale by MediaOne Group of the Shares
pursuant to the offering of the PIES.
(j) AirTouch is not an "investment company" within the meaning of
such term under the Investment Company Act of 1940 as amended, and the
rules and regulations thereunder.
3. PURCHASE AND SALE. (a) Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, MediaOne
Group agrees to sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from MediaOne Group, the number of PIES set forth
opposite that Underwriter's name on Schedule I hereto, at a price of $56.535 per
PIES.
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(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, MediaOne Group hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
3,900,000 of the Option PIES at the same purchase price as the Underwriters
shall pay for the Underwritten PIES. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten PIES by the Underwriters. Said
option may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the Final MediaOne Group Prospectus
upon written or telegraphic notice by the Representatives to MediaOne Group
setting forth the number of the Option PIES as to which the several Underwriters
are exercising the option and the settlement date. Delivery of certificates for
the Option PIES, and payment therefor, shall be made as provided in Section 4
hereof. The number of the Option PIES to be purchased by each Underwriter shall
be the same percentage of the total number of the Option PIES to be purchased by
the several Underwriters as such Underwriter is purchasing of the Underwritten
PIES, subject to such adjustments as you in your absolute discretion shall make
to eliminate any fractional Option PIES.
4. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten PIES and the Option PIES (if the option provided for in
Section 3(b) hereof shall have been exercised on or before the second business
day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
August 5, 1998, (or such later date not later than five business days after such
specified date as the Representatives shall designate) which date and time may
be postponed by agreement between the Representatives and MediaOne Group or as
provided in Section 11 hereof (such date and time of delivery and payment for
the PIES being herein called the "Closing Date"). Delivery of the PIES shall be
made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of MediaOne
Group by wire transfer of same day funds to an account specified by MediaOne
Group on or before the second business day prior to the Closing Date. Delivery
of the PIES shall be made through the facilities of the Depositary Trust
Company, unless the Representatives otherwise instruct. Certificates for the
PIES shall be registered in such names and in such denominations as the
Representatives may request not less than two full business days in advance of
the Closing Date.
If the option provided for in Section 3(b) hereof is exercised after
the second business day prior to the Closing Date, MediaOne Group will deliver
the Option PIES (at the expense of MediaOne Group) to the Representatives
through the facilities of the Depositary Trust Company on the date specified by
the Representatives (which shall be within three business days after exercise of
said option) to the Representatives against payment of the purchase price
thereof to or upon the order of MediaOne Group by wire transfer of funds payable
in same day funds to the above-mentioned account specified by MediaOne Group.
If settlement for the Option PIES occurs after the Closing Date, MediaOne Group
and AirTouch will deliver to the Representatives on the settlement date for the
Option PIES, and the obligation of the Underwriters to purchase the Option PIES
shall be conditioned upon receipt of, supplemental opinions, certificates and
letters confirming as of such date the opinions, certificates and letters
delivered on the Closing Date pursuant to Section 7 hereof.
5. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose
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to offer the PIES for sale to the public as set forth in the Final MediaOne
Group Prospectus.
6. AGREEMENTS OF MEDIAONE GROUP. MediaOne Group agrees with the
several Underwriters that:
(a) MediaOne Group will use its best efforts to cause the MediaOne
Group Registration Statement, if not effective at the Execution Time, and
any amendment thereof to become effective. Prior to the termination of
the offering of the PIES, MediaOne Group will not file any amendment of
the MediaOne Group Registration Statement or supplement (including the
Final MediaOne Group Prospectus or any Preliminary Final MediaOne Group
Prospectus) to the Basic MediaOne Group Prospectus unless MediaOne Group
has furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably
object unless MediaOne Group shall conclude in good faith that such
filing is required by applicable law. Subject to the foregoing sentence,
MediaOne Group will cause the Final MediaOne Group Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. MediaOne Group will promptly
advise the Representatives (i) when the MediaOne Group Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, shall have become effective, (ii) when the Final MediaOne Group
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424(b), (iii) when, prior to termination of
the offering of the PIES, any amendment to the MediaOne Group
Registration Statement shall have been filed or become effective, (iv) of
any request by the Commission for any amendment of the MediaOne Group
Registration Statement or supplement to the Final MediaOne Group
Prospectus or for any additional information, (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the MediaOne
Group Registration Statement or the institution or threatening of any
proceeding for that purpose and (vi) of the receipt by MediaOne Group of
any notification with respect to the suspension of the qualification of
the PIES for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. MediaOne Group will use its best
efforts to prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the PIES is
required to be delivered under the Act, any event occurs as a result of
which the Final MediaOne Group Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the MediaOne Group Registration Statement or
supplement the Final MediaOne Group Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, MediaOne Group
promptly will prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 6, an amendment or supplement
which will correct such statement or omission or effect such compliance.
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(c) As soon as practicable, MediaOne Group will make generally
available to its security holders an earnings statement or statements of
MediaOne Group and its subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) MediaOne Group will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the MediaOne Group
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the MediaOne Group Registration Statement (without
exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Final MediaOne Group Prospectus and the Final MediaOne Group
Prospectus and any supplement thereto as the Representatives may
reasonably request. MediaOne Group will pay the expenses of printing or
other production of the MediaOne Group Registration Statement, each
Preliminary Final MediaOne Group Prospectus and the Final MediaOne Group
Prospectus (other than with respect to the Preliminary Final AirTouch
Prospectus and Final AirTouch Prospectus, respectively, attached a
thereto, which shall be paid by AirTouch).
(e) MediaOne Group will arrange for the qualification of the PIES
and the Shares for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the PIES and the
Shares; provided, however, that in connection therewith MediaOne Group
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction.
(f) MediaOne Group will not, for a period of 90 days following the
Execution Time, without the prior written consent of Lehman Brothers
Inc., offer for sale, sell or contract to sell, or otherwise dispose of,
or announce the offering of, or file or cause the filing of any
registration statement under the Securities Act with respect to, any
shares of AirTouch Common Stock or any securities convertible into, or
exchangeable for, or warrants to acquire, shares of AirTouch Common Stock
(other than the PIES).
7. AGREEMENTS OF AIRTOUCH. AirTouch agrees with the several
Underwriters that:
(a) AirTouch will use its best efforts to cause the AirTouch
Registration Statement, if not effective at the Execution Time, and any
amendment thereof to become effective. Prior to the termination of the
offering of the PIES, AirTouch will not file any amendment of the
AirTouch Registration Statement or supplement (including the Final
AirTouch Prospectus) to the Preliminary Final AirTouch Prospectus or the
Final AirTouch Prospectus unless AirTouch has furnished you a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object unless AirTouch shall
conclude in good faith that such filing is required by applicable law.
Subject to the foregoing sentence, AirTouch will cause the Final AirTouch
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time
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period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. AirTouch will promptly advise the
Representatives (i) when the AirTouch Registration Statement, if not
effective at the Execution Time, and any amendment thereto, shall have
become effective, (ii) when the Final AirTouch Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant to
Rule 424(b), (iii) when, prior to termination of the offering of the
Shares, any amendment to the AirTouch Registration Statement shall have
been filed or become effective, (iv) of any request by the Commission for
any amendment of the AirTouch Registration Statement or supplement to the
Final AirTouch Prospectus or for any additional information, (v) of the
issuance by the Commission of any stop order suspending the effectiveness
of the AirTouch Registration Statement or the institution or threatening
of any proceeding for that purpose and (vi) of the receipt by AirTouch of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. AirTouch will use its best efforts
to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act (i) any event occurs as a result
of which the Final AirTouch Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or (ii) it shall
be necessary to amend the AirTouch Registration Statement or supplement
the Final AirTouch Prospectus to comply with the Act or the Exchange Act
or the respective rules thereunder, AirTouch will promptly notify the
Underwriters and will promptly prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 7, an
amendment or supplement which will correct such statement or omission or
effect such compliance.
(c) As soon as practicable, AirTouch will make generally available
to its security holders and to the Representatives an earnings statement
or statements of AirTouch and its consolidated subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) AirTouch will furnish to the Representatives and counsel for
the Underwriters, without charge, copies of the AirTouch Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the AirTouch Registration Statement (without exhibits thereto)
and, so long as delivery by an Underwriter or dealer of a prospectus with
respect to the PIES may be required by the Act, as many copies of each
Preliminary Final AirTouch Prospectus and the Final AirTouch Prospectus
and any supplement thereto as the Representatives may reasonably request.
AirTouch will pay the expenses of printing or other production of the
AirTouch Registration Statement, each Preliminary Final AirTouch
Prospectus and the Final AirTouch Prospectus.
(e) AirTouch will cooperate with MediaOne Group for purposes of
the qualification
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of the PIES and the Shares for sale under the laws of such jurisdictions
as the Representatives may designate and will use all reasonable efforts
to maintain such qualifications in effect so long as required for the
sale of the Shares pursuant to the distribution of the PIES; provided,
however, that in connection therewith, AirTouch shall not be required to
qualify to do business in any jurisdiction where it is now not qualified
or to take any action which would subject it to general or unlimited
service of process, or to taxation, in any jurisdiction where it is not
now so subject.
(f) AirTouch will not, for a period of 90 days following the
Execution Time, without the prior written consent of Lehman Brothers
Inc., offer for sale, sell or contract to sell, or otherwise dispose of,
or announce the offering of, or file or cause the filing of any
registration statement under the Securities Act with respect to, (i) any
shares of AirTouch Common Stock or any securities convertible into, or
exchangeable for, or warrants to acquire, shares of AirTouch Common Stock
(other than the Shares in connection with the offering by MediaOne Group
of the PIES); PROVIDED, HOWEVER, that AirTouch may sell AirTouch Common
Stock or grant options to purchase the same, in either case, pursuant to
any employee stock option plan, stock ownership plan or dividend
reinvestment plan of AirTouch in effect at the Execution Time.
(g) AirTouch will furnish to the Trustee copies of its annual
report to stockholders and reports on Forms 10-K and 10-Q in sufficient
quantities for transmission to holders of the PIES as soon as practicable
after such reports are required to be filed with the Commission. The
cost of production of such reports will be borne by AirTouch and the cost
of transmitting such reports to the holders will be borne by MediaOne
Group.
(h) AirTouch will take such actions as may be reasonably necessary
to comply with the rules and regulations of the NYSE in respect of the
offering of the Shares contemplated hereby.
8. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the PIES shall be subject to the accuracy of
the representations and warranties on the part of MediaOne Group and AirTouch
contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 4 hereof, to the accuracy of the
statements of MediaOne Group and AirTouch made in any certificates pursuant
to the provisions hereof, to the performance by MediaOne Group and AirTouch
of their respective obligations hereunder and to the following additional
conditions:
(a) If the MediaOne Group Registration Statement or the AirTouch
Registration Statement has not become effective prior to the Execution Time,
unless the Representatives agree in writing to a later time, such MediaOne Group
or AirTouch Registration Statement will become effective not later than (i) 6:00
PM, New York City time, on the date of determination of the public offering
price, if such determination occurred at or prior to 3:00 PM, New York City
time, on such date or (ii) 12:00 Noon, New York City time, on the business day
following the day on which the public offering price was determined, if such
determination occurred after 3:00 PM, New York City time, on such date; if
filing of the Final MediaOne Group Prospectus or the
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Final AirTouch Prospectus, or any supplements thereto, is required pursuant
to Rule 424(b), such Final MediaOne Group Prospectus or Final AirTouch
Prospectus, and any such supplements, will be filed in the manner and within
the time period required by Rule 424(b); and no stop order suspending the
effectiveness of the MediaOne Group Registration Statement or the AirTouch
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) MediaOne Group shall have furnished to the Representatives the
opinion of Stephen E. Brilz, Esq., Corporate Counsel of MediaOne Group, dated
the Closing Date, to the effect that:
(i) each of MediaOne Group and the MediaOne Group Subsidiary has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is organized,
with full corporate power and authority to own its properties and
conduct its business as described in the Final MediaOne Group
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification wherein it owns or leases material
properties or conducts material business, except where failure to so
qualify would not have a material adverse effect on MediaOne Group and
the MediaOne Group Subsidiary, taken as a whole;
(ii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation of
the transactions contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the distribution of the PIES and the
Shares by MediaOne Group and such other approvals (specified in such
opinion) as have been obtained; and
(iii) to the best knowledge of such counsel, MediaOne Group has
good and marketable title to the Shares and owns such Shares free and
clear of all liens, encumbrances, equities and claims.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Colorado or the
United States, to the extent such counsel deems proper and specified in such
opinion, the State of Delaware, upon the opinion of other counsel of good
standing whom such counsel believes to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent such
counsel deems proper, on certificates of responsible officers of MediaOne Group
and public officials. References to the Final MediaOne Group Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) MediaOne Group shall have furnished to the Representatives the
opinion of Weil, Gotshal & Manges, counsel for MediaOne Group, dated as of the
Closing Date, to the effect that:
(i) MediaOne Group has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with full corporate
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power and authority to own its properties and conduct its business as
described in the Final MediaOne Group Prospectus;
(ii) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act, and
(assuming the due authorization, execution and delivery thereof by the
Trustee) constitutes a legal, valid and binding instrument enforceable
against MediaOne Group in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect); and the PIES have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement will constitute legal, valid and
binding obligations of MediaOne Group entitled to the benefits of the
Indenture;
(iii) the MediaOne Group Registration Statement was declared
effective under the Act; any required filing of the Basic MediaOne Group
Prospectus, any Preliminary Final MediaOne Group Prospectus and the
Final MediaOne Group Prospectus, and of any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the best knowledge of such counsel,
no stop order suspending the effectiveness of the MediaOne Group
Registration Statement has been issued, no proceedings for that purpose
have been instituted or threatened;
(iv) this Agreement has been duly authorized, executed and
delivered by MediaOne Group; and
(v) The statements in the Basic MediaOne Group Prospectus under
the heading "Description of Debt Securities" and the statements in the
Final MediaOne Group Prospectus under the heading "Description of the
PIES", insofar as such statements constitute a summary of certain
provisions of the Indenture and the PIES, are accurate in all material
respects.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of MediaOne Group,
representatives of the independent public accountants for MediaOne Group and
representatives of the Underwriters and counsel for the Underwriters, at which
conferences the contents of the MediaOne Group Registration Statement and the
Final MediaOne Group Prospectus and related matters were discussed; such counsel
has not independently verified and is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of the statements
contained in the MediaOne Group Registration Statement and the Final MediaOne
Group Prospectus, except for the statements in the Basic MediaOne Group
Prospectus under the heading "Description of Debt Securities" and the statements
in the Final MediaOne Group Prospectus under the heading "Description of the
PIES"; 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 MediaOne Group Registration Statement, as of the MediaOne Group Effective
Date, and the Final MediaOne Group Prospectus (other than the financial
statements and other financial, accounting and operating (as described
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<PAGE>
below) information contained therein, the AirTouch Furnished Information, and
exhibit 25 to the MediaOne Group Registration Statement, as to which such
counsel need express no opinion) did not comply as to form in all material
respects with the applicable requirements of the Act, the Exchange Act and
the Trust Indenture Act and the respective rules thereunder; and such counsel
has no reason to believe that at the Effective Date the MediaOne Group
Registration Statement (other than the financial statements and schedules and
other financial, accounting and operating (as described below) information
included therein and exhibit 25 to the MediaOne Group Registration Statement)
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements included therein not misleading or that, as of the date thereof or
on the Closing Date, the Final MediaOne Group Prospectus (other than the
financial statements and schedules and other financial, accounting and
operating (as described below) information included therein, the AirTouch
Furnished Information, and exhibit 25 to the MediaOne Group Registration
Statement) included or includes any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements included therein, in the light of the
circumstances under which they were made, not misleading. For purposes of
this paragraph, the phrase "operating information" means information of the
type included in the Final MediaOne Group Prospectus in the last item under
the caption "Summary Financial Data."
(d) The Representatives shall have received from Cleary, Gottlieb,
Steen & Hamilton, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the PIES,
the Indenture, the MediaOne Group Registration Statement, the Final MediaOne
Group Prospectus (together with any supplement thereto), the Shares, the
AirTouch Registration Statement, the Final AirTouch Prospectus (together with
any supplement thereto) and other related matters as the Representatives may
reasonably require, and MediaOne Group and AirTouch shall have furnished to
such counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(e) AirTouch shall have furnished to the Representatives and to
MediaOne Group the opinion of Margaret G. Gill, Esq., Senior Vice President,
Legal, External Affairs and Secretary for AirTouch, dated as of the Closing
Date, to the effect that:
(i) each of AirTouch and the AirTouch Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is organized with full
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Final AirTouch Prospectus
and, in the case of AirTouch, to enter into and perform this Agreement;
each of AirTouch and the AirTouch Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing under the laws
of each jurisdiction in which the character of the business conducted by
it or the location of the properties owned or leased by it makes such
qualification necessary, except where the failure to be so qualified or
in good standing would not have a Material Adverse Effect;
(ii) all of the outstanding shares of AirTouch Common Stock
have been duly authorized, validly issued, fully paid and nonassessable,
with no personal liability
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attaching to the ownership thereof; except as described in the Final
AirTouch Prospectus, there are no preemptive rights, options, warrants
or other rights to subscribe for, to purchase or to convert any
obligations into or exchange any securities for, or any restriction upon
the voting or transfer of, any shares of capital stock of AirTouch
pursuant to the Amended and Restated Articles of Incorporation of
AirTouch, the Amended and Restated By-laws of AirTouch, or, to the
knowledge of such counsel, any agreement or other instrument to which
AirTouch is a party or by which it is bound; to the knowledge of such
counsel, neither the filing of the AirTouch Registration Statement nor
the offering or sale of the Shares pursuant to the PIES as contemplated
by this Agreement gives rise to any rights, other than those which have
been waived or satisfied, for or relating to the registration of any
shares of AirTouch Common Stock or other securities of AirTouch; and the
authorized, issued and outstanding capital stock of AirTouch at June 30,
1998 is as set forth under "Capitalization" in the Final AirTouch
Prospectus and the AirTouch Common Stock conforms to the description
thereof contained in the Final AirTouch Prospectus;
(iii) to the best knowledge of such counsel, there is no
franchise, contract or other document of a character required to be
described in the AirTouch Registration Statement or Final AirTouch
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required; all descriptions in the Final AirTouch Prospectus
of statutes, regulations, legal or governmental proceedings, contracts
and other documents are accurate in all material respects and fairly
present the information required to be shown;
(iv) the AirTouch Registration Statement has become effective
under the Act; any required filing of the Final AirTouch Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the effectiveness of
the AirTouch Registration Statement has been issued, and no proceedings
for that purpose have been instituted or threatened;
(v) the AirTouch Registration Statement and the Final AirTouch
Prospectus (except the financial statements and schedules and other
financial data contained therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder;
(vi) this Agreement has been duly authorized, executed and
delivered by AirTouch; the execution and delivery of this Agreement by
AirTouch and the consummation by AirTouch of the transactions
contemplated hereby will not conflict with, result in a breach or
violation of, or constitute a default under (a) the Amended and Restated
Articles of Incorporation of AirTouch, the Amended and Restated By-laws
of AirTouch or any of the AirTouch Subsidiaries or (b) any material
agreement, indenture or other instrument to which any of them is a party
or by which any of them is bound filed as an exhibit to the AirTouch
Registration Statement or otherwise known to such counsel (except, in
the case of clause (a), for such conflicts, breaches, violations and
defaults that would not result in a Material Adverse Effect), or, to the
knowledge of such counsel, any
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law, rule, administrative regulation or decree of any court,
governmental agency, regulatory body or other governmental body, or any
arbitrator having jurisdiction over AirTouch;
(vii) no consent, approval, authorization or order of any court,
governmental agency, regulatory body or other governmental body is
required for the performance of this Agreement by AirTouch or the
consummation by AirTouch of the transactions contemplated hereby, except
such as have been obtained under the Act;
(viii) to the knowledge of such counsel, there is no action,
suit or proceeding by or before any court or governmental agency,
regulatory body or other governmental body or any arbitrator involving
AirTouch required to be disclosed in the AirTouch Registration
Statement, other than those disclosed therein; and
(ix) the Shares are duly listed and admitted for trading on
the NYSE; the AirTouch Common Stock conforms in all material respects to
the description thereof contained in the Final AirTouch Prospectus.
In addition such counsel shall state that although she is not passing
upon and has not checked the accuracy or completeness, or otherwise verified the
information furnished in the AirTouch Registration Statement and the Final
AirTouch Prospectus (except to the extent otherwise set forth above), she has
considered the information required to be furnished therein, and on the basis of
such consideration, but without independent checking and verification, she has
no reason to believe that, at the AirTouch Effective Date, the AirTouch
Registration Statement and the basic prospectus included therein at the AirTouch
Effective Date contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or the AirTouch Furnished Information
contained in the Final MediaOne Prospectus as of the date of such prospectus or
on the Closing Date contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; it being understood that
with respect to the matters covered by this paragraph, counsel shall express no
opinion as to the financial statements and related schedules and other financial
or statistical data contained in or omitted from the AirTouch Registration
Statement or the AirTouch Furnished Information contained in the Final MediaOne
Prospectus.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
California or the United States, to the extent she deems proper and specified in
such opinion, upon the opinion of other counsel of good standing whom such
counsel believes to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of AirTouch and public
officials. References to the Final AirTouch Prospectus in this paragraph (e)
include any supplements thereto at the Closing Date.
(f) MediaOne Group shall have furnished to the Representatives a
certificate of MediaOne Group, signed by the Executive Vice President and Chief
Financial Officer of
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MediaOne Group or Senior Vice President and Treasurer of MediaOne Group,
dated the Closing Date, to the effect that the signer of such certificate has
carefully examined the MediaOne Group Registration Statement, the Final
MediaOne Group Prospectus, any supplements to the Final MediaOne Group
Prospectus and this Agreement and that to the best of his knowledge after
reasonable investigation:
(i) the representations and warranties of MediaOne Group in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and
MediaOne Group has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
MediaOne Group Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to MediaOne Group's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Final MediaOne Group Prospectus (exclusive of any
supplement thereto), there has been no material adverse change in the
financial position or results of operations of MediaOne Group and its
subsidiaries taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Final MediaOne Group Prospectus (exclusive of any
supplement thereto).
(g) AirTouch shall have furnished to the Representatives a
certificate of AirTouch, signed by one of: the Chairman of the Board, the Chief
Executive Officer, the President, any Vice Chairman, or any Vice President, and
one of: the Chief Financial Officer, the Treasurer or any Assistant Treasurer
of AirTouch, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the AirTouch Registration Statement, the
Final AirTouch Prospectus, any supplements to the Final AirTouch Prospectus and
this Agreement and that:
(i) the representations and warranties of AirTouch in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and
AirTouch has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
AirTouch Registration Statement has been issued and no proceedings for
that purpose have been instituted and are pending or, to his or her
knowledge, threatened as of such date; and
(iii) since the date of the most recent financial statements
included in the Final AirTouch Prospectus (exclusive of any supplement
thereto), there has been no material adverse change or any development
involving a prospective material adverse change in the Financial
condition or results of operations of AirTouch and its subsidiaries
taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated by
the Final AirTouch Prospectus (exclusive of any
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supplement thereto).
(i) At the Execution Time and at the Closing Date, Arthur Andersen
LLP, accountants for MediaOne Group for the years ended December 31, 1996 and
1997, shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act and
the respective applicable published rules and regulations thereunder and stating
in effect that:
(1) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the MediaOne
Group Registration Statement and the Final MediaOne Group Prospectus and
reported on by them comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations;
(2) on the basis of a reading of the latest unaudited financial
statements made available by the MediaOne Group and its subsidiaries;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of the meetings of
the shareholders, directors and executive, finance, audit committees of
MediaOne Group and its subsidiaries; and inquiries of certain officials
of MediaOne Group who have responsibility for financial and accounting
matters of MediaOne Group and its subsidiaries as to transactions and
events subsequent to December 31, 1997, nothing came to their attention
which caused them to believe that:
(a) any unaudited financial statements included or
incorporated in the MediaOne Group Registration Statement and the
Final MediaOne Group Prospectus do not comply in form in all
material respects with applicable accounting requirements and with
the published rules and regulations of the Commission with respect
to financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; or said unaudited
financial statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the MediaOne Group Registration Statement and the
Final MediaOne Group Prospectus; or
(b) with respect to the period subsequent to June 30, 1998,
there were any changes, at a specified date not more than five
business days prior to the date of the letter, in the capital stock
of MediaOne Group, or any increase in the consolidated long-term
debt of MediaOne Group and its subsidiaries, or decreases in
consolidated net current assets or net assets as compared with the
amounts shown on the June 30, 1998 consolidated balance sheet
included or
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incorporated in the MediaOne Group Registration Statement and the
Final MediaOne Group Prospectus, or for the period from July 1,
1998 to such specified date there were any decreases, as compared
with the corresponding period in the preceding year in consolidated
revenues, net income or net income per share of MediaOne Group and
its subsidiaries, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be
accompanied by an explanation by MediaOne Group as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives;
(c) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of MediaOne Group and its subsidiaries)
set forth or incorporated in the MediaOne Group Registration
Statement and the Final MediaOne Group Prospectus and in Exhibit 12
to the MediaOne Group Registration Statement, agrees with the
accounting records of MediaOne Group and its subsidiaries,
excluding any questions of legal interpretation.
(ii) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP, accountants for MediaOne Group for the year ended
December 31, 1995, shall have furnished to the Representatives a letter or
letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(1) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the MediaOne
Group Registration Statement and the Final MediaOne Group Prospectus and
reported on by them comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations;
(2) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of MediaOne Group and its subsidiaries)
specified by the Representatives set forth or incorporated in the
MediaOne Group Registration Statement and the Final MediaOne Group
Prospectus, agrees with the accounting records of MediaOne Group and its
subsidiaries, excluding any questions of legal interpretation.
References to the Final MediaOne Group Prospectus in this paragraph (h) include
any supplement thereto at the date of the letter.
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(i) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP, accountants for AirTouch, shall have furnished to
the Representatives a letter or letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within the
meaning of the Act and the Exchange Act and the respective applicable published
rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the AirTouch
Registration Statement and the Final AirTouch Prospectus and reported on
by them comply in form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by AirTouch and its subsidiaries;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of the meetings of
the shareholders, directors and committees of AirTouch and its
subsidiaries; and inquiries of certain officials of AirTouch who have
responsibility for financial and accounting matters of AirTouch and its
subsidiaries as to transactions and events subsequent to December 31,
1997, nothing came to their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the AirTouch Registration Statement and the Final
AirTouch Prospectus do not comply in form in all material respects
with applicable accounting requirements and with the published
rules and regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; or said unaudited financial statements
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements included or incorporated in the
AirTouch Registration Statement and the Final AirTouch Prospectus;
or
(2) with respect to the period subsequent to June 30, 1998,
there were any increases, at a specified date not more than five
business days prior to the date of the letter, in borrowings under
the commercial paper program of AirTouch and its consolidated
subsidiaries as compared with the amounts shown on the June 30,
1998 consolidated balance sheet included or incorporated in the
AirTouch Registration Statement and the Final AirTouch Prospectus,
or for the period from July 1, 1998 to such specified date there
were any decreases, as compared with the corresponding period in
the preceding year, in consolidated operating revenues, except in
all instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by
AirTouch as to the significance thereof unless said explanation is
not deemed necessary
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by the Representative.
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of AirTouch and its subsidiaries) set forth
or incorporated in the AirTouch Registration Statement and the Final
AirTouch Prospectus, agrees with the accounting records of AirTouch and
its subsidiaries, excluding any questions of legal interpretation.
References to the Final AirTouch Prospectus in this paragraph (i) include any
supplement thereto at the date of the letter.
(j) At the Execution Time and at the Closing Date, Arthur Andersen
LLP, accountants for the former US WEST NewVector Group, Inc., shall have
furnished to the Representatives a letter or letters related to US WEST
NewVector Group, Inc., dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Representatives.
(k) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in each of the MediaOne Group Registration Statement
and the AirTouch Registration Statements (exclusive of any amendment thereof)
and each of the Final MediaOne Group Prospectus and the Final AirTouch
Prospectus (exclusive of any supplement thereto), there shall not have been any
change, or any development involving a prospective change, in or affecting the
business or properties of either MediaOne Group or AirTouch and their respective
subsidiaries, taken as a whole, the effect of which is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the PIES as contemplated
by the MediaOne Group Registration Statement (exclusive of any amendment
thereof) and the Final MediaOne Group Prospectus (exclusive of any supplement
thereto).
(l) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of MediaOne Group's or AirTouch's debt securities
by any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
(m) The PIES shall have been listed and admitted and authorized for
trading on the New York Stock Exchange, and satisfactory evidence of such
actions shall have been provided to the Representatives.
(n) Prior to the Closing Date, each of MediaOne Group and AirTouch
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 8 shall not have
been fulfilled in
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all material respects when and as provided in this Agreement, or if any of
the opinions and certificates mentioned above or elsewhere in this Agreement
shall not be in all material respects reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled
at, or at any time prior to, the Closing Date by the Representatives. Notice
of such cancellation shall be given to MediaOne Group and AirTouch in writing
or by telephone or telegraph confirmed in writing.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the PIES
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 8 hereof is not satisfied, because of
any termination pursuant to Section 12 hereof or because of any refusal,
inability or failure on the part of MediaOne Group or AirTouch to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, MediaOne Group will reimburse the
Underwriters severally upon demand for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the PIES.
The Underwriters agree to pay such expenses, fees and disbursements in any other
event. In no event will MediaOne Group be liable to any of the Underwriters for
damages on account of loss of anticipated profits.
10. INDEMNIFICATION AND CONTRIBUTION. (a) MediaOne Group agrees to
indemnify and hold harmless each Underwriter and AirTouch, the directors,
officers, employees and agents of each Underwriter or AirTouch, and each person
who controls any Underwriter or AirTouch within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
MediaOne Group Registration Statement as originally filed or in any amendment
thereof, or in the Basic MediaOne Group Prospectus, any Preliminary Final
MediaOne Group Prospectus or the Final MediaOne Group Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that MediaOne Group will not be liable under the indemnity agreement in this
paragraph (a) to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the MediaOne Group
Registration Statement as originally filed or in any amendment thereof, or in
the Basic MediaOne Group Prospectus, any Preliminary Final MediaOne Group
Prospectus or the Final MediaOne Group Prospectus, or in any amendment thereof
or supplement thereto in reliance upon and in conformity with (A) written
information furnished to MediaOne Group by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein or (B) the
AirTouch Furnished Information (including the information contained in any
Preliminary Final AirTouch
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Prospectus or Final AirTouch Prospectus included in any such document (other
than information contained in or omitted from any such Preliminary Final
AirTouch Prospectus or Final AirTouch Prospectus in reliance on and
conformity with MediaOne Group Furnished Information)); and PROVIDED, FURTHER
that MediaOne Group shall not be liable to any Underwriter under the
indemnity agreement in this paragraph (a) with respect to the Preliminary
Final MediaOne Group Prospectus to the extent that any such loss, claim,
damage or liability of such Underwriter results from the fact that such
Underwriter sold PIES to a person as to whom it shall be established that
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Final MediaOne Group Prospectus (excluding documents
incorporated by reference), as the case may be, or of the Final MediaOne
Group Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where such delivery is required by the
Act and where MediaOne Group has previously furnished copies thereof in
sufficient quantity to such Underwriter and the loss, claim, damage or
liability of such Underwriter results from an untrue statement or omission of
a material fact contained in the Final Preliminary MediaOne Group Prospectus
and corrected in the Final MediaOne Group Prospectus (excluding documents
incorporated by reference) or in the Final MediaOne Group Prospectus as then
amended or supplemented (excluding documents incorporated by reference).
This indemnity agreement will be in addition to any liability which MediaOne
Group may otherwise have.
(b) AirTouch agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter, and each
person who controls any Underwriter within the meaning of either the Act or
the Exchange Act, and AirTouch agrees to indemnify and hold harmless MediaOne
Group, the directors, officers, employees and agents of MediaOne Group, and
each person who controls MediaOne Group within the meaning of either the Act
or the Exchange Act, in either case, against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
a material fact contained in (i) the AirTouch Registration Statement as
originally filed or in any amendment thereof, or in any Preliminary Final
AirTouch Prospectus or the Final AirTouch Prospectus, or in any amendment
thereof or supplement thereto, or (ii) all other AirTouch Furnished
Information, or arise out of or are based upon the omission hereto, or arise
out of or are based upon the omission or alleged omission to state in the
documents referred to in clause (i) or (ii) above a material fact required to
be stated in the documents referred to in clause (i) or (ii) above or
necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED,
HOWEVER, that AirTouch will not be liable under the indemnity agreement in
this paragraph (b) to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the documents
referred to in clause (i) above in reliance upon and in conformity with (A)
written information furnished to AirTouch by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein or (B)
MediaOne Group Furnished Information; and PROVIDED,
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FURTHER that AirTouch shall not be liable to any Underwriter under the
indemnity agreement in this paragraph (b) with respect to the Preliminary
Final AirTouch Prospectus or Final MediaOne Group Prospectus to the extent
that any such loss, claim, damage or liability of such Underwriter results
from the fact that such Underwriter sold PIES to a person as to whom it shall
be established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Final MediaOne Group Prospectus
(including the Final AirTouch Prospectus, but excluding, in either case,
documents incorporated by reference)) or of the Final MediaOne Group
Prospectus (including the Final AirTouch Prospectus as then amended or
supplemented (excluding, in either case, documents incorporated by
reference)), as the case may be, in any case where such delivery is required
by the Act and, if the correction were made in the Final AirTouch Prospectus
(or amendment or supplement thereto), AirTouch has previously furnished
copies of the Final AirTouch Prospectus (excluding documents incorporated by
reference) or the Final AirTouch Prospectus as then amended or supplemented
(excluding documents incorporated by reference) in sufficient quantity to
such Underwriter and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained in
the Preliminary Final AirTouch Prospectus and corrected in the Final AirTouch
Prospectus (excluding documents incorporated by reference) or in the Final
AirTouch Prospectus as then amended or supplemented (excluding documents
incorporated by reference). This indemnity agreement will be in addition to
any liability which AirTouch may otherwise have.
(c) Each Underwriter severally agrees to indemnify and hold harmless
MediaOne Group and AirTouch, each of their respective directors, each of their
respective officers who signs the MediaOne Group Registration Statement, and
each person who controls MediaOne Group or AirTouch within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity in
paragraph (a) from MediaOne Group to each Underwriter and AirTouch, but only
with reference to written information furnished to MediaOne Group by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. MediaOne Group and AirTouch acknowledge that the statements
set forth in the last paragraph of the cover page, in the last paragraph of the
inside cover page and under the heading "Plan of Distribution" in any
Preliminary Final MediaOne Group Prospectus or the Final MediaOne Group
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters as of the date hereof for inclusion in the documents
referred to in the foregoing indemnity, and you, as the Representative, confirm
that such statements are correct.
(d) Each Underwriter severally agrees to indemnify and hold harmless
AirTouch and MediaOne Group, each of their respective directors, each of their
respective officers who signs the AirTouch Registration Statement and each
person who controls AirTouch or MediaOne Group within the meaning of either the
Act or the Exchange Act, to the same extent as the foregoing indemnity in
paragraph (b) from AirTouch to each Underwriter and MediaOne Group, but only
with reference to written information relating to such Underwriter furnished to
AirTouch or MediaOne Group by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in
clause (i) of the foregoing indemnity. This indemnity agreement will be in
addition to any liability which any Underwriter may
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otherwise have. AirTouch and MediaOne Group acknowledge that the statements
set forth in the first paragraph of the inside cover page and under the
heading "Plan of Distribution" in any Preliminary Final AirTouch Prospectus
or the Final AirTouch Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters as of the date hereof for
inclusion in the documents referred to in the foregoing indemnity, and you,
as the Representatives, confirm that such statements are correct.
Promptly after receipt by an indemnified party under this Section 10
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 10, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from any liability under paragraphs (a), (b), (c) or (d) above except
to the extent it has been materially prejudiced by such omission and (ii) will
not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraphs (a), (b), (c) or (d) above. 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; PROVIDED, HOWEVER, that, any indemnified
party may employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party except as provided below. Upon receipt of
notice from the indemnifying party to the indemnified party of its election to
assume the defense thereof and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party (except as set
forth below) under this Section 10 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in connection
with the assertion of legal defenses which the indemnified party shall have been
advised by such counsel may be available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
representatives representing the indemnified parties who are parties to such
action), (ii) the indemnifying party shall not have employed satisfactory
counsel to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). An indemnifying party shall not be
liable for any amounts paid in settlement of any action or claim without its
written consent of the indemnifying party, which shall not be unreasonably
withheld. An indemnifying party will not, without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of such indemnified party from all liability
arising out of such claim, action, suit or proceeding.
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(f) In the event that the indemnity provided in paragraph (a), (b),
(c) or (d) of this Section 10 is for any reason held by a court to be
unavailable to an indemnified party for any reason, MediaOne Group, AirTouch and
the Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which MediaOne Group, AirTouch and one or more of the Underwriters may be
subject (i) if the claim under such indemnity would have related to the
Underwriters as an indemnifying or indemnified party, (x) in such proportion as
shall be appropriate to reflect the relative benefits received by MediaOne Group
or AirTouch, as applicable, on the one hand and the Underwriters, on the other,
from the offering of the PIES or (y) if the allocation provided by clause (i)
(x) above is not permitted by applicable law or if the otherwise indemnified
party failed to give the notice required under Section 10(e), in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) (x) above but also the relative fault of MediaOne Group or AirTouch,
as applicable, on the one hand and the Underwriters, on the other, with respect
to the statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations or (ii) if the claim under the indemnity
would have related to MediaOne Group or AirTouch as the respective indemnifying
and indemnified parties (or vice versa), in such proportion as shall be
appropriate to reflect the relative fault of MediaOne Group or AirTouch, as
applicable with respect to the statements or omissions which resulted in such
Losses as well as any other relevant equitable principles; PROVIDED, HOWEVER,
that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the PIES) be
responsible for any amount in excess of the product of (i) the total Losses and
(ii) the percentage (expressed as a decimal) that the aggregate underwriting
discount applicable to the PIES purchased by such Underwriter hereunder bears to
the aggregate initial public offering price of such PIES. The relative benefits
received by MediaOne Group or AirTouch, as applicable, on the one hand and the
Underwriters on the other with respect to such offering shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by MediaOne Group, and the total underwriting discounts and
commissions, respectively, in each case as set forth on the cover page of the
Final MediaOne Group Prospectus and, as between AirTouch and the Underwriters,
AirTouch shall be deemed for this purpose to have received such total net
proceeds as received by MediaOne Group. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by MediaOne Group or AirTouch, as applicable, on the one
hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. MediaOne Group, AirTouch and the Underwriters agree
that it would not be just and equitable if contribution were determined by PRO
RATA allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (g), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 10, each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to contribution
as such Underwriter, and each person who controls MediaOne Group or AirTouch
within the meaning of either the Act or the Exchange Act, each officer of
MediaOne Group or AirTouch who shall have signed the MediaOne Group
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Registration Statement or the AirTouch Registration Statement, as the case
may be, and each director of MediaOne Group or AirTouch shall have the same
rights to contribution as MediaOne Group or AirTouch, subject in each case to
the applicable terms and conditions of this paragraph (g). Any party
entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against another party or
parties under this paragraph (g), notify such party or parties from whom
contribution may be sought, but the omission to so notify in writing such
party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise under this paragraph (g).
11. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the PIES agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of PIES
set forth opposite their names in Schedule I hereto bears to the aggregate
principal amount of PIES set forth opposite the names of all the remaining
Underwriters) the PIES which the defaulting Underwriter or Underwriters agreed
but failed to purchase; PROVIDED, HOWEVER, that in the event that the aggregate
principal amount of PIES which the defaulting Underwriter or Underwriters agreed
but failed to purchase shall exceed 10% of the aggregate amount of PIES set
forth in Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
PIES, and if such nondefaulting Underwriters do not purchase all the PIES, this
Agreement will terminate without liability to any nondefaulting Underwriter,
MediaOne Group or AirTouch. In the event of a default by any Underwriter as set
forth in this Section 11, the Closing Date shall be postponed for such period,
not exceeding seven days, as the Representatives shall determine in order that
the required changes in the MediaOne Group or AirTouch Registration Statement
and the Final MediaOne Group or Final AirTouch Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to MediaOne
Group, AirTouch and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
12. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by written notice given to
MediaOne Group and AirTouch prior to delivery of and payment for the PIES, if
prior to such time (i) trading in MediaOne Group's or AirTouch's common stock
shall have been suspended by the Commission 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, (ii) a banking moratorium
shall have been declared by either Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis, the effect of which on financial markets of the United
States is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering or delivery of the
PIES as contemplated by the Final MediaOne Group Prospectus (exclusive of any
supplement thereto).
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13. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of
MediaOne Group and AirTouch or their respective officers and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
MediaOne Group or AirTouch or any of the officers, directors or controlling
persons referred to in Section 10 hereof, and will survive delivery of and
payment for the PIES. The provisions of Sections 9 and 10 hereof shall survive
the termination or cancellation of this Agreement.
14. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to it at Three World Financial Center,
New York, New York 10285; if sent to MediaOne Group, will be mailed, delivered
or telegraphed and confirmed to it at 188 Inverness Drive West, Englewood,
Colorado 80112, attention of the Legal Department; or if sent to AirTouch, will
be mailed, delivered, telegraphed and confirmed to it at One California Street,
San Francisco, California 94111, attention of the Legal Department.
15. 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 10 hereof, and no
other person will have any right or obligation hereunder.
16. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.<PAGE>
31
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among
MediaOne Group, AirTouch and the several Underwriters.
Very truly yours,
MediaOne Group, Inc.
By: ____________________________
Name:
Title:
AirTouch Communications, Inc.
By: ____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
By: Lehman Brothers Inc.
By:
Vice President
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
32
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Amount of
Underwritten PIES
Underwriter to be Purchased
----------- -----------------
<S> <C>
Lehman Brothers Inc. 11,336,000
Morgan Stanley & Co. Incorporated 5,720,000
Goldman, Sachs & Co. 5,720,000
BT Alex. Brown 260,000
CIBC Oppenheimer Corp. 260,000
A. G. Edwards & Sons, Inc. 260,000
Everen Securities, Inc. 260,000
PaineWebber Incorporated 260,000
Prudential Securities Incorporated 250,000
Advest, Inc. 104,000
Robert W. Baird & Co. Incorporated 104,000
Dain Rauscher Wessels 104,000
A Division of Dain Rauscher Incorporated
D. A. Davidson & Co. Incorporated 104,000
Fahnestock & Co. Inc. 104,000
Edward D. Jones & Co., L.P. 104,000
Legg Mason Wood Walker, Incorporated 104,000
McDonald & Company Securities, Inc. 104,000
Piper Jaffray Inc. 104,000
Ragen MacKenzie Incorporated 104,000
Raymond James & Associates, Inc. 104,000
Muriel Siebert & Co., Inc. 104,000
Stifel, Nicolaus & Company, Incorporated 104,000
Sutro & Co. Incorporated 104,000
Tucker Anthony Incorporated 104,000
Wheat First Securities, Inc. 104,000
----------
Total 26,000,000
----------
----------
</TABLE>
33
<PAGE>
===============================================================================
MEDIAONE GROUP, INC.,
Issuer
and
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
--------------------------------
THIRD SUPPLEMENTAL INDENTURE
Dated as of August [__], 1998
Supplemental to Indenture dated as of November 13, 1995
===============================================================================
<PAGE>
THIRD SUPPLEMENTAL INDENTURE dated as of August [__], 1998 (this
"Supplemental Indenture"), made and entered into by and between MediaOne Group,
Inc., a corporation organized and existing under the laws of the State of
Delaware having its principal office at 188 Inverness Drive West, Englewood, CO
80112 (the "Company"), and The First National Bank of Chicago, a national
banking association duly organized and existing under the laws of the United
States, as Trustee (the "Trustee") under the indenture of the Company (the
"Indenture") dated as of November 13, 1995.
WHEREAS, Sections 9.01(6) and (7) of the Indenture provide that the
Company and Trustee may enter into one or more indentures supplemental to the
Indenture without the consent of any Securityholder, (a) to provide for the
issuance of and establish the form, terms and conditions of Securities of any
Series as provided by Section 2.02 thereof and (b) to make any change in the
Indenture that does not adversely affect the rights of any Securityholder in any
material respect; and
WHEREAS, the Indenture also provides for the issuance from time to
time of unsecured and unsubordinated debentures, notes or other evidences of
indebtedness (the "Securities"), issuable for the purposes and subject to the
limitations contained in the Indenture; and
WHEREAS, the Company has duly authorized the creation of a Series of
its Securities denominated its "__% Exchangeable Notes Due August 15, 2001"
representing up to [ ] of its "Premium Income Exchangeable
Securities -SM-" (such Securities being referred to herein as the "PIES -SM-"),
the principal amount of which is mandatorily exchangeable at Maturity into
shares of the common stock, par value $.01 per share (the "AirTouch Common
Stock"), of AirTouch Communications, Inc., a Delaware corporation ("AirTouch"),
or, at the option of the Company (under the circumstances described herein),
cash, in either case at the Exchange Rate (as defined herein) and/or such other
consideration as permitted or required by the terms of the PIES; and
WHEREAS, the entry into this Supplemental Indenture by the parties
hereto is in all respects authorized by the provisions of the Indenture; and
WHEREAS, the Company has duly authorized the execution and delivery of
this Supplemental Indenture, and all things necessary have been done to make the
PIES, when executed by the Company and authenticated and delivered hereunder and
duly issued by the Company, the valid obligations of the Company, and to make
this Supplemental Indenture a valid agreement of the Company, in accordance with
their and its terms:
NOW, THEREFORE:
For and in consideration of the premises and purchase of the
Securities of any
2
<PAGE>
Series issued on or after the date hereof by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities of any such Series, as follows:
ARTICLE I
Certain Provisions of General Application
SECTION 101. DEFINITIONS.
For all purposes of the Indenture and this Supplemental Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article;
(2) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to the Indenture and this Supplemental Indenture as a whole
and not to any particular Article, Section or other subdivision; and
capitalized terms used but not defined herein are used as they are
defined in the Indenture.
"Adjustment Event" has the meaning set forth in Section 205(b).
"AirTouch Common Stock" has the meaning set forth in the recitals to
this Supplemental Indenture.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which the NYSE, banking institutions or trust companies in The City of New
York are authorized or obligated by law or executive order to close.
"Cash Delivery Option" has the meaning set forth in Section 202.
"Closing Price" of any security on any date of determination means (i)
the closing sale price (or, if no closing price is reported, the last reported
sale price) of such security (regular way) on the NYSE on such date, (ii) if
such security is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, (iii) if such security
is not so listed on a United States national or regional securities exchange, as
reported by the NASDAQ National Market, or (iv) if such security is not so
reported, the last quoted bid price for such security in the over-the-counter
market as reported by the National Quotation Bureau or similar organization.
"Continuing Obligations" means the Company's obligations in Sections
2.04,
3
<PAGE>
2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 7.07, 7.08 and Article 8 (as amended
hereby) of the Indenture and Section 206(c) hereof, each of which shall survive
until the Securities are no longer outstanding.
"Dilution Event" has the meaning set forth in Section 206(a)(ii).
"Exchange Rate" means a rate equal to (a) if the Maturity Price is
greater than or equal to $- (the "Threshold Appreciation Price"), - shares of
AirTouch Common Stock per PIES, (b) if the Maturity Price is less than the
Threshold Appreciation Price but is greater than the Initial Price, a fraction
of one share of AirTouch Common Stock per PIES equal to the quotient of (i) the
Initial Price divided by (ii) the Maturity Price (such fractional share being
calculated to the nearest 1/10,000th of a share or, if there is not a nearest
1/10,000th of a share, to the next highest 1/10,000th of a share) and (c) if the
Maturity Price is less than or equal to the Initial Price, one share of AirTouch
Common Stock per PIES; PROVIDED, HOWEVER, that the Exchange Rate is subject to
adjustment from time to time pursuant to Section 205(a).
"Extension Period" has the meaning set forth in Section 204.
"Initial Price" means $- per share of AirTouch Common Stock.
"Interest Payment Date" means February [15], May [15], August [15],
and November [15] of each year, commencing November [15], 1998.
"Market Price" means, as of any date of determination, the average
Closing Price per share of AirTouch Common Stock on the five Trading Days
immediately prior to (but not including) the date of determination; PROVIDED,
HOWEVER, that if there are not five Trading Days for the AirTouch Common Stock
occurring later than the 60th calendar day immediately prior to, but not
including, such date, "Market Price" means the market value per share of
AirTouch Common Stock as of such date as determined by a nationally recognized
investment banking firm retained for such purpose by the Company. For the
purposes of determining the Market Price, the Closing Price of any security on
any day prior to any "ex-dividend" date occurring during such five Trading Day
period for any dividend paid or to be paid with respect to such security shall
be reduced by the amount of such dividend.
"Maturity" means the date on which the principal of a PIES becomes due
and payable as provided herein, whether at Stated Maturity (whether as initially
stated or extended) or by declaration of acceleration, Post-Extension
Termination or otherwise.
"Maturity Price" means (i) if the date of Maturity occurs other than
at a Post-Extension Termination Date, the average Closing Price per share of
AirTouch Common Stock on the 20 Trading Days immediately prior to but not
including such date of Maturity and (ii) if the
4
<PAGE>
date of Maturity occurs at a Post-Extension Termination Date, the Closing
Price per share of AirTouch Common Stock on the Trading Day immediately
preceding the date that the related Refinancing Offer is priced (the "Pricing
Date") or, if such Refinancing Offer is priced after 4:00 p.m., New York
time, on the Pricing Date, the Closing Price per share on the Pricing Date;
PROVIDED, HOWEVER, that in the case of clause (i) if there are not 20 Trading
Days for the AirTouch Common Stock occurring later than the 60th calendar day
immediately prior to, but not including, such date of Maturity, or in the
case of clause (ii) if there is no Trading Day for AirTouch Common Stock
occurring on the Business Day immediately prior to the Pricing Date or if the
Refinancing Offer is priced after 4:00 p.m., New York time on the Pricing
Date and the Pricing Date is not a Trading Date, then in any such case
"Maturity Price" means the market value per share of AirTouch Common Stock as
of Maturity as determined by a nationally recognized independent investment
banking firm retained for such purpose by the Company. For purposes of
determining the Maturity Price, the Closing Price of any securities on any
day prior to any "ex-dividend" date occurring during the relevant 20 Trading
Day Period for any dividend paid or to be paid with respect to such security
should be reduced by the amount of such dividend.
"NYSE" means the New York Stock Exchange, Inc.
"Ordinary Cash Dividend" has the meaning set forth in subparagraph (5)
of Section 205(b).
"PIES" has the meaning set forth in the recitals to this Supplemental
Indenture.
"Post-Extension Termination" has the meaning set forth in Section 204.
"Post-Extension Termination Date" means any date of Maturity other
than the Stated Maturity that is established pursuant to Section 204.
"Pricing Date" has the meaning specified in the definition of
"Maturity Price" set forth in this Article.
"Refinancing Offer" means a refinancing, reoffering or retirement of
all or a part of the PIES effected not earlier than August [__], 2001 by means
of a completed offer or offers (which may include one or more exchange offers)
by or on behalf of the Company.
"Reported Securities" has the meaning set forth in subparagraph (3) of
Section 205(b).
"Share Components" means the ratios of shares of AirTouch Common Stock
per PIES specified in clauses (a), (b) and (c) of the definition of "Exchange
Rate" set forth in this Article.
5
<PAGE>
"Stated Maturity" means August [__] 2001, except that, following an
extension pursuant to Section 204, "Stated Maturity" as of the time of
determination means November [ ], 2001 or February [ ] 2002 as indicated in
the most recent extension notice given pursuant to Section 206(d).
"Threshold Appreciation Price" has the meaning specified in the
definition of "Exchange Rate" set forth in this Article.
"Trading Day" means a day on which the security the Closing Price of
which is being determined (a) is not suspended from trading on any national or
regional securities exchange or association or over-the-counter market at the
close of business and (b) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of such security.
"Transaction Value" means (a) for any cash received in any
Adjustment Event, the amount of cash received per share of AirTouch Common
Stock, (b) for any Reported Securities received in any Adjustment Event, an
amount equal to the product of (x) the average Closing Price per security of
such Reported Securities on the 20 Trading Days immediately prior to, but not
including, Maturity multiplied by (y) the number of such Reported Securities
(as adjusted pursuant to subparagraph (b)(4) of Section 205) received per
share of AirTouch Common Stock and (c) for any property received in any
Adjustment Event other than cash or such Reported Securities, an amount equal
to the fair market value of the property received per share of AirTouch
Common Stock on the date such property is received, as determined by a
nationally recognized investment banking firm retained for this purpose by
the Company; PROVIDED, HOWEVER, that in the case of clause (b), (i) with
respect to securities that are Reported Securities by virtue of only clause
(iv) of the definition of Reported Securities, "Transaction Value" means the
product of the average of the mid-point of the last bid and ask prices for
such Reported Security as of Maturity from each of at least three nationally
recognized investment banking firms retained for such purpose by the Company
multiplied by the number of such Reported Securities (as adjusted pursuant to
subparagraph (b)(4) of Section 205) received per share of AirTouch Common
Stock and (ii) with respect of all other Reported Securities, if there are
not 20 Trading Days for any particular Reported Security occurring after the
60th calendar day immediately prior to, but not including, the date of
Maturity, Transaction Value with respect to such Reported Security means the
market value per security of such Reported Security as of Maturity as
determined by a nationally recognized investment banking firm retained for
such purpose by the Company multiplied by the number of such Reported
Securities (as adjusted pursuant to subparagraph (b)(4) of Section 205)
received per share of AirTouch Common Stock. For purposes of calculating the
Transaction Value, any cash, Reported Securities or other property receivable
in an Adjustment Event shall be deemed to have been received immediately
prior to the close of business on the record date for such Adjustment Event
or, if there is no record date for such Adjustment Event, immediately prior
to the close of business on the effective date of such Adjustment Event.
6
<PAGE>
"U.S. Government Obligations" has the meaning set forth in Section
303.
SECTION 102. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
SECTION 103. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Supplemental Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.
SECTION 104. SEPARABILITY.
In case any provision in this Supplemental Indenture or the PIES shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 105. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Supplemental Indenture
by any of the provisions of the Trust Indenture Act, such required provision
shall control.
SECTION 106. BENEFITS OF SUPPLEMENTAL INDENTURE.
Nothing in this Supplemental Indenture, expressed or implied, shall
give to any person, other than the parties hereto and their successors
hereunder, and the Holders of the PIES any benefit or any legal or equitable
right, remedy or claim under this Supplemental Indenture.
SECTION 107. GOVERNING LAW.
THIS SUPPLEMENTAL INDENTURE AND THE PIES SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND THIS SUPPLEMENTAL
INDENTURE AND EACH SUCH PIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
ARTICLE II
The PIES
SECTION 201. TITLE AND TERMS.
7
<PAGE>
There is hereby created under the Indenture a Series of Securities
known and designated as the "__% Exchangeable Notes Due August 15, 2001" of the
Company. The aggregate principal amount of PIES that may be authenticated and
delivered under this Indenture is limited to $-, except for PIES authenticated
and delivered upon reregistration of, transfer of, or in exchange for, or in
lieu of, other PIES pursuant to Section 2.08, 2.09, 2.12, 3.06 or 9.05 of the
Indenture.
The Stated Maturity for payment of principal of the PIES shall be
August 15, 2001 or a later date as provided in the definition of "Stated
Maturity" in Section 101 and the PIES shall bear interest at the rate of __% per
annum, from August [_], 1998 or the most recent Interest Payment Date to which
interest has been paid or duly provided for, payable quarterly in arrears on
February 15, May 15, August 15 and November 15 of each year (commencing November
15, 1998) and at Maturity, to the persons in whose names the PIES (or any
predecessor securities) are registered at the close of business on the last day
of the calendar month immediately preceding such interest payment date, until
principal thereof is paid or made available for payment. In addition, if the
Stated Maturity is extended as provided in Section 204, interest at the rate set
forth in this Section 201 will continue to accrue on the PIES until Maturity and
additional interest will accrue in arrears as provided in Section 204.
The PIES shall be initially issued in the form of a Global Security
and the depositary for the PIES shall be The Depository Trust Company, New York,
New York (the "Depositary").
The PIES shall not be redeemable or terminable prior to their Stated
Maturity except as provided in Section 204 and shall not be subject to any
sinking fund.
The PIES shall be mandatorily exchangeable as provided in Section 202.
The PIES shall be issuable in denominations of $- and any integral
multiple thereof.
The Company shall not be obligated to pay any additional amount on the
PIES in respect of taxes, except as otherwise provided in Sections 207 and 301.
The form of PIES attached hereto as Exhibit A is hereby adopted,
pursuant to Section 9.01(7) of the Indenture, as a form of Securities of a
Series that consists of PIES.
SECTION 202. EXCHANGE AT MATURITY.
Subject to Section 205(b), at Maturity the principal amount of each
PIES shall be mandatorily exchanged by the Company into a number of shares of
AirTouch Common Stock at the Exchange Rate. The Holders of the PIES shall be
responsible for the payment of any and all
8
<PAGE>
brokerage costs upon the subsequent sale of such shares. The Company may at
its option deliver cash in lieu of delivering all or a portion (such portion
to be selected by the Company in its discretion) of the shares of AirTouch
Common Stock otherwise deliverable at Maturity (the "Cash Delivery Option").
The amount of cash deliverable in respect of each PIES (calculated to the
nearest 1/100th of a dollar per PIES or, if there is not a nearest 1/100th of
a dollar, then to the next higher 1/100th of a dollar) shall be equal to the
product of the number of shares of AirTouch Common Stock otherwise
deliverable in respect of such PIES on the date of Maturity multiplied by the
Maturity Price. An election to exercise the Cash Delivery Option with
respect to less than all of the shares of AirTouch Common Stock otherwise
deliverable at Maturity shall not in any way limit the Company's obligation
to deliver the remaining shares of AirTouch Common Stock deliverable at
Maturity. As further provided in Section 203, no fractional shares of
AirTouch Common Stock shall be delivered pursuant to this Section 202. In
determining the amount of cash deliverable in exchange for the PIES in lieu
of shares of AirTouch Common Stock pursuant to the fourth sentence of this
Section 202, if more than one PIES shall be surrendered for exchange at one
time by the same Holder, the amount of cash which shall be delivered upon
exchange shall be computed on the basis of the aggregate number of PIES so
surrendered at Maturity.
SECTION 203. NO FRACTIONAL SHARES.
If more than one PIES shall be surrendered for exchange pursuant to
Section 202 at one time by the same Holder, the number of full shares of
AirTouch Common Stock which shall be delivered upon such exchange, in whole or
in part, as the case may be, shall be computed on the basis of the aggregate
number of PIES surrendered. No fractional shares or scrip representing
fractional shares of AirTouch Common Stock shall be issued or delivered upon any
exchange pursuant to Section 202 of any PIES. In lieu of any fractional share
of AirTouch Common Stock which, but for the immediately preceding sentence,
would otherwise be deliverable upon such exchange, the Company, through any
applicable Paying Agent, shall make a cash payment in respect of such fractional
interest in an amount equal to the value of such fractional shares at the
Maturity Price. The Company shall, upon such exchange of any PIES, provide cash
to any applicable Paying Agent in an amount equal to the cash payable with
respect to any fractional shares of AirTouch Common Stock deliverable upon such
exchange, and the Company shall retain such fractional shares of AirTouch Common
Stock.
SECTION 204. EXTENSIONS AND POST-EXTENSION TERMINATION.
The Company may at its option elect to extend the Stated Maturity of
the PIES to November [__], 2001 and may further elect to extend the maturity of
the PIES to February [__], 2002. The period from and including August [+1],
2001 to the then current Stated Maturity, is referred to herein as an "Extension
Period." The Company may exercise the election to extend the Stated Maturity by
giving notice as provided in Section 206(d). In the event that the Company
exercises its option to extend the
9
<PAGE>
maturity of the PIES to February __, 2002, interest at the rate set forth in
Section 201 will continue to accrue on the PIES until Maturity and additional
interest will accrue in arrears, commencing November [__], 2001 until
Maturity, at a rate per annum equal to 0.5% of the principal amount of the
PIES. Such additional interest shall be payable in the same manner, at the
same time and to the same Holders as other interest payments required to be
made under the PIES.
The Company may elect to cause all but not less than all of the
PIES to mature at any time within an Extension Period upon completion of a
Refinancing Offer ("Post-Extension Termination"), whereupon the PIES shall
terminate and be repaid. The Company may exercise this election by (i)
providing to the Trustee an Officers' Certificate to the effect that MediaOne
is engaged in good faith efforts to launch and consummate a Refinancing Offer
and (ii) giving notice as provided in Section 206(e). The related date of
Maturity for the PIES shall be the anticipated settlement date indicated in
such notice, except that if the Company postpones the settlement date for the
Refinancing Offer and gives two Business Days' prior notice by press release
to Holders of such postponement, the date of Maturity for the PIES shall be
such postponed date on which the Refinancing Offer actually settles.
Notwithstanding the foregoing, if the Company terminates or abandons a
Refinancing Offer and gives notice thereof by press release to Holders, any
election made to cause Post-Extension Termination of the PIES will be deemed
rescinded and thereafter the PIES will mature on the then existing date of
Stated Maturity, subject to Post-Extension Termination on the terms described
herein.
SECTION 205. ADJUSTMENT OF EXCHANGE RATE.
(a) ADJUSTMENT FOR DISTRIBUTIONS, CERTAIN RECLASSIFICATIONS, ETC.
The Exchange Rate shall be subject to adjustment from time to time as follows:
(i) If AirTouch shall:
(A) pay a stock dividend or make a distribution, in either case,
with respect to the AirTouch Common Stock in shares of such stock;
(B) subdivide or split its outstanding shares of AirTouch Common
Stock;
(C) combine its outstanding shares of AirTouch Common Stock into
a smaller number of shares; or
(D) issue by reclassification (other than a reclassification
pursuant to clause (ii), (iii), (iv) or (v) of the definition of
Adjustment Event in paragraph (b) of this Section) of its shares of
AirTouch Common Stock any other shares of common stock of AirTouch
(other than shares of a class of common stock of
10
<PAGE>
AirTouch that is intended to reflect separately less than all of the
businesses of AirTouch and its subsidiaries);
then, in any such event, the Exchange Rate shall be adjusted by adjusting
each of the Share Components of the Exchange Rate in effect immediately
prior to such event so that a Holder of any PIES shall be entitled to
receive, upon mandatory exchange pursuant to Section 202 of the principal
amount of such PIES at Maturity, the number of shares of AirTouch Common
Stock (or, in the case of a reclassification referred to in clause (D) of
this sentence, the number of shares of other common stock of AirTouch
issued pursuant thereto) which such Holder of such PIES would have owned or
been entitled to receive immediately following such event had such PIES
been exchanged immediately prior to such event or any record date with
respect thereto. Each such adjustment shall become effective at the
opening of business on the Business Day next following the record date for
determination of holders of AirTouch Common Stock entitled to receive such
dividend or distribution in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of
a subdivision, split, combination or reclassification. Each such
adjustment shall be made successively.
(ii) If AirTouch shall, after the date hereof, issue rights or warrants
(other than rights to purchase AirTouch Common Stock pursuant to a plan for
the reinvestment of dividends or interest) to all holders of AirTouch
Common Stock entitling them to subscribe for or purchase shares of AirTouch
Common Stock at a price per share less than the Market Price of the
AirTouch Common Stock on the Business Day next following the record date
for the determination of holders of AirTouch Common Stock entitled to
receive such rights or warrants, then in each case the Exchange Rate shall
be adjusted by multiplying each of the Share Components of the Exchange
Rate in effect on the record date for the issuance of such rights or
warrants, by a fraction, of which the numerator shall be (A) the number of
shares of AirTouch Common Stock outstanding on the record date for the
issuance of such rights or warrants, plus (B) the number of additional
shares of AirTouch Common Stock offered for subscription or purchase
pursuant to such rights or warrants, and of which the denominator shall be
(X) the number of shares of AirTouch Common Stock outstanding on the record
date for the issuance of such rights or warrants, plus (Y) the number
specified in clause (B) above multiplied by the quotient of the exercise
price of such rights or warrants divided by the Market Price of the
AirTouch Common Stock on the Business Day next following the record date
for the determination of holders of AirTouch Common Stock entitled to
receive such rights or warrants. Such adjustment shall become effective at
the opening of business on the Business Day next following the record date
for the determination of stockholders entitled to receive such rights or
warrants. To the extent that such rights or warrants expire prior to the
Maturity of the PIES and shares of AirTouch Common Stock are not delivered
pursuant to such rights or warrants prior to such expiration, the Exchange
Rate shall be readjusted to the Exchange Rate which would then be in effect
had such adjustments for the issuance of
11
<PAGE>
such rights or warrants been made upon the basis of delivery of only the
number of shares of AirTouch Common Stock actually delivered pursuant to
such rights or warrants. Each such adjustment shall be made successively.
(iii) Any shares of AirTouch Common Stock issuable in payment of a
dividend that has been declared but not yet issued shall be deemed to have
been issued immediately prior to the close of business on the record date
for such dividend for purposes of calculating the number of outstanding
shares of AirTouch Common Stock under paragraph (a)(ii) of this Section.
(iv) All adjustments to the Exchange Rate shall be calculated to the
nearest 1/10,000th of a share of AirTouch Common Stock (or if there is not
a nearest 1/10,000th of a share, to the next higher 1/10,000th of a share).
No adjustment in the Exchange Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent therein;
PROVIDED, HOWEVER, that any adjustments which by reason of this paragraph
(a)(iv) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. If an adjustment is made to the
Exchange Rate pursuant to paragraphs (a)(i) or (a)(ii) of this Section, an
adjustment shall also be made to the Maturity Price as such term is used
throughout the definition of Exchange Rate set forth in Section 101. The
required adjustment to the Maturity Price shall be made at Maturity by
multiplying the Maturity Price by the cumulative number or fraction
determined under paragraphs (a)(i) and/or (a)(ii) of this Section by which
the original Exchange Rate was multiplied to adjust such rate. In the case
of the reclassification of any shares of AirTouch Common Stock into any
shares of common stock of AirTouch other than AirTouch Common Stock, such
shares of common stock shall be deemed shares of AirTouch Common Stock for
all purposes. Each such adjustment to the Exchange Rate and the Maturity
Price shall be made successively.
(b) OTHER ADJUSTMENT EVENTS. In the event of (i) any dividend or
distribution by AirTouch to all holders of AirTouch Common Stock of evidences of
its indebtedness or other assets (excluding any dividends or distributions
referred to in clause (A) of paragraph (a)(i) of this Section, any shares of
common stock issued pursuant to a reclassification referred to in clause (D) of
paragraph (a)(i) of this Section and any Ordinary Cash Dividends) or any
issuance by AirTouch to all holders of AirTouch Common Stock of rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to in paragraph (a)(ii) of this Section), (ii) any
consolidation or merger of AirTouch with or into another entity (other than a
merger or consolidation in which AirTouch is the continuing corporation and in
which the AirTouch Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of
AirTouch or another corporation), (iii) any sale, transfer, lease or conveyance
to another corporation of the property of AirTouch as an entirety or
substantially as an entirety, (iv) any statutory exchange of securities of
AirTouch with another corporation (other than in connection with a merger or
acquisition) or (v) any liquidation,
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dissolution or winding up of AirTouch (any such event, an "Adjustment
Event"), the property receivable by Holders of PIES at Maturity shall be
subject to adjustment from time to time as follows:
(1) Each Holder of a PIES will receive at Maturity, in lieu of
or (in the case of an Adjustment Event described in clause (i) of this
paragraph (b)) in addition to, the shares of AirTouch Common Stock that it
would otherwise receive as required by Section 202, cash in an amount equal
to (A) if the Maturity Price is greater than or equal to the Threshold
Appreciation Price, - multiplied by the Transaction Value, (B) if the
Maturity Price is less than the Threshold Appreciation Price but is greater
than the Initial Price, the product of (x) the Initial Price divided by the
Maturity Price multiplied by (y) the Transaction Value and (C) if the
Maturity Price is less than or equal to the Initial Price, the Transaction
Value.
(2) Following an Adjustment Event, the Maturity Price, as such
term is used throughout the definition of Exchange Rate and in subparagraph
(b)(1) above, shall be deemed to equal (A) if shares of AirTouch Common
Stock are outstanding at Maturity, the Maturity Price of the AirTouch
Common Stock, as adjusted pursuant to the provisions of paragraph (a)(iv)
of this Section, plus the Transaction Value or (B) if shares of AirTouch
Common Stock are not outstanding at Maturity, the Transaction Value.
(3) Notwithstanding the foregoing, with respect to any
securities received in an Adjustment Event that (A) are (i) listed on a
United States national securities exchange, (ii) reported on a United
States national securities system subject to last sale reporting, (iii)
traded in the over-the-counter market and reported on the National
Quotation Bureau or similar organization or (iv) for which bid and ask
prices are available from at least three nationally recognized investment
banking firms and (B) are either (x) perpetual equity securities or (y)
non-perpetual equity or debt securities with a stated maturity after the
Stated Maturity ("Reported Securities"), the Company may, at its option, in
lieu of delivering cash in respect of all or a percentage (selected by the
Company in its discretion) of such Reported Securities received in an
Adjustment Event, as determined in accordance with subparagraph (b)(1),
deliver a number of such Reported Securities with a value equal to all cash
amounts that would otherwise be deliverable in respect of all or such
percentage of Reported Securities received in such Adjustment Event, as
determined in accordance with clause (b) of the definition of Transaction
Value set forth in Section 101; PROVIDED, HOWEVER, that (i) if such option
is exercised in respect of less than all cash amounts that would otherwise
be deliverable in respect of Reported Securities received in an Adjustment
Event, the Company shall deliver all cash amounts as to which such option
has not been exercised and (ii) the Company may not exercise such option if
such Reported Securities have not yet been delivered to the Holders
entitled thereto following such Adjustment Event or any record date with
respect thereto. If the Company delivers any Reported Securities, each
Holder of a PIES will be
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responsible for the payment of any and all brokerage and other
transaction costs upon the sale of such Reported Securities. If,
following any Adjustment Event, any Reported Security ceases to qualify
as a Reported Security, then (x) the Company may no longer elect to
deliver such Reported Security in lieu of an equivalent amount of cash
and (y) notwithstanding clause (b) of the definition of Transaction
Value, the Transaction Value of such Reported Security shall mean the
fair market value of such Reported Security on the date such security
ceases to qualify as a Reported Security, as determined by a nationally
recognized investment banking firm retained for this purpose by the
Company.
(4) The amount of cash and/or the kind and number of securities
into which the PIES shall be exchangeable after an Adjustment Event shall
be subject to adjustment following the date of such Adjustment Event in the
same manner and upon the occurrence of the same type of events as described
in paragraphs (a) and (b) of this Section with respect to AirTouch Common
Stock and AirTouch.
(5) For purposes of the foregoing, the term "Ordinary Cash
Dividend" means, with respect to any consecutive 365-day period, any
dividend with respect to AirTouch Common Stock paid in cash to the extent
that the amount of such dividend, together with the aggregate amount of all
other dividends on the AirTouch Common Stock paid in cash during such
365-day period, does not exceed on a per share basis 10% of the average of
the Closing Prices of the AirTouch Common Stock over such 365-day period
(the amount of cash dividends paid on a per share basis to be appropriately
adjusted to reflect the occurrence during such period of any Adjustment
Event described in Section 205(a)). For purposes of this subparagraph
(b)(5), any cash dividend shall be deemed to be paid as of the record date
for such cash dividend.
SECTION 206. NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Exchange Rate is adjusted as herein provided or an
Adjustment Event occurs, the Company shall:
(v) forthwith compute the adjusted Exchange Rate (or Transaction
Value) in accordance with Section 205 and prepare an Officers' Certificate
signed by an officer of the Company setting forth the adjusted Exchange
Rate (or Transaction Value), the method of calculation thereof in
reasonable detail and the facts requiring such adjustment and upon which
such adjustment is based, which certificate shall be conclusive, final and
binding evidence of the correctness of the adjustment, and file such
certificate forthwith with the Trustee; and
(vi) within 10 Business Days following the occurrence of an event
that permits or requires an adjustment to the Exchange Rate pursuant to
Section 205(a) (each, a "Dilution
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<PAGE>
Event") or an Adjustment Event that permits or requires a change in the
consideration to be received by Holders pursuant to Section 205(b) (or,
in either case, if the Company is not aware of such occurrence, as soon
as practicable after becoming so aware), provide written notice to the
Trustee and to the Holders of the outstanding PIES of the occurrence of
such Dilution Event or Adjustment Event including a statement in
reasonable detail setting forth the method by which any adjustment to
the Exchange Rate or change in the consideration to be received was
determined and setting forth the revised Exchange Rate or consideration,
as the case may be, per PIES, PROVIDED, THAT, in respect of any
adjustment to the Maturity Price, such notice need only disclose the
factor by which the Maturity Price is to be multiplied pursuant to
Section 205(a)(iv) in order to determine which clause of the definition
of the Exchange Rate will apply at Maturity, it being understood that,
until Maturity, the Exchange Rate itself cannot be determined.
(b) In case at any time while any of the PIES are outstanding the
Company receives notice that:
(vii) AirTouch shall declare a dividend (or any other distribution) on
or in respect of the AirTouch Common Stock to which Section 205(a)(i) or
(ii) shall apply (other than any cash dividends and distributions, if any,
paid from time to time by AirTouch that do not constitute Ordinary Cash
Dividends);
(viii) AirTouch shall authorize the issuance to all holders of
AirTouch Common Stock of rights or warrants to subscribe for or purchase
shares of AirTouch Common Stock or of any other subscription rights or
warrants;
(ix) there shall occur any conversion or reclassification of AirTouch
Common Stock (other than a subdivision or combination of outstanding shares
of such AirTouch Common Stock) or any consolidation, merger or
reorganization to which AirTouch is a party and for which approval of any
stockholders of AirTouch is required, or the sale or transfer of all or
substantially all of the assets of AirTouch; or
(x) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of AirTouch;
(xi) then the Company shall promptly cause to be delivered to the
Trustee and any applicable Paying Agent and filed at the office or
agency maintained for the purpose of exchange of PIES at Maturity in the
Borough of Manhattan, in The City of New York by the Trustee (or any
applicable Paying Agent), and shall promptly cause to be mailed to the
Holders of PIES at their last addresses as they shall appear upon the
registration books of the Security Registrar, at least 10 days before
the date hereinafter specified (or the earlier of the dates hereinafter
specified, in the event that more than one is specified), a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or grant of rights or warrants, or, if a
record is not to be taken, the date as of which the holders of AirTouch
Common Stock of record to be entitled to such
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dividend, distribution or grant of rights or warrants are to be
determined, or (y) the date, if known by the Company, on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective. Following
any Adjustment Event, the provisions of this paragraph (b) shall apply
with respect to any Reported Securities in the same manner as with
respect to AirTouch and the AirTouch Common Stock
(c) On or prior to the twenty-first Business Day preceding the Stated
Maturity of the PIES, the Company will provide notice to the Holders of record
of the PIES and to the Trustee and will publish a notice in a daily newspaper of
national circulation stating whether the Company will deliver, in accordance
with Section 202, AirTouch Common Stock, cash (and/or, in accordance with
Section 205(b), cash or Reported Securities) or a combination thereof upon the
mandatory exchange of the principal amount of the PIES and, if a combination of
cash or such securities, the relative proportion of each. After the close of
business on the Business Day immediately preceding the Stated Maturity of the
PIES, the Company shall notify the Trustee in writing of the number of shares of
AirTouch Common Stock and/or Reported Securities, or the amount of cash, to be
delivered per PIES.
(d) An election pursuant to the first paragraph of Section 204 will
be effective if, not less than twenty-one Business Days nor more than sixty
Business Days preceding the Stated Maturity of the PIES, the Company provides
notice to Holders of record of the PIES and to the Trustee and publishes a
notice in a daily newspaper of national circulation stating the Company's
election to extend the maturity of the PIES to November [__], 2001 or February
[__], 2002, as the case may be, in accordance with Section 204, subject, in
either case, to Post-Extension Termination in accordance with Section 204.
(e) An election pursuant to the second paragraph of Section 204 will
be effective if (subject to satisfaction of any additional conditions set forth
in Section 204), not less than twenty-one Business Days nor more than thirty
Business Days preceding the anticipated settlement date of a Refinancing Offer,
the Company (i) gives notice to the Holders of record of the PIES (a) of the
Company's intention to launch and consummate a Refinancing Offer and of such
anticipated settlement date and (b) that, pursuant to the terms described
herein, the PIES will be terminated and repurchased by Company on the
anticipated settlement date of the Refinancing Offer and (ii) simultaneously
with giving such notice, gives notice to The Depository Trust Company and the
Trustee and publishes a notice in a daily newspaper of national circulation
stating whether the principal amount of each PIES will be exchanged for shares
of AirTouch Common Stock, cash or a combination thereof and, if a combination of
cash and shares, the relative proportions thereof.
SECTION 207. TAXES.
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The Company will pay any and all documentary, stamp, transfer or
similar taxes that may be payable in respect of the transfer and delivery of
AirTouch Common Stock (or Reported Securities) pursuant hereto; PROVIDED,
HOWEVER, that the Company shall not be required to pay any such tax which may be
payable in respect of any transfer involved in the delivery of AirTouch Common
Stock (or Reported Securities) in a name other than that in which the PIES so
exchanged were registered, and no such transfer or delivery shall be made unless
and until the person requesting such transfer has paid to the Company the amount
of any such tax, or has established, to the satisfaction of the Company, that
such tax has been paid.
SECTION 2.08. DELIVERY OF SECURITIES UPON MATURITY.
All AirTouch Common Stock and Reported Securities deliverable to
Holders upon the Maturity of the PIES shall be delivered to such Holders,
whenever practicable, in such manner (such as by book-entry transfer) so as to
assure same-day transfer of such Securities to Holders and otherwise in the
manner customary at such time for delivery of such Securities and Securities of
the same type.
ARTICLE III
Covenants
SECTION 301. SHARES FREE AND CLEAR.
With respect to the PIES only and for the benefit of only the Holders
thereof, the Company covenants and warrants that upon exchange of a PIES at
Maturity pursuant to the Indenture and this Supplemental Indenture, the Holder
of a PIES shall receive valid title to the AirTouch Common Stock (and, in the
event an Adjustment Event has occurred and Reported Securities are delivered,
the Reported Securities) for which such PIES is at such time exchangeable
pursuant to this Indenture, free and clear of any and all liens, claims, charges
and encumbrances whatsoever. To the extent as provided in Section 207, the
Company will pay all taxes and charges with respect to the delivery of AirTouch
Common Stock (and Reported Securities) delivered in exchange for PIES hereunder.
In addition, the Company further warrants that any AirTouch Common Stock (and
Reported Securities) so delivered in exchange for PIES hereunder shall be free
of any transfer restrictions (other than such as are solely attributable to any
Holder's status as an affiliate of AirTouch or the issuer of such Reported
Securities).
Section 302. EVENT OF DEFAULT.
With respect to the PIES only and for the benefit of only the Holders
thereof, Section 6.01 of the Indenture is amended to include the following
additional Event of Default after clause (5) thereof:
"(6) the Company fails at any time after terminating certain
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of its obligations under Section 8.01 hereof to deposit with the
Trustee from time to time cash and securities in the amounts and,
in the case of the securities, of the type required by the
provisions of Section 8.01 hereof within two Business Days of
receipt of notice of such failure by the Trustee or the Company."
Section 303 DISCHARGE OF INDENTURE.
With respect to the PIES only and for the benefit of only the Holders
thereof, Sections 8.01, 8.02 and 8.03 of the Indenture are amended and restated
to read in their entirety as follows:
"Section 8.01 Defeasance.
(a) The Company shall cease to be under any obligation with
respect to the PIES or with respect to this Indenture with respect to
the PIES (other than the Continuing Obligations) on the 91st day after
the following applicable conditions have been satisfied (and
thereafter such non-compliance shall not constitute an Event of
Default): (i) the Company shall have irrevocably deposited with
respect to the PIES in trust with the Trustee as trust funds,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders with respect to each PIES (A) the maximum
number of shares of AirTouch Common Stock and of any Reported
Securities, in either case, that could (based on the Share Components
of the Exchange Rate at the time of deposit and assuming no exercise
of the Cash Delivery option and full exercise of the option to deliver
Reported Securities in lieu of cash in respect of such securities
received in an Adjustment Event) be deliverable at Maturity, with
respect to such PIES and (B) U.S. Government Obligations (as defined
below), cash or a combination thereof, in any case, sufficient
(without any reinvestment of interest or principal of such U.S.
Government Obligations), in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee at or prior to the time
of such deposit, to pay not later than one day before due (1) all
interest on such PIES to Stated Maturity and (2) the maximum cash
amount with respect to such PIES that could be deliverable at Maturity
with respect to any cash or property other than Reported Securities
received in an Adjustment Event; (ii) no Default or Event of Default
with respect to this Indenture or the PIES shall have occurred and be
continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company is a party or by which it is bound, as evidenced to the
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Trustee in an Officers' Certificate delivered to the Trustee
concurrently with such deposit; (iii) the Company has delivered to the
Trustee an Opinion of Counsel in form satisfactory to the Trustee to
the effect that Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of the Company's exercise of
its option described in clause (i) and will be subject to Federal
income tax on the same amount and in the same manner and at the same
time as would have been the case if such option had not been
exercised; (iv) the Company has paid or duly provided for payment of
all amounts then due to the Trustee pursuant to the terms of this
Indenture; (v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating, as applicable,
that all conditions precedent provided for herein relating to the
discharge of the Company's obligations to comply with certain
covenants have been complied with; and (vi) the Company has delivered
to the Trustee an Opinion of Counsel to the effect that after the
passage of 90 days after the deposit, the trust funds will not be
subject to the effect of any applicable Federal or State bankruptcy,
insolvency or similar law.
(b) If any Dilution Event or any Adjustment Event shall occur,
in either case, following a deposit (an "initial deposit") pursuant to
paragraph (a) of this Section, then the Company shall make an
additional deposit with the Trustee (or the Trustee shall remit to the
Company) a number of shares of AirTouch Common Stock, Reported
Securities, U.S. Government Obligations and an amount of cash such
that the Trustee will hold the number of such securities and amount of
cash that it would be entitled to hold if such initial deposit (and
any permitted substitutions described below) were made immediately
following such event.
(c) Unless the Company is in default under the Indenture, it
may, at its option, substitute for the shares of AirTouch Common Stock
or Reported Securities deposited pursuant to paragraph (a) of this
Section U.S. Government Obligations having an aggregate market value
at the time of substitution and at daily mark-to-market valuations
thereafter of not less than 125% (except as provided below) of the
product of the Closing Price per share of AirTouch Common Stock or
security of Reported Securities, respectively, on the day immediately
preceding the time of each substitution or valuation multiplied by the
number of shares of AirTouch Common Stock or Reported Securities,
respectively, for which such obligations are being substituted. The
Company may, at its option substitute U.S. Government Obligations for
shares of AirTouch
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Common Stock or for Reported Securities pledged after any dilution
adjustment or Adjustment Event in the same manner described above
for such securities pledged pursuant to paragraph (a) of this
Section. Prior to any substitution made pursuant to this paragraph,
the Company shall delivery to the Trustee a legal opinion of
nationally recognized counsel to the effect that the deposit of
U.S. Government Obligations having an aggregate market value of
125% of the amount specified above is sufficient to avoid a
violation of any applicable federal law or regulation. If the
Company delivers an opinion to the foregoing effect but with
respect to a greater percentage, then all references in this
paragraph to 125% shall be deemed to be references to such greater
amount, as in the opinion of such counsel, shall be required to
avoid any such violation.
(d) Except in the case of U.S. Government Obligations deposited
in respect of a cash amount that could be deliverable at Maturity, the
Trustee will promptly pay over to the Company any dividends, interest,
principal or other payments received by the Trustee in respect of any
securities and deposit with it, unless the Company is in default on
its obligations under the PIES, or unless the payment of such amount
to the Company would cause the cash and securities on deposit with the
Trustee to become insufficient under the provisions of this Section
8.01.
(e) Notwithstanding anything to the contrary in this Section
8.01, the Company shall not substitute U.S. Government Obligations and
shall not replace AirTouch Common Stock or Reported Securities within
the 21 Business Days preceding Stated Maturity. If at Maturity the
number of shares of AirTouch Common Stock (or, after an Adjustment
Event, Reported Securities) on deposit with the Trustee pursuant to
this Article 8 is insufficient to meet the obligations (based on the
actual Maturity Price and the assumption that the Cash Delivery Option
is not exercised) under any PIES to deliver such securities, the
Trustee will distribute to the Holders pro rata all of such securities
held by it and, as to the remaining obligation to deliver such
securities, shall deliver the cash equivalent that the Company would
have been allowed to deliver thereunder, in the form of cash generated
from the liquidation of U.S. Government Obligations then pledged by
the Company.
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(f) Unless the Trustee holds, as of the 21st Business Day
preceding Stated Maturity, sufficient shares of AirTouch Common Stock
with which to settle the PIES in their entirety, the Company will
notify The Depository Trust Company and the Trustee and publish a
notice in a daily newspaper of national circulation stating the
proportions of securities and cash that will be delivered at Maturity.
The Trustee shall promptly remit to the Company any excess cash or
securities on deposit after all amounts owing in respect of the PIES
at Maturity have been paid in full.
(g) After a deposit by the Company in accordance with this
Section in respect of the PIES, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations
under the PIES in respect of which the deposit has been made and under
the Indenture with respect to the PIES except for those Continuing
Obligations specified above.
(h) U.S. Government Obligations shall not be callable at the
issuer's option.
(i) "U.S. Government Obligations" means (i) direct obligations
of the United States of America for the payment of which the full
faith and credit of the United States or America is pledged; or (ii)
obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the United States of America, the full
and timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America.
Section 8.02 Application of Trust Money.
The Trustee shall hold in trust shares of AirTouch Common
Stock, Reported Securities, U.S. Government Obligations,
cash or a combination thereof deposited with it pursuant to
Section 8.01. It shall apply the deposited AirTouch Common
Stock, Reported Securities, cash or cash generated from the
liquidation of the U.S. Government Obligations pledged by
the Company through any Paying Agent and in accordance with
this Supplemental Indenture to the payment of principal of
and interest on the PIES.
Section 8.03 Repayment to the Company.
The Trustee and any Paying Agent shall promptly pay to the
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Company upon request any money held by them for the payment
of principal or interest that remains unclaimed for two
years. After that, Securityholders entitled to the money
must look to the Company for payment as general creditors
unless an abandoned property law designates another person.
Upon payment to the Company, the Trustee and any Paying
Agent are released of any further obligation or liability
with respect to the utilization of such moneys."
SECTION 304. TAX TREATMENT.
The parties hereto hereby agree, and each Holder of a PIES by its
purchase of a PIES hereby agrees:
(i) to treat, for U.S. federal income tax purposes, each PIES as a
forward purchase contract to purchase AirTouch Common Stock at Maturity
(including as a result of acceleration or otherwise) (the "FORWARD
PURCHASE CONTRACT CHARACTERIZATION"), under the terms of which contract
(a) at the time of issuance of the PIES the Holder deposits irrevocably
with the Company a fixed amount of cash equal to the purchase price of
the PIES to assure the fulfillment of the Holder's purchase obligation
described in clause (c) below, which deposit will unconditionally and
irrevocably be applied at Maturity to satisfy such obligation, (b) until
Maturity the Company will be obligated to pay interest on such deposit at
a rate equal to the stated rate of interest on the PIES as compensation
to the Holder for the Company's use of such cash deposit during the term
of the PIES, and (c) at Maturity such cash deposit unconditionally and
irrevocably will be applied by the Company in full satisfaction of the
Holder's obligation under the forward purchase contract, and the Company
will deliver to the Holder the number of AirTouch Common Shares that the
Holder is entitled to receive at that time pursuant to the terms of the
PIES (subject to the Company's right to deliver cash in lieu of the
AirTouch Common Stock);
(ii) to treat, consistent with the above characterization, (x) amounts
paid to the Company in respect of the original issue of a PIES as allocable
in their entirety to the amount of the cash deposit attributable to such
PIES and (y) amounts denominated as interest that are payable with respect
to the PIES as interest payable on the amount of such deposit, includible
annually in the income of the Holder as interest income in accordance with
its method of accounting;
(iii) not to treat the delivery of any portion of the AirTouch Common
Stock, cash or Reported Securities to be delivered pursuant to this
Agreement (other than in respect of stated interest) as the payment of
interest or ordinary income; and
(iv) to file all U.S. federal, state and local income and franchise
tax returns
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consistent with the forward purchase contract characterization
(unless required otherwise by an applicable taxing authority).
ARTICLE IV
Miscellaneous
SECTION 401. CONFIRMATION OF INDENTURE.
The Indenture, as supplemented and amended by this Supplemental
Indenture and all other indentures supplemental thereto, is in all respects
ratified and confirmed, and the Indenture, this Supplemental Indenture and all
indentures supplemental thereto shall be read, taken and construed as one and
the same instrument.
SECTION 402. CONCERNING THE TRUSTEE.
The Trustee assumes no duties, responsibilities or liabilities by
reason of this Supplemental Indenture other than as set forth in the Indenture.
----------------------
This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
MEDIAONE GROUP, INC.
By:___________________________
Name:
Title:
Attest:___________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:___________________________
Name:
Title:
Attest:___________________________
Name:
Title:
24
<PAGE>
STATE OF )
) SS:
COUNTY OF )
On the day of _________, 1998, before me personally came
___________ ________________, to me known, who, being by me duly sworn, did
depose and say that she/he is the of MEDIAONE GROUP, INC., one of
the corporations described in and which executed the foregoing instrument; that
she/he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that she/he signed her/his name
thereto by like authority.
Notary Public
SEAL
STATE OF )
) SS:
COUNTY OF )
On the day of _________, 1998, before me personally came
___________ ________________, to me known, who, being by me duly sworn, did
depose and say that she/he is the of The First National Bank of
Chicago, one of the corporations described in and which executed the foregoing
instrument; that she/he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that she/he signed
her/his name thereto by like authority.
Notary Public
SEAL
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EXHIBIT A
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of the Depositary or a
nominee of the Depositary. Unless and until it is exchanged in whole or in part
for the individual Debt Securities represented hereby, this Global Security may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
security issued is registered in the name of Cede & Co., or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
NO._________________ CUSIP NO. 58440J401
Form of Face of PIES
MEDIAONE GROUP, INC.
[ ] PIES -SM-
(Premium Income Exchangeable Securities -SM-)
___% Exchangeable Note due August 15, 2001
(Subject to Exchange at Maturity into Shares of
Common Stock, Par Value $.01 Per Share,
of AirTouch Communications, Inc.)
MediaOne Group, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede &
Co. or registered assigns, the principal sum of [____________________] DOLLARS
(or $- for each Premium Income Exchangeable Securities (each, a "PIES")
represented by this note) on August 15, 2001 (subject to the mandatory exchange
provisions at Maturity described below) unless extended (as
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described below), and to pay interest (computed on the basis of a 360-day
year of twelve 30-day months) on such principal amount from August [15],
1998, or from the most recent Interest Payment Date (as defined below) to
which interest has been paid or duly provided for, quarterly on February [15]
, May [15], August [15], and November [15] of each year (each, an "Interest
Payment Date" and, collectively, the "Interest Payment Dates"), commencing
November [15], 1998, at the rate per annum specified in the title of this
note, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in said Indenture, be paid to the
person in whose name this PIES (or the PIES in exchange or substitution for
which this PIES was issued) is registered at the close of business on the
Regular Record Date (as defined below) for interest payable on such Interest
Payment Date. The "Regular Record Date" for any interest payment is the
close of business on the last day of the calendar month immediately preceding
the relevant Interest Payment Date, whether or not a Business Day (as defined
below), PROVIDED, that interest payable at Maturity shall be payable to the
person to whom the principal hereof is payable. In any case where such
Interest Payment Date shall not be a Business Day, then (notwithstanding any
other provision of said Indenture or this PIES) payment of such interest need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on such date, and, if such payment
is so made, no interest shall accrue for the period from and after such date.
Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holder on such Regular Record
Date, as the case may be, and may be paid to the person in whose name this
PIES (or the PIES in exchange or substitution for which this PIES was issued)
is registered at the close of business on a record date for the payment of
such interest to be fixed by the Trustee for the PIES, notice whereof shall
be given to Holders of the PIES not less than 10 days prior to such record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the PIES may be
listed, and upon such notice as may be required by such exchange. At
Maturity, the principal amount of this PIES will be mandatorily exchanged
into a number of shares of Common Stock, par value $.01 per share (the
"AirTouch Common Stock"), of AirTouch Communications, Inc. ("AirTouch") at
the Exchange Rate (as defined below). The "Exchange Rate" is equal to (a) if
the Maturity Price (as defined below) is greater than or equal to $- (the
"Threshold Appreciation Price"), - shares of AirTouch Common Stock per PIES,
(b) if the Maturity Price is less than the Threshold Appreciation Price but
is greater than $- (the "Initial Price"), a fraction of one share of AirTouch
Common Stock per PIES equal to the quotient of (i) the Initial Price divided
by (ii) the Maturity Price (such fractional share being calculated to the
nearest 1/10,000th of a share or, if there is not a nearest 1/10,000th of a
share, to the next higher 1/10,000th of a share) and (c) if the Maturity
Price is less than or equal to the Initial Price, one share of AirTouch
Common Stock per PIES. ACCORDINGLY, THE VALUE OF THE AIRTOUCH COMMON STOCK
TO BE RECEIVED BY HOLDERS OF THE PIES (OR, AS DISCUSSED BELOW, THE CASH
EQUIVALENT FOR ALL OR PART THEREOF OR OTHER CONSIDERATION THAT MAY BE
RECEIVED IN LIEU OF OR IN ADDITION TO SUCH SHARES) AT MATURITY MAY BE LESS
THAN THE PRINCIPAL AMOUNT OF
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SUCH PIES. Any shares of AirTouch Common Stock delivered by the Company to
the Holders of the PIES that are not affiliated with AirTouch shall be free
of any transfer restrictions, and the Holders of PIES will be responsible for
the payment of any and all brokerage costs upon the subsequent sale of such
shares. No fractional shares of AirTouch Common Stock will be issued at
Maturity as provided in the Indenture. The Company may at its option deliver
cash in lieu of delivering all or a portion (such portion to be selected by
the Company in its discretion) of the shares of AirTouch Common Stock
otherwise deliverable at Maturity (the "Cash Delivery Option"). The amount
of cash deliverable in respect of each PIES (calculated to the nearest
1/100th of a dollar per PIES or, if there is not a nearest 1/100th of a
dollar, then to the next higher 1/100th of a dollar) shall be equal to the
product of the number of shares of AirTouch Common Stock otherwise
deliverable in respect of such PIES on the date of Maturity multiplied by the
Maturity Price. An election to exercise the Cash Delivery Option with
respect to less than all of the shares of AirTouch Common Stock otherwise
deliverable at Maturity shall not in any way limit the Company's obligation
to deliver the remaining shares of AirTouch Common Stock otherwise
deliverable at Maturity. Notwithstanding the foregoing, (i) in the case of
certain dilution events, the Exchange Rate will be subject to adjustment and
(ii) in the case of certain adjustment events, the consideration received by
Holders of PIES at Maturity will be other securities and/or cash, each as
provided in the Indenture.
The "Maturity Price" is defined as the average Closing Price per
share of AirTouch Common Stock on the 20 Trading Days immediately prior to,
but not including, the date of Maturity or, under certain circumstances, the
market value per share of AirTouch Common Stock as of the date of Maturity as
determined by a nationally recognized independent investment banking firm
retained for such purpose by the Company, as provided in the Indenture, or,
under certain other circumstances, the Closing Price per share of AirTouch
Common Stock on the Trading Day immediately preceding the date that a
Refinancing Offer (as defined in the Indenture) is priced (the "Pricing
Date") or, if such Refinancing Offer is priced after 4:00 p.m., New York
time, on the Pricing Date, the Closing Price per share on the Pricing Date,
as provided in the Indenture. The "Closing Price" of any security on any
date of determination means (i) the closing sale price (or, if no closing
price is reported, the last reported sale price) of such security (regular
way) on the NYSE on such date, (ii) if such security is not listed for
trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on which
such security is so listed, (iii) if such security is not so listed on a
United States national or regional securities exchange, as reported by the
NASDAQ National Market, or (iv) if such security is not so reported, the last
quoted bid price for such security in the over-the-counter market as reported
by the National Quotation Bureau or similar organization. For purposes of
determining the Maturity Price, the Closing Price of any securities on any
day prior to any "ex-dividend" date occurring during the relevant 20 Trading
Day Period for any dividend paid or to be paid with respect to such security
should be reduced by the amount of such dividend. A "Trading Day" is defined
as a day on which the security the Closing Price of which is being determined
(i) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business
and (ii) has traded at
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<PAGE>
least once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of such
security. "Business Day" means any day that is not a Saturday, a Sunday or a
day on which the NYSE, banking institutions or trust companies in The City of
New York, New York are authorized or obligated by law or executive order to
close.
Interest on this PIES will be payable, and delivery of AirTouch
Common Stock and/or such other consideration as permitted or required herein
(or, at the Company's option, cash in an amount equal to the value of such
AirTouch Common Stock and/or other consideration) in exchange for the
principal amount of this PIES at Maturity will be made upon surrender of this
PIES, at the office or agency of the Company maintained for that purpose in
The City of New York, New York, and payment of interest on (and, if the
Company elects not to deliver AirTouch Common Stock and/or other securities
upon exchange at Maturity, the cash equivalent thereof payable upon exchange
for the principal amount of) this PIES will be made in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; PROVIDED, HOWEVER, that at the option of
the Company payment of interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear on the register for
the PIES.
ADDITIONAL PROVISIONS OF THIS PIES ARE CONTAINED ON THE REVERSE
HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY SET
FORTH IN THIS PLACE.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee for this PIES by manual signature, this PIES
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose. "PIES" and "Premium Income Exchangeable
Securities" are service marks of Lehman Brothers Inc.
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IN WITNESS WHEREOF, MediaOne Group, Inc. has caused this instrument to
be duly executed under its corporate seal.
Dated: MEDIAONE GROUP, INC.
By:______________________
Name:
Title:
By:______________________
Name:
Title:
Attest:
Name:
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated herein and
referred to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
AS TRUSTEE
By:____________________________
Authorized Signature
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<PAGE>
Form of Reverse of PIES
MEDIAONE GROUP, INC.
___% Exchangeable Note due August 15, 2001
(Subject to Exchange at Maturity into Shares of
Common Stock, Par Value $.01 Per Share,
of AirTouch Communications, Inc.)
This PIES is one of a duly authorized issue of unsubordinated
debentures, notes, or other evidences of indebtedness (hereinafter called the
"Securities") of the Company of the Series hereinafter specified, which
Series is limited in aggregate principal amount to $-, all such Securities
issued and to be issued under an indenture dated as of November 13, 1995
between the Company and The First National Bank of Chicago, as Trustee, as
supplemented by a First Supplemental Indenture dated as of December 6, 1995,
a Second Supplemental Indenture dated as of May 8, 1996 and a Third
Supplemental Indenture dated as of August [ ], 1998 (as so supplemented and
as may be further supplemented from time to time, the "Indenture") between
the Company and The First National Bank of Chicago as trustee (herein called
the "Trustee," which term includes any successor Trustee under the
Indenture), pursuant to which the Company has designated The First National
Bank of Chicago as Trustee for the PIES, to which Indenture and all other
indentures supplemental thereto reference is hereby made for a statement of
the rights and limitation of rights thereunder of the Holders of the
Securities and of the rights, obligations, duties and immunities of the
Trustee for each Series of Securities and of the Company, and the terms upon
which the Securities are and are to be authenticated and delivered. As
provided in the Indenture, the Securities may be issued in one or more
Series, which different Series may be issued in various aggregate principal
amounts, may be denominated in currencies other than U.S. Dollars, (including
composite currencies), may mature at different times, may bear interest, if
any, at different rates, may be subject to different redemption provisions,
if any, may be subject to different sinking fund or other purchase
provisions, if any, may be subject to different covenants and Events of
Default and may otherwise vary as in the Indenture provided or permitted.
This PIES is one of a Series of the Securities designated as ___%
Exchangeable Notes Due August 15, 2001.
The PIES may not be redeemed or terminated prior to Stated Maturity
(except as provided in the Indenture) and are not entitled to the benefit of
any sinking fund.
The Company may at its option elect to extend the Stated Maturity
of the PIES to November [__], 2001 and may further elect to extend the
maturity of the PIES to February [__], 2002 (each, an "Extension Period")
under certain circumstances,
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<PAGE>
subject, in either case, to Post-Extension Termination (as defined in the
Indenture). In the event that the Company exercises its option to extend the
maturity of the PIES to February __, 2002, interest at the rate set forth
above will continue to accrue on the PIES until Maturity and additional
interest will accrue in arrears, commencing November [__], 2001 until
Maturity (including by Post-Extension Termination), at a rate per annum equal
to 0.5% of the principal amount of the PIES. Such additional interest shall
be payable in the same manner, at the same time and to the same Holders as
other interest payments required to be made under the PIES.
The Company may elect to cause all but not less than all of the PIES to
be terminated and repaid at any time within an Extension Period upon
completion of a Refinancing Offer. The Company may exercise this election
upon satisfaction of certain conditions described in the Indenture. The
related date of Maturity for the PIES shall be the anticipated settlement
date indicated in such notice or, if two Business Days' prior notice to
Holders thereof is given, such later date as the Refinancing Offer actually
settles.
The provisions contained in the Indenture for defeasance and discharge
of the Company's obligations upon compliance by the Company with certain
conditions set forth therein will be applicable to the PIES.
If an Event of Default with respect to the PIES, as defined in the
Indenture, shall occur and be continuing, the principal of all PIES may be
declared due and payable and therefore will result in the mandatory exchange
of the principal amount thereof for AirTouch Common Stock and/or other
consideration as permitted or required under the terms hereof (or, at the
Company's option, cash), all in the manner and with the effect provided in
the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each Series under
the Indenture at any time by the Company with the consent of the Holders of
not less than a majority in aggregate principal amount of the Securities at
the time outstanding of each Series to be affected thereby. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities of any Series at the time
outstanding, on behalf of the Holders of all the Securities of such Series,
to waive compliance by the Company with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequences with
respect to such Series. Any such consent or waiver by the Holder of this PIES
shall be conclusive and binding upon such Holder and upon all future Holders
of this PIES and of any PIES issued upon the transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent of waiver is
made upon this PIES.
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<PAGE>
No reference herein to the Indenture and no provision of this PIES or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this PIES
at the times, place and rate, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, this PIES is transferable on the register for the PIES, upon
surrender of this PIES for registration of transfer at the office or agency
of the Company to be maintained for that purpose in The City of New York, New
York, or at any other office or agency of the Company maintained for that
purpose, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar for the PIES duly
executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new PIES, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee
or transferees. No service charge shall be made for any such transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection with the
registration of such transfer or exchange, other than certain exchanges not
involving any transfer.
Certain capitalized terms used in this PIES but not defined herein have
the meanings set forth in the Indenture.
THIS PIES SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company, the Trustee for the PIES and any agent of the Company or
such Trustee may treat the person in whose name this PIES is registered as
the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this PIES be overdue, and neither the
Company, such Trustee nor any such agent shall be affected by notice to the
contrary.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
UNIF GIFT MIN ACT - __________ Custodian
_________
TEN COM - as tenants in common
TEN ENT - as tenants by the (Cust) (Minor)
entireties
JT TEN - as joint tenants Under Uniform Gifts to
with right of Minors Act
survivorship and
not as tenants in
common
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
Please insert Social Security or Taxpayer I.D. or
other Identifying Number of Assignee
- - - -----------------
- - - --------------------------------------------------------------------------
Please Print or Type Name and Address Including Postal Zip Code of Assignee
the within PIES and all rights thereunder, hereby irrevocably constituting
and appointing
attorney
to transfer said PIES on the books of MediaOne Group, Inc. with full power of
substitution in the premises.
Dated:
Signature
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within PIES in every
particular, without alteration or
enlargement or any change
whatsoever.
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